Surgery Partners (SGRY) 12 Nov 242024 Q3 Earnings call transcript

Greetings, and welcome to the Surgery Partners Third Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. At this time, I would like to turn the call over to Dave Doherty. Please go ahead.

Good morning. Doherty, Surgery Dave is name CFO Partners. of My Evans, and Wayne joined today our CEO; Eric by I'm DeVeydt, our Executive Chairman.

we surgerypartners.com. could with each available to press release During risk the factors are these SEC, call, will the this statements. risk our forward-looking on this morning's in There statements. factors These that are materially reports cause of be results and which described future website, different from make are we file

to duty update forward-looking company does any The undertake these not statements.

In useful with financial as measures are release. non-GAAP, morning's or the be addition, GAAP. These of measures that most which we not will reference in accordance this isolation we certain our a presentation are substitute believe in The should to measure in considered press can reconciled GAAP performance. for information be results this considered applicable in evaluating prepared

Wayne? With over to that, Wayne. turn call I the will

morning, for Thank all you, you Good and Dave. thank today. us joining

margins prior with to same-facility XX.X%, net call the colleagues, compared financial a EBITDA On quarter results the to quarter. reported year XX% expanding growth quarter outlook the for prior of million, volume as revenues surgical turning my our grew $XXX XXX This the third quarter. greater like points of morning, of balance I the to growth highlights X.X%. over EBITDA of basis, net million, grew we adjusted our and over $XXX.X representing generating Before year. share of X.X% Adjusted case basis at revenue the than in year XX% to would

in volume. our many last storm but some have limited point, of precautionary are only of we Hurricane the performing followed, facilities of of damage. North impacted sustained as measures in our by this only This affected several affected all marginally are did Florida, At Our reopened, took facilities results were that largely cases, which Helene, September. scheduling Milton Carolina that several facilities and operations Georgia and the week and Hurricane but

joint CAGR replacements the compared XX%. that's In continue the X-year third ASCs, in we to quarter, our when and in growth in last a year greater than increasing total XX% to see quarter

We patients our of continue in value the environment, Eric physicians, see sites performing these care. sustained as this this are our his into growth total additional joint into insights programs remarks. in physician capture and area expansion an and of increasingly to well payers experience recruitment ASC we of ongoing positioned to and in and will provide shift our strong procedures

to Moving M&A.

Illinois. our footprint been to existing continue the our on and York basis, that On enter market of in represent York commercial markets we've we Texas. focus In pleased acquisitions markets, Texas, and to year-to-date and in targeted were and our expanding five deployed specifically opportunity, our million a in Florida, largest the $XX on footprint While transactions. with end team's quarter, markets California, New we high-growth grow three Medicare New ability those of

Health, the and performance orthopedic Chicago high forward. ASCs Duly operating independent have physician-directed growth a in of history in last of largest we addition, the completed strong nation. leading very acquisition outlook and In focused partnership have an group in a moving These for two multispecialty favorable financial medical the market ASCs multi-specialty demonstrated with week, acuity

excited our execution an growth market, clinical ASCs providing reputation operate on strong network fueled of about care we Chicago new a the other in patient ASCs experience by two the this efficiency growth capabilities. proven join and and will We're and These potential excellent market. high-quality Duly's

aspects believe investment of capital Our business remain deployment the opportunities, algorithm and continues acquisitions development growth of and pipeline novo team our robust achievable. a to we source de

and EBITDA as results, net prior of strength outlook EBITDA, growth million, $XXX revenue respectively, This adjusted and year respectively. XX% to full revenue year. XX% at and $X.XXX and in to billion least project these net compared represents adjusted the outlook than continue we the of On greater

let quarter. Eric? that, over With me turn the highlights provide for the to to call Eric additional

good Wayne, and morning, everyone. Thanks,

third service results We pleased growth growth. across double-digit growth algorithm our and with bottom again, and consistent long-term with Once elements our all lines. contributed our line predictable top quarter are of to all core line

growth surgical Diving the in deeper quarter, case Same rate net of was volume comprised results. facility our and X.X% our into in third growth revenue X.X% X.X% improvement.

