EX-99 2 g12932exv99.htm EX-99 PRESS RELEASE Ex-99 Press Release
 

Exhibit 99
Press Release
         
 
  Contact:   Claire M. Gulmi
 
      Executive Vice President and
 
      Chief Financial Officer
 
      (615) 665-1283
AMSURG ANNOUNCES NET EARNINGS FROM CONTINUING OPERATIONS PER
DILUTED SHARE OF $0.37 FOR FIRST-QUARTER 2008
NASHVILLE, Tenn. — (April 22, 2008) — Christopher A. Holden, President and Chief Executive Officer of AmSurg Corp. (Nasdaq: AMSG), today announced financial results for the first quarter ended March 31, 2008. Revenues grew to a record $147,421,000 for the quarter, up 18% from $125,190,000 for the first quarter of 2007. Net earnings from continuing operations increased 16% to $11,678,000 from $10,079,000. Net earnings from continuing operations per diluted share were $0.37 for the first quarter of 2008, an increase of 12% from $0.33 for the first quarter of 2007.
          “We are pleased with AmSurg’s performance for the first quarter of 2008, which was consistent with our guidance for the quarter,” stated Mr. Holden. “As expected, the centers added since the end of the first quarter last year accounted for the majority of a 17% increase in procedures on a comparable-quarter basis. In addition, same-center revenues increased 3% for the quarter from the first quarter of 2007. Consistent with our guidance for 2008, this same-center performance included a negative impact of one percentage point from the effect of the Medicare rule revising the payment system for ASCs, which was effective January 1, 2008.
          “The Company acquired two GI centers during the first quarter and classified one center as held for sale, bringing the total of continuing centers in operation to 177 at the end of the quarter, an increase of 19 since the first quarter of 2007. We also completed the quarter with two centers under development, one of which is expected to open in 2008. We had one center awaiting certificate of need certification and three centers under letter of intent.
          “We continued to generate substantial cash flow from operations, which for the first quarter rose 13% to $21,495,000 from $19,086,000 for the first quarter of 2007. We used this cash flow, combined with our cash and cash equivalents, to fund the two first-quarter acquisitions, as well as to reduce bank debt by approximately $17 million. As a result, the Company’s ratio of long-term debt to total capitalization improved to 33% at the end of the first quarter from 35% at the end of the fourth quarter of 2007. We also completed the quarter with cash and cash equivalents of $24,116,000 and availability under our revolving credit facility of nearly $115 million.
          Based on AmSurg’s financial performance for the first quarter, as well as its outlook for 2008, the Company today affirmed its established guidance for 2008 and provided its guidance for the second quarter of the year as follows:
    Revenues in a range of $600 million to $620 million for 2008.
 
    Same-center revenue growth of 3% to 4% for the full year, which includes a negative impact of one percentage point from the effect of the Medicare rule revising the payment system for ASCs, which was effective January 1, 2008.
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April 22, 2008
    The addition of 12 to 15 centers for the year, including the opening of one de novo center.
 
    An estimated effective income tax rate for the year of 39.8%.
 
    Net earnings per diluted share for 2008 in a range of $1.53 to $1.55, including a negative $0.05 impact from the effect of the revised Medicare payment system.
 
