Vanguard Health Systems, Nashville, said it lost $110.1 million in its first quarter ended Sept. 30, compared with a profit of $6.3 million a year ago, but the loss was entirely attributable to $182 million in pretax costs associated with the Blackstone Group's purchase of a two-thirds stake in the company. The recapitalization deal closed in September. Vanguard's original equity investor, Morgan Stanley Capital Partners, and other investors -- primarily Vanguard executives -- each own 17% stakes. Deal costs included stock compensation of $96.7 million, debt retirement costs of $62.2 million and other transaction expenses of $23.1 million.
Vanguard said adjusted discharges grew 9.4% in the first quarter, fueled by service expansions, the continued buildup of business at year-old West Valley Hospital Medical Center in Phoenix and the reopening of the emergency room at Phoenix Memorial Hospital earlier this year. Revenue increased 20.4% to $493.7 million. Vanguard owns or operates 16 hospitals in four states and has a pending deal to acquire three hospitals in Massachusetts from Tenet Healthcare Corp. -- by Vince Galloro
(Corrected 6 p.m. EST 11/11/04)