Tennessee | 001-36531 | 62-1493316 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
20 Burton Hills Boulevard | ||
Nashville, Tennessee | 37215 | |
(Address of Principal Executive Offices) | (Zip Code) |
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
AMSURG CORP. | ||
By: | /s/ Claire M. Gulmi | |
Claire M. Gulmi | ||
Executive Vice President and Chief Financial Officer | ||
(Principal Financial and Duly Authorized Officer) |
Exhibit | ||
Number | Description | |
99 | Press release dated July 31, 2014 |
Exhibit 99 | |
Press Release |
Contact: | Claire M. Gulmi | |
Executive Vice President and | ||
Chief Financial Officer | ||
(615) 665-1283 |
AMSG Reports Second-Quarter Results | ||
Page 2 | ||
July 31, 2014 |
• | Revenues in a range of $1.61 billion to $1.63 billion. |
• | Same-center revenue increase of 1% to 2% for ASCs, 6% to 8% organic revenue growth in physician services. |
• | Net cash flow provided by operating activities, less distributions to noncontrolling interests, in a range of $170 million to $180 million, excluding transaction costs. |
• | Adjusted EPS in a range of $2.61 to $2.66. |
• | For the third quarter of 2014, Adjusted EPS in a range of $0.63 to $0.65. |
AMSG Reports Second-Quarter Results | ||
Page 3 | ||
July 31, 2014 |
AMSG Reports Second-Quarter Results | ||
Page 4 | ||
July 31, 2014 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
Statement of Earnings Data: | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenues | $ | 281,105 | $ | 267,102 | $ | 544,212 | $ | 525,291 | ||||||||
Operating expenses: | ||||||||||||||||
Salaries and benefits | 84,866 | 81,085 | 168,060 | 162,043 | ||||||||||||
Supply cost | 41,283 | 38,989 | 80,003 | 76,202 | ||||||||||||
Other operating expenses | 60,331 | 53,925 | 115,600 | 106,652 | ||||||||||||
Depreciation and amortization | 8,550 | 8,125 | 16,924 | 16,133 | ||||||||||||
Total operating expenses | 195,030 | 182,124 | 380,587 | 361,030 | ||||||||||||
Gain on deconsolidation | 1,366 | — | 3,411 | 2,237 | ||||||||||||
Equity in earnings of unconsolidated affiliates | 539 | 696 | 1,303 | 1,098 | ||||||||||||
Operating income | 87,980 | 85,674 | 168,339 | 167,596 | ||||||||||||
Interest expense | 6,894 | 7,512 | 13,857 | 15,054 | ||||||||||||
Earnings from continuing operations before income taxes | 81,086 | 78,162 | 154,482 | 152,542 | ||||||||||||
Income tax expense | 12,921 | 12,710 | 25,978 | 24,979 | ||||||||||||
Net earnings from continuing operations | 68,165 | 65,452 | 128,504 | 127,563 | ||||||||||||
Discontinued operations: | ||||||||||||||||
Earnings from operations of discontinued interests in surgery centers, net of income tax | — | 384 | 137 | 546 | ||||||||||||
Gain (loss) on disposal of discontinued interests in surgery centers, net of income tax | 7 | — | (355 | ) | — | |||||||||||
Net earnings (loss) from discontinued operations | 7 | 384 | (218 | ) | 546 | |||||||||||
Net earnings and comprehensive income | 68,172 | 65,836 | 128,286 | 128,109 | ||||||||||||
Less net earnings and comprehensive income attributable to noncontrolling interests: | ||||||||||||||||
Net earnings from continuing operations | 49,211 | 47,035 | 92,046 | 91,396 | ||||||||||||
Net earnings from discontinued operations | — | 238 | 84 | 339 | ||||||||||||
Total net earnings and comprehensive income attributable to noncontrolling interests | 49,211 | 47,273 | 92,130 | 91,735 | ||||||||||||
Net earnings and comprehensive income attributable to AmSurg Corp. common shareholders | $ | 18,961 | $ | 18,563 | $ | 36,156 | $ | 36,374 | ||||||||
Amounts attributable to AmSurg Corp. common shareholders: | ||||||||||||||||
Earnings from continuing operations, net of income tax | $ | 18,954 | $ | 18,417 | $ | 36,458 | $ | 36,167 | ||||||||
Discontinued operations, net of income tax | 7 | 146 | (302 | ) | 207 | |||||||||||
