AmSurg Q3 revenues up, same store growth flat

'Clarity about lack of clarity' on health reform helps acquisition pipeline

Email | Print By Erin Lawley

10-23-2009 7:25 AM —

Ambulatory surgery center company AmSurg’s posted an 11 percent growth in revenue in the third quarter of 2009, though same-center growth was flat and sluggish volumes.

The company posted revenues of $168 million in the quarter, up from $151 million a year ago. Net earnings were $13.8 million or 45 cents per share compared to $12.4 million or 38 cents per share in the year-ago quarter.

On a conference call discussing the quarterly results, CEO Chris Holden said he was pleased with the company’s performance given the poor shape of the economy and the Medicare payment cut that shaved 2 cents per share off earnings in the quarter. There was zero same-center revenue growth in the quarter with 1 percent same-center procedure growth.

The company, which had 194 centers in operation at the end of the quarter, completed the acquisition of a small gastrointestinal center during the third quarter, bringing the company’s acquisition total to five centers during the first nine months of the year. AmSurg has opened one de novo center in 2009 so far.

At the end of the quarter, the company had two centers under development – one of which will open in the next quarter – and two centers under a letter of intent. But since the quarter’s end, Holden and his team have closed one of those acquisitions and added five letters of intent.

“The pipeline really has picked up significantly in the end of the third quarter and early fourth quarter,” Holden said. “Once the health care reform debate passed through the House and Senate and there was some clarity about the lack of clarity, that triggered ... some who were sitting on the sidelines to see if something would change their minds about whether to sell... Now they see that maybe there’s no clear answer and there’s more anxiety, not less than before. So that’s invigorated the pipeline.”

Holden said the company is projecting it will come in at the low end of its guidance of acquiring 13 to 16 centers in 2009. The company owned 194 centers at the close of the quarter.

But, noted Chief Financial Officer Claire Gulmi, “many of the acquisitions we’re doing today are larger than the ones we did three or four years ago.”

The company's stock (Ticker: AMSG) closed up 2.2 percent Thursday. Year to date, it's flat.