The following dialogue and evaluation ofATI Physical Therapy, Inc. and its subsidiaries (herein known as "we," "us," "the Company," "our Company," or "ATI") ought to be learn along with the Company's condensed consolidated monetary statements and associated notes thereto included elsewhere on this Quarterly Report. We make statements on this dialogue which can be forward-looking and contain dangers and uncertainties. These statements comprise forward-looking data relating to the monetary situation, outcomes of operations, plans, goals, future efficiency and enterprise of the Company. The forward-looking statements are primarily based on our present views and assumptions, and precise outcomes may differ materially from these anticipated in such forward-looking statements as a consequence of elements together with, however not restricted to, these mentioned underneath "Cautionary Note Regarding Forward-Looking Statements" and Part II, Item 1A. "Risk Factors." Many elements are past our management. Given these uncertainties, you shouldn't place undue reliance on our forward-looking statements. Our forward-looking statements symbolize our estimates and assumptions solely as of the date of this Quarterly Report. Except as required by legislation, we're underneath no obligation to replace any forward-looking assertion, whatever the cause the assertion could not be correct. Certain quantities on this Management's Discussion and Analysis could not add as a consequence of rounding. All percentages have been calculated utilizing unrounded quantities for the three and 6 months endedJune 30, 2022 , and 2021.
Todos los montos en dólares se presentan en miles, a menos que se indique lo contrario.
Resumen de la empresa
We are a nationally acknowledged outpatient bodily remedy supplier inthe United States specializing in outpatient rehabilitation and adjoining healthcare companies, with 926 owned clinics (in addition to 20 clinics underneath administration service agreements) situated in 25 states as ofJune 30, 2022 . We function with a dedication to offering our sufferers, medical supplier companions, payors and employers with evidence-based, patient-centric care. We supply a wide range of companies inside our clinics, together with bodily remedy to deal with backbone, shoulder, knee and neck accidents or ache; work harm rehabilitation companies, together with work conditioning and work hardening; hand remedy; and different specialised remedy companies. Our Company's workforce of professionals is devoted to serving to return sufferers to optimum bodily well being. Physical remedy sufferers obtain team-based care, modern methods and individualized remedy plans in an encouraging atmosphere. To obtain optimum outcomes, we use an intensive array of methods together with therapeutic train, guide remedy and power coaching, amongst others. Our bodily remedy mannequin goals to ship optimized outcomes and time to restoration for sufferers, insights and repair satisfaction for referring suppliers and predictable prices and measurable worth for payors. 43
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In addition to offering companies to bodily remedy sufferers at outpatient
rehabilitation clinics, we offer companies by our ATI Worksite Solutions
("AWS") program, Management Service Agreements ("MSA") and Sports Medicine
preparations. AWS supplies an on-site workforce of healthcare professionals at
employer worksites to advertise work-related harm prevention, facilitate
expedient and applicable return-to-work follow-up and preserve the well being and
well-being of the workforce. Our MSA preparations usually embody the Company
offering administration and bodily therapy-related companies to physician-owned
bodily remedy clinics. Sports Medicine preparations present licensed
healthcare professionals to varied colleges, universities and different establishments
to carry out on-site bodily remedy and rehabilitation companies.
Nombramiento del Director General
OnApril 28, 2022 , the Company appointedSharon Vitti as its Chief Executive Officer and to the Board of Directors.Ms. Vitti has 30 years of healthcare expertise, together with practically twenty years of government management in scientific and consumer-focused healthcare firms. In reference toMs. Vitti's appointment,John (Jack) Larsen stepped down as Executive Chairman of the Company, efficientApril 28, 2022 and can proceed in his function as Chairman of the Board of the Company.Mr. Larsen was appointed Executive Chairman of the Company onAugust 9, 2021 . In addition, efficientApril 28, 2022 ,John (Jack) Larsen ,Joseph Jordan , the Company's Chief Financial Officer, andRay Wahl , the Company's Chief Operating Officer, not fulfill the function of Principal Executive Officer.
2022 Refinanciamiento de deuda y financiamiento de acciones preferentes
OnFebruary 24, 2022 , the Company entered into varied financing preparations to refinance its current long-term debt (the "2022 Debt Refinancing"). The Company entered into a brand new 2022 Credit Agreement which is comprised of a senior secured time period mortgage which matures onFebruary 24, 2028 , and a "tremendous precedence" senior secured revolver, which matures onFebruary 24, 2027 . Refer to Note 8 - Borrowings within the condensed consolidated monetary statements for additional particulars.
En relación con el Refinanciamiento de Deuda de 2022, la Compañía emitió acciones preferenciales no convertibles y warrants para comprar acciones ordinarias de la Compañía. Refiérase a la Nota 10 – Mezzanine y Capital Contable en los estados financieros consolidados condensados para mayores detalles.
La Combinación de Negocios
OnJune 16, 2021 (the "Closing Date"), a Business Combination transaction (the "Business Combination") was finalized pursuant to the Agreement and Plan of Merger ("Merger Agreement"), datedFebruary 21, 2021 between the working firm,Wilco Holdco, Inc. ("Wilco Holdco"), andFortress Value Acquisition Corp. II (herein known as "FAII" and "FVAC"), a particular objective acquisition firm. In reference to the closing of the Business Combination, the Company modified its identify fromFortress Value Acquisition Corp. II toATI Physical Therapy, Inc. The Business Combination was accounted for as a reverse recapitalization in accordance withU.S. usually accepted accounting ideas ("GAAP"). The Company's widespread inventory is listed on theNew York Stock Exchange ("NYSE") underneath the image "ATIP." Refer to Note 3 - Business Combinations and Divestiture within the condensed consolidated monetary statements for additional particulars.Home Health divestiture OnAugust 25, 2021 , the Company entered into an settlement to divest itsHome Health service line. OnOctober 1, 2021 , the transaction closed with a sale worth of$7.3 million . The main lessons of belongings and liabilities related with theHome Health service line consisted predominantly of accounts receivable, accrued bills and different liabilities which weren't materials. 44
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adquisiciones 2021
During the fourth quarter of 2021, the Company accomplished 3 acquisitions consisting of seven whole clinics. The Company paid roughly$4.5 million in money and$1.4 million in future fee consideration, topic to sure time or efficiency circumstances set out within the buy agreements, to finish the acquisitions.
Tendencias y factores que afectan el desempeño futuro de la empresa y la comparabilidad de los resultados
Durante el segundo trimestre de 2022, observamos las siguientes tendencias en desarrollo en nuestro negocio:
•Mejoró los volúmenes de referencias y visitas de pacientes para concluir el primer trimestre de 2022 y continuar hasta el segundo trimestre de 2022, en relación con la debilidad del volumen experimentada durante el comienzo de 2022 que fue impulsada por un aumento en los casos de COVID-19 debido al brote de más variantes.
•Un mercado laboral ajustado continuo para la fisioterapia disponible y otros proveedores en la fuerza laboral, lo que contribuye a la competencia en la contratación, el desgaste y la continua inflación salarial en la industria de la fisioterapia y en ATI.
•Decrease in price per go to primarily pushed by Medicare price cuts that turned efficient onJanuary 1, 2022 , Medicare sequestration reductions that started afterMarch 31, 2022 and fewer favorable payor, state and repair combine when in comparison with prior durations.
Nuestra capacidad para lograr nuestro plan de negocios depende de una serie de factores, que incluyen, entre otros, el éxito de una serie de pasos continuos relacionados con el aumento de los niveles de private clínico, el management de costos y el aumento del volumen de visitas y referencias.
During the quarter endedMarch 31, 2022 , the Company recognized an interim triggering occasion on account of elements together with potential adjustments in low cost charges and the latest lower in share worth. The Company decided that the mixture of those elements constituted an interim triggering occasion that required additional evaluation with respect to potential impairment to goodwill, commerce identify indefinite-lived intangible and different belongings. Accordingly, the Company carried out interim quantitative impairment testing and decided that the honest worth quantities have been under the respective carrying quantities. As a consequence, the Company recorded non-cash impairment costs of$116.3 million associated to goodwill and$39.4 million associated to the commerce identify indefinite-lived intangible asset through the interval endedMarch 31, 2022 . These costs are non-cash in nature and don't have an effect on our liquidity or debt covenants. During the quarter endedJune 30, 2022 , the Company recognized an interim triggering occasion on account of elements primarily pushed by potential adjustments in low cost charges. The Company decided that these elements constituted an interim triggering occasion that required additional evaluation with respect to potential impairment to goodwill, commerce identify indefinite-lived intangible and different belongings. Accordingly, the Company carried out interim quantitative impairment testing and decided that the honest worth quantities have been under the respective carrying quantities. As a consequence, the Company recorded non-cash impairment costs of roughly$87.9 million associated to goodwill and$40.0 million associated to the commerce identify indefinite-lived intangible asset through the interval endedJune 30, 2022 . Refer to Note 5 -Goodwill ,Trade Name and Other Intangible Assets within the condensed consolidated monetary statements for additional particulars.
