Team Health Holdings, Inc. Announces Third Quarter 2010 Financial Results
-- Net Revenue less provision for uncollectibles increased 6.3% to $385.8 million over the prior year third quarter
-- Net Earnings of $17.6 million
-- Diluted Net Earnings per share of $0.27
-- Operating cash flows increased 29.8% to $45.8 million
-- Adjusted EBITDA increased 10.8% to $40.8 million
KNOXVILLE, Tenn., Nov. 9, 2010 /PRNewswire-FirstCall/ -- Team Health Holdings, Inc. ("TeamHealth") (NYSE: TMH), one of the largest providers of outsourced healthcare professional staffing and administrative services to hospitals and other healthcare providers in the United States, today announced results for its third quarter of 2010.
"We are very pleased with our third quarter results, highlighted by solid growth in revenues, net earnings, operating cash flow and Adjusted EBITDA. We achieved positive same contract volume, despite a challenging volume comparison from the third quarter of 2009, with associated revenue growth also driven by increased estimated collections per visit. Effective management of our cost structure and efficient M&A integration processes also contributed to the expansion of our Adjusted EBITDA margin and profitability. This performance has enabled us to continue to delever our capital structure, as we recently called for redemption the $45.5 million outstanding balance of our 11.25% senior subordinated notes. We are excited about our growth prospects and believe that our organization is well positioned for continued success," said TeamHealth President and Chief Executive Officer, Greg Roth.
2010 Third Quarter Results
Net revenue less provision for uncollectibles ("revenue less provision") increased 6.3% to $385.8 million from $363.0 million in the third quarter of 2009. Acquisitions contributed 8.6% of the growth in net revenue less provision. Same contract revenue (excluding the military division) contributed 2.1% of the growth. Same contract revenue associated with the military division reduced growth by 1.1%. New contracts, net of terminations (excluding the military division), contributed 1.2% of the growth. Net contract changes within the military division reduced quarter-over-quarter net revenue growth by 4.5%. Overall, the military division reduced quarter-over-quarter revenue growth by 5.5%, while all other areas contributed an 11.8% increase in net revenue less provision.
Same contract revenue less provision increased 1.1% to $327.4 million from $323.7 million in the third quarter of 2009. Increases in estimated collections on fee-for-service visits of 4.1% provided approximately 3.0% of same contract revenue growth between quarters. Fee for service volume growth provided a 0.8% increase in same contract revenue growth, as the number of visits increased 1.1% from the same contract volume growth above historical trends reported in the third quarter of 2009. Declines in contract and other revenue, primarily associated with our military and locum tenens divisions, constrained same contract revenue growth by 2.7%. Acquisitions contributed $31.1 million of growth between quarters. Net new contract revenue increased by $4.3 million, prior to changes within military staffing contracts which resulted in a total decline in this category of $16.2 million between quarters. Total declines in military revenue, inclusive of changes in same contract revenue, were $20.0 million between quarters.
Reported net earnings were $17.6 million, or $0.27 diluted net earnings per share, compared to net earnings of $13.5 million, or $0.28 pro forma diluted net earnings per share, in the third quarter of 2009.
Cash flow provided by operations increased to $45.8 million from $35.3 million in the same quarter in 2009. The $10.5 million increase was principally due to an increase in net earnings and a reduced level of accounts receivable funding between quarters.
Adjusted EBITDA increased to $40.8 million from $36.8 million, and Adjusted EBITDA margin increased to 10.6% from 10.1%, compared to the same quarter in 2009. See "Non-GAAP Financial Measures Reconciliation" and "Adjusted EBITDA" below for the definitions of Adjusted EBITDA Margin and Adjusted EBITDA and its reconciliation to net earnings.
2010 Nine Months Results
Revenue less provision increased 4.8% to $1.13 billion from $1.07 billion in the nine months ended September 30, 2009. Acquisitions contributed 6.8% of the growth. Same contract revenue (excluding the military division) contributed 1.6% of the growth. Same contract revenue associated with the military division reduced growth by 0.7%. New contracts, net of terminations (excluding the military division), contributed 1.3% of the growth. Net contract changes within the military division reduced period-over-period net revenue growth by 4.2%. Overall, the military division reduced period-over-period revenue growth by 4.8%, while all other areas contributed a 9.6% increase in net revenue less provision.
