Cash flow no problem for St. Francis Hospital buyer LifePoint Health

June 09--It's been nearly six months since LifePoint Health acquired a financially troubled St. Francis Hospital in Columbus, bringing stability to the Manchester Expressway medical campus.

A look at filings with the U.S. Securities and Exchange Commission -- required of LifePoint because it is a publicly traded company -- indicates cash flow should be no problem moving forward for St. Francis, the city's major heart-surgery center and provider of various other services to local residents.

LifePoint, headquartered in the Nashville, Tenn., suburb of Brentwood, bought St. Francis on Dec. 31, paying $242.5 million that day, with the hospital and its large campus becoming part of the parent company's overall system on Jan. 1. The firm has said it is "further assessing" the value of assets it purchased and obligations it assumed, with a final analysis expected sometime this year.

St. Francis is a 376-bed facility with more than 2,700 employees and 300 physicians on hand treating patients in a service area of about 316,000 residents. It completed a major expansion and renovation two years ago as its financial condition began to quickly deteriorate and force it into seeking a buyer, which it routinely referred to as a "partner."

With a growing LifePoint Health, the Columbus hospital found a company that racked up revenues of just over $6 billion in 2015, which came to about $5.3 billion even after subtracting a provision for "doubtful accounts." That compares to $5.3 billion in overall revenues in 2014, down to nearly $4.5 billion after a doubtful account provision. Net income, or profit, realized by LifePoint was just under $182 million in 2015, an increase from $126 million the year before.

For that performance, LifePoint Chairman and Chief Executive Officer William Carpenter earned a total pay package of $15.2 million last year, which was up from $12.3 million in 2014, according to an April 26 filing with the SEC. Breaking down the 2015 package, Carpenter earned a salary of $1,150,000, incentive compensation of $2.8 million, stock awards of nearly $6.5 million and option awards of just over $4.7 million.

The Tennessee company also made a fairly simple, but significant, change last year on its 16th anniversary, changing its name from LifePoint Hospitals to LifePoint Health to reflect its growth into multiple other health-care areas, including home health, hospice, long-term care, nursing homes and assisted living. The company operates more than 70 hospital campuses in 22 states and appears more than willing to add more in the future.

"The scope of our operations today represents how LifePoint continues to expand and thrive in today's dynamic healthcare environment, where patient care continues to shift from inpatient to outpatient settings," Carpenter said in the filing in which he invited shareholders to the firm's annual meeting, which took place Tuesday in Brentwood.

"Guiding us through this change is our diligent commitment to delivering the best possible quality care as we continue to focus on growing both organically (at existing facilities) and through acquisitions, managing costs effectively, and developing high-performing talent," the CEO said, which makes it plain that the publicly traded entity is being run much differently than the former nonprofit status under which St. Francis operated since its founding in 1950.

St. Francis Hospital CEO David Koontz in May did say an 11-member board of trustees has been set up to help the medical facility develop strategy and connect with the community in providing high-quality care. The board ranges from current physicians at St. Francis to community leaders and business people.

Carpenter, in his annual meeting invitation, closed by saying he expects to "create long-term value for all shareholders as well as our communities," thanking those who have invested in the company.

LifePoint stock, traded on the NASDAQ exchange under the ticker "LPNT," closed down 39 cents per share at $70.59 on Thursday, which is roughly midway between the stock's 52-week high of $88.18 per share and its low of $58.20 per share.

LifePoint among the Fortune 500

There's the old phrase of being a small fish in a big pond and vice-versa. In the case of LifePoint Health, the owner of St. Francis Hospital in Columbus, the company might be classified as a big fish in a large lake. That's because LifePoint, in the most recent Fortune 500 rankings, measured by overall revenues, is No. 430 in the nation due to its $6 billion in revenues last year.

But in Tennessee, where the company is headquartered, it is 10th out of 11 firms in that state on the list. The firm is fifth of six in the Nashville area, where its Brentwood corporate office is located. The Fortune 500 list of Tennessee companies includes FedEx, HCA Holdings (a hospital system), Dollar General, AutoZone and Tractor Supply.

For some perspective, The Fortune 500 rankings include Columbus' own Aflac, with the supplemental health and life insurer at No. 135 because of its $20.8 billion in revenues in 2015. Both TSYS and Synovus Financial Corp. are not in the Fortune 500, although the Fortune list filter down to the top 1,000 companies. Credit-card processor TSYS is No. 776 with $2.78 billion in annual revenues. Regional bank Synovus last year recorded revenues of about $1.2 billion, but is not in the top 1,000.

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