    Net earnings per diluted share for the second quarter of 2008 in a range of $0.38 to $0.39 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.
          Mr. Holden concluded, “AmSurg’s first-quarter performance supports our confidence in the Company’s growth prospects for 2008 and beyond. We are the largest provider in an industry with favorable growth dynamics, and we are well positioned competitively. In addition to having the expertise, capital and other resources to expand our business model in a fragmented industry, we have initiated a number of wide-ranging initiatives designed to enhance our business model. We expect these initiatives to gain increasing traction in the quarters and years ahead, increasing our ability to serve our physician partners and our centers’ patients, to expand our base of centers in operation and to improve our center and corporate efficiency and productivity.”
          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.earnings.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 July 22, 2008.
          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, 2007, and other filings with the Securities and Exchange Commission, including the following risks: the risk that payments from third-party payors, including government healthcare programs, may decrease or not increase as the Company’s costs increase; the Company’s ability to maintain favorable relations with its physician partners; the Company’s ability to acquire and develop additional surgery centers on favorable terms; the Company’s ability to grow revenues by increasing procedure volume while maintaining its operating margins and profitability at its existing centers; the Company’s ability to manage the growth in its business; the Company’s ability to obtain sufficient capital resources to complete acquisitions and develop new surgery centers; the Company’s ability to compete for physician partners, managed care contracts, patients and strategic relationships; risks associated with weather and other factors that may affect the Company’s surgery centers; uncertainties associated with judicial, regulatory and legislative developments in New Jersey; the Company’s
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April 22, 2008
failure to comply with applicable laws and regulations; the risk of changes in legislation, regulations or regulatory interpretations that may negatively affect the Company; the risk of becoming subject to federal and state investigation; the risk of regulatory changes that may obligate the Company to buy out interests of physicians who are minority owners of its surgery centers; risks associated with the Company’s status as a general partner of limited partnerships; the Company’s legal responsibility to minority owners of its surgery centers, which may conflict with its interests and prevent it from acting solely in its best interests; risks associated with the write-off of the impaired portion of intangible assets; and risks associated with the tax deductibility of goodwill. Consequently, actual results, performance or developments may differ materially from the forward-looking statements included above. AmSurg disclaims any intent or obligation to update these forward-looking statements.
          AmSurg Corp. acquires, develops and operates ambulatory surgery centers in partnership with physician practice groups throughout the United States. At March 31, 2008, AmSurg owned a majority interest in 177 continuing centers in operation and had two centers under development.
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April 22, 2008
AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data
(Dollars in thousands, except per share amounts)
                 
    For the Three Months  
    Ended March 31,  
Statement of Earnings Data:   2008     2007  
 
               
Revenues
  $ 147,421     $ 125,190  
 
               
Operating expenses:
               
Salaries and benefits
    43,008       37,677  
Supply cost
    17,024       14,075  
Other operating expenses
    30,687       24,479  
Depreciation and amortization
    5,292       4,617  
 
           
Total operating expenses
    96,011       80,848  
 
           
Operating income
    51,410       44,342  
 
               
Minority interest
    29,099       25,137  
Interest expense, net
    2,823       2,479  
 
           
 
               
Earnings from continuing operations before income taxes
    19,488       16,726  
Income tax expense
    7,810       6,647  
 
           
Net earnings from continuing operations
    11,678       10,079  
 
               
Discontinued operations:
               
Earnings from operations of discontinued interests in surgery centers, net of income tax expense
    28       198  
 
           
Net earnings
  $ 11,706     $ 10,277  
 
           
 
               
Basic earnings per common share:
               
Net earnings from continuing operations
  $ 0.37     $ 0.34  
Net earnings
  $ 0.37     $ 0.34  
Diluted earnings per common share:
               
Net earnings from continuing operations
  $ 0.37     $ 0.33  
Net earnings
  $ 0.37     $ 0.34  
 
               
Weighted average number of shares and share equivalents (000’s):
               
Basic
    31,298       30,046  
Diluted
    31,790       30,505  
 
               
Operating Data:
               
 
               
Continuing centers in operation at end of period
    177       158  
Centers under development/not opened at end of period
    2       5  
Development centers awaiting CON approval at end of period
    1        
Centers under letter of intent
    3       3  
Average number of centers in operation
    177       158  
Average revenue per center
  $ 833     $ 792  
Same center revenues increase
    3 %     3 %
Procedures performed during the period
    271,237       230,898  
Reconciliation of net earnings to EBITDA (1):
               
Net earnings from continuing operations
  $ 11,678     $ 10,079  
Add: income tax expense
    7,810       6,647  
Add: interest expense, net
    2,823       2,479  
Add: depreciation and amortization
    5,292       4,617  
 
