Emergency Medical Services Announces Q3 2009 Diluted EPS of $0.66

--Net income was $28.9 million, an increase of 0.9% compared to the third quarter of 2008; Adjusted EBITDA was $72.3 million, a decrease of 1.6% compared to the third quarter of 2008, which benefited from the FEMA hurricane deployment;

--Diluted EPS was $0.66 for the third quarter of 2009 compared to $0.66 for the third quarter of 2008, which benefited from the FEMA hurricane deployment;

--Cash provided by operating activities was $68.9 million compared to $75.0 million in the third quarter of 2008; Free cash flow was $61.2 million in the quarter compared to $65.5 million for the same quarter last year; and

--Based on third quarter results, the Company expects full year 2009 EPS and Adjusted EBITDA to be at the high end of its existing guidance range.

Emergency Medical Services Corporation (NYSE:EMS) (EMSC or the Company) today announces results for the third quarter ended September 30, 2009.

William A. Sanger, Chairman and Chief Executive Officer, said, "EMSC had an excellent third quarter. We produced diluted EPS of $0.66 and improved operating margins. This improvement is a result of the signing of new contracts, increased volumes at our emergency departments, expansion of our new service lines and improved resource utilization. I am particularly pleased that we were able to produce comparable results to the same quarter last year despite the more than $100 million of FEMA hurricane revenues in the third quarter of 2008. Finally, we continue to supplement our balance sheet by generating strong free cash flow, enhancing our ability to capitalize on market opportunities."

Results of Operations for the Third Quarter 2009

For the quarter ended September 30, 2009, EMSC generated net revenue of $665.1 million, a decrease of 2.1% compared to the same period last year, or a 15.0% increase excluding third quarter 2008 FEMA hurricane deployment revenue of $101.1 million. There was no FEMA hurricane deployment revenue in 2009.

EMSC generated net income of $28.9 million, or $0.66 per diluted share, for the third quarter of 2009, compared to net income of $28.6 million, or $0.66 per diluted share, in the third quarter of 2008. Adjusted EBITDA was $72.3 million, a decrease of 1.6% compared to the same quarter last year. Adjusted EBITDA in 2008 was favorably impacted by the FEMA hurricane deployment. Adjusted EBITDA was positively impacted in 2009 by the net impact of increased volume from net new contracts, higher rates and volumes from existing contracts, improvement in compensation and benefits expenses as a percentage of net revenue and lower fuel costs. A description of the non-GAAP measures, Adjusted EBITDA and Free Cash Flow, and a reconciliation of non-GAAP to GAAP financial measures are included in this news release.

Cash provided by operating activities was $68.9 million in the third quarter of 2009, compared to $75.0 million for the same quarter last year. Working capital changes in the third quarter 2008 were significantly impacted by the FEMA hurricane deployment. During the third quarter of 2009, accounts receivable decreased $7.6 million, and Days Sales Outstanding (DSO) decreased 3 days sequentially. Free cash flow was $61.2 million in the third quarter of 2009 compared to $65.5 million in the same quarter last year.

Net cash used in investing activities was $8.9 million for the quarter ended September 30, 2009, compared to $17.9 million for the same period in 2008. Third quarter 2009 was positively impacted by a decrease in insurance collateral of $6.0 million. Acquisition related funding was $1.2 million in the third quarter 2009 compared to $8.4 million in the same period last year.

For the quarter ended September 30, 2009, net cash provided by financing activities was $4.0 million compared to $5.5 million for the same quarter last year. At September 30, 2009, there were no amounts outstanding under our revolving credit facility.

Results of Operations for the Nine Months Ended September 30, 2009

EMSC's net revenue was $1.92 billion for the nine months ended September 30, 2009, an increase of 5.5% compared to the same period last year, or an 11.7% increase excluding the third quarter 2008 impact of the FEMA hurricane deployment.

