FOOL CONFERENCE CALL SYNOPSIS*
By Greg Markus (MF Boring)
Prime Medical Services (Nasdaq: PMSI)
1301 Capital of Texas Highway
Austin, TX 78746
(512) 328-2892
ANN ARBOR, Mich. (Feb. 27, 1997) -- PRIME MEDICAL SERVICES is the largest operator of lithotripters in the U.S., with 55
lithotripters in 32 states and contracts with approximately 400 hospitals and 255 managed care companies. The company reported today
its fourth quarter and 1996 results.
FINANCIAL RESULTS. Net income for the fourth quarter increased by 65% to $3.39 million, or $0.17 per share, versus $2.06 million, or
$0.13 per share, for the year ago period. Quarterly revenues nearly tripled, to $22.2 million versus $7.63 million a year ago. Both the EPS
and revenues results were in line with analysts' estimates. Revenues for the year more than tripled to $72.4 million from $23.2 million for
1995. Net income before non-recurring financial costs for 1996 was $12.5 million, or $0.67 per share, a 73% increase over the 1995 net
income of $7.2 million, or $0.46 per share.
HAWAII PARTNERSHIP. Prime recently announced the formation of a new partnership to serve the state of Hawaii with lithotripter
services on a mobile basis. The company just received approval of its certificate of need (CON) application, has ae use. Five hospitals on
Oahu supported Prime's CON application. This will be the first mobile lithotripsy service in the State of Hawaii. Prime expects the
partnership to be fully operational in July.
PROSTATRON VENTURE. Prime is negotiating a joint venture with EDAP Technomed to develop mobile routes similar to the lithotripsy
business but using a new machine, called a Prostatron, for treating benign prostatic hyperplasia (BPH). Prime is meeting with doctor
groups to establish routes to enter the Prostatron business, and the company expects to have formed at least three partnerships and have
some operational experience with the Prostatron by the end of the year. This business won't affect earnings in 1997 but has significant
potential thereafter.
PLANS FOR GROWTH IN 1997. Company executives said they anticipate the addition of new partnerships, the expansion of existing
partnership interests, and further selective acquisitions. Toward that end, Prime is negotiating with a consortium of banks to increase the
company's line of credit by approximately $40 million to facilitate growth. The company's stated goal is "to accelerate its evolution
towards becoming recognized nationally as the 'Urologist Company.'" The company is looking to provide additional services to its existing
network of urologists and other urologists throughout the U.S. Currently, Prime works with approximately 25% of the nation's active
urologists. Prime has been focusing on the Prostatron venture and possibilities for providing new services for urologist offices and
therefore has not acquired new lithotripsy routes recently. The company could acquire four to six new lithotripsy routes in coming months,
as well as increase its stake in perhaps three to five existing partnerships, on top of the ten such increases in minority interests that Prime
executed in the past few months.
INTERNAL BUSINESS EFFICIENCIES. The company expects to become more efficient in 1997 as they continue to merge Prime's and
Lithotripters Inc.'s administration and accounting operations. That will take six to nine months to complete and will yield savings in nine to
twelve months. The company has also negotiated more favorable insurance and maintenance rates in light of its greatly increased scale of
operations and penetration of the industry. |