Same contract revenue less provision increased 1.0% to $931.0 million from $921.9 million in the same period a year ago. Increases in estimated collections on fee-for-service visits of 3.8% provided approximately 2.7% of same contract revenue growth between periods. Fee-for-service volume growth provided a 0.2% increase in same contract revenue growth, as the number of visits increased 0.3%. Declines in contract and other revenue, primarily associated with our military and locum tenens divisions, constrained same contract revenue growth by 1.9%. Acquisitions contributed $72.6 million of growth between periods. Net new contract revenue increased by $14.2 million prior to changes within military staffing contracts which resulted in a total decline in this category of $44.8 million between periods. Total declines in military revenue, inclusive of changes in same contract revenue, were $52.2 million between periods.
Reported net earnings were $47.1 million, or $0.73 diluted net earnings per share, compared to net earnings of $55.2 million, or $1.13 pro forma diluted net earnings per share in the same period of 2009. Included in the 2010 nine months results were costs of $16.2 million associated with the Company's first quarter 2010 partial bond redemption and the contract intangible impairment charge of $2.5 million. Financial results for the 2010 nine months also reflected a reduction of professional liability reserves related to prior years of $7.2 million, compared to a prior year professional liability reserve adjustment of $18.8 million in the nine months period in 2009, resulting from favorable changes in actuarial loss estimates during each period. Following these adjustments, diluted net earnings per share were $0.84 for the nine months ended September 30, 2010, compared to $0.89 for the nine months ended September 30, 2009.
Cash flow provided by operations was $60.3 million compared to $84.6 million for the same period of 2009. Included within operating cash flow in 2010 were $13.8 million of cash costs associated with the first quarter 2010 partial bond redemption, including $2.8 million of accrued interest payments on bonds that were redeemed.
Adjusted EBITDA was $133.4 million compared to $137.1 million in the same period of 2009. Excluding the impact of the prior year professional liability reserve adjustments, Adjusted EBITDA was $126.2 million and $118.2 million, respectfully, in each period. See "Non-GAAP Financial Measures Reconciliation" and "Adjusted EBITDA" below for the definition of Adjusted EBITDA and its reconciliation to net earnings.
As of September 30, 2010, the Company had cash and cash equivalents of approximately $24.6 million and $125.0 million of available borrowings under a revolving credit facility (without giving effect to $7.4 million of undrawn letters of credit). During the nine months ended September 30, 2010, the Company redeemed $157.5 million of its 11.25% Senior Subordinated Notes (the "Notes"), which resulted in a charge of $14.9 million consisting of the payment of bond premiums in the amount of $11.0 million and the write off of $3.9 million of previously deferred financing costs. In addition, interest expense of $1.3 million was recognized on the bonds that were redeemed during the nine months ended September 30, 2010. The Company also made scheduled debt repayments of $3.2 million during the first nine months of 2010. As a result, the Company's total outstanding debt as of September 30, 2010 was $450.3 million and there were no amounts outstanding under its revolving credit facility.
On November 1, 2010, the Company announced its intention to redeem the remaining $45.5 million of outstanding Notes at a redemption price of 102.813% effective December 1, 2010. The redemption of the remaining Notes will be funded by existing cash on hand. To the extent that existing cash on hand is less than the redemption price, the remaining balance will be funded by the Company's revolving credit facility borrowings. As a result of the redemption notice, the Company has classified the Notes as a current liability as of September 30, 2010. The redemption of the Notes will result in an estimated loss on extinguishment of debt of $2.3 million. Included in the calculation of the loss is the write-off of deferred financing costs of approximately $1.0 million.
Lynn Massingale, M.D., Executive Chairman of TeamHealth, added, "Providing patients with the highest quality of care continues to be TeamHealth's number one priority. Our investment in proprietary information technology systems and infrastructure continues to drive positive results for our hospital clients' goals for patient safety, operational efficiency and customer satisfaction. We continue to enjoy a reputation of being a stable and attractive partner for strong physician groups, and are pleased with the successful integration of our recent acquisitions. As the healthcare landscape continues to become more complex, we believe TeamHealth's services and infrastructure will be in increasingly greater demand."
