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8-K - 8-K - Envision Healthcare Holdings, Inc.a16-20835_18k.htm

Exhibit 99.1

 

 

For Immediate Release

 

Contact:

Bob Kneeley

 

Vice President, Investor Relations

 

303-495-1245

 

bob.kneeley@evhc.net

 

ENVISION HEALTHCARE REPORTS THIRD QUARTER RESULTS

 

Net Income of $25.9 million and Adjusted EBITDA of $180.7 million

 

2016 Outlook Updated

 

Greenwood Village, Colo. (November 1, 2016) — Envision Healthcare Holdings, Inc. (Envision or Company) (NYSE: EVHC) reports results from operations for the three months and nine months ended September 30, 2016.  All comparisons included in this release are for the 2016 periods to the comparable 2015 periods, unless otherwise noted.

 

Highlights:

 

·                  Net revenue of $1.64 billion, an increase of 19.8%;

 

·                  Net income of $25.9 million, an increase of 50.2%;

 

·                  Adjusted EBITDA of $180.7 million, an increase of 26.8%;

 

·                  GAAP diluted earnings per share (EPS) was $0.13, an increase of 44.4%; and

 

·                  Adjusted diluted EPS was $0.36, an increase of 20.0%.

 

“In spite of lower sector volume growth in the period, our third quarter reflects strong operating results at EmCare, including encouraging progress at Evolution Health, and performance improvement at AMR’s Rural Metro operations,” said William A. Sanger, chairman, president and chief executive officer of Envision.  “Rural Metro’s margins improved, driven by continued integration into AMR’s operations and technology platforms.  Our results at Evolution Health improved as we realized benefits from our participation in bundled payment models and medical cost savings from our contract with a Florida health plan.

 

“The strategic investments we have made at Envision to expand our scale and scope continue to provide unique opportunities for the company and our stakeholders.  We believe these investments will be further enhanced by the merger between Envision and AMSURG Corp., which is expected to be completed this year.”

 

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Results of Operations for the Third Quarter of 2016

 

Envision generated net revenue of $1.64 billion, an increase of 19.8%, driven by contributions from acquisitions of 16.1%, and organic growth of 3.7%.  Net income was $25.9 million and Adjusted EBITDA was $180.7 million.   Envision earned $0.13 per diluted share on a GAAP basis and Adjusted diluted EPS for the quarter was $0.36.

 

Segment Results for the Third Quarter of 2016

 

Envision operates two business segments: EmCare Holdings (EmCare), the Company’s facility-based and post-acute care physician-led services segment and American Medical Response (AMR), the Company’s medical transportation services segment.

 

EmCare

 

EmCare’s net revenue for the third quarter of 2016 was $1.06 billion, an increase of 13.0% from the prior-year period.

 

Revenue from acquisitions completed during the past 12 months contributed growth of 9.0%. Organic revenue growth of 4.0% consisted of same-store contributions of 5.1% while revenue from net new contracts declined by 1.1%.  Revenue from net new contracts increased at Evolution Health and was offset by contract terminations, net of new contracts started at EmCare, during the last 12 months.

 

EmCare’s same-store revenue, when calculated from the comparable contract base for both periods, grew by 6.0% and included rate growth of 4.3%, driven by an increase in yield in all service lines, as well as same-contract growth at Evolution Health.  Same-store revenue growth from patient volume was 1.7% overall, with 1.1% from emergency department volume growth.

 

EmCare’s income from operations was $73.6 million, or 7.0% of revenue, which compares with $28.9 million, or 3.1% of revenue, and includes changes in restructuring and transaction costs in comparable periods. Adjusted EBITDA of $113.9 million was 10.8% of revenue, which compares with $86.4 million, or 9.2% of revenue.   EmCare’s results were impacted by Evolution Health, which generated revenue of $120.5 million in the third quarter and contributed Adjusted EBITDA of $1.7 million.

 

American Medical Response

 

AMR’s net revenue was $583.6 million and grew by 34.6% from the prior-year period.  Acquisition-related growth was 31.4%.  Growth from organic revenue sources was 3.2% and included net new contract growth of 2.2% and same-market growth of 1.0%.   When calculated on a comparable same-market basis, revenue growth was 1.2% and consisted of volume growth of 1.8%, offset by a 0.6% decline related to rate.  AMR’s same-market rate included contributions from improved commercial rates, offset by lower managed transportation revenue.

