EX-99 2 a5339854ex99.txt EXHIBIT 99 Exhibit 99 Symbion, Inc. Announces Fourth Quarter and Year-End 2006 Results Highlights for Full Year 2006 Compared with Full Year 2005: -- Revenues increased 16%; -- Same store revenues increased 8%; and -- Number of de novo facilities in process increased to seven. NASHVILLE, Tenn.--(BUSINESS WIRE)--Feb. 21, 2007--Symbion, Inc. (NASDAQ:SMBI), an owner and operator of short stay surgical facilities, announced today results for the fourth quarter and year ended December 31, 2006. For the fourth quarter ended December 31, 2006, revenues increased 10% to $78.9 million compared with $71.5 million for the fourth quarter ended December 31, 2005. Net income for the fourth quarter of 2006 decreased to $4.5 million compared with $5.6 million for the fourth quarter of 2005. The effective tax rate for the fourth quarter of 2006 was 38.5% as compared with 34.6% for the fourth quarter of 2005. Net income of $4.5 million includes the impact of $473,000 of non-cash stock option compensation expense recorded in accordance with the Company's adoption of Statement of Financial Accounting Standards ("SFAS") No. 123(R), "Share-Based Payment." Income per diluted share from continuing operations for the fourth quarter of 2006 was $0.21, including the impact of $0.02 per diluted share related to the Company's non-cash stock option compensation expense, compared with income per diluted share from continuing operations of $0.26 for the fourth quarter of 2005. The Company adopted SFAS No. 123(R) on January 1, 2006. Therefore, no expense was recorded during 2005 related to the Company's non-cash stock option compensation. The $0.21 income per diluted share from continuing operations includes the impact of $0.01 per diluted share related to losses incurred as a result of the Company's divestiture during the fourth quarter of 2006 of two short stay surgical facilities that the Company recorded as equity investments. EBITDA decreased 8.0% to $12.7 million for the fourth quarter of 2006, including the impact of $769,000 related to the Company's non-cash stock option compensation expense, compared with $13.8 million for the fourth quarter of 2005. Same store net patient service revenues for the fourth quarter of 2006 increased 8.0% compared with the same period in 2005. At December 31, 2006, the Company's outstanding indebtedness was $138.7 million with a ratio of debt to total capitalization of 33%. For the year ended December 31, 2006, revenues increased 16% to $301.5 million compared with $260.9 million for 2005. Net income for 2006 decreased 1.6% to $18.8 million compared with $19.1 million for 2005. Net income of $18.8 million includes the impact of $2.3 million of non-cash stock option compensation expense. The effective tax rate for 2006 was 38.5% as compared with 37.4% for 2005. Income per diluted share from continuing operations for the year ended December 31, 2006, increased 4.7% to $0.89, including the impact of $0.11 per diluted share related to the Company's non-cash stock option compensation expense, compared with income per diluted share from continuing operations of $0.86 for the year ended December 31, 2005. The $0.89 income per diluted share from continuing operations includes the impact of $0.03 per diluted share related to net gains and losses recorded during the year and an increase of $0.01 per diluted share related to an adjustment to depreciation expense during the second quarter of 2006 based on a change in depreciation estimates at certain of the Company's newly acquired surgery centers. EBITDA increased 8.3% to $52.0 million for 2006, including $3.7 million related to the Company's non-cash stock option compensation expense, compared with $48.0 million for 2005. Same store net patient service revenue for 2006 increased 8% compared with 2005. Commenting on the fourth quarter results, Richard E. Francis, Jr., chairman and chief executive officer of Symbion, said, "The Company had a busy and productive fourth quarter. We are very pleased with our operating results during the quarter given the challenges we experienced during the year regarding reductions in reimbursement by certain payors. Our results for the fourth quarter provide us with operating momentum as we begin 2007. During the fourth quarter, we announced the acquisition of a majority interest in a