<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A-1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 2, 1997
-----------------
AMSURG CORP.
(Exact Name of Registrant as Specified in its Charter)
TENNESSEE 000-22217 62-1493316
(State or other jurisdiction of (Commission (I.R.S. employer
incorporation or organization) File Number) identification no.)
ONE BURTON HILLS BOULEVARD
SUITE 350
NASHVILLE, TN 37215
(Address of principal executive offices) (Zip code)
(615) 665-1283
(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
This Form 8-K/A-1 includes the following financial information required
to be filed pursuant to Item 7 (Financial Statements and Exhibits) of the
Current Report on Form 8-K dated September 2, 1997:
(a) Financial Statements of Business Acquired:
Independent Auditors' Report.
Balance Sheets of The Endoscopy Center, Inc. as of December 31, 1995 and
1996 and August 31, 1997 (unaudited).
Statements of Earnings and Retained Earnings of The Endoscopy Center,
Inc. for the years ended December 31, 1995 and 1996 and the Eight
Months ended August 31, 1996 and 1997 (unaudited).
Statements of Cash Flows of The Endoscopy Center, Inc.for the years ended
December 31, 1995 and 1996 and the Eight Months ended August 31, 1996
and 1997 (unaudited).
Notes to Financial Statements of The Endoscopy Center, Inc.
(b) Pro Forma Financial Information:
Pro Forma Combined Statements of Operations for the year ended December
31, 1996 and the Eight Months ended August 31, 1997.
Notes to Pro Forma Financial Statements.
2
<PAGE> 3
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
The Endoscopy Center, Inc.
Independence, Missouri
We have audited the accompanying balance sheets of The Endoscopy Center,
Inc. as of December 31, 1995 and 1996, and the related statements of earnings
and retained earnings and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of The Endoscopy Center, Inc. as of December
31, 1995 and 1996 and the results of its operations and its cash flows for the
years then ended in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Nashville, Tennessee
October 7, 1997
3
<PAGE> 4
THE ENDOSCOPY CENTER, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31, AUGUST 31,
1995 1996 1997
------------ ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash..................................................... $179,363 $193,156 $191,848
Accounts receivable, net of allowance for uncollectible
accounts of $196,808, $160,148 and $150,000,
respectively.......................................... 429,651 467,787 500,000
Supplies inventory....................................... 10,374 12,507 13,240
-------- -------- --------
Total current assets............................. 619,388 673,450 705,088
Organization cost, net of accumulated amortization of $71,
$142 and $189, respectively.............................. 219 148 101
-------- -------- --------
$619,607 $673,598 $705,189
======== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable......................................... $ 19,744 $ 41,711 $ 20,756
Distribution withholdings................................ 78,525 108,355 --
Amount due to related party (note 2)..................... 69,779 73,580 65,050
-------- -------- --------
Total current liabilities........................ 168,048 223,646 85,806
Stockholders' equity:
Common stock, $1 par value, 30,000 shares authorized, 90
shares outstanding.................................... 90 90 90
Retained earnings........................................ 451,469 449,862 619,293
-------- -------- --------
Total stockholders' equity....................... 451,559 449,952 619,383
-------- -------- --------
$619,607 $673,598 $705,189
======== ======== ========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE> 5
THE ENDOSCOPY CENTER, INC.
STATEMENTS OF EARNINGS AND RETAINED EARNINGS
<TABLE>
<CAPTION>
EIGHT MONTHS
YEAR ENDED DECEMBER 31, ENDED AUGUST 31,
------------------------- -----------------------
1995 1996 1996 1997
----------- ----------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Revenues...................................... $ 2,836,600 $ 3,122,033 $1,953,144 $2,090,308
Expenses:
Salaries and benefits (note 2).............. 491,112 507,417 317,440 470,278
Supplies and other operating expenses....... 338,397 452,182 282,885 255,584
Rent expense (note 2)....................... 230,825 299,583 199,722 200,656
Bad debt expense............................ 168,029 56,335 35,243 44,503
----------- ----------- ---------- ----------
Total expenses...................... 1,228,363 1,315,517 835,290 971,021
----------- ----------- ---------- ----------
Net earnings........................ 1,608,237 1,806,516 1,117,854 1,119,287
Retained earnings, beginning of period........ 153,760 451,469 451,469 449,862
Distributions to stockholders................. (1,310,528) (1,808,123) (1,128,268) (949,855)
----------- ----------- ---------- ----------
Retained earnings, end of period.... $ 451,469 $ 449,862 $ 441,055 $ 619,294
=========== =========== ========== ==========
</TABLE>
See accompanying notes to the financial statements.
