EX-99.1 2 a10-5251_4ex99d1.htm EX-99.1

Exhibit 99.1

 

GRAPHIC

 

EMSC News- For Immediate Release

 

Contact:

Deborah Hileman

 

Vice President, Corporate Communications & Investor Relations

 

303-495-1210

 

Deborah.hileman@emsc.net

 

EMERGENCY MEDICAL SERVICES REPORTS 1st QUARTER EPS OF
$0.70, A 24.7% INCREASE, AND UPDATES EPS GUIDANCE

 

Highlights:

 

·                  First quarter 2010 diluted EPS was $0.70, an increase of 24.7% compared to the first quarter of 2009;

 

·                  First quarter 2010 net revenue was $679.4 million, an increase of 10.8% compared to the first quarter of 2009;

 

·                  First quarter 2010 Adjusted EBITDA was $74.4 million, an increase of 13.6% compared to the first quarter of 2009; and

 

·                  Updates 2010 diluted EPS guidance from $3.00 - $3.10 to an expected range of $3.10 - $3.20 excluding $0.28 of one-time charges related to our debt refinancing completed in April 2010.

 

Greenwood Village, Colorado (April 29, 2010) – Emergency Medical Services Corporation (NYSE: EMS) (EMSC or the Company) today announces results for the first quarter ended March 31, 2010.

 

William A. Sanger, Chairman and Chief Executive Officer, said, “EMSC continues to perform well, as evidenced by our 25% EPS growth. We are encouraged by both our strong pipeline and the continued demand for our services as communities and healthcare facilities increasingly recognize the value we provide. Our successful debt refinancing reduces our cost of capital and further positions the Company to take advantage of these opportunities.

 

Results of Operations for the First Quarter 2010

 

For the quarter ended March 31, 2010, EMSC generated net revenue of $679.4 million, an increase of 10.8% compared to the same period last year.

 

EMSC generated net income of $31.0 million, or $0.70 per diluted share, for the first quarter of 2010, compared to net income of $24.1 million, or $0.56 per diluted share, in the first quarter of 2009 for an increase of $7.0 million and 24.7%, respectively.  Adjusted EBITDA was $74.4 million, an increase of 13.6% compared to the same quarter last year. This increase is attributable primarily to the impact of increased volume from net new contracts, increased revenue from existing contracts, and a decrease in operating and insurance expenses as a percentage of

 

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revenue, offset in part by increased compensation and general and administrative expenses.  Net income and diluted earnings per share were also positively impacted by a reduction in interest expense due to the expiration of an interest rate swap agreement in December 2009.

 

Cash provided by operating activities was $44.6 million in the first quarter of 2010, compared to $41.9 million for the same quarter last year.  The change in operating cash flows was affected primarily by an increase in net income combined with a reduction in accounts receivable and a net increase in accrued liabilities.  In the first quarter of 2010, Days Sales Outstanding decreased by three days sequentially to 61 days.

 

Free cash flow was $40.8 million in the first quarter of 2010 compared to $47.4 million in the first quarter of 2009.  Free cash flow in the quarter ended March 31, 2009 benefited from a release of insurance collateral of $10 million.  Free cash flow in 2010 does not include a $10.6 million cash flow benefit related to tax deductions for stock-based compensation.

 

Net cash used in investing activities was $7.1 million for the quarter ended March 31, 2010, compared to $5.5 million net cash provided by investing activities for the same period in 2009. Cash flows provided by changes in insurance collateral decreased $10.9 million year over year related primarily to a release of collateral of $10 million in the first quarter 2009.  Acquisition related funding was $3.3 million in the first quarter 2010.

 

For the quarter ended March 31, 2010, net cash provided by financing activities was $10.7 million compared to $0.6 million for the first quarter of 2009. Financing activities in 2010 included a tax benefit from stock-based compensation of $10.6 million. At March 31, 2010, there were no amounts outstanding under our revolving credit facility.

 

A description of the non-GAAP measures, Adjusted EBITDA and Free Cash Flow, and a reconciliation of non-GAAP to GAAP financial measures are included in this news release.

 

Segment Results

 

EMSC operates two business segments: American Medical Response, Inc. (AMR), the Company’s healthcare transportation services segment, and EmCare Holdings Inc. (EmCare), the Company’s facility-based physician services segment.

 

American Medical Response (AMR)

 

For the quarter ended March 31, 2010, AMR generated net revenue of $337.0 million, an increase of 0.2% compared to the first quarter last year.  The increase in net revenue was from an improvement in revenue per transport and growth in our managed transportation business, offset primarily by a decrease in interfacility transports related to both exited markets and a mild flu season.

