Amsurg Corp. (AMSG, Financial) filed Quarterly Report for the period ended 2012-03-31.
Amsurg Corp has a market cap of $901.9 million; its shares were traded at around $28.54 with a P/E ratio of 15.8 and P/S ratio of 1.2. Amsurg Corp had an annual average earning growth of 10.8% over the past 10 years. GuruFocus rated Amsurg Corp the business predictability rank of 4-star.
We recognized income tax expense of $10.9 million in the three months ended March 31, 2012 compared to $8.3 million in the comparable 2011 period. Our effective tax rate in 2012 was 16.4% of earnings from continuing operations before income taxes. This differs from the federal statutory income tax rate of 35.0% primarily due to the exclusion of the noncontrolling interests share of pre-tax earnings and the impact of state income taxes. Because we deduct goodwill amortization for tax purposes only, approximately 50% to 60% of our income tax expense is deferred and our deferred tax liability continues to increase, which would only be due in part or in whole upon the disposition of a portion or all of our surgery centers.
Noncontrolling interests in net earnings for the three months ended March 31, 2012 increased $7.2 million, or 22%, from the comparable 2011 period, primarily as a result of noncontrolling interests in earnings at surgery centers recently added to operations. As a percentage of revenues, noncontrolling interests decreased to 17.5% from 18.5% in the three months ended March 31, 2012 as a result of the Company s higher ownership percentage in recently acquired centers. The net loss from discontinued operations attributable to noncontrolling interests was $60,000 during the three months ended March 31, 2012 and the net earnings from discontinued operations attributable to noncontrolling interests were $429,000 during the three months ended March 31, 2011.
Cash and cash equivalents at March 31, 2012 and 2011 were $44.3 million and $37.7 million, respectively. At March 31, 2012, we had working capital of $117.1 million, compared to $109.6 million at December 31, 2011. Operating activities for the three months ended March 31, 2012 generated $69.1 million in cash flow from operations, compared to $51.3 million in the three months ended March 31, 2011. The increase in operating cash flow resulted primarily from higher net earnings in the 2012 period over the comparable period. Positive operating cash flows of individual centers are the sole source of cash used to make distributions to our wholly-owned subsidiaries, as well as to the partners, which we are obligated to make on a monthly basis in accordance with each partnership s partnership or operating agreement. Distributions to noncontrolling
At March 31, 2012 and December 31, 2011, we had contingent purchase price obligations of $3.5 million and $5.2 million, respectively. During the three months ended March 31, 2012, we funded through operating cash flow $1.7 million of our purchase price obligations. The remaining purchase price obligations are related to our acquisition of 17 centers from National Surgical Care, Inc. (“NSC”) on September 1, 2011. We have agreed to pay as additional consideration an amount up to $7.5 million based on a multiple of the excess earnings over the targeted earnings of the acquired centers, if any, from the period of January 1, 2012 to December 31, 2012. In addition, $3.5 million of the purchase price was placed in an escrow fund to allow for any working capital adjustments up to $500,000, with the remainder allocated to potential indemnity claims, if any, which must be asserted by us within one year of the transaction date. As of March 31, 2012, we recorded in other long-term liabilities on our balance sheet a purchase price obligation related to our estimate of the working capital adjustment and the fair value of the potential additional consideration due to NSC.
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Amsurg Corp has a market cap of $901.9 million; its shares were traded at around $28.54 with a P/E ratio of 15.8 and P/S ratio of 1.2. Amsurg Corp had an annual average earning growth of 10.8% over the past 10 years. GuruFocus rated Amsurg Corp the business predictability rank of 4-star.
Highlight of Business Operations:
Of the continuing centers in operation at March 31, 2012, 146 centers performed gastrointestinal endoscopy procedures, 39 centers performed procedures in multiple specialties, 35 centers performed ophthalmology procedures, and seven centers performed orthopedic procedures. We intend to expand primarily through the acquisition and development of additional ASCs and through future same-center growth. During the three months ended March 31, 2012, we experienced same-center revenue growth of 5%. We estimate that 2% of this increase was a result of improved weather conditions in 2012 compared to 2011. We expect our same-center revenue growth for 2012 to be 1% to 3%. Our growth strategy also includes the acquisition and development of additional surgery centers, which we expect on an annual basis would generate additional operating income of $25 million to $29 million. We anticipate that because the majority of these acquisitions would occur in the latter part of 2012, their contribution to our 2012 operating income would not be significant.We recognized income tax expense of $10.9 million in the three months ended March 31, 2012 compared to $8.3 million in the comparable 2011 period. Our effective tax rate in 2012 was 16.4% of earnings from continuing operations before income taxes. This differs from the federal statutory income tax rate of 35.0% primarily due to the exclusion of the noncontrolling interests share of pre-tax earnings and the impact of state income taxes. Because we deduct goodwill amortization for tax purposes only, approximately 50% to 60% of our income tax expense is deferred and our deferred tax liability continues to increase, which would only be due in part or in whole upon the disposition of a portion or all of our surgery centers.
Noncontrolling interests in net earnings for the three months ended March 31, 2012 increased $7.2 million, or 22%, from the comparable 2011 period, primarily as a result of noncontrolling interests in earnings at surgery centers recently added to operations. As a percentage of revenues, noncontrolling interests decreased to 17.5% from 18.5% in the three months ended March 31, 2012 as a result of the Company s higher ownership percentage in recently acquired centers. The net loss from discontinued operations attributable to noncontrolling interests was $60,000 during the three months ended March 31, 2012 and the net earnings from discontinued operations attributable to noncontrolling interests were $429,000 during the three months ended March 31, 2011.
Cash and cash equivalents at March 31, 2012 and 2011 were $44.3 million and $37.7 million, respectively. At March 31, 2012, we had working capital of $117.1 million, compared to $109.6 million at December 31, 2011. Operating activities for the three months ended March 31, 2012 generated $69.1 million in cash flow from operations, compared to $51.3 million in the three months ended March 31, 2011. The increase in operating cash flow resulted primarily from higher net earnings in the 2012 period over the comparable period. Positive operating cash flows of individual centers are the sole source of cash used to make distributions to our wholly-owned subsidiaries, as well as to the partners, which we are obligated to make on a monthly basis in accordance with each partnership s partnership or operating agreement. Distributions to noncontrolling
At March 31, 2012 and December 31, 2011, we had contingent purchase price obligations of $3.5 million and $5.2 million, respectively. During the three months ended March 31, 2012, we funded through operating cash flow $1.7 million of our purchase price obligations. The remaining purchase price obligations are related to our acquisition of 17 centers from National Surgical Care, Inc. (“NSC”) on September 1, 2011. We have agreed to pay as additional consideration an amount up to $7.5 million based on a multiple of the excess earnings over the targeted earnings of the acquired centers, if any, from the period of January 1, 2012 to December 31, 2012. In addition, $3.5 million of the purchase price was placed in an escrow fund to allow for any working capital adjustments up to $500,000, with the remainder allocated to potential indemnity claims, if any, which must be asserted by us within one year of the transaction date. As of March 31, 2012, we recorded in other long-term liabilities on our balance sheet a purchase price obligation related to our estimate of the working capital adjustment and the fair value of the potential additional consideration due to NSC.
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