ATI Physical Therapy(US:ATIP)2024-08-05 20:19Clinic Operations - As of June 30, 2024, the company operates 878 clinics, a decrease from 911 clinics as of June 30, 2023[183]. Patient Visits and Revenue - Total patient visits for the three months ended June 30, 2024, were 1,594,923, an increase from 1,498,369 in the same period of 2023, representing a growth of approximately 6.4%[206]. - Average visits per day increased to 24,921 in Q2 2024 from 23,412 in Q2 2023, reflecting a rise of about 6.4%[206]. - Net patient revenue per visit rose to $108.32 in Q2 2024, compared to $104.74 in Q2 2023, marking an increase of approximately 2.8%[206]. - Same clinic revenue growth rate improved to 10.9% for the three months ended June 30, 2024, up from 6.4% in the same period of 2023[206]. - Net patient revenue for the three months ended June 30, 2024 was $172.8 million, an increase of $15.8 million or 10.1% compared to $156.9 million for the same period in 2023[210]. - Total patient visits increased by approximately 0.1 million visits, or 6.4%, with net patient revenue per visit rising $3.58, or 3.4%, to $108.32[211]. - Net patient revenue for the six months ended June 30, 2024 was $338.2 million, an increase of $30.5 million or 9.9% compared to $307.7 million for the same period in 2023[226]. - Total patient visits increased by approximately 0.2 million visits, or 5.7%, with net patient revenue per visit rising $4.11, or 3.9%, to $108.37[227]. Financial Performance - Total revenue for the three months ended June 30, 2024 was $188.1 million, an increase of $15.8 million or 9.2% compared to $172.3 million in 2023[210]. - Total cost of services for the three months ended June 30, 2024 was $158.1 million, an increase of $10.0 million or 6.8% compared to $148.1 million in 2023[210]. - Salaries and related costs for the three months ended June 30, 2024 were $102.5 million, an increase of $7.2 million or 7.6% compared to $95.3 million in 2023[214]. - Selling, general and administrative expenses decreased by $13.5 million or 36.9% to $23.1 million for the three months ended June 30, 2024, compared to $36.6 million in 2023[217]. - Net loss for the three months ended June 30, 2024 was $2.6 million, a decrease in loss of approximately $19.2 million compared to $21.7 million in 2023[223]. - Interest expense, net for the three months ended June 30, 2024 was $14.9 million, a decrease of approximately $1.8 million or 10.7% from $16.7 million in 2023[220]. - Net loss for the six months ended June 30, 2024 was $16.1 million, a decrease in loss of approximately $30.9 million compared to $47.0 million in 2023[238]. - Interest expense, net for the six months ended June 30, 2024 was $29.4 million, a decrease of approximately $1.2 million or 4.0% compared to $30.6 million in 2023[235]. - The company's EBITDA for the six months ended June 30, 2024, was $27.9 million, a substantial increase from $569,000 in the same period of the previous year[244]. - Adjusted EBITDA for the same period was $23.0 million, up from $14.1 million in 2023, reflecting improved operational efficiency[244]. Costs and Expenses - Provision for doubtful accounts remained consistent at $2.4 million for both periods, representing 1.3% of net revenue in 2024 and 1.4% in 2023[216]. - Salaries and related costs increased by approximately $15.8 million or 8.5% to $201.9 million, with salaries as a percentage of net revenue at 54.6%[229]. - Selling, general and administrative expenses decreased by $17.9 million or 26.6% to $49.3 million, with expenses as a percentage of net revenue at 13.3%[232]. - Provision for doubtful accounts increased by $0.9 million or 14.4% to $7.4 million, remaining consistent as a percentage of net revenue at 2.0%[231]. - Rent, clinic supplies, contract labor, and other costs increased by approximately $5.1 million or 4.9% to $108.4 million, with costs as a percentage of net revenue at 29.3%[230]. Debt and Liquidity - The company completed a debt restructuring transaction on June 15, 2023, aimed at improving liquidity[187]. - A one-for-fifty reverse stock split was executed on June 14, 2023, to adjust the company's stock structure[188]. - The company plans to improve operating results through increased clinical staffing, enhanced clinician productivity, and cost control measures[253]. - Future liquidity needs may require additional sources beyond operating results, including raising debt or equity capital and asset disposals[254]. - The company is at risk of insufficient funding to meet obligations, raising substantial doubt about its ability to continue as a going concern[252]. - As of June 30, 2024, the outstanding Revolving Loans amounted to $44.7 million, with a weighted average interest rate of 9.5%[263]. - The Company repaid approximately $24.9 million and drew an additional $31.2 million in Revolving Loans during the six months ended June 30, 2024[263]. - The outstanding principal amount on the Senior Secured Term Loan was $410.0 million as of June 30, 2024, with an interest rate of 12.7%[261]. - The 2L Notes issued as part of the 2023 Debt Restructuring totaled $100.0 million, with $50.8 million issued to Knighthead, $40.4 million to Marathon, and $8.8 million to Onex[265]. - The 2L Notes accrue interest at an annual rate of 8.0% and are convertible into common stock at a fixed conversion price of $12.50[266]. Cash Flow - As of June 30, 2024, the company had $33.0 million in cash and cash equivalents, down from $36.8 million at the end of 2023, with no available capacity under its revolving credit facility[246]. - Operating cash outflows for the six months ended June 30, 2024, were $27.9 million, driven by net losses and interest expense payments[249]. - Net cash used in operating activities for the six months ended June 30, 2024 was $27.9 million, an increase of approximately $22.5 million compared to the same period in 2023[271]. - Net cash used in investing activities decreased to $5.2 million for the six months ended June 30, 2024, down from $10.1 million in the prior year[272]. - Net cash provided by financing activities increased to $29.2 million for the six months ended June 30, 2024, compared to $30.0 million used in the same period in 2023[274]. Legal and Contingencies - The Company recorded an accrued liability related to certain legal matters as of June 30, 2024, reflecting potential loss contingencies[275]. - The Company had letters of credit totaling $5.3 million as of June 30, 2024, down from $6.5 million at the end of 2023[264]. Market Opportunity - The population of adults aged 65 and older in the U.S. is projected to grow by 23% from 2022 to 2030, expanding the company's market opportunity[196]. - The final 2024 Medicare Physician Fee Schedule indicated a 3.4% reduction in the conversion factor, impacting reimbursement rates for physical therapy services[198].