Reaffirms Guidance for Full Year 2022
BOLINGBROOK, Ill., May 9, 2022
/PRNewswire/ -- ATI Physical Therapy, Inc. ("ATI" or the "Company")
(NYSE: ATIP), the largest single-branded outpatient physical
therapy provider in the United States, today reported
financial results for the first quarter ended March 31, 2022.
"As previously announced, Sharon
Vitti stepped into the role of Chief Executive Officer for
the organization and joined the Board of Directors as of
April 28, 2022. We are excited
to welcome Sharon to the ATI family and continue our leadership in
helping people on their path to musculoskeletal health, engaging
consumers when and where they need care, while lowering healthcare
costs," said Jack Larsen, Chairman
of the Board of ATI. "During the quarter, we continued to make
steady progress on multiple fronts in ramping the business."
Mr. Larsen continued, "We saw increased therapist retention,
with annualized clinician turnover declining 900 basis points
quarter over quarter to 28%, approaching historical levels.
Moreover, referrals and visits are trending favorably.
Visits per Day in March 2022 were
approximately 22,600, the highest volume month since the COVID
pandemic first began impacting visits in March 2020."
Joe Jordan, Chief Financial
Officer of ATI, added, "While the impact of COVID variants in the
first 6 weeks of the quarter impacted visit volumes and contributed
to earnings losses for the quarter, we are confident with the
momentum we are seeing in referrals and visits and we are
reaffirming full year 2022 guidance."
First Quarter 2022 Results
Supplemental tables of key performance metrics for the first
quarter of 2019 through the first quarter of 2022 are presented
after the financial statements at the end of this press
release. Commentary on performance results in the first
quarter of 2022 is as follows:
- Net operating revenue was $153.8
million compared to $155.8
million in the fourth quarter of 2021 and $149.1 million in the first quarter of 2021, a
decrease of 1% quarter over quarter and an increase of 3% year over
year.
-
- Net patient revenue was $138.9
million compared to $140.3
million in the fourth quarter of 2021 and $132.3 million in the first quarter of 2021, a
decrease of 1% quarter over quarter and an increase of 5% year over
year. See below for discussion of drivers to net patient
revenue, i.e. patient visits and Rate per Visit.
- Other revenue was $14.9 million
compared to $15.5 million in the
fourth quarter of 2021 and $16.8
million in the first quarter of 2021, a decrease of 4%
quarter over quarter primarily due to a decline in MSA revenue and
a decrease of 11% year over year primarily due to sale of the Home
Health service line on October 1,
2021.
- Visits per Day ("VPD") were 21,062 compared to 20,649 in the
fourth quarter of 2021 and 19,520 in the first quarter of 2021, an
increase of 2% quarter over quarter and 8% year over year.
VPD per Clinic were 22.9 compared to 22.8 in the fourth quarter of
2021 and 22.2 in the first quarter of 2021, an increase of 0.1
visit quarter over quarter and 0.7 visit year over year. The
increase was muted by the Omicron wave of COVID in January and
continuing into the first half of February
2022, negatively impacting visits across the Company's
platform due to an increase in patient appointment cancellations,
clinical staff sick absences, and overall decline in referral
volume.
- Rate per Visit was $103.06
compared to $104.51 in the fourth
quarter of 2021 and $107.56 in the
first quarter of 2021, a decrease of 1% quarter over quarter and 4%
year over year. The decreases were due to the 2022 Medicare
Physician Fee Schedule, which introduced a 0.75% decrease in
overall rates and an additional 15% decrease in rates paid for
services performed by physical therapy assistants. The year
over year decrease was additionally due to an unfavorable mix shift
in payors, states and services.
- Salaries and related costs were $87.4
million compared to $88.1
million in the fourth quarter of 2021 and $80.7 million in the first quarter of 2021, a
decrease of 1% quarter over quarter primarily due to slightly fewer
clinical FTE and an increase of 8% year over year due to higher
number of clinical FTE and wage inflation.
PT salaries and related costs per Visit were $55.47 compared to $55.73 in the fourth quarter of 2021 and
$54.14 in the first quarter of 2021,
essentially flat quarter over quarter and an increase of 2% year
over year. The year over year increase was due to wage
inflation experienced in certain pockets of the country compared to
the first quarter of 2021.
- Rent, clinic supplies, contract labor and other was
$51.6 million compared to
$47.8 million in the fourth quarter
of 2021 and $43.3 million in the
first quarter of 2021, an increase of 8% quarter over quarter and
19% year over year due to more clinics and higher expenditures on a
per clinic basis.
PT rent, clinic supplies, contract labor and other per Clinic was
$54,472 compared to $50,976 in the fourth quarter of 2021 and
$47,722 in the first quarter of 2021,
an increase of 7% quarter over quarter and 14% year over year.
The increases were primarily driven by greater use of
contract labor while the Company worked to fill open positions.
- Provision for doubtful accounts was $5.1
million compared to $7.2
million in the first quarter of 2021. PT provision as
a percent of net patient revenue was 4% compared to 5% in the first
quarter of 2021, reflecting improved collections.
- Selling, general and administrative expenses were $30.0 million compared to $29.9 million in the fourth quarter of 2021 and
$24.7 million in the first quarter of
2021, essentially flat quarter over quarter and an increase of 21%
year over year. The year over year increase was due to higher
public company operating costs and non-ordinary legal and
regulatory costs.
- Non-cash goodwill impairment charge was $116.3 million, and the non-cash trade name
indefinite-lived intangible asset impairment charge was
$39.4 million. Due to an
increase in discount rate, driven by an increase in Treasury rates
and an increase in the Company's cost of capital, and lower public
company comparative multiples, it was determined that the fair
value amounts of goodwill and trade name were below their
respective carrying amounts.
