-----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, PehkI6facIJEia8rxL13i/rmpunPEIlQvV1cjhM1efjwdFPL8jiiLU7XJwkrNgMo UoAR6Ck782iujMHEczisOQ== 0000950123-04-013522.txt : 20041112 0000950123-04-013522.hdr.sgml : 20041111 20041112153838 ACCESSION NUMBER: 0000950123-04-013522 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20041111 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041112 DATE AS OF CHANGE: 20041112 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: 041139033 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 y68793e8vk.txt FORM 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): November 11, 2004 TEAM HEALTH, INC. (Exact Name of Registrant As Specified In Charter) TENNESSEE 333-80337 62-1562558 (State or Other Jurisdiction (Commission File (IRS Employer of Incorporation) Number) Identification No.) 1900 WINSTON ROAD, KNOXVILLE, TN 37919 (Address of Principal Executive Offices, including Zip Code) (865) 693-1000 (Registrant's telephone number, including area code) NOT APPLICABLE (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ SECTION 2. FINANCIAL INFORMATION Item 2.02 Results of Operations and Financial Condition On November 11, 2004, the Company issued a press release announcing its financial results for the third quarter of 2004. A copy of the Company's press release is attached hereto as Exhibit 99.1 and incorporated herein by reference. SECTION 9. FINANCIAL STATEMENTS AND EXHIBITS Item 9.01 Financial Statements and Exhibits (c) Exhibits. The following exhibit is being furnished as part of this Report. Exhibit 99.1 Press release reporting financial results for the third quarter of 2004, dated November 11, 2004. SIGNATURES 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 ------------------------------------ Date: November 11, 2004 Robert J. Abramowski Executive Vice President of Finance and Administration 2 INDEX TO EXHIBITS
EXHIBIT DESCRIPTION - ------- ----------- 99.1 Press release reporting financial results for the third quarter of 2004, dated November 11, 2004
3 EX-99.1 2 y68793exv99w1.txt PRESS RELEASE EXHIBIT 99.1 (TEAM HEALTH LOGO) FOR IMMEDIATE RELEASE Contact: Team Health, Inc. Knoxville, Tennessee David Jones, CFO (865) 693-1000 TEAM HEALTH ANNOUNCES THIRD QUARTER 2004 RESULTS KNOXVILLE, TENN. - NOVEMBER 11, 2004 - Team Health, Inc. today announced results for its third quarter ended September 30, 2004. For the third quarter of 2004, net revenue less provision for uncollectibles ("revenue less provision") decreased 1.7% to $251.0 million from $255.4 million in the third quarter of 2003. Same contract revenue less provision increased $5.2 million, or 2.5%, to $212.4 million in the third quarter of 2004 from $207.2 million for the same period of 2003. The Company reported net earnings of $3.1 million in the third quarter of 2004 compared to $9.4 million in the third quarter of 2003. During the third quarter of 2004, the Company concluded its evaluation of the carrying value of the goodwill related to its military staffing business and determined that an increase of $7.4 million was required in the period ended September 30, 2004, resulting in an impairment loss of $73.2 million for the nine months ended September 30, 2004. The adjustment of the goodwill impairment loss is based upon the completion, effective November 1, 2004, of the contract re-bidding process initiated under the military's TRICARE program and our assessment of the fair value of goodwill related to this business. Net revenue less provision for the nine months ended September 30, 2004 increased 3.3% to $768.4 million from $743.9 million in the prior year. For the first nine months of 2004, same contract revenue less provision increased $25.9 million, or 4.5%, to $599.8 million in 2004 from $573.9 million in the same period of 2003. During the first quarter of 2004, the Company completed a financial restructuring. A total of $16.0 million of refinancing costs and compensatory bonus expense paid in conjunction with the refinancing, along with an impairment loss in the amount of $73.2 million, resulted in the Company reporting a net loss of $52.8 million in the nine months ended September 30, 2004, compared to a net loss of $7.8 million in the nine months ended September 30, 2003. As of September 30, 2004, Team Health had cash of $75.0 million and $75.8 million of available capacity under its revolving credit facility. Total indebtedness as of September 30, 2004 was $428.8 million. Cash flow provided by operations (after interest, taxes and changes in working capital) for the first nine months ended September 30, 2004 was $49.9 million compared to $50.4 million in 2003. Lynn Massingale, M.D., Chief Executive Officer of Team Health said, "Effective November 1, 2004, we concluded the contract re-bidding process associated with the military's TRICARE program. As previously reported, during the transitional period, which commenced in June, the majority of the contracts to provide staffing services to the TRICARE program were subject to a re-bidding process. In certain cases, the opportunity to submit bids was limited to restricted vendor lists, small businesses or minority qualified businesses. As a result, the Company was not able to bid on all of its