2023 Q1 Form 10-K Financial Statement

#000181584923000004 Filed on March 16, 2023

View on sec.gov

Income Statement

Concept 2023 Q1 2022 Q4 2022
Revenue $166.9M $161.8M $635.7M
YoY Change 8.52% 3.85% 1.24%
Cost Of Revenue $143.6M $139.8M $560.6M
YoY Change 3.27% 2.87% 8.33%
Gross Profit $23.35M $21.98M $75.12M
YoY Change 57.86% 10.55% -31.98%
Gross Profit Margin 13.99% 13.59% 11.82%
Selling, General & Admin $30.60M $26.81M $114.7M
YoY Change 1.9% -10.34% 2.61%
% of Gross Profit 131.02% 121.95% 152.72%
Research & Development
YoY Change
% of Gross Profit
Depreciation & Amortization $9.691M $10.11M $40.59M
YoY Change -4.15% 1.08% 6.83%
% of Gross Profit 41.5% 46.01% 54.03%
Operating Expenses $30.60M $30.09M $114.7M
YoY Change 1.9% 0.65% 2.61%
Operating Profit -$11.37M -$8.109M -$539.7M
YoY Change -93.54% -33.05% -44.93%
Interest Expense -$13.94M -$13.46M -$45.28M
YoY Change 61.0% 86.6% -19.73%
% of Operating Profit
Other Income/Expense, Net -$354.0K $10.21M -$3.333M
YoY Change -87.27% -34.73% 1282.99%
Pretax Income -$25.15M -$107.4M -$541.6M
YoY Change -84.43% 2809.92% -36.51%
Income Tax $100.0K -$4.998M -$48.53M
% Of Pretax Income
Net Earnings -$26.27M -$102.8M -$492.4M
YoY Change -80.93% -12617.05% -36.74%
Net Earnings / Revenue -15.74% -63.53% -77.46%
Basic Earnings Per Share -$0.15 -$2.51
Diluted Earnings Per Share -$0.15 -$0.50 -$2.51
COMMON SHARES
Basic Shares Outstanding 207.4M shares 207.3M shares 203.2M shares
Diluted Shares Outstanding 204.9M shares 203.2M shares

Balance Sheet

Concept 2023 Q1 2022 Q4 2022
SHORT-TERM ASSETS
Cash & Short-Term Investments $63.08M $83.14M $83.14M
YoY Change -33.46% 71.01% 71.01%
Cash & Equivalents $63.08M $83.10M
Short-Term Investments
Other Short-Term Assets $6.722M $10.04M $30.32M
YoY Change 0.96% 213.36% 142.43%
Inventory
Prepaid Expenses $9.373M $13.53M
Receivables $82.21M $80.67M $80.67M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $166.8M $194.1M $194.1M
YoY Change -15.72% 35.21% 35.21%
LONG-TERM ASSETS
Property, Plant & Equipment $119.5M $123.7M $349.8M
YoY Change -12.63% -11.48% -11.76%
Goodwill $286.5M $286.5M
YoY Change -41.81% -52.95%
Intangibles $246.4M $246.6M
YoY Change -33.78% -40.11%
Long-Term Investments
YoY Change
Other Assets $1.823M $2.030M $2.030M
YoY Change -35.15% -9.09% -9.09%
Total Long-Term Assets $878.9M $884.9M $884.9M
YoY Change -30.21% -37.65% -37.65%
TOTAL ASSETS
Total Short-Term Assets $166.8M $194.1M $194.1M
Total Long-Term Assets $878.9M $884.9M $884.9M
Total Assets $1.046B $1.079B $1.079B
YoY Change -28.24% -30.95% -30.95%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $10.25M $12.56M $12.56M
YoY Change -16.46% -17.08% -17.08%
Accrued Expenses $94.50M $95.19M $95.19M
YoY Change -7.93% -9.44% -9.44%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $0.00 $0.00 $0.00
YoY Change -100.0% -100.0%
Total Short-Term Liabilities $111.2M $116.5M $116.5M
YoY Change -9.06% -15.15% -15.15%
LONG-TERM LIABILITIES
Long-Term Debt $534.1M $531.6M $531.6M
YoY Change 11.79% -2.24% -2.24%
Other Long-Term Liabilities $1.821M $1.834M $223.2M
YoY Change -22.44% -20.3% -26.24%
Total Long-Term Liabilities $536.0M $533.4M $754.8M
YoY Change 11.62% -2.32% -10.82%
TOTAL LIABILITIES
Total Short-Term Liabilities $111.2M $116.5M $116.5M
Total Long-Term Liabilities $536.0M $533.4M $754.8M
Total Liabilities $884.9M $890.2M $894.7M
YoY Change -3.67% -15.31% -15.46%
SHAREHOLDERS EQUITY
Retained Earnings -$1.366B -$1.340B
YoY Change 38.67% 58.12%
Common Stock $20.00K $20.00K
YoY Change 0.0% 0.0%
Preferred Stock
YoY Change
Treasury Stock (at cost) $100.0K
YoY Change 5.26%
Treasury Stock Shares 80.00K shares
Shareholders Equity $15.64M $43.96M $184.3M
YoY Change
Total Liabilities & Shareholders Equity $1.046B $1.079B $1.079B
YoY Change -28.24% -30.95% -30.95%