multispecialty surgical hospital in Durango, Colorado. In January 2007, we announced the signing of agreements with three separate healthcare systems for the development of surgery centers in Florida, Texas and Minnesota, with Symbion having a minority ownership interest in, and a management agreement with, all three centers. We view these transactions as a strong beginning to what we expect will be a year of solid development growth in 2007." Mr. Francis added, "The growing demand for our services makes us very optimistic about 2007. Our business model is recognized for its cost-effectiveness, and we have a dedicated and resourceful group of clinical professionals and physician partners to work with us in meeting our goals and objectives. We believe that the next year and the foreseeable future will be a very productive time for our company." The live broadcast of Symbion's fourth quarter and year-end 2006 conference call will begin at 10:00 a.m. Eastern Time on February 22, 2007. An online replay of the call will be available for 30 days following the conclusion of the live broadcast. A link for these events can be found on the Company's website at www.symbion.com or at www.earnings.com. Symbion, Inc., headquartered in Nashville, Tennessee, owns and operates a network of 59 short stay surgical facilities in 23 states. The Company's facilities provide non-emergency surgical procedures across many specialties. This press release contains forward-looking statements based on management's current expectations and projections about future events and trends that management believes may affect the Company's financial condition, results of operations, business strategy and financial needs. The words "anticipate," "believe," "continue," "estimate," "expect," "intend," "may," "plan," "will" and similar expressions are generally intended to identify forward-looking statements. These statements, including those regarding the Company's growth and continued success, have been included in reliance on the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks, uncertainties and other factors that may cause actual results to differ from the expectations expressed in the statements. Many of these factors are beyond the ability of the Company to control or predict. These factors include, without limitation: (i) the Company's dependence on payments from third-party payors, including government health care programs and managed care organizations; (ii) the Company's ability to acquire and develop additional surgery centers on favorable terms; (iii) numerous business risks in acquiring and developing additional surgery centers, including potential difficulties in operating and integrating such surgery centers; (iv) efforts to regulate the construction, acquisition or expansion of health care facilities; (v) the risk that the Company's revenues and profitability could be adversely affected if it fails to attract and maintain good relationships with the physicians who use its facilities; (vi) the Company's ability to comply with applicable laws and regulations, including health care regulations, corporate governance laws and financial reporting standards; (vii) risks related to pending or future heightened regulation of specialty hospitals which could restrict the Company's ability to operate its facilities licensed as hospitals and could adversely impact its reimbursement revenues; (viii) the risk of changes to physician self-referral laws that may require the Company to restructure some of its relationships, which could result in a significant loss of revenues and divert other resources; (ix) the Company's significant indebtedness; (x) the intense competition for physicians, strategic relationships, acquisitions and managed care contracts, which may result in a decline in the Company's revenues, profitability and market share; (xi) the geographic concentration of the Company's operations, which makes the Company particularly sensitive to regulatory, economic and other conditions in certain states; (xii) the Company's dependence on its senior management; (xiii) the Company's ability to enhance operating efficiencies at its surgery centers and to control costs as the volume of cases performed at the Company's facilities changes; (xiv) efforts by certain states to reduce payments from workers' compensation payors