Establishes 2015 Financial Guidance
Christopher A. Holden, President and Chief Executive Officer of
AmSurg Corp. (NASDAQ: AMSG), today announced financial results for
the fourth quarter and year ended December 31, 2014. The Company’s
results for the quarter included:
- Net revenues of $581.8 million, an
increase of 108% from the fourth quarter of 2013;
- Net earnings from continuing operations
attributable to AmSurg common shareholders of $25.3 million;
adjusted net earnings of $39.6 million, up 95% from the fourth
quarter of 2013;
- Net earnings per diluted share from
continuing operations attributable to AmSurg common shareholders of
$0.53; adjusted net earnings per diluted share of $0.77, up 22% on
60% higher diluted shares outstanding; and
- Adjusted EBITDA of $111.0 million, a
123% increase from the fourth quarter of 2013.
See pages 6 and 7 for a reconciliation of all GAAP and non-GAAP
financial results.
For the year ended December 31, 2014, net revenues increased 53%
to $1.62 billion from 2013. Net earnings from continuing operations
attributable to AmSurg common shareholders were $50.8 million for
2014, and adjusted net earnings increased 53% to $114.2 million
from 2013. Net earnings per diluted share from continuing
operations attributable to AmSurg common shareholders were $1.28
for 2014, and adjusted net earnings per diluted share were $2.75,
up 18% from 2013 on 30% higher diluted shares outstanding. Adjusted
EBITDA for 2014 was $304.5 million.
Mr. Holden commented, “AmSurg generated strong financial
performance for the fourth quarter of 2014. We are pleased with our
22% growth in adjusted net earnings per diluted share from the
fourth quarter of 2013. Sheridan made a significant contribution in
its first full quarter as a part of the Company. Operational
integration with Sheridan is essentially completed. A strong
cultural affinity between the two organizations has been a key
factor to our smooth transition. At our core, we share a vision and
commitment to build physician-centric organizations to ensure
delivery of the highest quality care.
“The Company remains committed to the investment thesis for the
AmSurg / Sheridan combination. We have achieved our targeted cost
synergies and remain confident in our plan to achieve the $5
million of revenue synergies through a combination of acquisition,
new contracts and health system ASC joint ventures. In the fourth
quarter, we completed two physician services acquisitions and
converted to Sheridan anesthesia at one of our ASCs. We have a
strong development pipeline for both ambulatory and physician
services. The market is active with ample opportunity to deploy our
target of over $200 million in development capital in 2015. We are
pleased with our early momentum and the breadth of outstanding
synergistic opportunities. We believe our differentiated market
position and current market conditions support our positive outlook
and guidance for 2015.”
Ambulatory Services
Net revenues for Ambulatory Services increased 6% for the fourth
quarter of 2014, to $295.7 million from $279.1 million for the
fourth quarter of 2013. Same-center revenue grew 1.1% for the
fourth quarter compared with the fourth quarter of 2013 and
increased 0.7% for full-year 2014. Adjusted EBITDA increased 4% to
$51.9 million for the fourth quarter of 2014 from $49.7 million for
the same prior-year quarter. Adjusted EBITDA margin was 17.6% for
the fourth quarter of 2014 compared with 17.8% for the fourth
quarter of 2013.
During the fourth quarter, Ambulatory Services acquired four
ambulatory surgery centers, including one center acquired as part
of the Sheridan transaction, and disposed of one center. Ambulatory
Services acquired 10 centers for the full year and had 246 centers
in operation at year end. There were also five centers under letter
of intent at year end, one of which has since been acquired, and
two centers under development, one of which is expected to open in
2015.
Physician Services
Net revenues for Physician Services were $286.1 million for the
fourth quarter of 2014. Adjusted EBITDA was $59.1 million for the
latest quarter, and adjusted EBITDA margin was 20.7%.
