EX-99.1 2 g96441exv99w1.txt EX-99.1 PRESS RELEASE EXHIBIT 99 PRESS RELEASE AMSURG ANNOUNCES GROWTH IN SECOND-QUARTER NET EARNINGS FROM CONTINUING OPERATIONS TO $0.33 PER DILUTED SHARE PRODUCES SAME-CENTER REVENUE GROWTH OF 5% NASHVILLE, Tenn. (July 26, 2005) - Ken P. McDonald, President and Chief Executive Officer of AmSurg Corp. (NASDAQ: AMSG), today announced financial results for the second quarter and six months ended June 30, 2005. Revenues increased 18% to a record $98,786,000 for the second quarter from $83,739,000 for the second quarter of 2004. Net earnings from continuing operations rose 28% to $9,986,000 from $7,823,000. Net earnings from continuing operations per diluted share increased 32% for the second quarter of 2005 to $0.33 from $0.25 for the second quarter of 2004. Net earnings from continuing operations for the second quarter of 2004 included a loss from note receivable of $0.02 per diluted share. For the first six months of 2005, revenues increased 17% to $190,601,000 from $162,745,000 for the first six months last year. Net earnings from continuing operations were $18,685,000, up 19% from $15,669,000. Net earnings from continuing operations per diluted share rose 22% to $0.62 for the first half of 2005 from $0.51 for the comparable period in 2004. "AmSurg produced continued earnings growth for the second quarter of 2005," remarked Mr. McDonald. "We primarily attribute this growth to the expansion of the number of our centers in operation to 140 at the end of the second quarter from 116 at the same time in 2004. The addition of 24 new centers during the 12 months ended June 30, 2005 strengthens our confidence in our ability to achieve our new center target for 2005 of adding 16 to 19 centers. We are also pleased to report an increase of 5% in same-facility revenue for the quarter, primarily driven by procedure growth. "During the second quarter, we added six new centers in operation and sold one nonperforming center. Three of the six additional centers were acquisitions completed late in the quarter, and the remaining three were de novo centers. As a result of this opening activity, we have added 13 new centers through the first half of 2005, approaching our 16 to 19 center target additions for 2005. Through June 30, 2005, we have opened five of the eight de novo centers scheduled for 2005, and we have completed the acquisitions of eight of our targeted acquisitions for the year. "We finished the second quarter with five centers under development, including the execution of one agreement during the quarter for a G.I. center to be opened in 2006. We also had four signed letters of intent for acquisitions at the quarter's end. Because of the progress-to- - MORE - AMSG Reports Second-Quarter Results Page 2 July 26, 2005 date toward completion of the remaining three de novo centers scheduled to open in 2005 and the continuing strength of our pipeline of potential acquisitions, we remain confident of achieving our overall center opening guidance for 2005. "The second quarter extended our long-term record of growth, including 30 consecutive quarters of positive same-facility revenues. Based on our year-to-date results and our expectations for the second half of the year, we have refined our guidance and narrowed the range for net earnings from continuing operations per diluted share for 2005 to a range of $1.33 to $1.34. This guidance includes our assumptions for revenues in a range of $400 million to $420 million for 2005 and growth in same-facility revenues for the remainder of the year in a range of 4% to 7%. Mr. McDonald concluded, "The second quarter was a positive indicator with regard to our same-facility revenues. We will continue working closely with our physician partners to increase market share and thereby support further gains in same-facility revenues. We are also focused on achieving our center opening goals for 2005. As a result, we are confident AmSurg is well positioned to meet its financial objectives for 2005." The information contained in the preceding paragraphs is forward-looking information, and the attainment of these targets is dependent not only on AmSurg's achievement of its assumptions discussed above, but also on the risks and uncertainties listed below that could cause actual results, performance or developments to differ materially from those expressed or implied by this forward-looking information. AmSurg Corp. will hold a conference call to discuss this release today at 5:00 p.m. Eastern time. Investors will have the opportunity to listen to the conference call over the Internet by going to www.amsurg.com and clicking "Investor Relations" or by going to www.streetevents.com at least 15 minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available at these sites shortly after the call through the end of business on August 26, 2005. This press release contains forward-looking statements. These statements, which have been included in reliance on the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, involve risks and uncertainties. Investors are hereby cautioned that these statements may be affected by the important factors, among others, set forth in AmSurg's Annual Report on Form 10-K for the fiscal year ended December 31, 2004, and other filings with the Securities and Exchange Commission, including the following risks: the Company's ability to enter into partnership or operating agreements for new practice-based ambulatory surgery centers; its ability to identify suitable acquisition candidates and negotiate and close acquisition transactions, including centers under letter of intent; its ability to obtain the necessary financing or capital on terms satisfactory to the Company to execute its expansion strategy; its ability to generate and manage growth at the Company's existing centers and through acquisitions and development of new centers; its ability to contract with managed care payers on terms satisfactory to the Company for its existing centers and its centers that are currently under development; its ability to obtain and retain appropriate licensing approvals for its existing centers and centers currently under development; its ability to minimize start-up losses of its - MORE - AMSG Reports Second-Quarter Results Page 3 July 26, 2005 development centers; the ability of its physician partners to recruit additional physicians to their practices; its ability to maintain favorable relations with its