First-quarter fiscal 2010 results announced by Rural/Metro

Rural/Metro Corporation (NASDAQ: RURL) First-Quarter Highlights:

-- Net revenue increased 6.8% to $132.0 million, compared to $123.6 million in the prior year. -- Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) from continuing operations increased 24.0% to $17.8 million, compared to $14.4 million in the prior year. -- Average Patient Charge (APC) increased $27 per transport to $389, compared to $362 in the prior year. -- Days Sales Outstanding (DSO) improved by 10 days, from 59 in the prior year to 49 in the fiscal 2010 first quarter. -- Cash flow from operations was $17.6 million in the quarter, up 39.3% compared to the fiscal 2009 first quarter.

Rural/Metro Corporation (NASDAQ: RURL), a leading provider of ambulance and private fire protection services, announced results today for its fiscal 2010 first quarter, reporting continued growth in net revenue, strong cash flows, and further improvements in key operating statistics.

"First-quarter results demonstrated the continued effectiveness of our ongoing efforts to increase revenue and profitability by gaining market share in existing communities, selectively targeting new contract opportunities and proactively managing our exposure to uncompensated care, said Jack Brucker, President and Chief Executive Officer. "We were very pleased to generate further improvements in key operating statistics, including both sequential and year-over-year improvements in APC and DSO, and to sustain strong cash-flow momentum throughout the quarter."

Results of Operations for the Fiscal 2010 First Quarter Ended September 30, 2009

Consolidated net revenue for the first quarter increased 6.8 percent, or $8.4 million, to $132.0 million, compared to $123.6 million in fiscal 2009. Ambulance services revenue increased 8.1 percent, or $8.5 million, to $113.3 million, compared to $104.8 million in the prior year. Other services revenue, which includes fire protection services was $18.7 million compared to $18.8 million for the prior year. Consolidated quarterly net revenue growth was driven primarily by increases in same-service-area APC and transport volume, as well as new ambulance contracts in Colorado, Tennessee and Oregon.

Payroll and employee benefits for the first quarter were $81.9 million, or 62.1 percent of net revenue, compared to $75.8 million, or 61.3 percent of net revenue, in the first quarter of fiscal 2009. The year-over-year increase in payroll dollars was driven by increases in employee health insurance and workers' compensation insurance expenses, as well as additional labor hours related to higher transport volume.

Mr. Brucker explained, "We have experienced a rise in employee health insurance expense due to an increase in the frequency of high-cost claims, which were driven primarily by advanced specialty care. We anticipate employee health insurance expense will continue to be influenced by this trend."

Other operating expenses for the first quarter were $28.3 million, or 21.4 percent of net revenue, compared to $29.7 million, or 24.0 percent of net revenue, in fiscal 2009. The difference was driven primarily by a reduction in fuel expenses in the first quarter compared to the same quarter of the prior year.

Income from continuing operations for the first quarter was $3.6 million, compared to $1.6 million for the same period in fiscal 2009. Net income attributable to Rural/Metro, excluding net income attributable to noncontrolling interest, was $2.9 million, or diluted EPS of $0.12, compared to $0.8 million, or diluted EPS of $0.03 for same period in fiscal 2009.

EBITDA from continuing operations for the first quarter increased 24.0 percent, or $3.4 million, to $17.8 million compared to $14.4 million for the same period in fiscal 2009.

EBITDA from continuing operations is a key indicator management uses 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 its 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 September 30, 2009 and 2008 is included with this press release and the related current report on Form 8-K.

Net cash provided by operating activities remained strong in the first quarter, increasing 39.3 percent to $17.6 million, compared to $12.6 million for the same period in fiscal 2009. Capital expenditures for the first quarter were $2.2 million.