           
EBITDA
  $ 27,603     $ 23,822  
 
           
 
(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 an alternative 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.
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April 22, 2008
AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data
(Dollars in thousands)
                 
    Mar. 31,     Dec. 31,  
Balance Sheet Data:   2008     2007  
 
               
Assets
               
 
               
Current assets:
               
Cash and cash equivalents
  $ 24,116     $ 29,953  
Accounts receivable, net of allowance of $9,364 and $8,310 respectively
    63,925       61,284  
Supplies inventory
    7,305       6,882  
Deferred income taxes
    1,545       1,354  
Prepaid and other current assets
    18,242       18,509  
Current assets held for sale
    141        
 
           
Total current assets
    115,274       117,982  
 
               
Long-term receivables and deposits
    977       1,653  
Property and equipment, net
    104,625       104,874  
Intangible assets, net
    563,281       557,125  
Long-term assets held for sale
    1,118        
 
           
Total assets
  $ 785,275     $ 781,634  
 
           
 
               
Liabilities and Shareholders’ Equity
               
 
               
Current liabilities:
               
Current portion of long-term debt
  $ 5,139     $ 5,781  
Accounts payable
    10,865       12,703  
Accrued salaries and benefits
    12,213       12,415  
Other accrued liabilities
    2,420       2,291  
Current income taxes payable
    4,878       1,000  
Current liabilities held for sale
    226        
 
           
Total current liabilities
    35,741       34,190  
 
               
Long-term debt
    200,219       216,822  
Deferred income taxes
    44,080       41,990  
Other long-term liabilities
    15,868       15,401  
Minority interest
    64,934       62,006  
Shareholders’ equity:
               
Common stock, no par value 70,000,000 shares authorized, 31,417,086 and 31,202,629 shares outstanding, respectively
    178,165       172,536  
Deferred compensation
    (7,069 )     (3,916 )
Retained earnings
    255,748       244,042  
Accumulated other comprehensive loss, net of income taxes
    (2,411 )     (1,437 )
 
           
Total shareholders’ equity
    424,433       411,225  
 
           
Total liabilities and shareholders’ equity
  $ 785,275     $ 781,634  
 
           
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April 22, 2008
AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data
(Dollars in thousands)
                 
    For the Three Months  
    Ended March 31,  
Statement of Cash Flow Data:   2008     2007  
 
               
Cash flows from operating activities:
               
Net earnings
  $ 11,706     $ 10,277  
Adjustments to reconcile net earnings to net cash flows provided by operating activities:
               
Minority interest
    29,099       25,137  
Distributions to minority partners
    (26,939 )     (22,579 )
Depreciation and amortization
    5,292       4,617  
Share-based compensation
    1,066       1,078  
Excess tax benefit from share-based compensation
    (271 )     (880 )
Deferred income taxes
    2,514       1,731  
Increase (decrease) in cash and cash equivalents, net of effects of acquisition and dispositions, due to changes in:
               
Accounts receivable, net
    (2,359 )     (2,301 )
Supplies inventory
    (132 )     178  
Prepaid and other current assets
    263       (1,070 )
Accounts payable
    (1,793 )     (2,530 )
Accrued expenses and other liabilities
    2,982       5,224  
Other, net
    67       204  
 
           
Net cash flows provided by operating activities
    21,495       19,086  
 
               
Cash flows from investing activities:
               
Acquisition of interest in surgery centers
    (7,897 )     (42,213 )
Acquisition of property and equipment
    (4,535 )     (4,149 )
Decrease in long-term receivables
    625       431  
 
           
Net cash flows used in investing activities
    (11,807 )     (45,931 )
 
               
Cash flows from financing activities:
               
Proceeds from long-term borrowings
    10,956       43,701  
Repayment on long-term borrowings
    (28,206 )     (19,533 )
Proceeds from issuance of common stock upon exercise of stock options
    1,139       3,903  
Proceeds from capital contributions by minority partners
    321       32  
Excess tax benefit from share-based compensation
    271       880  
Financing cost incurred
    (6 )     (5 )
 
