<PAGE> 1
Filed Pursuant to
Rule 424(b)(3)
Registration No. 33-99518
SUPPLEMENT NO. 5 DATED MAY 16, 1996
TO PROSPECTUS DATED AUGUST 11, 1995
RURAL/METRO CORPORATION
Quarterly Results
- -----------------
A copy of the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996 is attached hereto.
<PAGE> 2
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-22056
RURAL/METRO CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 86-0746929
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
8401 EAST INDIAN SCHOOL ROAD
SCOTTSDALE, ARIZONA
85251
(Address of principal executive offices)
(Zip Code)
(602) 994-3886
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
At May 13, 1996 there were 10,830,981 shares of Common Stock outstanding,
exclusive of treasury shares held by the Registrant.
<PAGE> 3
RURAL/METRO CORPORATION
INDEX TO QUARTERLY REPORT
ON FORM 10-Q
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I. Financial Statements
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
Part II. Other Information
Item 6a. Exhibits 13
Signatures 14
</TABLE>
<PAGE> 4
RURAL/METRO CORPORATION
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 AND JUNE 30, 1995
(IN THOUSANDS)
<TABLE>
<CAPTION>
March 31, June 30,
1996 1995
---------- ---------
(Unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 2,568 $ 900
Accounts receivable, net 62,626 41,090
Inventories 3,593 3,296
Prepaid expenses and other 6,319 3,466
--------- ---------
Total current assets 75,106 48,752
PROPERTY AND EQUIPMENT, net 43,778 31,510
INTANGIBLE ASSETS, net 83,972 73,558
OTHER ASSETS 3,317 5,610
--------- ---------
$ 206,173 $ 159,430
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 2,668 $ 5,048
Accrued expenses 10,637 8,969
Current portion of long-term debt 6,298 8,377
--------- ---------
Total current liabilities 19,603 22,394
LONG-TERM DEBT, net of current portion 87,062 53,282
NON-REFUNDABLE SUBSCRIPTION INCOME 11,958 10,917
DEFERRED INCOME TAXES 7,667 4,957
OTHER LIABILITIES 2,154 2,232
--------- ---------
Total liabilities 128,444 93,782
--------- ---------
STOCKHOLDERS' EQUITY
Preferred Stock --- ---
Common stock 96 90
Additional paid-in capital 56,245 52,431
Retained earnings 24,373 15,912
Deferred compensation (1,746) (1,546)
Treasury stock (1,239) (1,239)
--------- ---------
Total stockholders' equity 77,729 65,648
--------- ---------
$ 206,173 $ 159,430
========= =========
</TABLE>
The accompanying notes are an integral part of these
consolidated balance sheets.
-3-
<PAGE> 5
RURAL/METRO CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Ended March 31, Nine Months Ended March 31,
---------------------------- ---------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUE
Ambulance services $51,789 $33,159 $143,246 $ 87,566
Fire protection services 9,813 8,022 28,503 23,820
Other 3,382 2,605 9,837 8,630
------- ------- -------- ---------
Total revenue 64,984 43,786 181,586 120,016
------- ------- -------- --------
OPERATING EXPENSES
Payroll and employee benefits 34,596 23,393 98,198 64,498
Provision for doubtful accounts 8,138 5,522 22,445 15,356
Depreciation 2,571 1,636 7,063 4,593
Amortization of intangibles 888 495 2,574 1,312
Other operating expenses 12,016 8,475 34,378 23,740
------- ------- -------- --------
Total expenses 58,209 39,521 164,658 109,499
------- ------- -------- --------
OPERATING INCOME 6,775 4,265 16,928 10,517
INTEREST EXPENSE, net 1,706 771 4,136 1,837
------- ------- -------- --------
INCOME BEFORE INCOME TAXES 5,069 3,494 12,792 8,680
PROVISION FOR INCOME TAXES 2,080 1,444 5,305 3,536
------- ------- -------- --------
NET INCOME $ 2,989 $ 2,050 $ 7,487 $ 5,144
======= ======= ======== ========
EARNINGS PER COMMON STOCK AND
COMMON STOCK EQUIVALENT $0.31 $0.25 $0.79 $0.64
===== ===== ===== =====
WEIGHTED AVERAGE NUMBER OF
COMMON STOCK AND COMMON
STOCK EQUIVALENTS OUTSTANDING 9,735 8,253 9,522 8,063
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
-4-
<PAGE> 6
RURAL/METRO CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MARCH 31, 1996 AND 1995
