IONM - Earnings call transcript Q4 2021

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Operator

Greetings, and welcome to Assure Holdings' Fourth Quarter and Full Year 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder this conference call is being recorded. I would now like to turn this conference over to your host Mr. Investor of Director Kozak, Relations. Scott Thank you.

begin. may You

Scott Kozak

today's Hello, discuss to quarter full-year, XXXX. in for everyone. you for and XX, December Thank conference ended Assure fourth call the participating Holdings' results financial

are the Price. John Executive On today Chairman CEO, and John and CFO, Farlinger; call

results opened XXXX. its The on investor are the Before release release the issued the press and available of morning, and this market fourth our Investors company quarter the a announcing for year website. section full presentation

SEC, prepared the that statements will made the refer for call, We and more begin a that Before Actual would reference the believe non-GAAP operating company's Form you from with for differ be Assure's fourth certain management discussion future Litigation quarter I to are you including provide could results of we we our measures, on to remind a on full Securities materially to XXXX. variety those financial for today's remarks, the some condition. of risks investors. like Also and Act Private information year the detailed of recent made of projected report XX-K factors. under useful may due which will Reform or filings the the impact financial and forward-looking implied results

which of XXXX, these earnings XX, release please reconciliation filed three available consult filing ended measures, with SEC non-GAAP website. December the the For X-K for of the on most associated recently months the the is

download quarter earnings for Investor found company's to replay into available want slides link in the join telephone, at may see Assure's would recorded made like to fourth Relations today. the website. who call to XXXX or call webcast ir.assureneuromonitoring.com and I This remind will a by on referenced via site order dialed on be Finally, everyone the presentation our you our

like Chairman Assure John Executive to and call over turn Holdings, Now, Farlinger. I of CEO John? would the to the

John Farlinger

made strategic proud and our update for choice for increase Today, and performance, our against thanks financial against we'll positive generating everyone several total we met $XX.X revenue significant XX% Further, XXXX. Scott. XX% in metrics, XXXX; XXX. you, with we've which position, joining sustained a provide next a objectives EBITDA over cases, neuromonitoring today. long-held in represents highlights rapid and leadership an minimizing managed discuss delivered with recent XX,XXX objectives the Record our operational work progress on and of cash We driving Hello, while from burn or accelerated in Thank company to for Assure the growth the we to us I'm took growth. number performance successfully of intraoperative rapid include: step vision volume and Assure surgeons increase as our report a hospitals, that the years. partner million; forward with are continue a of Select surgeons of XXXX focusing to patients. record from on case focus of and and

to agreement remote states. largest Launching the and the three-year of ever; expanding neuromonitoring operational for include: contracted intraoperative neurology our network; services NASDAQ business; GPO a awarding the our two become accomplishments into listing; XXXX achieving a four our including completing sole additional footprint acquisitions, Additional provider Premier

placement, This driven a Board participation Finally, led a being a growth far function flexibility, cycle of ever new initiatives. and is I'm pleased our million fuel, private to most promising is automated financial before. combination development through enhanced than our $XX more management that institutionally revenue XXXX the used that analytically in with of $X we million and a management balance facility, sheet strengthened XXXX, credit and

neuromonitoring. the operating a an provide blue context, was neurology illustrated a providing We established, entirely intraoperative highly model. technologist services. remote one-to-one This left. technologist surgeon a with the model, historical Until contractor, component delivering focused on XXXX, our Assure's matched the we that slide is on room, paired on I room, Assure in from in technical which on Next X, technologist Assure will third-party in trained of delivering with pivot the board-certified operating

Assure its the Assure capability remote the model, based more is annually. model. technologists orange contractors to our and generate location featured quarter outstanding highly is X,XXX neurology be maintain typically XXXX. relationships for from cases will services perform technologists. subsidiaries. transitioning or services, each Assure serves has hospital in ability providing provider remote neurology Assure provide second cases surgeon continue volume. XXXX, service year. and spear the Physicians of physicians historical our is offsite began approximately on and pivoting throughout a This from remote tip the services To cases is repeatable our structure success. case transition It scalable which business. revenue Starting XXX is right The more to and skilled the client by clear, This that excellence one-to-many where their Assure's and retaining is for employed one-to-many an clinical handle managed served neurology has as per of neurology far develop to the as we in basis Remote on

managed own volume, onto perform. neurology already transitioning simply our patient the technologists focus servicing remote simply are is our platform. established The the we've cases neurologists now patients, Assure Assure through

manage slide location X, As simultaneously. off-site can review one and screens on can remote see neurology professional working multiple an surgeries multiple you from

