ATI Physical Therapy(ATIP) - 2024 Q3 - Quarterly Results

Financial Performance - Net revenue for Q3 2024 was $190.0 million, an increase of 7.1$177.5 million in Q3 2023[3] - Net patient revenue was $174.7 million, up 7.7$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$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$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$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$6,363,000, with an adjusted EBITDA margin of 3.9%[46]