CON - Earnings call transcript Q2 2024 | Concentra Group Holdings Parent, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and thank you for joining us today for Concentra Group Holdings Parent, Inc. earnings conference call to discuss the second quarter 2024 results.

Speaking today are the company's Chief Executive Officer, Keith Newton; and the company's President and Chief Financial Officer, Matt DiCanio. Management will give you an overview of the quarter and then open up the call for questions.

Before we get started, we'd like to remind you that this conference call may contain forward-looking statements regarding future events or the future financial performance of the company, including, without limitation, statements regarding operating results, growth opportunities or other statements that refer to Concentra's plans, expectations, strategies, intentions and beliefs. change. based and information obligation the these as are of to to statements statements today, Concentra company circumstances forward-looking on available the management update These assumes no

the At conference Newton. this like time, to call to Mr. I'd over Keith turn

William Newton

meet everyone. quarter Good Concentra's of to who of would the past of months by investors and employer what that public to of public XXXX. appreciate morning, as financial you results as extending first in Concentra will begin few thank equity all was where our I all through our we towards support partners we we Thanks, it patients, we discuss call to you a for showed very a our private Welcome and customers, operator. debt ] the believe earnings was public company, a and many so our both IPO. your the It to heartfelt to offering, our believe over in second offerings. work especially colleagues, like [ strongly pleasure ecosystem successful a

would I to new our of like introduce Directors. Board also

is X Co-Founder an of myself. and be including We our who Chief Board Officer Chairman director, of Concentra independent Executive years Bob will Board Ortenzio total served have through Select on members, Operating has the Medical. Executive XXXX Thomas, of and the and Board Chairman Dan since XXXX from XXXX at President, the of spent XX Officer. Medical and Select in positions Chief

held served the well as has U.S. companies care and including Marc Pegus. positions XXXX, the in of as Dr. X Kroger University educational U.S. an Chief Department Health. care seats Dr. Officer Dan, advisory of directors to our independent Dr. of Watkins over professor Since Watkins as health Medical adjunct Board: nonprofits at Cincinnati. roles, Pharmacy dozen Dr. institutions, health as addition other also Board and added Cheryl and a other In we've Watkins has to

Outcomes Dr. and Pegus Heart several of Patient-Centered Association. Research Institution the including the on has American served Board medical organizations,

on large-scale Cornell medical currently Joan Kettering institutions, a cardiologist, was Morgan and member a Weill College Dr. Cancer for and of researcher Memorial Scientific Board at Corporation taking the Before she Center. as & Sloan serves at as and managerial Sanford New Medical fellow University position, from Health previously served I. York-based including XXXX. partner XXXX clinical a Boston to Pegus

well industry Watkins look and of I our Dr. Board. extensive We on bring deep Dr. to experience qualified to move incredible care Dr. health company and leadership the the Dr. we believe them Both Watkins make working with and that and forward. them as and understanding Concentra, serve both Pegus' to experience Board operational forward Pegus

directors addition total with independent. to being of the individuals, X our brings number of this With these X

on refresher for health brief United followers, provider especially the largest a our business, States. of occupational any services As new the Concentra is in

and serve occupational of health that We clinics day of employer XXX have We locations and We XX,XXX both approximately occupational locations health are centers across U.S. XXX,XXX employers' our miles on-site see our XX patient visits estimate approximately workplace. states, including employer at within XX% centers. XX health approximately our the approximately per customers.

medical an typically early in work recommended workers' lower with employees and of We visit. normal compensation tend approximate Our the workers' cost some Injured employers. treated health last center claims same on average the capacity, to in for return the recover return activities. In XX% employees on this help and initial value lower of center centers. and of have a by expediate regard, incurred work. to to than total and safe return employees' to to supporting improvement intervention work patients in safe proposition restrictions, is indemnity injured costs injured day aim through Accordingly, were XX% a focused return non-Concentra and quick with Concentra to treated claims sustainable timely a year Concentra better

one, clinics; including, segments and centers; health operating businesses. X on-site other health occupational three, two, has Concentra

health total segment operating comprise Our XXXX. XX.X% of center as XXX and revenue occupational includes quarter the June for our of XX, centers second

