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8-K - 8-K - Envision Healthcare Holdings, Inc.a14-7285_18k.htm

Exhibit 99.1

 

 

EVHC News - For Immediate Release

 

Contact:

Bob East

 

Westwicke Partners

 

443-213-0502

 

Bob.East@westwicke.com

 

ENVISION HEALTHCARE REPORTS FOURTH QUARTER AND

FULL YEAR 2013 RESULTS AND REAFFIRMS 2014 GUIDANCE

 

Greenwood Village, Colorado (March 5, 2014) — Envision Healthcare Holdings, Inc. (NYSE: EVHC) (“EVHC” or the “Company”) today announces results for the fourth quarter and full year 2013. All comparisons included in this release are for fourth quarter or full year 2013 to fourth quarter or full year 2012 unless otherwise noted.

 

Highlights:

 

·                  Fourth quarter 2013 net revenue was $984.8 million, an increase of 13.0%, or 18.0% excluding $37.2 million of revenue from the fourth quarter 2012 Hurricane Sandy FEMA deployment;

 

·                  Fourth quarter 2013 Adjusted EBITDA was $117.2 million, an increase of 3.6%. Excluding insurance reserve adjustments of $9.7 million for two recent significantly higher than expected malpractice awards on cases filed in 2009 and 2011, fourth quarter Adjusted EBITDA was $126.9 million, an increase of 12.2%. Full year Adjusted EBITDA was $445.7 million. Excluding the impact of the aforementioned malpractice cases, full year Adjusted EBITDA was $455.4 million;

 

·                  Fourth quarter 2013 Adjusted EPS was $0.20, including a $0.03 dilutive impact from the aforementioned malpractice cases. GAAP diluted EPS was $0.04;

 

·                  On February 5, 2014, the Company completed the acquisition of Life Line Ambulance in Arizona with annualized revenue of approximately $16 million; and

 

·                  The Company reaffirms previously announced 2014 Adjusted EPS guidance of $1.10 to $1.15 and Adjusted EBITDA guidance of $538 million to $545 million.

 

William A. Sanger, Chief Executive Officer, said, “In the fourth quarter, we saw continued record-setting organic growth in both segments. EmCare maintained its accelerated pace for contract starts and AMR started the largest 911 contract we have seen in several years. These combined results contributed to another remarkable year. Looking forward, we believe our differentiated product offerings, which are specifically designed to address the challenges of our customers in a changing healthcare landscape, will provide us the opportunity to continue our growth.”

 



 

Results of Operations for the Fourth Quarter of 2013

 

For the fourth quarter of 2013, EVHC generated net revenue of $984.8 million, an increase of 13.0%, or 18.0% excluding the FEMA deployment.

 

Adjusted EBITDA was $117.2 million, an increase of 3.6%, or $126.9 million, an increase of 12.2%, excluding the $9.7 million impact from two recent significantly higher than expected malpractice awards on cases filed in 2009 and 2011. The increase in Adjusted EBITDA is primarily attributable to the impact of increased volume from net new contracts and increased revenue from same store contracts and acquisitions.

 

EVHC generated net income of $7.9 million compared to net income of $12.3 million. The decrease in net income is primarily attributable to the tax-effected impact of $38.7 million in costs related to the partial redemption of the 8.125% Senior Notes due 2019 (“2019 Notes”) on December 30, 2013, partially offset by lower interest expense due to debt reduction from IPO proceeds in August 2013.

 

Segment Results for the Fourth Quarter of 2013

 

EVHC operates two business segments: EmCare Holdings Inc. (“EmCare”), the Company’s facility-based and post-acute care physician services segment and American Medical Response, Inc. (“AMR”), the Company’s healthcare transportation services segment.

 

EmCare

 

EmCare generated net revenue of $629.6 million, an increase of $118.3 million or 23.1%. Organic growth was 16.8% primarily attributable to an increase of $72.4 million, or 14.2%, from net new contracts, and an increase of $13.4 million, or 2.6%, from same store contracts. Revenue from acquisitions increased $32.5 million or 6.3%.