- Income tax benefit was $23.3
million compared to $5.4
million in the fourth quarter of 2021 and $10.5 million in the first quarter of 2021.
- Net (loss) income was $(138.2)
million compared to $1.7
million in the fourth quarter of 2021 and $(17.8) million in the first quarter of 2021.
The first quarter 2022 net loss included significant non-cash
items, notably goodwill and intangible asset impairment charges of
$155.7 million and decrease in fair
value of warrant liability and contingent common shares liability
of $26.0 million.
- Adjusted EBITDA1 was $(4.7)
million compared to $1.6
million in the fourth quarter of 2021 and $5.6 million in the first quarter of 2021.
Quarter over quarter, the decrease was primarily driven by
lower revenue and higher rent, clinic supplies, and contract labor
costs and higher provision for doubtful accounts. Year over
year, the decrease was primarily due to higher cost of services and
selling, general, and administrative expenses partially offset by
higher revenue and lower provision for doubtful accounts.
Adjusted EBITDA margin was (3)% compared to 1% in the fourth
quarter of 2021 and 4% in the first quarter of 2021.
- Net increase (decrease) in cash was $46.2 million compared to $(44.5) million in the first quarter of 2021.
Operating cash use was $26.7 million
compared to $30.1 million in the
first quarter of 2021. Cash repaid in connection with the
Medicare Accelerated and Advance Payment Program ("MAAPP")
under the CARES Act was $4.3 million
compared to zero in the first quarter of 2021.
Investing cash use was $8.7 million,
with 12 new clinics opened, compared to $8.8
million in the first quarter of 2021 and 10 new clinics
opened.
Financing cash generation (use) was $81.6
million compared to $(5.6)
million in the first quarter of 2021. In February 2022, the Company refinanced its first
lien term loan with a new credit agreement and issued Series A
preferred stock with detachable warrants, adding approximately
$77 million to the balance sheet
after payment of transaction fees.
Summary of key balance sheet items as of March 31, 2022 is as follows:
- Cash and cash equivalents totaled $94.8
million, and the revolving credit facility was undrawn with
available capacity of $48.8 million,
net of usage by letters of credit, equaling $143.6 million in available liquidity.
Other notable achievements in the first quarter of 2022 were as
follows:
- Opened 12 new clinics in existing states, including
Arizona, Georgia, and Texas; and no clinics were closed. This
brings the total number of clinics to 922. The Company
continues to capitalize on growth opportunities in individual
markets, while optimizing its footprint and financial return in
other local markets.
- Net Promotor Score ("NPS") of 74 and Google Star Rating of 4.9,
reflecting continued high customer satisfaction and brand
loyalty.
2022 Guidance
ATI reaffirms full year 2022 guidance for net operating revenue
to be in a range of $675 million to
$705 million, Adjusted
EBITDA2 to be in a range of $25
million to $35 million, and
new clinic openings to be approximately 35.
First Quarter 2022 Earnings Conference Call
Management will host a conference call at 5:00 p.m. Eastern Time on May 9, 2022 to review first quarter 2022
financial results. The conference call can be accessed via a live
audio webcast. To join, please access the following web link, Q1
2022 Earnings Conference Call, on the Company's investor relations
website at https://investors.atipt.com at least 15 minutes
early to register, and download and install any necessary audio
software. A replay of the call will be available via webcast for
on-demand listening shortly after the completion of the call, at
the same web link, and will remain available for approximately 90
days.
About ATI Physical Therapy
At ATI Physical Therapy, we are passionate about potential.
Every day, we restore it in our patients and activate it in our
team members in our more than 900 locations in 25 states. With
outcomes from more than 2.5 million unique patient cases, ATI is
making strides in the industry by setting quality standards
designed to deliver predictable outcomes for our patients with
musculoskeletal (MSK) issues. ATI's offerings span across a broad
spectrum for MSK-related issues. From preventative services in the
workplace and athletic training support to outpatient clinical
services and online physical therapy via our online platform,
CONNECT™, a complete list of our service offerings can be found
at ATIpt.com. ATI is based in Bolingbrook, Illinois.
1 Refer to "Non-GAAP Financial Measures" below.
Forward-Looking Statements
All statements other than statements of historical facts
contained in this communication are forward-looking statements for
purposes of the safe harbor provisions under the United States
Private Securities Litigation Reform Act of 1995.
Forward-looking statements may generally be identified by the
use of words such as "believe," "may," "will," "estimate,"
"continue," "anticipate," "intend," "expect," "should," "would,"
"plan," "project," "forecast," "predict," "potential," "seem,"
"seek," "future," "outlook," "target" or other similar expressions
(or the negative versions of such words or expressions) that
predict or indicate future events or trends or that are not
statements of historical matters. These forward-looking
statements include, but are not limited to, statements regarding
the impact of physical therapist attrition, anticipated visit and
referral volumes and other factors that may impact the Company's
overall profitability and estimates and forecasts of other
financial and performance metrics and projections of market
opportunity. These statements are based on various
assumptions, whether or not identified in this communication, and
on the current expectations of ATI's management and are not
predictions of actual performance. These forward-looking
statements are estimates only and are not intended to serve as, and
must not be relied on by any investor as, a guarantee, an assurance
or a definitive statement of fact or probability. Actual
events and circumstances are difficult or impossible to predict and
may differ from assumptions, and such differences may be material.
Many actual events and circumstances are beyond the control of ATI.
