<PAGE> 1
EXHIBIT 99.1
IASIS
HEALTHCARE
DOVER CENTRE, 113 SEABOARD LANE, SUITE A200, FRANKLIN, TENNESSEE 37067
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PHONE: (615) 844-2747 FAX: (615) 846-3006 WWW.IASISHEALTHCARE.COM
CONTACT: WAYNE GOWER
PRESIDENT AND CHIEF EXECUTIVE OFFICER
OR
JOHN K. CRAWFORD
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
(615) 844-2747
IASIS HEALTHCARE CORPORATION ANNOUNCES
THIRD QUARTER AND NINE MONTHS RESULTS
FRANKLIN, Tennessee (August 3, 2000) - IASIS Healthcare Corporation announced
today financial results for the third quarter and nine months ended June 30,
2000. The results for the third quarter and nine months ended June 30, 2000,
include the contribution of ten acute care hospitals and other related
facilities and assets acquired from Tenet Healthcare and a management company on
October 15, 1999.
Net operating revenues for the third quarter of 2000 totaled $215.2
million compared with $47.0 million in the same quarter of last year. Earnings
before interest, depreciation, amortization, income taxes, minority interest and
recapitalization costs (EBITDA) for the third quarter increased to $28.3 million
in 2000 from $7.0 million in 1999. Net loss, before preferred stock dividends
and accretion, for the quarter was $788,000. The results for the third quarter
include start-up EBITDA losses of $2.9 million at Rocky Mountain Medical Center
(RMMC), a full service, acute care hospital opened April 10, 2000, with 120
licensed beds in Salt Lake City, Utah.
Net operating revenues for the nine months ended June 30, 2000, were
$618.3 million compared with $140.2 million for the same period of last year.
EBITDA totaled $90.1 million, including start-up EBITDA losses of $4.8 million
at RMMC, compared with $20.9 million for the same period in 1999. Net earnings,
before preferred stock dividends and accretion, for the nine months ended June
30, 2000, was $3.7 million.
On a pro forma basis, which assumes that the acquisitions of the Tenet
hospitals and the management company were effective as of the beginning of each
period, net operating revenues for the acute care services segment for the three
months ended June 30, 2000, increased 10.3% to $192.1 million compared with
$174.2 million in the same prior year period. Acute care services pro forma
EBITDA for the three months ended June 30, 2000, excluding EBITDA losses from
RMMC, was
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IASIS Healthcare Announces Third Quarter Results
Page 2
August 3, 2000
$30.2 million compared with $33.6 million for the same period in 1999. The third
quarter 1999 pro forma EBITDA includes approximately $7.0 million in earnings
resulting from pre-1999 cost report settlements and similar non-recurring items.
Excluding the effect of such items on 1999 pro forma EBITDA and excluding RMMC
EBITDA losses, EBITDA for the three months ended June 30, 2000 for the acute
care services segment increased by 13.5%. Pro forma net operating revenues for
the Company's health insurance business segment, Health Choice, for the three
months ended June 30, 2000, increased 7.9% to $23.1 million compared with $21.4
million in the same prior year period. Health Choice EBITDA for the three months
ended June 30, 2000, was $1.0 million compared with $1.1 million for the same
period in 1999.
On a pro forma basis, net operating revenues for the acute care
services segment for the nine months ended June 30, 2000, increased 11.3% to
$576.0 million compared with $517.3 million in the same prior year period. Acute
care services pro forma EBITDA for the nine months ended June 30, 2000,
excluding EBITDA losses from RMMC, was $93.3 million compared with $94.2 million
for the same period in 1999. Pro forma EBITDA for the nine months ended June 30,
1999 includes approximately $7.0 million in earnings resulting from pre-1999
cost report settlements and similar non-recurring items. Excluding the effect of
such items on 1999 pro forma EBITDA and excluding RMMC EBITDA losses, EBITDA for
the nine months ended June 30, 2000 for the acute care services segment
increased by 7.0%. Pro forma net operating revenues for the Company's health
insurance business segment, Health Choice, for the nine months ended June 30,
2000, increased 5.9% to $65.1 million compared with $61.5 million in the same
prior year period. Health Choice EBITDA for the nine months ended June 30, 2000,
was $2.6 million compared with $3.0 million for the same period in 1999.
