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Team Health Holdings Inc. Announces Fourth Quarter and Fiscal 2011 Financial Results
Fiscal 2011 Fourth Quarter Highlights
- Net Revenue less provision for uncollectibles grew 17.4% to $462.0 million over the prior year fourth quarter
- Net earnings were $13.3 million; $16.8 million after excluding after tax contingent purchase expense of $3.5 million ($5.8 million pretax); $20.6 million after excluding the after tax non-cash amortization expense of $3.8 million ($6.1 million pretax) and after tax contingent purchase expense
- Diluted net earnings per share of $0.20; $0.25 after excluding after tax contingent purchase expense; $0.31 after excluding the after tax non-cash amortization and contingent purchase expense
- Adjusted EBITDA increased 9.5% to $43.9 million over the prior year fourth quarter

KNOXVILLE, Tenn., Feb. 7, 2012 /PRNewswire/ -- Team Health Holdings Inc. ("TeamHealth") (NYSE: TMH), one of the largest suppliers of outsourced healthcare professional staffing and administrative services to hospitals and other healthcare providers in the United States, today announced results for its fourth quarter and full fiscal year 2011.

"We are pleased with our fourth quarter results, as we delivered healthy growth across revenues, operating earnings and Adjusted EBITDA.  With the solid performance in the fourth quarter, our full year results exceeded both our initial and increased revised financial performance targets for 2011," said TeamHealth President and Chief Executive Officer, Greg Roth.

"The strength of our financial performance demonstrates the effectiveness of our balanced and integrated approach to achieving our revenue growth goals. Once again, all of our growth drivers delivered major contributions to revenue, which include same contract, acquisitions and net contract growth, despite sequentially lower same contract volume growth throughout 2011. For the quarter, acquisition growth was the largest component of consolidated revenue growth as we benefited from recent acquisitions that closed in the third quarter of 2011.  Net new contract growth also performed well as we benefited from investments made in our sales and marketing process.  Finally, same contract revenue contributed solid growth, driven by increases in estimated collections per visit, despite a limited volume growth environment.  In addition, our military business delivered revenue growth for the second consecutive quarter, and we believe the improving revenue trends reflect continued stabilization of this division.  Moving into 2012, we remain well positioned, with a healthy acquisition pipeline and continued opportunities for both new contract wins and same contract revenue growth."

Lynn Massingale, M.D., Executive Chairman of TeamHealth, added, "We are pleased with our continued progress and the successful execution of our growth plan in 2011 and we look forward to delivering strong operating and financial performance in 2012. Our recent acquisitions and net sales efforts reinforce the appeal of our model and our reputation as a desirable partner to physician groups serving hospitals with the highest expectations of quality and service. We remain dedicated to delivering the highest quality of patient care and our proprietary information technology systems and infrastructure investments enable us to help hospitals drive patient safety, operational efficiency and customer satisfaction goals."

Fiscal 2011 Fourth Quarter Results

Net revenue less provision for uncollectibles ("revenue less provision") increased 17.4% to $462.0 million from $393.4 million in the fourth quarter of 2010. Acquisitions contributed 7.8%, new contracts, net of terminations contributed 6.1%, and same contract revenue contributed 3.5% of the increase in quarter-over-quarter growth in net revenue less provision.

Same contract revenue less provision increased 3.8% to $374.4 million from $360.5 million in the fourth quarter of 2010. Increases in estimated collections on fee-for-service visits of 5.8% provided approximately 4.2% of same contract revenue growth between quarters.  Fee for service volume growth provided a 0.4% increase in same contract revenue growth as the number of visits increased 0.5% from the same contract volume reported in the fourth quarter of 2010.  Declines in contract and other revenue, primarily associated with our locum tenens division, constrained same contract revenue growth by 0.8%.  Acquisitions contributed $30.8 million of growth and net new contract revenue increased by $23.9 million between quarters.

