The press release issued by Surgery Partners, Inc. (NASDAQ:SGRY) on
August 9, 2016, contained a typographical error in the calculation
of adjusted net income for the quarter ended June 30, 2016. The
Company’s adjusted net income for the three and six months ended
June 30, 2016 was $7.7 million and $12.6 million, respectively,
instead of $7.5 million and $12.5 million as initially reported. No
other numbers were impacted by this change. The complete corrected
text follows.
Surgery Partners, Inc. Announces Second
Quarter 2016 Results
Revenues increase 24% over prior year
period driven by strong same-facility revenue growth of
15%
Surgery Partners, Inc. (NASDAQ:SGRY) ("Surgery
Partners" or the "Company"), a leading provider of surgical
services, today announced results for the second quarter
ended June 30, 2016.
- Revenues increased 24.4% over second quarter 2015 to $289.7
million
- Same-facility revenue increased 14.9% over second quarter 2015
to $279.7 million
- Net income attributable to Surgery Partners increased 139.1%
over second quarter 2015 to $2.1 million
- Adjusted EBITDA increased 19.6% over second quarter 2015 to
$46.0 million
- Diluted net income per share of $0.04 vs. $(0.17) in second
quarter 2015
- Adjusted diluted net income per share of $0.16 vs. $0.04 in
second quarter 2015
“I am pleased to report another strong quarter with solid case
growth,” said Michael Doyle, Chief Executive Officer of Surgery
Partners. “The positive results reflect the excellent quality
of services delivered by our physician partners and staff and the
favorable reception by patients and payors. We continue to
see significant opportunities for growth at our existing facilities
and for further expansion.”
“Through a combination of transactions in both existing and new
markets, we continue to successfully execute our strategy of
focused growth through an integrated outpatient healthcare delivery
model. We completed five transactions during the quarter. As
previously announced, we closed on a platform transaction in
Jacksonville, FL that bolstered our position in that market by
adding a second ambulatory surgery center, an integrated physician
practice and related ancillary services. We also acquired an
ambulatory surgery center and anesthesia practice in Houston, which
will be our fifth market in Texas. Finally, we added two in-market
physician practices and an urgent care facility in two of our
existing markets.”
As of June 30, 2016, the Company owned or operated 103
surgical facilities primarily in partnership with physicians and,
on a select basis, physicians and health systems. In addition, the
Company provides anesthesia services to over 45 locations and
operates 51 physician practices.
Second Quarter 2016 Results
Total revenues for the second quarter of 2016 increased 24.4% to
$289.7 million from $232.8 million for the second quarter of 2015.
Same-facility revenues for the second quarter of 2016 increased
14.9% to $279.7 million from $243.5 million in the same period last
year. Results were driven by increased same-facility cases of
7.9%.
For the second quarter of 2016, the Company’s net income
attributable to Surgery Partners increased 139.1% to $2.1 million
compared to a net loss attributable to Surgery Partners of $5.4
million for the same period last year. For the second quarter of
2016, the Company’s Adjusted EBITDA increased 19.6% to $46.0
million compared to Adjusted EBITDA of $38.5 million for the same
period last year.
Year To Date 2016 Results
Total revenues year to date 2016 increased 21.8% to $556.8
million from $457.0 million for the same period last year.
Same-facility revenues for year to date 2016 increased 14.2% to
$536.7 million from $469.9 million in the same period last
year. Results were driven by increased same-facility cases of
9.8%.
For year to date 2016, the Company’s net loss attributable to
Surgery Partners decreased 58.4% to $5.1 million compared to net
loss attributable to Surgery Partners of $12.2 million for the same
period last year. For year to date 2016, the Company’s Adjusted
EBITDA increased 13.5% to $84.5 million compared to Adjusted EBITDA
of $74.4 million for the same period last year.
