Prime Medical Announces First Quarter Results; Exceeds Expectations on Strong Urology Performance.Business Editors/Health/Medical Writers AUSTIN, Texas--(BUSINESS WIRE)--April 27, 2004 Prime Medical Services Inc. (Nasdaq:PMSI PMSI Purchase-Money Security Interest (generally a lien resulting from a purchase such as a car loan) PMSI Physician Micro Systems, Inc. PMSI Programme de Médicalisation des Systèmes d'Information Hospitaliers PMSI Popular Mortgage Servicing, Inc. ) today announced its financial results for the first quarter ended March 31, 2004. See tables below. Prime's President & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Brad A. Hummel hummel entire, naturally polled deer. , commented, "Operating results for the first quarter of 2004 exceeded our expectations due to a solid performance from both our urology urology Medical specialty dealing with the urinary system and male reproductive organs. It traces its origin to medieval lithologists, itinerant healers who specialized in surgical removal of bladder stones. and specialty vehicle manufacturing units. Total revenue for the first quarter of 2004 was $40.2 million, compared with $40.9 million in the same quarter a year ago. Under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ), net income attributable to common stockholders for the first quarter of 2004 was $1.2 million, resulting in GAAP diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the quarter of $0.06. This compares to net income attributable to common stockholders of $1.8 million or GAAP diluted earnings per share of $0.11 for the first quarter of 2003. The 2004 GAAP net income includes non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) reductions related to FAS 150 applications for mandatory redeemable Redeemable Eligible for redemption under the terms of an indenture. obligations, resulting in pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma net income of $0.05 per common share. These results are set forth in the reconciliation of GAAP to non-GAAP financial measures table below. The weighted average shares outstanding grew to 18.9 million, reflecting shares issued during the quarter for the acquisition of Medstone International Inc. "With procedure volume following seasonal norms, first quarter results in our lithotripsy Lithotripsy Definition Lithotripsy is the use of high-energy shock waves to fragment and disintegrate kidney stones. The shock wave, created by using a high-voltage spark or an electromagnetic impulse, is focused on the stone. unit were in line with expectations. Prior period comparisons continue to be impacted by partnership re-engineering activity concluded during 2003, primarily evidenced by a 34% increase in minority interest expense on organic lithotripsy revenue. Revenues per procedure continue to be quite stable, averaging $2,062 in partnership driven cases and $1,986 overall, consistent with an anticipated case mix shift resulting from the Medstone acquisition. "We continued to focus on strengthening our balance sheet during the quarter. As previously announced, we reduced borrowings against our $50 million senior credit facility to zero. Additionally, net debt declined to $97.9 million and net working capital increased to $37.7 million at March 31, 2004."
MANUFACTURING SEGMENT
2004 Segment Review ($000's)
Q-1
-------------------
Units Delivered
Medical 26
Command/Homeland Security 20
Broadcast 32
-------------------
78
===================
Revenue $23,757
Adjusted EBITDA $1,730
Mr. Hummel continued, "Deliveries during the first quarter for the manufacturing group were in line with plan. "Our medical group delivered 26 units during the quarter, compared to 30 in the same period last year, indicative of the continued weak demand for mobile imaging product experienced throughout 2003. Customer breadth, however, was quite good during the quarter, as we delivered units to 21 customers and loaded units for each of our OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and strategic partners. "Broadcast unit contribution in the quarter was $680,000 on sales of $7.2 million. Unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. price strengthened sequentially as product shifted to larger units and our pricing environment stabilized sta·bi·lize v. sta·bi·lized, sta·bi·liz·ing, sta·bi·liz·es v.tr. 1. To make stable or steadfast. 2. . Broadcast backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. stands at $12.4 million, up from $7.3 million a year ago. "We continue to see growth in the demand for Homeland Security Noun 1. Homeland Security - the federal department that administers all matters relating to homeland security Department of Homeland Security executive department - a federal department in the executive branch of the government of the United States and Command & Control related products. First quarter deliveries totaled 20 units, slightly below plan as we experienced delays in chassis Pronounced "chah-see," it is a physical structure that holds everything or that everything is attached to. A computer's cabinet is often called the chassis. supply. However, backlog for the Command unit stood at $12.8 million at March 31, and both proposal and order writing remains brisk Brisk as a proper name may refer to:
UROLOGY SEGMENT
2004 Segment Review ($000's)
Q-1
-----------------
Procedures 7,249
Clicks 2,547
Revenue $16,219
EBITDA 9,257
Minority Interest 4,891
Adjusted EBITDA $4,366
Mr. Hummel continued, "The completion of our acquisition of Medstone highlighted our first quarter urology operations. Concluded on February 20, 2004, Prime enjoyed approximately five weeks of contribution from Medstone. Fee for service procedures totaled 748 and licensing applications, or `clicks,' totaled 2,547. "Integration at the operations level has proceeded exceptionally well. To date, scheduling, receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed management, human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. , sales and accounting have been departmentally integrated. We are continuing our documentation of the manufacturing product line and evaluation of sales and distributions alternatives. "Contribution from Prime's existing lithotripsy partnership structure exceeded our first quarter forecast, reflecting we believe, the benefits of our re-engineering activities. We continued, as well, our efforts to expand our urology platform and improve our delivery system. During the quarter we added three GreenLight PVP See portable video player. lasers and three Holmium holmium (hōl`mēəm) [Lat.,=Stockholm], metallic chemical element; symbol Ho; at. no. 67; at. wt. 164.9304; m.p. about 1,474°C;; b.p. about 2,425°C;; sp. gr. 8.78 at 25°C;; valence +3. laser packages to Prime partnerships, enhancing our partners' access to kidney stone kidney stone or renal calculus Mass of minerals and organic matter that may form in a kidney. Urine contains many salts in solution, and low fluid volume or high mineral