Akumin Inc. (NASDAQ:AKU) Q4 2022 Earnings Call Transcript

Riadh Zine: That’s a good €“ that’s obviously a good question. We are €“ I think you know that Stonepeak has supported the business believes in the vision, believes in the cash flow generation and the outpatient opportunities in hospitals and health systems partnerships ahead for this platform, which happens to be one of the two largest in the country. So, they understand the operating power and they understand the heavy listing that we had to do to kind of put the two platforms together and make all the tough decisions, as you know, of closures and when we actually really need revenue, we did all the right decisions to redeploy those assets for better higher revenues and higher margins. So, although impacted 2022 in a negative way, it should impact 2023 the other way.

So, they are aware of obviously what we have done with the business. So, we €“ it’s really time to execute here. So, at the end of the day, it’s going to come down to what else we could do on our capital structure and what other alternatives are available to us to address the capital structure. So, the capital structure we could €“ like David said, we could pay cash, and we see a way to do that and continue on. But also as the performance of the business improves, we could look at what other options are available to us so that we, as a management team, we continue to execute without having to worry about the capital structure as much as today. So, we will explore those alternatives and those options, of course. That’s part of our job.

Endri Leno: Okay. Thank you. And the last one for me, it just kind of relates more €“ and again, like you touched on this now, but I just wanted to clarify, in terms of the guidance provided for 2023, and that the situation is improved. So, if you are looking at the guidance for €˜22, when it was taken down by around $20 million given those issues in the second half, and as those issues are starting to resolve at the beginning of €˜23 is that $20 million that was taken down in €˜22? Would that be the swing factor in €˜23 that you are being conservative, or is it more of a fraction or even a multiple of that?

Riadh Zine: Go ahead David.

David Kretschmer: Yes. I would say at this point, our guidance is our guidance. We need to continue to see how Q1 evolves, and we will update during our first quarter earnings.

Endri Leno: Okay. Thank you. That’s it for me.

Riadh Zine: Thank you.

Operator: We will go next to Rishi Parekh with JPMorgan.

Rishi Parekh: Hi. Good morning guys. Thanks for taking my questions. First, you noted that the worst is behind you, but €“ and I know it has subsided, but I think you are still facing labor cost pressure, which may have also continued to affect your capacity utilization. So, can you just one, walk us what you are seeing today, your visibility around the drivers that may reduce these costs? And what is that facility capacity utilization today relative to what it was in the second half of €˜22? Then I have a few follow-ups.