ATI Physical Therapy, Inc. (ATIP) on Q1 2022 Results - Earnings Call Transcript
Operator: Good afternoon and welcome to ATI Physical Therapy's First Quarter 2020 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. Please note this event is being recorded. On the call today is Jack Larsen, Chairman of the Board; Sharon Vitti, Chief Executive Officer; Joseph Jordan, Chief Financial Officer; Ray Wahl, 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 Ms. Fong to read the safe harbor and forward-looking statements.
Joanne Fong: Thank you, Lisa. 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 our 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 cause actual results to be materially different from these forward-looking statements can be found in the Risk Factors 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 and the relationship between these non-GAAP measures to the most comparable GAAP measures and a reconciliation of historical non-GAAP financial measures can be found in the press release that’s posted on ATI's website and filed with the SEC. And with that, I'd like to turn the call over to Jack.
Jack Larsen: Thanks, Joanne, and welcome to all of you joining us this afternoon. I'm very pleased to welcome our new Chief Executive Officer, Sharon Vitti. By way of reminder, Sharon came from CVS Health, where she served as the President of MinuteClinic and led the company's clinical and consumer-centered strategy. Sharon is digging into our business and I look forward to working with her, as I continue my role as Chairman. Also on the call with us today is of course Joe Jordan, our Chief Financial Officer; and Ray Wahl, Chief Operating Officer. I'll start the discussion with some highlights of our first quarter 2022 business performance and then shift to the market trends we are currently seeing. Ray will then share an update on the activities in our clinics and with our teams. Joe will review our first quarter financial results and outlook for full year 2022 and Sharon will wrap us up with remarks to close. Before we jump in, as always, I want to acknowledge and thank our entire team for their continuing dedication and efforts. Although, the significant spike in COVID earlier this year feels like yesterday's news, it impacted our teams in a very meaningful way. And in some parts of the country, it still continues to be a fact of life in the clinic. Nevertheless, our teams, both clinical and support, have tackled these challenges head on. Most importantly, throughout this time, we continue to achieve high patient satisfaction scores and helped tens of thousands of people every day in their return to physical health. Since we last spoke, patient appointments to our clinics have continued to grow and we remain laser-focused on achieving visit volume at pre-COVID levels later this year and of course, building from there. Ray will go over the specifics, but I'm pleased to report that in March we delivered approximately 22,600 visits per day, representing the highest volume month since March of 2020. To keep this momentum going, we are executing on our referral growth strategy. Alongside an expanded business development team, over 600 or so clinical field leaders have started waiting back into relationship building, with local physicians and those in the communities that they serve. Understanding that building these relationships take time, we expect to see the full benefits of our market activities in the quarters and years to come. Until then, referrals per day in the first quarter were approximately 91% of the pre-COVID level full year 2019 while visits per day in the first quarter were approximately 84% of the full year 2019 level. But referrals without enough high-quality clinical staff, is just a nonstarter. So, during the first quarter we continued to focus on our people, again, both clinical and support. While COVID variance in January led us to conducting a virtual rather than in-person National Leadership Conference, it was great seeing our nationwide team taking part in leadership development and sharing clinical and management best practices albeit at a distance. I have shared with you the many past actions we've taken to strengthen our position as the employer of choice for clinicians and we continue to listen and quickly respond to further strengthening that reputation. As a result our annualized clinician turnover for the first quarter of 2022 decreased approximately 900 basis points to 28%, which opposes our historical levels. Moreover, while we work to balance growing our clinical staff and driving referrals across our nationwide footprint there are markets in the Southwest and Southeast where our clinics are running near full capacity. In the first quarter of 2022, we opened 12 de novo clinics with the majority in Arizona, Georgia and Texas. And we have the financial and people resources to capitalize on these immediate growth opportunities as we see them come up. Finally, all of our work comes to a fine point in the measurement of our patient satisfaction scores and they remain very high with an NPS of 74% and a Google star rating of 4.9 in the first quarter of 2022. We provide individualized NPS reports to each of our regions and clinics quarterly, and to each of our therapists semiannually and our strong commitment to continuously raise the bar on what counts: patient satisfaction with their overall experience and more importantly their outcomes. With that I'll turn the call over to Ray.
Ray Wahl: Thank you, Jack. I'd like to take a moment to provide a detailed review of our operational performance in the first quarter and discuss some of our activities in the field. As we started 2022, January and the first half of February included challenges from Omicron impacting patient visits, appointment schedules and therapist staffing at our clinics. As the impact from the COVID variant lessened, patient visits steadily climbed from 19,300 visits per day in January to 22,600 visits per day by March. In managing our clinical team one key metric that we track is visits per clinical FTE per day. While always focusing on reducing turnover we use this metric to adjust our hiring activities. As Jack mentioned, annualized clinician turnover was 28% in the first quarter of 2022 and the trend was positive each month within the quarter. Our visits per day per clinical FTE, was 8.5 across the platform while we consider full capacity utilization to be in the low to mid-90s. We do, however, have certain pockets of the country where the labor market continues to be particularly constrained and we have relied on some contract labor to bridge the gap in these specific markets. One area of focus for us in 2022 is rebuilding talent and growing our clinical team. With PT school graduations in May and our traditionally biggest hiring season right around the corner, we're excited to expand our already talented base of providers with new team members. In addition to optimizing labor productivity and adding clinical FTE, the third leg in the operational stool is driving referrals. In the first quarter of 2022, we filled many of the new business development positions created under the refreshed sales strategy and are targeting to fill the remaining open positions in the second quarter. Furthermore, we've completed a key project that provides our clinical leadership team unique visibility and allows them to play a more active role in relationship development, which will be key in growing the business. As Jack mentioned, we are already seeing early results with the sales efforts. Referrals per day in January were 85% of the pre-COVID level in 2019 and increased by March to 96% of the fiscal year 2019 level. It is essential that we continue to drive higher referral volumes in order to meet both our short-term goals and set ourselves up for long-term success. To wrap things up, I'm really proud of our clinical leadership team and more specifically all of our team members who are delivering a differentiated experience in the clinic. Q1 was a challenge and the team rose to the occasion. I'm excited to see our hard work pay off as we continue into Q2 and beyond. And with that said, I'd like to turn the call over to Joe for a financial review.
Joseph Jordan: Thank you, Ray, and thanks everyone for joining the call today. I will cover our first quarter 2022 financial results and then I'll review the company's full year outlook. Starting with the first quarter. Net operating revenue was $154 million, a 3.2% increase year-over-year from $149 million in Q1 of 2021. Net patient revenue was $139 million, increasing 5% year-over-year, driven by higher volumes partially offset by lower rate per visit. Other revenue was $15 million declining 11.3% year-over-year primarily due to the sale of our home health service line in the fourth quarter of 2021. Visits per day per clinic during the quarter were 22.9, sequentially increasing 0.1 from 22.8 in the fourth quarter of 2021. The quarter-over-quarter increase was muted by visit softness in January and the first half of February when COVID variance disrupted operations through increased cancellations, a decline in scheduled appointments and increased clinician absences. Compared to the prior year, visits per day per clinic improved 0.7 from 22.2. Rate per visit was $103.6, sequentially decreasing 1.4% from $104.51 in the fourth quarter of 2021 and 4.2% year-over-year from $107.56 in the first quarter of 2021. The decreases in rate were primarily driven by the 2022, Medicare Physician Fee Schedule having lower rates for reimbursement for physical therapy and lower reimbursement rates for physical therapy assistance. The decrease relative to Q1 of 2021 was also due to unfavorable mix shift in payer states and services. Salaries and related costs in the first quarter of 2022 were $87 million, an 8.4% increase year-over-year from $81 million due to both more clinical FTE and wage inflation. PT salaries and related costs per visit during the quarter were $55.47 essentially flat compared to Q4 and increasing 2.5% year-over-year from $54.14 in Q1 due to wage inflation. Rent, clinic supplies, contract labor and other in the first quarter of 2022 was $52 million a 19.2% increase year-over-year from $43 million due to having more clinics and higher cost per clinic. PT rent and other costs per clinic during the quarter was approximately $54,000 and sequentially increasing 6.9% from $51,000 in the fourth quarter and 14.1% from $48,000 in the first quarter of 2021. The increases were primarily due to greater use of contract labor in select markets where it's taking longer to fill certain positions. Our provision for doubtful accounts during the first quarter was $5 million or approximately 3.7% of net patient revenue, which is trending favorably when compared to the first quarter of 2021 at 5.4% of net patient revenue. SG&A during the quarter was approximately $30 million a 21.4% increase year-over-year from $25 million due to public company operating costs and non-ordinary legal and regulatory expenses. Impairment charges in the first quarter of 2022 were $116 million for goodwill and $39 million for our trade name both non-cash charges. The impairment was