AmSurg Reports Third-Quarter Net Earnings from Continuing Operations of $0.39 Per...

AmSurg Reports Third-Quarter Net Earnings from Continuing Operations of $0.39 Per Diluted Share

Completes Quarter with 13 Centers under Letter of Intent
NASHVILLE, Tenn.--(Business Wire)--
Christopher A. Holden, President and Chief Executive Officer of
AmSurg Corp. (NASDAQ: AMSG), today announced financial results for the
third quarter and nine months ended September 30, 2008. Revenues
increased 18% to $150,884,000 for the third quarter of 2008 from
$127,801,000 for the third quarter of 2007. Net earnings from
continuing operations were a record $12,583,000, an increase of 21%
from $10,372,000. Net earnings from continuing operations per diluted
share grew 18% to $0.39 for the third quarter of 2008 from $0.33 for
the third quarter of 2007.

Revenue rose 19% to $447,509,000 for the first nine months of 2008
from $376,829,000 for the first nine months of 2007. Net earnings from
continuing operations were $36,650,000, up 21% from $30,399,000. Net
earnings from continuing operations per diluted share increased 16% to
$1.14 for the first nine months of 2008 from $0.98 for the first nine
months of 2007.

Mr. Holden said, "AmSurg produced substantial growth for the third
quarter of 2008 and completed the quarter well positioned to achieve
its guidance for 2008 in a challenging economic environment. The
growth we generated for the third quarter included the negative impact
on operations of hurricanes in Texas, Louisiana and Florida. As
expected, we also continued to experience the impact of the Medicare
rule revising the payment system for ASCs. These two factors were
somewhat offset by the beneficial effect of an additional day in the
latest quarter versus the third quarter of 2007.

"Procedures for the third quarter of 2008 increased 17% compared
with the third quarter last year, driven by the expansion of
continuing centers in operation by 15 centers during the 12 months
ended September 30, 2008, to 176 centers at the quarter's end. In
addition, procedure growth was the primary driver of 4% growth in
same-center revenue for the third quarter of 2008 from the third
quarter of 2007.

"We are pleased with our significant center development
activities, which produced 13 centers under letter of intent (LOI) at
the quarter's end, including 11 centers to be acquired and two centers
to be developed. We also added three centers to continuing operations
during the quarter, two of which were acquisitions, while the third
center addition was the scheduled opening of a center under
development. We completed the third quarter with three centers under
development, having secured a certificate of need for a de novo center
that was awaiting approval at the end of the second quarter. Two of
these centers are scheduled to open in 2009.

"During the third quarter, we closed a center whose physician
partners disbanded their practice. We also classified two small
centers as held for sale, and we expect to complete these sales in the
current quarter.

"AmSurg's financial position strengthened further during the third
quarter. Our cash flow from operations funded virtually all our
third-quarter capital expenditures for center acquisition, development
and maintenance. Furthermore, we reduced long-term debt by $9.0
million during the quarter. As a result, the percentage of long-term
debt to total capital improved to 30% at the quarter's end from 32% at
the end of the second quarter, and the ratio of long-term debt to
trailing 12 months EBITDA improved to 1.8 from 1.9.

"Our balance-sheet strength positions AmSurg to fund anticipated
capital expenditures despite the challenging credit and economic
environment. Due to substantial cash flow from operations, we expect
to purchase the centers under LOI without significantly affecting our
leverage ratios. In addition, we have approximately $125 million in
availability under our revolving credit facility."

Based on AmSurg's financial performance for the first nine months
of 2008, as well as its outlook for the remainder of the year, the
Company today affirmed its established guidance for 2008 and provided
its guidance for the fourth quarter of the year as follows:

-- Revenues in a range of $600 million to $620 million for 2008.

-- Same-center revenue growth of 3% to 4% for the full year,
which includes a negative impact of one percentage point from
the effect of the Medicare rule revising the payment system
for ASCs, which was effective January 1, 2008.

