-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V2Tx9id0Sj9QcdgWbmZrbuHXwt3GoBmJY/evP7/ykcd8cTQLTJljxQtBrt/s7KHM 9EntCi7+z34AL9wasD6kIg== 0000950144-97-011977.txt : 19971114 0000950144-97-011977.hdr.sgml : 19971114 ACCESSION NUMBER: 0000950144-97-011977 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970902 ITEM INFORMATION: FILED AS OF DATE: 19971112 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMSURG CORP CENTRAL INDEX KEY: 0000895930 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HOSPITALS [8060] IRS NUMBER: 621493316 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-22217 FILM NUMBER: 97714973 BUSINESS ADDRESS: STREET 1: ONE BURTON HILLS BLVD. STREET 2: STE 350 CITY: NASHVILLE STATE: TN ZIP: 37215 BUSINESS PHONE: 6156651283 MAIL ADDRESS: STREET 1: ONE BURTON HILLS BLVD. STREET 2: SUITE 350 CITY: NASHVILLE STATE: TN ZIP: 37215 8-K/A 1 AMSURG CORP FORM 8-K/A-1 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A-1 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): September 2, 1997 ----------------- AMSURG CORP. (Exact Name of Registrant as Specified in its Charter) TENNESSEE 000-22217 62-1493316 (State or other jurisdiction of (Commission (I.R.S. employer incorporation or organization) File Number) identification no.) ONE BURTON HILLS BOULEVARD SUITE 350 NASHVILLE, TN 37215 (Address of principal executive offices) (Zip code) (615) 665-1283 (Registrant's Telephone Number, Including Area Code) NOT APPLICABLE (Former name or former address, if changed since last report) 2 ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. This Form 8-K/A-1 includes the following financial information required to be filed pursuant to Item 7 (Financial Statements and Exhibits) of the Current Report on Form 8-K dated September 2, 1997: (a) Financial Statements of Business Acquired: Independent Auditors' Report. Balance Sheets of The Endoscopy Center, Inc. as of December 31, 1995 and 1996 and August 31, 1997 (unaudited). Statements of Earnings and Retained Earnings of The Endoscopy Center, Inc. for the years ended December 31, 1995 and 1996 and the Eight Months ended August 31, 1996 and 1997 (unaudited). Statements of Cash Flows of The Endoscopy Center, Inc.for the years ended December 31, 1995 and 1996 and the Eight Months ended August 31, 1996 and 1997 (unaudited). Notes to Financial Statements of The Endoscopy Center, Inc. (b) Pro Forma Financial Information: Pro Forma Combined Statements of Operations for the year ended December 31, 1996 and the Eight Months ended August 31, 1997. Notes to Pro Forma Financial Statements. 2 3 INDEPENDENT AUDITORS' REPORT Board of Directors and Stockholders The Endoscopy Center, Inc. Independence, Missouri We have audited the accompanying balance sheets of The Endoscopy Center, Inc. as of December 31, 1995 and 1996, and the related statements of earnings and retained earnings and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the financial position of The Endoscopy Center, Inc. as of December 31, 1995 and 1996 and the results of its operations and its cash flows for the years then ended in conformity with generally accepted accounting principles. DELOITTE & TOUCHE LLP Nashville, Tennessee October 7, 1997 3 4 THE ENDOSCOPY CENTER, INC. BALANCE SHEETS
DECEMBER 31, DECEMBER 31, AUGUST 31, 1995 1996 1997 ------------ ------------ ----------- (UNAUDITED) ASSETS Current assets: Cash..................................................... $179,363 $193,156 $191,848 Accounts receivable, net of allowance for uncollectible accounts of $196,808, $160,148 and $150,000, respectively.......................................... 429,651 467,787 500,000 Supplies inventory....................................... 10,374 12,507 13,240 -------- -------- -------- Total current assets............................. 619,388 673,450 705,088 Organization cost, net of accumulated amortization of $71, $142 and $189, respectively.............................. 219 148 101 -------- -------- -------- $619,607 $673,598 $705,189 ======== ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable......................................... $ 19,744 $ 41,711 $ 20,756 Distribution withholdings................................ 78,525 108,355 -- Amount due to related party (note 2)..................... 69,779 73,580 65,050 -------- -------- -------- Total current liabilities........................ 168,048 223,646 85,806 Stockholders' equity: Common stock, $1 par value, 30,000 shares authorized, 90 shares outstanding.................................... 90 90 90 Retained earnings........................................ 451,469 449,862 619,293 -------- -------- -------- Total stockholders' equity....................... 451,559 449,952 619,383 -------- -------- -------- $619,607 $673,598 $705,189 ======== ======== ========