Comparable-quarter revenue growth for Physician Services was
17.4% and was comprised of 7.2% growth in same contract revenues,
2.3% growth in new contract revenues and 7.9% growth in acquisition
revenues. Organic growth in net revenues totaled 11.4% for the
fourth quarter of 2014 reflecting a 9.7% increase in same contract
revenues and a 1.7% increase in new contract revenues. Same
contract revenue growth for the fourth quarter was comprised of a
2.2% increase in patient encounters and a 7.4% increase in net
revenue per patient encounter. Organic growth increased 8.5% for
2014 from 2013, reflecting a 6.3% increase in same contract
revenues and a 2.2% increase in new contract revenues. Same
contract revenue growth for 2014 was comprised of a 2.3% increase
in patient encounters and a 4.0% increase in net revenue per
patient encounter.
During the fourth quarter, Physician Services completed two
acquisitions of children’s services practices. Subsequent to the
end of 2014, two additional acquisitions were completed, which have
previously been announced.
Liquidity
At the end of 2014, AmSurg had cash and cash equivalents of
$208.1 million and availability of $300.0 million under its
revolving credit facility. Net cash flows from operations, less
distributions to noncontrolling interests and excluding
transaction-related costs, were $91.7 million for the fourth
quarter. For full-year 2014, net cash flows from operations, less
distributions to noncontrolling interests and excluding
transaction-related costs, were $267.3 million. The Company’s ratio
of total debt at the end of 2014 to trailing 12 months EBITDA as
calculated under the Company’s credit agreement was 5.3.
Guidance
AmSurg today is establishing its financial and operating
guidance for 2015 and for the first quarter of the year. The
Company’s guidance for adjusted net earnings per diluted share from
continuing operations attributable to common shareholders
(“Adjusted EPS”) excludes transaction and severance costs related
to acquisitions, acquisition-related amortization expense, gains or
losses on deconsolidations and share-based compensation expense.
The Company’s guidance for the first quarter of 2015 includes the
normal season impact of higher salaries and benefits expense at the
start of a new year, as well as ongoing trends in compensation. The
Company’s guidance is as follows:
- Revenues in a range of $2.44 billion to
$2.47 billion;
- Same-center revenue increase of 1% to
3% for Ambulatory Services, 5% to 7% organic revenue growth in
Physician Services;
- Adjusted EBITDA of $445 million to $451
million;
- Adjusted EPS in a range of $3.24 to
$3.32; and
- For the first quarter of 2015, adjusted
EPS in a range of $0.55 to $0.58, which includes the higher
salary-related expenses historically experienced in Physician
Services.
The information contained in the preceding paragraphs, including
information regarding the Company’s 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 attain
the financial targets set forth in this press release. 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.
For the first quarter and full year of 2015, non-GAAP adjusted
net earnings per diluted share from continuing operations exclude
acquisition-related transaction costs, acquisition-related
amortization expense, gains and losses on deconsolidation and
share-based compensation expense, net of the tax impact thereon
(see pages 6 and 7 for a reconciliation of all GAAP and non-GAAP
financial results).
Conference Call
AmSurg Corp. will hold a conference call to discuss this release
Thursday, February 26, 2015, 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” 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.
