Earnings call transcript Q2 2023

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Operator

Good morning. My name is Lara, and I will be your conference operator today. At this time, I would like to welcome everyone to Akumin Inc.'s 2023 Second Quarter Results Research Analyst Call. [Operator Instructions]

Mr. your begin may you conference. Zine,

Riadh Zine

I'm thank Good for call. Officer. today's Chairman I joining David taking Akumin. for want this to of time for My morning, and our name you Financial of the the and on presentation. I'm is us and to by us all you Riadh Chief today joined thank CEO Krestchmer, Zine, join

for overview impacted of of In results Akumin's have go key results a conclude the of our our provide today's then of call, I to over some that we I metrics challenges business the both operating presentation, and will presentation the and taking and that quarter. proceed deck some the accompany the an factors is I revised There XXXX. review our to steps our will in Q&A. today. discuss we then will also to in segments. QX financial David meant will guidance is will slide and discuss experienced we're overcome our

Relations it of Investor from the Presentations. at of Events our for website download copy is akumin.com available under A section &

Before that press disclosure. results periodic detailed forward-looking risk that can or Akumin's refer at our are results presentation discussed today's our forward-looking may are future materially and public on accessed subject certain under differ section from call uncertainties to statements. remind as documents me or in relating The constitute our that the we disclosure business questions in Akumin's and these could forward-looking sec.gov be financial or well factors Slide earnings the slide, or the matters answers statements asked statements and be those public to information results that let #X, affect conference given performance. could begin, sedar.com. statements Please as you anticipated forward-looking These of may in to these Actual risks to disclaimer release.

measures non-GAAP such during adjusted adjusted certain EBITDA and to and refer also EBITDA as call, this may We conference margin. EBITDA

non-GAAP these measures including GAAP as Slide of is net well an appendix. of You and X our non-GAAP of our comparable the measures, included earnings reconciliation in the on loss, again, definitions, to EBITDA most section adjusted can regarding measure, presentation the find presentation release. A EBITDA information as as

have not We as reconciliation presentation forward-looking be to we able efforts. this any provided to reasonable would not a a such measures non-GAAP for produce without in any reconciliation referred

patient radiology Slide volume you Turning and lines to our in same-store our our Oncology QX division our the versus service results. see QX starts can our in X, last On in key consolidated growth year. of results

MRI reflects our same-store volume up for ongoing MRI strong procedures. were X.X%, which Specifically, demand

as the Our Total as starts that XX.X% same-store patient up demand continued particularly volumes oncology PET/CT remains oncology were strong partners modality. hospital for market for impressive our X.X% up were services from an robust.

of $XXX.X of the X.X% last $XX.X down million of second million was Adjusted down from from $XXX.X revenue first million QX million $XX.X causes sequentially of slides. QX in XX.X% decline elaborate the from this of EBITDA down And I of quarter of year. last the year. was million were later down from in of EBITDA and the quarter $XX.X margins will in quarter second on XXXX XXXX. some Adjusted XX.X% in X.X%

in in and, in impacted our margins given the margins factors quarter. a Our a of decline were operating in negatively significant QX number resulted high by leverage,

days equates accounts to were QX at XX XXXX. versus a quarter of end This consolidated near $XXX.X million receivable basis, record low million outstanding, sales the at levels. On $XXX.X of end

Radiology not our target. in continued remains segment extent Turning in below growth to Slide growth same-store see although which X. QX, and we to volume began the our to We anticipated, QX, in

revenues challenges $X.X Florida, which to in on period in our highlighted slide, million facility the this last Charlotte for suffering year. has our from some year. closed last hurricane-related of ongoing Radiology experienced be Port The that down closure in been we As necessary damage QX significant same after resulted renovations

are to proven While secure building and working local complete anticipated. the process this than more necessary with be renovations, to authorities to diligently time-consuming originally permits the has onerous we

delays do also we will quarter, some in online. bring such our that by new this We customers experienced equipment which situation can impacted commitments mobile delivery from negatively improve the that to year-end, new customers. We ability satisfy anticipate

which this additional items significantly on The labor particularly our ability we procedures of decline, those experienced perform to constrained. signs But QX. geographies. revenue addition to has severity across of despite year-over-year among this early also shortages, been some our clinical front staff staff resulted in persistent varies in In clinic improvement in -- issue aggregate,

addition compressed In relationships we number staff, have clinical executive also certain of referring the growth which vacancies has volume above-average our account for physicians, team specific regions. amongst to experienced with responsible in