EMSC's net income for the nine months ended September 30, 2009 was $82.0 million, or $1.89 per diluted share, compared to net income of $64.0 million, or $1.49 per diluted share, an increase of 27.1% over the same period last year. Adjusted EBITDA was $210.8 million, an increase of 14.9% compared to the same period last year. The increase in earnings is attributable primarily to the net impact of increased volume from net new contracts, higher rates and volumes on existing contracts, improvement in compensation and benefits expenses as a percentage of net revenue and lower fuel costs, partially offset by higher insurance expense and the favorable impact of the FEMA hurricane deployment in 2008.

Cash provided by operating activities for the nine months ended September 30, 2009 was $209.8 million compared to $130.4 million for the same period in 2008. The increase in operating cash flow relates primarily to an increase in net income, further reductions in DSO, and changes in accounts payable and accrued liabilities. Working capital changes for the nine months ended September 30, 2008 were significantly impacted by the FEMA hurricane deployment. Changes in accounts payable and accrued liabilities increased $10.6 million during the nine months ended September 30, 2009. Accounts receivable decreased $8.4 million for the nine months ended September 30, 2009, primarily due to a decrease in DSO of 10 days during the same period. Free cash flow was $179.5 million for the nine months ended September 30, 2009, an increase of $51.1 million over the nine months ended September 30, 2008.

Net cash used in investing activities was $31.7 million for the nine months ended September 30, 2009 compared to $30.4 million for the same period in 2008. Reductions in net insurance collateral were $4.1 million during 2009 compared to $16.0 million during 2008. Net capital expenditures were $33.6 million during the nine months ended September 30, 2009 compared to $21.4 million during the same period in 2008 due primarily to the timing of capital purchases. The quarter ended September 30, 2009 included $1.4 million used in the acquisition of businesses compared to $28.3 million in the same period in 2008.

For the nine months ended September 30, 2009 net cash provided by financing activities was $6.8 million compared to $6.7 million for the nine months ended September 30, 2008.

Segment Results

EMSC operates two business segments: American Medical Response, Inc. (AMR), the Company's healthcare transportation services segment, and EmCare Holdings Inc. (EmCare), the Company's outsourced hospital-based physician services segment.

American Medical Response (AMR)

Comparisons of AMR's results for the quarter and nine months ended September 30, 2009 to the same periods last year are significantly impacted by our FEMA hurricane deployment during the third quarter of last year. Notwithstanding the difficulty in comparing the 2009 to the 2008 periods, performance in our core business has improved in 2009.

For the quarter ended September 30, 2009, AMR generated net revenue of $338.8 million, a decrease of 20.4% compared to the third quarter last year, or a 4.5% increase excluding third quarter 2008 FEMA hurricane deployment revenue of $101.1 million. The 4.5% increase in net revenue was from an improvement in revenue per transport and growth in our managed transportation business, offset by lower transports from our exit of underperforming markets.

Adjusted EBITDA was $31.8 million, a decrease of 32.5% compared to the same quarter last year. The decrease in Adjusted EBITDA is attributable primarily to the favorable impact of the FEMA hurricane deployment in 2008. Adjusted EBITDA in 2009 was positively impacted by revenue growth coupled with improvements in our resource utilization and lower fuel costs. Insurance expense for the quarter ended September 30, 2009 included a favorable prior period insurance adjustment of $2.1 million compared to a favorable prior period adjustment of $1.7 million in the same period last year. Income from operations was $19.1 million, a decrease of 42.0% compared to the same quarter in 2008. Income from operations in 2008 was favorably impacted by the FEMA hurricane deployment.

For the nine months ended September 30, 2009, AMR's net revenue was $1.01 billion, a decrease of 6.0% compared to the same period last year, or a 3.7% increase excluding the third quarter 2008 FEMA hurricane deployment revenue. Adjusted EBITDA was $98.2 million, a decrease of 3.4% compared to the same period last year. Insurance expense in the nine months ended September 30, 2009 included a favorable prior period adjustment of $0.2 million compared to a favorable prior period adjustment of $5.3 million in the same period last year. Income from operations was $59.5 million, an increase of 3.4% compared to the same period in 2008.