Safe Harbor
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 costs
increase; the potential loss of collections and revenue if the
Company is unable to timely enroll providers in the Medicare and
Medicaid programs; the Company’s ability to acquire and develop
additional surgery centers and its ability to acquire or develop
additional relationships with providers for outsourced physician
services on favorable terms; the Company’s ability to compete for
physician partners, managed care contracts, patients and strategic
relationships; adverse developments affecting the medical practices
of the Company’s physician partners and affiliated practices; the
Company’s ability to maintain favorable relations with its
physician partners, affiliated practices and clients; the Company’s
ability to grow revenues by increasing procedure volume while
maintaining operating margins and profitability within its existing
centers and outsourced physician services operations; the Company’s
ability to manage the growth in its business, successfully
integrate and operate acquired businesses and achieve expected
benefits from acquisitions; the Company’s ability to obtain
sufficient capital resources to complete acquisitions and develop
new surgery centers or operations related to its outsourced
physician services; 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 its surgery
centers or operations of its outsourced physician services; the
Company’s failure to comply with applicable laws and regulations;
the Company’s failure to effectively and timely transition to the
ICD-10 coding system; 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; the risk from an unpredictable impact of the
Patient Protection and Affordable Care Act, as amended by the
Health Care and Education Reconciliation Act of 2010; the risk of
regulatory changes that may obligate the Company to buy out
interests of physicians who are minority owners of its surgery
centers; the risk that non-competition agreements in place with the
Company’s physicians or other clinical employees may not be
enforceable; the risk of payment delays, forfeiture of payment or
civil and criminal penalties related to failing to satisfy any
notification and reapplication requirements for any acquired
companies to maintain licensure, certification and other
authorities to operate after an acquisition; potential liabilities
associated with the Company’s status as a general partner of
limited partnerships; liabilities for claims brought against the
Company; the risk that the Company’s reserves established with
respect to its losses covered under its insurance programs are not
adequate; the Company’s legal responsibility to minority owners of
its surgery centers, which may conflict with its interests and
prevent the Company from acting solely in its best interests;
potential write-offs of the impaired portion of intangible assets;
and potential liabilities relating to the tax deductibility of
goodwill; and other risk factors described in AmSurg’s Current
Report on Form 8-K filed with the Securities and Exchange
Commission on June 23, 2014, and Annual Report on Form 10-K for the
fiscal year ended December 31, 2013, as updated by 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.
About AmSurg
AmSurg Corp. operates an Ambulatory Services business that
acquires, develops and operates ambulatory surgery centers in
partnership with physician practice groups throughout the U.S.
AmSurg also operates a Physician Services business that provides
outsourced physician services in multiple specialties to hospitals,
ASCs and other healthcare facilities, primarily in the areas of
anesthesiology, children’s services, emergency medicine and
radiology. Through these businesses as of December 31, 2014, AmSurg
owns and operates 246 ASCs in 34 states and provides physician
services in 24 states, employing more than 2,800 physicians and
other healthcare professionals.
AMSURG CORP.
Unaudited Selected Consolidated
Financial and Operating Data
(In thousands, except earnings per
share)
Three Months Ended December 31, Year Ended
December 31,
Statement of
Earnings Data:
2014 2013 2014 2013
Revenues $ 645,619 $ 279,095 $ 1,738,950 $ 1,057,196 Provision for
uncollectibles (63,808 ) — (117,001 ) — Net revenues 581,811
279,095 1,621,949 1,057,196 Operating expenses: Salaries and
benefits 288,037 84,658 694,576 327,585 Supply cost 43,732 41,462
164,296 153,126 Other operating expenses 93,685 58,041 284,928
216,501 Transaction costs 5,209 15 33,890 300 Depreciation and
amortization 22,811 8,330 60,344 32,400 Total
operating expenses 453,474 192,506 1,238,034 729,912 Gain on
deconsolidation — — 3,411 2,237 Equity in earnings of
unconsolidated affiliates 3,577 958 7,038
3,151 Operating income 131,914 87,547 394,364 332,672 Interest
expense, net 30,379 7,184 83,285 29,525 Debt extinguishment costs —
— 16,887 — Earnings from continuing operations
before income taxes 101,535 80,363 294,192 303,147 Income tax
expense 22,301 13,015 48,103 48,654 Net
earnings from continuing operations 79,234 67,348 246,089 254,493
Net earnings (loss) from discontinued operations (150 ) 3,820
(1,296 ) 7,051 Net earnings 79,084 71,168 244,793 261,544
Less net earnings attributable to noncontrolling interests 51,705
51,610 191,092 188,841 Net earnings
attributable to AmSurg Corp. shareholders 27,379 19,558 53,701
72,703 Preferred stock dividends (2,264 ) — (4,503 ) — Net
earnings attributable to AmSurg Corp. common shareholders $ 25,115
$ 19,558 $ 49,198 $ 72,703 Amounts
attributable to AmSurg Corp. common shareholders: Earnings from
continuing operations, net of income tax $ 25,311 $ 18,931 $ 50,777
$ 71,009 Earnings (loss) from discontinued operations, net of
income tax (196 ) 627 (1,579 ) 1,694 Net earnings
attributable to AmSurg Corp. common shareholders $ 25,115 $
19,558 $ 49,198 $ 72,703 Basic earnings per share
attributable to AmSurg Corp. common shareholders: Net earnings from
continuing operations $ 0.53 $ 0.60 $ 1.29 $ 2.27 Net earnings
(loss) from discontinued operations — 0.02 (0.04 )
0.05 Net earnings $ 0.53 $ 0.62 $ 1.25 $ 2.32
Diluted earnings per share attributable to AmSurg Corp. common
shareholders: Net earnings from continuing operations $ 0.53 $ 0.59
$ 1.28 $ 2.22 Net earnings (loss) from discontinued operations —
0.02 (0.04 ) 0.05 Net earnings $ 0.53 $ 0.61
$ 1.24 $ 2.28 Weighted average number of shares and
share equivalents outstanding: Basic 47,384 31,549 39,311 31,338
Diluted 47,828 32,082 39,625 31,954
AMSURG CORP.
