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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Concentra Group Holdings Parent Inc | NYSE:CON | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| -0.08 | -0.41% | 19.66 | 20.16 | 19.32 | 19.475 | 876,777 | 01:00:00 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported):
(Exact Name of Registrant as Specified in Its Charter)
(Commission File Number)
| (State or Other Jurisdiction of Incorporation) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip code)
(
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 2.02 | Results of Operations and Financial Condition. |
On October 31, 2024, Concentra Group Holdings Parent, Inc. (the “Company”) issued a press release announcing its financial results for its third quarter ended September 30, 2024. A copy of the press release and financial schedules are attached as Exhibit 99.1 to this report and incorporated herein by reference.
The information in this report (including Exhibit 99.1) is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.
| Item 7.01 | Regulation FD Disclosure. |
Attached as Exhibit 99.2 and furnished for purposes of Regulation FD is a presentation published by the Company on October 31, 2024 in connection with its press release announcing its financial results for its third quarter ended September 30, 2024.
The information in this Current Report on Form 8-K (including Exhibit 99.2) is being furnished solely to satisfy the requirements of Regulation FD and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.
| Item 8.01 | Other Events |
Dividend Declaration
On October 28, 2024, the Company’s Board of Directors declared a cash dividend of $0.0625 per share. The dividend will be payable on or about November 22, 2024 to stockholders of record as of the close of business on November 13, 2024.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit Number | Description |
| 99.1 | Press Release, dated October 31, 2024, announcing financial results for the third quarter ended September 30, 2024. |
| 99.2 | Concentra Group Holdings Parent, Inc. Presentation. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| CONCENTRA GROUP HOLDINGS PARENT, INC. | ||
| Date: October 31, 2024 | By: | /s/ Michael E. Tarvin |
| Michael E. Tarvin | ||
| Executive Vice President and Secretary | ||
Exhibit 99.1
| NEWS RELEASE |
| FOR IMMEDIATE RELEASE |
Concentra Group Holdings Parent, Inc. Announces Results
For Its Third Quarter Ended September 30, 2024 and Cash Dividend
ADDISON, TEXAS — October 31, 2024 — Concentra Group Holdings Parent, Inc. (“Concentra,” “we,” “us,” or “our”) (NYSE: CON) today announced results for its third quarter ended September 30, 2024, and the declaration of a cash dividend.
“We had a successful quarter and made significant progress on key strategic initiatives and our separation from Select Medical. I am proud of our results, solid execution, and our colleagues’ continued dedication to delivering quality patient-centric care,” said Keith Newton, Chief Executive Officer of Concentra.
Matt DiCanio, President & Chief Financial Officer, added “We expanded our footprint in new and existing areas and achieved some of our highest patient satisfaction scores. With our robust development pipeline and proven operating model, we are confident in our ability to meet our strategic business objectives and are well positioned for continued growth through the rest of the year and into 2025.”
Third Quarter 2024 Highlights
For the third quarter ended September 30, 2024 and 2023
| · | Revenue of $489.6 million, an increase of 3.3% from $474.0 million in Q3 2023 |
| · | Net Income of $45.8 million, and Earnings per Share of $0.37 in Q3 2024 |
| · | Adjusted EBITDA of $101.6 million, an increase of 2.7% from $98.9 million in Q3 2023 |
| · | Cash balance of $136.8 million and net leverage of 3.7x |
| · | Patient Visits of 3,258,605, or 50,916 Visits per Day in the quarter, a decrease in Visits per Day of 2.2% from Q3 2023 |
| · | Revenue per Visit of $141.42, an increase of 3.9% from $136.11 in Q3 2023 |
| · | Total occupational health centers of 549, compared to 539 at end of Q3 2023 |
| · | Total onsite health clinics of 156, compared to 145 at end of Q3 2023 |
Third Quarter 2024 Financial Overview
For the third quarter ended September 30, 2024, revenue increased 3.3% to $489.6 million, compared to $474.0 million for the same quarter, prior year. Income from operations increased 6.5% to $86.2 million for the third quarter ended September 30, 2024, compared to $80.9 million for the same quarter, prior year. Net income was $45.8 million and earnings per common share was $0.37 for the third quarter ended September 30, 2024. Adjusted EBITDA increased 2.7% to $101.6 million for the third quarter ended September 30, 2024, compared to $98.9 million for the same quarter, prior year. The Adjusted EBITDA margin was 20.7% for the third quarter ended September 30, 2024, compared to 20.9% for the same quarter, prior year. The definition of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA are presented in table X of this release.
Year to Date September 30, 2024 Financial Overview
For the nine months ended September 30, 2024, revenue increased 2.7% to $1,435.2 million, compared to $1,397.3 million for the same period, prior year. Income from operations increased 3.1% to $245.7 million for the nine months ended September 30, 2024, compared to $238.3 million for the same period, prior year. Net income was $149.1 million and earnings per common share was $1.32 for the nine months ended September 30, 2024. Adjusted EBITDA increased 2.1% to $299.3 million for the nine months ended September 30, 2024, compared to $293.0 million for the same period, prior year. The Adjusted EBITDA margin was 20.9% for the nine months ended September 30, 2024, compared to 21.0% for the same period, prior year. The definition of Adjusted EBITDA and a reconciliation of net income to Adjusted EBITDA are presented in table X of this release.
1
Balance Sheet
As of September 30, 2024, Concentra’s balance sheet reflected cash of $136.8 million, total debt of $1,482.3 million and total assets of $2,481.0 million.
Cash Flow
Cash flows provided by operating activities in the third quarter ended September 30, 2024 totaled $65.9 million compared to $58.6 million for the same quarter, prior year. During the third quarter ended September 30, 2024, capital expenditures totaled $15.1 million, excluding acquisitions.
Dividend
On October 28, 2024, Concentra’s Board of Directors declared a cash dividend of $0.0625 per share. The dividend will be payable November 22, 2024, to stockholders of record as of the close of business on November 13, 2024.
There is no assurance that future dividends will be declared. The declaration and payment of dividends in the future are at the discretion of Concentra’s Board of Directors after taking into account various factors, including, but not limited to, Concentra’s financial condition, operating results, available cash and current and anticipated cash needs, the terms of Concentra’s indebtedness, and other factors Concentra’s Board of Directors may deem to be relevant.
Business Outlook
Concentra is issuing its 2024 business outlook. Concentra expects revenue to be approximately $1.9 billion, Adjusted EBITDA to be in the range of $370.0 million to $375.0 million, capital expenditures to be in the range of $65.0 million to $70.0 million and our net leverage ratio to be in the range of 3.5 to 3.6x. A reconciliation of full year 2024 Adjusted EBITDA expectations to net income is presented in table XII of this release.
