Sarah James's questions to Surgery Partners Inc (SGRY) leadership • Q3 2024
Question
Sarah James of Cantor Fitzgerald asked if the sustainable level of free cash flow needed to self-fund growth is higher than previously thought to account for lumpiness. She also asked for clarification on the factors that impacted revenue per case during the quarter.
Answer
CFO David Doherty asserted that the company has no concerns about its ability to fund future M&A, stating their five-year model shows sufficient liquidity to meet growth targets while keeping leverage below 3.0x. He explained that the Q3 same-facility rate was impacted by a predictable calendar shift favoring higher volumes of lower-acuity procedures like GI and ophthalmology, which mathematically pressures the rate metric despite strong underlying growth in high-acuity total joints.