Impactos de volumen y pandemia de COVID-19
The coronavirus ("COVID-19") pandemic in the United States resulted in adjustments
to our working atmosphere. We proceed to carefully monitor the influence of
COVID-19 on all facets of our enterprise, and our priorities stay defending
the well being and security of workers and sufferers, maximizing the provision of
companies to fulfill affected person wants, and enhancing the operational and monetary
stability of our enterprise.
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As a results of the COVID-19 pandemic, visits per day ("VPD") decreased to a low
level of 12,643 through the quarter ended June 30, 2020 . The Company has
skilled relative will increase in quarterly VPD following the low level.
Quarterly VPD was 19,520, 21,569, 20,674, 20,649, 21,062 and 22,403 within the
quarters ended March 31, 2021 , June 30, 2021 , September 30, 2021 , December 31,
2021 , March 31, 2022 and June 30, 2022 , respectively, as native restrictions in
sure markets, referral ranges and particular person routines developed in comparison with
prior durations. During the fourth quarter of 2021, we noticed quantity softness
brought on, partially, by a rise in COVID-19 instances because of the outbreak of
further variants, which continued to influence go to volumes at first of
2022. Through the rest of the primary quarter of 2022 and the second quarter
of 2022, we skilled will increase in go to volumes relative to the start of
2022.
As demand for bodily remedy companies has elevated available in the market since its
low level through the quarter ended June 30, 2020 , the Company has targeted on
rising its scientific staffing ranges by hiring clinicians and decreasing ranges
of clinician attrition which were elevated relative to historic ranges.
The elevated ranges of attrition have been initially brought on, partially, by adjustments made
through the COVID-19 pandemic associated to compensation, staffing ranges and
help for clinicians. We have carried out a variety of actions associated to
compensation, staffing ranges, scientific {and professional} growth and different
initiatives in an effort to retain and entice therapists throughout our platform,
which has elevated our present and future expectations for labor prices. While
the Company has noticed enchancment in attrition ranges since implementing
these actions, attrition stays above historic ranges as a consequence of a continued
tight labor marketplace for accessible bodily remedy and different suppliers within the
workforce which can impede our progress towards rising go to volumes. In an
effort to drive extra quantity and visits per day, along with specializing in
scientific staffing ranges, we're working to determine relationships with new
referral sources and strengthen relationships with our accomplice suppliers and
current referral sources throughout our geographic footprint.
El siguiente gráfico refleja la tendencia trimestral de VPD.
[[Image Removed: ati-20220630_g1.jpg]]
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The COVID-19 pandemic continues to be evolving and the total extent of its future influence stays unknown and tough to foretell. The future influence of the COVID-19 pandemic on our efficiency will rely upon sure developments, together with the period and unfold of the virus and its newly recognized strains, effectiveness and adoption charges of vaccines and different therapeutic cures, the potential for continued or reinstated restrictive insurance policies enforced by federal, state and native governments, and the influence of the virus and vaccination necessities on our workforce, all of which create uncertainty and can't be predicted. While we anticipate the disruption attributable to COVID-19 and ensuing impacts to decrease over time, we can't predict the size of such impacts, and if such impacts proceed for an prolonged interval, it may have a continued impact on the Company's outcomes of operations, monetary situation and money flows, which could possibly be materials.
Ley CARES
OnMarch 27, 2020 , the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was signed into legislation offering reimbursement, grants, waivers and different funds to help well being care suppliers through the COVID-19 pandemic. The Company has realized advantages underneath the CARES Act together with, however not restricted to, the next: •The Company utilized for and obtained approval to obtain$26.7 million of Medicare Accelerated and Advance Payment Program ("MAAPP") funds through the quarter endedJune 30, 2020 . During the six months endedJune 30, 2022 and 2021, the Company utilized$10.7 million and$3.8 million in MAAPP funds in opposition to the excellent legal responsibility, respectively. The remaining quantities are required to be utilized or repaid by the quarter endingSeptember 30, 2022 . Because the Company has not but met all required efficiency obligations or carried out the companies associated to the remaining funds, as ofJune 30, 2022 andDecember 31, 2021 ,$1.6 million and$12.3 million of the funds are recorded in accrued bills and different liabilities, respectively. The Company expects the remaining superior funds to be utilized or repaid by the quarter endingSeptember 30, 2022 . •The Company elected to defer depositing the employer portion ofSocial Security taxes for funds due fromMarch 27, 2020 byDecember 31, 2020 , interest-free and penalty-free. Related to those funds, as ofJune 30, 2022 andDecember 31, 2021 ,$5.9 million is included in accrued bills and different liabilities. The Company expects the remaining deferred funds to be repaid previous to the top of 2022.
Tendencias y factores del mercado y la industria
•Outpatient bodily remedy companies development. Outpatient bodily remedy continues to play a key function in treating musculoskeletal circumstances for sufferers. According to theCenters for Medicare & Medicaid Services ("CMS"), musculoskeletal circumstances influence people of all ages and embody a few of the commonest well being points within theU.S. As healthcare traits within theU.S. proceed to evolve, with a rising give attention to value-based care emphasizing up-front, conservative care to ship higher outcomes, high quality healthcare companies addressing such circumstances in decrease value outpatient settings could proceed rising in prevalence. •U.S. inhabitants demographics. The inhabitants of adults aged 65 and older within theU.S. is anticipated to proceed to develop and thus broaden the Company's market alternative. According to theU.S. Census Bureau , the inhabitants of adults over the age of 65 is anticipated to develop 30% from 2020 by 2030. 47
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•Federal funding for Medicare and Medicaid. Federal and state funding of Medicare and Medicaid and the phrases of entry to those reimbursement applications have an effect on demand for bodily remedy companies. InDecember 2021 , the Protecting Medicare and American Farmers from Sequester Cuts Act was signed into legislation. As a consequence, the reimbursement price discount starting inJanuary 2022 was roughly 0.75%. The Act didn't tackle a beforehand proposed 15% lower in funds for companies carried out by bodily remedy assistants, which started onJanuary 1, 2022 . Additionally, an extra discount by resuming sequestration was postponed. Sequestration reductions resumed at 1% afterMarch 31, 2022 , and by a further 1% afterJune 30, 2022 , which resulted in an total discount of two% in reimbursement charges associated to sequestration afterJune 30, 2022 . InJuly 2022 , the CMS launched its proposed 2023 Medicare Physician Fee Schedule. The proposed payment schedule requires an approximate 4.5% discount within the calendar yr 2023 conversion issue which might result in additional reductions in reimbursement charges.
•Financiamiento de compensación para trabajadores. Los pagos recibidos en virtud de ciertos acuerdos de compensación para trabajadores pueden basarse en programas de tarifas estatales predeterminados, que pueden verse afectados por cambios en la financiación estatal.
•Number of individuals with personal medical insurance. Physical remedy companies are typically coated by personal medical insurance. Individuals coated by personal well being insurance coverage could also be extra probably to make use of healthcare companies as a result of it helps offset the price of such companies. As medical insurance protection rises, demand for bodily remedy companies tends to additionally improve.
Componentes clave de los resultados operativos
Net affected person income. Net affected person revenues are recorded for bodily remedy companies that the Company supplies to sufferers together with bodily remedy, work conditioning, hand remedy, aquatic remedy and useful capability evaluation. Net affected person income is acknowledged primarily based on contracted quantities with payors or different established charges, adjusted for the estimated results of any variable consideration, equivalent to contractual allowances and implicit worth concessions. Visit quantity is primarily pushed by conversion of doctor referrals and advertising and marketing efforts.
Otros ingresos. Otros ingresos consisten en los ingresos generados por nuestras líneas de servicio AWS, MSA y Sports Medicine.
Salarios y costos relacionados. Los salarios y costos relacionados consisten principalmente en salarios y beneficios para nuestros profesionales de la salud que participan directa o indirectamente en la prestación de servicios a los pacientes.
Rent, clinic provides, contract labor and different. Comprised of non-salary, clinic
associated bills consisting of lease, clinic provides, contract labor and different
prices together with journey bills and depreciation at our clinics.
Provision for uncertain accounts. Provision for uncertain accounts represents the
Company's estimate of accounts receivable recorded through the interval which will
in the end show uncollectible primarily based upon a number of elements, together with the age of
excellent receivables, the historic expertise of collections, the influence of
financial circumstances and, in some instances, the precise buyer account's skill
to pay.
Selling, common and administrative bills. Selling, common and
administrative bills consist primarily of wages and advantages for company
personnel, company outdoors companies, advertising and marketing prices, depreciation of
company fastened belongings, amortization of intangible belongings and sure company
degree skilled charges, together with these associated to authorized, accounting and
payroll.
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Goodwill and intangible asset impairment costs.Goodwill and intangible asset impairment costs symbolize non-cash costs related to the write-down of each goodwill and commerce identify indefinite-lived intangible belongings.
Cambio en el valor razonable del pasivo por warrants. Representa montos que no son en efectivo relacionados con el cambio en el valor razonable estimado de los Warrants de OPI.