net larger our a volume an more being on between anticipated and mentioned a of call, X%, volume smaller to As annualized role growth under balanced with on rate we playing rate. our the role with second a revenue reported growth in and last basis playing and we have we half volume year, year-to-date results same-facility which both between of balanced just On the basis, revenue date demonstrated. net rate

average particular utilizing our mix cohort. from focus with the On line of Continuing high exceed focus total the high lines. business third surgical our mostly as with over XXX, to per in a of started recruiting our over performed on the pace our experiencing brings consolidated year's exceed total. year The recruiting areas a volumes This strong acuity with XXXX orthopedics, consolidated by year's such new spine and the last were our recruits rates this facilities recruiting in basis, volume case with for the XXX in recruited we've cases in first rate X specialty on the to case in wave and acuity initial physicians been volume and continued the XXX,XXX cardiology. and quarter last quarters just expectations year, quarter positions

a compounding period class to XXXX to compared XXXX more XXX% strong as year-over-year recruiting generating As in drive the continue revenue our our with comparable in cohorts each growth XXXX. reminder, of

to musculoskeletal, our with XX% Our acquisitions over procedures recruitment growth last in and year-to-date nearly activities, performed XXXX, in development de accelerating novo have continued XXX,XXX especially growth, year. MSK-related fuel representing

not and in care slowing in in and in just with the in growth continue surgeries XX% to see is portfolio the a early volume rate joint high ASC continue well importantly, our cases to disproportionate shoulder long facilities increase team do continue of growth in ASCs mid- grow knee hip, over total case That to and More this We the term as with quarter. in transition our at acuity innings, we recruiting to positioned this setting. are our into space. site shift the

initiatives operating facilities. ongoing in basis the with quarter our reflects scale Moving which and year to to that increasing on improvement synergies prior previously margins, operating over along continue improved by quarter our XX.X%. achieved benefit both points from acquired This to our procurement efficiency XXX

us the accelerate growth. in growth. M&A with front our with this deployment process am made to surgical focused an including continue novos have the increasing acquisitions short-stay that progress de of spoke number into on sustainable, high are together deeper diving I And the position activities These on we our facilities company's Finally, long-term capital acuity that Wayne year, the and just pleased acquisitions very with about.

partners closing, a relentless clinical patient proud on our In superior Surgery experience Partners' delivering talented with I'm for of many high their colleagues our focus physician and quality.

physician benefit the highly With our in of team model, outlook. unique corporate growth growth-oriented long-term confident supporting partnership our remain I collaborative, our

results. now to Dave? provide With turn Dave the financial color to over our on additional that call I'll said,

surgical all in total surgical Thanks, year combined cases higher XXX,XXX focus Eric. consolidated our we actions with our over top acuity third growth the double-digit Starting to impact higher-acuity $XXX.X is last procedures, growth the nearly reflected supported with of of revenue on case in specific the specialties, increasing The MSK-related and quarter. managed in continued million. cases. growth cases specialties acquisitions XX.X% XXX,XXX in surgical spanned which and line, care These an performed across cases

Eric mentioned, As our same-facility and third in total revenue the increased quarter. Wayne X.X%

We of year to in high continue same the exceed range. facility with revenue facility full net to growth XXXX, forecast revenue in X.X%. our growth revenue algorithm was to single-digit Year-to-date, net our target same X% same-facility finishing X% our

more our quarter. $XXX.X being line basis, quarter, Our an continued fourth and forecast the EBITDA volume a for volume Adjusted of was expansion. rate larger rate a a million and on with the with role anticipates us margin annualized balanced in in expectations of role XX.X%, giving between net smaller margin playing playing third revenue

continue full points We believe margins basis annualized over XX XXXX. improve to by least at will year

with quarter liquidity. of of had $XX We amount Hurricane over and portfolio. in cash was the to million generation total million timing in combined working marginal flows a capital cash quarter. with our impacted transactions Helene. the in revolver We operating ended in involving available reported capacity, $XXX due underlying routine $XXX management as million we capital as We cash. from This When by confident the efforts well the the third on collections working our remain impact

the balance to Moving sheet.