Reported net earnings were $13.3 million in the fourth quarter of 2011, or $0.20 diluted net earnings per share, compared to a net loss of $36.0 million, or $0.56 diluted net loss per share in the same period of 2010.  Financial results for the fourth quarter of 2011 included $5.8 million ($3.5 million after-tax) of contingent purchase expense associated with acquisitions that contained a contingent payment component of the total purchase price.  Excluding this adjustment, net earnings for the fourth quarter of 2011 were $16.8 million and diluted net earnings per share were $0.25.  Financial results for the fourth quarter of 2010 included a non-deductible goodwill impairment charge of $48.8 million, a $2.3 million loss associated with the December 2010 bond redemption and $3.9 million of contingent purchase expense totaling $55.0 million on a pre-tax basis ($52.6 million after-tax).  Excluding these adjustments, diluted net earnings for the fourth quarter of 2010 were $16.5 million and diluted net earnings per share were $0.26.

As a result of the Company's increased pace of acquisitions during 2011, non-cash amortization expense increased to $6.1 million ($3.8 million after tax) in the fourth quarter of 2011 compared to $4.1 million ($2.6 million after tax) in 2010. Excluding the non-cash amortization expense and previously noted adjustments in each period, diluted net earnings per share were $0.31 in the fourth quarter of 2011 and $0.29 in 2010.

Fourth quarter 2011 net earnings per share were also impacted by transaction costs of $1.5 million ($0.9 million after tax or $0.01 per share), a higher effective state tax rate, and an increase in fully diluted outstanding shares between quarters.

Cash flow provided by operations in the fourth quarter of 2011 was $43.7 million compared to $50.4 million in the same quarter in 2010.  Included in operating cash flows were contingent purchase price payments of $3.5 million and $3.2 million, respectively, in 2011 and 2010. Excluding the impact of contingent purchase price payments, the $6.5 million decrease in operating cash flow between quarters was principally the result of an increase in the funding of accounts receivable in part associated with an increase in net revenue from new contracts and acquisitions.  

Adjusted EBITDA increased 9.5% to $43.9 from $40.0 million in the same quarter in 2010.  Adjusted EBITDA margin was 9.5% compared to 10.2% for the same quarter in 2010.  The change in margin was primarily due to lower operating margins on new contracts associated with initial startup costs and higher provider costs.  See "Non-GAAP Financial Measures Reconciliation" and "Adjusted EBITDA" below for the definitions of Adjusted EBITDA Margin and Adjusted EBITDA and its reconciliation to net earnings.

Fiscal 2011 Full Year Results

Revenue less provision in the year ended December 31, 2011 increased 14.9% to $1.75 billion from $1.52 billion in fiscal 2010. Same contract revenue contributed 4.0%, acquisitions contributed 5.1%, and new contracts, net of terminations contributed 5.9% of the increase in year-over-year growth in net revenue less provision.  

Same contract revenue less provision increased 4.6% to $1.36 billion from $1.30 billion in 2010. Increases in estimated collections on fee for service visits of 5.2% provided approximately 3.8% of same contract growth between periods.  Fee for service volume growth increased 2.5%, which contributed 1.9% of same contract growth between years.  Declines in contract and other revenue, primarily associated with our military and locum tenens divisions, constrained same contract growth by 1.0%.  Acquisitions contributed $76.8 million of growth between years while net new contract revenue increased by $88.9 million.

Reported net earnings were $65.5 million, or $0.98 diluted net earnings per share in 2011, compared to $6.8 million, or $0.11 diluted net earnings per share, in 2010.  Financial results for 2011 included an increase in discounted carrying value of prior year professional liability reserves of $5.3 million ($3.2 million after tax), contingent purchase expense of $13.6 million ($8.3 million after tax), and a loss on the refinancing of debt of $6.0 million ($3.6 million after tax), totaling $24.9 million on a pre-tax basis ($15.1 million after tax).  Excluding these adjustments, net earnings were $80.6 million and diluted net earnings per share were $1.21 for the year.  Financial results for 2010 included a reduction of professional liability reserves related to prior years of $7.2 million ($4.4 million after tax), contingent purchase expense of $13.3 million ($8.1 million after tax), an impairment charge of $50.3 million ($49.7 million after tax), and costs associated with the Company's bond redemption of $18.4 million ($11.2 million after tax), totaling $74.8 million on a pre-tax basis ($64.7 million after tax).  Excluding these adjustments, net earnings were $71.5 million and diluted net earnings per share were $1.11 in 2010.