Conference Call
As previously announced, TeamHealth will hold a conference call tomorrow, November 10, to discuss its third quarter 2010 results at 10:00 a.m. (Eastern Time). The conference call can be accessed live over the phone by dialing 1-877-941-4774, or for international callers, 1-480-629-9760. A replay will be available one hour after the call and can be accessed by dialing 1-877-870-5176, or for international callers, 1-858-384-5517. The passcode for the live call and the replay is 4374783. The replay will be available until November 17, 2010.
Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging on to the Investor Relations section of the Company's website at www.teamhealth.com. The on-line replay will remain available for a limited time beginning immediately following the call in the Investor Relations section of the Company's website at www.teamhealth.com.
To learn more about TeamHealth, please visit the company's website at www.teamhealth.com. TeamHealth uses its website as a channel of distribution for material Company information. Financial and other material information regarding TeamHealth is routinely posted on the Company's website and is readily accessible.
About TeamHealth
TeamHealth (Knoxville, Tenn.) (NYSE: TMH) was founded in 1979 and has become one of the largest suppliers of outsourced healthcare professional staffing and administrative services to hospitals and other healthcare providers in the United States. Through its seven principal service lines located in 14 regional sites, TeamHealth's approximately 5,500 affiliated healthcare professionals provide emergency medicine, hospital medicine, anesthesia, teleradiology, and pediatric staffing and management services to approximately 540 civilian and military hospitals, clinics, and physician groups in 45 states. For more information about TeamHealth, visit www.teamhealth.com.
Forward Looking Statements
Statements contained herein that are not historical facts and that reflect the current view of Team Health Holdings, Inc. (the "Company") about future events and financial performance are hereby identified as "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Some of these statements can be identified by terms and phrases such as "anticipate," "believe," "intend," "estimate," "expect," "continue," "could," "should," "may," "plan," "project," "predict" and similar expressions. The Company cautions 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 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." Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include but are not limited to current or future government regulation of the healthcare industry, exposure to professional liability lawsuits and governmental agency investigations, the adequacy of insurance coverage and insurance reserves, as well as those factors detailed under the caption "Risk Factors" in the Company's most recent annual report on Form 10-K filed with the Securities and Exchange Commission and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's quarterly report on Form 10-Q for the quarter ended September 30, 2010 and the Company's most recent annual report on Form 10-K. The Company's "forward looking statements" speak only as of the date hereof and the Company disclaims any intent or obligation to update "forward looking statements" herein to reflect changed assumptions, the occurrence of unanticipated events, or changes to future operating results over time.
Non-GAAP Financial Measures Reconciliation
This release includes a table that sets forth a reconciliation of net earnings to Adjusted EBITDA. Adjusted EBITDA under the indenture governing the 11.25% Senior Subordinated Notes is defined as net earnings before interest expense, taxes, depreciation and amortization, as further adjusted to exclude unusual items, non-cash items and the other adjustments shown in the table below. Adjusted EBITDA margin represents Adjusted EBITDA divided by net revenue less provision for uncollectibles. We believe that the disclosure of the calculation of Adjusted EBITDA and Adjusted EBITDA margin provides information that is useful to an investor's understanding of our covenant compliance (in the case of Adjusted EBITDA) and financial flexibility. Adjusted EBITDA and Adjusted EBITDA Margin are not measurements of financial performance or liquidity under generally accepted accounting principles ("GAAP"). They should not be considered in isolation or as a substitute for net income, operating income, cash flows from operating, investing or financing activities, or any other measure calculated in accordance with GAAP.
Since Adjusted EBITDA and Adjusted EBITDA Margin are not measures determined in accordance with GAAP and are susceptible to varying calculations, Adjusted EBITDA and Adjusted EBITDA Margin, as presented, may not be comparable to other similarly titled measures of other companies.