for services provided to injured workers; (xv) risks associated with the practice of some of the Company's centers in billing for services "out-of-network", including the risk that out-of-network payments by some third-party payors may be reduced or eliminated; and (xvi) other risks and uncertainties detailed from time to time in the Company's filings with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking statements contained in this press release, you should not place undue reliance on them. The Company undertakes no obligation to update any forward-looking statements or to make any other forward-looking statements, whether as a result of new information, future events or otherwise. SYMBION, INC. Unaudited Condensed Consolidated Statement of Operations (in thousands, except per share amounts) Three Months Ended Year Ended December 31, December 31, ------------------ ------------------- 2006 2005 2006 2005 --------- -------- --------- --------- Revenues $78,885 $71,472 $301,534 $260,949 Operating expenses: Salaries and benefits, includes non-cash stock option compensation expense 20,503 17,777 79,639 66,214 Supplies 15,738 13,220 59,314 47,776 Professional and medical fees 4,848 3,496 16,880 13,459 Rent and lease expense 4,987 4,697 19,155 16,748 Other operating expenses 6,180 4,753 21,815 18,400 --------- -------- --------- --------- Cost of revenues 52,256 43,943 196,803 162,597 General and administrative expense, includes non-cash stock option compensation expense 6,346 5,616 24,407 21,993 Depreciation and amortization 3,472 3,579 13,420 12,975 Provision for doubtful accounts 1,632 1,001 4,514 4,143 Income on equity investments (940) (431) (2,423) (1,273) Impairment and loss on disposal of long-lived assets 459 21 1,163 1,541 Gain on sale of long-lived assets (75) - (1,808) (1,785) Proceeds from insurance settlement - - (410) - Proceeds from litigation settlement - - (588) - --------- -------- --------- --------- Total operating expenses 63,150 53,729 235,078 200,191 Operating income 15,735 17,743 66,456 60,758 Minority interests in income of consolidated subsidiaries (6,513) (7,555) (27,894) (25,700) Interest expense, net (1,980) (1,530) (7,093) (4,894) --------- -------- --------- --------- Income from continuing operations before income taxes 7,242 8,658 31,469 30,164 Provision for income taxes 2,788 3,002 12,115 11,281 --------- -------- --------- --------- Income from continuing operations 4,454 5,656 19,354 18,883 Gain/(loss) from discontinued operations, net of tax 45 (49) (561) 172 --------- -------- --------- --------- Net income $4,499 $5,607 $18,793 $19,055 ========= ======== ========= ========= Net income per share - continuing operations: Basic $0.21 $0.26 $0.90 $0.89 ========= ======== ========= ========= Diluted $0.21 $0.26 $0.89 $0.86 ========= ======== ========= ========= Net income per share: Basic $0.21 $0.26 $0.87 $0.90 ========= ======== ========= ========= Diluted $0.21 $0.25 $0.86 $0.86 ========= ======== ========= ========= Weighted average number of common shares outstanding and common equivalent shares: Basic 21,631 21,427 21,546 21,285 Diluted 21,696 22,180 21,733 22,029 SYMBION, INC. Condensed Consolidated Balance Sheets (dollars in thousands) (unaudited) Dec. 31, Dec. 31, 2006 2005 --------- --------- ASSETS Current assets: Cash and cash equivalents $27,163 $28,319 Accounts receivable, less allowance for doubtful accounts 37,111 31,995 Inventories 8,453 7,440 Prepaid expenses and other current assets 14,178 7,914 Current assets of discontinued operations - 827 --------- --------- Total current assets 86,905 76,495 Property and equipment, net of accumulated depreciation 82,365 71,616 Goodwill 314,980 268,312 Other intangible assets, net - 650 Investments in and advances to affiliates 16,463 13,753 Other assets 3,093 3,740 Long-term assets of discontinued operations - 1,812 --------- --------- Total assets $503,806 $436,378 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $5,983 $6,527 Accrued payroll and benefits 8,112 8,591 Other accrued expenses 14,019 10,652 Current maturities of long-term debt 2,148 1,347 Current liabilities of discontinued operations - 594 --------- --------- Total current liabilities 30,262 27,711 Long-term debt, less current maturities 136,553 101,969 Other liabilities 18,944 17,762 Long-term liabilities of discontinued