QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
(NYSE) |
Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||
☒ | Smaller reporting company | ||||||||||
Emerging Growth Company |
June 30, 2024 | December 31, 2023 | ||||||||||
ASSETS | |||||||||||
Current Assets: | |||||||||||
Cash | $ | $ | |||||||||
Accounts receivable | |||||||||||
Prepaid income taxes | |||||||||||
Other current assets | |||||||||||
Total Current Assets | |||||||||||
Operating lease right-of-use assets | |||||||||||
Property and equipment, net | |||||||||||
Goodwill | |||||||||||
Customer relationships | |||||||||||
Other identifiable intangible assets, net | |||||||||||
Other assets | |||||||||||
Total Assets | $ | $ | |||||||||
LIABILITIES AND EQUITY | |||||||||||
Current Liabilities: | |||||||||||
Current operating lease liabilities | |||||||||||
Current portion of long-term debt and notes payable | |||||||||||
Accounts payable | |||||||||||
Due to related party | |||||||||||
Accrued and other liabilities | |||||||||||
Total Current Liabilities | |||||||||||
Non-current operating lease liabilities | |||||||||||
Long-term debt, net of current portion | |||||||||||
Long-term debt with related party | |||||||||||
Non-current deferred tax liability | |||||||||||
Other non-current liabilities | |||||||||||
Total Liabilities | |||||||||||
Commitments and contingencies (Note 11) | |||||||||||
Redeemable non-controlling interests | |||||||||||
Members’ contributed capital | |||||||||||
Common stock, $ | |||||||||||
Capital in excess of par | |||||||||||
Retained earnings | |||||||||||
Total Stockholders’ Equity (Members’ Equity at December 31, 2023) | |||||||||||
Non-controlling interests | |||||||||||
Total Equity | |||||||||||
Total Liabilities and Equity | $ | $ |
For the Three Months Ended June 30, | For the Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of services, exclusive of depreciation and amortization | |||||||||||||||||||||||
General and administrative, exclusive of depreciation and amortization (1) | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Total costs and expenses | |||||||||||||||||||||||
Other operating income | |||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
Other income and expense: | |||||||||||||||||||||||
Equity in losses of unconsolidated subsidiaries | ( | ( | ( | ||||||||||||||||||||
Interest expense on related party debt | ( | ( | ( | ( | |||||||||||||||||||
Interest income (expense) | ( | ||||||||||||||||||||||
Income before income taxes | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net income | |||||||||||||||||||||||
Less: Net income attributable to non-controlling interests | |||||||||||||||||||||||
Net income attributable to the Company | $ | $ | $ | $ | |||||||||||||||||||
Earnings per common share (Note 9): | |||||||||||||||||||||||
Basic and diluted | $ | $ | $ | $ | |||||||||||||||||||
For the Six Months Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Members’ Units | Members’ Contributed Capital | Common Stock Issued | Common Stock Par Value | Capital in excess of par | Retained Earnings | Total Stockholders’ Equity | Non-controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to the Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to non-controlling interests | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Distribution to Parent | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to and purchases of non-controlling interests | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption value adjustment on non-controlling interests | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Conversion of LLC to Corporation and Impact of Reverse Stock Split | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2024 | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to the Company | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to non-controlling interests | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Distribution to Parent | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to and purchases of non-controlling interests | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
Redemption value adjustment on non-controlling interests | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2024 | $ | $ | $ | $ | $ | $ | $ |
For the Six Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||
Members’ Units | |||||||||||||||||||||||||||||||||||||||||||||||
Class A Units Voting | Class B Units Non-Voting | Class C Units Non-Voting | Members’ Contributed Capital | Retained Earnings | Total Members’ Equity | Non-controlling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Net income attributable to the Company | |||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to non-controlling interests | |||||||||||||||||||||||||||||||||||||||||||||||
Contribution from Parent | |||||||||||||||||||||||||||||||||||||||||||||||
Vesting of restricted interests | |||||||||||||||||||||||||||||||||||||||||||||||
Distributions to and purchases of non-controlling interests | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Redemption value adjustment on non-controlling interests | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Net income attributable to the Company | |||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to non-controlling interests | |||||||||||||||||||||||||||||||||||||||||||||||
Distribution to Parent | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common shares | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to and purchases of non-controlling interests | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Redemption value adjustment on non-controlling interests | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
For the Six Months Ended June 30, | |||||||||||
2024 | 2023 | ||||||||||
Operating activities | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Provision for expected credit losses | |||||||||||
Equity in losses of unconsolidated subsidiaries | |||||||||||
(Gain) loss on sale or disposal of assets | ( | ||||||||||
Stock compensation expense | |||||||||||
Deferred income taxes | ( | ( | |||||||||
Changes in operating assets and liabilities, net of effects of business combinations: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Other current assets | ( | ||||||||||
Other assets | ( | ||||||||||
Accounts payable and accrued liabilities | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
Investing activities | |||||||||||
Business combinations, net of cash acquired | ( | ( | |||||||||
Purchase of customer relationships | ( | ||||||||||
Purchases of property and equipment | ( | ( | |||||||||
Proceeds from sale of assets | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Financing activities | |||||||||||
Borrowings from related party revolving promissory note | |||||||||||
Payments on related party revolving promissory note | ( | ( | |||||||||
Borrowings of other debt | |||||||||||
Principal payments on other debt | ( | ( | |||||||||
Distributions to and purchases of non-controlling interests | ( | ( | |||||||||
Distributions to Parent | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Net increase (decrease) in cash | ( | ||||||||||
Cash at beginning of period | |||||||||||
Cash at end of period | $ | $ | |||||||||
Supplemental information | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash paid for taxes |
2024 | 2023 | ||||||||||
(in thousands) | |||||||||||
Balance as of January 1 | $ | $ | |||||||||
Net income attributable to redeemable non-controlling interests | |||||||||||
Distributions to and purchases of redeemable non-controlling interests | ( | ( | |||||||||
Redemption value adjustment on redeemable non-controlling interests | |||||||||||
Balance as of March 31 | $ | $ | |||||||||
Net income attributable to redeemable non-controlling interests | |||||||||||
Distributions to and purchases of redeemable non-controlling interests | ( | ( | |||||||||
Redemption value adjustment on redeemable non-controlling interests | ( | ||||||||||
