<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transaction period from ____ to ____
Commission File Number 000-18799
-----------
HEALTH MANAGEMENT ASSOCIATES, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 61-0963645
- ------------------------------------ -----------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
5811 Pelican Bay Boulevard, Suite 500, Naples, Florida 34108-2710
- ------------------------------------------------------- -----------------
(Address of principal executive offices) (Zip Code)
(941)598-3131
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
--- ---
At April 30, 1999, the following shares of the Registrant were outstanding:
Class A Common Stock 251,948,663 shares
<PAGE>
HEALTH MANAGEMENT ASSOCIATES, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
INDEX
-----
PART I. FINANCIAL INFORMATION Page
Item 1. Financial Statements
Consolidated Statements of Income --
Three Months Ended March 31, 1999 and 1998..................... 3
Consolidated Statements of Income --
Six Months Ended March 31, 1999 and 1998....................... 4
Consolidated Balance Sheets--
March 31, 1999 and September 30, 1998........................ 5
Consolidated Statements of Cash Flows--
Six Months Ended March 31, 1999 and 1998..................... 6
Notes to Interim Condensed Consolidated Financial
Statements.................................................... 7-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 9-14
PART II. OTHER INFORMATION........................................... 15-16
Signatures........................................................... 17
Index To Exhibits.................................................... 18-19
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
HEALTH MANAGEMENT ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
-------------------
1999 1998
-------- --------
<S> <C> <C>
Net patient service revenue .................. $339,748 $302,922
Costs and expenses:
Salaries and benefits ..................... 114,673 104,148
Supplies and expenses ..................... 93,745 87,232
Provision for doubtful accounts ........... 29,877 23,747
Depreciation and amortization ............. 14,344 12,564
Rent expense .............................. 7,893 6,928
Interest, net ............................. 682 1,640
-------- --------
Total costs and expenses .............. 261,214 236,259
-------- --------
Income before income taxes ................... 78,534 66,663
Provision for income taxes ................... 30,827 26,165
-------- --------
Net income ................................... $ 47,707 $ 40,498
======== ========
Net income per share:
Basic ...................................... $ .19 $ .16
======== ========
Diluted .................................... $ .19 $ .16
======== ========
Weighted average number of shares outstanding:
Basic ...................................... 251,905 249,156
======== ========
Diluted .................................... 256,497 255,453
======== ========
</TABLE>
See accompanying notes.
3
<PAGE>
HEALTH MANAGEMENT ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
March 31,
-------------------
1999 1998
-------- --------
<S> <C> <C>
Net patient service revenue .................. $645,244 $537,492
Costs and expenses:
Salaries and benefits ..................... 228,316 188,715
Supplies and expenses ..................... 182,106 158,312
Provision for doubtful accounts ........... 58,972 45,719
Depreciation and amortization ............. 28,851 22,736
Rent expense .............................. 15,470 12,389
Interest, net ............................. 2,042 2,073
-------- --------
Total costs and expenses .............. 515,757 429,944
-------- --------
Income before income taxes ................... 129,487 107,548
Provision for income taxes ................... 50,825 42,213
-------- --------
Net income ................................... $ 78,662 $ 65,335
======== ========
Net income per share:
Basic ...................................... $ .31 $ .26
======== ========
Diluted .................................... $ .31 $ .26
======== ========
Weighted average number of shares outstanding:
Basic ...................................... 251,778 246,969
======== ========
Diluted .................................... 257,480 253,244
======== ========
</TABLE>
See accompanying notes.