primarily due to an increase in market interest rates and our cost of capital along with the public market price of our stock as of the valuation date. Operating loss in the first quarter of 2022 was $176 million increasing year-over-year from $7 million in Q2 of 2021. The increase was primarily driven by the $156 million impairment charge that I just mentioned. While visit volume and revenue were higher year-over-year, a lower rate per visit combined with clinician wage inflation, greater use of contractors and higher G&A led to lower margins driving the remaining $13 million increase in operating loss when compared to Q1 of the prior year. Notable below-the-line expenses during the quarter included a decrease in the fair value of certain warrant and contingent share liabilities totaling $26 million. The mark-to-market adjustment to fair value was based on a valuation analysis as of March 31. Interest expense during the quarter was $9 million compared to $16 million in the first quarter of 2021 which is consistent with the reduced principal debt outstanding as of the end of the first quarter. Other expenses were approximately $3 million during the quarter and were primarily due to the loss on extinguishment of debt in connection with the refinancing of our credit agreement in February. As discussed on our last call the refinance transaction added approximately $77 million to the balance sheet and pushed maturity out to 2028 providing liquidity and time to invest in our people and growth strategies as we work to continue to scale our business. Income tax benefit for the quarter was $23 million compared to $11 million in the first quarter of the prior year and our net loss during the quarter was $138 million compared to $18 million in the first quarter of 2021. Adjusted EBITDA during the quarter was a loss of $5 million or negative 3.1% margin decreasing year-over-year from adjusted EBITDA of $6 million in Q1 of 2021 or 3.8% margin. Cash generated during the first quarter was $46 million broken down between $27 million used to fund operations, $9 million used in investing activities and $82 million generated from financing activities. Cash used in operations did include $4 million repaid in connection with the Medicare Accelerated and Advanced Payment Program under the CARES Act. As of March 31st, 2022, available liquidity was approximately $144 million comprised of $95 million of cash on hand and $49 million in available revolver capacity. Looking ahead, we are maintaining our full year 2022 guidance expecting revenue to be in the range of $675 million to $705 million. In the first quarter of 2022, we ramped visits steadily. As Jack mentioned, visits per day of approximately 22,600 in March was the highest volume month since pre-COVID. Furthermore, as Ray mentioned, our most significant hiring season is around the corner. May being in the time when most new physical therapists complete their academic programs and graduate. As we drive referrals and convert to visits, we will focus on adding new team members and growing clinical headcount along with the growth in demand and in turn the growth in volume. We are also maintaining our full year guidance for adjusted EBITDA to be in the range of $25 million to $35 million. Traditionally, the first quarter of the year is the lowest in profitability with inclement weather causing patient cancellations and seasonally higher provision for doubtful accounts. With our National Leadership Meeting held at the beginning of the fiscal year, the first quarter profit is also impacted by higher expenses. And in 2022, as discussed on our last call, the first quarter was impacted by COVID variants during the first six weeks. As the business continues to ramp during the remainder of the year we will be able to better leverage our fixed costs and accordingly generate higher earnings which we've already begun to see in March. Finally, regarding new clinics, as Jack mentioned we opened 12 de novo clinics in the first quarter of 2022 and continue to expect to open between 20 and 30 new clinics for the full year 2022 focused on markets where we see outsized opportunities for growth. With that, I turn the call over to Sharon.
Sharon Vitti: Thank you, Joe for the detailed discussion of financial performance and outlook. ATI has an evidence-driven approach to improving function and helping our patients get back to their events. The company systematically measures and reports patient outcomes and patient satisfaction, which is uncommon in the highly fragmented outpatient physical therapy sector. I admire the energy and passion of our clinicians and I could not be more excited to be here at the pivotal time and as part of the team. Over the past 30-plus years, I dedicated my career to advancing high-quality health care and increasing access. In my last role, I was very much focused on making health management available timely and convenient and affordable. The bedrock of high-quality care is a medical professional in the field. Equally important delivery of affordable health care takes a village. And my experience includes how to effectively coordinate the patient's care with other health care providers and in doing so lower system costs. In the immediate term, my plan is to focus on regaining market momentum and meeting our performance commitments. As I spend my first 100 days digging into the business I'll be looking for opportunities to increase patient access to high-quality PT through various avenues including de novo clinics acquisitions digital health and strategic partnerships and alliances. ATI is a strong platform and I look forward to new milestones ahead. Operator, we are now ready to open the call for questions-and-answers.
