UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date
of
Report (Date of earliest event reported): December
12, 2007
NovaMed,
Inc.
(Exact
Name of Registrant as Specified in Charter)
|
Delaware
|
0-26625
|
36-4116193
|
|
(State
or Other Jurisdiction
|
(Commission
|
(IRS
Employer
|
|
of
Incorporation)
|
File
Number)
|
Identification
No.)
|
| |
|
|
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980
North Michigan Avenue, Suite 1620,
Chicago, Illinois
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60611
|
|
(Address
of Principal Executive
Offices)
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(Zip
Code)
|
Registrant’s
telephone number, including area code (312)
664-4100
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Section
1 - Registrant’s Business and Operations
Item
1.01 - Entry into a Material Definitive Agreement
On
December 13, 2007, NovaMed, Inc. (the “Company”) entered into a Third Amendment
and Consent to Credit Agreement (the “Third Amendment”) with National
City Bank, as agent and lender, LaSalle Bank National Association, as
documentation agent and lender, and Associated Bank, N.A., Charter One Bank
and
JPMorgan Chase Bank, National Association as the other participating lenders
that have executed the Third Amendment. The Third Amendment amended the terms
of
the Sixth Amended and Restated Credit Agreement dated as of February 7, 2007,
as
amended (the “Credit Facility”), among the same parties to the Third Amendment,
as well as BMO Capital Markets Financing, Inc. and the Northern Trust Company.
Under the terms of the Credit Facility, the Company’s subsidiaries are limited
in their ability to procure bank financing outside of the Credit Facility.
One
of the Company’s subsidiaries, NovaMed Surgery Center of Altamonte Springs, LLC,
is planning to relocate its ambulatory surgery center and is pursuing its
own
bank financing to fund this project. The Third Amendment sets forth the lenders’
consent to this transaction as well as modifications to various definitions
and
financial covenants to enable NovaMed Surgery Center of Altamonte Springs,
LLC
to procure this financing outside of the Credit Facility.
The
Third
Amendment also sets forth the lenders’ consent to the sale or closure of three
of the Company’s ambulatory surgery centers, as described in more detail in
Section 2 below.
The
foregoing summary does not purport to be complete and is qualified in its
entirety by reference to the full text of the Third Amendment, which is filed
herewith as Exhibit 10.57 and is incorporated herein by reference.
Section
2 - Financial Information
Item
2.05 - Costs Associated with Exit or Disposal Activities
On
December 12, 2007, the Board of Directors of the Company approved a plan
to
close or sell three ambulatory surgery centers located in Laredo, Texas,
Thibodaux, Louisiana and Columbus, Georgia. These centers together represented
approximately two percent of the Company’s total net revenue and an after-tax
loss of just over $0.01 per share for the nine months ended September 30,
2007.
The Company owns 96% of the Laredo, Texas facility, 70% of the Thibodaux,
Louisiana facility, and 71.5% of the Columbus, Georgia facility. The Board
determined to close or sell two of these ambulatory surgery centers due to
their
continued unprofitability. The third ambulatory surgery center is located
in
Thibodaux, Louisiana and its only surgeon is planning to retire shortly.
The
decision to close or sell this facility was based on the facility’s competitive
position in the market, limited growth potential, and the lack of a succession
plan for the surgeon in this rural area.
The
Company will seek potential buyers for its equity interests in these facilities.
If the Company is unable to sell its equity interests in any or all of these
facilities, then the Company will work with its remaining partners in the
facility to cease operations and liquidate its assets. The expected completion
date of this plan cannot be reasonably estimated at this
time.
In
connection with these closures or sales, the Company expects to record an
after-tax loss in the range of $11.5 million to $12.5 million in the fourth
quarter of 2007, which represents the difference between the net book value
of
these businesses and the estimated sales prices, if any. The Company also
expects to incur additional costs associated with these disposal activities
including, without limitation, lease termination costs, early contract
termination costs and employee severance costs. The Company estimates that
these
costs will not exceed $500,000.
The
results of these businesses, and the expected after-tax losses generated
by this
plan, will be reported in discontinued operations beginning in the fourth
quarter of 2007. These three centers generated, in the aggregate, net after-tax
losses of approximately $270,000 for the nine months ended September 30,
2007.
The
Company also owns a 25% interest in an ambulatory surgery center located
in Fort
Lauderdale, Florida. The Company has exercised its right to sell this 25%
interest to its physician-partner who owns the remaining 75% interest. The
sale
of this interest has taken longer than anticipated and the Company is uncertain
of its return on sale. Accordingly, the Company expects to record an after-tax
loss in continuing operations of up to approximately $1.0 million in the
fourth
quarter of 2007. This center generated an after-tax loss of $35,000 for the
nine
months ended September 30, 2007.
Item
2.06 Material
Impairments
The
information discussed above in Item 2.05 is hereby incorporated by reference.
Section
9 - Financial Statements and Exhibits
Item
9.01 Financial
Statements and Exhibits
(d) Exhibits
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Exhibit Number |
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Title |
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|
| |
10.57 |
|
Third Amendment and Consent
to
Credit Agreement dated as of December 13, 2007, by and among NovaMed,
Inc., National City Bank, as agent,
and the other lenders thereto |
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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NovaMed,
Inc. |
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| Dated: December
13, 2007 |
By: |
/s/ Scott
T.
Macomber |
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Scott
T. Macomber |
| |
Executive
Vice President and Chief Financial
Officer
|
EXHIBIT
INDEX
| Exhibit Number |
|
Title |
| |
|
|
| 10.57 |
|
Third Amendment and
Consent to
Credit Agreement dated as of December 13, 2007, by and among
NovaMed,
Inc., National City Bank, as agent,
and the other lenders thereto |