Q1 2022 Airsculpt Technologies Inc Earnings Call

Speaker 2: So.

Speaker 3: airscope technologies: results for the first quarter. Joining me on the call today as our Founder and Chief Executive Officer, DR Aaron rowllins, and our Chief Operating Officer ronzelhoff.

Speaker 3: Before we begin, I would like to remind you that this conference call may include forward-looking statements. These statements may include our future expectations regarding financial results and guidance, market opportunities and our growth. Risks and uncertainties that may impact these statements and could cause actual future results to differ materially from currently projected results are described in this morning's press release and the reports we will file with the SEC, all of which can be found on our website at investors: elite body sculpture com.

Speaker 3: We undertake no obligation to revise or update any forward-looking statements or information, except as required by law.

Speaker 3: During our call today, we will also reference certain non-GAAP financial measures.

Speaker 3: We use non-GAAP measures in some of our financial discussions as we believe they more accurately represent the true operational performance and underlying results of our business.

Speaker 3: A reconciliation of these measures can be found in our earnings release, as filed this morning, and at our most recently quarterly report, when filed, which will also be available on our website. With that, I'll turn the call over to DR arowllins.

Speaker 4: Thank you Dennis, good morning and thank you all for joining us today. First I want to say the first quarter saw us reached the highest quarterly volume and revenue that we have ever achieved in the history of our company. For the quarter we generated 39.5 million of revenue, reflecting outstanding growth of 51% over the prior year quarter.

Speaker 4: Additionally going into the second quarter. The demand we are seeing is higher than we have ever experienced.

Speaker 4: We developed air scope 10 years ago with one center in beverly Hills. We now have a national network of 19 centers across 15 States and we continued executing on our growth plans and opened a new location in Las Vegas during the quarter.

Speaker 4: We remain on target to execute on our Denovo strategy of opening four centers this year, which speaks to the demand for our services domestically.

Speaker 4: As we mentioned on our previous call, we also believe there is a great opportunity to also expand our network of centers internationally and we anticipate opening a center in Toronto Canada, in the second half of this year.

Speaker 4: We look forward to continuing the momentum for the rest of 2022 and beyond, and we are excited about the opportunities ahead of us as we continue to expand into new markets and deliver incredible results for our patients and our investors.

Speaker 4: There is tremendous winind in our sales from favorable trends in the aesthetic space, especially in fat reduction in body Contour.

Speaker 4: A recent publication by the aesthetic Society showed that liposuction surgical procedures increased to approximately five thousand procedures in 2021 and is now the top aesthetic plastic surgical procedure performed today, surpassing breast augmentation.

Speaker 4: These statistics are further evidence of the opportunity for us to increase our market share due to our superior results and technologies.

Speaker 4: We remain committed to driving aerscopes brand awareness. We believe most people who want body conjing services and fat removal don't know that we exist.

Speaker 4: We are focusing our plans to reach this group of customers by expanding our usage of celebrity influencers earned, owned and paid media content, as well as continued development of our social and digital media outreach.

Speaker 4: We believe these efforts to increase our brand awareness, along with the heavy demand for aesthetic services, will create exceptional value for our business.

Speaker 4: We have also been very active in building out our team. Due to our rapid pace of growth, we have taken a proactive approach of making investments in various areas of the company to position us for further growth. Over the past six months, we have developed a dedicated physitionian recruiting department and these efforts are performing exceptionally well.

Speaker 4: During the quarter, we added seven new surgeons to our network, which brings a number of physicians performing cases at our facilities to over fifty.

Speaker 4: As a result of our increased recruiting efforts, we recently hired our second surgeon trainer, which will allow us to trade newly recruited surgeons more effectively as we strive to meet customer demand.

Speaker 4: During the quarter, we also expanded our clinical capabilities by adding a Chief clinical Officer to not only support our clinical operations but also to lead our upcoming health research project.