 

Adjusted EBITDA was $75.3 million compared to $71.4 million, an increase of $3.9 million, or 5.4%. Excluding the impact of the two malpractice cases, Adjusted EBITDA was $85.0 million, an increase of 19.0% which was primarily driven by the net impact of revenue increases from net new contracts and same store revenue growth. These were offset by higher compensation costs and other related start-up costs associated with new contract starts. Excluding the impact of the two malpractice cases, insurance trends continue to be stable as expense for the fourth quarter of 2013 included a favorable prior period insurance adjustment of $0.9 million compared to a favorable prior period adjustment of $3.0 million in 2012. Income from operations was $63.0 million, an increase of 15.0%.

 

American Medical Response (AMR)

 

For the fourth quarter of 2013, AMR generated net revenue of $355.2 million, a decrease of $5.3 million, or 1.5%. Excluding the $37.2 million of revenue in 2012 for the FEMA deployment, AMR generated a net revenue increase of $31.8 million or 9.8%. Organic growth was 5.2% driven by new 911 contract wins and increased revenue in existing markets. Acquisition growth was 4.6%.

 

Adjusted EBITDA was $41.9 million in the fourth quarter of 2013 which was equivalent to the same quarter in 2012. Excluding the impact of the FEMA deployment in 2012, Adjusted EBITDA and margins improved substantially. This was attributable to revenue increases in existing markets, new contract wins, acquisitions and lower expenses due to cost saving initiatives. Insurance expense for the fourth quarter of 2013 included a favorable prior period adjustment of $0.9 million compared to an unfavorable prior period adjustment of $0.3 million. Income from operations was $21.6 million, an increase of 4.3%.

 



 

Cash Flows for the Fourth Quarter of 2013

 

Cash provided by operating activities was $28.5 million, compared to $47.2 million. The decrease of $18.7 million was primarily driven by an increase in accounts receivable at December 31, 2013. Days Sales Outstanding (“DSO”) increased by two days from the third quarter of 2013. While AMR’s DSO decreased by one day, EmCare’s DSO increased 5 days primarily as a result of provider enrollments previously delayed by CMS and a significant number of new contract starts.

 

Net cash used in investing activities was $28.6 million, compared to $187.5 million. Acquisitions were $7.7 million, compared to $172.4 million. Net capital expenditures increased $4.3 million primarily due to timing differences.

 

Net cash used in financing activities was $371.0 million compared to net cash provided by financing activities of $69.7 million.  During the quarter, a payment of $354.3 million was made to partially redeem the 2019 Notes, which included a $27.0 million redemption premium. At December 31, 2013, there were no amounts outstanding under the revolving credit facility.

 

Adjusted Free Cash Flow was $7.7 million, compared to $32.2 million. The difference is primarily attributable to aforementioned changes in accounts receivable at EmCare.

 

Results of Operations for the Full Year 2013

 

EVHC net revenue was $3.73 billion, an increase of 13.0%, or 14.5% excluding FEMA deployment revenue in 2012 of $44.1 million.

 

Adjusted EBITDA was $445.7 million, an increase of 10.2%. Excluding the impact of the two malpractice cases, Adjusted EBITDA was $455.4 million. This increase is primarily attributable to the impact of increased volume from net new contracts, increased revenue from existing contracts and acquisitions.

 

Net income of $6.0 million was affected by $88.4 million from the IPO-Related Costs in the third quarter, along with the early redemption costs for the PIK Notes and 2019 Notes. Net income for the year ended 2012 was $41.2 million.

 

Segment Results for the Full Year 2013

 

EmCare’s net revenue was $2.36 billion, an increase of 23.2%. Adjusted EBITDA was $294.0 million, an increase of 12.8%. Excluding the impact of the two malpractice cases, Adjusted EBITDA was $303.7 million. Income from operations was $219.8 million, an increase of 10.3%.

