AmSurg's Fourth-Quarter Earnings Grow 29% to $0.40 Per Diluted Share; Declares 3-for-2 Stock Split.Business Editors NASHVILLE Nashville, city (1990 pop. 487,969), state capital, coextensive with Davidson co., central Tenn., on the Cumberland River, in a fertile farm area; inc. as a city 1806, merged with Davidson co. 1963. , Tenn.--(BUSINESS WIRE)--Feb. 24, 2004 Ken P. McDonald, President and Chief Executive Officer of AmSurg Corp. (Nasdaq:AMSG AMSG Air Mobility Support Group (US Air Force) AMSG Ad Majorem Satanae Gloriam AMSG Allied Military Security Guidelines AMSG Advanced Metal Services Group AMSG Appropriate Military Systems Guide AMSG American Subterfuge Clothing ), today announced financial results for the fourth quarter and year ended December December: see month. 31, 2003. Revenues for the quarter rose 18% to $80,528,000 from $68,242,000 for the fourth quarter of 2002. Net earnings were $8,255,000, up 26% from $6,541,000. Earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share increased 29% to $0.40 for the fourth quarter of 2003 from $0.31 for the fourth quarter of the prior year. AmSurg's revenues increased 20% for full-year 2003 to $301,408,000 from $251,525,000 for 2002. Net earnings rose 25% to $30,126,000 from $24,022,000. Earnings per diluted share increased 27% to $1.47 for 2003 from $1.16 for 2002. The Company also announced today that its Board of Directors has approved a 3-for-2 stock split to be effected in the form of a 50% stock dividend. The new shares will be distributed on March 24, 2004, to shareholders of record at the close of business on March 8, 2004. AmSurg had 20,072,472 shares of common stock outstanding on December 31, 2003. Mr. McDonald remarked, "Our Board's declaration of our first stock split as a public company reflects not only AmSurg's strong operating and financial performance for the fourth quarter and full-year 2003, but also the Board's confidence in the Company's continuing growth prospects. In achieving 24 consecutive quarters of record revenues, record net earnings and increased same-center revenues, AmSurg has demonstrated its ability to implement proven growth strategies with the discipline and consistency to sustain long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. profitable growth. "We attribute (1) In relational database management, a field within a record. (2) In object technology, a single element of data. See instance attribute and static attribute. our revenue growth for the fourth quarter of 2003 primarily to the increase in procedures compared with the fourth quarter of 2002. This procedure growth resulted from the expansion of our base of centers in operation from 107 to 116 at the end of 2003 and from our same-center revenue growth of 6% for the quarter. We opened four de novo [Latin, Anew.] A second time; afresh. A trial or a hearing that is ordered by an appellate court that has reviewed the record of a hearing in a lower court and sent the matter back to the original court for a new trial, as if it had not been previously heard nor decided. centers during 2003 and acquired six centers, including two large centers in the first and third quarters that each generate revenues approximately three times the rate of our average center. In addition, we closed one center in the first quarter in conjunction with the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of its real estate lease. The fourth quarter included the opening of three of the de novo centers and the completion of two of the acquisitions. AmSurg's same-center revenue growth was 7% for 2003. "Our center development pipeline remained robust during the fourth quarter. We completed the year with 12 centers under development, and three of our eight centers under letter of intent at year end were for de novo centers. We expect to open seven of the centers under development during 2004, one of which opened in January January: see month. . The remaining five centers under development are scheduled to open in the first quarter of 2005. We are also pleased with our pipeline of potential acquisitions. One of the centers under letter of intent at year end was for the acquisition of a large orthopedic orthopedic /or·tho·pe·dic/ (-pe´dik) pertaining to the correction of deformities of the musculoskeletal system; pertaining to orthopedics. center. That transaction has now been completed. Four of the centers included in our signed letters of intent will be purchased in a single transaction if Certificate of Need approval is granted by the state. Determination of Certificate of Need for this acquisition is expected to occur in the third quarter of 2004. These transactions, and a recently signed letter of intent, if completed, will constitute approximately 60% of our acquisition capital expenditure target for 2004. The Company remains well positioned to fund its center development and acquisition efforts in 2004 with cash and cash equivalents of $14.3 million at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. and a ratio of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. to total capitalization Total capitalization The total long-term debt and all types of equity of a company that constitutes its capital structure. total capitalization See capitalization. of 18.6%. We also expect to continue to produce significant cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses for 2004, which, for 2003, was $48.1 million, or 1.6 times net earnings." The Company's financial guidance for 2004 assumes the net addition of 12 to 15 de novo or acquired centers during 2004, including the planned disposition of three existing centers during the first quarter of the year. It also assumes growth in same-center revenues in 2004 of 4% to 7%. Based on these assumptions, AmSurg's guidance for 2004 revenues is in a range of $350 million to $370 million and its guidance for 2004 earnings per diluted share is in a range of $1.80 to $1.84. This guidance includes an expected gain The expected gain (or expected return) is the weighted-average most likely outcome in gambling, probability theory, economics or finance. Discrete scenarios In gambling and probability theory, there is usually a discrete set of possible outcomes. of $0.06 per diluted share related to the dispositions of the three centers in the first quarter, discussed above. The information contained in the preceding paragraph is forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. 