Company Operations - As of September 30, 2024, the company operates 30 acute care hospitals and over 200 sites of care, with 1,808 employed and affiliated providers, marking a 3.3% increase compared to the previous year[111] - The company operates in six states, including Texas, Oklahoma, and New Mexico, and holds a leading position in most of its markets[111] - The company has a strategic joint venture model that enhances its operational capabilities and market penetration[111] - The total number of hospitals operated at the end of September 30, 2024, was 30, a decrease of 3.2% from 31 in the previous year[145] Financial Performance - Total revenue for the three months ended September 30, 2024, increased by $72.1 million, or 5.2%, compared to the same period in 2023, reaching $1,449,817 thousand[147] - Total revenue for the nine months ended September 30, 2024, increased by $296.3 million, or 7.3%, compared to the same prior year period[149] - Net income for the three months ended September 30, 2024, was $46,005,000, and for the nine months ended September 30, 2024, it was $158,817,000[215] - Adjusted EBITDA for the three months ended September 30, 2024, was $97.8 million, compared to $84.8 million for the same period in 2023, reflecting a year-over-year increase of 15.4%[180] - Adjusted EBITDAR for the three months ended September 30, 2024, was $137,820,000, and for the nine months ended September 30, 2024, it was $435,706,000[215] Revenue Sources - Medicare accounted for 38.7% of total revenue for the three months ended September 30, 2024, while Medicaid accounted for 10.2%[139] - Revenue related to joint ventures for the three months ended September 30, 2024, was $429.9 million, representing 29.7% of total revenue for that period[138] - The company recognized total revenue of $48.6 million under the Oklahoma directed payment program from its effective date of April 1, 2024, through September 30, 2024[116] Expenses and Costs - Total operating expenses for the three months ended September 30, 2024, increased by $61.0 million but decreased by 0.6% as a percentage of total revenue[148] - Total operating expenses increased by $243.3 million but decreased by 1.0% as a percentage of total revenue for the nine months ended September 30, 2024[151] - Professional fees increased to 18.6% of total revenue for the nine months ended September 30, 2024, compared to 17.6% in 2023[143] - Salaries and benefits as a percentage of total revenue decreased to 43.1% for the nine months ended September 30, 2024, down from 44.0% in the prior year[165] - Supplies as a percentage of total revenue decreased to 17.6% for the nine months ended September 30, 2024, down from 18.3% in the prior year[167] Debt and Financing - The company executed an amendment to its Term Loan B Facility on September 18, 2024, reducing the interest rate by 50 basis points to Term SOFR plus 2.75%[112] - The company entered into a Term Loan B Facility with a principal amount of $900.0 million, maturing in seven years, with quarterly principal installments of 0.25%[197] - The company has total long-term debt obligations of $1,464.5 million, with $25.3 million due within the next year[209] - The net leverage ratio as of September 30, 2024, was 1.6x, while the lease-adjusted net leverage ratio was 3.5x[184] - Interest expense decreased to $52.1 million for the nine months ended September 30, 2024, compared to $55.9 million in the prior year[170] Cybersecurity Incident - A ransomware cybersecurity incident occurred in November 2023, impacting operational and information technology systems, but patient care continued using established downtime procedures[119] - The Cybersecurity Incident had an adverse pre-tax impact of approximately $74 million during the year ended December 31, 2023, including lost revenue and remediation costs[120] Shareholder Activities - The company completed an initial public offering on July 19, 2024, raising gross proceeds of $192.0 million from the sale of 12,000,000 shares at $16.00 per share[113] - The company repurchased shares from Ventas for $26.0 million concurrent with Pure Health's investment in Ardent Health Partners, LLC[122] Operational Challenges - The company continues to face challenges related to staffing and labor trends, impacting operational performance and growth prospects[123] - For the three months ended December 31, 2023, admissions, surgeries, and emergency room visits decreased by 2.5%, 2.1%, and 5.7%, respectively, compared to the same period in 2022[120] Cash Flow and Liquidity - Cash flows provided by operating activities for the nine months ended September 30, 2024, totaled $195.5 million, up from $154.2 million in the prior year, indicating a growth of 27.0%[187] - Total cash and cash equivalents as of September 30, 2024, were $563.1 million, with available liquidity of $851.2 million, which includes $288.1 million in available capacity under the ABL Credit Agreement[184] - The company believes it has adequate liquidity to fund operations through operating cash flows and access to Senior Secured Credit Facilities[221]
Ardent Health Partners, Inc.(ARDT) - 2024 Q3 - Quarterly Report