SEC Filings

AMSURG CORP filed this Form 10-12G/A on 05/09/1997
Entire Document
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AmSurg now has a majority ownership have both greater revenues and greater
operating expenses as a percentage of revenues than any single center, the
acquisition of the urology physician practice and the inclusion in operations of
the gastroenterology and primary care physician practice for the full 1997
period compared to two months in the comparable period in 1996 caused the
practices to have a disproportionately large impact on operating margins.
Salaries and benefits expense and other operating expenses as a percentage of
revenues also increased because there existed one newly opened start-up surgery
center in the three month period ended March 31, 1997. Typically start-up
centers initially experience lower operating margins until their respective case
load grows to a more optimal operating level.
     Depreciation and amortization expense increased $416,000, or 62%, in the
three month period ended March 31, 1997 over the comparable period in 1996,
primarily due to 11 additional surgery centers and one physician practice in
operation in the 1997 period compared to the 1996 period. The increase of
$116,000, or 55%, in interest expense for the three month period ended March 31,
1997 over the comparable period in 1996 is primarily attributable to debt
assumed or incurred in connection with additional acquisitions of interests in
surgery centers and physician practices plus the interest expense associated
with newly opened start-up surgery centers financed partially with bank debt.
     Impairment loss of $2,321,000 in the three month period ended March 31,
1997 represents a charge in accordance with Statement of Financial Accounting
Standards No. 121 "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed of." AmSurg determined that an impairment in
the asset carrying value at one of its partnerships that owns two surgery
centers acquired in 1994, had taken place and as a result it recorded an
impairment of asset carrying value associated with these centers. Various
disagreements with the sole physician partner over the operation of these
centers have adversely impacted the operations of these centers, resulting in
AmSurg's determination in April 1997 that, based on the inability of the
partners to resolve their disagreements, it is likely that the carrying value of
the assets associated with this partnership will not be recovered. In
determining the impairment to be recorded, AmSurg projected the undiscounted
cash flows from these centers and determined these cash flows to be
substantially less than the carrying value of the long-lived assets attributable
to this partnership. While there has been no final decision, AmSurg believes
that the most probable outcome will be the discontinuance of its involvement
with these centers, and accordingly, the fair value of its investment is limited
to its interest in the current net book value of working capital and property
and equipment in the partnership. It is management's intent to pursue a course
of resolution that is as economically favorable as possible to AmSurg. AmSurg
believes it has good relationships with its other physician partners and that
the impairment loss attributable to the partnership discussed above resulted
from a unique set of circumstances. The revenues and the pretax loss after
minority interest for these two centers for the three month period ended March
31, 1997, before consideration of this impairment loss, were $148,000 and
$7,000, respectively. AmSurg does not believe that the operations of these two
centers subsequent to March 31, 1997 will have any significant impact on
AmSurg's future ongoing results of operations. See "RISK FACTORS -- Risks
Related to Intangible Assets."
     Minority partners' interest in earnings for the three month period ended
March 31, 1997 rose to $1,948,000 from $1,196,000 for the comparable period in
1996, an increase of 63%, primarily as a result of minority partners' interest
in earnings at surgery centers added to operations and from increased
same-center profitability.
     AmSurg recognized tax expense of $329,000 in the three month period ended
March 31, 1997 compared to $236,000 in the comparable period in 1996. Because
the loss incurred associated with the impairment loss discussed above may only
be deducted for tax purposes against future capital gains up to five years,
AmSurg has recognized no tax benefit associated with this loss in the current
period. AmSurg's effective tax rate is 40% of earnings prior to the impairment
loss in both periods, and differs from the federal statutory income tax rate of
34% due primarily to the impact of state income taxes.
  Fiscal Year Ended December 31, 1996 Compared to Fiscal Year Ended December 31,
     Revenues were $35,007,000 for 1996, an increase of $12,518,000, or 56%,
over revenues for 1995. The increase resulted primarily from the growth in the
number of surgery centers in operation, the acquisition of a