Surgery Partners, Inc. (NASDAQ:SGRY) ("Surgery Partners" or
the "Company"), a leading provider of surgical services, today
announced financial results for the second quarter
ended June 30, 2023.
- Revenues were $667.6 million
representing 8.5% growth and are inclusive of an $8 million cyber
event headwind
- Same-facility revenues increased 8.3%
on an unadjusted basis and approximately 10% adjusting for the
cyber event
- Non-consolidated minority interest
revenue increased by over 30%
- Net income attributable to Surgery
Partners was $18.9 million
- Adjusted EBITDA was $100.2 million,
representing 16.4% growth
- Adjusted EBITDA margin improved by
over 100 basis points year-over-year to 15.0%
- Combined, consolidated and
unconsolidated surgical case volume grew 5%
- Full year Adjusted EBITDA guidance
raised to greater than $435 million, revenue reaffirmed at
greater than $2.75 billion, inclusive of the cyber event, and
free cash flow reaffirmed at greater than $140 million.
Wayne DeVeydt, Executive Chairman of the Board of
Surgery Partners, noted, “Revenue and Adjusted EBITDA both exceeded
our expectations for the quarter, inclusive of the cyber event
headwind we experienced. We are extremely pleased with the momentum
we continue to see in all pillars of our growth algorithm with same
facility revenue, margin expansion and capital deployment all
performing at levels that support raising our full year adjusted
EBITDA outlook to greater than $435 million.”
Eric Evans, Chief Executive Officer, stated, “The
company continued its consistent growth and expense management
execution in Q2. We are also pleased to report significant progress
in our de novo investments with over 15 facilities expected to open
in the next 18 months. These investments, coupled with our robust
growth in high acuity procedures and the addition of three
unconsolidated minority interest partnerships acquired in
connection with our new health system partnership with Methodist
Health System in Dallas, Texas, give us further confidence in our
long-term mid-teen growth targets.”
Dave Doherty, Chief Financial Officer, commented,
“We deployed approximately $60 million in capital in the quarter
with the majority used to purchase minority interest in high growth
markets. Our non-consolidated investments have driven over 30%
revenue growth on a year-over-year basis in unconsolidated revenue,
and we expect these to continue to ramp up over the next 18
months.”
Second Quarter
2023 Results
Revenue for the second quarter of 2023 increased
8.5% to $667.6 million from $615.4 million for
the second quarter of 2022. Days adjusted same-facility revenues
for the second quarter of 2023 increased 8.3% from the same period
last year, with an increase in revenue per case of 5.8% and an
increase in same-facility cases of 2.3%. For the second quarter of
2023, the Company’s net income (loss) attributable to Surgery
Partners, Inc. and Adjusted EBITDA was $18.9 million and
$100.2 million, respectively, compared to ($18.4) million and $86.1
million, respectively, for the same period last year.
Year-to-Date 2023
Results
Revenue year-to-date 2023 increased 10.1% to
$1,333.8 million from $1,211.6 million for the 2022 period. Days
adjusted same-facility revenues for year-to-date 2023 increased
9.3% from the same period last year, with an increase in revenue
per case of 5.2% and an increase in same-facility cases of 3.9%.
For year-to-date 2023, the Company’s net loss attributable
to Surgery Partners, Inc. and Adjusted EBITDA was $6.0
million and $190.3 million, respectively, compared to $6.2 million
and $163.2 million for the same period last year. For both
year-to-date 2023 and 2022, Adjusted EBITDA benefited from
recognition of $1.1 million of CARES Act grants. Excluding CARES
Act grants for year-to-date 2023 and 2022, Adjusted EBITDA would
have been $189.2 million and $162.1 million, respectively.
Liquidity
Surgery Partners had cash and cash equivalents
of $177.4 million, and $545.9 million of borrowing capacity
under its revolving credit facility, at June 30, 2023. Cash
flows from operating activities was $52.1 million in the second
quarter of 2023, compared to $42.1 million in the prior year
quarter. Free Cash Flow, defined as operating cash flows less
distributions to non-controlling interests and less
maintenance-related capital expenditures, was $7.7 million for
the second quarter of 2023.