Turning to Oncology.

segment, than reexamination the a we impacted revenue in under starts, offset of specific that that repositioning other been our underwent leadership, $X.X patient Recall certain certain While areas Unfortunately, of segment partnerships. negatively have by Oncology several in growth decline factors more saw in this million. resulting new to operations. reduction approximately contract year-over-year was in led of the our received from customer. discontinuation included of of the XXXX, which revenues discrepancies a has The result

to and obviously QX matter. resolution do This may continue this impacted the pending of so results our

also of in facing. and they're experienced lengthy the have customers, our constraints challenges to We payment financial of part, in oncology due liquidity delays from some receipt one the

at disposal mitigate either We to have several financial this impact resolve tools the or our matter.

in the were, use tracers, particularly impacted of On specialty cost by which and related increased in modality. costs the PET/CT our quarter, the to we side, in part, also expense were higher

these including being has year-over-year. other of can passed to $X.X inflation have and expenses be higher supplies, these costs some through customers, million Although medical experienced, resulted in cost we in

implementing EBITDA measures the year-over-year on was high we focused to quarter. our operating net we over aggregate the remain in leverage, $XX the decline address challenges Given very operating impact are facing. said, That million

on and our measures not results do discussion our will which in his these XXXX to do performance guidance. benefit revised the to XXXX, we time, of a over of we elaborate end foresee improvement prior material David While expect

we X, Slide for current review balance outlook On XXXX. the of our

can you certain we continue in extent face and we As segments the the year. the Radiology see, our to for of remainder to both Oncology a challenges expect

partnerships, our We including budget continued have challenges, also factored our in additional and some deployment ongoing delays and implementing segment, In are of of digitizations the in outlook. our impact to equipment the we alleviate our these Radiology of business business the measures these should core later remote and we in improve the sub-optimal XXXX. contribution business have clinical described initiatives with underway of certain the on. materially from In segment capabilities we as on based oncology expect development that Oncology, discontinuation

fundamentals to our challenges strong, industry why the we Notwithstanding very face, we are these on focused continue remain challenges. and which the we remedy robust our services, is for taking to demand of measures see

know, enhanced management related to the synergies significant initiatives cost focus given $XX pressures challenges. scale, in of they of XXXX transformation optimizing in initiatives a near-term last year, a These and were business XXXX. in and business. These to the our you embarked run planned In our resolving we procurement on year. to basis somewhat all million realization systems organizational leveraging streamline synergies million by our As other increases during and align the offset implement areas inflationary have in $XX although had approximately in been XXXX, the we processes, initiatives resulted on end rate on delayed additional by which our consolidating would result of rationalizing by

financial in As any anticipate XXXX. a material result, we benefit now do not

synergies will that confident these we be very However, remain in XXXX. realized

business our we leverage As highlighted have past, there the in in model. significant is operating

such, for we focused labor front, and call As to and increasing hour capabilities. scheduling on very existing driving our on continue improving focus to On and that enhancing treatments center additional capacity utilization are and volumes scale sites. our we

capture Another efficiencies. enhance strategy to streamline digitize operations key the experience element in to our of patient and the to business is significant order

