<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): December 8, 1999
(September 24, 1999)
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.)
20 BURTON HILLS BOULEVARD
NASHVILLE, TENNESSEE 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 October 8, 1999.
(a) Financial Statements of Business Acquired:
Independent Auditors' Report.
Balance Sheets of Mid-Florida Surgery Center, Inc. as of September 30,
1998, September 24, 1999 and June 30, 1999 (unaudited).
Statements of Earnings and Retained Earnings of Mid-Florida Surgery
Center, Inc. for the year ended September 30, 1998, the period ended
September 24, 1999, and the nine months ended June 30, 1998 and 1999
(unaudited).
Statements of Cash Flows of Mid-Florida Surgery Center, Inc. for the year
ended September 30, 1998, the period ended September 24, 1999, and
the nine months ended June 30, 1998 and 1999 (unaudited).
Notes to Financial Statements of Mid-Florida Surgery Center, Inc.
(b) Pro Forma Financial Information:
Unaudited Pro Forma Combined Statements of Operations for the year ended
December 31, 1998 and the nine months ended September 30, 1999.
Notes to Unaudited Pro Forma Combined Statements of Operations.
2
<PAGE> 3
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
Mid-Florida Surgery Center, Inc.
Mount Dora, Florida
We have audited the accompanying balance sheets of Mid-Florida Surgery Center,
Inc. as of September 30, 1998, and September 24, 1999, and the related
statements of earnings and retained earnings and cash flows for the periods 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 audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the financial position of Mid-Florida Surgery Center, Inc. as of
September 30, 1998 and September 24, 1999, and the results of its operations and
its cash flows for the periods then ended in conformity with generally accepted
accounting principles.
DELOITTE & TOUCHE LLP
Nashville, Tennessee
November 19, 1999
3
<PAGE> 4
MID-FLORIDA SURGERY CENTER, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 24, JUNE 30,
1998 1999 1999
------------- ------------ -----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ................................ $ 168,777 $105,353 $110,527
Accounts receivable, net of allowance of $21,322, $18,691,
and $15,894 (unaudited), respectively .................. 526,363 469,666 401,468
Supplies inventory ....................................... 18,982 15,576 16,671
Prepaid expenses ......................................... 750 -- 13,137
---------- -------- --------
Total current assets ............................ 714,872 590,595 541,803
Property and equipment, net (note 2) .......................... 174,204 121,552 156,562
Other assets (note 1) ......................................... 176,600 218,563 221,001
---------- -------- --------
Total assets .................................... $1,065,676 $930,710 $919,366
========== ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt (note 3) ............... $ 136,117 $117,015 $151,742
Accounts payable ......................................... 24,095 270,713 20,383
Accrued expenses ......................................... 5,978 8,110 331
---------- -------- --------
Total current liabilities ....................... 166,190 395,838 172,456
Long-term debt (note 3) ....................................... 29,903 -- --
Stockholders' equity:
Common stock ............................................. 200 200 200
Retained earnings ........................................ 869,383 534,672 746,710
---------- -------- --------
Total stockholders' equity ...................... 869,583 534,872 746,910
---------- -------- --------
Commitments (note 4)
Total liabilities and stockholders' equity ...... $1,065,676 $930,710 $919,366
========== ======== ========
</TABLE>
See accompanying notes to the financial statements.
4
<PAGE> 5
MID-FLORIDA SURGERY CENTER, INC.
