Financial Data and Key Metrics Changes - Net revenue for Q1 2024 was $181 million, an 8.7% increase from $167 million in Q1 2023 [21] - Net patient revenue increased by 9.7% year-over-year to $165 million, while other revenue rose by 0.7% to $16 million [21] - Adjusted EBITDA for the quarter was $6 million, reflecting a 3.6% margin, up from $4.8 million in the prior year [25] Business Line Data and Key Metrics Changes - Patient visits per day per clinic increased to 26.9, up 1.9 visits year-over-year from 25 [21] - Rate per visit improved to $108.42, a 4.5% increase from $103.76 in the previous year [22] - Clinical FTE growth year-over-year contributed to improved operational performance [13] Market Data and Key Metrics Changes - The company experienced over 1,100 more patient visits each day compared to the previous year [9] - The company closed 11 clinics and divested one clinic as part of its strategic real estate plan [10] Company Strategy and Development Direction - The company aims to strengthen its culture, grow its provider base, and enhance patient access while improving financial performance [9] - Focus areas include leveraging patient outcomes data in payer negotiations and advocating for improved reimbursement rates for physical therapy [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue growing despite challenges in the labor market [27] - The company anticipates Q2 2024 revenue to be between $185 million and $195 million, reflecting a growth of 7% to 13% over the prior year [27][28] Other Important Information - The company achieved a significant reduction in clinician turnover rate to 16% in Q1 2024, down from the low 20s in the previous three quarters [13] - The company reported a net loss of $14 million for the quarter, an improvement from a loss of $25 million in Q1 2023 [25] Q&A Session Summary Question: Thoughts on sustainability of rate growth - Management acknowledged strong progress but indicated that future rate growth may be less predictable [30][31] Question: Labor costs and productivity outlook - Management noted that productivity was impacted by one-time factors but expects improvements moving forward [36][37]

