2014

Team Health Holdings, Inc., Announces Fourth Quarter and Fiscal 2009 Financial Results - Net Revenue less provision for uncollectibles for the quarter grows 5.2% to $348.8 million

- Net loss of $14.5 million for the quarter, which included costs associated with our IPO and acquisition related charges totaling $24.1 million on an after-tax basis

- Pro forma diluted net loss per share of $0.28; pro forma diluted net earnings per share of $0.19 after adjustments

- Adjusted EBITDA (excluding the effects of professional liability loss reserve adjustments) for the quarter increased 34.8% to $31.5 million

- Completion of Successful Initial Public Offering in December 2009

KNOXVILLE, Tenn., Feb. 9 /PRNewswire-FirstCall/ -- 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 2009.

"The fourth quarter of 2009 proved to be a landmark quarter for TeamHealth, and we are pleased to again report consistent improvement in our operating and financial performance for the fourth quarter and full year 2009," said TeamHealth President and Chief Executive Officer Greg Roth. "We are also very pleased to have successfully completed our initial public offering in December, which provides our organization with greater financial flexibility as we pursue our multiple growth initiatives in our market  place, as evidenced by the completion of three acquisitions during the quarter," added Roth.

Initial Public Offering

In December 2009, the Company completed its IPO of 13,300,000 shares. Including the subsequent exercise of the underwriters' over-allotment option of 1,995,000 shares, a total of 15,295,000 shares were sold.  Total outstanding common shares were 62,401,000 as of December 31, 2009, and total outstanding common shares after exercise of the over-allotment option were 64,396,000.

The Company's net proceeds of approximately $168.5 million from the offering are being used for the pro rata redemption of approximately $157.5 million aggregate amount of its outstanding 11.25% Senior Subordinated Notes due 2013.  TeamHealth completed the initial $136.9 million redemption on January 25, 2010, and the additional $20.6 million redemption using the over-allotment option proceeds is scheduled to be completed on February 12, 2010.

Fiscal 2009 Fourth Quarter Results

  • Net Revenue less provision for uncollectibles increased 5.2% to $348.8 million over the same period in the prior year.
  • Reported net loss of $14.5 million or $0.28 pro forma diluted net loss per share. Net Earnings were $9.6 million, or $0.19 pro forma diluted net earnings per share, after excluding costs associated with our IPO and acquisition related charges totaling $39.6 million on a pretax basis ($24.1 million after-tax)
  • Adjusted EBITDA (excluding the effects of professional liability loss reserve adjustments) increased 34.8% to $31.5 million over the same period in the prior year.

Net revenue less provision for uncollectibles ("revenue less provision") in the fourth quarter of 2009 increased 5.2% to $348.8 million from $331.5 million in the fourth quarter of 2008. Net revenue less provision from same contracts and acquisitions contributed 6.1% and 1.1%, respectively, of the 5.2% growth between quarters.  New contracts, net of terminations, excluding contracting changes within the military division, contributed 0.7% of growth.  New contracts, net of terminations within the military division, unfavorably impacted quarter over quarter net revenue growth by 2.7%.  

Same contract revenue less provision for the fourth quarter of 2009 increased 6.8% to $317.3 million from $297.0 million in the same period a year ago. During the fourth quarter of 2009, growth in same contract revenue less provision was positively impacted by an increase in fee for service visits and procedures of 9.7%, which contributed approximately 6.7% of same contract revenue growth between quarters, while increases in estimated collections per visit contributed approximately 1.3% of same contract growth. Declines in contract and other revenue, primarily associated with the locum tenens and military divisions, constrained same contract revenue growth by 1.2%.  Acquisitions contributed $3.5 million of growth between periods while new sales, net of contracts that terminated in the period, contributed a decline in revenue of $6.5 million between periods.  Excluding the impact of contracting changes within the military division, net new contract revenue increased by $2.3 million.

Reported net loss was $14.5 million in the fourth quarter of 2009, or $0.28 pro forma diluted net loss per share, compared to a net loss of $5.4 million, or $0.11 pro forma diluted net loss per share in the same quarter of 2008.  Included in the fourth quarter 2009 results were one-time fees associated with the IPO of approximately $37.4 million and transaction and other costs of $2.2 million.  Included in the fourth quarter 2008 results were an impairment charge of $9.1 million, $0.6 million in transaction costs and a $1.6 million gain on the extinguishment of debt.  Financial results for the fourth quarter of 2008 also reflected an unfavorable adjustment to prior year professional liability reserves of $5.4 million associated with a revaluation of the discounted carrying value of the prior year professional liability reserves due to the decline in the interest rate environment during the fourth quarter of 2008.  In the fourth quarter of 2009, no adjustments to professional liability reserves associated with prior years were recorded.  