Balance as of June 30 | $ | $ | |||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
Finance lease cost: | |||||||||||||||||||||||
Amortization of right-of-use assets | |||||||||||||||||||||||
Interest on lease liabilities | |||||||||||||||||||||||
Variable lease cost | |||||||||||||||||||||||
Total lease cost | $ | $ | $ | $ |
June 30, 2024 | December 31, 2023 | ||||||||||
(in thousands) | |||||||||||
Long-term revolving promissory note with related party | $ | $ | |||||||||
Other debt (1) | |||||||||||
Total debt | $ | $ |
2024 | 2025 | 2026 | 2027 | 2028 | Thereafter | Total | |||||||||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||||||||||||||
Revolving promissory note with related party | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Other debt, including finance leases | |||||||||||||||||||||||||||||||||||||||||
Total debt | $ | $ | $ | $ | $ | $ | $ |
June 30, 2024 | December 31, 2023 | ||||||||||
(in thousands) | |||||||||||
Accrued payroll | $ | $ | |||||||||
Accrued vacation | |||||||||||
Accrued other | |||||||||||
Income taxes payable | |||||||||||
Accrued and other liabilities | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
Occupational health centers: | |||||||||||||||||||||||
Workers’ compensation | $ | $ | $ | $ | |||||||||||||||||||
Employer services | |||||||||||||||||||||||
Consumer health | |||||||||||||||||||||||
Other occupational health center revenue | |||||||||||||||||||||||
Total occupational health center revenue | |||||||||||||||||||||||
Onsite clinics | |||||||||||||||||||||||
Other | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | |||||||||||||||||||||||||||||||||||||
Net Income Attributable to the Company | Shares(1) | Basic and Diluted EPS | Net Income Attributable to the Company | Shares(1) | Basic and Diluted EPS | |||||||||||||||||||||||||||||||||
(in thousands, except for per share amounts) | ||||||||||||||||||||||||||||||||||||||
Common shares | $ | $ | $ | $ |
Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | |||||||||||||
(in thousands) | ||||||||||||||
Net income | $ | $ | ||||||||||||
Less: net income attributable to non-controlling interests | ||||||||||||||
Net income attributable to the Company | ||||||||||||||
Less: Distributed and undistributed income attributable to participating shares | ||||||||||||||
Distributed and undistributed income attributable to outstanding shares | $ | $ |
Three Months Ended June 30, 2023 | Six Months Ended June 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 | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Participating shares | $ | $ | ||||||||||||||||||||||||||||||||||||
Total Company | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Occupational Health Centers | 95 | % | 95 | % | 95 | % | 95 | % | |||||||||||||||
Onsite Clinics | 3 | % | 3 | % | 3 | % | 3 | % | |||||||||||||||
Other Businesses | 2 | % | 2 | % | 2 | % | 2 | % | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Workers’ compensation services | 45 | % | 44 | % | 45 | % | 44 | % | |||||||||||||||
Employer services | 53 | % | 54 | % | 53 | % | 54 | % | |||||||||||||||
Consumer health services | 2 | % | 2 | % | 2 | % | 2 | % | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Workers’ compensation services | 64 | % | 63 | % | 64 | % | 63 | % | |||||||||||||||
Employer services | 34 | % | 35 | % | 34 | % | 35 | % | |||||||||||||||
Consumer health services | 2 | % | 2 | % | 2 | % | 2 | % | |||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||
2024 | 2023 | % Change | 2024 | 2023 | % Change | |||||||||||||||||||||||||||||||||
Number of patient visits | ||||||||||||||||||||||||||||||||||||||
Workers’ Compensation | 1,455,254 | 1,429,035 | 1.8% | 2,888,338 | 2,825,602 | 2.2% | ||||||||||||||||||||||||||||||||
Employer Services | 1,702,399 | 1,781,012 | (4.4)% | 3,361,690 | 3,541,543 | (5.1)% | ||||||||||||||||||||||||||||||||
Consumer Health | 56,602 | 57,847 | (2.2)% | 119,882 | 118,694 | 1.0% | ||||||||||||||||||||||||||||||||
Total | 3,214,255 | 3,267,894 | (1.6)% | 6,369,910 | 6,485,839 | (1.8)% | ||||||||||||||||||||||||||||||||
VPD Volume | ||||||||||||||||||||||||||||||||||||||
Workers’ Compensation | 22,739 | 22,329 | 1.8% | 22,565 | 22,075 | 2.2% | ||||||||||||||||||||||||||||||||
Employer Services | 26,600 | 27,828 | (4.4)% | 26,263 | 27,668 | (5.1)% | ||||||||||||||||||||||||||||||||
Consumer Health | 884 | 904 | (2.2)% | 937 | 928 | 1.0% | ||||||||||||||||||||||||||||||||
Total | 50,223 | 51,061 | (1.6)% | 49,765 | 50,671 | (1.8)% | ||||||||||||||||||||||||||||||||
Revenue per visit | ||||||||||||||||||||||||||||||||||||||
Workers’ Compensation | $ | 198.18 | $ | 194.92 | 1.7% | $ | 196.75 | $ | 193.55 | 1.7% | ||||||||||||||||||||||||||||
Employer Services | 90.05 | 86.00 | 4.7% | 90.44 | 86.22 | 4.9% | ||||||||||||||||||||||||||||||||
Consumer Health | 135.49 | 134.88 | 0.5% | 133.42 | 134.70 | (1.0)% | ||||||||||||||||||||||||||||||||
Total | $ | 139.81 | $ | 134.50 | 3.9% | $ | 139.45 | $ | 133.86 | 4.2% | ||||||||||||||||||||||||||||
Business Days | 64 | 64 | 128 | 128 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||
Number of occupational health centers—start of period | 547 | 539 | 544 | 540 | ||||||||||||||||||||||
Number of occupational health centers acquired | — | 1 | 2 | 1 | ||||||||||||||||||||||
Number of occupational health centers de novos | 1 | — | 2 | — | ||||||||||||||||||||||
Number of occupational health centers closed/sold | (1) | — | (1) | (1) | ||||||||||||||||||||||
Number of occupational health centers—end of period | 547 | 540 | 547 | 540 | ||||||||||||||||||||||
Number of onsite health clinics operated—end of period | 154 | 141 | 154 | 141 |
Three Months Ended June 30, | ||||||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||||||
Amount | Percent | Amount | Percent | |||||||||||||||||||||||
Revenue | $ | 477,915 | 100.0 | % | $ | 467,079 | 100.0 | % | ||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||
Cost of services, exclusive of depreciation and amortization | 339,273 | 71.0 | 329,836 | 70.6 | ||||||||||||||||||||||
General and administrative, exclusive of depreciation and amortization | 36,828 | 7.7 | 37,003 | 7.9 | ||||||||||||||||||||||
Depreciation and amortization | 17,870 | 3.7 | 18,283 | 3.9 | ||||||||||||||||||||||
Total costs and expenses | 393,971 | 82.4 | 385,122 | 82.4 | ||||||||||||||||||||||
Other operating income | — | — | 151 | 0.0 | ||||||||||||||||||||||
Income from operations | 83,944 | 17.6 | 82,108 | 17.6 | ||||||||||||||||||||||
Other income and expense: | ||||||||||||||||||||||||||
Equity in losses of unconsolidated subsidiaries | (3,676) | (0.8) | — | — | ||||||||||||||||||||||
Interest expense on related party debt | (9,318) | (1.9) | (11,500) | (2.5) | ||||||||||||||||||||||
Interest income | 205 | 0.0 | 17 | 0.0 | ||||||||||||||||||||||
Income before income taxes | 71,155 | 14.9 | 70,625 | 15.1 | ||||||||||||||||||||||
Income tax expense | 18,096 | 3.8 | 16,593 | 3.6 | ||||||||||||||||||||||
Net income | 53,059 | 11.1 | 54,032 | 11.6 | ||||||||||||||||||||||
Less: Net income attributable to non-controlling interests | 1,322 | 0.3 | 1,290 | 0.3 | ||||||||||||||||||||||
Net income attributable to the Company | 51,737 | 10.8 | % | 52,742 | 11.3 | % |
Six Months Ended June 30, | ||||||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||||||
Amount | Percent | Amount | Percent | |||||||||||||||||||||||
Revenue | $ | 945,513 | 100.0 | % | $ | 923,377 | 100.0 | % | ||||||||||||||||||
Costs and expenses: | ||||||||||||||||||||||||||
Cost of services, exclusive of depreciation and amortization | 676,263 | 71.5 | 657,914 | 71.3 | ||||||||||||||||||||||
General and administrative, exclusive of depreciation and amortization | 73,737 | 7.8 | 71,653 | 7.8 | ||||||||||||||||||||||
Depreciation and amortization | 36,355 | 3.8 | 36,593 | 4.0 | ||||||||||||||||||||||
Total costs and expenses | 786,355 | 83.1 | 766,160 | 83.1 | ||||||||||||||||||||||
Other operating income | 284 | 0.0 | 151 | 0.0 | ||||||||||||||||||||||