Change in honest worth of contingent widespread shares legal responsibility. Represents non-cash quantities associated to the change within the estimated honest worth of Earnout Shares and Vesting Shares. Loss on settlement of redeemable most popular inventory. Represents the loss on settlement of the Wilco Holdco redeemable most popular inventory legal responsibility primarily based on the worth of money and fairness offered to most popular stockholders in relation to the excellent Wilco Holdco redeemable most popular inventory legal responsibility on the time of the closing of the Business Combination.
Gasto por intereses, neto. Los gastos por intereses incluyen el costo de los préstamos bajo la línea de crédito de la Compañía y la amortización de los costos de financiamiento diferidos.
Gastos de intereses sobre acciones preferentes redimibles. Representa el gasto por intereses relacionado con la acumulación de dividendos sobre las acciones preferentes redimibles de Wilco Holdco según los términos del contrato.
Otros gastos, neto. Otros gastos, neto se compone de la actividad del estado de resultados no relacionada con las operaciones principales de la Compañía.
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Métricas comerciales clave
When evaluating the outcomes of operations, administration has recognized quite a lot of metrics that enable for particular analysis of efficiency on a extra detailed foundation. See "Results of Operations" for additional dialogue on monetary assertion metrics equivalent to internet working income, internet earnings, EBITDA and Adjusted EBITDA.
Visitas de pacientes
As the principle operations of the Company are pushed by bodily remedy companies offered to sufferers, administration considers whole affected person visits to be a key quantity measure of such companies. In addition to whole affected person visits, administration analyzes (1) common VPD calculated as whole affected person visits divided by enterprise days for the interval, as this enables for comparability between time durations with an unequal variety of enterprise days, and (2) common VPD per clinic, calculated as common VPD divided by the common variety of owned clinics open through the interval.
Ingresos netos de pacientes («NPR») por visita
La Compañía calcula los ingresos netos de los pacientes por visita, su métrica de reembolso más importante, dividiendo los ingresos netos de los pacientes en un período por el whole de visitas de pacientes en el mismo período.
Clínicas
To higher perceive geographical and location-based traits, the Company evaluates metrics primarily based on the 926 owned and 20 managed clinic areas as ofJune 30, 2022 . De novo clinics symbolize natural new clinics opened through the present interval primarily based on subtle website choice analytics. Acqui-novo clinics symbolize new clinics opened through the present interval, that have been current clinics not beforehand owned by the Company, in a goal geography that supplies the Company with a right away presence, accessible employees and referral relationships of the previous proprietor throughout the surrounding areas. Same clinic income development price identifies income development yr over yr on clinics that have been owned and working for over one yr. This metric is decided by isolating the inhabitants of clinics which were open for a minimum of 12 months and calculating the share change in income of this inhabitants between the present and prior interval.
La siguiente tabla presenta datos operativos y financieros seleccionados que consideramos son indicadores clave de nuestro desempeño operativo:
Three Months Ended Six Months Ended
June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Number of clinics owned (finish of
interval) 926 889 926 889
Number of clinics managed (finish of
interval) 20 23 20 23
New clinics through the interval 10 10 22 20
Business days 64 64 128 127
Average visits per day 22,403 21,569 21,733 20,553
Average visits per day per clinic 24.2 24.3 23.8 23.3
Total affected person visits 1,433,815 1,380,392 2,781,793 2,610,178
Net affected person income per go to $ 103.57 $ 106.26 $ 103.33 $ 106.87
Same clinic income development price 0.0 % 48.9 % 2.1 % 5.2 %
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La siguiente tabla proporciona un avance de la actividad relacionada con el número de clínicas propias durante los períodos correspondientes:
Three Months Ended Six Months Ended
June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Number of clinics owned (starting of
interval) 922 882 910
875
Add: New clinics opened through the interval 10 10 22
20
Less: Clinics closed/offered through the
interval 6 3 6 6
Number of clinics owned (finish of interval) 926 889 926 889
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Table of Contents Results of Operations
Tres meses terminaron
La siguiente tabla resume los resultados consolidados de las operaciones de la Compañía por los tres meses terminados
Three Months Ended June 30,
2022 2021 Increase/(Decrease)
($ in 1000's, besides percentages) $ % of Revenue $ % of Revenue $ %
Net affected person income $ 148,506 90.9 % $ 146,679 89.4 % $ 1,827 1.2 %
Other income 14,787 9.1 % 17,354 10.6 % (2,567) (14.8) %
Net working income 163,293 100.0 % 164,033 100.0 % (740) (0.5) %
Cost of companies:
Salaries and associated prices 89,606 54.9 % 80,917 49.3 % 8,689 10.7 %
Rent, clinic provides, contract
labor and different 50,405 30.9 % 44,079 26.9 % 6,326 14.4 %
Provision for uncertain accounts 3,506 2.1 % 3,585 2.2 % (79) (2.2) %
Total value of companies 143,517 87.9 % 128,581 78.4 % 14,936 11.6 %
Selling, common and administrative
bills 31,808 19.5 % 26,391 16.1 % 5,417 20.5 %
Goodwill and intangible asset
impairment costs 127,820 78.3 % 453,331 276.4 % (325,511) n/m
Operating loss (139,852) (85.6) % (444,270) (270.8) % 304,418 n/m
Change in honest worth of warrant
legal responsibility (1,184) (0.7) % (4,539) (2.8) % 3,355 n/m
Change in honest worth of contingent
widespread shares legal responsibility (1,496) (0.9) % (20,948) (12.8) % 19,452 n/m
Loss on settlement of redeemable
most popular inventory - - % 14,037 8.6 % (14,037) n/m
Interest expense, internet 11,379 7.0 % 15,632 9.5 % (4,253) (27.2) %
Interest expense on redeemable
most popular inventory - - % 4,779 2.9 % (4,779) n/m
Other expense, internet 205 0.1 % 5,626 3.4 % (5,421) (96.4) %
Loss earlier than taxes (148,756) (91.1) % (458,857) (279.7) % 310,101 n/m
Income tax profit (13,033) (8.0) % (19,731) (12.0) % 6,698 n/m
Net loss $ (135,723) (83.1) % $ (439,126) (267.7) % $ 303,403 n/m
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Net affected person income. Net affected person income for the three months endedJune 30, 2022 was$148.5 million in comparison with$146.7 million for the three months endedJune 30, 2021 , a rise of$1.8 million or 1.2%. The improve in internet affected person income was primarily pushed by elevated go to volumes on account of increased clinic depend within the present interval, partially offset by unfavorable internet affected person income per go to within the present interval. Total affected person visits elevated by roughly 0.1 million visits, or 3.9%, driving a rise in common visits per day of 834, or 3.9%. Net affected person income per go to decreased$2.69 , or 2.5%, to$103.57 for the three months endedJune 30, 2022 in comparison with$106.26 for the three months endedJune 30, 2021 . The lower in internet affected person income per go to through the three months endedJune 30, 2022 in comparison with the three months endedJune 30, 2021 was primarily pushed by unfavorable combine shifts associated to payor lessons, Medicare price cuts and better denials per go to.
El siguiente gráfico refleja detalles adicionales con respecto a los impulsores del cambio en los ingresos netos de los pacientes (en millones).
