Liquidity and Financial Condition - The company's liquidity position raises substantial doubt about its ability to continue as a going concern due to negative operating cash flows and net losses[72] - Future liquidity needs are expected to require additional sources beyond operating results, with potential options including raising additional debt or equity capital[77] - The company has outstanding indebtedness that could hinder its ability to obtain additional financing for working capital or acquisitions[80] - The company has not fully implemented management's plans to alleviate doubts about its ability to continue as a going concern[78] - The company is at risk of insufficient funding to meet its obligations within twelve months, raising substantial doubt about its ability to continue as a going concern[398] Revenue Sources and Reimbursement - Approximately 22.2% of the company's net patient revenue in 2024 was derived from Medicare and Medicaid, with recent reductions in reimbursement rates impacting financial results[88] - Medicare reimbursement rates for the physical therapy industry were reduced by approximately 2.0% in January 2023 and are expected to decrease by approximately 3.4% in 2024[88] - In 2024, approximately 58.7% of the company's net patient revenue was derived from commercial payors, indicating a reliance on third-party reimbursement[96] - The company derived approximately 11.8% of its net patient revenue from workers' compensation payors, highlighting potential vulnerability to changes in state laws affecting reimbursement rates[97] - The company anticipates continued pressure on Medicaid expenditures from federal and state governments, which could adversely affect revenue and profitability[92] - Significant adjustments or recoupments from Medicare and Medicaid could adversely impact the company's financial condition and results of operations[93] Operational Challenges and Strategies - The company plans to improve operating results through increases in clinical staffing levels and patient visit volumes, although success is not guaranteed[76] - The company has faced challenges related to interest rate fluctuations, with variable rates potentially increasing future interest payment obligations[81] - The company operates in a highly competitive industry, with potential threats from new entrants and existing competitors enhancing their service offerings[107] - The company must maintain high levels of service and patient satisfaction to avoid adverse effects on its reputation and financial condition[115] - The company relies on maintaining strong relationships with physicians for referrals, which are critical for revenue generation[120] - Future acquisitions are a key part of the company's growth strategy, but they may involve significant cash expenditures and operational risks[122] Regulatory and Compliance Risks - The company is subject to various governmental laws and regulations, with non-compliance potentially leading to fines or exclusion from Medicare and Medicaid programs[89] - The company is subject to extensive federal, state, and local regulations, which could impact operations and result in penalties if not complied with[129] - Compliance with privacy regulations such as HIPAA is crucial, as violations could lead to severe penalties and damage to reputation[137] - The company may face adverse impacts from healthcare reform efforts, particularly changes to the Affordable Care Act (ACA), which could lead to reduced funding for Medicaid programs and lower insured individual numbers[140] - The company is subject to significant legal proceedings and investigations, which could result in large claims and substantial costs, potentially affecting its financial condition[142] Financial Performance and Results - For the year ended December 31, 