See accompanying notes to financial statements. 4 5 THE ENDOSCOPY CENTER, INC. STATEMENTS OF EARNINGS AND RETAINED EARNINGS
EIGHT MONTHS YEAR ENDED DECEMBER 31, ENDED AUGUST 31, ------------------------- ----------------------- 1995 1996 1996 1997 ----------- ----------- ---------- ---------- (UNAUDITED) Revenues...................................... $ 2,836,600 $ 3,122,033 $1,953,144 $2,090,308 Expenses: Salaries and benefits (note 2).............. 491,112 507,417 317,440 470,278 Supplies and other operating expenses....... 338,397 452,182 282,885 255,584 Rent expense (note 2)....................... 230,825 299,583 199,722 200,656 Bad debt expense............................ 168,029 56,335 35,243 44,503 ----------- ----------- ---------- ---------- Total expenses...................... 1,228,363 1,315,517 835,290 971,021 ----------- ----------- ---------- ---------- Net earnings........................ 1,608,237 1,806,516 1,117,854 1,119,287 Retained earnings, beginning of period........ 153,760 451,469 451,469 449,862 Distributions to stockholders................. (1,310,528) (1,808,123) (1,128,268) (949,855) ----------- ----------- ---------- ---------- Retained earnings, end of period.... $ 451,469 $ 449,862 $ 441,055 $ 619,294 =========== =========== ========== ==========
See accompanying notes to the financial statements. 5 6 THE ENDOSCOPY CENTER, INC. STATEMENTS OF CASH FLOWS
EIGHT MONTHS YEAR ENDED DECEMBER 31, ENDED AUGUST 31, ------------------------- ------------------------- 1995 1996 1996 1997 ----------- ----------- ----------- ----------- (UNAUDITED) Cash flow from operations: Net earning............................... $ 1,608,237 $ 1,806,516 $ 1,117,854 $ 1,119,287 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of organization cost...... 71 71 47 47 Decrease (increase) in accounts receivable........................... (220,594) (38,136) 84,016 (32,213) Increase in supplies inventory......... (5,174) (2,133) (1,290) (733) Increase (decrease) in accounts payable.............................. (2) 21,967 42,685 (20,956) Increase (decrease) in amount due to related party........................ 33,559 3,801 193 (8,530) ----------- ----------- ----------- ----------- Net cash provided by operating activities...................... 1,416,097 1,792,086 1,243,505 1,056,902 ----------- ----------- ----------- ----------- Cash flows from investing activities: Stockholders' distribution................ (1,310,528) (1,808,123) (1,128,268) (949,855) Increase (decrease) in distribution withholdings........................... 78,525 29,830 (78,525) (108,355) Decrease in outstanding checks in excess of deposits............................ (4,731) -- -- -- ----------- ----------- ----------- ----------- Net cash used by financing activities...................... (1,236,734) (1,778,293) (1,206,793) (1,058,210) ----------- ----------- ----------- ----------- Net increase (decrease) in cash............. 179,363 13,793 36,712 (1,308) Cash, beginning of period................... -- 179,363 179,363 193,156 ----------- ----------- ----------- ----------- Cash, end of period......................... $ 179,363 $ 193,156 $ 216,075 $ 191,848 =========== =========== =========== ===========
See accompanying notes to the financial statements. 