-----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, WJVBuwMu+leHohYu8/3Tv4NluhmGUXJgdk33SLicTETU7eM0F9hShWz2wCyyhVEZ z0+9lSbSUm9DIaonD1BE1Q== 0000909518-05-000731.txt : 20050913 0000909518-05-000731.hdr.sgml : 20050913 20050913105553 ACCESSION NUMBER: 0000909518-05-000731 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050913 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050913 DATE AS OF CHANGE: 20050913 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RURAL/METRO CORP /DE/ CENTRAL INDEX KEY: 0000906326 STANDARD INDUSTRIAL CLASSIFICATION: LOCAL & SUBURBAN TRANSIT & INTERURBAN HWY PASSENGER TRAINS [4100] IRS NUMBER: 860746929 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22056 FILM NUMBER: 051081374 BUSINESS ADDRESS: STREET 1: 9221 EAST VIA DE VENTURA CITY: SCOTTSDALE STATE: AZ ZIP: 85258 BUSINESS PHONE: 4806063886 MAIL ADDRESS: STREET 1: 9221 EAST VIA DE VENTURA CITY: SCOTTSDALE STATE: AZ ZIP: 85258 FORMER COMPANY: FORMER CONFORMED NAME: RURAL METRO CORP /DE/ DATE OF NAME CHANGE: 19930528 8-K 1 jd9-12_8k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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): September 13, 2005 __________________ RURAL/METRO CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 0-22056 86-0746929 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 9221 East Via de Ventura Scottsdale, Arizona 85258 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (480) 606-3886 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)) ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION On September 13, 2005, Rural/Metro Corporation (the "Company") issued a press release announcing its preliminary unaudited financial results for the quarter and fiscal year ended June 30, 2005. The full text of the Company's press release is attached hereto as Exhibit 99.1. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits. Exhibit No. Description ----------- ----------- 99.1 Press release, dated September 13, 2005. The information in this Form 8-K, including the exhibits, shall not be deemed to be "filed" for purposes of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities thereof, nor shall it be deemed to be incorporated by reference in any filing under the Exchange Act or under the Securities Act of 1933, as amended, except to the extent specifically provided in any such filing. 2 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. RURAL/METRO CORPORATION Date: September 13, 2005 By: /s/ Michael S. Zarriello ---------------------------- Michael S. Zarriello Senior Vice President and Chief Financial Officer 3 EXHIBIT INDEX Exhibit No. Description ----------- ----------- 99.1 Press release, dated September 13, 2005. 4 EX-99 2 jd9-12ex99_1.txt EXHIBIT 99.1 [Rural/Metro Corporation logo] CONTACT: Liz Merritt, Rural/Metro Corporation (480) 606-3337 Financial Dynamics, Investor Relations Jim Byers (Investors) (415) 439-4504 For immediate release - --------------------- RURAL/METRO ANNOUNCES STRONG, PRELIMINARY FOURTH-QUARTER AND FISCAL 2005 RESULTS >> Fourth-quarter net revenue up 10.1% to $137.4 million >> Full-year net revenue up 7.6% to $531.1 million >> 5% Growth in Quarterly Transport Volume >> 7% increase in Quarterly Net/Net EMS Average Patient Charge SCOTTSDALE, Ariz. (Sept. 13, 2005) - Rural/Metro Corporation (Nasdaq/SC: RURL), a leading provider of medical transportation and private fire protection services, announced today preliminary, unaudited financial results for its fourth quarter and fiscal year ended June 30, 2005. The company has issued preliminary financial results as it completes its evaluation of internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, and expects to file its Form 10-K and final results with the Securities and Exchange Commission on September 28, 2005. The company expects final results will be consistent with preliminary, unaudited results announced today. For the fourth quarter ended June 30, 2005, net revenue increased 10.1% to $137.4 million, compared to $124.8 million in the fourth quarter of the prior year. For the fiscal year ended June 30, 2005, net revenue increased 7.6% to $531.1 million, compared to $493.8 million for fiscal 2004. Revenue growth for the quarter and fiscal year primarily reflects a growing demand for medical transportation and subscription fire protection services, as well as increasing rates in both the medical transportation and fire protection businesses. Fourth quarter net income for 2005 was $73.4 million or $2.95 per diluted share (including $71.5 million or $2.87 per diluted share relating to the deferred tax adjustment described below) compared to net income of $1.3 million, or $0.06 per diluted share in the prior year fourth quarter. For the fiscal year ended June 