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. McDonald concluded, "AmSurg remains the undisputed leader in the single-specialty surgery center industry, a position that is based on our ability to help our physician partners provide high quality low cost surgery services in a manner that creates high patient and physician satisfaction. We expect the tremendous institutional expertise we have earned in developing this industry over the past 12 years, as well as our seasoned management team and strong financial position, will enable us to enhance our position of industry leadership in 2004." 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 Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the by going to www.amsurg.com and clicking Investor Relations Investor relations The process by which the corporation communicates with its investors. or by going to www.streetevents.com at least 15 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , 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 March 24, 2004. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . These statements, which have been included in reliance on the "safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 filings with the Securities and Exchange Commission, and, consequently, actual operations and results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, the Company's ability to enter into partnership or operating agreements An operating agreement is an agreement among limited liability company ("LLC") members governing the LLC's business, and Member's financial and management rights and duties. No state requires an LLC to have an Operating agreement. for new practice-based ambulatory surgery centers ambulatory surgery center A free-standing center that performs various types of surgery ; 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; 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 Start-up The earliest stage of a new business venture. losses of its development centers; the ability of its physician partners to recruit additional physicians to their practices; its ability to maintain favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. 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 Surgical procedures have long and possibly daunting names. The meaning of many surgical procedure names can often be understood if the name is broken into parts. For example in splenectomy, "ectomy" is a suffix meaning the removal of a part of the body. "Splene-" means spleen. for ambulatory surgery centers by the Centers for Medicare Medicare, national health insurance program in the United States for persons aged 65 and over and the disabled. It was established in 1965 with passage of the Social Security Amendments and is now run by the Centers for Medicare and Medicaid Services. & Medicaid Medicaid, national health insurance program in the United States for low-income persons; established in 1965 with passage of the Social Security Amendments and now run by the Centers for Medicare and Medicaid Services. Services; the risk of legislative or regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. changes that would establish uniform rates for outpatient outpatient /out·pa·tient/ (-pa-shent) a patient who comes to the hospital, clinic, or dispensary for diagnosis and/or treatment but does not occupy a bed. out·pa·tient n. 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 Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. ; risks associated with the valuation and tax deductibility of goodwill; the risk of legislative or regulatory changes that would prohibit pro·hib·it tr.v. pro·hib·it·ed, pro·hib·it·ing, pro·hib·its 1. To forbid by authority: Smoking is prohibited in most theaters. See Synonyms at forbid. 2. 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. 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 December 31, 2003, AmSurg owned a majority interest in 116 centers and had 12 centers under development.
AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data
(Dollars in thousands, except per share amounts)
For the Three Months For the Year
Ended Ended
December 31, December 31,
------------ ------------
Statement of Earnings Data: 2003 2002 2003 2002
---------------------------------------- -------- --------- ---------
Revenues $80,528 $68,242 $301,408 $251,525
Operating expenses:
Salaries and benefits 20,371 18,477 78,659 66,332
Supply cost 9,743 8,316 35,195 30,060
Other operating expenses 16,650 13,678 62,383 52,815
Depreciation and
amortization 2,954 2,745 11,493 9,995
-------- -------- --------- ---------
Total operating
expenses 49,718 43,216 187,730 159,202
-------- -------- --------- ---------
Operating income 30,810 25,026 113,678 92,323
Minority interest 16,650 13,871 61,927 51,096
Interest expense, net 402 254 1,542 1,190
-------- -------- --------- ---------
Earnings before income
taxes 13,758 10,901 50,209 40,037
Income tax expense 5,503 4,360 20,083 16,015
-------- -------- --------- ---------
Net earnings $8,255 $6,541 $30,126 $24,022
======== ======== ========= =========
Earnings per common share:
Basic $0.41 $0.32 $1.50 $1.18
Diluted $0.40 $0.31 $1.47 $1.16
Weighted average number of
shares and share equivalents
(000's):
Basic 20,050 20,545 20,093 20,390
Diluted 20,540 20,815 20,444 20,728
Operating Data:
---------------
Centers in operation at end of
period 116 107 116 107
Centers under development/not
opened at end of period 12 9 12 9
Development centers awaiting CON
approval at end of period - 2 - 2
Centers under letter of intent 8 6 8 6
Average number of centers in
operation 113 103 109 98
Average revenue per center $715 $665 $2,769 $2,564
Same center revenues increase 6% 12% 7% 13%
Procedures performed during the
period 145,349 126,317 550,791 471,155
Cash flows provided by
operating activities $13,697 $10,578 $48,095 $46,919
Cash flows used by investing
activities $(8,950) $(6,719) $(48,384) $(43,832)
Cash flows provided by (used
in) financing activities $(6,088) $(4,072) $1,227 $(841)
Reconciliation of net earnings
to EBITDA (1):
Net earnings $8,255 $6,541 $30,126 $24,022
Add: income tax expense 5,503 4,360 20,083 16,015
Add: interest expense,
net 402 254 1,542 1,190
Add: depreciation and
amortization 2,954 2,745 11,493 9,995
-------- -------- --------- ---------
EBITDA $17,114 $13,900 $63,244 $51,222
======== ======== ========= =========
Unaudited Selected Consolidated Financial and Operating Data
(In thousands)
Dec. 31, Dec. 31,
Balance Sheet Data: 2003 2002
-------------------------------- --------- ---------
Cash and cash equivalents $14,258 $13,320
Accounts receivable, net 36,172 29,597
Working capital 46,009 37,414
Total assets 356,189 299,814
Long-term debt 53,137 27,884
Minority interest 36,796 29,869
Shareholders' equity 232,898 216,364
(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 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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