Unaudited Selected Consolidated
Financial and Operating Data, continued
(In thousands, except earnings per
share)
Three Months Ended December 31, Year
Ended December 31, 2014 2013 2014
2013 Reconciliation of net earnings to Adjusted
net earnings (1): Net earnings attributable to
AmSurg Corp. shareholders $ 27,379 $ 19,558 $ 53,701 $ 72,703
(Earnings) loss from discontinued operations 327 510 2,220 (1,694 )
Amortization of purchased intangibles 12,179 — 22,148 — Share-based
compensation 2,716 2,251 10,104 8,321 Gain on deconsolidation — —
(3,411 ) (2,237 ) Transaction costs 5,209 15 33,890 300 Debt
extinguishment costs — — 16,887 — Deferred financing write-off —
— 12,763 — Total pre-tax adjustments
20,431 2,776 94,601 4,690 Tax effect 8,172 2,046
34,140 2,560 Total adjustments, net 12,259 730
60,461 2,130 Adjusted net earnings $ 39,638
$ 20,288 $ 114,162 $ 74,833
Basic shares outstanding 47,384 31,549 39,311 31,338 Effect of
dilutive securities options and non-vested shares 3,891 533
2,152 616 Diluted shares outstanding, if
converted 51,275 32,082 41,463 31,954
Adjusted earnings per share $ 0.77 $ 0.63 $
2.75 $ 2.34
Reconciliation of net earnings
to Adjusted EBITDA (2): Net earnings attributable
to AmSurg Corp. shareholders $ 27,379 $ 19,558 $ 53,701 $ 72,703
(Earnings) loss from discontinued operations 196 (627 ) 1,579
(1,694 ) Interest expense, net 30,379 7,184 83,285 29,525 Income
tax expense 22,301 13,015 48,103 48,654 Depreciation and
amortization 22,811 8,330 60,344 32,400
EBITDA 103,066 47,460 247,012 181,588 Adjustments:
Share-based compensation 2,716 2,251 10,104 8,321 Transaction costs
5,209 15 33,890 300 Gain on deconsolidation — — (3,411 ) (2,237 )
Debt extinguishment costs — — 16,887 —
Total adjustments 7,925 2,266 57,470
6,384
Adjusted EBITDA $ 110,991 $ 49,726
$ 304,482 $ 187,972
Segment
Information: Ambulatory Services Adjusted EBITDA $ 51,904 $
49,726 $ 197,377 $ 187,972 Physician Services Adjusted EBITDA
59,087 — 107,105 —
Adjusted
EBITDA $ 110,991 $ 49,726 $ 304,482 $
187,972
Net Revenue by Segment: Ambulatory
Services $ 295,729 $ 279,095 $ 1,109,935 $ 1,057,196 Physician
Services 286,082 — 512,014 —
Total
net revenue $ 581,811 $ 279,095 $ 1,621,949
$ 1,057,196
See footnotes on page 12
AMSURG CORP.
