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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
January 27, 2000 January 27, 2000
(Date of earliest event reported)
RURAL/METRO CORPORATION
(Exact Name of Registrant as Specified in Charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-22056 86-0746929
(Commission File Number) (IRS Employer Identification Number)
8401 EAST INDIAN SCHOOL ROAD
SCOTTSDALE, ARIZONA
85251
(Address of Principal Executive Offices)
(Zip Code)
(480) 994-3886
(Registrant's telephone number, including area code)
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Item 5. Other Events
The Company provided a press release announcing business process
changes and restructuring plan and postponing release of second quarter results
as set forth in its press release dated January 27, 2000. See Exhibit 99.1.
Item 7C. Exhibits
99.1 Press Release dated January 27, 2000.
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SIGNATURE
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 hereunto duly authorized.
RURAL/METRO CORPORATION
Date: January 27, 2000 By: /s/ Dean Hoffman
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Dean Hoffman, Vice
President and Principal
Accounting Officer
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FOR: RURAL/METRO CORPORATION
APPROVED BY: Mark Liebner, CFO
CONTACT: Liz Merritt, Public Affairs
(480) 606-3886
Morgen-Walke Associates
Investor Relations: John Swenson
(415) 296-7383
Media Relations: Sheryl Seapy
(415) 296-7383
Wire Services: Eric Gonzales
(212) 850-5600
RURAL/METRO CORPORATION ANNOUNCES BUSINESS PROCESS CHANGES AND
RESTRUCTURING PLAN; POSTPONING RELEASE OF SECOND QUARTER RESULTS
UNTIL EARLY FEBRUARY PENDING FINAL ANALYSIS OF ANTICIPATED
$60-$75 MILLION OF CHARGES
SCOTTSDALE, ARIZ. Jan. 27, 2000 -- Rural/Metro Corporation today announced
that it is launching a significant change in its business process as well as a
restructuring program designed to reduce the Company's exposure to slow and
costly healthcare reimbursement in certain markets. The Company anticipates that
total charges in connection with the program will be in the range of $60 to $75
million after tax.
A portion of the charges are expected to be recognized in the second fiscal
quarter ended December 31, 1999, but the amount and classification of these
charges is still being determined in consultation with the Company's independent
public accountants. As a result, the Company is delaying announcement of its
final second quarter results until completion of this analysis, which is
expected no later than February 14, 2000. The remainder of the charges are
expected to be recognized in the Company's third fiscal quarter, which ends
March 31, 2000.
"It is unfortunate that exact quantification and classification of the
impact of our new programs, which we believe will result in a significantly more
efficient and profitable operating model, have forced a roughly two-week delay
in announcement of our second quarter results," said Jack E. Brucker, President
and Chief Operating Officer of Rural/Metro. "We can report that net revenue for
the second fiscal quarter was $147.1 million, an increase of 5% over net
revenue of $139.6 million in the second fiscal quarter
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a year ago. Significantly, as a result of our efforts to shift non-emergency
transport mix to higher margin, better paying opportunities, transports
declined to 320,000 in the second quarter from 325,000 in last year's second
quarter, but the average patient charge (APC) in the recent quarter increased
significantly to $326, versus $300 in the year ago period. This marks
significant progress in our efforts to improve potential operating
profitability, and we believe that these trends can further improve as a result
of our selective restructuring efforts in certain markets."
Key components of the announced programs include:
+ Reducing the operating platforms in certain service areas that are highly
dependent on Medicare and Medicaid reimbursements for non-emergency
transport activity.
+ Modifying collection activity to focus more attention on the front end of
the transport and collection process, spending less resources fighting
claim denials with fiscal intermediaries and pursuing private pay bills.
+ Exploring new cut-off points for internal collection efforts, which could
raise the productivity of the billing and collection operation, based on
cost/benefit analysis of collection efforts, which vary significantly on
a regional basis depending on the revenue mix and reimbursement practices
of the fiscal intermediaries.
+ Approximately 8-10% of the total $60 million to $75 million in charges
are expected to be cash items for severance and lease terminations.
Mr. Brucker concluded, "The longer-term goal of this restructuring plan is
to put in place a business model that is less dependent on shifts in government
healthcare policy, more predictable with regard to operating margins and
requires less working capital. We believe this direction also ensures that
Rural/Metro will continue to provide superior quality emergency services to the
communities entrusted to our care."
Rural/Metro Corporation provides mobile health services, including 911 and
general ambulance service, fire protection and other safety-related services to
municipal, residential, commercial and industrial customers in more than 450
communities throughout the United States, Latin America and Canada.
Except for the historical information contained herein, this press release
contains forward-looking statements that involve risks and uncertainties that
could cause actual
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results to differ materially. These risks and uncertainties include the
collectibility of revenue, uncertainties regarding healthcare reimbursement,
the Company's ability to improve average patient charges, increase the
efficiency of its collection process, and implement new programs; demand for
the Company's services and other factors and other risks disclosed from time to
time in the Company's SEC reports and filings.
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