provided. We type and have the on reporting to to or of segments due X tend only location only economic had similar unit, the operating health the based one primarily occupational fact that very vary services characteristics

workers' our and patient our of by disclose occupational operating Within disaggregated The X segment, revenue employer provide service visits segments. centers revenue the filings, In health. to our services consumer public we we our health of compensation, have lines day, X operating disaggregating of the per business, when it we service additional We this revenue. revenue level helpful revenue information is and visit occupational in results operations. at as line believe our this total and per financial center is provide explaining condition health provided breakdown

with XXXX another including In health offset leases existing to operating novo new Concentra as health centers, location, optimize Concentra during as an a the nearby addition of XXX the occupational center, we expire the mentioned, previously quarter, occasionally into QX and the do center by center which profitability. de efficiency of occupational ended fold-in segment, will

QX QX segment, XXXX, on-site X the is at XXXX. than sites operated the of end end the In clinic XXX health sites which at XXX operating we the more of

novo pipeline continue continue a to opportunities centers We of de order to acquisition potential in our and strong expand to maintain footprint.

commentary before provide over our company performance quarter now turning on to financial will I Matt. it overall second

initial roadshow results our we July financial the for offering. aware, announced at of for certain XX second you're estimate the our of the time on quarter of public As preliminary kickoff the

second QX estimates. we overall, with final successful And preliminary quarter. results a had Our our in line are

to $XXX.X days In $XXX.X was the million a year-over-year, compared revenue the was year, in million the $X.XX Earnings were EBITDA share Adjusted second the growth million to to million ended the $X.XX XXXX, same decreased XX.X% quarter prior second same for compared for representing $XXX.X in quarter year margin quarter compared the to for quarter compared the of prior common for on million quarter, June quarter the per per XX, number XX.X% the a $X.XX the business Net quarter million in per $XX X.X% year. increase. or for prior XXXX, EBITDA quarter year-over-year. June $X.XX income to prior ended decreased year. for quarter XX, prior same XXXX same the quarter versus prior the X.X% the $XXX.X to same second quarter year. Adjusted earnings share slightly for same share $XX.X in compared year. to were X.X%

X,XXX,XXX compensation this inflation when by COVID labor comp wage year. XX,XXX believe term. volume driven or visits expected year in the employer same of closer near of decreased were the services with service in decrease forces We're increase employer offset XXXX volumes QX large by trend visit increased of QX The decrease seeing and off the the the normalization by and visits to levels XXXX. a in We to the in X.X% types X.X% these in visits was or out in the of years Total applicants. employers XX,XXX will visit level of continuous workforce is the or workers' rebuilding reshuffling these types X.X%. QX created believe coming hiring X,XXX,XXX X,XXX,XXX last Workers' in to volume XX,XXX from of X,XXX,XXX decline from pre-pandemic

per and reimbursement in occupational We per workers' higher increases driven increase X.X% compensation principally negotiate percentage a revenue centers. which employer the pursuant we visit in visit Our as the per in revenue the experienced rates higher workers' increases health to their in certain day state in our revenue workers' of was schedules services quarter per mix visit. primarily for payable a X.X% with by directly compensation per fee due and increase increase the our visit before, with to visit, higher employer a visits customersand in revenue compensation visits, set rates noted rates

segments, provide activities This call to our now our cash overall on key efforts costs my on Select company as our as separation expenses, an and concludes from turn I'll flow Medical. well remarks. and operating sheet and metrics, to over growth update color Matt balance provide Matt? operating the

Matthew DiCanio

you like opportunities Concentra patients, growth Good Keith. the in to I evolution, Concentra exciting come. this time to company's first customers the many Thanks, very own in getting point investors positions colleagues, a everyone. Concentra and the to years heartfelt which would to for my for thank extend that morning, is

included center other major operating health Keith as filings, information revenue commentary in some discuss segment. metrics indicators occupational strategic expense mentioned, our as initiatives. have and and our here we disaggregated I'll additional as also other Now well performance key our add key from operating and categories

