AmSurg Reports Net Earnings from Continuing Operations of $0.51 Per Diluted Share for Second-Quarter 2012

  AmSurg Reports Net Earnings from Continuing Operations of $0.51 Per Diluted
  Share for Second-Quarter 2012

                       Same-Center Revenues Increase 3%

               Affirms Established Financial Guidance for 2012

Business Wire

NASHVILLE, Tenn. -- July 24, 2012

Christopher A. Holden, President and Chief Executive Officer of AmSurg Corp.
(NASDAQ: AMSG), today announced financial results for the second quarter ended
June 30, 2012. Revenues for the quarter were $231.6 million, a 23% increase
from $187.5 million for the second quarter of 2011. Net earnings from
continuing operations attributable to AmSurg common shareholders increased to
$16.2 million, or $0.51 per diluted share, for the second quarter of 2012 from
$12.7 million, or $0.40 per diluted share, for the second quarter of 2011,
which included acquisition transaction costs of $0.02 per diluted share.
Excluding these costs from the prior year, net earnings from continuing
operations per diluted share attributable to AmSurg common shareholders
increased 21% to $0.51 for the latest quarter from $0.42 for the second
quarter last year.

Revenues for the first six months of 2012 increased 26% to $461.8 million from
$365.2million for the same period in 2011. Net earnings from continuing
operations attributable to AmSurg common shareholders increased to $31.9
million, or $1.01 per diluted share, for the first six months of 2012 from
$24.3 million, or $0.78 per diluted share, for the first half of 2011, which
included acquisition transaction costs of $0.02 per diluted share. Excluding
these costs from the prior year, net earnings from continuing operations per
diluted share attributable to AmSurg common shareholders increased 26% to
$1.01 for the first half of 2012 from $0.80 for the comparable 2011 period.

Mr. Holden remarked, “AmSurg’s second-quarter results represent the third
consecutive quarter in which our revenues have grown in excess of 20% on a
comparable-quarter basis. For the latest quarter, this growth was driven by a
3% increase in same-center revenue, as well as an expansion in the number of
centers in operation to 228 at the quarter’s end from 206 centers at the end
of the second quarter last year. Our centers produced a 14% increase in
procedures for the latest quarter compared with the second quarter last year,
and revenue per procedure increased 8%, consistent with the growth in
multi-specialty centers as a percentage of our center mix since the second
quarter last year.

“During the second quarter, we completed the scheduled opening of one de novo
center. We also had seven centers under letter of intent at the end of the
quarter. We primarily applied our free cash flow for the quarter to net
repayments of long-term debt of $27.9 million, which contributed to an
improvement in our ratio of total debt to trailing 12 months EBITDA as
calculated under our credit agreement to 2.6 compared with 2.8 and 2.9 at
March 31, 2012 and December 31, 2011, respectively.

“Net cash flows from operating activities increased 21% for the second quarter
of 2012 to $74.5 million from $61.7 million for the second quarter of 2011.
Excluding distributions to noncontrolling interests, net cash flows from
operations grew 17% to $30.7 million from $26.2million. Excluding
distributions to noncontrolling interests, our cash flow was 1.9 times net
earnings from continuing operations attributable to AmSurg common
shareholders.

“In late June, we amended our credit agreements, which increased availability
under our revolving credit agreement by $25 million to $475 million, reduced
the interest rate on the outstanding borrowings under the agreement and
extended its term through June 2017. At the end of the second quarter, our
availability under our revolving credit facility was $159 million, and we had
cash and cash equivalents of $37.6 million. With expectations for continued
substantial cash flow during 2012, we believe we are well positioned to fund
our planned growth for the year.

“Based on our performance through the first half of 2012 and our outlook for
the remainder of the year, we today affirm our established financial guidance
for 2012, while increasing the lower end of the expected range of same-center
revenue growth for the year. We also establish our guidance for the third
quarter of 2012, which reflects our more typical seasonality, as well as one
less operating day than the second quarter of 2012 and the third quarter last
year, as follows:

  *Revenues in a range of $905 million to $925 million for 2012.
  *Same-center revenue increase of 2% to 3% for 2012, up from the prior range
    of 1% to 3%.
  *Center acquisitions for 2012 that generate annualized operating income in
    a range of $25million to $29 million, including approximately $2 million
    from centers acquired in the first half of 2012.
  *Net cash flow provided by operating activities, less distributions to
    noncontrolling interests, in a range of $115 million to $120 million for
    2012.
  *Net earnings from continuing operations per diluted share attributable to
    common shareholders for 2012 in a range of $1.97 to $2.01.
  *Net earnings from continuing operations per diluted share attributable to
    common shareholders for the third quarter of 2012 in a range of $0.47 to
    $0.49.”