through variable X% In rate we the rate caps billion component in we more limit outstanding corporate March billion The corporate after term the $X.X with favorable And is debt XXXX. such XXXX. in interest at rate until environment have the have no rate fixed approximately event, becomes improvements. We maturities on on $X.X will our interest of loan XX, interest future, that, in place the capitalize effective our debt to that X%.

debt-to-EBITDA total Our prior quarter was third credit net as end. calculated quarter ratio our agreement X.Xx of with under consistent

the in timing impacted be based time, below ratio term reminder, but leverage we will on project X.Xx. this ratio a this of short the acquisitions, As be will over

of remain confident about the Carrying optimistic company's we and year-to-date the momentum results, growth. our

implies $X.XXX XXXX year $XXX EBITDA billion to our than respectively. net million, guidance expansion, guidance. project full continued year-over-year adjusted margin continue We and with consistent revenue long-term This and greater

With the over for call questions. operator that, Operator? turn to like to I'd back the

from Our Instructions] Tanquilut Brian [Operator first question with Jefferies. is

Jack on got for You've Brian.

cash front. there details caught the Just on I to just all make the off want correctly, sure to kick free Dave. I

think just events going framework quarter next had the of on some working is if of quarter Or you're we understand, unpack point say in about and pieces movement or would But just on back over due back free the of would great. piece, you you next laid capital from as some to moving if So the your couple cash the could to before. of weakness both cash in the that be generation, the the in you quarters? most you the swing of that broader free out sort the I cash know on sort couple, are pulling expectations that

deploy for Jack, you all flow deployment. maybe anticipated and to and to to we're be our that start, our commitment just diligence to I'm But think of details generation costs about static a asked $XXX we integration modeling, some at going aligned, flow opportunities million cash make and continue sure the M&A. we Dave pleased But our on cash with it's about. to our based have on $XXX environment million to the includes elaborate when

model as So it's about company. growth that. that it a a static we're assumes think But

our the about size pace from the generated de to acquisitions to of good acquisitions. and to can from our future our with our impact and or elaborate on starting get continue specific you available so year-to-year. you of you point, further? both to do and flow But go the there. we kind quarter-to-quarter novos and want cash fund Dave, operating which And more is But start of feel cash kind

Jack. Yes. Thanks, Yes.

can flow million our you million sorry, of or partners that on or that. $XXX basis $XX operating roughly our in the so to as $XXX compared we've see, last and that, been what distribute now we with year. CapEx did year-to-date relatively approaches maintenance past The our remained cash $XXX to So quarter a roughly reporting consistent million of million this -- of components

to Wayne that cash execution And of of with we executed was So biggest transaction-related what costs variable model is are that the spending our going include associated into business forward. the flow our acquisitions on both integration prior which change related the driver flow, the just our deals rolling year. mentioning cash costs, this year-over-year

said M&A will activities you from that less is more what costs fluctuate But that, variable spend so year. typical having adjusted capital-related quarter directly reconciliation time. level little spend. those our year-to-date But inside norm than bit did that are in to a And can you That Xx to are is level is. historical time So far our the as related working our spend of point this earnings. see the Xx of there of out, than

others the include when about and that things dynamics. some we of like talked liabilities. accrued payer of have experiencing timing occurs those issues to other those But are related would also So payroll industry-related

-- of our to then the Of earlier, enables And be is has being where business Florida a to us on it's inside experts our our the more impact part hurricane a because cash the of and happens finally, impact we reside, advance. business the in marginal way, and effect of timing an in runs did Southeast payers of that in Nonetheless, services, where country. us and the with as scheduled communicate way lot which a hit course, which area impact the that an mentioned it primarily hurricane muted quarter. down the geography billing

So of -- last puts just we cash pressure did some lose week a of that in September, activity little on collection which bit it.

