For-profit rural hospital chains Province Healthcare Co. and Community Health Systems said they believe acquisition opportunities are plentiful and will keep them growing in the coming year.
The Brentwood, Tenn.-based companies' fourth-quarter and year-end financial results, both released last week, show strong growth trends in rural markets, their respective chief executive officers said.
"We feel confident we'll buy somewhere between two and four (hospitals) this year," Martin Rash, chairman, president and CEO of Province, told analysts during a conference call.
During the year, the company bought two hospitals, completed a stock offering of 4.2 million shares, announced a 3-for-2 stock split and sold $150 million in convertible subordinated notes.
For the quarter ended Dec. 31, 2000, Province reported a 7.3% drop in net income to $3.8 million, or 11 cents per share, from $4.1 million, or 17 cents per share, in the year-ago quarter. Net operating revenue rose 15.7% to $123.2 million. For the year, Province reported 37% growth in earnings to $19.9 million, or 67 cents per share, from $14.5 million, or 60 cents per share, in 1999. Net operating revenue rose 36% to $469.9 million.
CHS, the nation's largest investor-owned rural hospital chain with 52 facilities, raised $245 million in an initial public offering and $269 million in a secondary offering last year, and it bought seven hospitals at a total cost of $250 million, said Wayne Smith, the company's president, CEO and-as of last week-chairman of the board. CHS announced that Smith is replacing Michael Miles, who remains on the company's board.
Smith said CHS has about 12 to 14 hospitals in its acquisition pipeline.
For the quarter ended Dec. 31, 2000, CHS reported net income of $7.2 million, or 9 cents per share, compared with a loss of $12.4 million, or 23 cents per share, in the prior-year quarter. Net operating revenue rose 28% to $369.3 million.