Unaudited Selected Consolidated
Financial and Operating Data, continued
(In thousands, except earnings per
share and operating data)
Three Months Ended December 31, Year
Ended December 31,
Operating Data-
Ambulatory Services:
2014 2013 2014 2013
Centers in operation at end of period (consolidated) 237 233 237
233 Centers in operation at end of period (unconsolidated) 9 3 9 3
Average number of continuing centers in operation (consolidated)
235 232 233 230 New centers added during the period 4 1 10 6
Centers discontinued during the period 1 2 6 3 Centers under
development/not opened at end of period 2 — 2 — Centers under
letter of intent at end of period 5 5 5 5 Average revenue per
consolidated center $ 1,258 $ 1,203 $ 4,755 $ 4,594 Same center
revenues increase 1.1 % 2.0 % 0.7 % 0.6 % Procedures performed
during the period at consolidated centers 434,285 421,364 1,645,350
1,609,761
Operating Data-
Physician Services:
Three Months Ended
December 31, 2014
Year Ended
December 31, 2014
Same contract revenue growth 9.7 % 6.3 % New contract revenue
growth 1.7 % 2.2 % Total organic revenue growth 11.4 % 8.5 %
Three Months Ended March 31, 2015 Year
Ended December 31, 2015
2015 Guidance
Reconciliation:
Low High Low High
Reconciliation of net earnings to Adjusted net earnings
(1): Net earnings attributable to AmSurg Corp.
shareholders $ 18,500 $ 20,000 $ 127,500 $ 131,500 Amortization of
purchased intangibles 12,000 12,000 50,000 50,000 Share-based
compensation 3,800 3,800 13,800 13,800 Transaction costs 450
450 1,800 1,800 Total pre-tax adjustments 16,250
16,250 65,600 65,600 Tax effect 6,500 6,500 26,240
26,240 Total adjustments, net 9,750 9,750
39,360 39,360 Adjusted net earnings $ 28,250 $ 29,750
$ 166,860 $ 170,860 Diluted shares
outstanding, if converted 51,500 51,500 51,500
51,500 Adjusted earnings per share $ 0.55 $ 0.58
$ 3.24 $ 3.32
Reconciliation of net
earnings to Adjusted EBITDA (2): Net earnings
attributable to AmSurg Corp. shareholders $ 127,500 $ 131,500
Interest expense, net 121,000 120,800 Income tax expense 84,900
87,600 Depreciation and amortization 96,000 95,500
EBITDA 429,400 435,400 Adjustments: Share-based compensation
13,800 13,800 Transaction costs 1,800 1,800
Total
adjustments 15,600 15,600
Adjusted EBITDA $
445,000 $ 451,000
See footnotes on page 12
AMSURG CORP.
Unaudited Selected Consolidated
Financial and Operating Data, continued
(In thousands)
December 31, December 31,
Balance Sheet
Data:
2014 2013 Assets Current assets: Cash
and cash equivalents $ 208,079 $ 50,840 Restricted cash and
marketable securities 10,219 — Accounts receivable, net of
allowance of $113,357 and $27,862, respectively 233,053 105,072
Supplies inventory 19,974 18,414 Prepaid and other current assets
115,362 36,699 Total current assets 586,687 211,025 Property
and equipment, net 180,448 163,690 Investments in unconsolidated
affiliates 75,475 15,526 Goodwill 3,381,149 1,758,970 Intangible
assets, net 1,273,879 27,867 Other assets 25,886 866 Total
assets $ 5,523,524 $ 2,177,944
Liabilities and Equity
Current liabilities: Current portion of long-term debt $ 18,826 $
20,844 Accounts payable 29,585 27,501 Accrued salaries and benefits
140,044 32,294 Accrued interest 29,644 1,885 Other accrued
liabilities 67,986 7,346 Total current liabilities 286,085
89,870 Long-term debt 2,232,186 583,298 Deferred income taxes
633,480 176,020 Other long-term liabilities 89,443 25,503
Commitments and contingencies Noncontrolling interests – redeemable
184,099 177,697 Equity:
Mandatory convertible preferred stock, no
par value, 5,000 shares authorized, 1,725 and 0 shares issued and
outstanding, respectively
166,632 — Common stock, no par value, 70,000 shares authorized,
48,113 and 32,353 shares outstanding, respectively 885,393 185,873
Retained earnings 627,522 578,324 Total AmSurg Corp. equity
1,679,547 764,197 Noncontrolling interests – non-redeemable 418,684
361,359 Total equity 2,098,231 1,125,556 Total
liabilities and equity $ 5,523,524 $ 2,177,944
AMSURG CORP.
