Triad Hospitals, Plano, Texas, said the upfront cost of refinancing debt and a $10.2 million after-tax charge for a hospital sale wiped out its fourth-quarter profits and reduced 2003 profits by one-third compared with the previous year. Triad earned $95.2 million, or $1.29 per share, for the year, compared with $141.5 million, or $1.97 per share, in 2002. Revenue was up 12.4% to nearly $3.9 billion. The company earned $500,000, or 1 cent per share, for the fourth quarter, compared with $35.7 million, or 47 cents per share, in the year-ago quarter. Triad said the transaction cost of issuing $600 million in 7% senior subordinated notes, which allowed it to refinance $325 million in 11% notes and other debt, was $24.9 million after taxes. Besides the charges, the company's profits were squeezed by bad-debt expense equaling 10.8% of revenue for the quarter and 10.3% for the year, compared with 8.2% and 7.8% for the year-ago quarter and year. Triad reported strong same-hospital volume growth, with adjusted admissions increasing 8.2% for the quarter.
The company said it wrote down the value of 138-bed Alice (Texas) Regional Medical Center by $10.2 million after taxes based on the price Christus Health has agreed to pay for the hospital. The sale was announced yesterday and is expected to close by April 30. Terms were not disclosed. Christus, which owns the only other hospital in Alice, said in a news release it will study how to eliminate duplicate services between the two hospitals. Triad said in the same release that financial pressures had made it impossible for two hospitals to compete in Alice, a town of about 25,000 residents. Once the deal is completed, investor-owned Triad will own or operate 53 hospitals. Roman Catholic Christus, based in Irving, Texas, will own 26 U.S. hospitals. -- by Vince Galloro