KNOXVILLE, Tenn., Nov. 2 /PRNewswire/ -- TeamHealth Inc.'s parent company,
Team Finance LLC (the "Company"), today announced results for the third
quarter of 2009.
Net revenue less provision for uncollectibles ("revenue less provision") in
the third quarter of 2009 increased 8.6% to $363.0 million from $334.3 million
in the third quarter of 2008. Same contract revenue less provision for the
quarter increased 7.5% to $331.0 million from $307.9 million in the same
period a year ago. During the third quarter of 2009, growth in same contract
revenue less provision was positively impacted by increases in billed patient
volume, which contributed approximately 4.9% of growth between quarters.
Increases in estimated collections per visit contributed approximately 2.2% of
same contract growth between quarters. New sales, net of contracts that
terminated in the period, and acquisitions contributed $3.1 million and $2.4
million of growth between periods, respectively. Net earnings were $13.5
million in the third quarter of 2009, compared to $22.9 million in the same
quarter of 2008. Financial results for the third quarter 2008 reflected
reductions of professional liability reserves related to prior years of $26.5
million, while in the third quarter of 2009, no adjustments to professional
liability reserves associated with prior years were recorded. This factor was
primarily responsible for the increased level of net earnings in the third
quarter of 2008 versus the same quarter of 2009.
Net revenue less provision for the nine months ended September 30, 2009
increased 7.5% to $1.1 billion from $999.8 million in the same period of 2008.
Same contract revenue less provision for the nine months ended September 30,
2009 increased 5.7% to $946.3 million from $895.1 million in the corresponding
period of 2008. Same contract revenue growth during the nine month period
benefited 3.2% from increases in patient volume and 2.1% from growth in
estimated collections per visit. New sales, net of contracts that terminated
in the period and acquisitions contributed $15.6 million and $8.0 million of
growth between periods, respectively. Net earnings increased 10.3% to $55.2
million for the nine months ended September 30, 2009, compared to $50.1
million in the corresponding period of 2008. Financial results for the nine
months ended September 30, 2009 and 2008 reflected reductions of professional
liability reserves related to prior years of $18.8 million and $40.4 million,
respectively.
As of September 30, 2009, the Company had cash and cash equivalents of
approximately $113.0 million and a revolving credit facility of $110.0 million
(without giving effect to $7.5 million of undrawn letters of credit). Of the
$110.0 million revolving credit facility, $10.0 million is held by CIT Lending
Services Corporation ("CIT Lending Services"), a subsidiary of CIT Group, Inc.
CIT Group, Inc and CIT Group Funding Company of Delaware LLC filed for Chapter
11 bankruptcy protection on November 1, 2009. Although CIT Lending Services is
not currently a party to this filing, at this time it is not certain if this
portion of the revolving credit facility will be available to the Company.
The Company does not believe any potential reduction in available capacity
under the revolving credit facility will have a material impact on its
liquidity or the liquidity of its subsidiaries. During the nine months ended
September 30, 2009, the Company made scheduled debt payments of $3.2 million.
As a result, the Company's total outstanding debt as of September 30, 2009
was $612.1 million and there were no amounts outstanding under the revolving
credit facility. Cash flow provided by operations for the nine months ended
September 30, 2009 increased to $84.6 million compared to $62.9 million for
the same period in 2008. Contributing to the increase in operating cash flow
between years were improvements in profitability, lower levels of accounts
receivable funding, and reductions in interest payments during the first nine
months of 2009 compared to the same period in 2008.
Greg Roth, President and Chief Executive Officer of TeamHealth commented,
"Though we are pleased with these results, given the challenges presented by
the current economic environment, we will remain focused on managing our cost
structure and enhancing our revenue cycle process in order to improve our
operating leverage and cost margins. As an organization, we continue our
commitment to working closely with all of our 6,100 affiliated providers, who
share our long-term vision of continuous quality improvement, to enable them
to deliver exceptional patient care and service throughout the United States."
Lynn Massingale, M.D., Executive Chairman of TeamHealth, added, "TeamHealth
continues to seek out innovative solutions to enhance and improve the overall
patient experience and to support our affiliated physicians and clinicians in
the provision of these services. The stability, and financial strength of
TeamHealth, as well as the dedication of all our employees, provides us with a
strong foundation to continue to make investments in the areas of patient
safety, physician satisfaction and efficiency in the delivery of care."
Conference Call
As previously announced, TeamHealth will hold an investor conference call at
9:00 a.m. Eastern Time on November 3, 2009. All interested parties may listen
to the call by calling (888) 290-3292. A taped replay of the call will be
available after 1:00 p.m. Eastern Time Tuesday, November 3, 2009, through
midnight on Tuesday, November 10, 2009, by calling (800) 642-1687, access code
38716140.
About TeamHealth
Founded in 1979, TeamHealth is headquartered in Knoxville, Tennessee.
