-----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, KG4hC/Pb4bf6IvqBvjAeAC4xSQoIvU6XMhkngCnKFbUaQMa2U/HJ6S0j9j9ruf2u D5sgUvRcz0Xr/rR99JQG0A== 0000950147-02-001480.txt : 20021114 0000950147-02-001480.hdr.sgml : 20021114 20021114164913 ACCESSION NUMBER: 0000950147-02-001480 CONFORMED SUBMISSION TYPE: DEFA14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20021114 EFFECTIVENESS DATE: 20021114 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: DEFA14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-22056 FILM NUMBER: 02825707 BUSINESS ADDRESS: STREET 1: 8401 EAST INDIAN SCHOOL RD CITY: SCOTTSDALE STATE: AZ ZIP: 85251 BUSINESS PHONE: 4809943886 DEFA14A 1 e-9243.txt DEFA14A OF RURAL METRO SCHEDULE 14A (RULE 14A-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14 (A) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. __) Filed by the Registrant [X] Filed by a party other than the Registrant [ ] Check the appropriate box: [ ] Preliminary Proxy Statement [ ] Definitive Proxy Statement [ ] Definitive Additional Materials [X] Soliciting Material Under Rule 14a-12 [ ] Confidential, for Use of the Commission Only (as permitted by Rule14a-6(e)(2)) RURAL/METRO CORPORATION (NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) NOT APPLICABLE. (NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT) Payment of Filing Fee (Check the appropriate box): [X] No fee required. [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11: (1) Title of each class of securities to which transaction applies: ---------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ---------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the filing fee is calculated and state how it was determined.): ---------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: ---------------------------------------------------------------------- (5) Total fee paid: ---------------------------------------------------------------------- [ ] Fee paid previously with preliminary materials. [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount previously paid: ---------------------------------------------------------------------- (2) Form, Schedule or Registration Statement Number: ---------------------------------------------------------------------- (3) Filing party: ---------------------------------------------------------------------- (4) Date filed: ---------------------------------------------------------------------- The following is a press release issued by Rural/Metro Corporation on November 14, 2002. CONTACT: Liz Merritt, Rural/Metro Corporation, (480) 606-3337 FD Morgen-Walke, Investor Relations Jim Byers (investors), (415) 439-4504 Christopher Katis (media), (415) 439-4515 FOR IMMEDIATE RELEASE RURAL/METRO POSTS $3.8 MILLION NET INCOME FOR FISCAL 2003 FIRST QUARTER; EPS $0.21 CENTS FROM CONTINUING OPERATIONS * 8% GAIN IN DOMESTIC REVENUE OVER PRIOR YEAR * 33% INCREASE IN DOMESTIC EBITDA OVER PRIOR YEAR * DAYS' SALES OUTSTANDING DROPS TO 71 DAYS SCOTTSDALE, ARIZ. (Nov. 14, 2002) - Rural/Metro Corporation (Nasdaq: RURL), a leading national provider of medical transportation and fire protection services, announced today the results of its fiscal 2003 first quarter, which ended September 30, 2002. The company reported the following first-quarter results from continuing operations: Net revenue of $125.6 million, compared to $116.5 million in net revenue for the same period of the prior year. Net income was $3.8 million, and earnings before interest, taxes, depreciation and amortization (EBITDA) was $13.2 million, compared to a net loss of $990,000 and EBITDA of $9.9 million in the first quarter of fiscal 2002. The company generated earnings per fully diluted share of $0.21 cents, compared to a loss of $0.07 cents per share for the same period of last year. The company posted $12.3 million in net income from discontinued operations in Latin America, which included a $12.5 million gain from the first-quarter divestiture of those operations. The transaction was finalized on September 27, 2002 and included the company's operations in Argentina and Bolivia for consideration of assumed liabilities. Including the Latin American transaction, the company's first-quarter net income was $16.1 million, with corresponding EBITDA of $25.6 million, and fully diluted earnings per share of $0.91 cents. The company attributed its progress to continuing advancements in operational and billing efficiencies, as well as revenue growth in medical transportation and wildland firefighting services. Same-service-area revenue growth among the company's medical transportation divisions increased 9 percent over fiscal 2002 levels. Jack Brucker, President and Chief Executive Officer, said, "First-quarter results reflect our ongoing efforts to enhance operational efficiencies and leverage our reputation and presence in growing regional marketplaces. We are pleased with the progress and will continue to devote our full attention to achieving our goals throughout fiscal 2003." A series of significant contract renewals were awarded during the quarter, in