4
<PAGE>
HEALTH MANAGEMENT ASSOCIATES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
ASSETS
------
March 31, September 30,
1999 1998
----------- --------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents........................... $ 20,185 $ 12,685
Receivables--net.................................... 257,996 243,542
Supplies, prepaids and other assets................. 38,586 32,983
Funds held by trustee............................... 1,824 1,458
Income taxes - receivable and deferred.............. 18,039 18,039
---------- ----------
Total current assets.............................. 336,630 308,707
Property, plant and equipment........................ 1,020,866 925,956
Less accumulated depreciation and amortization...... 214,526 188,201
---------- ----------
Net property, plant and equipment................. 806,340 737,755
Other assets:
Funds held by trustee............................... 4,494 3,932
Excess of cost over acquired assets, net............ 44,737 46,674
Deferred charges and other assets................... 15,297 15,037
---------- ----------
Total............................................. 64,528 65,643
---------- ----------
$1,207,498 $1,112,105
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Accounts payable.................................... $ 57,055 $ 44,300
Accrued expenses and other liabilities.............. 42,055 57,516
Current maturities of long-term debt................ 8,155 8,544
Income taxes--currently payable and deferred........ 36,142 10,186
---------- ----------
Total current liabilities......................... 143,407 120,546
Deferred income taxes................................ 39,603 39,603
Other long-term liabilities.......................... 17,364 17,878
Long-term debt....................................... 135,944 134,217
Obligation under put option contracts................ - 43,036
Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000
shares authorized.................................. - -
Common stock, Class A, $.01 par value, 300,000,000
shares authorized, 251,946,000 and 251,558,000
shares issued and outstanding at March 31,
1999 and September 30, 1998, respectively.......... 2,519 2,491
Additional paid-in capital.......................... 285,443 241,677
Retained earnings................................... 591,319 512,657
---------- ----------
879,281 756,825
Less treasury stock, 499,000 shares at cost.......... (8,101) -
---------- ----------
Total stockholders' equity........................ 871,180 756,825
---------- ----------
$1,207,498 $1,112,105
========== ==========
</TABLE>
See accompanying notes.
5
<PAGE>
HEALTH MANAGEMENT ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six months ended
March 31,
---------------------
1999 1998
--------- ----------
<S> <C> <C>
Cash flows from operating activities:
Net income........................................... $ 78,662 $ 65,335
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization..................... 28,851 22,736
Gain on sale of fixed assets...................... 14 (43)
Changes in assets and liabilities:
Receivables--net................................ (31,387) (35,376)
Other current assets............................ (5,537) (4,634)
Deferred charges and other assets............... (664) 111
Accounts payable................................ 12,755 1,777
Accrued expenses and other liabilities.......... (725) (6,823)
Income taxes--
currently payable and deferred................ 25,956 11,059
Other long term liabilities..................... (514) 177
-------- ---------
Net cash provided by operating activities.... 107,411 54,319
-------- ---------
Cash flows from investing activities:
Acquisition of facilities, net of cash acquired...... (7,265) (95,735)
Additions to property, plant and equipment........... (77,321) (21,677)
Proceeds from sale of equipment...................... 71 167
-------- ---------
Net cash used in investing activities........ (84,515) (117,245)
-------- ---------
Cash flows from financing activities:
Proceeds from long-term borrowings................... 343 211
Principal payments on debt........................... (9,881) (4,570)
Increase in funds held by trustee.................... (606) (747)
Purchase of treasury stock........................... (8,101) -
Issuance of common stock, net of costs............... 2,849 5,111
-------- ---------
Net cash (used in)/provided by
financing activities....................... (15,396) 5
-------- ---------
Net increase (decrease) in cash........ 7,500 (62,921)
Cash and cash equivalents at beginning of period....... 12,685 67,381
-------- ---------
Cash and cash equivalents at end of period............. $ 20,185 $ 4,460
======== =========
</TABLE>
See accompanying notes.
6
<PAGE>
HEALTH MANAGEMENT ASSOCIATES, INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
- -------------------------
The consolidated balance sheet as of September 30, 1998 has been derived
from the audited consolidated financial statements included in Health Management
Associates, Inc.'s (the Company's) 1998 Annual Report. The interim consolidated
financial statements at March 31, 1999 and for the three and six month periods
ended March 31, 1999 and 1998 are unaudited; however, such interim statements
reflect all adjustments (consisting only of a normal recurring nature) which
are, in the opinion of management, necessary for a fair presentation of the
financial position and results of operations for the interim periods presented.
