<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):
January 27, 1999 (November 13, 1998)
-----------------
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)
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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 November 13, 1998:
(a) Financial Statements of Business Acquired:
Independent Auditors' Report
Balance Sheets of Endoscopy Center of Naples, Inc. as of December 31,
1997 and September 30, 1998 (unaudited)
Statements of Earnings and Retained Earnings of Endoscopy Center of
Naples, Inc. for the year ended December 31, 1997 and the nine months
ended September 30, 1997 and 1998 (unaudited)
Statements of Cash Flows of Endoscopy Center of Naples, Inc. for the
year ended December 31, 1997 and the nine months ended September 30,
1997 and 1998 (unaudited)
Notes to Financial Statements of Endoscopy Center of Naples, Inc.
(b) Pro Forma Financial Information:
Pro Forma Combined Balance Sheet as of September 30, 1998
Pro Forma Combined Statements of Operations for the year ended December
31, 1997 and the nine months ended September 30, 1998
Notes to Pro Forma Combined Financial Statements
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INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders
Endoscopy Center of Naples, Inc.
Naples, Florida
We have audited the accompanying balance sheet of Endoscopy Center of
Naples, Inc. as of December 31, 1997, and the related statement of earnings and
retained earnings and cash flows for the year 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 audit.
We conducted our audit 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 Endoscopy Center of Naples, Inc. as of
December 31, 1997 and the result of its operations and its cash flows for the
year then ended in conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Nashville, Tennessee
January 21, 1999
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ENDOSCOPY CENTER OF NAPLES, INC.
BALANCE SHEETS
DECEMBER 31, 1997 AND SEPTEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1997 1998
-------- --------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $104,096 $108,112
Accounts receivable, net of allowance for uncollectible
accounts of $2,922 and $2,794, respectively 332,639 318,090
Supplies inventory 6,965 9,123
-------- --------
Total current assets 443,700 435,325
-------- --------
TOTAL $443,700 $435,325
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 4,712 $ 5,102
Accrued expenses 116 4,336
Accrued salaries and benefits -- 2,827
Note payable (Note 2) 12,633 --
-------- --------
Total current liabilities 17,461 12,265
COMMITMENTS AND CONTINGENCIES (Note 3)
STOCKHOLDERS' EQUITY:
Common stock, no par value; 7,500 shares authorized,
issued and outstanding 821 821
Retained earnings 425,418 422,239
-------- --------
426,239 423,060
-------- --------
TOTAL $443,700 $435,325
======== ========
</TABLE>
See notes to financial statements.
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ENDOSCOPY CENTER OF NAPLES, INC.
STATEMENTS OF EARNINGS AND RETAINED EARNINGS
YEAR ENDED DECEMBER 31, 1997 AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
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<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED SEPTEMBER 30,
DECEMBER 31, -----------------------------------
1997 1997 1998
----------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
REVENUES $ 2,014,756 $ 1,413,926 $ 1,712,756
EXPENSES:
Supplies and other operating expenses 247,148 187,061 221,797
Salaries and benefits 342,757 242,907 297,205
Rent expense 136,029 104,550 117,247
Bad debt expense 11,265 8,392 15,189
Interest expense 380 227 --
----------- ----------- -----------
Total expenses 737,579 543,137 651,438
----------- ----------- -----------
NET EARNINGS 1,277,177 870,789 1,061,318
RETAINED EARNINGS, BEGINNING OF PERIOD 364,215 364,215 425,418
DISTRIBUTIONS TO STOCKHOLDERS (1,215,974) (951,281) (1,064,497)
----------- ----------- -----------
RETAINED EARNINGS, END OF PERIOD $ 425,418 $ 283,723 $ 422,239
=========== =========== ===========
</TABLE>
See notes to financial statements.
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ENDOSCOPY CENTER OF NAPLES, INC.
