Health Management Associates, Inc. Reports Record Second Quarter Results

Second Quarter Net Revenue up 18%



Apr 24, 2001, 01:00 ET from Health Management Associates, Inc.

    NAPLES, Fla., April 24 /PRNewswire Interactive News Release/ -- Health
 Management Associates, Inc. (NYSE:   HMA) announced today that net patient
 service revenue grew a robust 17.7% to $481.1 million for the quarter ended
 March 31, 2001, up $72.4 million from $408.7 million for the same period a
 year ago.  Net income for the quarter increased 17.0% to $59.1 million or
 $.23 per share (diluted), up from $50.5 million or $.21 per share (diluted),
 from the same quarter a year ago, before a non-cash, non-recurring charge of
 $10.3 million or $.04 per share (diluted) related to retirement benefits to be
 provided pursuant to an employment agreement with William J. Schoen, which
 became effective January 2, 2001, and the write down of assets held for sale.
 Earnings before interest, depreciation and amortization, non-recurring charges
 and taxes were $124.7 million, up $16.5 million, representing a 15.3% increase
 from the same period a year ago.
     Net patient service revenue at hospitals owned and operated by HMA for
 one year or more was up approximately 8%.  This quarter represents the 50th
 consecutive quarter of same hospital revenue growth.  Among the factors
 contributing to the growth were a strong 5.3% increase in admissions and a
 3.7% increase in surgeries.  Same store hospital EBITDA margins increased
 60 basis points to 28.7% from 28.1% for the same period a year ago.  In
 addition, continued focus on emergency room operations and reduced treatment
 times resulted in an 8.4% growth in same hospital emergency room visits,
 compared to the same quarter last year.
      "The second quarter of fiscal year 2001 was an excellent quarter for
 HMA," stated Joseph V. Vumbacco, Chief Executive Officer of Health Management
 Associates, Inc.  "Both acquisition and same-store hospitals saw improvements
 in revenue, EBITDA, and net income, reaching record levels for the Company.
 Our proven operating strategies continue to achieve outstanding results for
 both our patients and our shareholders."
     For the six months ended March 31, 2001, net earnings increased
 $14.4 million to $99.2 million or $0.39 per share (diluted) compared to
 $84.8 million or $0.35 per share (diluted) for the same period a year ago,
 before the $10.3 million or $0.04 per share (diluted) non-cash, non-recurring
 charge.  Diluted shares for the period increased 7.7% to 263.7 million shares
 from 244.9 million shares outstanding a year ago.  The Company reported total
 net patient service revenue for the period of $915.4 million, an increase of
 17.6% from $778.7 million in the comparable six-month period.
     Accounts receivable management was excellent for the quarter.  Days Sales
 Outstanding (DSOs) saw tremendous improvement for the quarter, decreasing
 11.0 days sequentially and 4.9 days year over year to 73.4 days outstanding.
 In addition, cash flow from operations improved significantly, up
 $30.3 million from the six month period a year ago, indicating our continued
 emphasis on cash collections.
     "The improvements we have seen during the second quarter related to DSOs
 and cash collection were impressive, and were in line with our expectations,"
 added Mr. Vumbacco.  "In addition to improvements at our same store hospitals
 during the quarter, we received our Medicare provider numbers for the last
 three acquisitions, and submitted and collected our backlog of Medicare and
 Medicaid receivables."
     Same hospital salaries and benefits remained flat as a percentage of net
 revenue, and were well within management's expectations.  As a percent of net
 revenue, total salaries and benefits expense decreased 210 basis points
 sequentially during the quarter, indicating expected improvements in our
 acquisitions' labor costs.  The June 2000 conversion of pharmacy services from
 an outside vendor to in-house operations, continues to contribute to margin
 expansion.
     The Company's continued focus on improving bad debt expense resulted in
 record results for the quarter.  As a percent of net revenue, bad debt expense
 continued to show sizable improvement to a record low 6.9% of net revenue.
 Sequentially and compared to the same period a year ago, this is a 140 and
 110 basis point improvement, respectively.  "I am very proud of the efforts
 our hospitals have made in improving our private pay collections.  The
 reallocation of key business office resources, and the focus on the patient
 portion of our billing has certainly produced tremendous results," said Mr.
 Vumbacco.
     The Company not only has the highest operating margins in the industry,
 but also carries the strongest balance sheet.  Equity represents 71% of total
 capitalization, with debt making up only 29%, marking the lowest debt to total
 capitalization ratio in the industry.  As a result of the Company's strong
 cash flow, HMA has repaid $60 million under its $450 million unsecured line of
 credit, year to date, leaving $370 million available for future growth
 opportunities.
     As previously announced, the Company has reached an agreement and received
 approval from the court to acquire the 80-bed Lee County Community Hospital in
 Pennington Gap, Virginia and signed a definitive agreement to acquire the
 200-bed Carlisle Hospital in Carlisle, Pennsylvania.  These are our second and
 third acquisitions of fiscal year 2001.  The transactions are expected to
 close during July and June, respectively.  "Both hospitals are sole community
 providers, with Lee County Community generating between $18-20 million of net
 revenue and Carlisle generating between $60-70 million.  We are very excited
 with the tremendous opportunities these hospitals offer HMA," added Mr.
 Vumbacco.
     Health Management Associates is the largest non-urban hospital company and
 third largest hospital company overall in the United States, and is a major
 operator of general acute care hospitals in communities situated primarily in
 the Southeast and Southwest.  The Company, upon closing the previously
 mentioned transactions to acquire the 200-bed Carlisle Hospital and the 80-bed
 Lee County Community Hospital, will operate 38 facilities in 12 states with
 5,304 licensed beds.  HMA has experienced 12 years of uninterrupted earnings
 growth.
 
