BRENTWOOD, Tenn.–(BUSINESS WIRE)–Ardent Health Partners, Inc. (NYSE: ARDT) (“Ardent Health” or the “Company”), a leading provider of healthcare in growing mid-sized urban communities across the U.S., today announced results for the second quarter ended June 30, 2024.
Second Quarter 2024 Financial Summary
(All comparisons versus the same prior year period, unless otherwise noted)
Full-Year 2024 Financial Guidance
_______________________ | ||
1 |
Rent expense payable to REITs consists of rent expense related to a master lease agreement (the “Ventas Master Lease”) with Ventas, Inc. (“Ventas”), lease agreements associated with the MOB Transactions (defined below) and a lease arrangement with Medical Properties Trust, Inc. (“MPT”) for Hackensack Meridian Mountainside Medical Center. |
“Our second quarter results were highlighted by strong top-line growth and margin expansion, driven by executing on our strategic priorities and continuing to build our consumer-first healthcare delivery model that optimizes access and provides care over the course of a patient’s healthcare journey,” stated Marty Bonick, President and Chief Executive Officer of Ardent Health. “Looking ahead, we are well-positioned for continued growth with a strengthened balance sheet and capital structure from the successful completion of our IPO in July. We believe our dedication to improving healthcare in the communities we serve and our balanced growth strategy position us to deliver long-term value for both our patients and shareholders.”
“Fundamentally, we continue to see broad-based demand for healthcare across both inpatient and outpatient settings, while systemic labor cost pressures continue to abate and normalize. This stability enables us to sharpen our strategic focus on growth and improving access to healthcare within our markets.”
“On the operational front, our team continued to successfully execute on its operational excellence initiatives, resulting in continued supply cost efficiencies and lower contract labor costs relative to last year,” continued Bonick. “Service line optimization drove an expected reduction in outpatient surgery volumes, and, in turn, contributed to a higher level of net patient service revenue per adjusted admission and improved margins, relative to the second quarter of last year.”
“We currently expect that continued volume growth in our markets, when combined with our strategic execution, should enable us to deliver sustained profitable growth through the end of the year,” said Bonick. “To that end, we have introduced our full year 2024 guidance, which reflects year-over-year growth in total revenue of approximately 6% to 9% and year-over-year growth in Adjusted EBITDA of 32% to 38%.”
“The completion of our IPO last month began an exciting new chapter for Ardent Health,” continued Bonick. “After giving effect to receipt of the IPO proceeds, our total available liquidity was approximately $832 million as of the end of the second quarter, giving us ample capital resources to pursue acquisitions by leveraging our differentiated joint-venture model. We are actively evaluating a strong pipeline of potential acquisition opportunities that represent a strategic fit for our platform.”
Financial Performance Summary
Total revenue for the second quarter of 2024 was $1.47 billion, compared to $1.37 billion in the second quarter of 2023, an increase of 7.5%. The increase in total revenue reflected a 3.4% increase in adjusted admissions and a 4.1% increase in net patient service revenue per adjusted admission, when compared to the same prior year period. Total revenue for the second quarter of 2024 also reflected a $13 million increase in supplemental program revenue associated with the Oklahoma directed payment program (“DPP”), which became effective on April 1, 2024.
For the second quarter of 2024, net income attributable to Ardent Health Partners, Inc. was $43 million, or $0.34 per basic and diluted share, compared to $33 million, or $0.26 per basic and diluted share, in the second quarter of 2023. Adjusted EBITDA for the second quarter of 2024 was $122 million, compared to $102 million in the same prior year period, an increase of 20.0%. The increase in net income attributable to Ardent Health Partners, Inc. and Adjusted EBITDA was driven by higher profitability resulting primarily from an increase in patient volumes, improved reimbursement rates, strategic service line optimization and improved operating leverage through greater scale and cost reduction initiatives.
Operating Performance Summary
The following table provides a summary of certain key operating metrics for the second quarter of 2024 compared to the same prior year period. See the footnotes of this press release for definitions of the metrics below and a full list of key operating metrics.
|
Three Months Ended June 30, |
|
|
|||||
|
2024 |
|
2023 |
|
% Change |
|||
Adjusted admissions |
|
85,763 |
|
|
82,964 |
|
3.4 |
% |
Admissions |
|
38,958 |
|
|
37,080 |
|
5.1 |
% |
Inpatient surgeries |
|
9,012 |
|
|
9,090 |
|
(0.9 |
)% |
Outpatient surgeries |
|
23,758 |
|
|
24,432 |
|
(2.8 |
)% |
Total surgeries |
|
32,770 |
|
|
33,522 |
|
(2.2 |
)% |
Emergency room visits |
|
156,287 |
|
|
152,915 |
|
2.2 |
% |
Net patient service revenue per adjusted admission |
$ |
16,859 |
|
$ |
16,196 |
|
4.1 |
% |
Strategic Update
Ardent Health is committed to delivering long-term value creation through a multi-faceted strategy focused on targeted market share growth, operational excellence, and disciplined capital allocation. The Company’s growth strategy and overall value proposition are driven by its culture of care and commitment to improving healthcare in the markets it serves.
Balance Sheet, Cash Flow & Liquidity Update
As of June 30, 2024, the Company had total cash and cash equivalents of $335 million and total debt (including current maturities) of $1.09 billion. During the second quarter, the Company opportunistically prepaid $100 million of outstanding borrowings under its senior secured term loan facility using cash on hand. The Company’s net leverage ratio as of June 30, 2024 was 2.3x, as calculated under the Company’s credit agreements, and its lease-adjusted net leverage ratio2 was 4.0x. At the end of the second quarter, the Company’s total cash and available liquidity was $624 million.
