EX-99 2 g97842exv99.txt EX-99 PRESS RELEASE 10/25/05 EXHIBIT 99 FOR IMMEDIATE RELEASE contact: Claire M. Gulmi Senior Vice President and Chief Financial Officer (615)665-1283 AMSURG REPORTS THIRD-QUARTER EARNINGS FROM CONTINUING OPERATIONS OF $0.30 PER DILUTED SHARE ---------------------- AFFIRMS GUIDANCE FOR FULL-YEAR 2005 NASHVILLE, Tenn. (Oct. 25, 2005) - Ken P. McDonald, President and Chief Executive Officer of AmSurg Corp. (NASDAQ: AMSG), today announced financial results for the third quarter and nine months ended September 30, 2005. Revenues increased 23% to a record $99,431,000 for the third quarter from $81,062,000 for the third quarter of 2004. Net earnings from continuing operations were $9,183,000, or $0.30 per diluted share, for the third quarter of 2005 compared with $8,840,000, or $0.29 per diluted share, for the third quarter last year. For the first nine months of 2005, revenues increased 19% to $288,900,000 from $243,597,000 for the first nine months of 2004. Net earnings from continuing operations were $27,979,000, a 13% increase from $24,653,000. Net earnings from continuing operations per diluted share increased 16% to $0.93 for the first nine months of 2005 from $0.80 for the comparable period in 2004. Mr. McDonald commented, "Our third-quarter results were consistent with the preliminary results we announced on October 3, 2005. Our revenue growth for the quarter primarily reflected the 18% expansion in the number of our centers to 141 at the end of the third quarter from 119 at the same time the prior year. In addition, we produced same-center revenue growth of 4% for the quarter, primarily due to increased procedure volume. As discussed in our October 3rd news release, same-center revenue growth was below our original target for the third quarter, which lowered earnings by $0.04 per diluted share. In addition, the timing and number of acquisitions completed during the third quarter had a negative impact on earnings of $0.01 per diluted share compared to our expectations. "During the third quarter, we added two centers through acquisition and one de novo center. We also closed on the disposition of one center that had incurred operating losses since its opening. Hurricanes Katrina and Rita directly affected three centers during the third quarter, all of which remained closed at the quarter's end. One of the centers in New Orleans is no longer operational and is now classified as discontinued operations. The other two centers in Metairie, Louisiana, and Beaumont, Texas, have now reopened and are beginning to perform procedures. Net loss from discontinued operations for the third quarter, which included the property loss at the New Orleans center, was $0.03 per diluted share. -MORE- AMSG Reports Third-Quarter Results Page 2 Oct. 25, 2005 "We completed the third quarter with four centers under development and two centers under letter of intent for acquisition. Upon the completion of these center acquisitions and the scheduled opening of two of the de novo centers under development during the fourth quarter, we expect to meet or exceed the high end of our established range of 16 to 19 new centers for 2005. In addition, our pipeline of potential center acquisitions remains strong." Based on AmSurg's year-to-date results and its expectations for the fourth quarter, the Company affirms its guidance for full-year 2005, which was established in the October 3, 2005, news release. AmSurg's guidance for net earnings from continuing operations per diluted share for 2005 is in a range of $1.18 to $1.21. This guidance includes the Company's assumptions for revenues in a range of $390 million to $395 million for 2005; growth in same-center revenues for the year in a range of 3% to 4%; and a negative impact in the fourth quarter related to the centers directly affected by Hurricanes Katrina and Rita, expected in a range of $0.01 to $0.02 per diluted share. 