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net income $ 7,487 $ 5,144
Adjustments to reconcile net income to cash
provided by (used in) operations --
Depreciation and amortization 9,637 5,905
Amortization of deferred compensation 459 320
Amortization of gain on sale of real estate (78) (78)
Provision for doubtful accounts 22,445 15,356
Change in assets and liabilities, net of
effect of businesses acquired --
Increase in accounts receivable (40,368) (27,102)
Increase in inventories (279) (331)
Decrease (increase) in prepaid expenses and other (1,673) 1,029
Increase (decrease) in accounts payable (2,865) 635
Increase in accrued expenses and other 307 256
Increase in nonrefundable subscription income 362 596
Increase (decrease) in deferred income taxes 1,837 (238)
-------- --------
Net cash provided by (used in) operating activities (2,729) 1,492
-------- --------
CASH FLOW FROM FINANCING ACTIVITIES
Borrowings on revolving credit facility, net 40,600 30,193
Repayment of debt and capital lease obligations (17,474) (7,010)
Borrowings of debt 2,016 1,003
Issuance of common stock 2,070 688
-------- --------
Net cash provided by financing activities 27,212 24,874
-------- --------
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditures (13,806) (7,977)
Increase in other assets (122) ---
Cash paid for businesses acquired (8,887) (27,380)
-------- --------
Net cash used in investing activities (22,815) (35,357)
-------- --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,668 (8,991)
CASH AND CASH EQUIVALENTS, Beginning of period 900 9,849
-------- --------
CASH AND CASH EQUIVALENTS, End of period $ 2,568 $ 858
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
-5-
<PAGE> 7
RURAL/METRO CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q. Accordingly, they do
not include all information and footnotes required by generally accepted
accounting principles for complete financial statements.
(1) INTERIM RESULTS
In the opinion of management, the consolidated financial statements for
the three month and nine month periods ended March 31, 1996 and 1995
include all adjustments, consisting only of normal recurring
adjustments necessary for a fair statement of the consolidated
financial position and results of operations for that period.
The results of operations for the three month and nine month periods
ended March 31, 1996 and 1995 are not necessarily indicative of the
results of operations for a full fiscal year.
(2) ACQUISITIONS
During the nine months ended March 31, 1996 the Company purchased the
stock of ambulance service providers operating in New York state and
Alabama, the assets of ambulance service providers operating in Ohio,
Texas, South Carolina and Georgia and the stock of a fire service
company operating in Oregon.
The acquisitions were accounted for as purchases in accordance with
Accounting Principles Board Opinion No. 16 (APB16) and, accordingly,
the purchased assets and assumed liabilities were recorded at their
estimated fair values at each respective acquisition date.
The aggregate purchase price consisted of the following:
<TABLE>
<CAPTION>
(in thousands)
<S> <C>
Cash $ 8,887
Rural/Metro common stock 903
Notes payable to sellers 2,718
Assumption of liabilities 2,157
-------
$14,665
=======
</TABLE>
The common stock has been valued based upon certain restrictions placed
on its subsequent resale.
During October 1995 and March 1996, subsidiaries of the Company merged
with and into two ambulance service providers operating in Indiana and
an ambulance service provider operating in Ohio. The Company issued an
aggregate of 405,077 shares of its common stock in exchange for all of
the issued and outstanding stock of the acquired companies. The
transactions were accounted for as pooling-of-interests in accordance
with APB16.
The unaudited pro forma combined condensed statements of income for the
fiscal year ended June 30, 1995 and the nine months ended March 31,
1996 give effect to the acquisitions as if each had been consummated as
of the beginning of each respective period.