Initial Public Offering and Debt Transactions
On July 26, 2024, Concentra completed an initial public offering (“IPO”) of 22,500,000 shares of its common stock, par value $0.01 per share, at an initial public offering price of $23.50 per share for net proceeds of $499.7 million after deducting underwriting discounts and commission of $29.1 million. In addition, the underwriters exercised the option to purchase an additional 750,000 shares of the Company’s common stock for net proceeds of $16.7 million after deducting underwriting discounts and commission of $1.0 million. Concentra shares began trading on the New York Stock Exchange under the symbol “CON” on July 25, 2024. In connection with the offering, Concentra Health Services, Inc. (“CHSI”), a wholly-owned subsidiary of Concentra, entered into certain financing arrangements which include Credit Facilities and $650.0 million aggregate principal amount of 6.875% Senior Notes due 2032 (the “Notes”). The Notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by Concentra and certain of its wholly-owned subsidiaries. The Credit Facilities consist of an $850.0 million Term Loan and a $400.0 million Revolving Credit Facility. The Revolving Credit Facility was undrawn at the time of closing. The Term Loan matures on July 26, 2031 and has an interest rate of Term SOFR plus 2.25%, subject to a leverage-based pricing grid. The Revolving Credit Facility matures on July 26, 2029 and has an interest rate of Term SOFR plus 2.50%, subject to a leverage-based pricing grid.
The net proceeds of the IPO and the debt financing transactions, except for $34.7 million, were paid to Select Medical Corporation through the issuance of a dividend and the repayment of promissory notes.
Company Overview
Concentra is the largest provider of occupational health services in the United States by number of locations, with the mission of improving the health of America’s workforce, one patient at a time. Our 11,000 colleagues and affiliated physicians and clinicians support the delivery of an extensive suite of services, including occupational and consumer health services and other direct-to-employer care, to more than 50,000 patients each day on average across 45 states at our 549 occupational health centers, 156 onsite health clinics at employer worksites, and Concentra Telemed as of September 30, 2024.
2
Conference Call
Concentra will host a conference call regarding its third quarter results and its business outlook on Friday, November 1, 2024, at 10:30 am ET. The conference call will be a live webcast and can be accessed at Concentra Group Holdings Parent, Inc.’s website at www.concentra.com and a replay of the webcast will be available shortly after the call through the same link.
For listeners wishing to dial-in via telephone, or participate in the question and answer session, you may pre-register for the call at Concentra Earnings Call Registration to obtain your dial-in number and unique passcode.
3
* * * * *
Certain statements contained herein that are not descriptions of historical facts are “forward-looking” statements (as such term is defined in the Private Securities Litigation Reform Act of 1995), including statements related to Concentra’s 2024 and long-term business outlook. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements due to factors including the following:
| · | The frequency of work-related injuries and illnesses; |
| · | The adverse changes to our relationships with employer customers, third-party payors, workers’ compensation provider networks or employer services networks; |
| · | Changes to regulations, new interpretations of existing regulations, or violations of regulations; |
| · | State fee schedule changes undertaken by state workers’ compensation boards or commissions and other third-party payors; |
| · | Our ability to realize reimbursement increases at rates sufficient to keep pace with the inflation of our costs; |
| · | Labor shortages, increased employee turnover or costs, and union activity could significantly increase our operating costs; |
| · | Our ability to compete effectively with other occupational health centers, onsite health clinics at employer worksites, and healthcare providers; |
| · | A security breach of our, or our third-party vendors’, information technology systems which may cause a violation of HIPAA and subject us to potential legal and reputational harm; |
| · | Negative publicity which can result in increased governmental and regulatory scrutiny and possibly adverse regulatory changes; |
| · | Litigation and other legal and regulatory proceedings in the course of our business that could adversely affect our business and financial statements and the effects of claims asserted against us could subject us to substantial uninsured liabilities; |
| · | Acquisitions may use significant resources, may be unsuccessful, and could expose us to unforeseen liabilities; |
| · | Our exposure to additional risk due to our reliance on third parties in many aspects of our business; |
| · | Compliance with applicable laws regarding the corporate practice of medicine and therapy and fee-splitting; |
| · | Our facilities are subject to extensive federal and state laws and regulations relating to the privacy of individually identifiable information; |
| · | Compliance with applicable data interoperability and information blocking rule; |
| · | Facility licensure requirements in some states are costly and time-consuming, limiting or delaying our operations; |
| · | Our ability to adequately protect and enforce our intellectual property and other proprietary rights; |
| · | Adverse economic conditions in the U.S. or globally; |
| · | Any negative impact on the global economy and capital markets resulting from other geopolitical tensions; |
| · | Our ability to maintain satisfactory credit ratings; |
| · | The inability to execute on the separation from Select Medical; |
| · | The risk of disruption or unanticipated costs in connection with the separation; |
| · | Our ability to succeed as a standalone publicly traded entity; |
| · | Restrictions on our business, potential tax and indemnification liabilities and substantial charges in connection with the separation, the distribution and related transactions; |
| · | The negative impact of public threats such as a global pandemic or widespread outbreak of an infectious disease similar to the COVID-19 pandemic; |
4
| · | The loss of key members of our management team and our ability to attract and retain talented, highly skilled employees and a diverse workforce, and on the succession of our senior management; and, |
| · | Changes in tax laws or exposures to additional tax liabilities. |
Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we are under no obligation to publicly update or revise any forward-looking statements, whether as a result of any new information, future events, or otherwise. You should not place undue reliance on our forward-looking statements. Although we believe that the expectations reflected in forward-looking statements are reasonable, we cannot guarantee future results or performance.
Investor inquiries:
Bill Chapman
Vice President, Strategy & Investor Relations
972-725-6488
ir@concentra.com
SOURCE: Concentra Group Holdings Parent, Inc.
