Rural/Metro Reports Fiscal 2009 Third-Quarter ResultsStrong Cash Flows and Profitability ContinueSCOTTSDALE, AZ, May 11, 2009 (MARKETWIRE via COMTEX News Network) -- Rural/Metro Corporation (NASDAQ: RURL) Highlights: -- Year-to-date net revenue up 3.2% to $371.3 million; quarterly net Rural/Metro Corporation (NASDAQ: RURL), a leading provider of ambulance and private fire protection services, announced results today for its fiscal 2009 third quarter and nine months ended March 31, 2009, highlighting strong cash flows and positive trends in key operating and financial metrics. "We are pleased with our results this quarter as we continue to demonstrate the effectiveness of our efforts to enhance revenue quality, improve rates, reduce uncompensated care, and drive strong free cash flow," said Jack Brucker, President and Chief Executive Officer. "Cash on hand at the close of the third quarter was $27.8 million. This includes the $5.0 million voluntary principal payment made in March to further reduce the outstanding balance of our Term Loan B." Mr. Brucker continued, "We look forward to additional progress in these areas as we move toward completion of our electronic patient care record system in fiscal 2010 and make continued investments in industry-leading programs, processes and technologies." Results of Operations for the Third Fiscal Quarter Ended March 31, 2009 Consolidated net revenue for the third quarter ended March 31, 2009 increased 0.6% to $125.9 million compared to $125.1 million for the same period in fiscal 2008. Ambulance revenue for the period was up 0.9% to $107.4 million compared to $106.5 million for the same prior-year period. Other services revenue, which includes fire protection services revenue, was $18.5 million compared to $18.7 million for the same prior-year period. Net revenue results for the fiscal 2009 third quarter include a $0.8 million increase in new emergency and non-emergency contracts. These were offset by reduced transports from discontinued contracts in Tempe, Arizona, and unincorporated Orange County, Florida, as well as some decline in 911 transports due to fewer temporary residents and leisure travelers in the Arizona, Florida and Southern California markets. Continued efforts to reduce uncompensated care and effect rate increases resulted in an increase in net medical transport APC to $373 in the third quarter, compared to $350 for the same period of the prior year. Payroll and employee benefits expense for the third quarter represented 61.5% of net revenue compared to 61.2% of net revenue for the same prior-year period. The difference was driven primarily by an increase in employee health insurance expenses. The Company reduced other operating expenses by $2.6 million reduction in the third quarter to $28.6 million, or 22.7% of net revenue, from $31.2 million, or 25.0% of net revenue, in the same period a year ago. The decrease included lower expenses for fuel, operating supplies and professional fees. General and auto liability insurance expense for the third fiscal quarter was $5.0 million compared to $4.1 million for the same prior-year period. The increase was primarily due to a net $0.9 million increase in claims reserves. Net income for the third quarter was $1.0 million, or diluted EPS of $0.04, compared to net income of $1.5 million, or diluted EPS of $0.06, for the same prior-year period. The year-over-year difference in net income was primarily driven by a higher effective tax rate. EBITDA from continuing operations for the third quarter was $14.4 million compared to $13.2 million in the same prior-year period. The $1.2 million improvement was driven by reductions in uncompensated care, rate increases, and overall cost-containment measures. EBITDA from continuing operations is a key indicator used by management to evaluate operating performance. While EBITDA from continuing operations is not intended to replace presentations included in the Company's consolidated financial statements under generally accepted accounting principles (GAAP) and should not be considered an alternative to operating performance or an alternative to cash flow as a measure of liquidity, the Company believes this measure is useful to investors in assessing the ability to meet future debt service, capital expenditure and working capital requirements. This calculation may differ in the method of calculation from similarly titled measures used by other companies. A reconciliation of EBITDA to income/(loss) from continuing operations and discontinued operations for the three months ended March 31, 2009 and 2008 is included with this press release and the related current report on Form 8-K. Results of Operations for the Nine Months Ended March 31, 2009 Consolidated net revenue for the nine months ended March 31, 2009 increased 3.2%, or $11.5 million, to $371.3 million from $359.8 million for the same period in fiscal 2008. Net ambulance revenue increased 3.5%, or $10.5 million, to $315.1 million from $304.5 million for the same prior-year period. Other services revenue, which includes fire protection services revenue, was $56.3 million for the nine-month period, up slightly compared to $55.2 million for the same prior-year period. The increase in consolidated year-to-date net revenue was due to growth in same-service-area revenue driven by improvements in net APC, as well as new contract revenue in the Tennessee, Washington, Colorado and Oregon markets. Payroll and employee benefits expense for the nine-month period ended March 31, 2009 represented 61.8% of net revenue compared to 62.4% of net revenue in the same