EmCare

For the quarter ended September 30, 2009, EmCare generated net revenue of $326.3 million, an increase of 28.5% compared to the same quarter last year. The increase in revenue is attributable primarily to the addition of 87 net new contracts since June 30, 2008 (of which 45 were a part of our acquisition of Clinical Partners in August 2008 with related management fee revenue of $2.3 million during the quarter) and revenue increases at existing contracts. Adjusted EBITDA was $40.4 million for the quarter compared to $26.3 million last year, an increase of 53.8%. The increase in Adjusted EBITDA was driven primarily by revenue increases and a reduction of compensation and benefits expenses as a percentage of net revenue. Insurance expense in the third quarter 2009 included an unfavorable prior period insurance adjustment of $1.3 million compared to an unfavorable prior period adjustment of $3.9 million in the same period last year. Income from operations was $36.3 million, an increase of 66.3% over the same period in 2008.

For the nine months ended September 30, 2009, EmCare's net revenue was $904.7 million, an increase of 22.1% compared to the same period last year. Adjusted EBITDA was $112.7 million compared to $81.9 million, an increase of 37.6% compared to the same period last year. Insurance expense in the nine months ended September 30, 2009 included unfavorable prior period adjustments of $4.5 million compared to unfavorable prior period adjustments of $1.3 million in the same period last year. Income from operations was $99.2 million, an increase of 44.5% over the same period in 2008.

Guidance

The Company expects full year 2009 EPS and Adjusted EBITDA to be at the high end of its existing guidance ranges. Our existing guidance range for EPS is an expected $2.38 - $2.48, and $268 million to $275 million for Adjusted EBITDA.

Conference Call

EMSC management will host a conference call and live audio webcast on Tuesday, November 3, 2009, at 11:00 a.m. EST, to discuss the Company's financial results. A 30-day online replay will be available approximately one hour following the conclusion of the live broadcast. A link to the live broadcast and online replay is available on the Investor Relations section of the Company's website at www.emsc.net.

About Emergency Medical Services Corporation

Emergency Medical Services Corporation (EMSC) is a leading provider of emergency medical services in the United States. EMSC operates two business segments: American Medical Response, Inc. (AMR), the Company's healthcare transportation services segment, and EmCare Holdings Inc. (EmCare), the Company's outsourced hospital-based physician services segment. AMR is the leading provider of ambulance services in the United States. EmCare is a leading provider of outsourced emergency department and hospital-based physician services. In 2008, EMSC provided services to 11.4 million patients in nearly 2,100 communities nationwide. EMSC is headquartered in Greenwood Village, Colorado. For additional information visit www.emsc.net.

Forward-Looking Statements

Certain statements and information herein 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 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. Any forward-looking statements herein are made as of the date of this press release, and EMSC undertakes 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. Important factors that could cause actual results, developments and business decisions to differ materially from forward-looking statements are described in EMSC's filings with the SEC from time to time, including in the section entitled "Risk Factors" in the Company's most recent Annual Report on Form 10-K and subsequent periodic reports. Among the factors that could cause future results to differ materially from those provided in this press release are: the impact on our revenue of changes in transport volume, mix of insured and uninsured patients, and third party reimbursement rates and methods; the adequacy of our insurance coverage and insurance reserves; potential penalties or changes to our operations if we fail to comply with extensive and complex government regulation of our industry, both; the impact of potential changes in the healthcare industry generally resulting from legislation currently under consideration; our ability to recruit and retain qualified physicians and other healthcare professionals, and enforce our non-compete agreements with our physicians; our ability to generate cash flow to service our debt obligations; the cost of capital expenditures to maintain and upgrade our vehicle fleet and medical equipment; the loss of one or more members of our senior management team; the outcome of government investigations of certain of our business practices; our ability to successfully restructure our operations to comply with future changes in government regulation; the loss of existing contracts and the accuracy of our assessment of costs under new contracts; the high level of competition in our industry; our ability to implement our business strategy; our ability to successfully integrate strategic acquisitions; and our ability to comply with the terms of our settlement agreements with the government.