Team Health Holdings, Inc. Consolidated Balance Sheets |
|||
December 31, |
September 30, 2010 |
||
(Unaudited) (In thousands) |
|||
ASSETS |
|||
Current assets: |
|||
Cash and cash equivalents |
$ 170,331 |
$ 24,645 |
|
Accounts receivable, less allowance for uncollectibles of $178,712 and $223,166 in 2009 and 2010, respectively |
237,703 |
259,430 |
|
Prepaid expenses and other current assets |
17,040 |
25,165 |
|
Receivables under insured programs |
17,615 |
10,952 |
|
Total current assets |
442,689 |
320,192 |
|
Investments of insurance subsidiary |
86,975 |
96,537 |
|
Property and equipment, net |
28,850 |
33,318 |
|
Other intangibles, net |
59,505 |
68,017 |
|
Goodwill |
213,978 |
256,158 |
|
Deferred income taxes |
44,880 |
38,564 |
|
Receivables under insured programs |
24,708 |
33,677 |
|
Other |
39,361 |
40,480 |
|
$ 940,946 |
$ 886,943 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) |
|||
Current liabilities: |
|||
Accounts payable |
$ 17,472 |
$ 15,882 |
|
Accrued compensation and physician payable |
124,380 |
122,368 |
|
Other accrued liabilities |
83,955 |
82,970 |
|
Income tax payable |
2,979 |
8,538 |
|
Current maturities of long-term debt |
161,752 |
49,773 |
|
Deferred income taxes |
34,764 |
35,998 |
|
Total current liabilities |
425,302 |
315,529 |
|
Long-term debt, less current maturities |
449,273 |
400,563 |
|
Other non-current liabilities |
158,703 |
189,081 |
|
Shareholders' equity (deficit): |
|||
Common stock, 100,000 shares authorized, 62,401 and 64,452 shares issued and outstanding at December 31, 2009 and September 30, 2010, respectively |
624 |
645 |
|
Additional paid-in capital |
490,989 |
515,265 |
|
Accumulated deficit |
(582,708 ) |
(535,636 ) |
|
Accumulated other comprehensive (loss) earnings |
(1,237) |
1,496 |
|
Total shareholders' deficit |
(92,332 ) |
(18,230 ) |
|
$ 940,946 |
$ 886,943 |
||
Team Health Holdings, Inc. Consolidated Statements of Operations |
|||
Three Months Ended |
|||
2009 |
2010 |
||
(Unaudited) |
|||
(In thousands, except per share data) |
|||
Net revenue |
$ 637,480 |
$ 690,648 |
|
Provision for uncollectibles |
274,499 |
304,814 |
|
Net revenue less provision for uncollectibles |
362,981 |
385,834 |
|
Cost of services rendered (exclusive of depreciation |
|||
Professional service expenses |
281,185 |
298,937 |
|
Professional liability costs |
13,479 |
13,967 |
|
General and administrative expenses |
32,348 |
33,374 |
|
Other expenses (income) |
804 |
(1,154) |
|
Depreciation and amortization |
4,696 |
6,927 |
|
Interest expense, net |
8,549 |
5,252 |
|
Transaction costs |
419 |
265 |
|
Earnings before income taxes |
21,501 |
28,266 |
|
Provision for income taxes |
8,001 |
10,712 |
|
Net earnings |
$ 13,500 |
$ 17,554 |
|
Three Months Ended |
|||
2009 |
2010 |
||
Net earnings per share |
|||
Basic |
$ 0.28 |
$ 0.27 |
|
Diluted |
$ 0.28 |
$ 0.27 |
|
Weighted average shares outstanding |
|||
Basic |
48,754 |
64,193 |
|
Diluted |
49,061 |
64,496 |
|
Team Health Holdings, Inc. Consolidated Statements of Operations |
|||
Nine Months Ended |
|||
2009 |
2010 |
||
(Unaudited) |
|||
(In thousands, except per share data) |
|||
Net revenue |
$ 1,868,002 |
$ 1,978,586 |
|
Provision for uncollectibles |
793,345 |
852,760 |
|
Net revenue less provision for uncollectibles |
1,074,657 |
1,125,826 |
|
Cost of services rendered (exclusive of depreciation |
|||
Professional service expenses |
828,268 |
865,362 |
|
Professional liability costs |
19,145 |
33,187 |
|
General and administrative expenses |
93,182 |
97,117 |
|
Other expenses (income) |
2,324 |
(437) |
|
Depreciation and amortization |
14,028 |
19,765 |
|
Interest expense, net |
27,671 |
15,936 |
|
Transaction costs |
578 |
723 |
|
Impairment of intangibles |
— |
2,523 |
|
