AmSurg Reports First-Quarter Net Earnings Per Diluted Share of $0.29, or $0.34 Excluding Effect of FAS 123R; Produces Same-Center Revenue Growth of 8%.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 first quarter ended March 31, 2006. For the first quarter, revenues increased 25% to a new quarterly record of $113,634,000 from $91,263,000 for the first quarter of 2005. 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 were $8,725,000, or $0.29 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, for the first quarter of 2006, including expense of $0.05 per diluted share for FAS 123R, which was adopted in January January: see month. 2006. The impact of FAS 123R was greater than originally anticipated for the quarter, but is expected to remain within the established guidance of $0.14 per diluted share for full-year 2006. Net earnings from continuing operations for the first quarter of 2005 were $8,751,000, or $0.29 per diluted share. Earnings per diluted share, excluding the impact of FAS 123R, would have increased 17% to $0.34 for the latest quarter from $0.29 for the first quarter last year.
Three Months Ended
March 31,
-----------------------
2006 2005
Earnings per diluted share, excluding ----------- -----------
impact of FAS 123R(1) $ 0.34 $ 0.29 (2)
Share-based payment expense (0.05) (0.03)(3)
----------- -----------
Earnings per diluted share $ 0.29 (2) $ 0.26
=========== ===========
(1) Earnings per diluted share excluding impact of FAS 123R is not a
measurement determined in accordance with accounting principles
generally accepted in the United States. AmSurg believes its
calculation of earnings per diluted share excluding impact of FAS
123R in this press release is a useful measure of the Company's
ongoing performance because it provides comparability to periods
prior to the adoption of FAS 123R and disclosures of its
operations on the same basis as that used by management. Earnings
per diluted share excluding impact of FAS 123R should not be
considered as a measure of financial performance under accounting
principles generally accepted in the United States, and the item
excluded from it is a significant component in understanding and
assessing financial performance.
(2) Earnings per diluted share, GAAP basis.
(3) Pro forma share-based payment expense, as if the Company adopted
FAS 123R on January 1, 2005.
Mr. McDonald remarked, "We are pleased with AmSurg's performance for the first quarter, especially with the procedure-driven 8% increase in same-center revenues. We anticipated a strong first-quarter performance because of significant same-center revenue growth expected in three large 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 that had minimal volume for the first quarter of 2005 and the observation of the Easter Easter [A.S. Eastre, name of a spring goddess], chief Christian feast, commemorating the resurrection of Jesus after his crucifixion. In the West, Easter is celebrated on the Sunday following the full moon next after the vernal equinox (see calendar); thus, it holiday during the second quarter of 2006 compared with the first quarter of 2005. We are encouraged by our same-center revenue performance for the first quarter, but because our annual expectations included a strong first quarter, we are maintaining our established same-center guidance for 2006 of 3% to 4%. "Our 25% growth in revenues for the first quarter also reflected the expansion of our base of centers in operation to 153 at the end of the quarter from 132 at the same time in 2005. We opened one de novo center during the first quarter and completed the acquisition of three additional centers. At the end of the first quarter, we had four de novo centers under development, one of which is scheduled to open during 2006, three centers awaiting CON (CONsole) The DOS name for the keyboard and screen. See DOS device names and DOS Copy con. con - [SF fandom] A science-fiction convention. Not used of other sorts of conventions, such as professional meetings. approval and two centers under letter of intent. Based on our first-quarter opening activity and our significant pipeline of potential center acquisitions, we remain confident of achieving our targeted range of 12 to 15 center openings for 2006." "Based on AmSurg's first-quarter performance and its outlook on the operating environment In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. for the remainder of 2006, the Company today affirms its established guidance for full-year 2006 as follows: --Revenues in a range of $445 million to $465 million. --Same-center revenue growth of 3% to 4%. --The addition of 12 to 15 new centers for the year, including one more de novo center and seven to ten additional center acquisitions. --Net earnings per diluted share as follows:
Twelve Months Three Months
----------------------- ------------
Ending Ended Ending
Dec. 31, 2006 Dec. 31, Jun. 30, 2006
(Guidance) 2005 (Guidance)
-------------- ------ ------------
Earnings per diluted
share, excluding impact
of FAS 123R $1.36 - 1.39 $1.21 (1) $0.34 - 0.35
Share-based payment
expense (0.14) (0.11)(2) (0.03)
------------- ------ -------------
Earnings per diluted share $1.22 - 1.25 (1) $1.10 $0.31 - 0.32 (1)
============= ====== =============
(1) Earnings per diluted share, GAAP basis.