5
I. Condensed Consolidated Statements of Operations
For the Third Quarter Ended September 30, 2024 and 2023
(In thousands, except per share amounts, unaudited)
| 2024 | 2023 | % Change | ||||||||||
| Revenue | $ | 489,638 | $ | 473,964 | 3.3 | % | ||||||
| Costs and expenses: | ||||||||||||
| Cost of services, exclusive of depreciation and amortization | 351,103 | 336,812 | 4.2 | |||||||||
| General and administrative, exclusive of depreciation and amortization (1) | 37,088 | 38,245 | (3.0 | ) | ||||||||
| Depreciation and amortization | 15,213 | 17,959 | (15.3 | ) | ||||||||
| Total costs and expenses | 403,404 | 393,016 | 2.6 | |||||||||
| Income from operations | 86,234 | 80,948 | 6.5 | |||||||||
| Other income and expense: | ||||||||||||
| Interest expense on related party debt | (2,691 | ) | (11,255 | ) | N/M | |||||||
| Interest expense | (21,369 | ) | (64 | ) | N/M | |||||||
| Income before income taxes | 62,174 | 69,629 | (10.7 | ) | ||||||||
| Income tax expense | 16,415 | 15,205 | 8.0 | |||||||||
| Net income | 45,759 | 54,424 | (15.9 | ) | ||||||||
| Less: Net income attributable to non-controlling interests | 1,421 | 1,318 | 7.8 | |||||||||
| Net income attributable to Concentra | $ | 44,338 | $ | 53,106 | (16.5 | )% | ||||||
| Basic and diluted earnings per common share:(2) | $ | 0.37 | $ | 0.51 | ||||||||
| (1) | Includes the shared service fee from related party of $3.8 million and $3.6 million for the third quarter ended September 30, 2024 and 2023, respectively. |
| (2) | Refer to table III for calculation of earnings per common share. |
N/M Not meaningful
6
II. Condensed Consolidated Statements of Operations
For the Nine Months Ended September 30, 2024 and 2023
(In thousands, except per share amounts, unaudited)
| 2024 | 2023 | % Change | ||||||||||
| Revenue | $ | 1,435,151 | $ | 1,397,341 | 2.7 | % | ||||||
| Costs and expenses: | ||||||||||||
| Cost of services, exclusive of depreciation and amortization | 1,027,366 | 994,726 | 3.3 | |||||||||
| General and administrative, exclusive of depreciation and amortization (1) | 110,825 | 109,898 | 0.8 | |||||||||
| Depreciation and amortization | 51,568 | 54,552 | (5.5 | ) | ||||||||
| Total costs and expenses | 1,189,759 | 1,159,176 | 2.6 | |||||||||
| Other operating income | 284 | 151 | 88.1 | |||||||||
| Income from operations | 245,676 | 238,316 | 3.1 | |||||||||
| Other income and expense: | ||||||||||||
| Equity in losses of unconsolidated subsidiaries | (3,676 | ) | (526 | ) | 598.9 | |||||||
| Interest expense on related party debt | (21,980 | ) | (33,831 | ) | N/M | |||||||
| Interest expense | (21,275 | ) | (108 | ) | N/M | |||||||
| Income before income taxes | 198,745 | 203,851 | (2.5 | ) | ||||||||
| Income tax expense | 49,648 | 47,964 | 3.5 | |||||||||
| Net income | 149,097 | 155,887 | (4.4 | ) | ||||||||
| Less: Net income attributable to non-controlling interests | 4,066 | 3,775 | 7.7 | |||||||||
| Net income attributable to Concentra | $ | 145,031 | $ | 152,112 | (4.7 | )% | ||||||
| Basic and diluted earnings per common share:(2) | $ | 1.32 | $ | 1.46 | ||||||||
| (1) | Includes the shared service fee from related party of $11.5 million and $11.0 million for the nine months ended September 30, 2024 and 2023, respectively. |
| (2) | Refer to table III for calculation of earnings per common share. |
N/M Not meaningful
7
III. Earnings per Share
For the Three and Nine Months Ended September 30, 2024 and 2023
(In thousands, except per share amounts, unaudited)
At September 30, 2024, the Company’s capital structure consists of common stock. There were no participating shares or securities outstanding during the three and nine months ended September 30, 2024.
The following table sets forth the computation of earnings per share (“EPS”) in 2024:
| Three Months Ended September 30, 2024 | Nine Months Ended September 30, 2024 | |||||||||||||||||||||||
| Net Income Attributable to Concentra | Shares(1) | Basic and Diluted EPS | Net Income Attributable to Concentra | Shares(1) | Basic and Diluted EPS | |||||||||||||||||||
| (in thousands, except for per share amounts) | ||||||||||||||||||||||||
| Common shares | $ | 44,338 | 120,765 | $ | 0.37 | $ | 145,031 | 109,691 | $ | 1.32 | ||||||||||||||
At September 30, 2023, the Company’s capital structure included Class A, B and C units outstanding and unvested restricted interests and outstanding options. To calculate EPS for the three and nine months ended September 30, 2023, Concentra applied the two-class method because its unvested restricted interests and outstanding options are participating securities.
The following table sets forth the net income attributable to the Company, its units outstanding, and its participating units outstanding:
Three Months September 30, | Nine Months September 30, | |||||||
| (in thousands) | ||||||||
| Net income | $ | 54,424 | $ | 155,887 | ||||
| Less: Net income attributable to non-controlling interests | 1,318 | 3,775 | ||||||
| Net income attributable to Concentra | 53,106 | 152,112 | ||||||
| Less: Distributed and undistributed income attributable to participating shares | 66 | 356 | ||||||
| Distributed and undistributed income attributable to outstanding shares | $ | 53,040 | $ | 151,756 | ||||
The following table sets forth the computation of EPS in 2023, under the two-class method:
| Three Months Ended September 30, 2023 | Nine Months Ended September 30, 2023 | |||||||||||||||||||||||
| Net Income Allocation | Shares (1)(2) | Basic and Diluted EPS | Net Income Allocation | Shares (1)(2) | Basic and Diluted EPS | |||||||||||||||||||
| (in thousands, except for per share amounts) | ||||||||||||||||||||||||
| Outstanding Class A, Class B, and Class C shares | $ | 53,040 | 104,035 | $ | 0.51 | $ | 151,756 | 103,980 | $ | 1.46 | ||||||||||||||
| Participating shares | 66 | 130 | $ | 0.51 | 356 | 244 | $ | 1.46 | ||||||||||||||||
| Total Company | $ | 53,106 | $ | 152,112 | ||||||||||||||||||||
| (1) | The recapitalization of the members units into common shares has been treated as such for earnings per share purposes and has been reflected retrospectively for all periods, along with the one for 4.295 reverse stock split. |
| (2) | Represents the weighted average units outstanding during the period. |
8
IV. Condensed Consolidated Balance Sheets
(In thousands, unaudited)
| September 30, 2024 | December 31, 2023 | |||||||
| Assets | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 136,822 | $ | 31,374 | ||||
| Accounts receivable | 232,202 | 216,194 | ||||||
| Other current assets | 40,933 | 46,850 | ||||||
| Total Current Assets | 409,957 | 294,418 | ||||||
| Operating lease right-of-use assets | 430,133 | 397,852 | ||||||
| Property and equipment, net | 191,099 | 178,370 | ||||||
| Goodwill | 1,234,707 | 1,229,745 | ||||||
| Identifiable intangible assets, net | 209,171 | 224,769 | ||||||
| Other assets | 5,975 | 8,406 | ||||||
| Total Assets | $ | 2,481,042 | $ | 2,333,560 | ||||
| Liabilities and Equity | ||||||||
| Current Liabilities: | ||||||||
| Payables and accruals | $ | 177,620 | $ | 196,879 | ||||
| Due to related party | 7,753 | 3,354 | ||||||
| Current operating lease liabilities | 74,411 | 72,946 | ||||||
| Current portion of long-term debt and notes payable | 9,737 | 1,455 | ||||||
| Total Current Liabilities | 269,521 | 274,634 | ||||||
| Non-current operating lease liabilities | 391,037 | 357,310 | ||||||
| Long-term debt, net of current portion | 1,472,610 | 3,291 | ||||||
| Long-term debt with related party | — | 470,000 | ||||||
