NET EARNINGS PER DILUTED SHARE TO $0.50
SAME-CENTER REVENUES INCREASE 5%
RAISES 2012 EARNINGS GUIDANCE TO RANGE OF $1.97 TO $2.01 PER DILUTED SHARE
NASHVILLE, Tenn. ─ (April 24, 2012) ─ Christopher A. Holden, President and Chief Executive Officer of AmSurg Corp. (NASDAQ: AMSG), today announced financial results for the first quarter ended March 31, 2012. Revenues for the quarter increased 30% to $230.2 million from $177.7 million for the first quarter of 2011. Net earnings from continuing operations attributable to AmSurg common shareholders rose 35% to $15.7 million for the first quarter of 2012 from $11.6 million for the first quarter last year. Net earnings from continuing operations per diluted share attributable to AmSurg common shareholders increased 35% to $0.50 for the latest quarter from $0.37 for the first quarter of 2011.
“We are pleased to report that AmSurg produced stronger than expected profitable growth for the first quarter of 2012,” said Mr. Holden. “Our revenue growth was driven by a 5% increase in same-center revenues and the addition of 27 centers during 2011, consisting of 26 acquired centers and one de novo center. We also acquired two additional centers during the first quarter of 2012, one of which we combined with an existing center. We added two centers to our discontinued operations during the first quarter and at the end of the quarter, we had one center under development, which is expected to open in the second quarter of 2012, and one center under letter of intent.
“Our 5% increase in same-center revenues, which is our best quarterly same-center performance since 2007, was better than anticipated. While milder weather during the quarter, compared with the first quarter of 2011, accounted for an estimated two percentage points of this increase, we are encouraged by the improved demand evident in these results.
“Net cash flows from operating activities increased 35% for the first quarter to $69.1 million from $51.3 million for the first quarter of 2011. Excluding distributions to noncontrolling interests, net cash flows from operations grew 55% to $30.1 million for the first quarter this year from $19.4 million for the first quarter of 2011. Excluding distributions to noncontrolling interests, our cash flow was 1.9 times net earnings from continuing operations attributable to AmSurg common shareholders and fully funded our maintenance capital expenditures for the first quarter, as well as $9.9 million in acquisition expenditures and net repayments of $11.2 million in long-term debt. As a result, the ratio of total debt to EBITDA, as calculated under our credit agreement, was 2.8 at March 31, 2012, compared with 2.9 at December 31, 2011. In addition, cash and cash equivalents increased to $44.3 million at the end of the first quarter of 2012 from $40.7 million at December 31, 2011, and our availability under our revolving credit facility at March 31, 2012 was $107.5 million. Based on our financial position at the end of the first quarter and our expectations for continued substantial cash flow during 2012, we believe we are well positioned to fund our planned growth for the year. In addition, we note that the Board has today renewed its authorization of the Company’s $40 million stock repurchase plan through November 1, 2013.
“Due to our stronger than expected financial results for the first quarter of 2012, we today increase our guidance for full-year 2012 and establish our guidance for the second quarter of 2012, as follows:
Revenues in a range of $905 million to $925 million compared with the previous range of $900 million to $920 million.
Same-center revenue increase of 1% to 3% for 2012, up from the prior range of 0% to 2%.
Center acquisitions for 2012 that generate annualized operating income in a range of $25 million to $29 million, including approximately $2 million from centers acquired in the first quarter.
Net cash flow provided by operating activities, less distributions to noncontrolling interests, in a range of $115 million to $120 million.
Net earnings from continuing operations per diluted share attributable to common shareholders for 2012 in a range of $1.97 to $2.01 compared with the prior range of $1.95 to $1.99.
Net earnings from continuing operations per diluted share attributable to common shareholders for the second quarter of 2012 in a range of $0.49 to $0.51.” Mr. Holden concluded, “As we celebrate the 20th anniversary of AmSurg’s founding in April 1992, we are encouraged by the strength of our first-quarter performance. We believe this performance puts us on a path to achieve our first year of double-digit growth in revenues and earnings since 2008, although we remain cautious of the potential impact of the uncertain economic environment, continuing high unemployment and the ultimate resolution of healthcare reform legislation. This expectation is primarily based on our improved same-center revenue performance and the record number of acquisitions we completed during 2011, which generally were larger and more weighted to multi-specialty centers than our previous center mix. With the majority of these centers added after the beginning of September 2011, we expect a significantly favorable impact from their full-year operations for 2012. In addition, we will continue to benefit from the absence of headwinds from revisions in the Medicare payment system for the first time since 2007, the negative impact of which was compounded by the economic downturn.
“We believe that our prospects for long-term growth continue to strengthen. In addition to significant industry growth prospects based on favorable demographics, expanding access, a large underserved population and increasing lifestyle risks such as obesity, freestanding ASCs are increasingly recognized as providing high quality care in the lowest cost modality. We are well positioned to leverage these positive industry dynamics as the operator of the largest number of ASCs in the country. We also have an excellent record of successful center acquisitions in a consolidating, highly fragmented industry. As the only public company primarily focused on the ASC industry, we believe we have a stronger financial position and greater access to capital than our industry peers.
“The foundation of this strong competitive position is our focused development of a physician-centric culture based on continually enhancing the value proposition we provide in support of physicians. Through our commitment to being the strategic partner of choice for our affiliated physicians, we have emerged from the headwinds of the past four years well positioned to leverage more favorable conditions to re-establish a record of long-term growth more consistent with our results throughout our 20-year history.”
The information contained in the preceding paragraphs is forward-looking 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 by this forward-looking information.
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 by going to www.amsurg.com and clicking “Investors” or by going to www.earnings.com at 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; adverse weather and other factors beyond the Company’s control that may affect the Company’s surgery centers; adverse impacts on the Company’s business associated with current and future economic conditions; 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, 2011 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 March 31, 2012, AmSurg owned and operated 227 centers and had one center under development.