The results of operations for the interim periods presented are not necessarily
indicative of the results to be expected for the full year. The interim
financial statements should be read in conjunction with the audited consolidated
financial statements of the Company included in its 1998 Annual Report.
2. Earnings Per Share
- ----------------------
The following table sets forth the computation of basic and diluted
earnings per share (in thousands, except per share data):
<TABLE>
<CAPTION>
Three months ended Six months ended
March 31, March 31,
--------------------- ---------------------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Numerator:
Net income $ 47,707 $ 40,498 $ 78,662 $ 65,335
======== ======== ======== ========
Denominator:
Denominator for basic earnings
Per share-weighted average shares 251,905 249,156 251,778 246,969
Effect of dilutive securities-
employee stock options 4,592 6,297 5,702 6,275
-------- -------- -------- --------
Denominator for diluted
earnings per share 256,497 255,453 257,480 253,244
======== ======== ======== ========
Basic earnings per share $ .19 $ .16 $ .31 $ .26
======== ======== ======== ========
Diluted earnings per share $ .19 $ .16 $ .31 $ .26
======== ======== ======== ========
</TABLE>
During October 1998 the Company purchased 498,700 shares of its own common
stock on the open market for a total cost of $8,101,000.
7
<PAGE>
HEALTH MANAGEMENT ASSOCIATES, INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
3. Subsequent events - acquisitions
- ------------------------------------
Effective April 1, 1999 the Company acquired a 473-bed, 2-hospital health
system located in Jackson, Mississippi pursuant to an asset purchase and lease
agreement. The consideration totaled approximately $135 million in cash,
including $20 million in net working capital.
Effective May 1, 1999 the Company acquired a 167-bed, 2-hospital health
system located in the Lower Keys, Florida pursuant to asset purchase and lease
agreements. The consideration totaled approximately $49.9 million, which
included $27 million in cash paid at closing, $18.6 million recorded as the net
present value of lease payments required over the 30 year term of the lease, and
the assumption of $4.3 million in debt. The agreements included the assumption
of working capital balances at closing, and also entitle the Company to receive
$1.5 million per year in cash from the seller for the first ten years of the
lease to support indigent care programs.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
---------------------
Three months ended March 31, 1999 compared
------------------------------------------
to three months ended March 31, 1998
------------------------------------
Net patient service revenue for the three months ended March 31,
1999 ("1999 Period") was $339,748,000, as compared to $302,922,000 for
the three months ended March 31, 1998 ("1998 Period"). This
represented an increase in net patient service revenue of $36,826,000,
or 12.2%. Hospitals in operation for the entire 1999 Period and 1998
Period ("same hospitals") provided $17,253,000 of the increase in net
patient service revenue, which resulted primarily from inpatient and
outpatient volume increases. The remaining increase of $19,573,000
included $19,652,000 of net patient service revenue from the
acquisition of the 166-bed Regional Healthcare , Inc. health system
effective June 1, 1998, offset by a decrease of $79,000 in Corporate
and miscellaneous revenue.
During the 1999 Period the Company's hospitals generated total
patient days of service and an occupancy rate of 188,740 and 54.7%,
respectively, versus 176,197 and 52.2%, respectively, for the 1998
Period. Same hospital patient days and occupancy for the 1999 Period
were 159,078 and 52.2%, respectively, versus 162,416 and 52.4%,
respectively for the 1998 Period. Same hospital admissions for the
Company during the 1999 Period were 34,438, up 3.4% from the 33,313
admissions during the 1998 Period.
The Company's operating expenses (salaries and benefits, supplies
and expenses, provision for doubtful accounts and rent expense) for
the 1999 Period were $246,188,000 or 72.5% of net patient service
revenue as compared to $222,055,000 or 73.3% of net patient service
revenue for the 1998 Period. Of the total $24,133,000 increase,
approximately $8,857,000 related to same hospitals, which was largely
attributable to the increased patient volumes. Another $14,349,000 of
increased operating expense related to the acquisition mentioned
previously. The remaining increase of $927,000 represented an increase
in Corporate and miscellaneous other operating expenses.
