Adjusts 2016 Financial Guidance
AMSURG Corp. (NASDAQ: AMSG) today announced financial results
for the third quarter and nine months ended September 30, 2016. The
Company’s results for the quarter, compared with the third quarter
of 2015, included:
- Net revenues of $822.2 million, up 26%
from $650.2 million for the third quarter of 2015;
- Net earnings attributable to AMSURG
common shareholders of $37.7 million, a decline of 7%, and $0.69
per diluted share, a decline of 17%, primarily due to transaction
costs related to AMSURG’s proposed merger with Envision Healthcare
and to AMSURG’s deconsolidation activities;
- An increase of 22% in adjusted net
earnings to $64.9 million;
- A 10% increase in adjusted net earnings
per diluted share to $1.13, on a 12% increase in diluted shares
outstanding, if converted, primarily due the Company’s December
2015 public offering of common stock; and
- Adjusted EBITDA of $153.0 million, an
increase of 15%.
See page 6 for a reconciliation of all GAAP and non-GAAP
financial results.
“AMSURG produced strong revenue growth for the third quarter of
2016, increasing more than 20% before the impact of consolidating a
Physician Services joint venture,” commented Christopher A. Holden,
President and Chief Executive Officer of AMSURG. “This revenue
growth primarily resulted from the substantial success of our
acquisition strategy, which, over the 12 months prior to the end of
the third quarter, included the deployment of more than $1 billion
of acquisition capital. In addition, third-quarter revenues
benefitted from same contract revenue growth of 7.5% in our
Physician Services division and 2.3% in our Ambulatory Services
division.
“We remain on pace to complete our transformative merger with
Envision Healthcare. We and Envision have received the required
antitrust approvals and scheduled our respective Special Meeting of
Shareholders to vote on the merger on November 28, 2016. Subject to
Envision and AMSURG shareholder approval and the satisfaction or
waiver of other customary closing conditions, we continue to expect
to complete the merger by the end of 2016. On completion, this
merger will create a national provider of a broad, unique continuum
of clinical network solutions, including multiple outsourced
physician specialties, such as emergency, hospitalist, anesthesia,
radiology and children’s services, as well as solutions for
ambulatory surgery, post-acute care and medical transportation.
“During the third quarter, Ambulatory Services acquired three
ambulatory surgery centers (ASCs), including two multi-specialty
centers and one gastroenterology center. Physician Services
completed two acquisitions of anesthesia practices. We continue to
evaluate additional potential acquisitions in our strong pipeline,
including opportunities for Ambulatory Services and across all our
Physician Services specialties. In the first nine months of 2016,
we deployed over $350 million of capital for acquisitions, which we
expect to increase to approximately $400 million for the full
year.
Ambulatory Services
Net revenues for the third quarter of 2016 were $314.6 million,
a 1.8% increase from $309.0 million for the third quarter of 2015.
While Ambulatory Services operated a total of 260 ASCs at the end
of the third quarter of 2016 compared with 253 at the end of the
third quarter last year, nine ASCs were deconsolidated during the
12 months ended September 30, 2016, which contributed incremental
revenues of $11.4 million for the third quarter of 2015. The 2.3%
increase in same center revenues for the third quarter of 2016
compared with the third quarter of 2015 was comprised of a 1.0%
increase in procedures and a 1.3% increase in net revenue per
procedure. Adjusted EBITDA increased 10.4% for the third quarter to
$61.1 million from $55.4 million for the third quarter last
year.
Ambulatory Services operated 260 ASCs and one surgical hospital
at September 30, 2016. In addition to acquiring three ASCs during
the quarter, Ambulatory Services disposed of one ASC. The division
had two ASCs under letter of intent at the end of the quarter, and
one ASC was under development, which is expected to open in the
fourth quarter of 2016.
Physician Services
Net revenues for Physician Services were $507.6 million for the
third quarter of 2016, a 48.8% increase from $341.2 million for the
third quarter of 2015. This growth reflected the consolidation for
accounting purposes of a joint venture into the Physician Services
results of operations, due to an expansion of certain powers
provided to the officers of the joint venture. This consolidation
accounted for $35.0 million of the $166.4 million growth in
revenues for the quarter, a portion of the growth in various
operating expenses and the decline in equity in earnings of
unconsolidated affiliates for the quarter. The consolidation did
not affect the dollar amounts of measures of profitability,
including operating income, EBITDA and net earnings attributable to
AMSURG common shareholders. However, profit margins were impacted
by the additional revenue. Adjusted EBITDA was $91.9 million for
the quarter, up 18.1% from $77.8 million for the third quarter of
2015, and adjusted EBITDA margin was 18.1% compared with 22.8%,
with a significant portion of the margin decline related to the
consolidation of the joint venture.
