AmSurg Announces 31% Growth in First Quarter Earnings Per Diluted Share to $0.34; Increases Earnings Guidance for 2003 to a Range of $1.44 to $1.48.Business Editors NASHVILLE, Tenn.--(BUSINESS WIRE)--April 22, 2003 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 first quarter of 2003. Revenues for the first quarter, which ended March 31, 2003, were $71,060,000, a 22% increase over $58,290,000 for the first quarter of 2002. Net earnings for the quarter rose 30% to $7,003,000 from $5,372,000 for the comparable prior-year quarter. Net 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 31% to $0.34 for the first quarter of 2003 from $0.26 for the first quarter last year. "We are pleased with AmSurg's first-quarter financial results," remarked Mr. McDonald. "Our revenue growth continues to reflect strong same-center revenues, which increased 9% for the first quarter, as well as significant growth in our number of centers in operation. AmSurg had 107 centers in operation at the end of the first quarter, up 13% from 95 centers in operation at the same time in 2002. At the end of the first quarter, we acquired one large center generating revenues approximately three times the size of our average surgery center. As expected, we also closed one center 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. With the transition of the two centers that had been awaiting issuance of certificates of need into centers under development and the cancellation of one letter of intent center, we completed the first quarter with 11 centers under development and four centers under letter of intent. "Virtually all of our same-center revenue growth for the latest quarter continued to be attributable to our growth in 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. . With the first quarter's same-center revenue growth, the Company has now produced increased same-center revenues for each of the 21 consecutive quarters it has been a public company, contributing to record revenues and net earnings for each of those quarters, as well. "We also remain pleased with the Company's 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 , which totaled $10.6 million for the first quarter. Our cash flow from operations was able to fund approximately 85% of our investing activities, including the center acquisition for approximately $9.6 million, thus resulting in only a $1.8 million increase in total debt outstanding. We completed the first quarter with cash and cash equivalents of $13.2 million, 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. of $30.1 million and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $223.6 million. With this strong financial position, expectations for continued substantial cash flow and our renewed five-year $100 million line of credit, we are confident of our ability to finance our growth strategies for 2003." Since the end of the first quarter, AmSurg has repurchased approximately $20.7 million of its common stock under the $25 million repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. program recently authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: by the Board of Directors. Primarily to account for the impact of these share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. , the Company today increased its guidance for 2003 earnings per diluted share to a range of $1.44 to $1.48, compared with the previous guidance of $1.41 to $1.45. AmSurg also reaffirms its earlier guidance with respect to acquiring or developing 12 to 15 surgery centers during 2003, achieving same-store revenue growth for the year of 9% to 11% and generating 2003 revenues of $300 million to $310 million. The Company's assumptions for 2003 do not include any impact from the MedPAC and OIG Noun 1. OIG - the investigative arm of the Federal Trade Commission Office of Inspector General independent agency - an agency of the United States government that is created by an act of Congress and is independent of the executive departments proposals discussed below. The information contained in the preceding paragraph 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. In January 2003, the Medicare Payment Noun 1. medicare payment - a check reimbursing an aged person for the expenses of health care medicare check bank check, check, cheque - a written order directing a bank to pay money; "he paid all his bills by check" Advisory Commission (MedPAC) voted to recommend that the reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. for procedures performed in surgery centers be no higher than the reimbursement rate for the same procedures performed in hospital 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. departments. Also in January 2003, the Office of Inspector General Noun 1. Office of Inspector General - the investigative arm of the Federal Trade Commission OIG independent agency - an agency of the United States government that is created by an act of Congress and is independent of the executive departments (OIG) issued a report that included a similar recommendation. It is uncertain if Congress will act on such recommendations. While fiscal 2003 has been used as the basis for the following analysis, no dates have been referenced or indicated for implementation of the recommendations. However, if these recommendations had been implemented at the beginning of fiscal 2003, and based on AmSurg's current procedure mix, the Company's earnings per diluted share for 2003 would be adversely affected by approximately $0.10, after which the Company would expect to return to its established long-term objectives for growth in same-center revenues of 7% to 9% and earnings per diluted share of 22% to 25%. Mr. McDonald added, "Our first-quarter results further validate To prove something to be sound or logical. Also to certify conformance to a standard. Contrast with "verify," which means to prove something to be correct. For example, data entry validity checking determines whether the data make sense (numbers fall within a range, numeric data the ability of our business model to produce sustainable, consistent and significant earnings growth. We are the acknowledged leader in the single-specialty surgery center segment of the ambulatory Movable; revocable; subject to change; capable of alteration. An ambulatory court was the former name of the Court of King's Bench in England. It would convene wherever the king who presided over it could be found, moving its location as the king moved. surgical care industry, a position we have built and strengthened by helping our physician partners provide high quality, high patient satisfaction surgical procedures in a low cost venue. We are confident that we can use this base to drive further growth and continue to enhance our leadership position." AmSurg Corp. will hold a conference call to discuss this release today at 4:15 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 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 May 22, 2003. 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 losses of its development centers; 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 rate setting methodology, payment rates, payment policies and the list of covered surgical procedures for ambulatory surgery centers by the Centers for Medicare and Medicaid Services The Centers for Medicare and Medicaid Services (CMS), previously known as the Health Care Financing Administration (HCFA), is a federal agency within the United States Department of Health and Human Services (DHHS) that administers the Medicare program and ; 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 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 March 31, 2003, AmSurg owned a majority interest in 107 centers and had 11 centers under development.
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: 2003 2002
-------- --------
Revenues $ 71,060 $ 58,290
Operating expenses:
Salaries and benefits 18,475 15,294
Supply cost 8,310 7,155
Other operating expenses 15,101 12,743
Depreciation and amortization 2,692 2,347
-------- --------
Total operating expenses 44,578 37,539
-------- --------
Operating income 26,482 20,751
Minority interest 14,513 11,447
Interest expense, net 299 350
-------- --------
Earnings before income taxes 11,670 8,954
Income tax expense 4,667 3,582
-------- --------
Net earnings $ 7,003 $ 5,372
======== ========
Earnings per common share:
Basic $ 0.34 $ 0.27
Diluted $ 0.34 $ 0.26
Weighted average number of shares and share
equivalents (000's):
Basic 20,555 20,140
Diluted 20,772 20,503
Operating Data:
Centers in operation at end of period 107 95
Centers under development/not opened at end of
period 11 5
Development centers awaiting CON approval at end
of period - 2
Centers under letter of intent 4 4
Average number of centers in operation 106 95
Average revenue per center $ 668 $ 614
Same center revenues increase 9% 12%
Procedures performed during the period 129,884 108,552
Cash flows provided by operating activities 10,591 9,934
Cash flows used by investing activities (12,418) (2,457)
Cash flows provided (used) by financing activities 1,696 (7,430)
March 31, December 31,
Balance Sheet Data: 2003 2002
------------ -------------
Cash and cash equivalents $ 13,189 $ 13,320
Accounts receivable, net 31,846 29,597
Working capital 39,509 37,414
Total assets 312,055 299,814
Long-term debt 30,134 27,884
Minority interest 32,114 29,869
Shareholders' equity 223,645 216,364
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