This Texas the geographies outsource to begun this number function and a our company. continue as in this we delivering ramp, While certain trusted we Colorado. positives markets service ourselves has Assure for in accomplishes partners to of largest including

by with be oversee agreements supports quality in-network commitment able efforts, sign remote to agreements service new to neurology to our providing facility-wide quality of services. and outsourcing we'll Firstly, This, hospitals.

function profitability facilitating bringing significantly to we every our the Secondly, in cost of reduce by case delivery, we perform. able neurologist be improvement will on in-house,

Our forward. of going the neurology cost objective is to XX% for services remote cut delivery by

expansion the margin in for catalyst future. a as serve will scale Additional

top Thirdly, benefits. regarding line

pursue intraoperative creation cases Fourthly, stream. opportunity new revenue finally, represents offering going For every our Fifthly neurology and we remote we a will and of of each forward. new integrated for significant the value most new neurology opens new perform, add the services be remote the providing and remote M&A can market door the The simple We've volume. services in built similar the patient to where neurology services utilized. neurology is already remote for we maintain straightforward. providing markets neuromonitoring shift opportunities adjacent already platform for

absorb We cash and over services as are create contractors to Assure, neurology we simply with more by subsidiaries remote margins replacing We'll quickly. volume. providing employed By physicians generate turn revenue third-party will higher ourselves, stream scale. Assure-owned new a this

are how managed our our that environment or an on where volume XXXX to increase managed case continue Next expect as expanded XXXX. more an we up of quickly will many Slide X, in to cases, of are XX,XXX see stagnant peers Assure than shrinking. guiding we XX% growth you even over

of organic X services result Assure's neurology states reach footprint; number and XXXX as growth extending remote within Slide our with one, our new the business. just ramping which primary of business with our pipeline opportunities. neurology spotlight high-margin our into new Premier. will well an On remote include: discussed. Assure's I interesting as brimming platform anticipate we generated relationship a We in as catalysts Expected wins, M&A existing operational

we services out this chart are this see rolling something As you in not is doing. these planning are is can we something

XXXX the XXXX. reading previous full-time of the slightly year fourth telehealth of above XX,XXX anticipate managed guided consider total in neurology we which In full range ramping. for one quarter of Assure's expect are XXXX. of managed a cases the of services In X,XXX to fourth to XXXX cases that team a physicians, remote has be to offering remote currently range call, we our X,XXX We neurology X,XXX ramp rapidly to remote and two cases. in opportunities. of the important cases quarter reading began had still a at company's neurology growth remote earnings and four most more Assure than our I with neurology ended of performing X,XXX

XX Next will operations. geographical on The represent current our in our you green X, states Slide footprint. see

and acquisition through states Neuromonitoring Missouri Kansas Assure Nevada expanded new growth. the organic into four via Sentry XXXX. with in of Nebraska and

been has by channel. supported the distributor build-out our expansion Our of

In markets, open And they and fact, partnerships XXXX. device Nevada medical that Nebraska. into new in anticipate will have with markets helped expand Assure further up distributors we

major of hospital system-wide facilities that the On expansion purchasing one the being other Premier, Assure's United X, group most organization in winning catalyst Slide our highlight is important with for to States. second-largest date we the the contracts. The contract GPO or system-wide

industry. services approximately serve of honored In that to be Premier's XXXX, quarter other our Over the an the the chosen of in hospitals and competitors three-year Premier, included X,XXX life process following neuromonitoring intraoperative agreement, XXX,XXX Assure to largest of we were by alliance contracted the sole will the as of providers. RFP US fourth supplier

