AmSurg Reports Fourth-Quarter and Full-Year 2005 Net Earnings Per Diluted Share from Continuing Operations of $0.28 and $1.21.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. -- Adds Eight Surgery Centers During Fourth Quarter; Establishes Earnings Guidance for 2006 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 fourth quarter and year ended December December: see month. 31, 2005. Revenues were a record $102,890,000 for the quarter, an 18% increase from $87,326,000 for the fourth 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 were $8,457,000, or $0.28 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 fourth quarter of 2005 compared with $8,747,000, or $0.29 per diluted share, for the fourth quarter of 2004. Revenues increased 18% to $391,790,000 for 2005 from $330,923,000 for 2004. Net earnings from continuing operations for 2005 increased 9% to $36,436,000 from $33,400,000, while net earnings from continuing operations per diluted share increased 11% to $1.21 from $1.09. Same-center revenue growth for 2005 was 3%. "We are pleased to report 18% growth in revenues for the quarter, which crossed the $100 million mark on a quarterly basis for the first time in our history," remarked Mr. McDonald. "This growth primarily reflected the addition of 24 new surgery centers during 2005, well above our expected range of 16 to 19 new centers for the year. We added eight of these centers during the fourth quarter, including seven center acquisitions and the opening of one 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. center. "Our revenue and net earnings for the fourth quarter were in line with our earlier guidance, established on October October: see month. 3, 2005. Same-center revenue growth for the quarter, which had one less business day than the fourth quarter of 2004, was 1%. Adjusted for the one-less day, same-center revenue growth for the fourth quarter of 2005 is estimated to have been 3%. Net earnings for the quarter were impacted primarily by the following items: --The continued underperformance of 16 of the Company's surgery centers, as discussed in our October 3, 2005 news release, which resulted in lower profit margins. --The impact of the temporary closure of two centers during a portion of the fourth quarter due to hurricanes. --One less day of revenue in the fourth quarter of 2005 compared to the fourth quarter of 2004. --Additional bonus expense awarded during the fourth quarter related to exceeding acquisition targets for the year. "2005 marked a record year for the Company in the number of new centers added. We expect these centers to contribute substantially to our growth in 2006. We are also encouraged about the increase in de novo development activity during the fourth quarter which provided five additional development centers, three of which will require certificate of need approval. As of December 31, 2005, we had 149 centers in operation, five centers under development, and three additional 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. "Today we are establishing our guidance for 2006 as follows: --Revenues in a range of $445 million to $465 million. --Same-center revenue growth of 3% to 4%. This guidance includes the full effect of the 16 underperforming centers. --The addition of 12 to 15 new centers for the year. We have already completed the acquisition of two centers in 2006, and we expect to open two de novo centers during the year. --Net earnings per diluted share as follows:
Twelve Months Three Months
------------------------------------------
Ending Ended Ending
Dec. 31, 2006 Dec. 31, Mar. 31, 2006
(Guidance) 2005 (Guidance)
--------------- --------- ---------------
Earnings per diluted
share, excluding
impact of FAS 123R $ 1.36 - 1.39 $ 1.21(1) $ 0.32 - 0.33
Share-based payment
expense (0.14) (0.11)(2) (0.04)
-------------- --------- --------------
Earnings per diluted
share $1.22 - 1.25(1) $ 1.10 $0.28 - 0.29(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, "The significant increase in centers in operation for the fourth quarter and 2006 year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. supports our ability to achieve our 2006 financial guidance. Our pipeline of potential acquisitions and de novo center partnerships remains robust, and with continued substantial 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 and excess debt capacity, we are confident of our ability to fund our new center addition plans. While we are projecting same-center revenue growth for 2006 of 3% to 4%, we are very focused on improving this same-center revenue growth rate in the longer run through operational initiatives." 