           
Net cash flows (used in) provided by financing activities
    (15,525 )     28,978  
 
           
Net (decrease) increase in cash and cash equivalents
    (5,837 )     2,133  
Cash and cash equivalents, beginning of period
    29,953       20,083  
 
           
Cash and cash equivalents, end of period
  $ 24,116     $ 22,216  
 
           
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April 22, 2008
AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data
(In thousands)
Presented below is certain statement of earnings and operating data for 2007, which have been restated in order to present additional discontinued operations.
                                         
                                    For the Year  
    For the Three Months Ended     Ended  
    March 31,     June 30,     Sept. 30,     Dec. 31,     Dec. 31,  
Statement of Earnings Data:   2007     2007     2007     2007     2007  
 
               
Revenues
  $ 125,190     $ 129,701     $ 130,539     $ 144,065     $ 529,495  
 
                                       
Operating expenses:
                                       
Salaries and benefits
    37,677       37,491       38,476       41,584       155,228  
Supply cost
    14,075       14,648       15,145       16,749       60,617  
Other operating expenses
    24,479       27,533       26,437       30,040       108,489  
Depreciation and amortization
    4,617       4,666       4,814       5,335       19,432  
 
                             
Total operating expenses
    80,848       84,338       84,872       93,708       343,766  
 
                             
Operating income
    44,342       45,363       45,667       50,357       185,729  
 
               
Minority interest
    25,137       25,780       25,827       28,097       104,841  
Interest expense, net
    2,479       2,192       2,208       2,893       9,772  
 
                             
 
               
Earnings from continuing operations before income taxes
    16,726       17,391       17,632       19,367       71,116  
Income tax expense
    6,647       6,515       6,845       7,661       27,668  
 
                             
Net earnings from continuing operations
    10,079       10,876       10,787       11,706       43,448  
 
                                       
Discontinued operations:
                                       
Earnings (loss) from operations of discontinued interest in surgery centers, net of income taxes
    198       169       (92 )     122       397  
Gain (loss) on disposal of discontinued interests in surgery centers, net of income tax benefit
          147       (705 )     888       330  
 
                             
Net earnings (loss) from discontinued operations
    198       316       (797 )     1,010       727  
 
                             
 
                                       
Net earnings
  $ 10,277     $ 11,192     $ 9,990     $ 12,716     $ 44,175  
 
                             
 
                                       
Basic earnings per common share:
                                       
Net earnings from continuing operations
  $ 0.34     $ 0.36     $ 0.35     $ 0.38     $ 1.42  
Net earnings
  $ 0.34     $ 0.37     $ 0.32     $ 0.41     $ 1.44  
Diluted earnings per common share:
                                       
Net earnings from continuing operations
  $ 0.33     $ 0.35     $ 0.35     $ 0.37     $ 1.40  
Net earnings
  $ 0.34     $ 0.36     $ 0.32     $ 0.40     $ 1.42  
 
                                       
Weighted average number of shares and share equivalents (000’s):
                                       
Basic
    30,046       30,541       30,778       31,110       30,619  
Diluted
    30,505       31,085       31,175       31,644       31,102  
 
                                       
Operating Data:
                                       
 
                                       
Procedures
    230,898       239,302       244,607       264,307       979,114  
Reconciliation of net earnings to EBITDA (1):
                                       
Net earnings from continuing operations
  $ 10,079     $ 10,876     $ 10,787     $ 11,706     $ 43,448  
Add: income tax expense
    6,647       6,515       6,845       7,661       27,668  
Add: interest expense, net
    2,479       2,192       2,208       2,893       9,772  
Add: depreciation and amortization
    4,617       4,666       4,814       5,335       19,432  
 
                             
 
                                       
EBITDA
  $ 23,822     $ 24,249     $ 24,654     $ 27,595     $ 100,320  
 
                             
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