IPC THE HOSPITALIST COMPANY, INC. (IPCM, Financial) filed Quarterly Report for the period ended 2010-06-30.
Ipc The Hospitalist Company, Inc. has a market cap of $389.93 million; its shares were traded at around $24.03 with a P/E ratio of 20.02 and P/S ratio of 1.26. IPCM is in the portfolios of RS Investment Management, Ron Baron of Baron Funds, Pioneer Investments.
Physician practice salaries, benefits and other expenses for the three months ended June 30, 2010 were $63.1 million or 71.9% of net revenue compared to $54.5 million or 72.9% of net revenue for the three months ended June 30, 2009. These costs increased by $8.6 million or 15.7%. Same-market area physician costs increased a total of $5.6 million, of which $5.8 million was primarily the result of increased costs related to our new hires or acquired physician practices offset by $0.2 million cost savings related to existing physician costs. In addition, $3.0 million of the $8.6 million overall cost increase is attributable to physician costs associated with our two new markets. The 1.0% reduction in costs as a percentage of revenue for the second quarter of 2010 compared to the second quarter of 2009 is principally the result of lower use of locum tenens and part-time providers for a hospital contract that was being operated at break-even in 2009 while we were in the process of staffing the facility with full-time employed providers. During 2010 we completed the process of staffing this facility with full-time employed providers.
Our patient encounters for the six months ended June 30, 2010 increased 15.0% to 1,847,000, compared to 1,606,000 for the same period last year. Patient revenue per encounter increased 1.9% primarily as the result of an increase in Medicare reimbursement rates. Net revenue for the six months ended June 30, 2010 increased 16.2% to $175.3 million, an increase of $24.5 million from $150.8 million for the six months ended June 30, 2009. Of this $24.5 million increase, $16.5 million or 67.3% was attributable to same-market area growth and $8.0 million was attributable to revenue generated from two new markets which were opened by acquisitions in 2009. Same-market encounters increased 10.5% and patient revenue per encounter increased 1.6% resulting in an increase in same-market patient revenue of 12.2%. Same-market hospital contract and other revenue decreased resulting in an overall 10.9% increase in same-market net revenue. The decrease in hospital contract and other revenue was primarily the result of the decrease in reimbursement from a hospital where the contract was being staffed by locum tenens and part-time providers while we were in the process of staffing the facility with full-time employed providers. During 2010 we completed the process of staffing this facility with full-time employed providers.
Physician practice salaries, benefits and other expenses for the six months ended June 30, 2010 were $126.7 million or 72.3% of net revenue compared to $109.9 million or 72.9% of net revenue for the six months ended June 30, 2009. These costs increased by $16.8 million or 15.2%. Same-market area physician costs increased a total of $11.0 million, of which $12.7 million was primarily the result of increased costs related to our new hires or acquired physician practices offset by $1.7 million cost savings related to existing physician costs. In addition, $5.8 million of the $16.8 million overall cost
Net cash provided by operating activities for the six months ended June 30, 2010 was $15.1 million compared to $17.3 million for the same period of 2009. Accounts receivable increased by $3.3 million during the six months ended June 30, 2010. The increase in accounts receivable was due to higher revenue and to the fact that Medicare reimbursement was delayed during the month of June 2010, by order of the Centers for Medicare and Medicaid Services (CMS) prior to Congressional action to increase Medicare rates. Claims are no longer being held by CMS. Although accounts receivable increased since December 31, 2009, our days sales outstanding (DSO) basis, which we use to measure the effectiveness of our collections, decreased to 53.5 DSO as of June 30, 2010, compared to 54.1 DSO as of December 31, 2009. We calculate our DSO using a three-month rolling average of net revenues. Prepaid expenses decreased by $2.7 million during the six months ended June 30, 2010 as a result of expensing prepaid medical malpractice premiums. Accrued compensation increased $1.5 million for the 2010 period compared to an increase of $5.6 million for the 2009 period due to the timing of our bi-weekly payday in relation to the period ending date of June 30. During March 2010, we paid $0.8 million for a professional liability settlement that was accrued at December 31, 2009.
Our Credit Facility provides a revolving line of credit of $30.0 million, with a sublimit of $5.0 million for the issuance of letters of credit, plus a term loan in an original amount of $10.0 million. The Credit Facility has a maturity date of September 15, 2011. We use the Credit Facility for working capital, practice acquisitions and capital expenditures. At June 30, 2010, we had no borrowings under the term loan portion of the Credit Facility, and a letter of credit of $100,000 outstanding and $29.9 million available under the revolving line of credit.
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Ipc The Hospitalist Company, Inc. has a market cap of $389.93 million; its shares were traded at around $24.03 with a P/E ratio of 20.02 and P/S ratio of 1.26. IPCM is in the portfolios of RS Investment Management, Ron Baron of Baron Funds, Pioneer Investments.