Mr. Holden concluded, “We are pleased with the improved operating environment
evidenced by two consecutive quarters of at least 3% same-center revenue
growth, compared with 1% for the first two quarters last year. While not
discounting the potential impact of uncertain economic conditions and high
unemployment, our second-quarter results support our confidence in meeting our
guidance of revenue and earnings growth in the mid to high teens for 2012.

“Beyond 2012, we expect AmSurg’s unique positioning in the free-standing ASC
industry to support sustained growth. In operating the largest number of
centers in the country, we are playing a significant role in expanding access
to lower cost, high quality healthcare at a time when demand for such access
from patients, payers and physicians is expected to steadily grow for the
foreseeable future. In addition to organic growth, we have an unequaled record
of expanding our center base through acquisition in an industry that remains
highly fragmented. As the only public company focused on ambulatory care, we
believe our access to capital represents a competitive advantage in
implementing our center acquisition strategy, in addition to our strong cash
flows and financial position. We further believe that we have built a
market-leading position as the physician partner of choice due to our
fundamental commitment to differentiating AmSurg through a physician-centric
culture. As a result of our competitive strengths in an industry experiencing
favorable long-term growth trends, we are confident of our prospects for
producing long-term growth in earnings and shareholder value.”

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
June 30, 2012, AmSurg owned and operated 228 centers.


AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data
(Dollars in thousands, except per share amounts)
                                                              
                         For the Three Months        For the Six Months
                         Ended June 30,              Ended June 30,
Statement of Earnings    2012          2011          2012          2011
Data:
                                                                   
Revenues                 $ 231,581     $ 187,522     $ 461,792     $ 365,248
                                                                   
Operating expenses:
Salaries and benefits      70,957        57,127        143,410       112,380
Supply cost                33,169        23,938        65,386        46,418
Other operating            48,681        40,393        96,090        78,153
expenses
Depreciation and          7,463       6,133       14,838      12,046  
amortization
                                                                   
Total operating            160,270       127,591       319,724       248,997
expenses
                                                                   
Equity in earnings of
unconsolidated            316         -           711         -       
affiliates
                                                                   
Operating income           71,627        59,931        142,779       116,251
                                                                   
Interest expense          4,159       3,631       8,428       7,573   
                                                                   
Earnings from
continuing operations      67,468        56,300        134,351       108,678
before income taxes
Income tax expense        11,263      8,899       22,204      17,166  
                                                                   
Net earnings from          56,205        47,401        112,147       91,512
continuing operations
                                                                   
Discontinued
operations:
Earnings (loss) from
operations of
discontinued interests     -             60            (110    )     758
in surgery centers,
net of income tax
Loss on disposal of
discontinued interests    (660    )    (1,084  )    (1,553  )    (1,265  )
in surgery centers,
net of income tax
                                                                   
Net loss from
discontinued              (660    )    (1,024  )    (1,663  )    (507    )
operations
                                                                   
Net earnings               55,545        46,377        110,484       91,005
                                                                   
Less net earnings
attributable to
noncontrolling
interests:
Net earnings from          40,009        34,718        80,232        67,224
continuing operations
Net earnings (loss)
from discontinued         -           29          (60     )    458     
operations
                                                                   
Total net earnings
attributable to           40,009      34,747      80,172      67,682  
noncontrolling
interests
                                                                   
Net earnings
attributable to AmSurg   $ 15,536     $ 11,630     $ 30,312     $ 23,323  
Corp. common
shareholders
                                                                   
Amounts attributable
to AmSurg Corp. common
shareholders:
Earnings from
continuing operations,   $ 16,196      $ 12,683      $ 31,915      $ 24,288
net of income tax
Discontinued
operations, net of        (660    )    (1,053  )    (1,603  )    (965    )
income tax
                                                                   
Net earnings
attributable to AmSurg   $ 15,536     $ 11,630     $ 30,312     $ 23,323  
Corp. common
shareholders
                                                                   
Earnings per
share-basic:
Net earnings from
continuing operations
attributable to AmSurg   $ 0.53        $ 0.42        $ 1.04        $ 0.80
Corp. common
shareholders
Net loss from
discontinued
operations                (0.02   )    (0.03   )    (0.05   )    (0.03   )
attributable to AmSurg
Corp. common
shareholders
                                                                   