 

AMR’s net revenue was $1.37 billion, a decrease of 1.1%. Excluding 2012 FEMA deployment revenue, net revenue increased 2.1%. Adjusted EBITDA was $151.7 million, an increase of 5.4%. Income from operations was $57.0 million, a decrease of 1.1%.

 

Cash Flows for the Full Year 2013

 

Cash provided by operating activities was $112.3 million, excluding $58.2 million in non-recurring outflows, compared to $216.4 million. The non-recurring operating outflows included the IPO-Related Costs outflows of $20 million, a $13.7 million operating cash flow payment to settle a prior shareholder lawsuit, and $24.5 million of payments related to a 2012 AMR contract termination and the 2012 FEMA deployment. The remaining

 



 

difference of $104.1 million primarily relates to an income tax refund of $43.0 million received in the third quarter of 2012 and an increase in accounts receivable in 2013. While AMR’s DSO decreased 5 days, EmCare’s DSO increased 17 days primarily as a result of provider enrollments previously delayed by CMS and a significant number of new contract starts as previously noted.

 

Net cash used in investing activities was $98.6 million, compared to net cash used in investing activities of $154.0 million. The change is primarily due to a return of insurance collateral of approximately $100 million in 2012. Acquisitions of businesses totaled $35.1 million compared to $193.0 million. Net cash capital expenditures increased $12.1 million primarily due to new AMR 911 contract wins.

 

Net cash provided by financing activities was $191.4 million, compared to net cash used in financing activities of $138.6 million. The increase in cash provided by financing activities is primarily related to proceeds from the IPO offset by redemption of the PIK Notes, partial redemption of the 2019 Notes and payment to settle a prior shareholder lawsuit.

 

Adjusted Free Cash Flow was $48.8 million compared to $255.4 million. The decrease is primarily attributable to the aforementioned return of insurance collateral, income tax refund received in 2012 and the increase in EmCare accounts receivable.

 

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

 

2014 Guidance

 

The Company reaffirms previously announced 2014 Adjusted EPS guidance of $1.10 to $1.15, and Adjusted EBITDA guidance of $538 million to $545 million. This guidance includes an estimated Adjusted EBITDA benefit from Medicaid parity ranging from $17 million to $20 million, but does not include other benefits from healthcare reform.

 

Conference Call

 

EVHC management will host a conference call and live audio webcast today Wednesday, March 5, 2014, at 5 p.m. Eastern Standard Time, to discuss the Company’s financial results. Interested participants may listen to the call by dialing 800-857-6466 or 517-623-4761 for international callers and referencing participant code 51200 approximately 15 minutes prior to the call. For those unable to participate in the live broadcast, a replay will be available one hour after the call ends through April 5, 2014, at 888-562-8235 or 402-220-6514 for international callers. An audio file will be archived for 90 days on the investor relations section of the Company’s investor relations website - investor.evhc.net.

 

About Envision Healthcare Holdings, Inc.

 

Envision Healthcare Holdings, Inc. and our more than 30,000 employees and affiliated clinicians offer an array of healthcare-related services to consumers, hospitals, healthcare systems, health plans and local, state and national government entities. Through Envision Healthcare Corporation, we operate American Medical Response, Inc. (“AMR”), EmCare Holdings, Inc. (“EmCare”) and Evolution Health, LLC (“Evolution Health”). AMR is a provider and manager of community-based medical transportation services, including emergency (‘‘911’’), non-emergency, managed transportation, fixed-wing air ambulance and disaster response. EmCare is a provider of integrated facility-based physician services, including emergency, anesthesiology, hospitalist/inpatient care, radiology, tele-radiology and surgery. Evolution Health provides comprehensive care

 



 

to patients across various settings, many of whom suffer from advanced illnesses and chronic diseases. We are headquartered in Greenwood Village, Colorado. For additional information, visit www.evhc.net.

