NovaMed Reports 29 Percent Increase in Earnings for 2nd Quarter

CHICAGO — NovaMed Inc., an operator of ambulatory surgery centers in partnership with physicians, announced results for the second quarter ended June 30. Total net revenue grew to $39.58 million, up 12 percent from $35.18 million in the prior year second quarter. Net revenue from surgical facilities was up 14 percent to $33.02 million from $29.07 million in the prior year second quarter, despite a 4 percent decline in same-facility net revenue.

Net income from continuing operations attributable to NovaMed in the second quarter of 2009 increased 17 percent to $2.12 million, or 9 cents per diluted share, from $1.81 million, or 7 cents per diluted share, in the prior year second quarter. Interest expense in the second quarter of 2009 included non-cash, imputed interest of $1.04 million, or 3 cents per diluted share, recorded in accordance with NovaMed’s adoption of FASB Staff Position APB 14-1. Second quarter 2008 results have been recast to include imputed interest of $952,000, or 2 cents per diluted share. Net cash provided by operations was $7.87 million in the second quarter of 2009, up 16 percent from $6.78 million in the prior year second quarter.

“We are pleased with our solid financial results in the second quarter, especially in light of the continuing challenges presented by the economy,” commented Thomas S. Hall, chairman, president and chief executive officer of NovaMed Inc. “Without the imputed interest expense resulting from the accounting rule change, net income from continuing operations attributable to NovaMed would have been $2.76 million, or 12 cents per diluted share, in the second quarter of 2009. The significance of these non-cash expenses can be seen in our cash flow from operations of $7.9 million, which was 3.7 times net income from continuing operations attributable to NovaMed. This strong cash flow allowed us to reduce our credit facility borrowings by $8.6 million in the second quarter.”

Highlights of second quarter continuing operations include:

• Earnings per diluted share from continuing operations increased 29 percent to $0.09
• Net income from continuing operations attributable to NovaMed increased 17 percent to $2.12 million
• Cash flow from operations of $7.87 million
• Operating income increased 10 percent to $10.1 million
• Total net revenue increased 12 percent to $39.58 million
• EBITDA increased 17 percent to $7.64 million
• Diluted shares outstanding decreased 8 percent to 23.26 million.

Source: NovaMed, Inc.