Surgery Partners,Inc. (NASDAQ:SGRY) Files An 8-K Results of Operations and Financial ConditionItem 2.02 Results of Operations and Financial Condition.
On October11, 2018, Surgery Partners,Inc. (“Surgery Partners” or the “Company”) announced that it intends to raise $115 million of Incremental Term Loans (the “Incremental Term Loans”) to fund an existing pipeline of potential transactions and to replenish proceeds spent in the first half of 2018.
While the Company is still in the process of closing its third quarter ended September30, 2018, in connection with the Incremental Term Loans, the Company is providing investors with the following preliminary unaudited estimates for the quarter:
· Surgical case volumes are projected to be in the range of 126,000 to 128,000 cases
· Same store revenues are projected to be up in the range of 9% to 11%, with modestly positive case volume growth and strong net revenue per case growth
· Revenues are expected to be in the range of $435 to $445 million
· Adjusted EBITDA is expected to be in the range of $57 to $60 million
· Credit Agreement EBITDA is expected to be in the range of $259 to $262 million
Preliminary Unaudited Selected Financial Data
These preliminary expectations regarding surgical case volumes, same store and total revenues and Adjusted EBITDA and Credit Agreement EBITDA for the quarter ended September30, 2018 are the responsibility of management and are subject to quarter end and year-end adjustments in connection with the completion of our customary financial closing procedures, including management’s review and finalization and to accounting review procedures by our independent registered public accounting firm, which have not yet been performed. Consequently, the results should not be viewed as a substitute for our earnings release and Quarterly Report on Form10-Q, which are expected to be released no later than November9, 2018. Actual results may differ materially from our preliminary expectations.
Non-GAAP Financial Measures
Adjusted EBITDA and Credit Agreement EBITDA are financial measures that have not been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and the Company’s definition and computation of these non-GAAP financial measures may vary from those used by other companies. These measures have limitations as analytical tools, 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.
The Company defines the term “Adjusted EBITDA” as income before income taxes adjusted for net income attributable to non-controlling interests, depreciation and amortization, interest expense, net, equity-based compensation expense, contingent acquisition compensation expense, transaction, integration and acquisition costs, reserve adjustments, loss on disposals and de-consolidations, net, gain on litigation settlements and certain other items that we do not believe are representative of our ongoing operations. Credit Agreement Adjusted EBITDA refers to Adjusted EBITDA further adjusted for the impact of hurricanes, synergies and certain other adjustments. The Company is unable to present a quantitative reconciliation of Adjusted EBITDA and Credit Agreement EBITDA to net income/loss for the period presented because management cannot reasonably predict with sufficient reliability all of the necessary components of net income/loss for the periods presented. The Company has excluded the items reflected in the definition of Adjusted EBITDA and Credit Agreement EBITDA above from its projected Adjusted EBITDA and Credit Agreement EBITDA for the period presented and is likely to exclude these
items from Adjusted EBITDA and Credit Agreement EBITDA in the future and may also exclude other similar items, the effect of which is uncertain but may be significant in amount. The determination of the amounts that are excluded from non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts.
Certain statements, including statements regarding the Incremental Term Loan, including its anticipated amount and use of proceeds, are forward-looking statements. These statements are subject to risks and uncertainties, including, without limitation, that we may not be able to consummate the Incremental Term Loan transaction on the terms or timeline anticipated, if at all, and, even if the Incremental Term Loan is consummated, we may not be able to consummate acquisitions in the pipeline on commercially reasonable terms, or at all. Management retains broad discretion to use the proceeds of any potential Incremental Term Loan. See also the other factors set forth under “Risk Factors” in the Company’s Annual Report on Form10-K for fiscal year 2017 filed with the Securities and Exchange Commission (the “SEC”) and other information we file with the SEC, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Quarterly Report on Form10-Q for the fiscal quarter ending June30, 2018. You should read the Company’s annual and quarterly reports, when available, and any and all other filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. The forward-looking statements contained in this Current Report speak only as of the date of filing, and the Company undertakes no obligation to update or revise any forward-looking statements for any reason, except as required by law. The business of the Company is subject to substantial risks and uncertainties, including those referenced above. Investors, potential investors, and others should give careful consideration to these risks and uncertainties and should not place considerable reliance on the forward-looking statements contained herein.
Item 2.02 Regulation FD Disclosure
In connection with the Incremental Term Loan described above, the Company intends to make a presentation to prospective lenders. Company is furnishing this presentation as Exhibit99.1. The information in this Current Report and the exhibit hereto are being furnished and shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934 (the Exchange Act) or otherwise subject to the liabilities under that Sectionand shall not be deemed to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933 or the Exchange Act.
Item 2.02 Financial Statements and Exhibits.
October2018 Lender Presentation
Surgery Partners, Inc. ExhibitEX-99.1 2 a18-36612_1ex99d1.htm EX-99.1 Exhibit 99.1 Lender Presentation October 2018 Legal Disclaimer Forward-Looking Statements Statements contained in this presentation,…To view the full exhibit click
About Surgery Partners,Inc. (NASDAQ:SGRY)
Surgery Partners, Inc. is a healthcare services company. The Company operates in three lines of business across the United States: Surgical Facility Services, Ancillary Services and Optical Services. The Company’s Surgical Facility Services segment consists of the operation of ambulatory surgery centers (ASCs) and surgical hospitals, which include its anesthesia services. The Company’s Ancillary Services segment consists of a diagnostic laboratory, a specialty pharmacy and multi-specialty physician practices. The Company’s physician practices include its owned and operated physician practices pursuant to management service agreements. The Company’s optical services segment consists of an optical laboratory, an optical products group purchasing organization and a marketing business. The Company’s optical laboratory manufactures eyewear, while its optical product purchasing organization negotiates volume buying discounts with optical product manufacturers.
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