IASIS Healthcare Announces First Quarter 2008 Results

Business Wire, Jan 30, 2008

FRANKLIN, Tenn. -- IASIS Healthcare[R] LLC ("IASIS") today announced financial and operating results for the fiscal first quarter ended December 31, 2007. Consolidated results for the first quarter ended December 31, 2007, include the operations of Mountain Vista Medical Center, the Company's new hospital in Mesa, Arizona, which opened on July 23, 2007; Glenwood Regional Medical Center in West Monroe, Louisiana, which was acquired effective January 31, 2007; and Alliance Hospital ("Alliance") in Odessa, Texas, which was acquired effective May 31, 2007. Upon acquisition, Alliance was immediately merged into Odessa Regional Hospital to form Odessa Regional Medical Center. All references to same-facility include the impact of the Alliance acquisition.

Net revenue for the first quarter totaled $512.1 million, an increase of 22.9%, compared with $416.8 million in the prior year quarter. Adjusted EBITDA for the first quarter totaled $64.9 million, an increase of 17.2%, compared with $55.4 million in the prior year quarter. A table describing adjusted EBITDA and reconciling net earnings to adjusted EBITDA is included in this press release in the attached Supplemental Consolidated Statements of Operations Information. Net earnings for the first quarter totaled $10.7 million, compared with $10.6 million in the prior year quarter.

IASIS' results for the first quarter of fiscal 2007 include $1.9 million in business interruption insurance recoveries resulting from the temporary closure and disruption of operations at The Medical Center of Southeast Texas as a result of Hurricane Rita in 2005. The Company's business interruption insurance claim was settled in the third quarter of fiscal 2007.

Admissions and adjusted admissions increased 18.5% and 17.7%, respectively, in the first quarter, compared with the prior year quarter. Net patient revenue per adjusted admission in the first quarter increased 6.0%, compared with the prior year quarter. On a same-facility basis, which includes the effect of the Alliance acquisition, admissions and adjusted admissions increased 1.2% and 2.2%, respectively, while net patient revenue per adjusted admission increased 7.5%, compared with the prior year quarter.

In commenting on the quarterly results, David R. White, chairman and chief executive officer of IASIS, said, "Recent growth through acquisitions and the opening of our new hospital in Arizona contributed to solid gains in admissions and net revenue during the first quarter. We're pleased with the ongoing effort to integrate these hospitals into our system and their potential for long-term growth. As an organization, we believe our success results from our focus on efficient operations, the recruitment and development of strong medical staffs and our ongoing commitment to equip our hospitals with the advanced technology required for clinical excellence."

A listen-only simulcast and 30-day replay of IASIS' first quarter conference call will be available by clicking the "For Investors" link on the Company's website at www.iasishealthcare.com beginning at 11:00 a.m. Eastern Time on January 30, 2008. A copy of this press release will also be available on the Company's website.

IASIS, located in Franklin, Tennessee, is a leading owner and operator of medium-sized acute care hospitals in high-growth urban and suburban markets. The Company operates its hospitals with a strong community focus by offering and developing healthcare services targeted to the needs of the markets it serves, promoting strong relationships with physicians and working with local managed care plans. IASIS owns or leases 16 acute care hospital facilities and one behavioral health hospital with a total of 2,737 beds in service and has total annual net revenue of approximately $1.9 billion. These hospital facilities are located in six regions: Salt Lake City, Utah; Phoenix, Arizona; Tampa-St. Petersburg, Florida; three cities in Texas, including San Antonio; Las Vegas, Nevada; and West Monroe, Louisiana. IASIS also owns and operates a Medicaid and Medicare managed health plan in Phoenix that serves over 127,000 members. For more information on IASIS, please visit the Company's website at www.iasishealthcare.com.

Some of the statements we make in this press release are forward-looking within the meaning of the federal securities laws, which are intended to be covered by the safe harbors created thereby. Those forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief or expectations including, but not limited to, future financial and operating results, the Company's plans, objectives, expectations and other statements that are not historical facts. Forward-looking statements involve known and unknown risks and uncertainties that may cause actual results in future periods to differ materially from those anticipated in the forward-looking statements. Those risks and uncertainties include, among others, the risks and uncertainties related to our ability to generate sufficient cash to service our existing indebtedness, our substantial level of indebtedness that could adversely affect our financial condition, the possibility of an increase in interest rates, which would increase the cost of servicing our debt and could reduce profitability, our ability to retain and negotiate favorable contracts with managed care plans, changes in legislation that may significantly reduce government healthcare spending and our revenue, our hospitals' competition for patients from other hospitals and healthcare providers, our hospitals facing a growth in bad debts resulting from increased self-pay volume and revenue, our ability to recruit and retain quality physicians, our hospitals' competition for staffing which may increase our labor costs and reduce profitability, our failure to consistently enhance our hospitals with the most recent technological advances in diagnostic and surgical equipment that would adversely affect our ability to maintain and expand our markets, our failure to comply with extensive laws and government regulations, the possible enactment of legislation that would impose significant restrictions on hospitals that have physician owners, the potential of exposure to liability from some of our hospitals being required to submit to the Department of Health and Human Services information on their relationships with physicians, the outcome of (and expenses incurred in connection with) a pending qui tam litigation and the Office of Inspector General investigation, the possibility that we may become subject to federal and state investigations in the future, our ability to satisfy regulatory requirements with respect to our internal controls over financial reporting under Section 404 of the Sarbanes-Oxley Act of 2002, a failure of our information systems that would adversely affect our ability to properly manage our operations, an economic downturn or other material change in any one of the regions in which we operate, potential liabilities because of claims brought against our facilities, increasing insurance costs that may reduce our cash flows and net earnings, the impact of certain factors, including severe weather conditions and natural disasters, on our revenue and volume trends at our hospitals, our ability to control costs at Health Choice Arizona, Inc., the possibility of Health Choice Arizona, Inc.'s contract with the Arizona Health Care Cost Containment System being discontinued or experiencing materially reduced reimbursements, significant competition from other healthcare companies and state efforts to regulate the sale of not-for-profit hospitals that may affect our ability to acquire hospitals, difficulties with the integration of acquisitions that may disrupt our ongoing operations, difficulties with the opening of our new hospital that may require unanticipated start-up costs, the significant capital expenditures that would be involved in the construction of current projects or other new hospitals that could have an adverse effect on our liquidity, the rising costs for construction materials and labor that could have an adverse impact on the return on investment relating to our new hospital and other expansion projects, state efforts to regulate the construction or expansion of hospitals that could impair our ability to operate and expand our operations, our dependence on key personnel, the loss of one or more of which could have a material adverse effect on our business, potential responsibilities and costs under environmental laws that could lead to material expenditures or liability, the possibility of a decline in the fair value of our reporting units that could result in a material non-cash charge to earnings and those risks, uncertainties and other matters detailed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2007.