As a result of the acquisitions completed in both 2010 and 2011, non-cash amortization expense increased to $17.8 million ($11.1 million after tax) in 2011 compared to $14.4 million ($9.3 million after tax) in 2010.   Excluding the non-cash amortization expense and previously noted adjustments in each fiscal year, diluted net earnings per share were $1.38 in 2011 and $1.25 in 2010.

Fiscal 2011 net earnings per share were also impacted by transaction costs of $4.1 million ($2.5 million after tax or $0.04 per share) compared to $0.8 million ($0.5 million after tax or $0.01 per share) in 2010, a higher effective state tax rate, and an increase in fully diluted outstanding shares between years.

Cash flow provided by operations in 2011 was $98.8 million compared to $109.9 million in 2010.  Included in operating cash flow were contingent purchase price payments of $15.5 million and $4.1 million, respectively, in 2011 and 2010. Excluding the impact of contingent purchase price payments, the $0.4 million increase in operating cash flow was principally the result of improved profitability, absence of cash costs associated with the bond redemption in 2010 and reduced interest payments during 2011, offset by an increase in accounts receivable funding and tax payments between periods.  Included in operating cash flow in 2010 were $15.1 million of cash costs associated with the bond redemption, including $2.8 million of accrued interest payments on bonds that were redeemed.  During 2011, total net cash used for acquisitions, including contingent payments reported in operating cash flow, was $141.3 million compared to $56.4 million for the same period in 2010.

Adjusted EBITDA increased 13.4% to $188.5 million from $166.3 million in 2010 and Adjusted EBITDA margin was 10.8% compared to 10.9% in 2010.  See "Non-GAAP Financial Measures Reconciliation" and "Adjusted EBITDA" below for the definition of Adjusted EBITDA and its reconciliation to net earnings.

As of December 31, 2011, the Company had cash and cash equivalents of $9.9 million and $200.0 million of available borrowings under a revolving credit facility (without giving effect to $6.6 million of undrawn letters of credit).  The Company's total outstanding debt was $420.0 million, including $25.0 million outstanding under its revolving credit facility, which reflected $2.5 million of term debt payments and a $34.5 million reduction of outstanding revolver borrowings during the fourth quarter of 2011.

Conference Call

As previously announced, TeamHealth will hold a conference call tomorrow, February 8, to discuss its fiscal fourth quarter and full-year 2011 results at 8:30 a.m. (Eastern Standard Time).  The conference call can be accessed live over the phone by dialing

1-877-941-1427, or for international callers, 1-480-629-9664. A replay will be available one hour after the call and can be accessed by dialing 1-877-870-5176, or for international callers, 1-858-384-5517. The passcode for the live call and the replay is 4509237. The replay will be available until February 15, 2012.

Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the Investor Relations section of the Company's website at www.teamhealth.com. The on-line replay will remain available for a limited time beginning immediately following the call in the Investor Relations section of the Company's website at www.teamhealth.com.

To learn more about TeamHealth, please visit the company's Web site at www.teamhealth.com. TeamHealth uses its Web site as a channel of distribution for material Company information. Financial and other material information regarding TeamHealth is routinely posted on the Company's Web site and is readily accessible.

About TeamHealth  

TeamHealth (Knoxville, Tenn.) (NYSE: TMH) was founded in 1979 and has become one of the largest suppliers of outsourced healthcare professional staffing and administrative services to hospitals and other healthcare providers in the United States. Through its six principal service lines located in 15 regional sites, TeamHealth's more than 7,100 affiliated healthcare professionals provide emergency medicine, hospital medicine, anesthesia, and pediatric staffing and management services to more than 730 civilian and military hospitals, clinics, and physician groups in 47 states. For more information about TeamHealth, visit www.teamhealth.com.