 

AMR’s income from operations was $9.7 million, or 1.7% of revenue, which compares with $31.1 million, or 7.2% of revenue.  The change in income from operations was driven primarily by higher transaction costs and depreciation and amortization expense.  Adjusted EBITDA was $66.8 million, or 11.4% of revenue, compared with $56.1 million, or 12.9% of revenue.

 

2



 

Envision Cash Flows for the Third Quarter of 2016

 

Envision generated cash flow from operations of $93.2 million.  This compares with cash flow from operations of $34.0 million.  Adjusted Free Cash Flow, a non-GAAP financial measure, was $47.7 million and was impacted primarily by expected higher capital expenditures, largely related to acquisition and new contract growth at AMR.  At the end of the quarter, Envision completed two acquisitions for net consideration of $66.1 million.  See “Non-GAAP Financial Measures Description and Reconciliation” below for a definition and reconciliation of Adjusted Free Cash Flow to Cash Flows from Operating Activities.

 

Results of Operations for the Nine Months Ended September 30, 2016

 

Envision’s net revenue was $4.88 billion, net income was $81.2 million, and Adjusted EBITDA was $504.2 million.   Envision generated cash flow from operations of $252.4 million, or $278.4 million when excluding certain non-recurring payments earlier in 2016, and Adjusted Free Cash Flow was $173.4 million.

 

Segment Results for the Nine Months ended September 30, 2016

 

Net revenue at EmCare was $3.12 billion, operating income was $198.9 million and Adjusted EBITDA was $305.0 million.

 

Net revenue at AMR was $1.76 billion, operating income was $60.7 million and Adjusted EBITDA was $199.2 million.

 

Merger Update

 

The previously announced merger between Envision and AMSURG remains on track for completion during the fourth quarter of 2016.  Both Envision and AMSURG mailed the definitive proxy statement/prospectus on October 21, 2016, and special meetings of shareholders of AMSURG and stockholders of Envision will be held on November 28, 2016, to vote on the merger proposals.

 

2016 Outlook

 

Envision Healthcare is updating its financial outlook for 2016.  Envision now expects to generate Adjusted EBITDA of $705 million to $715 million and Adjusted EPS of $1.39 to $1.42.   Envision’s outlook anticipates that lower volume growth at both EmCare and AMR will continue into the fourth quarter.

 

Envision is not providing a reconciliation of its forward-looking 2016 Adjusted EBITDA and Adjusted EPS because the Company is not able to accurately estimate the variables and individual adjustments for these items, including normal variability in income tax expense, equity compensation and transaction costs related to acquisition activities.  Envision believes that the variability of these items could have an impact on its GAAP financial results.

 

3



 

Conference Call

 

Envision management will host a conference call today, Tuesday, November 1, 2016, at 8:30 a.m. Eastern Time, to discuss the Company’s financial results.  Interested participants may listen to the call by dialing 800-857-6175, or 517-623-4852 for international callers, and referencing participant code 909712.  A replay will be available approximately one hour after the call ends through December 1, 2016. To access the replay, dial 866-441-1048, or 203-369-1056 for international callers. An audio file will also be archived for 30 days on the investor relations section of the Company’s website: investor.evhc.net.

 

About Envision Healthcare Holdings, Inc.

 

Envision Healthcare Holdings, Inc., offers an array of physician-led healthcare-related services to consumers, hospitals, healthcare systems, health plans and local, state and national government entities. The organization provides care across a broad patient continuum via American Medical Response, Inc. (AMR), EmCare Holdings, Inc. (EmCare) and Evolution Health, LLC (Evolution Health). AMR provides community-based medical transportation services, including emergency (‘911’), non-emergency, managed transportation, air ambulance and disaster response. EmCare’s integrated facility-based physician services include emergency, anesthesiology, hospitalist/inpatient care, radiology, tele-radiology and surgery. Evolution Health’s innovative and comprehensive care coordination solutions result in improved patient care delivery across a number of healthcare settings.   Envision Healthcare is headquartered in Greenwood Village, Colorado. For additional information, visit www.evhc.net.