Net earnings and comprehensive income attributable to AmSurg Corp. common shareholders | $ | 18,961 | $ | 18,563 | $ | 36,156 | $ | 36,374 | ||||||||
Earnings per share-basic: | ||||||||||||||||
Net earnings from continuing operations attributable to AmSurg Corp. common shareholders | $ | 0.60 | $ | 0.59 | $ | 1.15 | $ | 1.16 | ||||||||
Net earnings (loss) from discontinued operations attributable to AmSurg Corp. common shareholders | — | — | (0.01 | ) | 0.01 | |||||||||||
Net earnings attributable to AmSurg Corp. common shareholders | $ | 0.60 | $ | 0.59 | $ | 1.14 | $ | 1.17 | ||||||||
Earnings per share-diluted: | ||||||||||||||||
Net earnings from continuing operations attributable to AmSurg Corp. common shareholders | $ | 0.59 | $ | 0.58 | $ | 1.13 | $ | 1.13 | ||||||||
Net earnings (loss) from discontinued operations attributable to AmSurg Corp. common shareholders | — | — | (0.01 | ) | 0.01 | |||||||||||
Net earnings attributable to AmSurg Corp. common shareholders | $ | 0.59 | $ | 0.58 | $ | 1.12 | $ | 1.14 | ||||||||
Weighted average number of shares and share equivalents outstanding: | ||||||||||||||||
Basic | 31,825 | 31,208 | 31,770 | 31,213 | ||||||||||||
Diluted | 32,233 | 31,862 | 32,177 | 31,872 |
AMSG Reports Second-Quarter Results | ||
Page 5 | ||
July 31, 2014 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
Operating Data: | 2014 | 2013 | 2014 | 2013 | |||||||||||
Continuing centers in operation at end of period (consolidated) | 236 | 239 | 236 | 239 | |||||||||||
Continuing centers in operation at end of period (unconsolidated) | 7 | 4 | 7 | 4 | |||||||||||
Average number of continuing centers in operation (consolidated) | 238 | 234 | 238 | 234 | |||||||||||
New centers added during the period | 1 | 2 | 2 | 2 | |||||||||||
Centers discontinued during the period | — | — | 1 | — | |||||||||||
Centers under development/not opened at end of period | 1 | — | 1 | — | |||||||||||
Centers under letter of intent at end of period | 6 | 5 | 6 | 5 | |||||||||||
Average revenue per consolidated center | $ | 1,182 | $ | 1,141 | $ | 2,284 | $ | 2,245 | |||||||
Same center revenues increase (decrease) | 1 | % | 0 | % | (1 | )% | (1 | )% | |||||||
Procedures performed during the period at consolidated centers | 420,575 | 415,786 | 810,562 | 807,489 | |||||||||||
Income tax expense attributable to noncontrolling interests | $ | 176 | $ | 182 | $ | 344 | $ | 368 |
AMSG Reports Second-Quarter Results | ||
Page 6 | ||
July 31, 2014 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Reconciliation of net earnings to Adjusted EBITDA (1): | |||||||||||||||
Net earnings from continuing operations attributable to AmSurg Corp. common shareholders | $ | 18,954 | $ | 18,417 | $ | 36,458 | $ | 36,167 | |||||||
Income tax expense | 12,921 | 12,710 | 25,978 | 24,979 | |||||||||||
Interest expense, net | 6,894 | 7,512 | 13,857 | 15,054 | |||||||||||
Depreciation and amortization | 8,550 | 8,125 | 16,924 | 16,133 | |||||||||||
Share-based compensation | 2,506 | 1,916 | 4,964 | 3,966 | |||||||||||
Acquisition costs | 3,572 | 140 | 3,579 | 175 | |||||||||||
Gain on deconsolidation | (1,366 | ) | — | (3,411 | ) | (2,237 | ) | ||||||||
Adjusted EBITDA | $ | 52,031 | $ | 48,820 | $ | 98,349 | $ | 94,237 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Reconciliation of net earnings per share-diluted to adjusted net earnings per share-diluted (2): | |||||||||||||||
Net earnings from continuing operations attributable to AmSurg Corp. common shareholders | $ | 0.59 | $ | 0.58 | $ | 1.13 | $ | 1.13 | |||||||
Gain on deconsolidation, net of tax | (0.03 | ) | — | (0.04 | ) | (0.04 | ) | ||||||||
Acquisition costs, net of tax | 0.07 | — | 0.07 | — | |||||||||||
Adjusted net earnings from continuing operations attributable to AmSurg Corp. common stockholders | $ | 0.63 | $ | 0.58 | $ | 1.16 | $ | 1.10 |