[[Image Removed: ati-20220630_g2.jpg]] Other income. Other income for the three months endedJune 30, 2022 was$14.8 million in comparison with$17.4 million for the three months endedJune 30, 2021 , a lower of$2.6 million or 14.8%. The lower in different income was primarily pushed by the absence ofHome Health service line income for the three months endedJune 30, 2022 on account of its divestiture onOctober 1, 2022 . Salaries and associated prices. Salaries and associated prices for the three months endedJune 30, 2022 have been$89.6 million in comparison with$80.9 million for the three months endedJune 30, 2021 , a rise of$8.7 million or 10.7%. Salaries and associated prices as a share of internet working income was 54.9% and 49.3% for the three months endedJune 30, 2022 and 2021, respectively. The improve of$8.7 million was primarily pushed by increased wages because the Company elevated its clinician and help employees as a consequence of increased go to volumes and by increased compensation as a consequence of wage inflation for clinic labor. The improve as a share of internet working income was primarily pushed by increased compensation as a consequence of wage inflation for clinic labor, decrease clinic labor productiveness and decrease internet affected person income per go to through the three months endedJune 30, 2022 . 53
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Rent, clinic provides, contract labor and different. Rent, clinic provides, contract labor and different prices for the three months endedJune 30, 2022 have been$50.4 million in comparison with$44.1 million for the three months endedJune 30, 2021 , an improve of$6.3 million or 14.4%. Rent, clinic provides, contract labor and different prices as a share of internet working income was 30.9% and 26.9% for the three months endedJune 30, 2022 and 2021, respectively. The improve of$6.3 million and improve as a share of internet working income was primarily pushed by the next clinic depend and better contract labor prices for the three months endedJune 30, 2022 . Provision for uncertain accounts. Provision for uncertain accounts for the three months endedJune 30, 2022 was$3.5 million in comparison with$3.6 million for the three months endedJune 30, 2021 , a lower of$0.1 million or 2.2%. Provision for uncertain accounts in {dollars} and as a share of internet working income for the three months endedJune 30, 2022 and 2021 remained comparatively constant yr over yr. Selling, common and administrative bills. Selling, common and administrative bills for the three months endedJune 30, 2022 have been$31.8 million in comparison with$26.4 million for the three months endedJune 30, 2021 , an improve of$5.4 million or 20.5%. Selling, common and administrative bills as a share of internet working income was 19.5% and 16.1% for the three months endedJune 30, 2022 and 2021, respectively. The improve of$5.4 million and improve as a share of income was primarily as a consequence of a loss on authorized settlement, increased public firm working prices and non-ordinary authorized and regulatory prices through the three months endedJune 30, 2022 , partially offset by decrease transaction prices incurred relative to the three months endedJune 30, 2021 because of the closing of the Business Combination.Goodwill and intangible asset impairment costs.Goodwill and intangible asset impairment costs for the three months endedJune 30, 2022 was$127.8 million in comparison with$453.3 million for 3 months endedJune 30, 2021 . The quantity pertains to the non-cash write-down of each goodwill and commerce identify indefinite-lived intangible belongings on account of elements together with improve in low cost charges in 2022, and the acceleration of clinician attrition, competitors for clinicians within the labor market and internet affected person income per go to decreases primarily pushed by unfavorable payor, state and repair combine shifts in 2021. Refer to Note 5 -Goodwill ,Trade Name and Other Intangible Assets within the condensed consolidated monetary statements for additional particulars. Change in honest worth of warrant legal responsibility. Change in honest worth of warrant legal responsibility for the three months endedJune 30, 2022 was a acquire of$1.2 million in comparison with a acquire of$4.5 million for the three months endedJune 30, 2021 . The acquire in every interval pertains to the lower within the estimated honest worth of the Company's IPO Warrants, primarily pushed by decreases in worth of the Company's Public Warrants through the three months endedJune 30, 2022 and 2021, respectively. Change in honest worth of contingent widespread shares legal responsibility. Change in honest worth of contingent widespread shares legal responsibility for the three months endedJune 30, 2022 was a acquire of$1.5 million in comparison with a acquire of$20.9 million for the three months endedJune 30, 2021 . The acquire in every interval pertains to the lower in the estimated honest worth of the Company's Earnout Shares and Vesting Shares, primarily pushed by decreases within the Company's share worth through the three months endedJune 30, 2022 and 2021, respectively. Loss on settlement of redeemable most popular inventory. Loss on settlement of redeemable most popular inventory for the three months endedJune 30, 2021 was$14.0 million . The loss relies on the worth of money and fairness offered to most popular stockholders in relation to the excellent Wilco Holdco redeemable most popular inventory legal responsibility on the time of the closing of the Business Combination. 54
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Interest expense, internet. Interest expense, internet for the three months endedJune 30, 2022 was$11.4 million in comparison with$15.6 million for the three months endedJune 30, 2021 , a lower of roughly$4.3 million or 27.2%. The lower in curiosity expense was primarily pushed by decrease excellent principal balances underneath the Company's credit score settlement through the three months endedJune 30, 2022 . Interest expense on redeemable most popular inventory. Interest expense on redeemable most popular inventory for the three months endedJune 30, 2021 was$4.8 million . The redeemable most popular inventory was totally settled inJune 2021 and not accrued curiosity following the Business Combination. Other expense, internet. Other expense, internet for the three months endedJune 30, 2022 was$0.2 million in comparison with$5.6 million for the three months endedJune 30, 2021 , a lower of$5.4 million . The lower was pushed by$5.5 million in loss on debt extinguishment associated to the derecognition of the unamortized deferred financing prices and authentic subject low cost related to the partial and full compensation of the 2016 first and second lien time period loans through the three months endedJune 30, 2021 that didn't recur through the three months endedJune 30, 2022 . Income tax profit. Income tax profit for the three months endedJune 30, 2022 was$13.0 million in comparison with$19.7 million for the three months endedJune 30, 2021 , a lower in profit of roughly$6.7 million . The lower was primarily pushed by the distinction within the efficient tax price for the respective durations. The efficient tax price was totally different between the respective durations primarily as a consequence of increased nondeductible impairment costs, nondeductible transaction prices, nondeductible loss on redeemable most popular inventory and curiosity expense on redeemable most popular inventory for the three months endedJune 30, 2021 . Net loss. Net loss for the three months endedJune 30, 2022 was$135.7 million in comparison with$439.1 million for the three months endedJune 30, 2021 , a lower in lack of$303.4 million . The comparatively decrease loss was primarily pushed by decrease goodwill and intangible asset impairment costs through the three months endedJune 30, 2022 as in comparison with the three months endedJune 30, 2021 . 55
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Seis meses terminados
La siguiente tabla resume los resultados consolidados de las operaciones de la Compañía por los seis meses terminados
Six Months Ended June 30,
2022 2021 Increase/(Decrease)
($ in 1000's, besides percentages) $ % of Revenue $ % of Revenue $ %
Net affected person income $ 287,431 90.6 % $ 278,950 89.1 % $ 8,481 3.0 %
Other income 29,684 9.4 % 34,145 10.9 % (4,461) (13.1) %
Net working income 317,115 100.0 % 313,095 100.0 % 4,020 1.3 %
Cost of companies:
Salaries and associated prices 177,021 55.8 % 161,571 51.6 % 15,450 9.6 %
Rent, clinic provides, contract
labor and different 102,020 32.2 % 87,375 27.9 % 14,645 16.8 %
Provision for uncertain accounts 8,611 2.7 % 10,756 3.4 % (2,145) (19.9) %
Total value of companies 287,652 90.7 % 259,702 82.9 % 27,950 10.8 %
Selling, common and administrative
bills 61,832 19.5 % 51,117 16.3 % 10,715 21.0 %
Goodwill and intangible asset
impairment costs 283,561 89.4 % 453,331 144.8 % (169,770) n/m
Operating loss (315,930) (99.6) % (451,055) (144.1) % 135,125 n/m
Change in honest worth of warrant
legal responsibility (2,861) (0.9) % (4,539) (1.4) % 1,678 n/m
Change in honest worth of contingent
widespread shares legal responsibility (25,830) (8.1) % (20,948) (6.7) % (4,882) n/m
Loss on settlement of redeemable
most popular inventory - - % 14,037 4.5 % (14,037) n/m
Interest expense, internet 20,035 6.3 % 31,719 10.1 % (11,684) (36.8) %
Interest expense on redeemable
most popular inventory - - % 10,087 3.2 % (10,087) n/m
Other expense, internet 2,986 0.9 % 5,779 1.8 % (2,793) (48.3) %
Loss earlier than taxes (310,260) (97.8) % (487,190) (155.6) % 176,930 n/m
Income tax profit (36,314) (11.5) % (30,246) (9.7) % (6,068) n/m
Net loss $ (273,946) (86.4) % $ (456,944) (145.9) % $ 182,998 n/m
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Net affected person income. Net affected person income for the six months endedJune 30, 2022 was$287.4 million in comparison with$279.0 million for the six months endedJune 30, 2021 , a rise of$8.5 million or 3.0%. The improve in internet affected person income was primarily pushed by elevated go to volumes on account of increased VPD per clinic, increased clinic depend and another enterprise day within the present interval, partially offset by unfavorable internet affected person income per go to within the present interval. Total affected person visits elevated by roughly 0.2 million visits, or 6.6%, driving a rise in common visits per day of 1,180, or 5.7%. Net affected person income per go to decreased$3.54 , or 3.3%, to$103.33 for the six months endedJune 30, 2022 in comparison with$106.87 for the six months endedJune 30, 2021 . The lower in internet affected person income per go to through the six months endedJune 30, 2022 in comparison with the six months endedJune 30, 2021 was primarily pushed by unfavorable combine shifts associated to payor lessons, states and companies and Medicare price cuts.