We deploying also that remote is capabilities care labor sector constraints to are our generally facing the seeing. help alleviate is the health and industry technologies

strategic business position delivery service Akumin partners health of acquisition to ever-growing front, recall and to that in the capacity. hospitals was better in part for service outpatient the for development On XXXX Alliance need our and their rationale system

including have partner multiple hospitals today, and outpatient an for systems. markets, we are suite we attractive density With place facilities the health of in and extensive services in network

have we negotiating of partnership process significant interest with important the partnerships and in are fact, we from received In and hospitals customers. health these systems,

generated partnership given We have services our unique also business meaningful line. interest hospitals this oncology from for in capabilities our

that in the expect deliver XXXX mutual Akumin While finalize, that are these future. partners we initiatives benefit are will significant capabilities an our take time formal its we to to for our beyond. benefits the platform of on to confident leverage together, near hospital Akumin be important able and opportunities of and capitalize partnerships will relationships they we in and and will to focus of Each

X. Slide to Turning

As Board mentioned Directors a related capital results has structure. special committee in our initiatives our to explore of to strategic our release, quarterly press formed

evaluate know, the you it faced, our Board have prudent is felt challenges given above our at leverage As alternatives target levels. time. we recently management well this our current the operational was And to

expected paid on interest kind reminder, is our XXXX. X, to by and partner become pay and a Stonepeak, has sponsor, cash As September subordinated on in been our debt held

completion is The will for alternatives. that can no no of or result diligently There process but there assurance is any special timetable transaction committee this in evaluating the alternatives, be other provide to approves unless process, necessary. that the until is the Directors updates or of appropriate specific the does intend disclosure or or not a strategic and action Board otherwise determines review company set

metrics. some now David of to through walk will turn you over the who financial operating I our key presentation and will

David Kretschmer

Thank you, Riadh.

I illustrates of guidance. operating of our the continues modalities. offer diverse for As the Akumin the quarter of to metrics and focused of while Slide high outset, our XXXX and growth financial an the value-added business to at a suite update provide platform Riadh will areas services on high mentioned some X second that remaining and review key

a volumes of revenues from our MRI revenues total division. you coming revenue segment. PET/CT making XX% derived diagnosis in cancer are can MRI and see, player treatment is of Radiology XX% with a also Akumin As XX% of our driver and key our is from to Oncology that from Radiology significant our procedures,

critical specialties from of These variety diagnosis screening delivery quality continuum of across care modalities utilized and to by the to treatment. the to physician care are patient a are

footprint radiology eliminate our site an As ongoing we have have previously consolidate sites. we underperforming to to initiative fixed highlighted,

QX, XXX end at now XX comprised XXX of fixed radiology operate As oncology. and of the sites, we

including sites to our operations the sites. We footprint, improve economics hospitals fixed site from these and to continue to contribution our evaluate of opportunities exploring the partnerships with [indiscernible] optimize

Akumin care and shift sites of lower-cost hospital is to systems well previously to delivery. outpatient positioned from with transition to delivery partner service as we benefit As we the stated, hospitals ongoing to

over as to you procedures, from see XX% Slide continue outpatient revenues We generate of X. can on our

mix and between consolidated revenue balanced third-party payers a revenues. than of services X% We no more one for with customer forma have representing outpatient hospitals our pro

come derived outpatient provided party balance As The customers. hospital of revenues and hospitals, for by reimbursement our the from patient preferred revenues procedures from third payers. to solution paid government of our are half

both with as to and hospital expect in hospitals continue grow outpatient existing the radiology We search time and over for solutions new to both and revenue share partners oncology. customers

mentioned, Our by driven did primarily although is procedure results factors certain extraneous our performance impact typically financial previously past quarter. volumes, as this Riadh

percent with volumes, a the and our track are both on Previously you that revenue, sites, are performance the use scan PET/CT contributors radiology. radiology radiology of our includes the by platform. in biggest current as of metrics to procedures to is we our Radiology in and together key we know, modality financial as hospitals the volumes scans across MRI operating track As actual our mix and given X, procedure performance illustrated These independent the noted, Slide segment. business

we XX, in see same-store procedure over Slide and the the X last periods. MRI, can On the percent volumes those quarters PET/CT changes

ongoing primarily staff equipment together volumes. to our clinical has ability our been an As Riadh segment, constraining mentioned, in mobile delivery grow of procedure with delays, shortage

