ATI Physical Therapy, Inc.

Good morning and welcome to ATI Physical Therapy's fourth quarter 2021 year-end earnings conference call and webcast. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. If you would like to ask a question at this time, simply press star 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 are Jack Larson, Executive Chairman, Joseph Jordan, Chief Financial Officer, Ray Walsh, Chief Operating Officer, and Joanne Fong, Senior Vice President, Treasurer, and Head of Investor Relations. I would now like to turn the call over to his sponsor with a safe harbor and forward-looking statement.

Thank you, Lisa. Good morning, everyone. 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 our beliefs assumptions, and information currently available to us. Although we believe these expectations are reasonable, we undertake the obligation to revise any statements to reflect changes that occur after this call. Descriptions of some of the factors that could cause after-results that differ materially from these forward-looking statements can be found in the risk factor section in the company's filing for 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 and relationships with these non-GAAP measures to the most comparable GAAP measures and reconciliation of the non-GAAP financial measures can be found in the press release as posted on the ATI's website and filed to SAC. And with that, I'd like to turn the call over to Jack.

Thanks, Joanne, and welcome to all of you joining us this morning. With me on the call today is Joe Jordan, our Chief Financial Officer, and Ray Wall, our Chief Operating Officer. I'll begin with a few comments on our 2021 performance and move on to the more current and more interesting discussion of where our business is headed, as well as the activities we have underway that will set the foundation for growth in 2022 and beyond. I'll then pass the call over to Ray for a discussion on what's happening in our clinics and with our staff. And finally, Joe will provide a detailed review of fourth quarter and full year 2021 financial results, along with our 2022 outlook. Then, of course, we'll take your questions. To start, I want to thank all of our team members for their hard work and dedication. Simply put, I could not be working with a better bunch of people. The team accomplished quite a bit in 2021, including standing up our company for the public markets, continuing to operate through the challenges and uncertainty presented by the multiple waves of COVID, and throughout all of that, staying true to delivering high quality patient care that we're known for. First, We achieved our revenue guidance for the year and generated approximately $40 million in adjusted EBITDA, which approximates the low end of our guided range that we shared with you during our last call. This marks a change from earlier quarters, and you should very much read into this a deep and sustaining commitment to our stakeholders to do our very best to deliver on what we say we will do. And if not, we will be absolutely forthright about it. For the year, we added 58 new clinics right on top of our earlier guidance. The new clinics consist of 51 open clinics and seven acquired clinics located predominantly in the southwest, southeast, and northeast. This brings our total clinic count to 910 clinics across 25 states. Now, in our last earnings call, I highlighted two areas that we're going to be laser-focused on. was to stabilize and grow our clinical workforce by both increasing retention and recruiting and onboarding new team members. Ray will discuss the really great things we've done in this area. And without stealing all his thunder, I'm happy to report that annualized turnover continues to decline, decreasing 400 basis points from 41% in the third quarter of 2021 to 37% in the fourth quarter. And hiring remains strong in the fourth quarter. With this, we have nearly 2,500 clinical FTEs as of 2021 year-end, putting us just slightly ahead of our planned staffing levels going into 2022. During our last call, I also called out unacceptably low levels of visit volume, most acute in the Midwest and Northwest, and our need to drive higher referrals in order to realize more clinic visits. Since then, we've completed a top-to-bottom review of our sales strategy. conducting a market-by-market assessment of past, present, and potential referral sources and revamped their respective calling priorities. Equally as important, we've identified the gaps we have in our sales team's coverage of those referral sources. We created several new field-based sales positions in those gap areas and have already filled several of them with the remainder to be completed in the first half of 2022. Our business development managers continue to serve as the main point of contact to referring providers, ensuring they have access to the right ATI clinicians and physical therapy expertise as needed to accelerate their patients' return to full health. And while I think it's absolutely critical to build our market muscle back up again, I'm even more excited about our strategy of getting 600 or so of our clinical field leadership more actively in the mode of relationship building with referral sources, community event participation, and backing up their development managers with joint relationship calls, focusing on the quality of their patient outcomes. Moving from 50 or so salespeople to leveraging the 600 or so high quality clinical leaders should move the growth needle in 2022. While it's early innings in bringing our development partners and clinicians together for joint selling opportunities, in recent weeks, we have returned to pre-Omicron visit-per-day volume levels. And Joel will have more to say on this in his section. I'd also like to point out that our patient SAT metrics continue to remain very high, with a net promoter score of 78 and a Google Star rating at 4.8 in the fourth quarter of 2021. This is to the full credit of our clinic leaders and our care team. Finally, on a more financial note this morning, we announced the refinancing of our credit agreement and capital structure that reduced our leverage, extended maturities, and increased our liquidity. This transaction provides a strong financial foundation to support our operations, continue to invest in our people, and pursue our growth strategies. Joe will provide more details on this recap, as well as our 2022 outlook in the financial review. So with that, Ray, would you let us know what's going on in the clinics and what our teams are