2024, net patient revenue was $690.0 million, an increase from $636.1 million in 2023, representing an 8.5% growth[372] - The company reported a net loss of $54.0 million for the year ended December 31, 2024, compared to a net loss of $66.1 million in 2023, indicating a 18.5% improvement[372] - Operating income for the year ended December 31, 2024, was $2.3 million, a significant recovery from an operating loss of $27.5 million in 2023[372] - Comprehensive loss attributable to ATI Physical Therapy, Inc. for 2024 was $58,691 thousand, compared to $74,288 thousand in 2023, indicating a 21% decrease[375] - The company's total liabilities increased to $883.3 million as of December 31, 2024, compared to $878.7 million in 2023[370] Management and Governance - The company has experienced significant turnover in its senior management team, which could disrupt operations and negatively impact financial performance[145] - Preferred Equityholders own more than 50.0% of the common stock votes, significantly influencing corporate actions requiring stockholder approval[197] - The Series B Preferred Stock provides voting rights that dilute the voting interests of existing stockholders[190] - Anti-takeover provisions may delay or prevent a change of control, limiting stockholders' ability to obtain a premium for their shares[194] Market and Stock Performance - The company's common stock is currently quoted on the OTC Pink Open Market, and there is no assurance of an active, liquid, and orderly trading market for its common stock[172] - The market price of the company's common stock is less than $5.00 per share, which may classify it as a "penny stock," potentially restricting the ability of brokers to sell its shares[174] - The company may experience significant price volatility, which could result in rapid and substantial losses for stockholders[176] Risks and Uncertainties - The company faces risks associated with public health crises, such as the COVID-19 pandemic, which previously caused significant disruptions to operations and patient visits[103] - The company is exposed to risks from rapid technological changes, which could impact its ability to compete effectively in the market[113] - The company faces risks from third-party customer service providers, which could impact customer satisfaction and revenue[124] - The company must continuously monitor and develop its IT infrastructure to mitigate risks from cyber threats, which could lead to significant legal and reputational harm[151] - The company relies on third-party providers for critical operations, and any failure in their service could lead to significant operational disruptions and increased costs[155] Asset Management - As of December 31, 2024, the company had $289.7 million of goodwill and $245.5 million of trade name and other intangible assets recorded on its consolidated balance sheet, representing a significant portion of total assets[162] - The company has incurred cumulative net taxable losses, with deferred tax assets including federal net operating losses (NOLs) of $89.5 million and state NOLs of $45.0 million as of December 31, 2024[164] - An ownership change occurred on June 15, 2023, which may limit the company's ability to utilize its pre-change NOL carryforwards and other tax attributes[166] Cash Flow and Financing Activities - The company generated cash flows used in operating activities of $19.2 million for the year ended December 31, 2024, contributing to ongoing negative operating cash flows[398] - The net cash provided by financing activities in 2024 was $35,695 thousand, a significant recovery from a net cash used of $16,605 thousand in 2023[382] - The Company issued $26.0 million of Fourth Amendment 2L Notes on March 3, 2025, with an interest rate of 8.0% per annum, maturing on August 24, 2028[386]