Speaker 4: As we introduced on our previous call, we are excited to undertake a health research study on the effects our procedures have on a patient's metabolic parameters. We are well into the process of designing study and we are on target to submit to the institutional review Board for approval later in the second quarter. We expect patient enrollment to begin this fall and we anticipate having results from the study in 2020. -three.

Speaker 4: Additionally, we have contracted with a national adult stem cell banking company which will allow us to offer our patients the opportunity to Bank their stem cells harvested from the fat removed during their aoscope procedures. We believe this is one additional way for us to further promote the health and wellness of our patients and we plan to start offering this in the second quarter.

Speaker 4: I'm sure you all have questions on how the current inflationary environment and increasing interest rates will impact our business.

Speaker 4: While we CAn't predict the future, our current demand is stronger than we've ever seen in our history.

Speaker 4: We also have a very resilient business model which has a low fixed cost structure coupled with a strong balance sheet to support our business.

Speaker 4: No I want to turn the call over to ronzo off, our Chief Operating Officer, Rob. Thank you, DR ALS, and good morning everyone. I'm going to share some information regarding our gennovvo and procedure room expansion projects, But before I do, I want to say thank you to the airsculpe team.

Speaker 5: You perform magnificently every day by bring first-class results to the patients we treat, especially in the face of challenging times brought on by covidnow. I'll provide you with the development update. As you know, we opened the center in Las Vegas in March and, up to this point, demand has exceed our initial expectations. We've now opened three centers over a four -month period and each of these centers are performing exceptionally well. As previously discussed, it takes approximately four months for a center to become cash flow positive and, While these new centers have a short-term negative impact to our margins, they give us a great platform for margin expansion as we grow revenue over the rest of the year.

Speaker 5: We expect to open our next center in Boston in June , which will be the first to novo that we have opened with three procedure rooms.

Speaker 5: three procedure rooms not only allow us to meet the demand we anticipate in the market, but it also provide operational efficiencies as utilization increases.

Speaker 5: Looking to the rest of 2022, we have plans to open two additional facilities later in the second half of this year: one in Philadelphia and another in Toronto Canada, which will be our first international facility.

Speaker 5: We are also diligently working on our centers for 2023 and we look forward to sharing some more about those markets in the coming months.

Speaker 5: We have also been busy adding more procedure rooms to some of our existing centers. As mentioned on previous calls, our legacy centers were built with only one procedure room.

Speaker 5: Due to capacity constraints, we've been converting or, in some cases, relocating those centers to larger facilities.

Speaker 5: We relocated Sacramento in the fourth quarter of 2021, expanding this facility to three procedure rooms.

Speaker 5: Having the third room not only gives us increased capacity, but also allows us to operate on patients faster and more efficiently.

Speaker 5: In March we add our procedroom to our Chicago facility.

Speaker 5: In March we added a procedure to our Chicago facility and, I am pleased to say, we relocated our Dallas center on May second and it also was expanded to three procedure rooms.

Speaker 5: As discussed on previous calls, it typically costs less than a million dollars to open a new facilility And so far we have not seen a significant impact from inflation, nor have we encountered disruptions in our supply chain that would delay the opening of new facilities and procedure rooms that are scheduled later of this year. We are so excited about the interest in demand we are seeing an existing markets and in our new markets. Due to our record volumes in revenue and to further prepare for our growth plans, we have been expanding our team in both clinical capabilities as well as our sales and operations to prepare for further growth acceleration. With that, I'll turn it back over to Dennis to provide additional details on our financial results and revised outlook. Dennis thanks Ron. First I'll share some remarks on the first quarter in our liquidity and then provide some thoughts on our outlook for the remainder of the year. Our revenue increased 13.4 million.

Speaker 3: To 39.5 million, a 51% increase from the prior year quarter, and our cases increased 31% to 3156. the increase is primarary a result of adding five to novo centers over the prior year quarter, which expanded our footprint to 19 centers as of March 30, first 2020 two.

Speaker 3: Additionally, we experienced same center increases in both volume and revenue per case.

Speaker 3: Our revenue per case was $12.53 thousand, a 15% increase over the prior year quarter.