Unaudited Selected Consolidated
Financial and Operating Data, continued
(In thousands)
Three Months Ended December 31,
Year Ended December 31,
Statement of Cash
Flow Data:
2014 2013 2014 2013 Cash
flows from operating activities:
Net earnings $ 79,084 $ 71,168 $ 244,793
$ 261,544 Adjustments to reconcile net earnings to net cash
flows provided by operating activities: Depreciation and
amortization 22,811 8,330 60,344 32,400 Amortization of deferred
loan costs 2,070 — 17,715 1,977 Provision for uncollectibles 69,559
— 139,274 21,947 Net (gain) loss on sale of long-lived assets 375
(1,552 ) 2,843 (1,468 ) Gain on deconsolidation — — (3,411 ) (2,237
) Share-based compensation 2,716 2,251 10,104 8,321 Excess tax
benefit from share-based compensation (889 ) (5,357 ) (3,177 )
(7,247 ) Deferred income taxes (608 ) 8,528 30,780 38,363 Equity in
earnings of unconsolidated affiliates (3,577 ) (958 ) (7,038 )
(3,151 ) Debt extinguishment costs — — 4,536 — Increases
(decreases) in cash and cash equivalents, net of acquisitions and
dispositions: Accounts receivable (71,905 ) 142 (137,663 ) (23,244
) Supplies inventory (274 ) 470 (206 ) 132 Prepaid, supplies and
other current assets 15,323 (4,307 ) (9,091 ) (5,308 ) Accounts
payable 1,567 3,264 (8,440 ) 441 Accrued expenses and other
liabilities 17,807 (127 ) 66,175 6,693 Other, net 2,261
2,039 4,833 3,661 Net cash flows provided by
operating activities 136,320 83,891 412,371 332,824
Cash flows
from investing activities: Acquisitions and related expenses
(45,410 ) (14,139 ) (2,184,058 ) (73,594 ) Acquisition of property
and equipment (17,108 ) (8,145 ) (40,217 ) (28,856 ) Proceeds from
sale of interests in surgery centers 2,100 3,402 7,069 3,553
Purchases of marketable securities (2,988 ) — (6,474 ) — Maturities
of marketable securities 3,486 — 3,486 — Other (7,023 ) 52
(4,941 ) 159 Net cash flows used in investing activities
(66,943 ) (18,830 ) (2,225,135 ) (98,738 )
Cash flows from
financing activities: Proceeds from long-term borrowings 2,559
32,769 2,048,958 162,204 Repayment on long-term borrowings (5,432 )
(50,407 ) (408,475 ) (202,083 ) Distributions to noncontrolling
interests (50,654 ) (47,068 ) (190,097 ) (184,149 ) Proceeds from
preferred stock offering — — 172,500 — Cash dividends for preferred
shares (2,264 ) — (4,503 ) — Proceeds from common stock offering —
— 439,875 — Proceeds from issuance of common stock upon exercise of
stock options 480 10,060 2,630 33,349 Repurchase of common stock
(1,725 ) (10,483 ) (4,615 ) (45,964 ) Excess tax benefit from
share-based compensation 889 5,357 3,177 7,247 Payments of equity
issuance costs (128 ) — (24,494 ) — Financing costs incurred (138 )
(65 ) (65,811 ) (1,322 ) Other 1,034 113 858
1,074 Net cash flows provided by (used in) financing
activities (55,379 ) (59,724 ) 1,970,003 (229,644 ) Net
increase in cash and cash equivalents 13,998 5,337 157,239 4,442
Cash and cash equivalents, beginning of year 194,081 45,503
50,840 46,398 Cash and cash equivalents, end
of year $ 208,079 $ 50,840 $ 208,079 $ 50,840
AMSURG CORP. Unaudited
Selected Consolidated Financial and Operating Data, continued
(In thousands, except earnings per share)
Presented below is certain statement of
earnings and operating data for 2014, which have been restated in
order to present additional discontinued operations.