Cashflow Statement

Concept 2023 Q1 2022 Q4 2022
OPERATING ACTIVITIES
Net Income -$26.27M -$102.8M -$492.4M
YoY Change -80.93% -12617.05% -36.74%
Depreciation, Depletion And Amortization $9.691M $10.11M $40.59M
YoY Change -4.15% 1.08% 6.83%
Cash From Operating Activities -$14.20M -$6.428M -$65.50M
YoY Change -46.88% 87.02% 55.58%
INVESTING ACTIVITIES
Capital Expenditures $5.434M $6.056M $28.15M
YoY Change -38.05% -146.97% -30.14%
Acquisitions $0.00
YoY Change -100.0%
Other Investing Activities $355.0K -$130.0K $99.00K
YoY Change 211.4% -107.62% -95.24%
Cash From Investing Activities -$5.079M -$6.186M -$28.05M
YoY Change -41.34% -44.7% -29.68%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net $0.00 $555.0M
YoY Change -100.0% 21.67%
Cash From Financing Activities -$761.0K 47.18M $128.1M
YoY Change -100.93% -1753.84% -1211.51%
NET CHANGE
Cash From Operating Activities -$14.20M -6.428M -$65.50M
Cash From Investing Activities -$5.079M -6.186M -$28.05M
Cash From Financing Activities -$761.0K 47.18M $128.1M
Net Change In Cash -$20.06M 34.57M $34.52M
YoY Change -143.45% -297.81% -136.92%
FREE CASH FLOW
Cash From Operating Activities -$14.20M -$6.428M -$65.50M
Capital Expenditures $5.434M $6.056M $28.15M
Free Cash Flow -$19.63M -$12.48M -$93.65M
YoY Change -44.7% -232.04% 13.66%

