Surgery Partners, Inc. (NASDAQ:SGRY) Q1 2020 Earnings Conference Call May 11, 2020 4:30 PM ET Company Participants Wayne DeVeydt - Executive Chairman Thomas Cowhey - CFO Eric Evans - CEO Conference Call Participants Kevin Fischbeck - Bank of America Merrill Lynch Ralph Giacobbe - Citigroup Brian Tanquilut - Jefferies Frank Morgan - RBC Whit Mayo - UBS Operator Good afternoon, and welcome to the Surgery Partners, Inc. First Quarter 2020 Earnings Call. [Operator Instructions] I would now like to turn the conf ...

Financial Data and Key Metrics Changes - Full-year adjusted EBITDA reached $258.6 million, representing a growth of 10.1% over 2018 [13] - Adjusted revenues for the fourth quarter grew 4.2% to $520.7 million, while full-year adjusted revenues rose to $1.86 billion, reflecting nearly 3% year-over-year growth [28][30] - Adjusted EBITDA margin improved to 16.2% in the fourth quarter from 14.7% in the prior year period, and full-year adjusted EBITDA margin increased by 90 basis points to 13.9% [31] Business Line Data and Key Metrics Changes - Same facility revenue growth was nearly 8% year-over-year, with fourth-quarter adjusted same facility revenue increasing by 7.9% [9][14] - Approximately 138,000 surgical cases were performed in the fourth quarter, ending the year with around 525,000 cases [27] - The company reported strong growth in higher acuity cases, with about 1,300 total joint procedures performed in 2019, nearly double the total from 2018 [18] Market Data and Key Metrics Changes - The company achieved double-digit commercial rate increases in multiple markets, contributing to fourth-quarter net revenue per case growth [19] - The company expects its base business to grow at a long-term sustainable rate of 2% to 3% on volume and 2% to 3% on rate, yielding 4% to 6% same facility revenue growth [20] Company Strategy and Development Direction - The company is focused on physician recruiting, managed care, procurement, and revenue cycle management to differentiate itself as the operator of choice [8] - The company is actively pursuing a robust pipeline of tuck-in acquisitions and expects to see increased opportunities for acquisitions at attractive multiples in 2020 [10][11] - The company aims to expand its capabilities in multi-specialty centers, particularly in total joint procedures, with a goal of increasing the percentage of centers performing these procedures [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit adjusted EBITDA growth for both the immediate and long-term future [9] - The company has not yet seen any impact from the coronavirus on its operations, but is taking precautions to ensure safety [43] - Management anticipates continued strong same facility revenue growth and margin expansion as strategic initiatives take hold [41] Other Important Information - The company opened a new hospital in Idaho Falls in November 2019, which is expected to be a material contributor to adjusted EBITDA in the coming years [33][34] - The company ended 2019 with a cash balance of approximately $93 million and no borrowings on its revolving credit facility [33] Q&A Session Summary Question: Impact of coronavirus on operations - Management stated that there has been no impact from the coronavirus to date, but they are monitoring the situation closely [43] Question: Cash flow expectations for 2020 - Management noted that higher interest expenses and startup costs for the Idaho Falls hospital impacted cash flow, but they expect to grow double-digit earnings in 2020 [44][47] Question: M&A outlook and potential deals - Management confirmed a robust M&A pipeline and expects to announce more transactions in 2020 than in the previous year [51][65] Question: Physician recruitment and volume ramp-up - Management anticipates a slight increase in physician recruitment numbers in 2020 compared to previous years, with a focus on targeted specialties [55] Question: Total joint procedures and market expansion - Management indicated that they expect to increase the number of facilities capable of performing total joint procedures, with minimal capital requirements for many of these expansions [86]

38th Annual J.P. Morgan Healthcare Conference January 13, 2020 © 2020 Surgery Partners – Confidential & Proprietary Information Legal disclaimer Forward-Looking Statements Statements contained in this presentation, including the question and answer portion of the presentation, other than statements of historical fact, are forwardlooking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "could," "would," "expects," "plans," "anticipates," "believ ...

Surgery Partners, Inc. (NASDAQ:SGRY) Q3 2019 Earnings Conference Call November 5, 2019 8:30 AM ET Company Representatives Wayne DeVeydt - Chief Executive Officer Tom Cowhey - Chief Financial Officer Eric Evans - Chief Operating Officer Conference Call Participants Kevin Fischbeck - Bank of America Merrill Lynch Ralph Giacobbe - Citigroup Chad Vanacore - Stifel Brian Tanquilut - Jefferies Frank Morgan - RBC Whit Mayo - UBS Operator Greetings, and welcome to the Surgery Partners, Third Quarter 2019 Earnings C ...