ATI Physical Therapy, Inc. (ATIP) came out with a quarterly loss of $4.89 per share versus the Zacks Consensus Estimate of a loss of $3.12. This compares to loss of $4.42 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -56.73%. A quarter ago, it was expected that this company would post a loss of $2.63 per share when it actually produced a loss of $2.43, delivering a surprise of 7.60%.Over the last four quarters, the company h ...

ATI Physical Therapy, Inc. (NYSE:ATIP) Q3 2024 Earnings Conference Call November 4, 2024 5:00 PM ET Company Participants Sharon Vitti - Chief Executive Officer Eimile Tansey - Chief People Officer Joseph Jordan - Chief Financial Officer Conference Call Participants Brian Tanquilut - Jefferies Operator Good afternoon. And welcome to ATI Physical Therapy’s Third Quarter 2024 Earnings Conference Call and Webcast. All participants will be in a listen-only mode. After today’s presentation, there will be an oppor ...

Clinic Operations - As of September 30, 2024, the company operates 874 clinics across 24 states, with an additional 16 clinics under management service agreements[175]. - Total patient visits for the three months ended September 30, 2024, reached 1,591,008, an increase from 1,476,432 in the same period of 2023, representing a growth of approximately 7.8%[201]. - The average visits per day increased to 24,860 for the three months ended September 30, 2024, compared to 23,435 in the same period of 2023, reflecting a growth of about 6%[201]. - The same clinic revenue growth rate was 8.3% for the three months ended September 30, 2024, compared to 15.8% in the same period of 2023[201]. Financial Performance - Net patient revenue for the three months ended September 30, 2024 was $174.7 million, an increase of $12.5 million or 7.7% compared to $162.3 million for the same period in 2023[204]. - Other revenue for the three months ended September 30, 2024 was $15.3 million, an increase of $0.1 million or 0.4% compared to $15.2 million in 2023[206]. - Net patient revenue for the nine months ended September 30, 2024 was $512.9 million, an increase of $42.9 million or 9.1% compared to $470.0 million for the same period in 2023[221]. - Other revenue for the nine months ended September 30, 2024 was $46.7 million, a decrease of $0.1 million or 0.2% compared to $46.8 million in 2023[223]. Expenses and Costs - Salaries and related costs increased by $8.5 million or 8.7% to $105.6 million, representing 55.6% of net revenue for the three months ended September 30, 2024[207]. - Rent, clinic supplies, contract labor, and other costs rose by approximately $1.8 million or 3.4% to $54.5 million, accounting for 28.7% of net revenue[208]. - Provision for doubtful accounts increased by $1.6 million or 46.8% to $4.9 million, representing 2.6% of net revenue[210]. - Selling, general, and administrative expenses decreased by $1.3 million or 5.2% to $23.8 million, accounting for 12.5% of net revenue[211]. - Salaries and related costs increased by approximately $24.3 million or 8.6% to $307.4 million, remaining consistent at 54.9% of net revenue[224]. - Rent, clinic supplies, contract labor, and other costs rose by approximately $6.9 million or 4.4% to $162.9 million, with a decrease in percentage of net revenue from 30.2% to 29.1%[225]. - Provision for doubtful accounts increased by $2.5 million or 25.4% to $12.3 million, representing 2.2% of net revenue[226]. - Selling, general, and administrative expenses decreased by $19.2 million or 20.8% to $73.1 million, with a reduction in percentage of net revenue from 17.9% to 13.1%[227]. Net Loss and Financial Challenges - Net loss for the three months ended September 30, 2024 was $32.9 million, an increase in loss of approximately $18.3 million compared to $14.6 million in 2023[219]. - Net loss for the nine months ended September 30, 2024 was $48.9 million, a decrease of $12.6 million compared to a net loss of $61.6 million in 2023[235]. - The company is at risk of insufficient funding to meet obligations, raising substantial doubt about its ability to continue as a going concern[253]. - The company had operating cash outflows of $31.4 million during the nine months ended September 30, 2024, primarily driven by net losses and interest expense payments[249]. Debt and Financing - The company completed a debt restructuring transaction on June 15, 2023, aimed at improving liquidity[180]. - A reverse stock split of 1-for-50 was executed on June 14, 2023, to adjust the company's common stock trading[181]. - The company issued an additional $25.0 million in 2L Notes during the nine months ended September 30, 2024, as part of its financing strategy[247]. - The company completed a debt restructuring transaction in June 2023, exchanging $100.0 million of Senior Secured Term Loan for 2L Notes convertible into common stock[262]. - As of September 30, 2024, the outstanding principal amount on the Senior Secured Term Loan was $410.0 million, with $17.0 million due to related parties[268]. - The Company had $44.3 million in outstanding Revolving Loans bearing interest at a weighted average rate of 8.5%[270]. - The Revolving Loans have a maximum borrowing capacity of $50.0 million and mature on February 24, 2027[269]. Cash Flow and Liquidity - As of September 30, 2024, the company had $23.5 million in cash and cash equivalents, down from $36.8 million as of December 31, 2023[246]. - Net cash used in operating activities for the nine months ended September 30, 2024 was $31.4 million, an increase of approximately $13.6 million compared to the same period in 2023[281]. - Net cash used in investing activities decreased to $8.7 million for the nine months ended September 30, 2024, down from $14.6 million in 2023[282]. - Net cash provided by financing activities was $26.8 million for the nine months ended September 30, 2024, compared to $31.0 million used in the same period in 2023, an increase of approximately $57.8 million[283]. - Future liquidity needs may require additional sources beyond operating results, including raising debt or equity capital[257]. Market Opportunities - 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[190]. - The final 2024 Medicare Physician Fee Schedule includes a 3.4% reduction in the conversion factor, impacting reimbursement rates for physical therapy services[192].