Speaker 3: As a reminder, there are several variables that determine our pricing. While it is primarily based on the length of time a patient is in the procedure room, which can vary due to the number of areas being treated, other factors include the volume of fat being removed and whether a procedure involves fat transfse.

Speaker 3: For the first quarter. Fat transfers continue to make up greater than 20% of our procedures performed.

Speaker 3: Now every patient is a candidate for a fat transfer for a variety of reasons. However, we expect to maintain this percentage as case volumes grow.

Speaker 3: Same-center revenue increased 29% over the prior year quarter, driven by strong case growth and an increase in rate. Much of our same-store growth can be attributed to favorable trends in the aestic space and to expanding our marketing and selling capabilities, especially air scope TV, to increase brand awareness and to attract more patients into our centers.

Speaker 3: Our cost of services for the quarter as a percentage of revenue was 37% versus 33.6 in the same period last year.

Speaker 6: As DR ronins and Ron both mentioned, due to our rapid growth, we have been making certain clinical additions to our nursing teams, which started last quarter and continued into the first quarter.

Speaker 6: These investments further enhance the quality and safety for our patients and better prepare us for future growth in both existing centers and the new centers we are developing.

Speaker 6: Our margins in the quarter were impacted approximately $4 thousand or 100 basis points from these investments, which are now mostly complete, and we expect to begin leveraging these investments over time as revenues continue to grow at a strong pace.

Speaker 6: Additionally, our cost of services were impacted by approximately $15 thousand or 50 basis points related to increased staffing costs due to COVID-19.

Speaker 6: As Ron mentioned in his remarks, the opening of three dnovos in the past four months also impacted our margins by approximately 130 basis points.

Speaker 6: We expect this impact to be short-lived, as demand in these centers has been strong and will give us a platform for revenue growth later this year.

Speaker 6: Our advertising costs, which include our digital, social and traditional advertising, were four point eight million for the quarter, which is approximately 12% of our revenue.

Speaker 6: When combined with our marketing and sales personnel cost. Our total customer acquisition costs for the quarter were approximately 2200 per customer, down sequentially from $2.6 thousand per customer.

Speaker 6: Based on gross margin per case, which typically averages over $8 thousand, the return on our customer acquisition cost is nearly four X.

Speaker 6: Which we are extremely proud of.

Speaker 6: As a reminder, our marketing costs as a percentage of revenue and per customer rates can fluctuate quarter-to-quarter, related to the timing of investments we make compared to the related revenue increases we achieved after making these investments.

Speaker 6: Our adjusted EBITDA was nine point eight million for the quarter. Just to remind everyone, this was our first full quarter as a public company. Adjusted EBITDA included approximately $2.3 million of public company-related cost.

Speaker 6: Which did not exist in the prior year quarter as we were a private company.

Speaker 6: Normalizing the prior year to include these public company costs, our adjusted EBITDA growth rate would have been approximately 3,4% and.

Speaker 6: Additionally, our public company costs are approximately $65 thousand more in the first quarter as compared to other quarters, due to our annual SEC compliance requirements.

Speaker 6: And finally, our adjusted EBITDA margin for the first quarter was 25%, which was also impacted significantly due to public company-related costs.

Speaker 6: Moving on to liquidity and cash flow items, our cash position as of March thirty-first 2022 was 27.2 million.

Speaker 6: And we have a $5 million revolver that is undrawn and has no outstanding letters of credit.

Speaker 6: Our long-term debt was approximately 83 million and our leverage ratio at the end of the quarter is calculated under our credit agreement was 2: X. cash flow from operations for the quarter amounted to seven point one million, which reflects approximately 72% adjusted EBITDA to cash conversion.

Speaker 6: An attractive aspect of our business model is that we are 100% self-pay, with no reimbursement risk.

Speaker 6: We receive all of our payments upfront, So we have no accounts receivable to collect. Additionally, our surgeons are contracted and receiive payment only after a surgery is performed, which allows us to manage our operating cash flow very effectively.