 

Adjusted EBITDA was $32.4 million, a decrease of 4.4% compared to the same quarter last year.  The decrease in Adjusted EBITDA is attributable primarily to the impact of lower interfacility transports, higher fuel costs and general and administrative expenses offset by revenue per transport growth.  Income from operations was $20.8 million, an increase of 1.0% compared to the same quarter in 2009.

 

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EmCare

 

For the quarter ended March 31, 2010, EmCare generated net revenue of $342.4 million, an increase of 23.8% compared to the same quarter last year.  The increase in revenue is attributable primarily to the addition of 51 net new contracts since January 1, 2009, and revenue increases at existing contracts.

 

Adjusted EBITDA was $42.0 million for the quarter compared to $31.7 million last year, an increase of 32.8%.  The increase in Adjusted EBITDA was driven primarily by the net impact of revenue and volume increases from new contracts in addition to a decrease in operating and insurance expenses as a percentage of net revenue.  Income from operations was $36.6 million, an increase of 36.1% over the same period in 2009.

 

Guidance

 

Diluted 2010 EPS guidance is updated from $3.00 - $3.10 to an expected range of $3.10 - $3.20 excluding $0.28 of one-time charges related to our debt refinancing, completed in April 2010.  Diluted EPS including all one-time refinancing costs is expected to be between $2.82 - $2.92.

 

Conference Call

 

EMSC management will host a conference call and live audio webcast on Thursday, April 29, 2010, at 11:00 a.m. EDT, to discuss the Company’s financial results.  A 30-day online replay will be available approximately one hour following the conclusion of the live broadcast.  A link to the live broadcast and online replay is available on the Investor Relations section of the Company’s website at www.emsc.net.

 

About Emergency Medical Services Corporation

 

Emergency Medical Services Corporation (EMSC) is a leading provider of emergency medical services in the United States. EMSC operates two business segments: American Medical Response, Inc. (AMR), the Company’s healthcare transportation services segment, and EmCare Holdings Inc. (EmCare), the Company’s facility-based physician services segment. AMR is the leading provider of ambulance services in the United States. EmCare is a leading provider of physician services to healthcare facilities.  In 2009, EMSC provided services in 13.0 million patient encounters in more than 2,200 communities nationwide. EMSC is headquartered in Greenwood Village, Colorado. For additional information, visit www.emsc.net.

 

Forward-Looking Statements

 

Certain statements and information herein may be deemed to be “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. Any forward-looking statements herein are made as of the date of this press release, and EMSC undertakes no duty to update or revise any such statements. Forward-looking statements are not guarantees of future performance and are subject to risks and

 

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uncertainties. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in EMSC’s filings with the SEC from time to time, including in the section entitled “Risk Factors” in the Company’s most recent Annual Report on Form 10-K and subsequent periodic reports. Among the factors that could cause future results to differ materially from those provided in this press release are: the impact on our revenue of changes in transport volume, mix of insured and uninsured patients, and third party reimbursement rates and methods; the adequacy of our insurance coverage and insurance reserves; potential penalties or changes to our operations if we fail to comply with extensive and complex government regulation of our industry; the impact of potential changes in the healthcare industry generally resulting from legislation currently under consideration; our ability to recruit and retain qualified physicians and other healthcare professionals, and enforce our non-compete agreements with our physicians; our ability to generate cash flow to service our debt obligations; the cost of capital expenditures to maintain and upgrade our vehicle fleet and medical equipment; the loss of one or more members of our senior management team; the outcome of government investigations of certain of our business practices; our ability to successfully restructure our operations to comply with future changes in government regulation; the loss of existing contracts and the accuracy of our assessment of costs under new contracts; the high level of competition in our industry; our ability to maintain or implement complex information systems; our ability to implement our business strategy; our ability to successfully integrate strategic acquisitions; and our ability to comply with the terms of our settlement agreements with the government.