| Non-current deferred tax liability | 22,454 | 23,364 | ||||||
| Other non-current liabilities | 24,188 | 27,522 | ||||||
| Total Liabilities | 2,179,810 | 1,156,121 | ||||||
| Redeemable non-controlling interests | 18,122 | 16,477 | ||||||
| Total Equity | 283,110 | 1,160,962 | ||||||
| Total Liabilities and Equity | $ | 2,481,042 | $ | 2,333,560 | ||||
9
V. Condensed Consolidated Statements of Cash Flows
For the Three Months Ended September 30, 2024 and 2023
(In thousands, unaudited)
| 2024 | 2023 | |||||||
| Operating activities | ||||||||
| Net income | $ | 45,759 | $ | 54,424 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 15,213 | 17,959 | ||||||
| Provision for expected credit losses | 11 | 91 | ||||||
| (Gain) loss on sale or disposal of assets | (1 | ) | 17 | |||||
| Stock compensation expense | 168 | — | ||||||
| Amortization of debt discount and issuance costs | 750 | — | ||||||
| Deferred income taxes | 459 | (3,314 | ) | |||||
| Changes in operating assets and liabilities, net of effects of business combinations: | ||||||||
| Accounts receivable | (3,250 | ) | (8,641 | ) | ||||
| Other current assets | 11,276 | 1,408 | ||||||
| Other assets | 7,366 | 640 | ||||||
| Accounts payable and accrued liabilities | (11,843 | ) | (3,987 | ) | ||||
| Net cash provided by operating activities | 65,908 | 58,597 | ||||||
| Investing activities | ||||||||
| Business combinations, net of cash acquired | (1,821 | ) | — | |||||
| Purchases of property and equipment | (15,145 | ) | (15,456 | ) | ||||
| Proceeds from sale of assets | 2 | 3 | ||||||
| Net cash used in investing activities | (16,964 | ) | (15,453 | ) | ||||
| Financing activities | ||||||||
| Payments on related party revolving promissory note | (420,000 | ) | (50,000 | ) | ||||
| Proceeds from term loans, net of issuance costs | 836,697 | — | ||||||
| Proceeds from 6.875% senior notes, net of issuance costs | 637,337 | — | ||||||
| Borrowings of other debt | 1,604 | — | ||||||
| Principal payments on other debt | (3,510 | ) | (1,708 | ) | ||||
| Exercise of stock options | — | 3,340 | ||||||
| Repurchase of common shares | — | (5,322 | ) | |||||
| Distributions to and purchases of non-controlling interests | (1,583 | ) | (1,392 | ) | ||||
| Proceeds from Initial Public Offering | 511,198 | — | ||||||
| Dividend to Select | (1,535,683 | ) | — | |||||
| Contributions from Parent | 11,149 | 2,380 | ||||||
| Net cash provided by (used in) financing activities | 37,209 | (52,702 | ) | |||||
| Net increase (decrease) in cash and cash equivalents | 86,153 | (9,558 | ) | |||||
| Cash and cash equivalents at beginning of period | 50,669 | 33,238 | ||||||
| Cash and cash equivalents at end of period | $ | 136,822 | $ | 23,680 | ||||
| Supplemental information | ||||||||
| Cash paid for interest | $ | 14,709 | $ | 11,204 | ||||
| Cash paid for taxes | 15,328 | 17,599 | ||||||
10
VI. Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2024 and 2023
(In thousands, unaudited)
| 2024 | 2023 | |||||||
| Operating activities | ||||||||
| Net income | $ | 149,097 | $ | 155,887 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 51,568 | 54,552 | ||||||
| Provision for expected credit losses | 70 | 276 | ||||||
| Equity in losses of unconsolidated subsidiaries | 3,676 | 526 | ||||||
| Loss on sale or disposal of assets | 41 | 3 | ||||||
| Stock compensation expense | 500 | 178 | ||||||
| Amortization of debt discount and issuance costs | 750 | — | ||||||
| Deferred income taxes | (1,159 | ) | (6,579 | ) | ||||
| Changes in operating assets and liabilities, net of effects of business combinations: | ||||||||
| Accounts receivable | (16,079 | ) | (35,652 | ) | ||||
| Other current assets | 12,500 | (8,536 | ) | |||||
| Other assets | 3,149 | 2,436 | ||||||
| Accounts payable and accrued liabilities | (23,150 | ) | (4,953 | ) | ||||
| Net cash provided by operating activities | 180,963 | 158,138 | ||||||
| Investing activities | ||||||||
| Business combinations, net of cash acquired | (6,965 | ) | (1,446 | ) | ||||
| Purchase of customer relationships | — | (4,382 | ) | |||||
| Purchases of property and equipment | (47,639 | ) | (41,320 | ) | ||||
| Proceeds from sale of assets | 25 | 23 | ||||||
| Net cash used in investing activities | (54,579 | ) | (47,125 | ) | ||||
| Financing activities | ||||||||
| Borrowings from related party revolving promissory note | 10,000 | — | ||||||
| Payments on related party revolving promissory note | (480,000 | ) | (120,000 | ) | ||||
| Proceeds from term loans, net of issuance costs | 836,697 | — | ||||||
| Proceeds from 6.875% senior notes, net of issuance costs | 637,337 | — | ||||||
| Borrowings of other debt | 8,222 | 5,471 | ||||||
| Principal payments on other debt | (7,888 | ) | (5,782 | ) | ||||
| Exercise of stock options | — | 3,340 | ||||||
| Repurchase of common shares | — | (5,322 | ) | |||||
| Distributions to and purchases of non-controlling interests | (4,226 | ) | (4,522 | ) | ||||
| Proceeds from Initial Public Offering | 511,198 | — | ||||||
| Dividend to Select | (1,535,683 | ) | — | |||||
| Contributions from Parent | 3,407 | 1,825 | ||||||
| Net cash used in financing activities | (20,936 | ) | (124,990 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 105,448 | (13,977 | ) | |||||
| Cash and cash equivalents at beginning of period | 31,374 | 37,657 | ||||||
| Cash and cash equivalents at end of period | $ | 136,822 | $ | 23,680 | ||||
| Supplemental information | ||||||||
| Cash paid for interest | $ | 34,221 | $ | 33,988 | ||||
| Cash paid for taxes | 49,337 | 50,044 | ||||||
11
VII. Key Statistics
For the Third Quarter Ended September 30, 2024 and 2023
(unaudited)
| 2024 | 2023 | % Change | ||||||||||
| Facility Count | ||||||||||||
| Number of occupational health centers—start of period | 547 | 540 | ||||||||||
| Number of occupational health centers acquired | 1 | — | ||||||||||
| Number of occupational health centers de novos | 1 | — | ||||||||||
| Number of occupational health centers closed/sold | — | (1 | ) | |||||||||
| Number of occupational health centers—end of period | 549 | 539 | ||||||||||
| Number of onsite health clinics operated—end of period | 156 | 145 | ||||||||||
| Number of patient visits (1)(2) | ||||||||||||
| Workers’ Compensation | 1,476,486 | 1,451,115 | 1.7 | % | ||||||||
| Employer Services | 1,728,720 | 1,775,181 | (2.6 | )% | ||||||||
| Consumer Health | 53,399 | 54,746 | (2.5 | )% | ||||||||
| Total | 3,258,605 | 3,281,042 | (0.7 | )% | ||||||||
| Visits per day volume | ||||||||||||
| Workers’ Compensation | 23,070 | 23,034 | 0.2 | % | ||||||||
| Employer Services | 27,011 | 28,177 | (4.1 | )% | ||||||||
| Consumer Health | 834 | 869 | (4.0 | )% | ||||||||
| Total | 50,916 | (5) | 52,080 | (2.2 | )% | |||||||
| Revenue per visit (1)(3) | ||||||||||||
| Workers’ Compensation | $ | 202.29 | $ | 197.05 | 2.7 | % | ||||||
| Employer Services | 89.55 | 86.45 | 3.6 | % | ||||||||
| Consumer Health | 137.30 | 130.82 | 5.0 | % | ||||||||
| Total | $ | 141.42 | $ | 136.11 | 3.9 | % | ||||||
| Business Days (4) | 64 | 63 | ||||||||||
| (1) | Excludes onsite clinics. |
| (2) | Represents the number of visits in which patients were treated at Occupational Health Centers during the periods presented. |
| (3) | Represents the average amount of revenue recognized for each patient visit. Revenue per visit is calculated as total patient revenue divided by total patient visits. Revenue per visit as reported includes only the revenue and patient visits in our Occupational Health Centers segment and does not include our Onsite Health Clinics or Other Businesses segments. |