Year-to-date, operating cash flows were $126.6
million compared to $121.9 million in the prior year period. Free
Cash Flow, defined as operating cash flows less distributions to
non-controlling interests and less maintenance-related capital
expenditures, was $28.2 million for year-to-date 2023.
The Company’s ratio of total net debt to EBITDA, as
calculated under the Company’s credit agreement, was approximately
4.2x at the end of the second quarter of 2023.
2023 Outlook
The Company raises projected 2023 Adjusted EBITDA
to be greater than $435 million.
Conference Call Information
Surgery Partners will hold a conference call today,
August 1, 2023, at 8:30 a.m. (Eastern Time). The conference call
can be accessed live over the phone by dialing 1-877-451-6152, or
for international callers, 1-201-389-0879. A replay will be
available three hours after the call and can be accessed by dialing
1-844-512-2921, or for international callers, 1-412-317-6671. The
passcode for the live call and the replay is 13739956. The replay
will be available until August 15, 2023.
Interested investors and other parties may also
listen to a simultaneous webcast of the conference call by logging
onto the Investor Relations section of the Company's website
at www.surgerypartners.com. The replay will also be available
on this same website for a limited time following the call.
To learn more about Surgery Partners, please
visit the Company's website
at www.surgerypartners.com. Surgery Partners uses
its website as a channel of distribution for material Company
information. Financial and other material information
regarding Surgery Partners is routinely posted on the
Company's website and is readily accessible.
About Surgery Partners
Headquartered in Brentwood, Tennessee, Surgery
Partners is a leading healthcare services company with a
differentiated outpatient delivery model focused on providing
high-quality, cost-effective solutions for surgical and related
ancillary care in support of both patients and physicians. Founded
in 2004, Surgery Partners is one of the largest and fastest growing
surgical services businesses in the country, with more than 180
locations in 32 states, including ambulatory surgery centers,
surgical hospitals, multi-specialty physician practices and urgent
care facilities. For additional information, visit
www.surgerypartners.com.
Forward-Looking Statements
This press release contains forward-looking
statements, including those regarding growth, our anticipated
operating results for future periods and other similar statements.
These statements can be identified by the use of words such as
"believes," "anticipates," "expects," "intends," "plans,"
"continues," "estimates," "predicts," "projects," "forecasts,"
"may," "could," and similar expressions. All forward-looking
statements are based on current expectations and beliefs as of the
date of this release and are subject to risks, uncertainties and
other factors that may cause actual results to differ materially
from the expectations discussed in, or implied by, the
forward-looking statements. Many of these factors are beyond our
ability to control or predict including, without limitation,
reductions in payments from government health care programs and
private insurance payors, such as health maintenance organizations,
preferred provider organizations, and other managed care
organizations and employers; our ability to contract with private
insurance payors; changes in our payor mix or surgical case mix;
failure to maintain or develop relationships with physicians on
beneficial or favorable terms, or at all; the impact of payor
controls designed to reduce the number of surgical procedures; our
efforts to integrate operations of acquired businesses and surgical
facilities, attract new physician partners, or acquire additional
surgical facilities; supply chain issues, including shortages or
quality control issues with surgery-related products, equipment and
medical supplies; competition for physicians, nurses, strategic
relationships, acquisitions and managed care contracts; our ability
to attract and retain qualified health care professionals; our
ability to enforce non-compete restrictions against our physicians;
our ability to manage material liabilities whether known or unknown
incurred as a result of acquiring surgical facilities; the impact
of future legislation and other health care regulatory reform
actions, and the effect of that legislation and other regulatory
actions on our business; our ability to comply with current health
care laws and regulations; the outcome of legal and regulatory
proceedings that have been or may be brought against us; changes in
the regulatory, economic and other conditions of the states where
our surgical facilities are located; our indebtedness; the social
and economic impact of a pandemic, epidemic or outbreak of a
contagious disease, such as COVID-19, on our business; and the
risks and uncertainties identified and discussed from time to time
in the Company’s reports filed with the SEC, including in Item 1A
under the heading "Risk Factors" in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2022. Except as required
by law, the Company undertakes no obligation to revise or update
publicly any forward-looking statements to reflect events or
circumstances after the date of this report, or to reflect the
occurrence of unanticipated events or circumstances.