30, 2005, the company reported net income of $77.9 million or $3.23 per diluted share (including $71.5 million or $2.96 per diluted share relating to the deferred tax adjustment described below) compared to net income of $6.2 million, or $0.28 per diluted share, in fiscal 2004. Fourth quarter and full year net income for 2005 includes a $71.5 million deferred income tax benefit resulting from the reversal of valuation allowances associated with the company's deferred tax assets, primarily those relating to the company's net operating loss carryfowards, as realization of such benefit is currently considered likely. In addition to the deferred tax adjustment, fiscal year 2005 net income includes an $8.2 million loss on early debt extinguishment reported in the third quarter of 2005. Jack Brucker, President and Chief Executive Officer, said, "Our continued strong financial performance reflects the targeted growth we have generated during the year to meet the steadily increasing demand for our services combined with operating improvements and cost-management initiatives that we have achieved. Mr. Brucker continued, "We remain focused on continued market growth through the addition of select, new 911 contracts and the retention of contracts in locations where we have a well-established and growing operational base; advancing the technologies to ensure high-quality, reliable services and to protect the safety of our work force. Additionally, we continue to implement programs to enhance cash-flow performance, which is a foundation of our deleveraging strategy." REVENUE TRENDING Medical Transportation and Related Services: Fourth-quarter medical transportation and related services net revenue increased 10.3% to $121.7 million, compared to $110.3 million in the prior year's fourth quarter. For fiscal 2005, medical transportation and related services net revenue increased 7.2% to $469.1 million, compared to $437.5 million for the prior year. Same-service-area medical transportation and related service revenue increased 9.7% for the fourth quarter ended June 30, 2005, and 6.7% for the full fiscal year, when compared to the same prior-year periods. The company attributed approximately half of the revenue growth in this business to higher transport volume and half of the growth to rate increases. Fire Services: Fourth-quarter fire services net revenue increased 8.3% to $13.9 million, compared to $12.8 million in the prior year's fourth quarter. For fiscal 2005, fire services revenue increased 9.3% to $53.6 million, compared to $49.1 million for the prior year. The company primarily attributes the quarterly growth in revenue as a result of an increase in the number of new fire subscription customers and, to a lesser extent, an increase in rates. EBITDA RESULTS For the fourth quarter, earnings before interest, taxes, depreciation and amortization (EBITDA) grew by 8.0% to $12.1 million, compared to $11.2 million for the prior-year comparable period. For the 12 months ended June 30, 2005, EBITDA was $47.6 million, compared to $47.9 million for the same period a year ago. Fiscal 2005 EBITDA includes the $8.2 million loss on early extinguishment of debt. EBITDA is defined as earnings from continuing operations before interest expense (including costs related to early extinguishment of debt), interest income, income taxes, depreciation and amortization. The company regards EBITDA, which is widely used by analysts, investors, creditors, and other interested parties, as relevant and useful information. The company provides this information to permit additional analysis of its ability to meet future debt service, capital expenditures, and working capital requirements. Additionally, the company's management uses this information to evaluate the performance of its operating units. EBITDA is not intended to represent cash provided by operating activities as defined by generally accepted accounting principles, and it should not be considered as an indicator of operating performance or an alternative to cash provided by operating activities as a measure of liquidity. The company has provided a reconciliation of net income to EBITDA in the attached tables. QUARTERLY OPERATING STATISTICS Medical transport volume in the fourth quarter grew 5.1% to 272,556 transports, compared to 259,275 transports provided in the same period of the prior year. Net/net EMS average patient charge ("net/net EMS APC") for the fourth quarter increased 7.3% to $334, compared to $311 for the fourth quarter of 2004. The company considers net/net EMS APC its best approximation of cash collected per transport. Average daily cash deposits for the fiscal year ended June 30, 2005 totaled $1.9 million, compared to $1.8 million for the same period in fiscal 2004. Average quarterly days sales outstanding ("DSO") was 46 days for the three months ended June 30, 2005, compared to 45 days for the same period a year ago. The increase is primarily due to the company's exit in March 2005 from a fixed-price contract in Fort Worth, Texas. Following is a summary of certain of the company's key operating statistics. Medical transports and net/net EMS APC statistics have been adjusted to eliminate discontinued operations for all periods presented:
