<PAGE>
[LETTERHEAD OF TRIAD HOSPITALS, INC.]
Investor Contact: Media Contact:
Deborah Little Patricia G. Ball, Ed. D.
Investor Relations Coordinator Vice President, Marketing & PR
972-701-2259 972-789-2719
TRIAD REPORTS THIRD QUARTER RESULTS
DALLAS, TX (October 30, 2000) - Triad Hospitals, Inc. (the "Company" or "Triad")
(Nasdaq: TRIH) today reported consolidated financial results for the three and
nine months ended September 30, 2000. For the quarter, the Company reported
revenues of $301.3 million; earnings before interest, taxes, depreciation,
amortization and certain other charges ("EBITDA") of $39.2 million; and a loss
per share of $(0.03), compared with an after-tax loss per share of $(0.18) in
the prior year period before gain on sale of assets and impairment of long-lived
assets. On a same-facility basis, patient admissions grew 7.3% (to 30,924 from
28,812), net patient revenues grew 9.9% (to $292.4 million from $266.0 million),
and revenues grew 9.8% (to $301.6 million from $274.6 million), over the same
period a year earlier. Cash flow from operations totaled $30.8 million in the
quarter, after cash interest and tax payments of $10.6 million.
For the nine months, the Company reported revenues of $915.4 million; EBITDA of
$130.9 million; and diluted earnings per share ("EPS") of $0.24. This compares
with an after-tax loss of $(1.00) per share in the prior year period before
gains on sales of assets and impairments of long-lived assets. Cash flow from
operations totaled $62.4 million for the nine months, after cash interest and
tax payments of $39.7 million and after payments to HCA - The Healthcare Company
("HCA") (NYSE: HCA) of $20 million.
At September 30, cash and cash equivalents were $18.1 million, and the Company
still had a $125 million revolving line of credit, of which approximately $2.5
million has been allocated to letters of credit securing certain lease
obligations. On September 28, 2000, the Company also closed on a $200 million
delay draw term loan. The Company will have one year to draw down this new
facility, and any unused amount cannot be accessed after one year. This
additional funding gives the Company flexibility to pursue its planned capital
projects, hospital acquisitions and other growth opportunities without tapping
the revolving line of credit. Total debt outstanding was $549.9 million, or
$541.5 million net of an $8.4 million original issue discount on the Company's
Senior Subordinated Notes. Shareholders' equity totaled $584.9 million.
"We are pleased with our continued performance and progress," commented Triad
Chairman and CEO, James D. Shelton. "When we launched Triad as a newly
independent company in May 1999, we planned to improve the Company's operating
financial performance by simultaneously building volume and growing margin. To
date, we have focused primarily on the volume side, largely by developing good
working relationships with our independent physicians and communities and
working together with both groups to optimize performance for us all. Over the
next few years, we expect increasingly to improve our margins in a careful,
methodical, gradual manner, while continuing to support our independent doctors
and communities, to grow volume, and to provide quality patient care."
<PAGE>
Acquisitions, Developments, Closures and Divestitures
-----------------------------------------------------
On October 19, 2000, as previously announced, the Company signed a definitive
agreement to acquire Quorum Health Group, Inc. ("Quorum") (Nasdaq: QHGI). Triad
will pay Quorum shareholders $3.50 in cash and 0.4107 shares of Triad common
stock for each outstanding share of Quorum stock and will also assume Quorum's
outstanding debt. The Company expects to complete the transaction in the first
half of 2001. The transaction is subject to certain conditions, one of which is
Triad's receipt of a private letter ruling from the Internal Revenue Service
that the transaction will not alter the tax-free nature of Triad's spin-off from
HCA in May 1999; the Company filed this ruling request on October 30, 2000.
On September 29, 2000, the Company funded its previously announced acquisition
of Denton Community Hospital in Denton, Texas, for a closing effective October
1, 2000, and expects to consummate its previously announced acquisition of
Greenbrier Valley Medical Center in Lewisburg, West Virginia, on or about
October 31, 2000. The Company has paid approximately $69 million to date toward
a total of approximately $117 million for the two hospitals, including
approximately $10 million for working capital. The Company expects to pay the
remaining approximately $48 million upon close of the Greenbrier acquisition.