 

Non-GAAP Financial Measures Description and Reconciliation

 

This press release includes presentations of Adjusted EBITDA, which is defined as net income before equity in earnings of unconsolidated subsidiary, income tax expense, interest and other income, realized gain on investments, interest expense, and depreciation and amortization. It also includes presentations of free cash flow, which is defined as cash flow from operations adjusted for cash used in non-acquisition related investment activities.   Adjusted EBITDA and free cash flow are commonly used by management and investors as performance measures and liquidity indicators. Adjusted EBITDA and free cash flow are not considered measures of financial performance under U.S. generally accepted accounting principles (GAAP), and the items excluded therefrom are significant components in understanding and assessing our financial performance. Adjusted EBITDA and free cash flow should not be considered in isolation or as an alternative to GAAP measures such as net income, cash flows provided by or used in operating, investing or financing activities or other financial statement data presented in our consolidated financial statements as an indicator of financial performance or liquidity. Reconciliations of non-GAAP financial measures are provided in this news release.  Reconciliation for the forward-looking Adjusted EBITDA projections presented herein is not being provided due to the number of variables in the projected Adjusted EBITDA range. Since Adjusted EBITDA and free cash flow are not measures determined in accordance with GAAP and are susceptible to varying calculations, these measures, as presented, may not be comparable to other similarly titled measures of other companies.

 

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EMERGENCY MEDICAL SERVICES CORPORATION

Consolidated Statements of Operations and Other Information

(unaudited; in thousands, except shares, per share data and other information)

 

 

 

Quarter ended March 31,

 

 

 

2010

 

2009

 

 

 

 

 

 

 

Net revenue

 

$

679,354

 

$

613,022

 

Compensation and benefits

 

480,317

 

426,534

 

Operating expenses

 

86,529

 

84,672

 

Insurance expense

 

22,070

 

22,504

 

Selling, general and administrative expenses

 

16,858

 

15,036

 

Depreciation and amortization expense

 

16,180

 

16,768

 

Income from operations

 

57,400

 

47,508

 

Interest income from restricted assets

 

855

 

1,266

 

Interest expense

 

(8,266

)

(10,190

)

Realized gain on investments

 

92

 

639

 

Interest and other income

 

265

 

517

 

Income before income taxes and equity in earnings of unconsolidated subsidiary

 

50,346

 

39,740

 

Income tax expense

 

(19,410

)

(15,726

)

Equity in earnings of unconsolidated subsidiary

 

94

 

57

 

Net income

 

$

31,030

 

$

24,071

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

0.71

 

$

0.57

 

Diluted earnings per common share

 

$

0.70

 

$

0.56

 

Weighted average common shares outstanding, basic

 

43,571,705

 

41,924,218

 

Weighted average common shares outstanding, diluted

 

44,534,858

 

43,094,597

 

 

 

 

 

 

 

Other Information

 

 

 

 

 

EmCare patient encounters

 

2,531,495

 

2,182,132

 

EmCare weighted patient encounters (1)

 

2,228,636

 

1,941,186

 

AMR ambulance transports

 

710,252

 

726,608

 

AMR weighted transports (2)

 

716,860

 

734,630

 

 


(1)  EmCare weighted encounters include a weighting of Radiology and Anesthesia encounters due to the differences in reimbursement for these services.

(2)  AMR weighted transports include a weighting of wheelchair transports due to the differences in reimbursement for these services.

 

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EMERGENCY MEDICAL SERVICES CORPORATION

Reconciliation of Adjusted EBITDA to Net Income

(unaudited; in thousands)

 

 

 

Quarter ended March 31,

 

 

 

2010

 

2009

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

74,435

 

$

65,542

 

Depreciation and amortization expense

 

(16,180

)

(16,768

)

Interest income from restricted assets

 

(855

)

(1,266

)

Income from operations

 

57,400

 

47,508

 

Interest income from restricted assets

 

855

 

1,266

 

Interest expense

 

(8,266

)

(10,190

)

Realized gain on investments

 

92

 

639

 

Interest and other income

 

265

 

517

 

Income before income taxes and equity in earnings of unconsolidated subsidiary

 

50,346

 

39,740

 

Income tax expense

 

(19,410

)

(15,726

)

Equity in earnings of unconsolidated subsidiary

 

94

 

57

 

Net income

 

$

31,030

 

$

24,071

 

 

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EMERGENCY MEDICAL SERVICES CORPORATION

Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities

(unaudited; in thousands)

 

 

 

Quarter ended March 31,

 

 

 

2010

 

2009

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

74,435

 

$

65,542

 

Interest paid

 

(7,759

)

(9,877

)

Change in accounts receivable

 

2,191

 

(2,625

)

Change in other operating assets/liabilities

 

3,934

 

(12,483

)

Equity based compensation

 

1,104

 

650

 

Excess tax benefits from stock-based compensation

 

(10,581

)

 

Income tax expense, net of change in deferred taxes

 

(19,543

)

(1,131

)

Other

 

804

 

1,866

 

Net cash provided by operating activities

 

$

44,585

 

$

41,942

 

 

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EMERGENCY MEDICAL SERVICES CORPORATION

Reconciliation of Segment Adjusted EBITDA to Income from Operations

(unaudited; in thousands)