alleviate the are We XXXX. to by that explore these to end continuing tangible and optimistic to efforts pressures show these results ways of begin are will

of industry to services. which diseases. to years recent to for factor as in constraints tracers, leader Labor can the less demand in better modality, highly PET/CT, a the growth highlighted, PET/CT pharmaceutical to have able allow previously personnel strong for given detection and develop the specialized are improved we're continues strong skill of that capitalize we've modality As clinical we a this these as earlier in market seen of sets

volume. the level we activity segment, starts In Oncology patient track by

of Riadh the starts completed part, reduced which discrepancies patient That collections see, in of recent QX can the we in challenge, grow of to in noted. in because quarter, QX you customer was liquidity a and related As began as review that repositioned previously growth and contract pronounced to business specific from last XXXX less and QX year. customers

growth time to given an initiatives our have Oncology development we the trajectory improving division business We resume expect underway. over

we compelling we We in modality. have continue partners proposition value believe a this our to to therapy in hospital radiation bring

includes which enables treatment. our and programs Halcyon, equipment, This replacing can continue of platform with more our fleet, oncology Varian's while a faster, new patients mobile treatment cost significant to treating which effective experience provide

Slide our trends and revenue for adjusted On and EBITDA segments. XX, present we quarterly Oncology the Radiology

XX.X% allocation can XX% you between our second segment, balance our As Oncology X before been XX%. XX% and of the adjusted services. total quite quarter corporate ranging the of has see, over the XX% up the quarters Radiology segments EBITDA was and Oncology contribution of Radiology consistent from revenues and In making with past to margin Radiology

higher before illustrates is adjusted segment The on margin quarters. the corporate the of Oncology EBITDA allocation X services. adjusted an of with EBITDA EBITDA quarterly over the the margin past right XX.X% margin chart and Our

facilities XXXX. high our some growth to back these should Given the downward reopening solid together have delays labor to on modest has to for toward on margins for operational to we To attrition of in our the we extent shortage leverage volume some we demand said, executive half in growth issues, account address and revenue EBITDA adjusted services. period. and with in a pressure the the build foundation business, clinical see believe continue which strong in both the see significant in put are the part that a of operating return because That ongoing able large QX and we

quarter On results Radiology forma, XX legacy combined Slide the consolidated will our the see last the XX, Oncology pro divestiture Arizona. businesses, period completed for and segments and which and entire [XXXX] the September well are Alliance EBITDA. for fourth of the XXXX and in were as you in of annual financial adjusted Alliance the months Akumin as Note of Oncology was acquisition adjusted XXXX, performance the of assuming that

see Oncology of approximately the will on total on segment XX% segment while during or you the contributed the months, total. of approximately chart million XX XX% As revenue million contributed $XXX of the of Radiology the revenue, last revenue the left, representing $XXX

[of have in we As periods focused labor and mentioned EBITDA recent calls, in [is the prior ongoing growth as constraints. internal on have on muted] consolidated integration adjusted we transformation business] and

us I and their recording longer meaningfully for been the revenue mentioned, also existing no by which two the receivable, impacted also impacting failure we against has Riadh have of Oncology period. to segment revenue the current As customers increased meet for financial reserves obligations and are accounts to

volume issues that driving the as As our we half EBITDA year. volume the begin of XXXX, to mentioned, exit negatively impacting we higher the some expect growth, adjusted in and will abates see of the we growth assuming present at revenue back

a of XXXX. the from in is half XX cash Slide our EBITDA adjusted free flow bridge first our to

million and position cash lease our flow. free slide, the In meaningful finance from XXXX. service decreased have so continue see quarters, by the in a past on to cash impact can debt you far As payments approximately $XX.X

to As cash you of a minority hospital the not know, performance function a joint and relates fixed of these and obligation. interest partners oncology centers, primarily ventures is

