ý |
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
|
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
Delaware
|
36-4116193
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer Identification No.)
|
PART
OR ITEM
|
PAGE
|
|
Part
I.
|
FINANCIAL
STATEMENTS
|
3
|
Item
1.
|
Interim
Condensed Consolidated Financial Statements (unaudited)
|
|
Condensed
Consolidated Balance Sheets - June 30, 2007 and December 31,
2006
|
3
|
|
Condensed
Consolidated Statements of Operations - Three and six months ended
June
30, 2007 and 2006
|
4
|
|
Condensed
Consolidated Statement of Stockholders’ Equity - Six months ended June 30,
2007
|
5
|
|
Condensed
Consolidated Statements of Cash Flows - Six months ended June
30, 2007 and 2006
|
6
|
|
Notes
to the Interim Condensed Consolidated Financial Statements
|
7
|
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
18
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk
|
27
|
Item
4.
|
Controls
and Procedures
|
27
|
Part
II.
|
OTHER
INFORMATION
|
28
|
Item
1A.
|
Risk
factors
|
28
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds
|
29
|
Item
6.
|
Exhibits
|
29
|
Signatures
|
30
|
June
30,
|
|
December 31,
|
|
||||
|
2007
|
|
2006
|
|
|||
(unaudited)
|
|||||||
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
2,663
|
$
|
2,743
|
|||
Accounts
receivable, net of allowances of $35,121
and
$32,282, respectively
|
20,604
|
17,278
|
|||||
Notes
and amounts due from related parties
|
505
|
505
|
|||||
Inventory
|
2,325
|
2,187
|
|||||
Prepaid
expenses and deposits
|
1,429
|
1,361
|
|||||
Current
tax assets
|
1,273
|
569
|
|||||
Total
current assets
|
28,799
|
24,643
|
|||||
Property
and equipment, net
|
16,475
|
15,066
|
|||||
Intangible
assets, net
|
152,006
|
119,828
|
|||||
Noncurrent
deferred tax assets, net
|
4,250
|
—
|
|||||
Other
assets, net
|
1,259
|
1,010
|
|||||
Total
assets
|
$
|
202,789
|
$
|
160,547
|
|||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|||||||
Current
liabilities:
|
|||||||
Accounts
payable
|
$
|
7,614
|
$
|
6,525
|
|||
Accrued
expenses and income taxes payable
|
4,895
|
6,505
|
|||||
Current
maturities of long-term debt
|
1,291
|
1,373
|
|||||
Total
current liabilities
|
13,800
|
14,403
|
|||||
Long-term
debt, net of current maturities
|
28,848
|
61,227
|
|||||
Convertible
subordinated debt, net of debt issuance costs
|
72,389
|
—
|
|||||
Other
long-term liabilities
|
465
|
269
|
|||||
Deferred
income taxes
|
—
|
2,236
|
|||||
Minority
interests
|
15,517
|
14,296
|
|||||
Commitments
and contingencies
|
|||||||
Stockholders’
equity:
|
|||||||
Series
E Junior Participating Preferred Stock, $0.01 par
value,
1,912,000 shares authorized, none outstanding at
June
30, 2007 and December 31, 2006, respectively
|
—
|
—
|
|||||
Common
stock, $0.01 par value, 81,761,465 shares
authorized,
29,199,458 and 28,533,676 shares issued
at
June 30, 2007 and December 31, 2006, respectively
|
291
|
285
|
|||||
Additional
paid-in-capital
|
90,906
|
89,653
|
|||||
Accumulated
deficit
|
(8,692
|
)
|
(11,656
|
)
|
|||
Accumulated
other comprehensive income (loss)
|
(114
|
)
|