Use of Non-GAAP Financial
Measures
In addition to the results prepared in accordance
with generally accepted accounting principles in the United States
("GAAP") provided throughout this press release, Surgery Partners
has presented the following non-GAAP financial measures: Adjusted
net income (loss) attributable to common stockholders, Adjusted net
income (loss) per share attributable to common stockholders,
Adjusted EBITDA, Adjusted EBITDA excluding grant funds and Free
Cash Flow, which exclude various items detailed in the
"Reconciliation of Non-GAAP Financial Measures" below.
These non-GAAP financial measures are not intended
to replace financial performance measures determined in accordance
with GAAP. Rather, they are presented as supplemental measures of
the Company's performance that management believes may enhance the
evaluation of the Company's ongoing operating results. These
non-GAAP financial measures are not presented in accordance with
GAAP, and the Company’s computation of these non-GAAP financial
measures may vary from similar measures used by other companies.
These measures have limitations as an analytical tool and should
not be considered in isolation or as a substitute or alternative to
revenue, net income or loss, operating income or loss, cash flows
from operating activities, total indebtedness or any other measures
of operating performance, liquidity or indebtedness derived in
accordance with GAAP.
SURGERY PARTNERS, INC. Selected
Consolidated Financial Data(Dollars in millions,
except per share amounts, shares in thousands) |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
Revenues |
$ |
667.6 |
|
|
$ |
615.4 |
|
|
$ |
1,333.8 |
|
|
$ |
1,211.6 |
|
Operating expenses: |
|
|
|
|
|
|
|
Salaries and benefits |
|
195.2 |
|
|
|
181.9 |
|
|
|
397.4 |
|
|
|
360.8 |
|
Supplies |
|
182.2 |
|
|
|
173.5 |
|
|
|
370.6 |
|
|
|
345.1 |
|
Professional and medical fees |
|
72.9 |
|
|
|
66.7 |
|
|
|
147.5 |
|
|
|
130.3 |
|
Lease expense |
|
21.8 |
|
|
|
20.2 |
|
|
|
43.2 |
|
|
|
40.2 |
|
Other operating expenses |
|
41.4 |
|
|
|
38.5 |
|
|
|
87.0 |
|
|
|
75.8 |
|
Cost of revenues |
|
513.5 |
|
|
|
480.8 |
|
|
|
1,045.7 |
|
|
|
952.2 |
|
General and administrative expenses |
|
31.2 |
|
|
|
26.1 |
|
|
|
63.2 |
|
|
|
55.6 |
|
Depreciation and amortization |
|
24.4 |
|
|
|
28.0 |
|
|
|
58.1 |
|
|
|
55.4 |
|
Transaction and integration costs |
|
12.0 |
|
|
|
8.2 |
|
|
|
24.5 |
|
|
|
15.3 |
|
Grant funds |
|
— |
|
|
|
(0.1 |
) |
|
|
(1.1 |
) |
|
|
(1.3 |
) |
Net (gain) loss on disposals, consolidations and
deconsolidations |
|
(8.8 |
) |
|
|
1.1 |
|
|
|
1.7 |
|
|
|
1.0 |
|
Equity in earnings of unconsolidated affiliates |
|
(2.6 |
) |
|
|
(2.6 |
) |
|
|
(5.9 |
) |
|
|
(5.7 |
) |
Litigation settlements |
|
1.5 |
|
|
|
— |
|
|
|
4.5 |
|
|
|
(32.8 |
) |
Other income, net |
|
(1.2 |
) |
|
|
(2.6 |
) |
|
|
(0.9 |
) |
|
|
(5.0 |
) |
|
|
570.0 |
|
|
|
538.9 |
|
|
|
1,189.8 |
|
|
|
1,034.7 |
|
Operating income |
|
97.6 |
|
|
|
76.5 |
|