Forward Looking Statements

Statements and information contained herein that are not historical facts and that reflect the current view of Team Health Holdings, Inc.  (the "Company") about future events and financial performance are hereby identified as "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Some of these statements can be identified by terms and phrases such as "anticipate," "believe," "intend," "estimate," "expect," "continue," "could," "should," "may," "plan," "project," "predict" and similar expressions.  The Company cautions  that such "forward looking statements," including without limitation, those relating to the Company's future business prospects, revenue, working capital, professional liability expense, liquidity, capital needs, interest costs and income, wherever they occur in this or in other statements attributable to the Company, are necessarily estimates reflecting the judgment of the Company's senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the "forward looking statements."  Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include but are not limited to current or future government regulation of the healthcare industry, exposure to professional liability lawsuits and governmental agency investigations, the adequacy of insurance coverage and insurance reserves, as well as those factors detailed under the caption "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's most recent annual report on Form 10-K and the most recent quarterly report on Form 10-Q filed with the Securities and Exchange Commission.  The Company's "forward looking statements" speak only as of the date hereof and the Company disclaims any intent or obligation to update "forward looking statements" herein to reflect changed assumptions, the occurrence of unanticipated events, or changes to future operating results over time.

Non-GAAP Financial Measures Reconciliation

In this release we refer to Adjusted EBITDA and Adjusted EBITDA margin, which are financial measures that are calculated and presented on the basis of methodologies other than in accordance with generally accepted accounting principles in the United States of America ("GAAP").   Adjusted EBITDA is defined as net earnings before interest expense, taxes, depreciation and amortization, as further adjusted to exclude the non-cash items and the other adjustments shown in the table under "Adjusted EBITDA" below.   Adjusted EBITDA margin represents Adjusted EBITDA divided by net revenues less provision for uncollectibles.  For a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, we refer you to the table under "Adjusted EBITDA".

Team Health Holdings, Inc.

Consolidated Balance Sheets





As of
December 31,


2010


2011



(In thousands)

Assets



Current Assets:



Cash and cash equivalents

$  30,337

$  9,855

Accounts receivable, less allowance for uncollectibles of $194,833 and $265,293 in 2010 and 2011, respectively

241,238

307,874

Prepaid expenses and other current assets

21,211

24,021

Receivables under insured programs

15,492

14,129

Income tax receivable

2,179

1,438




Total current assets

310,457

357,317

Investments of insurance subsidiary

87,781

94,300

Property and equipment, net

35,159

34,674

Other intangibles, net

60,866

101,910

Goodwill

174,439

232,215

Deferred income taxes

45,791

36,188

Receivables under insured programs

28,639

31,581

Other

38,706

40,082





$  781,838

$  928,267




Liabilities and shareholders' (deficit) equity



Current liabilities:



Accounts payable

$  18,556

$  22,356

Accrued compensation and physician payable

131,043

153,674

Other accrued liabilities

106,824

109,649

Current maturities of long-term debt

4,250

35,000

Deferred income taxes

38,438

38,068




Total current liabilities

299,111

358,747

Long-term debt, less current maturities

399,500

385,000

Other non-current liabilities

151,980

167,120

Shareholders' (deficit) equity:



Common stock ($0.01 par value; 100,000 shares authorized and 64,489 and 65,589 shares issued and outstanding at December 31, 2010 and 2011, respectively)

645

656

Additional paid-in capital

522,992

541,216

Accumulated deficit

(593,295)

(527,774)

Accumulated other comprehensive earnings

905

3,302




Shareholders' (deficit) equity

(68,753)

17,400





$  781,838

$  928,267







Team Health Holdings, Inc.

Consolidated Statements of Operations






Three Months Ended December 31,


2010


2011



(In thousands, except per share data)

Net revenues

$  692,787

$  846,635

Provision for uncollectibles

299,349

384,601




Net revenues less provision for uncollectibles

393,438

462,034

Cost of services rendered (exclusive of depreciation and amortization shown separately below)



Professional service expenses

304,846

362,484

Professional liability costs

13,169

16,464

General and administrative expenses (includes contingent purchase compensation expense of $3,893 and $5,774 in 2010 and 2011, respectively

42,587

47,275

Other income

(582)

(974)

Impairment of intangibles

48,797

Depreciation

2,905

3,044

Amortization

4,052

6,116

Interest expense, net

4,615

3,581

Loss on extinguishment of debt

2,261

Transaction costs

122

1,496




(Loss) earnings before income taxes

(29,334)

22,548

Provision for income taxes

6,697

9,245




Net (loss) earnings

$  (36,031)

$  13,303





Three Months Ended December 31,


2010

2011




Net (loss) earnings per share



Basic

$  (0.56)

$  0.20




Diluted

$  (0.56)

$  0.20




Weighted average shares outstanding



Basic

64,274

65,412

Diluted

64,274

67,075




Team Health Holdings, Inc.