STATEMENTS OF EARNINGS AND RETAINED EARNINGS
<TABLE>
<CAPTION>
NINE MONTHS NINE MONTHS
YEAR ENDED PERIOD ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 24, JUNE 30, JUNE 30,
1998 1999 1998 1999
------------- ------------- ----------- ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Revenues ......................... $ 4,155,204 $ 3,840,790 $ 3,196,818 $ 2,927,768
Operating expenses:
Salaries and benefits ....... 644,080 725,363 497,476 531,373
Medical supply and drug costs 668,786 564,889 540,436 443,897
Other operating expenses .... 518,226 607,537 401,593 435,063
Depreciation and amortization 73,054 77,471 54,790 42,461
----------- ----------- ----------- -----------
Total operating expenses 1,904,146 1,975,260 1,494,295 1,452,794
----------- ----------- ----------- -----------
Operating income ........ 2,251,058 1,865,530 1,702,523 1,474,974
Interest Expense ................. 14,799 13,597 10,943 9,647
----------- ----------- ----------- -----------
Net earnings ............ 2,236,259 1,851,933 1,691,580 1,465,327
Beginning retained earnings ...... 833,622 869,383 833,622 869,383
Dividends ........................ (2,200,498) (2,186,644) (1,641,798) (1,588,000)
----------- ----------- ----------- -----------
Ending retained earnings $ 869,383 $ 534,672 $ 883,404 $ 746,710
=========== =========== =========== ===========
</TABLE>
See accompanying notes to the financial statements.
5
<PAGE> 6
MID-FLORIDA SURGERY CENTER, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS NINE MONTHS
YEAR ENDED PERIOD ENDED ENDED ENDED
SEPTEMBER 30, SEPTEMBER 24, JUNE 30, JUNE 30,
1998 1999 1998 1999
------------ ------------ ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net earnings .......................... $ 2,236,259 $ 1,851,933 $ 1,691,580 $ 1,465,327
Adjustments to reconcile net earnings
to net cash flows provided by operating
activities:
Depreciation and amortization ..... 73,054 77,471 54,790 42,461
Increase (decrease) in cash, due to
change in:
Accounts receivable, net ..... (86,016) 56,697 (117,698) 124,895
Supplies inventory ........... (4,702) 3,406 (5,855) 2,311
Prepaid expenses ............. 1,500 750 1,935 (12,387)
Other assets ................. (29,673) (41,963) (29,731) (44,401)
Accounts payable ............. (8,874) 246,618 36,369 (3,712)
Accrued expenses ............. (2,984) 2,132 5,691 (5,647)
----------- ----------- ----------- -----------
Net cash flows provided by
operating activities ........ 2,178,564 2,197,044 1,637,081 1,568,847
Cash flows used by investing activities-
Acquisition of property and equipment . (65,946) (24,819) (60,838) (24,819)
Cash flows from financing activities:
Payments on long-term debt ............ (18,945) (49,005) (12,770) (14,278)
Dividends ............................. (2,200,498) (2,186,644) (1,641,798) (1,588,000)
----------- ----------- ----------- -----------
Net cash flows used by
financing activities ........ (2,219,443) (2,235,649) (1,654,568) (1,602,278)
----------- ----------- ----------- -----------
Net decrease in cash and cash equivalents .. (106,825) (63,424) (78,325) (58,250)
Cash and cash equivalents, beginning of
period ................................ 275,602 168,777 275,602 168,777
----------- ----------- ----------- -----------
Cash and cash equivalents, end of period ... $ 168,777 $ 105,353 $ 197,277 $ 110,527
=========== =========== =========== ===========
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest ..................... $ 14,799 $ 13,597 $ 10,943 $ 9,647
=========== =========== =========== ===========
</TABLE>
See accompanying notes to the financial statements.
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MID-FLORIDA SURGERY CENTER, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 1998, PERIOD ENDED SEPTEMBER 24, 1999, NINE MONTHS
ENDED JUNE 30, 1998 (UNAUDITED) AND NINE MONTHS ENDED JUNE 30, 1999 (UNAUDITED)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. ORGANIZATION
Mid-Florida Surgery Center, Inc. (the "Center") began operations in
1991 and operates an ophthalmology surgery center in Mount Dora, Florida. The
Center is owned by a group of stockholders which perform ophthalmology
procedures at the center through their related physician practice. As more fully
discussed in Note 5, a majority ownership interest in the assets of the Center
was acquired by AmSurg Holdings, Inc. ("Holdings"). The financial statements for
the period ended September 24, 1999 represent the Center's results of operations
for the eleven months and twenty-four days prior to the acquisition of the
majority ownership interest.
