ATI Physical Therapy(US:ATIP)2021-11-10 03:08Financial Data and Key Metrics Changes - Net operating revenue in Q3 2021 was $159 million, a 7% increase year-over-year from $149 million in Q3 2020 [15] - Net patient revenue was $142 million, increasing 6.8% year-over-year, while other revenue was $17 million, increasing 8.2% year-over-year [15] - Operating loss in Q3 2021 was $509 million, decreasing year-over-year from income of $2 million in Q3 2020 [20] - Net loss in Q3 2021 was $326 million, decreasing year-over-year from net income of $1 million in Q3 2020 [21] - Adjusted EBITDA in Q3 2021 was $9 million, or a 5.4% margin, decreasing year-over-year from $17 million, or an 11.7% margin in Q3 2020 [21] Business Line Data and Key Metrics Changes - Visits per day per clinic for Q3 2021 was 23.1, a decrease from 24.3 in Q2 2021 [15] - Annualized clinician headcount turnover decreased from 50% in July to just over 30% in September [10] - Total clinical FTE increased by 91 from July to September [11] Market Data and Key Metrics Changes - Visit volume softened slightly in Q3 2021 to 26,674 visits per day, down from about 21,570 visits per day in Q2 2021 [12] - Some clinics in the South and Northeast are running close to or exceeding pre-COVID levels, while key states in the Midwest and Northwest are lagging [12][13] Company Strategy and Development Direction - The company is focused on driving visit volume to scale the business and leverage fixed costs [24] - Investments are being made in field-based sales representatives and digital marketing campaigns to increase referrals [13] - The company plans to open between 55 to 65 new clinics for the full year [23] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that financial performance for 2021 did not meet expectations but believes they are laying the foundation for improvement [10] - The company is committed to transparency and has included supplemental tables summarizing key performance metrics in earnings releases [14] - Management expressed confidence in the recovery of visit volumes and referrals, despite some markets lagging behind [32][33] Other Important Information - The company recorded impairment charges of $300 million for goodwill and $201 million for trading, primarily due to revised forecasts [20] - Available liquidity at September 30 was $135 million, comprised of $66 million in cash equivalents and $69 million in available undrawn revolver capacity [22] Q&A Session Summary Question: Update on referral sources and their strength - Management indicated that while some markets are lagging, they are working to rebuild referral relationships and improve visit volumes [32][33] Question: Impact of labor constraints and COVID on Midwest markets - Management acknowledged challenges in the Midwest, attributing some issues to competitors and systemic factors rather than solely COVID [47][48] Question: Changes to compensation and benefits packages - Positive feedback has been received regarding changes to compensation and support structures, which have helped with retention and recruitment [40][42] Question: Guidance for Q4 and full year - The guidance reflects a cautious outlook due to softer visit volumes and the time required for investments in sales to pay off [77][78] Question: Urban vs. rural market performance - Management stated that market performance does not strictly follow urban-rural divides, with each market having unique challenges [60][62]