(254
|
)
|
|||
Treasury
stock, at cost, 4,814,861 and 4,713,417 shares
at
June 30, 2007 and December 31, 2006, respectively
|
(10,621
|
)
|
(9,912
|
)
|
|||
Total
stockholders’ equity
|
71,770
|
68,116
|
|||||
Total
liabilities and stockholders’ equity
|
$
|
202,789
|
$
|
160,547
|
Three
months ended
June
30,
|
Six
months ended
June
30,
|
||||||||||||
2007
|
|
2006
|
|
2007
|
|
2006
|
|
||||||
Net
revenue:
|
|||||||||||||
Surgical
facilities
|
$
|
26,894
|
$
|
21,105
|
$
|
51,989
|
$
|
38,970
|
|||||
Product
sales and other
|
5,588
|
5,937
|
11,879
|
11,988
|
|||||||||
Total
net revenue
|
32,482
|
27,042
|
63,868
|
50,958
|
|||||||||
Operating
expenses:
|
|||||||||||||
Salaries,
wages and benefits
|
10,074
|
8,572
|
20,168
|
16,617
|
|||||||||
Cost
of sales and medical supplies
|
7,759
|
6,661
|
14,932
|
12,553
|
|||||||||
Selling,
general and administrative
|
6,064
|
4,983
|
12,068
|
9,486
|
|||||||||
Depreciation
and amortization
|
984
|
749
|
1,914
|
1,468
|
|||||||||
Total
operating expenses
|
24,881
|
20,965
|
49,082
|
40,124
|
|||||||||
Operating
income
|
7,601
|
6,077
|
14,786
|
10,834
|
|||||||||
Minority
interests in earnings of consolidated entities
|
3,746
|
2,825
|
7,267
|
5,042
|
|||||||||
Interest
(income) expense, net
|
1,457
|
574
|
2,785
|
950
|
|||||||||
Other
(income) expense, net
|
(16
|
)
|
(77
|
)
|
(125
|
)
|
(192
|
)
|
|||||
Income
before income taxes
|
2,414
|
2,755
|
4,859
|
5,034
|
|||||||||
Income
tax provision
|
941
|
1,102
|
1,895
|
2,014
|
|||||||||
Net
income from continuing operations
|
1,473
|
1,653
|
2,964
|
3,020
|
|||||||||
Net
income from discontinued operations
|
—
|
—
|
—
|
—
|
|||||||||
Net
income
|
$
|
1,473
|
$
|
1,653
|
$
|
2,964
|
$
|
3,020
|
|||||
Basic
earnings per common share:
|
|||||||||||||
Income
from continuing operations
|
$
|
0.06
|
$
|
0.07
|
$
|
0.12
|
$
|
0.13
|
|||||
Income
from discontinued operations
|
—
|
—
|
—
|
—
|
|||||||||
Net
income
|
$
|
0.06
|
$
|
0.07
|
$
|
0.12
|
$
|
0.13
|
|||||
Diluted
earnings per common share:
|
|||||||||||||
Income
from continuing operations
|
$
|
0.06
|
$
|
0.07
|
$
|
0.12
|
$
|
0.12
|
|||||
Income
from discontinued operations
|
—
|
—
|
—
|
—
|
|||||||||
Net
income
|
$
|
0.06
|
$
|
0.07
|
$
|
0.12
|
$
|
0.12
|
|||||
Weighted
average common shares outstanding
|
24,109
|
23,241
|
24,004
|
23,035
|
|||||||||
Dilutive
effect of employee stock options and
restricted
stock
|
1,122
|
1,534
|
1,199
|
1,659
|
|||||||||
Diluted
weighted average common shares outstanding
|
25,231
|
24,775
|
25,203
|
24,694
|
Common
Stock
|
Treasury
Stock
|
||||||||||||||||||||||||
Shares
|
Par
Value
|
Additional
Paid-In
Capital
|
Retained
Earnings
(Accumulated)
(Deficit)
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Shares
|
At Cost
|
Total
Stockholders’
Equity
|
||||||||||||||||||
Balance,
December 31, 2006
|
28,534
|
$
|
285
|
$
|
89,653
|
$
|
(11,656
|
)
|
$
|
(254
|
)
|
(4,713
|
)
|
$
|
(9,912
|
)
|
$
|
68,116
|
|||||||
Stock
options exercised
|
575
|
6
|
1,742
|
—
|
—
|
(82
|
)
|
(626
|
)
|
1,122
|
|||||||||||||||
Shares
issued - employee stock purchase plan