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 November 25, 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 generate and manage growth at the Company's existing centers and through acquisitions and development of new centers; its 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; the ability of its physician partners to recruit additional physicians to their practices; its ability to obtain the necessary financing or capital on terms satisfactory to the Company to execute its expansion strategy; 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 development centers; 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 -MORE- AMSG Reports Third-Quarter Results Page 3 Oct. 25, 2005 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 September 30, 2005, AmSurg owned a majority interest in 141 centers and had four centers under development. -MORE- AMSG Reports Third-Quarter Results Page 4 Oct. 25, 2005 AMSURG CORP. UNAUDITED SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FOR THE THREE MONTHS FOR THE NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, -------------------- ------------------- STATEMENT OF EARNINGS DATA: 2005 2004 2005 2004 -------- -------- -------- --------- Revenues $ 99,431 $ 81,062 $288,900 $ 243,597 Operating expenses: Salaries and benefits 28,336 21,797 80,658 65,172 Supply cost 11,607 8,936 32,303 27,162 Other operating expenses 19,810 15,407 57,224 48,469 Depreciation and amortization 3,980 3,253 11,309 9,477 -------- -------- -------- --------- Total operating expenses 63,733 49,393 181,494 150,280 -------- -------- -------- --------- Operating income 35,698 31,669 107,406 93,317 Minority interest 19,497 16,489 58,543 50,916 Interest expense, net 1,099 447 2,845 1,312 -------- -------- -------- --------- Earnings from continuing operations before income taxes 15,102 14,733 46,018 41,089 Income tax expense 5,919 5,893 18,039 16,436 -------- -------- -------- --------- Net earnings from continuing operations 9,183 8,840 27,979 24,653 Discontinued operations: Earnings (loss) from operations of discontinued interests in surgery centers, net of income taxes (79) (6) (299) 794 Gain (loss) on disposal of discontinued interests in surgery centers, net of income taxes (743) 4,332 (986) 5,573 -------- -------- -------- --------- Earnings (loss) from discontinued operations (822) 4,326 (1,285) 6,367 -------- -------- -------- --------- Net earnings $ 8,361 $ 13,166 $ 26,694 $ 31,020 ======== ======== ======== ========= Basic earnings per common share: Net earnings from continuing operations $ 0.31 $ 0.30 $ 0.95 $ 0.82 Net earnings $ 0.28 $ 0.44 $ 0.90 $ 1.03 Diluted earnings per common share: Net earnings from continuing operations $ 0.30 $ 0.29 $ 0.93 $ 0.80 Net earnings $ 0.28 $ 0.43 $ 0.89 $ 1.01 Weighted average number of shares and share equivalents (000's): Basic 29,625 29,886 29,538 30,094 Diluted 30,287 30,454 30,159 30,716 OPERATING DATA: Continuing centers in operation at end of period 141 119 141 119 Centers under development/not opened at end of period 4 12 4 12 Centers under letter of intent 2 8 2 8 Average number of centers in operation 139 115 134 113 Average revenue per center $ 714 $ 706 $ 2,164 $ 2,150 Same center revenues increase 4% 2% 4% 5% Procedures performed during the period 189,729 150,457 546,867 448,639 Cash flows provided by operating activities $ 21,104 $ 15,404 $ 51,981 $ 41,589 Cash flows used by investing activities $(17,957) $ (7,690) $(58,578) $ (37,295) Cash flows provided by (used in) financing activities $ 1,784 $ (7,047) $ 13,629 $ (2,522) Reconciliation of net earnings to EBITDA (1): Net earnings from continuing operations $ 9,183 $ 8,840 $ 27,979 $ 24,653 Add: income tax expense 5,919 5,893 18,039 16,436 Add: interest expense, net 1,099 447 2,845 1,312 Add: depreciation and amortization 3,980 3,253 11,309 9,477 -------- -------- -------- --------- EBITDA $ 20,181 $ 18,433 $ 60,172 $ 51,878 ======== ======== ======== =========
-MORE- AMSG Reports Third-Quarter Results Page 5 Oct. 25, 2005 AMSURG CORP. UNAUDITED SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA (IN THOUSANDS)
SEPT. 30, DEC. 31, 2005 2004 ------------- -------- BALANCE SHEET DATA: Cash and cash equivalents $ 22,024 $ 14,992 Accounts receivable, net 44,298 39,224 Working capital 63,653 56,302 Total assets 480,035 425,155 Long-term debt and other long-term liabilities 99,614 88,160 Minority interest 44,931 39,710 Shareholders' equity 285,662 254,149
(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 Third-Quarter Results Page 6 Oct. 25, 2005 AMSURG CORP. UNAUDITED SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA (IN THOUSANDS) Presented below is certain statement of earnings and operating data for prior quarterly periods in 2005, which have been restated in order to include additional discontinued operations.
