Novamed reports fourth quarter earnings from continuing operations of
$0.26 per diluted share
Chicago--(business wire)--novamed, inc. (nasdaq: nova), a leading operator of ambulatory surgery centers in partnership with physicians, today announced results for the fourth quarter and year ended december 31, 2010. total net revenue was $38,634,000 compared to $39,261,000 in the prior year fourth quarter. same-facility net revenue declined 2% for the quarter. net income from continuing operations attributable to novamed in the fourth quarter of 2010 was $2,073,000, or $0.26 per diluted share, compared to $2,020,000, or $0.26 per diluted share, in the prior year fourth quarter. fourth quarter 2010 results included $425,000 in pretax income from the settlement of an outstanding lawsuit as well as $379,000 in pretax merger related expenses. net cash provided by operating activities in the fourth quarter of 2010 was $11,094,000 and distributions to noncontrolling interests, which are included in net cash used in financing activities, were $3,929,000. in the fourth quarter of 2010, net cash provided by operating activities less distributions to noncontrolling interests was $7,165,000, or $0.90 per diluted share. interest expense in the fourth quarter of 2010 included non-cash, imputed interest of $1,202,000, or $0.09 per diluted share, compared to $1,100,000, or $0.09 per diluted share, in the fourth quarter of 2009. this interest expense is recorded in accordance with novamed’s adoption of accounting standards codification (“asc”) 470-20. there was no income tax impact related to the $425,000 settlement payment noted above as a valuation allowance was taken on the tax benefit associated with the original loss of $1,041,000 recorded in 2007. the loss related to novamed’s minority investment in a surgery center and the $425,000 settlement represents a partial recovery of this loss. this settlement payment resulted in a lower effective tax rate in the fourth quarter of 2010 as compared to prior periods. highlights of fourth quarter continuing operations include: total net revenue of $38,634,000 earnings per diluted share from continuing operations of $0.26 net cash from operating activities less distributions to noncontrolling interests of $7,165,000, or $0.90 per diluted share reduced senior debt outstanding by $5,364,000 for the year ended december 31, 2010, total net revenue was $151,802,000 compared to $154,031,000 in 2009. same-facility net revenue in 2010 declined 2% from 2009. net income from continuing operations attributable to novamed in 2010 was $7,208,000, or $0.92 per diluted share, compared to $8,251,000, or $1.06 per diluted share, in 2009. 2010 results included $425,000 in pretax income from the settlement of an outstanding lawsuit as well as $454,000 in pretax merger related expenses. net cash provided by operating activities in 2010 was $41,150,000 and distributions to noncontrolling interests, which are included in net cash used in financing activities, were $16,305,000. for 2010, net cash provided by operating activities less distributions to noncontrolling interests was $24,845,000, or $3.16 per diluted share. on january 21, 2011, novamed announced that it had entered into a definitive merger agreement to be acquired by an affiliate of surgery center holdings, inc. the transaction is subject to the approval of the merger agreement by holders of a majority of the outstanding shares of novamed’s common stock and is expected to close in the second quarter of 2011, subject to customary closing conditions, including antitrust and regulatory approvals. impact of adoption of asc 470-20 effective january 1, 2009, novamed adopted asc 470-20, debt with conversion and other options. asc 470-20 impacts the accounting treatment of our 1.0% convertible senior subordinated notes due june 15, 2012. as noted above, the adoption of asc 470-20 added non-cash, imputed interest expense of $1,202,000 and $1,100,000 to the fourth quarters of 2010 and 2009, respectively, and $4,614,000 and $4,225,000 to 2010 and 2009, respectively. we estimate that the adoption of asc 470-20 will add approximately $5.1 million of imputed interest expense to our 2011 results of operations. however, the adoption of asc 470-20 will not have an impact on our cash flows. about novamed novamed operates, develops and acquires ambulatory surgery centers in partnership with physicians and holds majority ownership interests in 37 surgery centers located in 19 states. learn more at www.novamed.com. due to the pending merger, novamed will not be holding a conference call to discuss fourth quarter and 2010 results. novamed measures same-facility results using only those facilities that it has owned and operated for the entire current and prior year periods reported. this press release contains forward-looking statements that relate to possible future events. these statements are based on management’s current expectations and are subject to risks and uncertainties, which could cause our actual results to differ materially from those expressed or implied in this press release. these risks and uncertainties include: the current difficult economy and tightened credit markets; our current and future debt levels; our ability to access capital on a cost-effective basis to continue to successfully implement our growth strategy; reduced prices and reimbursement rates for surgical procedures; our ability to acquire, develop or manage a sufficient number of profitable surgical facilities; our ability to maintain successful relationships with the physicians who use our surgical facilities; our ability to grow and manage effectively our increasing number of surgical facilities; competition from other companies in the acquisition, development and operation of surgical facilities; and uncertainty around national healthcare reform and the application of existing or proposed government regulations, or the adoption of new laws and regulations, that could limit our business operations, require us to incur significant expenditures or limit our ability to relocate our facilities if necessary. readers are encouraged to review a more complete discussion of the factors affecting novamed’s business and prospects in its filings with the securities and exchange commission, including the company’s 2009 form 10-k filed on march 16, 2010. readers should not place undue reliance on any forward-looking statements. except as required by the federal securities laws, novamed undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changing circumstances or any other reason after the date of this press release. diluted earnings per common share attributable to novamed, inc. (1): selected operating data: reconciliation of net income from continuing operations attributable to novamed, inc. to ebitda (1)(2): reconciliation of net income from continuing operations attributable to novamed, inc. to non-gaap net income from continuing operations attributable to novamed, inc. (1)(3): non-gaap net income from continuing operations attributable to novamed, inc. reconciliation of diluted earnings per common share from continuing operations attributable to novamed, inc. to non-gaap diluted earnings per common share from continuing operations attributable to novamed, inc. (1)(3)(4): diluted earnings per common share from continuing operations attributable to novamed, inc. non-gaap diluted earnings per common share from continuing operations attributable to novamed, inc. (5) computation of net cash provided by operating activities less distributions to noncontrolling interests per diluted share (1)(4): net cash provided by operating activities less distributions to noncontrolling interests net cash provided by operating activities less distributions to noncontrolling interests per diluted share balance sheet data: statement of cash flow data: notes:
