ATI Physical Therapy, Inc.

Good afternoon and welcome to ACI Physical Therapy's first quarter 2023 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 have a question at that time, please press star 1 on your telephone keypad. Please note this event is being recorded. On the call today is Sharon Vitti, Chief Executive Officer, Chris Cox, Chief Operating Officer, Joseph Jordan, Chief Financial Officer, and Joanne Fong, Senior Vice President, Treasurer, and Head of Ambassador Relations. I would now like to turn the call over to Ms. Fong. Please go ahead.

Thank you, Lisa. Good afternoon, everyone, and thank you for joining us today. 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 the current expectations based on our beliefs, assumptions, and information currently available to us. Although we believe these expectations are reasonable, we undertake no obligation to revise any statements or reflect changes that occur after this call. Descriptions of some of the factors that cause actual results that differ materially from these forward-looking statements can be found in the risk factors section in the company's filings of 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 relationships between these non-GAAP measures are the most comparable GAAP measures and reconciliation of historical non-GAAP financial measures can be found in earnings press release. That's posted on ATI's website and filed with the SEC. With that, I'd like to turn the call over to Sharon. Thanks, Joanne.

Welcome, everyone. Earlier today, we reported our first quarter 2023 earnings results and announced that we achieved an important milestone toward closing our previously announced capital transactions. On our last call, I said 2023 was off to a good start and it has been quite a journey. Now that the first quarter has concluded, I'm happy to share highlights of the exceptional performance we achieved as a result of the deliberate actions we are taking to improve access to high quality patient care and deliver excellent customer service across our organization. To start, I must congratulate the entire ATI family. our providers in the clinics, those in the field in our health services offerings, and our corporate team. On their accomplishments, this team saw more than 22,700 visits on average each day in the first quarter, helping hundreds of thousands of patients across the country to attain their individual health goals. In January, we held our national leadership event with our field teams and corporate leadership to align our 2023 strategies and goals for each of our clinics. It was great to have the team back together post-COVID. Throughout the first quarter, our providers exceeded established targets with visits and visits per day per clinic reaching a post-pandemic high. We recently completed ATI's management transformation, which started over the last five months adding onto our experienced team of high-performing healthcare leaders that are the basis for our new operating structure. As I reflect on my first year as CEO, I'm pleased we have had early successes to report and an incredibly strong foundation to drive our momentum. While a central priority at ATI continues to be achieving our near-term growth targets, we now have Scott Gregerson, our new Chief Growth Officer, who is focused on ensuring we deliver on ATI's long-term potential in the musculoskeletal sector and that the decisions we make today position us for the future. So now turning to our near-term growth drivers, specifically the three P's of our practice are pipeline, provider base, and provider productivity. So first if we look at pipeline, referrals remained above pre-pandemic levels to the first quarter. Our business development team continues to strengthen our existing referral relationships, build new relationships, and they've done a nice job executing on market-specific strategies. For the second P, provider productivity, visits in the first quarter of 2023 were the highest since the pandemic began. Additionally, our productivity per provider performed at an all-time high, even surpassing pre-pandemic levels. Our providers continue to focus on their commitment to our patients in meeting the high demand for care. And they increased productivity to an impressive 9.5 visits per day per clinical FTE in March 2023 to finish the quarter at an average of 9.4 visits per day. Chris will talk more about this and provide details on how we achieved this milestone and what lies ahead. For the third P, provider base, the labor market continues to be a headwind across the industry and at ATI, with labor scarcity and elevated competition for providers at all-time highs. Emily, our Chief People Officer, has thoroughly evaluated the overall provider landscape and has spent time with many of our teams, listening and hearing about the dynamics at play in the current environment. Our conclusion is aligned with many in the PT space. we do not foresee an immediate improvement in the labor market. At the same time, we are hyper-focused on involving our people strategy to aggressively attract and retain vital providers. Our newly formed talent acquisition team is making progress and has positioned ATI as an employer's choice for the new cohort of PT graduates entering the workforce. The ATI culture is strong. and Emily is leading a multitude of tactics to support and engage our employees, learning real-time what works and where to invest in our team members. As we move forward, we're continuing to execute on our fleet review and geographic footprint optimization. The reviewer of our footprint is designed to enhance convenience for our customers and optimize the underperforming clinics through consolidation, closure, and divestiture. In the first quarter of 2023, We opened four de novo clinics. We closed 12 clinics and divested six clinics as we executed on the plan. We are continuously monitoring clinic performance and taking swift action when appropriate. So as I said before, 2023 is off to a good start, and demand for ATI physical therapy services remains high. ATI's success is fueled by the contributions of every member of our team pulling in the same direction to deliver on the company's mission to exceed customer expectations by providing the highest quality of care in a friendly and encouraging environment with impactful outcomes. As we move into 2023, we're acting with urgency to harness our recent momentum and continue driving improvements in the business. Now, I will turn the call over to Chris to discuss our operations and what he's seeing in the field.