BOLINGBROOK, Ill., Oct. 19, 2021 /PRNewswire/ -- ATI Physical
Therapy - ("ATI" or the "Company") (NYSE: ATIP), the largest
single-branded outpatient physical therapy provider in the United
States, today announced selected preliminary third quarter
2021 financial results ended September 30,
2021. These preliminary results are subject to change
pending completion of the Company's quarterly financial and
accounting procedures.
ATI anticipates quarterly revenue of approximately $159 million, income before taxes of
approximately $147 million (subject
to completion of final financial and accounting procedures
including assessment of any potential asset impairments), and
Adjusted EBITDA of approximately $8
million.
Management has implemented targeted measures that reduced
clinical staff attrition and improved clinical full-time equivalent
(FTE) growth during the last two months of the third quarter of
2021. The Company made progress towards restoring FTEs with ATI
hiring roughly 2 clinicians for every 1 departure in August and
September 2021 compared to our second
quarter 2021 ratio of approximately 1-to-1.
Additionally, as cited below in the revised 2021 earnings
guidance, visit volume softened resulting in 20,674 average visits
per day during the third quarter of 2021 compared to 21,569 during
the second quarter of 2021, or approximately 1 less Visit per Day
per Clinic. Previous guidance anticipated continued visit volume
growth in both the third and fourth quarters of 2021 compared to
the second quarter. While ATI continues to focus on the labor
market dynamics, the company is also working to improve visit
volume growth by enhancing field relationships and referral
networks to strategically position ATI to capitalize on long-term
growth opportunities.
"During the third quarter of 2021, we made progress in improving
clinician retention and continued to hire additional clinical staff
at a record pace," said Jack Larsen,
Executive Chairman of ATI Physical Therapy. "While these new team
members go through the onboarding process, we simultaneously
experienced lower visit volume during the quarter compared to the
second quarter of 2021. Looking forward, we are focused on driving
visit growth by investing in our field sales
force and are well capitalized with $135 million of available liquidity as of
September 30, 2021. I remain
confident in the underlying industry tailwinds and the long-term
growth prospects for ATI."
Revised 2021 Earnings Guidance
For full year 2021, ATI is now projecting revenue to be in a
range of $620 million to $630 million from the prior range of $640 million to $670
million and Adjusted EBITDA to be in a range of $40 million to $44
million from $60 million to
$70 million. The further reduced
guidance is due to lower than expected patient volume. ATI is
maintaining guidance for 2021 new clinic openings, which is
expected to be in the range of 55 to 65 clinics.
Interim Impairment Analysis
The Company is currently completing quarterly financial and
accounting procedures for the third quarter of 2021, including
performing interim quantitative impairment testing to goodwill and
intangible and other assets. If, as a result of our reduced
guidance or other factors, it is determined that the fair value
amounts are below the respective carrying amounts, the Company will
in the third quarter results record an impairment charge which
could be material.
Third Quarter 2021 Results and Conference Call
The third quarter 2021 selected financial results and
disclosures in this press release are preliminary and reflect
management's current views. ATI Physical Therapy expects to
issue a press release with third quarter 2021 financial results
after the market close on November 9,
2021. Final financial results and other disclosures
will be reported in our Quarterly Report on Form 10-Q to be filed
with the Securities and Exchange Commission and may differ from the
preliminary results and disclosures in this press release due to,
among other things, the completion of closing and review
procedures, changes in management's views including estimates, and
the occurrence of subsequent events. We urge you to read the Form
10-Q when it becomes available.
Management will host a conference call at 5:00 p.m. Eastern Time on November 9, 2021 to review third quarter
financial results. The conference call can be accessed via a live
audio webcast. To join, please access the following web link,
Q3 2021 Earnings Conference Call, on the Company's website at
www.atipt.com at least 15 minutes early to register, and download
and install any necessary audio software. A replay of the call will
be available via webcast for on-demand listening shortly after the
completion of the call, at the same web link, and will remain
available for approximately 90 days.
About ATI Physical Therapy
At ATI Physical Therapy, we are passionate about potential.
