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HEALTHSOUTH Reports Third Quarter Earnings Per Share of $.20
PRNewswire
BIRMINGHAM, Ala.

HEALTHSOUTH Corporation announced operating results for the quarter and nine months ended September 30, 2001. For the quarter, HEALTHSOUTH's revenues were $1.076 billion, an increase of 1.5% as compared to $1.060 billion for the third quarter of 2000. Adjusting in both periods for the effect of the 2001 sale of the company's occupational medicine operations and its Richmond, Virginia, medical center, revenues for the 2001 quarter increased 5.2% over revenues for the 2000 quarter. Net income for the 2001 quarter was $79.1 million, an increase of 11% compared to net income of $71.0 million in the 2000 quarter. Earnings per share (assuming dilution) were $.20 for the 2001 quarter, consistent with consensus Wall Street estimates and representing an increase of 11% as compared to earnings per share (assuming dilution) of $.18 in the 2000 quarter. For the quarter, the company's earnings before interest, taxes, depreciation and amortization (EBITDA) margin was 27.7%, compared to 27.0% in the third quarter of 2000.

For the nine months ended September 30, 2001, HEALTHSOUTH's revenues were $3.265 billion, compared to $3.118 billion for the same period in 2000. Income before unusual and non-recurring items for the 2001 period (all of which were incurred in the second quarter of 2001) was $237.5 million, compared to net income of $201.6 million for the 2000 period. The comparable income per share (assuming dilution) for the 2001 period was $.60, a 15% increase compared to earnings per share (assuming dilution) of $.52 for the 2000 period.

"We are very pleased that we again met Wall Street's earnings expectations as we continued implementing our strategic plan," said Richard M. Scrushy, Chairman of the Board and Chief Executive Officer of HEALTHSOUTH. "We saw same-store growth across all of our ambulatory services lines of business, as well as continued favorable pricing trends. In addition, despite the disruption in the capital markets, we successfully completed a private placement of $600 million in five-year and ten-year senior notes in September. We also strengthened our management team with the promotion of Bill Owens to President and Chief Operating Officer and the consolidation of all of our ambulatory services into a single division, along with the other management changes we announced in August. We believe that these changes further strengthen our experienced management team and position us well as we move forward with our focus on providing exceptional service to the physicians, patients and payors that we serve."

HEALTHSOUTH is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitative healthcare services, with over 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 third quarter results at 9:00 a.m. Central Time on Thursday, October 25. 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 and at http://www.prnewswire.com/ via an Internet link under the "Multimedia" section. A replay of the call will be available at the same Internet site addresses until 5:00 p.m. Central Time on November 9, 2001.

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 reflecting the best judgment of HEALTHSOUTH's senior management 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, 2000 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
  Summary Operating Results
  (unaudited; in thousands, except per share data)

                          Three Months Ended         Nine Months Ended
                             September 30,             September 30,
                          2001          2000        2001          2000

  Revenues            $1,075,874    $1,060,457   $3,265,324    $3,118,115

  Net income             $79,126       $71,037     $134,489      $201,579

  Weighted average
   common shares
   outstanding           390,455       385,615      389,135       385,960

  Weighted average
   common shares
   outstanding -
   assuming dilution     401,074       390,033      399,077       391,382

  Net income per
   common share            $0.20         $0.18        $0.35         $0.52

  Net income per
   common share -
   assuming dilution       $0.20         $0.18        $0.34         $0.52

  ADJUSTMENT TO EXCLUDE
   UNUSUAL AND
   NON-RECURRING
   ITEMS IN 2001

  Net income             $79,126       $71,037     $134,489      $201,579

  Unusual and
   non-recurring items,
   net of minority
   interests                 ---           ---      164,906           ---

  Income tax benefit
   of unusual and
   non-recurring items       ---           ---      (61,880)          ---

  Income excluding
   effects of unusual
   and non-recurring
   items                 $79,126       $71,037     $237,515      $201,579

  Weighted average
   common shares
   outstanding -
   assuming dilution     401,074       390,033      399,077       391,382