| (4) | Represents the number of days in which normal business operations were conducted during the periods presented. |
| (5) | Does not total due to rounding. |
12
VIII. Key Statistics
For the Nine Months Ended September 30, 2024 and 2023
(unaudited)
| 2024 | 2023 | % Change | ||||||||||
| Facility Count | ||||||||||||
| Number of occupational health centers—start of period | 544 | 540 | ||||||||||
| Number of occupational health centers acquired | 3 | 1 | ||||||||||
| Number of occupational health centers de novos | 3 | — | ||||||||||
| Number of occupational health centers closed/sold | (1 | ) | (2 | ) | ||||||||
| Number of occupational health centers—end of period | 549 | 539 | ||||||||||
| Number of onsite health clinics operated—end of period | 156 | 145 | ||||||||||
| Number of patient visits (1)(2) | ||||||||||||
| Workers’ Compensation | 4,364,824 | 4,276,717 | 2.1 | % | ||||||||
| Employer Services | 5,090,410 | 5,316,724 | (4.3 | )% | ||||||||
| Consumer Health | 173,281 | 173,440 | (0.1 | )% | ||||||||
| Total | 9,628,515 | 9,766,881 | (1.4 | )% | ||||||||
| Visits per day volume | ||||||||||||
| Workers’ Compensation | 22,733 | 22,391 | 1.5 | % | ||||||||
| Employer Services | 26,513 | 27,836 | (4.8 | )% | ||||||||
| Consumer Health | 903 | 908 | (0.6 | )% | ||||||||
| Total | 50,149 | 51,136 | (5) | (1.9 | )% | |||||||
| Revenue per visit (1)(3) | ||||||||||||
| Workers’ Compensation | $ | 198.62 | $ | 194.74 | 2.0 | % | ||||||
| Employer Services | 90.14 | 86.30 | 4.4 | % | ||||||||
| Consumer Health | 134.62 | 133.47 | 0.9 | % | ||||||||
| Total | $ | 140.12 | $ | 134.62 | 4.1 | % | ||||||
| Business Days (4) | 192 | 191 | ||||||||||
| (1) | Excludes onsite clinics. |
| (2) | Represents the number of visits in which patients were treated at Occupational Health Centers during the periods presented. |
| (3) | Represents the average amount of revenue recognized for each patient visit. Revenue per visit is calculated as total patient revenue divided by total patient visits. Revenue per visit as reported includes only the revenue and patient visits in our Occupational Health Centers segment and does not include our Onsite Health Clinics or Other Businesses segments. |
| (4) | Represents the number of days in which normal business operations were conducted during the periods presented. |
| (5) | Does not total due to rounding. |
13
IX. Disaggregated Revenue
For the Three and Nine Months Ended September 30, 2024 and 2023
(In thousands, unaudited)
The following table disaggregates the Company’s revenue for the three and nine months ended September 30, 2024 and 2023:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Occupational health centers: | ||||||||||||||||
| Workers' compensation | $ | 298,681 | $ | 285,939 | $ | 866,952 | $ | 832,833 | ||||||||
| Employer services | 154,809 | 153,473 | 458,849 | 458,810 | ||||||||||||
| Consumer health | 7,332 | 7,162 | 23,327 | 23,150 | ||||||||||||
| Other occupational health center revenue | 2,239 | 1,866 | 6,245 | 6,538 | ||||||||||||
| Total occupational health center revenue | 463,061 | 448,440 | 1,355,373 | 1,321,331 | ||||||||||||
| Onsite clinics | 15,593 | 15,005 | 46,989 | 44,255 | ||||||||||||
| Other | 10,984 | 10,519 | 32,789 | 31,755 | ||||||||||||
| Total revenue | $ | 489,638 | $ | 473,964 | $ | 1,435,151 | $ | 1,397,341 | ||||||||
14
X. Net Income to Adjusted EBITDA Reconciliation
For the Three and Nine Months Ended September 30, 2024 and 2023
(In thousands, unaudited)
The presentation of Adjusted EBITDA is important to investors because Adjusted EBITDA is commonly used as an analytical indicator of performance by investors within the healthcare industry. Adjusted EBITDA is used by management to evaluate financial performance and determine resource allocation for each of our segments. Adjusted EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States of America (“GAAP”). Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. Adjusted EBITDA should not be considered in isolation or as an alternative to, or substitute for, net income, income from operations, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because Adjusted EBITDA is not a measurement determined in accordance with GAAP and is thus susceptible to varying definitions, Adjusted EBITDA as presented may not be comparable to other similarly titled measures of other companies.
The following table reconciles net income to Adjusted EBITDA for Concentra. Adjusted EBITDA is defined as earnings excluding interest, income taxes, depreciation and amortization, gain (loss) on early retirement of debt, stock compensation expense, separation transaction costs, gain (loss) on sale of businesses, and equity in earnings (losses) of unconsolidated subsidiaries.
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net income | $ | 45,759 | $ | 54,424 | $ | 149,097 | $ | 155,887 | ||||||||
| Income tax expense | 16,415 | 15,205 | 49,648 | 47,964 | ||||||||||||
| Interest expense | 21,369 | 64 | 21,275 | 108 | ||||||||||||
| Interest expense on related party debt | 2,691 | 11,255 | 21,980 | 33,831 | ||||||||||||
| Equity in losses of unconsolidated subsidiaries | — | — | 3,676 | 526 | ||||||||||||
| Stock compensation expense | 168 | — | 500 | 178 | ||||||||||||
| Depreciation and amortization | 15,213 | 17,959 | 51,568 | 54,552 | ||||||||||||
| Separation transaction costs (1) | (44 | ) | — | 1,569 | — | |||||||||||
| Adjusted EBITDA | $ | 101,571 | $ | 98,907 | $ | 299,313 | $ | 293,046 | ||||||||
| Adjusted EBITDA margin | 20.7 | % | 20.9 | % | 20.9 | % | 21.0 | % | ||||||||
| (1) | Separation transaction costs represent incremental consulting, legal, and audit-related fees incurred in connection with the Company’s planned separation into a new, publicly traded company and are included within general and administrative expenses on the Condensed Consolidated Statements of Operations. |
15
XI. Reconciliation of Earnings per Common Share to Adjusted Earnings per Common Share
For the Three and Nine Months Ended September 30, 2024 and 2023
(In thousands, except per share amounts, unaudited)
Adjusted net income attributable to common shares and adjusted earnings per common share are not measures of financial performance under GAAP. Items excluded from adjusted net income attributable to common shares and adjusted earnings per common share are significant components in understanding and assessing financial performance. Concentra believes that the presentation of adjusted net income attributable to common shares and adjusted earnings per common share are important to investors because they are reflective of the financial performance of Concentra’s ongoing operations and provide better comparability of its results of operations between periods. Adjusted net income attributable to common shares and adjusted earnings per common share should not be considered in isolation or as alternatives to, or substitutes for, net income, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because adjusted net income attributable to common shares and adjusted earnings per common share are not measurements determined in accordance with GAAP and are thus susceptible to varying calculations, adjusted net income attributable to common shares and adjusted earnings per common share as presented may not be comparable to other similarly titled measures of other companies.