 

Forward-Looking Statements

 

Certain statements and information in this press release may be deemed to be “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements relating to our 2016 Adjusted EBITDA and Adjusted EPS guidance, objectives, plans and strategies, and all statements (other than statements of historical facts) that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in our filings with the Securities and Exchange Commission from time to time, including in the section entitled “Risk Factors” in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Factors that could cause future results to differ materially from those provided in this press release include, but are not limited to: decreases in our revenue and profit margin under our fee-for-service contracts; failure to implement our business strategies, the loss of existing contracts; failure to accurately assess costs under new contracts; our ability to integrate acquisitions; competition in markets we serve;

 

4



 

the cost of required capital expenditures; retention of our senior management; our ability to maintain or implement information systems; the impact of labor union representation; failure to comply with extensive and complex government regulation of our industry, including oversight of state and federal healthcare programs; the impact of changes in the healthcare sector; our ability to service our debt obligations; risks associated with the ability to consummate the previously announced business combination between Envision and AMSURG Corp. (“AMSURG”) and the timing of the closing of the business combination; the ability to successfully integrate Envision’s and AMSURG’s operations and employees; the ability to realize anticipated benefits and synergies of the business combination; the potential impact of announcement of the business combination or consummation of the transaction on relationships, including with employees, customers and competitors, and other factors discussed in our filings with the Securities and Exchange Commission.  Any forward-looking statements herein are made as of the date of this press release, and we undertake no duty to update or revise any such statements. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties.

 

Non-GAAP Financial Measures Description and Reconciliation

 

This press release includes presentations of Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted EPS.  These are financial measures that are not calculated and presented in accordance with generally accepted accounting principles in the United States of America (GAAP).  These non-GAAP measures may not be comparable to similarly titled measures of other companies.

 

Adjusted EBITDA is defined as net income (loss) before equity in earnings of unconsolidated subsidiary, income tax benefit (expense), loss on early debt extinguishment, other income (expense), net, realized gains (losses) on investments, interest expense, net, equity-based compensation expense, transaction costs related to acquisition activities, restructuring and other charges, adjustment to net loss (income) attributable to non-controlling interest due to deferred taxes, and depreciation and amortization expense.  Adjusted Free Cash Flow is defined as cash flow from operations adjusted for cash used in non-acquisition related investing activities and certain out-of-period or non-recurring cash payments.  Adjusted EPS is defined as diluted earnings per share adjusted for expenses related to the Company’s secondary offerings, amortization expense, equity-based compensation expense, restructuring and other charges, severance and related costs, loss on early debt extinguishment, and transaction costs related to acquisition activities, net of an estimated tax benefit.

 

Adjusted Free Cash Flow is a non-GAAP measures used by management as a liquidity indicator. Adjusted EBITDA and Adjusted EPS are non-GAAP measures used by management solely as performance measures.  The items excluded from these non-GAAP measures are important in understanding the Company’s financial performance, and should not be considered in isolation of, or as an alternative to, GAAP financial measures. Reconciliations of non-GAAP financial measures are provided in the tables included in this press release.

 

5



 

Envision Healthcare Holdings, Inc.

Consolidated Statements of Operations and Other Information

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

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

 

2016

 

2015

 

2016

 

2015

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

1,638,750

 

$

1,367,370

 

$

4,877,326

 

$

3,966,130

 

Compensation and benefits

 

1,159,244

 

997,213

 

3,427,921

 

2,874,328

 

Operating expenses

 

256,481

 

165,099

 

772,877

 

472,954

 

Insurance expense

 

35,925

 

41,091

 

108,799

 

114,783

 

Selling, general and administrative expenses

 

42,753

 

29,463

 

122,336

 

87,161

 

Depreciation and amortization expense

 

60,886

 

44,547

 

178,075

 

129,364

 

Restructuring and other charges

 

164

 

30,000

 

7,726

 

30,000

 

Income from operations

 

83,297

 

59,957

 

259,592

 

257,540

 

Interest income from restricted assets

 

283

 

149

 

749

 

442

 

Interest expense, net

 

(39,300

)

(27,579

)

(117,751

)

(82,360

)

Realized gains (losses) on investments

 

(151

)

 

(191

)

(34

)

Other income (expense), net

 

756

 

(221

)

743

 

(593

)

Income (loss) before income taxes and equity in

 