Highlight of Business Operations:
Our patient encounters for the three months ended June 30, 2010 increased 15.6% to 920,000, compared to 796,000 for the same period in the prior year. Patient revenue per encounter increased 2.2% primarily as the result of an increase in Medicare reimbursement rates. Net revenue for the three months ended June 30, 2010 increased 17.2% to $87.6 million, an increase of $12.8 million from $74.8 million for the three months ended June 30, 2009. Of this $12.8 million increase, $8.7 million or 68.0% was attributable to same-market area growth and $4.1 million, or 32.0%, was attributable to revenue generated from two new markets which were opened by acquisitions in 2009. Same-market encounters increased 11.0% and patient revenue per encounter increased 1.6% resulting in an increase in same-market patient revenue of 12.8%. Same-market hospital contract and other revenue decreased slightly resulting in an overall 11.6% increase in same market net revenue. The decrease in hospital contract and other revenue was primarily the result of the decrease in reimbursement from aPhysician practice salaries, benefits and other expenses for the three months ended June 30, 2010 were $63.1 million or 71.9% of net revenue compared to $54.5 million or 72.9% of net revenue for the three months ended June 30, 2009. These costs increased by $8.6 million or 15.7%. Same-market area physician costs increased a total of $5.6 million, of which $5.8 million was primarily the result of increased costs related to our new hires or acquired physician practices offset by $0.2 million cost savings related to existing physician costs. In addition, $3.0 million of the $8.6 million overall cost increase is attributable to physician costs associated with our two new markets. The 1.0% reduction in costs as a percentage of revenue for the second quarter of 2010 compared to the second quarter of 2009 is principally the result of lower use of locum tenens and part-time providers for a hospital contract that was being operated at break-even in 2009 while we were in the process of staffing the facility with full-time employed providers. During 2010 we completed the process of staffing this facility with full-time employed providers.
Our patient encounters for the six months ended June 30, 2010 increased 15.0% to 1,847,000, compared to 1,606,000 for the same period last year. Patient revenue per encounter increased 1.9% primarily as the result of an increase in Medicare reimbursement rates. Net revenue for the six months ended June 30, 2010 increased 16.2% to $175.3 million, an increase of $24.5 million from $150.8 million for the six months ended June 30, 2009. Of this $24.5 million increase, $16.5 million or 67.3% was attributable to same-market area growth and $8.0 million was attributable to revenue generated from two new markets which were opened by acquisitions in 2009. Same-market encounters increased 10.5% and patient revenue per encounter increased 1.6% resulting in an increase in same-market patient revenue of 12.2%. Same-market hospital contract and other revenue decreased resulting in an overall 10.9% increase in same-market net revenue. The decrease in hospital contract and other revenue was primarily the result of the decrease in reimbursement from a hospital where the contract was being staffed by locum tenens and part-time providers while we were in the process of staffing the facility with full-time employed providers. During 2010 we completed the process of staffing this facility with full-time employed providers.
Physician practice salaries, benefits and other expenses for the six months ended June 30, 2010 were $126.7 million or 72.3% of net revenue compared to $109.9 million or 72.9% of net revenue for the six months ended June 30, 2009. These costs increased by $16.8 million or 15.2%. Same-market area physician costs increased a total of $11.0 million, of which $12.7 million was primarily the result of increased costs related to our new hires or acquired physician practices offset by $1.7 million cost savings related to existing physician costs. In addition, $5.8 million of the $16.8 million overall cost
Net cash provided by operating activities for the six months ended June 30, 2010 was $15.1 million compared to $17.3 million for the same period of 2009. Accounts receivable increased by $3.3 million during the six months ended June 30, 2010. The increase in accounts receivable was due to higher revenue and to the fact that Medicare reimbursement was delayed during the month of June 2010, by order of the Centers for Medicare and Medicaid Services (CMS) prior to Congressional action to increase Medicare rates. Claims are no longer being held by CMS. Although accounts receivable increased since December 31, 2009, our days sales outstanding (DSO) basis, which we use to measure the effectiveness of our collections, decreased to 53.5 DSO as of June 30, 2010, compared to 54.1 DSO as of December 31, 2009. We calculate our DSO using a three-month rolling average of net revenues. Prepaid expenses decreased by $2.7 million during the six months ended June 30, 2010 as a result of expensing prepaid medical malpractice premiums. Accrued compensation increased $1.5 million for the 2010 period compared to an increase of $5.6 million for the 2009 period due to the timing of our bi-weekly payday in relation to the period ending date of June 30. During March 2010, we paid $0.8 million for a professional liability settlement that was accrued at December 31, 2009.
Our Credit Facility provides a revolving line of credit of $30.0 million, with a sublimit of $5.0 million for the issuance of letters of credit, plus a term loan in an original amount of $10.0 million. The Credit Facility has a maturity date of September 15, 2011. We use the Credit Facility for working capital, practice acquisitions and capital expenditures. At June 30, 2010, we had no borrowings under the term loan portion of the Credit Facility, and a letter of credit of $100,000 outstanding and $29.9 million available under the revolving line of credit.
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