For the Three Months Ended
For the Nine
Months Ended
Sept. 30,
2014
March, 31 June 30, Sept. 30,
Statement of
Earnings Data:
2014 2014 2014 Revenue $ 259,561 $ 278,227 $
555,543 $ 1,093,331 Provision for uncollectibles — —
(53,193 ) (53,193 ) Net revenue 259,561 278,227 502,350 1,040,138
Operating expenses: Salaries and benefits 82,149 84,053 240,337
406,539 Supply cost 37,805 40,873 41,886 120,564 Other operating
expenses 54,168 55,812 81,263 191,243 Transaction costs — 3,579
25,102 28,681 Depreciation and amortization 8,259 8,436
20,838 37,533 Total operating expenses 182,381
192,753 409,426 784,560 Gain on deconsolidation 2,045 1,366 — 3,411
Equity in earnings of unconsolidated affiliates 764 539
2,158 3,461 Operating income 79,989 87,379
95,082 262,450 Interest expense, net 6,960 6,892 39,054 52,906 Debt
extinguishment costs — — 16,887 16,887
Earnings from continuing operations before income taxes 73,029
80,487 39,141 192,657 Income tax expense 12,982 12,798
22 25,802 Net earnings from continuing
operations 60,047 67,689 39,119 166,855 Net earnings (loss) from
discontinued operations 68 483 (1,697 ) (1,146 ) Net
earnings 60,115 68,172 37,422 165,709 Net earnings attributable to
noncontrolling interests 42,920 49,211 47,256
139,387 Net earnings (loss) attributable to AmSurg Corp.
shareholders 17,195 18,961 (9,834 ) 26,322 Preferred stock
dividends — — (2,239 ) (2,239 ) Net earnings (loss)
attributable to AmSurg Corp. common shareholders $ 17,195 $
18,961 $ (12,073 ) $ 24,083 Amounts
attributable to AmSurg Corp. common shareholders: Earnings (loss)
from continuing operations, net of income tax $ 17,392 $ 18,771 $
(10,697 ) $ 25,466 Earnings (loss) from discontinued operations,
net of income tax (197 ) 190 (1,376 ) (1,383 ) Net earnings
(loss) attributable to AmSurg Corp. common shareholders $ 17,195
$ 18,961 $ (12,073 ) $ 24,083 Basic earnings
(loss) per share attributable to AmSurg Corp. common shareholders:
Net earnings (loss) from continuing operations $ 0.55 $ 0.59 $
(0.23 ) $ 0.70 Net earnings (loss) from discontinued operations
(0.01 ) 0.01 (0.03 ) (0.04 ) Net earnings (loss) $ 0.54
$ 0.60 $ (0.26 ) $ 0.66 Diluted earnings
(loss) per share attributable to AmSurg Corp. common shareholders:
Net earnings (loss) from continuing operations $ 0.54 $ 0.58 $
(0.23 ) $ 0.69 Net earnings (loss) from discontinued operations
(0.01 ) 0.01 (0.03 ) (0.04 ) Net earnings (loss) $ 0.54
$ 0.59 $ (0.26 ) $ 0.65 Weighted average
number of shares and share equivalents outstanding: Basic 31,716
31,825 46,320 36,620 Diluted 32,120 32,233 46,320 37,026
AMSURG CORP. Unaudited Selected
Consolidated Financial and Operating Data, continued (In
thousands, except earnings per share)
Presented below is certain statement of
earnings and operating data for 2013, which have been restated in
order to present additional discontinued operations.
