-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FFXKZkhNfXHscHZaFu7qhD0kSm1m47Cz86LkkmFMBGth8J1K0al6qrNPyRjB6zz7 /mVqHS4s+lr/R4Du0COo5w== 0000950123-03-009277.txt : 20030812 0000950123-03-009277.hdr.sgml : 20030812 20030812150526 ACCESSION NUMBER: 0000950123-03-009277 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030811 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030812 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEAM HEALTH INC CENTRAL INDEX KEY: 0001086795 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISC HEALTH & ALLIED SERVICES, NEC [8090] IRS NUMBER: 621562558 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-80337 FILM NUMBER: 03837352 BUSINESS ADDRESS: STREET 1: 1900 WINSTON RD CITY: KNOXVILLE STATE: TN ZIP: 37919 BUSINESS PHONE: 8003422898 MAIL ADDRESS: STREET 1: 1900 WINSTON RD CITY: KNOXVILLE STATE: TN ZIP: 37919 8-K 1 y89278e8vk.txt TEAM HEALTH, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): August 11, 2003 Team Health, Inc. (Exact name of registrant as specified in its charter) Tennessee 333-80337 62-1562558 (State or other jurisdiction (Commission (IRS Employer of incorporation File Number) Identification No.) 1900 Winston Road, Knoxville, TN 37919 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (865) 693-1000 Item 7. Financial Statements and Exhibits The following exhibit is furnished as part of this Current Report on Form 8-K: Exhibit No. Exhibit ----------- ------- 99.1 Press Release of Team Health, Inc. dated August 11, 2003 Item 12. Results of Operations and Financial Condition On August 11, 2003, Team Health, Inc. announced its financial results for the quarter ended June 30, 2003. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to the Current Report of Form 8-K. The information in the Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Team Health, Inc. (Registrant) /s/ Robert J. Abramowski ------------------------------------ Robert J. Abramowski Executive Vice President of Finance and Administration Date: August 11, 2003 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 99.1 Press Release dated August 11, 2003 EX-99.1 3 y89278exv99w1.txt PRESS RELEASE [Team Health Logo] FOR IMMEDIATE RELEASE Contact: - --------------------- Team Health, Inc. Knoxville, Tennessee David Jones, CFO (865) 693-1000 Team Health Announces Second Quarter 2003 Results ------------------------------------------------- KNOXVILLE, Tenn. - August 11, 2003 - Team Health, Inc. today announced results for its second quarter ended June 30, 2003. For the second quarter of 2003, net revenue less provision for uncollectibles ("revenue less provision") increased 22.6% to $250.1 million from $204.1 million in the second quarter of 2002. The increase in net revenue less provision includes an increase of $15.4 million from acquisitions between periods. Same contract revenue less provision increased $15.2 million, or 8.4%, to $196.5 million in 2003 from $181.3 million in 2002. The Company reported net earnings of $7.7 million in the second quarter of 2003 versus $2.3 million in the second quarter of 2002. Net earnings in 2002 were impacted by a pre-tax loss of $3.4 million associated with the refinancing of the Company's bank debt. Net revenue less provision for the six months ended June 30, 2003 increased 29.6% to $488.5 million from $377.0 million in the prior year. The increase in net revenue less provision includes $56.0 million from acquisitions between periods. Same contract revenue less provision increased $24.7 million, or 7.5%, to $352.2 million in 2003 from $327.5 million in 2002. During the first quarter of 2003, the Company recorded a provision for expected professional liability losses in excess of insured limits of $50.8 million. The provision relates to the Company's aggregate loss limitation under a commercial insurance professional liability policy that ended March 11, 2003. The Company reported a net loss of $17.1 million and net earnings of $7.4 million in the first six months of 2003 and 2002, respectively. As of June 30, 2003, Team Health had cash of $34.1 million and $73.2 million of available capacity under its revolving credit facility. During the quarter, Team Health repaid $12.8 million of outstanding debt and total indebtedness as of June 30, 2003 declined to $305.4 million. Cash flow provided by operations (after interest, taxes and changes in working capital) for the first six months ended June 30, 2003 was $11.7 million compared to $14.1 million in 2002. The decrease between periods was principally due to the payment of a $30.6 million premium for tail liability coverage associated with the Company's former professional liability program during the second quarter of 2003. Lynn Massingale, M.D., President and CEO of Team Health said, "We are pleased with our financial results for the second quarter of 2003 that include significant increases in net revenue and net earnings over the prior year. These favorable financial results were achieved in the face of a year over year increase in professional liability costs of 48%, reflecting the significant challenges that remain in the area of professional liability insurance on a nationwide basis. We have increased our focus on the management of our cost structure and have benefited from increased emergency department patient volume and reimbursement. The enhanced reimbursement per patient visit is the result of experiencing increased reimbursement and acuity per patient encounter on average, including the impact of reimbursement negotiations with managed care providers. "We are disappointed that a national and comprehensive program of malpractice reform seems to have lost momentum in the past few weeks and continue to work with contacts at the national level to encourage appropriate malpractice reform efforts by Congress. We are pleased to see that many states have recognized the severe negative impact that the current malpractice crisis has on the cost and access to healthcare by patients and have started to enact state level reforms on their own. "Recognizing that providing outstanding patient care is critical to