Attached files
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| 8-K - FORM 8-K - UNITED SURGICAL PARTNERS INTERNATIONAL INC | d81868e8vk.htm |
Exhibit 99.1
Contact:
|
Mark A. Kopser Executive Vice President and Chief Financial Officer (972) 713-3500 |
UNITED SURGICAL PARTNERS INTERNATIONAL
ANNOUNCES FIRST QUARTER 2011 RESULTS
ANNOUNCES FIRST QUARTER 2011 RESULTS
Dallas, Texas (May 4, 2011) — United Surgical Partners International, Inc. (“USPI” or the
“Company”) today announced results for the first quarter ended March 31, 2011.
First Quarter Financial Results
For the quarter ended March 31, 2011, consolidated net revenues increased 7% to $147.1 million
compared with $137.9 million in the prior year period. Operating income increased 17% for the first
quarter and was $59.0 million as compared with $50.4 million for the prior year period. Operating
income margin for the first quarter increased 360 basis points to 40.1% versus 36.5% in the prior
year period. This increase in margin was driven by operating leverage achieved by stronger case volumes and the acquisition of facilities accounted for under the equity method. For the quarter, EBITDA less noncontrolling interests increased 13% to $50.1 million
compared with $44.3 million in the prior year period.
The financial results for the first quarter were driven by systemwide revenue growth of 14%,
consisting of 8% U.S. same-facility revenue growth and the remainder being due to acquisition
activity.
Cash flows from operating activities for the first quarter totaled $41.6 million compared with
$38.6 million for the prior year period. During the first quarter, the Company and its consolidated
subsidiaries invested approximately $4.8 million in maintenance capital expenditures and an
additional $2.2 million to develop new facilities and expand existing facilities.
Systemwide Financial Results
Due to the Company’s partnerships with physicians and not-for-profit healthcare systems, the
Company does not consolidate the financial results of the majority of its facilities. While
revenues of the Company’s unconsolidated facilities are not recorded as revenues by USPI, equity in
earnings of unconsolidated affiliates is a significant and growing portion of the Company’s overall
earnings. To help analyze results of operations, management uses systemwide operating measures
such as systemwide revenue growth, which includes revenues of both consolidated and unconsolidated
facilities. In addition to overall systemwide revenue growth, USPI calculates growth rates and
operating margins for the facilities that were operational in both the current and prior year
periods, a group the Company refers to as same-store or same-facility. This group also consists of
both consolidated and unconsolidated facilities. At March 31, 2011, 133 of the 191 facilities the
Company operated were not consolidated.
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United Surgical Partners Announces First Quarter 2011 Results
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Revenue Analysis
The systemwide revenues of the facilities operated by the Company increased 14% on a
year-over-year basis, while consolidated revenues increased 7%. Consolidated and unconsolidated
revenues were also affected by certain transactions and a stronger U.S. dollar. The table below
lists the key drivers of year-over-year changes in revenues.
| Three Months Ended | ||||||||
| March 31, 2011 | ||||||||
| As Reported | Unconsolidated | |||||||
| Under GAAP | Affiliates | |||||||
Total revenues, period ended March 31, 2010 |
$ | 137,871 | $ | 294,700 | ||||
Add: Revenue from acquired facilities |
3,716 | 21,086 | ||||||
Less: Revenue of deconsolidated facilities |
(3,058 | ) | 3,058 | |||||
Impact of exchange rate |
638 | — | ||||||
Adjusted base period |
$ | 139,167 | $ | 318,844 | ||||
Increase from operations |
5,358 | 28,000 | ||||||
Non-facility based revenue |
2,565 | 971 | ||||||
Total revenues, period ended March 31, 2011 |
$ | 147,090 | $ | 347,815 | ||||
Development Activity
During the quarter, the Company acquired two facilities and had five facilities under
development, all of which were under construction. The Company expects to add 15 to 20 facilities
in 2011.
Summary
Commenting on the results, William H. Wilcox, USPI’s chief executive officer, said, “We are
generally pleased with our first quarter results and believe we will be able to continue, and
hopefully accelerate our growth from both an operating and development perspective.”
The live broadcast of USPI’s first quarter conference call will begin at 10:00 a.m. Eastern
Time on May 4, 2011. A 30-day online replay will be available approximately an hour following the
conclusion of the live broadcast. A link to these events can be found on the Company’s website at
www.uspi.com or at www.earnings.com. Additional financial information pertaining to
United Surgical Partners International may be found by visiting the Investor Relations section of
the Company’s website.