Income from operations | 159,442 | 16.9 | 157,368 | 17.0 | ||||||||||||||||||||||
Other income and expense: | ||||||||||||||||||||||||||
Equity in losses of unconsolidated subsidiaries | (3,676) | (0.4) | (526) | (0.1) | ||||||||||||||||||||||
Interest expense on related party debt | (19,289) | (2.0) | (22,576) | (2.4) | ||||||||||||||||||||||
Interest income (expense) | 94 | 0.0 | (44) | 0.0 | ||||||||||||||||||||||
Income before income taxes | 136,571 | 14.4 | 134,222 | 14.5 | ||||||||||||||||||||||
Income tax expense | 33,233 | 3.5 | 32,759 | 3.5 | ||||||||||||||||||||||
Net income | 103,338 | 10.9 | 101,463 | 11.0 | ||||||||||||||||||||||
Less: Net income attributable to non-controlling interests | 2,645 | 0.3 | 2,457 | 0.3 | ||||||||||||||||||||||
Net income attributable to the Company | 100,693 | 10.6 | % | 99,006 | 10.7 | % |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||||||||||||
(in thousands, except for percentages) | ||||||||||||||||||||||||||
Reconciliation of Adjusted EBITDA | ||||||||||||||||||||||||||
Net income | $ | 53,059 | $ | 54,032 | $ | 103,338 | $ | 101,463 | ||||||||||||||||||
Income tax expense | 18,096 | 16,593 | 33,233 | 32,759 | ||||||||||||||||||||||
Interest (income) expense | (205) | (17) | (94) | 44 | ||||||||||||||||||||||
Interest expense on related party debt | 9,318 | 11,500 | 19,289 | 22,576 | ||||||||||||||||||||||
Equity in losses of unconsolidated subsidiaries | 3,676 | — | 3,676 | 526 | ||||||||||||||||||||||
Stock compensation expense | 166 | — | 332 | 178 | ||||||||||||||||||||||
Depreciation and amortization | 17,870 | 18,283 | 36,355 | 36,593 | ||||||||||||||||||||||
Separation transaction costs (a) | (380) | — | 1,613 | — | ||||||||||||||||||||||
Adjusted EBITDA | $ | 101,600 | $ | 100,391 | $ | 197,742 | $ | 194,139 | ||||||||||||||||||
Adjusted EBITDA margin | 21.3 | % | 21.5 | % | 20.9 | % | 21.0 | % | ||||||||||||||||||
Net income margin | 11.1 | % | 11.6 | % | 10.9 | % | 11.0 | % |
Six Months Ended June 30, | ||||||||||||||
2024 | 2023 | |||||||||||||
(in thousands) | ||||||||||||||
Net cash provided by operating activities | $ | 115,055 | $ | 99,541 | ||||||||||
Net cash used in investing activities | (37,615) | (31,672) | ||||||||||||
Net cash used in financing activities | (58,145) | (72,288) | ||||||||||||
Net increase (decrease) in cash | 19,295 | (4,419) | ||||||||||||
Cash at beginning of period | 31,374 | 37,657 | ||||||||||||
Cash at end of period | $ | 50,669 | $ | 33,238 |
Concentra Group Holdings Parent, Inc. | ||||||||
By: | /s/ Matthew T. DiCanio | |||||||
Matthew T. DiCanio | ||||||||
President and Principal Financial Officer | ||||||||
(Duly Authorized Officer) | ||||||||
By: | /s/ Su Zan Nelson | |||||||
Su Zan Nelson | ||||||||
Executive Vice President, Chief Accounting Officer | ||||||||
(Principal Accounting Officer) |
Date: August 27, 2024 | /s/ William K. Newton | ||||
William K. Newton | |||||
President and Chief Executive Officer |
Date: August 27, 2024 | /s/ Matthew T. DiCanio | ||||
Matthew T. DiCanio | |||||
President and Chief Financial Officer |
/s/ William K. Newton | |||||
William K. Newton | |||||
President and Chief Executive Officer | |||||
/s/ Matthew T. DiCanio | |||||
Matthew T. DiCanio | |||||
President and Chief Financial Officer |
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) shares in Thousands |
Jun. 30, 2024
$ / shares
shares
|
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Statement of Financial Position [Abstract] | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 |
Common stock, shares authorized (in shares) | 447,081 |
Common stock, shares issued (in shares) | 104,094 |
Common stock, shares outstanding (in shares) | 104,094 |
Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|||
Revenue | $ 477,915 | $ 467,079 | $ 945,513 | $ 923,377 | ||
Costs and expenses: | ||||||
Cost of services, exclusive of depreciation and amortization | 339,273 | 329,836 | 676,263 | 657,914 | ||
General and administrative, exclusive of depreciation and amortization | [1] | 36,828 | 37,003 | 73,737 | 71,653 | |
Depreciation and amortization | 17,870 | 18,283 | 36,355 | 36,593 | ||
Total costs and expenses | 393,971 | 385,122 | 786,355 | 766,160 | ||
Other operating income | 0 | 151 | 284 | 151 | ||
Income from operations | 83,944 | 82,108 | 159,442 | 157,368 | ||
Other income and expense: | ||||||
Equity in losses of unconsolidated subsidiaries | (3,676) | 0 | (3,676) | (526) | ||
Interest income (expense) | 205 | 17 | 94 | (44) | ||
Income before income taxes | 71,155 | 70,625 | 136,571 | 134,222 | ||
Income tax expense | 18,096 | 16,593 | 33,233 | 32,759 | ||
Net income | 53,059 | 54,032 | 103,338 | 101,463 | ||
Less: Net income attributable to non-controlling interests | 1,322 | 1,290 | 2,645 | 2,457 | ||
Net income attributable to the Company | $ 51,737 | $ 52,742 | $ 100,693 | $ 99,006 | ||
Earnings per common share (Note 9): | ||||||
Basic (in dollars per share) | $ 0.50 | $ 0.51 | $ 0.97 | $ 0.95 | ||
Diluted (in dollars per share) | $ 0.50 | $ 0.51 | $ 0.97 | $ 0.95 | ||
Related Party | ||||||
Other income and expense: | ||||||
Interest expense on related party debt | $ (9,318) | $ (11,500) | $ (19,289) | $ (22,576) | ||
|
Condensed Consolidated Statements of Operations (unaudited) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Related Party | ||||
Shared service fee from related party | $ 3.8 | $ 3.7 | $ 7.7 | $ 7.3 |
Organization |
6 Months Ended |
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Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Concentra Group Holdings Parent, LLC (“Concentra Group Holdings Parent”) was formed in October 2017 and converted to a Delaware corporation, Concentra Group Holdings Parent, Inc., on March 4, 2024. At the time of formation, Concentra Group Holdings Parent elected to be taxed as a corporation. The Company conducts substantially all of its business through Concentra Inc. and its subsidiaries. Concentra Group Holdings Parent and its subsidiaries are collectively referred to as the “Company.” The Company is the largest provider of occupational health services in the United States based on number of facilities. As of June 30, 2024, the Company operated 547 occupational health centers and 154 onsite clinics at employer worksites in 42 states. The Company provides a diverse and comprehensive array of occupational health services, including workers’ compensation and employers services, and consumer health services. The Company currently operates as an operating segment of Select Medical Corporation (“Select” or the “Parent”). As of June 30, 2024, Select Medical Corporation (“Select” or the “Parent”) owns 100.0% of the outstanding common shares of the Company on a fully diluted basis. On January 3, 2024, Select announced its intention to separate the Company into a new, publicly traded company through a spin-off distribution in 2024. On February 27, 2024, Select received a private letter ruling from the U.S. Internal Revenue Service to the effect that the distribution of Concentra’s common stock to Select and its stockholders will be tax-free for U.S. federal income tax purposes. On March 4, 2024, the member interests of the Company converted to common shares on a one-for-one basis. On June 24, 2024, the Company’s Board of Directors approved a reverse stock split at a ratio of one share of common stock for every 4.295 shares of common stock, which was effectuated on June 25, 2024. In accordance with ASC 260, Earnings Per Share, the recapitalization of the Company into a stock corporation and the reverse stock split have been retrospectively reflected in the Company’s earnings per unit calculation for all periods presented, see Note 9, Earning per Share. 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 the net proceeds of $499.7 million after deducting underwriting discounts and commission of $29.1 million. See Note 12, Subsequent Events for additional information on the IPO and the related debt transactions.