STATEMENTS OF CASH FLOWS
YEAR ENDED DECEMBER 31, 1997 AND NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1998
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<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED SEPTEMBER 30,
DECEMBER 31, ---------------------------------
1997 1997 1998
----------- --------- -----------
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 1,277,177 $ 870,789 $ 1,061,318
Adjustments to reconcile net income to net
cash provided by operating activities:
Decrease (increase) in accounts receivable (55,252) 39,196 14,549
Increase in supplies inventory (985) (1,282) (2,158)
Decrease in other assets 137 -- --
(Decrease) increase in accounts payable (5,008) (786) 390
(Decrease) increase in accrued expenses and
accrued salaries and benefits (6,662) 716 7,047
----------- --------- -----------
Net cash provided by operating activities 1,209,407 908,633 1,081,146
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from note payable 12,633 6,000 --
Principal payments on note payable -- -- (12,633)
Stockholders' distributions (1,215,974) (951,281) (1,064,497)
----------- --------- -----------
Net cash used in financing activities (1,203,341) (945,281) (1,077,130)
----------- --------- -----------
NET INCREASE (DECREASE) IN CASH 6,066 (36,648) 4,016
CASH AT BEGINNING OF PERIOD 98,030 98,030 104,096
----------- --------- -----------
CASH AT END OF PERIOD $ 104,096 $ 61,382 $ 108,112
=========== ========= ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for interest $ 380 $ 227 $ --
=========== ========= ===========
</TABLE>
See notes to financial statements.
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ENDOSCOPY CENTER OF NAPLES, INC.
NOTES TO FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 1997 AND NINE MONTHS ENDED
SEPTEMBER 30, 1997 AND 1998
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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Endoscopy Center of Naples, Inc. (the "Center") owns and operates a
gastroenterology surgery center in Naples, Florida. The Center is owned by
a group of physicians who perform endoscopy procedures at the Center
through their related physician practices. The accompanying financial
statements have been prepared on the accrual basis of accounting from the
separate records maintained by the Center. The Center and the affiliated
physician practice operate out of the same facility. Certain expenses,
primarily rent and utilities, have been allocated between the Center and
the affiliated physician practice based on management's estimate of usage
by these two entities. Accordingly, the accompanying financial statements
may not necessarily be indicative of the conditions that would have
existed or the results of operations if the Center had been operated on a
stand-alone basis.
REVENUE RECOGNITION - Revenues consist of amounts billed for physicians'
services in addition to the use of the Center's facilities (the "usage
fee") billed directly 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 1997,
approximately 55%, of the Center's revenues were provided to patients
covered under Medicare. Amounts that are determined to be uncollectible
are charged against the allowance for uncollectible accounts.
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.
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.
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-month period ended September 30, 1998 are not necessarily
indicative of the results that may be expected for a full year.
2. NOTE PAYABLE
The note payable represents a revolving line of credit which bears
interest at 9.5% and is payable on demand.
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ENDOSCOPY CENTER OF NAPLES, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED DECEMBER 31, 1997 AND NINE MONTHS ENDED
SEPTEMBER 30, 1997 AND 1998
- --------------------------------------------------------------------------------
3. COMMITMENTS AND CONTINGENCIES
The center operates under a facilities lease expiring April 2008. The
following is a schedule of future minimum lease payments under the
facilities lease, which is classified as an operating lease:
<TABLE>
<CAPTION>
<S> <C>
YEAR ENDING DECEMBER 31,
1998 $ 115,543
1999 116,255
2000 108,518
2001 100,439
2002 99,705
Thereafter 531,760
-----------
$ 1,072,220
===========
</TABLE>
4. SUBSEQUENT EVENT
Effective November 13, 1998 AmSurg Naples, Inc. ("AmSurg"), a subsidiary
of AmSurg Corp. (the "Company") acquired a sixty percent ownership
interest in the assets comprising the business operations of the Center.