|
|
144.0 |
|
|
|
176.9 |
|
Interest expense, net |
|
(47.7 |
) |
|
|
(56.9 |
) |
|
|
(94.5 |
) |
|
|
(113.2 |
) |
Income before income taxes |
|
49.9 |
|
|
|
19.6 |
|
|
|
49.5 |
|
|
|
63.7 |
|
Income tax benefit (expense) |
|
7.8 |
|
|
|
(4.3 |
) |
|
|
9.4 |
|
|
|
(5.6 |
) |
Net income |
|
57.7 |
|
|
|
15.3 |
|
|
|
58.9 |
|
|
|
58.1 |
|
Less: Net income attributable to non-controlling interests |
|
(38.8 |
) |
|
|
(33.7 |
) |
|
|
(64.9 |
) |
|
|
(64.3 |
) |
Net income (loss) attributable to Surgery Partners, Inc. |
$ |
18.9 |
|
|
$ |
(18.4 |
) |
|
$ |
(6.0 |
) |
|
$ |
(6.2 |
) |
|
|
|
|
|
|
|
|
Net income (loss) per share attributable to common
stockholders |
|
|
|
|
|
|
|
Basic |
$ |
0.15 |
|
|
$ |
(0.21 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.07 |
) |
Diluted (1) |
$ |
0.15 |
|
|
$ |
(0.21 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.07 |
) |
Weighted average common shares outstanding |
|
|
|
|
|
|
|
Basic |
|
125,718 |
|
|
|
88,900 |
|
|
|
125,463 |
|
|
|
88,450 |
|
Diluted (1) |
|
127,370 |
|
|
|
88,900 |
|
|
|
125,463 |
|
|
|
88,450 |
|
|
(1) The impact of
potentially dilutive securities for the three months ended June 30,
2022 and the six months ended June 30, 2023 and 2022, was not
considered because the effect would be anti-dilutive. |
|
SURGERY PARTNERS, INC. Selected Financial
and Operating Data(Dollars in millions, except per
case and per share amounts) |
|
|
June 30,2023 |
|
December 31,2022 |
Balance Sheet Data: |
|
|
|
Cash and cash equivalents |
$ |
177.4 |
|
$ |
282.9 |
Total current assets |
|
810.2 |
|
|
921.0 |
Total assets |
|
6,620.6 |
|
|
6,682.1 |
|
|
|
|
Current maturities of long-term debt |
|
64.7 |
|
|
62.8 |
Total current liabilities |
|
458.6 |
|
|
493.4 |
Long-term debt, less current maturities |
|
2,504.8 |
|
|
2,559.0 |
Total liabilities |
|
3,309.7 |
|
|
3,399.2 |
|
|
|
|
Non-controlling interests—redeemable |
|
328.1 |
|
|
342.0 |
|
|
|
|
Total Surgery Partners, Inc. stockholders' equity |
|
2,018.2 |
|
|
1,998.2 |
Non-controlling interests—non-redeemable |
|
964.6 |
|
|
942.7 |
Total stockholders' equity |
|
2,982.8 |
|
|
2,940.9 |
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Cash Flow Data: |
|
|
|
|
|
|
|
Net cash provided by (used in): |
|
|
|
|
|
|
|
Operating activities |
$ |
52.1 |
|
|
$ |
42.1 |
|
|
$ |
126.6 |
|
|
$ |
121.9 |
|
Investing activities |
|
(71.2 |
) |
|
|
(134.3 |
) |
|
|
(141.9 |
) |
|
|
(181.4 |
) |
Purchases of property and equipment |
|
(25.8 |
) |
|
|
(22.4 |
) |
|
|
(50.1 |
) |
|
|
(40.6 |
) |
Payments for acquisitions, net of cash acquired |
|
(2.8 |
) |
|
|
(43.8 |
) |
|
|
(43.5 |
) |
|
|
(74.9 |
) |
Purchases of equity investments |
|
(38.8 |
) |
|
|
(65.8 |
) |
|
|
(48.4 |
) |
|
|
(65.8 |
) |
Financing activities |
|
(49.0 |
) |
|
|
(59.3 |
) |
|
|
(90.2 |
) |
|
|
(103.0 |
) |
Distributions to non-controlling interests |
|
(35.0 |
) |
|
|
(39.0 |
) |
|
|
(76.9 |
) |
|
|
(75.2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Other Data: |