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 March 21, 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 31, 2004, and other filings with the Securities and Exchange Commission, including the following risks: the Company's ability to generate and manage growth at the Company's existing centers and through acquisitions and development of new centers; its 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; the ability of its physician partners to recruit RECRUIT. A newly made soldier. additional physicians to their practices; 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 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; 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 December 31, 2005, AmSurg owned a majority interest in 149 centers and had five 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 For the Year
Ended December 31, Ended December 31,
---------------------------------------
Statement of Earnings Data: 2005 2004 2005 2004
--------------------------- -------- -------- -------- --------
Revenues $102,890 $ 87,326 $391,790 $330,923
Operating expenses:
Salaries and benefits 30,764 23,774 111,422 88,946
Supply cost 12,130 10,096 44,433 37,258
Other operating expenses 20,683 17,817 77,907 66,286
Depreciation and
amortization 4,039 3,440 15,348 12,917
-------- -------- -------- --------
Total operating expenses 67,616 55,127 249,110 205,407
-------- -------- -------- --------
Operating income 35,274 32,199 142,680 125,516
Minority interest 20,071 17,376 78,614 68,292
Interest expense, net 1,293 643 4,138 1,955
-------- -------- -------- --------
Earnings from continuing
operations before income
taxes 13,910 14,180 59,928 55,269
Income tax expense 5,453 5,433 23,492 21,869
-------- -------- -------- --------
Net earnings from continuing
operations 8,457 8,747 36,436 33,400
Discontinued operations:
Earnings (loss) from
operations of discontinued
interests in surgery centers,
net of income tax - (93) (299) 708
Gain (loss) on disposal of
discontinued interests in
surgery centers, net of
income tax - 32 (986) 5,598
-------- -------- -------- --------
Earnings (loss) from
discontinued operations - (61) (1,285) 6,306
-------- -------- -------- --------
Net earnings $ 8,457 $ 8,686 $ 35,151 $ 39,706
======== ======== ======== ========
Basic earnings per common
share:
Net earnings from continuing
operations $ 0.28 $ 0.30 $ 1.23 $ 1.12
Net earnings $ 0.28 $ 0.30 $ 1.19 $ 1.33
Diluted earnings per common
share:
Net earnings from continuing
operations $ 0.28 $ 0.29 $ 1.21 $ 1.09
Net earnings $ 0.28 $ 0.29 $ 1.17 $ 1.30
Weighted average number of
shares and share equivalents
(000's):
Basic 29,681 29,299 29,573 29,895
Diluted 30,111 29,880 30,147 30,507
Operating Data:
-------------------------
Continuing centers in
operation at end of period 149 125 149 125
Centers under development/not
opened at end of period 5 9 5 9
Development centers awaiting
CON approval at end of period 3 - 3 -
Centers under letter of
intent - 7 - 7
Average number of centers in
operation 143 120 136 115
Average revenue per center $ 718 $ 727 $ 2,882 $ 2,877
Same center revenues
increase 1% 2% 3% 4%
Procedures performed during
the period 192,974 160,739 739,841 609,378
Cash flows provided by
operating activities $ 11,440 $ 13,863 $ 63,421 $ 55,452
Cash flows used by investing
activities (1) $(24,730) $(24,365) $(83,308) $(61,660)
Cash flows provided by
financing activities $ 11,762 $ 9,464 $ 25,391 $ 6,942
Reconciliation of net earnings
to EBITDA (2):
Net earnings from continuing
operations $ 8,457 $ 8,747 $ 36,436 $ 33,400
Add: income tax expense 5,453 5,433 23,492 21,869
Add: interest expense, net 1,293 643 4,138 1,955
Add: depreciation and
amortization 4,039 3,440 15,348 12,917
-------- -------- -------- --------
EBITDA $ 19,242 $ 18,263 $ 79,414 $ 70,141
======== ======== ======== ========
AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data
(In thousands)
Dec. 31, Dec. 31,
Balance Sheet Data: 2005 2004
------------------- ---------- ----------
Cash and cash equivalents $20,496 $14,992
Accounts receivable, net 46,387 39,224
Working capital 61,072 56,302
Total assets 527,816 425,155
Long-term debt and other long-term liabilities 125,712 88,160
Minority interest 47,271 39,710
Shareholders' equity 294,618 254,149
(1) In the quarter ended December 31, 2005 and 2004, the Company
incurred $17,507 in purchase price obligations and $3,477 in notes
payable as of December 31, 2005 and 2004, respectively, associated
with certain fourth quarter acquisitions. These non-cash amounts
were excluded from their respective year's cash flows from
investing activities. Such amounts were funded through long-term
borrowings in January 2006 and 2005, respectively, and reflected
in financing cash flow at that time.
(2) 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.
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