(2) Pro forma share-based payment expense, as if the Company had
adopted FAS 123R in 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. Mr. McDonald concluded, "Our first-quarter operating and financial performance provided AmSurg a solid start to achieving our objectives for 2006. We are continuing to focus on strengthening our same-center revenue growth. Our determination to succeed is supported by our market leading position, highly experienced operating teams operating team Surgery The participants–surgeons, nurses, etc–in a sterile surgical procedure performed under general–less commonly, local anesthesia , substantial operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. , solid financial position and compelling 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. industry dynamics." 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.earnings.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 July July: see month. 24, 2006. 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, 2005, and other filings with the Securities and Exchange Commission, including the following risks: the risk that payments from third-party payors may decrease or not increase as the Company's costs increase; 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 ambulatory surgery center A free-standing center that performs various types of surgery 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 Company's 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; the Company's ability to identify suitable acquisition and development candidates and negotiate and close transactions in a timely manner and on favorable terms; the Company's ability to grow revenues at its existing centers; risks associated with weather and other factors that may affect the Company's surgery centers located in Florida Florida, state, United States Florida (flôr`ĭdə, flŏr`–), state in the extreme SE United States. A long, low peninsula between the Atlantic Ocean (E) and the Gulf of Mexico (W), Florida is bordered by Georgia and ; the Company's ability to manage the growth in its business; the Company's ability to obtain the necessary financing or capital on terms satisfactory to it 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; the Company's ability to compete for physician partners, managed care contracts, patients and strategic relationships; the Company's ability to obtain and retain appropriate licensing approvals for its existing centers and centers currently under development and to comply with applicable laws; the risk of changes in legislation, regulations 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. interpretations that may negatively affect the Company; 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; risks associated with the Company's status as a general partner of limited partnerships; the Company's ability to obtain the necessary financing to fund the purchase of its physician partners' minority interests in the event of a regulatory change that would require such a purchase; and risks associated with the valuation and 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. develops, acquires and manages physician practice-based ambulatory surgery centers in partnership with surgical and other group practices. At March 31, 2006, AmSurg owned a majority interest in 153 centers and had four centers under development and three centers awaiting CON approval.
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: 2006 2005
--------------------------- ---------- ----------
Revenues $ 113,634 $ 91,263
Operating expenses:
Salaries and benefits 34,865 25,663
Supply cost 12,995 9,918
Other operating expenses 21,818 18,181
Depreciation and amortization 4,175 3,571
---------- ----------
Total operating expenses 73,853 57,333
---------- ----------
Operating income 39,781 33,930
Minority interest 23,729 18,709
Interest expense, net 1,702 828
---------- ----------
Earnings from continuing operations
before income taxes 14,350 14,393
Income tax expense 5,625 5,642
---------- ----------
Net earnings from continuing operations 8,725 8,751
Discontinued operations:
Loss from operations of discontinued
interests in surgery centers, net of
income tax - (99)
---------- ----------
Net earnings $ 8,725 $ 8,652
========== ==========
Basic earnings per common share:
Net earnings from continuing operations $ 0.29 $ 0.30
Net earnings $ 0.29 $ 0.29
Diluted earnings per common share:
Net earnings from continuing operations $ 0.29 $ 0.29
Net earnings $ 0.29 $ 0.29
Weighted average number of shares and share
equivalents (000's):
Basic 29,693 29,451
Diluted 30,219 30,024
Operating Data:
---------------
Continuing centers in operation at end of
period 153 132
Centers under development/not opened at end
of period 4 7
Development centers awaiting CON approval at
end of period 3 -
Centers under letter of intent 2 2
Average number of centers in operation 150 128
Average revenue per center $ 757 $ 712
Same center revenues increase 8% 3%
Procedures performed during the period 212,510 170,427
Cash flows provided by operating activities $ 21,341 $ 18,327
Cash flows used by investing activities $ (25,484) $ (21,822)
Cash flows provided by financing activities $ 4,366 $ 5,161
Reconciliation of net earnings to EBITDA and
adjusted EBITDA (1):
Net earnings from continuing operations $ 8,725 $ 8,751
Add: income tax expense 5,625 5,642
Add: interest expense, net 1,702 828
Add: depreciation and amortization 4,175 3,571
---------- ----------
EBITDA 20,227 18,792
Add: share-based compensation 2,574 -
---------- ----------
Adjusted EBITDA $ 22,801 $ 18,792
========== ==========
AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data
(In thousands)
March 31, Dec. 31,
Balance Sheet Data: 2006 2005
------------------- ---------- ----------
Cash and cash equivalents $ 20,719 $ 20,496
Accounts receivable, net 50,103 46,387
Working capital 66,371 61,072
Total assets 557,034 527,816
Long-term debt and other long-term liabilities 138,878 125,712
Minority interest 51,987 47,271
Shareholders' equity 306,129 294,618
(1) EBITDA is defined as earnings before interest, income taxes and
depreciation and amortization. Adjusted EBITDA is defined as
earnings before interest, income taxes, depreciation and
amortization and share-based compensation expense. EBITDA and
adjusted EBITDA should not be considered a measure of financial
performance under generally accepted accounting principles. Items
excluded from EBITDA and adjusted EBITDA are significant
components in understanding and assessing financial performance.
EBITDA and adjusted EBITDA are analytical indicators used by
management and the health care industry to evaluate company
performance, allocate resources and measure leverage and debt
service capacity. EBITDA and adjusted 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 and adjusted EBITDA are not measurements
determined in accordance with generally accepted accounting
principles and are thus susceptible to varying calculations,
EBITDA and adjusted 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 and adjusted EBITDA
as defined.
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