The Company's depreciation and amortization costs increased by
$1,780,000 and interest expense decreased by $958,000. The increase in
depreciation and amortization resulted primarily from the acquisitions
mentioned previously. The decrease in interest expense was due largely
to lower investment income and capitalized interest costs during the
1999 Period, which are netted against interest expense.
9
<PAGE>
Item 2. Management's discussion and Analysis of Financial
Condition and Results of Operations (continued)
The Company's income before income taxes was $78,534,000 for the
1999 Period as compared to $66,663,000 for the 1998 Period, an
increase of $11,871,000 or 17.8%. The increase resulted primarily from
same hospital volume increases and the acquisition mentioned
previously. The Company's provision for income taxes was $30,827,000
for the 1999 Period as compared to $26,165,000 for the 1998 Period.
These provisions reflect effective income tax rates of 39.25% for both
periods. As a result of the foregoing, the Company's net income was
$47,707,000 for the 1999 Period as compared to $40,498,000 for the
1998 Period.
Results of Operations
---------------------
Six months ended March 31, 1999 compared
----------------------------------------
to six months ended March 31, 1998
----------------------------------
Net patient service revenue for the six months ended March 31,
1999 ("1999 Six Month Period") was $645,244,000, as compared to
$537,492,000 for the six months ended March 31, 1998 ("1998 Six Month
Period"). This represented an increase in net patient service revenue
of $107,752,000, or 20.0%. Same hospitals provided $32,910,000 of the
increase in net patient service revenue, which resulted primarily from
inpatient and outpatient volume increases. The remaining increase of
$74,842,000 included $75,009,000 of net patient service revenue from
the acquisition of the 125-bed Southwest hospital effective November
1, 1997, the 221-bed River Oaks Health System effective January 1,
1998, the 180-bed Riley Memorial Hospital effective January 2, 1998,
and the 166-bed Regional Healthcare, Inc. health system effective June
1, 1998, offset by a decrease of $167,000 in Corporate and
miscellaneous revenue.
During the 1999 Six Month Period the Company's hospitals
generated 350,655 total patient days of service and an occupancy rate
of 50.5%, respectively, versus 309,119 and 49.8%, respectively, for
the 1998 Six Month Period. Same hospital patient days and occupancy
for the 1999 Six Month Period were 254,246 and 49.3%, respectively,
versus 253,930 and 49.8%, respectively, for the 1998 Six Month Period.
Same hospital admissions for the Company during the 1999 Six Month
Period were 56,259, up 3.6% from the 54,290 admissions during the 1998
Six Month Period.
The Company's operating expenses for the 1999 Six Month Period
were $484,864,000 or 75.1% of net patient service revenue as compared
to $405,135,000 or 75.4% of net patient service revenue for the 1998
Six Month Period. Of the total $79,729,000 increase, approximately
$24,219,000 related to same store hospitals, which was largely
attributable to increased patient volumes. Another $54,003 ,000 of
increased operating expense related to the hospital acquisitions
mentioned previously. The remaining increase of $1,507,000 represented
an increase in Corporate and miscellaneous other operating expenses.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
The Company's depreciation and amortization costs increased by
$6,115,000 and interest expense decreased by $31,000. The increase in
depreciation and amortization resulted primarily from the acquisitions
previously mentioned. The decrease in interest expense reflects lower
investment income and capitalized interest costs during the 1999 Six
Month Period, which are netted against interest expense.
The Company's income before income taxes was $129,487,000 for the
1999 Six Month Period as compared to $107,548,000 for the 1998 Six
Month Period, an increase of $21,939,000, or 20.4%. The increase
resulted primarily from same hospital volume increases and the
acquisitions mentioned previously. The Company's provision for income
taxes was $50,825,000 for the 1999 Six Month Period as compared to
$42,213,000 for the 1998 Six Month Period. These provisions reflect
effective income tax rates of 39.25% for both periods. As a result of
the foregoing, the Company's net income was $78,662,000 for the 1999
Six Month Period as compared to $65,335,000 for the 1998 Six Month
Period.