- ----------------------- ----------------- ----------------- -------------- -------------- ------------- Q4 '04 Q1 '05 Q2 '05 Q3 '05 Q4 '05 (6/30/04) (9/30/04) (12/31/04) (3/31/05) (6/30/05) - ----------------------- ----------------- ----------------- -------------- -------------- ------------- Medical Transports (1) 259,275 265,298 264,124 278,645 272,556 - ----------------------- ----------------- ----------------- -------------- -------------- ------------- Net/Net EMS APC (2) $311 $317 $324 $330 $334 - ----------------------- ----------------- ----------------- -------------- -------------- ------------- DSO (QTD) (3) 45 45 45 43 46 - ----------------------- ----------------- ----------------- -------------- -------------- -------------
(1) Medical transports from continuing operations are defined as actual emergency and non-emergency medical transports. (2) Net/net EMS APC is defined as gross medical transport revenue less provisions for Medicare, Medicaid and other third-party payers, and doubtful accounts, divided by emergency and non-emergency transports from continuing operations. (3) DSO is defined as average accounts receivable divided by consolidated net revenue per day, as calculated on a quarter-to-date basis. ABOUT RURAL/METRO Rural/Metro Corporation provides emergency and non-emergency medical transportation, fire protection, and other safety services in 22 states and approximately 365 communities throughout the United States. For more information, visit the company's web site at www.ruralmetro.com. The company will discuss these results in a conference call today beginning at 8 a.m. Pacific/11 a.m. Eastern. To access the conference call, dial 800-289-0496 (domestic) or (913) 981-5519 (international). The call also will be broadcast live on the company's web site at www.ruralmetro.com. A replay will be available from 12 Noon Eastern through midnight October 11, 2005. The number to call for the replay is (888) 203-1112. From international locations, (719) 457-0820. The required pass code to access the replay is 4850307. An archived webcast also will be available at www.ruralmetro.com. This press release contains forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include, among others, timely completion of the fiscal 2005 audit reflecting results consistent with the unaudited results presented herein; the company's ability to collect its accounts receivable; competitors' actions; litigation and regulatory matters; and the company's ability to sustain operating cash flow, secure new contracts, retain existing contracts, improve earnings and operating margins. Additional factors that could affect the company are described in its Form 10-K for the year ended June 30, 2004 under the caption "Risk Factors" in the Management's Discussion and Analysis section, and other factors as described from time to time in the company's SEC filings. The company disclaims any obligation to update its forward-looking statements. (Tables to Follow) RURAL/METRO CORPORATION CONSOLIDATED BALANCE SHEET (unaudited) (in thousands, except share data)
June 30, June 30, 2005 2004 --------------- --------------- ASSETS Current assets: Cash $ 17,688 $ 16,372 Accounts receivable, net 71,986 65,348 Current portion of accounts receivable from insurers 2,831 4,000 Inventories 12,743 11,738 Current portion of deferred tax assets 6,647 - Prepaid expenses and other 9,618 8,512 --------------- --------------- TOTAL CURRENT ASSETS 121,513 105,970 Property and equipment, net 43,155 40,283 Goodwill 39,344 41,100 Deferred tax assets 66,031 - Insurance deposits 9,037 9,244 Other assets 23,987 18,610 --------------- --------------- TOTAL ASSETS $ 303,067 $ 215,207 =============== =============== LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 14,738 $ 13,833 Accrued liabilities 44,487 46,202 Deferred revenue 19,429 17,541 Current portion of long-term debt 1,497 1,495 --------------- --------------- TOTAL CURRENT LIABILITIES 80,151 79,071 Long-term debt, net of current portion 305,478 304,057 Other liabilities 27,147 22,796 --------------- --------------- TOTAL LIABILITIES 412,776 405,924 --------------- --------------- Minority interest 1,456 1,509 --------------- --------------- Stockholders' equity (deficit): Common stock, $.01 par value 40,000,000 shares authorized, 24,117,499 and 21,890,816 shares issued and outstanding at June 30, 2005 and 2004, respectively 241 219 Additional paid-in capital 150,200 147,075 Treasury stock (1,239) (1,239) Accumulated deficit (260,367) (338,281) --------------- --------------- TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (111,165) (192,226) --------------- --------------- TOTAL LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS' EQUITY (DEFICIT) $ 303,067 $ 215,207 =============== ===============