|
Accounting Policies |
6 Months Ended |
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Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies Basis of Presentation and Consolidation The Company has historically operated as part of Select. The unaudited condensed consolidated financial statements of the Company have been prepared from Select’s historical accounting records and are derived from the condensed consolidated financial statements of Select to present Concentra as if it had been operating on a standalone basis. The unaudited condensed consolidated financial statements of the Company as of June 30, 2024, and for the three and six month periods ended June 30, 2024 and 2023, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim reporting and the accounting principles generally accepted in the United States of America (“U.S. GAAP”). Accordingly, certain information and disclosures required by GAAP, which are normally included in the notes to the consolidated financial statements, have been condensed or omitted pursuant to those rules and regulations, although the Company believes the disclosure is adequate to make the information presented not misleading. In the opinion of management, such information contains all adjustments, which are normal and recurring in nature, necessary for a fair statement of the financial position, results of operations and cash flow for such periods. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full fiscal year ended December 31, 2024. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes as contained in the Company’s registration statement on Form S-1, as amended (File No. 333-280242) (the “Registration Statement”). The condensed consolidated financial statements include the assets, liabilities, revenue, and expenses based on our legal entity structure as well as direct and indirect costs that are attributable to our operations. Indirect costs are the costs of support functions that are partially provided on a centralized basis by Select and its affiliates, which include finance, human resources, benefits administration, procurement support, information technology, legal, corporate governance and other professional services. Indirect costs have been allocated to us for the purposes of preparing the condensed consolidated financial statements based on a specific identification basis or, when specific identification is not practicable, a proportional cost allocation method, primarily based on headcount or other allocation methodologies that are considered to be a reasonable reflection of the utilization of services provided or the benefit received by us during the periods presented, depending on the nature of the services received. The income tax amounts in these condensed consolidated financial statements have been calculated based on a separate return methodology and are presented as if our income gave rise to separate federal and state consolidated income tax return filing obligations in the respective jurisdictions in which we operate. Adjustments to income tax expense resulting from the application of the separate return methodology, as compared to tax obligations determined by the Company’s inclusion in the Parent’s consolidated income tax provision, were assumed to be immediately settled with the Parent through Contributed Capital/Capital in Excess of Par as reflected on the Condensed Consolidated Balance Sheets, and reflected as a (Distribution)/Contribution to Parent on the Condensed Consolidated Statements of Changes in Stockholders’/Members’ Equity and the Condensed Consolidated Statements of Cash Flows within financing activities. The condensed consolidated financial statements include the accounts of Concentra and the subsidiaries and variable interest entities in which Concentra has a controlling financial interest. All intercompany balances and transactions within the Company are eliminated in consolidation. Transactions between the Company and Select have been included in these consolidated financial statements. The transfers with Select are expected to be settled in cash, other than the assumed income tax settlement noted above, and are reflected within the consolidated statement of cash flows as an operating or financing activity determined by the nature of the transaction. Select’s third-party debt and related interest expense have not been attributed to the Company because the Company is not the primary legal obligor of the debt and the borrowings are not specifically identifiable to the Company. However, the Company was a guarantor for Select’s senior notes and credit facilities until the guarantee was released at the closing of the IPO. The Company maintains its own cash management system and does not participate in a centralized cash management arrangement with Select. Recent Accounting Guidance Not Yet Adopted Segment Reporting In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve disclosure of segment information so that investors can better understand an entity’s overall performance. The ASU requires entities to quantitatively disclose significant segment expenses that are regularly provided to the chief operating decision maker for each reportable segment, as well as the amount of other segment items for each reportable segment and a description of what the other segment items are comprised. Disclosure of multiple measures of profit or loss will be permitted by the ASU. The ASU is effective for annual reporting periods beginning on or after December 15, 2023, and interim periods with fiscal years beginning after December 15, 2024; however, early adoption is permitted. The ASU is required to be applied retrospectively to all periods presented in the financial statements. The Company is currently reviewing the impact that ASU 2023-07 will have on the disclosures in our consolidated financial statements. Income Taxes In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency and decision usefulness of income tax disclosures. The ASU includes enhanced requirements on the rate reconciliation, including specific categories that must be disclosed, and provides a threshold over which reconciling items must be disclosed. The amendments in the update also require annual disclosure of income taxes paid, disaggregated by federal, state, and foreign taxes, as well as any individual jurisdictions in which income taxes paid is greater than 5% of total income taxes paid. The ASU is effective for annual periods beginning after December 15, 2024; however early adoption is permitted. The ASU can be applied either prospectively or retrospectively. The Company is currently reviewing the impact that ASU 2023-09 will have on the disclosures in our consolidated financial statements. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Actual results could differ from those estimates.
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Redeemable Non-Controlling Interests |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Redeemable Non-Controlling Interests | Redeemable Non-Controlling Interests The Company’s redeemable non-controlling interests are comprised of membership interests held by equity holders other than the Company in five less than wholly-owned subsidiaries. These interests are subject to redemption rights. The changes in redeemable non-controlling interests are as follows:
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Variable Interest Entities |
6 Months Ended |
---|---|
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities Certain states prohibit the “corporate practice of medicine,” which restricts the Company from owning medical practices that directly employ physicians and from exercising control over medical decisions by physicians. In these states, the Company enters into long-term management agreements with affiliated professional medical groups (referred to as “Managed PCs”) that are owned by licensed physicians which, in turn, employ or contract with physicians who provide professional medical services in its occupational health centers. The Company also enters into a stock transfer restriction agreement with the respective equity holders, which provide for the Company to direct the transfer of ownership of the Managed PCs to other licensed physicians at any time. The long-term management agreements provide for various administrative and management services to be provided by the Company to the Managed PCs, including, but not limited to, billing and collections, accounting, non-physician personnel, supplies, security and maintenance, and insurance. The Company has the right to receive income as an ongoing management fee, and effectively absorbs all of the residual interests of the Managed PCs. Based on the provisions of the management and stock transfer agreements, the Managed PCs are variable interest entities for which the Company is the primary beneficiary and consolidates the Managed PCs under the VIE model. There are no restrictions on the use of the assets of the Managed PCs or on the settlement of its liabilities. Additionally, the Company fully indemnifies the licensed physician owners from all claims, demands, costs, damages, losses, liabilities, and other amounts arising from the ownership and operation of the medical practices, excluding gross negligence. As of June 30, 2024, and December 31, 2023, the total assets of the Company’s variable interest entities were $224.8 million and $212.3 million, respectively, and are principally comprised of accounts receivable. As of June 30, 2024, and December 31, 2023, the total liabilities of the Company’s variable interest entities were $53.7 million and $56.4 million, respectively, and are principally comprised of accounts payable and accrued expenses. These variable interest entities have obligations payable for services received under their management agreements with the Company of $171.7 million and $156.2 million as of June 30, 2024, and December 31, 2023, respectively. These intercompany balances are eliminated in consolidation.