|
16
|
—
|
86
|
—
|
—
|
—
|
—
|
86
|
|||||||||||||||||
Restricted
stock grants
|
75
|
—
|
—
|
—
|
—
|
(20
|
)
|
(83
|
)
|
(83
|
)
|
||||||||||||||
Stock
compensation expense
|
—
|
—
|
1,265
|
—
|
—
|
—
|
—
|
1,265
|
|||||||||||||||||
Sale
of warrants
|
—
|
—
|
14,000
|
—
|
—
|
—
|
—
|
14,000
|
|||||||||||||||||
Convertible
note call options, net of $8,160 tax benefit
|
—
|
—
|
(15,840
|
)
|
—
|
—
|
—
|
—
|
(15,840
|
)
|
|||||||||||||||
Unrealized
loss on interest rate swaps
|
—
|
—
|
—
|
—
|
140
|
—
|
—
|
140
|
|||||||||||||||||
Net
income
|
—
|
—
|
—
|
2,964
|
—
|
—
|
—
|
2,964
|
|||||||||||||||||
Balance,
June 30, 2007
|
29,200
|
$
|
291
|
$
|
90,906
|
$
|
(8,692
|
)
|
$
|
(114
|
)
|
(4,815
|
)
|
$
|
(10,621
|
)
|
$
|
71,770
|
Six
months ended
June
30,
|
|||||||
2007
|
|
2006
|
|
||||
Cash
flows from operating activities:
|
|||||||
Net
income
|
$
|
2,964
|
$
|
3,020
|
|||
Adjustments
to reconcile net income to net cash provided by
continuing
operations, net of effects of purchase transactions—
|
|||||||
Net
earnings of discontinued operations
|
—
|
—
|
|||||
Depreciation
and amortization
|
1,914
|
1,468
|
|||||
Current
and deferred taxes
|
1,254
|
2,014
|
|||||
Stock-based
compensation
|
1,265
|
822
|
|||||
Loss
(earnings) of non-consolidated affiliate
|
34
|
(31
|
)
|
||||
Gain
on sale of minority interests
|
(79
|
)
|
(9
|
)
|
|||
Minority
interests
|
7,267
|
5,042
|
|||||
Distributions
to minority partners
|
(6,633
|
)
|
(4,194
|
)
|
|||
Changes
in operating assets and liabilities—
|
|||||||
Accounts
receivable
|
(1,839
|
)
|
(2,490
|
)
|
|||
Inventory
|
38
|
(17
|
)
|
||||
Other
current assets
|
42
|
(233
|
)
|
||||
Accounts
payable and accrued expenses
|
(657
|
)
|
898
|
||||
Other
noncurrent assets
|
78
|
39
|
|||||
Net
cash provided by operating activities
|
5,648
|
6,329
|
|||||
Cash
flows from investing activities:
|
|||||||
Payments
for acquisitions, net
|
(32,721
|
)
|
(19,891
|
)
|
|||
Proceeds
from sale of minority interests
|
273
|
60
|
|||||
Purchases
of property and equipment
|
(1,637
|
)
|
(1,379
|
)
|
|||
Other
|
—
|
33
|
|||||
Net
cash used in investing activities
|
(34,085
|
)
|
(21,177
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Borrowings
under revolving line of credit
|
50,100
|
34,900
|
|||||
Payments
under revolving line of credit
|
(83,800
|
)
|
(19,600
|
)
|
|||
Proceeds
from the issuance of convertible subordinated debt, net (Note
8)
|
62,375
|
—
|
|||||
Proceeds
from the issuance of common stock
|
702
|
232
|
|||||
Payments
of other debt, debt issuance fees and capital lease
obligations
|
(1,020
|
)
|
(648
|
)
|
|||
Net
cash provided by financing activities
|
28,357
|
14,884
|
|||||
Cash
flows from discontinued operations:
|
|||||||
Operating
activities
|
—
|
(12
|
)
|
||||
Investing
activities
|
—
|
—
|
|||||
Net
cash used in discontinued operations
|
—
|
(12
|
)
|
||||
Net
(decrease) increase in cash and cash equivalents
|
(80
|
)
|
24
|
||||
Cash
and cash equivalents, beginning of period
|
2,743
|
1,690
|
|||||
Cash
and cash equivalents, end of period
|
$
|
2,663
|
$
|
1,714
|
1.