USPI, headquartered in Dallas, Texas, currently has ownership interests in or operates 191
surgical facilities. Of the Company’s 186 domestic facilities, 133 are jointly owned with
not-for-profit healthcare systems. The Company also operates five facilities in the United
Kingdom.
The above includes forward-looking statements based on current management expectations.
Numerous factors exist that may cause results to differ from these expectations. 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 relating to the
Company, including without
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United Surgical Partners Announces First Quarter 2011 Results
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limitation, (i) reduction in reimbursement from payors; (ii) the Company’s ability to attract
physicians and retain qualified management and personnel; (iii) the Company’s significant leverage;
(iv) geographic concentrations of certain of the Company’s operations; (v) risks associated with
the Company’s acquisition and development strategies; (vi) the regulated nature of the healthcare
industry; (vii) the highly competitive nature of the healthcare business; and (viii) those risks
and uncertainties described from time to time in the Company’s filings with the Securities and
Exchange Commission. Therefore, the Company’s actual results may differ materially. The Company
undertakes no obligation to update any forward-looking statements or to make any other
forward-looking statements, whether as a result of new information, future events or otherwise.
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United Surgical Partners Announces First Quarter 2011 Results
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UNITED SURGICAL PARTNERS INTERNATIONAL, INC.
Unaudited Condensed Consolidated Statements of Income
(in thousands, except number of facilities)
Unaudited Condensed Consolidated Statements of Income
(in thousands, except number of facilities)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2011 | 2010 | |||||||
Revenues |
$ | 147,090 | $ | 137,871 | ||||
Equity in earnings of unconsolidated affiliates |
17,932 | 14,288 | ||||||
Operating expenses: |
||||||||
Salaries, benefits and other employee costs |
39,461 | 37,263 | ||||||
Medical services and supplies |
24,418 | 24,426 | ||||||
Other operating expenses |
23,832 | 22,056 | ||||||
General and administrative expenses |
9,780 | 8,549 | ||||||
Provision for doubtful accounts |
1,746 | 1,882 | ||||||
Net gain (loss) on deconsolidations, disposals and impairments |
(499 | ) | 316 | |||||
Depreciation and amortization |
7,328 | 7,303 | ||||||
Total operating expenses |
106,066 | 101,795 | ||||||
Operating income |
58,956 | 50,364 | ||||||
Interest expense, net |
(17,034 | ) | (17,610 | ) | ||||
Other, net |
72 | 335 | ||||||
Income from continuing operations before income taxes |
41,994 | 33,089 | ||||||
Income tax expense |
(9,868 | ) | (7,647 | ) | ||||
Income from continuing operations |
32,126 | 25,442 | ||||||
Discontinued operations, net of tax |
(693 | ) | 204 | |||||
Net income |
31,433 | 25,646 | ||||||
Less: Net income attributable to noncontrolling interests |
(15,712 | ) | (13,635 | ) | ||||
Net income attributable to USPI’s common stockholder |
$ | 15,721 | $ | 12,011 | ||||
Supplemental Data: |
||||||||
Facilities operated at period end |
191 | 169 | ||||||
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United Surgical Partners Announces First Quarter 2011 Results
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UNITED SURGICAL PARTNERS INTERNATIONAL, INC.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
| March 31, | Dec. 31, | |||||||
| 2011 | 2010 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 44,568 | $ | 60,253 | ||||
Accounts receivable, net of allowance for doubtful
accounts of $7,220 and $7,481, respectively |
46,860 | 50,082 | ||||||
Other receivables |
25,818 | 15,242 | ||||||
Inventories |
8,840 | 9,191 | ||||||
Deferred tax assets, net |
14,747 | 14,961 | ||||||
Other |
22,730 | 14,682 | ||||||
Total current assets |
163,563 | 164,411 | ||||||
Property and equipment, net |
199,238 | 202,260 | ||||||
Investments in unconsolidated affiliates |
391,796 | 393,561 | ||||||
Goodwill and intangible assets, net |
1,596,956 | 1,587,876 | ||||||
Other |
22,349 | 24,631 | ||||||
Total assets |
$ | 2,373,902 | $ | 2,372,739 | ||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 21,302 | $ | 23,488 | ||||
Accrued expenses and other |
215,860 | 218,786 | ||||||
Current portion of long-term debt |
24,523 | 22,386 | ||||||
Total current liabilities |
261,685 | 264,660 | ||||||
Long-term debt |
1,020,516 | 1,047,440 | ||||||
Other liabilities |
160,789 | 157,820 | ||||||
Total liabilities |
1,442,990 | 1,469,920 | ||||||
Noncontrolling interests — redeemable |
84,875 | 81,668 | ||||||
USPI stockholder’s equity |
811,368 | 786,757 | ||||||
Noncontrolling interests — nonredeemable |
34,669 | 34,394 | ||||||
Total equity |
846,037 | 821,151 | ||||||
Total liabilities and equity |
$ | 2,373,902 | $ | 2,372,739 | ||||
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United Surgical Partners Announces First Quarter 2011 Results
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UNITED SURGICAL PARTNERS INTERNATIONAL, INC.