Non-GAAP Financial Measures Description and Reconciliation

This press release includes presentations of Adjusted EBITDA, which is defined as net income before equity in earnings of unconsolidated subsidiary, income tax expense, interest and other income, realized gain on investments, interest expense, and depreciation and amortization. It also includes presentations of free cash flow, which is defined as cash flow from operations adjusted for cash used in non-acquisition related investment activities. Adjusted EBITDA and free cash flow are commonly used by management and investors as performance measures and liquidity indicators. Adjusted EBITDA and free cash flow are not considered measures of financial performance under U.S. generally accepted accounting principles (GAAP), and the items excluded therefrom are significant components in understanding and assessing our financial performance. Adjusted EBITDA and free cash flow should not be considered in isolation or as an alternative to GAAP measures such as net income, cash flows provided by or used in operating, investing or financing activities or other financial statement data presented in our consolidated financial statements as an indicator of financial performance or liquidity. Reconciliations of non-GAAP financial measures are provided in this news release. Reconciliation for the forward-looking Adjusted EBITDA projections presented herein is not being provided due to the number of variables in the projected Adjusted EBITDA range. Since Adjusted EBITDA and free cash flow are not measures determined in accordance with GAAP and are susceptible to varying calculations, these measures, as presented, may not be comparable to other similarly titled measures of other companies.

EMERGENCY MEDICAL SERVICES CORPORATION
Consolidated
Statements of Operations and Other Information
(unaudited;
in thousands, except shares, per share data and other information)
                                                      Quarter ended September 30,             Nine months ended September 30,
                                                      2009                2008                2009                  2008
Net revenue                                           $   665,056         $   679,328         $    1,915,369        $    1,816,193
Compensation and benefits                                 467,625             426,755              1,332,787             1,221,607
Operating expenses                                        85,510              135,087              252,355               302,014
Insurance expense                                         24,845              25,109               75,706                63,640
Selling, general and administrative expenses              15,871              20,509               47,186                50,621
Depreciation and amortization expense                     15,733              16,993               48,658                52,156
Income from operations                                    55,472              54,875               158,677               126,155
Interest income from restricted assets                    1,082               1,623                3,468                 5,113
Interest expense                                          (10,280    )        (11,117    )         (30,749    )          (31,387    )
Realized gain on investments                              544                 768                  2,030                 3,011
Interest and other income                                 502                 508                  1,442                 1,097
Income before income taxes and equity in earnings of      47,320              46,657               134,868               103,989
unconsolidated subsidiary
Income tax expense                                        (18,533    )        (18,138    )         (53,144    )          (40,170    )
Equity in earnings of unconsolidated subsidiary           91                  98                   244                   152
Net income                                            $   28,878          $   28,617          $    81,968           $    63,971
Basic earnings per common share                       $   0.67            $   0.69            $    1.93             $    1.54
Diluted earnings per common share                     $   0.66            $   0.66            $    1.89             $    1.49
Weighted average common shares outstanding, basic         42,809,582          41,637,765           42,366,065            41,594,270
Weighted average common shares outstanding, diluted       43,769,788          43,062,364           43,402,818            43,058,904
Other Information
EmCare patient encounters                                 2,553,676           1,999,161            7,126,651             5,983,821
EmCare weighted patient encounters (1)                    2,234,676           1,831,485            6,306,727             5,456,834
AMR ambulance transports                                  719,013             732,005              2,177,241             2,220,845
AMR weighted transports (2)                               726,353             742,574              2,200,139             2,254,694
(1) EmCare weighted encounters include a weighting of Radiology
and Anesthesia encounters due to the differences in reimbursement
for these services.
(2) AMR weighted transports include a weighting of wheelchair
transports due to the differences in reimbursement for these
services.