Consolidated Statements of Operations






Year Ended December 31,


2010


2011



(In thousands, except per share data)

Net revenues

$  2,671,374

$  3,141,678

Provision for uncollectibles

1,152,110

1,396,350




Net revenues less provision for uncollectibles

1,519,264

1,745,328

Cost of services rendered (exclusive of depreciation and amortization shown separately below)



Professional service expenses

1,170,208

1,348,255

Professional liability costs

46,356

65,982

General and administrative expenses (includes contingent purchase compensation expense of $13,311 and $13,575 in 2010 and 2011, respectively)

149,122

169,147

Other (income) expenses

(1,017)

242

Impairment of intangibles

50,293

Depreciation

11,503

12,208

Amortization

14,416

17,756

Interest expense, net

20,552

12,782

Loss on extinguishment and refinancing of debt

17,122

6,022

Transaction costs

843

4,149




Earnings before income taxes

39,866

108,785

Provision for income taxes

33,065

43,264




Net earnings

$  6,801

$  65,521





Year Ended December 31,


2010

2011

Net earnings per share



Basic

$  .11

$  1.01




Diluted

$  .11

$  0.98




Weighted average shares outstanding



Basic

64,177

65,041

Diluted

64,641

66,580




Team Health Holdings, Inc.

Consolidated Statements of Cash Flows






Three Months Ended December 31,

2010


2011


(In thousands)

Operating activities



Net (loss) earnings

$       (36,031)

$      13,303

Adjustments to reconcile net (loss) earnings:



Depreciation

2,905

3,044

Amortization

4,052

6,116

Amortization of deferred financing costs

480

198

Equity based compensation expense

762

1,349

Provision for uncollectibles

299,349

384,601

Impairment of intangibles

48,797

Deferred income taxes

4,400

10

Loss on extinguishment of debt

978

Loss on disposal of equipment

1

Loss on assets held for sale

67

Equity in joint venture income

1,390

1,174

Changes in operating assets and liabilities, net of acquisitions:



Accounts receivable

(281,157)

(392,642)

Prepaids and other assets

3,028

3,826

Income tax accounts

(10,433)

669

Accounts payable

2,523

6,957

Accrued compensation and physician payable

9,833

12,488

Other accrued liabilities

(655)

(488)

Contingent purchase liabilities

683

2,296

Professional liability reserves

(542)

754




Net cash provided by operating activities

50,430

43,655

Investing activities



Purchases of property and equipment

(4,625)

(5,925)

Cash paid for acquisitions, net

(662)

Purchases of investments at insurance subsidiary

(27,534)

(26,843)

Proceeds from investments at insurance subsidiary

34,228

25,558




Net cash provided by (used in) investing activities

1,407

(7,210)

Financing activities



Payments on notes payable

(1,063)

(2,500)

Payments on 11.25% senior subordinated notes

(45,523)

Proceeds from revolving credit facility

154,500

Payments on revolving credit facility

(189,000)

Payments of financing costs

(520)

Proceeds from exercise of stock options

56

940

Tax benefit from exercise of stock options

54

Proceeds from issuance of common stock under stock purchase plans

385

922




Net cash used in provided by financing activities

(46,145)

(35,604)




Increase in cash and cash equivalents

5,692

841

Cash and cash equivalents, beginning of period

24,645

9,014




Cash and cash equivalents, end of period

$  30,337

$  9,855




Supplemental cash flow information:



Interest paid

$  6,420

$  3,617

Taxes paid

$  12,934

$  8,663




Team Health Holdings, Inc.