 

Forward-Looking Statements

 

Certain statements and information herein may be deemed to be “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements relating to our 2014 Adjusted EBITDA and Adjusted EPS guidance, objectives, plans and strategies, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. Any forward-looking statements herein are made as of the date of this press release, and EVHC undertakes no duty to update or revise any such statements. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in EVHC’s filings with the U.S. Securities and Exchange Commission from time to time, including in the section entitled “Risk Factors” in the Company’s Registration Statements on Form S-1 and subsequent periodic reports. Among the factors that could cause future results to differ materially from those provided in this press release are: decreases in our revenue and profit margin under our fee-for-service contracts due to changes in volume, payor mix and third party reimbursement rates, including from political discord in the federal budgeting process; the loss of existing contracts; failure to accurately assess costs under new contracts; difficulties in our ability to recruit and retain qualified physicians and other healthcare professionals, and enforce our non-compete agreements with our physicians; failure to implement some or all of our business strategies, including our efforts to grow our Evolution Health business and cross-sell our services; lawsuits for which we are not fully reserved; the adequacy of our insurance coverage and insurance reserves; our ability to successfully integrate strategic acquisitions; the high level of competition in the markets we serve; the cost of capital expenditures to maintain and upgrade our vehicle fleet and medical equipment; the loss of one or more members of our senior management team; our ability to maintain or implement complex information systems; disruptions in disaster recovery systems or management continuity planning; our ability to adequately protect our intellectual property and other proprietary rights or to defend against intellectual property infringement claims; challenges by tax authorities on our treatment of certain physicians as independent contractors; the impact of labor union representation; the impact of fluctuations in results due to our national contract with FEMA; potential penalties or changes to our operations if we fail to comply with extensive and complex government regulation of our industry; the impact of changes in the healthcare industry, including changes due to healthcare reform; our ability to timely enroll our providers in the Medicare program; our ability to restructure our operations to comply with future changes in government regulation; the outcome of government investigations of certain of our business practices; our ability to comply with the terms of our settlement agreements with the government; our ability to generate cash flow to service our substantial debt obligations; the significant influence of investment funds sponsored by, or affiliated with, CD&R over us; and the factors discussed in “Risk Factors” in the Company’s Registration Statements on Form S-1.

 

Non-GAAP Financial Measures Description and Reconciliation

 

This press release includes presentations of Adjusted EBITDA, which is defined as net income before equity in earnings of unconsolidated subsidiary, income taxes, interest and other (expense) income, loss on early debt extinguishment, realized gains (losses) on investments, interest expense, equity-based compensation, related party management fees, restructuring charges and depreciation and amortization expense.

 

It also includes presentations of Adjusted Free Cash Flow, which is defined as cash flow from operations adjusted for cash used in non-acquisition related investing activities and certain out-of-period or non-recurring cash payments.

 



 

This press release also includes presentations of Adjusted EPS, which is defined as diluted earnings per share adjusted for the loss on early redemption of a portion of the 2019 Notes, amortization expense, equity-based compensation expense and restructuring charges, net of an estimated tax benefit.

 

These non-GAAP financial measures, Adjusted EBITDA, Adjusted Free Cash Flow, and Adjusted EPS are commonly used by management and investors as performance measures and liquidity indicators. The Company’s non-GAAP financial measures are not considered measures of financial performance under U.S. generally accepted accounting principles (GAAP), and the items excluded therefrom are significant components in understanding and assessing our financial performance. These non-GAAP financial measures should not be considered in isolation or as an alternative to GAAP measures such as net income, cash flows provided by or used in operating, investing or financing activities or other financial statement data presented in our consolidated financial statements as an indicator of financial performance or liquidity. Reconciliations of non-GAAP financial measures are provided in this press release.  Reconciliation for the forward-looking full-year 2014 Adjusted EBITDA and Adjusted EPS projections presented herein is not being provided due to the number of variables in the projected full-year 2014 Adjusted EBITDA and Adjusted EPS ranges and thus we do not currently have sufficient data to accurately estimate the individual adjustments for such a reconciliation. Since these non-GAAP financial measures are not measures determined in accordance with GAAP and are susceptible to varying calculations, these measures, as presented, may not be comparable to other similarly titled measures of other companies.