The comparable-quarter growth in Physician Services revenues was
comprised of an increase of 5.9% in same-contract revenues, 1.0% in
net new contract revenues, 31.6% in acquisition revenues and 10.3%
in revenues resulting from the consolidation of the joint venture.
Same-contract growth in net revenues totaled 7.5% for the third
quarter of 2016, which included a 2.9% increase in patient
encounters per day and a 4.6% increase in net revenue per patient
encounter.
Liquidity
At September 30, 2016, AMSURG had cash and cash equivalents of
$106.1 million and availability of $100 million under its revolving
credit facility. Net cash flows from operations, less distributions
to noncontrolling interests, were $109.7 million, excluding
transaction costs, for the third quarter. The Company’s ratio of
total debt at the end of the second quarter to trailing 12 months
EBITDA as calculated under the Company’s credit agreement was
4.2.
Guidance
AMSURG today increased its 2016 financial guidance for net
revenues based on third-quarter results, the outlook for the fourth
quarter and the continuing impact of the joint venture
consolidation. The Company also provided financial guidance for the
fourth quarter of 2016. The Company’s guidance does not include any
impact from the completion of the proposed merger with Envision. If
the completion of the merger occurs before the end of 2016, actual
results of operations for 2016 could differ from this guidance. The
Company’s financial and operating guidance is as follows:
- Revenues of $3.15 billion to $3.17
billion for 2016 compared with $3.05 billion to $3.09 billion
previously;
- A same-center revenue increase of 4% to
5% for Ambulatory Services for 2016, compared with 4% to 6%
previously, and same-contract revenue growth of 6% to 8% for
Physician Services, compared with 4% to 6% previously;
- Adjusted EBITDA of $592 million to $598
million for 2016, compared with $592 million to $601 million
previously;
- Adjusted EPS of $4.28 to $4.33 for
2016, compared with $4.28 to $4.35 previously; and
- For the fourth quarter of 2016,
adjusted EPS of $1.23 to $1.28.
Non-GAAP Adjusted EBITDA guidance for the full year of 2016
excludes interest expense, income taxes, depreciation,
amortization, share-based compensation, transaction costs, changes
in contingent purchase price consideration, gain or loss on
deconsolidations and discontinued operations. Non-GAAP Adjusted EPS
guidance for the fourth quarter and full year of 2016 exclude
acquisition-related transaction costs, acquisition-related
amortization expense, gains and losses on future deconsolidation
transactions and share-based compensation expense, net of the tax
impact thereon. The exact amount of such exclusions are not
currently determinable but may be significant and may vary
significantly from period to period (see page 6 for a
reconciliation of all GAAP and non-GAAP financial results).
Conference Call
AMSURG Corp. will hold a conference call to discuss this release
today, November 1, 2016, 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” 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,
including the Company’s financial and operating guidance for the
fourth quarter and full year of 2016. 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; there may be governmental
or commercial health changes designed to reduce the number of
surgical procedures; we may fail to comply with applicable laws and
regulations including the federal Anti-Kickback statue and similar
state laws; 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; the attention of management may
be diverted by the process of making new acquisitions; the risks
associated with our ability to consummate the business combination
with Envision and the timing of the closing of the business
combination; the ability to successfully integrate our and
Envision’s operations and employees; the ability to realize the
anticipated benefits and synergies of the business combination with
Envision; the potential impact of the announcement of the business
combination or consummation of the transaction on relationships,
including with our employees, customers and competitors; 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;
restricted covenants in our indenture documents may restrict our
business strategies or could result in an acceleration of our debt;
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 fail to
effectively manage and implement security measures protecting our
information technology systems to protect confidential data; our
disaster recovery systems or management continuity plans may be
disrupted; we may face shortages or quality control issues of
products, equipment, and medical supplies that could adversely
affect our operations and profitability; enforcement authorities
may conclude that our market share in any particular market is too
concentrated or our clients’ commercial payor contract negotiating
practices are illegal; 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; our physician partners may fail to perform on their pro
rata share of any indebtedness or lease agreements; 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, 2015, and Current Report on
Form 8-K dated August 4, 2016, each 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’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, 2016, AMSURG owned and operated 260
ASCs and one surgical hospital in 35 states and the District of
Columbia and provided physician services to more than 550
healthcare facilities in 32 states. AMSURG has partnerships with,
or employs, over 6,500 physicians and other healthcare
professionals in 40 states and the District of Columbia.