El siguiente gráfico refleja detalles adicionales con respecto a los impulsores del cambio en los ingresos netos de los pacientes (en millones):
[[Image Removed: ati-20220630_g3.jpg]] Other income. Other income for the six months endedJune 30, 2022 was$29.7 million in comparison with$34.1 million for the six months endedJune 30, 2021 , a lower of$4.5 million or 13.1%. The lower in different income was primarily pushed by the absence ofHome Health service line income for the six months endedJune 30, 2022 on account of its divestiture onOctober 1, 2021 . Salaries and associated prices. Salaries and associated prices for the six months endedJune 30, 2022 have been$177.0 million in comparison with$161.6 million for the six months endedJune 30, 2021 , a rise of roughly$15.5 million or 9.6%. Salaries and associated prices as a share of internet working income was 55.8% and 51.6% for the six months endedJune 30, 2022 and 2021, respectively. The improve of$15.5 million was primarily pushed by increased wages because the Company elevated its clinician and help employees as a consequence of increased go to volumes and by increased compensation as a consequence of wage inflation for clinic labor. The improve as a share of internet working income was primarily pushed by increased compensation as a consequence of wage inflation for clinic labor, increased share-based compensation for scientific workers, decrease clinic labor productiveness and decrease internet affected person income per go to through the six months endedJune 30, 2022 . 57
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Rent, clinic provides, contract labor and different. Rent, clinic provides, contract labor and different prices for the six months endedJune 30, 2022 have been$102.0 million in comparison with$87.4 million for the six months endedJune 30, 2021 , a rise of$14.6 million or 16.8%. Rent, clinic provides, contract labor and different prices as a share of internet working income was 32.2% and 27.9% for the six months endedJune 30, 2022 and 2021, respectively. The improve of$14.6 million and improve as a share of internet working income was primarily pushed by a increased clinic depend and better contract labor prices through the six months endedJune 30, 2022 . Provision for uncertain accounts. Provision for uncertain accounts for the six months endedJune 30, 2022 was$8.6 million in comparison with$10.8 million for the six months endedJune 30, 2021 , a lower of$2.1 million or 19.9%. Provision for uncertain accounts as a share of internet working income was 2.7% and three.4% for the six months endedJune 30, 2022 and 2021, respectively. The lower of$2.1 million and reduce as a share of internet working income was primarily pushed by favorable money collections through the six months endedJune 30, 2022 . Selling, common and administrative bills. Selling, common and administrative bills for the six months endedJune 30, 2022 have been$61.8 million in comparison with$51.1 million for the six months endedJune 30, 2021 , an improve of$10.7 million or 21.0%. Selling, common and administrative bills as a share of internet working income was 19.5% and 16.3% for the six months endedJune 30, 2022 and 2021, respectively. The improve of$10.7 million and improve as a share of internet working income was primarily as a consequence of a loss on authorized settlement, increased public firm working prices and non-ordinary authorized and regulatory prices through the six months endedJune 30, 2022 , partially offset by decrease transaction prices incurred relative to the six months endedJune 30, 2021 because of the closing of the Business Combination.Goodwill and intangible asset impairment costs.Goodwill and intangible asset impairment costs for the six months endedJune 30, 2022 was$283.6 million in comparison with$453.3 million for the six months endedJune 30, 2021 . The quantity pertains to the non-cash write-down of each goodwill and commerce identify indefinite-lived intangible belongings on account of elements together with improve in low cost charges and decrease public firm comparative multiples in 2022, and the acceleration of clinician attrition, competitors for clinicians within the labor market and internet affected person income per go to decreases primarily pushed by unfavorable payor, state and repair combine shifts in 2021. Refer to Note 5 -Goodwill ,Trade Name and Other Intangible Assets within the condensed consolidated monetary statements for additional particulars. Change in honest worth of warrant legal responsibility. Change in honest worth of warrant legal responsibility for the six months endedJune 30, 2022 was a acquire of$2.9 million in comparison with a acquire of$4.5 million for the six months endedJune 30, 2021 . The acquire in every interval pertains to the lower within the estimated honest worth of the Company's IPO Warrants, primarily pushed by decreases in worth of the Company's Public Warrants through the six months endedJune 30, 2022 and 2021, respectively. Change in honest worth of contingent widespread shares legal responsibility. Change in honest worth of contingent widespread shares legal responsibility for the six months endedJune 30, 2022 was a acquire of$25.8 million in comparison with a acquire of$20.9 million for the six months endedJune 30, 2021 . The acquire in every interval pertains to the lower within the estimated honest worth of the Company's Earnout Shares and Vesting Shares, primarily pushed by decreases within the Company's share worth through the six months endedJune 30, 2022 and 2021, respectively. Loss on settlement of redeemable most popular inventory. Loss on settlement of redeemable most popular inventory for the six months endedJune 30, 2021 was$14.0 million . The loss relies on the worth of money and fairness offered to most popular stockholders in relation to the excellent Wilco Holdco redeemable most popular inventory legal responsibility on the time of the closing of the Business Combination. 58
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Interest expense, internet. Interest expense, internet for the six months endedJune 30, 2022 was$20.0 million in comparison with$31.7 million for the six months endedJune 30, 2021 , a lower of$11.7 million or 36.8%. The lower in curiosity expense was primarily pushed by decrease excellent principal balances underneath the Company's credit score settlement through the six months endedJune 30, 2022 . Interest expense on redeemable most popular inventory. Interest expense on redeemable most popular inventory for the six months endedJune 30, 2021 was$10.1 million . The redeemable most popular inventory was totally settled inJune 2021 and not accrued curiosity following the Business Combination. Other expense, internet. Other expense, internet for the six months endedJune 30, 2022 was$3.0 million in comparison with$5.8 million for the six months endedJune 30, 2021 , a lower of$2.8 million . The lower was pushed by$5.5 million in loss on debt extinguishment associated to the derecognition of the unamortized deferred financing prices and authentic subject low cost related to the partial and full compensation of the 2016 first and second lien time period loans through the six months endedJune 30, 2021 , in comparison with$2.8 million in loss on debt extinguishment associated to the derecognition of the unamortized deferred financing prices and authentic issuance low cost related to the total compensation of the 2016 first lien time period mortgage through the six months endedJune 30, 2022 . Income tax profit. Income tax profit for the six months endedJune 30, 2022 was$36.3 million in comparison with$30.2 million for the six months endedJune 30, 2021 , a rise in profit of roughly$6.1 million . The improve was primarily pushed by the distinction within the efficient tax price for the respective durations. The efficient tax price was totally different between the respective durations primarily as a consequence of increased nondeductible impairment costs, nondeductible transaction prices, nondeductible loss on redeemable most popular inventory and curiosity expense on redeemable most popular inventory for the six months endedJune 30, 2021 . Net loss. Net loss for the six months endedJune 30, 2022 was$273.9 million in comparison with$456.9 million for the six months endedJune 30, 2021 , a lower in lack of roughly$183.0 million . The comparatively decrease loss was primarily pushed by decrease goodwill and intangible asset impairment costs through the six months endedJune 30, 2022 as in comparison with the six months endedJune 30, 2021 . 59
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Medidas financieras no GAAP
The following desk reconciles the supplemental non-GAAP monetary measures, as outlined underneath the foundations of theU.S. Securities and Exchange Commission ("SEC"), introduced herein to probably the most instantly comparable monetary measures calculated and introduced in accordance with GAAP. The Company has offered the non-GAAP monetary measures, which aren't calculated or introduced in accordance with GAAP, as supplemental data and along with the monetary measures that are calculated and introduced in accordance with GAAP. EBITDA and Adjusted EBITDA are outlined as internet earnings from persevering with operations calculated in accordance with GAAP, much less internet earnings attributable to non-controlling pursuits, plus the sum of earnings tax expense, curiosity expense, internet, depreciation and amortization ("EBITDA") and additional adjusted to exclude sure gadgets of a major or uncommon nature, together with however not restricted to, goodwill and intangible asset impairment costs, adjustments in honest worth of warrant legal responsibility and contingent widespread shares legal responsibility, loss on debt extinguishment, loss on authorized settlement, non-ordinary authorized and regulatory issues, share-based compensation, transaction and integration prices, pre-opening de novo prices, acquire on sale ofHome Health service line, loss on settlement of redeemable most popular inventory and reorganization and severance prices ("Adjusted EBITDA"). We current EBITDA and Adjusted EBITDA as a result of they're key measures utilized by our administration workforce to guage our working efficiency, generate future working plans and make strategic choices. The Company believes EBITDA and Adjusted EBITDA are helpful to traders for the needs of evaluating our outcomes period-to-period and alongside friends and understanding and evaluating our working ends in the identical method as our administration workforce and board of administrators. These supplemental measures shouldn't be thought-about superior to, as a substitute for or as an alternative choice to, and ought to be thought-about in conjunction with, the GAAP monetary measures introduced. In addition, since these non-GAAP measures are usually not decided in accordance with GAAP, they're vulnerable to various calculations and will not be corresponding to different equally titled non-GAAP measures of different firms. 60
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EBITDA y EBITDA ajustado (medidas financieras no GAAP)
The following is a reconciliation of internet loss, probably the most instantly comparable GAAP
monetary measure, to EBITDA and Adjusted EBITDA (every of which is a non-GAAP
monetary measure) for every of the durations indicated. For further data
on these non-GAAP monetary measures, see "Non-GAAP Financial Measures" above.