The following tables reconcile net income attributable to common shares and earnings per common share on a fully diluted basis to adjusted net income attributable to common shares and adjusted earnings per common share on a fully diluted basis.
| Three Months Ended September 30, | ||||||||||||||||
| 2024 | Per Share(1) | 2023 | Per Share(1) | |||||||||||||
| Net income attributable to common shares(1) | $ | 44,338 | $ | 0.37 | $ | 53,040 | $ | 0.51 | ||||||||
| Adjustments:(2) | ||||||||||||||||
| Separation transaction costs, net of tax | (30 | ) | (0.00 | ) | — | — | ||||||||||
| Adjusted net income attributable to common shares | $ | 44,308 | $ | 0.37 | $ | 53,040 | $ | 0.51 | ||||||||
| Nine Months Ended September 30, | ||||||||||||||||
| 2024 | Per Share(1) | 2023 | Per Share(1) | |||||||||||||
| Net income attributable to common shares(1) | $ | 145,031 | $ | 1.32 | $ | 151,756 | $ | 1.46 | ||||||||
| Adjustments:(2) | ||||||||||||||||
| Separation transaction costs, net of tax | 1,181 | 0.01 | — | — | ||||||||||||
| Adjusted net income attributable to common shares | $ | 146,212 | $ | 1.33 | $ | 151,756 | $ | 1.46 | ||||||||
| (1) | Net income attributable to common shares and earnings per common share are calculated based on the weighted average common shares outstanding, as presented in table III. |
| (2) | Adjustments to net income attributable to common shares include estimated income tax and non-controlling interest impacts and are calculated based on the diluted weighted average common shares outstanding. The estimated income tax impact, which is determined using tax rates based on the nature of the adjustment and the jurisdiction in which the adjustment occurred, includes both current and deferred income tax expense or benefit. |
16
XII. Net Income to Adjusted EBITDA Reconciliation
Business Outlook for the Year Ending December 31, 2024
(In millions, unaudited)
The following is a reconciliation of full year 2024 Adjusted EBITDA expectations as computed at the low and high points of the range to the closest comparable GAAP financial measure. Refer to tables X for discussion of Concentra's use of Adjusted EBITDA in evaluating financial performance and for the definition of Adjusted EBITDA. Each item presented in the below table is an estimation of full year 2024 expectations.
| Range | ||||||||
| Non-GAAP Measure Reconciliation | Low | High | ||||||
| Net income | 169 | 173 | ||||||
| Income tax expense | 57 | 58 | ||||||
| Interest expense on related party debt | 22 | 22 | ||||||
| Interest expense | 48 | 48 | ||||||
| Equity in losses of unconsolidated subsidiaries | 4 | 4 | ||||||
| Stock compensation expense | 1 | 1 | ||||||
| Depreciation and amortization | 67 | 67 | ||||||
| Separation transaction costs (1) | 2 | 2 | ||||||
| Adjusted EBITDA | $ | 370 | $ | 375 | ||||
17
| ©2024 Concentra Inc. All rights reserved. 3rd Quarter 2024 Results October 31, 2024 |
| ©2024 Concentra Inc. All rights reserved. Forward-Looking Statements This presentation contains forward-looking statements that express the Company’s opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results that include, but are not limited to, financial guidance and other projections and forecasts. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond the Company’s control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in the Company’s filings with the Securities and Exchange Commission (“SEC”), including those under “Risk Factors” therein. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Forward-looking statements speak only as of the date made. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Use of Non-GAAP Financial Information In order to provide investors with greater insight, promote transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision making, the Company supplements its condensed consolidated financial statements presented on a GAAP basis herein with certain non-GAAP financial information, including reconciliations of these non-GAAP measures to their most directly comparable GAAP measures, which are included in this presentation, as well as in the Company’s quarterly financial press releases and related Form 8-K filings with the SEC. This information can be accessed for free by visiting www.concentra.com or www.sec.gov. We believe that the presentation of Adjusted EBITDA and Adjusted EBITDA margin, as defined herein, are important to investors because Adjusted EBITDA and Adjusted EBITDA margin are commonly used as an analytical indicator of performance by investors within the healthcare industry. Adjusted EBITDA and Adjusted EBITDA margin are used by management to evaluate financial performance of, and determine resource allocation for, each of our operating segments. However, Adjusted EBITDA and Adjusted EBITDA margin are not measures of financial performance under U.S. GAAP. Items excluded from Adjusted EBITDA and Adjusted EBITDA margin are significant components in understanding and assessing financial performance. Adjusted EBITDA and Adjusted EBITDA margin should not be considered in isolation, or as an alternative to, or substitute for, net income, net income margin, income from operations, cash flows generated by operations, investing or financing activities, or other financial statement data presented in the consolidated financial statements as indicators of financial performance or liquidity. Because Adjusted EBITDA and Adjusted EBITDA margin are not measurements determined in accordance with U.S. GAAP and are thus susceptible to varying definitions, Adjusted EBITDA and Adjusted EBITDA margin as presented may not be comparable to other similarly titled measures of other companies. We define Adjusted EBITDA as earnings excluding interest, income taxes, depreciation and amortization, gain (loss) on early retirement of debt, stock compensation expense, separation transaction costs, gain (loss) on sale of businesses, and equity in earnings (losses) of unconsolidated subsidiaries. We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenue. We will refer to Adjusted EBITDA and Adjusted EBITDA margin throughout these materials. Disclaimer 2 |