Financial Performance - Net revenue for Q3 2024 was $190.0 million, an increase of 7.1% compared to $177.5 million in Q3 2023[3] - Net patient revenue was $174.7 million, up 7.7% from $162.3 million in Q3 2023, partly due to one additional business day[4] - Total net revenue for the nine months ended September 30, 2024, reached $559.571 million, compared to $516.724 million for the same period in 2023, reflecting an increase of 8.3%[35] - Operating income for Q3 2024 was $1.129 million, a significant improvement from an operating loss of $764 thousand in Q3 2023[35] - The company reported a net loss attributable to ATI Physical Therapy of $33.814 million for Q3 2024, compared to a net loss of $15.197 million in Q3 2023[35] - Net loss for the nine months ended September 30, 2024, was $48,944,000, an improvement from a net loss of $61,570,000 for the same period in 2023[38] - The net loss available to common stockholders was $40.8 million, compared to $18.3 million in Q3 2023[13] - The company reported a net loss of $32,869 in Q3 2024, compared to a net loss of $2,552 in Q2 2024[44] Revenue and Growth Metrics - Visits per Day (VPD) increased by 6.1% to 24,860 from 23,435 in Q3 2023, driven by higher clinical FTE and productivity[5] - For Q4 2024, the company projects revenue between $182 million and $192 million, with Adjusted EBITDA expected to be between $9 million and $14 million[20] - Net Patient Revenue for Q4 2023 was $166,145, representing a 13.0% increase from Q4 2022[40] - The number of visits per day increased to 24,238 in Q4 2023, up from 22,316 in Q4 2022, indicating a growth of 8.7%[41] - PT Revenue per Clinic for Q2 2024 reached $196,610, a 12.5% increase compared to Q1 2024[42] Cost and Expense Management - Salaries and related costs increased by 8.7% to $105.6 million, primarily due to added clinicians and wage inflation[6] - Selling, general, and administrative expenses decreased to $23.772 million in Q3 2024 from $25.085 million in Q3 2023, showing cost management efforts[35] - Cash paid for interest was $42,883,000, compared to $38,998,000 in the previous year, indicating an increase in interest expenses[39] Liquidity and Financial Position - Total liquidity as of September 30, 2024, was $23.5 million, with a need for additional liquidity by early 2025[18] - Cash and cash equivalents decreased to $23,460,000 from $36,802,000, a reduction of about 36.5%[39] - Total assets decreased to $967,281,000 as of September 30, 2024, down from $1,003,281,000 at December 31, 2023, representing a decline of approximately 3.6%[36] - Total current liabilities decreased to $143,662,000 from $156,447,000, a decrease of about 8.2%[36] - Long-term debt increased to $441,511,000 from $433,578,000, an increase of approximately 1.4%[36] - Net cash used in operating activities was $31,399,000 for the nine months ended September 30, 2024, compared to $17,775,000 for the same period in 2023, indicating a worsening cash flow situation[38] Impairment and Fair Value Adjustments - Fair value remeasurement losses totaled $19.0 million, compared to a gain of $1.9 million in Q3 2023, primarily due to share price increases[11] - The company faced a change in the fair value of 2L Notes amounting to $18.765 million in Q3 2024, compared to a loss of $1.485 million in Q3 2023[35] - The company reported a change in the fair value of 2L Notes resulting in a loss of $15,976,000 for the quarter[45] - The company incurred $5,591,000 in goodwill, intangible, and other asset impairment charges during the quarter[45] - The company faced a significant impairment charge of $96,038,000 for goodwill and intangible assets in 2022[46] Regulatory and Market Environment - The company is subject to extensive regulation and macroeconomic uncertainty, which may impact future performance and compliance[27] Employee Metrics - The headcount turnover rate decreased to 16% in Q1 2024, down from 27% in Q1 2023, showing improved employee retention[41] - The average PT salaries per visit decreased to $56.68 in Q1 2024, down from $56.38 in Q4 2023[42] Adjusted EBITDA and Margins - Adjusted EBITDA rose to $12.1 million, a 28.8% increase from $9.4 million in Q3 2023, with an Adjusted EBITDA margin of 6.4%[13][14] - Adjusted EBITDA and Adjusted EBITDA margin are used to provide a clearer picture of the company's operating performance, although specific figures for these measures were not disclosed[31] - Adjusted EBITDA for Q4 2023 was $12,145, with an Adjusted EBITDA margin of 6.4%[44] - Adjusted EBITDA for Q2 2024 was $16,579, marking a significant increase from $6,463 in Q1 2024[44] - Adjusted EBITDA for the quarter was $12,675,000, with an adjusted EBITDA margin of 7.0%, up from 5.3% in the previous quarter[45] - Adjusted EBITDA for the year ended December 31, 2022, was $6,363,000, with an adjusted EBITDA margin of 3.9%[46]

ATI Physical Therapy, Inc. (ATIP) could be a solid addition to your portfolio given its recent upgrade to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Ind ...