|
BASIS
OF PRESENTATION
|
2.
|
STATEMENT
OF CASH FLOWS - SUPPLEMENTAL
|
Six months ended June 30,
|
|||||||
2007
|
2006
|
||||||
Interest
paid
|
$
|
3,163
|
$
|
820
|
|||
Income
taxes paid
|
214
|
115
|
|||||
Income
tax refunds received
|
—
|
(38
|
)
|
3.
|
INVENTORY
|
Balances
as of:
|
June
30,
2007
|
December 31,
2006
|
|||||
Surgical
supplies
|
$
|
1,313
|
$
|
1,136
|
|||
Optical
products
|
905
|
912
|
|||||
Other
|
107
|
139
|
|||||
Total
inventory
|
$
|
2,325
|
$
|
2,187
|
4.
|
INTANGIBLE
ASSETS
|
Unamortized
Goodwill
|
||||||||||||||||
Surgical
Facilities
|
|
Product
Sales
|
|
Other
|
|
Total
|
|
Other
Intangibles
|
|
|||||||
Balance
December 31, 2006
|
$
|
113,364
|
$
|
5,475
|
$
|
941
|
$
|
119,780
|
$
|
48
|
||||||
Acquisitions
|
32,162
|
—
|
—
|
32,162
|
—
|
|||||||||||
Other
|
31
|
—
|
—
|
31
|
—
|
|||||||||||
Amortization
|
—
|
—
|
—
|
—
|
(15
|
)
|
||||||||||
Balance
June 30, 2007
|
$
|
145,557
|
$
|
5,475
|
$
|
941
|
$
|
151,973
|
$
|
33
|
5.
|
ACQUISITIONS
|
Fair
value of current assets:
|
$
|
866
|
||
Fair
value of long-term assets
|
1,067
|
|||
Fair
value of current liabilities
|
(614
|
)
|
||
Fair
value of long-term liabilities
|
(1,472
|
)
|
||
Minority
partner share of net assets
|
57
|
|||
Goodwill
|
24,717
|
|||
Total
purchase price:
|
$
|
24,621
|
Three
months ended
June
30,
|
|
Six
months ended
June
30,
|
|
||||||||||
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|
||||
Net
revenue
|
$
|
34,067
|
$
|
29,248
|
$
|
67,830
|
$
|
55,370
|
|||||
Net
income from continuing operations
|
$
|
1,546
|
$
|
1,755
|
$
|
3,146
|
$
|
3,224
|
|||||
Basic
earnings per common share
|
$
|
0.06
|
$
|
0.08
|
$
|
0.13
|
$
|
0.14
|
|||||
Diluted
earnings per common share
|
$
|
0.06
|
$
|
0.07
|
$
|
0.12
|
$
|
0.13
|
6.
|
UNCERTAIN
TAX POSITIONS
|
Unrecognized
Tax Benefits — January 1, 2007
|
$
|
416
|
||
Gross
increases – tax positions in prior period
|
—
|
|||
Gross
decreases – tax positions in prior period
|
—
|
|||
Gross
increases – current period tax positions
|
—
|
|||
Settlements
|
(72
|
)
|
||
Lapse
of statute of limitations
|
—
|
|||
Unrecognized
Tax Benefits — June 30, 2007
|
$
|
344
|
7.