Speaker 6: We also invested four point three million during the quarter, primarily related to opening our center in Las Vegas and our upcoming openings in Boston and Philadelphia and our procedure room expansion projects.

Speaker 3: Now I'll provide some information on our outlook for the remainder of the year.

Speaker 6: As we think about revenue, we now expect to achieve between 175 to 179 million for the full year.

Speaker 6: Up from our prior forecast of 172 to one hundred and seventy-six million.

Speaker 6: And represents a 31 per to 34% increase over 2021 levels.

Speaker 6: And we are maintaining our adjusted EBITDA outlook of 58 ill to sixty million.

Speaker 6: From a modeling perspective, we expect to open four centers this year.

Speaker 6: As you heard, we opened a center in Las Vegas in March and we expect to open Boston in late June , and the remaining two center openings are expected to be in late in the second half of the year.

Speaker 6: Also as we have previously discussed, there is a slight element of seasonality in the business during the second quarter, as patients prepare for the summer months, and our first quarter tends to be a lighter quarter, with volumes trending upward in March and through the second quarter.

Speaker 6: Just to remind everyone, as a result of our IPO, we reorganized into a C Corp and are now estimating income taxes accordingly. Additionally, our stock-based compensation increase related to IPO equity grants that were issued as part of the creation of our 2021 stock incentive planthese initial IPO-related grants have a three -year vesting period and are expected to impact net income significantly until they fully vest.

Speaker 6: Before we take questions, let me say that this truly is a unique company that provides incredible results for our patients. We have an extremely attractive business model that provides excellent return on invested capital and is being fueled by favorable trends in the aesthetic space, and we look forward to further capitalizing on these tailwinds.

Speaker 6: With that, I would like to turn the call over to the operator for a few questions operator.

Speaker 7: Thank you. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, Please basase Star one on your telephone keeper.

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Speaker 7: one moment is while we pull for questions. Our first question is from line of Josh Raskin with nephfront research. Please go ahead.

Speaker 8: thankanks. So good morning everyone. two questions for you. The first one here is the booston guidance for revenues, that $3 million. How much of that is, you know, sort of Boston coming online faster? I I think about, you know, each month being maybe 75.8 million of revenue. And then how much of that was better demand? And if it's, And regarding the better demand, if you could just talk about what specifically is driving that geography wise, product mix-wise?

Speaker 1: Thanks for the question, Josh. I would say it's probably equally weighed. If I were looking at it from the standpoint of the increase, we did bring Boston on a little bit earlier, but remember when we bring those on that they tend to ramp up a little slower, intentionally for quality purposes. But the demand is really the main driver as far as increasing the revenue guidance. All right, did I hear halfen, half or more more? I wait, I would wait a little bitmore on the demand side.

Speaker 8: Okay and what specifically driving that? Is that more higher cost procedures? It certainly look like you saw that in pricing is in more fat transfers is there? Specific geographies are outperforming.

Speaker 6: It's really not related to what I would consider the activities that we are doing. It's really more of the industry itself. I meanwe'we've.

Speaker 6: We discussed a report that came out recently that just showed the massive demand for fat reduction type procedures in body contouring and that is really what is putting this major win behind us and we again, we're extremely bullish from that standpoint, which is why we've kind of looked at it from the standpoint of saying demand is really the key driver here.

Speaker 6: You know, and our procedures they fluctuate from month to to month. I mean we don't we're out a high volume, you know center, our centers don't run a lot of volume and so there could be some, some movement within our rates just due to the types of procedures that come in the door. There's nothing anything that we would call out significantly. I mean, you know, certain certain months we may do more chins, which are a really short procedures, but they're very profitable procedures and so while the rate might might, dip a a bit, it's really has no, you know, significant impact of what we think of from from a bottom line perspective. So we like where our business is. You called out fat transfers.

Speaker 6: Fat transfers aren't for everyone. Not every patient is up is a candidate and, quite frankly, most patients aren't candidates for that for various reasons. 20% is kind of what we've been sort of calling out, what we expect to maintain as we, as our volume grows. And that's what we expect to maintain and it's kind of where we've been over the last several quarters.