Liquidity
At June 30, 2016, Surgery Partners had cash and cash
equivalents of $51.6 million and availability of $146.9 million
under its revolving credit facility. Net operating cash flow,
including operating cash flow less distributions to non-controlling
interests, was $33.9 million for the second quarter of 2016. As
expected, the Company’s ratio of total debt to EBITDA, as
calculated under the Company’s credit agreement, was 6.0x at the
end of the second quarter of 2016.
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 $184.0 million to $191.0
million representing growth of 16% to 21% over 2015.
Conference Call Information
Surgery Partners will hold its conference call tomorrow, August
10, 2016 at 8:30 a.m. (Eastern Time). The conference call can
be accessed live over the phone by dialing 1-877-407-0789, or for
international callers, 1-201-689-8562. A replay will be available
two hours after the call and can be accessed by dialing
1-877-870-5176, or for international callers, 1-858-384-5517. The
passcode for the live call and the replay is 13640836. The replay
will be available until August 24, 2016.
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 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.
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 December 31, 2015 that may cause
actual results to differ materially from those that we
expected.
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,
Surgery Partners has presented the following non-GAAP financial
measures: Adjusted EBITDA and adjusted net income per share, which
exclude various items detailed in the attached "Reconciliation of
Non-GAAP Financial Measures".
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, earnings per share or any other
measures of operating performance, liquidity or indebtedness
derived in accordance with GAAP.
About Surgery Partners
Headquartered in Nashville, 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 150 locations in
29 states, including ambulatory surgical facilities, surgical
hospitals, a diagnostic laboratory, multi-specialty physician
practices and urgent care facilities.
SURGERY PARTNERS, INC. |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Amounts in thousands, except shares and per
share amounts) |
(Unaudited) |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
289,681 |
|
|
$ |
232,827 |
|
|
$ |
556,755 |
|
|
$ |
456,970 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Salaries and benefits |
|
93,791 |
|
|
62,182 |
|
|
180,677 |
|
|
122,333 |
|
Supplies |
|
66,915 |
|
|
59,087 |
|
|
130,577 |
|
|
116,173 |
|
Professional and medical fees |
|
20,304 |
|
|
16,171 |
|
|
39,957 |
|
|
30,911 |
|
Lease expense |
|
13,074 |
|
|
11,096 |
|
|
25,508 |
|
|
22,056 |
|
Other operating expenses |
|
14,768 |
|
|
13,022 |
|
|
28,836 |
|
|
25,858 |
|
Cost of revenues |
|
208,852 |
|
|
161,558 |
|
|
405,555 |
|
|
317,331 |
|
General and administrative expenses
(includes acquisition compensation expense of $1,530 in 2016) |
|
15,023 |
|
|
11,846 |
|
|
27,220 |
|
|
23,708 |
|
Depreciation and amortization |
|
9,702 |
|
|
8,465 |
|
|
19,271 |
|
|
16,927 |
|
Provision for doubtful
accounts |
|
3,544 |
|
|
5,023 |
|
|
7,417 |
|
|
10,209 |
|
