Q4 2019 Earnings Call
Ladies and gentlemen, thank you for spending by and welcome to the U.S. physical therapy Q4, your and 2019 earnings call. At this time all participants are already in listen only mode. After the speaker presentation, there will be a question and answer recession.
He's asking question during the session, we'll need to press star one on your telephone.
If you required for the assistance. Please press Star Zero I would now like to hand, the conference over to your speaker today Mr., Chris spreading Chief Executive Officer. Thank you. Please go ahead Sir.
Thank you good morning, everyone and welcome to U.S. physical therapists fourth quarter and year end 2019 earnings call.
With me today include Larry Mcafee, our executive Vice President Chief Financial Officer Grammar, even Glenn Mcdowell, Chief operating officers, Rick Binstein, Our General Counsel, Jon Bates Vice President controller for begin my prepared comments Oh I started to cover brief disclosure John if you were.
Thanks, Chris. This presentation contains forward looking statements, which involve certain risks and uncertainties. These forward looking statements are based on the company's current views and assumptions.
Ladies actual results can vary materially from those anticipated. Please see the company's filings with the Securities and Exchange Commission for more information.
Thanks, John.
So I'm gonna start with some prepared comments im going to kick it over little area, and then I'm going to have some final comments before we open it up for questions. The focus initially operating segments.
Overall, you will see our various operating surrogate segments performed extremely well for the year as well the quarter later in my discussion I'll also cover a few challenges we encountered this year, which impacted our overall results, especially later in the year for some highlights on the year.
Gross profit grew by 10.6%.
Additionally, an outside of our operating results for the year, we produced the gain on sale partnership announced earlier in the year of over $5 million gross margin on the entirety of the business improved 90 basis points to 23.3.
Partners that are ops team worked hard to increase or P.T. gross margins for the year to 23.6%.
We finished the year in strong fashion with a P.T. gross margins further improving by 290 basis points to 25.4% on continued strong same store sales and higher visits per clinic per day than the prior year quarter.
Our management contracts gross margin improved for the year by 270 basis points.
And in spite of significant integration and infrastructure related costs remain excellent forward progress in our industrial injury prevention business, improving margins 200 basis points to 22.4% for the year.
Also some additional perspective on just how far we've come on our IP business, that's or injury prevention business. Since we started with periodic since early 2017.
That first year, we finished with a 13% margin. So just a couple of tuna half almost three years, we've gone from 13% margin.
In that business now to over 22.
Our entire bricks team has done a truly exemplary job and continues to create opportunities which were all very excited about.
Additional perspective.
Sorry about that first year with just under 15 million in revenue ended this past 2019 year at just under $38 million in revenue our year over year change was a very healthy 47% and there's a lot more opportunity to capture as we look ahead.
Other highlights for the year.
Our total company operating income decreased 11.8%.
Operating margin improved by 70 basis points in spite of a few meaningfully large I love the ordinary cost for us this year, including a very large healthcare claims expense over run for the year.
Moving on our same stores or same store volume and revenue for the year well what I believe is the best ever result for the current team up 5.86, 0.3%, respectively, and our visits per clinic per day increased to an all time high 27.6 for me here.
Hats off to our sales teams <unk> partners and all of our leaders who assist in driving in supporting those efforts.
Able us to touch and positively impact more lives.
We finished 2019 in our final core and strong fashion as well our industrial injury prevention revenue increased over 46%.
Hi, P. margins improved a whopping 760 basis points in spite of immigration infrastructure related costs necessary for the beat T E deal integration.
All the growth that has been created over the past few years.
Our P.T. margins improved 290 basis points to 25.4% despite the impact the additional health care cost felt especially late meter.
We are addressing that important aspect of our business and we have moved up pharmacy, playing already with embedded and guaranteed cost savings, we're making further adjustments in our health plan.
Which will allow us to continue to offer an excellent benefit to our employees and their families. While addressing some of the fundamental issues, which worked against us in 2019 year.
Finally, a management contracts business, some margins improved 660 basis points for the quarter 270 basis points for you.
I also want to mention that yesterday, we closed end fund and what will be an excellent partner driven acquisition for us with a very special gifted team. We're very excited about a deal activity has been strong keeping us very busy.
We've invested additional resources and this development area expect to have a very good year income both organic as well as acquired opportunities.
That concludes my prepared comments later, we'll have some additional comments and color and then I'll make a few.
A few other comments, we'll open up for questions. Thank you.