Pursuant to the terms of the Asset Purchase Agreement, dated as of
November 13, 1998, by and among, AmSurg, the Company and the Center,
AmSurg paid $4,528,813 in cash as consideration for the sixty percent
ownership interest in the Center. Following the asset purchase, AmSurg
and the Center contributed their respective ownership in the assets of
the Center into a newly formed limited partnership, The Naples Endoscopy
ASC, L.P., and received proportionate ownership therein.
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<PAGE> 9
AMSURG CORP.
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
BASIS OF PRESENTATION
The unaudited pro forma balance sheet of AmSurg Corp. as of September
30, 1998, is presented to show the effects of the acquisition of the majority
interest in certain assets comprising the business operations of Endoscopy
Center of Naples, Inc. on November 13, 1998, as if it had occurred on September
30, 1998. The unaudited pro forma combined statements of operations are
presented to show the effects of the acquisition as if it had occurred on
January 1, 1997. 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.
The unaudited pro forma financial information does not purport to
represent what the Company's financial position or 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 1997 Annual Report on Form 10-K and Quarterly
Report on Form 10-Q for the quarter ended September 30, 1998.
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AMSURG CORP.
PRO FORMA COMBINED BALANCE SHEET
SEPTEMBER 30, 1998
(ALL AMOUNTS EXPRESSED IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
EFFECT OF PRO
ENDOSCOPY ACQUISITION FORMA
CENTER OF AND RELATED COMBINED
HISTORICAL NAPLES, INC. FINANCING TOTALS
---------- ------------ --------- ---------
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 4,851 $ 108 $ (237)(1) $ 4,722
Accounts receivable, net 11,871 318 -- 12,189
Other current assets 2,600 9 -- 2,609
-------- ------- ------- --------
Total current assets 19,322 435 (237) 19,520
Long-term receivables and deposits 315 -- -- 315
Property and equipment, net 21,474 -- -- 21,474
Intangible assets, net 45,865 -- 4,332 (2) 50,197
-------- ------- ------- --------
TOTAL $ 86,976 $ 435 $ 4,095 $ 91,506
======== ======= ======= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 1,210 $ -- $ -- $ 1,210
Other current liabilities 3,319 12 (12)(3) 3,319
-------- ------- ------- --------
Total current liabilities 4,529 12 (12) 4,529
Long-term debt 6,990 -- 4,400 (4) 11,390
Deferred income taxes 838 -- -- 838
Minority interest 11,866 -- 130 (5) 11,996
Shareholders' equity 62,753 423 (423)(6) 62,753
-------- ------- ------- --------
TOTAL $ 86,976 $ 435 $ 4,095 $ 91,506
======== ======= ======= ========
</TABLE>
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AMSURG CORP.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(ALL AMOUNTS EXPRESSED IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
PRO
ENDOSCOPY FORMA
CENTER OF PRO FORMA COMBINED
HISTORICAL NAPLES, INC. ADJUSTMENTS TOTALS
---------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
REVENUES $ 57,414 $ 2,015 $ -- $ 59,429
OPERATING EXPENSES:
Salaries and benefits 17,363 343 66 (7) 17,772
Other operating expenses 20,352 395 8 (8) 20,755
Depreciation and amortization 4,944 -- 173 (9) 5,117
Net loss on sale of assets 1,425 -- -- 1,425
-------- ------- ------- --------
Total operating expenses 44,084 738 247 45,069
-------- ------- ------- --------
Operating income 13,330 1,277 (247) 14,360
Minority interest 9,084 -- 511 (10) 9,595
Other (income) and expense:
Interest expense, net of interest income 1,554 -- 334 (11) 1,888
Distribution cost 842 -- -- 842
-------- ------- ------- --------
Earnings before income taxes 1,850 1,277 (1,092) 2,035
Income tax expense 1,774 -- 74 (12) 1,848
-------- ------- ------- --------
Net earnings 76 1,277 (1,166) 187
Accretion of preferred stock discount 286 -- -- 286
-------- ------- ------- --------
Net earnings (loss) available to
common shareholders $ (210) $ 1,277 $(1,166) $ (99)