Three Months Ended Six Months Ended
($ in 1000's) June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021
Net loss $ (135,723) $ (439,126) $ (273,946) $ (456,944)
Plus (minus):
Net loss attributable to
non-controlling pursuits 177 3,769 650 2,460
Interest expense, internet 11,379 15,632 20,035 31,719
Interest expense on redeemable
most popular inventory - 4,779 - 10,087
Income tax profit (13,033) (19,731) (36,314) (30,246)
Depreciation and amortization expense 10,055 9,149 19,955 18,768
EBITDA $ (127,145) $
(425,528)
127,820 453,331 283,561 453,331Goodwill and intangible asset impairment costs attributable to non-controlling pursuits(1) (654) (5,021) (1,594) (5,021) Changes in honest worth of warrant legal responsibility and contingent widespread shares legal responsibility(2) (2,680) (25,487) (28,691) (25,487) Loss on debt extinguishment(3) - 5,534 2,809 5,534 Loss on authorized settlement(4) 3,000 - 3,000 - Non-ordinary authorized and regulatory issues(5) 2,202 - 4,699 - Share-based compensation 2,004 3,112 3,968 3,616 Transaction and integration prices(6) 603 3,580 2,141 6,498 Pre-opening de novo prices(7) 286 441 667 875 Gain on sale ofHome Health service line, internet - - (199) - Loss on settlement of redeemable most popular inventory - 14,037 - 14,037 Reorganization and severance prices(8) - - - 362 Adjusted EBITDA$ 5,436 $ 23,999 $ 741$ 29,589 (1)Represents non-cash costs associated to the write-down of goodwill and commerce identify indefinite-lived intangible belongings. Refer to Note 5 of the accompanying condensed consolidated monetary statements for additional particulars. (2)Represents non-cash quantities associated to the change within the estimated honest worth of IPO Warrants, Earnout Shares and Vesting Shares. Refer to Notes 3, 12 and 13 of the accompanying condensed consolidated monetary statements for additional particulars. 61
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(3)Represents costs associated to the derecognition of the unamortized deferred financing prices and authentic issuance low cost related to the total compensation of the 2016 first lien time period mortgage and the partial and full compensation of the 2016 first and second lien time period loans, respectively. Refer to Note 8 of the accompanying condensed consolidated monetary statements for additional particulars. (4)Represents estimated cost for possible internet settlement legal responsibility associated to billing dispute. Refer to Note 17 of the accompanying condensed consolidated monetary statements for additional particulars.
(5)Representa costos legales de curso no ordinario relacionados con las demandas colectivas de accionistas de ATIP, demandas derivadas y
(6)Represents prices associated to the Business Combination, non-capitalizable debt transaction prices and consulting and planning prices associated to preparation to function as a public firm.
(7)Representa los gastos asociados a costos de renovación, equipamiento y mercadeo relacionados con la puesta en marcha y puesta en marcha de nuevos locales incurridos antes de la apertura.
(8)Representa indemnizaciones, consultorías y otros costos relacionados con iniciativas discretas enfocadas en la reorganización y desjerarquización del modelo laboral, la estructura gerencial y las funciones de apoyo de la Compañía.
Liquidez y Recursos de Capital
Our principal sources of liquidity are working money flows, borrowings underneath our credit score settlement and proceeds from fairness issuances. We have used these funds for our short-term and long-term capital makes use of, which embody salaries, advantages and different employee-related bills, lease, scientific provides, outdoors companies, capital expenditures, acquisitions, de novos and acqui-novos and debt service. Our capital expenditure, acquisition, de novo and acqui-novo spend will rely upon many elements, together with, however not restricted to, the focused variety of new clinic openings, affected person volumes, clinician labor market, income development charges and degree of working money flows.
A partir de
For the six months endedJune 30, 2022 , we had working money outflows of$32.7 million pushed by gadgets together with internet losses and the partial utility of MAAPP funds. Our skill to generate future working money flows is dependent upon many elements, together with scientific staffing ranges, affected person volumes and income development charges. As ofJune 30, 2022 andDecember 31, 2021 , the Company had$1.6 million and$12.3 million of MAAPP funds included within the steadiness of money and money equivalents, respectively. In addition, as ofJune 30, 2022 andDecember 31, 2021 , the Company had$5.9 million of deferredSocial Security taxes included in the steadiness of money and money equivalents. The Company started making use of MAAPP funds to Medicare billings within the second quarter of 2021 and remitted funds on its deferred employerSocial Security taxes within the third and fourth quarters of 2021. The MAAPP funds and deferred employerSocial Security taxes are required to be utilized or repaid previous to the top of 2022, which along with different operational exercise, could end in a internet working money outflow for 2022. We make affordable and applicable efforts to gather accounts receivable, together with payor quantities and relevant affected person deductibles, co-payments and co-insurance, in a constant method for all payor sorts. Claims are submitted to payors day by day, weekly or month-to-month in accordance with our coverage or payor's necessities. When attainable, we submit our claims electronically. The assortment course of is time consuming and usually entails the submission of claims to a number of payors whose fee of claims could also be dependent upon the fee of one other payor. Claims underneath litigation and vehicular incidents can take a yr or longer to gather. 62
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Acuerdo de Crédito 2022
OnFebruary 24, 2022 (the "Refinancing Date"), the Company entered into varied financing preparations to refinance its current long-term debt, which consisted of$555.0 million in principal underneath the Company's current time period mortgage (the "2016 first lien time period mortgage"), which was repaid in full on the Refinancing Date. As a part of the 2022 Debt Refinancing,ATI Holdings Acquisition, Inc. (the "Borrower"), an oblique subsidiary ofATI Physical Therapy, Inc. , entered into a credit score settlement among the many Borrower,Wilco Intermediate Holdings, Inc. ("Holdings"), as mortgage guarantor, Barclays Bank PLC, as administrative agent and issuing financial institution, and a syndicate of lenders (the "2022 Credit Agreement"). The 2022 Credit Agreement supplies a$550.0 million credit score facility (the "2022 Credit Facility") that's comprised of a$500.0 million senior secured time period mortgage (the "Senior Secured Term Loan") which was totally funded at closing and a$50.0 million "tremendous precedence" senior secured revolver (the "Revolving Loans") with a$10.0 million letter of credit score sublimit. The 2022 Credit Facility refinanced and changed the Company's prior credit score facility for which Barclays Bank PLC served as administrative agent for a syndicate of lenders. The Company acknowledged$2.8 million in loss on debt extinguishment associated to the derecognition of the remaining unamortized deferred financing prices and unamortized authentic subject low cost along with the compensation of the 2016 first lien time period mortgage. The Company capitalized debt issuance prices totaling$12.5 million associated to the 2022 Credit Facility in addition to an authentic subject low cost of$10.0 million . The Company capitalized issuance prices of$0.5 million associated to the Revolving Loans. The Senior Secured Term Loan matures onFebruary 24, 2028 and bears curiosity, at the Company's election, at a base rate of interest of the Alternate Base Rate ("ABR"), as outlined within the settlement, plus an relevant credit score unfold, or the Adjusted Term Secured Overnight Financing Rate ("SOFR"), as outlined within the settlement, plus an relevant credit score unfold. The credit score unfold is decided primarily based on a pricing grid and the Company's Secured Net Leverage Ratio. As ofJune 30, 2022 , borrowings on the Senior Secured Term Loan bear curiosity at 1-month SOFR, topic to a 1.0% flooring, plus 7.25%. The Company could elect to pay 2.0% curiosity in-kind at a 0.5% premium through the first yr underneath the settlement. As ofJune 30, 2022 , the rate of interest on the Senior Secured Term mortgage was 8.8% and the efficient rate of interest was 9.7%. As ofJune 30, 2022 , the excellent principal quantity underneath the Senior Secured Term Loan was$500.0 million . The Revolving Loans are topic to a most borrowing capability of$50.0 million and mature onFebruary 24, 2027 . Borrowings on the Revolving Loans bear curiosity, on the Company's election, at a base rate of interest of the ABR, as outlined within the settlement, plus an relevant credit score unfold, or the Adjusted Term SOFR Rate, as outlined within the settlement, plus an relevant credit score unfold. The credit score unfold is decided primarily based on a pricing grid and the Company's Secured Net Leverage Ratio. Commitment charges on the Revolving Loans are payable quarterly at 0.5% each year on the day by day common undrawn portion for the quarter and are expensed as incurred. The 2022 Credit Facility is assured by sure of the Company's subsidiaries and is secured by considerably all the belongings of Holdings, the Borrower and the Borrower's wholly owned subsidiaries, together with a pledge of the inventory of the Borrower, in every case, topic to customary exceptions. The 2022 Credit Agreement comprises customary covenants and restrictions, together with monetary and non-financial covenants. The monetary covenants require the Company to keep up$30.0 million of minimal liquidity at every take a look at date by the primary quarter of 2024. Additionally, starting within the second quarter of 2024, the Company should preserve a Secured Net Leverage Ratio, as outlined in the settlement, to not exceed 7.00:1.00. The internet leverage ratio covenant decreases within the third quarter of 2024 to six.75:1.00 and additional decreases within the first quarter of 2025 to six.25:1.00, which stays relevant by maturity. The monetary covenants are examined as of every fiscal quarter finish for the respective durations. 63
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The 2022 Credit Facility comprises customary representations and warranties, occasions of default, reporting and different affirmative covenants and destructive covenants, together with limitations on indebtedness, liens, investments, destructive pledges, dividends, junior debt funds, basic adjustments and asset gross sales and affiliate transactions. Failure to adjust to these covenants and restrictions may end in an occasion of default underneath the 2022 Credit Facility, topic to customary remedy durations. In such an occasion, all quantities excellent underneath the 2022 Credit Facility, along with any accrued curiosity, may then be declared instantly due and payable. Under the 2022 Credit Facility the Company could also be required to make sure necessary prepayments upon the incidence of sure occasions, together with: an occasion of default, a Prepayment Asset Sale or receipt of Net Insurance Proceeds (as outlined within the 2022 Credit Agreement) in extra of$15.0 million , or extra money flows exceeding sure thresholds (as outlined within the 2022 Credit Agreement).