Operator: Thank you. We'll take our first question today from Chris Neamonitis, Jefferies.
Chris Neamonitis: Great. Thanks for the questions and welcome Sharon. You guys talked about a reduction in attrition sequentially which is great. But if I look at your clinical FTE, it's actually down quarter-over-quarter. So, is hiring proving to be more challenging than you originally anticipated?
Joseph Jordan: Hey Chris this is Joe. I can take that one. So two things to point out there, we actually have a decrease in turnover at 28%. You probably also noticed that there's an increase in hiring at 39%. So hiring does outpace turnover when you look at those two. The clinical FTE metric is a bit nuanced. And it's a function of the number of hours that a clinician works. And I would tell you the delta there is really the timing of when someone is termed or decides to attrite and the timing of when someone has hired on. And maybe to cut through all of that noise, what I would say is, if we look at our clinical FTE to-date we're north of 2,500. I think that reflects that there are a lot of terms that calculated longer for a period versus hires.
Chris Neamonitis: Got it. That makes sense. And you mentioned kind of PT graduation in May, so how do you feel about infilling with new grads? Do you feel like you're well positioned with kind of the maybe more seasoned clinical staff? And does the hiring really does come down to more support or junior-level stuff?
Jack Larsen: Yeah, Chris this is Jack. We do focus I would say most of our attention on new grad recruiting, and that's proven to be quite successful for us over the past few quarters where we're able to source them, from really attractive offers in front of them and then, bring them up the productivity curve pretty quick. But I think Ray can probably put a little more color on those remarks.
Ray Wahl: Yeah. Chris, we have a mentoring program specifically for this situation or this environment that you're describing. As we bring on new grads, we pair them up with experienced providers, not only to ask questions and deal with the actual diagnosis that they're treating, but how do you handle case load, how do you interact with physicians, how you interact with family members and such. So we feel good about the support system that we're providing to these new providers as they exit school and enter the workforce.
Chris Neamonitis: Great. That's helpful. And then one more for me if I may, you talked about your labor and sales strategies last quarter potentially taking hold and maybe driving outperformance. But with the guide reiterated today how should we think about the progression of those strategies? Are you feeling more or maybe less confident about winning back referral share versus where you guys were during the fourth quarter call? Thanks.
Jack Larsen: Yeah so, the strategy we put in really has two components. One, we had to rebuild the people part of our business development team. And I think we've done that very well. We're within less than a handful of our targeted business development team size. But then, we also had to rebuild some of the sales and marketing data sets if you will to a point where referrals are where they have been historically and then where our development teams need to spend our time. So I think we have all those components in place. Where we have had some aging of our development teams in a particular market, we are seeing growth at a higher rate than we are in some of the less mature sort of new areas. So put that all into the balance I feel pretty good that we've got kind of a sales and referral resurgence program underway. But it takes time. And I think as I said in my prepared remarks we'll see a little bit now and then increasingly more so in the quarters to come.
Chris Neamonitis: Very helpful. Thank you.
Jack Larsen: Next question.
Operator: Next question comes from Larry Solow CJS Securities.
Stefanos Crist: Hi. This is Stefanos Crist, calling in for Larry. Thanks for taking my questions. In terms of the improvement on referrals, are those predominantly new doctors, or are some of those lost referral sources coming back?
Jack Larsen: Yes. I think it's a mix of both. The existing referral sources are probably our most fertile areas and we are beginning to knock on the door of less traditional for us referrals. And I think we're seeing some success. But at this point, I can't give you an exact percent but it's a mix of both but still predominantly existing referral sources.
Stefanos Crist: Got it. Thank you. And just for a follow-up, in terms of pricing on the private side can you talk about the progression of rates just considering the inflationary environment we're in?
Jack Larsen: Sure. A couple of thoughts and I'll ask Joe to jump in. So, we expected rate compression in 2022 is a function of the Medicare fee schedule cuts that we saw last year, fully anticipated. And we are working very diligently on the bulk of the other rates primarily with commercial payers and the like. But remember, the Medicare rate cut fee schedule is only the starting point. On top of that there are performance bonuses, that I think we've said in prior calls that because of our success in reporting under the Medicare incentive programs we get a little bit better rate than what the fee schedules would indicate. So I'm not surprised to see some rate compression in Q1 and we anticipated that in the balance of the year forecast.