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Leases |
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company’s total lease cost is as follows:
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Leases | Leases The Company’s total lease cost is as follows:
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Long-Term Debt and Notes Payable |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt and Notes Payable | Long-Term Debt and Notes Payable The carrying values of the Company’s long-term debt are as follows:
_______________________________________________________________________________ (1) Other debt is primarily comprised of insurance financing arrangements, promissory notes executed in connection with business combinations, and finance leases. As of June 30, 2024, principal maturities of the Company’s long-term debt were as follows:
See Note 12, Subsequent Events, for a description of the debt financing transactions which occurred in connection with the IPO on July 26, 2024.
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Accrued and Other Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued and Other Liabilities | Accrued and Other Liabilities The following table sets forth the components of accrued and other liabilities:
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Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue The following table disaggregates the Company’s revenue for the three and six months ended June 30, 2024 and 2023:
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Earnings per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | Earnings per Share At December 31, 2023, there were 435,000 Class A units, 8,498 Class B units, and 3,583 Class C units (in thousands) outstanding which converted to common shares on a one-for-one basis effective March 4, 2024. On June 25, 2024, the Company effectuated a reverse stock split at a ratio of one share of common stock for every 4.295 shares of common stock and resulted in 104,094 shares (in thousands) outstanding. There were no participating shares or securities outstanding during the three and six months ended June 30, 2024. The following table sets forth the computation of earnings per share (EPS) in 2024:
At June 30, 2023, Concentra’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 six months ended June 30, 2023, Concentra applied the two-class method because its unvested restricted interests and outstanding options were participating securities. The following table sets forth the net income attributable to the Company, its units outstanding, and its participating units outstanding:
The following table sets forth the computation of EPS in 2023, under the two-class method:
_______________________________________________________________________________ (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, as described in Note 1, Organization. (2) Represents the weighted average units outstanding during the period.
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Related Party Transactions |
6 Months Ended |
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Jun. 30, 2024 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Shared Services Agreement - cost allocations from Select The Company pays Select a fee for the shared support functions provided on a centralized basis by Select and its affiliates. The shared services fee is reassessed and adjusted annually. For the three months ended June 30, 2024 and 2023, the shared service fees were $3.8 million and $3.7 million, respectively. For the six months ended June 30, 2024 and 2023, the shared service fees were $7.7 million and $7.3 million, respectively. These cost allocations reasonably reflect the services and the benefits derived for the periods presented. These allocations may not be indicative of the actual expenses that would have been incurred as a stand-alone entity. In connection with the IPO, and described in the Registration Statement, Select and Concentra entered into a separation agreement, a transition services agreement, a tax matters agreement, and an employee matters agreement on July 26, 2024, which effects the separation of the Company’s business from Select and provides a framework for the Company’s relationship with Select after the separation.
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Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation The Company is a party to various legal actions, proceedings, and claims, and regulatory and other governmental audits and investigations in the ordinary course of its business, including, but not limited to, legal actions and claims alleging professional malpractice, general liability for property damage, personal and bodily injury, violations of federal and state employment laws, often in the form of wage and hour class action lawsuits, and liability for data breaches. Many of these actions involve large claims and significant defense costs and sometimes, as in the case of wage and hour class actions, are not covered by insurance. The Company cannot predict the ultimate outcome of pending litigation, proceedings, and regulatory and other governmental audits and investigations. These matters could potentially subject the Company to sanctions, damages, recoupments, fines, and other penalties. To address claims arising out of the Company’s operations, the Company maintains professional malpractice liability insurance and general liability insurance coverages through a number of different programs that are dependent upon such factors as the state where the Company is operating. The Company currently maintains insurance coverages under a combination of policies with a total annual aggregate limit of up to $29.0 million for professional malpractice liability insurance and $29.0 million for general liability insurance. The Company’s insurance for the professional liability coverage is written on a “claims-made” basis, and its commercial general liability coverage is maintained on an “occurrence” basis. These coverages apply after a self-insured retention limit is exceeded. Each of these programs has either a deductible or self-insured retention limit. The Company also maintains additional types of liability insurance covering claims which, due to their nature or amount, are not covered by or not fully covered by the applicable professional malpractice and general liability insurance policies, including workers compensation, property and casualty, directors and officers, cyber liability, and employment practices liability insurance coverages. Our insurance policies generally are silent with respect to punitive damages so coverage is available to the extent insurable under the law of any applicable jurisdiction, and are subject to various deductibles and policy limits. The Company reviews its insurance program annually and may make adjustments to the amount of insurance coverage and self-insured retentions in future years. Significant legal actions, as well as the cost and possible lack of available insurance, could subject the Company to substantial uninsured liabilities. Physical Therapy Billing. On October 7, 2021, Select received a letter from a Trial Attorney at the U.S. Department of Justice, Civil Division, Commercial Litigation Branch, Fraud Section (“DOJ”) stating that the DOJ, in conjunction with the U.S. Department of Health and Human Services (“HHS”), is investigating Select in connection with potential violations of the False Claims Act, 31 U.S.C. § 3729, et seq. The letter specified that the investigation relates to Select’s billing for physical therapy services, and indicated that the DOJ would be requesting certain records from Select. In October and December 2021, the DOJ requested, and Select furnished, records relating to six of Select’s outpatient therapy clinics in Florida. In 2022 and 2023, the DOJ requested certain data relating to all of Select’s outpatient therapy clinics nationwide, and sought information about the Company’s ability to produce additional data relating to the physical therapy services furnished by Select’s outpatient therapy clinics and the Company. The Company has produced data and other documents requested by the DOJ and is fully cooperating on this investigation. In May 2024, by order of the U.S. District Court for the Middle District of Florida, a qui tam lawsuit that is related to the DOJ’s investigation was unsealed after the U.S. filed a notice declining to intervene in the case, but stating that its investigation is continuing and reserving its right to intervene at a later date. The lawsuit, filed in May 2021 and amended in October 2021 and July 2024, was brought by Kathleen Kane, a physical therapist formerly employed in Select’s outpatient division, against Select Medical Corporation, Select Physical Therapy Holdings, Inc. and Select Employment Services, Inc. The amended complaint alleges that the defendants billed federally funded health programs for one-on-one therapy services when group therapy was performed or overbilled for one-on-one therapy services, and billed for unreimbursable unskilled physical therapy services. At this time, the Company is unable to predict the timing and outcome of this matter. California Department of Insurance Investigation. On February 5, 2024, the Company received a subpoena from the California Department of Insurance relating to an investigation under the California Insurance Frauds Prevention Act, Cal. Ins. Code § 1871.7 et seq., which allows a whistleblower to file a false claims lawsuit based on the submission of false or fraudulent claims to insurance companies. The subpoena seeks documentation relating mainly to the Company’s billing and coding for physical therapy claims submitted to commercial insurers and workers compensation carriers located or doing business in California. The Company has produced data and other documents requested by the California Department of Insurance and intends to fully cooperate on this investigation. At this time, the Company is unable to predict the timing and outcome of