Vanguard Health Systems, Nashville, said profits were up sharply on strong admissions for its fourth quarter and fiscal 2004 ended June 30. Privately held Vanguard earned $10.2 million on $469.2 million in revenue for the fourth quarter, almost double its year-ago earnings of $5.3 million on $402.9 million in revenue. For the fiscal year, Vanguard earned $38.2 million on $1.78 billion in revenue, 2.4 times its fiscal 2003 earnings of $15.9 million on $1.34 billion in revenue. Part of the revenue increase was attributed to the company's January 2003 acquisition of five-hospital Baptist Health System, San Antonio, but Vanguard said revenue also rose 13.7% at hospitals owned for all of both fiscal years.
Same-hospital adjusted discharges were up 6.6%, outpatient surgeries 6.5% and emergency room visits 11.8%, compared with the previous year. Vanguard recently announced that the Blackstone Group, a private equity firm, will become its majority owner as part of a $1.75 billion recapitalization deal. The Blackstone Group will invest $500 million for a two-thirds stake in the company, Vanguard said. Total company equity will be $749 million. Management will reinvest $114 million for a 15.3% stake, and Morgan Stanley Capital Partners, Vanguard's original lead investor, will reinvest $130 million for a 17.4% stake. Vanguard owns or operates 16 hospitals. -- by Vince Galloro