Financiamiento de acciones preferentes
In reference to the 2022 Debt Refinancing, the Company issued 165,000 shares of non-convertible most popular inventory (the "Series A Senior Preferred Stock") plus 5.2 million warrants to buy shares of the Company's widespread inventory at an train worth of$3.00 per share (the "Series I Warrants") and warrants to buy 6.3 million shares of the Company's widespread inventory at an train worth equal to$0.01 per share (the "Series II Warrants"). The shares of the Series A Senior Preferred Stock have a par worth of$0.0001 per share and an preliminary acknowledged worth of$1,000 per share, for an combination preliminary acknowledged worth of$165.0 million . The Series I and Series II Warrants are exercisable for five years from the Refinancing Date The gross proceeds obtained from the issuance of the Series A Senior Preferred Stock and the Series I and Series II Warrants have been$165.0 million , which was allotted among the many devices primarily based on the relative honest values of every instrument. Of the gross proceeds,$144.7 million was allotted to the Series A Senior Preferred Stock,$5.1 million to the Series I Warrants and$15.2 million to the Series II Warrants. The ensuing low cost on the Series A Senior Preferred Stock can be acknowledged as a deemed dividend when these shares are subsequently remeasured upon changing into redeemable or possible of changing into redeemable. The Company acknowledged$2.9 million in issuance prices and$1.4 million of authentic subject low cost associated to the Series A Senior Preferred Stock. The Company acknowledged whole issuance prices and authentic subject low cost of roughly$0.2 million and$0.5 million associated to the Series I Warrants and Series II Warrants, respectively. The Series A Senior Preferred Stock has precedence over the Company's Class A widespread inventory and all different junior fairness securities of the Company, and is junior to the Company's current or future indebtedness and different liabilities (together with commerce payables), with respect to fee of dividends, distribution of belongings, and all different liquidation, winding up, dissolution, dividend and redemption rights. The Series A Senior Preferred Stock carries an preliminary dividend price of 12.0% each year (the "Base Dividend Rate"), payable quarterly in arrears. Dividends can be paid in-kind and added to the acknowledged worth of the Series A Senior Preferred Stock. The Company could elect to pay dividends on the Series A Senior Preferred Stock in money starting on the third anniversary of the Refinancing Date and, with respect to any such dividends paid in money, the dividend price then in impact can be decreased by 1.0%. The Base Dividend Rate is topic to sure changes, together with a rise of 1.0% each year on the primary day following the fifth anniversary of the Refinancing Date and on every one-year anniversary thereafter, and a pair of.0% each year upon the incidence of both an Event of Noncompliance (as outlined within the Certificate of Designation) or a failure by the Company to redeem in full all Series A Senior Preferred Stock upon a Mandatory Redemption Event, which features a change of management, liquidation, chapter or sure restructurings. The paid in-kind dividends associated to the Series A Preferred Stock have been$5.1 million and$7.0 million for the three and 6 months endedJune 30, 2022 , respectively. As ofJune 30, 2022 , the gathered paid in-kind dividends associated to the Series A Preferred Stock have been$7.0 million and the combination acknowledged worth was$172.0 million . 64
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La Compañía tiene el derecho de redimir las acciones preferenciales senior Serie A, en su totalidad o en parte, en cualquier momento (sujeto a ciertas limitaciones sobre redenciones parciales). El Precio de Redención (según se outline en el Certificado de Designación) para cada acción de las Acciones Preferenciales Preferenciales Serie A depende de cuándo se lleve a cabo dicha redención opcional, si es que se lleva a cabo.
The Series A Senior Preferred Stock is perpetual and isn't mandatorily redeemable on the choice of the holders, besides upon the incidence of a Mandatory Redemption Event (as outlined within the Certificate of Designation). Upon the incidence of a Mandatory Redemption Event, to the extent not prohibited by legislation, the Company is required to redeem all Series A Senior Preferred Stock, in money, at a worth per share equal to the then relevant Redemption Price. Based on the Company's evaluation of the circumstances which might set off the redemption of the Series A Senior Preferred Stock, the Company has decided that the Series A Senior Preferred Stock is neither presently redeemable nor possible of changing into redeemable. Because the Series A Senior Preferred Stock is assessed as mezzanine fairness and isn't thought-about redeemable or possible of changing into redeemable, the paid in-kind dividends which can be added to the acknowledged worth don't influence the carrying worth of the Series A Senior Preferred Stock within the Company's condensed consolidated steadiness sheets. Should the Series A Senior Preferred Stock develop into possible of changing into redeemable, the Company will acknowledge adjustments within the redemption worth of the Series A Senior Preferred Stock instantly as they happen and modify the carrying quantity accordingly on the finish of every reporting interval. As ofJune 30, 2022 , the redemption worth of the Series A Senior Preferred Stock was$172.0 million , which is the acknowledged worth. If an Event of Noncompliance happens, then the holders of a majority of the then excellent shares of Series A Senior Preferred Stock (the "Majority Holders") have the proper to demand that the Company interact in a sale/refinancing course of to consummate a Forced Transaction (as outlined within the Certificate of Designation). A Forced Transaction features a refinancing of the Series A Senior Preferred Stock or a sale of the Company. Upon consummation of any Forced Transaction, to the extent not prohibited by legislation, the Company is required to redeem all Series A Senior Preferred Stock, in money, at a worth per share equal to the then relevant Redemption Price. Holders of shares of Series A Senior Preferred Stock don't have any voting rights with respect to the Series A Senior Preferred Stock besides as set forth within the Certificate of Designation, different paperwork entered into in reference to the Purchase Agreement and the transactions contemplated thereby (collectively, the "Transaction Documents"), or as in any other case required by legislation. For as long as any Series A Senior Preferred Stock is excellent, the Company is prohibited from taking sure actions with out the prior consent of the Majority Holders as set forth within the Certificate of Designation which embody: issuing fairness securities rating senior to or pari passu with the Series A Senior Preferred Stock, incurring indebtedness or liens, partaking in affiliate transactions, making restricted funds, consummating investments or asset inclinations, consummating a change of management transaction except the Series A Senior Preferred Stock is redeemed in full, altering the Company's organizational paperwork, and making materials adjustments to the character of the Company's enterprise. Holders of Series A Senior Preferred Stock, voting as a separate class, have the proper to designate and elect one director to serve on the Company's board of administrators till such time after the Refinancing Date that (i) as of any relevant fiscal quarter finish, the Company's trailing 12-month Consolidated Adjusted EBITDA (as outlined within the Certificate of Designation) exceeds$100 million , or (ii) the Lead Purchaser ceases to carry a minimum of 50.1% of the Series A Senior Preferred Stock held by it as of the Refinancing Date.
Como resultado del Refinanciamiento de Deuda 2022 y el Financiamiento de Acciones Preferenciales, la Compañía agregó aproximadamente
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Flujos de efectivo consolidados
The following desk presents chosen knowledge from our condensed consolidated
statements of money flows:
Six Months Ended
($ in 1000's) June 30, 2022 June 30, 2021
Net money utilized in working actions $ (32,737) $ (27,109)
Net money utilized in investing actions (17,618) (18,943)
Net money offered by (utilized in) financing actions 81,419 (5,507)
Net improve (lower) in money and money equivalents 31,064 (51,559)
Cash and money equivalents at starting of interval 48,616 142,128
Cash and money equivalents at finish of interval $ 79,680
Seis meses terminados
Net money utilized in working actions for the six months endedJune 30, 2022 was$32.7 million in comparison with$27.1 million for the six months endedJune 30, 2021 a rise in money used of$5.6 million . The change was primarily the results of$10.8 million of partial utility of MAAPP funds and better internet losses as adjusted for non-cash gadgets through the six months endedJune 30, 2022 , partially offset by money outflows associated to lease terminations and exercise related with the Business Combination not recurring in 2022. Net money utilized in investing actions for the six months endedJune 30, 2022 was$17.6 million in comparison with$18.9 million for the six months endedJune 30, 2021 , a lower of$1.3 million . The lower was primarily pushed by money outflows associated to purchases of intangible belongings through the six months endedJune 30, 2021 not recurring in 2022. Net money offered by financing actions for the six months endedJune 30, 2022 was$81.4 million in comparison with$5.5 million of money utilized in financing actions for the six months endedJune 30, 2021 , a rise in money offered of$86.9 million . The change was primarily pushed by internet money inflows associated to the 2022 Debt Refinancing (check with Note 8 - Borrowings for additional particulars) and a decrease distribution to non-controlling curiosity holders through the six months endedJune 30, 2022 .
