This is the Tagline, edited under "Misc Content"
HEALTHSOUTH Corporation
For the six months ended June 30, 2002, HEALTHSOUTH's revenues were $2.293 billion, compared to $2.189 billion for the 2001 period. Operating earnings for the 2002 period were $221.4 million, an increase of 39.8% compared to operating earnings of $158.4 million for the 2001 period. The comparable operating earnings per share (assuming dilution) for the 2002 period were $0.55, compared to operating earnings per share (assuming dilution) of $0.40 for the 2001 period.
Operating earnings exclude the effects of certain items that are included in net income, including unusual and non-recurring items and changes in accounting principles. Including the effects of these items, net income was $57.5 million or $0.14 per diluted share versus a net loss of $19.9 million or ($0.05) per diluted share for the 2001 quarter. For the six months ended June 30, 2002, net income was $82.1 million or $0.20 per diluted share compared to $55.4 million or $0.14 per diluted share in the 2001 period. A reconciliation of operating earnings to net income as determined under generally accepted accounting principles is provided in the accompanying financial information.
Management believes that operating earnings and operating earnings per share excluding such unusual and non-recurring items and non-cash impairment charges provide a clearer picture of the Company's operational performance than net income and earnings per share standing alone. Unusual and non-recurring items in the second quarter totaled approximately $56.2 million, net of income taxes. These items included a loss of approximately $52.8 million on the previously announced disposition of five nursing homes and a loss of $3.4 million related to the early extinguishment of debt.
"The second quarter showed strength across all product lines with each of our businesses demonstrating continued positive volume and pricing trends," said Richard M. Scrushy, Chairman of the Board and Chief Executive Officer of HEALTHSOUTH. "We were especially pleased with the performance of our inpatient rehabilitation facilities as they generated an 11% increase in revenue. This clearly demonstrates the success we are having under the new Prospective Payment System."
Scrushy added, "Additionally, we completed the final stage of our refinancing plan with the successful completion of a $1 billion note offering and a $1.25 billion revolving credit facility. This financing provides us with ample liquidity to meet the 2003 maturity of our convertible debentures. Subsequent to quarter-end, we have repurchased approximately $220 million of our outstanding debt securities, and we still have availability of $1.2 billion under our new credit facility. We have also used the recent weakness in our stock price to reactivate our share repurchase program and have been actively accumulating shares."
At June 30, 2002, the Company's balance sheet reflected total debt of $3.480 billion and cash and cash equivalents of $547 million, resulting in net debt of $2.933 billion. Total debt and net debt at June 30, 2002 reflect the funding of $207 million in expenditures during the quarter to acquire certain properties previously held under synthetic operating leases. Excluding the effect of funding such expenditures, net debt decreased $55 million in the quarter in comparison to net debt at March 31, 2002. Accounts receivable days declined 2.5 days to 79 days from the first quarter of 2002.
Cash flow from operations totaled approximately $235 million compared to $159 million in the 2001 quarter. Capital spending was approximately $137 million in the quarter, excluding the $207 million expenditure to acquire the properties held under synthetic operating leases.
On January 1, 2002, HEALTHSOUTH adopted Financial Accounting Standards Board Statement No. 142, which requires the periodic testing of goodwill for impairment rather than a monthly amortization of goodwill. The results for the 2002 quarter reflect the adoption of this new policy. Had the policy been in effect in 2001, reported net income would have increased by $12.0 million, or $.03 per share (assuming dilution), in the second quarter of 2001. During the quarter the Company and its auditors completed their testing of goodwill for impairment under FASB 142 and the Company recognized a goodwill impairment of $83.2 million, net of tax. The effects of this impairment are reflected as the cumulative effect of a change in accounting principle in the Company's results of operations for the six months ended June 30, 2002.
HEALTHSOUTH is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitative healthcare services, with approximately 1,900 locations in all 50 states, the United Kingdom, Australia, Puerto Rico and Canada. HEALTHSOUTH can be found on the Web at http://www.healthsouth.com/.