The pro forma combined condensed financial statements do not purport to
represent what the Company's actual results of operations or financial
position would have been had such transactions in fact occurred on such
dates. The pro forma combined condensed statements of income also do
not purport to project the results of operations of the Company for the
current year or for any future period.
-6-
<PAGE> 8
RURAL/METRO CORPORATION
UNAUDITED PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
FOR THE YEAR ENDED JUNE 30, 1995
AND FOR THE NINE MONTHS ENDED MARCH 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED
JUNE 30, 1995
-------------------------
PROFORMA
HISTORICAL COMBINED
---------- --------
<S> <C> <C>
Revenue $171,583 $236,588
Income before extraordinary item $ 7,593 $ 11,228
Earnings per share before extraordinary item $0.92 $1.15
NINE MONTHS ENDED
MARCH 31, 1996
-------------------------
PROFORMA
HISTORICAL COMBINED
---------- --------
Revenue $181,586 $194,227
Net income $ 7,487 $ 8,293
Earnings per share $0.79 $0.86
</TABLE>
Pro forma adjustments include adjustments to: (i) reflect amortization
of the cost in excess of the fair value of net assets acquired
(ii) adjust payroll and related expenses for the effect of certain
former owners of the acquired businesses not being employed by the
Company and to reflect the difference between the actual
compensation paid to officers of the businesses acquired and the lower
level of aggregate compensation such individuals would have received
under the terms of employment agreements executed by the Company and
such individuals; (iii)adjust other operating expenses to reflect the
reduction of expenses related to certain real estate and buildings not
acquired and sellers' costs incurred in connection with the sale of
their respective businesses; (iv) adjust interest expense to reflect
interest expense related to debt issued in connection with the
acquisitions; and, (v) adjust income taxes to reflect the tax effect of
the adjustments and the tax effect of treating all of the acquisitions
as if they had C corporation status.
Subsequent to March 31, 1996, the Company purchased the assets of
ambulance service providers operating in New York and the stock of an
ambulance service provider operating in South Dakota. The aggregate
purchase price was $4.1 million. The Company paid cash of $2.9 million,
issued notes payable to sellers of $0.7 million, issued 3,464 shares of
the Company's common stock valued at $0.1 million and assumed $0.4
million of liabilities. These transactions were accounted for as
purchases in accordance with APB16.
(3) CREDIT AGREEMENTS AND BORROWINGS
During September 1995, the Company funded a fully underwritten credit
agreement for a $125 million revolving credit facility. The Company
used the proceeds from the facility to repay the Company's existing
revolving credit facility and its notes payable. Approximately $75.5
million was outstanding on the credit facility at March 31, 1996.
During April 1996, the Company issued 1,367,500 shares of its common
stock in a public stock offering. The Company used the net proceeds of
approximately $34.8 million to repay a portion of its revolving credit
facility.
-7-
<PAGE> 9
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
The Company derives its revenue primarily from fees charged for ambulance and
fire protection services. The Company provides ambulance services in response to
emergency medical calls ("911" emergency ambulance services) and non-emergency
transport services (general transport services) to patients on both a
fee-for-service basis and non-refundable subscription fee basis. Per transport
revenue depends on various factors, including the mix of rates between existing
markets and new markets and the mix of activity between "911" emergency
ambulance services and general transport services as well as other competitive
factors. Fire protection services are provided either under contracts with
municipalities or fire districts or on a non-refundable subscription fee basis
to individual homeowners or commercial property owners.
Ambulance service fees are recorded net of Medicare, Medicaid and other
reimbursement limitations and are recognized when services are provided.
Payments received from third-party payors represent a substantial portion of the
Company's ambulance service fee receipts. Provision for doubtful accounts is
made for the expected difference between ambulance services fees and amounts
actually collected. The Company's provision for doubtful accounts generally is
higher with respect to collections to be derived directly from patients than for
collections to be derived from third-party payors and generally is higher for
"911" emergency ambulance services than for general ambulance transport
services.