EMERGENCY MEDICAL SERVICES CORPORATION
Reconciliation
of Adjusted EBITDA to Net Income
(unaudited; in
thousands)
                                                      Quarter ended September 30,       Nine months ended September 30,
                                                      2009             2008             2009               2008
Adjusted EBITDA                                       $   72,287       $   73,491       $    210,803       $    183,424
Depreciation and amortization expense                     (15,733 )        (16,993 )         (48,658 )          (52,156 )
Interest income from restricted assets                    (1,082  )        (1,623  )         (3,468  )          (5,113  )
Income from operations                                    55,472           54,875            158,677            126,155
Interest income from restricted assets                    1,082            1,623             3,468              5,113
Interest expense                                          (10,280 )        (11,117 )         (30,749 )          (31,387 )
Realized gain on investments                              544              768               2,030              3,011
Interest and other income                                 502              508               1,442              1,097
Income before income taxes and equity in earnings of      47,320           46,657            134,868            103,989
unconsolidated subsidiary
Income tax expense                                        (18,533 )        (18,138 )         (53,144 )          (40,170 )
Equity in earnings of unconsolidated subsidiary           91               98                244                152
Net income                                            $   28,878       $   28,617       $    81,968        $    63,971

EMERGENCY MEDICAL SERVICES CORPORATION
Reconciliation
of Adjusted EBITDA to Net Cash Provided by Operating Activities
(unaudited;
in thousands)
                                              Quarter ended September 30,      Nine months ended September 30,
                                              2009            2008             2009               2008
Adjusted EBITDA                               $   72,287      $   73,491       $    210,803       $    183,424
Interest paid                                     (9,773 )        (10,644 )         (29,424 )          (29,808 )
Change in accounts receivable                     7,574           (40,747 )         8,448              (54,499 )
Change in other operating assets/liabilities      (2,956 )        51,307            16,000             29,226
Equity based compensation                         1,121           717               2,875              1,841
Other                                             609             923               1,099              242
Net cash provided by operating activities     $   68,862      $   75,047       $    209,801       $    130,426

EMERGENCY MEDICAL SERVICES CORPORATION
Reconciliation
of Segment Adjusted EBITDA to Income from Operations
(unaudited;
in thousands)
                                        Quarter ended September 30,       Nine months ended September 30,
                                        2009             2008             2009               2008
AMR
Adjusted EBITDA                         $   31,838       $   47,184       $    98,151        $    101,558
Depreciation and amortization expense       (12,199 )        (13,447 )         (37,147 )          (41,951 )
Interest income from restricted assets      (495    )        (705    )         (1,485  )          (2,069  )
Income from operations                      19,144           33,032            59,519             57,538
EmCare
Adjusted EBITDA                             40,449           26,307            112,652            81,866
Depreciation and amortization expense       (3,534  )        (3,546  )         (11,511 )          (10,205 )
Interest income from restricted assets      (587    )        (918    )         (1,983  )          (3,044  )
Income from operations                      36,328           21,843            99,158             68,617
Total
Adjusted EBITDA                             72,287           73,491            210,803            183,424
Depreciation and amortization expense       (15,733 )        (16,993 )         (48,658 )          (52,156 )
Interest income from restricted assets      (1,082  )        (1,623  )         (3,468  )          (5,113  )
Income from operations                  $   55,472       $   54,875       $    158,677       $    126,155