Speaker 8: And then just separately on the new centers. I'm assuming it's a little too early to know anything about Las Vegas, but you know Miami, Sal Lake. I'm just curious. You know it sounds like you ING a little bit of outperformance there- anything you know particular there and maybe any lessons you've learned in terms of you know the newer opening that are going to be helpful in the future.

Speaker 5: Hey Josh a tron, how are you? All of our- all of our centers are performing slightly, actually ahead of expectations or extremely pleased with how they're performing right now.

Speaker 6: I think the biggest surprise might be our MI Beach location. When we opened it we were maybe a concerned about pricing just because of the some of the challenges maybe in the MI South Florida market area as far as these types of procedures. So that's been quite frankly a positive for us that the rate there hasn't seen significant pressure at all. We've actually been very successful in in getting our rates.

Speaker 9: Alright perfect, thanksthank you. Our next question is from the line of simeon gutman.

Speaker 10: Please go ahead. Thanks everyone, good morning. May have new questions. First on good morning, first on demand and then second on some costs. So first on demand.

Speaker 11: Can you share with us what I guess forward bookings look like? I don't know if you'll touch on quarter-to-date, but that's fine. But in light of the backdrop, which mostly is stock market changes and geopolitical orries, curious if there's any correlation to how demand is shaping up going forward. That was my first question.

Speaker 6: Thanks sion, you're right. Well, we don't give up know, any sort of forward looking, specific information. What we would say though, is that the first part of the second quarter is is really, really going strong. We're very positive as to what we're seeing from the from, from from volumes and sales and bookings, and so we're, you know extremely, extremely excited about you know what? What's ahead of us. Second quarter is looking really good so far.

Speaker 11: Ok great thingss. And then the second question. It is on cost and scaling. There were two buckets that I don't know, if it caught our attention- marketing spend and then surgeons, but especially the second trainer. Can you talk about how much of this is plan versus on planned as the business scales and grows? What portion of this is proactive? For example marketing, where you see an opportunity and you think it would have a good return versus their certain level that needs to be spent to support and then, at the same time, more surgeon trainers. This is being scaled for the first time. Right, you guys are are doing it. Are there areas? Are you finding that the business needs more investment? Or is this all planned as as as the number of sensors ramp upi can start their enrollance? I can start with some answers about our investments in the business giving our second surgery trainer. It was wonderful for us. It was hoped for planned.

Speaker 4: There's not many people that can do that, and we're really happy to have them. Having two full time surgical trainers really allows us to scale at a different, at a different pace, and it allows us to maintain our quality and our safety in a way that we couldn't before, So we're thrilled about that as a money very, very well spent. We don't plan on hiring a third at this time. Dennis, you want to fill in some more?

Speaker 12: Yeah I would say, you know, as I look at kind of the original outlook, you know, I think those costs we've pulled forward a little bit earlier in the year compared to what we sort of expected to and quite frankly, we did so because our revenue has been so strong and the demand's been so strong. You know, one of the things that we want to do is prepare for growth and we want to accelerate our growth not only in same store but also accelerate, you know, our growth in new facilities. And so you know we've again, because of the demand, you know, we felt that was the right time to invest a little bit sooner. Another thing is we're happy to see our customer acquisition costs went the twentthousand 200 for patient for the quarter and that's a strong return on SP because our gross margin in excess of $8 thousand per patient, which is close to a four times return.

Speaker 11: Thank everyone. Good lookuck. Thanks, smy. Thank you. Next question is from the lane of golden miles, the pipeus cent of the Fe quid. Hi, good morning and thanks for taking a question. So I'd like to: one expand on kind of what's going on in the current macro environment and I just like to get your thoughts. I mean, I know demand is obviously trending very well, but you know, as we hear more about, you know, consumer sentiment starting to decline both here in the U's and internationally and maybe consumer stud cut spending. How are you viealing the resiliency of the broaders that market through these conditions and how do you, how are you expecting the market to fair, you know, if we do continue to go into a downturn here?