Thanks, Chris.
I may repeat a few that highlights a Chris yes, I'll try not to his first I want to talk about the year 19 versus 18 overall revenue increased 6.2% to just under 482 million.
A lot of that was internal growth as Chris mentioned, it wasn't particularly robust M&A here and we also sold an entity and despite that we were able to produce increases in total revenue and even PT revenue.
PT revenue for the year increased by 15.6 million, despite having sold in entity.
With that contributed 11.6 million in the year before.
Total company operating costs in 2019 were 76.7% that was a reduction a 90 basis points total salaries and related costs at 56.9 were reduced by 20 basis points from the prior year rent supplies contract labor and other costs reduced by 70 basis points.
So in almost every operating area, we saw an improvement in the cost structure.
The gross profit for the year grew by 10.8 million to 112.5 million.
The core corporate office costs were 9.3% of revenue 19 versus 9.1 at 18.
As Chris mentioned included in operating a corporate costs for 2019 was approximately 1.8 million at higher employee health care costs unplanned and planned the after tax EPS impact from that was 10 and a half sense.
Operating income for 2019 increased 11.8% to 67.4 million and as a percentage of revenue grew by 70 basis points to 14%.
There was a gain of five and a half million, which is not included in operating results from the sale of the partnership interest at June Thirtyth.
Provision for income taxes as a percentage of income was 25.4 and 19 versus 24.6 in 18 and as we get to the quarter I really want to go into that little more depth and show you. The magnitude of the difference in the tax rate same store revenue for Denovo and acquired clinics seven for a year more increased 6.3.
As soon as Chris mentioned visits increased 5.8%, while the rate at rate increase to half a percent.
Now I will talk about the quarter revenue and overall total revenue increased 4.1% to 122 million.
Despite the loss of revenue from the clinics within the partnership that were sold a 5.9 million.
Fourth quarter of 18 patient revenue from physical therapy operations, the fourth quarter 19 actually grew by 1.1 million.
Revenue from physical therapy management contracts is pretty consistent between the two quarters industrial injury prevention jump dramatically, 46.3% to 10.3 million.
The company's total operating costs were 77.9% of revenue in the fourth quarter and improvement of 60 basis points total salaries and related costs were consistent with the two quarters, 57.8% or rent supplies contract labor and other improved by 50 basis points.
Revision of doubt for doubtful accounts was pretty consistent 1.2% in the fourth quarter of last year versus 1.3% here earlier.
Overall gross profit grew by 6.9% in the fourth quarter to 27 million.
Gross profit percentage increased by 60 basis points to 22.1%.
As Chris mentioned that the gross in the gross profit the physical therapy clinics was pretty amazing at 290 basis points.
Management contracts also for PC operations also did a lot better decreasing 660 basis points to for 18.3% in the industrial injury prevention jump by 760 basis points to 18% corporate office costs were higher in the fourth quarter last year as compared to the year before we.
I had to do a catch up on our accrued incentive comp because frankly operations teams were doing such a good job. So.
So overall incentive comp for 2019 was lower than 2018, it was higher by about.
600000 in the quarter.
In the fourth quarter alone, we incurred more than a million dollars and higher employee health care costs and plan that's about a six cents hit.
So we missed the consensus estimate by four cents, but honestly it wasn't from operations and this is something we can fix we've already changed our [noise].
Pharmacy plan effective January one the savings from that will be over a million dollars and I'm in may we will make substantial changes to our health care plan and I expect seven figure savings from that as well.
Operating income for the fourth quarter of 2019 increased 3.3% to 15.3 million.
And I mentioned the taxes the provision for income taxes.
23.4% in the fourth quarter 19 versus 20.2 in the fourth quarter of 18, that's an 800000 dollar tax differential or six cents.
Same store revenue for acquired clinics opened for your more increased 4.7% in the quarter, mostly on volume increases as the revenue was net rate was pretty flat.
Our adjusted EBITDA for the year increased 8.5% to 67.3 million.
In the release management provides earning guidance.
This is from existing operations and excludes future acquisitions at the current time, we expect.
Operating results to be in the range of 38.1 million to 39.8 or $2.90 to $3 in 10 cents per share.
We increased the quarterly dividend of 32 cents per share at that quarterly rate. The total dividend expects to be paid for 2020 would be 12.2% higher than what we paid in 2019.