During the second quarter of 2024, net cash provided by operating activities was $120 million, compared to $43 million in the same prior year period. The increase in net cash provided by operating activities relative to the second quarter of 2023 was primarily attributable to an increase in net income and higher cash flow generated by changes in net working capital.
On July 19, 2024, the Company completed its IPO of 12 million shares of common stock at a price of $16 per share for gross proceeds of $192 million, before deducting underwriting discounts, commissions and other offering costs. Subsequent to the closing of the IPO, the underwriters fully exercised their option to purchase an additional 1.8 million shares at the IPO price of $16 per share for total gross proceeds of $29 million. Including the full exercise of the underwriters’ option, total proceeds to the Company from the IPO were $209 million, net of underwriting discounts and commissions (but before other IPO costs). After giving effect to receipt of the IPO proceeds, our total available liquidity as of June 30, 2024 was approximately $832 million, and our pro forma lease adjusted net leverage ratio was approximately 3.6x.
Financial Guidance
Today, the Company issued financial guidance for the full year 2024. All guidance is current as of the time provided and is subject to change.
|
Full Year |
|
Full Year 2024 Projected |
||||||
|
|
Low |
|
High |
|||||
(Dollars in millions, except per share amount) |
|
Amount |
|
% |
|
Amount |
|
% |
|
Total revenue |
$5,409 |
|
$5,750 |
|
6.3% |
|
$5,900 |
|
9.1% |
Net income |
$129 |
|
$247 |
|
91.5% |
|
$268 |
|
107.8% |
Net income attributable to Ardent Health Partners, Inc. |
$54 |
|
$163 |
|
201.9% |
|
$182 |
|
237.0% |
Adjusted EBITDA |
$315 |
|
$415 |
|
31.7% |
|
$435 |
|
38.1% |
Rent expense payable to REITs |
$157 |
|
$161 |
|
2.5% |
|
$161 |
|
2.5% |
Basic and diluted earnings per share |
$0.43 |
|
$1.23 |
|
186.0% |
|
$1.37 |
|
218.6% |
The Company’s full year 2024 total revenue guidance reflects projected adjusted admissions growth of 4.0% to 4.5% and projected net patient service revenue per adjusted admission growth of 2.3% to 4.4%.
The Company’s full year 2024 total revenue guidance reflects an estimated $27 million benefit compared to 2023 from the Oklahoma DPP implementation. The Company’s guidance does not reflect any additional impacts from potential changes in state supplemental payment programs in other states.
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2 |
Lease adjusted net leverage is defined as the Company’s net debt as of June 30, 2024, plus 8x trailing twelve month REIT rent expense as of the end of the second quarter of 2024, divided by trailing twelve month Adjusted EBITDAR as of June 30, 2024. |
The Company also expects that capital expenditures for the full year 2024 will be in a range of between $170 million and $185 million.
The Company’s forecasted guidance is based on current plans and expectations and is subject to a number of known and unknown uncertainties and risks, including those set forth below under the heading “Forward-Looking Statements.” The Company does not forecast the impact of items such as, but not limited to, losses (gains) on sales of facilities, losses on retirement of debt, legal claim costs (benefits) and impairments of long-lived assets because the Company does not believe that it can forecast these items with sufficient accuracy. This is due to the inherent difficulty of forecasting the timing or amount of various items that have not yet occurred and are out of the Company’s control or cannot be reasonably predicted.
Second Quarter 2024 Results Conference Call
The Company will host a conference call to discuss its second quarter financial results on Thursday, August 15, 2024, at 10:00 a.m. Eastern Time.
A webcast of the conference call will be available in the Investor Relations section of the Company’s corporate website at https://ir.ardenthealth.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download, and install any necessary audio software.
To participate in the live teleconference:
United States Live: 1-888-596-4144
International Live: 1-646-968-2525
Access Code: 4437657
To listen to a replay of the teleconference, which will be available through August 22, 2024:
United States Replay: 1-800-770-2030
International Replay: 1-609-800-9909
Access Code: 4437657
About Ardent Health
Ardent Health (NYSE: ARDT) is a leading provider of healthcare in growing mid-sized urban communities across the U.S. With a focus on people and investments in innovative services and technologies, Ardent Health is passionate about making healthcare better and easier to access. Through its subsidiaries, Ardent Health delivers care through a system of 30 acute care hospitals and more than 200 sites of care with over 1,700 affiliated providers across six states. For more information, please visit www.ardenthealth.com.
Supplemental Non-GAAP Financial Information
We have included certain financial measures in this press release that have not been prepared in a manner that complies with U.S. generally accepted accounting principles (“GAAP”), including Adjusted EBITDA and Adjusted EBITDAR. We define these terms as follows:
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and are based on current expectations and assumptions that are subject to risks and uncertainties. Forward-looking statements include all statements that are not historical facts. The words “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable,” the negative version of these words, or similar terms and phrases are intended to identify forward-looking statements. These forward-looking statements include, but are not limited to, statements regarding anticipated financial performance and financial position, including our financial outlook for the full year 2024 and other statements that are not historical facts.
Contacts
Media Relations:
Rebecca Kirkham
Ardent Health
rebecca.kirkham@ardenthealth.com
(615) 296-3000
Investor Relations:
Investor.Relations@ardenthealth.com
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