Every day, we restore it in our patients and activate it in our
team members in our approximate 900 locations across the U.S. With
outcomes from more than 2.5 million unique patient cases, ATI is
making strides in the industry by setting quality standards that
deliver predictable outcomes for our patients with musculoskeletal
(MSK) issues. ATI's offerings span across a broad spectrum for
MSK-related issues. From preventative services in the workplace and
athletic training support to outpatient clinical services and
online physical therapy via its online platform, CONNECTâ„¢, a
complete list of our service offerings can be found at ATIpt.com.
ATI is based in Bolingbrook,
Illinois.
Forward-Looking Statements
All statements other than statements of historical facts
contained in this communication are forward-looking statements for
purposes of the safe harbor provisions under the United States
Private Securities Litigation Reform Act of 1995. Forward-looking
statements may generally be identified by the use of words such as
"believe," "may," "will," "estimate," "continue," "anticipate,"
"intend," "expect," "should," "would," "plan," "project,"
"forecast," "predict," "potential," "seem," "seek," "future,"
"outlook," "target" or other similar expressions (or the negative
versions of such words or expressions) that predict or indicate
future events or trends or that are not statements of historical
matters. These forward-looking statements include, but are not
limited to, statements regarding 2021 forecast and other estimates
of financial and performance metrics and market opportunity. These
statements are based on various assumptions, whether or not
identified in this communication, and on the current expectations
of ATI's management and are not predictions of actual performance.
These forward-looking statements are estimates only and are not
intended to serve as, and must not be relied on by any investor as,
a guarantee, an assurance or a definitive statement of fact or
probability. Actual events and circumstances are difficult or
impossible to predict and may differ from assumptions, and such
differences may be material. Many actual events and circumstances
are beyond the control of ATI. These forward-looking statements are
subject to a number of risks and uncertainties, including, but not
limited to:
(i)
|
changes in domestic
business, market, financial, political and legal conditions,
including shifts and trends in payor mix;
|
(ii)
|
the ability to
maintain the listing of the Company's securities on
NYSE;
|
(iii)
|
the ability of the
Company to realize the anticipated benefits of the business
combination;
|
(iv)
|
risks related to the
rollout of ATI's business strategy and the timing of expected
business milestones;
|
(v)
|
the effects of
competition on ATI's future business and the ability of ATI to grow
and manage growth profitably, maintain relationships with customers
and suppliers and retain its management and key
employees;
|
(vi)
|
the ability of the
Company to retain and to hire physical therapists consistent with
its business plan;
|
(vii)
|
the ability of the
Company to develop new and retain and expand relationships with
referral sources;
|
(viii)
|
the outcome of any
legal proceedings that may be instituted against the Company or any
of its directors or officers;
|
(ix)
|
the ability of the
Company to issue equity or equity-linked securities or obtain debt
financing in the future;
|
(x)
|
risks related to
political and macroeconomic uncertainty;
|
(xi)
|
the impact of the
global COVID-19 pandemic on any of the foregoing risks;
and
|
(xii)
|
those factors
discussed in our amended S-1 registration statement filed with the
SEC on July 28, 2021 under the heading "Risk Factors," and other
documents filed, or to be filed, by ATI with the SEC.
|
If any of these risks materialize or our assumptions prove
incorrect, actual results could differ materially from the results
implied by these forward-looking statements, including our forecast
update. There may be additional risks that ATI does not presently
know or that ATI currently believes are immaterial that could also
cause actual results to differ from those contained in the
forward-looking statements. In addition, the forward-looking
statements in this communication reflect ATI's expectations, plans
or forecasts of future events and views as of the date of this
communication. ATI anticipates that subsequent events and
developments will cause ATI's assessments with respect to these
forward-looking statements to change. However, while ATI may elect
to update these forward-looking statements at some point in the
future, ATI specifically disclaims any obligation to publicly
update any forward-looking statement, whether written or oral,
which may be made from time to time, whether as a result of new
information, future developments or otherwise, unless required by
applicable law. These forward-looking statements should not be
relied upon as representing ATI's assessments as of any date
subsequent to the date of this press release. Accordingly, undue
reliance should not be placed upon the forward-looking
statements.
Non-GAAP Financial Measures
To supplement the Company's financial information presented in
accordance with GAAP and aid understanding of the Company's
business performance, the Company uses certain non-GAAP financial
measures, namely "Adjusted EBITDA." We believe Adjusted EBITDA
assists investors and analysts in comparing our operating
performance across reporting periods on a consistent basis by
excluding items that we do not believe are indicative of our core
operating performance.
