November 03, 1999 08:05
HEALTHSOUTH Reports Third Quarter Income Per Share of $.16
BIRMINGHAM, Ala., Nov. 3 /PRNewswire/ -- HEALTHSOUTH Corporation (NYSE: HRC) announced operating results for the quarter and nine months ended September 30, 1999. Revenues for the quarter were $993.3 million, compared to $1.047 billion in the third quarter of 1998. Income before non-recurring expenses for the quarter was $66.9 million, compared to income before non-recurring expenses of $122.5
million for the third quarter of 1998. The corresponding income per share (assuming dilution) was $.16 for the 1999 quarter, compared to income per share (assuming dilution) of $.28 in the 1998 quarter.
For the nine months ended September 30, 1999, HEALTHSOUTH's revenues were $3.072 billion, as compared to $2.965 billion in the 1998 period. Income before non-recurring expenses for the 1999 period
was $290.8 million, compared to income before non-recurring expenses of $357.3 million in the 1998 period. The corresponding income per share (assuming dilution) was $.69 for the 1999 period, compared
to income per share (assuming dilution) of $.82 reported in the 1998 period.
HEALTHSOUTH announced on September 9 that it expected to incur restructuring and other charges ranging from $250 million to $300 million during the third and fourth quarters of 1999. In that connection, one-time adjustments reduced net income by $71.2 million in the 1999 periods. This reflects the provision of additional reserves related to accounts receivable determined by management to be uncollectible during the third quarter of 1999. Those additional reserves primarily relate to accounts receivable of facilities
included in the impairment and restructuring charges recognized in 1998. These accounts receivable were determined to be uncollectible by local and regional operations management personnel who assumed
collection responsibilities in the third quarter of 1999 in connection with the elimination of the company's outpatient regional business offices, which had previously been responsible for collection activities.
HEALTHSOUTH's results for the quarter and nine months reflect the inclusion of the results of operations of National Surgery Centers, Inc. for all periods presented. National Surgery Centers was acquired by HEALTHSOUTH in a merger accounted for as a pooling of interests on July 22, 1998. Non-recurring expenses in the 1998 periods related to the National Surgery Centers acquisition and the company's decision to dispose of or otherwise discontinue substantially all of the home health operations.
"As we estimated in our September announcement, our results for the third quarter reflect some decreases from our historic margins, as we have seen an increase in the Medicare mix in our inpatient operations and lower-than-expected same-store growth in our ambulatory services segment," said Richard M. Scrushy, Chairman of the Board and Chief Executive Officer of HEALTHSOUTH. "Despite those factors, we are making good progress on responding to these new challenges through the strategic initiatives we have previously announced. In September, we consolidated the management of all of our ambulatory services lines of business, enabling us to better integrate our services in major markets. We have established regional market leaders and local market managers, who are responsible not only for operations but for development and managed care activities in their markets. We believe that this will enable us to respond more rapidly to new opportunities in local markets and to ensure that we remain in touch with the particular needs of each market."
Scrushy continued, "In September, we reinstituted purchases under our previously announced share repurchase program. We purchased over 28.7 million shares of HEALTHSOUTH Common Stock in September and October, bringing our total purchases under the program to over 36.2 million shares. This reflects management's continued confidence in the long-term value of our company and our belief that our stock remains undervalued. We have done this while remaining committed to our financial policies and the integrity of our balance sheet.
"We have also continued to build on the value of HEALTHSOUTH's strong brand name and reputation for high-quality, cost-effective healthcare services," Scrushy added. "In September, we announced an agreement in principle with Healtheon/WebMD to undertake a series of ventures that should make HEALTHSOUTH's services more accessible to physicians and patients alike. This strategic alliance with the leading source of healthcare information on the Web is just one way that HEALTHSOUTH is uniting its history of excellence in healthcare with the latest in technology and innovation to build value for the future." Scrushy concluded, "These continue to be challenging times for healthcare providers. Like others, we continue to face declining reimbursement from the government, as well as payment pressures and delays from managed care payors. Unlike many other providers, however, we face these challenges with strong cash flow, a strong balance sheet, and the best group of assets and one of the most experienced management teams in healthcare. We will continue to execute the strategic plans that we have announced, and we will continue to do the things that we believe will build long-term value for our stockholders, while providing the patients, physicians and payors that we serve with the quality, efficiency and innovation that they have come to rely on."
HEALTHSOUTH is the nation's largest provider of outpatient surgery and rehabilitative healthcare services, with nearly 2,000 locations in all 50 states, the United Kingdom, Australia and Puerto Rico.
Statements contained in this press release which are not historical facts are forward-looking statements. Without limiting the generality of the preceding statement, all statements in this press release concerning or relating to estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results are forward-looking statements. In addition, HEALTHSOUTH, through its senior management, may from time to time make forward-looking public statements concerning the matters described herein. Such forward-looking statements are necessarily estimates reflecting the best judgment of HEALTHSOUTH's senior management based upon current information, involve a number of risks and uncertainties and are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. HEALTHSOUTH's actual results may differ materially from the results anticipated in these forward-looking statements as a result of a variety of factors, including those identified in this press release and in the public filings made by HEALTHSOUTH with the Securities and Exchange Commission, including HEALTHSOUTH's Annual Report on Form 10-K for the year ended December 31, 1998 and its Quarterly Reports on Form 10-Q, and forward-looking statements contained in this press release or in other public statements of HEALTHSOUTH or its senior management should be considered in light of those factors. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements.
Summary Operating Results
(unaudited; in thousands, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
Revenues $ 993,341 $1,047,422 $3,071,520 $2,965,265
Net income $ (4,330) $ 5,670 $ 219,582 $ 240,403
Weighted average
common shares
outstanding 412,874 422,649 415,341 420,957
Weighted average
common shares and
common equivalent
shares outstanding --
assuming dilution 418,404 433,034 422,622 433,913
Net income per
common share $ (0.01) $ 0.01 $ 0.53 $ 0.57
Net income per
common share --
assuming
dilution $ (0.01) $ 0.01 $ 0.52 $ 0.55
ADJUSTMENT TO EXCLUDE NON-RECURRING EXPENSES
Net Income $ (4,330) $ 5,670 $ 219,582 $ 240,403
Income effect of
non-recurring
expenses, net
of taxes
Merger and
acquisition
related
expenses 0 20,712 0 20,712
Impairment and
restructuring
charges 0 75,373 0 75,373
Write off of
home health
notes receivable 0 20,768 0 20,768
Provision for
additional accounts
receivable
reserves 71,240 0 71,240 0
Net income excluding
effects of
non-recurring
expenses $ 66,910 $ 122,523 $ 290,822 $ 357,256
Weighted average
common shares
and common
equivalent shares
outstanding --
assuming
dilution 418,404 448,535 438,123 443,855
Net income per
common share --
assuming
dilution $ .16 $ .28 $ .69 $ .82
For more information, contact Richard M. Scrushy, Chairman & CEO, Michael D. Martin, Executive Vice
President & Chief Financial Officer, or Tadd McVay, Vice President - Finance, at 205-967-7116.
SOURCE HEALTHSOUTH Corporation
/CONTACT: Richard M. Scrushy, Chairman & CEO, or Michael D. Martin,
Executive Vice President & Chief Financial Officer, or Tadd McVay, Vice
President - Finance, all of HEALTHSOUTH Corporation, 205-967-7116/
/Web site: healthsouth.com |