     Certain statements contained in this release, including, without
 limitation, statements containing the words "believes," "anticipates,"
 "intends," "expects," and words of similar import, constitute "forward-looking
 statements" within the meaning of the Private Securities Litigation Reform Act
 of 1995.  These statements may include projections of revenues, income or
 loss, capital expenditures, capital structure, or other financial items,
 statements regarding the plans and objectives of management for future
 operations, statements of future economic performance, statements of the
 assumptions underlying or relating to any of the foregoing statements, and
 other statements which are other than statements of historical fact.
     Statements made throughout this release are based on current estimates of
 future events, and the Company has no obligation to update or correct these
 estimates.  Readers are cautioned that any such forward-looking statements are
 not guarantees of future performance and involve risks and uncertainties, and
 that actual results may differ materially as a result of these various
 factors.
 
 
                       HEALTH MANAGEMENT ASSOCIATES, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
                    (in thousands except per share amounts)
                                  (unaudited)
 
                                   Three Months Ended     Six Months Ended
                                       March 31,              March 31,
                                    2001       2000       2001        2000
 
     Net patient service revenue  $481,144   $408,655   $915,381    $778,749
     Costs and expenses:
      Salaries and benefits        177,520    143,179    346,673     279,607
      Supplies and expenses        135,666    115,183    261,735     225,129
      Provision for doubtful
       accounts                     33,051     32,885     68,956      67,058
      Depreciation and
       amortization                 22,116     18,534     43,546      36,666
      Rent expense                  10,254      9,268     19,776      18,542
      Interest, net                  5,272      6,503     11,308      12,193
      Non-cash charge for retirement
       benefits and write down of
        assets held for sale        17,000         --     17,000          --
 
     Total costs and expenses      400,879    325,552    768,994     639,195
 
     Income before income taxes     80,265     83,103    146,387     139,554
     Provision for income taxes     31,525     32,616     57,469      54,775
 
     Net income                    $48,740    $50,487    $88,918     $84,779
 
     Net income per share:
      Basic                           $.20       $.21       $.36        $.35
      Diluted                         $.19       $.21       $.35        $.35
 
     Weighted average number of
      shares outstanding:
       Basic                       244,117    241,064    243,671     241,492
       Diluted                     263,100    244,979    263,689     244,863
 
 
     EARNINGS PER SHARE CALCULATION:
 
     Net income                    $48,740    $50,487    $88,918     $84,779
     Add:  Interest from convertible
      debt, net of taxes             1,337         --      2,673          --
 
     Adjusted net income           $50,077    $50,487    $91,591     $84,779
 
     Basic shares outstanding      244,117    241,064    243,671     241,492
     Add:  Employee stock options    4,534      3,915      5,569       3,371
     Convertible shares             14,449         --     14,449          --
 
     Diluted shares outstanding    263,100    244,979    263,689     244,863
 
     Diluted earnings per share      $0.19      $0.21      $0.35       $0.35
 
 
                       HEALTH MANAGEMENT ASSOCIATES, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
 