Adjusted EBITDA for the fourth quarter of 2009 was $31.5 million, an increase of 34.8% from $23.4 million in the same quarter of 2008 (excluding the effect of the professional liability loss reserve adjustment in 2008).

Fiscal 2009 Full Year Results

  • Net Revenue less provision for uncollectibles increased 6.9% to $1.42 billion over fiscal 2008.
  • Reported net earnings were $40.7 million or $0.82 pro forma diluted net earnings per share. Net earnings were $55.4 million, or $1.11 pro forma diluted net earnings per share, after excluding favorable professional liability loss reserve adjustments, costs associated with the IPO, and acquisition related and management fee charges totaling $23.7 million on a pretax basis ($14.7 million after-tax)
  • Adjusted EBITDA (excluding the effects of professional liability loss reserve adjustments) increased 21.8% to $149.7 million over fiscal 2008.

Revenue less provision for the year ended December 31, 2009, increased 6.9% to $1.42 billion from $1.33 billion in fiscal 2008. Revenue less provision from same contracts contributed 5.2% of growth between fiscal years while acquisitions contributed 0.9%.  New contracts, net of terminations, excluding contracting changes within the military division, contributed 1.6% of growth.  New contracts, net of terminations within the military division, unfavorably impacted net revenue growth by 0.8%.

Same contract revenue less provision for the year ended December 31, 2009, increased 6.1% to $1.21 billion from $1.14 billion in fiscal 2008. Same contract revenue growth during the year benefited from a 5.9% increase in fee for service visits and procedures which contributed approximately 4.1% of year-over-year growth, while increases in estimated collections per visit contributed an additional 1.8% of growth in same contract revenue between years. Acquisitions and new sales, net of contracts that terminated in the period, contributed $11.6 million and $10.7 million of growth between periods, respectively.  Excluding the impact of contracting changes within the military division, net new contract revenue increased by $21.4 million.

Reported net earnings were $40.7 million, or $0.82 pro forma diluted net earnings per share, for the year ended December 31, 2009, compared to $44.7 million, or $0.91 pro forma diluted net earnings per share, in fiscal 2008. Financial results for the years ended December 31, 2009 and 2008 reflected reductions of professional liability reserves related to prior years of $18.8 million and $34.9 million, respectively.

Adjusted EBITDA (excluding the effects of professional liability loss reserve adjustments) for the year ended December 31, 2009, was $149.7 million, an increase of 21.8% from $122.9 million in fiscal 2008.

As of December 31, 2009, the Company had cash and cash equivalents of approximately $170.3 million and a revolving credit facility of $125.0 million (without giving effect to $7.7 million of undrawn letters of credit).  Included in the cash and cash equivalents were proceeds of the IPO that have since been applied to debt reduction.   Excluding the IPO proceeds, cash was approximately $23.7 million.  During the year ended December 31, 2009, the Company made scheduled debt payments of $4.3 million. As a result, the Company's total outstanding debt as of December 31, 2009, was $611.0 million and there were no amounts outstanding under the revolving credit facility. After giving effect to the redemptions of the 11.25% Senior Subordinated Notes in January and February of 2010 in the aggregate amount of $157.5 million, total outstanding debt will be $453.5 million.

Cash flow provided by operations for the year ended December 31, 2009, increased to $82.8 million compared to $62.0 million for fiscal 2008. Included within operating cash flow in 2009 was approximately $32.7 million of cash costs associated with the IPO.  Excluding after tax costs associated with the IPO, 2009 operating cash flows would have been $103.1 million.  Contributing to the increase in operating cash flow between years were improvements in profitability, lower levels of accounts receivable funding, and reductions in interest payments during fiscal 2009 compared to fiscal 2008.  

"Our focus on reducing our cost structure and enhancing our revenue cycle process not only aligned our operations with current market conditions, but has also generated increased cash flow that has provided greater financial flexibility in making further investments in the growth and efficiency of our business. Our organization is in a stronger strategic position, and we are excited about the opportunities to accelerate our gains in profitable market share and to drive increasing value for our shareholders." concluded Roth.

