Emergency Medical Services Corporation (NYSE:EMS) (EMSC or the
Company) today announced results for the second quarter and six
months ended June 30, 2007. William A. Sanger, EMSC Chairman and
Chief Executive Officer, said, �EMSC continues to produce
year-over-year growth in diluted earnings per share, revenue and
Adjusted EBITDA. �We are particularly pleased with our recent
acquisitions. At EmCare during the quarter, we acquired two
emergency physician practices. In July, AMR expanded its presence
in the growing Las Vegas market with the acquisition of MedicWest
Ambulance, and entered a new market with the acquisition of Abbott
Ambulance in St. Louis. These acquisitions, consistent with our
strategies to expand in current markets and enter new markets,
provide excellent potential for additional growth.� Financial
Statement Presentation Changes The Company has modified its
presentation of interest income derived from restricted funds held
for its insurance programs, following communications with the
Securities and Exchange Commission. Interest income related to
these restricted funds, which was previously included as an offset
to insurance expense, is now being recorded as a separate line
item, �Interest income from restricted assets,� and is included in
the Company�s presentation of Adjusted EBITDA. Prior periods have
been reclassified for comparative purposes. The components included
in Adjusted EBITDA are the same as the components included in
EBITDA in prior presentations. Results of Operations for the Three
Months Ended June 30, 2007 For the quarter ended June 30, 2007,
EMSC generated net revenue of $516.7�million, an increase of 8.0%,
compared to the same quarter last year. The Company generated
Adjusted EBITDA of $52.4 million, an increase of 16.4%, compared to
the same quarter last year. A reconciliation of non-GAAP to GAAP
financial measures is included in this news release. EMSC generated
net income of $15.1 million, or $0.35 per diluted share on 43.2
million weighted average diluted shares outstanding for the second
quarter of 2007, compared to net income of $10.7 million, or $0.25
per diluted share on 42.4 million weighted average diluted shares
outstanding, an increase of 40.0% over the same quarter last year.
The improvement in earnings is due primarily to higher net revenues
per patient encounter, an increase in patient encounters and
favorable results from our risk mitigation programs. Operating cash
flows for the quarter ended June 30, 2007, were $23.1 million,
compared to $75.6 million provided during the same quarter last
year. Operating cash flows in the quarter ended June 30, 2007 were
negatively impacted by increases in accounts receivable. These
increases were the result of significant revenue growth at EmCare
and collection delays in both operating segments. The collection
delays are primarily related to the implementation of our new
billing system in certain AMR operating markets, and delays by
fiscal intermediaries in releasing physician provider numbers for
EmCare provider billings. The intermediary delays are a recent
industry issue that is being addressed by the Centers for Medicare
and Medicaid Services (CMS). The Company expects to collect the
receivables that have been delayed pursuant to both issues.
Operating cash flows in the quarter ended June 30, 2006 were
positively impacted by the collection of an $11.0 million 2005
income tax receivable. Net cash used in investing activities was
$17.2 million for the quarter ended June 30, 2007, compared to
$22.6 million for the same quarter last year. The variance relates
to lower insurance collateral and lower net capital expenditures.
Net cash used in financing activities was $6.3 million for the
quarter ended June 30, 2007, compared to $22.3 million for the same
quarter last year. The variance relates primarily to an unscheduled
payment of approximately $10.0 million on the senior secured credit
facility in May 2006. Results of Operations for the Six Months
Ended June 30, 2007 For the six months ended June 30, 2007, EMSC
generated net revenue of $1.04 billion, an increase of 9.8%
compared to the same period last year. The Company generated
Adjusted EBITDA of $106.7 million, an increase of 27.1% compared to
the same period last year. Adjusted EBITDA increased 28.4%,
excluding restructuring charges of $2.2 million recorded during the
six months ended June 30, 2007 and $0.9 million recorded during the
same period in 2006. EMSC generated net income of $31.7 million, or
$0.74 per diluted share ($0.77 per diluted share excluding
restructuring charges) on 43.1 million weighted average diluted
shares outstanding for the six months ended June 30, 2007, compared
to net income of $18.0 million or $0.42 per diluted share ($0.44
per diluted share excluding restructuring charges) on 42.4 million
weighted average diluted shares outstanding, an increase of 76.2%
over the same period last year. Operating cash flows for the six
months ended June 30, 2007 were $19.3 million, compared to $112.4
million for the same period last year. Operating cash flows in the
six months ended June 30, 2007 were negatively impacted by
increases in accounts receivable. These increases were the result
of significant revenue growth at EmCare and collection delays in
both operating segments. The collection delays are primarily
related to the implementation of our new billing system in certain
AMR operating markets, and delays by fiscal intermediaries in
releasing physician provider numbers for EmCare provider billings.