physician partners; changes in the medical staff at its centers; changes in the rate setting methodology, payment rates, payment policies and the list of covered surgical procedures for ambulatory surgery centers by the Centers for Medicare & Medicaid Services; the risk of legislative or regulatory changes that would establish uniform rates for outpatient surgical services, regardless of setting; risks associated with the Company's status as a general partner of limited partnerships; the Company's ability to maintain its technological capabilities in compliance with regulatory requirements; risks associated with the valuation and tax deductibility of goodwill; the risk of legislative or regulatory changes that would prohibit physician ownership in ambulatory surgery centers; and the Company's ability to obtain the necessary financing to fund the purchase of its physician partners' minority interest in the event of a regulatory change that would require such a purchase. Consequently, actual operations and results may differ materially from the forward-looking statements included above. AmSurg disclaims any intent or obligation to update these forward-looking statements. AmSurg Corp. develops, acquires and manages physician practice-based ambulatory surgery centers in partnership with surgical and other group practices. At June 30, 2005, AmSurg owned a majority interest in 140 centers and had five centers under development. Contact: Claire M. Gulmi Senior Vice President and Chief Financial Officer (615) 665-1283 - MORE - AMSG Reports Second-Quarter Results Page 4 July 26, 2005 AMSURG CORP. UNAUDITED SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FOR THE THREE MONTHS FOR THE SIX MONTHS ENDED JUNE 30, ENDED JUNE 30, ----------------------- ----------------------- 2005 2004 2005 2004 --------- --------- --------- --------- STATEMENT OF EARNINGS DATA: Revenues $ 98,786 $ 83,739 $ 190,601 $ 162,745 Operating expenses: Salaries and benefits 26,878 22,110 52,717 43,547 Supply cost 10,936 9,429 21,017 18,316 Other operating expenses 19,429 17,868 37,830 33,325 Depreciation and amortization 3,894 3,218 7,561 6,338 --------- --------- --------- --------- Total operating expenses 61,137 52,625 119,125 101,526 --------- --------- --------- --------- Operating income 37,649 31,114 71,476 61,219 Minority interest 20,242 17,582 38,870 34,195 Interest expense, net 983 494 1,873 910 --------- --------- --------- --------- Earnings from continuing operations before income taxes 16,424 13,038 30,733 26,114 Income tax expense 6,438 5,215 12,048 10,445 --------- --------- --------- --------- Net earnings from continuing operations 9,986 7,823 18,685 15,669 Discontinued operations: Earnings (loss) from operations of discontinued interests in surgery centers, net of income taxes (61) 411 (108) 944 Gain (loss) on disposal of discontinued interests in surgery centers, net of income taxes (243) - (243) 1,241 --------- --------- --------- --------- Earnings (loss) from discontinued operations (304) 411 (351) 2,185 --------- --------- --------- --------- Net earnings $ 9,682 $ 8,234 $ 18,334 $ 17,854 ========= ========= ========= ========= Basic earnings per common share: Net earnings from continuing operations $ 0.34 $ 0.26 $ 0.63 $ 0.52 Net earnings $ 0.33 $ 0.27 $ 0.62 $ 0.59 Diluted earnings per common share: Net earnings from continuing operations $ 0.33 $ 0.25 $ 0.62 $ 0.51 Net earnings $ 0.32 $ 0.27 $ 0.61 $ 0.58 Weighted average number of shares and share equivalents (000's): Basic 29,537 30,238 29,494 30,198 Diluted 30,165 30,862 30,094 30,847 OPERATING DATA: Continuing centers in operation at end of period 140 116 140 116 Centers under development/not opened at end of period 5 13 5 13 Centers under letter of intent 4 6 4 6 Average number of centers in operation 135 115 133 114 Average revenue per center $ 731 $ 728 $ 1,437 $ 1,433 Same center revenues increase 5% 5% 4% 6% Procedures performed during the period 187,615 153,253 358,853 298,446 Cash flows provided by operating activities $ 12,550 $ 11,095 $ 30,877 $ 26,185 Cash flows used by investing activities $ (18,799) $ (17,170) $ (40,621) $ (29,605) Cash flows provided by (used in) financing activities $ 6,684 $ 6,060 $ 11,845 $ 4,525 Reconciliation of net earnings to EBITDA (1): Net earnings from continuing operations $ 9,986 $ 7,823 $ 18,685 $ 15,669 Add: income tax expense 6,438 5,215 12,048 10,445 Add: interest expense, net 983 494 1,873 910 Add: depreciation and amortization 3,894 3,218 7,561 6,338 --------- --------- --------- --------- EBITDA $ 21,301 $ 16,750 $ 40,167 $ 33,362 ========= ========= ========= =========
- MORE - AMSG Reports Second-Quarter Results Page 5 July 26, 2005 AMSURG CORP. UNAUDITED SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA (IN THOUSANDS)
JUNE 30, DECEMBER 31, 2005 2004 --------- ------------ BALANCE SHEET DATA: Cash and cash equivalents $ 17,093 $ 14,992 Accounts receivable, net 44,342 39,224 Working capital 61,440 56,302 Total assets 464,439 425,155 Long-term debt and other long-term liabilities 98,814 88,160 Minority interest 43,972 39,710 Shareholders' equity 275,664 254,149
(1) EBITDA is defined as earnings before interest, income taxes and depreciation and amortization. EBITDA should not be considered a measure of financial performance under generally accepted accounting principles. Items excluded from EBITDA are significant components in understanding and assessing financial performance. EBITDA is an analytical indicator used by management and the health care industry to evaluate company performance, allocate resources and measure leverage and debt service capacity. EBITDA should not be considered in isolation or as alternatives to net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, EBITDA as presented may not be comparable to other similarly titled measures of other companies. Net earnings from continuing operations is the financial measure calculated and presented in accordance with generally accepted accounting principles that is most comparable to EBITDA as defined. - MORE - AMSG Reports Second-Quarter Results Page 6 July 26, 2005 AMSURG CORP. UNAUDITED SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA (IN THOUSANDS) Presented below is certain statement of earnings and operating data for 2005 and 2004, which has been restated in order to conform to the current year presentation, which reflects operating results from continuing and discontinued operations.