operations - (660) Minority interests 32,768 29,538 Total stockholders' equity 285,279 260,058 --------- --------- Total liabilities and stockholders' equity $503,806 $436,378 ========= ========= SYMBION, INC. Supplemental Operating Data (dollars in thousands, except per case and per share data) Three Months Ended Year Ended December 31, December 31, ------------------- ------------------- 2006 2005 2006 2005 --------- --------- --------- --------- Same store statistics (1): Cases 59,593 54,282 203,037 190,605 Cases percentage growth 9.8% N/A 6.5% N/A Net patient service revenue per case $1,378 $1,404 $1,340 $1,326 Net patient service revenue per case percentage growth (1.9)% N/A 1.1% N/A Number of same store surgery centers 48 N/A 42 N/A Consolidated statistics - continuing operations: Cases 56,535 49,892 219,832 191,534 Cases percentage growth 13.3% N/A 14.8% N/A Net patient service revenue per case $1,333 $1,368 $1,301 $1,297 Net patient service revenue per case percentage growth (2.6)% N/A 0.3% N/A Number of surgery centers operated as of end of period (2) 59 59 59 59 Number of states in which the Company operates surgery centers 23 22 23 22 Revenues - continuing operations: Net patient service revenues $75,382 $68,233 $286,071 $248,385 Physician service revenues 1,148 1,090 4,525 4,325 Other service revenues 2,355 2,149 10,938 8,239 --------- --------- --------- --------- Total revenues $78,885 $71,472 $301,534 $260,949 ========= ========= ========= ========= Cash flow information - continuing operations: Net cash provided by operating activities $10,578 $14,638 $31,043 $41,438 Net cash used in investing activities (30,586) (6,964) (65,411) (68,732) Net cash provided by (used in) financing activities 17,148 (6,109) 32,370 32,095 Other information: EBITDA, (3) includes non-cash stock option compensation expense $12,694 $13,767 $51,982 $48,033 (1) For purposes of this release, the Company defines same store facilities as those centers that the Company owned an interest in and managed throughout each of the respective periods shown. The Company has also included the results of a surgery center in which it owns an interest that opened during the first quarter of 2006 within the market served by another surgery center in which the Company owns an interest. The Company has not included the surgery centers that are reported as discontinued operations. The definition of same store facilities includes non-consolidated centers and allows for comparability to other companies in the industry. (2) This data includes nine surgery centers that the Company managed but in which it did not have an ownership interest. SYMBION, INC. Supplemental Operating Data (Continued) (3) The following table reconciles EBITDA to net cash provided by operating activities - continuing operations: Three Months Ended Year Ended (in thousands) December 31, December 31, ------------------ ----------------- 2006 2005 2006 2005 --------- -------- -------- -------- EBITDA $12,694 $13,767 $51,982 $48,033 Depreciation and amortization (3,472) (3,579) (13,420) (12,975) Interest expense, net (1,980) (1,530) (7,093) (4,894) Income taxes (2,788) (3,002) (12,115) (11,281) Gain/(loss) on discontinued operations, net of taxes 45 (49) (561) 172 --------- -------- -------- -------- Net income 4,499 5,607 18,793 19,055 Depreciation and amortization 3,472 3,579 13,420 12,975 Non-cash compensation expense 801 - 3,865 - Non-cash gains and losses 384 21 (645) (244) Minority interests in income of consolidated subsidiaries 6,513 7,555 27,894 25,700 Income taxes 2,788 3,002 12,115 11,281 Distributions to minority partners (6,351) (7,543) (25,447) (23,049) Income on equity investments (940) (431) (2,423) (1,273) Provision for doubtful accounts 1,632 1,001 4,514 4,143 Excess tax benefit from share- based compensation (116) - (201) - Changes in operating assets and liabilities, net of effects of acquisitions and dispositions: Accounts receivable (902) (3,703) (4,102) (4,958) Income tax payments (2,500) - (9,600) (2,425) Other assets and liabilities 1,298 5,550 (7,140) 233 --------- -------- -------- -------- Net cash provided by operating activities - continuing operations $10,578 $14,638 $31,043 $41,438 ========= ======== ======== ======== CONTACT: Symbion, Inc. Kenneth C. Mitchell Senior Vice President and Chief Financial Officer 615-234-5904