FOR THE THREE MONTHS ENDED FOR THE SIX ------------------- MONTHS ENDED MARCH 31, JUNE 30, JUNE 30, 2005 2005 2005 --------- -------- --------- STATEMENT OF EARNINGS DATA: Revenues $ 91,263 $ 98,206 $ 189,469 Operating expenses: Salaries and benefits 25,663 26,659 52,322 Supply cost 9,918 10,778 20,696 Other operating expenses 18,181 19,233 37,414 Depreciation and amortization 3,571 3,758 7,329 --------- -------- --------- Total operating expenses 57,333 60,428 117,761 --------- -------- --------- Operating income 33,930 37,778 71,708 Minority interest 18,709 20,337 39,046 Interest expense, net 828 918 1,746 --------- -------- --------- Earnings from continuing operations before income taxes 14,393 16,523 30,916 Income tax expense 5,642 6,478 12,120 --------- -------- --------- Net earnings from continuing operations 8,751 10,045 18,796 Discontinued operations: Loss from operations of discontinued interests in surgery centers, net of income taxes (99) (121) (220) Loss on disposal of discontinued interests in surgery centers, net of income taxes - (243) (243) --------- -------- --------- Loss from discontinued operations (99) (364) (463) --------- -------- --------- Net earnings $ 8,652 $ 9,681 $ 18,333 ========= ======== ========= Basic earnings per common share: Net earnings from continuing operations $ 0.30 $ 0.34 $ 0.64 Net earnings $ 0.29 $ 0.33 $ 0.62 Diluted earnings per common share: Net earnings from continuing operations $ 0.29 $ 0.33 $ 0.62 Net earnings $ 0.29 $ 0.32 $ 0.61 Weighted average number of shares and share equivalents (000's): Basic 29,451 29,537 29,494 Diluted 30,024 30,165 30,094 OPERATING DATA: Procedures 170,427 186,711 357,138 Reconciliation of net earnings to EBITDA (1): Net earnings from continuing operations $ 8,751 $ 10,045 $ 18,796 Add: income tax expense 5,642 6,478 12,120 Add: interest expense, net 828 918 1,746 Add: depreciation and amortization 3,571 3,758 7,329 --------- -------- --------- EBITDA $ 18,792 $ 21,199 $ 39,991 ========= ======== =========
-MORE- AMSG Reports Third-Quarter Results Page 7 Oct. 25, 2005 AMSURG CORP. UNAUDITED SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA (IN THOUSANDS) Presented below is certain statement of earnings and operating data for 2004, which have 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, JUNE 30, SEPT. 30, DEC. 31, DEC. 31, 2004 2004 2004 2004 2004 --------- -------- --------- -------- ------------ STATEMENT OF EARNINGS DATA: Revenues $ 78,942 $ 83,593 $ 81,062 $ 87,326 $ 330,923 Operating expenses: Salaries and benefits 21,360 22,015 21,797 23,774 88,946 Supply cost 8,861 9,365 8,936 10,096 37,258 Other operating expenses 15,337 17,725 15,407 17,817 66,286 Depreciation and amortization 3,055 3,169 3,253 3,440 12,917 --------- -------- --------- -------- --------- Total operating expenses 48,613 52,274 49,393 55,127 205,407 --------- -------- --------- -------- --------- Operating income 30,329 31,319 31,669 32,199 125,516 Minority interest 16,731 17,696 16,489 17,376 68,292 Interest expense, net 399 466 447 643 1,955 --------- -------- --------- -------- --------- Earnings from continuing operations before income taxes 13,199 13,157 14,733 14,180 55,269 Income tax expense 5,280 5,263 5,893 5,433 21,869 --------- -------- --------- -------- --------- Net earnings from continuing operations 7,919 7,894 8,840 8,747 33,400 Discontinued operations: Earnings (loss) from operations of discontinued interests in surgery centers, net of income taxes 460 340 (6) (86) 708 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 1,701 340 4,326 (61) 6,306 --------- -------- --------- -------- --------- Net earnings $ 9,620 $ 8,234 $ 13,166 $ 8,686 $ 39,706 ========= ======== ========= ======== ========= Basic earnings per common share: Net earnings from continuing operations $ 0.26 $ 0.26 $ 0.30 $ 0.30 $ 1.12 Net earnings $ 0.32 $ 0.27 $ 0.44 $ 0.30 $ 1.33 Diluted earnings per common share: Net earnings from continuing operations $ 0.26 $ 0.26 $ 0.29 $ 0.29 $ 1.09 Net earnings $ 0.31 $ 0.27 $ 0.43 $ 0.29 $ 1.30 Weighted average number of shares and share equivalents (000's): Basic 30,158 30,238 29,886 29,299 29,895 Diluted 30,832 30,862 30,454 29,880 30,507 OPERATING DATA: Procedures 145,123 153,059 150,457 160,739 609,378 Reconciliation of net earnings to EBITDA (1): Net earnings from continuing operations $ 7,919 $ 7,894 $ 8,840 $ 8,747 $ 33,400 Add: income tax expense 5,280 5,263 5,893 5,433 21,869 Add: interest expense, net 399 466 447 643 1,955 Add: depreciation and amortization 3,055 3,169 3,253 3,440 12,917 --------- -------- --------- -------- --------- EBITDA $ 16,653 $ 16,792 $ 18,433 $ 18,263 $ 70,141 ========= ======== ========= ======== =========
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