|
OTHER
(INCOME) EXPENSE
|
Three
months ended
June
30,
|
Six
months ended
June
30,
|
||||||||||||
2007
|
|
2006
|
|
2007
|
|
2006
|
|||||||
Loss
(earnings) of non-consolidated affiliate
|
$
|
18
|
$
|
(11
|
)
|
$
|
34
|
$
|
(31
|
)
|
|||
(Gain)
loss on sale of minority interests
|
—
|
—
|
(79
|
)
|
(9
|
)
|
|||||||
Other,
net
|
(34
|
)
|
(66
|
)
|
(80
|
)
|
(152
|
)
|
|||||
Other
(income) expense, net
|
$
|
(16
|
)
|
$
|
(77
|
)
|
$
|
(125
|
)
|
$
|
(192
|
)
|
8.
|
CONVERTIBLE
SENIOR SUBORDINATED NOTES AND REVOLVING CREDIT
FACILITY
|
·
|
during
any calendar quarter commencing after the date of original issuance
of the
Convertible Notes, if the closing sale price of the Company’s common stock
for at least 20 trading days in the period of 30 consecutive trading
days
ending on the last trading day of the calendar quarter preceeding
the
quarter in which the conversion occurs is more than 120% of the conversion
price of the Convertible Notes in effect on the last trading
day;
|
·
|
during
the ten consecutive trading-day period following any five consecutive
trading-day period in which the trading price for the Convertible
Notes
for each such trading day was less than 97% of the closing sale price
of
the Company’s common stock on such date multiplied by the then current
conversion rate;
|
·
|
the
Company makes certain significant distributions to holders of the
Company’s common stock;
|
·
|
the
Company enters into specified corporate transactions;
or
|
·
|
the
Company’s common stock ceases to be approved for listing on the NASDAQ
Global Select Market and is not listed for trading on another U.S.
national securities exchange.
|
9.
|
OTHER
COMPREHENSIVE INCOME
|
10.
|
STOCK
BASED COMPENSATION
|
2007
|
|
2006
|
|
||||||||||
|
|
Three
months
|
|
Six
months
|
|
Three
months
|
|
Six
months
|
|
||||
Expected
option life in years
|
6
|
6
|
6
|
6
|
|||||||||
Risk-free
interest rate
|
4.77
|
%
|
4.77
|
%
|
4.73
|
%
|
4.73
|
%
|
|||||
Dividend
yield
|
—
|
—
|
—
|
—
|
|||||||||
Expected
volatility
|
48.1
|
%
|
48.1
|
%
|
51.3
|
%
|
51.3
|
%
|
|||||
Per
share fair value
|
$
|
3.77
|
$
|
3.77
|
$
|
3.77
|
$
|
3.77
|
Number of
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Term
(Years)
|
Aggregate
Intrinsic
Value
|
||||||||||
Outstanding
at December 31, 2006
|
4,604,068
|
$
|
4.15
|
||||||||||
Granted
|
649,500
|
$
|
7.22
|
||||||||||
Exercised
|
(575,006
|
)
|
$
|
2.30
|
|||||||||
Canceled
|
(129,794
|
)
|
$
|
8.69
|
|||||||||
Outstanding
at June 30, 2007
|
4,548,768
|
$
|
4.68
|
6.4
|
$
|
8,313
|
|||||||
Exercisable
at June 30, 2007
|
3,017,363
|
$
|
3.65
|
5.1
|
$
|
8,624
|
Number of
Shares
|
|
Weighted
Average
Grant-Date
Fair
Value
|
|||||
Nonvested
at December 31, 2006
|
1,207,655 |
$
|
3.22
|
||||
Granted
|
649,500 |
$
|
3.77
|
||||
Vested
|
(252,400 | ) |
$
|
3.75
|
|||
Canceled
|
(73,350 | ) |
$
|
3.41
|
|||
Nonvested
at June 30, 2007
|
1,531,405 |
$
|
3.36
|
11.
|
SUBSEQUENT
EVENTS
|
12.