prior-year period. The decrease in payroll and employee benefits as a percentage of net revenue was due to the Company's continued management of ambulance unit hours and improvements in workers' compensation claims expense. A decrease in expenses for professional fees drove a $1.0 million reduction in other operating expenses for the period. Other operating expenses for the first nine months of fiscal 2009 were $86.3 million, or 23.3% of net revenue, compared to $87.3 million, or 24.3% of net revenue, in the same period of fiscal 2008. General and auto liability expense of for the first nine months of fiscal 2009 was $10.9 million, compared to $10.0 million for the same prior-year period. The increase was due to a net $0.9 million increase in claims reserves during the three months ended March 31, 2009. Net income for the nine-month period ended March 31, 2009 was up slightly to $2.8 million, or diluted EPS of $0.11, compared to net income of $2.6 million, or diluted EPS of $0.11 for the same prior-year period. EBITDA from continuing operations for the nine-month period increased to $43.6 million compared to $38.5 million for the same prior-year period. The $5.1 million improvement was driven by reductions in uncompensated care, rate increases, and overall cost-containment measures. Net cash provided by operating activities for the nine months ended March 31, 2009 was $37.3 million, compared to $24.5 million for the same prior-year period. Capital expenditures for the nine-month period were $12.5 million, resulting in year-to-date free cash flow of $24.8 million. Third-Quarter Operating Statistics The following table provides results for medical transports, APC, and DSO during each of the five most recent quarters. The Company noted that discontinued contracts in Tempe, Arizona, and unincorporated Orange County, Florida, accounted for approximately 60% of the decrease in year-over-year transport volume, with the balance related to a reduction in temporary residents and leisure travelers to markets in Arizona, Florida and Southern California. Excluding the discontinued contracts, transport volume for the nine months ended March 31, 2009 grew by 1%, or approximately 8,400 transports. Q3 '08 Q4 '08 Q1 '09 Q2 '09 Q3 '09 Fiscal 2009 Financial Guidance Updated The Company updated guidance for the fiscal year ending June 30, 2009, expecting EBITDA from continuing operations to be in the range of $56.0 million to $58.0 million and capital expenditures to be in the range of $16.0 million to $18.0 million. Conference Call to Discuss Results The Company will discuss results in a conference call today beginning at 8 a.m. Pacific/11 a.m. Eastern. To access the conference call, dial 877-856-1962 (domestic) or 719-325-4762 (international). The call also will be broadcast on the Company's web site at www.ruralmetro.com. A telephone replay will be available from approximately 2 p.m. (Eastern) today through midnight (Eastern) May 13, 2009. To access the replay, dial 888-203-1112. From international locations, dial 719-457-0820. The required pass code is 1689049. An archived webcast will be available following the call at www.ruralmetro.com. About Rural/Metro Rural/Metro Corporation provides emergency and non-emergency ambulance services and private fire protection services in 22 states and approximately 400 communities throughout the United States. For more information, visit the Company's web site at www.ruralmetro.com. SAFE HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS The foregoing reflects the Company's views about its future financial condition, performance and other matters that constitute "forward-looking" statements as such term is defined by the federal securities laws. Many of these statements can be found by looking for words such as "believe," "anticipate," "expect," "plan," "intend," "may," "should," "will likely result," "continue," "estimate," "project," or similar words used herein in connection with any discussions of future operating or financial performance or business prospects. We may also make forward-looking statements in our earnings reports filed with the Securities and Exchange Commission (SEC), earnings calls and other investor communications. These forward-looking statements are subject to the safe harbor protection provided by federal securities laws. These forward-looking statements are subject to numerous risks, uncertainties and assumptions, including those relating to the Company's future business prospects, uncompensated care, working capital, accounts receivable collection, liquidity, cash flow, EBITDA, capital expenditures, insurance coverage and claim reserves, capital needs, future operating results and future compliance with covenants in our debt facilities or instruments. In addition, the Company may face risks and uncertainties related to other factors that are listed in its periodic reports filed under the Securities Exchange Act. Although the Company believes the expectations reflected in its forward-looking statements are based upon reasonable assumptions, because the statements are subject to risks and uncertainties, the Company can give no assurance that its expectations will be attained or that actual developments and results will not materially differ from those expressed or implied by the forward-looking statements. Readers are cautioned not to place undue reliance on the statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as may be required by law. RURAL/METRO CORPORATION (RURL/F) CONTACT: SOURCE: Rural/Metro Corporation Copyright 2009 Marketwire, All rights reserved. News Provided by COMTEX |