Thanks, Larry Larry hit some of the comments and I just before we open it up for questions. Some of the comments I was going to make before we open up for questions. I just want to reiterate a couple of things are ops team, which extends down to our facilities extends to our 16 extend.
Through our corporate support folks in this final quarter and I recognize that it was bit of a messy quarter on surface, a miss our ops team didnt Miss across although our segments. They had an outstanding quarter, we had some things on top.
That were out of ordinary we had 640000 dollar.
Trying to.
Quarter over quarter Vishal incentive accrual.
Compared to the year prior.
Even though our all in accrual for the year 19 was less than 18 that was an impact.
Health care thing, we've got our arms around that.
We've made a huge amount of progress Jeff Toyota's VP of administration, Larry they've done a really good job and outlining and being able to tweak as we go forward our health plan ever so slightly back to matter is it isn't something that weekend in the year control, we had a bunch of.
Unfortunate really significant cases.
Which which caused us to believe at the end.
We're able to make some subtle adjustments in the form a benefit adjustment is already paying off.
And so that will impact US then the fact that we had in 18 and an artificially low fourth quarter tax rate.
On a benefit that extended the majority of which extended back into the 217 period, so quarter over quarter basis, those don't reflect our the operating strength in each of our operating divisions.
But that did impact obviously overall result, so I just think it's important to understand where those issues or what's addressable and I think it's all fairly addressable.
An understandable so with that that concludes my comments will go and opening up for questions.
As a reminder to ask a question you will need to press star one on your telephone to withdraw your question first the pound key.
Please standby, while we compiled the trendy roster.
Your first question is on the line of Brian Tanquilut with Jefferies.
Brian Good morning.
Good morning violent from Brian.
I just wanted to.
Asked about the strengthen in same store volume, obviously as you mentioned very sound performance record performance.
Yeah, what would you say is driving that is the investment in your Salesforce is that you know the strong economy you know.
Other adding capacity well what would you say are kind of the factors that are allowing you to deliver that performance.
Yeah. So I think the economies been went the economy has been it's been strong for a while.
This is the best ever performance for US this year I think it's a combination factors and 18.
We added a new region, we added some additional resources focused specifically.
On support or sales and marketing we've continued to make investments.
In those individuals and training a partners and doing a great job. They're doing they are also doing a great job in terms of the care.
We focus more on our direct consumer marketing.
And from a variety of different fronts, and so we're driving more direct business.
Directly from the consumer that not coming through a referral doctor referral. So that's helping so I think it's the combination of.
Those things good people working hard and making a difference I think the economies.
Being great, but it's been great for few years, and we've been able to Eke. This up so really pleased and proud of the team for the work. They did this year and you know we're going to work hard to see if we can't keep it going.
Okay that makes sense and then you.
Planting is a little bit slower on on the PT M&A on just wondering you know the number of conversations you're having with with new partners is that you know how is that trending directionally and also any.
Areas of interest on the Ipi died as far as acquisitions or he focused on on the integration at this point, yes. So 2018 on the face those you know we get credit for what we get closed strike for 2018, we had some things that we expected to close both earlier in the year and and for instance deal we announced Chester.
And we originally thought we'd get dog.
I'm sorry.
2019 that the deal that we just announced yesterday, we originally thought we'd get done this year.
Better right thing to do with.
The time that it took into get it done when it was ready to be dog instead of trying to force. So we're busier right now in discussions and active.
Process than any time since I've been here it will be I think hopefully a good very good year.
Well you know pricing continues to.
To be strong.
Very healthy very good for sellers.
We continue to be selective.
Thank you know, we just had a board meeting we've.
With that or you know inception forever to date performance and including you know deals that we've done in last four or five years and performance continues to be really strong. So I expect to get a lot.
PT I you know on on the brioche oxide, we'll see.
We expect to we expect a really good organic year, we've had to digest a lot through these three acquisitions since we started and we'll see how the year progress is I'm not going to I'm not going to provide much more coal. We made we may have activity there from and then.
M&A perspective, and remain focused on organic growth, so, we'll wait and see how the year unfolds.
Okay Fair enough and then last one from me.
The cash flow between 18, it seemed like it is impacted by some working capital headwinds and planting Larry any thoughts on on operating.
Cash flow for 2020.
Well.
Cash machines I don't ever feel.
Typically apologetic about the cash flow we rolled out.
Braintree, and AMR clinics or spend on software and hardware was normal was higher than normal and we had a really good here in terms of de novo openings, which is a good thing.