These forward-looking statements are subject to a number of
risks and uncertainties, including, but not limited to:
|
(i)
|
changes in domestic
business, market, financial, political and legal conditions,
including shifts and trends in payor mix;
|
|
(ii)
|
the ability to execute
on our sales and marketing strategies;
|
|
(iii)
|
the ability to maintain
the listing of the Company's securities on NYSE;
|
|
(iv)
|
risks related to the
execution of ATI's business strategy, including but not limited to
ramping of visits, growing clinical headcount, and opening new
clinics, and the timing of expected business milestones;
|
|
(v)
|
the effects of
competition on ATI's future business and the ability of ATI to grow
and manage growth profitably, maintain relationships with patients,
payors and referral sources and retain its management and key
employees;
|
|
(vi)
|
the ability of the
Company to attract and retain physical therapists consistent with
its business plan;
|
|
(vii)
|
the ability of the
Company to develop new and retain and expand relationships with
referral sources;
|
|
(viii)
|
the outcome of any
legal proceedings or regulatory investigations that have or may be
instituted against the Company or any of its directors or
officers;
|
|
(ix)
|
the ability of the
company to comply with its covenants in its credit facility and
preferred stock financing arrangements or to redeem preferred
stock;
|
|
(x)
|
the ability of the
Company to issue equity or equity-linked securities or obtain debt
financing in the future;
|
|
(xi)
|
risks related to
political and macroeconomic uncertainty;
|
|
(xii)
|
the impact of the
global COVID-19 pandemic (and existing or emerging variants) on any
of the foregoing risks;
|
|
(xiii)
|
risks related to the
impact on our workforce of mandatory COVID-19 vaccination of
employees;
|
|
(xiv)
|
risks related to
further impairments of goodwill and other intangible assets, which
represent a significant portion of the Company's total assets,
especially in view of the Company's recent market
valuation;
|
|
(xv)
|
risks associated with
the Company's inability to remediate material weaknesses in
internal controls over financial reporting related to income taxes
and to maintain effective internal controls over financial
reporting; and
|
those factors discussed in our amended S-1 registration
statement filed with the SEC on April 12,
2022 under the heading "Risk Factors," and our Form 10-K for
the fiscal year ended December 31,
2021 and other documents filed, or to be filed, by ATI with
the SEC.
If any of these risks materialize or our assumptions prove
incorrect, actual results could differ materially from the results
implied by these forward-looking statements, including our forecast
update. There may be additional risks that ATI does not presently
know or that ATI currently believes are immaterial that could also
cause actual results to differ from those contained in the
forward-looking statements. In addition, the forward-looking
statements in this communication reflect ATI's expectations, plans
or forecasts of future events and views as of the date of this
communication. ATI anticipates that subsequent events and
developments will cause ATI's assessments with respect to these
forward-looking statements to change. However, while ATI may elect
to update these forward-looking statements at some point in the
future, ATI specifically disclaims any obligation to publicly
update any forward-looking statement, whether written or oral,
which may be made from time to time, whether as a result of new
information, future developments or otherwise, unless required by
applicable law. These forward-looking statements should not be
relied upon as representing ATI's assessments as of any date
subsequent to the date of this press release. Accordingly, undue
reliance should not be placed upon the forward-looking
statements.
Non-GAAP Financial Measures
To supplement the Company's financial information presented in
accordance with GAAP and aid understanding of the Company's
business performance, the Company uses certain non-GAAP financial
measures, namely "Adjusted EBITDA" and "Adjusted EBITDA margin." We
believe Adjusted EBITDA and Adjusted EBITDA margin (i.e. Adjusted
EBITDA divided by Net Operating Revenue) assist investors and
analysts in comparing our operating performance across reporting
periods on a consistent basis by excluding items that we do not
believe are indicative of our core operating performance.
Management believes these non-GAAP financial measures are useful
to investors in highlighting trends in our operating performance,
while other measures can differ significantly depending on
long-term strategic decisions regarding capital structure, the tax
jurisdictions in which we operate and capital investments.
Management uses these non-GAAP financial measures to supplement
GAAP measures of performance in the evaluation of the effectiveness
of our business strategies, to make budgeting decisions, to
establish discretionary annual incentive compensation and to
compare our performance against that of other peer companies using
similar measures. Management supplements GAAP results with non-GAAP
financial measures to provide a more complete understanding of the
factors and trends affecting the business than GAAP results
alone.
Adjusted EBITDA and Adjusted EBITDA margin are not recognized
terms under GAAP and should not be considered as an alternative to
net income (loss) or the ratio of net income (loss) to net revenue
as a measure of financial performance, cash flows provided by
operating activities as a measure of liquidity, or any other
performance measure derived in accordance with GAAP. Additionally,
these measures are not intended to be a measure of cash available
for management's discretionary use as they do not consider certain
cash requirements such as interest payments, tax payments and debt
service requirements. The presentations of these measures have
limitations as analytical tools and should not be considered in
isolation, or as a substitute for analysis of our results as
reported under GAAP. Because not all companies use identical
calculations, the presentations of these measures may not be
comparable to other similarly titled measures of other companies
and can differ significantly from company to company.
Please see "Reconciliation of GAAP to Non-GAAP Financial
Measures" below for reconciliations of non-GAAP financial measures
used in this release to their most directly comparable GAAP
financial measures. We are unable to provide a reconciliation
between forward-looking Adjusted EBITDA to its comparable GAAP
financial measure without unreasonable effort, due to the
high difficulty and impracticability of predicting certain amounts
required by GAAP with a reasonable degree of accuracy by the date
of this release.
Contact:
Joanne
Fong
SVP, Treasurer and Investor Relations
ATI Physical Therapy
(630) 296-2222 x 7131
investors@atipt.com
ATI Physical
Therapy, Inc.
