Surgery Partners, Inc. (NASDAQ:SGRY) Q1 2023 Earnings Call Transcript

Wayne DeVeydt: So, Lisa, I’ll start with kind of your first question, and I’ll turn it over to Dave to talk a little bit about kind of future — I don’t know how much guidance we’ll give on that, but we can talk a little about directional stuff. When it comes to the relationship with Privia, look, we have said before that Privia and companies like them that are in the payvider space naturally align well with what we’re doing. So I definitely think it’s not surprising that a partner we would choose would also choose to partner with kind of those value-based primary care groups. That certainly aligns well for us to grow together. So we can see lots of markets where that’s a real potential synergy, not just with Privia, but VillageMD, anyone who really has a primary care group that is either capitated or value-based.

We look at that as a real benefit. And I think OhioHealth, having those kind of partnerships on the primary care side just reiterates that they’re a like-minded partner really thinking about driving value, making sure patients get to the right place and growing the health care system in a very thoughtful way.

Dave Doherty: Yeah, Lisa, I think your question on kind of how you’re going to see this coming through our results this year, it is a ramp that we’re going into these facilities kind of on a very deliberate basis. So as we migrate into these relationships, we’re being very thoughtful about that. So first and foremost, that’s how the ramp-up kind of happens for us. We do expect this to be slightly positive to the company’s earnings this year, inclusive of any of the start-up costs that are inside there. So there is a slight positive benefit that we baked into our updated outlook for the year.

Operator: Our next question is from Whit Mayo with SVB Securities. Please proceed with your question.

Whit Mayo: Good afternoon. Just want to make sure I get this right on the hospital partnerships. I think this is correct. But OhioHealth is not contributing any of their existing ASCs into a joint venture with you initially, correct?

Eric Evans: Hey, Whit, that’s correct. I do think one of the things that we try to do with any partner as we show our value, we think there could be opportunities in the future to earn that business as we show what we can do across the state, but that is correct from the start. We will be start — we’ll be looking at new offensive opportunities together.

Whit Mayo: And Dave, you mentioned that you spent $60 million on acquisitions. The cash flow statement has $40 million net of cash. I presume that, that’s just net of the divestitures. Do I have that correct? And is it safe to say that you received $20 million roughly for those asset sales?

Dave Doherty: Yes. No, I don’t think that’s a safe assumption, Whit. I think that cash flow statement is net of the cash acquired as we go into that as well as any assumption of debt, the mechanics, I think, of just how that shows through. I can walk you through that a little bit later.

Whit Mayo: No, no. That’s fine. You spent $60 million, okay, I got it. One last one, just want to make sure, from a modeling perspective, I get this right. I think you said you plan on selling $100 million of revenue, and I presume a portion of that has already closed. There’s more to come. Is all of that consolidated today? Is any of it coming through equity earnings? I just want to make sure that we get our models right.