                                                     March 31,   September 30,
                                                       2001          2000
                                                    (Unaudited)
     Assets:
     Current Assets:
      Cash and investments                            $41,548       $16,471
      Accounts receivable, net                        392,505       372,653
      Other current assets                            102,093        97,839
     Property, plant and equipment                  1,069,034     1,065,330
     Restricted funds                                   1,944         2,005
     Other assets                                     226,765       217,767
 
                                                   $1,833,889    $1,772,065
 
     Liabilities and Stockholders' Equity:
     Current liabilities                             $164,554      $169,782
     Deferred income taxes                             34,496        34,496
     Other long-term liabilities                       31,747        17,570
     Long-term debt                                   464,940       520,151
     Stockholders' equity                           1,138,152     1,030,066
 
                                                   $1,833,889    $1,772,065
 
 
                                 Quarter ended March 31,  Year ended March 31,
                                     2001       2000       2001        2000
 
     Same Store Hospitals
     Occupancy                        52.6%      50.5%      48.4%       47.3%
     Patient days                  206,644    201,018    384,769     378,782
     Admissions                     44,942     42,669     85,177      81,690
     Adjusted Admissions            67,661     64,399    129,444     125,090
     Average length of stay            4.6        4.7        4.5         4.6
     Total surgeries                39,242     37,830     75,966      73,824
 
     OP rev as % of total
      net revenue                     47.2%      49.3%      47.5%       50.1%
     IP rev as % of total
      net revenue                     43.1%      49.4%      42.7%       48.6%
 
     Total Hospitals
     Occupancy                        52.8%      50.4%      49.0%       47.8%
     Patient Days                  238,835    213,763    448,266     408,023
     Admissions                     50,077     42,792     94,636      82,030
     Adjusted Admissions            75,495     64,428    144,085     125,229
     Average length of stay            4.8        5.0        4.7         5.0
     Total surgeries                43,682     37,830     84,408      73,824
     Total OP rev as % of
      net revenue                     52.5%      50.1%      53.2%       50.7%
     Total IP rev as % of
      net revenue                     47.5%      49.9%      46.8%       49.3%
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X86938622
 
 