Early on they lose money that they quickly get in the black so.
That was higher in 19 than 18, but I mean, we we sit in that analysis showed that if we didn't do any new clinics or acquisitions, you pay off your debt and less than a year. So.
So we have given strong cash flow.
Great Thanks to the questions.
Your next question is from the line.
Larry Solow CJS Securities filler.
Good morning, Thanks, guys.
Couple of follow ups. So obviously.
Same store sales of especially volumes have been running a little bit above what we thought was the sort of normal highs I guess, if you will or peaks last years, what do you guys baking into sort of going back to that sort of 2% to 3% ish baked into your 2020 outlook that a good starting point.
Good starting point, that's what we normally use in the budget is 2% to 3% we used.
This year, it's in three this year, just because we've been running higher than that.
Right, so hopefully there potentially on the things.
Seems like the environment is pretty stable, obviously, who knows what happens.
Growing it gets into the U.S., but I would do that as a short term issues out there now okay. What about on the on the health care cost side. So it sounds like yeah, you guys called out it looks like it's a maybe its operational but not certainly related to volumes are in that your clinics.
It seems like you have it pretty much on the control unless I guess since cost continue to go up right I guess things healthcare costs seem to be.
Let me through it it's not operate institutes two items.
Owner.
Okay costs were significantly higher than we expected I'll be honest with you as these name brand drugs that are advertised on TV that are now being used for 10 different purposes other than they were with the originally.
Most of the used for so we changed plan administrators as of January 1st and put in a gatekeeper. So you can buy these 10000 dollar for prescription drugs without getting.
Making sure there is not a generic alternative or or less expense right much more scrutiny out there yet be up and then we increased co pays on drugs to and then for the health care plan.
We try to provide health care plan.
Really solid because oftentimes, we're competing with hospitals for their they normally provide superior benefits on the health care side, but we're getting to make some design changes there.
And just frankly, what everybody else it didn't have to increase deductibles and co pays but again, we're going to try to do it such that we still maintain.
Maintain a top tier health plan, but their design changes that we already know will save us seven figures and so we're going to.
I'm not going to have a recurrence of what we had last year.
But I think part of the issue last year, we ran them the way we've had.
Relatively speaking, we've tweaked our health care plan, a little but your and your out.
Yes really really.
Tough.
Big spend cases, so much yeah.
Including young people and premium accidents that yeah, you just can't avoid yup absolutely.
Insured up to $300000 and then we have an individual pay stop loss and then have an aggregate stop loss both of those got triggered by the ended the year outright or cases over $150000 and claims jumped 62% prior year.
Typically you would normally expect something like that.
But won't Tonight will make some adjustments and.
Certainly it seemed like an extraordinary little Perfectstorm against you guys couple of things that we're you know impossible as sort of predict and.
Probably don't repeat.
And your upside in your other higher stuff.
Well what does the I guess that shows up in one salaries and related costs, where does that show up in the in the piano it shows up and operating costs in clinics and corporate DNA in corporate.
Okay, So it's sort of spread out.
The point on that even though it shows up in operating cost and clinics. We had one of the best fourth quarter operating margins in PT that we've posted.
We really long time, even with those costs pushed down.
Right. So hopefully that you got a little room for improvement to once you get some I'm going to offset some of these higher costs, what about well on the out and industry prevention side. Chris you want you mentioned you know you've obviously done a great job integrating.
I guess two questions. There I know you had some increase expenses in Q4 sort of to complete I guess the integration of the most recent acquisition is that sort of pretty much complete and that on the margin side. You know what do you think the ultimate you know not an exact number but you up to the low twentys today cannot continue decline.
Yeah. This is a young business and [laughter].
We've taken margins from 13 to 22, and I understand how that graph plots out I would encourage everybody not to get too far ahead of us we've kinda budgeted for the year around where we are right now we'll see what we can do with that the focus is on growing.
In that business, we have had to take in kind of re scale, some support, particularly around our financial team and IP.
Because there's a lot of IP resources that need to be deployed to.
Both manage the company in support these support these contracts. So we'll see we'll see I think right now you know where we finished the year as kind of a good watermark and we'll see we'll see if we can't take that forward, but you know I wouldn't but wouldn't model at.
At least that asking relative no not fair enough just last question just.
And the Larry has not not keeping my to do it too fast, although I would like to seem here longer but I know I think you, leaving I think in October.
Do you expect to have a replacement at some point before you leave to sort of help the.