Some integration-related costs as of But to we mentioned, things variable is of those perhaps Thanks, transaction I one Jack. expect return. we should that, and anticipated. the haven't that

That's a maybe quick taking it. Got Okay. back follow-up, really just And further. a then step helpful.

things that the a of the strategy. of market in One been the surgical little misunderstanding we've around perceiving bit hospital

ask And step Wayne. I back probably taking maybe so taking to and for I Eric guess just -- wanted it's or

consolidated tracked has of overall to on where on you is get a color about hospitals, side those Partners like you As Would of what little to the the strategy bit why to you sort how that stand things. service the Surgery broader think love business physician-owned and with business? or relative that of surgical

appreciate Jack. question. the I Sure,

First acute to our hospital differentiate from I of ER has visits. or all, median X our X surgical I has care. hospitals either next would of traditional five mean a

And them our like are really in these are of facilities. ultimately an ecosystem. much they basis because the We so elective-focused very strategy

if of across us think the any whether about spectrum. cardiology entirety orthopedics with number the acuity you it's of to physicians or allows it So or partner specialists,

within increased all And And we ASCs gives for our to again, us a basis cover treat that to they are where grow so a at in in those around been really, -- really back way their to But full and us population. which that want partnerships. you really them, allows our to patients tool a basis look assets, have a a ASC to patient build deeper entire footprint. powerful partner are it's to them surgical their physicians again, they perspective, us. I are go to, more to we autonomy physicians allows our also allow cover They markets

Our next Gajuk of question Bank with is from America. Joanna

$X matter? You mentioned of for the an volumes there for but add-back collections. to to quarter was some quarter was any impact get that million fourth in than there and to less impacted third I And know adjusted EBITDA hurricanes, for

somewhat good the in impact of that all you marginal, the did Southeast, Yes, -- from us. to the and of It a that, was quarter. was it the not as timing but of swath know, hurricanes the really for large week affect happened the last

the there quarter. third an was So clearly inside impact

of impacted. into damage will impact facilities fairly quarter. only of Some the community fourth that significantly the was and one our sustained There our was facilities

carefully we So it's we is itself open, but that pretty schedule a second are right tracking one partial go the facility The now. on into as quarter.

but reopened normal, All other our and back business have marginal is facilities on impact as and of cases. to revenue

Okay.

to quantify? So it's small too

Yes.

Okay.

call guess, So now I I same-store volumes, growth. I year-to-date adjusted, cases, on tracking guess, around, guess, this X% it,

we how to this comes growth? should when sort think of into is going it So next same-store year about

it's early XXXX. talk about think off, first for too so I Well, to Yes. us

to been at rate our I'll proud year-to-date we so a that our of reiterate how facility X%. X% exceeds we X% we've that about growth what year. far just produce same to growth talk now long-term With often on able this of are algorithm So basis,

us at to So soon It to XXXX. great look and that our for algorithm. growth, our you history achieve. facilities long-term you'll is we've great great that of But been I'm for on constantly case momentum, facilities, above able if proud kind growth support are too that organic at see, growth, look our long-term

some to from -- it question have self-pay I But But understand pretty impacting to comes next guess, I specifically. your Medicaid your mean, surgeries. somewhat is when about not outpatient peers headwinds I but guess lower volume and talked ready I talk you're Okay. about another year solid. helpful, still

not So as you presumably, really about much, that's impacting those dynamics?