addition to the start of a new, 911 EMS contract in Forsyth County, Georgia. Medical transportation contract renewals included Rochester, New York; and Knox County, Tennessee. Additionally, the company's National Fire Safety Division won a new contract to provide aircraft rescue and fire fighting services to McClellen-Palomar Airport in Carlsbad, California, and renewed key fire protection contracts with CITGO Petroleum Corp., Sikorsky Aircraft Corp., and the Port Columbus (Ohio) International Airport. Cash collection performance continued to trend positively during the quarter, with average days' sales outstanding (DSO) improving to 71 days, compared to an average of 76 days for the same period a year ago. "We continue to strengthen and enhance our billing and collections systems, placing particular emphasis on pre-screening non-emergency requests for medical transports and redoubling our collections efforts on private-pay accounts," Brucker said. At the close of the first quarter, the company also finalized an agreement to amend its $152 million credit facility and extend the maturity date to December 31, 2004. The facility requires no principal amortization until maturity, is unsecured, and returns the company to full covenant compliance. Additionally, it carries an adjustable LIBOR-based interest rate, which was approximately 8.8 percent at the commencement of the loan. In conjunction with the agreement, the company's bank group became 10-percent equity holders through a grant of preferred shares that are automatically convertible, with stockholder approval, to common shares. Brucker continued, "This solution is a very important step in our ongoing plan to maintain financial strength while positioning the company to capitalize on future growth opportunities, particularly in the medical transportation sector." Stockholder approval to convert lenders' preferred shares to fully diluted common shares will be sought at the company's next annual meeting. "Management believes the amended credit facility is a key link in the company's long-term path to success," Brucker explained. "It will enable us to continue to strengthen the fundamentals of our core business, expand in good-performing regional service areas, and selectively pursue contract opportunities in new markets. For these reasons, we believe it is vital that the Company's stockholders approve the upcoming proposal." Q1 `02 Q2 `02 Q3 `02 Q4 `02 Q1 `03 (9/30/01) (12/31/01) (3/31/02) (6/30/02) (9/30/02) --------- ---------- --------- --------- --------- REVENUE FROM CONTINUING $116.5 $114.3 $120.5 $120.3 $125.6 OPERATIONS million million million million million AVERAGE EMS PATIENT CHARGE (NET/NET) $267 $271 $281 $284 $287 DOMESTIC EMS TRANSPORTS 265,076 256,292 265,207 259,090 263,194 AVERAGE DSO (YTD) 76 75 74 74 71 EXCEPT FOR HISTORICAL INFORMATION HEREIN, 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, THE SUFFICIENCY OF THE COMPANY'S CASH RESOURCES; THE ABILITY TO SUSTAIN OPERATING CASH FLOW; SECURE NEW CONTRACTS; RETAIN EXISTING CONTRACTS; IMPROVE EARNINGS AND OPERATING MARGINS; FURTHER ENHANCE THE EFFICIENCY OF THE COLLECTION PROCESS; THE COMPANY'S ABILITY TO MAINTAIN COMPLIANCE WITH COVENANT AND OTHER REQUIREMENTS OF ITS CREDIT FACILITY; AND EFFECTIVELY MANAGE COLLATERAL REQUIREMENTS AND COSTS RELATED TO ITS INSURANCE COVERAGE. THE COMPANY DISCLAIMS ANY OBLIGATION TO UPDATE ITS FORWARD-LOOKING STATEMENTS. ADDITIONAL INFORMATION AND WHERE TO FIND IT The Company intends to file a preliminary proxy statement regarding the conversion proposal with the Securities and Exchange Commission, and it intends to mail a definitive proxy statement to its stockholders regarding the proposal. Investors and stockholders of the Company are urged to read the definitive proxy statement when it becomes available because it will contain important information about the Company and the conversion proposal. Investors and stockholders may obtain a free copy of the definitive proxy statement (when it is available) and all of the Company's annual, quarterly and special reports at the SEC's web site at www.sec.gov. The Company and its executive officers and directors may be deemed to be participants in the solicitation of proxies from the Company's stockholders in favor of the conversion proposal. Information regarding the security ownership and other interests of the Company's executive officers and directors will be included in the definitive proxy statement. RURAL/METRO CORPORATION CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 2002 AND JUNE 30, 2002 (In Thousands) September 30, June 30, 2002 2002 --------- --------- (Unaudited) ASSETS CURRENT ASSETS Cash $ 4,417 $ 9,828 Accounts receivable, net 97,736 99,115 Inventories 11,666 12,220 Prepaid expenses and other 8,750 9,015 --------- --------- Total current assets 122,569 130,178 --------- --------- PROPERTY AND EQUIPMENT, net 46,524 48,532 GOODWILL 41,167 41,244 OTHER ASSETS 23,703 17,484 --------- --------- Total assets $ 233,963 $ 237,438 ========= ========= LIABILITIES, REDEEMBABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES Accounts payable $ 10,135 11,961 Accrued liabilities 53,934 73,719 Deferred subscription fees 15,632 15,409 Current portion of long-term debt 1,543 1,633 --------- --------- Total current liabilities 81,244 102,722 --------- --------- LONG-TERM DEBT, net of current portion 306,288 298,529 OTHER LIABILTIES 408 477 DEFERRED INCOME TAXES 650 650 --------- --------- Total liabilities 388,590 402,378 --------- --------- MINORITY INTEREST 379 379 --------- --------- REDEEMABLE PREFERRED STOCK 4,189 -- --------- --------- STOCKHOLDERS' EQUITY (DEFICIT) Common stock 164 159 Additional paid-in capital 138,760 138,470 Accumulated deficit (296,880) (313,025) Accumulated other comprehensive income -- 10,316 Treasury stock (1,239) (1,239) --------- --------- Total stockholders' deficit (159,195) (165,319) --------- --------- $ 233,963 $ 237,438 ========= ========= RURAL/METRO CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS For the three months ended September 30, 2002 and 2001 (Unaudited) (In thousands, except per share amounts)
2002 2001 --------- --------- NET REVENUE $ 125,565 $ 116,474 --------- --------- OPERATING EXPENSES Payroll and employee benefits 71,112 68,321 Provision for doubtful accounts 18,725 16,738 Depreciation and amortization 3,440 4,031 Other operating expenses 22,534 21,530 --------- --------- Total operating expenses 115,811 110,620 --------- --------- OPERATING INCOME 9,754 5,854 Interest expense, net (5,886) (6,824) Other -- -- --------- --------- INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND THE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 3,868 (970) INCOME TAX PROVISION (55) (20) --------- --------- INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 3,813 (990) INCOME (LOSS) FROM DISCONTINUED OPERATIONS (including gain on disposal of Latin American operations of $12,488 in 2002) 12,332 (200) --------- --------- INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE 16,145 (1,190) CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE -- (49,513) --------- --------- NET INCOME (LOSS) $ 16,145 $ (50,703) ========= ========= INCOME (LOSS) PER SHARE Basic- Income (loss) from continuing operations before cumulative effect of change in accounting principle $ 0.24 $ (0.07) Income (loss) from discontinued operations 0.77 (0.01) --------- --------- Income (loss) before cumulative effect of change in accounting principle 1.01 (0.08) Cumulative effect of change in accounting principle -- (3.29) --------- --------- Net income (loss) $ 1.01 $ (3.37) ========= ========= Diluted- Income (loss) from continuing operations before cumulative effect of change in accounting principle $ 0.21 $ (0.07) Income (loss) from discontinued operations 0.70 (0.01) --------- --------- Income (loss) before cumulative effect of change in accounting principle $ 0.91 $ (0.08) Cumulative effect of change in accounting principle -- (3.29) --------- --------- Net income (loss) $ 0.91 $ (3.37) ========= ========= AVERAGE NUMBER OF SHARES OUTSTANDING -BASIC 15,994 15,031 ========= ========= AVERAGE NUMBER OF SHARES OUTSTANDING - DILUTED 17,778 15,031 ========= =========
RURAL/METRO CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001 (Unaudited) (In thousands)
2002 2001 -------- -------- CASH FLOW FROM OPERATING ACTIVITIES Net income (loss) $ 16,145 $(50,703) Adjustments to reconcile net income (loss) to cash used in operating activities-- Non-cash portion of gain on disposition of Latin American operations (13,732) -- Cumulative effect of a change in accounting principle -- 49,513 Depreciation and amortization 3,448 4,331 (Gain) loss on sale of property and equipment (172) 57 Provision for doubtful accounts 18,725 16,886 Equity earnings net of distributions received (877) (104) Amortization of debt discount 6 6 Change in assets and liabilities - Increase in accounts receivable (17,926) (19,045) Decrease in inventories 493 23 Decrease in prepaid expenses 71 88 (Increase) decrease in other assets 708 (965) Increase (decrease) in accounts payable (1,791) 2,490 Decrease in accrued liabilities and other liabilities (8,324) (7,856) Increase (decrease) in non-refundable subscription income 224 (49) -------- -------- Net cash used in operating activities (3,002) (5,328) -------- -------- CASH FLOW FROM INVESTING ACTIVITIES Capital expenditures (2,011) (1,501) Proceeds from the sale of property and equipment 214 332 -------- -------- Net cash used in investing activities (1,797) (1,169) -------- -------- CASH FLOW FROM FINANCING ACTIVITIES Repayments on revolving credit facility -- (13) Repayment of debt and capital lease obligations (356) (443) Cash paid for debt issuance costs (391) -- Issuance of common stock 156 153 -------- -------- Net cash used in financing activities (591) (303) -------- -------- EFFECT OF CURRENCY EXCHANGE RATE CHANGES ON CASH (21) (40) -------- -------- DECREASE IN CASH (5,411) (6,840) CASH, beginning of period 9,828 8,699 -------- -------- CASH, end of period $ 4,417 $ 1,859 ======== ========
-----END PRIVACY-ENHANCED MESSAGE-----