Joseph Jordan: Yes. And just to maybe add on to Jack's, you're obviously well aware Stefanos of the Medicare rate environment. We talked about it Jack just hit on it. When we step over to commercial, there's a handful of payers not a material piece of our payer landscape in commercial that does attach their rates to Medicare, so their Medicare like contracts. And as a result, there's a small decline in rates for those payers. What we've seen with other payers thus far this year is pretty consistent rates. The rates or the agreements with those payers are generally evergreen and therefore, they'll renew throughout the year. So we'll have them coming out throughout the year. But to date relatively consistent rates not going up or down.
Stefanos Crist: Thanks a lot.
Operator: Next up is Pito Chickering, Deutsche Bank.
Pito Chickering: Hey, good afternoon, guys. Thanks for taking my question. Sharon it's great to have you here on the telephone. A question on rates just on the sort of year-over-year decline of 450, can you just provide us a bridge of how much that was from Medicare fee schedule, how much of that was from lower rates because is being performed by systems and then if possible, the unfavorable mix shift in payer mix just to understand sort of all those moving parts.
Joseph Jordan: Hey, Pito, it's Joe. I'm going to lump the two Medicare pieces together. If you look at Q4 to Q1, we went $104.50-ish to the $103 and change in Q1. That I think you could pretty closely tied to the change in Medicare. It's a combination of PT scene visits and Medicare PT and I don't have at my fingertips how much is each of those two components. The delta between Q1 of last year and the remaining difference on bridging down to $104.50 is primarily state mix shift and pay on mix shift meaning, less workers' comp, less API, more commercial, more Medicare. So $107 to $104 is that and then $104.50 to $103 is Medicare change.
Pito Chickering: Okay. And then looking at March has that payer mix stabilized? And kind of how should we be thinking about that going forward? And from a modeling perspective what's the right amount that we should be modeling from here for 2022?
Joseph Jordan: Generally, the payer mix has stayed consistent in March, although I want to be careful getting into month-to-month discussions, but generally stayed pretty consistent in March. And as we look out going forward, what we had anticipated in 2022, is a stable payer mix. Granted, you want to focus on trying to grow some of those higher-paying states back and grow some of the payer mix back to workers' comp and API where we can capture share, but we haven't modeled that out.
Pito Chickering: Okay. Shifting to guidance, so you said rate per visit was what it was the first quarter and the PT cost per visit is obviously a big pressure due to these macro pressures that we're facing. And your visits per clinicians that's 8.5 is a slightly below where it was in 2019 pre-COVID. So can you sort of walk me through what assumptions and which KPIs sort of you're assuming in order to get to the guidance? I mean just which KPI should we be modeling to get to the guidance?
Joseph Jordan: Sure, Pito. It's Joe again. The visits per clinical FTE to your point we're about 8.5 for the first quarter. And we talked about in the February call, but we certainly had labor early in the year January and February when visits weren't coming in because of COVID. And the productivity as you can imagine as a result was significantly depressed from that 8.5 average for the quarter. So again, that's a breakout individual month specifically. But if you can think about the trend that was happening there when we were in March we were in the low-9s. As we think through the rest of the year that's where we want to be is in the low-9s. Now we understand that as we add clinicians and Ray and Jack and I all talked about needing to add labor throughout the year to grow our volume back, the productivity could be uneven throughout the year. But generally, we expect it to be somewhere in the low-9s.
Pito Chickering: Okay. And then I guess from a hiring perspective, is this sort of the right rate that you guys will be hiring throughout the year. What we've seen I guess to your point I think you gave us the numbers of where you are today at 2,500. So adding 50-plus clinicians a quarter, plus getting to your low-9s that's how we get to sort of the guidance numbers?
Jack Larsen: So Pito, this is Jack. I think you have to think about a continuous upward progression and referrals turning into visits. Certainly, everything flows from that. I think the other thing about hiring, we anticipate exiting the year at what level of clinicians?
Joseph Jordan: About 2,800.
Jack Larsen: 2,800 or so. So it's not a linear progression. We'll sort of see good growth here in May and June. As we said, that's a big graduation time and then again in the fall. So volume growing productivity mirroring what we saw in March and then hiring up to our ending level is probably the three key KPIs you want to keep an eye on as you model out rest of year.
Pito Chickering : Okay. Great. And then last quick question for me. Apologies for going this long. On the referral numbers, I think, you said you're 96% in March. Is that on a sort of per center or on a per clinic? Because I think you guys added 40 clinics year-over-year. Just trying to get a feeling for sort of where the number is.