 

 

 

 

 

 

 

 

earnings of unconsolidated subsidiary

 

44,885

 

32,306

 

143,142

 

174,995

 

Income tax benefit (expense)

 

(16,057

)

(13,795

)

(53,611

)

(69,009

)

Equity in earnings of unconsolidated subsidiary

 

123

 

59

 

1,758

 

202

 

Net income (loss)

 

28,951

 

18,570

 

91,289

 

106,188

 

Less: Net (income) loss attributable to noncontrolling interest

 

(3,062

)

(1,334

)

(10,118

)

(3,161

)

Net income (loss) attributable to Envision Healthcare Holdings, Inc.

 

25,889

 

17,236

 

81,171

 

103,027

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share

 

$

0.14

 

$

0.09

 

$

0.43

 

$

0.56

 

Diluted earnings per common share

 

$

0.13

 

$

0.09

 

$

0.42

 

$

0.54

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

187,188,118

 

185,969,475

 

187,123,581

 

185,214,021

 

Weighted average common shares outstanding, diluted

 

192,045,426

 

191,769,107

 

191,998,390

 

191,373,606

 

 

 

 

 

 

 

 

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

EmCare weighted patient encounters

 

4,803,721

 

4,585,390

 

14,420,261

 

13,394,015

 

AMR weighted transports

 

1,183,962

 

848,688

 

3,543,061

 

2,503,731

 

 

Earnings Per Share Reconciliation

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

 

2016

 

2015

 

2016

 

2015

 

Weighted average common shares outstanding, diluted

 

192,045,426

 

191,769,107

 

191,998,390

 

191,373,606

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Envision Healthcare Holdings, Inc. stockholders

 

$

25,889

 

$

17,236

 

$

81,171

 

$

103,027

 

Net income (loss) allocated to participating securities

 

140

 

 

359

 

 

Net income (loss) attributable to Envision Healthcare Holdings, Inc. common

 

 

 

 

 

 

 

 

 

stockholders

 

$

25,749

 

$

17,236

 

$

80,812

 

$

103,027

 

Adjustments:

 

 

 

 

 

 

 

 

 

Other expense related to secondary offering/other filings

 

 

154

 

 

526

 

 

 

 

 

 

 

 

 

 

 

Amortization expense

 

30,838

 

26,697

 

95,192

 

76,276

 

 

 

 

 

 

 

 

 

 

 

Equity-based compensation expense

 

3,353

 

1,761

 

9,290

 

4,786

 

 

 

 

 

 

 

 

 

 

 

Restructuring and other charges

 

164

 

30,000

 

7,726

 

30,000

 

 

 

 

 

 

 

 

 

 

 

Severance and related costs

 

3,381

 

863

 

7,953

 

3,426

 

 

 

 

 

 

 

 

 

 

 

Transaction costs related to acquisition activities

 

32,348

 

6,535

 

50,973

 

11,708

 

 

 

 

 

 

 

 

 

 

 

Total pre-tax adjustments

 

70,084

 

66,010

 

171,134

 

126,722

 

 

 

 

 

 

 

 

 

 

 

Tax impact of adjustments

 

(26,702

)

(25,022

)

(65,202

)

(50,494

)

 

 

 

 

 

 

 

 

 

 

Total adjustments, net

 

43,382

 

40,988

 

105,932

 

76,228

 

Net income (loss) attributable to Envision Healthcare Holdings, Inc., adjusted

 

$

69,131

 

$

58,224

 

$

186,744

 

$

179,255

 

Adjusted EPS

 

$

0.36

 

$

0.30

 

$

0.97

 

$

0.94

 

 

6



 

Envision Healthcare Holdings, Inc.

