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 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. -- Ken P. McDonald, President and Chief Executive Officer of AmSurg Corp. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :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 second quarter and six months ended June June: see month. 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 continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the rose 28% to $9,986,000 from $7,823,000. Net earnings from continuing operations 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 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 note receivable A debt due from borrowers and evidenced by a written promise of payment. Note receivable, an entry on the asset side of many corporate balance sheets, indicates the dollar amount of loans due to be repaid by borrowers. 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 (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. 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 [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. 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-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 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. record of growth, including 30 consecutive quarters of positive same-facility revenues. Based on our year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current 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 Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. 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 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 Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. 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 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 August 26, 2005. 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 Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended December December: see month. 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 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 To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution 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 In a graphical environment, to hide an application that is currently displayed on screen. For example, in Windows and Mac, the application's window is removed from the screen and represented by an icon on the Windows Taskbar. In the Mac, the icon is placed in the Dock. See Win Minimize windows. 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 RECRUIT. A newly made soldier. 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. 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.
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,
------------------- -------------------
Statement of Earnings Data: 2005 2004 2005 2004
--------------------------- --------- --------- --------- ---------
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
========= ========= ========= =========
AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data
(In thousands)
June 30, December 31,
Balance Sheet Data: 2005 2004
------------------- ----------- -----------
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.
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
For the Three Months Ended Year
-------------------------------------------- Ended
Statement of Mar. 31, Mar. 31, June 30, Sept. 30, Dec. 31, Dec. 31,
Earnings Data: 2005 2004 2004 2004 2004 2004
--------------- -------- -------- -------- -------- -------- ---------
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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