| ©2024 Concentra Inc. All rights reserved. Concentra At-a-Glance 3 Concentra is the largest provider of occupational health services in the United States by number of locations1, with a mission of improving the health of America’s workforce, one patient at a time. KEY STATISTICS 156 Onsite health clinics1 ~11k Total colleagues & affiliated clinicians2,3 $1.9bn TTM Revenue1 19.6% TTM Adj. EBITDA margin1,4 45 States with service offerings1 200k+ Employer customers2 50,000+ Patients cared for each business day2 ROBUST FINANCIALS $368mm TTM Adj. EBITDA1,4 <1% Revenue from government payor reimbursement1 >80% Free cash flow conversion5 ©2024 Concentra Inc. All rights reserved. (1) As of September 30, 2024; (2) As of CY 2023; (3) The term "colleagues and affiliated physicians and clinicians" includes both our directly employed colleagues who provide administrative and management support to the affiliated professional medical group entities and the physicians and clinicians that are employed by the affiliated professional medical groups; (4) Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures, see appendix for a reconciliation to net income; (5) Average of 2020-2023, calculated as free cash flow (“FCF”) divided by Adjusted EBITDA, FCF is calculated as Adjusted EBITDA minus purchases of property and equipment, and is a non-GAAP measure 549 Occupational health centers1 <3% Revenue from largest employer customer1 |
| ©2024 Concentra Inc. All rights reserved. We Create Convenient Access for Employers and Patients… 4 (1) As of September 30, 2024; (2) TTM as of September 30, 2024, figures are rounded, remaining ~2% comprised of other businesses (pharmacy repackaging operations and third-party employer services administration) Occupational Health Centers Onsite Health Clinics Telemed Description Centers specializing in offering occupational and other health care services to employer customers Clinics dedicated to a single employer’s worksite, offering occupational health, advanced primary care, and other services Telemedicine solution used to treat work injuries and illnesses, behavioral health, and other services # of Facilities1 549 156 Virtual 24/7 Customer Types 200,000+ employers, ranging from Fortune 100 to small businesses Medium to large-sized companies All types of employers % of Revenue2 ~94% ~3% ~1% Services Offered Occupational Health (Workers’ Compensation, Employer Services), Consumer Health and Advanced Primary Care ©2024 Concentra Inc. All rights reserved. 4 |
| ©2024 Concentra Inc. All rights reserved. Our Value Proposition is Focused on Improving Employees’ Health with a Safe Return to Work (1) Seen by Concentra for the year ended December 31, 2023; (2) Claim studies conducted by Concentra are based on approximately 500,000 closed claims evaluated between 2020 and 2023 for a select number of Concentra customers, including employers and a worker's compensation insurance carrier; (3) Based on over 1 million survey reports received annually; (4) Based on Google review scores of ~540 centers for CY 2023 5 With alignment across all stakeholders – including patients, employers, and payors – we aim to ensure employees’ safe and sustainable return to work and help lower overall claims costs, all while providing the highest quality care and experience possible Access and convenience High-quality health care and positive clinical outcomes Excellent customer experience with strong communication Early clinical intervention and safe and sustainable return to work Strong process management, technologies, and innovation Strong outcomes for employers… … High quality experience for employees Of injured employees are recommended for return to work in some capacity on same day after initial visit1 95% Of patients rate Concentra a 9 or 10, on a scale of 1-10, on overall satisfaction with their occupational health center visit3 ~77% On a rating scale of 1-5 stars on nationwide google reviews; 72% of centers rated 4 stars or above4 4.1 Lower average total cost per claim2 (compared to non-Concentra health centers) 25% |
| ©2024 Concentra Inc. All rights reserved. We Have a Highly Diverse Business with Strong Underlying Fundamentals 6 (1) Occupational Health Center revenue, TTM as of September 30, 2024; (2) Based on occupational health centers operated by Concentra as of September 30, 2024. Percentages represent rounded approximations and may not total 100%. Broad geographic mix2 Remaining States 55% California 18% Texas 10% Florida 6% Pennsylvania Colorado 6% 5% Attractive payor mix1 ~99% Non-government payor Employer Services Employers and TPAs 34% Medicare & Other <1% Workers’ Compensation Employers, insurance carriers and TPAs 64% Urgent & Commercial 2% Diverse industry mix1 Manufacturing, 9% Business Services & Staffing Agencies, 8% Retail, 8% Healthcare, 8% Food Stores, Products & Restaurants, 8% Government, 7% Logistics & Motor Freight, 7% Transportation, 7% Construction, 7% Wholesale, 7% Schools, 4% Other, 20% Low employer customer concentration1 37% Top 1,000 Employers Remaining Employers 63% #2 - #1,000 Employers 34% #1 Employer 3% |
| ©2024 Concentra Inc. All rights reserved. Experienced Leadership Team with 275 Years of Combined Experience with Concentra 7 MATTHEW DICANIO President & Chief Financial Officer Joined Concentra in 2015 20+ years of experience in management, finance and M&A Tenure: 9 years WILLIAM K. NEWTON Chief Executive Officer Joined Concentra (formerly known as OccuSystems) in 1995 40+ years of experience in healthcare business Tenure: 25 years JOHN DELORIMIER Executive Vice President, Chief Digital & Data Officer Tenure: 16 years DANIELLE KENDALL Senior Vice President, Human Resources Tenure: 24 years JONATHAN CONSER Executive Vice President, Chief Growth & Customer Officer Tenure: 21 years DOUGLAS MCANDREW Executive Vice President, Chief Operating Officer – West Tenure: 30 years GIOVANNI GALLARA, PT Executive Vice President, Chief Clinical Services Officer Tenure: 13 years JOHN ANDERSON, DO Executive Vice President, Chief Medical Officer Tenure: 31 years GREG GILBERT Executive Vice President, Chief Reimbursement & Government Relations Officer Tenure: 30 years SU ZAN NELSON Executive Vice President, Chief Accounting Officer Tenure: 21 years MICHAEL KOSUTH Executive Vice President, Chief Operating Officer – East Tenure: 28 years MICHAEL RHINE Executive Vice President, Chief Operating Officer Onsite Health & Telemedicine Tenure: 19 years THOMAS DEVASIA Executive Vice President, Chief Marketing & Innovation Officer Tenure: 8 years TIM RYAN Executive Vice President, General Counsel Tenure: Joined Oct. 2024 |
| ©2024 Concentra Inc. All rights reserved. Our Competitive Strengths Deliver Value Creation 8 1 Leader in Occupational Health Services 6 Track Record of Innovation 7 Multiple Levers Driving Robust Growth 8 Experienced Leadership 3 High-Quality Health Care & Positive Clinical Outcomes 2 Diversified Service Offering 4 Operational Excellence & Positive Patient Satisfaction 5 Deep & Diverse Customer Relationships |
