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Business Services Industry

Emergency Medical Services Announces $0.40 Diluted EPS for First Quarter 2008

Business Wire, May 6, 2008

Highlights:

* Net revenue was $565.8 million, an increase of 8.1% compared to the first quarter of 2007, or 10.0% excluding the impact of the 2007 items in the note below;

* Adjusted EBITDA was $54.4 million, an increase of 0.3% compared to the first quarter of 2007, or 12.2% excluding the impact of the 2007 items in the note below; and

* Diluted earnings per share were $0.40, an increase of 2.2% compared to the first quarter of 2007, or 29.7% excluding the impact of the 2007 items in the note below.

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Note: The first quarter 2007 included a positive revenue adjustment of $9 million, which the Company indicated last year would not recur. The revenue adjustment resulted in a positive Adjusted EBITDA impact of $8 million. Including the $2.2 million in restructuring charges, first quarter 2007 Adjusted EBITDA was positively impacted by $5.8 million.

GREENWOOD VILLAGE, Colo. -- Emergency Medical Services Corporation (NYSE:EMS) (EMSC or the Company) today announced results for the first quarter ended March 31, 2008.

Commenting on the quarter, William A. Sanger, Chairman and Chief Executive Officer, said, "We are very pleased with our first quarter results. Our strategy of organic growth, market rationalization and targeted acquisitions resulted in improved performance, both sequentially and compared to last year. We are particularly encouraged by our market expansion in both segments, including AMR's recent entry into Arizona."

Results of Operations for the First Quarter 2008

For the quarter ended March 31, 2008, EMSC generated net revenue of $565.8 million, an increase of 8.1% compared to the same quarter last year, or 10.0% excluding the $9 million positive revenue adjustment in the first quarter 2007. Adjusted EBITDA was $54.4 million, an increase quarter over quarter of 0.3%, or 12.2% excluding the impact of the first quarter 2007 items of $5.8 million. A reconciliation of non-GAAP to GAAP financial measures is included in this news release.

EMSC generated net income of $17.0 million, or $0.40 per diluted share, for the first quarter of 2008, compared to net income of $16.6 million, or $0.39 per diluted share, in the first quarter of last year, an increase of 2.2%. Excluding the earnings per share impact of the first quarter 2007 items of $5.8 million, diluted earnings per share increased $0.09, or 29.7%, compared to the three months ended March 31, 2007. The increase in earnings is attributable primarily to the net impact of higher rates and volumes on existing contracts, increased volume from net new contracts and acquisitions and lower interest expense, partially offset by higher fuel costs.

Cash used in operating activities was $2.8 million in the first quarter 2008, compared to cash used of $3.8 million for the same quarter last year. Cash used in operating activities in the first quarter was affected primarily by an increase in accounts receivable due to higher revenue, lower insurance accruals and a reduction in liabilities. Historically, EMSC has not generated positive operating cash flow in the first quarter primarily due to payouts of semi-annual bond interest payments and annual incentive awards.

While accounts receivable increased, EMSC's days sales outstanding (DSO) improved by one day in the first quarter 2008 from collections of AMR receivables that had been delayed as a result of the billing system conversion in several markets during 2007. AMR's DSO increased 8 days during fiscal 2007, of which 6 days was related to this conversion. The Company expects to collect the remaining net receivables related to the system conversion by the end of 2008.

Although EmCare receivables continue to be impacted by industry-wide delays in obtaining provider enrollment numbers for Medicare and Medicaid billings, we have seen improvement in the amount of time required to obtain provider numbers. This resulted in significant decreases in enrollment-delayed amounts over 90 days, although the total amount has only decreased by 6% due to the increase in recent contract starts. The Company expects to collect these Medicare and Medicaid receivables, which currently represent approximately 7 days of EmCare's DSO.

Net cash used in investing activities was $13.0 million for the three months ended March 31, 2008, compared to $6.1 million for the same period in 2007. The increase relates primarily to our acquisition of River Medical for $13.3 million. Net capital spending was $2.5 million during the three months ended March 31, 2008, compared to $8.2 million for the same period last year primarily as a result of timing differences.

For the three months ended March 31, 2008, net cash provided by financing activities was $3.0 million compared to $0.4 million for the three months ended March 31, 2007. At March 31, 2008, there were no amounts outstanding under our revolving credit facility.

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.

Business Services Industry

Emergency Medical Services Announces $0.40 Diluted EPS for First Quarter 2008

Business Wire, May 6, 2008

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