For the Three Months Ended March 31,
2013
June 30,
2013
Sept. 30,
2013
Dec. 31,
2013
Year Ended
Dec. 31, 2013
Statement of
Earnings Data:
Net revenues $ 253,364 $ 262,497 $ 262,240 $ 279,095 $ 1,057,196
Operating expenses: Salaries and benefits 79,839 79,897 83,191
84,658 327,585 Supply cost 36,377 38,144 37,143 41,462 153,126
Other operating expenses 51,269 52,417 54,774 58,041 216,501
Transaction costs 35 140 110 15 300 Depreciation and amortization
7,874 7,986 8,210 8,330 32,400 Total
operating expenses 175,394 178,584 183,428 192,506 729,912 Gain on
deconsolidation 2,237 — — — 2,237 Equity in earnings of
unconsolidated affiliates 402 696 1,095 958
3,151 Operating income 80,609 84,609 79,907 87,547 332,672
Interest expense, net 7,540 7,509 7,292 7,184
29,525 Earnings from continuing operations before income
taxes 73,069 77,100 72,615 80,363 303,147 Income tax expense 12,001
12,493 11,145 13,015 48,654 Net
earnings from continuing operations 61,068 64,607 61,470 67,348
254,493 Net earnings from discontinued operations 1,205
1,229 797 3,820 7,051 Net earnings 62,273
65,836 62,267 71,168 261,544 Net earnings attributable to
noncontrolling interests 44,462 47,273 45,496
51,610 188,841 Net earnings attributable to AmSurg Corp.
common shareholders $ 17,811 $ 18,563 $ 16,771
$ 19,558 $ 72,703 Amounts attributable to AmSurg
Corp. common shareholders: Earnings from continuing operations, net
of income tax $ 17,349 $ 18,093 $ 16,636 $ 18,931 $ 71,009
Discontinued operations, net of income tax 462 470
135 627 1,694 Net earnings attributable to AmSurg
Corp. common shareholders $ 17,811 $ 18,563 $ 16,771
$ 19,558 $ 72,703 Basic earnings per share
attributable to AmSurg Corp. common shareholders: Net earnings from
continuing operations $ 0.56 $ 0.58 $ 0.53 $ 0.60 $ 2.27 Net
earnings from discontinued operations 0.01 0.02 —
0.02 0.05 Net earnings $ 0.57 $ 0.59 $
0.53 $ 0.62 $ 2.32 Diluted earnings per share
attributable to AmSurg Corp. common shareholders: Net earnings from
continuing operations $ 0.54 $ 0.57 $ 0.52 $ 0.59 $ 2.22 Net
earnings from discontinued operations 0.01 0.01 —
0.02 0.05 Net earnings $ 0.56 $ 0.58 $
0.52 $ 0.61 $ 2.28 Weighted average number of shares
and share equivalents outstanding: Basic 31,217 31,208 31,376
31,549 31,338 Diluted 31,881 31,862 31,991 32,082 31,954
AMSURG CORP.
Footnotes to Reconciliations of
Non-GAAP Measures to GAAP Measures
(1) 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, acquisition costs, including associated
debt extinguishment costs and deferred financing write-off, and
acquisition-related amortization expense (the majority of which
relate to the Sheridan transaction and which are of a nature and
significance not generally associated with our historical
individual center acquisition activity) and share-based
compensation expense. 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.
For purposes of calculating adjusted earnings per share, the
Company utilizes the if-converted method to determine the number of
diluted shares outstanding. In periods where utilizing the
if-converted method is anti-dilutive, the mandatory convertible
preferred stock will not be included in the calculation of diluted
shares outstanding. (2) 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 and discontinued operations. 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.
AmSurg Corp.Claire M. Gulmi, 615-665-1283Executive Vice
President and Chief Financial Officer
Amsurg Corp. (NASDAQ:AMSG)
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