Surgery Partners, Inc. (NASDAQ:SGRY) (“Surgery Partners” or the “Company”), a leading provider of surgical services at facilities such as Cool Springs Surgery Center on Mallory Lane in Franklin, and Spring Hill Surgery Center on Reserve Boulevard in Spring Hill, on Wednesday announced results for the third quarter ended September 30, 2018.
- Revenues increased 44.9% to $443.9 million
- Same store revenues increased 11.4% over prior period
- Surgical cases increased 13.9% to 127,199
- Net loss attributable to common stockholders of $29.2 million
- Adjusted EBITDA increased 153.8% to $59.0 million
- Diluted net loss per share of $(0.61)
- Adjusts full year 2018 Adjusted EBITDA guidance to $230 million – $235 million
Wayne DeVeydt, Chief Executive Officer of Surgery Partners, stated, “Our third quarter results were highlighted by strong year over year revenue and surgical case growth, as well as same store volume growth, a trend which has carried over into October. We continue to advance our agenda both operationally and strategically, as we remain focused on pruning the portfolio, investing in our platforms and processes and deploying capital to continue to execute on our inorganic growth opportunities.”
Mr. DeVeydt continued, “Looking ahead to 2019, we firmly believe that the investments we have made in 2018 will drive organic growth across our business and leave us well positioned to make real progress towards our goal of becoming the trusted partner of choice for operating short stay surgical facilities across the United States.”
Tom Cowhey, Chief Financial Officer of Surgery Partners, commented, “Third quarter results demonstrated good progress as we reposition the company for growth in 2019. However, when we considered the seasonal increases that were required to hit our previous projection, coupled with our pruning efforts and continued growth investments, we made a decision to lower our 2018 Adjusted EBITDA projection to a range of $230 to $235 million.”
Third Quarter 2018 Results
Total revenues for the third quarter of 2018 increased 44.9% to $443.9 million from $306.3 million for the third quarter of 2017. Same-facility revenues for the third quarter of 2018 increased 11.4% from the same period last year, with a 10.5% increase in revenue per case and a 0.9% increase in same facility cases. For the third quarter of 2018, the Company’s net loss attributable to common stockholders was $29.2 million compared to $31.8 million for the same period last year. For the third quarter of 2018, the Company’s Adjusted EBITDA increased 153.8% to $59.0 million compared to $23.2 million for the same period last year.
Year to Date 2018 Results
Total revenues year to date 2018 increased 48.3% to $1,306.1 million from $880.9 million for the same period last year. Same-facility revenues year to date 2018 increased 4.6% from the same period last year, with a 6.2% increase in revenue per case offset by a 1.5% decrease in same facility cases. For year to date 2018, the Company’s net loss attributable to common stockholders was $81.9 million compared to $39.0 million for the same period last year. For year to date 2018, the Company’s Adjusted EBITDA increased 60.8% to $161.5 million compared to $100.4 million for the same period last year.
Surgery Partners had cash and cash equivalents of $79.1 million at September 30, 2018 and availability of approximately $60.5 million under its revolving credit facility. Net operating cash inflow, including operating cash flow less distributions to non-controlling interests, was $5.1 million for the third quarter of 2018. The Company’s ratio of total net debt to EBITDA, as calculated under the Company’s credit agreement was 7.75x at the end of the third quarter of 2018.
The Company is revising its full-year 2018 guidance to revenue in the range of $1.75 to $1.80 billion and Adjusted EBITDA in the range of $230 million to $235 million. The Company now expects to deploy at least $100 million in capital for acquisitions in FY’18.
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, a diagnostic laboratory, multi-specialty physician practices and urgent care facilities. For additional information, visit www.surgerypartners.com.