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Overview of the Company<div style="margin-bottom:12pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">ATI Physical Therapy, Inc., together with its subsidiaries (herein referred to as “we,” “the Company,” “ATI Physical Therapy” and “ATI”), is a nationally recognized healthcare company, specializing in outpatient rehabilitation and adjacent healthcare services. The Company provides outpatient physical therapy services under the name ATI Physical Therapy and, as of December 31, 2022, had 923 clinics (as well as 20 clinics under management service agreements) located in 25 states. The Company offers a variety of services within its clinics, including physical therapy to treat spine, shoulder, knee and neck injuries or pain; work injury rehabilitation services, including work conditioning and work hardening; hand therapy; and other specialized treatment services. The Company’s direct and indirect wholly-owned subsidiaries include, but are not limited to, Wilco Holdco, Inc., ATI Holdings Acquisition, Inc. and ATI Holdings, LLC.</span></div><div style="margin-bottom:12pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On June 16, 2021 (the “Closing Date”), a Business Combination transaction (the “Business Combination”) was finalized pursuant to the Agreement and Plan of Merger ("Merger Agreement"), dated February 21, 2021 between the operating company, Wilco Holdco, Inc. (“Wilco Holdco”), and Fortress Value Acquisition Corp. II (herein referred to as "FAII" and "FVAC"), a special purpose acquisition company. In connection with the closing of the Business Combination, the Company changed its name from Fortress Value Acquisition Corp. II to ATI Physical Therapy, Inc. The Company’s common stock is listed on the New York Stock Exchange ("NYSE") under the symbol “ATIP.”</span></div><div style="margin-bottom:12pt;text-align:justify"><span style="background-color:#ffffff;color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. generally accepted accounting principles ("GAAP"). Under </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">this method of accounting, FAII is treated as the acquired company and Wilco Holdco is treated as the acquirer for financial statement reporting and accounting purposes. As a result, the historical operations of Wilco Holdco are deemed to be those of the Company. Therefore, the financial statements included in this report reflect (i) the historical operating results of Wilco Holdco prior to the Business Combination; (ii) the combined results of FAII and Wilco Holdco following the Business Combination on June 16, 2021; (iii) the assets and liabilities of Wilco Holdco at their historical cost; and (iv) the Company’s equity structure for all periods presented. The recapitalization of the number of shares of common stock attributable to the Business Combination is reflected retroactively to the earliest period presented and will be utilized for calculating earnings per share in all prior periods presented. No step-up basis of intangible assets or goodwill was recorded in the Business Combination consistent with the treatment of the transaction as a reverse recapitalization of Wilco Holdco, Inc. Refer to Note 3 - </span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:400;line-height:120%">Business Combinations and Divestitures</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%"> for additional information.</span></div><div style="margin-bottom:6pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Impact of COVID-19 and CARES Act</span></div><div style="margin-bottom:12pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The coronavirus ("COVID-19") pandemic in the United States resulted in changes to our operating environment. We continue to closely monitor the impact of COVID-19 on all aspects of our business, and our priorities remain protecting the health and safety of employees and patients, maximizing the availability of services to satisfy patient needs and improving the operational and financial stability of our business. While we expect the disruption caused by COVID-19 and resulting impacts to diminish over time, we cannot predict the length of such impacts, and if such impacts continue for an extended period, it could have a continued effect on the Company’s results of operations, financial condition and cash flows, which could be material.</span></div><div style="margin-bottom:12pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law providing reimbursement, grants, waivers and other funds to assist health care providers during the COVID-19 pandemic. The Company has realized benefits under the CARES Act including, but not limited to, the following: </span></div><div style="margin-bottom:12pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Times New Roman',sans-serif;font-size:10pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:14.5pt">In 2020, the Company received approximately $91.5 million of general distribution payments under the Provider Relief Fund. These payments have been recognized in other expense (income), net in the consolidated statements of operations throughout 2020 in a manner commensurate with the reporting and eligibility requirements issued by the U.S. Department of Health &amp; Human Services ("HHS"). Based on the terms and conditions of the program, including reporting guidance issued by HHS in 2021, the Company believes that it has met the applicable terms and conditions. This includes, but is not limited to, the fact that the Company’s COVID-19 related expenses and lost revenues for the year ended December 31, 2020 exceeded the amount of funds received. To the extent that reporting requirements and terms and conditions are subsequently modified, it may affect the Company’s ability to comply and ability to retain the funds.</span></div><div style="margin-bottom:12pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:14.5pt">The Company applied for and obtained approval to receive $26.7 million of Medicare Accelerated and Advance Payment Program ("MAAPP") funds during the quarter ended June 30, 2020. During the years ended December 31, 2022 and 2021, the Company applied $12.3 million and $12.6 million in MAAPP funds against the outstanding liability, respectively. During the year ended December 31, 2021, the Company transferred $1.8 million in MAAPP funds as part of the divestiture of its Home Health Service line. During the quarter ended September 30, 2022, the Company met the required performance obligations and performed the remaining services related to the MAAPP funds. Therefore, the remaining funds were applied and repaid during the quarter ended September 30, 2022. As of December 31, 2022 and December 31, 2021, zero and $12.3 million of the funds are recorded in accrued expenses and other liabilities, respectively.