has competitive recognition hospitals high-quality for the the to our make hunting of a facilities to also with neuromonitoring a Assure intraoperative fully second-largest this opportunity is of the two capacity for a established pursue within the help enables delivering years. support substantial reputation Assure platform the with sure in thousands States. the consistent price Premier's with provides to United its selection Assure underscores GPO a at This It in the opportunities coverage scale for Our to license agreement network. resources be Premier that We'll course and and medical build to harnesses annually. three strategy services outsource that cases devoting current over to service next

provide we some at M&A around company's look XX, Next and color on our expectations the XXXX. XXXX activities in for Slide

pleased were purchased million. very attractive completed in in a opportunistic we XXXX. approximately neuromonitoring Texas valuations Commission-certified two company We for Sentry we Neuromonitoring, $X.X First, with intraoperative acquisitions at Joint

in has As reinforcing acquisition accounts Kansas a closing it build helped of efficiency million also facilitate Assure Sentry's density in the our related transaction, into operational value Texas, expansion point only largest and $X.X reference, This old transaction. this us out helped Missouri. and collected but of over not in this market, Sentry's receivable,

Assure Elevation Texas-based acquisition neuromonitoring small closed intraoperative in company separate a bolt-on. a was of also a XXXX.

progressed they performing quickly as integration both are of these and Our acquisitions expected.

a and to billing general of to see sufficient capital. forward issues, fee assets, collections, inability XXXX, as buyers' we intraoperative struggle COVID-XX lingering continue out-of-network competitors with Looking our neuromonitoring raise impact of market for sustained many the in the high-quality

volume acquisition among We as opportunities businesses continually neurology managed also evaluating platform. case on build-versus-buy to decisions We're focused our to remote services. look cost add efficient see we

that we on better we our into due care. revenue focused provide is exceptional simply and and believe important make by we doing identifying more collecting process care An always, a businesses are of them that managed plugging part job can of our cycle As platforms valuable cash. diligence clinical businesses

Now our we're number with to Assure valuation-sensitive rates, our and can competitors the on maintaining talked able that clinical of indirectly match, already the end will cash and of bit XXXX collections On are and will how now we volume none focus with with and our we total of of and our our contracting commercial a cash Consistent the we public anticipate evaluate price We in this quite total opportunities. agreements, about strong XX% administrators review than a approximately expanding remain; our third-party that All payers XXXX. comfortable XXXX, at of expanding scale, XXXX. is objectives collections. in more situation XX% scale, corporate We've listing until and through here contractual remain we either to a get for so that said, we by or XX, NASDAQ go-forward. improving and expanding directly I have currency leadership. expanding in-network volume with an objectives company in-network increasing patient signing slide

I'm collections quarter we of sustain between did of expectations, XXXX say cash February collections that improvement are happy record fourth XXXX. Assure's this XXXX optimistic December three not months generated and to we meet our can over consecutive of While that and

want highlight I cases our of aspects few handing Before slide call, to the managed on ramp a in off XX.

to The the the become mix company's busy seasonality more volumes pattern patients In trends Similarly, in from highest insurance second XXXX, quarter followed progressively seasonality business. representing the in this first quarter fourth quarter continue after of a anticipate utilizing our tilted with seeing profitable of in cases with a and managed our cases gradual our third the percentage with ramp-up seasonality government with quarters. the familiar and higher both is the mix typically first first progressively that quarter We towards commercial XXXX. insurance. to reflects the revenue each

us is expansion has in to organic opportunities from position platform I a that best remote a Before catalyst neurology in of keep perspective, this with from handing a reiterate business perspective. want and over new off perspective John Assure Price, busy and the of been Premier, capitalization The ahead course will M&A states to XXXX. us the services,

John Price

begin you on financial would for like today. thank Assure's Hello, with XX and to XXXX from slide joining fiscal everyone, I Thanks John. us results. highlights

and primarily the adjusted case managed EBITDA expected, the for revenue year volume. in As positive our from increase strong we Assure experienced

total Internally, annual and remote managed to in the to XX% second primarily of million Our EBITDA XX,XXX we and during of resulting managed more quarter our adjusted of increase anticipated acquisition from $XX.X the increased cases revenue services. than cases Sentry neurology $X.X million. launching of completed

of XXXX our of $XX.X rates. adjusted the to by EBITDA and revenue in on XXXX. a quarter revenue our We in a elective million of case profit As the bad reminder, neurology Adjusted third April and revenue as and March was fourth decreased XXXX; of had XXXX impacted increased results company's in COVID-XX our of positive the $X.X approximately primarily remote services and cycle of resulting loss restrictions management investment was launch achieved as EBITDA volumes, accrual for XXXX impact negatively during million compared from a positive managed surgeries debt expense. well

$XX compared Our operating prior to $XX.X in expenses increased to million the million year.

