AmSurg Corp. (“AmSurg”) (NASDAQ: AMSG) today announced
preliminary financial results for the third quarter ended September
30, 2015.
Based on preliminary unaudited information, AmSurg expects
revenues for the third quarter of 2015 to be approximately $650.2
million compared to $502.4 million for the third quarter of 2014.
Net earnings from continuing operations attributable to AmSurg
common shareholders is expected to be approximately $40.4 million
compared to a net loss of $12.1 million for the comparable
prior-year period. Adjusted net earnings for the third quarter of
2015 is expected to be approximately $53.0 million compared to
$34.6 million for the third quarter of 2014. Net earnings per
diluted share from continuing operations attributable to AmSurg
common shareholders is anticipated to be approximately $0.83 for
the third quarter of 2015 compared to a net loss of $0.23 for the
third quarter of the previous year. For the third quarter of 2015,
adjusted net earnings per diluted share is expected to be
approximately $1.03 compared to $0.69 for the third quarter of
2014. Adjusted EBITDA is anticipated to be approximately $133.2
million for the 2015 third quarter compared to $95.9 million for
the 2014 third quarter.
See page 4 for a reconciliation of all GAAP and non-GAAP
financial results.
AmSurg anticipates Ambulatory Services same-center revenue
growth to be 6.6% and Physician Services same-contract revenue
growth to be 10.1% for the third quarter of 2015. Net cash flows
from operations, less distributions to noncontrolling interests,
are expected to be approximately $118.7 million for the third
quarter of 2015. The Company’s ratio of total debt at the end of
the third quarter of 2015 to trailing 12 months EBITDA as
calculated under the Company’s credit agreement is anticipated to
be approximately 4.4.
The financial results are subject to finalization of the
Company’s quarterly financial and accounting procedures. These
preliminary third-quarter results are not necessarily indicative
for any future period and should be read together with the “Risk
Factors” section of this news release. These estimates are
preliminary and are based upon the information available to
management as of today’s date. Therefore, it is possible that
AmSurg’s actual results may differ materially from these estimates
due to the completion of AmSurg’s financial closing procedures,
final adjustments and other developments that may arise between now
and the time AmSurg’s 2015 third-quarter financial results are
finalized.
Conference Call
AmSurg Corp. will hold a conference call Tuesday, October 20,
2015, at 8:30 a.m. Eastern time. The dial-in number is (719)
325-2356, pass code 7964659. Presentation materials related to the
conference call will be available on the Company’s web site,
www.amsurg.com, by following the link to Investors. A telephonic
replay of the conference call will be available through midnight on
October 26, 2015, by dialing (719) 457-0820 and entering pass
code 7964659. Investors will also have the opportunity to listen to
the conference call over the Internet by going to the Company’s web
site and following the link to 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.
Risk Factors
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: we may
face challenges managing our Physician Services Division as a new
business and may not realize anticipated benefits; we may become
subject to investigations by federal and state entities and
unpredictable impacts of the Patient Protection and Affordable Care
Act, as amended by the Health Care and Education Reconciliation Act
of 2010; we may not be able to successfully maintain effective
internal controls over financial reporting; we may not be able to
implement our business strategy, manage the growth in our business,
and integrate acquired businesses; our substantial indebtedness and
restrictions in our debt instruments could adversely affect our
business or our ability to implement our growth strategy, or limit
our ability to react to changes in the economy or our industry; we
may not generate sufficient cash to service our indebtedness,
including any future indebtedness; regulatory changes may obligate
us to buy out interests of physicians who are minority owners of
our surgery centers; we may not be able to successfully maintain
our information systems and processes, implement new systems and
processes, and maintain the security of those systems and
processes; we may fail to effectively and timely transition to the
ICD-10 coding system; we may be subject to litigation and
investigations and liability claims for damages and other expenses
not covered by insurance; we may be required to write-off a portion
of our intangible assets; payments from third-party payors,
including government healthcare programs, may decrease or not
increase as our costs increase; there may be adverse developments
affecting the medical practices of our physician partners; we may
not be able to maintain favorable relations with our physician
partners; we may not be able to grow our ambulatory services
revenue by increasing procedure volume while maintaining operating
margins and profitability at our existing surgery centers; we may
not be able to compete for physician partners, managed care
contracts, patients and strategic relationships; adverse weather
and other factors beyond our control may affect our business; our
legal responsibility to minority owners of our surgery centers may
conflict with our interests and prevent us from acting solely in
our best interests; we may be adversely impacted by changes in
patient volume and patient mix; several client relationships
generate a significant portion of our physician services revenues;
our physician services contracts may be cancelled or not renewed or
we may not be able to enter into additional contracts under terms
acceptable to us; reimbursement rates, revenue and profit margin
under our fee-for-service physician services payor contracts may
decrease; we may not be able to timely or accurately bill for
services; laws and regulations that regulate payments for medical
services made by government healthcare programs could cause our
revenues to decrease; we may not be able to enroll our physician
services providers in the Medicare and Medicaid programs on a
timely basis; our strategic partnerships with healthcare providers
may not be successful; our segments of the market for medical
services have a high level of competition; we may not be able to
successfully recruit and retain physicians, nurses and other
clinical providers; we may not be able to accurately assess the
costs we will incur under new contracts; our margins may be
negatively impacted by cross-selling to existing clients or selling
bundled services to new clients; we may not be able to enforce
non-compete agreements with our physicians and other clinical
employees in some jurisdictions; there may be unfavorable changes
in regulatory, economic and other conditions in the states where we
operate; legislative or regulatory action may make our captive
insurance company arrangement less feasible or otherwise reduce our
profitability; our reserves with respect to our losses covered
under our insurance programs may not be sufficient; and the other
risk factors are described in AmSurg’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2014, 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 Corp.