Lynn Massingale, M.D., Executive Chairman of TeamHealth, added, "The financial benefits from our IPO, combined with the consistency of our financial performance, will continue to enable us to recruit and retain high quality physicians and other clinicians who do an outstanding job of caring for the patients of our hospital clients.  Additionally, our financial performance allows us to continue to invest in resources that support our clinicians and drive value for our hospital clients."  

Conference Call

As previously announced, TeamHealth will hold a conference call tomorrow, February 10, to discuss its fiscal fourth quarter and full-year 2009 results at 10:00 a.m. (Eastern Standard Time).  The conference call can be accessed live over the phone by dialing 1-877-941-8418, or for international callers, 1-480-629-9809. A replay will be available one hour after the call and can be accessed by dialing 1-800-406-7325, or for international callers, 1-303-590-3030. The passcode for the live call and the replay is 4203264. The replay will be available until February 17, 2010.

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 seven principal service lines located in 13 regional sites, TeamHealth's more than 5,900 affiliated healthcare professionals provide emergency medicine, hospital medicine, anesthesia, teleradiology, and pediatric staffing and management services to more than 530 civilian and military hospitals, clinics, and physician groups in 48 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 from time to time in the Company's filings 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

This release includes a table that sets forth a reconciliation of net earnings (loss) to Adjusted EBITDA. Adjusted EBITDA under the indenture governing the 11.25% Senior Subordinated Notes is defined as net earnings (loss) before interest expense, taxes, depreciation and amortization, as further adjusted to exclude unusual items, non-cash items and the other adjustments shown in the table below.   We believe that the disclosure of the calculation of Adjusted EBITDA provides information that is useful to an investor's understanding of our liquidity and financial flexibility.  Adjusted EBITDA is not a measurement of financial performance or liquidity under generally accepted accounting principles.  It 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.

Since Adjusted EBITDA is not a measure determined in accordance with GAAP and is susceptible to varying calculations, Adjusted EBITDA, as presented, may not be comparable to other similarly titled measures of other companies.

    
    
    
    
                           Team Health Holdings, Inc. 
                          Consolidated Balance Sheets 
                                                           As of
                                                        December 31,
                                                     2008         2009
                                                      (In thousands)
    Assets
    Current Assets:
        Cash and cash equivalents                   $46,398     $170,331
        Accounts receivable, less allowance
         for uncollectibles of $158,685 and
         $178,712 in 2008  and 2009,
         respectively                               237,790      237,703
        Prepaid expenses and other current
         assets                                      15,467       17,040
        Receivables under insured programs           27,145       17,615
        Income tax receivable                         3,446
    
    Total current assets                            330,246      442,689
    Investments of insurance subsidiary              87,413       86,975
    Property and equipment, net                      27,477       28,850
    Other intangibles, net                           32,438       59,505
    Goodwill                                        149,763      213,978
    Deferred income taxes                            47,915       44,880
    Receivables under insured programs               20,589       24,708
    Other                                            30,940       39,361
    
                                                   $726,781     $940,946
    
    Liabilities and members' and
     shareholders' equity (deficit)
    Current liabilities:
        Accounts payable                            $13,451      $17,472
        Accrued compensation and physician
         payable                                    111,556      124,380
        Other accrued liabilities                    82,012       83,955
        Income tax payable                                -        2,979
        Current maturities of long-term
         debt                                         4,250      161,752
        Deferred income taxes                        33,231       34,764
    
    Total current liabilities                       244,500      425,302
    Long-term debt, less current
     maturities                                     611,025      449,273
    Other non-current liabilities                   154,930      158,703
    Members' and shareholders' equity
     (deficit):
        Class A equity units                        339,070           --
        Class B equity units                          1,028           --
        Class C equity units                            616           --
        Common stock, 100,000 shares
         authorized and 62,401 shares issued
         and outstanding at December 31,
         2009                                            --          624
        Additional paid-in capital                       --      490,989
        Accumulated deficit                        (622,234)    (582,708)
        Accumulated other comprehensive loss         (2,154)      (1,237)
    
    Total members' and shareholders'
     deficit                                       (283,674)     (92,332)
    
                                                   $726,781     $940,946
    
    
    