Liquidity and Capital Resources
-------------------------------
The Company's operating cash flows totaled $107,411,000 for the
1999 Six Month Period as compared to $54,319,000 for the 1998 Six
Month Period. The positive cash flows resulted from the Company's
profitability and management of its working capital. The Company's
investing activities used $84,515,000 and $117,245,000 for the 1999
Six Month Period and 1998 Six Month Period, respectively. Acquisitions
and capital expenditure requirements accounted for substantially all
of the funds used in investing activities in both periods. Financing
activities used net cash of $15,396,000 for the 1999 Six Month Period
and provided $5,000,000 during the 1998 Six Month Period. Increased
principal debt reductions and purchases of the Company's common stock
accounted for the majority of the change from the 1998 Six Month
Period to the 1999 Six Month Period. See the Condensed Consolidated
Statements of Cash Flows for the six months ended March 31, 1999 and
1998 at page 6 of this Report.
11
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
The Company currently has a $300 million Amended and Restated
Credit Agreement with a syndicate of banks. Interest accrues at the
option of the Company at either the prime rate of interest, a fixed
certificate of deposit rate of the agent bank or a LIBOR rate. Under
all methods, interest payments are required quarterly. The interest
rate is subject to adjustments based upon certain debt-related
financial statement ratios provided under the Amended and Restated
Credit Agreement. As of May 1, 1999, there was a $200 million
outstanding balance. The $300 million Amended and Restated Credit
Agreement permits the Company to borrow under a revolving credit loan
at any time through November 30, 1999, at which time any outstanding
balance becomes due and payable. The Company is currently negotiating
a renewal of the facility.
The Company also has a revolving credit facility with a bank
which provides a $10 million unsecured line of credit commitment
through January 31, 2000. All outstanding loans under this revolving
credit facility are due on January 31, 2000. Interest on the
outstanding loans is payable at the bank's Index Rate (prime) less
1/2%. As of May 1, 1999, there were no amounts outstanding under this
line.
The Company is obligated to pay certain commitment fees based
upon amounts borrowed and available for borrowing during the terms of
both such credit facilities ("Credit Facilities").
The Company's Credit Facilities contain certain covenants which,
without prior consent of the banks, limit certain activities of the
Company and its subsidiaries, including those relating to merger,
consolidation and the Company's ability to secure indebtedness, make
guarantees, and grant security interests. The Company must also
maintain minimum levels of consolidated tangible net worth, debt
service coverage, and debt to cash flow and net worth.
Effective October 28, 1998 the Company completed a Form S-3 to
register $300 million of senior unsecured debt securities. The Company
may issue all or part of the issue at a future date for general
corporate purposes, including acquisitions, capital expenditures,
refinancing of indebtedness, working capital, and repurchase and
redemption of securities.
Effective April 1, 1999 the Company acquired a 473-bed,
2-hospital health system located in Jackson, Mississippi pursuant to
an asset purchase and lease agreement. The consideration totaled
approximately $135 million in cash, including $20 million in net
working capital.
12
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Effective May 1, 1999 the Company acquired a 167-bed, 2-hospital
system located in Key West, Florida pursuant to asset purchase and
lease agreements. The consideration totaled approximately $49.9
million, which included $27 million in cash paid at closing, $18.6
recorded as the net present value of lease payments required over the
30 year term of the lease, and the assumption of $4.3 million in debt.
The agreements included the assumption of working capital balances at
closing, and also entitle the Company to receive $1.5 million per year
in cash from the seller for the first ten years of the lease to
support indigent care programs.
At the present time, the Company anticipates that cash on hand,
internally generated funds and funds available under its Credit
Facilities and Form S-3 mentioned above will be sufficient to satisfy
the Company's requirements for capital expenditures, future
acquisitions and working capital.
Year 2000 Computer Issues
-------------------------
The Year 2000 Computer Issue is the result of most computer
programs using two digits rather than four to identify a year in a
data field. These programs were designed and developed without
considering the impact of the upcoming change in the century. If not
corrected, many computer applications could fail or create erroneous
results on or after January 1, 2000.