NASDAQ and to as well acquisition support support continue our Elevation debt expenses growth. such for anticipated infrastructure legal growth to we start-up manage costs initiatives initiatives that costs our remote of our expenses listing, as in services, analytics costs costs, associated While and as costs our neurology Sentry several investments IT tightly financing data supported non-recurring to and with XXXX included operating

slide from quarter I financial Moving fourth our XX, highlight on to will results XXXX.

the strong adjusted resulting experienced fourth positive revenue EBITDA Assure in quarter. for

of quarter in $X.X quarter increase adjusted included net managed the Drivers X,XXX loss of $X.X and resulting XX% fourth the for seasonality. to positive impact of EBITDA revenue the in cases and managed million, $X.X million. million previously total Our mentioned cases increased of

was unchanged quarter the to accrual Additionally, cycle to team. our in-house the from fourth quarter our rate management third revenue revenue testament

both data to was a rates. these in RCM focus our provide with anticipate profit positive cash year revenue The of of the process continues of our collections. stability neurology million scale EBITDA period. and $X.X business. efforts on M&A; RCM drive to team will services; to business result our the impact to further the intelligence $X.X million positive from improving Our compared accrual We organically and maintain investments volumes and to benefit case prior in The reflects: EBITDA launch of remote in Adjusted

IT in slide anticipated company's infrastructure costs to XX, review fourth ended increased expenses quarter support XXXX million. $X $X.X analytics On million compensation. operating with XXXX. compared operating Our expenses to to $X.X includes I stock-based end of data compared and to initiatives, sheet million Assure's The will at support $X and growth investments cash We million to balance cash flow. the

were entering to remote a cash new services launch our with by payors markets. related backlog as collections neurology of of impacted Our the as well credentialing

accounts the receivable remote automation, quarter. forward third by we accounts $XX.X was the Looking from increase to collections of company's driven a in a has anticipate was the million approximately in from neurology and managed XXXX investments our and the capitalization of and million, our overall in-network business. case Assure's step benefit we had greatly our improve remote to best in $X.X at billing. of contracting our sequential due several million The Assure. neurology financial This volume Taking improved receivable have is strength increase back, primarily ever current

highlight before to Finally, we to wanted made a our reporting. financial concluding, change I

and upon based Technical three technologist Assure XX, our now derived components other. slide are This on the we platform. disclosing Specifically technical, revenue provides. are services from includes underlying professional services

remote services mentioned, pivot derived XXXX. surgeons of neurology Professional neurology remote launched business in to is we by services second professionals. the our the leading from John volume discussed technologists and facilities. the quarter As Assure's in when our the services John previously driven are our patient provide in-house

volume able we technologist to scale continue services. remote to additional our We to contractors neurology are Assure services platform. now remote established our relied to Previously the provide neurology to volume. patient as profit, have provide and third-party anticipate our generate We our we on services revenue these on

represents primarily the via performing service and from services administrative operational for agreements. revenue entities we fees other collect Finally, physician-owned management managed

that In Q&A. a to the understanding operator over I'll volume are we facilitate business at mix for our that, catalysts. addition and And looking call turn of reporting to better this financial with can enhancements other change, our to

Operator

At from Sidoti line a be Instructions] Company. session. time, Our question Sidoti of this we’ll conducting & first [Operator comes question-and-answer Jim with the

with may your question. Your proceed

Jim Sidoti

Good morning. Can you hear me?

John Farlinger

Yes, sir.

Jim Sidoti

morning. Good

So, fact first comment, the I really the appreciate broke way in. that out revenue comes you

really this the I from think, brings out potential it really of paints picture a bringing me And that doing. in-house. much it from what third-party transition, using neurologists to you're to clearer

accounts Is was up that switch think But do much it you So go professional quarter. neurologists? more did in-house structure. than now reporting related to it's I in the receivable And forward? think this to previous -- with clearer trends that going where the

John Farlinger

maybe volume Jim. There's Yes. a Price John bit let Great in I relationship Why a clearly question, more. don't the elaborate to neurology.