B. CASH AND CASH EQUIVALENTS
Cash and cash equivalents are comprised principally of demand deposits
at banks and other highly liquid short-term investments with maturities less
than three months when purchased.
C. REVENUE RECOGNITION
Revenues consist of amounts billed for the use of the Center's
facilities billed directly to the patient or third-party payer. Revenues are
reported at the estimated net realizable amounts from patients, third-party
payers 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 1998 and 1999, approximately 79% of the Center's revenues were
provided to patients covered under Medicare and Medicaid. Amounts that are
determined to be uncollectible are charged against the allowance for
uncollectible accounts.
D. PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation for leasehold
improvements is recognized under the straight-line method over the remaining
term of the lease plus renewal options. Depreciation for equipment and furniture
and fixtures is recognized over useful lives of five to seven years.
E. OTHER ASSETS
Other assets consist principally of a deposit required in order for the
Center to have a noncalendar year-end as a Subchapter S corporation. The deposit
is refundable to the Center upon dissolution or a change in tax status.
F. EMPLOYEE BENEFIT PLANS
The Center sponsors a profit sharing plan to which the Center may
contribute a discretionary amount each year to be shared by eligible employees.
The Center also sponsors a defined contribution plan to which the Center makes
contributions on behalf of eligible employees based on a formula as defined by
the plan. During the year ended September 30, 1998, period ended September 24,
1999, nine months ended June 30, 1998 (unaudited) and nine months ended June 30,
1999 (unaudited), the Center incurred costs of $12,667, $7,864, $11,240 and
$5,559, respectively, associated with these plans.
G. INCOME TAXES
The Center has elected Subchapter S status of the Internal Revenue
Code, and accordingly, income taxes are the responsibility of the individual
stockholders of the Center. Therefore, no provision for income taxes has been
reflected in the accompanying financial statements.
H. 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 these estimates.
7
<PAGE> 8
MID-FLORIDA SURGERY CENTER, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
I. UNAUDITED INTERIM INFORMATION
The unaudited interim financial statements include all adjustments,
consisting only of normal recurring adjustments, which management considers
necessary for a fair presentation of the financial position and results of
operations. The results of operations for the nine months ended June 30, 1998
and 1999 are not necessarily indicative of the results that may be expected for
a full year.
(2) PROPERTY AND EQUIPMENT
Property and equipment at September 30, 1998, September 24, 1999 and
June 30, 1999 are as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30, SEPTEMBER 24, JUNE 30,
1998 1999 1999
------------ ------------ ---------
(UNAUDITED)
<S> <C> <C> <C>
Medical equipment .................. $ 542,163 $ 544,444 $ 544,444
Other equipment .................... 72,456 94,994 94,994
Furniture and fixtures ............. 2,756 2,756 2,756
Leasehold improvements ............. 19,328 19,328 19,328
--------- --------- ---------
Total cost ................ 636,703 661,522 661,522
Accumulated depreciation ........... (462,499) (539,970) (504,960)
--------- --------- ---------
Property and equipment, net $ 174,204 $ 121,552 $ 156,562
========= ========= =========
</TABLE>
(3) LONG-TERM DEBT
Long-term debt at September 30, 1998, September 24, 1999 and June 30,
1999 (unaudited) is comprised of notes with banks of $166,020, $117,015 and
$151,742, respectively, at rates ranging from 8% to 8.75%. The notes are secured
by the assets of the Center.
At September 24, 1999 only one of these notes remain outstanding with
payment of the remaining principal of $117,015 due on July 31, 2000.
(4) LEASES
The Center operates under a facilities lease that expires June 2009.
