Symbion, Inc. (NASDAQ:SMBI), an owner and operator of short stay
surgical facilities, announced today results for the first quarter
ended March 31, 2007. For the first quarter ended March 31, 2007,
revenues increased 14% to $77.2�million compared with $67.5 million
for the first quarter ended March 31, 2006. Net income for the
first quarter of 2007 decreased to $4.0 million compared with $4.6
million for the first quarter of 2006. During 2006, two facilities
were reclassified as discontinued operations and during the first
quarter of 2007, four additional facilities were reclassified.
Previously issued results have been reclassified to present the six
facilities as discontinued operations. The effective tax rate for
the first quarter of 2007 was 39% compared with 38.5% for the first
quarter of 2006. Income per diluted share from continuing
operations for the first quarter of 2007 and 2006 was $0.20.
Earnings per diluted share for the first quarter of 2006 reflects a
gain of $0.01 per diluted share related to a litigation settlement
and insurance proceeds related to the hurricanes that affected the
Company during the third quarter of 2005. EBITDA increased 3% to
$12.3 million for the first quarter of 2007 compared with $12.0
million for the first quarter of 2006. Same store net patient
service revenues for the first quarter of 2007 increased 3%
compared with the same period in 2006. At March 31, 2007, the
Company�s outstanding indebtedness was $133.3 million with a ratio
of debt to total capitalization of 31%. The Company announced on
April 24, 2007, that it had entered into a merger agreement (the
�Merger Agreement�) with a newly formed subsidiary of Crestview
Partners, L.P., a New York-based private equity firm. Under the
terms of the Merger Agreement, holders of Symbion common stock will
receive $22.35 per share in cash for their shares. The transaction
is valued at approximately $637 million, including the assumption
of debt obligations of approximately $140 million. The transaction
is expected to close in the third quarter of 2007, subject to
satisfaction of the closing conditions set forth in the Merger
Agreement. The Company also announced that, given the pending
transaction, it would not be hosting a conference call for its
first quarter earnings release on Thursday, April 26, 2007, as had
been previously announced. The Company is also withdrawing its
previously issued guidance for 2007 due to the pending transaction.
Additional Information and Where to Find It In connection with the
proposed merger, Symbion will prepare a proxy statement for the
stockholders of the Company to be filed with the SEC. Before making
any voting decision, the Company�s stockholders are urged to read
the proxy statement regarding the merger carefully in its entirety
when it becomes available because it will contain important
information about the proposed transaction. The Company�s
stockholders and other interested parties will be able to obtain,
without charge, a copy of the proxy statement (when available) and
other relevant documents filed with the SEC from the SEC�s website
at http://www.sec.gov. The Company�s stockholders and other
interested parties will also be able to obtain, without charge, a
copy of the proxy statement and other relevant documents (when
available) by directing a request by mail or telephone to Symbion,
Inc., 40 Burton Hills Boulevard, Suite 500, Nashville, Tennessee
37215, Attention: R. Dale Kennedy, telephone: (615) 234-5900, or
from the Company�s website, www.symbion.com. Participants in the
Solicitation Symbion and its directors and executive officers may
be deemed to be participants in the solicitation of proxies from
its stockholders in connection with the merger. A description of
the interests of Symbion�s directors and executive officers in
Symbion is set forth in the proxy statement for Symbion�s 2007
annual meeting of stockholders, which was filed with the SEC on
April 3, 2007. Any benefits to be received by Symbion�s directors
and executive officers in connection with the merger will be
described in the definitive proxy statement. Investors and
stockholders can obtain additional information regarding the direct
and indirect interests of Symbion directors and executive officers
in the merger by reading the definitive proxy statement when it
becomes available. About Symbion, Inc. 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
occurrence of any event, change or other circumstances that could
give rise to the termination of the Merger Agreement; (ii) the
outcome of any legal proceedings that may be instituted against
Symbion and others following announcement of the Merger Agreement;
(iii) the inability to complete the merger due to the failure to
obtain stockholder approval or the failure to satisfy other
conditions to completion of the merger, including the receipt of
stockholder approval and expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976; (iv) the
failure to obtain the necessary debt financing arrangements set
forth in commitment letters received in connection with the merger;
(v)�risks that the proposed transaction disrupts current plans and
operations and the potential difficulties in employee retention as
a result of the merger; (vi) the ability to recognize the benefits
of the merger; (vii) the amount of the costs, fees, expenses and
charges related to the merger and the actual terms of certain
financings that will be obtained for the merger; (viii) the
Company�s dependence on payments from third-party payors, including
government health care programs and managed care organizations;
(ix) the Company�s ability to acquire and develop additional
surgery centers on favorable terms; (x) numerous business risks in
acquiring and developing additional surgery centers, including
potential difficulties in operating and integrating such surgery
centers; (xi) efforts to regulate the construction, acquisition or
expansion of health care facilities; (xii) 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; (xiii) the Company�s ability to
comply with applicable laws and regulations, including health care
regulations, corporate governance laws and financial reporting