FOR THE THREE MONTHS ENDED FOR THE YEAR ---------------------------------------------------------- ENDED MARCH 31, MARCH 31, JUNE 30, SEPT. 30, DEC. 31, DEC. 31, 2005 2004 2004 2004 2004 2004 --------- --------- --------- --------- --------- ------------ STATEMENT OF EARNINGS DATA: Revenues $ 91,815 $ 79,006 $ 83,739 $ 81,277 $ 87,800 $ 331,822 Operating expenses: Salaries and benefits 25,839 21,437 22,110 21,914 23,927 89,388 Supply cost 10,081 8,887 9,429 9,040 10,206 37,562 Other operating expenses 18,401 15,457 17,868 15,613 18,013 66,951 Depreciation and amortization 3,667 3,120 3,218 3,315 3,558 13,211 --------- --------- --------- --------- --------- --------- Total operating expenses 57,988 48,901 52,625 49,882 55,704 207,112 --------- --------- --------- --------- --------- --------- Operating income 33,827 30,105 31,114 31,395 32,096 124,710 Minority interest 18,628 16,613 17,582 16,340 17,299 67,834 Interest expense, net 890 416 494 477 699 2,086 --------- --------- --------- --------- --------- --------- Earnings from continuing operations before income taxes 14,309 13,076 13,038 14,578 14,098 54,790 Income tax expense 5,610 5,230 5,215 5,831 5,402 21,678 --------- --------- --------- --------- --------- --------- Net earnings from continuing operations 8,699 7,846 7,823 8,747 8,696 33,112 Discontinued operations: Earnings (loss) from operations of discontinued interests in surgery centers, net of income taxes (47) 533 411 87 (35) 996 Gain on disposal of discontinued interests in surgery centers, net of income taxes - 1,241 - 4,332 25 5,598 --------- --------- --------- --------- --------- --------- Earnings (loss) from discontinued operations (47) 1,774 411 4,419 (10) 6,594 --------- --------- --------- --------- --------- --------- Net earnings $ 8,652 $ 9,620 $ 8,234 $ 13,166 $ 8,686 $ 39,706 ========= ========= ========= ========= ========= ========= Basic earnings per common share: Net earnings from continuing operations $ 0.30 $ 0.26 $ 0.26 $ 0.29 $ 0.30 $ 1.11 Net earnings $ 0.29 $ 0.32 $ 0.27 $ 0.44 $ 0.30 $ 1.33 Diluted earnings per common share: Net earnings from continuing operations $ 0.29 $ 0.25 $ 0.25 $ 0.29 $ 0.29 $ 1.09 Net earnings $ 0.29 $ 0.31 $ 0.27 $ 0.43 $ 0.29 $ 1.30 Weighted average number of shares and share equivalents (000's): Basic 29,451 30,158 30,238 29,886 29,299 29,895 Diluted 30,024 30,832 30,862 30,454 29,880 30,507 OPERATING DATA: Procedures 171,238 145,193 153,253 150,850 161,442 610,738 Reconciliation of net earnings to EBITDA (1): Net earnings from continuing operations $ 8,699 $ 7,846 $ 7,823 $ 8,747 $ 8,696 $ 33,112 Add: income tax expense 5,610 5,230 5,215 5,831 5,402 21,678 Add: interest expense, net 890 416 494 477 699 2,086 Add: depreciation and amortization 3,667 3,120 3,218 3,315 3,558 13,211 --------- --------- --------- --------- --------- --------- EBITDA $ 18,866 $ 16,612 $ 16,750 $ 18,370 $ 18,355 $ 70,087 ========= ========= ========= ========= ========= =========
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