Great question. Yes.

back goes this comment much business. my hospitals. and don't reminder, on a We have our So to Medicaid earlier surgical

We business. have ER very little

and group. are commercial We all Medicare almost pretty an much primarily elective

have grow not felt a and matches we rate that have And expect. we so impact, continued consistency algorithm we and our that at to

from Our UBS. A.J. Rice question next is with

thought the question. pricing volume another on and Just

higher take to procedures time, and longer things, on revenues. the but yield versus to shift As you acuity volume joints the does Do trend higher hand, surgical pricing? other other impact how see those for the just that the generally

impact may thoughts So Any pricing volume. that and on long-term on the a just between have metrics that?

per I said, would start are what minute procedures. with just you clearly, procedures but more which dollar higher these other that contribution require is, time, a have OR than

our time facilities can. to of algorithm, lower X% of It's high-margin prioritize acuity so Relative important to and nonetheless to the those simple, right? within X% we the X% X% volume it's procedures, able in we And we other ones. were fill but then to where with And rate. growth still obviously, it's

to We have on going of regarding generally ultimately, see higher-quality that. we a to outperforming the same-store a into seen model agnostic this who's we're of forward. And track procedures close basis. algorithm business in because is acuity a changing don't to setting. consistently This year, record be our We X% higher have about office growth lower-cost, really anything the shift

the So quarter-to-quarter, I don't think year-over-year play to the would from math play with with but to it will games math basis. continue expect on games it see a I

question, The a hurricane the little about Okay. spent I we time talking impact. other know only

supply it others you? any on to an expect -- are calling fourth chain, cetera, of et IV the quarter? Did Some out in bags, do impact have the impact that the Or on cetera. that et you

that that Thanks we Clearly, something question. for it's Yes. track.

canceled on we happy it not to say got right somewhat Baxter of You're impact the proud to having We cases And North that got a team. we of behind country were us that any pretty We on of variety abate. the talking I'm have sit of result a it. different our companies chain had in to as having that supply say really away. partners portfolio I'm part about quickly, We're pressure. liquids. Clearly sit we mean, it starting here Carolina long-term kind shortage. of I that that anticipating we're benefit -- did in the that kind of top not a I across see facility today, as of of of procurement And

has kind at the many combination our had allowed and hand, So storm facilities our as us of were. with we to our as backstop it that with partnership great that both and providers on inventory our of weather of

question. great Thanks, A.J. a So

is next Mok Barclays. from with Andrew Our question

wanted just around free year. I flow clarify expectations to cash the for

I cash the think pleased transaction you higher costs. said with you're noted generation, flow also but

So free less million the to Is me clear that the million still it we about cash be for $XXX achievable? was whether should target flow $XXX to thinking year. still

Andrew, thanks.

trying capital the nature I the to nature of from away moved deployed, recognize point folks that we to flow of that we've just is why the our that is is cash to free does think thing flow when not which static metric. modeling actually were reflect out dynamic cash

So current on in year, deployment. this we're M&A Xx

so means and doing integration diligence. we're more that more ultimately, And

static point model, a dynamic So one we're where we're to in provides value. number no in a but providing backing a longer is into model thing, saying, that look,

Was of and response things that it Can helpful. in if million the you more to then some us about $XX that G&A or nature? on G&A the That's color looks of it like XX% that line in it. nearly look the the was challenges sequentially. or And from driving planned lower. what's quarter, hurricanes give Got at down I

Yes.

last talked our as reminder, million, quarter. a compensation we of G&A about in $X stock-based quarter our have kind So call true-up a second of about did

QX basis, normalize you expenses with if full for expectations. in our amount a on year line So that our G&A

next from is Tao Qiu Our Stifel. question with

And Macquarie. that time, year. this rule? from the on term? were second just foresee regulatory any I'm under decision Qiu you procedures CMS in to have comments the ASC Trump changes acceleration noticed we guys shift under you first out the Tao of is terms In do not many to the potential the second kind presidency? IPO final wondering in phase of particular, Medicare size if his added Remember, payment This list, Any made CPL

for the Thanks Yes. question.