On a pro forma combined basis, hospital admissions and adjusted
admissions for the quarter ended June 30, 2000, increased over the prior year
period by 9.4% and 12.8%, respectively, and for the nine months ended June 30,
2000, hospital admissions and adjusted admissions increased over the prior year
period by 6.7% and 9.1%, respectively.
In commenting on the third quarter results, Wayne Gower, president and
chief executive officer of IASIS Healthcare, said, "We continued to make
progress in our operating units during the third quarter of our first year. Our
positive momentum results from our focus on the quality and convenience of care
we deliver to our patients and their physicians. We expect to continue upgrading
our hospitals and patient care services to meet the increased demand we are
experiencing in the communities we serve. We are also optimistic about prospects
for the longer term as a result of what appear to be improving reimbursement
trends and a more positive legislative environment.
"While we are experiencing significant start-up losses at our Rocky
Mountain Medical Center, we remain convinced that we will ultimately prevail in
establishing Salt Lake City's newest hospital delivering exceptional medical,
surgical and diagnostic services to this rapidly growing market. Our
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IASIS Healthcare Announces Third Quarter Results
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August 3, 2000
revenues during our first few months of operation at RMMC have been lower than
we had expected primarily due to impediments that are blocking our ability to
attain certain managed care contracts. We are vigorously pursuing elimination of
any barriers that patients may encounter in seeking care at RMMC. In addition,
as of August 1, we have physicians occupying our adjacent medical office
building, which provides additional access to care for our patients."
IASIS Healthcare Corporation owns and operates 15 general, acute care
hospitals with a total of 2,194 operating beds. IASIS focuses on networks of
medium-sized hospitals, each with 100 to 400 beds. The Company currently
operates hospitals in Salt Lake City, Utah; Phoenix, Arizona; Tampa-St.
Petersburg, Florida; and three markets within the State of Texas. IASIS also
operates four ambulatory surgery centers and a Medicaid managed health plan
serving over 40,000 members in Arizona.
This press release contains forward-looking statements based on
management's current expectations. Forward-looking statements involve known and
unknown risks and uncertainties that may cause the Company's actual results in
future periods to differ materially from those anticipated in the
forward-looking statements. Those risks and uncertainties include, among others,
risks and uncertainties associated with general economic and business
conditions, the effect of existing and future governmental regulations,
including the Balanced Budget Act of 1997 and the Balanced Budget Refinement
Act, changes in Medicare and Medicaid reimbursement levels, the highly
competitive nature of the healthcare industry, the possible enactment of Federal
or state healthcare reform, the impact of possible future governmental
investigations, the ability to attract and retain qualified management and
personnel - including physicians, the ability to enter into managed care
provider arrangements on acceptable terms, the ability to successfully negotiate
agreements with payors at Rocky Mountain Medical Center and build census levels
there, the ability to successfully manage the risks of our Medicaid managed care
plan, Health Choice, the ability to successfully convert our management
information systems, the ability to service our significant indebtedness, the
ability to implement successfully the Company's acquisition and development
strategy and to obtain financing therefore, and those risks, uncertainties and
others matters detailed from time to time in the Company's filings with the
Securities and Exchange Commission. You are cautioned not to unduly rely on such
forward-looking statements when evaluating the information presented in this
release.