SOURCE Health Management Associates, Inc.
    NAPLES, Fla., April 24 /PRNewswire Interactive News Release/ -- Health
 Management Associates, Inc. (NYSE:   HMA) announced today that net patient
 service revenue grew a robust 17.7% to $481.1 million for the quarter ended
 March 31, 2001, up $72.4 million from $408.7 million for the same period a
 year ago.  Net income for the quarter increased 17.0% to $59.1 million or
 $.23 per share (diluted), up from $50.5 million or $.21 per share (diluted),
 from the same quarter a year ago, before a non-cash, non-recurring charge of
 $10.3 million or $.04 per share (diluted) related to retirement benefits to be
 provided pursuant to an employment agreement with William J. Schoen, which
 became effective January 2, 2001, and the write down of assets held for sale.
 Earnings before interest, depreciation and amortization, non-recurring charges
 and taxes were $124.7 million, up $16.5 million, representing a 15.3% increase
 from the same period a year ago.
     Net patient service revenue at hospitals owned and operated by HMA for
 one year or more was up approximately 8%.  This quarter represents the 50th
 consecutive quarter of same hospital revenue growth.  Among the factors
 contributing to the growth were a strong 5.3% increase in admissions and a
 3.7% increase in surgeries.  Same store hospital EBITDA margins increased
 60 basis points to 28.7% from 28.1% for the same period a year ago.  In
 addition, continued focus on emergency room operations and reduced treatment
 times resulted in an 8.4% growth in same hospital emergency room visits,
 compared to the same quarter last year.
      "The second quarter of fiscal year 2001 was an excellent quarter for
 HMA," stated Joseph V. Vumbacco, Chief Executive Officer of Health Management
 Associates, Inc.  "Both acquisition and same-store hospitals saw improvements
 in revenue, EBITDA, and net income, reaching record levels for the Company.
 Our proven operating strategies continue to achieve outstanding results for
 both our patients and our shareholders."
     For the six months ended March 31, 2001, net earnings increased
 $14.4 million to $99.2 million or $0.39 per share (diluted) compared to
 $84.8 million or $0.35 per share (diluted) for the same period a year ago,
 before the $10.3 million or $0.04 per share (diluted) non-cash, non-recurring
 charge.  Diluted shares for the period increased 7.7% to 263.7 million shares
 from 244.9 million shares outstanding a year ago.  The Company reported total
 net patient service revenue for the period of $915.4 million, an increase of
 17.6% from $778.7 million in the comparable six-month period.
     Accounts receivable management was excellent for the quarter.  Days Sales
 Outstanding (DSOs) saw tremendous improvement for the quarter, decreasing
 11.0 days sequentially and 4.9 days year over year to 73.4 days outstanding.
 In addition, cash flow from operations improved significantly, up
 $30.3 million from the six month period a year ago, indicating our continued
 emphasis on cash collections.
     "The improvements we have seen during the second quarter related to DSOs
 and cash collection were impressive, and were in line with our expectations,"
 added Mr. Vumbacco.  "In addition to improvements at our same store hospitals
 during the quarter, we received our Medicare provider numbers for the last
 three acquisitions, and submitted and collected our backlog of Medicare and
 Medicaid receivables."
     Same hospital salaries and benefits remained flat as a percentage of net
 revenue, and were well within management's expectations.  As a percent of net
 revenue, total salaries and benefits expense decreased 210 basis points
 sequentially during the quarter, indicating expected improvements in our
 acquisitions' labor costs.  The June 2000 conversion of pharmacy services from
 an outside vendor to in-house operations, continues to contribute to margin
 expansion.
     The Company's continued focus on improving bad debt expense resulted in
 record results for the quarter.  As a percent of net revenue, bad debt expense
 continued to show sizable improvement to a record low 6.9% of net revenue.
 Sequentially and compared to the same period a year ago, this is a 140 and
 110 basis point improvement, respectively.  "I am very proud of the efforts
 our hospitals have made in improving our private pay collections.  The
 reallocation of key business office resources, and the focus on the patient
 portion of our billing has certainly produced tremendous results," said Mr.
 Vumbacco.
     The Company not only has the highest operating margins in the industry,
 but also carries the strongest balance sheet.  Equity represents 71% of total
 capitalization, with debt making up only 29%, marking the lowest debt to total
 capitalization ratio in the industry.  As a result of the Company's strong
 cash flow, HMA has repaid $60 million under its $450 million unsecured line of
 credit, year to date, leaving $370 million available for future growth
 opportunities.
     As previously announced, the Company has reached an agreement and received
 approval from the court to acquire the 80-bed Lee County Community Hospital in
 Pennington Gap, Virginia and signed a definitive agreement to acquire the
 200-bed Carlisle Hospital in Carlisle, Pennsylvania.  These are our second and
 third acquisitions of fiscal year 2001.  The transactions are expected to
 close during July and June, respectively.  "Both hospitals are sole community
 providers, with Lee County Community generating between $18-20 million of net
 revenue and Carlisle generating between $60-70 million.  We are very excited
 with the tremendous opportunities these hospitals offer HMA," added Mr.
 Vumbacco.
     Health Management Associates is the largest non-urban hospital company and
 third largest hospital company overall in the United States, and is a major
 operator of general acute care hospitals in communities situated primarily in
 the Southeast and Southwest.  The Company, upon closing the previously
 mentioned transactions to acquire the 200-bed Carlisle Hospital and the 80-bed
 Lee County Community Hospital, will operate 38 facilities in 12 states with
 5,304 licensed beds.  HMA has experienced 12 years of uninterrupted earnings
 growth.
 
     Certain statements contained in this release, including, without
 limitation, statements containing the words "believes," "anticipates,"
 "intends," "expects," and words of similar import, constitute "forward-looking
 statements" within the meaning of the Private Securities Litigation Reform Act
 of 1995.  These statements may include projections of revenues, income or
 loss, capital expenditures, capital structure, or other financial items,
 statements regarding the plans and objectives of management for future
 operations, statements of future economic performance, statements of the
 assumptions underlying or relating to any of the foregoing statements, and
 other statements which are other than statements of historical fact.
     Statements made throughout this release are based on current estimates of
 future events, and the Company has no obligation to update or correct these
 estimates.  Readers are cautioned that any such forward-looking statements are
 not guarantees of future performance and involve risks and uncertainties, and
 that actual results may differ materially as a result of these various
 factors.
 