|
OPERATING
SEGMENTS
|
Surgical
Facilities
|
Product
Sales
|
Other
|
Corporate
|
Total
|
||||||||||||
Three
months ended June 30, 2007
|
||||||||||||||||
Net
revenue
|
$
|
26,894
|
$
|
3,704
|
$
|
1,878
|
$
|
6
|
$
|
32,482
|
||||||
Earnings
(loss) before taxes
|
4,023
|
863
|
224
|
(2,696
|
)
|
2,414
|
||||||||||
Depreciation
and amortization
|
832
|
60
|
34
|
58
|
984
|
|||||||||||
Interest
income
|
23
|
—
|
—
|
5
|
28
|
|||||||||||
Interest
expense
|
93
|
—
|
—
|
1,392
|
1,485
|
|||||||||||
Capital
expenditures
|
494
|
92
|
35
|
4
|
625
|
|||||||||||
Accounts
receivable
|
13,958
|
5,905
|
656
|
85
|
20,604
|
|||||||||||
Identifiable
assets
|
176,464
|
13,055
|
2,456
|
10,814
|
202,789
|
|||||||||||
Three
months ended June 30, 2006
|
||||||||||||||||
Net
revenue
|
$
|
21,105
|
$
|
4,152
|
$
|
1,771
|
$
|
14
|
$
|
27,042
|
||||||
Earnings
(loss) before taxes
|
3,732
|
1,180
|
69
|
(2,226
|
)
|
2,755
|
||||||||||
Depreciation
and amortization
|
627
|
56
|
18
|
48
|
749
|
|||||||||||
Interest
income
|
13
|
—
|
—
|
8
|
21
|
|||||||||||
Interest
expense
|
22
|
—
|
—
|
573
|
595
|
|||||||||||
Capital
expenditures
|
825
|
41
|
1
|
38
|
905
|
|||||||||||
Accounts
receivable
|
8,851
|
5,769
|
492
|
85
|
15,197
|
|||||||||||
Identifiable
assets
|
102,979
|
12,938
|
1,660
|
5,123
|
122,700
|
|||||||||||
Six
months ended June 30, 2007
|
||||||||||||||||
Net
revenue
|
$
|
51,989
|
$
|
8,084
|
$
|
3,780
|
$
|
15
|
$
|
63,868
|
||||||
Earnings
(loss) before taxes
|
7,761
|
2,285
|
381
|
(5,568
|
)
|
4,859
|
||||||||||
Depreciation
and amortization
|
1,614
|
119
|
72
|
109
|
1,914
|
|||||||||||
Interest
income
|
56
|
—
|
—
|
8
|
64
|
|||||||||||
Interest
expense
|
180
|
—
|
—
|
2,669
|
2,849
|
|||||||||||
Capital
expenditures
|
1,119
|
143
|
121
|
254
|
1,637
|
|||||||||||
Accounts
receivable
|
13,958
|
5,905
|
656
|
85
|
20,604
|
|||||||||||
Identifiable
assets
|
176,464
|
13,055
|
2,456
|
10,814
|
202,789
|
|||||||||||
Six
months ended June 30, 2006
|
||||||||||||||||
Net
revenue
|
$
|
38,970
|
$
|
8,136
|
$
|
3,816
|
$
|
36
|
$
|
50,958
|
||||||
Earnings
(loss) before taxes
|
6,607
|
2,164
|
353
|
(4,090
|
)
|
5,034
|
||||||||||
Depreciation
and amortization
|
1,209
|
110
|
39
|
110
|
1,468
|
|||||||||||
Interest
income
|
25
|
—
|
—
|
13
|
38
|
|||||||||||
Interest
expense
|
35
|
—
|
—
|
953
|
988
|
|||||||||||
Capital
expenditures
|
1,119
|
132
|
19
|
109
|
1,379
|
|||||||||||
Accounts
receivable
|
8,851
|
5,769
|
492
|
85
|
15,197
|
|||||||||||
Identifiable
assets
|
102,979
|
12,938
|
1,660
|
5,123
|
122,700
|
13.