-- The addition of 12 to 17 new centers for the year.

-- An estimated effective income tax rate for the year of 39.8%.

-- Net earnings from continuing operations per diluted share for
2008 in a range of $1.53 to $1.55, including a negative $0.05
impact from the effect of the revised Medicare payment system.

-- Net earnings from continuing operations per diluted share for
the fourth quarter of 2008 in a range of $0.39 to $0.41 per
diluted share.

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.

Mr. Holden concluded, "Our confidence in our guidance for 2008 is
based on the consistency of our operations, our potential center
acquisitions under LOI and in the pipeline, and our strong financial
position. We also continue our longer-term initiatives to improve our
business model and enhance the value proposition we provide our
physician partners. In the current environment, these initiatives take
on added importance because of our ability to use best practices,
technology and scale to assist physician partners eager to improve
efficiency and revenue opportunities. We are committed to
strengthening our ability to remain the partner of choice for our
physician partners, and thereby our ability to achieve our long-term
growth objectives."

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 "Investor Relations" 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 through the end of business on January 21, 2009.

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 the important factors, among
others, set forth in AmSurg's Annual Report on Form 10-K for the
fiscal year ended December 31, 2007, and other filings with the
Securities and Exchange Commission, including 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; the Company's ability to maintain favorable relations
with its physician partners; 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; the Company's
ability to compete for physician partners, managed care contracts,
patients and strategic relationships; risks associated with weather
and other factors that may affect the Company's surgery centers;
uncertainties associated with judicial, regulatory and legislative
developments in New Jersey; 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; the risk of regulatory changes that may obligate the
Company to buy out interests of physicians who are minority owners of
its surgery centers; risks associated with the Company's status as a
general partner of limited partnerships; 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 write-off of the impaired
portion of intangible assets; and risks associated with the tax
deductibility of goodwill. 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 September 30, 2008, AmSurg owned a majority interest
in 176 continuing centers in operation and had three centers under
development.

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AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data
(Dollars in thousands, except per share amounts)

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------- -------------------
Statement of Earnings Data: 2008 2007 2008 2007
----------------------------- ---------- --------- --------- ---------

Revenues $150,884 $127,801 $447,509 $376,829

Operating expenses:
Salaries and benefits 44,271 37,749 130,298 111,427
Supply cost 17,370 14,982 51,990 43,345
Other operating expenses 31,429 25,910 92,035 76,784
Depreciation and
amortization 5,266 4,642 15,614 13,592
---------- --------- --------- ---------

Total operating
expenses 98,336 83,283 289,937 245,148
---------- --------- --------- ---------

Operating income 52,548 44,518 157,572 131,681

Minority interest 29,794 25,411 89,427 75,426
Interest expense, net 2,331 2,158 7,626 6,716
---------- --------- --------- ---------

Earnings from
continuing operations
before income taxes 20,423 16,949 60,519 49,539
Income tax expense 7,840 6,577 23,869 19,140
---------- --------- --------- ---------

Net earnings from
continuing operations 12,583 10,372 36,650 30,399

Discontinued operations:
(Loss) earnings from
operations of
discontinued interests in
surgery centers, net of
income tax expense (68) 323 4 1,618
(Loss) gain on disposal of
discontinued interests in
surgery centers, net of
income tax (benefit)
expense (131) (705) (1,320) (558)
---------- --------- --------- ---------

Net (loss) earnings
from discontinued
operations (199) (382) (1,316) 1,060
---------- --------- --------- ---------

Net earnings $ 12,384 $ 9,990 $ 35,334 $ 31,459
========== ========= ========= =========

Basic earnings per common
share:
Net earnings from
continuing operations $ 0.40 $ 0.34 $ 1.16 $ 1.00
Net earnings $ 0.39 $ 0.32 $ 1.12 $ 1.03
Diluted earnings per common
share:
Net earnings from
continuing operations $ 0.39 $ 0.33 $ 1.14 $ 0.98
Net earnings $ 0.38 $ 0.32 $ 1.10 $ 1.02

