Profile: NovaMed Inc (NOVA.O)

NovaMed, Inc. is a health care services company and an owner and operator of ambulatory surgery centers (ASCs). Its primary focus is to acquire, develop and operate ASCs in joint ownership with physicians throughout the United States. As of March 15, 2009, the Company owns and operates 37 ASCs located in 19 states. As of March 15, 2009, 13 of its 37 ASCs offer surgical services in specialties other than ophthalmology. As of March 15, 2009, the Company owned a majority interest in 35 of its ASCs with the minority interests generally being held by physicians. In addition it also owns 100% of the equity interests in two of its ASCs. In August 2008, the Company acquired MDnetSolutions, a call center and marketing solutions company serving primarily the bariatric market.

The Company also owns and operates optical laboratories, optical products purchasing organization and a marketing products and services business. In addition to its surgical facilities and optical products businesses, the Company provides management services to two eye care practices pursuant to long-term service agreements. Under these service agreements, the Company provides business, information technology, administrative and financial services to these practices in exchange for a management fee. These management services are provided to an optometric practice with an optical retail store located in the Chicago market and an ophthalmology practice with multiple locations in Atlanta, Georgia.

Surgical Facilities

Physicians perform a variety of surgical procedures in its ASCs, including ophthalmology, orthopedics (including podiatry), urology, gastroenterology, pain management, plastic surgery, gynecology, and ear, nose and throat (ENT). During the year ended December 31, 2008, 61% of the surgical procedures performed in its facilities were ophthalmic procedures, with pain management, orthopedics, gastroenterology, ENT and urology comprising 16%, 10%, 5%, 3% and 2%, respectively.

The Company generally owns and operates its surgical facilities through joint ownership arrangements, in which it owns a majority interest in the facility and the minority interests are held by physicians that perform surgeries in the ASC and live in the ASC's local community. Each facility is generally owned and operated through a separate limited liability company, with one of its wholly owned subsidiaries generally serving as the manager of the entity.

Product Sales

The Company owns and operates an optical laboratory business that specializes in surfacing, finishing and distributing corrective lenses and eyeglass lenses. Its laboratories have in excess of 275 active customers, including ophthalmologists, optometrists, opticians and optical retail chains. Its optical products purchasing organization allows eye care professionals to purchase optical products through it from more than 250 suppliers.

The Company’s marketing products and services business provides eye care professionals and vendors with a range of products and services, including brochures, videos, advertising and Website design, education and training programs, and consulting services. The Company also has a long-term service agreement with an optometric practice located in Illinois. The optometric practice also has a retail optical outlet that sells eyeglasses and other products to patients.

Other

The Company also has a 40-year service agreement in place with an ophthalmology practice with multiple locations in Atlanta, Georgia. It provides all of the services, facilities and equipment necessary to operate this medical practice, including services identical in nature to those described above with respect to its Illinois affiliated optometric practice.