this matter. Perry Johnson & Associates, Inc. Data Breach. On November 10, 2023, Perry Johnson & Associates, Inc., a third-party vendor of health information technology solutions that provides medical transcription services (“PJ&A”), notified Concentra Health Services, Inc. (“Concentra”) that certain information related to particular Concentra patients was potentially affected by a cybersecurity event. In February 2024, Concentra sent notices to almost four million patients who may have been impacted by the data breach. During the first quarter of 2024, Concentra became aware of six putative class action lawsuits filed against PJ&A and Concentra related to the data breach. The first was filed in the U.S. District Court for the Eastern District of Michigan on February 19, 2024 by Elliot Curry, individually and on behalf of all others similarly situated. Plaintiff alleged, among other things, that he became the victim of identity theft as a result of the PJ&A data breach and that Concentra had lax data security policies. The second was filed in the U.S. District Court for the Eastern District of New York on February 21, 2024 by Tiffany Williams and Jo Joaquim, individually and on behalf of all others similarly situated. Plaintiffs alleged, among other things, that they face an immediate and heightened risk of identity theft as a result of the data breach and that the defendants failed to take measures to properly safeguard their private information. The third was filed in the U.S. District Court for the Eastern District of Missouri on February 26, 2024 by Stephen Tate, a.k.a. Steven Tate, individually and on behalf of all others similarly situated. Plaintiff alleged, among other things, that he faces a heightened and imminent risk of identity theft as a result of the data breach and that the defendants failed to take measures to properly safeguard his private information. The fourth was filed in the U.S. District Court for the Eastern District of Michigan on February 26, 2024 by Eric Franczak, individually and on behalf of all others similarly situated. Plaintiff alleged, among other things, that he faces a substantially increased risk of fraud and identity theft as a result of the data breach and that the defendants failed to take measures to properly safeguard his private information. The fifth was filed in the U.S. District Court for the Eastern District of Michigan on March 6, 2024 by Lazema Johnson, individually and on behalf of all others similarly situated. Plaintiff alleged, among other things, that she faces a substantially increased risk of fraud and identity theft as a result of the data breach and that the defendants failed to take measures to properly safeguard her private information. The sixth was filed in the Superior Court of California, County of Los Angeles, on April 8, 2024 by Robert Valencia, individually and on behalf of all others similarly situated. Plaintiff alleged, among other things, that he faces a substantially increased risk of fraud and identity theft as a result of the data breach and that the defendants failed to take measures to properly safeguard his private information. Concentra is working with its cybersecurity risk insurance policy carrier and does not believe that the data breach or the lawsuits will have a material impact on its operations or financial performance. However, at this time, Concentra is unable to predict the timing and outcome of these matters.
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Subsequent Events |
6 Months Ended |
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Jun. 30, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On July 26, 2024, the Company completed an 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 the 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. The Company’s shares began trading on the New York Stock Exchange under the symbol “CON” on July 25, 2024. In connection with the IPO, Concentra Health Services, Inc. (“CHSI”), a wholly-owned subsidiary of the Company, entered into certain financing arrangements which include senior secured credit facilities of $1,250.0 million (the “Credit Facilities”) and a private offering of $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 closing of the IPO. 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 through the issuance of a dividend, the repayment of the $420.0 million revolving promissory note outstanding, and the repayment of a new promissory note issued subsequent to June 30, 2024 in contemplation of the IPO. After the closing of the IPO, and the exercise of the underwriters’ option to purchase additional shares, Select owns 81.74% of the total outstanding shares of the Company’s common stock. Select intends to make a distribution, which is intended to be tax-free for U.S. federal income tax purposes, to its stockholders of all of its remaining equity interest in the Company within twelve months of the IPO.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
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Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
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Pay vs Performance Disclosure | ||||||
Net income attributable to the Company | $ 51,737 | $ 48,956 | $ 52,742 | $ 46,264 | $ 100,693 | $ 99,006 |
Insider Trading Arrangements |
3 Months Ended |
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Jun. 30, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The Company has historically operated as part of Select. The unaudited condensed consolidated financial statements of the Company have been prepared from Select’s historical accounting records and are derived from the condensed consolidated financial statements of Select to present Concentra as if it had been operating on a standalone basis. The unaudited condensed consolidated financial statements of the Company as of June 30, 2024, and for the three and six month periods ended June 30, 2024 and 2023, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim reporting and the accounting principles generally accepted in the United States of America (“U.S. GAAP”). Accordingly, certain information and disclosures required by GAAP, which are normally included in the notes to the consolidated financial statements, have been condensed or omitted pursuant to those rules and regulations, although the Company believes the disclosure is adequate to make the information presented not misleading. In the opinion of management, such information contains all adjustments, which are normal and recurring in nature, necessary for a fair statement of the financial position, results of operations and cash flow for such periods. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full fiscal year ended December 31, 2024. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes as contained in the Company’s registration statement on Form S-1, as amended (File No. 333-280242) (the “Registration Statement”). The condensed consolidated financial statements include the assets, liabilities, revenue, and expenses based on our legal entity structure as well as direct and indirect costs that are attributable to our operations. Indirect costs are the costs of support functions that are partially provided on a centralized basis by Select and its affiliates, which include finance, human resources, benefits administration, procurement support, information technology, legal, corporate governance and other professional services. Indirect costs have been allocated to us for the purposes of preparing the condensed consolidated financial statements based on a specific identification basis or, when specific identification is not practicable, a proportional cost allocation method, primarily based on headcount or other allocation methodologies that are considered to be a reasonable reflection of the utilization of services provided or the benefit received by us during the periods presented, depending on the nature of the services received. The income tax amounts in these condensed consolidated financial statements have been calculated based on a separate return methodology and are presented as if our income gave rise to separate federal and state consolidated income tax return filing obligations in the respective jurisdictions in which we operate. Adjustments to income tax expense resulting from the application of the separate return methodology, as compared to tax obligations determined by the Company’s inclusion in the Parent’s consolidated income tax provision, were assumed to be immediately settled with the Parent through Contributed Capital/Capital in Excess of Par as reflected on the Condensed Consolidated Balance Sheets, and reflected as a (Distribution)/Contribution to Parent on the Condensed Consolidated Statements of Changes in Stockholders’/Members’ Equity and the Condensed Consolidated Statements of Cash Flows within financing activities. The condensed consolidated financial statements include the accounts of Concentra and the subsidiaries and variable interest entities in which Concentra has a controlling financial interest. All intercompany balances and transactions within the Company are eliminated in consolidation. Transactions between the Company and Select have been included in these consolidated financial statements. The transfers with Select are expected to be settled in cash, other than the assumed income tax settlement noted above, and are reflected within the consolidated statement of cash flows as an operating or financing activity determined by the nature of the transaction. Select’s third-party debt and related interest expense have not been attributed to the Company because the Company is not the primary legal obligor of the debt and the borrowings are not specifically identifiable to the Company. However, the Company was a guarantor for Select’s senior notes and credit facilities until the guarantee was released at the closing of the IPO. The Company maintains its own cash management system and does not participate in a centralized cash management arrangement with Select.
