BRENTWOOD, Tenn., May 07, 2024 (GLOBE NEWSWIRE) -- Surgery Partners, Inc. (NASDAQ:SGRY) ("Surgery Partners" or the "Company"), a leading short-stay surgical facility owner and operator, today announced results for the first quarter ended March 31, 2024. Revenues increased 7.7% to $717.4 million compared to the prior year period Same-facility revenues increased 10.2% Net loss attributable to Surgery Partners, Inc. was $12.4 million Adjusted EBITDA was $97.5 million, representing 8.2% growth compared to the prior year period Adjusted EBITDA margin improved year-over-year to 13.6% Full year guidance raised to at least $3.05 billion in revenue and at least $505 million in Adjusted EBITDA Wayne DeVeydt, Executive Chairman of the Board of Surgery Partners, noted, "We are proud to report strong growth in Adjusted EBITDA and revenue, both ahead of our expectations. We achieved these results by continuing to focus on exceptional clinical quality and value, operational execution and the strategic impact of physician recruiting and acquisitions. Our same-facility revenue growth in excess of 10% continues to demonstrate our performance outpacing our long-term growth algorithm." Eric Evans, Chief Executive Officer, stated, "In addition to the strength of our quarter, we closed on a number of targeted acquisitions in late April, including a large system acquisition that includes a specialty surgery hospital, ASC and physician practices. Our year-to-date acquisitions, robust de novo pipeline, as well as execution on all of our key growth levers gives us confidence in our continued future growth including our ability to raise our 2024 revenue and Adjusted EBITDA guidance." Dave Doherty, Chief Financial Officer, commented, "During the past six months, we completed multiple capital market transactions to enhance our balance sheet while providing further upside in an improving rate environment. With strong market support, we refinanced our term loan, increased our revolver, refinanced our unsecured senior notes and recently we entered into forward starting interest rate caps to hedge our future interest rate exposure. We now have no material debt maturities until 2030 and have capped our interest rate exposure." First Quarter 2024 Results Revenues for the first quarter of 2024 increased 7.7% to $717.4 million from $666.2 million for the first quarter of 2023. Same-facility revenues for the first quarter of 2024 increased 10.2% from the same period last year, with an 8.8% increase in revenue per case and a 1.3% increase in same-facility cases. For the first quarter of 2024, the Company's Adjusted EBITDA was $97.5 million, compared to $90.1 million for the same period last year. Liquidity Surgery Partners had cash and cash equivalents of $185.2 million and $607.3 million of borrowing capacity under its revolving credit facility at March 31, 2024. Cash flows from operating activities was $40.7 million for the first quarter of 2024, compared to $74.5 million in the prior year quarter. The year-over-year change is due to the timing of receivable collections, the majority of which has been received or is expected to be received in the second/early third quarter of 2024. The Company continues to expect strong operating and free cash flow growth over 2023. The Company's ratio of total net debt to EBITDA, as calculated under the Company's credit agreement, was approximately 3.5x at the end of the first quarter of 2024. 2024 Outlook The Company raised its outlook for 2024 revenues to be at least $3.05 billion and projects 2024 Adjusted EBITDA to be at least $505 million. Conference Call Information Surgery Partners will hold a conference call today, May 7, 2024 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 13746011. The replay will be available until May 21, 2024. 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 33 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; the impact of cybersecurity attacks or intrusions, 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, 2023 and other reports filed with the SEC. 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 related to unconsolidated affiliates, 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)(Unaudited)       Three Months Ended March 31,       2024       2023             Revenues   $ 717.4     $ 666.2   Operating expenses:         Salaries and benefits     215.2       202.2   Supplies     188.8       188.4   Professional and medical fees     82.6       74.6   Lease expense     21.4       21.4   Other operating expenses     54.1       45.6   Cost of revenues     562.1       532.2   General and administrative expenses     33.2       32.0   Depreciation and amortization     33.7       33.7   Transaction and integration costs     17.4       12.5   Net loss on disposals, consolidations and deconsolidations     1.5       10.5   Equity in earnings of unconsolidated affiliates     (2.7 )     (3.3 ) Litigation settlement     (1.8 )     3.0   Other income, net     (2.0 )     (0.8 )       641.4       619.8   Operating income     76.0       46.4   Interest expense, net     (47.3 )     (46.8 ) Income (loss) before income taxes     28.7       (0.4 ) Income tax (expense) benefit     (4.4 )     1.6   Net income     24.3       1.2   Less: Net income attributable to non-controlling interests     (36.7 )     (26.1 ) Net loss attributable to Surgery Partners, Inc.   $ (12.4 )   $ (24.9 )           Net loss per share attributable to common stockholders         Basic   $ (0.10 )   $ (0.20 ) Diluted (1)   $ (0.10 )   $ (0.20 ) Weighted average common shares outstanding         Basic     125,972       125,206   Diluted (1)     125,972       125,206   (1) The impact of potentially dilutive securities for all periods 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)(Unaudited)       March 31,2024