and quarter operating million. on QX commentary health was with center the operating These begin our $X.X than of center million revenue prior million in of In visits; segment. year $XXX.X segment, visit in occupational higher I'll XXXX $XXX.X employer driven same this QX to by year-over-year, revenue outlined $XXX.XX volume, our lower in X.X% the XXXX X.X% visit which from services are revenue lower expected XXXX. per increase $XXX.XX QX in decline the

revenue represents operating XXX center of or $X.X The or segment, QX XX,XXX. from $XXX.X per million or more increased QX of visit QX was the Workers' comp day X.X% by prior X.X% year per work revenue XX,XXX XXXX million. of year Within work $XXX.X than revenue QX point or versus revenue segment XX.X% year in compensation XXXX per of total visit revenue X.X $XXX.XX by of a in our comp operating was center XXXX percentage X.X%. $X.XX increase. $XXX.XX above prior compensation of XXXX workers' million visits XX.X% of prior

of expectations $XXX.X of normalized or $XXX,XXX prior year XXXX QX X,XXX per The revenue day million revenue $XX towards line prior XX,XXX day services year as increased the prior from to levels. in or visit continue from million. visits decreased Employer of segment or of increased services $XXX.X center with operating from in employer X.X% Employer XX,XXX visits our by per in these $XX.XX. X.X% X.X%, to trend services visits $X.XX year per

same quarter in of year other or million our $X.X $XX.X against million $XX.X of year And million. from million revenue million $X.X $XX.X QX increased X.X% of business prior revenue X.X%. million prior quarter or increased same XXXX $XX.X On-site of

costs; XX% million X services to XXXX. Our June revenue June indirect revenue $XXX.X cost of support costs direct or X for months related expense, ended is compared amortization, XX, ended XX.X% major a providing or all Cost to million of customers. months of which services for the of personnel includes XX, our XXXX, $XXX.X depreciation was and of component services to and excluding the

offices corporate human marketing, overheads such and General and administrative other includes areas. expense legal, administrative finance, as resources, corporate

months were X administrative general XXXX. million June for for X.X% X of or the of to the X.X% months revenue $XX or XX, Our million XX, XXXX, ended compared expenses June and ended revenue $XX.X

fewer have more or labor same The due X the services centers Our full-time quarter-over-quarter, and clinics where prior more lower health [ quarter-over-quarter in FTEs FTEs, despite occupational the costs health year. quarter equivalents, XX center fewer quarter [ in the primarily lower helped segment, visit. FTEs ] compared we was operating by employer to on-site largely ] the having to are

in For will quarter. And clinical that the drive and quarter, $XX.X the it payments provided for This cash XX, June systems June at DSO, second XXXX. property activities business was in initiatives with second flow. XX with customers second of to and or debt. investments continued XX, for operational million and easier in million make centers million in of activities in $XX.X our includes at Medical to our of the equipment where used on Financing and revolving other in operating Select days days XXXX, had our million Investing technological and outstanding, us. days compared $X.X million purchases our $X on credit cash used in efficiencies quarter. million the net activities $XX.X $XX $XX.X of the XX sales million do we've payments committed We cash ultimately

initial initial $XXX.X offering an par of share for shares XX.X million at On July completed public proceeds $X.XX offering of XX, public its $XX.XX of value stock, gross an Concentra price of share, common XXXX, per per million.

granted the its Exchange shares up on XX, an option underwriters X.XXX CON began New purchase Stock the XXXX. million to has XX-day under stock. additional Concentra common of trading shares a addition, the July symbol Concentra York In to on

has of X.XX%, The related a facility proceeds proceeds has debt the our promissory facilities of Concentra $XXX jointly IPO, to used Concentra; of $XXX the million long-term pricing with Inc., amount Services, plus July million on arrangements, an $XX.X matures and grid. The of notes the used an were subsidiary revolving were financing a to of the million a wholly $X.X a down the XXXX. with the by rate owned balance of pay wholly certain The except connection July senior severally, aggregate unsecured are notes Concentra the a And of financing this SOFR In net revolving subject X.X%, leverage-based party. credit of guaranteed, into The interest in results debt IPO due and a loan facilities net subsidiaries. Upon for an its rate a which certain entered plus $XXX The and XXXX credit term principal and matures and dividend note to total completion of facility. in in included X.XXX% debt credit to net loan Select sheet billion $XXX credit in consist Medical senior unconditionally debt and basis on a interest million, and Health $X.X in to transactions, and offering, total XXXX grid. cash pricing leverage-based owned term of SOFR issue billion. Corporation. or million recapitalization subject