|
|
|
|
|
|
|
Number of surgical facilities as of the end of period |
|
152 |
|
|
|
133 |
|
|
|
|
152 |
|
|
|
133 |
|
|
Number of consolidated surgical facilities as of the end of
period |
|
119 |
|
|
|
109 |
|
|
|
|
119 |
|
|
|
109 |
|
|
|
|
|
|
|
|
|
|
Cases |
|
155,185 |
|
|
|
149,033 |
|
|
|
|
306,139 |
|
|
|
291,299 |
|
|
Revenue per case |
$ |
4,302 |
|
|
$ |
4,129 |
|
|
|
$ |
4,357 |
|
|
$ |
4,159 |
|
|
Adjusted EBITDA (1) |
$ |
100.2 |
|
|
$ |
86.1 |
|
|
|
$ |
190.3 |
|
|
$ |
163.2 |
|
|
Adjusted EBITDA excluding grant funds (1) |
$ |
100.2 |
|
|
$ |
86.0 |
|
|
|
$ |
189.2 |
|
|
$ |
162.1 |
|
|
Adjusted EBITDA margin (2) |
|
15.0 |
% |
|
|
14.0 |
|
% |
|
|
14.3 |
% |
|
|
13.5 |
|
% |
Adjusted EBITDA excluding grant funds margin (3) |
|
15.0 |
% |
|
|
14.0 |
|
% |
|
|
14.2 |
% |
|
|
13.4 |
|
% |
Adjusted net income (loss) per share attributable to common
stockholders - Basic (1) |
$ |
0.29 |
|
|
$ |
(0.03 |
) |
|
|
$ |
0.37 |
|
|
$ |
(0.12 |
) |
|
Adjusted net income (loss) per share attributable to common
stockholders - Diluted (1) |
$ |
0.28 |
|
|
$ |
(0.03 |
) |
|
|
$ |
0.37 |
|
|
$ |
(0.12 |
) |
|
Free Cash Flow (1) |
$ |
7.7 |
|
|
N/A |
|
|
$ |
28.2 |
|
|
N/A |
|
|
(1) A reconciliation of these non-GAAP financial measures appears
below. |
(2) Defined as Adjusted EBITDA as a % of Revenues. |
(3) Defined as Adjusted EBITDA excluding grant funds as a % of
Revenues. |
|
SURGERY PARTNERS, INC. Supplemental
Information(Dollars in millions, except per case
amounts) |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
Same-facility Information
(1): |
|
|
|
|
|
|
|
Cases |
|
158,010 |
|
|
|
154,433 |
|
|
312,462 |
|
|
|
300,753 |
Case growth |
|
2.3 |
% |
|
N/A |
|
|
3.9 |
% |
|
N/A |
Revenue per case |
$ |
4,086 |
|
|
$ |
3,861 |
|
$ |
4,100 |
|
|
$ |
3,899 |
Revenue per case growth |
|
5.8 |
% |
|
N/A |
|
|
5.2 |
% |
|
N/A |
Number of work days in the period |
|
64 |
|
|
|
64 |
|
|
128 |
|
|
|
128 |
Case growth (days adjusted) |
|
2.3 |
% |
|
N/A |
|
|
3.9 |
% |
|
N/A |
Revenue growth (days adjusted) |
|
8.3 |
% |
|
N/A |
|
|
9.3 |
% |
|
N/A |
|
(1) Same-facility information includes cases and revenues from our
consolidated and non-consolidated surgical facilities (excluding
facilities acquired in new markets or divested during the current
and prior periods). |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Segment Revenues: |
|
|
|
|
|
|
|
Surgical facility services |
$ |
650.2 |
|
$ |
597.9 |
|
$ |
1,299.2 |
|
$ |
1,176.7 |
Ancillary services |
|
17.4 |
|
|
17.5 |
|
|
34.6 |
|
|
34.9 |
Total revenues |
$ |
667.6 |
|
$ |
615.4 |
|
$ |
1,333.8 |
|
$ |
1,211.6 |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
Surgical facility services |
$ |
126.7 |
|
|
$ |
108.7 |
|
|
$ |
245.5 |
|
|
$ |
209.7 |
|
Ancillary services |
|
(0.1 |
) |
|
|
(0.8 |
) |
|
|
(1.5 |
) |
|
|
(0.7 |
) |
All other |
|
(26.4 |
) |
|
|
(21.8 |
) |
|
|
(53.7 |
) |
|
|
(45.8 |
) |
Total Adjusted EBITDA |
$ |
100.2 |
|
|
$ |
86.1 |
|
|
$ |
190.3 |