John Price

a primary I the Yes. here as increase overall. mentioned, volume -- Jim is few One is significant driver in the factors. there's

into pivot of the aspect professional services. this second is, the business The of

so, in-house our through, own credentialing administering managed take a there's a us process And few go by can we which that those with services months. neurologists,

And we line the in so the volume. entered business scale as slight as And an delay through we that through of and QX then to we that course bring the increase continue a just credentialing there's year, have process. in business

to AR, volume then As up we going catches flatten think bit. that think out But once continue to process credentialing continue start a to is I to add curve. I likely the expand we'll

John Farlinger

tell and well were material course last that as was, of the And significant just happy XXXX. They Jim we're comment was write-downs. other over obvious, our The to not -- shareholder base.

normalized a fairly collecting -- been rate the like at rates we're So have and business billing in we're that we're we've where are normalized and XXXX. almost it accruing that to looks got

Jim Sidoti

talk Billing The bit going question. in about little Surprises quick just a act, to grow you you then your business can how help No that's XXXX? And

John Farlinger

talk arbitrate on No who's economic expert don't ours to the resident I'll it's companies. for going know the cursory also just by are in In that Webster, with that companies federal going will forward ours like Surprises cases, it a is listening. the I our Yes. really to hampered about major high opportunity be Paul companies an going quite have insurance Act us like frankly, really level. and fact you allow cases past, forward. leverage the But

couple you, a pay they decide of stuck with So to not if you're options.

either You a options. couple stuck you're – historically of with

go insurance You could either respective commissions. the or to litigate

Ultimately forward. more not nearly of -- arbitrate and we state number seeking right our able to for to care to going claims Going now. our XXXX. go paid of a ultimately it managed every our for. contracting payment flow and now, a in-network cash forward, will of that will believe And reduce needs a think portion opportunity into is, in a RCM right are we're in where it create is on a be part up working belief going and structure speed migrate, significant contracts in our to states moving We going us lead that accounts will or you're meaningful capital that's will now more for business on level procedures it's be our in-network forward. -- are meaningful receivable opportunity batch going we an is that and And by at reducing that that that

Jim Sidoti

trend from postponed the in from QX? pent-up fourth from a or significant one as there And deferred XXXX seeing you XXXX, result COVID who last some as like continue procedures the in It in Are then impact patients the demand COVID? of into procedures that could sounds be And me. wasn't quarter.

John Farlinger

Good question. Yes.

to but expect the pretty to have now much COVID, impacts pretty expect we back it's we more lead will would some do the have as couple based were XXXX. And hope additional be, quantum would procedures of that upon behind we prior would to we There on of those to we but normal nor where canceled. in where lift lingering to we're be. a states us. in exposure that here We don't have volume anticipate much what insight a think being right data, I back would some from and

Jim Sidoti

Got it. Thank you.

Operator

the Company. next Bill from Our line comes with Benchmark The of question Sutherland

You your may proceed with question.

Bill Sutherland

Are guys. Thank in the care Premier, things couple you. as morning, about Wanted Hey, out managed you – model? managed good sorry, to outlook the of there. put about case there any that just that outlook I'm as additions assumptions ask a far

John Farlinger

at end Bill the organic from Obviously, us for of but growth Premier. joining that and continued Bill. successful looking going look be we're are primarily first they're And half modest. business. where When are, numbers. Obviously, bringing – we to growth this of obviously at on modest exiting we're There and they're you the in from thanks we XXXX in coming believe XXXX, morning, new at

is So of procedures. that to on lift continue be the in approximately still that front probably end will will opportunity you're we XX,XXX smaller a to that active portion there organic then be a be M&A few for growth. looking And active at add from us with right And of year. through portion and The to now, from to Will Premier, this a we're thousand to the XXXX. a it, procedures, additional XX,XXX. majority M&A

Bill Sutherland

pretty question that at it strikes Well, the a is open-ended. yes. of – It's just Premier me opportunity

John Farlinger

now that and expect be negotiations now can the with two. not busy. – to many of hospitals in We're we'll success negotiating one you hoping It's a tell announce hospital I right month we're huge able right these And or on some but we we're opportunity. groups. next

it's we're that quantify to and up the So of ended and ramping we're tough it's in learning busy open now. right curve because right

Bill Sutherland

the that of as you're getting it? include new deals remote of most part are And

John Farlinger

profitable portion of a That be hospital be forward. with a going our part key of will of business the Remote new any the Premier. contracts – will very particularly, Yes.

