Release Date: November 04, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ATI Physical Therapy Inc (ATIP, Financial) reported a 7.1% increase in net revenue year over year, reaching $190 million.
- Patient referrals per day grew by more than 5% year over year, indicating strong demand for services.
- Clinician headcount increased by 3% year over year, showing progress in workforce expansion.
- The company maintained a high Google star rating of 4.9 out of 5, reflecting strong patient satisfaction.
- Adjusted EBITDA increased to $12 million, a 6.4% margin, up from $9 million or 5.3% margin in the prior year.
Negative Points
- Wage inflation remains a persistent challenge, contributing to increased salaries and related costs.
- Net loss during the quarter was $33 million, compared to $15 million in the third quarter of 2023.
- Provision for doubtful accounts increased to 2.8% of PT revenue, up from 2.1% last year.
- The labor market remains challenging, with clinician attrition holding steady at 21%.
- The company closed eight clinics and divested one as part of its strategic real estate plan.
Q & A Highlights
Q: Can you provide insight into wage inflation and its impact on margins for Q4?
A: Sharon Vitti, CEO, noted that wage inflation remains a persistent headwind. Joseph Jordan, CFO, added that they are seeing low to mid-single-digit wage inflation year over year. The Q4 guidance reflects these pressures, with one less business day impacting revenue flow-through to adjusted EBITDA.
Q: What is the current status of patient revenue per visit and the reimbursement landscape?
A: Joseph Jordan, CFO, explained that patient revenue per visit was flat year over year, despite Medicare rate cuts. They are seeing some commercial rate increases, and the team is working with payers to improve rates or find creative solutions. Sharon Vitti, CEO, mentioned efforts to educate CMS and Medpac to revisit upcoming Medicare cuts.
Q: How is ATI addressing the labor market challenges and clinician retention?
A: Emily Tansey, Chief People Officer, highlighted that ATI grew clinician headcount by 3% year over year, with attrition holding steady at 21%. They focus on market trends, employee feedback, and nurturing a culture of excellence to attract and retain skilled providers.
Q: What operational improvements have been made to enhance clinic productivity?
A: Sharon Vitti, CEO, stated that clinic productivity improved by more than 0.1 year over year due to better resource allocation and streamlined workflows. Clinics saw over two more visits per day compared to Q3 of last year, reflecting enhanced operational efficiency.
Q: What are the financial highlights for Q3 2024?
A: Joseph Jordan, CFO, reported a 7.1% increase in net revenue year over year to $190 million. Adjusted EBITDA was $12 million, a 6.4% margin, up from $9 million or 5.3% margin in the prior year. The increase was driven by higher revenue and improved clinic utilization.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
