AmSurg's net income ticked up about 3 percent to $12.1 million in the fourth quarter. Net earnings per diluted share came in at 40 cents, compared to 37 cents in the year-ago quarter. Earnings from continuing operations met analysts' expectations of 42 cents, but a new accounting rule and revised Medicare payment rates hurt net profits by 5 cents during the quarter.
The addition of 14 surgery centers in 2009 – lifting AmSurg's network above 200 – helped boost Q4 revenue by 10 percent to $168 million. The Nashville-based company anticipates buying or developing between 13 and 16 centers in 2010. Eight centers were added in Q4, with six closing on Dec. 31, including some in the Dallas and Phoenix areas that CFO Claire Gulmi said are up to two times larger than the company’s average facility.
For all of 2009, AmSurg’s revenue rose 11 percent to $668 million from $660 million in 2008. Net earnings from continuing operations were up 7 percent to $52 million for the year.
AmSurg pegged its 2010 revenue guidance at $720 million to $750 million. Net earnings from continuing operations should fall between $1.77 per share to $1.80 per share — analysts had been expecting $1.81. That discrepancy had AmSurg shares (Ticker: AMSG) trading down almost 4 percent after hours Wednesday.
Eyeing new credit line, overseas growth
During the second quarter, Gulmi said she expects to refinance and expand AmSurg's credit facility, which comes due in July 2011. Her team is in discussions with its bank and expects an associated incremental financing cost of about 11 cents per share for the year.
Also of note on Wednesday’s conference call was the somewhat lengthy discussion of the company’s plans to expand internationally and add service lines beyond its traditional business, which is heavily weighted toward gastroenterology and ophthalmology.
The international plan grew out of discussions Holden has had in Nashville with “leaders of other health care companies that had an established international presence” and his observations of other developed countries’ health care systems. Economic pressures are making surgery centers – and their relatively lower costs compared to “large institutionally based delivery systems” – an attractive venture abroad, he said.
But Holden had few details and said the company has just begun thinking through its international options, an evaluation process that could last as long as two years. It hasn’t yet nailed down which countries it wants to enter, whether it would partner with existing providers, try to develop single or multi-specialty centers or even pursue physician ownership.
“Looking at this company, our evolution over the next 10 to 30 years, our strength is in ambulatory health services, not just ASCs,” Holden said. “We feel like we have a capability to do more over time.”
Along those lines, Holden said his team is also considering expanding its offerings to enter the weight loss and obesity management space. Holden said these centers would be “very synergistic” with the company’s existing GI and ophthalmology platforms, the latter due to comorbidities between diabetes and ophthalmologic problems.
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