Weighted average number of
shares and share equivalents
(000's):
Basic 31,719 30,778 31,499 30,455
Diluted 32,303 31,175 32,018 30,922

Operating Data:
-----------------------------

Continuing centers in
operation at end of period 176 161 176 161
New centers added during the
period 3 6 7 16
Centers under development/not
opened at end of period 3 4 3 4
Development centers awaiting
CON approval at end of
period - - - -
Centers under letter of
intent 13 3 13 3
Average number of centers in
operation 174 158 172 155
Average revenue per center $ 866 $ 808 $ 2,595 $ 2,439
Same center revenues increase 4% 5% 4% 4%
Procedures performed during
the period 280,158 238,475 827,328 695,648
Reconciliation of net
earnings to EBITDA (1):
Net earnings from
continuing operations $ 12,583 $ 10,372 $ 36,650 $ 30,399
Add: income tax expense 7,840 6,577 23,869 19,140
Add: interest expense, net 2,331 2,158 7,626 6,716
Add: depreciation and
amortization 5,266 4,642 15,614 13,592
---------- --------- --------- ---------

EBITDA $ 28,020 $ 23,749 $ 83,759 $ 69,847
========== ========= ========= =========

(1) 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 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 is the financial measure calculated and
presented in accordance with generally accepted accounting principles
that is most comparable to EBITDA as defined.
*T

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AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data
(Dollars in thousands)

September 30, Dec. 31,
Balance Sheet Data: 2008 2007
---------------------------------------------- ------------- ---------

Assets

Current assets:
Cash and cash equivalents $ 25,857 $ 29,953
Accounts receivable, net of allowance of
$10,017 and $8,310 respectively 66,391 61,284
Supplies inventory 7,399 6,882
Deferred income taxes 2,514 1,354
Prepaid and other current assets 16,546 18,509
Current assets held for sale 132 -
------------- ---------

Total current assets 118,839 117,982

Long-term receivables and deposits 87 1,653
Property and equipment, net 102,204 104,874
Intangible assets, net 598,168 557,125
Long-term assets held for sale 981 -
------------- ---------

Total assets $820,279 $781,634
============= =========

Liabilities and Shareholders' Equity

Current liabilities:
Current portion of long-term debt $ 5,162 $ 5,781
Accounts payable 11,211 12,703
Accrued salaries and benefits 15,297 12,415
Other accrued liabilities 3,066 2,291
Current income taxes payable - 1,000
Current liabilities held for sale 165 -
------------- ---------

Total current liabilities 34,901 34,190

Long-term debt 189,654 216,822
Deferred income taxes 53,575 41,990
Other long-term liabilities 15,867 15,401
Minority interest 64,766 62,006
Shareholders' equity:
Common stock, no par value 70,000,000
shares authorized, 31,857,643 and
31,202,629 shares outstanding,
respectively 189,459 172,536
Deferred compensation (5,887) (3,916)
Retained earnings 279,376 244,042
Accumulated other comprehensive loss, net
of income taxes (1,432) (1,437)
------------- ---------

Total shareholders' equity 461,516 411,225
------------- ---------

Total liabilities and shareholders'
equity $820,279 $781,634
============= =========
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AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data
(Dollars in thousands)

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------- -------------------
Statement of Cash Flow Data: 2008 2007 2008 2007
----------------------------- ---------- --------- --------- ---------

