AmSurg Produces $0.31 Earnings Per Diluted Share for the 4th Quarter of 2002; Earnings Per Share of $1.16 for 2002; Authorizes Stock Repurchase Program.Business Editors NASHVILLE, Tenn.--(BUSINESS WIRE)--Feb. 18, 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 fourth quarter and year ended December 31, 2002. Revenues grew 22% for the fourth quarter to $68,242,000 from $56,117,000 for the fourth quarter of 2001. Net earnings were $6,541,000, a 43% increase from $4,567,000. 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 rose 41% to $0.31 for the fourth quarter from $0.22 for the fourth quarter of 2001. For full-year 2002, revenues increased 24% to $251,525,000 from $202,312,000 for 2001. Net earnings rose 61% to $24,022,000 from $14,905,000. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of increased 49% to $1.16 for 2002 from $0.78 for 2001. Results for the fourth quarter and full-year 2002 include a positive impact of $0.04 per diluted share and $0.16 per diluted share, respectively, from the adoption of FAS 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ." "We are pleased to report another record-breaking quarter and year for AmSurg," remarked Mr. McDonald. "For 2002, we produced an increase in same-center revenues of 13%, our fifth consecutive year of double-digit same-center revenue growth. In producing 12% same-center revenue growth for the fourth quarter, we also achieved our 20th consecutive quarter of positive same-center revenue growth since we became a public company. Based on this performance, the Company's prospects for further profitable growth and its strong financial position, we believe that our stock is undervalued Undervalued A stock or other security that is trading below its true value. Notes: The difficulty is knowing what the "true" value actually is. Analysts will usually recommend an undervalued stock with a strong buy rating. at current market prices. Consequently, we also announce today the authorization The right or permission to use a system resource; the process of granting access. See access control. by our Board of Directors of a stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program for up to $25 million of the Company's outstanding shares of common stock over the next 18 months. "AmSurg generated significant new partnership formation activity for both acquisition and 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. partnerships during the fourth quarter. We acquired five centers in the fourth quarter and opened one development center. In addition, we entered into four new joint ventures to develop surgery centers and signed new three new letters of intent. As a result, we have a solid foundation from which to build toward our center opening goals for 2003 and 2004 with a total of 17 centers in our development pipeline at the end of 2002 compared with seven centers at the end of 2001. Of these 17 centers, we have a total of nine centers under development, six under letter of intent and two awaiting issuance of a certificate of need. "We expect this acquisition and development momentum to continue in 2003, as well as additional same-center revenue growth. Our guidance for 2003 is as follows: -- Acquire or develop 12 to 15 surgery centers. -- Same center revenue growth of 9% to 11%. -- Revenues of $300 million to $310 million, an increase of 20% to 24% over 2002. -- Earnings per diluted share of $1.41 to $1.45, an increase of 22% to 25% over 2002. "We have increased our same-center revenue guidance for 2003 based on continued demand for surgery in our centers, particularly in gastroenterology gastroenterology Medical specialty dealing with digestion and the digestive system. In the 17th century Jan Baptista van Helmont conducted the first scientific studies in the field; William Beaumont published his own observations in 1833. , and because of planned expansions at several of our centers. We continue to believe that 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. same-center revenue growth will be in the 7% to 9% range. Our 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 or from the stock buyback Stock buyback A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. plan announced today." The information contained in the preceding two 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. 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. Based on the Company's current procedure mix, the recommendations would adversely affect earnings per diluted share 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 concluded, "AmSurg's financial success during 2002 highlights the sustainability of a business model that we have consistently implemented since our founding 11 years ago. This model continues to produce substantial profitable growth through the combination of significant same-center revenue growth and the expansion of the base of centers in operation. For 2003, we are confident we have the resources to achieve our objectives and to further strengthen our dominant industry 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 March 18, 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 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 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 December 31, 2002, AmSurg owned a majority interest in 107 centers and had nine 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 December 31, Ended December 31,
----------------------------------------
Statement of Earnings Data: 2002 2001 2002 2001
----------------------------- ---------- --------- --------- ---------
Revenues $68,242 $56,117 $251,525 $202,312
Operating expenses:
Salaries and benefits 18,477 14,713 66,332 54,190
Supply cost 8,316 6,757 30,060 23,835
Other operating expenses 13,678 11,737 52,815 42,572
Depreciation and
amortization 2,745 3,968 9,995 14,426
---------- --------- --------- ---------
Total operating expenses 43,216 37,175 159,202 135,023
---------- --------- --------- ---------
Operating income 25,026 18,942 92,323 67,289
Minority interest 13,871 11,207 51,096 39,599
Interest expense, net 254 124 1,190 2,844
---------- --------- --------- ---------
Earnings before income
taxes 10,901 7,611 40,037 24,846
Income tax expense 4,360 3,044 16,015 9,941
---------- --------- --------- ---------
Net earnings $6,541 $4,567 $24,022 $14,905
========== ========= ========= =========
Earnings per common share:
Basic $0.32 $0.23 $1.18 $0.81
Diluted $0.31 $0.22 $1.16 $0.78
Weighted average number of
shares and share equivalents
(000's):
Basic 20,545 20,078 20,390 18,428
Diluted 20,815 20,495 20,728 19,021
Operating Data:
-----------------------------
Centers in operation at end
of period 107 95 107 95
Centers under development/not
opened at end of period 9 5 9 5
Development centers awaiting
CON approval at end of
period 2 1 2 1
Centers under letter of
intent 6 1 6 1
Average number of centers in
operation 103 93 98 89
Average revenue per center $665 $602 $2,564 $2,264
Same center revenues increase 12% 11% 13% 10%
Procedures performed during
the period 126,317 106,600 471,155 389,431
EBITDA after minority
interest $13,900 $11,703 $51,222 $42,116
Operating cash flow per share $0.51 $0.57 $2.26 $1.96
December 31, December 31,
Balance Sheet Data: 2002 2001
----------------------------- ------------- -------------
Cash and cash equivalents $13,320 $11,074
Accounts receivable, net 29,597 28,069
Working capital 37,414 34,909
Total assets 299,814 241,383
Long-term debt and other
long-term obligations 27,884 12,685
Minority interest 29,869 25,047
Shareholders' equity 216,364 185,569
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