Nov 4 2013
United Surgical Partners International, Inc. ("USPI" or the "Company") today announced results for the third quarter and nine months ended September 30, 2013.
Third Quarter Financial Results
For the quarter ended September 30, 2013, consolidated net revenues increased 17.7% to $151.0 million compared with $128.3 million in the prior year period, or increased 10.6% excluding the impact of two facilities that were previously accounted for under the equity method subsequent to the prior year period. Operating income for the third quarter increased 12.5% to $63.1 million as compared with $56.1 million for the prior year period. EBITDA less noncontrolling interests increased 3.9% to $49.3 million in the third quarter of 2013 compared with $47.4 million for the prior year period, although adjusting for a $2.4 million real estate gain in the prior year period results in EBITDA less noncontrolling interests growth of 9.6%. The operating results for the third quarter of 2013 were driven by modest same-facility revenue growth and acquisition related revenue growth.
Cash flows from operating activities for the third quarter of 2013 totaled $50.7 million compared with $54.5 million in the prior year period. During the third quarter of 2013, the Company and its consolidated subsidiaries invested $2.6 million in maintenance capital expenditures and an additional $1.1 million to develop new facilities and expand or invest in the infrastructure of existing facilities.
Nine-Month Financial Results
For the nine months ended September 30, 2013, consolidated net revenues increased 17.0% to $451.4 million compared with $385.7 million in the prior year period. Operating income for the first nine months of 2013 increased 3.3% to $181.9 million as compared with $176.1 million for the prior year period. EBITDA less noncontrolling interests increased 6.9% to $152.3 million in the first nine months of 2013 compared with $142.5 million for the first nine months of 2012.
Cash flows from operating activities for the nine months ended September 30, 2013, totaled $128.1 million compared with $129.9 million for the prior year period. During the first nine months of 2013, the Company and its consolidated subsidiaries invested $7.8 million in maintenance capital expenditures and an additional $10.5 million to develop new facilities and expand or invest in the infrastructure of existing facilities.
Systemwide Financial Results
Due to the Company's partnerships with physicians and prominent healthcare systems, the Company does not consolidate the financial results of the majority of its facilities. While revenues of the Company's unconsolidated facilities are not recorded as revenues by USPI, equity in earnings of unconsolidated affiliates is a significant portion of the Company's overall earnings. To help analyze results of operations, management uses systemwide operating measures such as systemwide revenue growth, which include revenues of both consolidated and unconsolidated facilities. In addition to overall systemwide revenue growth, USPI calculates growth rates and operating margins for the facilities that were operational in both the current and prior year periods, a group the Company refers to as same-store or same-facility. This group also consists of both consolidated and unconsolidated facilities. At September 30, 2013, 149 of the 214 facilities the Company operated were not consolidated.
For the third quarter, the systemwide revenues of the facilities operated by the Company increased 7% on a year-over-year basis, driven primarily by acquisitions. On a same-store basis, systemwide net revenue increased 1.5% in the third quarter. For the first nine months of 2013, the systemwide revenues of the facilities operated by the Company increased 7% on a year-over-year basis, also driven primarily by acquisitions. On a same-store basis, systemwide net revenue increased 0.5% during the first nine months of the year.
Development Activity
During the first nine months of 2013, the Company acquired one facility, opened one de novo facility and sold its interest in one facility.
Conclusion
Commenting on the results, William H. Wilcox, USPI's chief executive officer, said, "Our operating environment remains challenging as macroeconomic factors and the impact of changing benefit plan design continue to have downward pressure on volumes. We continue to believe that the combination of our partnerships with prominent health systems and physicians and our market-specific strategies position us well for the future."
Source:
United Surgical Partners International, Inc.