On October 16, 2000, the Company announced plans to discontinue operations at
Mission Bay Hospital ("Mission Bay") in San Diego, California, by January 24,
2001, the date pending state approval. The Company decided to close the facility
because of declining market share, government cuts, low reimbursement rates from
managed care, and non-compliance with seismic codes. The Company also decided
not to construct a replacement facility for Mission Bay because of an estimated
cost of $150 million and an estimated time to complete the project of four to
five years. The Company may sell the Mission Bay property for real estate value
or may sell the hospital to a local area health care provider.
On October 26, 2000, the Company announced a definitive agreement to sell
Community Medical Center of Sherman ("Sherman"), which has been designated as
held-for-sale. Terms were not disclosed. The acquisition is subject to
regulatory approvals and is expected to close no later than December 31, 2000.
During the fourth quarter 2000, the Company expects to record a gain on sale of
assets associated with the sale of Sherman, and to record a non-cash impairment
of long-lived assets and one-time expenses associated with closing Mission Bay.
The Company preliminarily estimates the net impact from these two one-time
events will be a pretax loss of approximately $2 to $5 million.
In the first half of 2001, Triad expects to begin construction on a new hospital
facility in Las Cruces, New Mexico. Construction is expected to take about one
year, at a cost of approximately $60 million. The Company is also developing a
new surgery center in Tucson, Arizona, which it expects to open in the first
quarter of 2001.
Excluding the acquisitions of Denton and Greenbrier, the Company has spent
approximately $57.2 million on capital expenditures to date in 2000 ($14.6
million for maintenance capital and $42.6 million for development capital) and
approximately $9.9 million for its share of capital expenditures at its two
joint venture hospitals, and expects to spend an annual total of approximately
$115 million by year end, including a total of approximately $15 million at its
two joint venture hospitals, subject to potential changes in development
schedules.
"We are excited to be complementing our internal growth with selected hospital
acquisitions, development projects, and now the major acquisition of Quorum. We
believe these growth initiatives will add significantly to the enterprise value
of Triad over time," commented Mr. Shelton.
The Company will hold a conference call at 9:30 am Eastern Time (8:30 am Central
Time) on Tuesday, October 31 to discuss its quarterly results. To obtain the
call-in number, please call 800-289-0579, code 569573. This conference call will
be simulcast on the Internet via the Triad website at www.triadhospitals.com. A
recorded replay of the call will be available for 30 days at 719-457-0820,
conference code 569573.
<PAGE>
Triad owns and manages hospitals and ambulatory surgery centers in small cities
and selected high-growth urban markets. Upon closing of the announced
transactions, the Company will own and manage 51 hospitals and 14 ambulatory
surgery centers, with one hospital and one ambulatory surgery center under
development. The Company completed a spin-off and began operations as an
independent company on May 11, 1999.
This press release contains forward-looking statements based on current
management expectations. Numerous factors, including those related to market
conditions and those detailed from time-to-time in the Company's filings with
the Securities and Exchange Commission, may cause results to differ materially
from those anticipated in the forward-looking statements. Many of the factors
that will determine the Company's future results are beyond the ability of the
Company to control or predict. These statements are subject to risks and
uncertainties and, therefore, actual results may differ materially.
Readers should not place undue reliance on forward-looking statements, which
reflect management's views only as of the date hereof. The Company undertakes 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.
All references to "Company", "Triad", and "Triad Hospitals, Inc." as used
throughout this document refer to Triad Hospitals, Inc. and its affiliates.
<PAGE>
Triad Hospitals, Inc.