Ray Wahl: Pito, this is Ray. That's for the platform the entire platform.
Pito Chickering : Got it. All right. Great. Thanks so much guys.
Ray Wahl: Thank you for the questions, Pito.
Operator: We'll take the next question from Mike Petusky, Barrington.
Mike Petusky: Good afternoon. Joe, can I have the share count for the quarter? I don't think it was in the release.
Joseph Jordan : Yes. I have it here. Give me one second, Mike. Let me just pull that up. 197.5 .
Mike Petusky: All right. So, obviously, balance sheet continues to be really levered. Free cash flow in the first quarter, understanding that the first quarter is always the weakest. You guys did the refinance. With the balance sheet this levered generating positive free cash it has to be a priority that you guys have given a lot of thought and analysis to. Can you share what you all are targeting, or what you told your lenders you're targeting in terms of where you sort of break through and start generating consistent positive free cash? Thanks.
Joseph Jordan : Yes. Yes, I can talk to that a little bit. I mean one of the things that we've talked about with lenders, and I think we've talked about in some of the previous earnings calls is as we ramp up this year, we knew it would be a year where we're still in the cash outflow, particularly with the financing transaction in Q1 and carrying labor in advance of seeing volume. So Q1 was obviously a big outflow quarter for us. I'd expect Q2 and Q3 to still be a cash outflow and get closer to breakeven, as we get into the fourth quarter. And then beyond that, obviously, I'm not prepared to comment on 2023 at this point. But that's the journey that we see ourselves on for the remainder of 2022.
Mike Petusky: Okay. So obviously no positive free cash this year and no comments on whether you might find a quarter in 2023 that you can generate positive cash.
Joseph Jordan : Yes. I mean, Q4, I'd say, it could be right around that right around positive.
Mike Petusky: Including CapEx?
Joseph Jordan : Yes. And 2023 really the reason, we don't want to comment on that yet as it comes down to the determination made on CapEx and the investments that you make back in the business. So Sharon's just on board. And obviously, there's a lot of evaluation that she'll want to do and we'll want to do as a team to figure out how we strategize around 2023.
Mike Petusky: Okay. One quick one, for Sharon. Sharon, obviously you're coming into a situation that has struggled in its history as a public company. What about the situation did you sort of assessed and say hey I can really bring value to this area, this area, and this area. This is how I can help sort of turn this sucker around and it sort of aligns with my skill set? Can you just talk about as, I'm sure you gave a lot of thought to taking this position? Thanks.
Sharon Vitti: Sure. Thanks for the question. I'd say, a few things. One, the ATI practice being a national practice having a national footprint and all the number of clinics and being able to deliver on a national brand, is very similar to what I came from CVS Health. From a PT perspective, I was really excited about PT. When we think about where health care is going around, wellness and prevention, we think about increasing clinical outcomes quality of life and reducing cost of care or more invasive treatments that PT area was really very interesting to me. And then I would say, as we look at where we are, right now as the team pointed out, we're blocking and tackling most of looking at our providers looking at our pipeline looking at our productivity. And so that work needs to continue and I'm pretty used to that work. And then I would say, in parallel how do we think about as with all health care organizations, what the transformation is and what we need today to stay up with how the health care landscape is changing. And so, again very similar to a lot of the dynamic nature of the work in MinuteClinic, and really reading the landscape and then evolving the business to perform and to meet the needs of patients.
Jack Larsen: Mike, I might add on top of Sharon's comments you all have followed, our journey over the last well gosh a year 1.5 years or so just post-COVID with our clinical workforce and some of the things that we did that, we wish we didn't do, and have done and then our remediation steps. And I think Sharon, with her leadership of a highly intensive clinical organization with a national footprint really, is in tune with the provider perspective. And that was something, I think that was certainly key on my list that Sharon brings uniquely.
Mike Petusky: All right. Thank you. Appreciate it.
Jack Larsen: Thanks for the question. Next question.
Operator: At that time that does conclude all the questions. I'll hand the conference back to our speakers for any additional or closing remarks.
Sharon Vitti: Well, I want to extend a thank you to everyone that prepared the materials for our call today and to all participants. I'm going to work with the ATI team, the Board and strategic partners to capitalize on the current momentum, to deliver on our performance goals and bring ATI to the next level. I look forward to our next earnings call. Thank you.
Operator: And that will conclude today's conference. We would like to thank you all for your participation. You may now