The Company expects to collect the receivables that have been
delayed pursuant to both issues. Operating cash flows in the six
months ended June 30, 2006 were positively impacted by collection
of approximately $24.0 million related to 2005 hurricane and income
tax receivables. Net cash used in investing activities was $23.2
million for the six months ended June 30, 2007, compared to $41.8
million for the same period last year. The variance relates to
lower insurance collateral and lower net capital expenditures. Net
cash used in financing activities was $5.9 million for the six
months ended June 30, 2007, compared to $19.0 million for the same
period last year. The variance relates primarily to an unscheduled
payment of approximately $10.0 million on the senior secured credit
facility in May 2006. 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 emergency department and
hospital-based management services segment. American Medical
Response (AMR) For the quarter ended June 30, 2007, AMR generated
net revenue of $295.3 million, an increase of 0.5% compared to the
same quarter last year. Adjusted EBITDA was $23.4 million, a
decrease of 4.4% compared to the same quarter last year, or 7.9%
excluding restructuring charges in 2006. The decrease is primarily
the result of the loss of a portion of AMR�s 9-1-1 contract with
Los Angeles County in June 2006 and the restructuring of our
operations in that market in the first quarter of 2007, partially
offset by the net impact of revenue growth during the period and
lower insurance costs. For the six months ended June 30, 2007, AMR
generated net revenue of $603.4 million, an increase of 2.4%
compared to the same period last year. Adjusted EBITDA was $48.3
million, an increase of 1.5% compared to the same period last year,
or 4.2% excluding restructuring charges of $2.2 million recorded
during the six months ended June 30, 2007, and $0.9 million
recorded during the same period in 2006. EmCare For the quarter
ended June 30, 2007, EmCare generated net revenue of $221.4
million, an increase of 19.9% compared to the same quarter last
year, resulting primarily from volume and revenue increases on new
and existing contracts. Adjusted EBITDA was $29.1 million, an
increase of 41.2% compared to the same quarter last year. The
increase in Adjusted EBITDA resulted primarily from the net impact
of revenue growth during the period and from lower insurance costs.
For the six months ended June 30, 2007, EmCare generated net
revenue of $436.6 million, an increase of 21.8% compared to the
same period last year. Adjusted EBITDA was $58.4 million, an
increase of 60.8% compared with the same period last year. Guidance
The Company reaffirms its guidance of $205.0 to $210.0 million of
Adjusted EBITDA, and diluted EPS of $1.30 to $1.37. This guidance
does not include acquisitions. Conference Call EMSC management will
host a conference call and live audio webcast on Tuesday, August 7,
2007, 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 emergency department and hospital-based management
services segment. AMR is the leading provider of ambulance services
in the United States. EmCare is the nation�s leading provider of
outsourced emergency department staffing and related management
services. In 2006, EMSC provided services to nearly 10 million
patients in more than 2,000 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 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, both as it exists now and as it may change in the
future; our ability to recruit and retain qualified physicians and
other healthcare professionals, and enforce our non-compete
agreements with our physicians; 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
generate cash flow to service our debt obligations and fund the
cost of capital expenditures to maintain and upgrade our vehicle
fleet and medical equipment; and the loss of existing contracts and
the accuracy of our assessment of costs under new contracts.
Non-GAAP Financial Measures 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, loss on early debt extinguishment, interest and
other income, realized gain (loss) on investments, interest
expense, interest income from restricted assets and depreciation
and amortization. Adjusted EBITDA is commonly used by management
and investors as a performance measure and a liquidity indicator.
Adjusted EBITDA is not considered a measure of financial
performance under U.S. generally accepted accounting principles
(GAAP), and the items excluded from Adjusted EBITDA are significant
components in understanding and assessing our financial
performance. Adjusted EBITDA should not be considered in isolation
or as an alternative to such GAAP measures 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. However, 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 is not a
measure determined in accordance with GAAP and is susceptible to
varying calculations, Adjusted EBITDA, as presented, may not be
comparable to other similarly titled measures of other companies.
