Surgery Partners (SGRY) Provides Preliminary First Quarter 2021 Financial Performance Update

Surgery Partners, Inc. (NASDAQ: SGRY) ("Surgery Partners" or the "Company"), a leading short-stay surgical facility owner and operator, announced its intent to raise incremental term loans, convert Series A Preferred Stock into Company Common Stock and provided a preliminary financial update on first quarter 2021 results.

Incremental Term Loans

Surgery Partners announced today that it intends to raise $125 million of Incremental Term Loans (the “Incremental Term Loans”) to refinance $119 million of existing Incremental Term Loans that were raised in April 2020 and to pay the fees and expenses associated with this refinancing. At prevailing market rates, the Company expects that this refinancing transaction would save the Company in excess of $5 million in interest expense annually.

Conversion of Series A Preferred Stock

The Company also announced today that it has sent notice to BCPE Seminole Holdings LP (“Bain Capital”) of its intent to convert all of the outstanding 10.00% Series A Convertible Perpetual Participating Preferred Stock into approximately 22.609 million shares of Company Common Stock on May 17, 2021.

“We are pleased that our company has achieved this important milestone,” said Eric Evans, Chief Executive Officer of Surgery Partners. “It’s a testament to the relentless focus of our colleagues and physician partners on clinical quality and patient experience excellence as well as our management team’s execution on our strategic initiatives.”

“We continue to be excited about the long-term growth prospects for Surgery Partners and look forward to seeing its many investments come to fruition over the coming years as management continues to execute on their strategy,” said Devin O’Reilly, Managing Director of Bain Capital.

Interim Update on First Quarter 2021 Performance

While the Company is still in the process of closing its first quarter ended March 31, 2021, in connection with the offering of the Incremental Term Loans, the Company is providing investors with the following preliminary unaudited estimates for the quarter:

• Surgical case volumes are projected to be approximately 125,000 cases
• Revenues are expected to exceed $505 million
• Same-facility revenues are projected to increase by approximately 16% to 17% over the prior year period, with strong volume growth and net revenue per case growth
• Adjusted EBITDA is expected to exceed $70 million, inclusive of at least $9 million of Adjusted EBITDA benefit from recognition of CARES Act grants in the quarter
• Cash and Equivalents is expected to be approximately $540 million as of March 31, 2021
• Credit Agreement EBITDA is expected to exceed $355 million

Based on the preliminary financial results for the first quarter of 2020, the Company projects that Adjusted EBITDA for 2021 will be at least $315 million.

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