Condensed
Consolidated Statements of Operations
($ in
thousands)
(unaudited)
|
|
|
Three Months Ended
|
|
March 31, 2022
|
|
March 31, 2021
|
|
|
|
|
Net patient
revenue
|
$
138,925
|
|
$
132,271
|
Other
revenue
|
14,897
|
|
16,791
|
Net operating
revenue
|
153,822
|
|
149,062
|
|
|
|
|
Cost of
services:
|
|
|
|
Salaries and related costs
|
87,415
|
|
80,654
|
Rent, clinic supplies, contract labor and other
|
51,615
|
|
43,296
|
Provision for doubtful accounts
|
5,105
|
|
7,171
|
Total cost of
services
|
144,135
|
|
131,121
|
Selling, general and
administrative expenses
|
30,024
|
|
24,726
|
Goodwill and intangible
asset impairment charges
|
155,741
|
|
—
|
Operating loss
|
(176,078)
|
|
(6,785)
|
Change in fair value of
warrant liability
|
(1,677)
|
|
—
|
Change in fair value of
contingent common shares liability
|
(24,334)
|
|
—
|
Interest expense,
net
|
8,656
|
|
16,087
|
Interest expense on
redeemable preferred stock
|
—
|
|
5,308
|
Other expense,
net
|
2,781
|
|
153
|
Loss before taxes
|
(161,504)
|
|
(28,333)
|
Income tax
benefit
|
(23,281)
|
|
(10,515)
|
Net loss
|
(138,223)
|
|
(17,818)
|
ATI Physical
Therapy, Inc.
Condensed
Consolidated Balance Sheets
($ in
thousands)
(unaudited)
|
|
|
March 31, 2022
|
|
December 31, 2021
|
Assets:
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash equivalents
|
$
94,797
|
|
$
48,616
|
Accounts receivable (net of allowance for doubtful accounts
of $51,519 and
$53,533 at
March 31, 2022 and December 31, 2021,
respectively)
|
87,809
|
|
82,455
|
Prepaid expenses
|
8,706
|
|
9,303
|
Other current assets
|
6,658
|
|
3,204
|
Total current
assets
|
197,970
|
|
143,578
|
|
|
|
|
Property and equipment,
net
|
136,776
|
|
139,730
|
Operating lease
right-of-use assets
|
255,372
|
|
256,646
|
Goodwill,
net
|
492,240
|
|
608,811
|
Trade name and other
intangible assets, net
|
372,090
|
|
411,696
|
Other non-current
assets
|
2,811
|
|
2,233
|
Total assets
|
$
1,457,259
|
|
$
1,562,694
|
|
|
|
|
Liabilities, Mezzanine Equity and Stockholders'
Equity:
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable
|
$
12,264
|
|
$
15,146
|
Accrued expenses and other liabilities
|
59,391
|
|
64,584
|
Current portion of operating lease liabilities
|
50,651
|
|
49,433
|
Current portion of long-term debt
|
—
|
|
8,167
|
Total current
liabilities
|
122,306
|
|
137,330
|
|
|
|
|
Long-term debt,
net
|
477,817
|
|
543,799
|
Warrant
liability
|
2,664
|
|
4,341
|
Contingent common
shares liability
|
21,026
|
|
45,360
|
Deferred income tax
liabilities
|
44,178
|
|
67,459
|
Operating lease
liabilities
|
248,354
|
|
250,597
|
Other non-current
liabilities
|
2,348
|
|
2,301
|
Total
liabilities
|
918,693
|
|
1,051,187
|
Commitments and
contingencies
|
|
|
|
Mezzanine
equity:
|
|
|
|
Series A Senior Preferred Stock, $0.0001 par value; 1.0
million shares
authorized;
$1,011.67 stated value per share and 0.2 million shares issued
and
outstanding at
March 31, 2022; none issued and outstanding at
December 31,
2021
|
140,340
|
|
—
|
Stockholders'
equity:
|
|
|
|
Class A common stock, $0.0001 par value; 470.0 million shares
authorized;
207.4 million
shares issued, 197.5 million shares outstanding at
March 31,
2022; 207.4
million shares issued, 197.4 million shares outstanding at
December 31,
2021
|
20
|
|
20
|
Treasury stock, at cost, 0.04 million shares and 0.03 million
shares at March 31,
2022 and
December 31, 2021, respectively
|
(117)
|
|
(95)
|
Additional paid-in capital
|
1,373,282
|
|
1,351,597
|
Accumulated other comprehensive income
|
3,780
|
|
28
|
Accumulated deficit
|
(984,882)
|
|
(847,132)
|
Total ATI Physical Therapy,
Inc. equity
|
392,083
|
|
504,418
|
Non-controlling interests
|
6,143
|
|
7,089
|
Total stockholders'
equity
|
398,226
|
|
511,507
|
Total liabilities,
mezzanine equity and stockholders' equity
|
$
1,457,259
|
|
$
1,562,694
|
ATI Physical
Therapy, Inc.
