News Column

AmSurg Posts 4th Quarter Net Earnings

February 28, 2014

Christopher A. Holden, President and Chief Executive Officer of AmSurg Corp., announced financial results for the fourth quarter and year ended December 31, 2013.

In a release on February 25, the Company noted that revenues were $284.6 million for the quarter, an increase of 17 percent from $242.8 million for the fourth quarter of 2012. Net earnings from continuing operations attributable to AmSurg common shareholders increased 24 percent to $19.3 million for the fourth quarter of 2013 from $15.6 million for the fourth quarter of 2012 and increased 22 percent per diluted share to $0.60 from $0.49 per diluted share during the same periods.

Revenues for fiscal 2013 increased 17 percent to $1.08 billion from $923.2 million for fiscal 2012. Same-center revenue increased 1 percent for 2013 compared with 2012. Net earnings from continuing operations attributable to AmSurg common shareholders rose 17 percent to $72.7 million for 2013 from $62.2 million for 2012 and were $2.27 per diluted share, a 15 percent increase from $1.97 per diluted share in 2012. Results for 2013 include a pre-tax gain of $2.2 million, or $0.04 per diluted share, related to the deconsolidation of a surgery center that AmSurg contributed to a newly formed joint venture with a hospital system partner. Excluding this gain, net earnings from continuing operations per diluted share attributable to AmSurg common shareholders increased 13 percent to $2.23 for 2013.

"AmSurg completed a year of significant profitable growth by producing a 22 percent increase in fourth-quarter earnings per diluted share, our strongest quarterly performance for 2013," commented Holden. "This increase reflected 10 percent growth in procedures, mainly attributable to centers acquired in the prior year. In addition, our same-center revenue grew 2 percent for the fourth quarter. Revenue per procedure increased 6 percent for the fourth quarter of 2013, primarily due to the growth in the number of multi-specialty centers as a percentage of our center mix. These increases contributed to higher operating leverage for the quarter, which drove a 25 percent increase in EBITDA to $48.3 million compared with the fourth quarter of 2012 and a 100 basis point increase in EBITDA margin to 17 percent.

"We acquired six centers during 2013. These centers, along with an additional center acquisition completed January 2, are expected to generate annualized operating income of $20 million. Several relatively large and complex transactions did not close in 2013 as planned. Certain of these transactions remain in our pipeline and are expected to be completed in 2014. Our pipeline of additional potential transactions also remains strong, positioning us to achieve our acquisition objectives for 2014. We completed 2013 with a total of 242 centers in operation, compared with 237 at the end of 2012, and we had five letters of intent.

"The Company also remains well-positioned to fund its planned growth for 2014. At the end of 2013, we had availability of $222.5 million under our revolving credit facility, and our ratio of total debt to trailing 12 months EBITDA as calculated under our credit agreement was 3.0, down from 3.2 at the end of 2012. We had $50.8 million of cash and cash equivalents at the end of 2013, and we continued to produce substantial cash flow during the year. For the fourth quarter, net operating cash flows, excluding distributions to noncontrolling interests, were $36.8 million, and for 2013, were $148.7 million, up 12 percent from 2012.

"We are today establishing our financial and operating guidance both for 2014 and for the first quarter of 2014. Our financial guidance for the full year reflects the impact of fewer fourth- quarter 2013 acquisitions than planned. In addition, our guidance for the first quarter of 2014 includes the impact of severe winter weather during January and February to-date. For fiscal 2014, our guidance is as follows:

-Revenues in a range of $1.12 billion to $1.15 billion.

-Same-center revenue increase of 1 percent to 2 percent.

-Center acquisitions that generate annualized operating income in a range of $25 million to $29 million.

-Net cash flow provided by operating activities, less distributions to noncontrolling interests, in a range of $150 million to $160 million.

-Net earnings from continuing operations per diluted share attributable to common shareholders in a range of $2.45 to $2.49.

-For the first quarter of 2014, net earnings from continuing operations per diluted share attributable to common shareholders in a range of $0.53 to $0.57."

Holden concluded, "We continue to expect AmSurg, which owns and operates the most ambulatory surgery centers in the country, to benefit from strong demographic trends, better access to healthcare and increasing demand for high quality care in the most cost effective venue. In focusing the resources of our Company on enhancing the value proposition we provide our physician partners, we also expect to continue differentiating AmSurg in the market by our physician-centric operating model, thereby strengthening our position as the physicians' strategic partner of choice."

AmSurg Corp. acquires, develops and operates ambulatory surgery centers in partnership with physician practice groups throughout the United States.

More information:

www.amsurg.com

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