Income from equity investments |
|
(1,082 |
) |
|
(839 |
) |
|
(1,840 |
) |
|
(1,546 |
) |
Loss (gain) on disposal or
impairment of long-lived assets, net |
|
1,331 |
|
|
(2,906 |
) |
|
1,125 |
|
|
(2,683 |
) |
Loss on debt refinancing |
|
— |
|
|
— |
|
|
8,281 |
|
|
— |
|
Merger transaction and integration
costs |
|
1,325 |
|
|
8,642 |
|
|
4,497 |
|
|
13,648 |
|
Electronic health records incentive
income |
|
(2 |
) |
|
50 |
|
|
(95 |
) |
|
50 |
|
Other expense (income) |
|
40 |
|
|
(13 |
) |
|
97 |
|
|
(26 |
) |
Total operating expenses |
|
238,733 |
|
|
191,826 |
|
|
471,528 |
|
|
377,618 |
|
Operating income |
|
50,948 |
|
|
41,001 |
|
|
85,227 |
|
|
79,352 |
|
Interest expense,
net |
|
(26,235 |
) |
|
(26,178 |
) |
|
(48,388 |
) |
|
(51,934 |
) |
Income before income taxes |
|
24,713 |
|
|
14,823 |
|
|
36,839 |
|
|
27,418 |
|
Income tax expense |
|
2,420 |
|
|
2,344 |
|
|
4,190 |
|
|
4,451 |
|
Net income |
|
22,293 |
|
|
12,479 |
|
|
32,649 |
|
|
22,967 |
|
Less: Net income
attributable to non-controlling interests |
|
(20,173 |
) |
|
(17,905 |
) |
|
(37,720 |
) |
|
(35,155 |
) |
Net income (loss) attributable to
Surgery Partners, Inc. |
|
$ |
2,120 |
|
|
$ |
(5,426 |
) |
|
$ |
(5,071 |
) |
|
$ |
(12,188 |
) |
|
|
|
|
|
|
|
|
|
Net income
(loss) per share attributable to common stockholders |
|
|
|
|
|
|
Basic |
|
$ |
0.04 |
|
|
$ |
(0.17 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.38 |
) |
Diluted (1) |
|
$ |
0.04 |
|
|
$ |
(0.17 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.38 |
) |
Weighted average common
shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
48,019,652 |
|
|
32,054,089 |
|
|
48,018,228 |
|
|
32,054,089 |
|
Diluted (1) |
|
48,129,041 |
|
|
32,054,089 |
|
|
48,018,228 |
|
|
32,054,089 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The impact of potentially dilutive securities for the six
months ended June 30, 2016 and the three and six months ended
June 30, 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) |
|
|
|
June 30, 2016 |
|
December 31, 2015 |
|
|
|
|
|
Balance Sheet
Data (at period end): |
|
|
|
|
Cash and cash
equivalents |
|
$ |
51,599 |
|
|
$ |
57,933 |
|
Total current
assets |
|
316,950 |
|
|
310,957 |
|
Total assets |
|
2,213,523 |
|
|
2,104,443 |
|
|
|
|
|
|
Current maturities of
long-term debt |
|
28,738 |
|
|
27,247 |
|
Total current
liabilities |
|
182,437 |
|
|
181,289 |
|
Long-term debt, less
current maturities |
|
1,325,778 |
|
|
1,228,112 |
|
Total liabilities |
|
1,717,245 |
|
|
1,623,077 |
|
|
|
|
|
|
Total Surgery Partners,
Inc. stockholders' deficit |
|
(6,626 |
) |
|
(4,028 |
) |
Non-controlling
interests--non-redeemable |
|
320,237 |
|
|
301,955 |
|
Total stockholders'
equity |
|
313,611 |
|
|
297,927 |
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
Cash Flow
Data: |
|
|
|
|
|
|
|
|
Net cash provided by
(used in): |
|
|
|
|
|
|
|
|
Operating
activities |
|
$ |
48,793 |
|
|
$ |
21,472 |
|
|
$ |
74,037 |
|
|
$ |
30,986 |
|
Investing
activities |
|
(114,514 |
) |
|
(7,546 |
) |
|
(133,367 |
) |
|
(12,742 |
) |
Capital expenditures |
|
(8,546 |
) |
|
(6,085 |
) |
|
(20,350 |
) |
|
(11,546 |
) |
Investments in new businesses |
|
(105,968 |
) |
|
(3,961 |
) |
|
(113,017 |
) |
|
(12,063 |
) |