The Company has implemented a plan to evaluate and correct the
effect of this problem on the Company's computer system and programs.
As part of the plan, the Company is also contacting its principal
vendors and suppliers to identify and correct the potential effects of
this problem relating to embedded systems of certain computer aided
medical and other equipment. In addition, the Company is contacting
the Federal and State governments, other payors and other companies
with which the Company's systems interface or on which they rely to
monitor their timely completion of necessary upgrades.
The Company's financial systems, including general ledger,
accounts payable, cash management, payroll and patient accounting are
substantially Year 2000 compliant. Facility testing of systems-wide
changes is currently in progress, with Company-wide implementation
expected to be completed by the quarter ending June 30, 1999.
The Company is utilizing both internal and external resources to
complete the Year 2000 modifications. The majority of the costs
relating to the Year 2000 Issue will be expensed as incurred.
13
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Continued)
Management of the Company does not believe such costs will have a
material adverse impact to the Company's future results of operation.
However, there can be no guarantee that actual results could differ
materially from those anticipated. Factors that might cause material
differences include, but are not limited to, the availability and cost
of trained personnel and the ability to locate and correct all
relevant computer coding and all medical equipment affected.
As noted above, the Company is contacting its principal
suppliers, other vendors and payors, including Federal and State
governments, Medicare fiscal intermediaries, insurance companies and
managed care companies, concerning the status of their Year 2000
compliance. The Company is not aware at this time whether those other
systems are or will be Year 2000 compliant and is unable to estimate
at this time the impact on the Company if one or more of those systems
is not Year 2000 compliant. For the foregoing reasons, the Company is
not able to determine at this time whether the Year 2000 Computer
Issue will materially affect its future financial results or financial
condition.
Forward-Looking Statements
--------------------------
Certain statements contained in this Form 10-Q, 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. Such forward-looking
statements involve known and unknown risks, uncertainties and other
factors that may cause the actual results, performance or achievements
of the Company or industry results to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others,
the following: general economic and business conditions, both
nationally and in the regions in which the Company operates; industry
capacity; demographic changes; existing governmental regulations and
changes in, or the failure to comply with, governmental regulations;
legislative proposals for health care reform; the ability to enter
into managed care provider arrangements on acceptable terms; changes
in Medicare and Medicaid payment levels; liability and other claims
asserted against the Company; competition; the loss of any significant
ability to attract and retain qualified personnel, including
physicians; the availability and terms of capital to fund additional
acquisitions or replacement facilities. Given these uncertainties,
prospective investors are cautioned not to place undue reliance on
such forward-looking statements. The Company disclaims any obligation
to update any such factors or to publicly announce the results of any
revision to any of the forward-looking statements contained herein to
reflect future events or developments.
14
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
-----------------
None.
Item 2. Changes in Securities.
---------------------
None.
Item 3. Defaults upon Senior Securities.
-------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
At the Annual Meeting of Stockholders of the Company on February 16,
1999, the stockholders of the Company adopted proposals to:
a) elect six directors of the Company
Votes For Abstained
----------- ---------
William J. Schoen 227,018,751 256,046
Kent P. Dauten 227,033,049 241,748
Robert A. Knox 227,036,146 238,651
Charles R. Lees 226,992,254 282,543
Kenneth D. Lewis 227,043,732 231,065
William E. Mayberry M.D. 227,015,670 259,127
b) approve a Certificate of Amendment to the Fifth Restated
Certificate of Incorporation of the Company to increase the
number of authorized shares of Common Stock, par value $.01 per
share, to an aggregate of 750,000,000 shares(205,739,389 votes
for; 21,368,835 votes against; 166,573 votes abstained)
c) approve and ratify the selection of Ernst & Young LLP as the
Company's independent auditors for the fiscal year ending
September 30, 1999 (227,090,237 votes for; 82,158 votes against;
102,402 votes abstained)
Item 5. Other Information.
-----------------
None.
15
<PAGE>
PART II - OTHER INFORMATION (Continued)
Item 6. Exhibits and Reports on Form 8-K.