The transition process.
[laughter] Yeah, we're we're not gonna do without a CFO letter he's been an amazing CFO. So that process is well underway. We've got we've got a good way to people talk too.
We're still early in the process, we expect I have somebody I would say you know broadly by the summertime so.
Situated with overlap with Larry.
A nice smooth transition larry's can be around to help support and transition as we as we need to so yeah got it.
I should overlap with the new person for several months.
Yes, they have a deep accounting financial admin team.
Right now we mourn the new CFO not to take calls from Mike the taski, but other than that [laughter].
Alright sounds good I appreciate it guys. Thanks.
Your next question is from the line of Matt Leroux with William Blair.
Hey, Matt Hi, Good morning, Hey, good morning.
One of that yes.
Yeah again, obviously the most recent acquisition added since slightly different business makes the some of that the pilot testing.
Could you maybe give sense for growth and.
2020 here, whether you think there's a big opportunity penetrating existing customers like to dumb Costco versus now do you have a broader suite of services going on acquiring new customers and then just any update on the cross selling opportunity with PT.
Yes so.
Two different question so on the BT E car.
Suffered testing.
We spent a lot of last year, just on integration and to be honest within we've got a great BTD team and a lot of great folks.
So we're excited about that spend a little bit of a tough market for the poet, especially with their concentration and.
Transportation Railways and some other industries that got hit a bit hard and 19 with China tariffs and all the all the craziness that was going on you know around the world, particularly centered around tariffs and so and then secondarily.
To that in such a high employment market well, we've kept all these contracts some of the people because they can find even warm bodies to fill their positions. There. They are temporarily at least not screening everybody because they don't have enough people that you know even.
To to look at the higher end. So it's good problem. The I would say the poet business is kind of counter cyclical insulin in a super hot economy, a little bit tougher now having said that we have seen and pick up more recently in that volume.
I'm hopeful and it's early but we can continue that into the year Weve a little slow frankly in the latter part of the 19, we have great team. We started the the the war to cross sell and do that were early and I don't really have commentary on how that looks yet because it really truly don't know.
And then on the P.T. business, we're still early in that we've been as I mentioned to you. When we were traveling you know to meet with shareholders recently, we've been really slow on trying to and very careful on launch and trying to keep these businesses between PT and the prevention.
A bit suffer now there's lots of opportunity to cross sell within three optics, where are our folks do such a good job on the prevention side frankly.
Now if they do their job and that they do you know there isn't a ton of PC business now there is relationship there and overtime, we believe those relationships.
We will benefit our customers, maybe not necessarily on the comp side, but on the group health side because most of these companies are large self insured implores employers were in the first or second inning. There we're moving slowly so as not to create the impression we've done this just to suck.
PT visits by doing a bad job on prevention. So we're not doing that we're doing a great job one prevention and so this is a long term play and we're still early so it's going to take a while yep.
Understood.
And I just wanted to get that any sort of update in terms of 2021.
On the discussions you've had with industrial grew up in terms of finished again.
Yes.
What how we should be thinking about in terms of our own 2021 models.
You know kind of the rate impact from those changes and then whether you think supply disruption it could create an industry.
The light accelerate M&A, so I guess.
Yeah, the easy part of that first any disruption industry, absolutely accelerates M&A, that's just been the pattern.
As I say if everybody is in the same storm, but if you have a much bigger boat you feel a little bit less.
It feels a lot better if you're in a small boat you know gets a lot refer and in people want to onboard and that's going to happen our industry group.
The Alliance our alliance has continued to grow and strengthen.
I'm really proud of the group a P.T.Q. I.
Weve added number more companies here in the last few months great companies. We've been very active we've had six or seven congressional dinners over the last two or three months focused around the 2021 issue.
We've been to CMS.
We've been to CMS, a few times for a few different things we started out the year also what kind of a bungled.
See I added process, which affects code combinations. It was a mistake shouldn't have happened.
It affected January a little bit of February February actually, but we got that resolved uncorrected back to where it was so that was an effect of initiative that.
APC Q. I participated in directly with other industry groups and leaders were still working on that 8% issue.
How to model it until changes you're going to model like it is you know it's 8% for 24 2021, we're working really hard to blend into mitigate that but it's it's not done yet so but that's about as clear as I can I can make.
Okay. Thank you.
In Q.
Again to ask a question. Please press star one on your telephone keypad.