AmSurg’s Ambulatory Services Division acquires, develops and
operates ambulatory surgery centers in partnership with physicians
throughout the U.S. AmSurg’s Physician Services Division, Sheridan,
provides outsourced physician services in multiple specialties to
hospitals, ASCs and other healthcare facilities throughout the
U.S., primarily in the areas of anesthesiology, children’s
services, emergency medicine and radiology. Through these
businesses as of September 30, 2015, AmSurg owned and operated 253
ASCs in 34 states and provided physician services to more than 360
healthcare facilities in 27 states. AmSurg has partnerships with,
or employs, over 5,000 physicians in 38 states and the District of
Columbia.
AMSURG CORP. Unaudited Selected Consolidated
Financial Data (In thousands, except earnings per share)
Three Months Ended September 30,
2015 2014 (Preliminary
Estimates) Reconciliation of net earnings (loss) to
Adjusted net earnings (1): Net earnings (loss) attributable to
AmSurg Corp. shareholders $ 42,661 $ (9,834 ) Loss from
discontinued operations - 1,877 Amortization of purchased
intangibles 12,681 9,969 Share-based compensation 3,727 2,424
Transaction costs 2,107 25,102 Gain on deconsolidation (9,112 ) -
Net change in fair value of contingent consideration 1,928 - Debt
extinguishment costs - 16,887 Deferred financing write-off -
12,763 Total pre-tax adjustments 11,331 69,022
Tax effect (including $3.7 million in
change in valuation allowance for 2015)
946 24,574 Total adjustments, net
10,385 44,448 Adjusted net earnings $
53,046 $ 34,614 Basic shares outstanding
47,707 46,320 Effect of dilutive securities, options and non-vested
shares 3,568 3,904 Diluted shares
outstanding, if converted 51,275 50,224
Adjusted earnings per share $ 1.03 $ 0.69
Reconciliation of net earnings (loss) to Adjusted EBITDA
(2): Net earnings (loss) attributable to AmSurg Corp.
shareholders $ 42,661 $ (9,834 ) Loss from discontinued operations
- 1,376 Interest expense, net 30,242 39,054 Income tax expense
37,518 22 Depreciation and amortization 24,106
20,838
EBITDA 134,527 51,456 Adjustments: Share-based
compensation 3,727 2,424 Transaction costs 2,107 25,102 Gain on
deconsolidation (9,112 ) - Net change in fair value of contingent
consideration 1,928 - Debt extinguishment costs -
16,887
Total adjustments (1,350 )
44,413
Adjusted EBITDA $ 133,177 $
95,869
AMSURG CORP.Footnotes to
Reconciliations of Non-GAAP Measures to GAAP Measures
(1) We believe the calculation of adjusted net earnings 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
discontinued operations, the gains or loss from deconsolidations,
which are non-cash in nature, transaction 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), changes in
contingent purchase price consideration 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 items 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, we utilize
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 expense, net, income taxes, depreciation, amortization,
share-based compensation, transaction costs, changes in contingent
purchase price consideration, gain or loss 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 from
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.
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version on businesswire.com: http://www.businesswire.com/news/home/20151020005587/en/
AmSurg Corp.Claire M. Gulmi, 615-665-1283Executive Vice
President and Chief Financial Officer
Amsurg Corp. (NASDAQ:AMSG)
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