Future minimum lease payments at September 24, 1999 are as follows:
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
-------------
<S> <C>
2000 .......................................... $ 75,204
2001 .......................................... 76,896
2002 .......................................... 79,206
2003 .......................................... 81,579
2004 .......................................... 84,030
Thereafter ....................................... 434,964
--------
Total .............................. $831,879
========
</TABLE>
The Center incurred rent expense for the year ended September 30, 1998,
the period ended September 24, 1999, the nine months ended June 30, 1998
(unaudited) and the nine months ended June 30, 1999 (unaudited) of $123,883,
$145,542, $96,782 and $111,674, respectively.
8
<PAGE> 9
MID-FLORIDA SURGERY CENTER, INC.
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(5) SUBSEQUENT EVENT
Effective September 24, 1999, Holdings, a subsidiary of AmSurg Corp.
("AmSurg"), acquired from the Center a 54% ownership interest in the assets
comprising the business operations of the Center.
Pursuant to the terms of the Asset Purchase Agreement dated September
24, 1999, by and among Holdings, AmSurg and the Center, Holdings paid an initial
purchase price of $6,374,859 in cash and AmSurg issued to the Center 117,338
shares of its Class A Common Stock, subject to adjustment as set forth in the
Asset Purchase Agreement.
9
<PAGE> 10
AMSURG CORP.
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION BASIS OF PRESENTATION
The unaudited pro forma combined statements of operations of AmSurg
Corp. for the year ended December 31, 1998 and nine months ended September 30,
1999, are presented to show the effects of the acquisition of the majority
interest in Mid-Florida Surgery Center, Inc. on September 24, 1999, as if it had
occurred on January 1, 1998. Mid-Florida Surgery Center, Inc. operates on a
fiscal period ending September 30. The pro forma information is based on the
historical financial statements of the Company and the acquired center, giving
effect to the acquisition under the purchase method of accounting and the
assumptions and adjustments in the accompanying notes to the pro forma
consolidated financial information. The allocation of the purchase price is
preliminary, but management does not believe it will change materially. For
proforma purposes, the Company's historical financial statements have been
combined with the respective fiscal periods of Mid-Florida Surgery Center (year
ended September 30, 1998 and nine months ended June 30, 1999).
The unaudited pro forma financial information does not purport to
represent what the Company's results of operations would actually have been had
the transaction in fact occurred on the dates indicated above, nor to project
the Company's financial position or results of operations for any future date or
period. In the opinion of the Company'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 accompanying notes and the
consolidated financial statements of AmSurg Corp. and the related notes included
in the Company's 1998 Annual Report on Form 10-K and Quarterly Report on Form
10-Q for the quarter ended September 30, 1999.
10
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AMSURG CORP.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(All amounts expressed in thousands, except per share data)
<TABLE>
<CAPTION>
MID-FLORIDA
SURGERY PRO FORMA
CENTER, PRO FORMA COMBINED
HISTORICAL INC. ADJUSTMENTS TOTALS
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues .................................... $80,322 $4,155 $ -- $84,477
Operating expenses:
Salaries and benefits .................. 22,947 644 66 (1) 23,657
Other operating expenses ............... 28,393 1,187 -- 29,580
Depreciation and amortization .......... 6,568 73 272 (2) 6,913
Net loss on sale of assets ............. 5,462 -- -- 5,462
------- ------ -------- -------
Total operating expenses ........... 63,370 1,904 338 65,612
------- ------ -------- -------
Operating income ................... 16,952 2,251 (338) 18,865
Minority interest ........................... 13,645 -- 1,035 (3) 14,680
Other expenses:
Interest expense, net of interest income 1,499 15 365 (4) 1,879
------- ------ -------- -------
Earnings before income taxes ....... 1,808 2,236 (1,738) 2,306
Income tax expense .......................... 1,047 -- 199 (5) 1,246
------- ------ -------- -------
Net earnings ....................... $ 761 $2,236 $ (1,937) $ 1,060
