Surgery Partners, Inc. · NASDAQ:SGRY
Surgery Partners — Debt Investor Presentation (April 2021)
19 slides from Surgery Partners's debt investor presentation, Apr 20, 2021
Slide 1: Lender Presentation April 2021
Lender Presentation April 2021
Slide 2: Legal Disclaimer
2 Legal Disclaimer Forward - Looking Statements This presentation contains “forward - looking” statements, including statements regarding the anticipated conversion of the Series A Preferred Stock, the Incremental Term Loan, including its anticipated amount and use of proceeds, and statements about
Slide 3: Transaction Overview
3 Transaction Overview ▪ Surgery Partners, Inc. (“Surgery Partners” or the “Company”) is a leading independent operator of short - stay surgical facilities, focused on providing high quality, cost effective solutions for surgical and related ancillary care – National network of 127 surgical faciliti
Slide 4: Sources, Uses and Pro Forma Capitalization
4 Sources, Uses and Pro Forma Capitalization ($ in Millions) (1) Non - Fungible Add - on First Lien Term Loan subject to a 2% prepayment penalty. (2) December 31, 2020 cash balance pro forma for net proceeds from follow - on equity issuance in January 2021 of $249.2 million. (3) Excludes debt of non
Slide 5: Incremental Senior Secured Credit Facility
5 Incremental Senior Secured Credit Facility Fungible Incremental First Lien Term Loan Borrower Surgery Center Holdings, Inc. Guarantors Same as existing First Lien Term Loan Security Same as existing First Lien Term Loan Incremental Facility $125.0 million Fungible Incremental First Lien Term Loan
Slide 6: Transaction Timeline
6 Transaction Timeline April 2021 S M T W T F S 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Key Event Date Title April 20 Launch financing April 23 Lender commitments due by 12pm ET April 26 Close and fund Holiday
Slide 7: Surgery Partners Update
Confidential Surgery Partners Update
Slide 8: Surgery Partners is the Leading Independent Operator of Surgery Centers in the United States
8 110 Ambulatory Surgery Centers 30 States 4,000 Affiliated Physicians 600,000+ Annual Patients 17 Short - Stay Surgical Hospitals $343 million 2020 Credit Agreement EBITDA (1) $1,860 million 2020 Revenue (1) See pages 18 and 19 for full reconciliations of Adjusted EBITDA to income (loss) before inc
Slide 9: TAM: Over $90B Outpatient Surgical Market and ~$60B of Cases Projected to Migrate to Outpatient
9 $500B+ $230B surgery Inpatient HOPD ASC Office Home $470B+ $55B+ surgery $35B+ surgery $550B+ $100B+ Annual Revenue (US) Annual Volume Growth - 2% 6% 2% 0 20 40 60 80 100% Payments for surgical inpatient procedures (2018) Total surgical inpatient procedures Likely to remain inpatient Uncategorized
Slide 10: Clinical and Operations platform well-positioned to accommodate shift
10 1 Surgery Partners’ Clinical and Operations platform well - positioned to accommodate shift Inpatient Surgical Procedures with Potential to Shift to Outpatient Setting 0 20 40 60 80 100% Likely able to move to ASC MAJOR HIP AND KNEE JOINT REPLACEMENT OR REATTACHMENT OF LOWER EXTREMITY W/O MCC SPI
Slide 11: Our Leading Musculoskeletal & Cardio Platform is Well Positioned to Capture this Opportunity
11 11 Robots added in 2020, bringing total to 30 $3 billion Annual savings by shifting 50% of joint cases to ASCs (1) 9%+ Surgery Partners’ historic orthopedic case growth 80%+ Surgery Partners’ facilities perform MSK procedures 17 Cardiac catherization procedures approved in 2019 6%+ Surgery Partne
Slide 12: Musculoskeletal has Proven Most Resilient Through COVID Disruption
12 Musculoskeletal has Proven Most Resilient Through COVID Disruption Year - over - year surgical cases by key service lines (1) 111% 109% 63% 102% 128% 113% 98% 112% 98% 101% 110% Orthopedics 133% 117% 73% 97% 122% 99% 98% 122% 113% 110% 163% Spine Note: COVID period represents March and April 2020
Slide 13: Business Has Proven Resilient Through COVID-Disruption
13 Business Has Proven Resilient Through COVID - 19 Disruption Net Revenue Has Experienced Strong Rebound Since April 110% 109% 86% 47% 96% 103% 110% 109% 106% 103% 101% 105% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Percentage of procedures performed Same f
Slide 14: Q4 2020 Year-Over-Year Performance
14 137,699 134,532 Q4 2019 Q4 2020 $84.4 $90.8 Q4 2019 Q4 2020 Q4 2020 Performance $517.2 $548.3 Q4 2019 Q4 2020 Year - Over - Year Performance Net Revenue ▪ Surgery Partners continued to exhibit strong performance in 4Q20 with Revenue and Adjusted EBITDA increasing by 6.0% and 7.6%, year - over - y
Slide 15: First Quarter 2021 Preliminary Financials
15 First Quarter 2021 Preliminary Financials Preliminary Unaudited Estimate (1) 1Q 2021 ~125,000 At least $505 Million 16% to 17% Strong volume growth over prior year quarter At least $70 Million Includes at least $9M of AEBITDA benefit from CARES Act grants recognition At least $355 Million Approxi
Slide 16: Appendix
Confidential Appendix
Slide 17: Historical Financial Results
17 468,443 520,741 525,136 459,420 2017 2018 2019 2020 $164 $235 $259 $257 12% 13% 14% 14% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% 0 50 100 150 200 250 300 350 2017 2018 2019 2020 $1,341 $1,772 $1,831 $1,860 2017 2018 2019 2020 Historical Financial Results As Reported Basis Net Rev
Slide 18: Credit Agreement EBITDA Reconciliation
18 The following table reconciles Credit Agreement EBITDA to cash flows from operating activities, the most directly comparable GAA P financial measure (in millions and unaudited): Credit Agreement EBITDA Adjustments 2020 Cash flows from operating activities 246.9$ Plus (minus): Non-cash interest in
Slide 19: Adjusted EBITDA Reconciliation
19 The following table reconciles Adjusted EBITDA to (loss) income before income taxes, the most directly comparable GAAP financ ial measure (in millions and unaudited): (1) This amount includes transaction and integration costs of $23.2 million, $19.0 million, and $31.7 million in 2020, 2019, and 2
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