                          Team Health Holdings, Inc. 
                    Consolidated Statements of Operations 
    
                                                         Three Months Ended
                                                            December 31,
                                                          2008        2009
                                                       (In thousands, except
                                                          per share data)
    
    Net revenues                                       $571,040    $615,273
    Provision for uncollectibles                        239,531     266,489
    
        Net revenues less provision for uncollectibles  331,509     348,784
    Cost of services rendered (exclusive of
     depreciation and amortization shown separately
     below)
        Professional service expenses                   267,379     273,823
        Professional liability costs                     18,233      13,033
    General and administrative expenses                  28,665      37,043
    Management fee and other expenses                       856      33,354
    Impairment of intangibles                             9,134          --
    Depreciation and amortization                         4,722       4,784
    Interest expense, net                                11,816       9,008
    Gain on extinguishment of debt                       (1,640)         --
    Transaction costs                                       581       1,542
    
            Loss before income taxes                     (8,237)    (23,803)
    Benefit from income taxes                            (2,841)     (9,277)
    
            Net loss                                    $(5,396)   $(14,526)
    
    Pro forma net loss per share
        Basic                                             $(.11)      $(.28)
        Diluted                                           $(.11)      $(.28)
    
    Pro forma weighted average shares outstanding
        Basic                                            48,807      51,189
        Diluted                                          48,807      51,189
    
    
    
                          Team Health Holdings, Inc. 
                    Consolidated Statements of Operations 
    
                                                       Year Ended December 31,
                                                           2008        2009
                                                         (In thousands, except
                                                            per share data)
    
    Net revenues                                       $2,291,812  $2,483,275
    Provision for uncollectibles                          960,495   1,059,834
    
        Net revenues less provision for uncollectibles  1,331,317   1,423,441
    Cost of services rendered (exclusive of
     depreciation and amortization shown
     separately below)
        Professional service expenses                   1,046,806   1,102,091
        Professional liability costs                       15,247      32,178
    General and administrative expenses                   116,942     130,226
    Management fee and other expenses                       3,602      35,676
    Impairment of intangibles                               9,134          --
    Depreciation and amortization                          17,281      18,813
    Interest expense, net                                  45,849      36,679
    Gain on extinguishment of debt                         (1,640)         --
    Transaction costs                                       2,386       2,120
    
            Earnings before income taxes                   75,710      65,658
    Provision for income taxes                             31,044      24,953
    
            Net earnings                                  $44,666     $40,705
    
    Pro forma net earnings per share
        Basic                                                $.91        $.82
        Diluted                                              $.91        $.82
    
    Pro forma weighted average shares outstanding
        Basic                                              48,876      49,427
        Diluted                                            49,311      49,747
    
    
    
                        Team Health Holdings, Inc. 
                  Consolidated Statements of Cash Flows 
    
                                                       Three Months Ended
                                                          December 31,
                                                       2008         2009
                                                          (In thousands)
    
    Operating activities
        Net loss                                      $(5,396)    $(14,526)
        Adjustments to reconcile net loss:
            Depreciation and amortization               4,722        4,784
            Amortization of deferred financing
             costs                                        521          481
            Employee equity based compensation
             expense                                      186        4,872
            Provision for uncollectibles              239,527      266,489
            Impairment of intangibles                   9,134           --
            Deferred income taxes                        (345)         218
            Gain on extinguishment of debt             (1,640)          --
            Loss on disposal of equipment                  15           10
            Equity in joint venture income              1,038          867
            Changes in operating assets and
             liabilities, net of acquisitions:
                Accounts receivable                  (251,250)    (260,704)
                Prepaids and other assets               4,215         (798)
                Income tax accounts                    (8,036)      (9,357)
                Accounts payable                        3,448          183
                Accrued compensation and physician
                 payable                                  872       (2,216)
                Other accrued liabilities              (6,924)       6,291
                Professional liability reserves         9,015        1,626
    
        Net cash used in operating activities            (898)      (1,780)
    Investing activities
        Purchases of property and equipment            (4,800)      (6,369)
        Cash paid for acquisitions, net                    --      (87,599)
        Purchases of investments at insurance
         subsidiary                                   (31,685)     (18,035)
        Proceeds from investments at insurance
         subsidiary                                    27,856       25,506
        Other investing activities                         13           19
    