RURAL/METRO CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS For The Three Months Ended June 30, 2005 and 2004 (unaudited) (in thousands, except per share amounts)
% of % of 2005 Net revenue 2004 Net revenue ----------------------------------------------------- Net revenue $ 137,432 100.0% $ 124,815 100.0% ------------- ------------- Operating expenses: Payroll and employee benefits 69,706 50.7% 64,049 51.3% Provision for doubtful accounts 23,239 16.9% 22,802 18.3% Depreciation and amortization 2,817 2.0% 2,569 2.1% Other operating expenses 32,224 23.4% 28,327 22.7% ------------- ------------- Total operating expenses 127,986 93.1% 117,747 94.3% ------------- ------------- Operating income 9,446 6.9% 7,068 5.7% Interest expense (7,540) -5.5% (7,137) -5.7% Interest income 78 0.1% 30 0.0% ------------- ------------- Income (loss) from continuing operations before income taxes and minority interest 1,984 1.4% (39) 0.0% Income tax benefit (provision) 71,700 52.2% (11) 0.0% Minority interest (62) 0.0% 873 0.7% ------------- ------------- Income from continuing operations 73,622 53.6% 823 0.7% Income (loss) from discontinued operations (197) -0.1% 440 0.4% ------------- ------------- NET INCOME 73,425 53.4% 1,263 1.0% Less: Net income allocated to redeemable nonconvertible participating preferred stock under the two-class method - (286) Less: Accretion of redeemable nonconvertible participating preferred stock - (1,707) Add: Credit related to settlement of redeemable nonconvertible participating preferred stock with common shares - 10,066 ------------- ------------- NET INCOME APPLICABLE TO COMMON STOCK $ 73,425 $ 9,336 ============= ============= Income (loss) per share: Basic - Income from continuing operations applicable to common stock $ 3.14 $ 0.53 Income (loss) from discontinued operations applicable to common stock (0.01) 0.02 ------------- ------------- NET INCOME $ 3.13 $ 0.55 ============= ============= Diluted - Income from continuing operations applicable to common stock $ 2.96 $ 0.04 Income (loss) from discontinued operations applicable to common stock (0.01) 0.02 ------------- ------------- NET INCOME $ 2.95 $ 0.06 ============= ============= Average number of common shares outstanding - Basic 23,475 16,910 ============= ============= Average number of common shares outstanding - Diluted 24,910 22,561 ============= =============
RURAL/METRO CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS For The Year Ended June 30, 2005 and 2004 (unaudited) (in thousands, except per share amounts)
% of % of 2005 Net revenue 2004 Net revenue ----------------------------- -------------------------- Net revenue $ 531,084 100.0% $ 493,773 100.0% --------------- -------------- Operating expenses: Payroll and employee benefits 272,574 51.3% 254,757 51.6% Provision for doubtful accounts 87,298 16.4% 86,717 17.6% Depreciation and amortization 11,046 2.1% 10,990 2.2% Other operating expenses 119,033 22.4% 111,217 22.5% --------------- -------------- Total operating expenses 489,951 92.3% 463,681 93.9% --------------- -------------- Operating income 41,133 7.7% 30,092 6.1% Interest expense (29,579) -5.6% (29,243) -5.9% Interest income 305 0.1% 97 0.0% Loss on early extinguishment of debt (8,170) -1.5% - 0.0% --------------- -------------- Income from continuing operations before income taxes and minority interest 3,689 0.7% 946 0.2% Income tax benefit (provision) 71,318 13.4% (279) -0.1% Minority interest (102) 0.0% 475 0.1% --------------- -------------- Income from continuing operations 74,905 14.1% 1,142 0.2% Income from discontinued operations 3,009 0.6% 5,069 1.0% --------------- -------------- Net income 77,914 14.7% 6,211 1.3% Less: Net income allocated to redeemable nonconvertible participating preferred stock under the two-class method - (1,262) Less: Accretion of redeemable nonconvertible participating preferred stock - (6,320) Add: Credit related to settlement of redeemable nonconvertible participating preferred stock with common shares - 10,066 --------------- -------------- Net income applicable to common stock $ 77,914 $ 8,695 =============== ============== Income per share: Basic - Income from continuing operations applicable to common stock $ 3.31 $ 0.28 Income from discontinued operations applicable to common stock 0.13 0.24 --------------- -------------- Net income $ 3.44 $ 0.52 =============== ============== Diluted - Income from continuing operations applicable to common stock $ 3.11 $ 0.05 Income from discontinued operations applicable to common stock 0.12 0.23 --------------- -------------- Net income $ 3.23 $ 0.28 =============== ============== Average number of common shares outstanding - Basic 22,674 16,645 =============== ============== Average number of common shares outstanding - Diluted 24,105 21,817 =============== ==============
