EMSC generates net revenue of $679.4 million for first-quarter 2010

Emergency Medical Services Corporation (NYSE: EMS) (EMSC or the Company) today announces results for the first quarter ended March 31, 2010.

William A. Sanger, Chairman and Chief Executive Officer, said, "EMSC continues to perform well, as evidenced by our 25% EPS growth. We are encouraged by both our strong pipeline and the continued demand for our services as communities and healthcare facilities increasingly recognize the value we provide. Our successful debt refinancing reduces our cost of capital and further positions the Company to take advantage of these opportunities."

Results of Operations for the First Quarter 2010

For the quarter ended March 31, 2010, EMSC generated net revenue of $679.4 million, an increase of 10.8% compared to the same period last year.

EMSC generated net income of $31.0 million, or $0.70 per diluted share, for the first quarter of 2010, compared to net income of $24.1 million, or $0.56 per diluted share, in the first quarter of 2009 for an increase of $7.0 million and 24.7%, respectively. Adjusted EBITDA was $74.4 million, an increase of 13.6% compared to the same quarter last year. This increase is attributable primarily to the impact of increased volume from net new contracts, increased revenue from existing contracts, and a decrease in operating and insurance expenses as a percentage of revenue, offset in part by increased compensation and general and administrative expenses. Net income and diluted earnings per share were also positively impacted by a reduction in interest expense due to the expiration of an interest rate swap agreement in December 2009.

Cash provided by operating activities was $44.6 million in the first quarter of 2010, compared to $41.9 million for the same quarter last year. The change in operating cash flows was affected primarily by an increase in net income combined with a reduction in accounts receivable and a net increase in accrued liabilities. In the first quarter of 2010, Days Sales Outstanding decreased by three days sequentially to 61 days.

Free cash flow was $40.8 million in the first quarter of 2010 compared to $47.4 million in the first quarter of 2009. Free cash flow in the quarter ended March 31, 2009 benefited from a release of insurance collateral of $10 million. Free cash flow in 2010 does not include a $10.6 million cash flow benefit related to tax deductions for stock-based compensation.

Net cash used in investing activities was $7.1 million for the quarter ended March 31, 2010, compared to $5.5 million net cash provided by investing activities for the same period in 2009. Cash flows provided by changes in insurance collateral decreased $10.9 million year over year related primarily to a release of collateral of $10 million in the first quarter 2009. Acquisition related funding was $3.3 million in the first quarter 2010.

For the quarter ended March 31, 2010, net cash provided by financing activities was $10.7 million compared to $0.6 million for the first quarter of 2009. Financing activities in 2010 included a tax benefit from stock-based compensation of $10.6 million. At March 31, 2010, there were no amounts outstanding under our revolving credit facility.

A description of the non-GAAP measures, Adjusted EBITDA and Free Cash Flow, and a reconciliation of non-GAAP to GAAP financial measures are included in this news release.

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 facility-based physician services segment.

American Medical Response (AMR)

For the quarter ended March 31, 2010, AMR generated net revenue of $337.0 million, an increase of 0.2% compared to the first quarter last year. The increase in net revenue was from an improvement in revenue per transport and growth in our managed transportation business, offset primarily by a decrease in interfacility transports related to both exited markets and a mild flu season.

Adjusted EBITDA was $32.4 million, a decrease of 4.4% compared to the same quarter last year. The decrease in Adjusted EBITDA is attributable primarily to the impact of lower interfacility transports, higher fuel costs and general and administrative expenses offset by revenue per transport growth. Income from operations was $20.8 million, an increase of 1.0% compared to the same quarter in 2009.

EmCare

For the quarter ended March 31, 2010, EmCare generated net revenue of $342.4 million, an increase of 23.8% compared to the same quarter last year. The increase in revenue is attributable primarily to the addition of 51 net new contracts since January 1, 2009, and revenue increases at existing contracts.

Adjusted EBITDA was $42.0 million for the quarter compared to $31.7 million last year, an increase of 32.8%. The increase in Adjusted EBITDA was driven primarily by the net impact of revenue and volume increases from new contracts in addition to a decrease in operating and insurance expenses as a percentage of net revenue. Income from operations was $36.6 million, an increase of 36.1% over the same period in 2009.

Guidance

Diluted 2010 EPS guidance is updated from $3.00 - $3.10 to an expected range of $3.10 - $3.20 excluding $0.28 of one-time charges related to our debt refinancing, completed in April 2010. Diluted EPS including all one-time refinancing costs is expected to be between $2.82 - $2.92.

SOURCE Emergency Medical Services Corporation