 
                       HEALTH MANAGEMENT ASSOCIATES, INC.
                       CONSOLIDATED STATEMENTS OF INCOME
                    (in thousands except per share amounts)
                                  (unaudited)
 
                                   Three Months Ended     Six Months Ended
                                       March 31,              March 31,
                                    2001       2000       2001        2000
 
     Net patient service revenue  $481,144   $408,655   $915,381    $778,749
     Costs and expenses:
      Salaries and benefits        177,520    143,179    346,673     279,607
      Supplies and expenses        135,666    115,183    261,735     225,129
      Provision for doubtful
       accounts                     33,051     32,885     68,956      67,058
      Depreciation and
       amortization                 22,116     18,534     43,546      36,666
      Rent expense                  10,254      9,268     19,776      18,542
      Interest, net                  5,272      6,503     11,308      12,193
      Non-cash charge for retirement
       benefits and write down of
        assets held for sale        17,000         --     17,000          --
 
     Total costs and expenses      400,879    325,552    768,994     639,195
 
     Income before income taxes     80,265     83,103    146,387     139,554
     Provision for income taxes     31,525     32,616     57,469      54,775
 
     Net income                    $48,740    $50,487    $88,918     $84,779
 
     Net income per share:
      Basic                           $.20       $.21       $.36        $.35
      Diluted                         $.19       $.21       $.35        $.35
 
     Weighted average number of
      shares outstanding:
       Basic                       244,117    241,064    243,671     241,492
       Diluted                     263,100    244,979    263,689     244,863
 
 
     EARNINGS PER SHARE CALCULATION:
 
     Net income                    $48,740    $50,487    $88,918     $84,779
     Add:  Interest from convertible
      debt, net of taxes             1,337         --      2,673          --
 
     Adjusted net income           $50,077    $50,487    $91,591     $84,779
 
     Basic shares outstanding      244,117    241,064    243,671     241,492
     Add:  Employee stock options    4,534      3,915      5,569       3,371
     Convertible shares             14,449         --     14,449          --
 
     Diluted shares outstanding    263,100    244,979    263,689     244,863
 
     Diluted earnings per share      $0.19      $0.21      $0.35       $0.35
 
 
                       HEALTH MANAGEMENT ASSOCIATES, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
 
                                                     March 31,   September 30,
                                                       2001          2000
                                                    (Unaudited)
     Assets:
     Current Assets:
      Cash and investments                            $41,548       $16,471
      Accounts receivable, net                        392,505       372,653
      Other current assets                            102,093        97,839
     Property, plant and equipment                  1,069,034     1,065,330
     Restricted funds                                   1,944         2,005
     Other assets                                     226,765       217,767
 
                                                   $1,833,889    $1,772,065
 
     Liabilities and Stockholders' Equity:
     Current liabilities                             $164,554      $169,782
     Deferred income taxes                             34,496        34,496
     Other long-term liabilities                       31,747        17,570
     Long-term debt                                   464,940       520,151
     Stockholders' equity                           1,138,152     1,030,066
 
                                                   $1,833,889    $1,772,065
 
 
                                 Quarter ended March 31,  Year ended March 31,
                                     2001       2000       2001        2000
 
     Same Store Hospitals
     Occupancy                        52.6%      50.5%      48.4%       47.3%
     Patient days                  206,644    201,018    384,769     378,782
     Admissions                     44,942     42,669     85,177      81,690
     Adjusted Admissions            67,661     64,399    129,444     125,090
     Average length of stay            4.6        4.7        4.5         4.6
     Total surgeries                39,242     37,830     75,966      73,824
 
     OP rev as % of total
      net revenue                     47.2%      49.3%      47.5%       50.1%
     IP rev as % of total
      net revenue                     43.1%      49.4%      42.7%       48.6%
 
     Total Hospitals
     Occupancy                        52.8%      50.4%      49.0%       47.8%
     Patient Days                  238,835    213,763    448,266     408,023
     Admissions                     50,077     42,792     94,636      82,030
     Adjusted Admissions            75,495     64,428    144,085     125,229
     Average length of stay            4.8        5.0        4.7         5.0
     Total surgeries                43,682     37,830     84,408      73,824
     Total OP rev as % of
      net revenue                     52.5%      50.1%      53.2%       50.7%
     Total IP rev as % of
      net revenue                     47.5%      49.9%      46.8%       49.3%
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X86938622
 
 SOURCE  Health Management Associates, Inc.