Core Viewpoint - The stock of ATI Physical Therapy, Inc. (ATIP) has recently experienced a bearish trend, losing 5.7% over the past two weeks, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be increasing [1] Technical Analysis - The hammer chart pattern indicates a possible bottoming out of the stock price, with reduced selling pressure and a shift in control towards bulls [1][2] - A hammer pattern forms when there is a small candle body with a long lower wick, signaling that bears may be losing control during a downtrend [2] Fundamental Analysis - There has been a significant upward revision in earnings estimates for ATIP, with the consensus EPS estimate increasing by 21.6% over the last 30 days, indicating strong agreement among analysts about improved earnings potential [3] - ATIP holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which historically outperform the market [3] - The Zacks Rank serves as a timing indicator, suggesting that ATIP's prospects are beginning to improve, reinforcing the bullish case for the stock [3]

Financial Data and Key Metrics Changes - The company's net revenue for Q2 2024 was $188 million, representing a 9.2% increase from $172 million in Q2 2023 [16] - Net patient revenue increased by 10.1% year-over-year to $173 million, while other revenue remained flat at $15 million [16] - Adjusted EBITDA for Q2 was $17 million, an increase from $9 million in the prior year, reflecting an 8.8% margin compared to 5.4% [21] Business Line Data and Key Metrics Changes - Referrals per day increased by over 9% year-over-year, with over 1,500 additional patient visits each day compared to the previous year [6][12] - The revenue rate per visit was $108.32, up 3.4% from $104.74 in Q2 2023, driven by higher reimbursement rates and operational improvements [12][17] - Clinician headcount grew by more than 4% year-over-year, contributing to increased patient access and operational efficiency [7][11] Market Data and Key Metrics Changes - The company experienced a 2.7 increase in visits per day per clinic, reaching an average of 28.4 visits compared to 25.7 in the prior year [16] - The clinician turnover rate for Q2 was 21%, consistent with market averages, indicating stability in workforce retention [8] Company Strategy and Development Direction - The focus remains on expanding access to physical therapy, particularly in underserved areas, and improving operational efficiencies [7][9] - The company is committed to refining its revenue cycle management and enhancing patient onboarding experiences to drive growth [12][14] - Strategic adjustments included closing two clinics and divesting four to better align with community needs [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macro-level headwinds but expressed confidence in the company's growth strategies and operational improvements [7][24] - Future guidance for Q3 anticipates revenue between $180 million and $190 million, reflecting a 4% growth over the prior year [23] Other Important Information - Salaries and related costs increased by 7.6% year-over-year to $103 million, primarily due to wage inflation and increased staffing [17] - The company recorded a non-cash long-lived asset impairment charge of $0.3 million during the quarter [19] Q&A Session Summary Question: What is the potential for further rate growth and what levers remain? - Management indicated that while initial gains have been made, there are still opportunities to refine revenue cycle management and improve collection performance [26][27] Question: How should G&A expenses be viewed going forward? - G&A is expected to remain relatively flat, with a focus on reducing administrative burdens on clinicians to improve margins [29][30] Question: What is the impact of proposed rules on PT assistants? - The company continues to adapt its strategies regarding PT assistants, who are crucial to the care model, while monitoring reimbursement rates from commercial payers [32][33]

Clinic 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].

ATI Physical Therapy Reports Second Quarter 2024 Results Drove Continued Growth in Visits, Rate per Visit, Revenue and Adjusted EBITDA Advanced Company's Capacity to Expand Patient Access to High-Quality Care BOLINGBROOK, IL – August 5, 2024 – ATI Physical Therapy, Inc. (NYSE: ATIP) ("ATI" or the "Company"), a nationally recognized outpatient physical therapy provider in the United States, today reported financial results for the second quarter ended June 30, 2024. "We again experienced notable growth in th ...