NovaMed, Inc. (Nasdaq: NOVA), a leading operator of ambulatory surgery centers in partnership with physicians, today announced results for the second quarter ended June 30, 2010. Total net revenue was $38,164,000 compared to $38,879,000 in the prior year second quarter. Same-facility net revenue declined 1% for the quarter. Net income from continuing operations attributable to NovaMed in the second quarter of 2010 was $1,805,000, or $0.23 per diluted share, compared to $2,290,000, or $0.30 per diluted share, in the prior year second quarter. Net cash provided by operating activities in the second quarter of 2010 was $9,339,000 and distributions to noncontrolling interests, which are included in net cash used in financing activities, were $3,743,000. Net cash provided by operating activities less distributions to noncontrolling interests was $5,596,000, or $0.71 per diluted share.
“Although we saw a significant improvement in our same-facility revenue growth in the second quarter, we continue to be negatively impacted by the general economic conditions”
Interest expense in the second quarter of 2010 included non-cash, imputed interest of $1,137,000, or $0.09 per diluted share, compared to $1,041,000, or $0.08 per diluted share, in the second quarter of 2009. This interest expense is recorded in accordance with NovaMed's adoption of Accounting Standards Codification ("ASC") 470-20. The results for the second quarter of 2010 included a negative impact of $0.03 per diluted share from the increase in this non-cash imputed interest expense plus the higher interest expense relating to the amendment to NovaMed's credit agreement in August 2009.
"Although we saw a significant improvement in our same-facility revenue growth in the second quarter, we continue to be negatively impacted by the general economic conditions," commented Thomas S. Hall, Chairman, President and Chief Executive Officer of NovaMed, Inc. "We believe that high unemployment as well as a lack of consumer confidence is responsible for the softness in surgical procedure volumes in our industry as some patients postpone procedures recommended by their physicians. Despite these issues, we continue to generate strong cash flow with net cash from operating activities less distributions to noncontrolling interests of $5.6 million or 3.1 times net income from continuing operations attributable to NovaMed. With capital expenditures of $453,000 in the quarter, our free cash flow of $5.1 million continued to allow us to deleverage our balance sheet in the second quarter."
Highlights of second quarter continuing operations include:
- Total net revenue of $38,164,000
- Earnings per diluted share from continuing operations of $0.23
- Net cash from operating activities less distributions to noncontrolling interests of $5,596,000, or $0.71 per diluted share
For the six months ended June 30, 2010, total net revenue was $74,609,000 compared to $76,584,000 for the first six months last year. Same-facility net revenue declined 3% for the six month period. Net income from continuing operations attributable to NovaMed in the first six months of 2010 was $3,319,000, or $0.42 per diluted share, compared to $4,188,000, or $0.54 per diluted share, for the same period last year. Net cash provided by operating activities in the first six months of 2010 was $19,062,000 and distributions to noncontrolling interests, which are included in net cash used in financing activities, were $8,071,000. Net cash provided by operating activities less distributions to noncontrolling interests was $10,991,000, or $1.40 per diluted share. The results for the first six months of 2010 included a negative impact of $0.06 per diluted share from the increase in the non-cash imputed interest expense on our convertible debt plus the higher interest expense relating to the amendment to our credit agreement in August 2009.