|
RECENT
ACCOUNTING PRONOUNCEMENTS
|
·
|
Consolidated
net revenue increased 25.3% to $63.9 million. Surgical facilities
net
revenue increased 33.4% to $52.0 million (same-facility surgical
net
revenue increased 9.7% to $37.9
million).
|
·
|
Operating
income increased 36.5% to $14.8
million.
|
·
|
Acquired
majority interests in two ASCs for $32.6
million.
|
·
|
Issued
$75 million convertible senior subordinated
notes.
|
·
|
Increased
the available commitment under our credit facility to $125 million.
|
Three
months ended
June
30,
|
|
Six
months ended
June
30,
|
|
||||||||||
2007
|
|
2006
|
|
2007
|
|
2006
|
|
||||||
Net
Revenue:
|
|||||||||||||
Surgical
facilities
|
82.8
|
%
|
78.0
|
%
|
81.4
|
%
|
76.5
|
%
|
|||||
Product
sales and other
|
17.2
|
22.0
|
18.6
|
23.5
|
|||||||||
Total
net revenue
|
100.0
|
100.0
|
100.0
|
100.0
|
|||||||||
Operating
expenses:
|
|||||||||||||
Salaries,
wages and benefits
|
31.0
|
31.7
|
31.6
|
32.6
|
|||||||||
Cost
of sales and medical supplies
|
23.9
|
24.6
|
23.4
|
24.6
|
|||||||||
Selling,
general and administrative
|
18.7
|
18.4
|
18.9
|
18.6
|
|||||||||
Depreciation
and amortization
|
3.0
|
2.8
|
3.0
|
2.9
|
|||||||||
Total
operating expenses
|
76.6
|
77.5
|
76.9
|
78.7
|
|||||||||
Operating
income
|
23.4
|
22.5
|
23.1
|
21.3
|
|||||||||
Minority
interests in earnings of consolidated entities
|
11.5
|
10.5
|
11.4
|
9.9
|
|||||||||
Other
(income) expense
|
4.5
|
1.8
|
4.1
|
1.5
|
|||||||||
Income
before income taxes
|
7.4
|
10.2
|
7.6
|
9.9
|
|||||||||
Income
tax provision
|
2.9
|
4.1
|
3.0
|
4.0
|
|||||||||
Net
income from continuing operations
|
4.5
|
6.1
|
4.6
|
5.9
|
|||||||||
Net
income from discontinued operations
|
—
|
—
|
—
|
—
|
|||||||||
Net
income
|
4.5
|
%
|
6.1
|
%
|
4.6
|
%
|
5.9
|
%
|
Three
Months Ended
June 30, |
Increase
|
|||||||||
Dollars
in thousands
|
2007
|
2006
|
(Decrease)
|
|||||||
Surgical
Facilities:
|
||||||||||
Same-facility:
|
||||||||||
Net
revenue
|
$
|
21,128
|
$
|
19,707
|
$
|
1,421
|
||||
#
of procedures
|
24,960
|
23,772
|
1,188
|
|||||||
New
ASCs:
|
||||||||||
Net
revenue
|
$
|
5,758
|
$
|
805
|
$
|
4,953
|
||||
#
of procedures
|
8,311
|
1,012
|
7,299
|
|||||||
Expired
laser services agreement and ASC closures
|
||||||||||
Net
revenue
|
$
|
8
|
$
|
593
|
$
|
(585
|
)
|
|||
#
of procedures
|
—
|
797
|
(797
|
)
|
Three
Months Ended June 30,
|
|
Increase
|
|
|||||||
Dollars
in thousands
|
|
2007
|
|
2006
|
|
(Decrease)
|
|
|||
Product
Sales:
|
||||||||||
Optical
laboratories
|
$
|
1,622
|
$
|
1,537
|
$
|
85
|
||||
Optical
products purchasing organization
|
808
|
681
|
127
|
|||||||
Marketing
products and services
|
800
|
1,427
|
(627
|
)
|
||||||
Optometric
practice/retail store
|
474
|
507
|
(33
|
)
|
||||||
3,704
|
4,152
|
(448
|
)