(1) | We define Adjusted EBITDA of AmSurg as earnings before interest, income taxes, depreciation, amortization, share-based compensation, acquisition costs and gains or losses on deconsolidations. Adjusted EBITDA should not be considered a measure of financial performance under generally accepted accounting principles. Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Adjusted 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. Adjusted EBITDA should not be considered in isolation or as an alternative 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 Adjusted EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies. Net earnings from continuing operations attributable to AmSurg Corp. common shareholders is the financial measure calculated and presented in accordance with generally accepted accounting principles that is most comparable to Adjusted EBITDA as defined. |
(2) | We believe the calculation of adjusted net earnings from continuing operations per diluted share attributable to AmSurg Corp. common shareholders provides a better measure of our ongoing performance and provides better comparability to prior periods because it excludes the gains or loss from deconsolidations, which are non-cash in nature, and acquisition costs (the majority of which relate to the Sheridan Transaction), which are of a nature and significance not generally associated with our historical individual center acquisition activity. Adjusted net earnings from continuing operations per diluted share attributable to AmSurg Corp. common shareholders should not be considered as a measure of financial performance under accounting principles generally accepted in the United States, and the item excluded from it is a significant component in understanding and assessing financial performance. Because adjusted net earnings from continuing operations per diluted share attributable to AmSurg Corp. common shareholders is not a measurement determined in accordance with accounting principles generally accepted in the United States and is thus susceptible to varying calculations, it may not be comparable as presented to other similarly titled measures of other companies. |
AMSG Reports Second-Quarter Results | ||
Page 7 | ||
July 31, 2014 |
June 30, | December 31, | |||||||
Balance Sheet Data: | 2014 | 2013 | ||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 44,911 | $ | 50,840 | ||||
Accounts receivable, net of allowance of $30,414 and $27,862, respectively | 110,538 | 105,072 | ||||||
Supplies inventory | 18,808 | 18,414 | ||||||
Deferred income taxes | 3,386 | 3,097 | ||||||
Prepaid and other current assets | 34,658 | 33,602 | ||||||
Total current assets | 212,301 | 211,025 | ||||||
Property and equipment, net | 168,839 | 169,895 | ||||||
Investments in unconsolidated affiliates and other | 26,546 | 16,392 | ||||||
Goodwill | 1,794,493 | 1,758,970 | ||||||
Intangible assets, net | 20,829 | 21,662 | ||||||
Total assets | $ | 2,223,008 | $ | 2,177,944 | ||||
Liabilities and Equity | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | $ | 20,208 | $ | 20,844 | ||||
Accounts payable | 26,353 | 27,501 | ||||||
Accrued salaries and benefits | 29,849 | 32,294 | ||||||
Other accrued liabilities | 9,771 | 9,231 | ||||||
Total current liabilities | 86,181 | 89,870 | ||||||
Long-term debt | 556,793 | 583,298 | ||||||
Deferred income taxes | 194,181 | 176,020 | ||||||
Other long-term liabilities | 25,695 | 25,503 | ||||||
Commitments and contingencies | ||||||||
Noncontrolling interests – redeemable | 177,063 | 177,697 | ||||||
Equity: | ||||||||
Preferred stock, no par value, 5,000 shares authorized, no shares issued or outstanding | — | — | ||||||
Common stock, no par value, 70,000 shares authorized, 32,572 and 32,353 shares outstanding, respectively | 189,822 | 185,873 | ||||||