--------------------------------
a. Exhibits:
--------
See Index to Exhibits located on page 18.
b. Reports on Form 8-K:
-------------------
None.
16
<PAGE>
SIGNATURES
Pursuant to the requirements of the securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HEALTH MANAGEMENT ASSOCIATES, INC.
DATE: May 7, 1999 BY: /s/ Stephen M. Ray
-------------------------------
Stephen M. Ray
Executive Vice President-Finance
(Duly authorized officer and
Principal Financial Officer)
17
<PAGE>
INDEX TO EXHIBITS
(2) Plan of acquisition, reorganization, arrangement, liquidation or
succession.
Not applicable.
(3) (i) Articles of Incorporation
3.1 The Fifth Restated Certificate of Incorporation, previously filed and
included as Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1995, is incorporated herein by
reference.
3.2 Cettificate of Amendment to Fifth Restated Certificate of
Incorporation, previously filed and included as Exhibit 4.5 to the
Company's Annual Report on Form 10-K for the year ended September 30,
1998, is incorporated herein by reference.
(ii) By-laws
The By-laws, as amended, previously filed and included as Exhibit 3.2
to the Company's Quarterly Report on Form 10-Q for the quarter ended
December 31, 1995, is incorporated herein by reference.
(4) Instruments defining the rights of security holders, including indentures.
The Exhibits referenced under (3) of this Index to Exhibits are
incorporated herein by reference.
Fourth Amended and Restated Credit and Reimbursement Agreement among the
Company and NationsBank of Florida National Association and the Banks named
therein, dated December 1, 1994, previously filed and included as Exhibit
4.12 to the Company's Annual Report on Form 10-K for the year ended
September 30, 1994, is incorporated herein by reference.
Credit Agreement dated May 6, 1996 between First Union National Bank of
Florida and the Company, pertaining to a $10 million working capital and
cash management line of credit, previously filed and included as Exhibit
4.3 to the Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 1996, is incorporated herein by reference.
Amendment Agreement No. 1 to Fourth Amended and Restated Revolving Credit
and Reimbursement Agreement, made as of September 30, 1996, previously
filed and included as Exhibit 4.1 to the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1997, is incorporated herein by
reference.
(10) Material contracts.
Not applicable.
18
<PAGE>
INDEX TO EXHIBITS (Continued)
(11) Statement re computation of per share earnings.
Not applicable.
(15) Letter re unaudited interim financial information.
Not applicable.
(18) Letter re change in accounting principles.
Not applicable.
(19) Report furnished to security holders.
Not applicable.
(22) Published report regarding matters submitted to vote of security holders.
Not applicable.
(23) Consents of experts and counsel.
Not applicable.
(24) Power of attorney.
Not applicable.
(27) Financial Data Schedule.
Financial Data Schedule is included herein as Exhibit 27.1 at page 20 of
this report.
(99) Additional exhibits.
Not applicable.
19
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
FINANCIAL STATEMENTS INCLUDED WITHIN THE COMPANY'S MARCH 31, 1999 FORM
10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> MAR-31-1999
<CASH> 20,185
<SECURITIES> 0
<RECEIVABLES> 243,969
<ALLOWANCES> 85,973
<INVENTORY> 25,931
<CURRENT-ASSETS> 336,630
<PP&E> 1,020,866
<DEPRECIATION> 214,526
<TOTAL-ASSETS> 1,207,498
<CURRENT-LIABILITIES> 143,407
<BONDS> 39,603
0
0
<COMMON> 2,519
<OTHER-SE> 868,661
<TOTAL-LIABILITY-AND-EQUITY> 1,207,498
<SALES> 0
<TOTAL-REVENUES> 645,244
<CGS> 0
<TOTAL-COSTS> 410,422
<OTHER-EXPENSES> 44,321
<LOSS-PROVISION> 58,972
<INTEREST-EXPENSE> 2,042
<INCOME-PRETAX> 129,487
<INCOME-TAX> 50,825
<INCOME-CONTINUING> 78,662
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 78,662
<EPS-PRIMARY> .31
<EPS-DILUTED> .31
</TABLE>