|
|
$ |
163.2 |
|
|
SURGERY PARTNERS, INC.Reconciliation of
Non-GAAP Financial Measures(Dollars in millions,
except per share amounts, shares in thousands) |
|
The following table reconciles Adjusted EBITDA and Adjusted EBITDA
excluding grant funds to income before income taxes in the reported
condensed consolidated financial information, the most directly
comparable GAAP financial measure: |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
Income before income taxes |
$ |
49.9 |
|
|
$ |
19.6 |
|
|
$ |
49.5 |
|
|
$ |
63.7 |
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling interests |
|
(38.8 |
) |
|
|
(33.7 |
) |
|
|
(64.9 |
) |
|
|
(64.3 |
) |
Interest expense, net |
|
47.7 |
|
|
|
56.9 |
|
|
|
94.5 |
|
|
|
113.2 |
|
Depreciation and amortization |
|
24.4 |
|
|
|
28.0 |
|
|
|
58.1 |
|
|
|
55.4 |
|
Equity-based compensation expense |
|
4.6 |
|
|
|
4.3 |
|
|
|
8.8 |
|
|
|
8.0 |
|
Transaction, integration and acquisition costs (1) |
|
13.0 |
|
|
|
8.2 |
|
|
|
25.8 |
|
|
|
15.3 |
|
Net (gain) loss on disposals, consolidations and
deconsolidations |
|
(8.8 |
) |
|
|
1.1 |
|
|
|
1.7 |
|
|
|
1.0 |
|
Litigation settlements and regulatory change impact (2) |
|
1.7 |
|
|
|
1.7 |
|
|
|
9.7 |
|
|
|
(29.1 |
) |
Undesignated derivative activity |
|
— |
|
|
|
— |
|
|
|
0.6 |
|
|
|
— |
|
Other (3) |
|
6.5 |
|
|
|
— |
|
|
|
6.5 |
|
|
|
— |
|
Adjusted EBITDA (4) |
$ |
100.2 |
|
|
$ |
86.1 |
|
|
$ |
190.3 |
|
|
$ |
163.2 |
|
Less: Impact of grant funds (5) |
|
— |
|
|
|
(0.1 |
) |
|
|
(1.1 |
) |
|
|
(1.1 |
) |
Adjusted EBITDA excluding grant funds |
$ |
100.2 |
|
|
$ |
86.0 |
|
|
$ |
189.2 |
|
|
$ |
162.1 |
|
|
(1) This amount includes transaction and integration costs of $12.0
million and $8.2 million for the three months ended June 30,
2023 and 2022, respectively. This amount further includes start-up
costs related to de novo surgical facilities of $1.0 million for
the three months ended June 30, 2023, with no comparable costs
for the three months ended June 30, 2022.This amount includes
transaction and integration costs of $24.5 million and $15.3
million for the six months ended June 30, 2023 and 2022,
respectively. This amount further includes start-up costs related
to de novo surgical facilities of $1.3 million for the six months
ended June 30, 2023, with no comparable costs for the six
months ended June 30, 2022. |
|
(2) This amount includes a litigation settlement loss of $1.5
million for the three months ended June 30, 2023, with no
comparable costs for the three months ended June 30, 2022. This
amount also includes other litigation costs of $0.2 million and
$1.7 million for the three months ended June 30, 2023 and
2022, respectively.This amount includes a litigation settlement
loss of $4.5 million and a gain of $32.8 million for the six months
ended June 30, 2023 and 2022, respectively. This amount also
includes other litigation costs of $0.8 million and $3.7 million
for the six months ended June 30, 2023 and 2022, respectively.
