Vanguard Health Systems Reports Second Quarter Fiscal 2012 Results

Vanguard Health Systems, Inc. (NYSE: VHS) today announced financial and operating results for the second fiscal quarter and six months ended December 31, 2011.

Second Quarter Fiscal 2012 Key Metrics (all percentage changes compare Q2 FY2012 to Q2 FY2011):

Consolidated:
  • Total revenues increased 61.4 percent
  • Net income attributable to Vanguard Health Systems, Inc. stockholders was $12.1 million, or $0.15 per diluted share, compared to a net loss attributable to Vanguard Health Systems, Inc. stockholders of $5.0 million, or a loss per share of $0.11, during the prior year period
  • Adjusted EBITDA increased 54.7 percent to $133.7 million

Same Hospital:
  • Net patient service revenues increased 2.5 percent and health plan premium revenues declined 16.1 percent
  • Adjusted discharges increased 0.9 percent
  • Discharges declined 2.0 percent

Year to Date Fiscal 2012 Key Metrics (all percentage changes compare six months YTD FY2012 to six months YTD FY2011):

Consolidated:
  • Total revenues increased 64.4 percent
  • Net loss attributable to Vanguard Health Systems, Inc. stockholders was $7.1 million, or $0.10 loss per share, which included a pre-tax charge of $38.9 million, or $0.34 per share net of taxes, related to the redemption of substantially all of our outstanding 10.375% senior discount notes due 2016 and a pre-tax charge of $12.6 million, or $0.10 per share net of taxes, related to expenses incurred to complete our acquisition of Valley Baptist Health System effective September 1, 2011
  • Adjusted EBITDA increased 56.3 percent to $256.5 million

Same Hospital:
  • Net patient service revenues increased 2.9 percent and health plan premium revenues declined 10.1 percent
  • Adjusted discharges increased 1.8 percent
  • Discharges declined 1.7 percent

Discussion of Results

The increase in consolidated total revenues during the second quarter of fiscal 2012 and during the first six months of fiscal 2012 was primarily attributable to the acquisitions of The Detroit Medical Center (“DMC”) in January 2011 and Valley Baptist Health System in September 2011. The increase in same hospital net patient service revenues during the second quarter of fiscal 2012 was primarily comprised of a 1.8 percent increase in patient revenue per adjusted discharge and a 0.9 percent increase in adjusted discharges. The decrease in health plan premium revenues during the second quarter of fiscal 2012 resulted from the impact to Phoenix Health Plan of a combination of capitation rate decreases, program eligibility cuts and health plan profitability limitations for certain groups of covered members adopted by the Arizona Health Care Cost Containment System (“AHCCCS”) since the second quarter of fiscal 2011.

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