And the three clinics that we were recently – that we recently acquired in North Carolina, I think are illustrative of that, they are now fully operational, strong track record of positive patient outcomes. But putting those on our chassis, we are able to serve these patients even more efficiently, particularly given some of the advances in technology that we have made there. So, we are now in North Carolina, we have expanded from 7 CTCs, with these 3 additions to 10. We are a real market leader in the state there. And we continue to think that there will be additional M&A opportunity, particularly from – in this space that remains so fragmented. I think your question may also tie to some of the larger private equity scale players. And we really have not seen a lot of activity on that front, but it’s just difficult to say how that will continue through the year.
But we – from an attractiveness of these smaller opportunities, we continue to be very positive on those and continue to pursue those.
Operator: And our next question will come from John Ransom with Raymond James. Please go ahead.
John Ransom: Hi. Good morning. Some of your provider – I guess they are not peers, but other providers have called out kind of the Medicaid to HICS as being a thing in their results. Are you seeing anything with either health exchange enrollment or Medicaid to call out so far this year?
Heather Dixon: Hi John. No, we are not. And I think you are referring to as patients move from Medicaid, maybe through the redetermination process and on to the exchanges, are we seeing any impact as a result of that, and we are not. It’s a very, very small portion of our patients that would be in that category. Those are mostly in the CTC business. But again, it’s a very, very small percentage of patients.
John Ransom: Okay. And then my follow-up is just going back to corporate overhead. It’s running about $26 million higher than it was in 2022 to 2023 and then it’s elevated, again, although at a slower pace. Can you just give us an outlook for corporate overhead for the remainder of the year? And just kind of remind us where those dollars went to, whether it’s technology or people or other?
Heather Dixon: Yes, sure. I will kick that off, and then Chris may want to jump in on the last part of your question. So, you are right, we did see a sequential increase of about 20 basis points. But on a year-over-year basis, we saw an improvement of about the same amount. And that’s what I would consider the lowering of the baseline of growth there because we have really been focused on those corporate costs, but also normal seasonality from Q4 to Q1 that we typically see. Couple of reasons for that, it might be merit increases or some of the differences that come in Q1 from a payroll tax perspective come into play, but that’s what I would consider normal seasonality. I mean in general, we have seen the stabilization, as I mentioned, in those corporate costs, and we are starting to really see the benefit of some of those investments.
Maybe just to think about how we view the balance of the year as those investments continue to pay off and frankly as we start to lap some of those investments from last year, we will expect to continue to see operating leverage as we move throughout the year. We expect that the corporate costs will stay relatively consistent, certainly as a percentage of revenues and then they will moderate and just create that leverage. And just the last part of your question on what we have been focused on, it’s across the board, we have of course, invested in IT. We have invested in quality. Our managed care team has really been a big focus and a benefit to us, some of the marketing things that we have done. So, just overall, just looking across the board, no one specific area, I would say, outpaced.
Chris Hunter: Yes. John, this is Chris. I think the only other thing I would say is just that we continue to watch this very closely. And I think we also, just given the commitment that we put out at our first ever Investor Day in December of 2022, we really felt like there was too much variation across the company in terms of the way we were approaching quality and IT and just other corporate areas that we needed to make some investments, and we feel very pleased with what we have been able to do there and some of the talent that we have been able to attract, but also some of the process that we have put in place and some of the results that we are continuing to see that position us well for the future. So, we will continue to watch it moving forward.
Operator: And our next question will come from Pito Chickering with Deutsche Bank. Please go ahead.
Pito Chickering: Hey. Good morning. Thanks for taking my questions. Sure lead up here, I know that you don’t give quarterly guidance, but the comments are on a slower start to April, lagging impact from the longer look of, say, patients in specialty. Can you give us any commentary around if 2Q consensus is mis-modeled?
Heather Dixon: Yes. As you know, we don’t give quarterly guidance, except for first quarter, and I really don’t like to comment on consensus and how the modeling comes in. I will just maybe reiterate, Pito, on what we said. When we think about how the quarters will play out, we think that we will have a similar drag to the beginning of 2Q, certainly on a same-store basis, just as we start to bring ourselves through the second quarter. Q1, obviously is a little bit slower, and that’s going to drive a little bit slower start to Q2, but we really have a lot of confidence in the back half of the year.
Pito Chickering: Okay. And a follow-up here, despite the seasonal softness that you guys talked about, your EBITDA margins of 22.6% were the highest first quarter that we have seen. Is there any sort of one-time benefit that you guys saw on the cost side, or should this be a baseline margin fee as sort of you grow from in 2024 and 2025? And besides the one-time $10 million payment, are there any new Medicaid programs started in 2024? Thanks.
Heather Dixon: So, maybe I will take that in two parts. So, in terms of EBITDA, when we set out the guidance at the beginning of the year, we said we expected to see some leverage. And so we are seeing that leverage. We are really, really pleased to see that we are outperforming in the first quarter, and that’s driven largely by the SWB line, which of course, we have been very focused on over the last 12 months. As we are doing the work around all of the things we have done to invest in the hiring retention, we are just seeing that, as we said earlier, continued moderated rate. But also I think it’s important to point out, we were able to really react quickly to some of the softer volumes that we saw at the end of March.