As minority these increases profitable more generate from well. partners as cash, become our cash more partnerships and distribution

over $X.X we Port It million restructuring our ongoing related the and of site should facility costs repairs to at be efforts. end incurred cash as at QX, have our that noted of Charlotte

mentioned, than to onerous are facility to closed proving anticipated. Charlotte reopening be more be As our and we had continues lengthy as Port measures

expect of We together in XXXX, additional from the to and additional of flow. received call on [recover] payments modest with have to be restructuring burn benefit synergy capture free reduce to part year. will notes, We Stonepeak for cash this the offset the which subordinated insurers to This our partial latter by cash cash expected X of interest September to some do charges expect more. related pay are reimbursement

Slide of fourth the call. our previously quarter XX XXXX update XXXX to earnings is in guidance announced an

these we persist our revenue of range will in faced $XXX and we the range of the Given some XXXX and million in in be to expectation now expect conditions million. to future million of to of in first half $XXX have that be year EBITDA the the consolidated the challenges adjusted to million $XXX the quarters, $XXX

Turning to CapEx.

refine plans our deployment continue expenditure capital with priorities. to We most ensure to aligned efficient the equipment, better our of strategic

and greatest the continue We for potential growth. to evaluate markets those and our on criteria based all prioritize near-term

ability that in our cognizant delivery take install experiencing are timely and delays some also equipment are and of front. We in to currently a manner

million to customers a allocated and and growth now with $XX spend $XX be to balance CapEx to $XX $XX total sites to million As and CapEx new between we result, maintenance expect for the million CapEx. million new

at expansion. hospital CapEx oriented existing sites, customers acquisition Recall CapEx primarily that customer is while capacity as growth partner define we spend for as maintenance new as well existing towards and

Our anticipate continues by coming a in to and new funded and approximately return, to in in total Higher and with X-year industries financing investments may by growth equipment to typically and be combination We are CapEx in reality a balance a payback headwind quarters. be finance be capital. high customers the sites cash financed OEMs of companies. be all costs and XX%

illustrates structure of the our at end QX capital XX Slide XXXX.

X.Xx, see, and can Akumin's our you leverage X.Xx. As secured is -- now unsecured is leverage leverage

time, on structure, to incentivized market and of from have of so organization, standardization previous shareholders, to future, to do as that come focused evaluate outlined Note capital an technology-driven as we we service this we continue calls. prudently reduction significant of as optimize rationalization, made in although permit. highly leverage events delivery, As recent will the and conditions options increasingly In network streamlining the very that result are as drivers over EBITDA synergy capture, have increasing reducing we are challenging. leverage a

that As the committee Riadh alternatives evaluating is special of the Board mentioned, front. currently in

that, wrap we Riadh take questions. I'll back With before up to turn over it to

Riadh Zine

concludes operator we That to prepared start to results the provided we remarks for the the the David. Thanks, ask would quarter, and I the the hope portion an question-and-answer informative presentation. of window period. now

Operator

[Operator Noel Your the Instructions] of Securities. first from Clarus comes Atkinson from line question

Noel Atkinson

constraints. just the labor off, First on

constraints? your that seeing where have it this of is you radiology So it growth. Is activity QX? seeing seeing -- all more freestanding PET/CT are Or across activity of hiring in the -- labor centers the in then in difference you segments? improvement growth any seen versus hiring MRI And easing we're you're

Riadh Zine

Sure. question. of we're not like specialized market Thanks, by Noel, MRI constraint. of But and the for the in across PET/CT, severity for the depends shortage level -- the The board. We're market. same workforce yes, other it's procedures, seeing

used exact tight of even It's and I, David it's not an not labor. Even you have a overtime the improvement. to have. from it's And we to same same They that the before, were when labor. there we everywhere, said we like compare pre-COVID flexibility post-COVID, but -- new just perspective, don't signs