Financing
activities |
|
(17,727 |
) |
|
(22,463 |
) |
|
52,996 |
|
|
(45,257 |
) |
Distributions to non-controlling
interests |
|
(14,849 |
) |
|
(16,317 |
) |
|
(32,362 |
) |
|
(32,376 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Other
Data: |
|
|
|
|
|
|
|
|
Number of surgical
facilities as of the end of period |
|
103 |
|
|
102 |
|
|
103 |
|
|
102 |
|
Number of consolidated
surgical facilities as of the end of period |
|
92 |
|
|
90 |
|
|
92 |
|
|
90 |
|
Cases |
|
107,931 |
|
|
97,851 |
|
|
208,687 |
|
|
189,059 |
|
Revenue per case |
|
$ |
2,684 |
|
|
$ |
2,379 |
|
|
$ |
2,668 |
|
|
$ |
2,417 |
|
Adjusted EBITDA |
|
$ |
46,032 |
|
|
$ |
38,474 |
|
|
$ |
84,457 |
|
|
$ |
74,442 |
|
Adjusted EBITDA as a % of
revenues |
|
15.9 |
% |
|
16.5 |
% |
|
15.2 |
% |
|
16.3 |
% |
Adjusted EPS- Basic |
|
$ |
0.16 |
|
|
$ |
0.05 |
|
|
$ |
0.26 |
|
|
$ |
0.04 |
|
Adjusted EPS- Diluted |
|
$ |
0.16 |
|
|
$ |
0.04 |
|
|
$ |
0.26 |
|
|
$ |
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SURGERY PARTNERS, INC. |
Supplemental Information |
(Unaudited, in thousands, except cases and
growth rates) |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Same-facility
Information(2): |
|
|
|
|
|
|
|
|
Cases |
|
110,503 |
|
|
102,396 |
|
|
211,758 |
|
|
192,911 |
|
Case growth |
|
7.9 |
% |
|
|
N/A |
|
|
9.8 |
% |
|
|
N/A |
|
Revenue per case |
|
$ |
2,531 |
|
|
$ |
2,378 |
|
|
$ |
2,535 |
|
|
$ |
2,436 |
|
Revenue per case
growth |
|
6.4 |
% |
|
|
N/A |
|
|
4.1 |
% |
|
|
N/A |
|
|
|
|
|
|
|
|
|
|
|
|
(2) Same-facility revenue includes revenues from our
consolidated and non-consolidated surgical facilities (excluding
facilities acquired in new markets or divested during the current
and prior periods) along with the revenues from our ancillary
services comprised of a diagnostic laboratory, multi-specialty
physician practices, urgent care facilities, anesthesia services,
optical services and specialty pharmacy services that complement
our surgical facilities in our existing markets.
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Segment
Revenues: |
|
|
|
|
|
|
|
|
Surgical facility
services |
|
$ |
263,783 |
|
|
$ |
216,585 |
|
|
$ |
509,453 |
|
|
$ |
424,269 |
|
Ancillary services |
|
22,503 |
|
|
12,492 |
|
|
40,283 |
|
|
25,211 |
|
Optical services |
|
3,395 |
|
|
3,750 |
|
|
7,019 |
|
|
7,490 |
|
Total revenues |
|
$ |
289,681 |
|
|
$ |
232,827 |
|
|
$ |
556,755 |
|
|
$ |
456,970 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the second quarter of 2016, the Company reassessed its
segment reporting and realigned the disclosures to reflect the
review and decision making made by the Chief Operating Decision
Maker (“CODM”). The purpose of these changes was to replace
operating income with adjusted EBITDA as the primary profit/loss
metric reviewed by the CODM in making key business decisions and on
allocation of resources. The Company has revised the segment
disclosures below to replace operating income with adjusted EBITDA
and has provided a reconciliation from adjusted EBITDA back to net
income in the reported condensed consolidated financial
information. These changes had no effect on the Company’s
reportable segments, which are presented consistent with prior
periods.