|
|||||||
Other:
|
||||||||||
Ophthalmology
practice
|
1,878
|
1,771
|
107
|
|||||||
Other
|
6
|
14
|
(8
|
)
|
||||||
1,884
|
1,785
|
99
|
||||||||
Total
Net Product Sales and Other Revenue
|
$
|
5,588
|
$
|
5,937
|
$
|
(349
|
)
|
Six
Months Ended June 30,
|
|
Increase
|
|
|||||||
Dollars
in thousands
|
|
2007
|
|
2006
|
|
(Decrease)
|
|
|||
Surgical
Facilities:
|
||||||||||
Same-facility:
|
||||||||||
Net
revenue
|
$
|
37,909
|
$
|
34,567
|
$
|
3,342
|
||||
#
of procedures
|
45,239
|
42,591
|
2,648
|
|||||||
New
ASCs:
|
||||||||||
Net
revenue
|
$
|
14,046
|
$
|
3,160
|
$
|
10,886
|
||||
#
of procedures
|
19,276
|
3,240
|
16,036
|
|||||||
Expired
laser services agreement and ASC closures
|
||||||||||
Net
revenue
|
$
|
34
|
$
|
1,243
|
$
|
(1,209
|
)
|
|||
#
of procedures
|
—
|
2,125
|
(2,125
|
)
|
Six
Months Ended June 30,
|
Increase
|
|||||||||
Dollars
in thousands
|
2007
|
2006
|
(Decrease)
|
|||||||
Product
Sales:
|
||||||||||
Optical
laboratories
|
$
|
3,261
|
$
|
3,130
|
$
|
131
|
||||
Optical
products purchasing organization
|
1,610
|
1,367
|
243
|
|||||||
Marketing
products and services
|
2,261
|
2,687
|
(426
|
)
|
||||||
Optometric
practice/retail store
|
952
|
952
|
—
|
|||||||
8,084
|
8,136
|
(52
|
)
|
|||||||
Other:
|
||||||||||
Ophthalmology
practice
|
3,780
|
3,744
|
36
|
|||||||
Other
|
15
|
108
|
(93
|
)
|
||||||
3,795
|
3,852
|
(57
|
)
|
|||||||
Total
Net Product Sales and Other Revenue
|
$
|
11,879
|
$
|
11,988
|
$
|
(109
|
)
|
Period
|
Total
Number
of
Shares
Purchased (1)
|
Average
Price Paid
per
Share
|
Total Number
of
Shares
Purchased as
Part
of
Publicly
Announced
Plans
or
Programs
|
Maximum
Number
of
Shares that
May Yet Be
Purchased
Under
the
Plan
or
Programs
|
||||
4/01/2007
- 4/30/2007
|
1,690
|
$
6.49
|
None
|
None
|
||||
5/01/2007
- 5/31/2007
|
1,690
|
$
6.68
|
None
|
None
|
||||
6/01/2006
- 6/30/2007
|
2,483
|
$
6.42
|
None
|
None
|
(1)
|
Represents
shares of restricted stock delivered by employees to the Company,
upon
vesting, to satisfy tax withholding
requirements.
|
Directors
|
For
|
Authority
Withheld
|
||
Robert
J. Kelly
|
18,604,377
|
1,875,529
|
||
C.A.
Lance Piccolo
|
19,233,010
|
1,246,896
|
31.1
|
Certification
by the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|
31.2
|
Certification
by the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
|
32
|
Certification
of Principal Executive Officer and Chief Financial Officer pursuant
to
Section 906 of the Sarbanes-Oxley Act of 2002
|
NOVAMED,
INC.
|
||
Scott
T. Macomber
|
August
09, 2007
Date
|
|
Executive
Vice President and
|
||
Chief
Financial Officer
|
||
(on
behalf of Registrant and as principal financial officer)
|
||
/s/
John P. Hart
John
P. Hart
|
August
09, 2007
Date
|
|
(as
principal accounting officer)
|