Consolidated Statements of Cash Flows






Year Ended December 31,

2010


2011



(In thousands)

Operating activities



Net earnings

$  6,801

$  65,521

Adjustments to reconcile net earnings:



Depreciation

11,503

12,208

Amortization

14,416

17,756

Amortization of deferred financing costs

2,001

1,313

Equity based compensation expense

2,104

4,053

Provision for uncollectibles

1,152,110

1,396,350

Impairment of intangibles

50,293

Deferred income taxes

7,070

7,886

Loss on extinguishment and refinancing of debt

4,815

1,654

Loss on disposal of equipment

23

253

Loss on assets held for sale

67

Equity in joint venture income

(492)

(1,057)

Changes in operating assets and liabilities, net of acquisitions:



Accounts receivable

(1,150,878)

(1,447,870)

Prepaids and other assets

(8,029)

3,428

Income tax accounts

(4,999)

605

Accounts payable

787

3,629

Accrued compensation and physician payable

9,158

21,408

Contingent purchase liabilities

9,249

(1,918)

Other accrued liabilities

(1,201)

3,384

Professional liability reserves

5,068

10,196




Net cash provided by operating activities

109,866

98,799




Investing activities



Purchases of property and equipment

(11,898)

(11,977)

Cash paid for acquisitions, net

(52,368)

(125,828)

Purchases of investments at insurance subsidiary

(79,460)

(88,561)

Proceeds from investments at insurance subsidiary

78,372

84,866

Other investing activities

5

90




Net cash used in investing activities

(65,349)

(141,410)




Financing activities



Payments on notes payable

(4,250)

(408,750)

Proceeds on notes payable

400,000

Payments on 11.25% senior subordinated notes

(203,025)

Proceeds from sale of common stock

21,762

Proceeds from revolving credit facility

109,800

269,000

Payments on revolving credit facility

(109,800)

(244,000)

Payments of financing costs

(8,303)

Stock issuance costs

(491)

Proceeds from the issuance of common stock under stock purchase plans

385

1,794

Proceeds from exercise of stock options

617

12,825

Tax benefit from exercise of stock options

54




Net cash (used in) provided by financing activities

(184,511)

22,129




Decrease in cash and cash equivalents

(139,994)

(20,482)

Cash and cash equivalents, beginning of year

170,331

30,337




Cash and cash equivalents, end of year

$  30,337

$  9,855




Supplemental cash flow information:



Interest paid

$  23,316

$  14,251

Taxes paid

$  31,246

$  34,573




Team Health Holdings, Inc.

Adjusted EBITDA



We present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as net earnings before interest expense, taxes, depreciation and amortization, as further adjusted to exclude the non-cash items and the other adjustments shown in the table below. We present Adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.

Adjusted EBITDA is not a measurement of financial performance or liquidity under generally accepted accounting principles. In evaluating our performance as measured by Adjusted EBITDA, management recognizes and considers the limitations of this measure. Adjusted EBITDA does not reflect certain cash expenses that we are obligated to make, and although depreciation and amortization are non-cash charges, assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements. In addition, other companies in our industry may calculate Adjusted EBITDA differently than we do or may not calculate it at all, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for net income, operating income, cash flows from operating, investing or financing activities, or any other measure calculated in accordance with generally accepted accounting principles.

The following table sets forth a reconciliation of net earnings to Adjusted EBITDA.








Year Ended December 31,


Three Months
Ended December 31,



2010


2011


2010


2011



(In thousands)

Net earnings (loss)

$  6,801

$  65,521

$  (36,031)

$  13,303

Interest expense, net

20,552

12,782

4,615

3,581

Provision for income taxes

33,065

43,264

6,697

9,245

Depreciation

11,503

12,208

2,905

3,044

Amortization

14,416

17,756

4,052

6,116

Impairment of intangibles(a)

50,293

48,797

Other expenses (income)(b)

(1,017)

242

(582)

(974)

Loss on extinguishment and refinancing of debt(c)

17,122

6,022

2,261

Contingent purchase expense(d)

13,311

13,575

3,893

5,774

Transaction costs(e)

843

4,149

122

1,496

Equity based compensation expense(f)

2,104

4,053

762

1,349

Insurance subsidiary interest income

2,444

2,244

619

491

Professional liability loss reserve adjustments associated with prior years

(7,219)

5,345

Severance and other charges

2,053

1,378

1,937

444






Adjusted EBITDA

$  166,271

$  188,539

$  40,047

$  43,869









(a) Includes impairment of goodwill of $48,797 and $1,496 for impairment of intangibles for the year ended December 31, 2010.

