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Team Health Holdings announces Q4 & fiscal 2014 results

•             Net Revenue increased 27.2% to $790.7 million over fourth quarter of 2013

•             Net earnings were $16.1 million $40.5 million after adjustments

•             Diluted net earnings per share of $0.22 Adjusted EPS increased 21.7% to $0.56

•             Adjusted EBITDA increased 26.4% to $78.2 million

Full Year 2014 Year Highlights:

•             Net Revenue increased 18.3% to $2.82 billion from 2013

•             Net earnings were $97.7 million $166.1 million after adjustments

•             Diluted net earnings per share of $1.35 Adjusted EPS increased 25.7% to $2.30

•             Adjusted EBITDA increased 29.4% to $325.2 million

2015 Outlook:

•             Net revenue growth of 18.0% to 20.0% Adjusted EBITDA margin between 10.5% and 11.0%

Team Health Holdings, Inc. ("TeamHealth" or the "Company"), one of the largest providers of outsourced physician staffing solutions for hospitals in the United States, today announced results for its fourth quarter and full fiscal year of 2014.

"Overall, 2014 was a fantastic year for TeamHealth.  We finished the year with 18.3% growth in net revenue, 29.4% growth in Adjusted EPS and 25.7% growth in Adjusted EBITDA, while delivering robust operating cash flows," said TeamHealth President and Chief Executive Officer, Mike Snow.

"During the fourth quarter, all three of our primary drivers contributed to our financial performance. Our consolidated growth was driven largely by acquisitions, with strong same contract results, and the return to historical growth rates in our net new contracts providing meaningful contributions.  These results reflect our balanced and integrated approach to achieving our targets moving forward.  Over the year, we saw a number of positive trends continue to develop.  Healthcare reform, specifically the expansion of Medicaid coverage, allowed us to realize improvements in our payor mix, and we believe that healthcare reform and an improving economic environment, coupled with a more active flu season, provided support to volume growth in 2014.  In addition, 2014 was a record year for acquisitions and our pipeline remains robust as we continue to evaluate and pursue a number of high quality groups to partner with TeamHealth."

"As a result of our financial performance in 2014 and our current expectations about operating trends in 2015, including the momentum from our recent acquisitions, we expect to generate net revenue in 2015 of between $3.33 billion and $3.38 billion, reflecting an annual growth rate of 18.0% to 20.0%. We are also targeting an Adjusted EBITDA margin for fiscal 2015 of between 10.5% and 11.0%.  Our guidance assumes some incremental benefit from new contract sales and acquisitions and the continued expansion of coverage, but contemplates no benefit from the federal Medicaid Parity program in 2015, which contributed approximately 80 basis points towards our Adjusted EBITDA margin in 2014.  Our projected Adjusted EBITDA margin reflects an opportunity for the continuation of a modest margin improvement in 2015 on our core operations excluding parity.  TeamHealth remains an attractive solution for hospitals and physician groups that want to enhance their service offerings in today's dynamic healthcare environment and we look forward to continuing to deliver the highest quality patient care while executing on our operational and financial goals in 2015," concluded Mr. Snow.

2014 Fourth Quarter Results

Net revenue increased 27.2% to $790.7 million from $621.8 million in the fourth quarter of 2013.  Acquisitions contributed 18.4%, same contract revenue contributed 6.1%, and net sales growth contributed 2.7% of the increase in quarter-over-quarter growth in net revenue.  Within the acquisitions category,  new hospital contracting opportunities that were initially developed by our sales and marketing process contributed 2.9% of overall net revenue growth between quarters.     

Same contract revenue increased $37.9 million, or 6.9%, to $587.7 million from $549.8 million in the fourth quarter of 2013.  An 8.0% increase in same contract volumes, supported by increased flu activity in the quarter, contributed 5.7% to the growth while an increase of 2.2% in estimated collections on fee for service visits provided a 1.9% increase in same contract revenue growth between quarters.  The increase in estimated collections per visit was constrained by lower patient acuity in the current quarter and a reduced benefit from payor mix improvements and managed care contracting when compared to prior quarters of 2014.  Contract and other revenue constrained same contract revenue growth between quarters by 0.7%. Acquisitions contributed $114.5 million of revenue growth and net new contract revenue increased by $16.5 million between quarters.  The benefit fromMedicaid parity revenue recognized in the fourth quarter of 2014 was $12.1 million, of which $10.7 million is same contract revenue.  The fourth quarter of 2013 reflects Medicaid parity revenue of $12.9 million, of which $12.7 million is same contract.  The decline in total parity revenue between periods of$0.9 million constrained consolidated revenue growth by 0.1% while the decline in same contractMedicaid parity revenue of $2.0 million constrained same contract revenue growth by 0.4% between quarters.


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