Because of the nature of the Company's ambulance services, it is necessary to
respond to a number of calls, primarily "911" emergency ambulance service
calls, which may not result in transports. Results of operations are discussed
below on the basis of actual transports since transports are more directly
related to revenue. Expenses associated with calls that do not result in
transports are included in operating expenses. The percentage of calls not
resulting in transports varies substantially depending upon the mix of general
transport and "911" emergency ambulance service calls in the Company's markets
and is generally higher in markets in which the calls are primarily "911"
emergency ambulance service calls. Rates in the Company's markets take into
account the anticipated number of calls that may not result in transports. The
Company does not separately account for expenses associated with calls that do
not result in transports.
Revenue generated under fire protection services contracts is recognized over
the life of the contract. Subscription fees received in advance are deferred and
recognized over the term of the subscription agreement, which is generally one
year.
Other revenue consists primarily of fees associated with alternative
transportation services and is recognized when the services are provided.
Other operating expenses consist primarily of rent and related occupancy
expenses, maintenance and repairs, insurance, fuel and supplies, travel and
professional fees.
THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THREE MONTHS ENDED MARCH 31, 1995
REVENUE
Total revenue increased $21.2 million, or 48.4%, from $43.8 million for the
three months ended March 31, 1995 to $65.0 million for the three months ended
March 31, 1996. Approximately $15.2 million of this increase resulted from the
acquisition of ambulance service providers during the last quarter of fiscal
1995 and the first three quarters of fiscal 1996. Ambulance services revenue in
markets served by the Company in both of the three month periods ended March 31,
1995 and 1996 increased by 10.2%. Fire protection services revenue increased by
$1.8 million, or 22.5%, from $8.0 million for the three months ended March 31,
1995 to $9.8 million for the three months ended March 31, 1996.
-8-
<PAGE> 10
Total ambulance transports increased by 61,000, or 63.2%, from 122,000 for the
three months ended March 31,1995 to 183,000 for the three months ended March 31,
1996. The acquisition of eleven ambulance service companies during the last
quarter of fiscal 1995 and the first three quarters of fiscal 1996 accounted for
57,000 of these additional transports.
Fire protection services revenue increased due to revenue generated from new
fire protection contracts awarded to the Company through competitive bidding and
due to rate increases for fire protection services. The increase also resulted
from the acquisition of a fire service company during the first quarter of
fiscal 1996.
OPERATING EXPENSES
Payroll and employee benefit expenses increased $11.2 million, or 47.9%, from
$23.4 million for the three months ended March 31, 1995 to $34.6 million for the
three months ended March 31, 1996. This increase was primarily due to the
acquisition of eleven ambulance service providers during the last quarter of
fiscal 1995 and the first three quarters of fiscal 1996.
Provision for doubtful accounts increased $2.6 million, or 47.3%, from $5.5
million for the three months ended March 31, 1995 to $8.1 million for the three
months ended March 31, 1996. Provision for doubtful accounts decreased from
12.6% of total revenue for the three months ended March 31, 1995 to 12.5% of
total revenue for the three months ended March 31, 1996, reflecting the effect
of the acquisition of ambulance service providers operating in markets with
higher receivable collections as a result of a greater mix of general transport
activity.
Depreciation increased $0.9 million, or 56.3% from $1.6 million for the three
months ended March 31, 1995 to $2.5 million for the three months ended March 31,
1996, primarily as a result of increased property and equipment from recent
acquisition activity.
Amortization of intangibles increased by $0.4 million, or 80.0%, from $0.5
million for the three months ended March 31, 1995 to $0.9 million for the three
months ended March 31, 1996. This increase was the result of increased
intangible assets caused by recent acquisition activity. Amortization of
intangibles increased from 1.1% of total revenue for the three months ended
March 31, 1995 to 1.4% for the three months ended March 31, 1996.