 



 

Envision Healthcare Holdings, Inc.

Consolidated Statements of Operations and Other Information

(unaudited; in thousands, except shares, per share data and other information)

 

 

 

Quarter ended December 31,

 

Year ended December 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

984,845

 

$

871,918

 

$

3,728,312

 

$

3,300,121

 

Compensation and benefits

 

703,893

 

601,423

 

2,667,439

 

2,307,628

 

Operating expenses

 

111,720

 

116,419

 

424,865

 

421,424

 

Insurance expense

 

27,646

 

22,598

 

106,293

 

97,950

 

Selling, general and administrative expenses

 

20,138

 

20,870

 

106,659

 

78,540

 

Depreciation and amortization expense

 

36,080

 

31,907

 

140,632

 

123,751

 

Restructuring charges

 

681

 

3,335

 

5,669

 

14,086

 

Income from operations

 

84,687

 

75,366

 

276,755

 

256,742

 

Interest income from restricted assets

 

158

 

196

 

792

 

625

 

Interest expense

 

(38,175

)

(56,319

)

(186,701

)

(182,607

)

Realized gain on investments

 

195

 

28

 

471

 

394

 

Interest and other income (expense)

 

262

 

82

 

(12,760

)

1,422

 

Loss on early debt extinguishment

 

(38,738

)

(1,574

)

(68,379

)

(8,307

)

Income before income taxes and equity in earnings of unconsolidated subsidiary

 

8,389

 

17,779

 

10,178

 

68,269

 

Income tax benefit (expense)

 

4,926

 

(5,511

)

994

 

(27,463

)

Equity in earnings of unconsolidated subsidiary

 

93

 

75

 

323

 

379

 

Net income

 

13,408

 

12,343

 

11,495

 

41,185

 

Less: Net income attributable to noncontrolling interest

 

(5,500

)

 

(5,500

)

 

Net income attributable to Envision Healthcare Holdings, Inc.

 

$

7,908

 

$

12,343

 

$

5,995

 

$

41,185

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

0.04

 

$

0.09

 

$

0.04

 

$

0.32

 

Diluted earnings per common share

 

$

0.04

 

$

0.09

 

$

0.04

 

$

0.31

 

Weighted average common shares outstanding, basic

 

180,382,885

 

130,256,607

 

150,156,216

 

130,228,970

 

Weighted average common shares outstanding, diluted

 

189,325,628

 

134,343,687

 

156,962,385

 

132,945,862

 

 

 

 

 

 

 

 

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

EmCare weighted patient encounters

 

3,181,902

 

2,781,604

 

12,137,518

 

10,517,412

 

AMR weighted transports

 

716,325

 

698,125

 

2,811,212

 

2,847,752

 

 

Earnings Per Share Reconciliation

 

 

 

Quarter ended
December 31, 2013

 

Year ended
December 31, 2013

 

Weighted average common shares outstanding, diluted

 

189,325,628

 

156,962,385

 

 

 

 

 

 

 

Net income attributable to Envision Healthcare Holdings, Inc.

 

$

7,908

 

$

5,995

 

Adjustments:

 

 

 

 

 

Loss on early debt extinguishment, net of tax of $(19,830) and $(29,225) for quarter and twelve months ended, respectively

 

18,908

 

39,154

 

 

 

 

 

 

 

Termination of CD&R Consulting Agreement, net of tax of $(8,548) for twelve months ended

 

 

11,452

 

 

 

 

 

 

 

Amortization expense, net of tax of $(10,156) and $(32,783) for quarter and twelve months ended 2013, respectively

 

9,683

 

43,920

 

 

 

 

 

 

 

Equity-based compensation expense, net of tax of $(544) and $(1,816) for quarter and twelve months ended 2013, respectively

 

518

 

2,432

 

 

 

 

 

 

 

Restructuring expense, net of tax of $(349) and $(2,423) for quarter and twelve months ended 2013, respectively

 

332

 

3,246

 

Net income attributable to Envision Healthcare Holdings, Inc., adjusted

 

$

37,350

 

$

106,199

 

Adjusted EPS

 

$

0.20

 

$

0.68

 

 



 

Envision Healthcare Holdings, Inc.