HEALTHSOUTH will hold a conference call to discuss its second quarter results at 9:00 a.m. Central Daylight Time on Wednesday, August 7. Simultaneously with the conference call, a webcast of the call will be available to interested parties at http://www.healthsouth.com/ via an Internet link under the "Investor Relations" section. A replay of the call will be available at the same Internet site address for 15 days following the call.
Statements contained in this press release which are not historical facts are forward-looking statements. Without limiting the generality of the preceding statement, all statements in this press release concerning or relating to estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results are forward-looking statements. In addition, HEALTHSOUTH, through its senior management, may from time to time make forward-looking public statements concerning the matters described herein. Such forward-looking statements are necessarily estimates based upon current information, involve a number of risks and uncertainties and are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. HEALTHSOUTH's actual results may differ materially from the results anticipated in these forward-looking statements as a result of a variety of factors, including those identified in this press release and in the public filings made by HEALTHSOUTH with the Securities and Exchange Commission, including HEALTHSOUTH's Annual Report on Form 10-K for the year ended December 31, 2001 and its Quarterly Reports on Form 10-Q, and forward-looking statements contained in this press release or in other public statements of HEALTHSOUTH or its senior management should be considered in light of those factors. There can be no assurance that such factors or other factors will not affect the accuracy of such forward-looking statements.
HEALTHSOUTH Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED - In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Revenues $1,163,683 $1,098,989 $2,293,458 $2,189,451
Operating unit expenses 747,412 722,705 1,483,813 1,458,750
Corporate general and
administrative expenses 43,291 51,214 83,257 83,868
Provision for doubtful
accounts 25,642 34,858 50,636 59,241
Depreciation and amortization 79,807 93,223 157,389 184,442
Early extinguishment
of debt 5,534 6,475 5,534 6,475
Loss on sale of assets 76,690 139,883 76,690 139,883
Interest expense 52,892 55,247 100,935 114,667
Interest income (1,204) (1,591) (2,267) (4,312)
1,030,064 1,102,014 1,955,987 2,043,014
Income (loss) before
income taxes and
minority interests 133,619 (3,025) 337,471 146,437
Provision (benefit)
for income taxes 45,782 (7,636) 113,950 41,534
Income before minority
interests 87,837 4,611 223,521 104,903
Minority interests (30,331) (24,558) (58,266) (49,539)
Income (loss) before
cumulative effect of
accounting change 57,506 (19,947) 165,255 55,364
Cumulative effect of
accounting change -- -- (83,165) --
Net income (loss) $57,506 $(19,947) $82,090 $55,364
Weighted average common
shares outstanding 395,302 388,665 393,559 388,463
Income (loss) per common
share before cumulative
effect of accounting change 0.15 (0.05) 0.42 0.14
Cumulative effect of
accounting change -- -- (0.21) --
Net income (loss) per
common share $0.15 $(0.05) $0.21 $0.14
Weighted average common
shares outstanding --
assuming dilution 402,472 388,665 400,896 397,993
Income (loss) per common
share before cumulative
effect of accounting
change -- assuming dilution 0.14 (0.05) 0.41 0.14
Cumulative effect of
accounting change -- -- (0.21) --
Net income (loss) per common
share -- assuming dilution $0.14 $(0.05) $0.20 $0.14
Add-back to income for
diluted earnings per
share: Interest and
amortization on
convertible debt. $-- $-- $-- $--
* * * *
* The effect of these securities
was antidilutive.
Income (loss) per common
share before cumulative
effect of accounting change $57,506 $(19,947) $165,255 $55,364
Add back non-recurring items
Non-recurring items 82,224 164,906 82,224 164,906
Tax benefit (26,049) (61,880) (26,049) (61,880)
Adjusted net income $113,681 $83,079 $221,430 $158,390
Weighted average common
shares outstanding 395,302 388,665 393,559 388,463
Weighted average common shares
outstanding -- assuming
dilution 417,973 397,500 416,398 397,993
Net income per common share $0.29 $0.21 $0.56 $0.41
Net income per common
share -- assuming dilution $0.28 $0.21 $0.55 $0.40
Add-back to income for
diluted earnings per
share: Interest and
amortization on
convertible debt $3,164 $-- $6,294 $--
* *
* The effect of these securities
was antidilutive.
