After a lengthy delay that drew negative reaction from investors, creditors and NASDAQ, Rural/Metro Corp. released its financial results Wednesday for the first quarter of its fiscal 2008 and full fiscal 2007.
The company, headquartered in the Salt River Pima-Maricopa Indian Community, first had to complete multiple financial restatements because of accounting errors.
“We want to recognize the frustration we have caused to our investors due to the financial restatement and resulting delay in filing,” said Jack Brucker. Rural/Metro president and CEO.
“We recognize how these delays affect our investors and we are committed to doing everything we can to prevent this ... in the future.”
Kristine Ponczak, chief financial officer, said all of the earnings reports would be filed immediately with the U.S. Securities and Exchange Commission.
Overall, the reports show increases in net revenue and continuing struggles with net income.
The company’s stock, traded on the NASDAQ, closed at $2.67 a share Wednesday, up 11.25 percent, on volume of 421,989 shares. The 52-week high was $8.68, while the 52-week low was $2.39.
During the first quarter of fiscal 2008, Rural/Metro showed improvement in reducing uncompensated care, one of its biggest financial drains. Uncompensated care as a percentage of gross revenue dropped slightly to 15 percent from 15.2 percent in the third quarter of fiscal 2007.
Last spring, the company began implementing seven new initiatives to minimize exposure to uncompensated care.
“These initiatives have driven reductions in contractual allowances and decreases in write-offs for uncompensated care, resulting in a 2.1 percent increase in overall ambulance collection rates,” Brucker said. “We view this as a significant improvement in uncompensated care.”
Rural/Metro also gave investors financial guidance for its fiscal 2008, projecting $50 million to $55 million in earnings before interest, taxes, depreciation and amortization from continuing operations, and $13 million to $15 million in capital expenditures. For fiscal 2007, such earnings from continuing operations totaled $44.1 million, while capital expenditures totaled $13.2 million.
Also Wednesday, the firm announced a new contract with Hospital Corp. of America, the nation’s largest for-profit medical system. The contract is to provide non-emergency medical transports for the company’s national headquarters operations in Nashville, Tenn,
The contract should mean about $2.5 million in annualized revenue for the first month, increasing to $5 million over the first year, Brucker said. Three other HCA operations have expressed interest in contracting with Rural/Metro, he said.
“We are excited by HCA choosing us ... for its national headquarters operations and hope to move that along across the country as fast as we can,” he said.