Capella Healthcare, Inc. Announces Third Quarter 2012 Results
November 2, 2012
FOR IMMEDIATE RELEASE
INVESTOR CONTACT: MEDIA CONTACT:
Denise Warren Beth Wright
SVP/CFO VP – Communications
615-764-3013 615-764-3010
Capella Healthcare, Inc. Announces Third Quarter 2012 Results
Franklin, Tennessee. November 2, 2012 – Capella Healthcare, Inc. (“Capella”) today announced financial and operating results for the three and nine months ended September 30, 2012. Consolidated and same-facility results for the third quarter and the nine months ended September 30, 2012 include the operations of Muskogee Community Hospital in Muskogee, Oklahoma, which was acquired through a merger effective July 1, 2012. Upon the execution of the lease, Muskogee Community Hospital immediately became a satellite campus of Muskogee Regional Medical Center in Muskogee, Oklahoma.
Revenue for the third quarter of 2012 totaled $183.4 million, an increase of 7.6%, compared to $170.5 million in the third quarter of 2011. Adjusted EBITDA for the third quarter of 2012 totaled $22.2 million, compared to $20.3 million in the third quarter of 2011. Net loss from continuing operations for the third quarter of 2012 totaled $4.8 million, compared to $2.1 million in the third quarter of 2011.
Third quarter admissions and adjusted admissions increased 4.5% and 5.4%, respectively, compared to the prior year quarter. Consolidated revenue per adjusted admission increased 2.1%, compared to the prior year quarter.
Revenue for the nine months ended September 30, 2012 totaled $564.6 million, an increase of 10.5%, compared to $511.1 million in the prior year period. Adjusted EBITDA for the nine months ended September 30, 2012 totaled $79.4 million, compared to $69.7 million in the prior year period. Net income from continuing operations for the nine months ended September 30, 2012 totaled $4.5 million, compared to $3.0 million in the prior year period.
For the nine months ended September 30, 2012, admissions and adjusted admissions increased 5.2% and 9.6%, respectively, compared to the prior year period. Same-facility admissions and adjusted admissions increased 2.1% and 6.1%, respectively, compared to the prior year period. Consolidated revenue per adjusted admission increased 0.7%, compared to the prior year period. Same-facility revenue per adjusted admission increased 1.7%, compared to the prior year.
Commenting on the results, Dan Slipkovich, Chairman and Chief Executive Officer of Capella Healthcare, Inc. said, “We are pleased with our third quarter results. We generated solid volume and revenue growth despite the continuing challenges that the health care industry is facing. Our growth is the result of our strategic initiatives which include our recent acquisitions and partnerships, investments in new technology, and implementation of new services. Our hospital leaders are doing an excellent job providing high quality care, outstanding constituency satisfaction, and achieving their strategic objectives. We are especially pleased with our recent ranking on Modern Healthcare’s list of fastest growing healthcare companies, for which we give full credit to the dedicated employees, volunteers and physicians who serve our patients.”
“The future will require continued focus on creative and collaborative approaches, such as the partnership Capella has in Middle Tennessee with Saint Thomas Health, as we pursue new ways to continue to improve access and quality while lowering the costs of care.”
About Capella Healthcare
Based in Franklin, Tennessee, Capella Healthcare owns and/or operates general acute-care hospitals in seven states. With the philosophy that all health care is local, Capella collaborates with each hospital’s medical staff, board and community leadership to take care to the next level. The company has access to significant leadership and financial resources, reinvesting in its family of hospitals to strengthen and expand services and facilities. For more information visit the website at www.CapellaHealth.com.
Conference Call
Capella will host a conference call for investors at 9:00 a.m. Central Standard Time today. All interested investors are invited to access the call by dialing: 877-806-6964, passcode: 58862532. A replay of the call will be available for a period of 30 days, beginning approximately one hour after the call has concluded. Instructions to access the audio recording can be found on the Investor Relations section of the Company’s website at www.CapellaHealth.com. A copy of the Company’s Form 10-Q for the third quarter ended September 30, 2012 may be obtained via the Company’s website when filed with the SEC.