HEALTHSOUTH Corporation and Subsidiaries
Consolidated Statements of Income Before Unusual and Non-Recurring Items
(UNAUDITED - In thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
2002 2001 2002 2001
Revenues $1,163,683 $1,098,989 $2,293,458 $2,189,451
Operating unit expenses 747,412 722,705 1,483,813 1,458,750
Corporate general and
administrative expenses 43,291 42,966 83,257 75,620
Provision for doubtful
accounts 25,642 24,558 50,636 48,941
Depreciation and
amortization 79,807 93,223 157,389 184,442
Interest expense 52,892 55,247 100,935 114,667
Interest income (1,204) (1,591) (2,267) (4,312)
947,840 937,108 1,873,763 1,878,108
Income before income
taxes and minority
interests 215,843 161,881 419,695 311,343
Provision for income
taxes 71,831 54,244 139,999 103,414
Income before minority
interests 144,012 107,637 279,696 207,929
Minority interests (30,331) (24,558) (58,266) (49,539)
Net income $113,681 $83,079 $221,430 $158,390
Weighted average common
shares outstanding 395,302 388,665 393,559 388,463
Net income per common
share $0.29 $0.21 $0.56 $0.41
Weighted average common
shares outstanding -
assuming dilution 417,973 397,500 416,398 397,993
Net income per common
share - assuming
dilution $0.28 $0.21 $0.55 $0.40
Add-back to income for
diluted earnings per share:
Interest and amortization
on convertible debt $3,164 -- $6,294 --
* *
* The effect of these securities
was antidilutive.
HEALTHSOUTH Corporation and Subsidiaries
Consolidated Statements of Income
Six Months Ended June 30, 2002
(UNAUDITED - In thousands, except per share amounts)
Six Months
Ended
June 30,
2002
Less Before
Unusual Unusual
Six Months and Non- and Non-
Ended Recurring Recurring
June 30, 2002 Items Items
Revenues $2,293,458 $2,293,458
Operating unit expenses 1,483,813 1,483,813
Corporate general and
administrative expenses 83,257 83,257
Provision for doubtful accounts 50,636 50,636
Depreciation and amortization 157,389 157,389
Early extinguishment of debt 5,534 5,534 (1) --
Loss on sale of assets 76,690 76,690 (2) --
Interest expense 100,935 100,935
Interest income (2,267) (2,267)
1,955,987 82,224 1,873,763
Income before income taxes,
minority interests and cumulative
effect of accounting change 337,471 (82,224) 419,695
Provision for income taxes 113,950 (26,049) 139,999
Income before minority interests
and cumulative effect
of accounting change 223,521 (56,175) 279,696
Minority interests (58,266) (58,266)
Income before cumulative
effect of accounting change 165,255 (56,175) 221,430
Cumulative effect of accounting change (83,165) (83,165) --
Net income $82,090 $(139,340) $221,430
Weighted average common
shares outstanding 393,559 393,559
Income per common share before
cumulative effect of accounting change 0.42 0.56
Cumulative effect of accounting change (0.21) --
Net income per common share $0.21 $0.56
Weighted average common shares
outstanding -- assuming dilution 400,896 416,398
Income per common share before
cumulative effect of accounting
change -- assuming dilution 0.41 0.55
Cumulative effect of accounting change (0.21) --
Net income per common
share -- assuming dilution $0.20 $0.55
Add-back to income for diluted
earnings per share:
Interest and amortization on
convertible debt * -- $6,294
*
* The effect of these securities
was antidilutive.
(1) Impairment charge related to the write-off of the unamortized balance
of loan fees on retired debt.
(2) Loss related to the sale of certain facilities.