So actually it pace the at end year. at was than the year it's of slower early next or last challenges a are

it's the levels and We demand that X%, see flat. experience recall, we've QX think you in and the It slide our was start year-over-year, on as based probably for year It think you services. or the X%. X% we should no on the we growth was past for Noel, and MRI. growth same-store of I at that's last experienced in but I deck, to look had actually when QX not

the taking we're steps. So

we where the remote also technology solution, where markets capabilities. had see you higher where our And long-term with know, changes to is some made scanning of as were applicants challenges open. number start We've positions we in

both and on plans. short-term long-term working we're So the the

David Kretschmer

EBITDA modalities mammography. shortage been well. things we discuss was great we you those because if Noel, tech appropriately of put ability mobile in And revenue is out, is. some like you ultrasound, a And for one have backfill our noted, meaningful a in our most don't division, pronounced and seen what of where we there And other jump and don't in. kind it's pointed positions less as -- of mind, like lower The Riadh, as Riadh lower that is question. which And PET/CT I'll it's to consider thing as

as while don't about us impacted that So it's talk we headline much, that's also.

Noel Atkinson

Okay.

Secondly, seeing to that PET/CT so you're supply -- of again, also on And acceleration seeing you're that volumes getting let's continued the chain PET/CT you issues, a new basis. just mentioned same-store go equipment. back

give maybe with kind current impacting secondly, equipment this sense how inability you first are start revenue, new pipeline is that So then of to, contracts get us off, with hospitals? I contracts can in a for you of your to guess, seeing new for And what demand much hospitals?

new you this look, like approvals back kind are are new save like to they drug partnerships Or they're on that? they new initiatives, Alzheimer's with light and because saying, need of, increase Like just holding trying of we to things folks like money? say, the in

Riadh Zine

try again, of detailed So each one a Noel, There there, PET/CT. the the for answer were questions on question couple to I'll thanks, and them. of

phenomenon So kind continue this believe next and of not term. we new years. a is forward. to if just we're expect higher, these for of on applications short experience not going growth of We levels, to growth demand and into the going couple new This tracers, the

especially PET/CT, new we true more of we're deploy customers. even But said and already equipment you is pointed PET/CTs, in there -- looking for Those Having is signing delay a number on as is radiology, -- the and are is so us. have which not forward. post to up we lot the the digital for -- a oncology, just the as for this side that, deployed of COVID, requirement them we're mobile impacting new going out, more

the business the ratio of of XXXX, second of And we -- right an that revenue booked the signed booked in at we're customers new signing customers book in up we is new the versus mobile, getting up we or in equipment in delay Xx. is because when look as second quarter of quarter what which you dealing a give you of of the that now, issues, why order is magnitude, what just discussion the timing in quarter with to

at signing you're of of booking. up the customers new you're Xx what rate So

delay address our the it's that. real because a issue, equipment And understand at delivery. And also time it's I'll so the to it same investors in actually important for

The can't we get to year. reason for the equipment pipeline for on That's -- resolved X next really focus signed side, -- into the don't and and oncology focusing you we the are because today. future repositioning operations building and access a we the more have you to if as mobile to example. even new But you're on move going equipment experiencing same you up delay have today, going the radiology facilities we're

So -- it's -- I question a that That's it's but answers good supply issue. really so -- think on your I hope a question.

dealing in change reality not We're with we're fundamentals. But dealing the with supply the side. just of the

Noel Atkinson

manufacturer end like by And you've that the of comfortable assurances come -- the will that will the feel you the improve the from back been provided availability PET/CT year? digital --

Riadh Zine

believe will where also we unit freestanding. GE equipment in not like It's you it's like also the the the what That's already mobile, know, first that's a coming all, the has market. as and is the that of solution host -- just from. as manufacturing for equipment, And bottleneck

it's the the that some is able unit OEM not the So the mobile manufacturing PET/CT OEMs to but PET/CT the been from cases is have side of hosting we secure because in itself bottleneck from equipment. units,

Noel Atkinson

you. Got

I just quick a maybe financial couple And Okay. if can. then ones, of

or bit a QX? closing oncology QX depreciation starting amortization in to in amortization below QX one and and levels second. the winding accelerated the kind from site also had you go of Does So back

David Kretschmer

be the because It it couple amortization would accelerated lower to your we point, of would just be slightly of like sites. -- those

spot you're on. think I So

Noel Atkinson

Okay.