  Income per common
   share excluding
   effects of unusual
   and non-recurring
   items - assuming
   dilution                $0.20         $0.18        $0.60         $0.52


   HEALTHSOUTH Corporation and Subsidiaries
   CONSOLIDATED STATEMENTS OF INCOME
   (UNAUDITED - In thousands, except per share amounts)

                              Three Months Ended      Nine Months Ended
                                September 30,           September 30,
                               2001        2000        2001        2000

  Revenues                  $1,075,874  $1,060,457  $3,265,324  $3,118,115

  Operating unit expenses      714,750     711,872   2,173,500   2,106,326
  Corporate general and
   administrative expenses      38,958      37,403     122,827     107,130
  Provision for doubtful
   accounts                     23,980      24,971      83,221      72,482
  Depreciation and
   amortization                 95,790      89,160     280,231     269,100
  Impairment of unamortized
   loan fee costs                              ---       6,475         ---
   Loss on sale of assets                      ---      139,883        ---
  Interest expense              50,914      60,261     165,580     161,880
  Interest income               (1,430)     (2,398)     (5,742)     (7,334)
                               922,962     921,269   2,965,975   2,709,584
    Income before net loss
     on sales of facilities
     and long-term
     investments, income
     taxes and minority
     interests                 152,912     139,188     299,349     408,531
  Net loss on sales of
   facilities and
    long-term investments                      ---                     ---
  Provision for income
   taxes                        51,659      46,380      93,193     131,609
    Income before minority
     interests                 101,253      92,808     206,156     276,922
  Minority interests           (22,127)    (21,771)    (71,667)    (75,343)

    Net income                 $79,126     $71,037    $134,489    $201,579


  Weighted average common
   shares outstanding          390,455     385,615     389,135     385,960


  Net income (loss) per
   common share                  $0.20       $0.18       $0.35       $0.52

  Weighted average common
   shares
    outstanding -- assuming
     dilution                  401,074     390,033     399,077     391,382

  Net income (loss) per
   common share --
    assuming dilution            $0.20       $0.18       $0.34       $0.52


  Net income                   $79,126     $71,037    $134,489    $201,579
  Add back non-recurring
   items (net of taxes):
    Non - recurring items            0                 164,906
    Tax benefit                      0                 (61,880)

  Adjusted net income          $79,126     $71,037    $237,515    $201,579

  Weighted average common
   shares outstanding          390,455     385,615     389,135     385,960

  Weighted average common
   shares
    outstanding -- assuming
     dilution                  401,074     390,033     399,077     391,382

  Net income per common
   share                         $0.20       $0.18       $0.61       $0.52

  Net income per common
   share - assuming
    dilution                     $0.20       $0.18       $0.60       $0.52



   HEALTHSOUTH Corporation and Subsidiaries
   Consolidated Statements of Income Before Unusual and Non-Recurring Items
   (UNAUDITED - In thousands, except per share amounts)

                            Three Months Ended         Nine Months Ended
                               September 30,             September 30,
                             2001         2000         2001         2000

   Revenues               $1,075,874   $1,060,457   $3,265,324   $3,118,115

   Operating unit
    expenses                 714,750      711,872    2,173,500    2,106,326
   Corporate general and
    administrative
    expenses                  38,958       37,403      114,579      107,130
   Provision for doubtful
    accounts                  23,980       24,971       72,921       72,482
   Depreciation and
    amortization              95,790       89,160      280,231      269,100
   Interest expense           50,914       60,261      165,580      161,880
   Interest income            (1,430)      (2,398)      (5,742)      (7,334)
                             922,962      921,269    2,801,069    2,709,584
   Income before income
    taxes and minority
    interests                152,912      139,188      464,255      408,531
   Provision for income
    taxes                     51,659       46,380      155,073      131,609
   Income before minority
    interests                101,253       92,808      309,182      276,922
   Minority interests        (22,127)     (21,771)     (71,667)     (75,343)
   Net income                $79,126      $71,037     $237,515     $201,579

   Weighted average
    common shares
    outstanding              390,455      385,615      389,135      385,960

   Net income per common
    share                      $0.20        $0.18        $0.61        $0.52

   Weighted average
    common shares
    outstanding -
    assuming
     dilution                401,074      390,033      399,077      391,382

   Net income per common
    share - assuming
    dilution                   $0.20        $0.18        $0.60        $0.52

   Add-back to income for
    diluted earnings per
    share:
     Interest and
      amortization on
      convertible debt           ---          ---          ---          ---
                                  *            *            *            *
   *  The effect of these securities was antidilutive.