AMSURG CORP.
Unaudited Selected Consolidated
Financial and Operating Data
(In thousands, except earnings per
share)
Three Months Ended September 30,
Nine Months Ended September 30,
Statement of
Earnings Data:
2016 2015 2016
2015 Revenues $ 968,822 $ 712,719 $ 2,646,940 $ 2,058,649
Provision for uncollectibles (146,606 ) (62,492 ) (341,547 )
(196,027 ) Net revenue 822,216 650,227 2,305,393 1,862,622
Operating expenses: Salaries and benefits 461,281 327,532 1,275,131
950,107 Supply cost 47,952 45,638 144,618 134,012 Other operating
expenses 114,928 98,852 333,755 294,424 Transaction costs 16,906
2,107 23,431 5,560 Depreciation and amortization 31,585
24,106 90,711 70,536 Total operating expenses
672,652 498,235 1,867,646 1,454,639 Net gain on disposals and
deconsolidations 4,144 9,112 6,739 5,854 Equity in earnings of
unconsolidated affiliates 4,445 4,935 18,375
11,575 Operating income 158,153 166,039 462,861 425,412
Interest expense, net 32,915 30,242 95,638
90,671 Earnings before income taxes 125,238 135,797 367,223
334,741 Income tax expense 29,658 37,518 83,820
76,960 Net earnings 95,580 98,279 283,403 257,781
Less net earnings attributable to noncontrolling interests 55,626
55,618 166,517 160,407 Net earnings
attributable to AmSurg Corp. shareholders 39,954 42,661 116,886
97,374 Preferred stock dividends (2,264 ) (2,264 ) (6,792 ) (6,792
) Net earnings attributable to AmSurg Corp. common shareholders $
37,690 $ 40,397 $ 110,094 $ 90,582
Net earnings per share attributable to common shareholders:
Basic $ 0.70 $ 0.85 $ 2.05 $ 1.90 Diluted $ 0.69 $ 0.83 $ 2.03 $
1.89 Weighted average number of shares and share equivalents
outstanding: Basic 53,757 47,707 53,720 47,652 Diluted 54,258
51,275 54,152 48,050
AMSURG CORP.
Unaudited Selected Consolidated
Financial and Operating Data, continued
(In thousands, except earnings per
share)
Three Months Ended September 30,
Nine Months Ended September 30, 2016
2015 2016 2015
Reconciliation of net earnings to Adjusted net earnings
(1): Net earnings attributable to AmSurg Corp.
shareholders $ 39,954 $ 42,661 $ 116,886 $ 97,374 Amortization of
purchased intangibles 19,118 12,681 55,002 37,593 Share-based
compensation 6,175 3,727 21,243 11,319 Transaction costs 16,906
2,107 23,431 5,560 Net gain on disposals and deconsolidations
(4,144 ) (9,112 ) (6,739 ) (5,854 ) Net change in fair value of
contingent consideration — 1,928 (2,598 ) 8,338
Total pre-tax adjustments 38,055 11,331 90,339 56,956 Tax
effect 13,072 946 32,525 19,669 Total
adjustments, net 24,983 10,385 57,814 37,287
Adjusted net earnings $ 64,937 $ 53,046
$ 174,700 $ 134,661 Basic shares outstanding
53,757 47,707 53,720 47,652 Effect of dilutive securities, options
and non-vested shares 3,630 3,568 3,561 3,534
Diluted shares outstanding, if converted 57,387
51,275 57,281 51,186
Adjusted
earnings per share $ 1.13 $ 1.03 $ 3.05 $
2.63
Reconciliation of net earnings to Adjusted
EBITDA (2): Net earnings attributable to AmSurg
Corp. shareholders $ 39,954 $ 42,661 $ 116,886 $ 97,374 Interest
expense, net 32,915 30,242 95,638 90,671 Income tax expense 29,658
37,518 83,820 76,960 Depreciation and amortization 31,585
24,106 90,711 70,536
EBITDA 134,112
134,527 387,055 335,541 Adjustments: Share-based compensation 6,175
3,727 21,243 11,319 Transaction costs 16,906 2,107 23,431 5,560 Net
gain on disposals and deconsolidations (4,144 ) (9,112 ) (6,739 )
(5,854 ) Net change in fair value of contingent consideration —
1,928 (2,598 ) 8,338 Total adjustments 18,937
(1,350 ) 35,337 19,363
Adjusted EBITDA
$ 153,049 $ 133,177 $ 422,392 $ 354,904
Segment Information: Ambulatory Services Adjusted
EBITDA $ 61,111 $ 55,353 $ 176,483 $ 162,965 Physician Services
