Surgery Partners, Inc.

Please stand by. Your program is about to begin. If you need assistance on today's program, please press star zero. Good day, everyone, and welcome to today's program, Surgery Partners Incorporated Second Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and one on your telephone keypad. You may withdraw yourself from the queue by pressing star two. Please note, this call may be recorded. I'll be standing by should you need any assistance. It is now my pleasure to turn the conference over to CFO Dave Doherty.

Good morning. My name is Dave Doherty, CFO of Surgery Partners. I am joined today by Eric Evans, our CEO, and Wayne Devite, our Executive Chairman. During this call, we will make forward-looking statements. There are risk factors that could cause future results to be materially different from these statements. These risk factors are described in this morning's press release and the reports we filed with the SEC, each of which are available on our website, surgerypartners.com. The company does not undertake any duty to update these forward-looking statements. In addition, we will reference certain financial measures that are considered non-GAAP, which we believe can be useful in evaluating our performance. The presentation of this information should not be considered in isolation or as a substitute for results prepared in accordance with GAAP. These measures are reconciled to the most applicable GAAP measure in this morning's press release. With that, I will turn the call over to Wayne. Wayne?

Thank you, Dave. Good morning, and thank you all for joining us today. My initial comments will briefly highlight our consolidated second quarter results and the consistency of our long-term growth algorithm. I'll then provide a brief update on our recent acquisition activity and refreshed outlook for the balance of the year. Eric and Dave will provide additional insights with their remarks. Turning to our second quarter results, we reported net revenue of $762 million, representing growth of 14.2% over the prior year quarter. On a same facility basis, net revenues grew just under 10%, with surgical case volume growth in the quarter just under 4%. Adjusted EBITDA grew 18% to $118.3 million, generating adjusted EBITDA margins of 15.5%, expanding 50 basis points as compared to the prior year quarter. Our efforts to pursue higher acuity procedures continue to produce strong results with total joint replacements in our ASCs increasing 46% in the first half of 2024 over the comparable period in 2023. Eric will provide additional insights into our physician recruitment and expansion of our total joint programs, including our success in targeting orthopedic surgeons specializing in total shoulder procedures, which were moved to the ASC covered list starting January 1st of this year. We continue to be extremely pleased with our same facility growth and the expected long-term sustainability of our organic top line and margin expansion growth goals. As previously stated, our short-stay surgical facilities have been purpose-built to capture the macro tailwinds of both an aging population and the increased shift in site of care for higher acuity procedures into our lower cost, high clinical quality outpatient settings. We believe our results reflect the strength and durability of our business model as we pursue this highly fragmented market which currently consists of over 6,000 CMS-certified ASCs and an estimated $150 billion total addressable market representing both current and expected surgical procedures to be formed in an outpatient setting in the coming years. Moving to our capital deployment activities. We maintained our disciplined approach to sourcing and executing our strategically important acquisitions at attractive multiples. Through the end of the second quarter, we deployed nearly $280 million, which includes a $60 million transaction in early January that we had initially targeted closing in the fourth quarter of 2023. This level of deployment reflects both our annual targeted goal of at least $200 million, along with the redeployment of the remaining net proceeds from assets divested in 2023. Our business development team continues to source a robust pipeline of acquisitions and de novo investment opportunities, and we believe the capital deployment aspects of our growth algorithm remain achievable. Before I turn the call over to Eric, let me provide a brief update on our outlook for the remainder of 2024. Based on our strong organic performance in the first half of 2024 and the timing of our recently completed acquisitions, we are increasing full-year net revenue and adjusted EBITDA outlook to greater than $3.075 billion and $508 million, respectively. This refreshed outlook represents at least 13% and 16% growth in net revenue and adjusted EBITDA, respectively, as compared to the prior year and balances our optimism for the company's growth with an appropriate amount of conservatism. We look forward to updating you on our progress as the remainder of the year unfolds With that, let me turn the call over to Eric to provide additional highlights for the quarter. Eric?