our success, Team Health is continuing with its efforts to work with our physician leaders around the country to develop innovative processes and tools to address risk management issues that will enhance the care that patients receive when seen by a healthcare provider affiliated with Team Health. "The second quarter of 2003 marks the one-year anniversary of our acquisition of Spectrum Healthcare Resources. From inception, the integration of this significant acquisition has gone very smoothly and we continue to be pleased with the financial results achieved. Spectrum has continued during the second quarter to work with our country's military to meet the healthcare staffing needs of military treatment facilities resulting from the deployment of military healthcare providers to the Middle East. "As we look ahead, the military treatment facility reimbursement system known as TRICARE is undergoing significant planned structural changes that will impact managed care organizations and providers currently servicing the military. The award of certain service contracts under the revised Tricare system is imminent. Spectrum stands poised to continue its high standard of service to the military and its dependents under the new organizational service structure. "Although many challenges remain within healthcare today, we are pleased to be able to work with outstanding healthcare providers and employees to take on these challenges for the ultimate benefit of our clients and their patients." About Team Health - ----------------- Founded in 1979, Team Health is headquartered in Knoxville, Tennessee. Team Health is affiliated with over 7,000 healthcare professionals who provide emergency medicine, radiology, anesthesia, hospitalist, urgent care and pediatric staffing and management services to over 450 civilian and military hospitals, surgical centers, imaging centers and clinics in 43 states. For more information about Team Health, visit www.teamhealth.com. As previously announced, Team Health will hold an investor conference call at 9:00 a.m. Eastern Time on August 12, 2003. All interested parties may listen to the call by calling (877) 234-1830. A taped replay of the call will be available after 12:00 p.m. Eastern Time Tuesday, August 12, 2003, through midnight on August 19, 2003, by calling (800) 642-1687, access code 2139205. Statements in this document that are not historical facts are hereby identified as "forward looking statements" for purposes of the safe harbor provided by Section 21E of the Securities Exchange Act of 1934 (the "Exchange Act") and Section 27A of the Securities Act of 1933 (the "Securities Act"). Team Health, Inc. (the "Company") cautions readers that such "forward looking statements", including without limitation, those relating to the Company's future business prospects, revenue, working capital, professional liability expense, liquidity, capital needs, interest costs and income, wherever they occur in this document or in other statements attributable to the Company, are necessarily estimates reflecting the judgment of the Company's senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the "forward looking statements." Moreover, the Company, through its senior management, may from time to time make "forward looking statements" about matters described herein or other matters concerning the Company. The Company disclaims any intent or obligation to update "forward looking statements" to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time. - tables attached - Team Health, Inc. Financial Highlights (in thousands) (unaudited) Three Months Ended June 30, ------------------ 2003 2002 ---- ---- (Unaudited) (In thousands) Net revenue $ 358,979 $ 295,311 Provision for uncollectibles 108,848 91,256 --------- --------- Net revenue less provision for uncollectibles 250,131 204,055 Cost of services rendered Professional service expenses 187,001 155,132 Professional liability costs 14,535 9,803 --------- --------- Gross Profit 48,595 39,120 General and administrative expenses 24,460 19,787 Management fee and other expenses 128 124 Depreciation and amortization 5,598 5,019 Interest expense, net 6,178 5,889 Refinancing costs - 3,389 --------- --------- Earnings before income taxes 12,231 4,912 Provision for income taxes 4,553 2,585 --------- --------- Net earnings 7,678 2,327 Dividends on preferred stock 3,600 3,286 --------- --------- Net earnings (loss) attributable to common stockholders $ 4,078 $ (959) ========= ========= -more- Team Health, Inc. Financial Highlights (in thousands) (unaudited) Six Months Ended June 30, ----------------------- 2003 2002 ---- ---- (Unaudited) (In thousands) Net revenue $ 709,118 $ 559,038 Provision for uncollectibles 220,573 182,073 ---------- ---------- Net revenue less provision for uncollectibles 488,545 376,965 Cost of services rendered Professional service expenses 368,997 284,664 Professional liability costs 76,078 17,798 ---------- ---------- Gross profit 43,470 74,503 General and administrative expenses 45,923 36,973 Management fee and other expenses 253 262 Depreciation and amortization 11,121 8,587 Interest expense, net 12,393 11,165 Refinancing costs - 3,389 ---------- ---------- Earnings (loss) before income taxes and cumulative effect of change in accounting principle (26,220) 14,127 Provision (benefit) for income taxes (9,089) 6,410 ---------- ---------- Earnings (loss) before cumulative effect of change in accounting principle (17,131) 7,717 Cumulative effect of change in accounting principle net of taxes of $209 - (294) ---------- ---------- Net earnings (loss) (17,131) 7,423 Dividends on preferred stock 7,161 6,511 ---------- ---------- Net earnings (loss) attributable to common stockholders $ (24,292) $ 912 ========== ========== -more- Team Health, Inc. Supplemental Information (in thousands) (unaudited) June 30, December 31, 2003 2002 ---- ---- Cash and cash equivalents $ 34,086 $ 47,789 Long-term debt, including current portion 305,410 320,500 Accounts receivable, net 163,077 156,449 Capital expenditures, year to date 5,891 9,796 ### -----END PRIVACY-ENHANCED MESSAGE-----