Health Management Posts Q3 Loss; Urges Stockholders To Vote For CHS Merger

(RTTNews) - Health Management Associates Inc. (HMA) reported that its third-quarter of 2013 net loss attributable to common stockholders was $96.65 million or $0.37 per share, compared to a net income of $40.94 million or $0.16 per share in the same quarter last year.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.15 per share for the quarter. Analysts' estimates typically exclude special items.

Net revenue before the provision for doubtful accounts for the quarter increased to $1.68 billion from last year's $1.66 billion, as restated. Twelve analysts had consensus revenue estimate of $1.70 billion for the quarter. Net revenues for the quarter declined to $1.42 billion from $1.44 billion in the prior year quarter.

The company said it has completed its previously announced restatement to correct the accounting treatment of approximately $31.0 million of Medicare and Medicaid HCIT incentive payments which were recognized as income by the Company between July 1, 2011 and June 30, 2013 for 11 hospitals that did not meet "meaningful use" criteria.

Health Management Associates is updating its 2013 annual guidance. For the fiscal year ended December 31, 2013, the company expects net revenue, before the provision for doubtful accounts, to be between $6.84 billion and $6.86 billion, Adjusted EBITDA to be between $790 million and $800 million, and earnings per share to be between $0.48 and $0.50. Street currently is looking for full-year 2013 earnings of $0.55 per share on annual revenues of $6.90 billion.

In a separate press release, Health Management Associates announced that its board of Directors, has completed its comprehensive review of the definitive merger agreement, dated July 29, 2013, between HMA and Community Health Systems Inc. (CYH) or CHS and has unanimously affirmed its support for the transaction.

Health Management Associates' Board recommends HMA stockholders vote "FOR" the adoption of the merger agreement with CHS at the Special Meeting of the Company's stockholders to be scheduled. The Company noted that the merger agreement was previously unanimously approved by the Company's former Board on July 29, 2013.

As per the terms of the transaction, HMA will be acquired by CHS for approximately $7.6 billion, including the assumption of outstanding indebtedness.

Separately, Community Health Systems said it expressed its appreciation to HMA's Board of Directors for HMA's comprehensive evaluation and full support of the transaction.

In addition, Glenview Capital Management LLC, which owns 14.5% of the common stock of Health Management Associates, Inc., confirmed its intention to vote its shares in favor of the CHS proposal, which it believes represents full and fair value for HMA.