concentration can cause these salts to precipitate and grow, forming stones. therapy and an exciting new technology to treat prostate prostate /pros·tate/ (pros´tat) a gland surrounding the bladder neck and urethra in the male; it contributes a secretion to the semen.prostat´ic pros·tate n. The prostate gland. adj. disease." FINANCIAL GUIDANCE John Q. Barnidge, Prime's CFO See Chief Financial Officer. , added, "As we look beyond the integration of Medstone, we intend to continue our efforts to strengthen our balance sheet, lower our weighted average cost of capital Weighted average cost of capital (WACC) Expected return on a portfolio of all a firm's securities. Used as a hurdle rate for capital investment. Often the weighted average of the cost of equity and the cost of debt The weights are determined by the relative proportions of equity and improve business unit operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . To that end, we will initiate a reorganization of our manufacturing division later this quarter, which will rationalize ra·tion·al·ize v. 1. To make rational. 2. To devise self-satisfying but false or inconsistent reasons for one's behavior, especially as an unconscious defense mechanism through which irrational acts or feelings are made to appear plant capacity acquired through acquisitions, streamline production and optimize optimize - optimisation synergies available through labor redundancies, purchasing and materials management Materials management is the branch of logistics that deals with the tangible components of a supply chain. Specifically, this covers the acquisition of spare parts and replacements, quality control of purchasing and ordering such parts, and the standards involved in ordering, . "Notwithstanding the uncertainties underlying the current market for diagnostic imaging devices and the lack of a historical perspective with respect to the scope and length of the sales cycle for Homeland Security related-vehicles, we are encouraged by the growth prospects in our manufacturing division. The strength of our backlog, a stable lithotripsy environment and the initial success of our integration of Medstone adds to our confidence in our ability to execute our strategic plan. Accordingly, we are maintaining our earlier guidance with respect to fiscal year 2004, which includes revenue of approximately $188 million ($110 million from manufacturing and $78 million from lithotripsy), EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (net of minority interest expense) of approximately $32 million, and EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of $0.46-$0.47 per share." Conference Call and Webcast Management of Prime Medical Services will host a conference call the morning of Wednesday, April 28, 2004, at 10:30 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . To participate in the live call, please dial 800-915-4836 (973-317-5319 for international callers) -- please call in 10 minutes before the call is scheduled to begin, and ask for the Prime Medical call. A telephone replay will be available for one week by dialing 800-428-6051 in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and 973-709-2089 for international callers. The access number is 347139. The conference call will also be broadcast live over the Internet via the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Company's Web site at www.primemedical.com. To listen to the live webcast, go to the Web site at least 10 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. If you are unable to listen live, the conference call will be archived on the Company's Web site. About Prime Medical Services Prime is an industry leader in providing healthcare services to the urology community and is a market leader in the design and manufacturing of specialty vehicles for use in the medical and broadcast & communications industries communications industry, broadly defined, the business of conveying information. Although communication by means of symbols and gestures dates to the beginning of human history, the term generally refers to mass communications. . UROLOGY SERVICES AND PRODUCTS. Prime is the country's leading provider of lithotripsy, a non-invasive therapy for kidney stone disease, operating a fleet of 112 lithotripsy systems in mobile and fixed-based configurations throughout the United States. As a result of its February 2004 Medstone acquisition, Prime now offers a line of state-of-the-art urological medical devices including lithotripters, fixed and mobile treatment tables and radiology radiology, branch of medicine specializing in the use of X rays, gamma rays, radioactive isotopes, and other forms of radiation in the diagnosis and treatment of disease. equipment. Through 43 partnerships organized around local urologists, the Company provides the personnel and operating infrastructure required to deliver lithotripsy treatments to hospitals and other healthcare settings. Services include scheduling, logistics, receivables management, contracting, personnel management, training, quality assurance, outcomes management and regulatory compliance. MANUFACTURING. Prime is a global leader in the design, engineering and construction of specialty vehicles for the transport of high-technology medical and broadcast & communications equipment. Working with original equipment manufacturers, Prime oversees the integration of a broad range of devices, including diagnostic imaging equipment and therapeutic medical devices, as well as satellite and microwave transmission Microwave transmission refers to the technique of transmitting information over a Microwave link. Since microwaves are highly susceptible to attenuation by the atmosphere (especially during wet weather), the use of microwave transmission is limited to a few contexts. equipment. The Company has recently expanded its products to include mobile command and control facilities, and other law enforcement, military and Homeland Security-related vehicles. For more information, visit Prime's Web site at: www.primemedical.com. Statements in this press release that are not strictly historical, including statements regarding plans, objective and future financial performance, are "forward-looking" statements that are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Although Prime believes that the expectations reflected in such forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. are reasonable, no assurance can be given that the expectations will prove to be correct. Factors that could cause actual results to differ materially from Prime's expectations include, among others, the existence of demand for and acceptance of Prime's services, the availability of appropriate candidates for acquisition by Prime, regulatory approvals, economic conditions, the impact of competition and pricing, financing efforts and other factors described from time to time in Prime's periodic filings with the Securities and Exchange Commission.