Cash flows from operating
activities:
Net earnings $ 12,384 $ 9,990 $ 35,334 $ 31,459
Adjustments to reconcile
net earnings to net cash
flows provided by
operating activities:
Minority interest 29,794 25,411 89,427 75,426
Distributions to
minority partners (32,136) (25,953) (88,993) (75,305)
Depreciation and
amortization 5,266 4,642 15,614 13,592
Net loss on sale and
impairment of long-
lived assets 215 452 1,076 1,518
Share-based
compensation 1,293 1,052 3,701 3,324
Excess tax benefit from
share-based
compensation (838) (885) (1,316) (2,809)
Deferred income taxes 4,258 2,770 10,190 6,180
Increase (decrease) in
cash and cash
equivalents, net of
effects of acquisition
and dispositions, due
to changes in:
Accounts receivable,
net (164) (405) (3,063) (4,598)
Supplies inventory 190 15 16 223
Prepaid and other
current assets 872 591 1,972 1,218
Accounts payable 38 2,040 (1,765) (341)
Accrued expenses and
other liabilities 2,228 2,802 2,416 4,398
Other, net (36) 573 573 2,278
---------- --------- --------- ---------

Net cash flows
provided by
operating
activities 23,364 23,095 65,182 56,563

Cash flows from investing
activities:
Acquisition of interest in
surgery centers (19,213) (35,902) (42,810) (84,769)
Acquisition of property
and equipment (4,127) (6,331) (13,565) (16,533)
Proceeds from sale of
surgery center 3,753 226 3,753 1,885
Decrease in long-term
receivables 209 847 1,459 1,918
---------- --------- --------- ---------

Net cash flows
used in
investing
activities (19,378) (41,160) (51,163) (97,499)

Cash flows form financing
activities:
Proceeds from long-term
borrowings 22,615 35,995 57,771 91,264
Repayment on long-term
borrowings (32,824) (22,288) (87,653) (66,897)
Proceeds from issuance of
common stock upon
exercise of stock options 6,946 4,844 9,935 13,452
Proceeds from capital
contributions by minority
partners - 122 548 154
Excess tax benefit from
share-based compensation 838 885 1,316 2,809
Financing cost incurred (23) (1) (32) (7)
---------- --------- --------- ---------

Net cash flows
(used in)
provided by
financing
activities (2,448) 19,557 (18,115) 40,775
---------- --------- --------- ---------

Net increase (decrease) in
cash and cash equivalents 1,538 1,492 (4,096) (161)
Cash and cash equivalents,
beginning of period 24,319 18,430 29,953 20,083
---------- --------- --------- ---------

Cash and cash equivalents,
end of period $ 25,857 $ 19,922 $ 25,857 $ 19,922
========== ========= ========= =========
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AMSURG CORP.
Unaudited Selected Consolidated Financial and Operating Data
(In thousands)

Presented below is certain statement of earnings and operating data
for the first two quarters of 2008 and fiscal year 2007, which have
been restated in order to present additional discontinued operations.

Three Months Ended
-------------------

March 31, June 30,
Statement of Earnings Data: 2008 2008
------------------------------------------------ --------- ---------

Revenues $145,729 $150,896

Operating expenses:
Salaries and benefits 42,442 43,585
Supply cost 16,917 17,703
Other operating expenses 30,141 30,465
Depreciation and amortization 5,135 5,213
--------- ---------

Total operating expenses 94,635 96,966
--------- ---------

Operating income 51,094 53,930

Minority interest 28,911 30,722
Interest expense, net 2,792 2,503
--------- ---------

Earnings from continuing operations before
income taxes 19,391 20,705
Income tax expense 7,772 8,257
--------- ---------

Net earnings from continuing operations 11,619 12,448

Discontinued operations:
Earnings (loss) from operations of
discontinued interest in surgery centers,
net of income taxes 87 (15)
(Loss) gain on disposal of discontinued
interest in surgery centers, net of income
taxes - (1,189)
--------- ---------

Net earnings (loss) from discontinued
operations 87 (1,204)
--------- ---------

Net earnings $ 11,706 $ 11,244
========= =========

Basic earnings per common share:
Net earnings from continuing operations $ 0.37 $ 0.40
Net earnings $ 0.37 $ 0.36
Diluted earnings per common share:
Net earnings from continuing operations $ 0.37 $ 0.39
Net earnings $ 0.37 $ 0.35