| ©2024 Concentra Inc. All rights reserved. • Number of locations grew +3% YoY to 705 total locations • Opened one de novo (Chattanooga, TN) and completed one acquisition (Chicago, IL) • Revenue increased +3% in Q3 YoY • Largely driven by stable workers’ compensation visit volume and reimbursement rate increases across visit types, more than offsetting the decline of the lower revenue-per-visit employer services volume • Adjusted EBITDA grew +3% YoY, largely a result of revenue growth as well as improved efficiencies around general and administrative expense • Capital expenditures (excluding acquisitions) totaled $15.1 million in Q3 • Dividend approved by Board of Directors ($0.0625 per share), payable November 22, 2024 • Successfully navigated through and mitigated impacts of major storms (Beryl and Helene) and the CrowdStrike-related IT outage • Continued to advanced opportunities in our corporate development pipeline, including potential acquisitions and de novos • Initial stages of separation from Select Medical proceeding very smoothly, with a focus on key hires and minimizing disruption 9 Key Q3 Performance Highlights & Company Developments |
| ©2024 Concentra Inc. All rights reserved. Q3 2024 Performance (1) Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures, see appendix for a reconciliation to net income 10 539 549 145 156 684 705 9/30/23 9/30/24 Centers Onsites +2% +8% +3% Number of Locations 23,034 23,070 28,177 27,011 52,080 50,916 Q3 '23 Q3 '24 Work. Comp. Empl. Svcs. Cons. Health +0% -4% -2% Visits per Day $474.0 $489.6 Q3 '23 Q3 '24 +3% Revenue ($mm) $98.9 $101.6 Q3 '23 Q3 '24 +3% Adjusted EBITDA1 ($mm) 20.9% 20.7% Q3 '23 Q3 '24 -20bps Adjusted EBITDA Margin1 $136.11 $141.42 Q3 '23 Q3 '24 +4% Revenue per Visit Work. Comp. Empl. Svcs. $197 $86 $202 $90 +3% +4% |
| ©2024 Concentra Inc. All rights reserved. YTD 2024 Performance (1) Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures, see appendix for a reconciliation to net income 11 539 549 145 156 684 705 9/30/23 9/30/24 Centers Onsites +2% +8% +3% 22,391 22,733 27,836 26,513 51,136 50,149 YTD '23 YTD '24 Work. Comp. Empl. Svcs. Cons. Health +2% -5% -2% $1,397.3 $1,435.2 YTD '23 YTD '24 +3% Revenue ($mm) $293.0 $299.3 YTD '23 YTD '24 +2% Adjusted EBITDA1 ($mm) 21.0% 20.9% YTD '23 YTD '24 -10bps Adjusted EBITDA Margin1 $134.62 $140.12 YTD '23 YTD '24 +4% Work. Comp. Empl. Svcs. $195 $86 $199 $90 +2% +4% Number of Locations Visits per Day Revenue per Visit |
| ©2024 Concentra Inc. All rights reserved. Continued Execution of Proven, Multi-Pronged Growth Strategy 12 Strong history of organic growth in new and existing markets Organic Growth / Technologies Recent Accomplishments Completed nationwide rollout of CCaaS (Contact Center as a Service), significantly reducing calls to the medical centers Major progress in digitization initiatives (DOT forms, results reporting, lab connectivity, etc.) Continued significant improvement in patient satisfaction scores and turnaround time metrics Track record of growth and integration De Novos & Acquisitions Recent Accomplishments Acquisition of occupational health center in Chicago, IL (Jul. ‘24) De novo opened in Chattanooga, TN, a new area for Concentra (Sep. ‘24) De novo opened in Orlando, FL (Oct. ‘24) 8 signed leases for de novos slated to open over next 12 months Continue to build out strong acquisition pipeline Further expanding into adjacent, high-growth opportunities Expansion into Adjacencies Recent Accomplishments Launch of telemedicine-based behavioral health service offering (Aug. ‘24) Launch of advanced primary care in Onsite Health segment (Sep. ‘24) |
| ©2024 Concentra Inc. All rights reserved. Balance Sheet & Capital Allocation Strategy (1) Net Leverage = Net Debt / Adjusted EBITDA (per credit facility leverage calculation, non-GAAP measure) (2) $400M revolver undrawn, except $14M of normal course letters of credit that were in place at time of IPO/refinancing 13 Capital Allocation Strategy Leverage Prudent management of leverage levels, targeting <3.0x net leverage 24 months post-IPO M&A and De Novos Strong pipeline + disciplined approach to enhancing footprint for short- and long-term value creation Capital Expenditures Continued strategic investment in technology, facilities, and infrastructure Dividend Concentra Board of Directors approved a dividend of $0.0625 per share Net Leverage1 ~3.9x 3.7x <3.0x IPO Launch 9/30/2024 24-Month Target Post-IPO Liquidity ($mm) $137 $386 $523 9/30/2024 Cash Revolver Capacity2 |
| ©2024 Concentra Inc. All rights reserved. 2024 Full-Year Guidance 14 FY 2024 Outlook Total Revenue ~$1.9bn Adjusted EBITDA1 $370mm - $375mm Capital Expenditures $65mm - $70mm Net Leverage2 3.5x - 3.6x (1) Adjusted EBITDA is a non-GAAP measures, see appendix for a reconciliation to net income; (2) Net Leverage = Net Debt / Adjusted EBITDA (per credit facility leverage calculation, non-GAAP measure) |
| ©2024 Concentra Inc. All rights reserved. APPENDIX 15 |
| ©2024 Concentra Inc. All rights reserved. Reconciliation of Net Income to Adjusted EBITDA 16 Three Months Ended Sep. 30, Nine Months Ended Sep. 30, TTM Sep. 30, ($000's) 2024 2023 2024 2023 2024 Net Income $45,759 $54,424 $149,097 $155,887 $177,953 Income Tax Expense $16,415 $15,205 $49,648 $47,964 $59,571 Interest Expense $21,369 $64 $21,275 $108 $21,390 Interest Expense on Related Party Debt $2,691 $11,255 $21,980 $33,831 $32,402 Equity in Losses of Unconsolidated Subsidiaries - - $3,676 $526 $3,676 Stock Compensation Expense $168 - $500 $178 $973 Depreciation and Amortization $15,213 $17,959 $51,568 $54,552 $70,067 Separation Transaction Costs $(44) - $1,569 - $1,569 Adjusted EBITDA $101,571 $98,907 $299,313 $293,046 $367,601 Adjusted EBITDA Margin 20.7% 20.9% 20.9% 21.0% 19.6% |
| ©2024 Concentra Inc. All rights reserved. Reconciliation of Net Income to Adjusted EBITDA (2024 Guidance) 17 Range ($mm) Low High Net Income $169 $173 Income Tax Expense $57 $58 Interest Expense on Related Party Debt $22 $22 Interest Expense $48 $48 Equity in Losses of Unconsolidated Subsidiaries $4 $4 Stock Compensation Expense $1 $1 Depreciation and Amortization $67 $67 Separation Transaction Costs $2 $2 Adjusted EBITDA $370 $375 |
|
Cover |
Oct. 31, 2024 |
|---|---|
| Cover [Abstract] | |
| Document Type | 8-K |
| Amendment Flag | false |
| Document Period End Date | Oct. 31, 2024 |
| Entity File Number | 001-42188 |
| Entity Registrant Name | CONCENTRA GROUP HOLDINGS PARENT, INC. |
| Entity Central Index Key | 0002014596 |
| Entity Tax Identification Number | 30-1006613 |
| Entity Incorporation, State or Country Code | DE |
| Entity Address, Address Line One | 4714 Gettysburg Road |
| Entity Address, Address Line Two | P.O. Box 2034 |
| Entity Address, City or Town | Mechanicsburg |
| Entity Address, State or Province | PA |
| Entity Address, Postal Zip Code | 17055 |
| City Area Code | 717 |
| Local Phone Number | 972-1100 |
| Written Communications | false |
| Soliciting Material | false |
| Pre-commencement Tender Offer | false |
| Pre-commencement Issuer Tender Offer | false |
| Title of 12(b) Security | Common Stock, $0.01 par value per share |
| Trading Symbol | CON |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | false |
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