Condensed
Consolidated Statements of Cash Flows
($ in
thousands)
(unaudited)
|
|
|
Three Months Ended
|
|
March 31,
2022
|
|
March 31,
2021
|
Operating activities:
|
|
|
|
Net loss
|
$ (138,223)
|
|
$ (17,818)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
Goodwill and intangible asset impairment charges
|
155,741
|
|
—
|
Depreciation and amortization
|
10,111
|
|
9,619
|
Provision for doubtful accounts
|
5,105
|
|
7,171
|
Deferred income tax provision
|
(23,281)
|
|
(10,515)
|
Amortization of right-of-use assets
|
11,807
|
|
11,055
|
Share-based compensation
|
1,960
|
|
504
|
Amortization of debt issuance costs and original issue
discount
|
660
|
|
1,045
|
Non-cash interest expense on redeemable preferred
stock
|
—
|
|
5,308
|
Loss on extinguishment of debt
|
2,809
|
|
—
|
(Gain) loss on disposal and impairment of assets
|
(219)
|
|
221
|
Change in fair value of warrant liability
|
(1,677)
|
|
—
|
Change in fair value of contingent common shares
liability
|
(24,334)
|
|
—
|
Changes in:
|
|
|
|
Accounts receivable,
net
|
(10,459)
|
|
(11,148)
|
Prepaid expenses and other
current assets
|
588
|
|
(5,265)
|
Other non-current
assets
|
14
|
|
(112)
|
Accounts payable
|
(928)
|
|
1,060
|
Accrued expenses and other
liabilities
|
(544)
|
|
(5,686)
|
Operating lease
liabilities
|
(11,555)
|
|
(15,984)
|
Other non-current
liabilities
|
(37)
|
|
473
|
Medicare Accelerated and
Advance Payment Program Funds
|
(4,269)
|
|
—
|
Net cash used in
operating activities
|
(26,731)
|
|
(30,072)
|
|
|
|
|
Investing activities:
|
|
|
|
Purchases of property
and equipment
|
(8,772)
|
|
(8,376)
|
Purchases of intangible
assets
|
—
|
|
(650)
|
Proceeds from sale of
property and equipment
|
114
|
|
16
|
Proceeds from sale of
clinics
|
—
|
|
248
|
Net cash used in
investing activities
|
(8,658)
|
|
(8,762)
|
Financing activities:
|
|
|
|
Proceeds from long-term
debt
|
500,000
|
|
—
|
Deferred financing
costs
|
(12,952)
|
|
—
|
Original issue
discount
|
(10,000)
|
|
—
|
Principal payments on
long-term debt
|
(555,048)
|
|
(2,042)
|
Proceeds from issuance
of Series A Senior Preferred Stock
|
144,667
|
|
—
|
Proceeds from issuance
of 2022 Warrants
|
20,333
|
|
—
|
Payments for equity
issuance costs
|
(4,935)
|
|
—
|
Taxes paid on behalf of
employees for shares withheld
|
(22)
|
|
—
|
Distribution to
non-controlling interest holders
|
(473)
|
|
(3,575)
|
Net cash provided by
(used in) financing activities
|
81,570
|
|
(5,617)
|
|
|
|
|
Changes in cash and cash
equivalents:
|
|
|
|
Net increase (decrease)
in cash and cash equivalents
|
46,181
|
|
(44,451)
|
Cash and cash
equivalents at beginning of period
|
48,616
|
|
142,128
|
Cash and cash
equivalents at end of period
|
$
94,797
|
|
$
97,677
|
|
|
|
|
Supplemental noncash
disclosures:
|
|
|
|
Derivative changes in
fair value
|
$
(3,752)
|
|
$
(561)
|
Purchases of property
and equipment in accounts payable
|
$
2,223
|
|
$
2,161
|
|
|
|
|
Other supplemental disclosures:
|
|
|
|
Cash paid for
interest
|
$
3,932
|
|
$
14,990
|
Cash paid for
taxes
|
$
35
|
|
$
1
|
ATI Physical
Therapy, Inc.
Supplemental Tables
of Key Performance Metrics
|
|
|
Financial Metrics ($ in 000's)
|
|
Net Patient
Revenue
|
Other Revenue
|
Net Operating
Revenue
|
Adjusted
EBITDA(1)
|
Adj EBITDA
margin(1)
|
Q1 2019
|
$170,940
|
$16,277
|
$187,217
|
$25,989
|
13.9%
|
Q2 2019
|
$182,757
|
$16,015
|
$198,772
|
$33,342
|
16.8%
|
Q3 2019
|
$179,561
|
$16,624
|
$196,185
|
$29,455
|
15.0%
|
Q4 2019
|
$184,338
|
$18,946
|
$203,284
|
$39,606
|
19.5%
|
Q1 2020
|
$164,939
|
$17,799
|
$182,738
|
$26,487
|
14.5%
|
Q2 2020
|
$95,003
|
$12,751
|
$107,754
|
$1,189
|
1.1%
|
Q3 2020
|
$132,803
|
$15,852
|
$148,655
|
$17,321
|
11.7%
|
Q4 2020
|
$136,840
|
$16,266
|
$153,106
|
$18,622
|
12.2%
|
Q1 2021
|
$132,271
|
$16,791
|
$149,062
|
$5,590
|
3.8%
|
Q2 2021
|
$146,679
|
$17,354
|
$164,033
|
$23,999
|
14.6%
|
Q3 2021
|
$141,855
|
$17,158
|
$159,013
|
$8,539
|
5.4%
|
Q4 2021
|
$140,275
|
$15,488
|
$155,763
|
$1,643
|
1.1%
|
Q1 2022
|
$138,925
|
$14,897
|
$153,822
|
$(4,695)
|
(3.1)%
|
|
|
|
|
|
|
|
|
(1)
|
Excludes CARES Act
Provider Relief Funds of $44.3 million in the second quarter of
2020, $23.1 million in the third quarter of 2020, and $24.1 million
in the fourth quarter of 2020.