Adjusted EBITDA 91,938 77,824 245,909 191,939
Adjusted EBITDA $ 153,049 $ 133,177 $
422,392 $ 354,904
Net Revenue by
Segment: Ambulatory Services $ 314,609 $ 308,983 $ 941,490 $
903,884 Physician Services 507,607 341,244 1,363,903
958,738
Total net revenue $ 822,216 $
650,227 $ 2,305,393 $ 1,862,622
See footnotes on page 10
AMSURG CORP.
Unaudited Selected Consolidated
Financial and Operating Data, continued
Operating Data-
Ambulatory Services:
Three Months Ended
September 30, Nine Months Ended September 30,
2016 2015 2016 2015 Procedures
performed during the period at consolidated centers 429,621 434,720
1,283,145 1,280,541 Centers in operation, end of period
(consolidated) 238 240 238 240 Centers in operation, end of period
(unconsolidated) 22 13 22 13 Average number of continuing centers
in operation (consolidated) 237 239 237 237 New centers added,
during period 3 3 7 7 Centers merged into existing centers, during
period — — 1 — Centers disposed, during period 1 — 3 — Centers
under development, end of period 1 1 1 1 Centers under letter of
intent, end of period 2 5 2 5 Average revenue per consolidated
center (in thousands) $ 1,326 $ 1,295 $ 3,981 $ 3,810 Same center
revenues increase (consolidated)
2.3
%
6.6
%
5.2 % 5.5 % Surgical hospitals in operation, end of period
(unconsolidated) 1 1 1 1
Operating Data-
Physician Services:
Three Months Ended September 30, Nine Months Ended
September 30, 2016 2015 2016 2015
Contribution to Net Revenue Growth: Same contract 5.9 % 7.6
% 6.6 % 7.9 % New contract 1.0 2.9 1.0 2.3 Acquired contract and
other (1) 41.9 15.4 34.7
11.4 Total net revenue growth 48.8 %
25.9 % 42.3 % 21.6 % Same contract revenue
growth 7.5 % 10.1 % 7.6 % 10.4 %
_____________________
(1) Includes net revenue growth related to
the consolidation of a previously unconsolidated affiliate of 10.3%
and 3.7% for the three and nine months ended September 30,
2016, respectively.
AMSURG CORP.
Unaudited Selected Consolidated
Financial and Operating Data, continued
(In thousands)
September 30, December
31,
Balance Sheet
Data:
2016 2015 Assets Current assets: Cash and cash
equivalents $ 106,058 $ 106,660 Restricted cash and marketable
securities 12,794 13,506 Accounts receivable, net of allowance of
$251,414 and $167,411, respectively 424,895 337,330 Supplies
inventory 22,505 21,406 Prepaid and other current assets 64,454
75,771 Total current assets 630,706 554,673 Property and
equipment, net 227,213 189,168 Investments in unconsolidated
affiliates 111,006 169,170 Goodwill 4,300,102 3,970,210 Intangible
assets, net 1,678,927 1,594,637 Other assets 48,985 21,450
Total assets $ 6,996,939 $ 6,499,308
Liabilities and
Equity Current liabilities: Current portion of long-term debt $
22,020 $ 20,377 Accounts payable 27,191 32,561 Accrued salaries and
benefits 213,298 202,537 Accrued interest 18,577 30,480 Other
accrued liabilities 101,625 119,237 Total current
liabilities 382,711 405,192 Long-term debt, net of deferred
financing costs of $40,768 and $47,174, respectively 2,591,895
2,357,956 Deferred income taxes 760,504 699,498 Other long-term
liabilities 129,897 96,183 Commitments and contingencies
Noncontrolling interests – redeemable 177,877 175,732 Equity:
Preferred stock, no par value, 5,000 shares authorized, 1,725
shares issued and outstanding 166,632 166,632 Common stock, no par
value, 120,000 shares authorized, 54,804 and 54,294 shares issued
and outstanding, respectively 1,361,581 1,345,418 Retained earnings
891,507 781,413 Total AmSurg Corp. equity 2,419,720
2,293,463 Noncontrolling interests – non-redeemable 534,335
471,284 Total equity 2,954,055 2,764,747 Total liabilities
and equity $ 6,996,939 $ 6,499,308
AMSURG
CORP.