Reconciliation of Adjusted EBITDA to Net Income and Net Cash Provided by Operating Activities

(unaudited; in thousands)

 

 

 

Quarter ended December 31,

 

Year ended December 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

117,168

 

$

113,116

 

$

445,705

 

$

404,452

 

Depreciation and amortization expense

 

(36,080

)

(31,907

)

(140,632

)

(123,751

)

Restructuring charges

 

(681

)

(3,335

)

(5,669

)

(14,086

)

Interest (income) expense from restricted assets

 

(158

)

(196

)

(792

)

(625

)

Equity-based compensation expense

 

(1,062

)

(1,062

)

(4,248

)

(4,248

)

Related party management fees

 

 

(1,250

)

(23,109

)

(5,000

)

Noncontrolling interest

 

5,500

 

 

5,500

 

 

Income from operations

 

84,687

 

75,366

 

276,755

 

256,742

 

Interest income from restricted assets

 

158

 

196

 

792

 

625

 

Interest expense

 

(38,175

)

(56,319

)

(186,701

)

(182,607

)

Realized gain on investments

 

195

 

28

 

471

 

394

 

Interest and other income (expense)

 

262

 

82

 

(12,760

)

1,422

 

Loss on early debt extinguishment

 

(38,738

)

(1,574

)

(68,379

)

(8,307

)

Income tax benefit (expense)

 

4,926

 

(5,511

)

994

 

(27,463

)

Equity in earnings of unconsolidated subsidiary

 

93

 

75

 

323

 

379

 

Noncontrolling interest

 

(5,500

)

 

(5,500

)

 

Net income attributable to Envision Healthcare Holdings, Inc.

 

$

7,908

 

$

12,343

 

$

5,995

 

$

41,185

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

117,168

 

$

113,116

 

$

445,705

 

$

404,452

 

Related party management fees

 

 

(1,250

)

(23,109

)

(5,000

)

Restructuring charges

 

(681

)

(3,335

)

(5,669

)

(14,086

)

Interest paid

 

(34,353

)

(51,278

)

(168,746

)

(165,201

)

Payment of dissenting shareholder settlement

 

 

 

(13,717

)

 

Change in accounts receivable

 

(49,462

)

(13,481

)

(175,968

)

(81,857

)

Change in other operating assets/liabilities

 

(11,466

)

21,040

 

3,363

 

72,514

 

Excess tax benefits from stock-based compensation

 

3,106

 

(873

)

(62

)

(873

)

Income tax (benefit) expense, net of change in deferred taxes

 

(1,809

)

(16,725

)

(1,422

)

4,469

 

Noncontrolling interest

 

5,500

 

 

5,500

 

 

Other

 

487

 

(26

)

(11,760

)

2,017

 

Net cash provided by operating activities

 

$

28,490

 

$

47,188

 

$

54,115

 

$

216,435

 

 



 

Envision Healthcare Holdings, Inc.