Additionally, the six months ended June 30, 2023, includes
$4.4 million related to the impact of recent changes in Florida law
regarding the use of letters of protection. |
|
(3) This amount includes estimates for the net impact of a cyber
event and losses from divested businesses. |
|
(4) We use Adjusted EBITDA as a measure of financial performance.
Adjusted EBITDA is a key measure used by management to assess
operating performance, make business decisions and allocate
resources. Non-controlling interests represent the interests of
third parties, such as physicians, and in some cases, healthcare
systems that own an interest in surgical facilities that we
consolidate for financial reporting purposes. We believe that it is
helpful to investors to present Adjusted EBITDA as defined above
because it excludes the portion of net income attributable to these
third-party interests and clarifies for investors our portion of
Adjusted EBITDA generated by our surgical facilities and other
operations. Adjusted EBITDA is not a measurement of financial
performance under GAAP, and should not be considered in isolation
or as a substitute for net income, operating income or any other
measure calculated in accordance with GAAP. The items excluded from
Adjusted EBITDA are significant components in understanding and
evaluating our financial performance. We believe such adjustments
are appropriate, as the magnitude and frequency of such items can
vary significantly and are not related to the assessment of normal
operating performance. Our calculation of Adjusted EBITDA may not
be comparable to similarly titled measures reported by other
companies. |
|
(5) Represents the impact of grant funds recognized, net of amounts
attributable to non-controlling interests. |
|
The following table reconciles Free Cash Flow to
net cash provided by operating activities in the reported condensed
consolidated financial information, the most directly comparable
GAAP financial measure:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2023 |
|
|
|
|
|
Net cash provided by operating activities |
$ |
52.1 |
|
|
$ |
126.6 |
|
|
|
|
|
Less: Maintenance capital expenditures |
|
(9.4 |
) |
|
|
(21.5 |
) |
Less: Distributions to non-controlling interest holders |
|
(35.0 |
) |
|
|
(76.9 |
) |
Free Cash Flow (1) |
$ |
7.7 |
|
|
$ |
28.2 |
|
|
|
|
|
Growth capital expenditures |
|
(16.4 |
) |
|
|
(28.6 |
) |
Maintenance capital expenditures |
|
(9.4 |
) |
|
|
(21.5 |
) |
Purchases of property and equipment |
$ |
(25.8 |
) |
|
$ |
(50.1 |
) |
|
(1) Free Cash Flow is defined as cash flow provided by operating
activities, less distributions to non-controlling interest holders
and less maintenance capital expenditures, which are capital
expenditures primarily to maintain our existing facilities. We use
the non-GAAP measure of Free Cash Flow as a measure of liquidity to
determine amounts we can reinvest in our core businesses, such as
amounts available to make acquisitions and invest in growth
projects. In order to provide a meaningful basis for comparison, we
are providing information with respect to our Free Cash Flow for
the three and six months ended June 30, 2023, reconciled to net
cash provided by operating activities, which we believe to be the
most directly comparable measure under GAAP. We are not presenting
the comparative prior year period since we did not track capital
expenditures in this manner prior to the current fiscal year. Our
calculation of Free Cash Flow may not be comparable to similarly
titled measures reported by other companies. |
|
From time to time, the Company incurs certain
non-recurring gains or losses that are normally non-operational in
nature and that it does not consider relevant in assessing its
ongoing operating performance. When significant, Surgery Partners’
management and Board of Directors typically exclude these gains or
losses when evaluating the Company’s operating performance and in
certain instances when evaluating performance for incentive
compensation purposes. Additionally, the Company believes that
certain investors and equity analysts exclude these or similar
items when evaluating the Company’s current or future operating
performance and in making informed investment decisions regarding
the Company. Accordingly, the Company provides adjusted net income
(loss) attributable to common stockholders and adjusted net income
(loss) per share attributable to common stockholders as supplements
to the comparable GAAP financial measures. Adjusted net income
(loss) attributable to common stockholders and adjusted net income
(loss) per share attributable to common stockholders should not be
considered measures of financial performance under GAAP, and the
items excluded from such measures are significant components in
understanding and assessing financial performance. These measures
should not be considered in isolation or as an alternative to the
comparable GAAP financial measures as presented in the consolidated
financial statements.