|
|
|
|
Operational Metrics: PT Clinics
|
|
|
|
Ending Clinic
Count
|
Visits per
Day(1)
|
Clinical
FTE(2)
|
VPD per
cFTE(3)
|
Annualized
Clinician
Adds %(4)
|
Annualized
Clinician
Turnover %(5)
|
Q1 2019
|
|
|
825
|
24,142
|
2,833
|
8.5
|
20%
|
19%
|
Q2 2019
|
|
|
836
|
25,527
|
2,862
|
8.9
|
26%
|
21%
|
Q3 2019
|
|
|
847
|
25,229
|
2,901
|
8.7
|
37%
|
26%
|
Q4 2019
|
|
|
872
|
25,693
|
2,936
|
8.8
|
17%
|
26%
|
Q1 2020
|
|
|
868
|
22,855
|
2,841
|
8.0
|
17%
|
22%
|
Q2 2020
|
|
|
866
|
12,643
|
1,487
|
8.5
|
0%
|
20%
|
Q3 2020
|
|
|
873
|
18,159
|
2,004
|
9.1
|
9%
|
82%
|
Q4 2020
|
|
|
875
|
19,441
|
2,214
|
8.8
|
43%
|
34%
|
Q1 2021
|
|
|
882
|
19,520
|
2,284
|
8.5
|
44%
|
32%
|
Q2 2021
|
|
|
889
|
21,569
|
2,325
|
9.3
|
44%
|
44%
|
Q3 2021
|
|
|
900
|
20,674
|
2,359
|
8.8
|
63%
|
41%
|
Q4 2021
|
|
|
910
|
20,649
|
2,475
|
8.3
|
44%
|
37%
|
Q1 2022
|
|
|
922
|
21,062
|
2,466
|
8.5
|
39%
|
28%
|
|
|
(1)
|
Equals patient visits
divided by operating days.
|
(2)
|
Represents clinical
staff hours divided by 8 hours divided by number of paid
days.
|
(3)
|
Equals patient visits
divided by operating days divided by clinical full-time equivalent
employees.
|
(4)
|
Represents clinician
headcount new hire adds divided by average clinician headcount,
multiplied by 4 to annualize.
|
(5)
|
Represents clinician
headcount separations divided by average clinician headcount,
multiplied by 4 to annualize.
|
|
|
|
Unit Economics: PT Clinics ($
actual)
|
|
PT Revenue
per
Clinic(1)
|
VPD
per
Clinic(2)
|
PT Rate
per
Visit(3)
|
PT
Salaries
per
Visit(4)
|
PT Rent
and Other
per
Clinic(5)
|
PT
Provision
as % PT
Revenue(6)
|
Q1 2019
|
$208,803
|
29.5
|
$112.39
|
$57.21
|
$48,682
|
4.3%
|
Q2 2019
|
$219,748
|
30.7
|
$111.87
|
$55.21
|
$48,130
|
3.2%
|
Q3 2019
|
$213,255
|
30.0
|
$111.21
|
$56.47
|
$48,995
|
2.8%
|
Q4 2019
|
$213,767
|
29.8
|
$112.10
|
$54.65
|
$47,843
|
2.1%
|
Q1 2020
|
$189,658
|
26.3
|
$112.76
|
$55.11
|
$50,258
|
3.6%
|
Q2 2020
|
$109,872
|
14.6
|
$117.41
|
$53.39
|
$43,621
|
4.1%
|
Q3 2020
|
$152,472
|
20.8
|
$112.51
|
$53.83
|
$44,140
|
2.2%
|
Q4 2020
|
$155,913
|
22.2
|
$109.98
|
$52.16
|
$47,168
|
2.4%
|
Q1 2021
|
$150,536
|
22.2
|
$107.56
|
$54.14
|
$47,722
|
5.4%
|
Q2 2021
|
$165,241
|
24.3
|
$106.26
|
$48.22
|
$47,857
|
2.4%
|
Q3 2021
|
$158,556
|
23.1
|
$105.56
|
$53.70
|
$49,499
|
2.5%
|
Q4 2021
|
$154,772
|
22.8
|
$104.51
|
$55.73
|
$50,976
|
1.5%
|
Q1 2022
|
$151,225
|
22.9
|
$103.06
|
$55.47
|
$54,472
|
3.7%
|
|
|
(1)
|
Equals Net Patient
Revenue divided by average clinics over the quarter.
|
(2)
|
Equals patient visits
divided by operating days divided by average clinics over the
quarter
|
(3)
|
Equals Net Patient
Revenue divided by patient visits.
|
(4)
|
Equals estimated
patient-related portion of Salaries and Related Costs divided by
patient visits.
|
(5)
|
Equals estimated
patient-related portion of Rent, Clinic Supplies, Contract Labor
and Other divided by average clinics over the quarter.
|
(6)
|
Equals estimated
patient-related portion of Provision for Doubtful Accounts divided
by Net Patient Revenue.
|
|
|
|
|
|
|
Customer Satisfaction Metrics
|
|
|
|
|
|
|
|
Net Promoter
Score(1)
|
Google Star
Rating(2)
|
|
Q1 2019
|
|
|
|
|
|
|
77
|
4.6
|
|
Q2 2019
|
|
|
|
|
|
|
79
|
4.9
|
|
Q3 2019
|
|
|
|
|
|
|
78
|
4.9
|
|
Q4 2019
|
|
|
|
|
|
|
79
|
4.8
|
|
Q1 2020
|
|
|
|
|
|
|
77
|
4.9
|
|
Q2 2020
|
|
|
|
|
|
|
77
|
4.9
|
|
Q3 2020
|
|
|
|
|
|
|
78
|
4.6
|
|
Q4 2020
|
|
|
|
|
|
|
76
|
4.7
|
|
Q1 2021
|
|
|
|
|
|
|
75
|
4.9
|
|
Q2 2021
|
|
|
|
|
|
|
77
|
4.9
|
|
Q3 2021
|
|
|
|
|
|
|
73
|
4.9
|
|
Q4 2021
|
|
|
|
|
|
|
78
|
4.8
|
|
Q1 2022
|
|
|
|
|
|
|
74
|
4.9
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
NPS measures customer
experience from ATI patient survey responses. The score is
calculated as the percentage of promoters less the percentage of
detractors.
|
(2)
|
A Google Star rating is
a five-star rating scale that ranks businesses based on
customer reviews. Customers are given the opportunity to leave a
business review after interacting with a business, which involves
choosing from one star (poor) to five stars (excellent).
|
ATI Physical
Therapy, Inc.