Reconciliation of Segment Adjusted EBITDA to Income from Operations

(unaudited; in thousands)

 

 

 

Quarter ended December 31,

 

Year ended December 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

EmCare

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

75,266

 

$

71,426

 

$

294,033

 

$

260,657

 

Depreciation and amortization expense

 

(17,230

)

(14,312

)

(66,653

)

(55,719

)

Restructuring charges

 

8

 

(1,237

)

(926

)

(1,519

)

Interest (income) expense from restricted assets

 

(47

)

(37

)

(348

)

11

 

Equity-based compensation expense

 

(457

)

(477

)

(1,827

)

(1,897

)

Related party management fees

 

 

(562

)

(9,937

)

(2,233

)

Noncontrolling interest

 

5,500

 

 

5,500

 

 

Income from operations

 

$

63,040

 

$

54,801

 

$

219,842

 

$

199,300

 

 

 

 

 

 

 

 

 

 

 

AMR

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

41,902

 

$

41,889

 

$

151,745

 

$

143,994

 

Depreciation and amortization expense

 

(18,850

)

(17,595

)

(73,979

)

(68,032

)

Restructuring charges

 

(689

)

(2,098

)

(4,743

)

(12,567

)

Interest income from restricted assets

 

(111

)

(159

)

(444

)

(636

)

Equity-based compensation expense

 

(605

)

(585

)

(2,421

)

(2,351

)

Related party management fees

 

 

(688

)

(13,172

)

(2,767

)

Income from operations

 

$

21,647

 

$

20,764

 

$

56,986

 

$

57,641

 

 

 

 

 

 

 

 

 

 

 

Envision Healthcare Holdings, Inc.

 

 

 

 

 

 

 

 

 

Adjusted EBITDA and Income from operations

 

$

 

$

(199

)

$

(73

)

$

(199

)

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

117,168

 

$

113,116

 

$

445,705

 

$

404,452

 

Depreciation and amortization expense

 

(36,080

)

(31,907

)

(140,632

)

(123,751

)

Restructuring charges

 

(681

)

(3,335

)

(5,669

)

(14,086

)

Interest income from restricted assets

 

(158

)

(196

)

(792

)

(625

)

Equity-based compensation expense

 

(1,062

)

(1,062

)

(4,248

)

(4,248

)

Related party management fees

 

 

(1,250

)

(23,109

)

(5,000

)

Noncontrolling interest

 

5,500

 

 

5,500

 

 

Income from operations

 

$

84,687

 

$

75,366

 

$

276,755

 

$

256,742

 

 



 

Envision Healthcare Holdings, Inc.

Condensed Consolidated Balance Sheets

(unaudited; in thousands)

 

 

 

December 31,

 

 

 

2013

 

2012

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

204,712

 

$

57,832

 

Trade and other accounts receivable, net

 

801,146

 

625,144

 

Other current assets

 

76,425

 

70,283

 

Total current assets

 

1,082,283

 

753,259

 

Non-current assets:

 

 

 

 

 

Property, plant and equipment, net

 

194,715

 

191,864

 

Goodwill and other intangible assets, net

 

2,949,368

 

2,977,850

 

Other long-term assets

 

73,651

 

113,860

 

Total assets

 

$

4,300,017

 

$

4,036,833

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

Current liabilities

 

$

426,329

 

$

478,694

 

Long-term debt

 

1,895,381

 

2,647,098

 

Long-term deferred tax liability

 

151,130

 

156,761

 

Insurance reserves and other long-term liabilities

 

217,424

 

209,593

 

Total liabilities

 

2,690,264

 

3,492,146

 

Total equity

 

1,609,753

 

544,687

 

Total liabilities and equity

 

$

4,300,017

 

$

4,036,833

 

 



 

Envision Healthcare Holdings, Inc.

Condensed Consolidated Statements of Cash Flows and Reconciliation of Net Cash Provided by

Operating Activities to Adjusted Free Cash Flow

(unaudited; in thousands)

 

 

 

Quarter ended December 31,

 

Year ended December 31,

 

 

 

2013

 

2012

 

2013

 

2012

 

Cash Flows from Operating Activities

 

 

 

 

 

 

 

 

 

Net income

 

$

13,408

 

$

12,343

 

$

11,495

 

$

41,185

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation, amortization, and other

 

44,007

 

36,926

 

162,979

 

144,354

 

