Conference Call, 05/01/97 - Prime Medical Services Q1 '97

FOOL CONFERENCE CALL SYNOPSIS*
By Greg Markus (MF Boring)

Prime Medical Services
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1301 Capital of Texas HighwayHarbor Bay Pkwy.
Austin, TX 78746
(512) 328-2892

ANN ARBOR, Mich. (April 30, 1997) /FOOLWIRE/ -- Prime Medical Services Inc. operates 55 lithotripters in 32 states. In addition, the company is developing several urologist partnerships to provide Prostatron services for the treatment of benign prostatic hyperplasia (BPH). Prime today announced record results for first quarter lithotripsy procedures, net income, and earnings per share.

REVENUES AND EARNINGS. Revenues increased by 189% to $20.9 million from $7.22 million for the year ago period. Net income increased by 51% to $2.88 million, or $0.15 per share, vs. $1.91 million, or $0.12 per share, for the year ago period. The EPS results were a penny above the mean estimate of analysts and at the top end of the range of estimates.

MINORITY INTEREST BUYBACK. The company increased its stake in a number of lithotripter partnerships the fourth quarter of 1996. Those buybacks contributed to earnings in the first quarter of 1997.

BALANCE SHEET. The company said it would be filing its 10-Q statement with the SEC later in the day. The statement would then be available via EDGAR and would provide full financial details. Management said that long-term debt stood at $85.0 million and other debt at $4.0 million. Prime restructured its bank lending facility at the end of March and has $50 million available on its line of credit to use along with the company's cash flow for making acquisitions and developing its Prostatron joint venture. In conjunction with this restructuring, the first quarter financial results included a one-time charge of $360,000. With that charge backed out of the results, EPS would be greater than $0.15.

PROSTATRON BUSINESS. Prime's Prostatron joint venture is receiving a great deal of interest from physicians, particularly in the western part of the U.S. The company's goal is to have three mobile Prostatron routes in operation by the end of the year.

LITHOTRIPTER ACQUISITIONS. Prime has been granted its certificate of need (CON) to provide mobile lithotripsy service in Hawaii. The appeals period associated with the CON process expires on May 9, and Prime has a mobile lithotripter on order to begin operations in August or possibly September. In addition, the company expects to announce another lithotripter acquisition within a few weeks and perhaps three to five more acquisitions during the balance of the year. Five to ten acquisitions are projected for 1998, although that number could change if Prime finds it more economic to ramp up the Prostatron business more aggressively than is currently anticipated.

LITHOTRIPSY PROCEDURES. The number of procedures performed in the first quarter increased by approximately 2% [on a "same stores" basis] relative to last year. Prime has been averaging approximately 4% annual growth in the number of procedures. The business is seasonal, with the winter months being slower than the rest of the year.

CORAM HEALTHCARE. The proposed merger of CORAM <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CRH)") else Response.Write("(NYSE: CRH)") end if %> and INTEGRATED HEALTH SERVICES <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: IHS)") else Response.Write("(NYSE: IHS)") end if %> fell through recently. In the past, Prime has had conversations with Coram about purchasing Coram's lithotripters. Prime has renewed those conversations and has expressed interest in making such purchases but will not overpay. As a rule, Prime pays four to five times annual EBITDA for a lithotripter, and Coram has wanted more than that. Coram is under financial pressure, however, so the situation could change.

* A Fool conference call synopsis represents an effort to highlight the salient points of a conference call and should not be taken as an authoritative accounting or transcription of the entire event. Note: Statements made by a company other than historical information may constitute forward-looking statements for which the company can claim protection under the Safe Harbor Act. Please consult the company's filings with the SEC for information on risk factors which might cause actual results to differ materially from the information contained in these forward-looking statements.