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Health Management improves liquidity, pays down $165 million of debt
By Lisa Kerner
Charlotte, N.C., Sept. 30 - Health Management Associates, Inc. chief financial officer and senior vice president Robert E. Farnham said when it comes to liquidity, the company is in "much better shape" than it was six months ago.
Farnham made his remarks during a presentation at the Deutsche Bank 17th Annual Leveraged Finance Conference in Scottsdale, Ariz., on Wednesday.
As of June 30, Health Management had about $165 million cash on hand and an undrawn $500 million line of credit.
According to Farnham, the company has paid off $165 million principal amount of debt in 2009 and will have incremental retirements through the balance of the year.
Health Management "always generates good cash flow," said Farnham, which is why the company was able to repay the $165 million this year.
For the first half of 2009, Health Management generated $255 million and had capital expenditures of $115 million, leaving the company with $140 million in free cash flow.
The company's key drivers are emergency room operations, physician recruitment and market service development, Farnham said.
Farnham reviewed the company's acquisition strategy, which is to acquire hospitals in small, non-urban communities of 30,000 to a couple hundred thousand people.
He stopped short of mentioning any specific potential near-term acquisitions.
Health Management also targets the southeastern and southwestern parts of the United States where the demographic favors retirees who require more health care.
Currently Health Management owns 56 hospitals in 15 states with 8,120 total licensed beds.
Health Management is a Naples, Fla., operator of hospitals in non-urban communities.
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