ATI Physical Therapy, Inc.

Good afternoon and welcome to the ATI Physical Therapist 3rd Quarter 2021 Earnings Conference Call and Webcast. All participants will be in the listen-only mode. After today's presentation, there will be an opportunity to ask questions. If you would like to ask a question during this time, simply press the star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press the pound key. Please note this event is being recorded. On the call today is Jeff Larson, Executive Chairman and Acting Chief Executive Officer, Joseph Jordan, Chief Financial Officer, Ray Wall, Chief Operating Officer, Ryan Wilson, Chief Commercial Officer, and John Fong, Senior Vice President, Treasurer, and Head of Investor Relations. I would now like to turn the call over to Ms. Fong to read the safe harbor and forward-looking statements.

Thank you, Alexander. Good afternoon, everyone, and thank you for joining us for today's call. Before we begin, we'd like to remind you that certain statements made during this call will be forward-looking statements that are subject to various risks and uncertainties and reflect our current expectations based on beliefs, assumptions, and information currently available to us. Although we believe these expectations are reasonable, we undertake no obligation to revise any statements to reflect changes that occur after this call. Descriptions of some of the factors that could cause factor results that differ materially from these statements can be found in the risk factor section in the company's filings with the Securities and Exchange Commission. In addition, please note that the company will be discussing certain non-GAAP financial measures that we believe are important in evaluating performance. Details on the relationship between these non-GAAP measures to the most comparable GAAP measures and reconciliation of non-GAAP financial measures can be found in the press release that's posted on ATI's website. and follow up the SEC. And with that, I'd like to turn the call over to Jack.

Thanks, Joanne, and welcome to all of you joining us this afternoon. I want to begin my remarks with a few high-level comments on our third quarter performance and quickly move on to the more interesting discussion of where our business is today and the activities we have underway to advance through the balance of 2021 and beyond. I'll then pass the call over to Joe, who will provide a detailed financial review before we open the call to your questions. Now, for those of you who I haven't had a chance to meet with yet, I joined API's board in 2018 and served on the audit committee and nominating in corporate governance committee. I was appointed to the role of chair in March of this year and recently took on the role of executive chairman. I spent the past 25 years gaining a fairly broad operating experience And most recently at United Health Group from 2005 until 2018. So I'm very familiar with the overall healthcare landscape. And alongside our executive team, I will help navigate ATI while we find a permanent CEO. As we previously reported, the board started a formal CEO search process in August, and we've assembled what I would say is an interesting slate of candidates. Interviewing and assessments are currently underway, and of course, we will keep you advised as to our progress. Now on to the third quarter. Any discussion on our performance must start with a big thank you to all of our team members for their hard work and dedication, both clinical and support. Despite the many challenges, our team continued to provide high-quality care and customer service. Patient SAT ratings remain very high, with our net promoter score at 73, and our Google star rating at 4.9 out of five stars in the third quarter, a real credit to our team. Furthermore, CMS recently advised us that our clinics scored in the 100th percentile for performance year 2020. And accordingly, ATI will be receiving the highest possible bonus adjustment to the Medicare physician fee schedule in 2022. Our business model and single reporting platform enable ATI providers in every clinic to report and collect the same data. This centralization allows for reporting out to payers, such as CMS and the MIPS program, turning the exceptional work that our clinicians deliver into higher reimbursement rates. And considering the 2022 Medicare fee rate schedule for therapy, The capability to collect and report on functional outcomes and other data becomes increasingly important to our success. Although our financial performance for 2021 is not what you expect of us or what we expect of ourselves, I believe we are laying the foundation for steady improvement going into next year. Last quarter, we spiked out the higher levels of attrition we were experiencing with our clinical teams. and the potential for challenges in hiring both replacement roles as well as for second half expected growth. Since then, we revisit many of our workplace policy and compensation issues put in place during COVID that in hindsight led to clinical dissatisfaction, and we quickly course corrected. Annualized clinician headcount turnover decreased from 50% in the month of July to just over 30% in September, an approximate 36% improvement from the beginning of the third quarter to the end of the third quarter. Our total clinical FTE increased by 91 from this past July through September as we reduced attrition and picked up our hiring. with approximately two clinicians hired for every departure, both in August as well as September. These encouraging results extended through October into early November as well. But to be clear, this is a journey and not an event. We will continue to authentically engage and support our entire workforce, both clinical as well as support, the way you'd expect a world-class company would do. Now, let me move on to a discussion of patient volume. We mostly think about volume in terms of clinic count, visits per day, and visits per day per clinic. In the third quarter of 2021, our 900 clinics saw nearly 21,000 visits on average per day, or 23.1 VPD per clinic. In 2019, we delivered approximately 30 VPD per clinic. which is about the right level of activity for the average clinic and really strikes a healthy balance between fixed cost leverage and a positive provider as well as patient experience. Throughout the first two quarters of this year, our visit volumes were tracking towards what appeared to be a steady recovery to a level comparable with 2019. During the third quarter of this year, our visit volume softened slightly to 26,674 visits per day, down from about 21,570 visits per day in the second quarter. Simply stated, we experienced declining visit volume when we forecast we should have been growing. This volume softness is centered primarily in a few key states within both the Midwest and Northwest while many of our clinics in the South and Northeast are actually running very close to or exceeding pre-COVID levels. To drive more volume for all clinics across our national footprint, in addition to integrating new clinical team members, we are investing in both field-based sales representatives, here we call them practice partners, in our digital marketing campaigns. We've identified those markets where we believe sales and marketing can rev up our referrals, and we are moving quickly to put this in place. This function was significantly reduced during COVID, but is obviously an important contributor to accelerating volume growth, particularly as we move into next year. While we work to navigate our recovery, we are committed to being more transparent and helping you, the investment community, understand the drivers and underlying trends in our business. To this end, we included supplemental tables summarizing our key performance metrics in the earnings press release. We believe this information will help you better understand the many key moving parts of our business. Now, I want to turn the call over to Joe to provide a detailed financial review of our third quarter results and our revised outlook for full year 2021. Joe?