Net earnings
attributable to AmSurg   $ 0.51       $ 0.38       $ 0.99       $ 0.77    
Corp. common
shareholders
                                                                   
Earnings per
share-diluted:
Net earnings from
continuing operations
attributable to AmSurg   $ 0.51        $ 0.40        $ 1.01        $ 0.78
Corp. common
shareholders
Net loss from
discontinued
operations                (0.02   )    (0.03   )    (0.05   )    (0.03   )
attributable to AmSurg
Corp. common
shareholders
                                                                   
Net earnings
attributable to AmSurg   $ 0.49       $ 0.37       $ 0.96       $ 0.75    
Corp. common
shareholders
                                                                   
Weighted average
number of shares and
share equivalents
(000's):
Basic                      30,743        30,415        30,681        30,418
Diluted                    31,577        31,335        31,489        31,180
                                                                   

    
    AMSURG CORP.
    Unaudited Selected Consolidated Financial and Operating Data, continued
    (Dollars in thousands, except per share amounts)
                                                              
                         For the Three Months        For the Six Months
                         Ended June 30,              Ended June 30,
    Operating Data:      2012          2011          2012          2011
                                                                   
    Continuing
    centers in
    operation at end       226           206           226           206
    of period
    (consolidated)
    Continuing
    centers in
    operation at end       2             -             2             -
    of period
    (unconsolidated)
    Average number of
    continuing
    centers in             225           206           225           203
    operation
    (consolidated)
    New centers added      1             5             2             6
    during the period
    Centers
    discontinued           -             1             2             2
    during the period
    Centers under
    development/not        -             1             -             1
    opened at end of
    period
    Centers under
    letter of intent       7             4             7             4
    at end of period
    Average revenue
    per consolidated     $ 1,028       $ 912         $ 2,054       $ 1,798
    center
    Same center            3       %     1       %     4       %     1       %
    revenues increase
    Procedures
    performed during
    the period at          385,630       338,331       768,180       656,601
    consolidated
    centers
    Income tax
    expense
    attributable to      $ 210         $ 175         $ 422         $ 304
    noncontrolling
    interests
    Reconciliation of
    net earnings to
    EBITDA (1):
    Net earnings from
    continuing
    operations
    attributable to      $ 16,196      $ 12,683      $ 31,915      $ 24,288
    AmSurg Corp.
    common
    shareholders
    Add: income tax        11,263        8,899         22,204        17,166
    expense
    Add: interest          4,159         3,631         8,428         7,573
    expense, net
    Add: depreciation     7,463       6,133       14,838      12,046  
    and amortization
                                                                   
    EBITDA               $ 39,081     $ 31,346     $ 77,385     $ 61,073  
                                                                   
    EBITDA is defined as earnings before interest, income taxes and
    depreciation and amortization. EBITDA should not be considered a measure
    of financial performance under generally accepted accounting principles.
    Items excluded from EBITDA are significant components in understanding and
    assessing financial performance. 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. EBITDA
    should not be considered in isolation or as an alternative to net income,
    cash flows generated by operations, investing or financing activities, or
(1) other financial statement data presented in the consolidated financial
    statements as indicators of financial performance or liquidity. Because
    EBITDA is not a measurement determined in accordance with generally
    accepted accounting principles and is thus susceptible to varying
    calculations, 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 EBITDA as
    defined.
    


AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data, continued
(Dollars in thousands)
                                                           
                                                    June 30,      December 31,
Balance Sheet Data:                                 2012          2011
                                                                  
Assets
                                                                  
Current assets:
Cash and cash equivalents                           $ 37,649      $  40,718
Accounts receivable, net of allowance of              90,446         93,454
$23,009 and $18,844, respectively
Supplies inventory                                    14,741         15,039
Deferred income taxes                                 2,478          2,129
Prepaid and other current assets                     21,813        21,875
                                                                  
Total current assets                                  167,127        173,215
                                                                  
Property and equipment, net                           143,830        144,558
Investment in unconsolidated affiliates               11,851         10,522
and long-term notes receivable
Goodwill                                              1,240,422      1,229,298
Intangible assets, net                               16,248        15,425
                                                                  
Total assets                                        $ 1,579,478   $  1,573,018
                                                                  
Liabilities and Equity
                                                                  
Current liabilities:
Current portion of long-term debt                   $ 10,018      $  10,800
Accounts payable                                      17,442         19,746
Current income taxes payable                          -              1,796
Accrued salaries and benefits                         22,576         22,224
Other accrued liabilities                            9,664         9,088
                                                                  