million liquidity. $XXX With have the revolver, we total in $XXX million

leverage Our leverage a to a ratio on we prospects trailing ratio net not a cash net as EBITDA. should will X.Xx lower go-forward based This debt. on use flow impact strategic initiatives. XX-month pay debt adjusted down target growth or represents our our basis Concentra

brief growth efforts. some our on Now remarks

as in During de Hialeah of Gardens, Florida market. the novo Concentra second our an opened Miami quarter, extension a clinic

leases our We novo road early signed where remainder de slated to for build now open XXXX. have also and we the map, XXXX of out de to continued throughout novo, X

open centers Knoxville, to Tennessee; and Next will in Chattanooga, Orlando, Tennessee Florida. be

including like Concentra been finance, certain preparing our our governance of from portions to technology, and consolidated add Medical. XXXX, comments I functions, other human efforts administration, separation corporate have Since to in of financial brief statements. cost have would also resources, information provided some Medical's us around acquisition at services support they benefits that Select of legal, back Select for purposes allocated

period stockholders. On other Medical IPO, and agreements Select to several the transition the Concentra closing continue shares services of of tax-related date X-year proposed Concentra and for to the Select distribution post provide with entered employee into a to

of stand full at a Over progress estimated up incremental system good in plan handful have activities on are to hires work with Concentra and [ key place a already recurring at $XX technology from have the made stand-alone We time, expenses these the million completed approximately separation and standpoint. a services ].

as everyone separation. we progress more We with will update make the

available Lastly, our on in we investor outlines website. financial our presentation presentation have our a slide long-term that This targets. is

guidance specific results at will a time. later on We have future more

quarter for to operator for turn Thank open go This time, business update the you results. we'd concludes like our prepared remarks. financial your through this At to it Concentra's time second and call today questions. to back the to up

Operator

is Instructions] [Operator first Rishi from Your Parekh from JPMorgan. question coming

Rishi Parekh

should then can One, just should how are how Any to rate of thoughts? year? you Where regions? in for And us And going we the prospects the into your just year? this you about through half think expand? are XXXX? looking specifically, that rate, particular we what growth then second about around And walk think your

Matthew DiCanio

is DiCanio. for Matt your This Rishi. Yes. Thanks question,

X. those take can I So

we're We're prospects, all the broad handful extend that There's continue our to looking a doing footprint dots country. for years and pretty the on, map we'll been states across what growth not focused but on future. many we've looking really strategy, the add growth country. into the the On across we're of and continue to

then question rate. was And around your second

we've remainder the seen we then year experienced consistent in what presentation, much months our with rate prospects, X outlined historically. in very long-term view we've very rate with So a what investor of through through first the of And year. line but expect long-term this be we've on to our the view,

Rishi Parekh

a see outside similar? Florida something are quantify rate the opportunities And where in is? of that might just bump just Florida. You had you what also what you Can bump

Matthew DiCanio

well. can that Yes, as Sure. I take

law say to not signed increase efforts. at we worker I we what in going Florida. on state future. So We'll disclosing point And us in DeSantis add yes, January a place on it's compensation reimbursement Governor to growth impact But into this goes in rate the to guidance the related the will into have that our to of more are That time. -- have XXXX. X, is

in. can continue makes a grow Florida where to there. reimbursement we This add attractive us it change more is centers to for state

continue to for centers. access create and we'll in jobs Florida We'll employers. the create add So of state

So in for growth work industry be our for going overall, of news and the it's good the to comp Florida. very state

Operator

you. further There now Instructions] no are remarks. to Newton Thank [Operator go for queue. in questions ahead. back I'll the the conference Mr. hand Keith closing Please

William Newton

believe for thanks And wanted are today. call just we operator, joining finished. you. everybody Thank to I I say the

Operator

Thank you, today's everyone. This event. concludes

for You day. may and wonderful participation. have time, your disconnect a you at Thank this

Concentra Group Holdings Parent (CON) 2 Aug 242024 Q2 Earnings call transcript