Bill Sutherland

of as monitoring which this Yes. remote makes like lot many... it you're rate looks the like looks a almost sense Because year adding – it of

John Farlinger

the past model. facility not revenue on sharing in in ideally in the And our the that as typically revenue side done you're neurology MSA we've

Bill Sutherland

at DSO the are going Okay. looking I'm and what you forward. was John curious Price, what

John Price

Thanks, Yes. Bill.

what the credentialing growth side, AR the these go mentioned, driven through So really as as just on processes. we that's I has professional

So But with touch I in generally we relationships payments continue points, there's mind, anticipate multiple of on of months first that of up through some so. quarter our receivable. payments over speaking, And also there's a the bit XXXX. life or see that to to within here so keep we the – say, four start historic multiple end

Bill Sutherland

So if kind I'm continue a the going will just up? rapid. to think be the the on do to be to caught -- of be going demand similar rest growth year, your curious get And cash you of for here is or you are little

John Price

Yes.

fund at there be continue to turnover as and think to I accounts a professional use grow. we of higher also will I rate. capital services working think see our receivable But the

within But overall QX, I of as probably credentialing. at start to QX. accounts to into out up going part so think, that you'll receivable see to continue expand it is flatten And early point, catch I think, we on

John Farlinger

a higher faster I at we see Bill, side, remote cash on the of thing, turnover the other neurology margin. is think

reduce we year John's our that over we the as kick into we the John, that -- capital as over there of model to can out starts benefit I and to tends kind And But need kick a hoping QX in-network faster. fall. we will of our in we And scale some AR pointing max So and can we I revenue believe of we're this then the in additional QX. in -- neurology planning, -- AR can and from see and kind out working we'll and see remote then XXXX. contracting and to our get gear, start piece over course the cash for QX think, think be turn if

Bill Sutherland

to your XX% almost in impressive sense. that were going this quarter. at You margin improvement in the makes And gross That is continue?

John Farlinger

Well, have as margins commercial QX cases. because deductibles QX the higher of to slides and being propensity maximized the mentioned, I the on higher gross

one that we you'll to XXXX. the in of balance out as point we probably improve want margins that thing piece you'll the believe I the do business margins -- honest. QX, margin over that We'll that The be scale slight want it. have think we of as on in for see we neurology to scale see XX% drop I remote I will portion and rebuild then a

I beyond. that So and in think meaningful the portion there's business XXXX upside of to

Bill Sutherland

Yes.

Okay. it. get I

Appreciate Sounds the color. good. Thanks guys.

John Price

Thank you, Bill.

Operator

we to would the gentlemen, like end today's session. and Mr. reached to turn remarks. call closing over John of this Farlinger have Ladies question-and-answer I back for

John Farlinger

behalf On everyone we'd to you. team, Assure call. of like listening thank for today's to the Thank

add few Before comments. like to I'd a concluding, last

all Assure's greatest remote opportunities intraoperative number full existing currency taking advantage forward helps extends look cycle Thank into of agreements. management on our that to in-network growth include: our network; utilize and With automation revenue leverages going our signing to states the going the conclude. and for our I'm neurology organic contract of that sole expanding to of Number advantage states; of none you our three, first and neuromonitoring the you Premier thank We facilitate data continuing intraoperative the provider one, participation call. as services neuromonitoring-focused competitors two, position, contracted markets reach to today and four, strengthen five, your within that again analytics expand public can NASDAQ us new forward duplicate; M&A opportunistic new new and to company and an of services; speaking earnings that, for quarter you.

Operator

This concludes today's conference.

may time. Enjoy of disconnect participation. your the lines you for You your Thank day. your at rest this

Assure (IONM) 14 Mar 222021 Q4 Earnings call transcript