Steward reports $52m loss for 2013

Releases financials after deleting several pages

STEWARD HEALTH CARE reported a net loss of nearly $52 million in fiscal 2013, according to financial statements the for-profit health care company released after more than a year of stonewalling.

The dispute over the documents – which had prompted a $5,000 fine from the state – ended when regulators agreed that Steward could redact several pages of the financial statements that dealt with long-term debt, non-hospital businesses, loan and pledge agreements with executive officers, and “investor share mark.”  Investor share mark may be a reference to Steward’s financial dealings with corporate parent Cerberus Capital Management, a private equity firm in New York.

State officials released the documents late Friday afternoon. Steward submitted the information on Tuesday.

A letter accompanying the financial documents from Kevin Conroy of Foley Hoag said Steward should not have to pay the $5,000 fine because the redacted information is confidential.  A spokesman for the Center for Health Information and Analysis said the agency agreed to the redactions but is demanding payment of the fine. Steward released the entire contents of its financial statements in fiscal 2012 and 2011.

The financial statements indicate the company’s net loss for the year ending Dec. 31, 2013, was $51.96 million, up from a net loss of $33 million in the prior year. The company also reported a loss in fiscal 2011 of $56.9 million. Steward’s 2013 loss from operations was $54.99 million and its loss from continuing operations was $66.4 million.

Steward had cash and cash equivalents at the end of 2013 of $36.5 million, down from $52.2 million the previous year. The hospital company also had $550,000 in letters of credit outstanding, down from $2.1 million the prior year.  It spent $4.8 million on advertising, down from $9.8 million the year before.

The financial documents said the spinoffs of Laboure College, Steward Research and Specialty Projects Corp., and the charitable medical service organization Por Cristo cost the company $7.9 million, $5.1 million, and $3.6 million, respectively.

Steward also reported that it acquired Hawthorn Medical Associates, a physician practice, in July 2013 for $32.9 million.

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Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

Cerberus  incorporated Steward in late 2010 as a vehicle to purchase and operate six struggling Catholic hospitals in Brighton, Dorchester, Norwood, Brockton, Fall River, and Methuen; since then, Steward added five more hospitals in Ayer, Haverhill, Taunton, Quincy, Stoughton and a number of physician groups. It closed the money-losing Quincy Medical Center last year despite promises to keep it open until 2017.

Steward provides to the state fairly detailed information on the individual hospitals it owns but starting with fiscal 2013 it balked at handing over the company’s consolidated financial statement. Steward says it shouldn’t have to turn over the consolidated financial statement because the document includes information on non-hospital businesses that are not covered by state regulation.