Your next question based on the line of Mitra Ramgopal with Sidoti.
Hi, good morning, thanks to take any questions.
First I just wanted to start to the IP business, Chris I know you talked about.
Turning opportunities that are out there and I was wondering if you also need a dedicated sales force.
Drive incremental Ralph can you do it.
Just to cross selling initiatives.
We do have a dedicated sales force.
Bob Patterson has set up for us.
Partner Embryotic Oh.
He's got a great team is made up of Riyadh exposure.
[music].
Okay.
And as well.
He.
And so that's been a growing force for us.
And they're doing a terrific job as our client manager and other people embedded throughout our.
We ought to help or for.
Then client relationships and cross selling and all those things leadership team.
All the way through the organization. So we've invested a lot in that.
For the Miss that team together.
And so that's not new for us, but it continues to be you know a significant part of our success there they're doing a really casino.
Okay, No that's great.
And then just commented on the acquisition today. It seems like obviously just makes that a number of clinics in the revenue generated by these are pretty nice size that clinics.
Just wondering in terms of as you look at opportunities opportunities out there.
Is it just a question a balance into four or five clinics versus maybe 10 plus clinics in a similar revenue if you have a preferential one versus the other.
[laughter], Yes Mimi.
And you.
You know attach really good people in one region.
Morning.
Outstanding So.
Really excited about it may come in different shapes and sizes, some are bigger and more Ben.
I'm more clinics.
Our more average.
An average clinic volumes.
This happened for the smaller footprint be really really nice size facilities.
That run you know what amazing schedule, including through the weekend. So they do a great job affinity one for the other they're all different than so we have an affinity for great people of integrity love the business.
And then you know.
People that that also.
Understand how to run the business and have an appetite for growth those things combined that they look and feel a little bit different.
So we start with us with the people and once that equal fit is there there's a healthy business and there's a healthy appetite to grow we're interested the size of the clinics don't matter as much.
[music].
At least though right now.
Okay No. That's the this great and then just on the guidance.
It's already factoring in the savings from the pharma side I was wondering if it also has including some of this savings you expect.
Yes, you tweak sells the eye health care plans.
Really I mean.
Mainly.
Jane.
Yes for last year and then.
Okay. Thanks, and then finally.
Im not sure if you mentioned it already Larry I was wondering if you had the payer mix three year.
Year.
The quarter is actually quite okay quarter.
Right and names.
Sure.
Yeah.
Workers.
Yeah.
Medicare and Medicaid.
Yeah.
Others.
Yes.
Total revenue.
Oh.
Yes.
<unk>.
I never really.
And we May start to report on.
On a recurring basis factoring in Riyadh.
[noise], who.
We order roll out you're going forward.
[music].
Mark.
Spec.
[music].
Okay sounds good thanks again for taking the questions.
Your next question is from the line of Brian Tanquilut with Jefferies.
Hey, Brian Hey, Hey, <unk>, one quick follow up on the PC side are you seeing any change in ease of hiring or a compensation given some of their reports out there about reduced therapist utilization in the other sectors you know post acute.
Yeah, the nursing homes at home health seem to be cutting back on on therapy utilization somewhat so just wondering if you're seeing an increased supply as of candidates. When you have opened position.
No I I personally don't have.
Particularly clear optics on you know I don't get a report on how many applicants reject per.
Advertise location I can tell you the group's doesn't really good job filling open positions are partners have done a good job and staying connected and creating reputations where people want to come work I don't know that particularly we often.
Higher you know typically.
Folks that are coming out of the long term care business not necessarily.
We think about in terms of being a great fit for orthopedic or sports medicine business.
But you know I I don't know that I'm that I'm aware of it when it may be easier here recently, but we seem to be able to fill positions generally where people live on the pricing side I will tell you know unfortunately, five or six or over many years ago, you know our association maimed.
Turning to have everybody come out with the Doctor degree people come out with more debt and so you know and that's a full employment market and I don't think therapists are waiting tables right now so the pricing is there's pressure there. The group 19 did what I think is an exemplary.
Rob and getting some margin expansion.
Relatively flat rate.
But but eking out some margin improvement, but it's not because we're paying people less that's not the case.
Got it thanks, Chris.
Thank you.
There are no further questions.
All right everybody. Thanks for your time and attention today learn our available via a follow up questions are pretty gives the buzz have a great day.
Okay.
This concludes today's your end earnings call. Thank you for your participation you may now disconnect.
[music].