IASIS Healthcare's net revenue increases 7.7% to $648.1 million in second quarter fiscal 2014

IASIS Healthcare® LLC ("IASIS" or the "Company") today announced financial and operating results for the fiscal second quarter and six months ended March 31, 2014.

Key Financial & Operating Results

Second Quarter Fiscal 2014

Net revenue for the second quarter totaled $648.1 million, an increase of 7.7% compared to $601.8 million in the prior year quarter. Adjusted EBITDAR, which excludes rent expense associated with the sale-leaseback of certain hospital real estate, for the second quarter totaled $68.5 million, compared to $63.3 million in the prior year quarter. Included in adjusted EBITDAR for the current period second quarter was $3.5 million of compensation expense associated with a special bonus paid to certain members of the Company's leadership team in recognition of the execution of certain recent strategic initiatives. The prior year quarter's results were negatively impacted by $6.1 million of changes in reimbursement estimates associated with the Company's Houston market.

In the second quarter, admissions decreased 3.6% and adjusted admissions decreased 0.2%, each compared to the prior year quarter. Net patient revenue per adjusted admission in the second quarter increased 4.0% compared to the prior year quarter. Excluding the prior year impact of the $6.1 million of changes in reimbursement estimates, net patient revenue per adjusted admission increased 2.6% compared to the prior year quarter.

In Health Choice's operations for the second quarter ended March 31, 2014, total lives enrolled across all health plan product lines increased 11.3% to 207,174, compared to 186,128 in the prior year.

Cash flows provided by continuing operations for the quarter ended March 31, 2014, totaled $36.9 million, compared to cash flows provided by continuing operations of $24.5 million in the prior year quarter.

"We are pleased that our second quarter results further demonstrate our ability to effectively and efficiently provide high-quality, affordable care to the communities we serve - even in the midst of continued volume softness in the acute care segment and investments in new growth opportunities in the Health Choice segment. Additionally, Medicaid expansion in Arizona is yielding positive results for both our health plan and hospitals in the market," said IASIS Healthcare President and Chief Executive Officer Carl Whitmer. "Beyond these results, we are excited about our ongoing transformation from a hospital company to a healthcare services company intently focused on integrating our strong provider network of facilities and physicians with our proven managed care solutions at Health Choice."

Whitmer added, "As a result, we firmly believe we are a unique healthcare delivery system poised for long-term success under the new era of expanded coverage and value-based reimbursement."

Year-to-Date Fiscal 2014

Net revenue for the first six months of fiscal 2014 totaled $1.26 billion, an increase of 5.9% compared to $1.19 billion in the prior year period. Adjusted EBITDAR, which includes the same $3.5 million of compensation expense previously discussed, for the first six months of fiscal 2014 totaled $134.3 million, compared to $127.4 million in the prior year period. Additionally, the prior year period was impacted by the same $6.1 million of changes in reimbursement estimates previously discussed.

For the first six months of fiscal 2014, admissions decreased 3.9% and adjusted admissions decreased 0.2%, each compared to the prior year period. Net patient revenue per adjusted admission for the first six months of fiscal 2014 increased 3.4% compared to the prior year period. Excluding the prior year impact of the $6.1 million of changes in reimbursement estimates, net patient revenue per adjusted admission increased 2.7% compared to the prior year period.

Cash flows used in continuing operations for the first six months of fiscal 2014 totaled $27.1 million, compared to cash flows provided by continuing operations of $21.8 million in the prior year period. Cash flows used in operations in fiscal 2014 were impacted by the payment of income taxes, transaction fees and other costs, including additional rent expense, associated with the Company's recent sale-leaseback of certain hospital real estate and the timing of payments related to Texas Medicaid supplemental reimbursement.

SOURCE IASIS Healthcare LLC