previously existing contracts. Despite these challenges, the Company has been able to retain existing contracts and obtain new business equal to approximately 66% of its contract revenue prior to the re-bidding process. "During the second quarter of 2004, we determined that a portion of the goodwill related to the military staffing business was impaired and recorded an estimated goodwill impairment loss during the quarter. The initial estimate of the impairment loss was based on the results of contracts awarded to date, as well as a projection of the financial impact of estimated future awards. With the conclusion of the re-bidding process, we reevaluated the carrying value of such goodwill based upon the actual re-bidding results and concluded that an increase in the impairment loss in the amount of $7.4 million was required. This additional impairment loss was recorded during the third quarter. "The outcome of the re-bidding process resulted in reduced revenues and operating margins within the military staffing business. Although near term profitability will be impacted, we have retained a significant portion of our previous military staffing business due to the efforts of our management team. We also believe that we are well-positioned to compete for new opportunities to provide services to the military in 2005. "Other areas of the Company, particularly our emergency department physician staffing services, have continued to perform very well. Reduced military staffing revenues were substantially offset within other business units of the Company by modest growth in patient volumes as well as increases in net estimated revenue per billing unit of 4.7% between quarters and 5.9% for the nine months ended September 30, 2004, compared to the same period last year. Cash flow from operations remained strong and other liquidity and leverage measures continued to improve during the period. "We are pleased to report that Mr. Greg Roth has joined the Company as President and Chief Operating Officer. Greg is a seasoned healthcare executive who has significant experience working with both hospitals and physicians during his career. Greg was President of HCA's Ambulatory Surgery Center Division until late October of this year. Greg will be a welcome addition to the Company's management team." ABOUT TEAM HEALTH Founded in 1979, Team Health is headquartered in Knoxville, Tennessee. Team Health is affiliated with over 6,000 healthcare professionals who provide emergency medicine, radiology, anesthesia, hospitalist, urgent care and pediatric staffing and management services to over 420 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 November 12, 2004. 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 Friday, November 12, 2004, through midnight on November 19, 2004, by calling (800) 642-1687, access code 1330066. 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 SEPTEMBER 30, ------------------ 2004 2003 -------- -------- (UNAUDITED) (IN THOUSANDS) Net revenue $392,745 $385,035 Provision for uncollectibles 141,700 129,676 -------- -------- Net revenue less provision for uncollectibles 251,045 255,359 Cost of services rendered Professional service expenses 186,328 188,568 Professional liability costs 14,921 17,148 -------- -------- Gross profit 49,796 49,643 General and administrative expenses 25,889 23,130 Management fee and other expenses 161 124 Depreciation and amortization 3,378 5,478 Interest expense, net 7,349 6,075 Estimated impairment loss adjustment 7,358 -- -------- -------- Earnings before income taxes 5,661 14,836 Provision for income taxes 2,555 5,458 -------- -------- Net earnings 3,106 9,378 Dividends on preferred stock -- 3,639 -------- -------- Net earnings attributable to common stockholders $ 3,106 $ 5,739 ======== ========
-more- TEAM HEALTH, INC. FINANCIAL HIGHLIGHTS (IN THOUSANDS) (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, ---------------------------- 2004 2003 ----------- ----------- (UNAUDITED) (IN THOUSANDS) Net revenue $ 1,178,778 $ 1,094,153 Provision for uncollectibles 410,329 350,249 ----------- ----------- Net revenue less provision for uncollectibles 768,449 743,904 Cost of services rendered Professional service expenses 572,275 557,565 Professional liability costs 44,813 93,226 ----------- ----------- Gross profit 151,361 93,113 General and administrative expenses 74,708 69,053 Management fee and other expenses 774 378 Depreciation and amortization 10,322 16,599 Interest expense, net 21,675 18,467 Refinancing costs 14,731 -- Impairment loss 73,177 -- ----------- ----------- Loss before income taxes (44,026) (11,384) Provision (benefit) for income taxes 8,821 (3,630) ----------- ----------- Net loss (52,847) (7,754) Dividends on preferred stock 3,602 10,800 ----------- ----------- Net loss attributable to common stockholders $ (56,449) $ (18,554) =========== ===========
-more- TEAM HEALTH, INC. SUPPLEMENTAL INFORMATION (IN THOUSANDS) (UNAUDITED)
SEPTEMBER 30, DECEMBER 31, 2004 2003 ---- ---- Cash and cash equivalents $ 75,048 $100,964 Long-term debt, including current portion 428,750 299,415 Accounts receivable, net 154,552 167,957 Capital expenditures, year to date 4,535 8,972
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