Consolidated Statement of Operations
For the Periods Ended September 30, 2000 and 1999
Unaudited
(Dollars in millions, except earnings per share)
<TABLE>
<CAPTION>
For the three months ended
------------------------------------------------------------
2000 1999
---- ----
Amount Percentage Amount Percentage
----------- ----------- ----------
Revenues $ 301.3 100.0% $ 321.3 100.0%
<S> <C> <C> <C> <C>
Operating expenses:
Salaries and benefits 125.4 41.6% 134.8 42.0%
Supplies 44.7 14.8% 48.7 15.2%
Other operating expenses 63.4 21.1% 72.2 22.5%
Provision for doubtful accounts 28.4 9.4% 26.0 8.1%
Depreciation 19.2 6.4% 23.1 7.2%
Amortization 1.7 0.5% 1.3 0.4%
Interest expense allocated from Columbia/HCA - 0.0% - 0.0%
Interest expense 14.4 4.8% 18.7 5.8%
ESOP expense 2.0 0.7% 1.6 0.5%
(Gain) loss on sale of assets (0.2) (0.1%) (16.9) (5.3%)
Management fees allocated from Columbia/HCA - 0.0% - 0.0%
Impairment of long lived assets - 0.0% 4.6 1.4%
----------- -------- ----------- --------
Total operating expenses 299.0 99.2% 314.1 97.8%
----------- -------- ----------- --------
Income (loss) from continuing operations before minority
interest, equity in earnings and income taxes 2.3 0.8% 7.2 2.2%
Minority interests in earnings of consolidated entities (1.9) (0.6%) (2.3) (0.7%)
Equity in earnings of affiliates (0.2) (0.1%) (0.9) (0.3%)
----------- -------- ----------- --------
Income (loss) before income tax (provision) benefit 0.2 0.1% 4.0 1.2%
Income tax (provision) benefit (1.2) (0.4%) (2.2) (0.7%)
----------- -------- ----------- --------
Net income (loss) $ (1.0) (0.3%) $ 1.8 0.5%
----------- -------- ----------- --------
Earnings (loss) per share:
Basic $ (0.03) $ 0.06
Diluted $ (0.03) $ 0.06
Shares used in earnings per share calculations 31,883,620 30,956,415
Shares used in diluted earnings per share calculations 31,883,620 30,956,415
EBITDA /(1)/ $ 39.2 $ 38.7
EBITDA margin (as % of revenues) 13.0% 12.0%
</TABLE>
/(1)/ EBITDA is defined as earnings before interest expense, income taxes,
depreciation, amortization, ESOP expense, gain on sale of assets,
management fees, impairment of long-lived assets, and minority interest.
EBITDA comprises:
<TABLE>
<S> <C> <C> <C> <C>
Revenues $ 301.3 100.0% $ 321.3 100.0%
Less:
Salaries and benefits 125.4 41.6% 134.8 42.0%
Supplies 44.7 14.8% 48.7 15.2%
Other operating expenses 63.4 21.0% 72.2 22.5%
Provision for doubtful accounts 28.4 9.4% 26.0 8.1%
Equity in earnings of affiliates 0.2 0.1% 0.9 0.3%
------------- ------------
EBITDA $ 39.2 13.0% $ 38.7 12.0%
</TABLE>
<PAGE>
Triad Hospitals, Inc.
Consolidated Statement of Operations
For the Periods Ended September 30, 2000 and 1999
Unaudited
(Dollars in millions, except earnings per share)
<TABLE>
<CAPTION>
For the nine months ended
---------------------------------------------------------
2000 1999
Amount Percentage Amount Percentage
-------- ---------- --------- ----------
<S> <C> <C> <C> <C>
Revenues $ 915.4 100.0% $ 1,029.0 100.0%
Operating expenses:
Salaries and benefits 376.2 41.1% 438.3 42.6%
Supplies 136.9 14.9% 151.3 14.7%
Other operating expenses 192.7 21.1% 233.2 22.7%
Provision for doubtful accounts 78.1 8.5% 93.6 9.1%
Depreciation 57.0 6.2% 72.4 7.0%
Amortization 5.1 0.6% 6.3 0.6%
Interest expense allocated from Columbia/HCA - 0.0% 22.5 2.2%
Interest expense 42.9 4.7% 28.3 2.8%
ESOP expense 4.7 0.5% 2.1 0.2%
(Gain) loss on sale of assets (4.6) (0.5%) (16.9) (1.6%)
Management fees allocated from Columbia/HCA - 0.0% 8.9 0.9%
Impairment of long lived assets 0.9 0.1% 38.5 3.7%
-------- ------- -------- ------
Total operating expenses 889.9 97.2% 1,078.5 104.8%
-------- ------- -------- ------
Income (loss) from continuing operations before minority
interest, equity in earnings and income taxes 25.5 2.8% (49.5) (4.8%)
Minority interests in earnings of consolidated entities (6.3) (0.7%) (7.0) (0.7%)
Equity in earnings of affiliates (0.6) (0.1%) (2.4) (0.2%)
-------- ------- -------- ------
Income (loss) before income tax (provision) benefit 18.6 2.0% (58.9) (5.7%)
Income tax (provision) benefit (10.5) (1.1%) 15.3 1.5%
-------- --------
Net income (loss) $ 8.1 0.9% $ (43.6) (4.2%)
======== ======= ======== ======
Earnings (loss) per share:
Basic $ 0.26 $ (1.43)
Diluted $ 0.24 $ (1.43)
Shares used in earnings per share calculations 31,564,645 30,438,600
Shares used in diluted earnings per share calculations 33,681,372 30,438,600
EBITDA (1) $ 130.9 $ 110.2
EBITDA margin (as % of revenues) 14.3% 10.7%
(1) EBITDA is defined as earnings before interest expense, income taxes,
depreciation, amortization, ESOP expense, gain on sale of assets,
management fees, impairment of long-lived assets, and minority interest.