        Net cash used in investing activities          (8,616)     (86,478)
    Financing activities
        Payments on notes payable                      (1,063)      (1,063)
        Payments on 11.25% senior subordinated
         notes                                         (9,999)          --
        Proceeds from sale of common shares                 -      146,656
        Redemptions of common units                       (43)           2
    
        Net cash (used in) provided by
         financing activities                         (11,105)     145,595
    
        (Decrease) increase in cash and cash
         equivalents                                  (20,619)      57,337
        Cash and cash equivalents, beginning
         of period                                     67,017      112,994
    
        Cash and cash equivalents, end of
         period                                       $46,398     $170,331
    
        Supplemental cash flow information:
        Interest paid                                 $17,464      $14,086
        Taxes paid                                     $6,234          $29
    
    
    
                           Team Health Holdings, Inc.
                      Consolidated Statements of Cash Flows 
    
                                                      Year Ended December 31,
                                                         2008           2009
                                                           (In thousands)
    Operating activities
        Net earnings                                   $44,666        $40,705
        Adjustments to reconcile net earnings:
            Depreciation and amortization               17,281         18,813
            Amortization of deferred financing costs     2,082          2,035
            Employee equity based compensation
             expense                                       625          5,430
            Provision for uncollectibles               960,495      1,059,834
            Impairment of intangibles                    9,134             --
            Deferred income taxes                       19,519          3,000
            Gain on extinguishment of debt              (1,640)            --
            Loss on disposal of equipment                   78             84
            Equity in joint venture (income) loss           64           (606)
            Changes in operating assets and
             liabilities, net of acquisitions:
                Accounts receivable                   (975,682)    (1,052,755)
                Prepaids and other assets               (8,250)       (12,456)
                Income tax accounts                     (4,709)         6,694
                Accounts payable                         1,254          3,765
                Accrued compensation and physician
                 payable                                 9,389         11,803
                Other accrued liabilities               (2,999)         4,826
                Professional liability reserves         (9,336)        (8,331)
    
        Net cash provided by operating
         activities                                     61,971         82,841
    Investing activities
        Purchases of property and equipment            (12,141)       (11,613)
        Cash paid for acquisitions, net                 (7,513)       (90,386)
        Purchases of investments at insurance
         subsidiary                                   (180,578)      (110,997)
        Proceeds from investments at insurance
         subsidiary                                    170,447        113,388
        Other investing activities                          13             28
    
        Net cash used in investing activities          (29,772)       (99,580)
    Financing activities
        Payments on notes payable                       (4,250)        (4,250)
        Payments on 11.25% senior subordinated
         notes                                          (9,999)            --
        Proceeds from sale of common shares                 --        146,656
        Redemptions of common units                     (1,842)        (1,734)
    
        Net cash (used in) provided by financing
         activities                                    (16,091)       140,672
    
        Increase in cash and cash equivalents           16,108        123,933
        Cash and cash equivalents, beginning of
         year                                           30,290         46,398
    
        Cash and cash equivalents, end of year         $46,398       $170,331
    
        Supplemental cash flow information:
        Interest paid                                  $48,550        $36,512
        Taxes paid                                     $16,392        $15,389
    
    
                           Team Health Holdings, Inc.
                               Adjusted EBITDA

The following table sets forth a reconciliation of net earnings (loss) to Adjusted EBITDA. Adjusted EBITDA under the indenture governing the senior subordinated notes is defined as net earnings (loss) before interest expense, taxes, depreciation and amortization, as further adjusted to exclude unusual items, non-cash items and the other adjustments shown in the table below. We believe that the disclosure of the calculation of Adjusted EBITDA provides information that is useful to an investor's understanding of our financial flexibility under our indenture covenants. Adjusted EBITDA is not a measurement of financial performance or liquidity under generally accepted accounting principles. It 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.

