Q1 2020 Earnings Call
[music].
Good afternoon, and welcome to the surgery partners Inc. first quarter 2020 earnings call.
All participants will be in listen only mode should you need assistance. Please signal a conference specialist I press and this darkie followed by zero.
After todays presentation, there will be an opportunity to ask questions to ask a question May Press Star then one on your Touchtone phone.
To withdraw your question. Please press Star then too.
Please note this event is being recorded.
I'd now like turn the conference over to Tom Kelly Chief Financial Officer. Please go ahead.
Good afternoon, and welcome to surgery partners first quarter 2020 earnings call. This is Tom Cowhey Chief Financial Officer. Joining me today are Wayne device 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 afternoon's press release and the reports we filed 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 it's a substitute for results prepared in accordance with gap.
A reconciliation of these measures can be found in our earnings release, which is posted on our web site at surgery partners Dotcom and our most recent quarterly report when filed with that I'll turn the call over to wane Wayne.
Thank you Tom Good afternoon, and thank you all for joining us today.
I want to start today by recognizing the crisis facing our nation.
The cobot 19 pandemic literally impacts all of us as nothing else in our recent history has and we hope that this state funds, you and your loved ones safe and healthy.
This crisis has also shown us our collective strength.
Continually humbled by the dedication of our and the nation's frontline workers doctors, and particularly our nurses and medical staff. We're fighting this deadly disease, each and everyday and saving lives. Thank you.
While the Coca 19 pandemic has presented us unique challenges for surgery partners. It is a testament to the strength of the team we built over the last two years to see how quickly and effectively they responded to the task.
We started the quarter with two months that saw same store revenues and adjusted EBITDA grow at nearly a double digit rate.
March was also off to strong start before Kogut 19 began its exponential spread and we saw volumes dropped by nearly 75% as some of our facilities reduced operations to a day or two per week, serving only the most critical patients.
Our team quickly mobilized to the task at hand, reducing facility level costs, reducing corporate overhead.
Slowing capital expenditures and distributions.
Tightly managing working capital.
Eric will talk about our actions in greater detail, but know that this team reacted swiftly decisively and responsibly to preserve our business and liquidity.
To further enhance our liquidity and this uncertain environment on April 22nd we closed an incremental term loan raise that when combined with assistance from government programs should give us ample availability to weather the storm.
Tom will speak to our liquidity efforts and position in more detail.
But our ability to execute a financing transaction in this market that was 13 times oversubscribed speaks to the power of our business model and the execution of our teams.
Strategically we've never felt stronger.
Surgeries are back on the rise P.P. availability is increasing.
States are lifting restrictions and we're beginning the process of ramping our operations back up after the pause in operations our facilities experience for the last several weeks.
Further this crisis has demonstrated the power of our short stay surgical models of the health care ecosystem.
Now more than ever patients providers and payers recognize the value convenience and safety of our facilities.
Our physician recruiting efforts in March and April have yielded strong results.
Our pipeline of M&A and partnership activity remains robust.
Standalone facilities have a new appreciation of the benefits of being part of a larger organization and we're looking forward over time to return and potential acceleration of our previous growth trajectory.
With that let me turn the call over that Eric the talking about the company's operations Eric.
Thank you Wayne and good afternoon.
Today I'd like to review highlights of our most recent results and then provide an update on our cobot planning.
Tom will then close our prepared remarks with greater detail on first quarter financial results and liquidity before we take questions.
We entered 2020 with a strong plan to deliver another year of double digit growth.
Our investments in physician recruiting we're demonstrating significant traction our managed care efforts were delivering robust rate growth and our portfolio positioning over the last two years had created a stronger core set of assets that we were continuing to optimize as we matured our surgery partners operating system.
As evidence of our progress February 2020 year to date results saw adjusted revenues up over 12% over the prior year period with adjusted EBITDA up nearly 10% and seasonally long March expected to further add to our momentum.
Our confidence levels in our outlook were high.
However by mid March it was clear that.