PRIME MEDICAL SERVICES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
PRO FORMA VS. GAAP RESULTS
(Unaudited)
GAAP RESULTS
------------
Three Months Ended
March 31,
($ in thousands, except per share data) 2004 2003
---------- ---------
Revenue:
Lithotripsy $16,219 $14,994
Manufacturing 23,757 25,595
Other 237 263
---------- ---------
Total revenue 40,213 40,852
---------- ---------
Cost of services and general and administrative
expenses:
Lithotripsy 6,997 6,432
Manufacturing 21,704 23,048
Corporate 976 645
---------- ---------
29,677 30,125
Depreciation and amortization 1,620 1,820
---------- ---------
31,297 31,945
---------- ---------
Operating income 8,916 8,907
Other income (expenses):
Interest and dividends 88 106
Interest expense (2,289) (2,096)
Other, net 40 (75)
---------- ---------
(2,161) (2,065)
---------- ---------
Income before provision for income taxes and
minority interests 6,755 6,842
Minority interest in consolidated income 4,891 4,009
Provision for income taxes 683 1,006
---------- ---------
Net income $1,181 $1,827
========== =========
Diluted earnings per share:
Net income $0.06 $0.11
========== =========
Weighted average shares outstanding 18,873 17,223
========== =========
PRO FORMA RESULTS
-----------------
Net income, as reported $1,181 $1,827
Expense reductions (additions) pursuant to
application of FAS 150 204 -
---------- ---------
Net income, pro forma $977 $1,827
========== =========
Diluted earnings per share:
Net income, pro forma $0.05 $0.11
========== =========
Weighted average shares outstanding 18,873 17,223
========== =========
Prime Medical Services Inc.
Pro Forma Supplemental Financial Information
For the Three Months Ended March 31, 2004
Unaudited
In thousands, except per share data
1st Quarter
------------------
2004(a) 2003
Summary of Results from Operations
Revenues $40,213 $40,852
EBITDA(b) $10,342 $10,758
Adjusted EBITDA(b) $5,451 $6,749
Net Income $977 $1,827
EPS $0.05 $0.11
Number of Shares 18,873 17,223
Segment Information
Revenues:
Urology $16,219 $14,994
Manufacturing $23,757 $25,595
Adjusted EBITDA:
Urology $4,366 $4,486
Manufacturing $1,730 $2,549
Capital Expenditures:
Consolidated $3,268 $2,281
Urology, net to Prime $670 $505
Manufacturing, net to Prime $877 $380
Corporate $132 $458
Other Information:
Net Draws (Payments) on Line of Credit $(3,000) $4,000
Net Debt $97,897 $105,293
Days Sales Outstanding 33.4 33.1
(a) Excludes FAS 150 expense reduction: EBITDA - $322; Adjusted EBITDA
- $322
(b) See accompanying reconciliation of EBITDA and Adjusted EBITDA
Prime Medical Services Inc.
Reconciliation of EBITDA and Adjusted EBITDA
For the Three Months Ended March 31, 2004
Unaudited
(000's)
1st Quarter
-----------------
2004 2003
-------- --------
Net Income as Reported $1,181 $1,827
Add Back(deduct):
Provision (benefit) for Income Taxes 683 1,006
Interest Expense, Including Loan Fees 2,289 2,096
Depreciation & Amortization 1,620 1,820
FAS 150 expense reduction (322) -
-------- --------
Adjusted EBITDA 5,451 6,749
Add Back:
Minority Interest Expense 4,891 4,009
-------- --------
EBITDA $10,342 $10,758
======== ========
PRIME MEDICAL SERVICES INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
($ in thousands) 2004 2003
--------- ------------
ASSETS
Total current assets $77,792 $69,110
Property and equipment, net 28,087 23,956
Other assets 195,051 186,902
--------- ------------
$300,930 $279,968
========= ============
LIABILITIES
Total current liabilities $40,124 $35,266
Long-term debt, net of current portion 108,111 111,728
Other long-term liabilities 20,237 19,286
--------- ------------
Total liabilities 168,472 166,280
Minority interest 6,991 7,077
Total stockholders' equity 125,467 106,611
--------- ------------
$300,930 $279,968
========= ============
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