Management believes these non-GAAP financial measures are useful
to investors in highlighting trends in our operating performance,
while other measures can differ significantly depending on
long-term strategic decisions regarding capital structure, the tax
jurisdictions in which we operate and capital investments.
Management uses these non-GAAP financial measures to supplement
GAAP measures of performance in the evaluation of the effectiveness
of our business strategies, to make budgeting decisions, to
establish discretionary annual incentive compensation and to
compare our performance against that of other peer companies using
similar measures. Management supplements GAAP results with non-GAAP
financial measures to provide a more complete understanding of the
factors and trends affecting the business than GAAP results
alone.
Adjusted EBITDA is not a recognized term under GAAP and should
not be considered as an alternative to net income (loss) or the
ratio of net income (loss) to net revenue as a measure of financial
performance, cash flows provided by operating activities as a
measure of liquidity, or any other performance measure derived in
accordance with GAAP. Additionally, these measures are not intended
to be a measure of cash available for management's discretionary
use as they do not consider certain cash requirements such as
interest payments, tax payments and debt service requirements. The
presentations of these measures have limitations as analytical
tools and should not be considered in isolation, or as a substitute
for analysis of our results as reported under GAAP. Because not all
companies use identical calculations, the presentations of these
measures may not be comparable to other similarly titled measures
of other companies and can differ significantly from company to
company.
We have reconciled preliminary Adjusted EBITDA to preliminary
Income (loss) before taxes. We are not able to reconcile to Net
income (loss) at this time, because the information necessary to
complete that reconciliation is not yet available without
unreasonable effort and will provide such reconciliation in our
Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2021 when filed. Please
see "Reconciliation of GAAP to Non-GAAP Financial Measures" below
for reconciliations of non-GAAP financial measures used in this
release to their most directly comparable GAAP financial
measures.
Investor Contact:
Joanne
Fong
SVP, Treasurer and Investor Relations
(630) 296-2222 x 7131
investors@atipt.com
Media Contact:
Sean
Leous
ICR Westwicke
(646) 866-4012
Sean.Leous@westwicke.com
ATI Physical
Therapy Reconciliation of GAAP to Non-GAAP Financial
Measures ($ in thousands)
(unaudited)
(preliminary)
|
|
|
Three months
ended
September
30,2021(1)
|
Income before
taxes(2)
|
|
|
$
|
146,865
|
Plus
(minus):
|
|
Net income
attributable to non-controlling interest
|
|
(819)
|
Interest expense,
net
|
|
7,386
|
Depreciation and
amortization expense
|
|
9,222
|
EBITDA
|
|
|
$
|
162,654
|
Changes in fair value
of warrant liability and contingent common shares
liability(3)
|
|
(162,202)
|
Executive severance
costs(4)
|
|
3,551
|
Transaction and
integration costs(5)
|
|
2,335
|
Share-based
compensation
|
|
1,248
|
Pre-opening de novo
costs(6)
|
|
511
|
Non-ordinary legal and
regulatory matters(7)
|
|
442
|
Adjusted
EBITDA
|
|
$
8,539
|
|
|
|
|
|
|
|
|
(1)
|
Figures reflected are
preliminary and subject to completion of the Company's quarterly
financial and accounting procedures. The Company is currently
performing interim quantitative impairment testing to goodwill and
trade name intangible assets. If it is determined that the fair
value amounts are below the respective carrying amounts, the
Company will record an impairment charge which could be
material.
|
(2)
|
We have reconciled
Adjusted EBITDA to Income before taxes. At this time, we are not
yet able to reconcile to Net income (loss) and will provide such
reconciliation in our Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2021 when filed.
|
(3)
|
Represents non-cash
amounts related to the change in the estimated fair value of
Warrants, Earnout Shares and Vesting Shares.
|
(4)
|
Represents severance
costs related to the separation of the Company's former Chief
Executive Officer and Chief Human Resources Officer.
|
(5)
|
Represents costs
related to the Company's business combination with FVAC II, clinic
acquisitions and acquisition-related integration and
consulting.
|
(6)
|
Represents expenses
associated with renovation, equipment and marketing costs relating
to the start-up and launch of new locations incurred prior to
opening.
|
(7)
|
Represents
non-ordinary course legal costs related to the previously-disclosed
ATIP shareholder class action complaint.
|
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SOURCE ATI Physical Therapy