Net earnings from continuing operations attributable to AmSurg common shareholders for the first quarter of 2011 were $11,709,000, or $0.38 per diluted share, compared with $12,620,000, or $0.41 per diluted share, for the first quarter last year. As anticipated, the results for the first quarter of 2011 included an incremental negative impact of $0.01 per diluted share from the revision of the Medicare payment system for ASCs and $0.04 per diluted share from the higher interest costs related to the refinancing of the Company’s credit facility in May 2010 and a higher effective tax rate.
“AmSurg’s earnings for the first quarter were in-line with our guidance and continued to reflect the impact of a weak economic environment and high unemployment, in addition to the expected negative incremental impact from Medicare reimbursement, our 2010 debt refinancing and higher taxes,” said Chris Holden, President and Chief Executive Officer of AmSurg Corp.
“During the first quarter, we acquired one of the eight centers that were under letter of intent at the end of 2010. We have completed the acquisition of three more of these centers since the end of the first quarter, and we expect to complete transactions for another three during the second quarter. In the first quarter, we also sold two centers. We completed the first quarter with seven centers under letter of intent, including the three centers since acquired, and one center under development that we expect to open this year.”
“On April 7, 2011, we were pleased to announce a definitive agreement to acquire National Surgical Care (NSC) for $173.5 million in cash. NSC owns and operates 18 ASCs, including 16 multi-specialty centers and two GI centers that produced consolidated revenues for 2010 of $124.5 million and adjusted EBITDA of $21.5 million. We intend to fund this transaction with available cash and additional borrowings and have exercised the accordion feature on our revolving credit facility, increasing the Company’s borrowing capacity to $450 million from $375 million previously. We expect to complete the transaction, subject to normal closing conditions, regulatory approvals and clearance under the Hart-Scott-Rodino Act, by the end of the second quarter.
“We expect the NSC transaction will be accretive to our 2012 financial results and, excluding transaction costs, to our results for 2011. However, we will incorporate the specific impact of the transaction into our guidance for 2011 only after the transaction is complete. As a result, today, we affirm our existing guidance for 2011, and we establish our guidance for the second quarter of 2011, neither of which includes the impact of the NSC transaction:
- Revenues in a range of $740 million to $770 million for 2011.
- Same-center revenues in a range of 0% to a negative 1% for 2011. •
- The addition of 18 to 20 new centers for the year, not including the NSC transaction.
- Net cash flow provided by operating activities, less distributions to noncontrolling interests, in a range of $90 million to $95 million.
- Net earnings from continuing operations per diluted share attributable to common shareholders for 2011 in a range of $1.64 to $1.68, which includes a negative $0.05 impact from the effect of the revised Medicare payment system and a negative $0.07 impact from higher interest costs related to the refinancing of our revolving credit facility and the higher effective tax rate.
- Net earnings from continuing operations per diluted share attributable to common shareholders for the second quarter of 2011 in a range of $0.40 to $0.42 per diluted share, including a negative $0.01 impact from the effect of the revised Medicare payment system revision and a negative $0.03 impact from the higher interest costs related to the refinancing of our credit facility and the higher effective tax rate.”