there and those. a right, us the So there it growth the way to was was this recent you're years, to have a of again, go in lot list there's long on year, change although, drivers for been not key -- at

our the So I we're nice pretty been Medicare certainly, a well just with algorithm. normal update. pleased would that's overall say, thing above And

to pricing the favorite of tons surprises, no is your list real nice. news got procedures change. look, administrations tremendous question, of a space as We good value about our that in are within create. room of both the been So and as to that I far there. has expect But the say goes, we the because don't election we've would

to again, time where are inpatient-only say opportunities the goes. I You we're us our are in, they within eliminate and would wanted them. administration Trump noting see list. already right already was for last that the realm executing the But biggest We'll on that

Great. question. a And clarification second,

expense D&A the done up $XXX I second stepped to to contributing the So up acquisition probably step related $XX the But million largely million anything quarter? that's think else quarter, this quarter. higher in from it's the

-- talking G&A the expense? you're In about

No, D&A, and amortization. depreciation

the That's Yes. of assets our X portfolio have that the years. in joined new introduction past

driving that So that would most increase. be of

is from Matthew Our question with KeyBanc. Gillmor next

little the for terms terms of their in of was maybe ask faster seems to of doctors takes comments about platform, joining how in come you're case? to how I they new any migrate this you the bit recruitment. the physicians physician those them wanted platform. year It we the just business to facilities? long if if maturity it should over as running had that your on to like think on a And Curious

mature a be creating say, bit great and now of little a for use of would targeting. that with We And our It provide of we quality more saving opportunity year the Yes, place. get on I this us our the -- use pace lot drive to last Yes, more Matthew, and our we're to benefits specialists facilities the question. participate year. every more also data say in year, pleased very can the year. for this ahead recruitment the we I'd and record is can system. with to thanks them aware acuity health value in those for are higher a

that seem a we're be to gain to does continuing So momentum. where place

our typically year around we We that we mentioned Your a after them, and the or prepared year, is see year how more recruit and up. that in second remarks X X, as much cohort group continues question last double growth through X. in the

so effect. it compounding And is a

excited excited So this about much how particular, of independent, place more to health certainly, want we're continue the class. we to class and this patients for physicians, want value We're about of be both specialty is very high remain a And attractive create the control, acuity. who ability but very, a who in and system. their for physicians better lifestyle lot to physicians

follow-up exposure think, a pretty if week, and your was just you exchanges. some the just of would perspective as quick curious kind the to that. happens your exchanges then to with but characterize I was least the been, last hear the acute with I there. was My could what And care limited, focus subsidies election enhanced great Great. with at sense there's on it hospitals, on be

and limited, but Yes. I how that kind think of wouldn't relatively that I in well But limited. going high-value No, matter to would product, going we positioned, where predict the that's great is It not administration, go are it's place structure. relatively obviously, to deliver to they a with say question. but a we're it's

that watching don't material. anything be we'll anticipate but that's carefully, so And

James Cantor Sarah from is question with next Our

it for the have like wondering talked can cash the about $XXX broader a also XXX about not You've level used free that and and mind, to XXX what that at Street Is account general if or I'm like the threshold needs consistently just I million but of cash was for lumpiness growth use today with flow the And at, feel to lot like payroll. for higher cash? of something self-fund mind thinking in of we're you this lumpiness really timing operate growth? in their

our to to the million. we've Sarah based million ability $XXX seeing go-forward no $XXX on will not M&A on we strength so I'm the But far. a even based balance that I everything that following our we've basis, you, modeled over have on experiences sheet of tell been concern and that the with fund

we modeling suggest over period, sheet the leverage would at end that with X.X revolver the balance the of use our such years flow that So nothing the below is liquidity X strong our end our total our next target, a sufficient on that of generation. cash and X-year

this does at need we of inclusive there. our And change that point, behind So whatsoever. that's growth lever not inorganic to algorithm really that sit out growth as confident is feel that. We

