Health Management Associates, Inc. ( HMA) Q4 2011 Earnings Call February 14, 2012 11:00 AM ET Executives John Merriwether - VP, IR Gary Newsome - President and CEO Kelly Curry - CFO Bob Farnham - VP, Finance Analysts Adam Feinstein - Barclays Capital John Ransom - Raymond James Dana Vartabedian - Deutsche Bank Ralph Giacobbe - Credit Suisse A. J. Rice - Susquehanna Financial Gary Lieberman - Wells Fargo Justin Lake - UBS Tom Gallucci - Lazard Markets Whit Mayo - Robert W. Baird Kevin Fischbeck - Bank of America Presentation Operator
All statements addressing operating performance, events or developments that Health Management Associates Inc. expects or anticipates will occur in the future including but not limited to incurrence of indebtedness, projections of revenue, income or loss, capital expenditures, earnings per share, the timing and receipt of Medicare and Medicaid HCIT incentive payments, the financial impact expected from interest rate swap accounting, debt structure, bad debt expense, capital structure, repayment of indebtedness, other financial items and operating statistics, statements regarding the plans and objectives of management for future operations, innovations or market service developments, statements regarding acquisitions, joint ventures, divestitures and other proposed or contemplated transactions, including but not limited to statements regarding the timing of anticipated acquisitions, the potential for future acquisitions and proceeds benefits of those acquisitions, statements of future economic performance, statements regarding the effects and or interpretations of recently enacted future healthcare laws and regulations, statements of the assumptions underlying or relating to any of the foregoing statements and other statements which are other than statements of historical fact are considered to be forward looking statements.Statements made throughout this presentation are based on current estimates of future events and the company has no obligation to update or correct these estimates. Listeners are cautioned that any such forward looking statements are not guarantees of future performance and involve risks and uncertainties and that actual results may differ materially as a result of these various factors. In addition, adjusted EBITDA as mentioned on this call is defined as consolidated net income before discontinued operations, net gains or losses on sale of assets, net interest and other income, interest expense, income taxes, cost for acquisitions and investigations, write-offs and deferred debt issuance cost, restructuring cost and depreciation and amortization. On the call with me this morning are President and Chief Executive Officer Gary Newsome; Chief Financial Officer Kelly Curry and Senior Vice President of Finance, Bob Farnham.
Thank you for your attention. I’ll now turn the call over to Gary.Gary Newsome Thanks John and good morning everyone. Thank you for joining us to discuss another solid quarter and a strong 2011 as we report our results for the fourth quarter and year ended December 31, 2011. For the fourth quarter from continuing operations and compared to the same quarter a year ago, Health Management reported net revenue growth of 17.6% to $1,587 billion and adjusted EBITDA growth of 27.3% to $236.2 million. Excluding certain write-offs of deferred debt issuance costs, Tennova restructuring charges and interest rates swap accounting, diluted earnings per share from continuing operations increased 63.5% to $0.26 contributing to these outstanding continuing operations financial results where admissions increased to 6.8%, adjusted admissions increased over 11.6%, emergency room visit increase of 12.4% and a surgery increase of 18%. For continuing operations of the hospitals we have owned and operated for one year or more referred to as same hospital continuing operations, compared to the prior year’s fourth quarter, revenues increased 5.5%. Adjusted EBITDA increased 25.3% to $271.6 million resulting in a 300 basis point improvement in EBITDA margins and 19.1% and surgeries were up 0.8%. Recall that our same hospital surgery growth in the fourth quarter last year was among the best in the publicly traded space at 5.2%. We believe a challenging economic environment is continuing to impact our volumes as patients seek more outpatient services to limit their time away from work to better ensure their employment. We continue to see declines in uninsured volumes and this contributed to a same hospital admission decline for the fourth quarter of 3.7% compared to the same period a year ago. Outpatient services however continued their 2011 positive trend as outpatient surgeries grew. As a result, same hospital adjusted admissions showed a smaller decline of 1.1% for the quarter. Excluding the declines in uninsured admissions at same hospital facilities, same hospital admissions would have declined 3% compared to a year ago quarter and same hospital adjusted admissions would have been approximately flat. Read the rest of this transcript for free on seekingalpha.com