RURAL/METRO CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS For The Year Ended June 30, 2005 and 2004 (unaudited) (in thousands)
2005 2004 --------------- --------------- Cash flows from operating activities: Net income $ 77,914 $ 6,211 Adjustments to reconcile net income to cash provided by operating activities - Provision for doubtful accounts 88,030 91,477 Deferred income taxes (71,464) - Depreciation and amortization 11,630 12,256 Non-cash insurance adjustments (6,725) (722) Non-cash portion of loss on early extinguishment of debt 5,668 - Amortization of deferred financing costs 2,604 2,753 Accretion of 12.75% Senior Discount Notes 2,066 - Loss on sale of property and equipment 454 39 Earnings (losses) of minority shareholder 102 (475) Tax benefit from the exercise of stock options 97 - Amortization of debt discount 17 26 Change in assets and liabilities - Accounts receivable (94,668) (96,397) Accounts receivable from insurers 1,429 (1,195) Inventories (1,005) (234) Prepaid expenses and other (3,218) (1,957) Insurance deposits (5,311) (2,449) Other assets 81 (7,586) Accounts payable 750 55 Accrued liabilities 2,168 (11,920) Deferred revenue 1,888 1,227 Other liabilities 12,348 23,392 --------------- --------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 24,855 14,501 --------------- --------------- Cash flows from investing activities: Capital expenditures (12,521) (8,646) Proceeds from the sale of property and equipment 149 225 --------------- --------------- NET CASH USED IN INVESTING ACTIVITIES (12,372) (8,421) --------------- --------------- Cash flows from financing activities: Repayment of credit facility due December 2006 (152,555) (1,000) Repayment of 7.875% Senior Notes due March 2008 (150,000) - Cash provided under Term Loan B 135,000 - Issuance of 9.875% Senior Subordinated Notes 125,000 - Issuance of 12.75% Senior Discount Notes 50,209 - Repayment of debt (8,393) (1,248) Cash paid for debt issuance costs (13,478) (515) Issuance of common stock 3,050 494 --------------- --------------- NET CASH USED IN FINANCING ACTIVITIES (11,167) (2,269) --------------- --------------- Increase in cash 1,316 3,811 Cash, beginning of year 16,372 12,561 --------------- --------------- CASH, END OF YEAR $ 17,688 $ 16,372 =============== =============== Non-cash investing activities: Landlord funded leasehold improvements for new corporate headquarters $ 1,828 $ - =============== ===============
RURAL/METRO CORPORATION RECONCILIATION OF EBITDA TO CASH FLOW PROVIDED BY OPERATING ACTIVITIES (unaudited) (in thousands)
Three Months Ended Twelve Months Ended ------------------ ------------------- June 30, June 30, -------- -------- 2005 2004 2005 2004 --------------- --------------- -------------- --------------- Net income $ 73,425 $ 1,263 $ 77,914 $ 6,211 Add back: Depreciation and amortization 2,867 2,808 11,632 12,256 Interest expense 7,540 7,137 29,579 29,243 Interest income (83) (30) (310) (97) Income tax (benefit) provision (71,654) 24 (71,257) 311 --------------- --------------- -------------- --------------- EBITDA 12,095 11,202 47,558 47,924 Increase (decrease): Interest expense (7,540) (7,137) (29,579) (29,243) Interest income 83 30 310 97 Income tax benefit (provision) 71,654 (24) 71,257 (311) Provision for doubtful accounts 23,429 23,302 88,030 91,477 Deferred income taxes (71,464) - (71,464) - Non-cash insurance adjustments (6,725) (722) (6,725) (722) Non-cash portion of loss on early extinguishment of debt - - 5,668 - Amortization of deferred financing costs 672 670 2,604 2,753 Accretion of 12.75% Senior Discount Notes 1,586 - 2,066 - Loss (gain) on sale of property and equipment 328 (65) 454 39 Earnings (losses) of minority shareholder 62 (873) 102 (475) Tax benefit from the exercise of stock options (62) - 97 - Amortization of debt discount - 7 17 26 Changes in operating assets and liabilities (7,440) (16,655) (85,540) (97,064) --------------- --------------- -------------- --------------- Net cash provided by operating actvities $ 16,678 $ 9,735 $ 24,855 $ 14,501 =============== =============== ============== ===============
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