5
<PAGE> 6
THE ENDOSCOPY CENTER, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
EIGHT MONTHS
YEAR ENDED DECEMBER 31, ENDED AUGUST 31,
------------------------- -------------------------
1995 1996 1996 1997
----------- ----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Cash flow from operations:
Net earning............................... $ 1,608,237 $ 1,806,516 $ 1,117,854 $ 1,119,287
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization of organization cost...... 71 71 47 47
Decrease (increase) in accounts
receivable........................... (220,594) (38,136) 84,016 (32,213)
Increase in supplies inventory......... (5,174) (2,133) (1,290) (733)
Increase (decrease) in accounts
payable.............................. (2) 21,967 42,685 (20,956)
Increase (decrease) in amount due to
related party........................ 33,559 3,801 193 (8,530)
----------- ----------- ----------- -----------
Net cash provided by operating
activities...................... 1,416,097 1,792,086 1,243,505 1,056,902
----------- ----------- ----------- -----------
Cash flows from investing activities:
Stockholders' distribution................ (1,310,528) (1,808,123) (1,128,268) (949,855)
Increase (decrease) in distribution
withholdings........................... 78,525 29,830 (78,525) (108,355)
Decrease in outstanding checks in excess
of deposits............................ (4,731) -- -- --
----------- ----------- ----------- -----------
Net cash used by financing
activities...................... (1,236,734) (1,778,293) (1,206,793) (1,058,210)
----------- ----------- ----------- -----------
Net increase (decrease) in cash............. 179,363 13,793 36,712 (1,308)
Cash, beginning of period................... -- 179,363 179,363 193,156
----------- ----------- ----------- -----------
Cash, end of period......................... $ 179,363 $ 193,156 $ 216,075 $ 191,848
=========== =========== =========== ===========
</TABLE>
See accompanying notes to the financial statements.
6
<PAGE> 7
THE ENDOSCOPY CENTER, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1996 AND EIGHT MONTHS ENDED AUGUST 31, 1997
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Endoscopy Center Inc. ("TEC") began operations in 1994 and operates two
gastrointestinal surgery centers in Independence and Kansas City, Missouri. TEC
is owned by a group of stockholders which perform gastroenterology procedures at
the centers through their related physician practice.
a. Revenue Recognition
Revenue consists of the billing for the use of TEC's facilities (the "usage
fee") directly to the patient or third-party payor. The usage fee excludes
amounts billed for physicians' services, which are billed separately by the
physicians to the patient or third-party payor. Revenues are reported at the
estimated net realizable amounts from patients, third-party payors and others,
including Medicare and Medicaid. Such revenues are recognized as the related
services are performed. Contractual adjustments resulting from agreements with
various organizations to provide services for amounts which differ from billed
charges, are recorded as deductions from patient service revenues. During the
1995, 1996 and 1997 periods, approximately 29%, 39% and 28%, respectively, of
the Centers' revenues were provided to patients covered under Medicare and
Medicaid. Amounts, which are determined to be uncollectible, are charged against
the allowance for uncollectible accounts.
b. Amortization
Amortization of organization cost is provided on a straight-line basis over
four years.
c. Income Taxes
TEC has elected Subchapter S status of the Internal Revenue Code, and
accordingly, income taxes are the responsibility of the individual stockholders
of TEC. Therefore, no provision for income taxes has been reflected by TEC.
d. Management Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from the estimates.
2. RELATED PARTY TRANSACTIONS
Both centers rent equipment and furniture and one center occupies space
provided by an entity which is owned by the same group of stockholders which own
TEC. Included in the statement of earnings and retained earnings is a charge of
$156,571, $200,993, $133,995 and $133,587 for the years ended December 31, 1995
and 1996 and the eight months ended August 31, 1996 and 1997, respectively,
related to these lease arrangements, which management believes reflects the fair
value of space and rental items provided. In addition, the employees of TEC are
leased from the related physician practice. Charges associated with this
arrangement are reflected as salaries and benefits in the statements of earnings
and retained earnings.
3. SUBSEQUENT EVENT
Effective September 1, 1997, AmSurg Holdings, Inc. ("Holdings"), a
subsidiary of AmSurg Corp. ("AmSurg") acquired from TEC a sixty percent
ownership interest in the assets comprising the business operations of two
gastrointestinal surgery centers.
7
<PAGE> 8
THE ENDOSCOPY CENTER, INC.
NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)
Pursuant to the terms of the Asset Purchase Agreement, dated as of
September 2, 1997, by and among Holdings, AmSurg and TEC, Holdings paid
$5,652,205 in cash and AmSurg issued 280,367 shares of its common stock to TEC.
Following the asset purchase, Holdings and TEC contributed their respective
ownership in the assets of the centers into a newly formed limited liability
company, The Independence ASC, LLC, and received proportionate membership
therein.
8
<PAGE> 9
AMSURG CORP.
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
The following unaudited pro forma statements of operations of AmSurg
Corp. ("AmSurg") for the year ended December 31, 1996 and the nine months ended
September 30, 1997 are presented to show the effects of the acquisition of The
Endoscopy Center, Inc., acquired on September 2, 1997, which is accounted for as
a purchase, assuming the acquisition had occurred on January 1, 1996.
