ATI Physical Therapy, Inc. (NYSE:ATIP) Q2 2023 Earnings Call Transcript

Mike Petusky: Okay. So, I just had a sense, maybe three, six months ago, that there was a little bit more likelihood or urgency around the idea of potentially divesting clinics. It almost sounds like maybe with the refinancing, that you guys have backed off of that or am I reading too much into this, so that you’re still actively potentially looking at divesting meaningful numbers of clinics or can you just speak to that? Thanks. Sorry, did I break up?

Sharon Vitti: No, I was trying to get the numbers quickly for you. So, you’re — I don’t think — I can’t we haven’t slowed down. The discipline is still there. Things have changed a little bit. And yes, there’s — I would say, as our key operating metrics move up, that should also allow some of our underperforming [watch list] (ph) clinics to start breaking even and getting to profitability. But I would say we have — we closed 22 in the first-half of the year, and those were definitely on the close list. We divested four clinics. There was another group of clinics that we were looking at divesting, and ended up not doing that because of some changes in that marketplace. So, I would say the attention hasn’t changed, but that the conclusions from the data have caused us to either continue to close some clinics or move forward and keep some clinics, I mean that’s our whole goal is not to be closing clinics, but to be getting them to the performance level that allows us to have profitability per clinic.

So, I think there’s a combination of a little [dynamicism] (ph) in the marketplace. And then also as we improve our performance overall, it is helping some of these clinics get to where they need to be. We’ve also changed some of our strategies around referrals and around our talent. And so, many times, when there are clinics that haven’t performed, that some of it relates to not having the right attention around either our referrals or having enough talent, if you will, to be staffing the clinics. And so, I would say, with some of the changes in our strategy over the last six months, instead of [peanut butter] (ph), we’ve really focused in on very specific marketplace strategies, which in turn have paid off.

Mike Petusky: Okay, all right. So, one more question. It sounds like there’s not a ton of people in the queue, so I’ll ask one more, if that’s okay on [indiscernible].

Sharon Vitti: Go for it.

Mike Petusky: So, last quarter, you guys said, “Hey, look, we’re seeing a lot of demand, we don’t necessarily have the clinical staff in place to take care of all the demand we have.” And I think I asked the question, well, what type of clinical workforce would you need, and I you guys guess somewhere around 2,900, something like that relative to the sub-2,700 you all have at the end of June. And I understand the number of these things are sort of multiyear, but how long, given the low unemployment rate, it feels like it may take a while for you guys to get what you would consider fully staffed up. Have you guys thought about that in terms of is that a three-year goal or how do you all think about that particular item? Thanks.

Sharon Vitti: That’s a great question, Mike. I think there’s two ways to think about it. One is, what does ATI need? And I think you’re right, those are the numbers we said, and we might even push them up a little bit given the continued demand. So, and I have great confidence in our team, our TA, our Talent Acquisition team really was recreated and fully up to speed or in action at the end of Q1. And so we’re starting to see that traction, I think the bigger issue, so I think we’re going to be able to keep moving in regards to both retaining our staff and creating a great value proposition for new recruits. But I mean, I got to tell you, I do not see, and yes, there may be high unemployment, or sorry, low unemployment, but on the PT front, this is a macro level issue.