And clarify, any case then Got it. if quarter? could per that you impacted this revenue are there moving pieces

Yes.

be we as call, by mentioned, growth So to going impacted I same-facility equation the last the our rate think, on our was mathematical of how same-facility growth.

don't same-facility of cases of want over-index So I'm -- talked one any us us on we've rate in one before, I particular you or -- just as about kind to remind going and quarter. to

that there. for of of that behind on to so calculation our sits on So it the have some we variances these it basis, look at kind a tend just normalizes longer-term can calendar unusual

the both from X% same fact sides a our on it. on we're contributions of just coming or basis about year-to-date with reiterate I'll X% So that facility

Now same-facility if call. line quarter in in and lower growth that quarter but GI relatively it higher And in procedures the The rate we our return with ophthalmology. was the had third favored the exactly quarter, second from we calendar the and remember, saw predictable volume, our with our you strong, that case of mentioned on acuity was what was line inside in expectations.

through. drive the rate pressure coming side, So see that which some is going just on math you the Sarah is can that. to of how

beginning Those seen total a as However, acuity. XX% at joint we call, procedures. the talked about high are have in replacement very of we growth the our

seeing. So underlying that the you're that kind of rate is

you case that of the impressed same the inside that's that so the per come a predicted, net look we is It's do but company just quarter, way works produce be still has again, will overall continue everything fourth to producing, revenue but odd you'll results. nothing It those So in when through. the quarter at it will the facility kind and new. calendar

basis, So we're underlying on an proud. very, very

with Our Benchmark Sutherland question from is next Company. Bill The

a Eric, could touch you some your lot. mix wondering case could on if how I hearing And provide now? a you wonder -- on been second. just for dimension EP that's I've procedures that fits how cardio into if picking about up

And future into is to the Bill, we're with me just about couple a Yes, ASC you've of about procedures cardio safely. It times. the talk I of the ability cardio. question. saying would their move thanks for heard start and excited cardiac

EP, stuff So don't of require in XX% our procedures move rhythm fluoroscopy to today. like to easier lab, over facilities are those you have cardiac a facilities cath into that's procedures, Those mentioned our do particular, management.

about probably we've a albeit lines, growing to year so a add on we capability. that we're talked X see XX service that facilities this Again, a one our trying as small add And end. to lot of fastest

it's practiced So as like growth. come orthopedics, we docs, too, employed will where of that think you in expect the specialty. a And ASCs. I rapid corner, turn but be do these in know, a Bill, much a lot historically it they haven't saw highly to there we will time a

being wave. rapid area, a learning that. growth, is be the And we a to little We kind small lot of it of interest so Bill. working that through we're the of in over haven't caught also it's again, a curve really of somewhat rapid it see have do muted most curve, do heavily there excited employed bit expect a but but in, But next We states several specialty yet. CMS the the with up the by it, about we're and as next certain kind years, big fact but

we're the early but think orthopedics, innings about there. in you after still If

So most are fantastic. opportunities

Yes. me Bill, -- quick. I'll to just real add that let on

another saw just we're for orthopedic we point getting ready of like as what Much So the it reference. company. on side, a

So we now it. know are opportunities. XX% lot But what's kind it. We of facilities a about know of cardiac of doing our capable driving

been when we've company positioning the does this So opportunity for manifest.

and now mix de the us where partnerships. update looking back my and minority was at interest with launches. syndicated the And I consolidated calendar you maybe where then And fully Great. on . fall they the on notes novo, of into stand

a novos really Yes, that have novos is Bill, de in of XX over that going think question. of of great for pipeline. de any kind the given with -- lever in us doing about. the year, target I excited been we're course lever we're de the for novos growth or to It's us

remind a favorable start. the don't the at With an consolidate opportunity even relative a some economics really you will capital I for are M&A, still use But point for for de interest to they move They us, so novos end XX, for into Most a capital over of entry to far, though low since X they year in months with the future and the to minority framework. of in cost That's consolidated us opened point. to interest. the are are past these or going XXXX. this de year, going novos, Six doing next happen we've think in be we so. And by couple investment us. of minority we've of been we've more how best X opened of the

