A late flu season and the continuing integration of IPC Healthcare helped TeamHealth scratch out a profit in its first-quarter earnings.
The physician-staffing company posted net earnings of $668,000, or 1 cent per share, in the first quarter compared with $28.1 million, or 38 cents, in the prior year quarter.
TeamHealth's first-quarter revenue jumped 35.1% to $1.14 billion from $840.5 million the prior year. IPC, which was purchased late last year, contributed about $192.7 million of this year's first-quarter revenue. In its fourth quarter, TeamHealth posted a net loss of $9.7 million.
Net income, revenue and adjusted EBITDA all beat analyst expectations.
“The first quarter was a solid start to 2016,” CEO Mike Snow said during an earnings call Tuesday.
The flu season, which was mild most of last winter, arrived in March to boost business, Snow said.
TeamHealth also is doing a better job with payment collections and gradually absorbing the huge acquisition of rival IPC, which contributed 23% of the revenue growth during the quarter.
Snow said TeamHealth is on track to realize $25 million in cost synergies from the IPC combination and a total of $60 million over three years.
TeamHealth is trying new compensation models with physicians affiliated with IPC, Snow said. It's a priority to try to reduce a physician turnover rate of more than 20%, he said.
TeamHealth Chief Medical Officer Dr. Jasen Gundersen told Today's Hospitalist that the company has been raising the at-risk portion of pay for hospitalists, not the basic salary.
Snow said TeamHealth will be selective about acquisitions given the task of absorbing IPC and an already high debt ratio. But it has a pipeline of prospects to consider and is willing to pull the trigger if the right deal comes along, he said.
For example, TeamHealth last month announced the acquisition of Children's Emergency Services, a physician group in Dayton, Ohio, that provides emergency services to Dayton Children's Hospital.
In other news, the company is also expanding its Knoxville, Tenn., headquarters to the tune of $6.7 million.
About a year ago, TeamHealth announced a $16.8 million expansion of its facility in Louisville, Tenn.