News Release Details
Surgery Partners, Inc. Announces First Quarter 2016 Results
May 5, 2016
- Revenues increased 19.2% over first quarter 2015 to
$267.1 million - Same-facility revenue increased 13.3% over first quarter 2015 to
$259.7 million - Adjusted EBITDA increased 6.8% over first quarter 2015 to
$38.4 million
“The first quarter of 2016 continued the momentum we enjoyed in 2015, with solid operating performance and further expansion of our network of surgical facilities, physician practices and ancillary services,” said
“During the first quarter we completed three in-market transactions, including two in-market physician practices and one in-market surgical facility. Subsequent to quarter end, we continue to focus on our in-market strategy completing a platform transaction in
As of March 31, 2016, the Company owned or operated 101 surgical facilities primarily in partnership with physicians and, on a select basis, physicians and health systems, in addition to a network of 48 physician practices.
First Quarter 2016 Results
Total revenues for the first quarter of 2016 increased 19.2% to
For the first quarter of 2016, the Company’s Adjusted EBITDA was
Liquidity
Full Year 2016 Guidance
For 2016, the Company reiterates the guidance provided on our conference call in March of this year. The Company continues to expect Adjusted EBITDA in the range of
Conference Call Information
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 on-line replay will remain available for a limited time beginning immediately following the call.
To learn more about
Forward-Looking Statements
This press release contains forward-looking statements 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. These statements, which have been included in reliance of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, involve risks and uncertainties and assumptions relating to our operations, financial condition, business, prospects, growth strategy and liquidity, which may cause our actual results to differ materially from those projected by such forward-looking statements, and the Company cannot give assurances that such statements will prove to be correct. You can identify forward-looking statements because they do not relate strictly to historical or current facts. These statements may include words such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “outlook,” “potential,” “project,” “projection,” “plan,” “intend,” “seek,” “may,” “could,” “would,” “will,” “should,” “can,” “can have,” “likely,” the negatives thereof and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.
The forward-looking statements appear in a number of places throughout this press release and include statements regarding our intentions, beliefs or current expectations concerning, among other things, our results of operations, financial condition, liquidity, prospects, growth, strategies and the industry in which we operate. All forward-looking statements are subject to risks and uncertainties, including but not limited to those risks and uncertainties described in “Risk Factors” in our Annual Report on form 10-K for the year ended
The forward-looking statements made in this press release are made only as of the date of the hereof. Except as required by law, we undertake no obligation to update any forward-looking statement, whether as a result of new information or otherwise. More information about potential factors that could affect our business and financial results is included in our filings with the Securities and Exchange Commission.
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,
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 those 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 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.
About Surgery Partners
Headquartered in
| SURGERY PARTNERS, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (Amounts in thousands, except shares and per share amounts) | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2016 | 2015 | |||||||
| Revenues | $ | 267,074 | $ | 224,143 | ||||
| Operating expenses: | ||||||||
| Salaries and benefits | 86,886 | 60,151 | ||||||
| Supplies | 63,662 | 57,086 | ||||||
| Professional and medical fees | 19,654 | 14,740 | ||||||
| Lease expense | 12,434 | 10,960 | ||||||
| Other operating expenses | 14,067 | 12,836 | ||||||
| Cost of revenues | 196,703 | 155,773 | ||||||
| General and administrative expenses | 12,197 | 11,862 | ||||||
| Depreciation and amortization | 9,568 | 8,462 | ||||||
| Provision for doubtful accounts | 3,873 | 5,186 | ||||||
| Income from equity investments | (758 | ) | (707 | ) | ||||
| (Gain) loss on disposal or impairment of long-lived assets, net | (206 | ) | 223 | |||||
| Loss on debt refinancing | 8,281 | — | ||||||
| Merger transaction and integration costs | 3,172 | 5,006 | ||||||
| Electronic health records incentive income | (93 | ) | — | |||||
| Other expense (income) | 57 | (13 | ) | |||||
| Total operating expenses | 232,794 | 185,792 | ||||||
| Operating income | 34,280 | 38,351 | ||||||
| Interest expense, net | (22,153 | ) | (25,756 | ) | ||||
| Income before income taxes | 12,127 | 12,595 | ||||||
| Income tax expense | 1,770 | 2,107 | ||||||
| Net income | 10,357 | 10,488 | ||||||