Weighted average number of shares and share
equivalents (000's):
Basic 31,298 31,479
Diluted 31,790 31,962

Operating Data:
------------------------------------------------

Procedures 267,649 279,521
Reconciliation of net earnings to EBITDA (1):
Net earnings from continuing
operations $ 11,619 $ 12,448
Add: income tax expense 7,772 8,257
Add: interest expense, net 2,792 2,503
Add: depreciation and amortization 5,135 5,213
--------- ---------

EBITDA $ 27,318 $ 28,421
========= =========

Year
Three Months Ended Ended
-------------------------------------

Statement of Earnings March 31, June 30, Sept. 30, Dec. 31, Dec. 31,
Data: 2007 2007 2007 2007 2007
----------------------- --------- -------- --------- -------- --------

Revenues $122,192 $126,836 $127,801 $141,482 $518,311

Operating expenses:
Salaries and
benefits 36,911 36,767 37,749 40,905 152,332
Supply cost 13,877 14,486 14,982 16,585 59,930
Other operating
expenses 23,919 26,955 25,910 29,439 106,223
Depreciation and
amortization 4,452 4,498 4,642 5,163 18,755
--------- -------- --------- -------- --------

Total operating
expenses 79,159 82,706 83,283 92,092 337,240
--------- -------- --------- -------- --------

Operating income 43,033 44,130 44,518 49,390 181,071

Minority interest 24,689 25,326 25,411 27,727 103,153
Interest expense, net 2,422 2,136 2,158 2,852 9,568
--------- -------- --------- -------- --------

Earnings from
continuing
operations
before income
taxes 15,922 16,668 16,949 18,811 68,350
Income tax expense 6,331 6,232 6,577 7,444 26,584
--------- -------- --------- -------- --------

Net earnings from
continuing
operations 9,591 10,436 10,372 11,367 41,766

Discontinued
operations:
Earnings (loss) from
operations of
discontinued
interest in surgery
centers, net of
income taxes 686 609 323 461 2,079
(Loss) gain on
disposal of
discontinued
interest in surgery
centers, net of
income taxes - 147 (705) 888 330
--------- -------- --------- -------- --------

Net earnings
(loss) from
discontinued
operations 686 756 (382) 1,349 2,409
--------- -------- --------- -------- --------

Net earnings $ 10,277 $ 11,192 $ 9,990 $ 12,716 $ 44,175
========= ======== ========= ======== ========

Basic earnings per
common share:
Net earnings from
continuing
operations $ 0.32 $ 0.34 $ 0.34 $ 0.37 $ 1.36
Net earnings $ 0.34 $ 0.37 $ 0.32 $ 0.41 $ 1.44
Diluted earnings per
common share:
Net earnings from
continuing
operations $ 0.31 $ 0.34 $ 0.33 $ 0.36 $ 1.34
Net earnings $ 0.34 $ 0.36 $ 0.32 $ 0.40 $ 1.42

Weighted average number
of shares and share
equivalents (000's):
Basic 30,046 30,541 30,778 31,110 30,619
Diluted 30,505 31,085 31,175 31,644 31,102

Operating Data:
-----------------------

Procedures 224,347 232,826 238,475 258,619 954,267
Reconciliation of net
earnings to EBITDA
(1):
Net earnings from
continuing
operations $ 9,591 $ 10,436 $ 10,372 $ 11,367 $ 41,766
Add: income tax
expense 6,331 6,232 6,577 7,444 26,584
Add: interest
expense, net 2,422 2,136 2,158 2,852 9,568
Add: depreciation
and amortization 4,452 4,498 4,642 5,163 18,755
--------- -------- --------- -------- --------

EBITDA $ 22,796 $ 23,302 $ 23,749 $ 26,826 $ 96,673
========= ======== ========= ======== ========
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AmSurg Corp.
Claire M. Gulmi, 615-665-1283
Executive Vice President and Chief Financial Officer

Copyright Business Wire 2008