EMERGENCY MEDICAL SERVICES CORPORATION
Condensed
Consolidated Balance Sheets
(in thousands)
                                                    September 30,     December 31,
                                                    2009              2008
                                                    (Unaudited)       (Audited)
Assets
Current assets:
Cash and cash equivalents                           $      331,105    $      146,173
Trade and other accounts receivable, net                   464,241           472,501
Other current assets                                       109,949           196,500
Total current assets                                       905,295           815,174
Non-current assets:
Property, plant and equipment, net                         123,520           124,869
Goodwill and other intangible assets, net                  410,467           422,154
Other long-term assets                                     160,729           179,022
Total assets                                        $      1,600,011  $      1,541,219
Liabilities and Equity
Current liabilities                                 $      334,172    $      320,141
Long-term debt                                             451,751           453,600
Non-current deferred tax liability                         5,673             -
Insurance reserves and other long-term liabilities         167,013           228,439
Total liabilities                                          958,609           1,002,180
Total equity                                               641,402           539,039
Total liabilities and equity                        $      1,600,011  $      1,541,219

EMERGENCY MEDICAL SERVICES CORPORATION
Condensed
Consolidated Statements of Cash Flows
(unaudited; in
thousands)
                                                               Quarter ended September 30,       Nine months ended September 30,
                                                               2009             2008             2009               2008
Cash Flows from Operating Activities
Net income                                                     $   28,878       $   28,617       $    81,968        $    63,971
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation, amortization, deferred taxes and other               35,366           35,870            103,385            91,728
Changes in operating assets/liabilities, net of acquisitions:
Trade and other accounts receivable                                7,574            (40,747 )         8,448              (54,499 )
Insurance accruals                                                 4,280            1,807             7,033              (5,333  )
Other assets and liabilities                                       (7,236  )        49,500            8,967              34,559
Net cash provided by operating activities                          68,862           75,047            209,801            130,426
Cash Flows from Investing Activities
Purchases of property, plant and equipment, net                    (13,535 )        (11,447 )         (33,560 )          (21,407 )
Acquisition of businesses, net of cash received                    (1,241  )        (8,368  )         (1,374  )          (28,325 )
Net change in insurance collateral                                 6,002            1,127             4,069              15,983
Other investing activities                                         (166    )        764               (809    )          3,392
Net cash used in investing activities                              (8,940  )        (17,924 )         (31,674 )          (30,357 )
Cash Flows from Financing Activities
EMSC issuance of class A common stock                              2,437            1,875             7,160              1,920
Borrowings under revolving credit facility                         -                -                 -                  14,000
Repayments of capital lease obligations and other debt             (1,214  )        (1,285  )         (3,826  )          (18,006 )
Increase in bank overdrafts                                        2,821            4,950             3,471              8,785
Net cash provided by financing activities                          4,044            5,540             6,805              6,699
Change in cash and cash equivalents                                63,966           62,663            184,932            106,768
Cash and cash equivalents, beginning of period                     267,139          73,019            146,173            28,914
Cash and cash equivalents, end of period                       $   331,105      $   135,682      $    331,105       $    135,682
Free cash flow                                                 $   61,163       $   65,491       $    179,501       $    128,394

EMERGENCY MEDICAL SERVICES CORPORATION
Reconcilation
of Free Cash Flow to Net Cash Provided by Operating Activities
(unaudited;
in thousands)
                                                Quarter ended September 30,     Nine months ended September 30,
                                                2009            2008            2009               2008
Free cash flow                                  $   61,163      $   65,491      $    179,501       $    128,394
Purchase of property, plant and equipment, net      13,535          11,447           33,560             21,407
Net change in insurance collateral                  (6,002 )        (1,127 )         (4,069  )          (15,983 )
Other investing activities                          166             (764   )         809                (3,392  )
Net cash provided by operating activities       $   68,862      $   75,047      $    209,801       $    130,426

SOURCE: Emergency Medical Services Corporation

Emergency Medical Services Corporation 
Deborah Hileman, 303-495-1210 
Vice President, Corporate Communications & Investor Relations 
Deborah.hileman@emsc.net