NASHVILLE, Tenn. ─ (October 22, 2013) ─ Christopher A. Holden, President and Chief Executive Officer of AmSurg Corp. (NASDAQ: AMSG), today announced financial results for the third quarter ended September 30, 2013. Revenues increased 19% for the quarter to $268.2 million from $224.9 million for the third quarter of 2012. Net earnings from continuing operations attributable to AmSurg common shareholders rose 12% to $17.0 million for the third quarter of 2013 compared with $15.3 million for the third quarter of 2012 and increased 10% per diluted share to $0.53 from $0.48 per diluted share.
Revenues for the first nine months of 2013 increased 17% to $797.2 million from $683.6 million for the first nine months of 2012. Net earnings from continuing operations attributable to AmSurg common shareholders were $53.4 million for the first nine months of 2013, a 14% increase from $46.9 million for the same period in 2012, and were $1.67 per diluted share, a 12% increase from $1.49 per diluted share. Results for the first nine months of 2013 include a pre-tax gain of $2.2 million, or $0.04 per diluted share, related to the deconsolidation of a surgery center that AmSurg contributed to a newly formed joint venture with a hospital system partner. Excluding this gain, net earnings from continuing operations per diluted share attributable to AmSurg common shareholders increased 9% to $1.63 per diluted share for the first nine months of 2013.
Mr. Holden said, “We are pleased with AmSurg’s second consecutive quarter of double- digit growth in earnings per share, especially considering the headwinds represented by the previously discussed reduction in workers’ compensation reimbursement by the State of California, sequestration and increased interest expense related to our debt offering in the fourth quarter of 2012. This performance was driven by the 19% growth in our third-quarter revenues, reflecting both growth in procedures compared with the third quarter of last year and an increase in revenue per procedure resulting from the higher percentage of multi-specialty centers in our overall center mix.
“Our procedure growth for the third quarter was due primarily to the 17 centers we acquired in 2012, as well as the five centers added thus far in 2013. We further benefited from a 2% increase in same-center revenues for the quarter, which was attributable, in part, to an additional business day in the third quarter this year versus the third quarter of 2012.
“During the third quarter, we acquired two centers, divested one center and merged two centers, giving us a total of 243 centers in operation at the quarter’s end, unchanged from the end of the second quarter. We completed the third quarter with five centers under letter of intent, and we remain confident of our ability to meet our acquisition goals for the year.
“AmSurg continued to produce significant net operating cash flows, which, excluding distributions to noncontrolling interests, increased 58% to $50.8 million for the latest quarter compared with the third quarter of 2012. In addition to having cash and cash equivalents of $46 million at September 30, 2013, we had availability of $209 million under our revolving credit facility, and our ratio of total debt to trailing 12 months EBITDA as calculated under our credit agreement was 3.0.
“For 2013, we expect our financial results to reflect increased interest expense of $0.19 per diluted share related to our debt offering in the fourth quarter of 2012, net of the positive interest rate impact from the amendment to the credit agreement during the second quarter of 2013; reductions by the State of California in workers’ compensation reimbursement that have a negative impact on 2013 same-center revenues of approximately 100 basis points and that total $0.06 per diluted share, spread relatively evenly through the year; and the impact of sequestration, which we expect to total $0.05 per diluted share for the year. Due to our third- quarter financial performance and our expectations for the remainder of 2013, we are increasing our financial guidance for 2013 earnings per share, affirming our existing guidance for the other annual metrics and announcing our guidance for the fourth quarter of 2013, as follows:
- Revenues in a range of $1.06 billion to $1.09 billion.
- Same-center revenue increase of 0% to 1%.
- Center acquisitions that generate annualized operating income in a range of $25 million to $29 million.
- Net cash flow provided by operating activities, less distributions to noncontrolling interests, in a range of $140 million to $150 million.
- Net earnings from continuing operations per diluted share attributable to common shareholders in a range of $2.19 to $2.21, excluding the impact of the deconsolidation gain, compared with the previous range of $2.17 to $2.20, excluding the impact of the deconsolidation gain.
- For the fourth quarter of 2013, net earnings from continuing operations per diluted share attributable to common shareholders in a range of $0.56 to $0.58.”
The information contained in the preceding paragraphs, including information regarding the Company’s acquisition plans and financial results for future periods, is forward-looking information. Forward-looking information involves known and unknown risks and uncertainties as described below. There can be no assurance that AmSurg will be successful in acquiring the surgery centers described above and the attainment of the financial targets set forth in this press release is dependent on the assumptions described above. The Company’s actual results and performance could differ materially from those expressed or implied by the forward-looking information contained in this press release.
Mr. Holden concluded, “With the increase in our earnings guidance for 2013, we now expect to produce double-digit growth for the year, despite the significant reimbursement headwinds experienced for the year. While this expectation is primarily the result of our disciplined acquisitions in 2012, it reflects the ongoing significant growth potential of our business as the country’s largest owner and operator of freestanding ambulatory surgery centers in a highly fragmented industry.
“We continue to expect this growth potential to be supported by favorable industry dynamics, such as strong demographic trends, increased access to healthcare and rising demand for high quality, cost effective procedures. We also expect to maintain and enhance a differentiated market position with a physician-centric culture that produces high physician and patient satisfaction with our services. By continually earning our position as the physician partner of choice, we are confident of driving long-term profitable growth and shareholder value.”
AmSurg Corp. will hold a conference call to discuss this release tomorrow, October 23, 2013, at 9:00 a.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 “Investors” or by going to www.earnings.comat least 15 minutes early to register, download, 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 and continue for 30 days.
This press release contains forward-looking statements. These statements, which have been included in reliance on the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, involve risks and uncertainties. Investors are hereby cautioned that these statements may be affected by important factors, including, but not limited to, the following risks: the risk that payments from third-party payors, including government healthcare programs, may decrease or not increase as the Company’s costs increase; adverse developments affecting the medical practices of the Company’s physician partners; the Company’s ability to maintain favorable relations with its physician partners; the Company’s ability to compete for physician partners, managed care contracts, patients and strategic relationships; the Company’s ability to acquire and develop additional surgery centers on favorable terms; the Company’s ability to grow revenues by increasing procedure volume while maintaining its operating margins and profitability at its existing centers; the Company’s ability to manage the growth in its business; the Company’s ability to obtain sufficient capital resources to complete acquisitions and develop new surgery centers; the Company’s ability to generate sufficient cash to service all of its indebtedness; adverse weather and other factors beyond the Company’s control that may affect the Company’s surgery centers; the Company’s failure to comply with applicable laws and regulations; the risk of changes in legislation, regulations or regulatory interpretations that may negatively affect the Company; the risk of becoming subject to federal and state investigation; uncertainties regarding the impact of the Health Reform Law; the risk of regulatory changes that may obligate the Company to buy out interests of physicians who are minority owners of its surgery centers; potential liabilities associated with the Company’s status as a general partner of limited partnerships; liabilities for claims brought against our facilities; the Company’s legal responsibility to minority owners of its surgery centers, which may conflict with its interests and prevent it from acting solely in its best interests; risks associated with the potential write-off of the impaired portion of intangible assets; potential liability relating to the tax deductibility of goodwill; and other risk factors described in AmSurg’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and other filings with the Securities and Exchange Commission. 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. acquires, develops and operates ambulatory surgery centers in partnership with physician practice groups throughout the United States. At September 30, 2013, AmSurg owned and operated 243 centers.