###
Cautionary Statement about Preliminary Results and other Forward-Looking Information
This press release contains forward-looking statements based on current management expectations. Numerous risks, uncertainties and other factors may cause actual results to differ materially from those expressed in any forward-looking statements. These factors include, but are not limited to, (1) the impact of healthcare reform on our financial position and results of operations; (2) the impact of efforts by federal and state healthcare programs and managed care companies to reduce reimbursement rates for the services provided by our facilities; (3) the impact of the lingering effects of the economic downturn; (4) the collectability of accounts receivable related to patient accounts; (5) our ability to recruit and maintain favorable and continuing relationships with qualified physicians and other healthcare professionals who use our facilities; (6) our ability to comply with extensive laws and government regulations related to the healthcare industry and the potential adverse impact of government investigations, liabilities and other claims asserted against us; (7) potential competition from other hospitals or healthcare providers, including physicians; (8) the concentration of our facilities in a small number of states; (9) the impact of interruptions to or changes in our information systems; (10) our ability to obtain adequate levels of general and professional liability insurance; (11) our ability to ensure confidential information is not inappropriately disclosed and that we are in compliance with federal and state health information privacy standards; (12) the resources needed for, or unforeseen liabilities related to, future capital commitments, acquisitions or joint ventures; (13) our ability to integrate and improve successfully the operations of acquired facilities; (14) our ability to enhance our hospitals with the most recent technological advances in diagnostic and surgical equipment; (15) our substantial indebtedness and adverse changes in credit markets impacting our ability to receive timely additional financing on terms acceptable to us to fund our acquisition strategy and capital expenditure needs; and (16) other risk factors described in our annual report on Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission. Many of the factors that will determine our future results are beyond our ability to control or predict. In light of the significant uncertainties inherent in the forward-looking statements contained herein, readers should not place undue reliance on forward-looking statements, which reflect management’s views only as of the date hereof. We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.
###
Capella Healthcare, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in millions)
###
Capella Healthcare, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
(Dollars in millions)
###
Capella Healthcare, Inc.
Condensed Consolidated Balance Sheet
(Dollars in millions)
###
Capella Healthcare, Inc.
Condensed Consolidated Statement of Cash Flows (Unaudited)
(Dollars in millions)
###
Capella Healthcare, Inc.
Supplemental Same-Facility Financial Information (1) (Unaudited)
(1) All information is on a same-facility basis. Same-facility for the nine months ended September 30, 2012 represents hospitals that we have owned for more than one year. Information above excludes the acquisition of the 60% interest in Cannon County Hospital, LLC, which owns DeKalb Community Hospital and Stones River Hospital.
###
Capella Healthcare, Inc.
Supplemental Non-GAAP Disclosures
Adjusted EBITDA – Reported (Unaudited)
(Dollars in millions)
(1) Adjusted EBITDA is defined as income (loss) before interest expense, income taxes, depreciation and amortization, non-controlling interests, acquisition-related expenses, debt extinguishment costs, stock-based compensation, management fee to related party and discontinued operations, net of taxes. Adjusted EBITDA is not intended as a substitute for net income (loss) attributable to Capella Healthcare, Inc. stockholders, operating cash flows or other cash flow data determined in accordance with accounting principles generally accepted in the United States. Due to varying methods of calculation, Adjusted EBITDA as presented may not be comparable to similarly titled measures of other companies.
###
Capella Healthcare, Inc.
Operating Statistics (1) (Unaudited)
(1) All hospital statistics are on a continuing operations basis and excludes all facilities classified under discontinued operations
(2) Consolidated and same-facility results for the quarter ended September 30, 2012 are the same and reflect all facilities in continuing operations, including Muskogee Community Hospital, which became a campus of Muskogee Regional Medical Center upon acquisition. Same-facility results for the nine-months ended September 30, 2011 and 2012 exclude Dekalb Community Hospital and Stones River Hospital, which were acquired on July 1, 2011 through our acquisition of a 60% interest in Cannon County Hospital, LLC.