6 7 THE ENDOSCOPY CENTER, INC. NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1995 AND 1996 AND EIGHT MONTHS ENDED AUGUST 31, 1997 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Endoscopy Center Inc. ("TEC") began operations in 1994 and operates two gastrointestinal surgery centers in Independence and Kansas City, Missouri. TEC is owned by a group of stockholders which perform gastroenterology procedures at the centers through their related physician practice. a. Revenue Recognition Revenue consists of the billing for the use of TEC's facilities (the "usage fee") directly to the patient or third-party payor. The usage fee excludes amounts billed for physicians' services, which are billed separately by the physicians to the patient or third-party payor. Revenues are reported at the estimated net realizable amounts from patients, third-party payors and others, including Medicare and Medicaid. Such revenues are recognized as the related services are performed. Contractual adjustments resulting from agreements with various organizations to provide services for amounts which differ from billed charges, are recorded as deductions from patient service revenues. During the 1995, 1996 and 1997 periods, approximately 29%, 39% and 28%, respectively, of the Centers' revenues were provided to patients covered under Medicare and Medicaid. Amounts, which are determined to be uncollectible, are charged against the allowance for uncollectible accounts. b. Amortization Amortization of organization cost is provided on a straight-line basis over four years. c. Income Taxes TEC has elected Subchapter S status of the Internal Revenue Code, and accordingly, income taxes are the responsibility of the individual stockholders of TEC. Therefore, no provision for income taxes has been reflected by TEC. d. Management Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from the estimates. 2. RELATED PARTY TRANSACTIONS Both centers rent equipment and furniture and one center occupies space provided by an entity which is owned by the same group of stockholders which own TEC. Included in the statement of earnings and retained earnings is a charge of $156,571, $200,993, $133,995 and $133,587 for the years ended December 31, 1995 and 1996 and the eight months ended August 31, 1996 and 1997, respectively, related to these lease arrangements, which management believes reflects the fair value of space and rental items provided. In addition, the employees of TEC are leased from the related physician practice. Charges associated with this arrangement are reflected as salaries and benefits in the statements of earnings and retained earnings. 3. SUBSEQUENT EVENT Effective September 1, 1997, AmSurg Holdings, Inc. ("Holdings"), a subsidiary of AmSurg Corp. ("AmSurg") acquired from TEC a sixty percent ownership interest in the assets comprising the business operations of two gastrointestinal surgery centers. 7 8 THE ENDOSCOPY CENTER, INC. NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) Pursuant to the terms of the Asset Purchase Agreement, dated as of September 2, 1997, by and among Holdings, AmSurg and TEC, Holdings paid $5,652,205 in cash and AmSurg issued 280,367 shares of its common stock to TEC. Following the asset purchase, Holdings and TEC contributed their respective ownership in the assets of the centers into a newly formed limited liability company, The Independence ASC, LLC, and received proportionate membership therein. 8 9 AMSURG CORP. UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS The following unaudited pro forma statements of operations of AmSurg Corp. ("AmSurg") for the year ended December 31, 1996 and the nine months ended September 30, 1997 are presented to show the effects of the acquisition of The Endoscopy Center, Inc., acquired on September 2, 1997, which is accounted for as a purchase, assuming the acquisition had occurred on January 1, 1996. The unaudited pro forma financial information does not purport to represent what AmSurg's financial position or results of operations would actually have been had the transactions in fact occurred on the dates indicated above, nor to project AmSurg's financial position or results of operations for any future date or period. In the opinion of AmSurg's management, all adjustments necessary for a fair presentation have been made. This unaudited pro forma financial information should be read in conjunction with the financial statements and notes thereto included in AmSurg's Registration Statement on Form 10/A-3 dated November 3, 1997. YEAR ENDED DECEMBER 31, 1996 (IN THOUSANDS, EXCEPT PER SHARE DATA)
