AMSURG REPORTS 14% GROWTH IN SECOND-QUARTER NETEARNINGS FROM CONTINUING OPERATIONS PER DILUTED SHARE TO $0.58
INCREASES 2013 EPS GUIDANCE TO RANGE OF $2.17 TO $2.20
NASHVILLE, Tenn. ─ (July 23, 2013) ─ Christopher A. Holden, President andChief Executive Officer of AmSurg Corp. (NASDAQ: AMSG), today announced financial results for the second quarter ended June 30, 2013. Revenuesincreased 17% for the quarter to $269.3 million from $230.3 million for thesecond quarter of 2012. Net earnings from continuing operations attributable toAmSurg common shareholders rose 16% to $18.6 million for the second quarterof 2013 compared with $16.1 million for the second quarter of 2012, whileincreasing 14% to
$0.58 per diluted share from $0.51 per diluted share.
Revenues for the first six months of 2013 were $529.4 million, up 15% from$459.2 million for the first six months of 2012. Net earnings from continuingoperations attributable to AmSurg common shareholders increased 15% for thelatest six months to $36.4 million from $31.6 million for the first half of lastyear, while increasing 14% to $1.14 per diluted share from $1.00 per dilutedshare. Results for the first six months of 2013 include a pre-tax gain of $2.2million, or $0.04 per diluted share, related to the deconsolidation of asurgery center that AmSurg contributed to a newly formed joint venture with ahospital system partner. Excluding this gain, net earnings from continuingoperations per diluted share attributable to AmSurg common shareholdersincreased 10% to $1.10 per diluted share for the first six months of 2013.
Mr. Holden said, “AmSurg produced significant growth in revenues and earningsfor the second quarter of 2013. We attribute this growth in our seasonallystrongest quarter primarily to the 17 centers we acquired in 2012, which haveperformed well. Our same-center revenues for the quarter were even with thesecond quarter of 2012, reflecting the impact of the reduction in workers’compensation reimbursement by the State of California and sequestration. Thisimpact more than offset the benefits from having one additional business day inthe latest quarter compared with the second quarter last year. Nonetheless, weare pleased with our earnings growth for the second quarter, given the workers’compensation reimbursement reduction, sequestration and the increased interestexpense related to our debt offering in the fourth quarter of 2012.
“AmSurg completed the acquisition of two centers during the second quarter tobring our total centers in operation to 243 at the end of the quarter. We alsocompleted the second quarter with five centers under letter of intent. We believe the acquisition environment remains favorable in the fragmented freestanding ambulatory surgery center industry, and we are confident ofmeeting our acquisition objectives for the year.
“We are also well positioned to fund our acquisition strategy. In addition tocontinued substantial operating cash flows for the second quarter, we hadavailability of $215 million under our revolving credit facility at June 30, 2013. Also at the quarter’s end, our ratio of total debt to trailing 12 months EBITDAas calculated under our credit agreement was 3.1. During the second quarter,we amended our revolving credit facility to extend the maturity of the facility to June 2018 and to reduce the interest rate payable on amounts outstanding underthe facility by approximately 25 to 50 basis points based on the Company’sleverage ratio as defined under the credit agreement. We expect the amendmentto reduce interest expense by approximately $0.01 per diluted share for theremainder of 2013 and, depending on our leverage ratio, by $0.01 to
$0.02 per diluted share on an annualized basis.
“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 impact from the amendment to the credit agreement;reductions by the State of California in workers’ compensation reimbursement that have a negative impact on 2013 same-center revenues of approximately100 basis points and that total $0.06 per diluted share, spread relativelyevenly through the year; and the impact of sequestration, which we expect tototal
$0.05 per diluted share for the year. We further note that the third quarter isseasonally the weakest quarter of the year. Due to our second-quarter financialperformance and our expectations for the second half of 2013, we are increasingour financial guidance for 2013 earnings per share, affirming our existingguidance for the other annual metrics and announcing our guidance for the thirdquarter 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 $2.17 to $2.20, excluding the impact ofthe deconsolidation gain, compared with the previous range of $2.13 to $2.18,excluding the impact of the deconsolidation gain.
• For the third quarter of 2013, net earnings from continuing operations perdiluted share attributable to common shareholders in a range of $0.51 to $0.53.”
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 andunknown risks and uncertainties as described below. There can be no assurancethat AmSurg will be successful in acquiring the surgery centers described aboveand the attainment of the financial targets set forth in this press release isdependent on the assumptions described above. The Company’s actual resultsand performance could differ materially from those expressed or implied bythe forward-looking information contained in this press release.
Mr. Holden concluded, “Our ability to increase our earnings guidance for 2013reflects the strength of our disciplined acquisition strategy and our colleagues’ability to integrate acquisitions successfully. These skills support ourconfidence in AmSurg’s long-term growth prospects, as the largest owner andoperator of freestanding ambulatory surgery centers in the country. We willcontinue to leverage our scale and our core commitment to being our physician partners’ provider of choice to serve increasing market demand for high quality,cost effective procedures driven by strong demographic trends and expandedaccess to healthcare. As we anniversary the reimbursement and funding costheadwinds affecting our results for 2013, we expect to be positioned to producestrong growth in the coming year.”
AmSurg Corp. will hold a conference call to discuss this release tomorrow, July24, 2013, at 9:00 a.m. Eastern time. Investors will have the opportunity tolisten to the conference call over the Internet by going to www.amsurg.com andclicking “Investors” or by going to www.earnings.com at least 15 minutes earlyto register, download, and install any necessary audio software. For those whocannot listen to the live broadcast, a replay will be available at these sites shortlyafter 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 thePrivate Securities Litigation Reform Act of 1995, involve risks and uncertainties. Investors are hereby cautioned that these statements may be affected byimportant factors, including, but not limited to, the following risks: the risk thatpayments from third-party payors, including government healthcare programs,may decrease or not increase as the Company’s costs increase; adversedevelopments affecting the medical practices of the Company’s physician partners; the Company’s ability to maintain favorable relations with its physicianpartners; the Company’s ability to compete for physician partners, managed carecontracts, patients and strategic relationships; the Company’s ability to acquireand develop additional surgery centers on favorable terms; the Company’sability to grow revenues by increasing procedure volume while maintaining itsoperating margins and profitability at its existing centers; the Company’s abilityto manage the growth in its business; the Company’s ability to obtain sufficientcapital resources to complete acquisitions and develop new surgery centers; theCompany’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 regulatoryinterpretations that may negatively affect the Company; the risk of becomingsubject to federal and state investigation; uncertainties regarding the impact of theHealth Reform Law; the risk of regulatory changes that may obligate theCompany to buy out interests of physicians who are minority owners of its surgery centers; potential liabilities associated with the Company’s status as ageneral partner of limited partnerships; liabilities for claims brought against ourfacilities; the Company’s legal responsibility to minority owners of its surgerycenters, which may conflict with its interests and prevent it from acting solely inits best interests; risks associated with the potential write-off of the impairedportion of intangible assets; potential liability relating to the tax deductibilityof goodwill; and other risk factors described in AmSurg’s Annual Report onForm 10-K for the fiscal year ended December 31, 2012 and other filings withthe Securities and Exchange Commission. Consequently, actual results,performance or developments may differ materially from the forward-lookingstatements included above. AmSurg disclaims any intent or obligation to updatethese forward-looking statements.
AmSurg Corp. acquires, develops and operates ambulatory surgery centers inpartnership with physician practice groups throughout the United States. At June30, 2013, AmSurg owned and operated 243 centers.