| Less: Net income attributable to non-controlling interests | (17,547 | ) | (17,250 | ) | ||||
| Net loss attributable to Surgery Partners, Inc. | $ | (7,190 | ) | $ | (6,762 | ) | ||
| Net loss per share attributable to common stockholders | ||||||||
| Basic | $ | (0.15 | ) | $ | (0.21 | ) | ||
| Diluted (1) | $ | (0.15 | ) | $ | (0.21 | ) | ||
| Weighted average common shares outstanding | ||||||||
| Basic | 48,017,226 | 32,054,089 | ||||||
| Diluted (1) | 48,017,226 | 32,054,089 | ||||||
| (1) The impact of potentially dilutive securities for the three months March 31, 2016 and 2015 was not considered because the effect would be anti-dilutive in each of those periods. | ||||||||
| SURGERY PARTNERS, INC. | ||||||||
| Unaudited Selected Financial and Operating Data | ||||||||
| (Amounts in thousands, except shares and per share amounts) | ||||||||
| March 31, 2016 | December 31, 2015 | |||||||
| Balance Sheet Data (at period end): | ||||||||
| Cash and cash equivalents | $ | 135,047 | $ | 57,933 | ||||
| Total current assets | 394,886 | 310,957 | ||||||
| Total assets | 2,202,340 | 2,104,443 | ||||||
| Current maturities of long-term debt | 27,169 | 27,247 | ||||||
| Total current liabilities | 183,781 | 181,289 | ||||||
| Long-term debt, less current maturities | 1,328,739 | 1,228,112 | ||||||
| Total liabilities | 1,727,078 | 1,623,077 | ||||||
| Total Surgery Partners, Inc. stockholders' deficit | (9,887 | ) | (4,028 | ) | ||||
| Noncontrolling interests--non-redeemable | 302,121 | 301,955 | ||||||
| Total stockholders' equity | 292,234 | 297,927 | ||||||
| Three Months Ended March 31, | ||||||||
| 2016 | 2015 | |||||||
| Cash Flow Data: | ||||||||
| Net cash provided by (used in): | ||||||||
| Operating activities | $ | 25,244 | $ | 9,514 | ||||
| Investing activities | (18,853 | ) | (5,196 | ) | ||||
| Capital expenditures | (11,804 | ) | (5,461 | ) | ||||
| Investments in new businesses | (7,049 | ) | (8,102 | ) | ||||
| Financing activities | 70,723 | (22,794 | ) | |||||
| Distributions to noncontrolling interests | (17,513 | ) | (16,059 | ) | ||||
| Three Months Ended March 31, | ||||||||
| 2016 | 2015 | |||||||
| Other Data: | ||||||||
| Cases | 100,756 | 91,208 | ||||||
| Revenue per case | $ | 2,651 | $ | 2,457 | ||||
| Adjusted EBITDA | $ | 38,426 | $ | 35,968 | ||||
| Adjusted EBITDA as a % of revenues | 14.4 | % | 16.0 | % | ||||
| Number of surgical facilities as of the end of period | 101 | 102 | ||||||
| Number of consolidated surgical facilities as of the end of period | 90 | 90 | ||||||
| SURGERY PARTNERS, INC. | ||||||||
| Supplemental Information | ||||||||
| (Unaudited, in thousands, except cases and growth rates) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2016 | 2015 | |||||||
| Same-facility Information: (2) | ||||||||
| Cases | 103,296 | 92,574 | ||||||
| Case growth | 11.6 | % | N/A | |||||
| Revenue per case | $ | 2,514 | $ | 2,476 | ||||
| Revenue per case growth | 1.5 | % | N/A | |||||
| (2) Includes cases and revenues from non-consolidated facilities. | ||||||||
| Three Months Ended March 31, | ||||||||
| 2016 |
2015 |
|||||||
| Segment Revenues: | ||||||||
| Surgical facility services | $ | 245,670 | $ | 207,684 | ||||
| Ancillary services | 17,780 | 12,719 | ||||||
| Optical services | 3,624 | 3,740 | ||||||
| Total revenues | $ | 267,074 | $ | 224,143 | ||||
| Three Months Ended March 31, | ||||||||
| 2016 |
2015 |
|||||||
| Segment Operating Income: | ||||||||
| Surgical facility services | $ | 56,201 | $ | 52,253 | ||||
| Ancillary services | 2,458 | 3,442 | ||||||
| Optical services | 506 | 610 | ||||||
| Total | $ | 59,165 | $ | 56,305 | ||||
| General and administrative | $ | (13,638 | ) | $ | (12,725 | ) | ||
| Gain (loss) on disposal or impairment of long-lived assets, net | 206 | (223 | ) | |||||
| Loss on debt extinguishment | (8,281 | ) | — | |||||
| Merger transaction and integration costs | (3,172 | ) | (5,006 | ) | ||||
| Total operating income | $ | 34,280 | $ | 38,351 | ||||
| SURGERY PARTNERS, INC. | ||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||
| (Unaudited, Amounts in thousands) | ||||||||
| Three Months Ended March 31, | ||||||||
| 2016 | 2015 | |||||||
| Consolidated Statements of Operations Data (in thousands): | ||||||||
| Net income | $ | 10,357 | $ | 10,488 | ||||
| (Minus): | ||||||||
| Net income attributable to non-controlling interests | 17,547 | 17,250 | ||||||
| Plus (minus): | ||||||||
| Income tax expense | 1,770 | 2,107 | ||||||
| Interest and other expense, net | 22,153 | 25,756 | ||||||
| Depreciation and amortization | 9,568 | 8,462 | ||||||
| EBITDA | 26,301 | 29,563 | ||||||
| Plus: | ||||||||
| Management fee (5) | — | 750 | ||||||
| Merger transaction, integration and practice acquisition costs | 3,917 | 5,006 | ||||||
| Non-cash stock compensation expense | 133 | 426 | ||||||
| Loss on debt refinancing | 8,281 | — | ||||||
| (Gain) loss on disposal of investments and long-lived assets, net | (206 | ) | 223 | |||||
| Adjusted EBITDA | $ | 38,426 | $ | 35,968 | ||||
| (5) Fee payable pursuant to the Management and Investment Advisory Services Agreement between the Company and Bayside Capital, Inc., which was terminated in connection with our IPO. | ||||||||
ContactTeresa Sparks , CFOSurgery Partners, Inc. (615) 234-8940 IR@surgerypartners.com