The unaudited pro forma financial information does not purport to
represent what AmSurg's financial position or results of operations would
actually have been had the transactions in fact occurred on the dates indicated
above, nor to project AmSurg's financial position or results of operations for
any future date or period. In the opinion of AmSurg's management, all
adjustments necessary for a fair presentation have been made. This unaudited pro
forma financial information should be read in conjunction with the financial
statements and notes thereto included in AmSurg's Registration Statement on Form
10/A-3 dated November 3, 1997.
YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AMSURG THE ENDOSCOPY PRO FORMA PRO FORMA
HISTORICAL CENTER, INC. ADJUSTMENTS COMBINED
----------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues................................ $ 35,007 $ 3,122 $ (74)(2) $ 38,055
Expenses:
Salaries and benefits .............. 11,613 507 66 (3) 12,186
Other operating expenses............ 11,547 808 9 (4) 12,364
Depreciation and amortization....... 3,000 - 239 (5) 3,239
Interest............................ 948 - 290 (6) 1,238
----------- ----------- ----------- -----------
Total expenses................... 27,108 1,315 604 29,027
----------- ----------- ----------- -----------
Income before minority interest
and income taxes............. 7,899 1,807 (678) 9,028
Minority interest....................... 5,433 - 723 (7) 6,156
----------- ----------- ----------- -----------
Income before income taxes....... 2,466 1,807 (1,401) 2,872
Income tax expense...................... 985 - 162 (8) 1,147
----------- ----------- ----------- -----------
Net income....................... 1,481 1,807 (1,563) 1,725
Accretion of preferred stock discount... 22 - - 22
----------- ----------- ----------- -----------
Net income attributable to
common stockholders.......... $ 1,459 $ 1,807 $ (1,563) $ 1,703
=========== =========== =========== ===========
Net income per share
attributable to common
stockholders................. $ 0.05 $ 0.06
=========== ===========
Weighted average common shares
and equivalents.................. 27,307 280 (9) 27,587
=========== =========== ===========
</TABLE>
9
<PAGE> 10
AMSURG CORP.
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
AMSURG THE ENDOSCOPY PRO FORMA PRO FORMA
HISTORICAL CENTER, INC.(1) ADJUSTMENTS COMBINED
----------- --------------- ------------ -----------
<S> <C> <C> <C> <C>
Revenues............................... $ 41,163 $ 2,090 $ (50)(2) $ 43,203
Expenses:
Salaries and benefits.............. 12,552 470 (64)(3) 12,958
Other operating expenses........... 14,564 501 10 (4) 15,075
Depreciation and amortization...... 3,511 - 159 (5) 3,670
Interest........................... 1,141 - 193 (6) 1,334
Net loss on sale of assets......... 1,494 - - 1,494
Distribution cost.................. 458 - - 458
----------- ----------- ----------- -----------
Total expenses.................. 33,720 971 298 34,989
----------- ----------- ----------- -----------
Income before minority interest
and income taxes............ 7,443 1,119 (348) 8,214
Minority interest...................... 6,447 - 491 (7) 6,938
----------- ----------- ----------- -----------
Income before income taxes...... 996 1,119 (839) 1,276
Income tax expense..................... 1,279 - 112 (8) 1,391
----------- ----------- ----------- -----------
Net income (loss)............... (283) 1,119 (951) (115)
Accretion of preferred stock discount.. 210 - - 210
----------- ----------- ----------- -----------
Net income (loss) attributable to
common stockholders......... $ (493) $ 1,119 $ (951) $ (325)
=========== =========== =========== ===========
Net income (loss) per share
attributable to common
stockholders................ $ (0.02) $ (0.01)
=========== ===========
Weighted average common shares
and equivalents................. 28,310 251 (9) 28,561
=========== =========== ===========
</TABLE>
10
<PAGE> 11
AMSURG CORP.
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
1. From January 1, 1997 to date of acquisition.
2. Reflects a decrease in interest income on the funds used to complete the
acquisition.
3. The pro forma adjustments to salaries and benefits reflect $66,000 and
$44,000 in the year ended December 31, 1996 and the nine months ended
September 30, 1997, respectively, for estimated additional general and
administrative costs as a result of two additional centers in operation.
In addition, salaries and benefits in the nine months ended September 30,
1997 reflects a reduction of $108,000 for previously allocated salaries no
longer charged to operations.
4. Reflects increase in other miscellaneous fees.
5. Reflects an increase in amortization due to the increase in excess of cost
over net assets of purchased operations.
6. Reflects increase in interest expense for debt incurred to complete the
acquisition.
7. Reflects minority owner's interest in earnings of acquired operations.
8. Change to the income tax provision due to combination of operations.
9. Average weighted shares for stock issued in the acquisition.
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
AMSURG CORP.
By: /s/ Claire M. Gulmi
------------------------------------
CLAIRE M. GULMI
Senior Vice President and Chief Financial Officer
(Principal Financial and Duly Authorized Officer)
Date: November 12, 1997
12