Reconciliation of
GAAP to Non-GAAP Financial Measures
($ in
thousands)
(unaudited)
|
|
|
Three Months Ended
|
|
March 31, 2022
|
Net loss
|
$
(138,223)
|
Plus (minus):
|
|
Net loss attributable to
non-controlling interests
|
473
|
Interest expense,
net
|
8,656
|
Income tax
benefit
|
(23,281)
|
Depreciation and amortization
expense
|
9,900
|
EBITDA
|
$
(142,475)
|
Goodwill and intangible asset
impairment charges(1)
|
155,741
|
Goodwill and intangible asset
impairment charges attributable to non-controlling
interests(1)
|
(940)
|
Changes in fair value of
warrant liability and contingent common shares
liability(2)
|
(26,011)
|
Loss on debt
extinguishment(3)
|
2,809
|
Non-ordinary legal and
regulatory matters(4)
|
2,497
|
Share-based
compensation
|
1,964
|
Transaction and integration
costs(5)
|
1,538
|
Pre-opening de novo
costs(6)
|
381
|
Gain on sale of Home Health
service line, net
|
(199)
|
Adjusted EBITDA
|
$
(4,695)
|
|
|
(1)
|
Represents non-cash
charges related to the write-down of goodwill and trade name
indefinite-lived intangible assets.
|
(2)
|
Represents non-cash
amounts related to the change in the estimated fair value of IPO
Warrants, Earnout Shares and Vesting Shares.
|
(3)
|
Represents charges
related to the derecognition of the unamortized deferred financing
costs and original issuance discount associated with the full
repayment of the 2016 first lien term loan.
|
(4)
|
Represents non-ordinary
course legal costs related to the previously-disclosed ATIP
shareholder class action complaints, derivative complaint and SEC
inquiry.
|
(5)
|
Represents costs
related to the Business Combination with FVAC II and
non-capitalizable debt transaction costs.
|
(6)
|
Represents expenses
associated with renovation, equipment and marketing costs relating
to the start-up and launch of new locations incurred prior to
opening.
|
ATI Physical
Therapy, Inc.
Reconciliation of
GAAP to Non-GAAP Financial Measures
($ in
thousands)
(unaudited)
|
|
|
Three Months Ended
|
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
|
2021
|
2021
|
2021
|
2021
|
Net income (loss)
|
$1,690
|
($326,774)
|
($439,126)
|
($17,818)
|
Plus (minus):
|
|
|
|
|
Net (income) loss attributable
to non-controlling interests
|
(869)
|
2,109
|
3,769
|
(1,309)
|
Interest expense,
net
|
7,215
|
7,386
|
15,632
|
16,087
|
Interest expense on redeemable
preferred stock
|
—
|
—
|
4,779
|
5,308
|
Income tax (benefit)
expense
|
(5,381)
|
(35,333)
|
(19,731)
|
(10,515)
|
Depreciation and amortization
expense
|
10,005
|
9,222
|
9,149
|
9,619
|
EBITDA
|
12,660
|
(343,390)
|
(425,528)
|
1,372
|
Goodwill and intangible asset
impairment charges(1)
|
—
|
508,972
|
453,331
|
—
|
Goodwill and intangible asset
impairment charges
attributable to
non-controlling interest(1)
|
—
|
(2,928)
|
(5,021)
|
—
|
Changes in fair value of
warrant liability and contingent
common shares
liability(2)
|
(10,046)
|
(162,202)
|
(25,487)
|
—
|
Gain on sale of Home Health
service line, net
|
(5,846)
|
—
|
—
|
—
|
Reorganization and severance
costs(3)
|
—
|
3,551
|
—
|
362
|
Transaction and integration
costs(4)
|
955
|
2,335
|
3,580
|
2,918
|
Share-based
compensation
|
905
|
1,248
|
3,112
|
504
|
Pre-opening de novo
costs(5)
|
543
|
511
|
441
|
434
|
Non-ordinary legal and
regulatory matters(6)
|
2,472
|
442
|
—
|
—
|
Loss on debt
extinguishment(7)
|
—
|
—
|
5,534
|
—
|
Loss on settlement of
redeemable preferred stock(8)
|
—
|
—
|
14,037
|
—
|
Adjusted EBITDA
|
$1,643
|
$8,539
|
$23,999
|
$5,590
|
|
|
|
|
|
|
(1)
|
Represents non-cash
charges related to the write-down of goodwill and trade name
indefinite-lived intangible assets.
|
(2)
|
Represents non-cash
amounts related to the change in the estimated fair value of
Warrants, Earnout Shares and Vesting Shares.
|
(3)
|
Represents severance,
consulting and other costs related to discrete initiatives focused
on reorganization and delayering of the Company's labor model,
management structure and support functions.
|
(4)
|
Represents costs
related to the Company's business combination with FVAC II,
non-capitalizable debt transaction costs, clinic acquisitions and
acquisition-related integration and consulting and planning costs
related to preparation to operate as a public company.
|
(5)
|
Represents expenses
associated with renovation, equipment and marketing costs relating
to the start-up and launch of new locations incurred prior to
opening.
|
(6)
|
Represents non-ordinary
course legal costs related to the previously-disclosed ATIP
shareholder class action complaints, derivative complaint and SEC
inquiry.
|
(7)
|
Represents charges
related to the derecognition of the proportionate amount of
remaining unamortized deferred financing costs and original
issuance discount associated with the partial repayment of the
first lien term loan and derecognition of the unamortized original
issuance discount associated with the full repayment of the
subordinated second lien term loan.
|
(8)
|
Represents loss on
settlement of redeemable preferred stock based on the value of cash
and equity provided to preferred stockholders in relation to the
outstanding redeemable preferred stock liability at the time of the
closing of the business combination with FVAC II.
|
ATI Physical
Therapy, Inc.