Reconciliation of Adjusted EBITDA to Net Income (Loss)

(unaudited; in thousands)

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

Envision

 

2016

 

2015

 

2016

 

2015

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

180,650

 

$

142,478

 

$

504,240

 

$

434,105

 

Depreciation and amortization expense

 

(60,886

)

(44,547

)

(178,075

)

(129,364

)

Restructuring and other charges

 

(164

)

(30,000

)

(7,726

)

(30,000

)

Interest income from restricted assets

 

(283

)

(149

)

(749

)

(442

)

Transaction costs

 

(32,348

)

(6,535

)

(50,973

)

(11,708

)

Severance and related costs

 

(3,381

)

(863

)

(7,953

)

(3,426

)

Equity-based compensation expense

 

(3,353

)

(1,761

)

(9,290

)

(4,786

)

Net income (loss) attributable to noncontrolling interest

 

3,062

 

1,334

 

10,118

 

3,161

 

Income from operations

 

83,297

 

59,957

 

259,592

 

257,540

 

Interest income from restricted assets

 

283

 

149

 

749

 

442

 

Interest expense, net

 

(39,300

)

(27,579

)

(117,751

)

(82,360

)

Realized gains (losses) on investments

 

(151

)

 

(191

)

(34

)

Other income (expense), net

 

756

 

(221

)

743

 

(593

)

Income tax benefit (expense)

 

(16,057

)

(13,795

)

(53,611

)

(69,009

)

Equity in earnings of unconsolidated subsidiary

 

123

 

59

 

1,758

 

202

 

Net (income) loss attributable to noncontrolling interest

 

(3,062

)

(1,334

)

(10,118

)

(3,161

)

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to Envision Healthcare Holdings, Inc.

 

$

25,889

 

$

17,236

 

$

81,171

 

$

103,027

 

 

7



 

Envision Healthcare Holdings, Inc.

Reconciliation of Segment Adjusted EBITDA to Income from Operations

(unaudited; in thousands)

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

 

2016

 

2015

 

2016

 

2015

 

EmCare

 

 

 

 

 

 

 

 

 

Net revenue

 

$

1,055,156

 

$

933,941

 

$

3,118,613

 

$

2,688,117

 

Compensation and benefits

 

816,349

 

758,379

 

2,420,857

 

2,175,715

 

Operating expenses

 

92,687

 

46,417

 

278,161

 

124,638

 

Insurance expense

 

22,026

 

28,511

 

64,021

 

77,645

 

Selling, general and administrative expenses

 

23,028

 

17,032

 

67,005

 

50,324

 

Interest income from restricted assets

 

(172

)

(38

)

(416

)

(109

)

Transaction costs

 

(12,799

)

(2,820

)

(17,955

)

(7,288

)

Severance and related costs

 

(1,287

)

(448

)

(3,574

)

(2,480

)

Equity-based compensation expense

 

(1,608

)

(793

)

(4,644

)

(2,154

)

Net income (loss) attributable to noncontrolling interest

 

3,062

 

1,334

 

10,118

 

3,161

 

Adjusted EBITDA

 

113,870

 

86,367

 

305,040

 

268,665

 

Depreciation and amortization expense

 

(27,317

)

(24,744

)

(81,964

)

(70,831

)

Restructuring and other charges

 

(164

)

(30,000

)

(7,726

)

(30,000

)

Interest income from restricted assets

 

(172

)

(38

)

(416

)

(109

)

Transaction costs

 

(12,799

)

(2,820

)

(17,955

)

(7,288

)

Severance and related costs

 

(1,287

)

(448

)

(3,574

)

(2,480

)

Equity-based compensation expense

 

(1,608

)

(793

)

(4,644

)

(2,154

)

Net income (loss) attributable to noncontrolling interest

 

3,062

 

1,334

 

10,118

 

3,161

 

Income from operations

 

$

73,585

 

$

28,858

 

$

198,879

 

$

158,964

 

 

 

 

 

 

 

 

 

 

 

AMR

 

 

 

 

 

 

 

 

 

Net revenue

 

$

583,594

 

$

433,429

 

$

1,758,713

 

$

1,278,013

 

Compensation and benefits

 

342,895

 

238,834

 

1,007,064

 

698,613

 

Operating expenses

 

163,794

 

118,682

 

494,716

 

348,316

 

Insurance expense

 

13,899

 

12,580

 

44,778

 

37,138

 

Selling, general and administrative expenses

 

19,725

 

12,431

 

55,331

 

36,837

 

Interest income from restricted assets

 

(111

)

(111

)

(333

)

(333

)

Transaction costs

 

(19,549

)

(3,715

)

(33,018

)

(4,420

)

Severance and related costs

 

(2,094

)

(415

)

(4,379

)

(946

)

Equity-based compensation expense

 

(1,745

)

(968

)

(4,646

)