EBITDA comprises:
Revenues $ 915.4 100.0% $ 1,029.0 100.0%
Less:
Salaries and benefits 376.2 41.1% 438.3 42.6%
Supplies 136.9 15.0% 151.3 14.7%
Other operating expenses 192.7 21.1% 233.2 22.7%
Provision for doubtful accounts 78.1 8.5% 93.6 9.1%
Equity in earnings of affiliates 0.6 0.1% 2.4 0.2%
-------- --------
EBITDA $ 130.9 14.3% $ 110.2 10.7%
</TABLE>
<PAGE>
Triad Hospitals, Inc.
Same-Facility Operating Statistics (1)
Unaudited
<TABLE>
<CAPTION>
For the three months ended September 30,
--------------------------------------------
2000 1999 % Change
------------- -------------- -------------
<S> <C> <C> <C>
Admissions (excluding joint ventures) (2) 30,924 28,812 7.3%
Admissions (including joint ventures) (2) 33,841 30,960 9.3%
Average length of stay (days) 4.3 4.4 (1.5%)
Surgeries (excluding joint ventures) (2) 51,445 49,091 4.8%
Surgeries (including joint ventures) (2) 54,688 52,022 5.1%
Outpatient visits (including emergency room visits) 322,466 306,700 5.1%
Adjusted patient days 233,278 219,243 6.4%
Adjusted admissions 54,199 50,170 8.0%
Patient revenue per adjusted patient day $1,253.4 $1,213.4 3.3%
Patient revenue per adjusted admission $5,395.0 $5,302.3 1.7%
Same-facility patient revenues (millions) $292.4 $266.0 9.9%
Same-facility non-patient revenues (millions) $9.2 $8.6 6.4%
Same-facility revenues (millions) $301.6 $274.6 9.8%
</TABLE>
(1) Same-facility statistics are equivalent to "core operations" as reported in
the Company's fourth quarter 1999 earnings release, plus the addition of a
hospital in Sherman, Texas, which is held-for-sale.
(2) Joint ventures include SouthCrest Hospital, which opened May 3, 1999.
<PAGE>
Triad Hospitals, Inc.
Same-Facility Operating Statistics (1)
Unaudited
<TABLE>
<CAPTION>
For the nine months ended September 30,
--------------------------------------------
2000 1999 % Change
------------- -------------- -------------
<S> <C> <C> <C>
Admissions (excluding joint ventures) (2) 95,253 91,435 4.2%
Admissions (including joint ventures) (2) 103,575 96,866 6.9%
Average length of stay (days) 4.4 4.5 (2.3%)
Surgeries (excluding joint ventures) (2) 155,920 145,346 7.3%
Surgeries (including joint ventures) (2) 166,411 152,713 9.0%
Outpatient visits (including emergency room visits) 959,552 927,325 3.5%
Adjusted patient days 717,915 695,355 3.2%
Adjusted admissions 164,057 155,215 5.7%
Patient revenue per adjusted patient day $1,226.9 $1,174.9 4.4%
Patient revenue per adjusted admission $5,369.1 $5,263.4 2.0%
Same-facility patient revenues (millions) $880.8 $816.9 7.8%
Same-facility non-patient revenues (millions) $30.8 $26.0 18.3%
Same-facility revenues (millions) $911.6 $843.0 8.1%
</TABLE>
(1) Same-facility statistics are equivalent to "core operations" as reported in
the Company's fourth quarter 1999 earnings release, plus the addition of a
hospital in Sherman, Texas, which is held-for-sale.
(2) Joint ventures include SouthCrest Hospital, which opened May 3, 1999.