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Segment
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
Surgical facility
services |
|
$ |
54,311 |
|
|
$ |
43,486 |
|
|
$ |
99,971 |
|
|
$ |
85,306 |
|
Ancillary services |
|
3,068 |
|
|
4,484 |
|
|
6,568 |
|
|
8,300 |
|
Optical services |
|
849 |
|
|
1,173 |
|
|
1,728 |
|
|
2,191 |
|
Total segment adjusted EBITDA
(3) |
|
$ |
58,228 |
|
|
$ |
49,143 |
|
|
$ |
108,267 |
|
|
$ |
95,797 |
|
|
|
|
|
|
|
|
|
|
General and
administrative expenses |
|
$ |
(15,023 |
) |
|
$ |
(11,846 |
) |
|
$ |
(27,220 |
) |
|
$ |
(23,708 |
) |
Non-cash stock
compensation expense |
|
502 |
|
|
427 |
|
|
635 |
|
|
853 |
|
Contingent acquisition
compensation expense |
|
$ |
1,530 |
|
|
$ |
— |
|
|
$ |
1,530 |
|
|
$ |
— |
|
Management fee (4) |
|
— |
|
|
750 |
|
|
— |
|
|
1,500 |
|
Acquisition related
costs |
|
$ |
795 |
|
|
$ |
— |
|
|
$ |
1,245 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
Total adjusted EBITDA
(3) |
|
$ |
46,032 |
|
|
$ |
38,474 |
|
|
$ |
84,457 |
|
|
$ |
74,442 |
|
|
|
|
|
|
|
|
|
|
Net income attributable
to non-controlling interests |
|
$ |
20,173 |
|
|
$ |
17,905 |
|
|
$ |
37,720 |
|
|
$ |
35,155 |
|
Depreciation and
amortization |
|
(9,702 |
) |
|
(8,465 |
) |
|
(19,271 |
) |
|
(16,927 |
) |
Interest and other
expense, net |
|
$ |
(26,235 |
) |
|
$ |
(26,178 |
) |
|
$ |
(48,388 |
) |
|
$ |
(51,934 |
) |
Income tax expense |
|
(2,420 |
) |
|
(2,344 |
) |
|
(4,190 |
) |
|
(4,451 |
) |
Non-cash stock
compensation expense |
|
$ |
(502 |
) |
|
$ |
(427 |
) |
|
$ |
(635 |
) |
|
$ |
(853 |
) |
Contingent acquisition
compensation expense |
|
(1,530 |
) |
|
— |
|
|
(1,530 |
) |
|
— |
|
Management fee (4) |
|
$ |
— |
|
|
$ |
(750 |
) |
|
$ |
— |
|
|
$ |
(1,500 |
) |
Merger transaction and
integration costs |
|
(2,192 |
) |
|
(8,642 |
) |
|
(6,108 |
) |
|
(13,648 |
) |
(Loss) gain on disposal
or impairment of long-lived assets, net |
|
$ |
(1,331 |
) |
|
$ |
2,906 |
|
|
$ |
(1,125 |
) |
|
$ |
2,683 |
|
Loss on debt
extinguishment |
|
— |
|
|
— |
|
|
(8,281 |
) |
|
— |
|
Total net income |
|
$ |
22,293 |
|
|
$ |
12,479 |
|
|
$ |
32,649 |
|
|
$ |
22,967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) The above table reconciles adjusted EBITDA by segment to net
income as reflected in the unaudited condensed consolidated
statements of operations.
When we use the term “Adjusted EBITDA,” we are referring to net
income minus (a) net income attributable to non-controlling
interests plus (b) income tax expense, (c) interest and other
expense, net, (d) depreciation and amortization, (e)
management fee, (f) merger transaction, integration and practice
acquisition costs, (g) non-cash stock compensation expense, (h)
loss on debt refinancing, (i) contingent acquisition compensation
expense and (j) (gain) loss on disposal of investments and
long-lived assets. 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. Our operating
strategy is to apply a market-based approach in structuring our
partnerships with individual market dynamics driving the structure.
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.
We use Adjusted EBITDA as a measure of liquidity. We have
included it because we believe that it provides investors with
additional information about our ability to incur and service debt
and make capital expenditures.