(2,632

)

Adjusted EBITDA

 

66,780

 

56,111

 

199,200

 

165,440

 

Depreciation and amortization expense

 

(33,569

)

(19,803

)

(96,111

)

(58,533

)

Interest income from restricted assets

 

(111

)

(111

)

(333

)

(333

)

Transaction costs

 

(19,549

)

(3,715

)

(33,018

)

(4,420

)

Severance and related costs

 

(2,094

)

(415

)

(4,379

)

(946

)

Equity-based compensation expense

 

(1,745

)

(968

)

(4,646

)

(2,632

)

Income from operations

 

$

9,712

 

$

31,099

 

$

60,713

 

$

98,576

 

 

 

 

 

 

 

 

 

 

 

Envision

 

 

 

 

 

 

 

 

 

Net revenue

 

$

1,638,750

 

$

1,367,370

 

$

4,877,326

 

$

3,966,130

 

Compensation and benefits

 

1,159,244

 

997,213

 

3,427,921

 

2,874,328

 

Operating expenses

 

256,481

 

165,099

 

772,877

 

472,954

 

Insurance expense

 

35,925

 

41,091

 

108,799

 

114,783

 

Selling, general and administrative expenses

 

42,753

 

29,463

 

122,336

 

87,161

 

Interest income from restricted assets

 

(283

)

(149

)

(749

)

(442

)

Transaction costs

 

(32,348

)

(6,535

)

(50,973

)

(11,708

)

Severance and related costs

 

(3,381

)

(863

)

(7,953

)

(3,426

)

Equity-based compensation expense

 

(3,353

)

(1,761

)

(9,290

)

(4,786

)

Net income (loss) attributable to noncontrolling interest

 

3,062

 

1,334

 

10,118

 

3,161

 

Adjusted EBITDA

 

180,650

 

142,478

 

504,240

 

434,105

 

Depreciation and amortization expense

 

(60,886

)

(44,547

)

(178,075

)

(129,364

)

Restructuring and other charges

 

(164

)

(30,000

)

(7,726

)

(30,000

)

Interest income from restricted assets

 

(283

)

(149

)

(749

)

(442

)

Transaction costs

 

(32,348

)

(6,535

)

(50,973

)

(11,708

)

Severance and related costs

 

(3,381

)

(863

)

(7,953

)

(3,426

)

Equity-based compensation expense

 

(3,353

)

(1,761

)

(9,290

)

(4,786

)

Net income (loss) attributable to noncontrolling interest

 

3,062

 

1,334

 

10,118

 

3,161

 

Income from operations

 

$

83,297

 

$

59,957

 

$

259,592

 

$

257,540

 

 

8



 

Envision Healthcare Holdings, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

 

 

 

September 30,
2016

 

December 31,
2015

 

 

 

(Unaudited)

 

(Audited)

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

190,033

 

$

141,677

 

Trade and other accounts receivable, net

 

1,341,202

 

1,257,021

 

Other current assets

 

172,650

 

199,729

 

Total current assets

 

1,703,885

 

1,598,427

 

Non-current assets:

 

 

 

 

 

Property, plant and equipment, net

 

383,947

 

335,869

 

Goodwill and intangible assets, net

 

4,448,663

 

4,323,564

 

Other long-term assets

 

119,313

 

95,712

 

Total assets

 

$

6,655,808

 

$

6,353,572

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

Current liabilities

 

$

757,384

 

$

705,980

 

Long-term debt and capital lease obligations

 

3,055,440

 

2,958,481

 

Deferred income taxes

 

388,661

 

369,110

 

Insurance reserves and other long-term liabilities

 

322,620

 

318,560

 

Total liabilities

 

4,524,105

 

4,352,131

 

Total equity

 

2,131,703

 

2,001,441

 

Total liabilities and equity

 

$

6,655,808

 

$

6,353,572

 

 

Note:  Certain prior period balances in the consolidated balance sheets have been reclassified to conform to the current year presentation. Such reclassifications had no impact on the results of operations or cash flows previously reported.

 

9



 

Envision Healthcare Holdings, Inc.