standards; (xiv) 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; (xv) 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; (xvi)�the Company�s significant indebtedness; (xvii) 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;
(xviii) the geographic concentration of the Company�s operations,
which makes the Company particularly sensitive to regulatory,
economic and other conditions in certain states; (xix) the
Company�s dependence on its senior management; (xx) 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; (xxi) efforts by certain states to
reduce payments from workers� compensation payors for services
provided to injured workers; (xxii) 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
(xxiii) 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 March 31, 2007�
2006� Revenues $77,220� $67,496� Operating expenses: Salaries and
benefits 20,838� 17,854� Supplies 14,946� 12,748� Professional and
medical fees 4,699� 2,808� Rent and lease expense 4,690� 4,252�
Other operating expenses 5,779� 4,280� Cost of revenues 50,952�
41,942� General and administrative expense 6,453� 6,538�
Depreciation and amortization 3,098� 3,225� Provision for doubtful
accounts 894� 607� Income (loss) on equity investments 36� (245)
Impairment and loss on disposal of long-lived assets 16� 39� Gain
on sale of long-lived assets (28) -� Proceeds from insurance
settlement (161) (410) Proceeds from litigation settlement -� (588)
Total operating expenses 61,260� 51,108� Operating income 15,960�
16,388� Minority interests in income of consolidated subsidiaries
(6,733) (7,568) Interest expense, net (1,967) (1,501) Income from
continuing operations before income taxes 7,260� 7,319� Provision
for income taxes 2,831� 2,818� Income from continuing operations
4,429� 4,501� Gain/(loss) from discontinued operations, net of tax
(399) 76� Net income $4,030� $4,577� � Net income per share -
continuing operations: Basic $0.20� $0.21� Diluted $0.20� $0.20� �
Net income per share: Basic $0.19� $0.21� Diluted $0.18� $0.21� �
Weighted average number of common shares outstanding and common
equivalent shares: Basic 21,668� 21,461� Diluted 22,163� 22,135�
SYMBION, INC. Condensed Consolidated Balance Sheets (dollars in
thousands) (unaudited) March 31, Dec. 31, 2007� 2006� ASSETS �
Current assets: Cash and cash equivalents $26,593� $26,909�
Accounts receivable, less allowance for doubtful accounts 34,819�
34,700� Inventories 8,130� 8,070� Prepaid expenses and other
current assets 12,058� 13,927� Current assets of discontinued
operations 2,594� 3,299� Total current assets 84,194� 86,905�
Property and equipment, net of accumulated depreciation 74,469�
76,277� Goodwill 315,462� 314,980� Investments in and advances to
affiliates 16,189� 16,463� Other assets 2,627� 3,079� Long-term
assets of discontinued operations 5,720� 6,102� � Total assets
$498,661� $503,806� � LIABILITIES AND STOCKHOLDERS' EQUITY �
Current liabilities: Accounts payable $5,253� $5,145� Accrued
payroll and benefits 5,800� 7,950� Other accrued expenses 9,816�
13,413� Current maturities of long-term debt 3,581� 2,108� Current
liabilities of discontinued operations 1,486� 1,646� Total current
liabilities 25,936� 30,262� Long-term debt, less current maturities
129,695� 136,533� Other liabilities 19,757� 18,734� Long-term
liabilities of discontinued operations 265� 404� Minority interests
32,681� 32,594� Total stockholders' equity 290,327� 285,279� �
Total liabilities and stockholders' equity $498,661� $503,806�
SYMBION, INC. Supplemental Operating Data (dollars in thousands,
except per case and per share data) � Three Months Ended March 31,
2007� 2006� Same store statistics (1): Cases 58,869� 55,020� Cases
percentage growth 7.0% N/A� Net patient service revenue per case
$1,281� $1,328� Net patient service revenue per case percentage
growth (3.5)% N/A� Number of same store surgery centers 45� N/A� �
Consolidated statistics - continuing operations: Cases 54,672�
50,191� Cases percentage growth 8.9% N/A� Net patient service
revenue per case $1,343� $1,266� Net patient service revenue per
case percentage growth 6.1% N/A� Number of surgery centers operated
as of end of period (2) 56� 56� Number of states in which the
Company operates surgery centers 23� 22� � Revenues - continuing
operations: Net patient service revenues $73,425� $63,552�
Physician service revenues 1,330� 1,140� Other service revenues
2,465� 2,804� Total revenues $77,220� $67,496� � Cash flow
information - continuing operations: Net cash provided by operating
activities $6,350� $6,836� Net cash used in investing activities
(1,528) (14,574) Net cash provided by (used in) financing
activities (5,138) 6,875� � Other information: EBITDA (3) $12,325�
$12,045� � (1) For purposes of this release, the Company defines
same store facilities as those facilities that the Company owned an
interest in and managed throughout each of the respective periods
shown. The Company has not included the facilities that are
reported as discontinued operations. The definition of same store
facilities includes non-consolidated facilities and allows for
comparability to other companies in the industry. � (2) This data
includes nine facilities 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 (in thousands) March 31, 2007�
2006� EBITDA $12,325� $12,045� Depreciation and amortization
(3,098) (3,225) Interest expense, net (1,967) (1,501) Income taxes
(2,831) (2,818) Gain/(loss) on discontinued operations, net of tax
(399) 76� Net income 4,030� 4,577� Depreciation and amortization
3,098� 3,225� Non-cash compensation expense 849� 1,092� Non-cash
gains and losses (12) (576) Minority interests in income of
consolidated subsidiaries 6,733� 7,568� Income taxes 2,831� 2,818�
Distributions to minority partners (6,399) (5,843) Income (loss) on
equity investments 36� (245) Provision for doubtful accounts 894�
607� Changes in operating assets and liabilities, net of effects of
acquisitions and dispositions: � Accounts receivable 694� (592)
Income tax payments (4,090) (600) Other assets and liabilities
(2,314) (5,195) Net cash provided by operating activities -
continuing operations $6,350� $6,836�
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