    
    
    
    
                                                          Three Months
                              Year Ended December 31,   Ended December 31,
                                2008        2009          2008       2009
                                             (In thousands)
    Net earnings (loss)       $44,666     $40,705       $(5,396) $(14,526)
    Interest expense, net      45,849      36,679        11,816     9,008
    Provision for (benefit 
     from) income taxes        31,044      24,953        (2,841)   (9,277)
    Depreciation and
     amortization              17,281      18,813         4,722     4,784
    Impairment of
     intangibles(a)             9,134          --         9,134        --
    Management fee and
     other expenses(b)          3,602      35,676           856    33,354
    Gain on extinguishment
     of debt(c)                (1,640)         --        (1,640)       --
    Transaction costs(d)        2,386       2,120           581     1,542
    Stock based compensation
     expense(e)                   625       5,430           186     4,872
    Insurance subsidiary
     interest income            3,341       2,812           301       674
    Severance and other 
     charges                    1,549       1,355           209     1,054
    
    Adjusted EBITDA*         $157,837    $168,543       $17,928   $31,485
    
    
    * Adjusted EBITDA totals are not adjusted for the effects of professional
    liability loss reserve adjustments associated with prior years of  
    $34,927, $18,824 and ($5,437) for the years ended December 31, 2008 and 
    2009, and the three months ended December 31, 2008, respectively.
    Adjusting for the effects of professional liability loss reserve 
    adjustments associated with prior years, Adjusted EBITDA would have been 
    reduced to $122,910 and $149,719 for the years ended December 31, 2008 and
    2009, respectively and increased to $23,365 for the three months ended 
    December 31, 2008. There was no adjustment to professional liability 
    reserves associated with prior years in the fourth quarter of 2009.
    
    
    (a)  Includes impairment of goodwill. 
    (b)  Reflects management sponsor fees (including $32,719 paid in 
         conjunction with the IPO), loss on disposal of assets and realized
         gains on investments. 
    (c)  Reflects the gain on the retirement of a portion of the 11.25% Senior
         Subordinated Notes, net of write-off of deferred financing costs. 
    (d)  Reflects expenses associated with acquisition transaction fees. 
    (e)  Reflects costs related to the recognition of expense in connection 
         with the issuance of restricted units under the Team Health Inc. 2005
         Unit Plan and, for the 2009 periods, reflects $4,682 of expense 
         related to options granted in conjunction with the December 2009 IPO.
    
    
                              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 new and acquired contracts during the periods, as set forth in the table below:

    
    
    
                                                        Three Months Ended
                                                           December 31,
                                                        2008           2009
                                                          (In thousands)
    Same contracts:
        Fee for service revenue                      $201,870       $225,631
        Contract and other revenue                     95,167         91,691
    
            Total same contracts                      297,037        317,322
    New contracts, net of terminations:
        Fee for service revenue                        13,558         17,055
        Contract and other revenue                     20,914         10,894
    
            Total new contracts, net of terminations   34,472         27,949
    Acquired contracts:
        Fee for service revenue                            --          3,505
        Contract and other revenue                         --              8
    
            Total acquired contracts                       --          3,513
    Consolidated:
        Fee for service revenue                       215,428        246,191
        Contract and other revenue                    116,081        102,593
    
            Total net revenue less provision for
             uncollectibles                          $331,509       $348,784

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

    
    
    
                                                        Three Months Ended
                                                            December 31,
                                                          2008        2009
                                                         (In thousands)
    Fee for service visits and procedures:
        Same contract                                    1,674       1,837
        New and acquired contracts, net of terminations    137         188
            Total fee for service visits and procedures  1,811       2,025
    
    
                          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 new and acquired contracts during the periods, as set forth in the table below:

    
    
    
                                                       Year Ended December 31,
                                                          2008           2009
                                                            (In thousands)
    Same contracts:
        Fee for service revenue                        $783,264       $851,188
        Contract and other revenue                      354,727        356,650
            Total same contracts                      1,137,991      1,207,838
    New contracts, net of terminations:
        Fee for service revenue                          82,084         95,531
        Contract and other revenue                      107,379        104,591
            Total new contracts, net of terminations    189,463        200,122
    Acquired contracts:
        Fee for service revenue                           3,849         15,449
        Contract and other revenue                           14             32
            Total acquired contracts                      3,863         15,481
    Consolidated:
        Fee for service revenue                         869,197        962,168
        Contract and other revenue                      462,120        461,273
    
            Total net revenue less provision for
             uncollectibles                          $1,331,317     $1,423,441

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

    
    
                                                       Year Ended December 31,
                                                           2008        2009
                                                           (In thousands)
    Fee for service visits and procedures:
        Same contract                                     6,539       6,923
        New and acquired contracts, net of terminations     835         979
            Total fee for service visits and procedures   7,374       7,902

SOURCE Team Health Holdings, Inc.



RELATED LINKS
http://www.teamhealth.com

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