Adjusted EBITDA is not a measurement of financial performance or
liquidity under GAAP. It should not be considered in
isolation or as a substitute for net income, operating income, cash
flows from operating, investing or financing activities, or any
other measure calculated in accordance with generally accepted
accounting principles. The items excluded from Adjusted
EBITDA are significant components in understanding and evaluating
financial performance and liquidity. Our calculation of Adjusted
EBITDA may not be comparable to similarly titled measures reported
by other companies.
(4) Fee payable pursuant the Management and Investment
Advisory Services Agreement between the Company and Bayside
Capital, Inc., which was terminated in connection with our IPO.
SURGERY PARTNERS, INC.
Reconciliation of Non-GAAP Financial
Measures(Unaudited, Amounts in thousands except
shares and per share amounts)
From time to time, the Company incurs certain non-recurring
gains or losses that are normally nonoperational 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 some 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 per share attributable to
Surgery Partners, Inc. stockholders as a supplement to its
comparable GAAP measure of net income per share attributable to
Surgery Partners, Inc. Adjusted net income per share attributable
to Surgery Partners, Inc. stockholders should not be considered as
a measure of financial performance under GAAP, and the items
excluded from adjusted net income per share attributable to Surgery
Partners, Inc. stockholders are significant components in
understanding and assessing financial performance. Adjusted net
income per share attributable to Surgery Partners, Inc.
stockholders should not be considered in isolation or as an
alternative to net income per share attributable to Surgery
Partners, Inc. stockholders as presented in the condensed
consolidated financial statements.
The following table reconciles net income as reflected in the
unaudited condensed consolidated statements of operations to
adjusted net income used to calculate adjusted net income per share
attributable to Surgery Partners, Inc. stockholders:
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Consolidated
Statements of Operations Data: |
|
|
|
|
|
|
|
|
Net
Income |
|
$ |
22,293 |
|
|
$ |
12,479 |
|
|
$ |
32,649 |
|
|
$ |
22,967 |
|
Less: |
|
|
|
|
|
|
|
|
Net income attributable to
non-controlling interest |
|
20,173 |
|
|
17,905 |
|
|
37,720 |
|
|
35,155 |
|
Plus: |
|
|
|
|
|
|
|
|
Management fee (4) |
|
— |
|
|
750 |
|
|
— |
|
|
1,500 |
|
Merger transaction, integration and
practice acquisition costs |
|
2,192 |
|
|
8,642 |
|
|
6,108 |
|
|
13,648 |
|
Non-cash stock compensation
expense |
|
502 |
|
|
427 |
|
|
635 |
|
|
853 |
|
Contingent acquisition compensation
expense |
|
1,530 |
|
|
— |
|
|
1,530 |
|
|
— |
|
Loss on debt refinancing |
|
— |
|
|
— |
|
|
8,281 |
|
|
— |
|
Loss (gain) on disposal of
investment and long-lived assets |
|
1,331 |
|
|
(2,906 |
) |
|
1,125 |
|
|
(2,683 |
) |
Adjusted net
income |
|
$ |
7,675 |
|
|
$ |
1,487 |
|
|
$ |
12,608 |
|
|
$ |
1,130 |
|
|
|
|
|
|
|
|
|
|
Adjusted net
income per share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.16 |
|
|
$ |
0.05 |
|
|
$ |
0.26 |
|
|
$ |
0.04 |
|
Diluted |
|
$ |
0.16 |
|
|
$ |
0.04 |
|
|
$ |
0.26 |
|
|
$ |
0.03 |
|
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
48,019,652 |
|
|
32,054,089 |
|
|
48,018,431 |
|
|
32,054,089 |
|
Diluted |
|
48,129,041 |
|
|
33,871,990 |
|
|
48,118,991 |
|
|
33,871,990 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact
Teresa Sparks, CFO
Surgery Partners, Inc.
(615) 234-8940
IR@surgerypartners.com
Surgery Partners (NASDAQ:SGRY)
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