EMERGENCY MEDICAL SERVICES CORPORATIONConsolidated Statements of
Operations and Other InformationIncluding a Reconciliation of
Income from Operations to Adjusted EBITDA1(unaudited; in thousands,
except shares, per share data and other information) � Three months
endedJune 30, Six months endedJune 30, 2007 2006 2007 2006 � Net
revenue $ 516,712 � $ 478,451 � $ 1,040,031 � $ 947,575 �
Compensation and benefits 357,309 330,927 712,241 656,974 Operating
expenses 76,262 69,203 156,258 135,657 Insurance expense 17,476
20,566 37,777 44,796 Selling, general and administrative expenses
14,901 13,170 28,206 28,009 Depreciation and amortization expense
17,577 16,360 34,356 32,204 Restructuring charges � - � � 919 � �
2,242 � � 919 � Income from operations 33,187 27,306 68,951 49,016
Interest income from restricted assets 1,660 1,362 3,375 2,685
Interest expense (11,395 ) (11,445 ) (22,629 ) (22,737 ) Realized
gain (loss) on investments 22 (306 ) 59 (525 ) Interest and other
income 532 780 1,189 1,132 Loss on early debt extinguishment � - �
� (193 ) � - � � (193 ) Income before income taxes and equity in
earnings of unconsolidated subsidiary 24,006 17,504 50,945 29,378
Income tax expense (9,012 ) (6,788 ) (19,474 ) (11,416 ) Equity in
earnings of unconsolidated subsidiary � 101 � � 2 � � 255 � � 17 �
Net income $ 15,095 � $ 10,718 � $ 31,726 � $ 17,979 � � Basic
earnings per common share $ 0.36 $ 0.26 $ 0.76 $ 0.43 Diluted
earnings per common share $ 0.35 $ 0.25 $ 0.74 $ 0.42 Weighted
average common shares outstanding, basic 41,544,901 41,497,245
41,533,093 41,497,238 Weighted average common shares outstanding,
diluted 43,211,661 42,356,192 43,120,416 42,377,804 � Other
Information EmCare patient encounters 1,807,602 1,631,705 3,551,624
3,179,310 AMR ambulance transports 702,621 724,854 1,430,028
1,457,615 AMR weighted transports 715,462 740,816 1,457,132
1,488,876 � � Reconciliation of income from operations to Adjusted
EBITDA Income from operations $ 33,187 $ 27,306 $ 68,951 $ 49,016
Depreciation and amortization expense 17,577 16,360 34,356 32,204
Interest income from restricted assets � 1,660 � � 1,362 � � 3,375
� � 2,685 � Adjusted EBITDA $ 52,424 � $ 45,028 � $ 106,682 � $
83,905 � � (1) These statements provide a reconciliation of
Adjusted EBITDA to income from operations; and a reconciliation of
income from operations to net income. EMERGENCY MEDICAL SERVICES
CORPORATIONReconciliation of Adjusted EBITDA to Cash Flows Provided
by Operating Activities(unaudited; in thousands) � Three months
ended June 30, Six months ended June 30, 2007 2006 2007 2006 �
Adjusted EBITDA $ 52,424 $ 45,028 $ 106,682 $ 83,905 Interest paid
(10,864 ) (10,922 ) (21,609 ) (21,671 ) Change in accounts
receivable (35,783 ) 11,903 (63,934 ) 31,881 Change in other
operating assets/liabilities 17,164 29,496 (3,718 ) 18,164 Equity
based compensation 400 329 800 629 Dividends received - - 416 -
Gain on disposal of property, plant and equipment (170 ) (670 )
(181 ) (717 ) Other � (45 ) � 475 � � 824 � � 224 � Net cash
provided by operating activities $ 23,126 � $ 75,639 � $ 19,280 � $
112,415 � EMERGENCY MEDICAL SERVICES CORPORATIONReconciliation of
Segment Income from Operations to Adjusted EBITDA(unaudited; in
thousands) � Three months endedJune 30, Six months endedJune 30,
2007 2006 2007 2006 AMR Income from operations $ 8,934 $ 10,782 $
19,408 $ 20,720 Depreciation and amortization expense 13,711 13,051
27,461 25,661 Interest income from restricted assets � 719 � 611 �
1,440 � 1,222 Adjusted EBITDA (1) � 23,364 � 24,444 � 48,309 �
47,603 � EmCare Income from operations 24,253 16,524 49,543 28,296
Depreciation and amortization expense 3,866 3,309 6,895 6,543
Interest income from restricted assets � 941 � 751 � 1,935 � 1,463
Adjusted EBITDA � 29,060 � 20,584 � 58,373 � 36,302 � Total Income
from operations 33,187 27,306 68,951 49,016 Depreciation and
amortization expense 17,577 16,360 34,356 32,204 Interest income
from restricted assets � 1,660 � 1,362 � 3,375 � 2,685 Adjusted
EBITDA $ 52,424 $ 45,028 $ 106,682 $ 83,905 � (1) AMR Adjusted
EBITDA includes $2.2 million of restructuring charges for the six
months ended June 30, 2007, and $0.9 million for the three and six
months ended June 30, 2006. EMERGENCY MEDICAL SERVICES
CORPORATIONCondensed Consolidated Balance Sheets(in thousands) �
June 30, December 31, 2007 2006 (Unaudited) (Audited) Assets
Current assets: Cash and cash equivalents $ 29,484 $ 39,336 Trade
and other accounts receivable, net 481,123 416,450 Other current
assets � 137,669 � 76,703 Total current assets 648,276 532,489
Non-current assets: Property, plant and equipment, net 150,420
147,162 Goodwill and other intangible assets, net 337,028 339,117
Other long-term assets � 269,662 � 299,449 Total assets $ 1,405,386
$ 1,318,217 � Liabilities and Equity Current liabilities $ 300,186
$ 300,962 Long-term debt 480,481 475,616 Insurance reserves and
other long-term liabilities � 205,890 � 155,599 Total liabilities
986,557 932,177 Total equity � 418,829 � 386,040 Total liabilities
and equity $ 1,405,386 $ 1,318,217 EMERGENCY MEDICAL SERVICES
CORPORATIONCondensed Consolidated Statements of Cash
Flows(unaudited; in thousands) � Three months ended June 30, Six
months ended June 30, 2007 2006 2007 2006 Cash Flows from Operating
Activities Net income $ 15,095 $ 10,718 $ 31,726 $ 17,979
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation, amortization, deferred taxes
and other 26,650 23,522 55,206 44,391 Changes in operating
assets/liabilities, net of acquisitions: Trade and other accounts
receivable (35,783 ) 11,903 (63,934 ) 31,881 Insurance accruals
(5,020 ) 1,528 4 8,987 Other assets and liabilities � 22,184 � �
27,968 � � (3,722 ) � 9,177 � Net cash provided by operating
activities � 23,126 � � 75,639 � � 19,280 � � 112,415 � � Cash
Flows from Investing Activities Purchases of property, plant and
equipment, net (14,256 ) (15,396 ) (22,452 ) (28,296 ) Acquisition
of businesses, net of cash received (477 ) (840 ) (477 ) (840 )
Insurance collateral (2,123 ) (6,883 ) (3,033 ) (12,515 ) Other
investing activities � (306 ) � 563 � � 2,715 � � (194 ) Net cash
used in investing activities � (17,162 ) � (22,556 ) � (23,247 ) �
(41,845 ) � Cash Flows from Financing Activities EMSC issuance of
class A common stock 76 - 249 - EMSC equity issuance costs - (90 )
- (912 ) Repayments of capital lease obligations and other debt
(1,058 ) (11,937 ) (3,391 ) (13,923 ) Increase in bank overdrafts �
(5,330 ) � (10,237 ) � (2,743 ) � (4,123 ) Net cash used in
financing activities � (6,312 ) � (22,264 ) � (5,885 ) � (18,958 )
� Change in cash and cash equivalents (348 ) 30,819 (9,852 ) 51,612
Cash and cash equivalents, beginning of period � 29,832 � � 38,841
� � 39,336 � � 18,048 � Cash and cash equivalents, end of period $
29,484 � $ 69,660 � $ 29,484 � $ 69,660 � � Non-cash Activities � �
� � Re-financing of equipment under existing capital lease $ - � $
- � $ 8,038 � $ - �
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