ATI Physical Therapy(ATIP) - 2022 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Net operating revenue for Q1 2022 was $154 million, a 3.2% increase year-over-year from $149 million in Q1 2021 [17] - Net patient revenue increased by 5% year-over-year to $139 million, driven by higher volumes but partially offset by lower rates per visit [17] - Operating loss for Q1 2022 was $176 million, significantly increasing from $7 million in Q1 2021, primarily due to a $156 million impairment charge [21] - Adjusted EBITDA for Q1 2022 was a loss of $5 million, decreasing year-over-year from adjusted EBITDA of $6 million in Q1 2021 [23] Business Line Data and Key Metrics Changes - Visits per day per clinic during Q1 2022 were 22.9, a slight increase from 22.8 in Q4 2021 [17] - Referrals per day in Q1 were approximately 91% of pre-COVID levels from 2019, while visits per day were about 84% of the same [9] - Annualized clinician turnover decreased to 28%, down approximately 900 basis points from historical levels [11] Market Data and Key Metrics Changes - Patient visits increased from 19,300 per day in January to 22,600 per day by March 2022 [13] - The company opened 12 new clinics in Q1 2022, primarily in Arizona, Georgia, and Texas, with plans to open 20 to 30 new clinics for the full year [26] Company Strategy and Development Direction - The company aims to regain market momentum and meet performance commitments through various avenues including new clinics, acquisitions, digital health, and strategic partnerships [28] - A focus on building relationships with local physicians and communities is emphasized to drive referral growth [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by COVID-19 variants but expressed optimism about achieving pre-COVID visit levels later in the year [9] - The company maintains its full-year 2022 revenue guidance in the range of $675 million to $705 million, with an adjusted EBITDA expectation of $25 million to $35 million [24] Other Important Information - The company reported a provision for doubtful accounts of $5 million, approximately 3.7% of net patient revenue, which is an improvement from 5.4% in Q1 2021 [20] - Cash generated during Q1 was $46 million, with available liquidity of approximately $144 million as of March 31, 2022 [23] Q&A Session Summary Question: Challenges in hiring and clinical FTE - Management noted a decrease in turnover to 28% and an increase in hiring at 39%, indicating that hiring is outpacing turnover [31] Question: Positioning with new graduates - The company has a mentoring program for new graduates to support their transition into the workforce [34] Question: Referral share and sales strategies - Management expressed confidence in the sales and referral resurgence program, indicating that it takes time to see results [36] Question: Improvement in referrals - Referrals are a mix of new doctors and returning existing referral sources [38] Question: Year-over-year rate decline - The decline in rates was attributed to Medicare fee schedule changes and a shift in payer mix [44] Question: Guidance and modeling KPIs - Management suggested focusing on referrals turning into visits and hiring to model out the rest of the year [51]