Loss on extinguishment of debt |
— |
14,862 |
|
Earnings before income taxes |
89,461 |
76,788 |
|
Provision for income taxes |
34,230 |
29,716 |
|
Net earnings |
$ 55,231 |
$ 47,072 |
|
Nine Months Ended |
|||
2009 |
2010 |
||
Net earnings per share |
|||
Basic |
$ 1.13 |
$ 0.73 |
|
Diluted |
$ 1.13 |
$ 0.73 |
|
Weighted average shares outstanding |
|||
Basic |
48,834 |
64,113 |
|
Diluted |
49,040 |
64,584 |
|
Team Health Holdings, Inc. Consolidated Statements of Cash Flows |
|||
Three Months Ended |
|||
2009 |
2010 |
||
(Unaudited) |
|||
(In thousands) |
|||
Operating Activities |
|||
Net earnings |
$ 13,500 |
$ 17,554 |
|
Adjustments to reconcile net earnings: |
|||
Depreciation and amortization |
4,696 |
6,927 |
|
Amortization of deferred financing costs |
518 |
493 |
|
Employee equity based compensation expense |
187 |
732 |
|
Provision for uncollectibles |
274,499 |
304,814 |
|
Deferred income taxes |
(2,738) |
712 |
|
Loss on disposal of equipment |
36 |
14 |
|
Equity in joint venture income |
(480) |
(745 ) |
|
Changes in operating assets and liabilities, net of acquisitions: |
|||
Accounts receivable |
(277,861) |
(304,176) |
|
Prepaids and other assets |
5,240 |
(451) |
|
Income tax accounts |
3,571 |
921 |
|
Accounts payable |
6,295 |
3,282 |
|
Accrued compensation and physician payable |
12,738 |
13,802 |
|
Other accrued liabilities |
(1,663) |
(1,243) |
|
Professional liability reserves |
(3,280) |
3,129 |
|
Net cash provided by operating activities |
35,258 |
45,766 |
|
Investing Activities |
|||
Purchases of property and equipment |
(1,208) |
(3,399) |
|
Cash paid for acquisitions, net |
(88) |
(48,398) |
|
Purchases of investments by insurance subsidiary |
(19,811) |
(24,054) |
|
Proceeds from investments by insurance subsidiary |
20,052 |
22,326 |
|
Other investing activities |
6 |
1 |
|
Net cash used in investing activities |
(1,049) |
(53,524) |
|
Financing Activities |
|||
Payments on notes payable |
(1,062) |
(1,062 ) |
|
Proceeds from revolving credit facility |
— |
53,000 |
|
Payments on revolving credit facility |
— |
(53,000 ) |
|
Proceeds from the exercise of stock options |
— |
175 |
|
Redemption of common units |
(20) |
— |
|
Net cash used in financing activities |
(1,082) |
(887) |
|
Net increase (decrease) in cash |
33,127 |
(8,645) |
|
Cash and cash equivalents, beginning of period |
79,867 |
33,290 |
|
Cash and cash equivalents, end of period |
$ 112,994 |
$ 24,645 |
|
Interest paid |
$ 3,038 |
$ 3,976 |
|
Taxes paid |
$ 7,165 |
$ 9,079 |
|
Team Health Holdings, Inc. Consolidated Statements of Cash Flows |
|||
Nine Months Ended |
|||
2009 |
2010 |
||
(Unaudited) |
|||
(In thousands) |
|||
Operating Activities |
|||
Net earnings |
$ 55,231 |
$ 47,072 |
|
Adjustments to reconcile net earnings: |
|||
Depreciation and amortization |
14,028 |
19,765 |
|
Amortization of deferred financing costs |
1,554 |
1,522 |
|
Employee equity based compensation expense |
558 |
1,342 |
|
Provision for uncollectibles |
793,345 |
852,760 |
|
Impairment of intangibles |
— |
2,523 |
|
Deferred income taxes |
2,782 |
5,919 |
|
Loss on extinguishment of debt |
— |
3,837 |
|
Loss on disposal of equipment |
75 |
23 |
|
Equity in joint venture income |
(1,473) |
(1,882) |
|
Changes in operating assets and liabilities, net of acquisitions: |
|||
Accounts receivable |
(792,051) |
(869,721) |
|
Prepaids and other assets |
(11,658) |
(11,056) |
|
Income tax accounts |
16,051 |
5,531 |
|
Accounts payable |
3,582 |
(1,736) |
|
Accrued compensation and physician payable |
14,019 |
(675) |
|
Other accrued liabilities |
(1,465) |
(547) |
|
Professional liability reserves |
(9,957) |
5,610 |
|
Net cash provided by operating activities |
84,621 |
60,287 |
|
Investing Activities |
|||
Purchases of property and equipment |