AMSURG THE ENDOSCOPY PRO FORMA PRO FORMA HISTORICAL CENTER, INC. ADJUSTMENTS COMBINED ----------- ------------- ----------- ----------- Revenues................................ $ 35,007 $ 3,122 $ (74)(2) $ 38,055 Expenses: Salaries and benefits .............. 11,613 507 66 (3) 12,186 Other operating expenses............ 11,547 808 9 (4) 12,364 Depreciation and amortization....... 3,000 - 239 (5) 3,239 Interest............................ 948 - 290 (6) 1,238 ----------- ----------- ----------- ----------- Total expenses................... 27,108 1,315 604 29,027 ----------- ----------- ----------- ----------- Income before minority interest and income taxes............. 7,899 1,807 (678) 9,028 Minority interest....................... 5,433 - 723 (7) 6,156 ----------- ----------- ----------- ----------- Income before income taxes....... 2,466 1,807 (1,401) 2,872 Income tax expense...................... 985 - 162 (8) 1,147 ----------- ----------- ----------- ----------- Net income....................... 1,481 1,807 (1,563) 1,725 Accretion of preferred stock discount... 22 - - 22 ----------- ----------- ----------- ----------- Net income attributable to common stockholders.......... $ 1,459 $ 1,807 $ (1,563) $ 1,703 =========== =========== =========== =========== Net income per share attributable to common stockholders................. $ 0.05 $ 0.06 =========== =========== Weighted average common shares and equivalents.................. 27,307 280 (9) 27,587 =========== =========== ===========
9 10 AMSURG CORP. UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS NINE MONTHS ENDED SEPTEMBER 30, 1997 (IN THOUSANDS, EXCEPT PER SHARE DATA)
AMSURG THE ENDOSCOPY PRO FORMA PRO FORMA HISTORICAL CENTER, INC.(1) ADJUSTMENTS COMBINED ----------- --------------- ------------ ----------- Revenues............................... $ 41,163 $ 2,090 $ (50)(2) $ 43,203 Expenses: Salaries and benefits.............. 12,552 470 (64)(3) 12,958 Other operating expenses........... 14,564 501 10 (4) 15,075 Depreciation and amortization...... 3,511 - 159 (5) 3,670 Interest........................... 1,141 - 193 (6) 1,334 Net loss on sale of assets......... 1,494 - - 1,494 Distribution cost.................. 458 - - 458 ----------- ----------- ----------- ----------- Total expenses.................. 33,720 971 298 34,989 ----------- ----------- ----------- ----------- Income before minority interest and income taxes............ 7,443 1,119 (348) 8,214 Minority interest...................... 6,447 - 491 (7) 6,938 ----------- ----------- ----------- ----------- Income before income taxes...... 996 1,119 (839) 1,276 Income tax expense..................... 1,279 - 112 (8) 1,391 ----------- ----------- ----------- ----------- Net income (loss)............... (283) 1,119 (951) (115) Accretion of preferred stock discount.. 210 - - 210 ----------- ----------- ----------- ----------- Net income (loss) attributable to common stockholders......... $ (493) $ 1,119 $ (951) $ (325) =========== =========== =========== =========== Net income (loss) per share attributable to common stockholders................ $ (0.02) $ (0.01) =========== =========== Weighted average common shares and equivalents................. 28,310 251 (9) 28,561 =========== =========== ===========
10 11 AMSURG CORP. NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS 1. From January 1, 1997 to date of acquisition. 2. Reflects a decrease in interest income on the funds used to complete the acquisition. 3. The pro forma adjustments to salaries and benefits reflect $66,000 and $44,000 in the year ended December 31, 1996 and the nine months ended September 30, 1997, respectively, for estimated additional general and administrative costs as a result of two additional centers in operation. In addition, salaries and benefits in the nine months ended September 30, 1997 reflects a reduction of $108,000 for previously allocated salaries no longer charged to operations. 4. Reflects increase in other miscellaneous fees. 5. Reflects an increase in amortization due to the increase in excess of cost over net assets of purchased operations. 6. Reflects increase in interest expense for debt incurred to complete the acquisition. 7. Reflects minority owner's interest in earnings of acquired operations. 8. Change to the income tax provision due to combination of operations. 9. Average weighted shares for stock issued in the acquisition. 11 12 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned thereunto duly authorized. AMSURG CORP. By: /s/ Claire M. Gulmi ------------------------------------ CLAIRE M. GULMI Senior Vice President and Chief Financial Officer (Principal Financial and Duly Authorized Officer) Date: November 12, 1997 12 -----END PRIVACY-ENHANCED MESSAGE-----