Total current liabilities                             59,700         63,654
                                                                  
Long-term debt                                        409,726        447,963
Deferred income taxes                                 125,853        114,167
Other long-term liabilities                           28,480         28,131
Commitments and contingencies
Noncontrolling interests - redeemable                 171,412        170,636
Preferred stock, no par value, 5,000,000
shares authorized, no shares issued or                -              -
outstanding
Equity:
Common stock, no par value, 70,000,000
shares authorized, 31,624,480 and                     174,690        173,187
31,283,772 shares outstanding,
respectively
Retained earnings                                    473,370       443,058
                                                                  
Total AmSurg Corp. equity                             648,060        616,245
Noncontrolling interests - non-redeemable            136,247       132,222
                                                                  
Total equity                                         784,307       748,467
                                                                  
Total liabilities and equity                        $ 1,579,478   $  1,573,018
                                                                  

                                                              
AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data, continued
(Dollars in thousands)
                                                                   
                        For the Three Months        For the Six Months
                        Ended June 30,              Ended June 30,
Statement of Cash       2012          2011          2012           2011
Flow Data:
                                                                   
Cash flows from
operating activities:
Net earnings            $ 55,545      $ 46,377      $ 110,484      $ 91,005
Adjustments to
reconcile net
earnings to net cash
flows provided by
operating activities:
Depreciation and          7,463         6,133         14,838         12,046
amortization
Net (gain) loss on
sale of long-lived        -             (465    )     599            (363    )
assets
Share-based               1,620         1,578         3,412          3,171
compensation
Excess tax benefit
from share-based          (450    )     (61     )     (529     )     (463    )
compensation
Deferred income taxes     4,666         5,814         13,388         11,460
Equity in earnings of
unconsolidated            (316    )     -             (711     )     -
affiliates, net
Increase (decrease)
in cash and cash
equivalents, net of
effects of
acquisition and
dispositions, due to
changes in:
Accounts receivable,      4,054         (290    )     2,935          (1,534  )
net
Supplies inventory        156           141           333            67
Prepaid and other         302           1,144         (331     )     2,506
current assets
Accounts payable          2,594         (1,590  )     901            (3,737  )
Accrued expenses and      (1,631  )     2,666         (2,616   )     (1,866  )
other liabilities
Other, net               476         298         921          733     
                                                                   
Net cash flows
provided by operating     74,479        61,745        143,624        113,025
activities
                                                                   
Cash flows from
investing activities:
Acquisition of
interest in surgery       (115    )     (41,979 )     (9,972   )     (45,674 )
centers and related
transactions
Acquisition of
property and              (8,523  )     (5,959  )     (14,569  )     (10,303 )
equipment
Proceeds from the
sale of interests in     -           3           -            3,369   
surgery centers
                                                                   
Net cash flows used
in investing              (8,638  )     (47,935 )     (24,541  )     (52,608 )
activities
                                                                   
Cash flows from
financing activities:
Proceeds from             13,778        57,364        33,378         72,984
long-term borrowings
Repayment on              (41,640 )     (40,076 )     (72,517  )     (64,852 )
long-term borrowings
Distributions to
noncontrolling            (43,750 )     (35,497 )     (82,759  )     (67,360 )
interests
Distributions
received from             400           -             400            -
unconsolidated
affiliates
Proceeds from
issuance of common        4,151         891           6,672          4,628
stock upon exercise
of stock options
Repurchase of common      (4,396  )     -             (7,219   )     (6,185  )
stock
Capital contributions
and ownership
transactions by           250           675           1,119          698
noncontrolling
interests
Excess tax benefit
from share-based          450           61            529            463
compensation
Financing cost           (1,755  )    (1,982  )    (1,755   )    (1,986  )
incurred
                                                                   
Net cash flows used
in financing             (72,512 )    (18,564 )    (122,152 )    (61,610 )
activities
                                                                   
Net decrease in cash      (6,671  )     (4,754  )     (3,069   )     (1,193  )
and cash equivalents
Cash and cash
equivalents,             44,320      37,708      40,718       34,147  
beginning of period
                                                                   
Cash and cash
equivalents, end of     $ 37,649     $ 32,954     $ 37,649      $ 32,954  
period

Contact:

AmSurg Corp.
Claire M. Gulmi, 615-665-1283
Executive Vice President and Chief Financial Officer
 
Press spacebar to pause and continue. Press esc to stop.