Condensed Consolidated Statements of Cash Flows and Reconciliation of Net Cash Provided by (Used in)

Operating Activities to Adjusted Free Cash Flow

(unaudited; in thousands)

 

 

 

Three months ended September 30,

 

Nine months ended September 30,

 

 

 

2016

 

2015

 

2016

 

2015

 

Cash Flows from Operating Activities

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

28,951

 

$

18,570

 

$

91,289

 

$

106,188

 

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

Depreciation, amortization and other

 

67,219

 

48,371

 

195,573

 

140,920

 

Excess tax benefits from equity-based compensation

 

(105

)

(9,575

)

(1,324

)

(34,051

)

Deferred income taxes

 

(1,143

)

2,403

 

8,598

 

3,503

 

Changes in operating assets/liabilities, net of acquisitions:

 

 

 

 

 

 

 

 

 

Trade and other accounts receivable, net

 

(9,818

)

(45,299

)

(42,014

)

(83,065

)

Parts and supplies inventory

 

(882

)

(324

)

(596

)

(485

)

Prepaids and other current assets

 

5,401

 

928

 

20,924

 

(3,696

)

Accounts payable and accrued liabilities

 

11,864

 

17,468

 

454

 

66,296

 

Insurance reserves

 

(12,578

)

(36

)

(22,448

)

(2,257

)

Other assets and liabilities, net

 

4,304

 

1,517

 

1,977

 

1,592

 

Net cash provided by (used in) operating activities

 

93,213

 

34,023

 

252,433

 

194,945

 

 

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

 

 

 

 

 

 

Purchases of available-for-sale securities

 

(8,651

)

(440

)

(15,459

)

(2,507

)

Sales and maturities of available-for-sale securities

 

2,421

 

200

 

3,869

 

9,409

 

Purchases of property, plant and equipment

 

(34,978

)

(22,659

)

(125,738

)

(65,687

)

Proceeds from sale of property, plant and equipment

 

160

 

25

 

202

 

377

 

Acquisition of businesses, net of cash received

 

(66,059

)

(69,653

)

(180,867

)

(568,570

)

Net change in insurance collateral

 

(1,104

)

4,456

 

33,859

 

(1,250

)

Other investing activities

 

(3,462

)

(2,197

)

(3,033

)

(1,226

)

Net cash provided by (used in) investing activities

 

(111,673

)

(90,268

)

(287,167

)

(629,454

)

 

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

 

 

 

 

 

Borrowings under the ABL Facility

 

80,000

 

60,000

 

315,000

 

365,000

 

Repayments of the ABL Facility

 

(80,000

)

(55,000

)

(210,000

)

(155,000

)

Repayments of the Term Loan

 

(5,843

)

(3,343

)

(17,529

)

(10,029

)

Debt issuance costs

 

14

 

 

(709

)

(27

)

Proceeds from stock options exercised and issuance of shares under employee stock purchase plan and provider stock purchase plan

 

1,073

 

2,417

 

2,644

 

11,767

 

Excess tax benefits from equity-based compensation

 

105

 

9,575

 

1,324

 

34,051

 

Contributions from (distributions to) non-controlling interest, net

 

 

 

(8,833

)

100

 

Other financing activities

 

399

 

(119

)

1,193

 

(358

)

Net cash provided by (used in) financing activities

 

(4,252

)

13,530

 

83,090

 

245,504

 

 

 

 

 

 

 

 

 

 

 

Change in cash and cash equivalents

 

(22,712

)

(42,715

)

48,356

 

(189,005

)

Cash and cash equivalents, beginning of period

 

212,745

 

172,605

 

141,677

 

318,895

 

Cash and cash equivalents, end of period

 

$

190,033

 

$

129,890

 

$

190,033

 

$

129,890

 

 

 

 

 

 

 

 

 

 

 

Operating and non-acquisition investing cash flow

 

$

47,599

 

$

13,408

 

$

146,133

 

$

134,061

 

 

 

 

 

 

 

 

 

 

 

Cash flow adjustments:

 

 

 

 

 

 

 

 

 

Excess tax benefits from equity-based compensation

 

105

 

9,575

 

1,324

 

34,051

 

Non-recurring restructuring costs

 

 

 

6,500

 

 

Non-recurring pre-acquisition payroll accrual

 

 

 

19,486

 

 

Adjusted Free Cash Flow

 

$

47,704

 

$

22,983

 

$

173,443

 

$

168,112

 

 

10