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 December 31, 2002 |
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
| SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from to |
Commission File Number 001-11141
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 No.) |
| 5811 Pelican Bay Boulevard, Suite 500, Naples, Florida |
34108-2710 | |
| (Address of principal executive offices) |
(Zip Code) |
(239) 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 (or such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
At February 5, 2003, the following number of shares of the Registrant were outstanding:
Class A Common Stock: 238,678,367 shares
HEALTH MANAGEMENT ASSOCIATES, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2002
INDEX
| Page | ||
| PART I—FINANCIAL INFORMATION |
||
| Item 1. Financial Statements |
||
| 3 | ||
| 4 | ||
| 5 | ||
| Notes to Interim Condensed Consolidated Financial Statements |
6 | |
| 9 | ||
| 15 | ||
| 15 | ||
| 16 | ||
| 17 | ||
| 20 | ||
| Exhibits |
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
HEALTH MANAGEMENT ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
| Three months ended December 31, | ||||||
| 2002 |
2001 | |||||
| Net patient service revenue |
$ |
609,419 |
$ |
495,821 | ||
| Costs and expenses: |
||||||
| Salaries and benefits |
|
242,511 |
|
195,748 | ||
| Supplies and other |
|
179,942 |
|
143,433 | ||
| Provision for doubtful accounts |
|
46,307 |
|
36,878 | ||
| Depreciation and amortization |
|
26,087 |
|
21,648 | ||
| Rent expense |
|
12,105 |
|
10,926 | ||
| Interest, net |
|
3,761 |
|
4,116 | ||
| Total costs and expenses |
|
510,713 |
|
412,749 | ||
| Income before minority interests and income taxes |
|
98,706 |
|
83,072 | ||
| Minority interests in earnings of consolidated entities |
|
922 |
|
— | ||
| Income before income taxes |
|
97,784 |
|
83,072 | ||
| Provision for income taxes |
|
38,128 |
|
32,606 | ||
| Net income |
$ |
59,656 |
$ |
50,466 | ||
| Net income per share: |
||||||
| Basic |
$ |
.25 |
$ |
.21 | ||
| Diluted |
$ |
.24 |
$ |
.20 | ||
| Dividends per share |
$ |
.02 |
$ |
— | ||
| Weighted average number of shares outstanding: |
||||||
| Basic |
|
238,589 |
|
243,649 | ||
| Diluted |
|
257,255 |
|
263,365 | ||
See accompanying notes.
3
HEALTH MANAGEMENT ASSOCIATES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
| ASSETS | December 31, 2002 |
September 30, 2002 |
||||||
| (Unaudited) |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
189,301 |
|
$ |
123,736 |
| ||
| Receivables-net |
|
463,442 |
|
|
454,427 |
| ||
| Supplies, prepaids and other assets |
|
86,724 |
|
|
79,034 |
| ||
| Funds held by trustee |
|
3,605 |
|
|
2,628 |
| ||
| Deferred income taxes |
|
35,961 |
|
|
35,961 |
| ||
| Total current assets |
|
779,033 |
|
|
695,786 |
| ||
| Property, plant and equipment |
|
1,770,350 |
|
|
1,723,343 |
| ||
| Less: accumulated depreciation and amortization |
|
(477,768 |
) |
|
(441,561 |
) | ||
| Net property, plant and equipment |
|
1,292,582 |
|
|
1,281,782 |
| ||
| Other assets: |
||||||||
| Funds held by trustee |
|
1,226 |
|
|
1,450 |
| ||
| Excess of cost over acquired net assets, net |
|
338,296 |
|
|
335,313 |
| ||
| Deferred charges and other assets |
|
40,754 |
|
|
49,986 |
| ||
| Total other assets |
|
380,276 |
|
|
386,749 |
| ||
| Total assets |
$ |
2,451,891 |
|
$ |
2,364,317 |
| ||
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ |
135,182 |
|
$ |
132,228 |
| ||
| Accrued expenses and other liabilities |
|
128,022 |
|
|
122,678 |
| ||
| Income taxes-currently payable and deferred |
|
34,462 |
|
|
11,228 |
| ||
| Current maturities of long-term debt |
|
7,519 |
|
|
7,609 |
| ||
| Total current liabilities |
|
305,185 |
|
|
273,743 |
| ||
| Deferred income taxes |
|
17,861 |
|
|
17,861 |
| ||
| Other long-term liabilities |
|
38,873 |
|
|
42,793 |
| ||
| Long-term debt |
|
652,094 |
|
|
650,159 |
| ||
| Minority interests in consolidated entities |
|
33,931 |
|
|
33,009 |
| ||
| Stockholders’ equity: |
||||||||
| Preferred stock, $.01 par value, 5,000 shares authorized |
|
— |
|
|
— |
| ||
| Common stock, Class A, $.01 par value, 750,000 shares authorized, 261,160 and 261,067 shares issued at December 31, 2002 and September 30, 2002, respectively |
|
2,612 |
|
|
2,611 |
| ||
| Additional paid-in capital |
|
375,615 |
|
|
373,214 |
| ||
| Retained earnings |
|
1,326,376 |
|
|
1,271,583 |
| ||
|
|
1,704,603 |
|
|
1,647,408 |
| |||
| Less treasury stock, 22,500 shares at cost at both December 31, 2002 and September 30, 2002 |
|
(300,656 |
) |
|
(300,656 |
) | ||
| Total stockholders’ equity |
|
1,403,947 |
|
|
1,346,752 |
| ||
| Total liabilities and stockholders’ equity |
$ |
2,451,891 |
|
$ |
2,364,317 |
| ||
See accompanying notes.
4
HEALTH MANAGEMENT ASSOCIATES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
| Three months ended December 31, |
||||||||
| 2002 |
2001 |
|||||||
| Cash flows from operating activities: |
||||||||
| Net income |
$ |
59,656 |
|
$ |
50,466 |
| ||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
|
26,087 |
|
|
21,648 |
| ||
| Provision for doubtful accounts |
|
46,307 |
|
|
36,878 |
| ||
| Loss on sale of fixed assets |
|
10 |
|
|
— |
| ||
| Changes in assets and liabilities: |
||||||||
| Receivables |
|
(52,822 |
) |
|
(23,690 |
) | ||
| Supplies and other current assets |
|
(7,515 |
) |
|
(7,147 |
) | ||
| Deferred charges and other assets |
|
8,729 |
|
|
898 |
| ||
| Accounts payable |
|
2,554 |
|
|
21,974 |
| ||
| Accrued expenses and other liabilities |
|
5,151 |
|
|
1,216 |
| ||
| Income taxes-currently payable and deferred |
|
23,865 |
|
|
28,370 |
| ||
| Other long term liabilities |
|
(1,548 |
) |
|
(2,171 |
) | ||
| Net cash provided by operating activities |
|
110,474 |
|
|
128,442 |
| ||
| Cash flows from investing activities: |
||||||||
| Acquisition of facilities, net of cash acquired |
|
(9,556 |
) |
|
(186,520 |
) | ||
| Additions to property, plant and equipment |
|
(32,015 |
) |
|
(20,582 |
) | ||
| Proceeds from sale of property, plant and equipment |
|
120 |
|
|
40,052 |
| ||
| Net cash used in investing activities |
|
(41,451 |
) |
|
||||