Compromisos y contingencias
The Company could also be topic to loss contingencies, equivalent to authorized proceedings and
claims arising out of its enterprise. The Company information accruals for such loss
contingencies when it's possible {that a} legal responsibility has been incurred and the
quantity of loss might be moderately estimated. As of June 30, 2022 , the Company did
not report any accruals associated to the outcomes of the authorized issues described
in Note 17 - Commitments and Contingencies. Refer to Note 17 to our condensed
consolidated monetary statements included elsewhere on this Quarterly Report
for additional data.
We enter into contractual obligations and commitments on occasion within the
regular course of enterprise, primarily associated to our debt financing and working
leases. Refer to Notes 8 and 16 to our condensed consolidated monetary
statements included elsewhere on this Quarterly Report for additional data.
As famous beforehand, we've got commitments associated to MAAPP funds and deferred
Social Security taxes that are required to be utilized or repaid previous to the
finish of 2022.
Arreglos Fuera de Balance
A partir de
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Estimaciones contables críticas
The dialogue and evaluation of the Company's monetary situation and outcomes of operations relies upon the Company's condensed consolidated monetary statements, which have been ready in accordance with US GAAP. The preparation of the Company's condensed consolidated monetary statements requires its administration to make estimates and judgments that have an effect on the reported quantities of belongings, liabilities, income and bills and associated disclosures. The Company's administration bases its estimates, assumptions and judgments on historic expertise and varied different elements which can be believed to be affordable underneath the circumstances, the outcomes of which type the premise for making judgments concerning the carrying values of belongings and liabilities that aren't readily obvious from different sources. Different assumptions and judgments would change the estimates used within the preparation of the Company's condensed consolidated monetary statements which, in flip, may change the outcomes from these reported. In addition, precise outcomes could differ from these estimates and such variations could possibly be materials to the Company's monetary place and outcomes of operations. Critical accounting estimates are people who the Company's administration considers crucial to the portrayal of the Company's monetary situation and outcomes of operations as a result of they require administration's most tough, subjective or complicated judgments, typically on account of the necessity to make estimates concerning the impact of issues which can be inherently unsure. The Company's vital accounting estimates in relation to its condensed consolidated monetary statements embody these associated to:
•Reconocimiento de ingresos de pacientes y provisión para cuentas de cobro dudoso
•Realización de activos por impuestos diferidos
•Fondo de comercio y activos intangibles
Additional data associated to our vital accounting estimates might be discovered in Note 2 - Basis of Presentation and Summary of Significant Accounting Policies of our audited consolidated monetary statements and Part II, Item 7 included in our Annual Report on Form 10-Okay filed with theSEC onMarch 1, 2022 . Other than as described under, there have been no materials adjustments to our vital accounting estimates since our Annual Report on Form 10-Okay for the yr endedDecember 31, 2021 .
Goodwill represents the surplus of the acquisition worth over the honest worth of belongings acquired and liabilities assumed. The Company accounts for goodwill and indefinite-lived intangible belongings underneath ASC Topic 350, Intangibles -Goodwill and Other, which requires the Company to check goodwill and different indefinite-lived belongings for impairment yearly or every time occasions or circumstances point out that impairment could exist. The value of acquired companies is allotted first to its identifiable belongings, each tangible and intangible, primarily based on estimated honest values. Costs allotted to finite-lived identifiable intangible belongings are usually amortized on a straight-line foundation over the remaining estimated helpful lives of the belongings. The extra of the acquisition worth over the honest worth of identifiable belongings acquired, internet of liabilities assumed, is recorded as goodwill. 67
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Goodwill and intangible belongings with indefinite lives are usually not amortized however should be reviewed a minimum of yearly for impairment. If the impairment take a look at signifies that the carrying worth of an intangible asset exceeds its honest worth, then an impairment loss ought to be acknowledged within the condensed consolidated statements of operations in an quantity equal to the surplus carrying worth over honest worth. Fair worth is decided utilizing valuation methods primarily based on estimates, judgments and assumptions the Company believes are applicable within the circumstances. The Company accomplished the interim and annual impairment analyses of goodwill as ofJune 30, 2021 ,September 30, 2021 andOctober 1, 2021 utilizing a median of a discounted money stream evaluation and comparable public firm evaluation. The Company concluded that no goodwill impairment occurred through the fourth quarter of 2021.Goodwill impairment costs have been recorded through the second and third quarters of 2021. The key assumptions related to figuring out the estimated honest worth embody projected income development charges, EBITDA margins, the terminal development price, the low cost price and related market multiples. The Company accomplished the interim and annual impairment evaluation of indefinite lived intangible belongings as ofJune 30, 2021 ,September 30, 2021 andOctober 1, 2021 utilizing the reduction from royalty methodology. The Company concluded that no indefinite lived intangible asset impairment occurred through the fourth quarter of 2021. Indefinite lived intangibles asset impairment costs have been recorded through the second and third quarters of 2021. The key assumptions related with figuring out the estimated honest worth embody projected income development charges, the royalty price, the low cost price and the terminal development price.
La Compañía tiene una unidad de informes para efectos de las pruebas de deterioro del fondo de comercio de la Compañía.
During the quarter endedMarch 31, 2022 , the Company recognized an interim triggering occasion on account of elements together with potential adjustments in low cost charges and the latest lower in share worth. The Company decided that the mixture of those elements constituted an interim triggering occasion that required additional evaluation with respect to potential impairment to goodwill, commerce identify indefinite-lived intangible and different belongings. Accordingly, the Company carried out interim quantitative impairment testing and decided that the honest worth quantities have been under the respective carrying quantities. As a consequence, the Company recorded non-cash impairment costs of$116.3 million associated to goodwill and$39.4 million associated to the commerce identify indefinite-lived intangible asset through the interval endedMarch 31, 2022 . During the quarter endedJune 30, 2022 , the Company recognized an interim triggering occasion on account of elements primarily pushed by potential adjustments in low cost charges. The Company decided that these elements constituted an interim triggering occasion that required additional evaluation with respect to potential impairment to goodwill, commerce identify indefinite-lived intangible and different belongings. Accordingly, the Company carried out interim quantitative impairment testing and decided that the honest worth quantities have been under the respective carrying quantities. As a consequence, the Company recorded non-cash impairment costs of roughly$87.9 million associated to goodwill and$40.0 million associated to the commerce identify indefinite-lived intangible asset through the interval endedJune 30, 2022 . Refer to Note 5 -Goodwill ,Trade Name and Other Intangible Assets within the condensed consolidated monetary statements for additional particulars. 68
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Fair worth determinations require appreciable judgment and are delicate to adjustments in underlying assumptions, estimates and market elements. Estimating the honest worth of the Company's reporting unit and indefinite-lived intangible belongings requires us to make assumptions and estimates concerning our future plans, in addition to business, financial, and regulatory circumstances. These assumptions and estimates embody projected income development charges, EBITDA margins, terminal development charges, low cost charges, related market multiples, royalty charges and different market elements. If present expectations of future development charges, margins and money flows are usually not met, or if market elements outdoors of our management change considerably, together with low cost charges, related market multiples, firm share worth and different market elements, then our reporting unit or indefinite-lived intangible belongings may develop into impaired sooner or later, negatively impacting our working outcomes and monetary place. As the carrying quantities of goodwill and the Company's commerce identify indefinite-lived intangible asset have been impaired as ofMarch 31, 2022 andJune 30, 2022 and written all the way down to honest worth, these quantities are extra vulnerable to an impairment danger if there are unfavorable adjustments in assumptions and estimates. Additionally, goodwill and indefinite-lived intangible belongings related to acquisitions which will happen sooner or later are recorded on the steadiness sheet at their estimated acquisition date honest values, these quantities are extra vulnerable to impairment danger if enterprise working outcomes or market circumstances deteriorate. To additional illustrate sensitivity of the valuation fashions, if we had modified the assumptions used to estimate the honest worth of our goodwill reporting unit and commerce identify indefinite-lived intangible asset in our most up-to-date quantitative evaluation, these remoted adjustments, that are moderately attainable to happen, would have led to the next approximate improve/(lower) within the combination honest worth of the reporting unit underneath the discounted money stream evaluation or commerce identify indefinite-lived intangible asset (in 1000's): Discount price Terminal development price(1) EBITDA margin Royalty price 50 foundation factors 50 foundation factors 100 foundation factors 50 foundation factors Increase Decrease Increase Decrease Increase Decrease Increase Decrease Goodwill$(30,000) $35,000 $30,000 $(25,000) $50,000 $(50,000) Trade identify$(20,000) $20,000 $10,000 $(10,000) $40,000 $(40,000)
(1) Un cambio de 100 puntos base en nuestras tasas de crecimiento de ingresos no terminales supuestas daría como resultado aproximadamente
Pronunciamientos Contables Recientes
Para información sobre pronunciamientos contables recientes, referirse a la Nota 2 – Bases de Presentación y Normas Contables Recientes en los estados financieros consolidados condensados adjuntos.
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