Other operating expenses increased approximately $3.5 million, or 41.2%, from
$8.5 million for the three months ended March 31, 1995 to $12.0 million for the
three months ended March 31, 1996, primarily due to increased expenses
associated with the operation of the eleven ambulance service providers acquired
during the last quarter of fiscal 1995 and the first three quarters of fiscal
1996. Other operating expenses decreased from 19.4% of total revenue for the
three months ended March 31, 1995 to 18.5% of total revenue for the three months
ended March 31, 1996 as a result of operational efficiencies.
Interest expense increased by $0.9 million from $0.8 million for the three
months ended March 31, 1995 to $1.7 million for the three months ended March 31,
1996. This increase was caused by higher debt balances, reflecting increased
borrowings on the Company's revolving credit facility.
NINE MONTHS ENDED MARCH 31, 1996 COMPARED TO NINE MONTHS ENDED MARCH 31, 1995
REVENUE
Total revenue increased $61.6 million, or 51.3%, from $120.0 million for the
nine months ended March 31, 1995 to $181.6 million for the nine months ended
March 31, 1996. Approximately $45.5 million of this increase resulted from the
acquisition of ambulance service providers during the last quarter of fiscal
1995 and the first three quarters of fiscal 1996. Fire protection services
revenue increased by $4.7 million and other revenue increased by $1.2 million.
-9-
<PAGE> 11
Total ambulance transports increased by 203,000, or 64.0%, from 317,000 for the
nine months ended March 31, 1995 to 520,000 for the nine months ended March 31,
1996. The acquisition of eleven ambulance service companies during the last
quarter of fiscal 1995 and the first three quarters of fiscal 1996 accounted for
188,000 of these additional transports.
Fire protection services revenue increased due to revenue generated from new
fire protection contracts awarded to the Company through competitive bidding and
due to rate increases for fire protection services. The increase also resulted
from the acquisition of a fire service company during the first quarter of
fiscal 1996.
OPERATING EXPENSES
Payroll and employee benefit expenses increased $33.7 million, or 52.2%, from
$64.5 million for the nine months ended March 31, 1995 to $98.2 million for the
nine months ended March 31, 1996. This increase was primarily due to the
acquisition of eleven ambulance service providers during the last quarter of
fiscal 1995 and the first three quarters of fiscal year 1996.
Provision for doubtful accounts increased $7.1 million, or 46.1%, from $15.4
million for the nine months ended March 31, 1995 to $22.5 million for the nine
months ended March 31, 1996. Provision for doubtful accounts decreased from
12.8% of total revenue for the nine months ended March 31, 1995 to 12.4% of
total revenue for the nine months ended March 31, 1996 reflecting the effect
of the acquisition of ambulance service providers operating in markets with
higher receivable collections as a result of a greater mix of general
transport activity.
Depreciation increased $2.5 million, or 54.3%, from $4.6 million for the nine
months ended March 31, 1995 to $7.1 million for the nine months ended March 31,
1996, primarily due to increased property and equipment from recent acquisition
activity.
Amortization of intangibles increased by $1.3 million, from $1.3 million for the
nine months ended March 31, 1995 to $2.6 million for the nine months ended March
31, 1996. This increase was the result of increased intangible assets caused by
recent acquisition activity. Amortization of intangibles increased from 1.1% of
total revenue for the nine months ended March 31, 1995 to 1.4% for the nine
months ended March 31, 1996.
Other operating expenses increased approximately $10.7 million, or 45.1% from
$23.7 million for the nine months ended March 31, 1995 to $34.4 million for the
nine months ended March 31, 1996, primarily due to increased expenses associated
with the operation of the eleven ambulance service providers acquired during the
last quarter of fiscal 1995 and the first three quarters of fiscal 1996. Other
operating expenses decreased from 19.8% of total revenue for the nine months
ended March 31, 1995 to 18.9% of total revenue for the nine months ended March
31, 1996 as a result of operational efficiencies.
Interest expense increased by $2.3 million from $1.8 million for the nine months
ended March 31, 1995 to $4.1 million for the nine months ended March 31, 1996.