Retained earnings | 614,480 | 578,324 | ||||||
Total AmSurg Corp. equity | 804,302 | 764,197 | ||||||
Noncontrolling interests – non-redeemable | 378,793 | 361,359 | ||||||
Total equity | 1,183,095 | 1,125,556 | ||||||
Total liabilities and equity | $ | 2,223,008 | $ | 2,177,944 |
AMSG Reports Second-Quarter Results | ||
Page 8 | ||
July 31, 2014 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
Statement of Cash Flow Data: | 2014 | 2013 | 2014 | 2013 | ||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net earnings | $ | 68,172 | $ | 65,836 | $ | 128,286 | $ | 128,109 | ||||||||
Adjustments to reconcile net earnings to net cash flows provided by operating activities: | ||||||||||||||||
Depreciation and amortization | 8,550 | 8,125 | 16,924 | 16,133 | ||||||||||||
Net loss on sale of long-lived assets | 7 | — | 611 | — | ||||||||||||
Gain on deconsolidation | (1,366 | ) | — | (3,411 | ) | (2,237 | ) | |||||||||
Share-based compensation | 2,506 | 1,916 | 4,964 | 3,966 | ||||||||||||
Excess tax benefit from share-based compensation | (363 | ) | (922 | ) | (2,090 | ) | (1,210 | ) | ||||||||
Deferred income taxes | 5,939 | 6,400 | 17,872 | 19,329 | ||||||||||||
Equity in earnings of unconsolidated affiliates | (539 | ) | (696 | ) | (1,303 | ) | (1,098 | ) | ||||||||
Increases (decreases) in cash and cash equivalents, net of effects of acquisitions and dispositions, due to changes in: | ||||||||||||||||
Accounts receivable, net | (4,328 | ) | (3,516 | ) | (5,979 | ) | (5,221 | ) | ||||||||
Supplies inventory | 238 | (119 | ) | (7 | ) | (320 | ) | |||||||||
Prepaid and other current assets | 1,328 | (2,074 | ) | (2,310 | ) | (2,057 | ) | |||||||||
Accounts payable | 1,181 | 689 | (2,397 | ) | (2,351 | ) | ||||||||||
Accrued expenses and other liabilities | 1,375 | 1,946 | 769 | (2,155 | ) | |||||||||||
Other, net | 1,062 | 1,100 | 1,652 | 1,662 | ||||||||||||
Net cash flows provided by operating activities | 83,762 | 78,685 | 153,581 | 152,550 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||
Acquisition of interests in surgery centers and related transactions | (19,399 | ) | (18,094 | ) | (24,437 | ) | (18,346 | ) | ||||||||
Acquisition of property and equipment | (9,037 | ) | (6,362 | ) | (16,075 | ) | (12,472 | ) | ||||||||
Proceeds from sale of interests in surgery centers | 981 | 55 | 2,092 | — | ||||||||||||
Other | (963 | ) | — | (1,381 | ) | 55 | ||||||||||
Net cash flows used in investing activities | (28,418 | ) | (24,401 | ) | (39,801 | ) | (30,763 | ) | ||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from long-term borrowings | 42,301 | 40,052 | 74,246 | 70,922 | ||||||||||||
Repayment on long-term borrowings | (51,473 | ) | (48,011 | ) | (102,326 | ) | (96,222 | ) | ||||||||
Distributions to noncontrolling interests | (48,816 | ) | (47,612 | ) | (92,010 | ) | (91,526 | ) | ||||||||
Proceeds from issuance of common stock upon exercise of stock options | 1,158 | 8,037 | 1,646 | 13,728 | ||||||||||||
Repurchase of common stock | — | (9,406 | ) | (2,857 | ) | (26,164 | ) | |||||||||
Capital contributions and ownership transactions by noncontrolling interests | (1,082 | ) | 377 | (498 | ) | 936 | ||||||||||
Excess tax benefit from share-based compensation | 363 | 922 | 2,090 | 1,210 | ||||||||||||
Financing cost incurred | — | (1,133 | ) | — | (1,146 | ) | ||||||||||
Net cash flows used in financing activities | (57,549 | ) | (56,774 | ) | (119,709 | ) | (128,262 | ) | ||||||||
Net decrease in cash and cash equivalents | (2,205 | ) | (2,490 | ) | (5,929 | ) | (6,475 | ) | ||||||||
Cash and cash equivalents, beginning of period | 47,116 | 42,413 | 50,840 | 46,398 | ||||||||||||
Cash and cash equivalents, end of period | $ | 44,911 | $ | 39,923 | $ | 44,911 | $ | 39,923 |
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