Surgery Partners, Inc.

Greetings and welcome to Surgery Partners, Inc. second quarter 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your cell phone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Tom Cowie, CFO.

Good morning. And welcome to Surgery Partners' second quarter 2021 earnings call. This is Tom Cowie, Chief Financial Officer. Joining me today are Wayne Devite, Surgery Partners Executive Chairman, and Eric Evans, Surgery Partners Chief Executive Officer. As a reminder, during this call, we will make forward-looking statements. Risk factors that may impact those statements and could cause actual future results to differ materially from currently projected results are described in this morning's press release and the reports we file with the SEC. The company does not undertake any duty to update such forward-looking statements. Additionally, during today's call, the company will discuss certain non-GAAP measures which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of these measures can be found in our earnings release and our most recent quarterly report when filed, which will be available on our website at surgerypartners.com. With that, I'll turn the call over to Wayne. Wayne?

Thank you, Tom. Good morning, and thank you all for joining us today. With the first six months of the year on the books, 2021 promises to be another strong year of growth. Second quarter EBITDA grew to 76 million, representing 30% growth over the prior year quarter, and same-store volumes achieved approximately 104% of the second quarter of 2019 baseline. Strong progress, especially when coupled with our increasing acuity mix. Although the persistent pressures of COVID-19 affected our operations, the demand for our services and the value proposition we offer to payers, physicians, and patients has resulted in record-breaking revenues in excess of $2.1 billion over the last 12 months. While we continue to closely watch the Delta variant impact in key geographies, we remain confident in our prospects for growth in the back half of the year and are increasing our full-year outlook to at least $325 million of projected adjusted EBITDA. Our growth has been driven by a relentless focus on and an execution of our key strategic drivers, which our team continued to make excellent progress during the second quarter. Some highlights. Our physician recruiting efforts continue to outpace last year's strong results, recruiting 24% more new physicians year to date as compared to the prior year period, with cases from new physicians up 55% year to date as compared to 2020. Total joint replacement, which approximately doubled in 2020 compared to 2019, continued to grow in 2021, increasing over 144% on a year-to-date basis, as compared to the prior year period. Our total joint replacement growth is buoyed by our surging robotics case volume, with cases associated with our investments up 72% year-to-date versus the prior year. And finally, all of this comes together with strong 45% same facility revenue growth, with volumes up nearly 68% over the prior year quarter. Partially offsetting this strong volume growth was reduced net revenue per case of approximately 14%, as lower acuity cases represented a higher portion of our mix than they did in the highly COVID impacted second quarter 2020 baseline. But more importantly, year to date same facility revenues are up nearly 17% as compared to the 2019 baseline with nearly four points of volume growth. On the capital deployment front, we've spent much of the year identifying and negotiating with potential targets while maintaining a disciplined approach. We are pleased to announce that we have closed over $100 million in transactions so far this year at an average adjusted EBITDA multiple of less than 7.5 times, the vast majority of which was deployed in three transactions that closed in the last week. Our pipeline remains robust with over $200 million of additional acquisitions under letter of intent at attractive multiples. We continue to target deploying at least $200 million in proceeds this year, and we remain confident that we will meet or exceed the capital deployment goal. In summary, we're executing well on our growth plans. We remain a leader in an industry with significant tailwinds and a total addressable market of $150 billion, with high-acuity musculoskeletal and cardiosurgical cases continuing to transition to our purpose-built surgical facilities. We are executing on our organic and inorganic strategies, and plan to be a consolidator in this highly fragmented industry. With the benefit of capital deployment and a continued strong pipeline of both organic and inorganic opportunities, we believe our business is capable of mid-teens adjusted EBITDA growth. With that, let me turn the call over to Eric to walk you through some of our recent accomplishments in greater detail. Eric?