(5,244) |
(7,273) |
|
Cash paid for acquisitions, net |
(2,787) |
(52,557) |
|
Purchases of investments by insurance subsidiary |
(92,962) |
(51,925) |
|
Proceeds from investments by insurance subsidiary |
87,882 |
44,143 |
|
Other investing activities |
9 |
5 |
|
Net cash used in investing activities |
(13,102) |
(67,607) |
|
Financing Activities |
|||
Payments on notes payable |
(3,187) |
(3,187) |
|
Payments on 11.25% senior subordinated notes |
— |
(157,502) |
|
Proceeds from revolving credit facility |
— |
109,800 |
|
Payments on revolving credit facility |
— |
(109,800) |
|
Proceeds from sale of common shares |
— |
21,762 |
|
Proceeds from the exercise of stock options |
— |
561 |
|
Redemption of common units |
(1,736) |
— |
|
Net cash used in financing activities |
(4,923) |
(138,366) |
|
Net increase (decrease) in cash |
66,596 |
(145,686) |
|
Cash and cash equivalents, beginning of period |
46,398 |
170,331 |
|
Cash and cash equivalents, end of period |
$ 112,994 |
$ 24,645 |
|
Interest paid |
$ 22,426 |
$ 16,896 |
|
Taxes paid |
$ 15,360 |
$ 18,312 |
|
Team Health Holdings, Inc. |
|
Adjusted EBITDA |
|
The following table sets forth a reconciliation of net earnings to Adjusted EBITDA. Under the indenture governing the 11.25% Notes, our ability to engage in certain activities such as incurring certain additional indebtedness, making certain investments, and paying certain dividends is tied to ratios based on Adjusted EBITDA (which is defined as "EBITDA" in the indenture). Adjusted EBITDA under the indenture is defined as net earnings before interest expense, taxes, depreciation and amortization, as further adjusted to exclude unusual items, non-cash items and the other adjustments shown in the table below. We believe that the disclosure of the calculation of Adjusted EBITDA provides information that is useful to an investor's understanding of our covenant compliance and financial flexibility under our indenture covenants. Adjusted EBITDA is not a measurement of financial performance or liquidity under generally accepted accounting principles. It should not be considered in isolation or as a substitute for net income, operating income, cash flows from operating, investing or financing activities, or any other measure calculated in accordance with generally accepted accounting principles. Adjusted EBITDA as calculated under the indenture for the 11.25% Notes is as follows (in thousands):
Three Months Ended |
Nine Months Ended |
||||
2009 |
2010 |
2009 |
2010 |
||
(in thousands) |
|||||
Net earnings |
$ 13,500 |
$ 17,554 |
$ 55,231 |
$ 47,072 |
|
Interest expense, net |
8,549 |
5,252 |
27,671 |
15,936 |
|
Provision for income taxes |
8,001 |
10,712 |
34,230 |
29,716 |
|
Depreciation and amortization |
4,696 |
6,927 |
14,028 |
19,765 |
|
Other expenses (income)(a) |
804 |
(1,154) |
2,324 |
(437) |
|
Loss on extinguishment of debt(b) |
— |
— |
— |
14,862 |
|
Impairment of intangibles |
— |
— |
— |
2,523 |
|
Transaction costs(c) |
419 |
265 |
578 |
723 |
|
Stock based compensation expense(d) |
187 |
732 |
558 |
1,342 |
|
Insurance subsidiary interest income |
640 |
456 |
2,138 |
1,825 |
|
Severance and other charges |
(22) |
20 |
301 |
115 |
|
Adjusted EBITDA* |
$ 36,774 |
$ 40,764 |
$ 137,059 |
$ 133,442 |
|
* Adjusted EBITDA totals are not adjusted for the favorable effects of professional liability loss reserve adjustments associated with prior years of $18,824 and $7,219 for the nine months ended September 30, 2009 and 2010, respectively. Adjusting for the effects of professional liability loss reserve adjustments associated with prior years, Adjusted EBITDA would have been reduced to $118,235 and $126,223 for the nine months ended September 30, 2009 and 2010, respectively.
