HOUSTON, April 11, 2002 (PRIMEZONE) -- SurgiCare, Inc. (AMEX:SRG), a Houston-based Ambulatory Surgical Center (ASC) company, announced today that it has commitments that will allow it to acquire a 56% interest in the San Jacinto Surgery Center, L.P., located in San Jacinto, Texas. The acquisition will increase SurgiCare's ownership interest in the 24 doctor Surgery Center to 66% and will enable it to consolidate the revenues and earnings from the Center in its financial statements. This transaction represents the company's largest acquisition to date.
The San Jacinto Surgery Center had revenues of $5.7 million in 2001 and Earnings Before Interest, Taxes and Depreciation (EBITD) of $2.4 million. The Center is expected to generate $11.2 million in revenues and $5.9 million in EBITD for 2002. The dramatic increase in growth will come from a significant increase in procedures performed at the facility. The Center has four Operating Rooms and was built in 1999. SurgiCare will pay approximately $11.7 million to acquire the Center through a combination of cash, stock and notes.
SurgiCare is also exploring the possibility of converting the Center into a short-stay surgical hospital to further increase revenues. The procedures that are currently performed at the Center include orthopedic, urology, pain management and EN&T. The acquisition is anticipated to close next month and will be immediately accretive.
"We have been looking for ways to rapidly grow our revenues and earnings and could not think of a better way to do so than through this very strategic, highly accretive acquisition," said Charles S. Cohen, SurgiCare's Co-Chief Executive Officer. "This is an ideal way for us to begin our national expansion strategy. The Center is not only extremely profitable, but has tremendous growth potential. We believe that it will nearly double its revenues this year and that there are further near-term opportunities to enhance its profitability."
"We believe that this is an excellent example of the way we are able to work with our doctor partners," said Dr. David Blumfield, SurgiCare's Chairman and Co-Chief Executive Officer. "We began with a minority interest in the Center when we acquired a 10% stake. Now, the doctors have seen our operating capabilities and want to extend the relationship further. We feel that the way we differentiate SurgiCare from others in the sector is by the close relationships we have developed with physicians. This should make us very attractive to other medical groups as we grow across the country."
The Company plans to release guidance for 2002 on Wednesday, April 17th, before the market opens. The Company will discuss the guidance in an interview with CEOcast, Inc., an online financial portal. The interview will be available at www.ceocast.com.
About SurgiCare, Inc.
SurgiCare, Inc. offers licensed, freestanding Ambulatory Surgery Centers for use by physicians and its physician partners and their patients. Freestanding refers to the fact that the facilities are physically and organizationally independent from a hospital. Ambulatory Surgery means surgical procedures that do not require hospitalization after the surgery. The ASCs are run under the guidance of a committee of physician partners. SurgiCare's goal is to grow through mergers, acquisitions and turnkey management contracts in conjunction with physician-involved supervision and potential equity participation within a public company model. SurgiCare has assembled a team of highly qualified industry professionals that are equipped to effectively manage multiple ASCs, essentially cutting operational costs and increasing profit margins. For more information on SurgiCare, please visit the company's Website at http://www.surgicareinc.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This news release contains 'forward-looking' information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements that include the words ``believes,'' ``expects,'' ``anticipates'' or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of SurgiCare, Inc. (the Company) to differ materially from those expressed or implied by such forward-looking statements. Such factors include, among others, the risk factors contained in the Company's Annual Reports and other filings with the Securities and Exchange Commission. In addition, description of anyone's past success, either financial or strategic, is no guarantee of future success. This news release speaks as of the date first set forth above and the Company assumes no responsibility to update the information included herein for events occurring after the date hereof.