Loss on early debt extinguishment

 

38,738

 

1,574

 

68,379

 

8,307

 

Deferred income taxes

 

(6,735

)

(11,214

)

(2,416

)

31,932

 

Payment of dissenting shareholder settlement

 

 

 

(13,717

)

 

Changes in operating assets/liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

 

Trade and other accounts receivable

 

(49,462

)

(13,481

)

(175,968

)

(81,857

)

Parts and supplies inventory

 

(837

)

292

 

(1,326

)

643

 

Prepaids and other current assets

 

9,984

 

12,540

 

987

 

5,839

 

Accounts payable and accrued liabilities

 

(29,284

)

5,638

 

(6,764

)

65,777

 

Insurance accruals

 

8,671

 

2,570

 

10,466

 

255

 

Net cash provided by operating activities

 

28,490

 

47,188

 

54,115

 

216,435

 

 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

 

 

 

 

 

 

Purchases of property, plant and equipment

 

(20,386

)

(15,904

)

(65,879

)

(60,215

)

Proceeds from sale of property, plant and equipment

 

348

 

128

 

744

 

7,220

 

Acquisition of businesses, net of cash received

 

(7,740

)

(172,443

)

(35,098

)

(193,002

)

Net change in insurance collateral

 

825

 

1,339

 

3,705

 

91,940

 

Other investing activities

 

(1,613

)

(575

)

(2,069

)

14

 

Net cash used in investing activities

 

(28,566

)

(187,455

)

(98,597

)

(154,043

)

 

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

 

 

 

 

 

Issuance of class A common stock

 

 

 

1,112,017

 

334

 

Borrowings under the Term Loan

 

 

 

150,000

 

 

Borrowings under the ABL Facility

 

 

 

130,000

 

345,440

 

130,000

 

Proceeds from issuance of PIK Notes and senior notes

 

 

450,000

 

 

450,000

 

Repayments of the Term Loan

 

(3,343

)

(52,968

)

(13,371

)

(262,884

)

Repayments of the ABL credit facility

 

 

(5,000

)

(470,440

)

(5,000

)

Repayment of PIK Notes and senior notes

 

(327,250

)

 

(777,250

)

(15,000

)

Payments for debt extinguishment premiums

 

(27,016

)

 

 

(39,402

)

 

Dividend paid

 

 

(428,782

)

 

(428,782

)

Equity issuance costs

 

(1,711

)

 

(65,131

)

 

Debt issue costs

 

 

(21,124

)

(5,011

)

(21,219

)

Proceeds from noncontrolling interest

 

3,000

 

 

3,000

 

6,530

 

Payment of dissenting shareholder settlement

 

 

 

(38,336

)

 

Other financing cash flow activities

 

(14,653

)

(2,455

)

(10,154

)

7,438

 

Net cash (used in) provided by financing activities

 

(370,973

)

69,671

 

191,362

 

(138,583

)

 

 

 

 

 

 

 

 

 

 

Change in cash and cash equivalents

 

(371,049

)

(70,596

)

146,880

 

(76,191

)

Cash and cash equivalents, beginning of period

 

575,761

 

128,428

 

57,832

 

134,023

 

Cash and cash equivalents, end of period

 

$

204,712

 

$

57,832

 

$

204,712

 

$

57,832

 

 

 

 

 

 

 

 

 

 

 

Operating and non-acquisition investing cash flow

 

$

7,664

 

$

32,176

 

$

(9,384

)

$

255,394

 

 

 

 

 

 

 

 

 

 

 

Non-recurring cash flow adjustments:

 

 

 

 

 

 

 

 

 

Termination of CD&R Consulting Agreement

 

 

 

20,000

 

 

Operating cash outflow for dissenting shareholder settlement

 

 

 

13,717

 

 

FEMA and contract exit costs

 

 

 

24,500

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Free Cash Flow

 

$

7,664

 

$

32,176

 

$

48,833

 

$

255,394

 

 

END