UPDATE: October 29, 2018: LifePoint announced that a majority of shareholders approved its pending merger with private equity-owned RCCH Healthcare Partners at their meeting Monday. LifePoint shareholders will get $65 per share in cash on completion of the merger, which is expected during Q4 2018.
Hospital chain LifePoint Health beat analysts' expectations for revenue in the third quarter despite sluggish volumes as its impending merger with rural hospital operator RCCH HealthCare Partners grows closer to a close.
In its corporate earnings announced Friday, the Brentwood, Tennessee-based system reported revenue of almost $1.6 billion, down 1.2% compared with the third quarter of 2017, just exceeding analyst forecasts.
LifePoint disclosed profits of $22.3 million in the quarter, down 19% from the same quarter last year, and net cash from operations of $163 million, up 79% year over year.
LifePoint Health managed to outperform analyst estimates in the fiscal quarter ended Sept. 30 despite struggling, as the majority of health systems are right now, with lowering admissions across the board as more Americans seek, or are pushed toward, cheaper outpatient facilities for their care.
The 19-year-old hospital chain reported a 4.7% decline in overall admissions during the third quarter year over year to just 63,118, although on a same-facility basis admissions were relatively unchanged. Inpatient surgeries lowered by 7.1% over a year ago and 2.5% on a same-facility basis, and profitable emergency room visits were down 9.1% overall and 3.8% same-facility.
The company did better on a same-hospital basis, seeing a 0.7% increase in same-hospital equivalent admissions and a 1.4% increase in same-hospital revenues per equivalent admission. LifePoint's same-facility revenue grew 2.1% year over year to $1.5 billion.
The system also noted a $40 million impairment loss in its results, stemming from the closing of a hospital facility in Louisiana along with merger-related expenses.
Those latter costs arise from a planned merger announced in late July between LifePoint and RCCH HealthCare Partners, owned by private equity giant Apollo Global Management and also based in Brentwood.
The deal, which will restructure LifePoint as an RCCH subsidiary, will create a hospital system operating 84 hospitals with a combined revenue of $8 billion. Its portfolio will include physician practices, outpatient clinics and post-acute providers in largely rural areas spanning 30 states.
LifePoint's shareholders will receive $65 per share in cash if the deal goes through for a total bill of $5.6 billion for Apollo (including $2.9 billion in minority interest and net debt).
For the merger to be finalized, LifePoint still needs majority approval from its shareholders along with final regulatory nods. The federal government can no longer block the deal as the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act expired last month.
LifePoint's current chairman and CEO William Carpenter III will retire on completion of the merger, to be relieved at the helm by LifePoint's current COO David Dill. As a result of Carpenter's retirement, Lifepoint accelerated the vesting (and gave Carpenter the ownership) of $21.6 million of outstanding stock-based awards.
In a statement on the earnings results, Carpenter wrote he's "pleased" with LifePoint's third quarter performance, which he attributed to same-hospital revenue growth, effective cost management and strong operating cash flows.
The company's stock price was up slightly Friday afternoon following the earnings release.
LifePoint is not holding a third quarter earnings call due to the coming merger close and a shareholder meeting Monday morning.