   HEALTHSOUTH Corporation and Subsidiaries
   Consolidated Statements of Income
   Nine Months Ended September 30, 2001
   (UNAUDITED - In thousands, except per share amounts)

                                                                Nine Months
                                                                   Ended
                                                              Sept. 30, 2001
                                                    Less           Before
                                                 Unusual and     Unusual and
                                    Nine Months      Non-            Non-
                                       Ended       Recurring      Recurring
                                  Sept. 30, 2001     Items          Items

  Revenues                           $3,265,324                  $3,265,324
  Operating unit expenses             2,173,500                   2,173,500
  Corporate general and
   administrative                                                       -
     expenses                           122,827      8,248  (a)     114,579
  Provision for doubtful accounts        83,221     10,300  (c)      72,921
  Depreciation and amortization         280,231                     280,231
  Impairment of unamortized loan fee
   costs                                  6,475      6,475  (b)         -
  Loss on sale of assets                139,883    139,883  (c)         -
  Interest expense                      165,580                     165,580
  Interest income                        (5,742)                     (5,742)
                                      2,965,975    164,906        2,801,069
  Income before income taxes and
     minority interests                 299,349   (164,906)         464,255
  Provision for income taxes             93,193    (61,880)         155,073
  Income before minority interests      206,156   (103,026)         309,182
  Minority interests                    (71,667)                    (71,667)
  Net income                           $134,489  $(103,026)        $237,515

  Weighted average common shares
     outstanding                        389,135                     389,135

  Net income per common share             $0.35                       $0.61

  Weighted average common shares
     outstanding -- assuming
      dilution                          399,077                     399,077

  Net income per common share -
     assuming dilution                    $0.34                       $0.60

  Add-back to income for diluted
   earnings per share:
     Interest and amortization on
       convertible debt *                   ---                         ---
                                             *                           *

  *  The effect of these securities was antidilutive


  (a)  Charge related to settlement agreement with the United States
       Department of Justice.
  (b)  Impairment charge related to the write-off of the unamortized balance
       of loan fees on retired debt.
  (c)  Loss related to the sale of certain facilities.


  HEALTHSOUTH Corporation
  Quarterly Statistics (Unaudited)

              1st Qtr       2nd Qtr      3rd Qtr      4th Qtr      Total

  Outpatient Division Total Visits: (Revised to exclude Occupational
   Medicine)
  2000        2,212,042    2,266,260    2,195,908    2,271,269   8,945,479
  2001        2,198,772    2,249,908    2,243,112                6,691,792

  Inpatient Division Total Patient Days:
  2000          647,575      643,441      668,451      650,987   2,610,454
  2001          653,434      661,635      659,515                1,974,584

  Medical Center Division Total Patient Days: (Revised to Exclude Richmond
   Medical Center)
  2000           24,390       22,283       24,355       24,000      95,028
  2001           29,271       24,243       24,238                   77,752

  Surgery Center Division Total Cases:
  2000          217,505      220,593      212,647      219,321     870,066
  2001          219,777      225,512      211,570                  656,859

  Diagnostic Division Total Procedures:
  2000          213,505      221,052      242,647      250,621     927,825
  2001          268,645      274,623      275,908                  819,176

For more information, contact Richard M. Scrushy, Chairman & CEO, or Tadd McVay, Executive Vice President and Treasurer, at 205-967-7116.

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SOURCE: HEALTHSOUTH Corporation

Contact: Richard M. Scrushy, Chairman & CEO, or Tadd McVay, Executive
Vice President and Treasurer, both of HEALTHSOUTH Corporation,
+1-205-967-7116