Unaudited Selected Consolidated
Financial and Operating Data, continued
(In thousands)
Three Months Ended September 30,
Nine Months Ended September 30,
Statement of Cash
Flow Data:
2016 2015 2016
2015 Cash flows from operating activities: Net
earnings $ 95,580 $ 98,279 $ 283,403 $ 257,781 Adjustments to
reconcile net earnings to net cash flows provided by operating
activities: Depreciation and amortization 31,585 24,106 90,711
70,536 Amortization of deferred loan costs 2,140 2,083 6,419 6,238
Provision for uncollectibles 152,244 68,032 359,290 212,546 Net
gain on disposals and deconsolidations (4,144 ) (9,112 ) (6,739 )
(5,854 ) Share-based compensation 6,175 3,727 21,243 11,319 Excess
tax benefit from share-based compensation (176 ) (246 ) (3,910 )
(3,779 ) Deferred income taxes 13,618 4,610 34,605 7,309 Equity in
earnings of unconsolidated affiliates (4,445 ) (4,935 ) (18,375 )
(11,575 ) Net change in fair value of contingent consideration —
1,928 (2,598 ) 8,338 Increases (decreases) in cash and cash
equivalents, net of acquisitions and dispositions: Accounts
receivable (159,359 ) (75,409 ) (387,733 ) (232,465 ) Supplies
inventory (287 ) (423 ) (699 ) (533 ) Prepaid and other current
assets 7,626 6,152 (16,118 ) 36,479 Accounts payable (2,270 ) 3,012
(5,617 ) 2,316 Accrued expenses and other liabilities 13,781 52,112
(14,423 ) 64,760 Other, net 3,917 1,891 11,631
3,786 Net cash flows provided by operating activities
155,985 175,807 351,090 427,202
Cash flows from investing
activities: Acquisitions and related expenses (70,623 ) (37,458
) (351,736 ) (233,490 ) Acquisition of property and equipment
(26,389 ) (14,341 ) (64,007 ) (47,006 ) Increase in cash due to
consolidation of previously unconsolidated affiliates 31,412 —
31,412 — Purchases of marketable securities — (498 ) (498 ) (1,743
) Maturities of marketable securities 249 1,245 2,987 4,233 Other,
net 2,236 (1,987 ) (6,488 ) (3,974 ) Net cash flows used in
investing activities (63,115 ) (53,039 ) (388,330 ) (281,980 )
Cash flows from financing activities: Proceeds from
long-term borrowings and revolving credit facility 112,855 2,402
430,006 10,197 Repayment on long-term borrowings and revolving
credit facility (115,505 ) (5,449 ) (214,268 ) (15,737 )
Distributions to noncontrolling interests (56,486 ) (57,111 )
(172,075 ) (158,144 ) Proceeds from issuance of common stock upon
exercise of stock options — 276 450 2,356 Repurchase of common
stock (457 ) — (6,145 ) (3,684 ) Other, net (1,324 ) (1,753 )
(1,330 ) (867 ) Net cash flows provided by (used in) financing
activities (60,917 ) (61,635 ) 36,638 (165,879 ) Net
increase (decrease) in cash and cash equivalents 31,953 61,133 (602
) (20,657 ) Cash and cash equivalents, beginning of period 74,105
126,289 106,660 208,079 Cash and cash
equivalents, end of period $ 106,058 $ 187,422 $
106,058 $ 187,422
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 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, 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161101006644/en/
AMSURG Corp.Claire M. Gulmi, 615-665-1283Executive Vice
President andChief Financial Officer
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