Financial Data and Key Metrics Changes - The company reported adjusted revenues of $452.8 million for Q2 2019, reflecting a 2% increase compared to the prior year quarter [26] - Adjusted EBITDA for the quarter was $61.2 million, representing a 10.5% increase over Q2 2018, with adjusted EBITDA margins improving to 13.5%, a 100-basis point increase year-over-year [28][8] - Same facility revenue increased by 7.9% from the prior year quarter, driven by strong net revenue per case and volume growth [6][27] Business Line Data and Key Metrics Changes - Surgical cases totaled just over 133,000 in the quarter, up 1.2% from the prior year period, despite losses from closed or divested facilities [27] - The ancillary and optical segments showed slight revenue growth, but combined adjusted EBITDA from these segments remained stable compared to the prior year quarter [30] Market Data and Key Metrics Changes - The proposed 2020 Medicare fee schedule indicates increases for musculoskeletal procedures by approximately 2%, ophthalmology by approximately 3%, and gastrointestinal codes by approximately 1% [20] - The company anticipates a net increase of at least 2% based on its case mix if the proposed rates are finalized [20] Company Strategy and Development Direction - The company is focused on organic growth through physician recruitment, facility expansion, and innovative partnerships, aiming for sustainable double-digit adjusted EBITDA growth [5][9] - A notable partnership was established with UCLA and the Southern California Orthopedic Institute, enhancing the company's footprint in Southern California [17][18] - The company is strategically positioned to leverage its existing infrastructure for accelerated organic growth and margin expansion [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit adjusted EBITDA growth for 2019 and beyond, citing strong performance in same facility growth and margin improvement [36][8] - The company is optimistic about the potential for new market opportunities arising from changes in Medicare coverage for high-acuity procedures [22][24] Other Important Information - The company ended Q2 2019 with cash balances of approximately $117 million and an undrawn revolving credit facility of nearly $116 million [31] - The total net debt to EBITDA ratio was approximately 7.8 times, slightly up due to higher debt from refinancing [33] Q&A Session Summary Question: What is the expected impact of seasonality on Q4 earnings? - Management indicated that approximately one-third of adjusted EBITDA is expected in Q4, influenced by seasonal volume and cost initiatives [38][39] Question: Why is the volume growth at the low end of long-term expectations despite physician recruitment efforts? - Management noted a compounding effect in volume growth and emphasized a focus on recruiting high-value specialties, which may result in fewer procedures but higher revenue per case [40][41][46] Question: What is the long-term target for same-store topline growth? - Management targets 4% to 6% growth, with a focus on achieving higher margins through improved acuity and specialty mix [86][88][90] Question: How does the company plan to address the elevated interest expense? - Management explained that the increase in interest expense is due to refinancing and provided an annualized estimate for principal and interest payments [61][62] Question: What is the company's strategy regarding commercial reimbursement? - Management is pursuing a multi-pronged strategy to improve reimbursement rates while maintaining independence from large health systems [102][104]

Surgery Partners, Inc. (NASDAQ:SGRY) Q1 2019 Earnings Conference Call May 8, 2019 8:30 AM ET Company Participants Tom Cowhey - CFO Wayne DeVeydt - CEO Eric Evans - COO Conference Call Participants Ralph Giacobbe - Citigroup Scott Mafale - SVB Leerink Chad Vanacore - Stifel Brian Tanquilut - Jefferies Kevin Fischbeck - Bank of America Merrill Lynch Operator Greetings and welcome to Surgery Partners, Incorporated First Quarter 2019 Earnings Conference Call. [Operator Instructions] Please note this conference ...

Surgery Partners, Inc. (NASDAQ:SGRY) Q4 2018 Earnings Conference Call March 13, 2019 8:30 AM ET Company Participants Thomas Cowhey - CFO Wayne DeVeydt - CEO Conference Call Participants Chad Vanacore - Stifel Nicolaus Ana Gupte - Leerink Partners Frank Morgan - RBC Capital Markets Bill Sutherland - The Benchmark Company Operator Greetings. And welcome to Surgery Partners' Fourth Quarter 2018 Earnings Call. At this time, all participants are in listen-only mode, a brief question-and-answer session will follo ...