[PART I - FINANCIAL INFORMATION - UNAUDITED](index=7&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION%20-%20UNAUDITED) This section presents the unaudited financial information, including statements, management's discussion, and disclosures on market risk and controls [Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) The company reported a reduced net loss in Q1 2024, but recurring losses and negative cash flows raise going concern doubts [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to $991.5 million, with significant long-term debt and mezzanine equity impacting the balance sheet Condensed Consolidated Balance Sheet Data (in thousands) | Balance Sheet Item | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $23,727 | $36,802 | | Total current assets | $166,171 | $168,638 | | Total assets | $991,493 | $1,003,281 | | **Liabilities & Equity** | | | | Total current liabilities | $139,723 | $156,447 | | Long-term debt, net | $439,274 | $433,578 | | 2L Notes due to related parties, at fair value | $95,615 | $79,472 | | Total liabilities | $879,883 | $878,743 | | Series A Senior Preferred Stock (Mezzanine equity) | $225,014 | $220,393 | | Total stockholders' equity | ($113,404) | ($95,855) | [Condensed Consolidated Statements of Operations](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net revenue increased to $181.5 million, narrowing operating and net losses, aided by a non-cash gain Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Mar 31, 2024 | Three Months Ended Mar 31, 2023 | | :--- | :--- | :--- | | Net revenue | $181,472 | $166,932 | | Total cost of services | $159,570 | $147,706 | | Operating loss | ($4,778) | ($11,369) | | Net loss | ($13,523) | ($25,210) | | Net loss attributable to ATI | ($14,651) | ($26,270) | | Loss per share (Basic & Diluted) | ($4.61) | ($7.70) | [Condensed Consolidated Statements of Comprehensive Loss](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss) Comprehensive loss significantly improved to $13.7 million in Q1 2024, primarily due to a reduced net loss Comprehensive Loss (in thousands) | Metric | Three Months Ended Mar 31, 2024 | Three Months Ended Mar 31, 2023 | | :--- | :--- | :--- | | Net loss | ($13,523) | ($25,210) | | Other comprehensive (loss) income | ($140) | ($3,456) | | Comprehensive loss | ($13,663) | ($28,666) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Stockholders' equity deficit widened to $113.4 million due to net loss and preferred stock dividend adjustments - Total stockholders' equity deficit widened to **$113.4 million** as of March 31, 2024, from **$95.9 million** at the start of the year[30](index=30&type=chunk) - The decrease was driven by a net loss of **$14.7 million** and **$4.6 million** in Series A Senior Preferred Stock dividends and redemption value adjustments[30](index=30&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=12&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations increased to $39.1 million, partially offset by $28.5 million from financing activities, leading to a cash decrease Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended Mar 31, 2024 | Three Months Ended Mar 31, 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | ($39,066) | ($14,224) | | Net cash used in investing activities | ($2,492) | ($5,079) | | Net cash provided by (used in) financing activities | $28,483 | ($761) | | **Net decrease in cash** | **($13,075)** | **($20,064)** | - Financing activities in Q1 2024 included **$25.0 million** in proceeds from 2L Notes from related parties and a net **$5.0 million** draw on the revolving line of credit[37](index=37&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key notes include a going concern warning, details on debt restructuring, and a $26.5 million shareholder litigation settlement covered by insurance - The company's financial condition, including recurring negative operating cash flows (**$39.1 million** in Q1 2024), operating losses, and net losses, raises substantial doubt about its ability to continue as a going concern[47](index=47&type=chunk) - Management's plans to improve operating results and seek additional liquidity have not been fully implemented and do not alleviate the substantial doubt[50](index=50&type=chunk) - A global settlement in principle has been reached for shareholder class action and derivative litigations for an aggregate of **$26.5 million**, which is expected to be paid entirely by insurance[164](index=164&type=chunk) - In Q1 2024, the company issued an additional **$25.0 million** of 2L Notes under its Delayed Draw Right, increasing the principal amount of 2L Notes to **$135.3 million**[89](index=89&type=chunk)[91](index=91&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 revenue growth driven by patient volumes, ongoing liquidity challenges, and a going concern warning despite debt restructuring [Trends and Factors Affecting Performance](index=44&type=section&id=Trends%20and%20Factors%20Affecting%20Performance) Improved patient volumes and revenue per visit were noted, but the company continues to face labor market challenges and wage inflation - Key positive trends in Q1 2024 include improved patient visit volumes and clinician retention[186](index=186&type=chunk) - Net patient revenue per visit improved due to favorable payor contracting and lower denials, but was partially offset by Medicare rate cuts[187](index=187&type=chunk) - The physical therapy industry continues to face a tight labor market, contributing to hiring challenges, elevated use of contract labor, and wage inflation[186](index=186&type=chunk) [Key Business Metrics](index=46&type=section&id=Key%20Business%20Metrics) Key performance indicators show increased patient visits and revenue per visit, with a 10.4% same clinic revenue growth rate Key Performance Indicators | Metric | Three Months Ended Mar 31, 2024 | Three Months Ended Mar 31, 2023 | | :--- | :--- | :--- | | Number of clinics (end of period) | 884 | 909 | | Average visits per day | 23,837 | 22,701 | | Total patient visits | 1,525,556 | 1,452,848 | | Net patient revenue per visit | $108.42 | $103.76 | | Same clinic revenue growth rate | 10.4% | 8.7% | [Results of Operations](index=49&type=section&id=Results%20of%20Operations) Net revenue grew 8.7% to $181.5 million, reducing operating and net losses, despite increased salaries, aided by lower SG&A - Net patient revenue increased by **$14.7 million** (**9.7%**) in Q1 2024 vs. Q1 2023, driven by a **5.0%** increase in patient visits and a **4.5%** increase in revenue per visit[209](index=209&type=chunk)[210](index=210&type=chunk) - Salaries and related costs increased by **$8.6 million** (**9.5%**), primarily due to a higher number of clinicians, wage inflation, and higher incentive compensation[213](index=213&type=chunk) - Selling, general and administrative (SG&A) expenses decreased by **$4.4 million** (**14.4%**) due to lower transaction and non-ordinary legal costs, and higher legal cost insurance reimbursements[216](index=216&type=chunk) - A non-cash gain of **$5.4 million** was recognized from the change in fair value of 2L Notes, contributing to the reduced net loss[217](index=217&type=chunk) [Non-GAAP Financial Measures](index=54&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA increased to $6.5 million in Q1 2024, with reconciliation detailing non-cash and non-ordinary adjustments EBITDA and Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended Mar 31, 2024 | Three Months Ended Mar 31, 2023 | | :--- | :--- | :--- | | Net loss | ($13,523) | ($25,210) | | EBITDA | $8,430 | ($2,708) | | **Adjusted EBITDA** | **$6,463** | **$4,790** | - Key adjustments to arrive at Adjusted EBITDA in Q1 2024 included a **$5.4 million** gain on the change in fair value of 2L Notes (subtracted), **$2.3 million** in share-based compensation, and **$1.2 million** in non-ordinary legal costs[228](index=228&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) Critical liquidity challenges persist with negative operating cash flow and a going concern warning, despite recent debt restructuring and drawdowns - The company has continued to generate negative operating cash flows and net losses, raising substantial doubt about its ability to continue as a going concern[235](index=235&type=chunk) - As of March 31, 2024, cash and cash equivalents were **$23.7 million**, and there was no available capacity under the revolving credit facility[233](index=233&type=chunk) - During Q1 2024, the company utilized the full **$25.0 million** delayed draw new money financing available under its 2023 Debt Restructuring[236](index=236&type=chunk) - The company was in compliance with its minimum liquidity covenant of **$10.0 million** as of March 31, 2024[233](index=233&type=chunk)[265](index=265&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This disclosure is not required as the company qualifies as a smaller reporting company - The company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act, and therefore this item is not required[292](index=292&type=chunk) [Controls and Procedures](index=67&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective, with no material changes to internal control over financial reporting - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2024[294](index=294&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[295](index=295&type=chunk) [PART II - OTHER INFORMATION](index=67&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This section provides other required information, including legal proceedings, risk factors, and equity security sales [Legal Proceedings](index=68&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, with detailed information provided in Note 14 of the financial statements - The company refers to Note 14 of the financial statements for detailed information on legal proceedings[297](index=297&type=chunk) [Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since the last Annual Report on Form 10-K - No material changes to risk factors have occurred since the last Annual Report on Form 10-K[298](index=298&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered equity sales occurred, but 78,412 shares were repurchased to cover employee tax withholding obligations - The company did not have any sales of unregistered equity securities in Q1 2024[299](index=299&type=chunk) Issuer Purchases of Equity Securities (Q1 2024) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | March 1 - March 31, 2024 | 78,412 | $6.10 | | **Total** | **78,412** | **$6.10** | - The shares were withheld to cover employee minimum tax withholding obligations upon vesting of stock awards and were not part of a publicly announced repurchase program[302](index=302&type=chunk) [Defaults Upon Senior Securities](index=68&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable for the reporting period - Not applicable[302](index=302&type=chunk) [Mine Safety Disclosures](index=68&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable for the reporting period - Not applicable[302](index=302&type=chunk) [Other Information](index=68&type=section&id=Item%205.%20Other%20Information) No other information was required to be reported under this item during the quarter [Exhibits](index=69&type=section&id=Item%206.%20Exhibits) The report includes standard filings such as CEO and CFO certifications and XBRL data files - Exhibits filed with the report include Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to Sarbanes-Oxley Act Sections 302 and 906, and XBRL data files[304](index=304&type=chunk) [Signatures](index=69&type=section&id=Signatures) The report was signed on May 6, 2024, by Joseph Jordan, Chief Financial Officer - The Form 10-Q was signed on May 6, 2024, by Joseph Jordan, Chief Financial Officer[306](index=306&type=chunk)