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Basis of Presentation and Consolidation | Basis of Presentation and Consolidation The Company has historically operated as part of Select. The unaudited condensed consolidated financial statements of the Company have been prepared from Select’s historical accounting records and are derived from the condensed consolidated financial statements of Select to present Concentra as if it had been operating on a standalone basis. The unaudited condensed consolidated financial statements of the Company as of June 30, 2024, and for the three and six month periods ended June 30, 2024 and 2023, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim reporting and the accounting principles generally accepted in the United States of America (“U.S. GAAP”). Accordingly, certain information and disclosures required by GAAP, which are normally included in the notes to the consolidated financial statements, have been condensed or omitted pursuant to those rules and regulations, although the Company believes the disclosure is adequate to make the information presented not misleading. In the opinion of management, such information contains all adjustments, which are normal and recurring in nature, necessary for a fair statement of the financial position, results of operations and cash flow for such periods. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the full fiscal year ended December 31, 2024. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes as contained in the Company’s registration statement on Form S-1, as amended (File No. 333-280242) (the “Registration Statement”). The condensed consolidated financial statements include the assets, liabilities, revenue, and expenses based on our legal entity structure as well as direct and indirect costs that are attributable to our operations. Indirect costs are the costs of support functions that are partially provided on a centralized basis by Select and its affiliates, which include finance, human resources, benefits administration, procurement support, information technology, legal, corporate governance and other professional services. Indirect costs have been allocated to us for the purposes of preparing the condensed consolidated financial statements based on a specific identification basis or, when specific identification is not practicable, a proportional cost allocation method, primarily based on headcount or other allocation methodologies that are considered to be a reasonable reflection of the utilization of services provided or the benefit received by us during the periods presented, depending on the nature of the services received. The income tax amounts in these condensed consolidated financial statements have been calculated based on a separate return methodology and are presented as if our income gave rise to separate federal and state consolidated income tax return filing obligations in the respective jurisdictions in which we operate. Adjustments to income tax expense resulting from the application of the separate return methodology, as compared to tax obligations determined by the Company’s inclusion in the Parent’s consolidated income tax provision, were assumed to be immediately settled with the Parent through Contributed Capital/Capital in Excess of Par as reflected on the Condensed Consolidated Balance Sheets, and reflected as a (Distribution)/Contribution to Parent on the Condensed Consolidated Statements of Changes in Stockholders’/Members’ Equity and the Condensed Consolidated Statements of Cash Flows within financing activities. The condensed consolidated financial statements include the accounts of Concentra and the subsidiaries and variable interest entities in which Concentra has a controlling financial interest. All intercompany balances and transactions within the Company are eliminated in consolidation. Transactions between the Company and Select have been included in these consolidated financial statements. The transfers with Select are expected to be settled in cash, other than the assumed income tax settlement noted above, and are reflected within the consolidated statement of cash flows as an operating or financing activity determined by the nature of the transaction. Select’s third-party debt and related interest expense have not been attributed to the Company because the Company is not the primary legal obligor of the debt and the borrowings are not specifically identifiable to the Company. However, the Company was a guarantor for Select’s senior notes and credit facilities until the guarantee was released at the closing of the IPO. The Company maintains its own cash management system and does not participate in a centralized cash management arrangement with Select.
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Recent Accounting Guidance Not Yet Adopted | Recent Accounting Guidance Not Yet Adopted Segment Reporting In November 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve disclosure of segment information so that investors can better understand an entity’s overall performance. The ASU requires entities to quantitatively disclose significant segment expenses that are regularly provided to the chief operating decision maker for each reportable segment, as well as the amount of other segment items for each reportable segment and a description of what the other segment items are comprised. Disclosure of multiple measures of profit or loss will be permitted by the ASU. The ASU is effective for annual reporting periods beginning on or after December 15, 2023, and interim periods with fiscal years beginning after December 15, 2024; however, early adoption is permitted. The ASU is required to be applied retrospectively to all periods presented in the financial statements. The Company is currently reviewing the impact that ASU 2023-07 will have on the disclosures in our consolidated financial statements. Income Taxes In December 2023, FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which is intended to improve the transparency and decision usefulness of income tax disclosures. The ASU includes enhanced requirements on the rate reconciliation, including specific categories that must be disclosed, and provides a threshold over which reconciling items must be disclosed. The amendments in the update also require annual disclosure of income taxes paid, disaggregated by federal, state, and foreign taxes, as well as any individual jurisdictions in which income taxes paid is greater than 5% of total income taxes paid. The ASU is effective for annual periods beginning after December 15, 2024; however early adoption is permitted. The ASU can be applied either prospectively or retrospectively. The Company is currently reviewing the impact that ASU 2023-09 will have on the disclosures in our consolidated financial statements.
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Actual results could differ from those estimates.
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Redeemable Non-Controlling Interests | Redeemable Non-Controlling InterestsThe Company’s redeemable non-controlling interests are comprised of membership interests held by equity holders other than the Company in five less than wholly-owned subsidiaries. These interests are subject to redemption rights. |
Variable Interest Entities | Variable Interest Entities Certain states prohibit the “corporate practice of medicine,” which restricts the Company from owning medical practices that directly employ physicians and from exercising control over medical decisions by physicians. In these states, the Company enters into long-term management agreements with affiliated professional medical groups (referred to as “Managed PCs”) that are owned by licensed physicians which, in turn, employ or contract with physicians who provide professional medical services in its occupational health centers. The Company also enters into a stock transfer restriction agreement with the respective equity holders, which provide for the Company to direct the transfer of ownership of the Managed PCs to other licensed physicians at any time. The long-term management agreements provide for various administrative and management services to be provided by the Company to the Managed PCs, including, but not limited to, billing and collections, accounting, non-physician personnel, supplies, security and maintenance, and insurance. The Company has the right to receive income as an ongoing management fee, and effectively absorbs all of the residual interests of the Managed PCs. Based on the provisions of the management and stock transfer agreements, the Managed PCs are variable interest entities for which the Company is the primary beneficiary and consolidates the Managed PCs under the VIE model. There are no restrictions on the use of the assets of the Managed PCs or on the settlement of its liabilities. Additionally, the Company fully indemnifies the licensed physician owners from all claims, demands, costs, damages, losses, liabilities, and other amounts arising from the ownership and operation of the medical practices, excluding gross negligence.
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Redeemable Non-Controlling Interests (Tables) |
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Noncontrolling Interest [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of redeemable non-controlling interests | The changes in redeemable non-controlling interests are as follows:
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of lease cost | The Company’s total lease cost is as follows:
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Long-Term Debt and Notes Payable (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt and notes payable | The carrying values of the Company’s long-term debt are as follows:
_______________________________________________________________________________ (1) Other debt is primarily comprised of insurance financing arrangements, promissory notes executed in connection with business combinations, and finance leases.
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Schedule of principal maturities of long-term debt and notes payable | As of June 30, 2024, principal maturities of the Company’s long-term debt were as follows:
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Accrued and Other Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of accrued and other liabilities | The following table sets forth the components of accrued and other liabilities:
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Revenue (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of disaggregation of revenue | The following table disaggregates the Company’s revenue for the three and six months ended June 30, 2024 and 2023:
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Earnings per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of computation of basic and diluted earnings per share | The following table sets forth the computation of earnings per share (EPS) in 2024:
The following table sets forth the net income attributable to the Company, its units outstanding, and its participating units outstanding:
The following table sets forth the computation of EPS in 2023, under the two-class method:
_______________________________________________________________________________ (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, as described in Note 1, Organization. (2) Represents the weighted average units outstanding during the period.