Key Operating Statistics
Key Operating Statistics
| Three Months Ended March 31, | ||||||||||||
| 2011 | 2010% | Change | ||||||||||
Systemwide statistics (in thousands): |
||||||||||||
Revenue |
$ | 480,141 | $ | 420,044 | 14.3 | % | ||||||
Systemwide same-facility statistics(1) (2): |
||||||||||||
United States: |
||||||||||||
Facility cases |
201,920 | 198,041 | 2.0 | % | ||||||||
Net revenue/case |
$ | 2,193 | $ | 2,073 | 5.7 | % | ||||||
Net revenue (in thousands) |
$ | 442,746 | $ | 410,631 | 7.8 | % | ||||||
Facility operating income margin(3) |
26.0 | % | 24.7 | % | 130bps | |||||||
United Kingdom: |
||||||||||||
Adjusted admissions |
5,430 | 5,655 | (4.0 | %) | ||||||||
Net revenue/adjusted admission |
$ | 5,121 | $ | 4,660 | 9.9 | % | ||||||
Net revenue/adjusted admission
(at constant currency translation rates)(4) |
$ | 5,121 | $ | 4,773 | 7.3 | % | ||||||
Net revenue (in thousands) |
$ | 27,806 | $ | 26,353 | 5.5 | % | ||||||
Facility operating income margin(3) |
23.5 | % | 25.4 | % | (190) bps | |||||||
Other: |
||||||||||||
Total consolidated facilities |
58 | 59 | ||||||||||
EBITDA less noncontrolling interests(5) |
||||||||||||
GAAP operating income |
$ | 58,956 | $ | 50,364 | 17.1 | % | ||||||
Depreciation and amortization |
7,328 | 7,303 | ||||||||||
Net (gain) loss on deconsolidations, disposals and
impairments |
(499 | ) | 316 | |||||||||
EBITDA |
65,785 | 57,983 | ||||||||||
Net income attributable to noncontrolling interests |
(15,712 | ) | (13,635 | ) | ||||||||
EBITDA less noncontrolling interests |
$ | 50,073 | $ | 44,348 | 12.9 | % | ||||||
| (1) Excludes facilities in their first year of operations. Includes facilities accounted for under the equity method as well as consolidated facilities. | ||
| (2) Statistics are included in both periods for current year acquisitions. | ||
| (3) Calculated as operating income divided by net revenue. | ||
| (4) Calculated using first quarter 2011 exchange rates. The Company believes net revenue per adjusted admission is an important measure of the United Kingdom operations and that using a constant currency translation rate more accurately reflects the trend of the business. | ||
| (5) EBITDA and EBITDA less noncontrolling interests are not measures defined under generally accepted accounting principles (GAAP). The Company believes EBITDA and EBITDA less noncontrolling interests are important measures for purposes of allocating resources and assessing performance. EBITDA, which is computed by adding operating income plus depreciation and amortization, net (gain) loss on deconsolidations, disposals and impairments, is commonly used as an analytical indicator within the healthcare industry and also serves as a measure of leverage capacity and debt service ability. EBITDA less noncontrolling interests, which is computed by subtracting net income attributable to noncontrolling interests from EBITDA, adjusts both years’ EBITDA to reflect that the Company does not own 100% of each facility. EBITDA and EBITDA less noncontrolling interests should not be considered as measures of financial performance under GAAP, and the items excluded from EBITDA and EBITDA less noncontrolling interests are significant components in understanding and assessing financial performance. Because EBITDA and EBITDA less noncontrolling interests are not measurements determined in accordance with GAAP and are thus susceptible to varying calculation methods, EBITDA and EBITDA less noncontrolling interests as presented by United Surgical Partners International may not be comparable to similarly titled measures of other companies. |
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