This increase was caused by higher debt balances, reflecting increased
borrowings on the Company's revolving credit facility.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company has financed its cash requirements principally through
cash flow from operating activities, term and revolving indebtedness, capital
equipment lease financing, and the sale of stock through an initial public
offering in July 1993, subsequent public stock offerings in May 1994 and April
1996, and the on-going exercise of stock options previously issued.
-10-
<PAGE> 12
During the nine months ended March 31, 1996 the Company used cash flow of $2.7
million, compared with cash flow generated by operations of $1.5 million for the
nine months ended March 31, 1995.
During September 1995, the Company funded a fully underwritten credit agreement
for a $125 million revolving credit facility. The Company used the proceeds from
the facility to repay the Company's existing revolving credit facility and its
notes payable. Approximately $75.5 million was outstanding on the credit
facility at March 31, 1996.
During the nine months ended March 31, 1996 the Company purchased the stock of
ambulance service providers operating in New York state and Alabama, the assets
of ambulance service providers operating in Ohio, Texas, South Carolina and
Georgia and the stock of a fire service company operating in Oregon. The
aggregate purchase price was $14.7 million. The Company paid cash of $8.9
million, issued notes payable to sellers totaling $2.7 million, issued 67,606
shares of Rural/Metro common stock valued at $0.9 million and assumed $2.2
million of liabilities. The cash portion of the acquisitions was funded through
operating cash flow and through the Company's revolving credit facility. These
transactions were accounted for as purchases in accordance with Accounting
Principles Board Opinion No.16 (APB16).
During October 1995 and March 1996, subsidiaries of the Company merged with and
into two ambulance service providers operating in Indiana and an ambulance
service provider operating in Ohio. The Company issued an aggregate of 405,077
shares of its common stock in exchange for all of the issued and outstanding
stock of the acquired companies. The transactions were accounted for as
pooling-of-interests in accordance with APB16.
During August 1995, the Company registered for offer and sale up to 2,283,658
shares of common stock under a shelf registration statement. Approximately
337,000 shares included in this statement have been issued through April 1996 in
connection with acquisitions.
During April 1996, the Company issued 1,367,500 shares of its common stock in a
public stock offering. The Company used the net proceeds of approximately $34.8
million to repay a portion of its revolving credit facility.
Subsequent to March 31, 1996, the Company purchased the assets of ambulance
service providers operating in New York and the stock of an ambulance service
provider operating in South Dakota. The aggregate purchase price was $4.1
million. The Company paid cash of $2.9 million, issued notes payable to sellers
of $0.7 million, issued 3,464 shares of the Company's common stock valued at
$0.1 million and assumed $0.4 million of liabilities. These transactions were
accounted for as purchases in accordance with APB16.
The Company expects that cash flow from operations and additional borrowing
capacity will be sufficient to meet its operating and capital needs for existing
operations as well as to fund certain service area expansion and acquisitions
for the twelve months subsequent to March 31, 1996. The Company is engaged in an
active acquisition program. The Company intends to fund any acquisitions that it
consummates through the use of cash from operations, credit facilities, seller
notes payable and the issuance of common stock. In addition, the Company may
seek to raise additional capital through public or private debt or equity
financing. The availability of these capital sources will depend upon prevailing
market conditions, interest rates and the financial condition of the Company.
-11-
<PAGE> 13
RURAL/METRO CORPORATION AND SUBSIDIARIES
PART II -- OTHER INFORMATION
Item 6a. Exhibits:
10.16(c) Form of Change of Control Agreement by and between
Registrant and the following executive officers,
dated as indicated:
Executive Officer Date Signed
----------------- -----------
Warren S. Rustand November 3, 1995
James H. Bolin December 1, 1995
Robert T. Edwards December 1, 1995
Mark E. Liebner December 1, 1995
John E. Stuart December 1, 1995
10.16(d) Employment Agreement by and between Registrant and
Warren S. Rustand dated November 3, 1995.
21. Subsidiaries
27. Financial Data Schedule
-12-
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RURAL/METRO CORPORATION
Date: May 15, 1996 By /s/ W. R. Crowell
------------------------------------
W. R. Crowell, Vice President
and Principal Accounting Officer
-13-