So -- instead okay. of

like So down would million $XX it or go that something quarter-over-quarter? like by

David Kretschmer

$XX sure million. not I'm

it Let me a for that be. to you get estimate better could what as

Noel Atkinson

on you end the before of available queue, back then the And at finally, your in Okay. just June. all revolver $XX had million go I

does $XX So the future? that present to it in all the time of needed have it the full access if company million at

David Kretschmer

is Well, XX and based availability on the ratio to EBITDA. trailing months revolver

majority but the will vast that probably available to be be will So slightly -- the that majority of impaired, us.

Operator

comes Parekh question next the Rishi from of JPM. from Your line

Rishi Parekh

being concessions making sign even that being is hospital not this you revenue your is customers? Hospital to business the down. And side trying business then was that slack? just to price revenue your Is so revenue flattish. more. and with legacy are for that, of strong, a with is revenue understand Alliance Commercial the deteriorating HealthCare was hospital or and volumes providing flat up Because granting why I'm up

seeing had just the that producing. Port given you're the you but more we're know issue, volumes Charlotte what I than

David Kretschmer

just question in real because jump we did let recording are to broader to mention reverse I X Riadh and had quick of payment. that oncology the lack accrued the no previously before on I'll And customers receiving longer address due revenue I actually on side, particularly revenue

a QX distort the lower just does until that on resolve with So bit side rate the customers. slightly a we these have run issues little a because of reversal, couple we of and oncology

Rishi Parekh

volume that increase? But to does explain the despite the entire as reason why revenue down is

David Kretschmer

the part that's on oncology side. Well, the large

Riadh Zine

sorry, -- Yes. go And radiology side ahead. the on

Rishi Parekh

let No, radiology. the you address I'll

Riadh Zine

Yes.

radiology you've it's what the on side, So Rishi, outlined. exactly

is on we you The shortage, the it's as that challenges know, the the it's hurricane enough. is So mobile only not demands the commercial your But the on fast the of commercial on, the satisfying side. it's challenge having we're where side business the really is right customer where labor points. side pain side on whether the observation have hospital in on or related we're having

Rishi Parekh

And of relative at is today, contracts? low this to with HealthCare losing then CapEx contracts me you those on you which down? before I spending high. is very CapEx you to are to know front to on hospital very keep side, just seen may hospital to implies side, -- regards are that, to add not, Alliance to the And that are that business, on kind revenues was you also the which what maintain contracts. CapEx the money needed before, you're we've why explain losing look But because

Riadh Zine

Yes.

-- is it's mobile There on have typically And as expired business the natural that side, contracts so the you radiology. you nature So the in know, a right, of of the past. churn.

business because -- like think as book Rishi, renewal, I Alliance, larger talk than always the think you're probably of about legacy recall, very you're of you is what net familiar right, replacing. what with they I your

our as but from is the -- from the bring in basically on a a in revenue book historically. new But is timing still have not signing signed, because or perspective, booking business but churning business position, -- you don't but equipment yet. actually turning the Today, just revenue you net to from you're have still commitments, have a a the customers, of booking you issue because contract perspective

have we're has pace absolutely and equipment we've the not And come at you you're the also for when what customers beast CapEx we you're in of CapEx, -- it year expected. which delivery the mobile that's you're the that just deploying And same to new balance signing of you're nature right of doing the said the that's side the radiology. And why deploy did revised terms. you because CapEx, to down, for basically when longer getting continue of the really

Rishi Parekh

those this you Port a you And On loss pass-through. to the just obviously, insurance? tracers, same insurance? this future Is in in took periods said those there recoup money no I that expect way All to do you you questions. you're losses quarter. recoup a with Charlotte, customers? it's have regards a know few But to with through do spending, other it And

to I access your lastly, partial just then know And have revolver. you

You of cash million sheet. the balance or $XX have on so

pay that cash up. this have You coming be might

some you get maybe believe challenges So through and year? now. liquidity seeing that this tight, whether to to really sufficient be liquidity is or Do going not your you certain that reflecting the as have you're not guidance of to is it's

just what capacity, with that to or what complete capacity restructuring Can baskets capacity. I additional sooner million $XXX you this your so of secured side maybe And today? then have RP you believe secured and something than capacity the $XXX to you on super that, have -- of confirm what secured is are million Is million $XXX basket later? your

Riadh Zine

No problem.