======== ======= ======= ========
Loss per common share:
Basic $ (0.02) $ (0.01)
Diluted $ (0.02) $ (0.01)
Weighted average number of shares and
share equivalents outstanding:
Basic 9,453 9,453
Diluted 9,453 9,453
</TABLE>
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<PAGE> 12
AMSURG CORP.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(ALL AMOUNTS EXPRESSED IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
PRO
ENDOSCOPY FORMA
CENTER OF PRO FORMA COMBINED
HISTORICAL NAPLES, INC. ADJUSTMENTS TOTALS
---------- ------------ ----------- ---------
<S> <C> <C> <C> <C>
REVENUES $ 58,074 $ 1,713 $ -- $ 59,787
OPERATING EXPENSES:
Salaries and benefits 16,666 297 50 (7) 17,013
Other operating expenses 20,994 355 -- 21,349
Depreciation and amortization 4,912 -- 130 (9) 5,042
Net loss on sale of assets 5,464 -- -- 5,464
-------- ------- ------- --------
Total operating expenses 48,036 652 180 48,868
-------- ------- ------- --------
Operating income 10,038 1,061 (180) 10,919
Minority interest 9,472 -- 424 (10) 9,896
Interest expense, net of interest income 1,296 -- 255 (11) 1,551
-------- ------- ------- --------
Earnings (loss) before income taxes (730) 1,061 (859) (528)
Income tax expense 32 -- 81 (12) 113
-------- ------- ------- --------
Net earnings (loss) $ (762) $ 1,061 $ (940) $ (641)
======== ======= ======= ========
Loss per common share:
Basic $ (0.07) $ (0.06)
Diluted $ (0.07) $ (0.06)
Weighted average number of shares and
share equivalents outstanding:
Basic 11,550 11,550
Diluted 11,550 11,550
</TABLE>
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<PAGE> 13
AMSURG CORP.
NOTES TO PRO FORMA COMBINED FINANCIAL INFORMATION (UNAUDITED)
On November 13, 1998, the Company acquired a majority interest in
certain assets comprising the business operations of Endoscopy Center of
Naples, Inc. The accompanying pro forma consolidated balance sheet includes the
purchased assets and effects of financing, as if the surgery center had been
acquired on September 30, 1998. The accompanying pro forma consolidated
statements of operations reflect the pro forma results of operations of the
Company, as if the surgery center had been acquired on January 1, 1997.
PRO FORMA ADJUSTMENTS
The adjustments reflected in the pro forma consolidated balance sheet
and statement of operations are as follows:
1. To reflect cash used to fund the acquisition, net of
cash not acquired.
2. To reflect additional excess of cost over net assets
acquired resulting from the acquisition as follows:
Total purchase price $ 4,529
Less: tangible assets acquired (327)
Minority interest recognized 130
-------
$ 4,332
=======
3. To reflect obligations of acquired entity not
assumed.
4. To reflect additional long-term debt used to finance
the acquisition.
5. To reflect minority owners' interest in assets
acquired.
6. To eliminate equity of acquired entity.
7. To reflect additional corporate general and
administrative salary costs as a result of an
increase in the number of centers managed.
8. To reflect additional miscellaneous general and
administrative costs as a result of an increase in
the number of centers managed.
9. To reflect amortization of additional excess of cost
over net assets of purchased operations' assets based
on a 25 year amortization period.
10. To reflect minority owners' interest in earnings of
acquired operations.
11. To reflect interest expense on acquisition-related
borrowings, net of a reduction in interest income on
cash and cash equivalents used in the acquisition.
12. To record estimated additional federal and state
income taxes at a combined statutory rate of 40%, as
a result of the incremental increase in earnings
before income taxes.
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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: January 26, 1999 By: /s/ Claire M. Gulmi
--------------------------------------
CLAIRE M. GULMI
Senior Vice President and Chief
Financial Officer (Principal Financial
and Duly Authorized Officer)
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