LifePoint Health, Inc. (LPNT)

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LifePoint Hospitals Inc. (LPNT)

Q2 2011 Earnings Call

July 30, 2011 10:00 AM ET


Bill Carpenter – Chairman and CEO

Jeff Sherman – Chief Financial Officer

David Dill – President and COO


Adam Feinstein – Barclays Capital

A.J. Rice – Susquehanna Financial Group

Tom Gallucci – Lazard Capital Markets

Darren Lehrich – Deutsche Bank

Gary Lieberman – Wells Fargo Securities

Whit Mayo – Robert Baird

Kemp Dolliver – Avondale Partners

Gary Taylor – Citigroup

Art Henderson – Jefferies & Co.



Ladies and gentlemen, thank you for standing by. Welcome to the LifePoint Hospital’s Second Quarter 2011 Earnings Conference Call. 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 filings 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 to various information and filings.

During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. (Operator Instructions)

As a reminder, this conference is being recorded today, Friday, July 29, 2011.

I would now like to turn the conference over to Bill Carpenter, Chairman and Chief Executive Officer of LifePoint Hospital. Please go ahead, sir.

Bill Carpenter

Thank you. Thanks to all of you for joining us today for LifePoint Hospital’s second quarter 2011 earnings call. We hope that you’ve had a chance to review the press release we issued earlier this morning.

On today’s call, after my remarks, Jeff Sherman, our Chief Financial Officer will take about LifePoint’s results for the second quarter in detail. Following that, Jeff and I, as well as David Dill, our President and Chief Operating Officer will be glad to answer your questions.

To summarize our results for the second quarter, revenues from continuing operations grew to $878 million, up 11% from the same period in the prior year. EBITDA for the quarter was $135 million, up 8.9% over the prior year and EPS for the quarter was $0.77, up 11.6% over the prior year.

Through the first half of the year, we successfully executed our strategies to drive performance. Our quality metrics continue to improve. We’re growing the company with our recent acquisitions which are performing very well and we are operating effectively and efficiently. LifePoint has a longstanding history of solid operations, which remains a core competency of our hospital leadership teams.

Admissions from continuing operations were up 6.1% but adjusted admissions increasing by 4.6% versus the prior year. On a same store basis, admissions were up 0.9% with same store adjusted admissions declining 1.1% due to lower outpatient activity, which reflects fewer observations visits, a decline in outpatient surgeries and lower ED volume growth in the quarter.

So let’s spend a minute on service and quality which are critical to our ability to be the provider of choice in each of our markets. We’re focused on making progress in these areas by implementing improved processes and setting higher targets for ourselves. As a result, we have consistently increased our core measure scores to above 95% for each of the four core measure sets, with our skip scores reaching 98% during 2011.

In addition, we have consistently increased our aggregate [each] cat results in each of the past three years and are on target to meet our goals for 2011. We remained focused on recruiting the right physicians in the right communities and we’re on track once again to achieve our annual recruiting targets.

LifePoint is implementing strategies to enhance relationships with our physicians, which will improve outcomes, enhance our mutual success and drive performance. We maintain a solid balance sheet with strong cash flows and ample liquidity.

Our financial strength allows us to make strategic investments in our hospitals including new technologies and facility renovations. While maintaining our focus on being the sole provider in smaller communities, we are repositioning our portfolio by moving into faster growing markets with a more diversified employer base and a more favorable payer mix.

We’re a disciplined buyer and together with our strong balance sheet and track record of successfully integrating our acquisitions, we’re confident that we can continue to identify and integrate acquisitions that add value for our stockholders.

The latest acquisitions -- hospital acquisitions, Rockdale, Clark Regional and High Point Health System have all contributed to our earnings growth and continue to demonstrate tremendous potential. The state-of-the-art hospital that we’re currently building to replace the existing Clark Regional Medical Center facility remains on track and it’s expected to be completed by the first quarter of 2012.

There are a number of attractive acquisition opportunities in the pipeline. As always, we will remain disciplined in our approach. We continue to move forward with the strategic partnership components of our acquisition strategy.

Our innovative partnership with Duke University Health System is well underway. Duke LifePoint Healthcare currently has a number of exciting products in line that we believe will transform healthcare in North Carolina and the surrounding regions.

During the quarter, DLP acquired an outpatient cardiac business consisting of nine mobile and fixed sites cath labs. This represents an important product line for the company and provides us flexibility in our acquisition strategy since the COMs associated with these cath labs are portable.

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