ATI Physical Therapy Reports First Quarter 2024 Results Disciplined Execution of Clinic Operations Drove Continued Growth People Strategies and Culture Refresh Efforts Result in Exceptional Therapist Retention BOLINGBROOK, IL – May 6, 2024 – ATI Physical Therapy, Inc. (NYSE: ATIP) ("ATI" or the "Company"), a nationally recognized outpatient physical therapy provider in the United States, today reported financial results for the first quarter ended March 31, 2024. "We grew again in the first quarter, seeing ...

Founded by ATI Physical Therapy, iMSKA will drive musculoskeletal research and post-secondary education in the field BOLINGBROOK, Ill., May 1, 2024 /PRNewswire/ -- The Institute for Musculoskeletal Advancement (iMSKA) today appointed Tom Denninger, PT, DPT, OCS, FAAOMPT, as Executive Director. This is the first executive appointment by iMSKA, which announced its formation earlier this year. Mr. Denninger will play a pivotal role in shaping the strategy for equipping, training, and transforming MSK care del ...

BOLINGBROOK, Ill., April 22, 2024 /PRNewswire/ -- ATI Physical Therapy, Inc. – ("ATI" or the "Company") (NYSE: ATIP), a nationally recognized outpatient physical therapy provider in the United States, today announced that it will release first quarter 2024 financial results on Monday, May 6, 2024, after the market closes. In conjunction, the company will host a conference call to review results at 5 p.m. ET on the same day.Conference Call DetailsManagement will host a conference call at 5 p.m. Eastern Time ...

ATI Physical Therapy Inc. (NYSE:ATIP) Q4 2023 Earnings Conference Call February 26, 2024 5:00 PM ET Company Participants Joanne Fong - Senior Vice President, Treasurer and Head of Investor Relation Sharon Vitti - Chief Executive Officer Joseph Jordan - Chief Financial Officer Chris Cox - Chief Operating Officer Conference Call Participants Taji Milan - Phillips Jefferies Bill Sutherland - The Benchmark Company Operator Good afternoon. And welcome to ATI Physical Therapy Fourth Quarter and Full-Year 2023 E ...

Refreshed Corporate Leadership and Dedicated Field Team Expand Patient Access, Drove Sequential Growth every Quarter in Topline Revenue and Visits per Day Accelerated Execution of Clinic Operations and Geographic Footprint Strategies, Drove Sequential Improvement every Quarter in Revenue per Clinic and Visits per Day per Clinic Beat 2023 Revenue and Adjusted EBITDA1 Guidance BOLINGBROOK, Ill., Feb. 26, 2024 /PRNewswire/ -- ATI Physical Therapy, Inc. (NYSE: ATIP) ("ATI" or the "Company"), a nationally recog ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For transition period from to Commission File Number 001-39439 ATI Physical Therapy, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or ...

ATI Physical Therapy Reports Fourth Quarter and Full Year 2023 Results Refreshed Corporate Leadership and Dedicated Field Team Expand Patient Access, Drove Sequential Growth every Quarter in Topline Revenue and Visits per Day Accelerated Execution of Clinic Operations and Geographic Footprint Strategies, Drove Sequential Improvement every Quarter in Revenue per Clinic and Visits per Day per Clinic 1 Beat 2023 Revenue and Adjusted EBITDA Guidance BOLINGBROOK, IL – February 26, 2024 – ATI Physical Therapy, In ...

The new larger facility signals ATI's enhanced access to care in Washington BOLINGBROOK, Ill., Feb. 20, 2024 /PRNewswire/ -- ATI Physical Therapy ("ATI" or the "Company") (NYSE: ATIP), a nationally recognized outpatient physical therapy provider in the United States, proudly announces the relocation of its Kirkland, Wash. clinic to a new state-of the-art facility on 97th Lane in Kirkland. This move signifies ATI's commitment to delivering exceptional physical therapy services while catering to the needs of ...