(a) Reflects sponsor management fee and loss on disposal of assets in 2009 and loss on disposal of assets and changes in the fair value of investments in 2010.
(b) Reflects the loss on the redemption of a portion of the 11.25% Notes, including the write-off of deferred financing costs of $3,837.
(c) Reflects expenses associated with acquisition transaction fees.
(d) Reflects, for 2009, costs related to the recognition of expense in connection with the issuance of restricted units under the Team Health, Inc. 2005 Unit Plan and, for 2010, reflects costs related to options and restricted shares granted under the Team Health Holdings, Inc. 2009 Stock Incentive Plan.
Team Health Holdings, Inc. |
|
Revenue Analysis |
|
The components of net revenue less provision for uncollectibles includes revenue from contracts that have been in effect for prior periods (same contracts) and from new and acquired contracts during the periods, as set forth in the table below:
Three Months Ended |
|||
2009 |
2010 |
||
(in thousands) |
|||
Same contracts: |
|||
Fee-for-service revenue |
$ 230,244 |
$ 242,486 |
|
Contract and other revenue |
93,480 |
84,933 |
|
Total same contracts |
323,724 |
327,419 |
|
New contracts, net of terminations: |
|||
Fee-for-service revenue |
14,045 |
12,989 |
|
Contract and other revenue |
25,212 |
14,366 |
|
Total new contracts, net of terminations |
39,257 |
27,355 |
|
Acquired contracts: |
|||
Fee-for-service revenue |
— |
18,009 |
|
Contract and other revenue |
— |
13,051 |
|
Total acquired contracts |
— |
31,060 |
|
Consolidated: |
|||
Fee-for-service revenue |
244,289 |
273,484 |
|
Contract and other revenue |
118,692 |
112,350 |
|
Total net revenue less provision for uncollectibles |
$ 362,981 |
$ 385,834 |
|
The following table reflects the visits and procedures included within fee-for-service revenues described in the table above:
Three Months Ended |
|||
2009 |
2010 |
||
(in thousands) |
|||
Fee-for-service visits and procedures: |
|||
Same contract |
1,865 |
1,886 |
|
New and acquired contracts, net of terminations |
138 |
228 |
|
Total fee-for-service visits and procedures |
2,003 |
2,114 |
|
Team Health Holdings, Inc. |
|
Revenue Analysis |
|
The components of net revenue less provision for uncollectibles includes revenue from contracts that have been in effect for prior periods (same contracts) and from new and acquired contracts during the periods, as set forth in the table below:
Nine Months Ended |
|||
2009 |
2010 |
||
(in thousands) |
|||
Same contracts: |
|||
Fee-for-service revenue |
$ 646,221 |
$ 672,870 |
|
Contract and other revenue |
275,647 |
258,166 |
|
Total same contracts |
921,868 |
931,036 |
|
New contracts, net of terminations: |
|||
Fee-for-service revenue |
64,390 |
67,827 |
|
Contract and other revenue |
83,032 |
49,008 |
|
Total new contracts, net of terminations |
147,422 |
116,835 |
|
Acquired contracts: |
|||
Fee-for-service revenue |
5,367 |
48,140 |
|
Contract and other revenue |
— |
29,815 |
|
Total acquired contracts |
5,367 |
77,955 |
|
Consolidated: |
|||
Fee-for-service revenue |
715,978 |
788,837 |
|
Contract and other revenue |
358,679 |
336,989 |
|
Total net revenue less provision for uncollectibles |
$ 1,074,657 |
$ 1,125,826 |
|
The following table reflects the visits and procedures included within fee-for-service revenues described in the table above:
Nine Months Ended |
|||
2009 |
2010 |
||
(in thousands) |
|||
Fee-for-service visits and procedures: |
|||
Same contract |
5,207 |
5,221 |
|
New and acquired contracts, net of terminations |
669 |
847 |
|
Total fee-for-service visits and procedures |
5,876 |
6,068 |
|
SOURCE Team Health Holdings, Inc.
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