Heath Sampson: Yes. So consistent with the last couple of quarters, and across the board, just in any industry and even in kind of health care and specifically, we’re in that kind of hourly rate perspective, it’s normalized. So it’s – but it’s still a struggle, right? That, for us, is the number one challenge and opportunity for us is to hire caregivers, right? So I would say not a headwind from the market anymore that it’s accelerating, but it’s our number one thing. So – and this gets back to how do we overcome that because we’re doing fine, and we’re growing in line with the market. It really is finishing – and I know I’m repeating myself, but when we take away all the activity that’s unnecessary, whether that’s centralizing revenue cycle management, whether that’s centralizing intake, you can just go across the board, then you free up the local offices to just hire and retain and service that member or customer.
And that’s where we’re really going to see us, be able to recruit faster and retain better. So it’s solid. Growth is solid. Margin is rigid. When we finish this off, we’ll start growing above that in 2024 and beyond. One more thing on that, for us and this gets back to the value of personal care and how important it is because of that access, customers – you go across the board, payers, risk-bearing entities, providers are really interested in personal care because we have access to that member. So people that are doing what we are doing, professionalizing, centralizing, automating to ensure that we can get more out of that caregiver, therefore, pay more to that caregiver. It’s just going to be on a flywheel. And I think the industry as a whole and us as a whole are at the beginning stages of doing that.
So I’m really bullish on that business and specifically combining it with our monitoring business.
Brooks O’Neil: Yes. And as you said, with the trip towards value-based care, the opportunity for you there is immense. So it’s a great hit. Let me answer one more. It strikes me that very strong cash flow this quarter. That’s great, maybe a little bit less in the fourth quarter. But I think probably a lot of investors focus on the balance sheet and the debt repayment strikes me as it always has, that Matrix is an important hidden asset or it’s actually right out there in plain sight, but most people don’t pay attention to it. Could you give us any feel for, a, what you think that business might be worth to you in terms of cash to you on a sale or a restructuring, whatever. And then secondly, what do you think the timing might be?
Heath Sampson: Yes. Well, first, Brooks, you hit on something really kind of around all the levers we have in our capital structure. One, we’re generating cash. We’re through the COVID payments of you go to each business line, generating cash, low CapEx, which is why a big part of why we’re doing that. We have a strong line that gives us the flexibility for working capital fluctuations. We have – our bonds are fixed rate right now. So we have lots of good attributes within our capital structure platform. And then you go to the other item, which is what you’re saying is around our investment in Matrix. So first off, what the Matrix team has done over these last 12 months is tremendous. And I think part of the reason why some of the shareholders or maybe some of the analysts are maybe not paying attention to Matrix.
Prior to this new management team and its restructuring, we had a COVID bump, but the kind of core risk assessment or adjustment business wasn’t performing. That’s not the case anymore. It’s performing very well. We’re the second largest. And what the team has done and what is going to happen each month and each quarter on that is tremendous. So I feel really good about that business, and thanks to the management team for what they’re doing and the partnership with our partner there. So the most important thing is they continue to perform, and we don’t distract them with anything other than that. So then what’s it get to around kind of monetization and value on that. So we gave a really broad range on EBITDA, and why we gave that, we want to make sure that the business can focus is not distracted by when I say publicly, we said $50 million to $100 million.
And why we gave this a broad range because if we keep performing, it’s going to continue to kick up – move up closer to that higher end. But it helps you then box in, how would you value that? So – and we’ve done some – there’s been a lot of work on that. So you just take a multiple off of that and less the debt, and you can see that it’s very significant cash flow to us that would help us even further solidify our balance sheet. So whether that’s paid on the loan, whether that’s grow, whatever it may be. So the timing is going to be when the timing is going to be because they’re performing so well and because it’s an extremely valuable asset, the right way to think about it is 2024. So that’s a broad range, but that’s the right way to think about it.
Brooks O’Neil: All right. That’s very helpful. I appreciate it. And I’m excited about all you’re doing.
Heath Sampson: Yes. Thanks Brooks.
Operator: Our next question comes from Mike Petusky with Barrington Research. Please proceed.
Mike Petusky: Good morning. Let me just follow up real quick on Brooks’ last question around Matrix. I know you said, hey, look, when you’re thinking about ultimate monetization valuation of this one, think about $50 million to $100 million of EBITDA. Can you just talk about where they’re likely to come in this year in ’23? Do you have a ballpark even if it’s a range of where they’re likely to come in, in terms of EBITDA?
Heath Sampson: Yes. So right now, we’re in that range, right? So that’s why we gave the broad range, and I don’t mean to be – if we want to make sure that we do the right thing for the business and if there is a sale process, I don’t want to kind of front-run anything. So it’s right in that range. So I would – like we do want to just about everything, usually, people take the middle point of that range.
Mike Petusky: Okay. Fair enough. So Heath, you guys have a great slide in the deck sort of illustrating the progress on contract mix. And in 2020, it was 60% full risk and now it’s 30% full risk, what might that look like if you sort of run it out another three years? I mean, could 30% turn into 15% or 20%? What would you – I won’t hold you to this, but I mean, what’s your best guess as to – is there additional progress that can be made on that?
