ENVISION HEALTHCARE CORP filed this 10-Q on 11/13/2013
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Interest expense. Interest expense for the three months ended September 30, 2013 was $46.8 million compared to $41.3 million for the three months ended September 30, 2012. The increase was due to the issuance of $450 million of Senior PIK Toggle Notes due 2017 on October 1, 2012 which were subsequently redeemed on August 30, 2013, offset partially by decreases due to voluntary prepayments of the Term Loan Facility made during 2012 and the re-pricing of the Term Loan Facility during the three months ended March 31, 2013.

 

Interest and other (expense) income.  Interest and other (expense) income was $0.1 million of expense for the three months ended September 30, 2013 compared to $0.9 million of income for the three months ended September 30, 2012.

 

Income tax benefit (expense). Income tax expense decreased by $16.4 million for the three months ended September 30, 2013 compared to the same period in 2012. Our effective tax rate was 39% and 43.1% for the three months ended September 30, 2013 and 2012, respectively. The decrease in our effective tax rate for the three months ended September 30, 2013 compared to the three months ended September 30, 2012 was primarily a result of a reduction in our state effective tax rate. Our state effective tax rate is impacted by our state revenue mix, level of pre-tax book income, and certain state taxes which have tax rates not based on pre-tax book income.

 

Consolidated - Corporation

 

Our results for the three months ended September 30, 2013 reflect an increase in net revenue of $135.1 million and a decrease in net income of $0.5 million compared to the three months ended September 30, 2012. The decrease in net income is attributable primarily to a decrease in operating income due to the $20.0 million payment to terminate the Consulting Agreement with CD&R.

 

Net revenue. For the three months ended September 30, 2013, we generated net revenue of $955.9 million compared to net revenue of $820.8 million for the three months ended September 30, 2012, representing an increase of 16.5%. The increase is attributable primarily to increases in rates and volumes on existing contracts combined with increased volume from net new contracts and acquisitions, partially offset by the impact of markets exited.

 

Adjusted EBITDA. Adjusted EBITDA was $121.7 million, or 12.7% of net revenue, for the three months ended September 30, 2013 compared to $103.4 million, or 12.6% of net revenue, for the three months ended September 30, 2012.

 

Restructuring charges. Restructuring charges of $1.3 million were recorded during the three months ended September 30, 2013, related to continuing efforts to re-align AMR and EmCare operations, compared to charges of $2.0 million for the three months ended September 30, 2012.

 

Interest expense. Interest expense for the three months ended September 30, 2013 was $39.1 million compared to $41.3 million for the three months ended September 30, 2012.  The decrease was due to voluntary prepayments of the Term Loan Facility made during 2012 and the re-pricing of the Term Loan Facility during the three months ended March 31, 2013.

 

Interest and other (expense) income.  Interest and other (expense) income was $0.1 million of expense for the three months ended September 30, 2013 compared to $0.9 million of income for the three months ended September 30, 2012.

 

Income tax expense. Income tax expense decreased by $1.6 million for the three months ended September 30, 2013 compared to the same period in 2012. Our effective tax rate was 40.1% and 43.1% for the three months ended September 30, 2013 and 2012, respectively. The decrease in our effective tax rate for the three months ended September 30, 2013 compared to the three months ended September 30, 2012 was primarily a result of a reduction in our state effective tax rate. Our state effective tax rate is impacted by our state revenue mix, level of pre-tax book income, and certain state taxes which have tax rates not based on pre-tax book income.

 

EmCare

 

Net revenue. Net revenue for the three months ended September 30, 2013 was $605.1 million, an increase of $119.2 million, or 24.5%, from $485.9 million for the three months ended September 30, 2012. The increase was due to an increase in patient encounters from net new hospital contracts and net revenue increases in existing contracts. Net new contracts since September 30, 2012 accounted for a net revenue increase of $64.0 million for the three months ended September 30, 2013, of which $11.9 million came from net new contracts added in 2012, with the remaining increase in net revenue from those added in 2013. Net revenue under our “same store” contracts (contracts in existence for the entirety of both periods) increased $16.0 million, or 3.8%, for the three months ended September 30, 2013. The change was due to a 1.9% increase in revenue per weighted patient encounter and by a 1.9% increase in same store weighted patient encounters. Revenue from recent acquisitions was $39.8 million during the three months ended September 30, 2013 and included $27.8 million from our post-acute care services acquisitions (Evolution Health).

 

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