(b) Reflects gain or loss on sale of assets, realized gains on investments, and changes in the fair value of investments associated with the Company's non-qualified retirement plan.

(c) For 2010, reflects the loss on the redemption of the 11.25% Notes, including write-off of deferred financing costs of $4,815. For 2011, reflects the write-off of deferred financing costs of $1,654 from the previous term loan as well as certain fees and expenses associated with the 2011 debt refinancing.

(d) Reflects expense recognized for estimated future contingent payments associated with acquisitions.

(e) Reflects expenses associated with acquisition transaction fees.

(f) Reflects costs related to options and restricted shares granted under the Team Health Holdings, Inc. 2009 Stock Incentive Plan.

Team Health Holdings, Inc.

Revenue Analysis



The components of net revenue less provision for uncollectibles includes revenue from contracts that have been in effect for prior periods (same contracts) and from net new and acquired contracts during the periods, as set forth in the table below:



Three Months Ended December 31,



2010


2011


% Change


Contribution to
Growth



(In thousands)

Same contracts:





Fee for service revenue

$  263,202

$  279,770

6.3  %

4.2  %

Contract and other revenue

97,323

94,620

(2.8)

(0.7)






Total same contracts

360,525

374,390

3.8

3.5

New contracts, net of terminations:





Fee for service revenue

16,790

34,849

107.6

4.6

Contract and other revenue

16,123

21,970

36.3

1.5






Total new contracts, net of terminations

32,913

56,819

72.6

6.1

Acquired contracts:





Fee for service revenue

25,683

6.5

Contract and other revenue

5,142

1.3






Total acquired contracts

30,825

7.8

Consolidated:





Fee for service revenue

279,992

340,302

21.5

15.3

Contract and other revenue

113,446

121,732

7.3

2.1






Total net revenues less provision for uncollectibles

$  393,438

$  462,034

17.4  %

17.4  %









The following table reflects the visits and procedures included within fee for service revenues described in the table above:


Three Months Ended December 31


2010

2011


(In thousands)




Fee for service visits and procedures:



Same contract

1,977

1,987

New and acquired contracts, net of terminations

133

401




Total fee for service visits and procedures

2,110

2,388







Team Health Holdings, Inc.

Revenue Analysis



The components of net revenue less provision for uncollectibles includes revenue from contracts that have been in effect for prior periods (same contracts) and from net new and acquired contracts during the periods, as set forth in the table below:








Year Ended December 31,



2010


2011


% Change


Contribution to
Growth



(In thousands)

Same contracts:





Fee for service revenue

$  952,502

$  1,026,626

7.8  %

4.9  %

Contract and other revenue

345,782

332,015

(4.0)

(0.9)






Total same contracts

1,298,284

1,358,641

4.6

4.0

New contracts, net of terminations:





Fee for service revenue

90,867

155,325

70.9

4.2

Contract and other revenue

97,716

122,181

25.0

1.6






Total new contracts, net of terminations

188,583

277,506

47.2

5.9

Acquired contracts:





Fee for service revenue

25,460

91,256

258.4

4.3

Contract and other revenue

6,937

17,925

158.4

0.7






Total acquired contracts

32,397

109,181

237.0

5.1

Consolidated:





Fee for service revenue

1,068,829

1,273,207

19.1

13.5

Contract and other revenue

450,435

472,121

4.8

1.4






Total net revenues less provision for uncollectibles

$  1,519,264

$  1,745,328

14.9  %

14.9  %









The following table reflects the visits and procedures included within fee for service revenues described in the table above:






Year Ended December 31,


2010

2011


(In thousands)

Fee for service visits and procedures:



      Same contract

7,178

7,355

      New and acquired contracts, net of terminations

1,000

1,792




        Total fee for service visits and procedures

8,178

9,147







SOURCE Team Health Holdings Inc.

Investor Contact, David Jones, Executive Vice President and Chief Financial Officer, +1-865-293-5299 , or Media Contact, Tracy Young, Vice President, Communications, 1-800-818-1498

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