If also you to we'll earnings, for the in. tolerate facility amount interest that management of of We'll minority get to can but us bring get continues fees time the grow. kind as

So now change these for right de No every doing approach favorable us. de of are to the in novos year. XX novos very long-term our economics

Rossi is Our with next question JPMorgan. from Benjamin

comments. you in the opening mentioned M&A, On deal the Chicago

Just align pursuit strategically pipeline capital at you that the more Where this up of see we you're targets consider in position yourself whether wrap curious you deployment? acuity procedures? year? a with point And your opportunistic as the approaching higher how for

we've with this what capital we're obviously can to $XXX guidance the the mentioned, do we're the you million of going of the very Duly that be Ben, with our added for as divested is obviously to growth what said predict. as consistent, being profile. always providing start of we've thanks our with fickle a is We're assets obviously, pleased to and over difficult capital. as saying, far last future acquisition, portfolio on for year, incremental reflects capital as year. that with deployed, timing outlook M&A question. along which we But I'll redeployment It with not XXXX

I'd of we've So opportunistic. always to your But that. caution point, ahead been getting

to procedures. high continues that We're continue grow well be so position. positioned acuity to to And our

current a the buy-ups behavior And can on remind just book? you you opportunity And potential your it. opportunity, seeing then on of on your stronger Got us buy-up volume in buy-up regarding change physician environment? are any

those not although every as be always -- to will year, opportunities. buy-up as There's look those, about. talking at pipeline we mature. novo our of So those we look portfolio. grow opportunities There they We for our de across opportunities a ton we Dave grow is continues what was

to We commitment having that with have buying. physician and balance

kind facilities. current on in as huge our And side consolidate it's opportunistic majority always we the not so our we well. of of are as opportunity But portfolio a that

model mentioned us kind Yes. I to we're in for a looks what of have know it's agnostic have that whether just consolidation a or revenue like. -- before, results for those it of to frustrating kind I criteria not. But

business of -- it's going we there's going the what every off model. -- driven get need off our driven physician one syndication It's to sure healthy Eric the facilities. in be of one deals, ever of it's to the present each desire between As a of is ownership sustainability to a have. really but that that not we it's model be make long-term a That's natural mentioned, consolidation. opportunity mix to our of to drives And

last Cowen. Our Ryan Langston from is TD with question

recruitment. of physicians for work these have on on Will physician I a hospital? Ryan. ask of new to outlook in you is anything seeing This but my terms Most I of just preferences shifting employed long-term your the for guess questions been environment would asked, versus in kind for Are

general, question. very it's I say, stable. great in would Ryan,

answer interest, there's seen how allows see get be current our have right? gives an and that their have frustrated see system kind that we're to them right? We say as the to on more a having can like more numbers, a think We don't with all. in machine haven't lot are to of we of time who efficient, them to continue with continue more recruitment an allows things procedures independent more opportunity to that done to to we surgeons they efficient that, have chance that them do answer mostly and And you We a because scheduling, provide in their time, provide for consistent strong to them wane I physicians. spend and for at practice. in up be to much time as end they

Okay.

questions. I all appreciate So right the

the I last up. was think go wrap just question. and I'll that ahead

team, call say our and we partner that for our great want enhance joining patient our you each partnership. of a management Hope morning. you I Before And our you entire partners this day colleagues to all every deliver on life mission with have would physician to quality of conclude, like on to I thank our thank behalf to through to day.

conference. concludes today's This

your Thank your this at participation. disconnect time. may You for lines you