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Lifepoint Hospitals (LPNT)
Q1 2013 Earnings Call
April 26, 2013 10:00 am ET
William F. Carpenter - Chairman, Chief Executive Officer and Chairman of Quality Committee
Jeffrey S. Sherman - Chief Financial Officer and Executive Vice President
David M. Dill - President and Chief Operating Officer
Albert J. Rice - UBS Investment Bank, Research Division
Ralph Giacobbe - Crédit Suisse AG, Research Division
Thomas Gallucci - Lazard Capital Markets LLC, Research Division
Joshua R. Raskin - Barclays Capital, Research Division
Christian Rigg - Susquehanna Financial Group, LLLP, Research Division
Frank G. Morgan - RBC Capital Markets, LLC, Research Division
Andrew Schenker - Morgan Stanley, Research Division
Kevin M. Fischbeck - BofA Merrill Lynch, Research Division
Kevin Campbell - Avondale Partners, LLC, Research Division
Darren Lehrich - Deutsche Bank AG, Research Division
Justin Lake - JP Morgan Chase & Co, Research Division
Whit Mayo - Robert W. Baird & Co. Incorporated, Research Division
John W. Ransom - Raymond James & Associates, Inc., Research Division
Previous Statements by LPNT
» Lifepoint Hospitals' CEO Presents at Barclays Global Healthcare Conference (Transcript)
» Lifepoint Hospitals' CEO Presents at Citi 2013 Global Healthcare Conference (Transcript)
» LifePoint Hospitals' CEO Discusses Q4 2012 Results - Earnings Call Transcript
On today's call, LifePoint will be making forward-looking statements based upon management's current expectations. Numerous factors could cause LifePoint's results to differ from these expectations, and LifePoint has outlined these factors in its filing with the SEC. The company encourages you to review these filings. LifePoint also asks that you please review the cautionary language under the caption Important Legal Information in the company's press release issued this morning. The company undertakes no obligation to update or make any other forward-looking statements, whether as a result of new information, future events or otherwise. Also, please visit LifePoint's website for links on various information and filings.
I would now like to turn the conference over to Bill Carpenter, Chairman and Chief Executive Officer. Please go ahead, sir.
William F. Carpenter
Thank you very much. Welcome, everyone, to LifePoint Hospital's First Quarter 2013 Earnings Call. We hope you've had a chance to review the press release we issued earlier this morning. After my initial remarks, Jeff Sherman, our Chief Financial Officer, will discuss LifePoint's results for the first quarter in detail. After our prepared remarks, Jeff and I, as well as David Dill, our President and Chief Operating Officer, will be available to answer your questions.
Let me begin by summarizing our results for the quarter. Revenues from continuing operations grew to $931 million. EBITDA was $137 million, and EPS for the quarter was $0.69. As outlined in the press release we issued earlier, there were 2 items we highlighted that impacted our Q1 results. Jeff will discuss those in more detail later on the call.
The first quarter results reflect volume softness in both inpatient and outpatient activity. As we move through 2013, we anticipate that our industry will continue to face challenges, which include regulatory and reimbursement challenges. That said, we are executing on our strategies to grow existing market share, as well as to acquire hospitals while focusing on building regional networks. In addition, we're positioning LifePoint to capitalize on the anticipated benefits of health care reform.
As an example of our growth strategy, last September, LifePoint entered the Upper Peninsula of Michigan with the acquisition of Marquette General Health System by Duke LifePoint Healthcare. Marquette is an ideal fit for Duke LifePoint as it is a tertiary hospital and regional referral center that benefits from Duke's clinical programs and LifePoint's operational expertise and resources. Since the completion of the Marquette acquisition, LifePoint has executed 2 letters of intent to acquire Portage Health in Hancock, Michigan and Bell Hospital in Ishpeming, Michigan.
Together, these hospitals would strengthen the health care delivery system in the Upper Peninsula, enhance patient care and ensure that health care services continue to be available locally to people in those communities. Either through ownership or simply through collaboration, we expect to partner with health care providers throughout the region to enhance the services provided and the coordination of care in the Upper Peninsula.
In March, LifePoint signed a letter of intent to form a new joint venture with Fauquier Health in Warrenton, Virginia. Fauquier would be LifePoint's sixth hospital in Virginia and would continue to enhance our statewide presence with a new footprint in Northern Virginia.
We're confident that facilities like these in attractive markets will provide us with significant upside potential. These partnerships expand our network strategy and represent new ways to enhance health care services and strengthen the health care delivery system throughout our regions. We expect to identify additional opportunities not only through LifePoint but also through Duke LifePoint and other collaborations. As always, we will maintain a disciplined approach to our acquisition program.
An important part of our strategy includes a continuing focus to improve operations. We have been and will continue to be vigilant in controlling costs and operating efficiently, both at the hospital support center and local hospital levels. One example is our transition of certain back office services to Parallon Business Solutions. This transition is on track to be completed in 2014, and we have accelerated the pace at which we're adding our hospitals to the program. Additionally, we have reorganized our hospital support center to provide services to our hospitals more efficiently, resulting in severance costs, which impacted the quarter.
As you are aware, we have been a part of the CMS Hospital Engagement Network since the beginning of 2012. I'm pleased with the progress that we have made as a result of our participation in this program. We feel confident that we will achieve the goals we have set in the Hospital Engagement Network program by the end of 2013, and we have made measurable improvements in the culture of safety within our hospitals over the last year.
While the outcome of health care reform is evolving, we believe it will be a net positive for LifePoint as more people will have coverage and seek hospital services. We are also closely monitoring Medicaid expansion and will continue to support efforts to expand coverage. Our hospitals are well-positioned to be an important part of exchange networks in states in which we operate. The pace of exchange contract negotiations has ramped up considerably, with active negotiations occurring in most of our markets. We expect to conclude some exchange contract negotiations in the next month with additional contract completed during the remainder of the second quarter.