So I'll first on question answer the Charlotte. Port

have cost a a -- We mentioned we much cover will cost the most portion and of pretty when was David permits construction companies received, like have in from start most covered the of the we the or of because renovation. delay that -- when earlier, the insurance getting the there

$X the insurance company million a more number, expecting recovered. to given companies. which still But we're that expecting obviously to the would was So that's more still that that business from -- relate it from but payments an has revenue that's interruption, to going been facility, as million we're $X large insurance you payments --

with going on Charlotte. kind that's of really And what's Port

go think -- again, your on? Rishi, was we into your question, before second liquidity, I

Rishi Parekh

the pass-throughs. On tracer

Riadh Zine

tracers. and Yes, cost recovery On simple of the service -- demand the what seeing. specialty doing and tracers has the so growth for been given given these the the not more we're cost we a historically is just we're

basket new in Or And cannot liquidity the on in new more want it? on -- address well contracts, successful cost we happy contracts, I'm but to to have. the in currently obviously, more So company. the and David, as of existing we're we you contracts, address getting that then those, you if than change all it the

David Kretschmer

us as is Yes, entirely available a QX. I end couple one, points. actually of at entirely the earlier. the -- -- QX misspoke I had, of high-level said, to of Number revolver of actually, the it's end We largely --

Stonepeak So of while $XX to obligations. available. do going capacity we of the be are we financial meet we cash that million the to notes do have our fact pay, that cognizant do liquidity have have And

that's an next for year. year-end So through into us issue and not

some of no mention -- have in well sight. to outlined. think assurances of that we So course, range no there realize there's I we've we going degree did that -- you're as Rishi, assurance the that be is line of

$XXX EBITDA $XXX events. for concern you've given And I that I conservative million additional range guidance, been liquidity are say And there We to appropriately revised think opportunities million we've some around and I Riadh think putting that. in understand heard together.

We can to more. from We Port we've expect Charlotte. have the what receive payments some on recovered spent of

a that again, would -- above be, -- and benefit over EBITDA. adjusted beyond the that's So

the of you number I terms in get precise And basket, want offline. probably to more a

You're had And on -- the to we limit us. the quarter because right. have bottom month money our for lease available of those We every the recreate or expenses, last just of of we some some the does financing into done operating been equipment capital purchase reached do down pay every we've capacity while couple for purchases that purchase have capacity But we financing money. and able by to under leases. equipment do goes that

going financing we continued how of we now calling Riadh, operating leases, EBITDA versus affects But operating not EBITDA. in for starting leases, it impact start out it usually. EBITDA should had EBITDA. does leases it because adjusted that significant. leases, also adjusted But the And a Again, finance the adjusted practice of probably not that forward, about some little the previous use And out to adjusted a comes that the negatively. of headwind marginally, how impacts creates bit

Riadh Zine

questions? additional any Rishi,

Rishi Parekh

the on up it. follow of rest I'll

Operator

further are to now at any time. questions this back turn call like over Zine the for remarks. Mr. closing I'd to There no

Riadh Zine

your would your we ongoing in like their for challenges as and concludes capital today's all everyone, our efforts opportunity this participants thanks operating you, and address we This interest our radiologists take thank and to on to structure all call, to stakeholders as Akumin. address of again our support participation and for Thank our staff, call. well. Thanks. for I our

Operator

today. conference sir. Have thank lines. you, and please We disconnect call ask a your Ladies lovely Thank participating that this your and gentlemen, for for concludes day. you you

Akumin (AKUMQ) 10 Aug 232023 Q2 Earnings call transcript