Reconciliation of
GAAP to Non-GAAP Financial Measures
($ in
thousands)
(unaudited)
|
|
|
Three Months Ended
|
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
|
2020
|
2020
|
2020
|
2020
|
Net income (loss)
|
$2,190
|
$1,022
|
$4,596
|
($8,106)
|
Plus (minus):
|
|
|
|
|
Net income attributable to
non-controlling interests
|
(987)
|
(901)
|
(1,855)
|
(1,330)
|
Interest expense,
net
|
16,404
|
17,346
|
17,683
|
17,858
|
Interest expense on redeemable
preferred stock
|
5,154
|
4,896
|
4,604
|
4,377
|
Income tax (benefit)
expense
|
(2,033)
|
2,322
|
3,568
|
(1,792)
|
Depreciation and amortization
expense
|
10,072
|
9,880
|
9,763
|
9,985
|
EBITDA
|
30,800
|
34,565
|
38,359
|
20,992
|
Reorganization and severance
costs(1)
|
679
|
4,436
|
1,255
|
1,142
|
Transaction and integration
costs(2)
|
3,747
|
75
|
100
|
868
|
Share-based
compensation
|
503
|
473
|
466
|
494
|
Pre-opening de novo
costs(3)
|
335
|
368
|
268
|
594
|
Business optimization
costs(4)
|
2,450
|
519
|
5,011
|
2,397
|
Charges related to lease
terminations(5)
|
4,253
|
—
|
—
|
—
|
Adjusted EBITDA
|
$42,767
|
$40,436
|
$45,459
|
$26,487
|
|
|
|
|
|
|
(1)
|
Represents severance,
consulting and other costs related to discrete initiatives focused
on reorganization and delayering of the Company's labor model,
management structure and support functions.
|
(2)
|
Represents costs
related to the Company's business combination with FVAC II, clinic
acquisitions and acquisition-related integration and consulting and
planning costs related to preparation to operate as a public
company.
|
(3)
|
Represents expenses
associated with renovation, equipment and marketing costs relating
to the start-up and launch of new locations incurred prior to
opening.
|
(4)
|
Represents
non-recurring costs to optimize our platform and ATI transformative
initiatives. Costs primarily relate to duplicate costs driven by IT
and Revenue Cycle Management conversions, labor related costs
during the transition of key positions and other incremental costs
of driving optimization initiatives.
|
(5)
|
Represents charges
related to lease terminations prior to the end of term for
corporate facilities no longer in use.
|
ATI Physical
Therapy, Inc.
Reconciliation of
GAAP to Non-GAAP Financial Measures
($ in
thousands)
(unaudited)
|
|
|
Three Months Ended
|
|
December 31,
|
September 30,
|
June 30,
|
March 31,
|
|
2019
|
2019
|
2019
|
2019
|
Net income (loss)
|
$31,914
|
($6,046)
|
($4,816)
|
($11,303)
|
Plus (minus):
|
|
|
|
|
Net income attributable to
non-controlling interests
|
(1,234)
|
(878)
|
(933)
|
(1,355)
|
Interest expense,
net
|
18,022
|
19,263
|
19,927
|
19,760
|
Interest expense on redeemable
preferred stock
|
4,206
|
4,000
|
3,763
|
3,542
|
Income tax benefit
|
(36,095)
|
(2,055)
|
(1,825)
|
(4,044)
|
Depreciation and amortization
expense
|
9,884
|
9,567
|
9,635
|
10,018
|
EBITDA
|
26,697
|
23,851
|
25,751
|
16,618
|
Reorganization and severance
costs(1)
|
3,401
|
120
|
775
|
4,035
|
Transaction and integration
costs(2)
|
3,998
|
198
|
310
|
29
|
Share-based
compensation
|
(57)
|
559
|
795
|
525
|
Pre-opening de novo
costs(3)
|
438
|
757
|
487
|
593
|
Business optimization
costs(4)
|
5,129
|
3,970
|
5,224
|
4,189
|
Adjusted EBITDA
|
$39,606
|
$29,455
|
$33,342
|
$25,989
|
|
|
|
|
|
|
(1)
|
Represents severance,
consulting and other costs related to discrete initiatives focused
on reorganization and delayering of the Company's labor model,
management structure and support functions.
|
(2)
|
Represents costs
related to the Company's business combination with FVAC II, clinic
acquisitions and acquisition-related integration and consulting and
planning costs related to preparation to operate as a public
company.
|
(3)
|
Represents expenses
associated with renovation, equipment and marketing costs relating
to the start-up and launch of new locations incurred prior to
opening.
|
(4)
|
Represents
non-recurring costs to optimize our platform and ATI transformative
initiatives. Costs primarily relate to duplicate costs driven by IT
and Revenue Cycle Management conversions, labor related costs
during the transition of key positions and other incremental costs
of driving optimization initiatives.
|
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SOURCE ATI Physical Therapy