======= ====== ======== =======
Earnings per common share:
Basic .................................. $ 0.06 $ 0.09
Diluted ................................ $ 0.06 $ 0.08
Weighted average number of shares and share
equivalents outstanding:
Basic .................................. 12,247 117 (6) 12,364
Diluted ................................ 12,834 117 (6) 12,951
</TABLE>
11
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AMSURG CORP.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
(All amounts expressed in thousands, except per share data)
<TABLE>
<CAPTION>
MID-FLORIDA
SURGERY PRO FORMA
CENTER, PRO FORMA COMBINED
HISTORICAL INC. ADJUSTMENTS TOTALS
---------- ----------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues ..................................... $ 73,457 $2,928 $ -- $ 76,385
Operating expenses:
Salaries and benefits ................... 20,196 532 50 (1) 20,778
Other operating expenses ................ 25,097 879 -- 25,976
Depreciation and amortization ........... 5,229 42 204 (2) 5,475
Net gain on sale of assets .............. (34) -- -- (34)
-------- ------ -------- --------
Total operating expenses ............ 50,488 1,453 254 52,195
-------- ------ -------- --------
Operating income .................... 22,969 1,475 (254) 24,190
Minority interest ............................ 14,025 -- 679 (3) 14,704
Other expenses:
Interest expense, net of interest income 668 10 275 (4) 953
-------- ------ -------- --------
Earnings before income taxes and
cumulative effect of an accounting
change ............................ 8,276 1,465 (1,208) 8,533
Income tax expense ........................... 3,186 -- 107 (5) 3,293
-------- ------ -------- --------
Net earnings before cumulative effect
of an accounting change ........... 5,090 1,465 (1,315) 5,240
Cumulative effect of the change in the method
in which pre-opening costs are recorded . (126) -- -- (126)
-------- ------ -------- --------
Net earnings ........................ $ 4,964 $1,465 $ (1,315) $ 5,114
======== ====== ======== ========
Basic earnings per common share:
Net earnings before cumulative effect of
an accounting change .................. $ 0.35 $ 0.36
Net earnings ............................ $ 0.34 $ 0.35
Diluted earnings per common share:
Net earnings before cumulative effect of
an accounting change .................. $ 0.34 $ 0.35
Net earnings ............................ $ 0.34 $ 0.34
Weighted average number of shares and share
equivalents outstanding:
Basic ................................... 14,394 86 (6) 14,480
Diluted ................................. 14,754 86 (6) 14,840
</TABLE>
12
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AMSURG CORP.
NOTES TO UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
On September 24, 1999, the Company acquired a majority interest in
Mid-Florida Surgery Center, Inc., LLC. The accompanying pro forma combined
statements of operations reflect the pro forma results of operations of the
Company as if the surgery center had been acquired on January 1, 1998.
PRO FORMA ADJUSTMENTS
1. To reflect additional corporate general and administrative salary
costs as a result of an increase in the number of centers managed.
2. To reflect amortization of additional excess of cost over net assets
of purchased operations based on a 25-year amortization period and the
following purchase price allocation:
<TABLE>
<S> <C>
Fair value of net assets acquired .......................... $ 289,000
Excess of cost over net assets of purchased operations...... 6,790,000
----------
Total purchase price ........................ $7,079,000
==========
</TABLE>
3. To reflect minority owner's interest in earnings of acquired
operations.
4. To reflect interest expense on acquisition-related borrowings, net of
a reduction in interest income on cash and cash equivalents used in
the acquisition and interest expense of the acquired entity on
indebtedness not assumed.
5. To record estimated additional federal and state income taxes at a
combined statutory rate of 40% in 1998 and 38.5% in 1999, as a result
of the incremental increase in earnings before income taxes.
6. To reflect weighted average shares outstanding for stock issued in
acquisition.
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<PAGE> 14
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.
Date: December 8, 1999 By: /s/ Claire M. Gulmi
--------------------------------------
CLAIRE M. GULMI
Senior Vice President and Chief Financial Officer
(Principal Financial and Duly Authorized Officer)
14