TeamHealth is affiliated with more than 6,100 healthcare professionals who
provide emergency medicine, radiology, hospital medicine, urgent care and
pediatric staffing and management services to more than 550 civilian and
military hospitals, and clinics and physician groups in 46 states. For more
information about TeamHealth, visit www.teamhealth.com or call 800.818.1498.
Statements made in this communication that are not historical facts and that
reflect the current view of Team Finance LLC or TeamHealth, Inc. (collectively
the "Company") about future events and financial performance are hereby
identified as "forward looking statements." 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 and include references to assumptions that
we believe are reasonable and relate to our future prospects, developments and
business strategies. The Company cautions readers of this communication 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 communication 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 those factors
detailed from time to time in the Company's filings with the Securities and
Exchange Commission, including filings on Forms 10-Q and 10-K.
The Company's forward-looking statements speak only as of the date they are
made. The Company disclaims any intent or obligation to update any "forward
looking statement" made in this communication.
Team Finance LLC
Financial Highlights
Three Months Ended
September 30,
-------------
2008 2009
---- ----
(Unaudited)
(In thousands)
Net revenue $582,749 $637,480
Provision for uncollectibles 248,447 274,499
------- -------
Net revenue less provision for
uncollectibles 334,302 362,981
Cost of services rendered
Professional service expenses 265,633 281,185
Professional liability (benefit) costs (15,535) 13,479
-------- ------
Gross profit 84,204 68,317
General and administrative expenses 29,318 32,348
Management fee and other expenses 960 804
Depreciation and amortization 4,553 4,696
Interest expense, net 10,438 8,549
Transaction costs 19 419
-- ---
Earnings before income taxes 38,916 21,501
Provision for income taxes 15,986 8,001
------ -----
Net earnings $22,930 $13,500
======= =======
Team Finance LLC
Financial Highlights
Nine Months Ended
September 30,
-------------
2008 2009
---- ----
(Unaudited)
(In thousands)
Net revenue $1,720,775 $1,868,002
Provision for uncollectibles 720,968 793,345
------- -------
Net revenue less provision for uncollectibles 999,807 1,074,657
Cost of services rendered
Professional service expenses 779,426 828,268
Professional liability (benefit) costs (2,986) 19,145
------- ------
Gross profit 223,367 227,244
General and administrative expenses 88,277 93,182
Management fee and other expenses 2,745 2,324
Depreciation and amortization 12,559 14,028
Interest expense, net 34,033 27,671
Transaction costs 1,805 578
----- ---
Earnings before income taxes 83,948 89,461
Provision for income taxes 33,885 34,230
------ ------
Net earnings $50,063 $55,231
======= =======
Team Finance LLC
Financial Highlights
Under the indenture governing the Company's 11.25% senior subordinated notes
(the "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 liquidity and financial flexibility. 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 Notes is as follows (in thousands):
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2008 2009 2008 2009
---- ---- ---- ----
Net earnings $22,930 $13,500 $50,063 $55,231
Interest expense, net 10,438 8,549 34,033 27,671
Provision for income taxes 15,986 8,001 33,885 34,230
Depreciation and amortization 4,553 4,696 12,559 14,028
Management fee and other
expenses (a) 960 804 2,745 2,324
Restricted unit expense (b) 163 187 439 558
Insurance subsidiary interest
income 1,173 640 3,040 2,138
Severance and other charges (118) (22) 1,340 301
Transaction costs(c) 19 419 1,805 578
-- --- ----- ---
Adjusted EBITDA* $56,104 $36,774 $139,909 $137,059
======= ======= ======== ========
* Adjusted EBITDA totals are not adjusted for the favorable effects of
professional liability loss reserve adjustments associated with prior
years of $0 and $26,529 for the three months ended September 30, 2009
and 2008, respectively, and $18,824 and $40,364 for the nine months
ended September 30, 2009 and 2008, respectively. Adjusting for the
effects of professional liability loss reserve adjustments associated
with prior years, Adjusted EBITDA would have been reduced to $36,774
and $29,575 for the three months ended September 30, 2009 and 2008,
respectively, and $118,235 and $99,545 for the nine months ended
September 30, 2009 and 2008, respectively.
(a)Reflects sponsor management fee, loss on disposal of assets and
realized gain on investments.
(b)Reflects costs related to the recognition of expense in connection with
the issuance of restricted units under the 2005 Unit Plan.
(c)Reflects expenses associated with acquisition transaction fees.
Team Finance LLC
Financial Highlights
Balance Sheet Data As of As of
------------------ December 31, September 30,
2008 2009
---- ----
(Unaudited)
(In thousands)
Cash and cash equivalents $46,398 $112,994
Accounts receivable, net 237,790 237,563
Long term debt, including current portion 615,275 612,088
SOURCE TeamHealth
David Jones, CFO, +1-865-693-1000, of Team Health, Inc.