 

 

 

Quarter ended March 31,

 

 

 

2010

 

2009

 

AMR

 

 

 

 

 

Adjusted EBITDA

 

$

32,402

 

$

33,888

 

Depreciation and amortization expense

 

(11,234

)

(12,706

)

Interest income from restricted assets

 

(344

)

(555

)

Income from operations

 

20,824

 

20,627

 

 

 

 

 

 

 

EmCare

 

 

 

 

 

Adjusted EBITDA

 

42,033

 

31,654

 

Depreciation and amortization expense

 

(4,946

)

(4,062

)

Interest income from restricted assets

 

(511

)

(711

)

Income from operations

 

36,576

 

26,881

 

 

 

 

 

 

 

Total

 

 

 

 

 

Adjusted EBITDA

 

74,435

 

65,542

 

Depreciation and amortization expense

 

(16,180

)

(16,768

)

Interest income from restricted assets

 

(855

)

(1,266

)

Income from operations

 

$

57,400

 

$

47,508

 

 

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EMERGENCY MEDICAL SERVICES CORPORATION

Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

March 31,

 

December 31,

 

 

 

2010

 

2009

 

 

 

(Unaudited)

 

(Audited)

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

381,055

 

$

332,888

 

Trade and other accounts receivable, net

 

456,897

 

459,088

 

Other current assets

 

77,734

 

73,241

 

Total current assets

 

915,686

 

865,217

 

Non-current assets:

 

 

 

 

 

Property, plant and equipment, net

 

122,556

 

125,855

 

Goodwill and other intangible assets, net

 

480,427

 

484,605

 

Other long-term assets

 

177,373

 

179,030

 

Total assets

 

$

1,696,042

 

$

1,654,707

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

Current liabilities

 

$

336,074

 

$

349,139

 

Long-term debt

 

448,610

 

449,254

 

Insurance reserves and other long-term liabilities

 

177,234

 

170,227

 

Total liabilities

 

961,918

 

968,620

 

Total equity

 

734,124

 

686,087

 

Total liabilities and equity

 

$

1,696,042

 

$

1,654,707

 

 

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EMERGENCY MEDICAL SERVICES CORPORATION

Condensed Consolidated Statements of Cash Flows

(unaudited; in thousands)

 

 

 

 

Quarter ended March 31,

 

 

 

2010

 

2009

 

Cash Flows from Operating Activities

 

 

 

 

 

Net income

 

$

31,030

 

$

24,071

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Depreciation, amortization, deferred taxes and other

 

7,430

 

32,979

 

Changes in operating assets/liabilities, net of acquisitions:

 

 

 

 

 

Trade and other accounts receivable

 

2,191

 

(2,625

)

Insurance accruals

 

1,478

 

3,877

 

Other assets and liabilities

 

2,456

 

(16,360

)

Net cash provided by operating activities

 

44,585

 

41,942

 

 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

 

 

Purchases of property, plant and equipment, net

 

(6,474

)

(7,186

)

Acquisition of businesses, net of cash received

 

(3,300

)

 

Net change in insurance collateral

 

2,366

 

13,310

 

Other investing activities

 

290

 

(670

)

Net cash (used in) provided by investing activities

 

(7,118

)

5,454

 

 

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

 

EMSC issuance of class A common stock

 

4,402

 

898

 

Excess tax benefits from stock-based compensation

 

10,581

 

 

Repayments of capital lease obligations and other debt

 

(1,184

)

(1,159

)

(Decrease) Increase in bank overdrafts

 

(3,099

)

840

 

Net cash provided by financing activities

 

10,700

 

579

 

 

 

 

 

 

 

Change in cash and cash equivalents

 

48,167

 

47,975

 

Cash and cash equivalents, beginning of period

 

332,888

 

146,173

 

Cash and cash equivalents, end of period

 

$

381,055

 

$

194,148

 

 

 

 

 

 

 

Free cash flow

 

$

40,767

 

$

47,396

 

 

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EMERGENCY MEDICAL SERVICES CORPORATION

Reconciliation of Free Cash Flow to Net Cash Provided by Operating Activities

(unaudited; in thousands)

 

 

 

Quarter ended March 31,

 

 

 

2010

 

2009

 

 

 

 

 

 

 

Free cash flow

 

$

40,767

 

$

47,396

 

Purchase of property, plant and equipment, net

 

6,474

 

7,186

 

Net change in insurance collateral

 

(2,366

)

(13,310

)

Other investing activities

 

(290

)

670

 

Net cash provided by operating activities

 

$

44,585

 

$

41,942

 

 

END