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Redeemable Non-Controlling Interests - Narrative (Details) |
Jun. 30, 2024
less_than_wholly_owned_subsidiary
|
---|---|
Noncontrolling Interest [Abstract] | |
Number of less than wholly owned subsidiaries | 5 |
Redeemable Non-Controlling Interests - Schedule of Redeemable Non-Controlling Interests (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
Mar. 31, 2023 |
|
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||
Balance, beginning | $ 18,257 | $ 16,477 | $ 16,466 | $ 16,772 |
Net income attributable to redeemable non-controlling interests | 1,078 | 1,053 | 993 | 914 |
Distributions to and purchases of redeemable non-controlling interests | (793) | (1,174) | (610) | (1,656) |
Redemption value adjustment on redeemable non-controlling interests | (132) | 1,901 | 3 | 435 |
Redemption value adjustment on redeemable non-controlling interests | 436 | |||
Balance, ending | $ 18,410 | $ 18,257 | $ 16,852 | $ 16,466 |
Variable Interest Entities (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Assets | $ 2,363,338 | $ 2,333,560 |
Liabilities | 1,092,946 | 1,156,121 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Assets | 224,800 | 212,300 |
Liabilities | 53,700 | 56,400 |
Variable Interest Entity, Primary Beneficiary | Related Party | ||
Variable Interest Entity [Line Items] | ||
Obligations payable | $ 171,700 | $ 156,200 |
Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Lease, Cost [Abstract] | ||||
Operating lease cost | $ 25,077 | $ 24,296 | $ 49,867 | $ 48,424 |
Finance lease cost: | ||||
Amortization of right-of-use assets | 109 | 261 | 320 | 512 |
Interest on lease liabilities | 77 | 100 | 132 | 203 |
Variable lease cost | 5,293 | 4,920 | 10,549 | 10,034 |
Total lease cost | $ 30,556 | $ 29,577 | $ 60,868 | $ 59,173 |
Long-Term Debt and Notes Payable - Carrying Value Of Long-Term Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Debt Instrument [Line Items] | ||
Total debt | $ 427,730 | $ 474,746 |
Related Party | ||
Debt Instrument [Line Items] | ||
Long-term revolving promissory note with related party | 420,000 | 470,000 |
Nonrelated Party | ||
Debt Instrument [Line Items] | ||
Total debt | $ 7,730 | $ 4,746 |
Long-Term Debt and Notes Payable - Principal Maturities Of Long-Term Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Debt Instrument [Line Items] | ||
2024 | $ 3,819 | |
2025 | 1,024 | |
2026 | 351 | |
2027 | 397 | |
2028 | 447 | |
Thereafter | 421,692 | |
Total | 427,730 | $ 474,746 |
Other debt, including finance leases | ||
Debt Instrument [Line Items] | ||
2024 | 3,819 | |
2025 | 1,024 | |
2026 | 351 | |
2027 | 397 | |
2028 | 447 | |
Thereafter | 1,692 | |
Total | 7,730 | |
Related Party | ||
Debt Instrument [Line Items] | ||
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
2028 | 0 | |
Thereafter | 420,000 | |
Total | $ 420,000 |
Accrued and Other Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2024 |
Dec. 31, 2023 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued payroll | $ 57,439 | $ 62,824 |
Accrued vacation | 42,983 | 41,488 |
Accrued other | 55,484 | 71,755 |
Income taxes payable | 3,014 | 399 |
Accrued and other liabilities | $ 158,920 | $ 176,466 |
Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 477,915 | $ 467,079 | $ 945,513 | $ 923,377 |
Operating Segments | Total occupational health center revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 451,240 | 441,774 | 892,312 | 872,890 |
Operating Segments | Onsite clinics | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 15,539 | 14,705 | 31,396 | 29,250 |
Operating Segments | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 11,136 | 10,600 | 21,805 | 21,237 |
Workers’ compensation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 288,405 | 278,554 | 568,271 | 546,894 |
Employer services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 153,305 | 153,164 | 304,040 | 305,337 |
Consumer health | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 7,669 | 7,802 | 15,995 | 15,987 |
Other occupational health center revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 1,861 | $ 2,254 | $ 4,006 | $ 4,672 |
Earnings per Share - Computation of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Earnings Per Share [Abstract] | ||||
Net income allocated to common shares - basic | $ 51,737 | $ 52,594 | $ 100,693 | $ 98,719 |
Net income allocated to common shares - diluted | $ 51,737 | $ 52,594 | $ 100,693 | $ 98,719 |
Weighted average common shares outstanding, basic (in shares) | 104,094 | 103,962 | 104,094 | 103,952 |
Weighted average common shares outstanding, diluted (in shares) | 104,094 | 103,962 | 104,094 | 103,952 |
Basic (in dollars per share) | $ 0.50 | $ 0.51 | $ 0.97 | $ 0.95 |
Diluted (in dollars per share) | $ 0.50 | $ 0.51 | $ 0.97 | $ 0.95 |
Earnings per Share - Net Income Attributable to the Company, Units Outstanding, and Participating Units Outstanding (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Earnings Per Share [Abstract] | ||||||
Net income | $ 53,059 | $ 54,032 | $ 103,338 | $ 101,463 | ||
Less: Net income attributable to non-controlling interests | 1,322 | 1,290 | 2,645 | 2,457 | ||
Net income attributable to the Company | 51,737 | $ 48,956 | 52,742 | $ 46,264 | 100,693 | 99,006 |
Basic EPS | ||||||
Less: Distributed and undistributed income attributable to participating shares - basic EPS | 148 | 287 | ||||
Distributed and undistributed income attributable to outstanding shares | 51,737 | 52,594 | 100,693 | 98,719 | ||
Diluted EPS | ||||||
Less: Distributed and undistributed income attributable to participating shares - diluted EPS | 148 | 287 | ||||
Distributed and undistributed income attributable to outstanding shares | $ 51,737 | $ 52,594 | $ 100,693 | $ 98,719 |
Earnings per Share - Computation of EPS Under the Two-Class Method (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2024 |
Mar. 31, 2024 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Net Income Allocation | ||||||
Net income allocated to common shares - basic | $ 51,737 | $ 52,594 | $ 100,693 | $ 98,719 | ||
Participating shares - basic | 148 | 287 | ||||
Net income allocated to common shares - diluted | 51,737 | 52,594 | 100,693 | 98,719 | ||
Participating shares - diluted | 148 | 287 | ||||
Net income attributable to the Company | $ 51,737 | $ 48,956 | $ 52,742 | $ 46,264 | $ 100,693 | $ 99,006 |
Weighted average common shares outstanding, basic (in shares) | 104,094 | 103,962 | 104,094 | 103,952 | ||
Weighted average common shares outstanding, diluted (in shares) | 104,094 | 103,962 | 104,094 | 103,952 | ||
Weighted average participating shares outstanding (in shares) | 0 | 292 | 0 | 302 | ||
Basic EPS | ||||||
Basic EPS (in dollars per share) | $ 0.50 | $ 0.51 | $ 0.97 | $ 0.95 | ||
Diluted EPS | ||||||
Diluted EPS (in dollars per share) | $ 0.50 | $ 0.51 | $ 0.97 | $ 0.95 |
Related Party Transactions (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2024 |
Jun. 30, 2023 |
Jun. 30, 2024 |
Jun. 30, 2023 |
|
Related Party | ||||
Related Party Transaction [Line Items] | ||||
Shared service fee from related party | $ 3.8 | $ 3.7 | $ 7.7 | $ 7.3 |
Commitments and Contingencies (Details) $ in Millions |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Mar. 31, 2024
class_action_lawsuit
|
Jun. 30, 2024
USD ($)
|
Feb. 29, 2024
patient
|
|
Commitments and Contingencies | |||
Loss contingency, number of patients | patient | 4,000,000 | ||
Loss contingency, new claims filed, number | class_action_lawsuit | 6 | ||
Professional liability claims | |||
Commitments and Contingencies | |||
Total annual aggregate limit of insurance coverage | $ 29.0 | ||
General Liability | |||
Commitments and Contingencies | |||
Total annual aggregate limit of insurance coverage | $ 29.0 |
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