IPC The Hospitalist Company Reports Third Quarter 20...(e continue to evaluate opportunities acr...),Health

Third Quarter 2009

Patient encounters for the three months ended September 30, 2009 increased 18.9% to 823,000, compared to 692,000 for the same period last year. Net revenue for the three months ended September 30, 2009 was $77.5 million, an increase of $14.3 million, or 22.7%, from $63.2 million for the three months ended September 30, 2008. Of this $14.3 million increase, $11.9 million, or 83.2%, was attributable to same-market area growth and $2.4 million was attributable to revenue generated from new market acquisitions. IPC completed one new market acquisition in the third quarter of 2008 and entered a second new market with two practice acquisitions, one each in the second and third quarters of 2009. The change in same-market area net revenue was largely the result of a 16.1% increase in patient encounters and a 3.2% increase in patient revenue per encounter.

Physician practice salaries, benefits and other expenses for the three months ended September 30, 2009 were $56.8 million, or 73.2% of net revenue, compared to $45.8 million, or 72.5% of net revenue, for the three months ended September 30, 2008. The increase in physician costs as a percentage of revenue is the result of more practices under development.

General and administrative expenses increased $1.4 million, or 12.5%, to $12.8 million, or 16.5% of net revenue, for the three months ended September 30, 2009, as compared to $11.4 million, or 18.0% of net revenue, for the three months ended September 30, 2008.

Income from operations increased $2.0 million, or 37.9%, to $7.4 million, as compared to $5.4 million for the same period in the prior year. The operating margin increased to 9.6% for the three months ended September 30, 2009,
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