The Plastic Surgery Company Acquires the Florida Center for Cosmetic Surgery in a MultiMillion Dollar Transaction

Business Wire, Dec 21, 2000

Business Editors

SANTA BARBARA, Calif.--(BUSINESS WIRE)--Dec. 21, 2000

This Center Will Secure the Company's Position

in the Affluent South Florida Market

The Plastic Surgery Company (AMEX: PSU)(www.tpsc.com and www.idealme.com), which owns and/or provides services for a national network of cosmetic surgery centers, today announced that it has acquired the Ft. Lauderdale-based, Florida Center for Cosmetic Surgery, which has annual revenues of approximately $8 million.

This Center, which is located adjacent to the upscale Galleria Shopping Center in Ft. Lauderdale, serves a large area including Broward and Dade Counties. The Center is currently staffed by five attending plastic surgeons and is managed and marketed by business professionals.

It will serve as a prototype for The Plastic Surgery Company's next generation model, wholly-owned Personal Image Centers. The Company has been pursuing this strategy through the conversion of selected affiliate practices, the acquisition of existing centers in attractive retail markets and an expanding offering of physician-directed cosmetic procedures.

Business professionals developed The Florida Center for Cosmetic Surgery in 1995. The Center operates through a retail minded approach to quality elective care, with its retail location and evening and weekend hours. The Center's focus on quality cosmetic surgery is enhanced by its five attending surgeons (including one medical director) and three Medicare certified operating rooms staffed by physician anesthesiologists.

In fact, the Center has gone the extra mile to include an in-house licensed risk manager who reviews every patient's chart both before and after surgery to insure total compliance.

The Florida Center's patient flow is supported by extensive television advertising, which includes 40 to 60 spots per day. Viewers are given toll-free contact numbers, which connect them to a highly trained, in-house, call center staff.

"Among the competitive advantages of a large, well-run center such as this, is the ability to finance ongoing, intensive, advertising campaigns," commented Paul Refkin, executive director of the Center. "It would be nearly impossible for most solo surgeon cosmetic practices to be able to afford this level of television exposure from operating profits."

"The profitability of The Florida Center's approach to the delivery of cosmetic surgery services is positively impacted by both professional business management and economies of scale," said Dennis Condon, president and chief executive officer of The Plastic Surgery Company. "Professional managers provide for efficient, effective operations and strong, compelling marketing programs, along with a more disciplined approach to investing operating profits.

"Additionally, the organization, by virtue of its higher patient volume, can leverage fixed expenses further and enjoy discounted supply contracts. We anticipate extending most of these benefits to our network of 24 cosmetic surgery affiliates, and to capture even more efficiencies through our transition to Company owned Personal Image Centers."

Today the Center is considered to be among the most active private independent cosmetic surgery centers in the State of Florida. Recently the Center was informed by one of the breast implant manufacturers that they perform more breast augmentation procedures than any other single center in the United States.

"As we look forward with this acquisition, we anticipate an opportunity to add other cosmetic procedures to its already diverse menu of services," added Condon. "We also believe that there will be ample opportunity to expand the number of attending plastic surgeons operating at the facility, thus being able to capture more of the business that is driven by our marketing programs."

In fact the Center has recently expanded through a joint advertising and licensing agreement with a new, highly successful independently run office in the suburban Kendall area.

The value of this acquisition is estimated at $7.0 million, which was paid in a combination of $1.0 million in cash, $1.0 million in stock and $5.0 million in seller financing. The Company intends to maximize its capital financing rounds with this successful seller-financing model.

This acquisition is expected to secure the Company's position in Florida, one of three target states that include Texas and California, in the Company's current business plan. Today, the Company has two affiliated Centers in Florida, three in Texas, three in Southern California, and 16 centers throughout the remainder of the country.

The Plastic Surgery Company is a leading provider of cosmetic surgery business development services in the United States. The Company has business service agreements with a network of board certified/eligible plastic surgeon affiliates across the United States. Its practice development/marketing strategies include the implementation of the 'best practices' of its affiliates across all of its plastic surgery centers, management's extensive experience in the industry and a robust consumer-oriented plastic surgery online destination.