</span></div><div style="margin-bottom:14pt;padding-left:36pt;text-align:justify;text-indent:-18pt"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">•</span><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%;padding-left:14.5pt">The Company elected to defer depositing the employer portion of Social Security taxes for payments due from March 27, 2020 through December 31, 2020, interest-free and penalty-free. The Company repaid the remaining deferred payments during the fourth quarter of 2022. Related to these payments, as of December 31, 2022 and December 31, 2021, zero and $5.9 million is included in accrued expenses and other liabilities, respectively.</span></div>
CY2022Q4 us-gaap Number Of Stores
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CY2022Q4 ati Number Of Stores Under Management Service Agreements
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20 clinic
CY2022Q4 us-gaap Number Of States In Which Entity Operates
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25 state
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CY2022 us-gaap Profit Loss
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UseOfEstimates
<div style="margin-bottom:6pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-style:italic;font-weight:700;line-height:120%">Use of estimates</span></div><div style="margin-bottom:12pt;text-align:justify"><span style="color:#000000;font-family:'Arial',sans-serif;font-size:10pt;font-weight:400;line-height:120%">The preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. The effect of any change in estimates will be recognized in the current period of the change.</span></div>
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CY2022 us-gaap Concentration Risk Credit Risk
ConcentrationRiskCreditRisk
Concentrations of business riskThe Company provides physical therapy services to a large number of patients who participate in government healthcare programs, resulting in a customer concentration relating to Medicare and Medicaid’s service reimbursement programs. The Company believes that the concentration of credit risk with respect to other patient accounts receivable is limited due to the large number of patients that make up the Company’s patient base and the dispersion across many different insurance companies, preferred provider organizations and individuals.
CY2022 us-gaap Amortization Of Financing Costs
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CY2021 us-gaap Amortization Of Financing Costs
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CY2020 us-gaap Amortization Of Financing Costs
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CY2020 us-gaap Amortization Of Debt Discount Premium
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CY2021Q2 us-gaap Common Stock Shares Outstanding
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CY2021Q2 ati Reverse Recapitalization Transaction Cost Offset Against Proceeds
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CY2021 ati Reverse Recapitalization Transaction Cost
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CY2021 ati Adjustments To Additional Paid In Capital Recapitalization Transaction Costs
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CY2022 us-gaap Number Of Reporting Units
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CY2022Q4 us-gaap Goodwill
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CY2022 us-gaap Goodwill Impairment Loss
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CY2021Q4 us-gaap Property Plant And Equipment Net
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CY2022 us-gaap Depreciation
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CY2021 us-gaap Depreciation
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CY2022Q4 us-gaap Employee Related Liabilities Current
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CY2021Q4 us-gaap Employee Related Liabilities Current
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2410000 usd
CY2021Q4 ati Accrued Occupancy Costs Current
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1895000 usd
CY2022Q4 ati Medicare Accelerated And Advance Payment Funds And Deferred Employer Social Security Tax Cares Act Current
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0 usd
CY2021Q4 ati Medicare Accelerated And Advance Payment Funds And Deferred Employer Social Security Tax Cares Act Current
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CY2021Q4 us-gaap Deferred Finance Costs Net
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1935000 usd
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CY2021Q4 us-gaap Debt Instrument Unamortized Discount
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CY2021Q4 us-gaap Long Term Debt
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CY2022Q1 ati Proceeds From Issuance Of Temporary Equity And Warrants
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CY2022Q4 ati Temporary Equity Stated Value Per Share
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1108.34
CY2022Q1 ati Temporary Equity Number Of Directors Equity Holders Can Elect
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1 segment
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CY2021 us-gaap Current State And Local Tax Expense Benefit
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CY2020 us-gaap Current State And Local Tax Expense Benefit
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CY2022 us-gaap Current Income Tax Expense Benefit
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CY2021 us-gaap Current Income Tax Expense Benefit
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CY2020 us-gaap Current Income Tax Expense Benefit
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CY2021 us-gaap Deferred Federal Income Tax Expense Benefit
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CY2020 us-gaap Deferred Federal Income Tax Expense Benefit
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CY2020 us-gaap Deferred Income Tax Expense Benefit
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CY2020 us-gaap Income Tax Expense Benefit
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