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IASIS Healthcare Announces Third Quarter Results
Page 4
August 3, 2000
IASIS HEALTHCARE CORPORATION
CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ -------------------------
2000 1999 2000 1999
--------- -------- --------- ---------
<S> <C> <C> <C> <C>
Net operating revenue $ 215,247 $ 46,991 $ 618,279 $ 140,207
Salaries and benefits 77,291 15,939 215,957 48,623
Supplies 31,957 6,500 93,453 19,359
Other operating expenses 62,681 12,523 174,408 35,878
Provision for bad debts 15,011 3,350 44,378 10,413
Allocated management fees -- 1,692 -- 5,061
--------- -------- --------- ---------
Earnings before interest, taxes, depreciation,
amortization and recapitalization costs (EBITDA) 28,307 6,987 90,083 20,873
Interest, net 16,132 2,431 45,577 8,525
Depreciation and amortization 12,753 3,097 34,248 9,413
Recapitalization costs -- -- 3,478 --
Minority interests 210 (32) 252 (51)
--------- -------- --------- ---------
Earnings (loss) before income taxes (788) 1,491 6,528 2,986
Provision for income taxes -- -- 2,853 --
--------- -------- --------- ---------
Net earnings (loss) (788) 1,491 3,675 2,986
Preferred stock dividends and accretion 6,627 -- 18,775 --
--------- -------- --------- ---------
Net earnings (loss) attributable
to common shareholders $ (7,415) $ 1,491 $ (15,100) $ 2,986
========= ======== ========= =========
</TABLE>
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<PAGE> 5
IASIS HEALTHCARE CORPORATION
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET REVENUE ....................................... $ 215,247 $ 46,991 $618,279 $ 140,207
COSTS AND EXPENSES:
Salaries and benefits ......................... 77,291 15,939 215,957 48,623
Supplies ...................................... 31,957 6,500 93,453 19,359
Other operating expenses ...................... 62,681 12,523 174,408 35,878
Provision for bad debts ....................... 15,011 3,350 44,378 10,413
Interest, net ................................. 16,132 2,431 45,577 8,525
Depreciation and amortization ................. 12,753 3,097 34,248 9,413
Allocated management fees ..................... -- 1,692 -- 5,061
Recapitalization costs ........................ -- -- 3,478 --
--------- -------- -------- ---------
TOTAL COSTS AND EXPENSES .................... 215,825 45,532 611,499 137,272
--------- -------- -------- ---------
Earnings (loss) from operations before minority
interests and income taxes ...................... (578) 1,459 6,780 2,935
Minority interests ................................ 210 (32) 252 (51)
--------- -------- -------- ---------
Earnings (loss) from operations before income taxes (788) 1,491 6,528 2,986
Provision for income taxes ........................ -- -- 2,853 --
--------- -------- -------- ---------
NET EARNINGS (LOSS) ......................... (788) 1,491 3,675 2,986
Preferred stock dividends and accretion ........... 6,627 -- 18,775 --
--------- -------- -------- ---------
NET EARNINGS (LOSS) ATTRIBUTABLE TO COMMON
SHAREHOLDERS ................................ $ (7,415) $ 1,491 $(15,100) $ 2,986
========= ======== ======== =========
EBITDA ............................................ $ 28,307 $ 6,987 $ 90,083 $ 20,873
========= ======== ======== =========
EBITDA MARGIN ..................................... 13.15% 14.87% 14.57% 14.89%
</TABLE>
<PAGE> 6
IASIS HEALTHCARE CORPORATION
CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
2000 2000
---- ----
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............................... $ 3,345 $ 24,867
Accounts receivable, net of allowance for doubtful
accounts of $37,691 at June 30, 2000 and $33,812 at
March 31, 2000 ........................................ 145,885 124,128
Supplies ................................................ 19,729 18,720
Prepaid expenses and other current assets ............... 29,322 41,970
--------- ---------
TOTAL CURRENT ASSETS ................................ 198,281 209,685
Property and equipment, net of accumulated depreciation ..... 429,940 431,788
Goodwill and other intangible assets, net of accumulated
amortization ............................................ 219,426 227,747
Deferred debt financing costs, net of accumulated
amortization ............................................ 24,103 24,031
Other assets ................................................ 5,305 5,545
--------- ---------
TOTAL ASSETS ........................................ $ 877,055 $ 898,796
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ........................................ $ 41,438 $ 47,919
Accrued salaries and benefits ........................... 17,078 22,189
Medical claims payable .................................. 16,467 18,121
Other accrued liabilities and expenses .................. 25,142 31,955
Current maturities of long-term debt and capital lease
obligations ........................................ 7,996 7,757