HEALTHSOUTH Corporation and Subsidiaries
Consolidated Statements of Income
Three Months Ended June 30, 2002
(UNAUDITED - In thousands, except per share amounts)
Three Months
Ended
June 30,
2002
Less Before
Unusual Unusual
Three Months and Non- and Non-
Ended Recurring Recurring
June 30, 2002 Items Items
Revenues $1,163,683 $1,163,683
Operating unit expenses 747,412 747,412
Corporate general and
administrative expenses 43,291 43,291
Provision for doubtful accounts 25,642 25,642
Depreciation and amortization 79,807 79,807
Early extinguishment of debt 5,534 5,534 (1) --
Loss on sale of assets 76,690 76,690 (2) --
Interest expense 52,892 52,892
Interest income (1,204) (1,204)
1,030,064 82,224 947,840
Income before income taxes and
minority interests 133,619 (82,224) 215,843
Provision for income taxes 45,782 (26,049) 71,831
Income before minority interests 87,837 (56,175) 144,012
Minority interests (30,331) (30,331)
Net income $57,506 $(56,175) $113,681
Weighted average common
shares outstanding 395,302 395,302
Net income per common share $0.15 $0.29
Weighted average common shares
outstanding -- assuming dilution 402,472 417,973
Net income per common share -
assuming dilution $0.14 $0.28
Add-back to income for diluted
earnings per share:
Interest and amortization on
convertible debt * -- $3,164
*
* The effect of these securities
was antidilutive
(1) Impairment charge related to the write-off of the unamortized balance
of loan fees on retired debt.
(2) Loss related to the sale of certain facilities.
HEALTHSOUTH Corporation and Subsidiaries
BALANCE SHEET
(UNAUDITED - In thousands)
June 30, December 31,
2002 2001
ASSETS
Cash and Cash Equivalents $546,864 $278,456
Accounts Receivable, net 1,010,083 940,414
Other Current Assets 464,858 517,585
Total Current Assets 2,021,805 1,736,455
Net Property and Equipment 3,064,617 2,774,736
Net Intangibles 2,659,399 2,725,103
Other 385,777 342,943
Total Assets $8,131,598 $7,579,237
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts Payable 29,682 37,085
Other Current Liabilities 270,161 299,999
Current Maturities of Long-Term Debt 589,662 21,912
Total Current Liabilities 889,505 358,996
Long-Term Debt 2,889,863 3,005,035
Other 257,058 263,741
Minority Interests 161,966 154,541
Stockholders' Equity 3,933,206 3,796,924
Total Liabilities and Stockholder's Equity $8,131,598 $7,579,237
HEALTHSOUTH Corporation
Quarterly Statistics (Unaudited)
For Period Ending June 30, 2002
2Q 2002 2Q 2001
Outpatient Rehab
Total Visits: 2,400,046 2,249,908
Total Volume Growth (Y/Y): 6.7%
Same Store Volume Growth (Y/Y): 6.5%
Average Revenue per Visit: $100 $95
Facility Count: 1,427 1,432
Surgery Centers
Total Cases: 230,746 225,512
Total Volume Growth (Y/Y): 2.3%
Same Store Volume Growth (Y/Y): 4.8%
Average Revenue per Case: $1,146 $1,097
Facility Count: 209 216
Diagnostic Imaging
Total Scans: 278,262 274,623
Total Volume Growth (Y/Y): 1.3%
Same Store Volume Growth (Y/Y): 5.6%
Average Revenue per Scan: $318 $318
Facility Count: 136 140
Inpatient Division
Total Discharges: 29,873 28,307
Total Volume Growth (Y/Y): 5.5%
Same Store Volume Growth (Y/Y): 5.2%
Average Revenue per Discharge: $16,257 $15,425
Facility Count: 118 120
Medical Centers (Revised to Exclude Richmond Medical Center)
Total Days: 24,293 24,243
Total Volume Growth (Y/Y): 0.2%
Same Store Volume Growth (Y/Y): 0.2%
Average Revenue per Day: $2,999 $2,953
Facility Count: 4 4
For more information, contact Richard M. Scrushy, Chairman & CEO, or Tadd McVay, Executive Vice President and Treasurer at 205-967-7116
SOURCE: HEALTHSOUTH Corporation
CONTACT: Richard M. Scrushy, Chairman & CEO, or Tadd McVay, Executive
Vice President and Treasurer, both of HEALTHSOUTH Corporation, 205-967-7116
Web site: http://www.healthsouth.com/