The following table reconciles net income as
reflected in the consolidated statements of operations to adjusted
net income (loss) attributable to common stockholders used to
calculate adjusted net income (loss) per share attributable to
common stockholders:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Consolidated Statements of Operations Data: |
|
|
|
|
|
|
|
Net income |
$ |
57.7 |
|
|
$ |
15.3 |
|
|
$ |
58.9 |
|
|
$ |
58.1 |
|
Plus (minus): |
|
|
|
|
|
|
|
Net income attributable to non-controlling interests |
|
(38.8 |
) |
|
|
(33.7 |
) |
|
|
(64.9 |
) |
|
|
(64.3 |
) |
Equity-based compensation expense |
|
4.6 |
|
|
|
4.3 |
|
|
|
8.8 |
|
|
|
8.0 |
|
Transaction, integration and acquisition costs |
|
13.0 |
|
|
|
8.2 |
|
|
|
25.8 |
|
|
|
15.3 |
|
Net (gain) loss on disposals, consolidations and
deconsolidations |
|
(8.8 |
) |
|
|
1.1 |
|
|
|
1.7 |
|
|
|
1.0 |
|
Litigation settlements and regulatory change impact |
|
1.7 |
|
|
|
1.7 |
|
|
|
9.7 |
|
|
|
(29.1 |
) |
Other (1) |
|
6.5 |
|
|
|
— |
|
|
|
6.5 |
|
|
|
— |
|
Adjusted net income (loss) attributable to common stockholders |
$ |
35.9 |
|
|
$ |
(3.1 |
) |
|
$ |
46.5 |
|
|
$ |
(11.0 |
) |
|
|
|
|
|
|
|
|
Adjusted net income (loss) per share attributable to common
stockholders |
|
|
|
|
|
|
|
Basic |
$ |
0.29 |
|
|
$ |
(0.03 |
) |
|
$ |
0.37 |
|
|
$ |
(0.12 |
) |
Diluted (2) |
$ |
0.28 |
|
|
$ |
(0.03 |
) |
|
$ |
0.37 |
|
|
$ |
(0.12 |
) |
Weighted average common shares outstanding |
|
|
|
|
|
|
|
Basic |
|
125,718 |
|
|
|
88,900 |
|
|
|
125,463 |
|
|
|
88,450 |
|
Diluted (2) |
|
127,370 |
|
|
|
88,900 |
|
|
|
127,017 |
|
|
|
88,450 |
|
|
(1) This amount
includes estimates for the net impact of a cyber event and losses
from divested businesses. |
(2) The impact of
potentially dilutive securities for the three and six months ended
June 30, 2022, was not considered because the effect would be
anti-dilutive. |
|
Contact
Surgery Partners Investor Relations (615) 234-8940
IR@surgerypartners.com
Surgery Partners (NASDAQ:SGRY)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Surgery Partners (NASDAQ:SGRY)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024