--------- ---------
TOTAL CURRENT LIABILITIES ........................... 108,121 127,941
Long-term debt and capital lease obligations ................ 549,513 551,705
Other long-term liabilities ................................. 3,825 2,458
Minority interest ........................................... 2,238 2,027
Series A Preferred Stock -- $.01 par value, authorized
500,000 shares; 160,000 shares issued and outstanding
at June 30, 2000 (liquidation preference value of
$178,133 at June 30, 2000) ............................. 176,784 170,369
Series B Preferred Stock -- $.01 par value, authorized
50,000 shares; 5,311 shares issued and outstanding
at June 30, 2000 (liquidation preference value of $5,913
at June 30, 2000) ...................................... 5,868 5,655
SHAREHOLDERS' EQUITY:
Common stock -- $.01 par value, authorized 5,000,000
shares; 1,371,490 shares issued and outstanding
at June 30, 2000 ...................................... 14 14
Additional paid-in capital .............................. 266,667 273,799
Treasury stock (at cost) ................................ (155,025) (155,025)
Accumulated deficit ..................................... (80,950) (80,147)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY ............................ 30,706 38,641
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ............ $ 877,055 $ 898,796
========= =========
</TABLE>
<PAGE> 7
IASIS HEALTHCARE CORPORATION
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED ENDED
JUNE 30, 2000 JUNE 30, 2000
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) earnings ............................... $ (788) $ 3,675
Adjustments to reconcile net (loss) earnings to
net cash used in operating activities:
Depreciation and amortization ................... 12,753 34,248
Minority interests .............................. 210 252
Changes in operating assets and liabilities,
net of the effect of acquisitions:
Accounts receivable ........................... (21,757) (117,491)
Supplies, prepaid expenses and other
current assets .............................. 11,639 (19,710)
Accounts payable and other accrued liabilities (10,703) 42,299
-------- ---------
NET CASH USED IN OPERATING ACTIVITIES ........... (8,646) (56,727)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment ............... (10,472) (36,910)
Payments for acquisitions, net .................... -- (433,401)
(Increase) decrease in other assets ............... 240 (1,339)
-------- ---------
NET CASH USED IN INVESTING ACTIVITIES ........... (10,232) (471,650)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of preferred stock ......... -- 160,000
Repurchase of common stock ........................ -- (155,025)
Proceeds from senior bank debt borrowings ......... -- 330,000
Proceeds from issuance of senior subordinated notes -- 230,000
Payment of debt and capital leases ................ (1,953) (4,010)
Common and preferred stock issuance costs incurred -- (2,625)
Debt financing costs incurred ..................... (691) (26,618)
-------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING
ACTIVITIES .................................... (2,644) 531,722
-------- ---------
Increase (decrease) in cash and cash equivalents ...... (21,522) 3,345
Cash and cash equivalents at beginning of the period .. 24,867 --
-------- ---------
Cash and cash equivalents at end of the period ........ $ 3,345 $ 3,345
======== =========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
Effects of acquisitions, net:
Assets acquired, net of cash .................... $ (7,273) $ 481,531
Liabilities assumed ............................. 7,273 (38,670)
Issuance of preferred and common stock, net ..... -- (9,460)
-------- ---------
PAYMENT FOR ACQUISITIONS, NET ................. $ -- $ 433,401
======== =========
</TABLE>
<PAGE> 8
IASIS HEALTHCARE CORPORATION
PRO FORMA COMBINED OPERATING STATISTICS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED JUNE 30, ENDED JUNE 30,
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Number of hospitals at end of period 15 15 15 15
Licensed beds at end of period 2,684 2,564 2,684 2,564
Beds in service at end of period 2,194 2,144 2,194 2,144
Admissions 18,725 17,115 57,119 53,519
Adjusted admissions 31,584 27,994 93,345 85,533
Average length of stay 4.43 4.51 4.49 4.64
Patient days 82,863 77,142 256,562 248,387
Adjusted patient days 134,879 125,040 406,936 390,925
Occupancy rates (average beds in service)* 42.6% 39.5% 43.7% 42.4%
</TABLE>
Note: The table above presents the unaudited historical and pro forma combined
operating statistics as if the acquisition of the Tenet hospitals was effective
as of the beginning of each period.
*Excludes 71 beds at RMMC placed in service on April 10, 2000. If these beds are
included, occupancy rates would have been 41.6% and 43.4% for the three and nine
months ended June 30, 2000, respectively.