Speaker 4: This is Aaron rollins. Thanks so much for the question you. I've been doing this my whole life and I've been in the CEO of aeroscope now for over 10 years and I can say with absolute certainty that I've never seen this level of demandour. Volumes have never been better. Our financing rate is exactly the same.

Speaker 4: And I see demand actually accelerating. So that's, that's all I can really tell you. So I feel great about, about the coming quarters here and these macro conditions have had no effect on our business. I mean, in fact, it's accelerating.

Speaker 12: I I would. I would add a little bit that we are a luxury brand and so, with that, our customer base tends to be a bit more resilient to some of these macroenvironment trends that we're seeing.but again, like DR Robin says, from our demand that we're seeing it, it's again.

Speaker 12: I's say knock on Wood. We're excited about where we're going about change cost struures.

Speaker 13: Helpful Thank you, I really appreciate the color there. And then I just like to touch a bit on renew V on. You didn't really mention it in the prepared remarks, but can you just give us any of the color on how that's been going? How many offices now have this technology? What has demand been? And can you just walk us through the economic procedures or economic of this procedure again So we understand what's the add on cost and what's the cost for you? Bring this on just any, any color. That would be helpful. I can start. So we're really happy to offer renew V on and run. How many offices do we haveen in date? Chairman.

Speaker 4: We have T in seven and the way we're rolling. It out is based on demand if there's an office where patients are asking for for it and which we call erocope plus. Then we then we immediately get them a machine. There are some offices that do a lot more of it than others and it's really just based on patient demand for it. The economics are very good. I'm not sure then it you want to and see what we're allowed to SA about sure. We usually say about it a $2.5 thousand AD on typically for that. Obviously it depends on that every case is different that but that's on average about what it looks likeand the good thing is for that $2.5 thousand out on that's about 20 minutes more of operating room time. So it's it's really good and I'd like to say because we're a result focus company. It actually works very well. So I'm very happy with the technology. I think it's extremely sayfe and.

Speaker 4: We have. We have every plan to continue to roll it out based on demand for any individual. Great, Thank you. Thank you. Our next question is FR line of which mail with SVB living Please go ahead.

Speaker 14: Hey thanks morning Dennis I just wanted to go back to the topic of the increased investments and the timing I totally appreciate the decision toyou pull. The trigger on these I don't think it's actually fully you within your control when you find the right people the right talent to join the team. So that decision seems to oftentimes be made for you not really easy to put that into a budget and you guys don't give quarterly guidance and we're getting a few questions here. So if we just kind of take all the puts and takes your of like how the quarter developed with. These increased investments how did to really compare with your internal plani thanks with first before we get into that to the investment side. I mean we obviously get impacted heavily by being a public company and so I just wanted to make sure that again we sort of reiterated that point that we we saw excellent adjusted ebitdog growth year over year when you. When you account for those costs that we cur and I know that wasn't part of your question with. But I think it's just it's just a significant number. We just need to continue that right to make sure everybody's calling that out as well. But.

Speaker 12: We and kind of like what I'd shared earlier, the demand has really what caused us to pull these costs forward. We again, as we've always talked about quality safety, our paramount for us, and so that's caused us to really focus on bring our nurses up to a higher standard, in that we're hiring more our NS, whereas in the past we had LPN. We put nurse managers in place. And all of this is because, as you grow a business, like we are in the health care space, you CAn't sacrifice quality for rapid growth, and we see the opportunities out in front of us for this growth and so we the inved these dollars, primarily the quarter. We feel like we we're right at the point of maxing out from that standpoint. So we feel like the investments we've made in that arena are about where we need to be and so we'regoing be able to leverage that number as we move forth through the year. We had probably a $4 thousand impact in the quarter.

Speaker 12: You know, if we think of it from a sequential and over prior year, we had about a four 5, five thousand dollar impact there related to adding these. You know. You know nurses and other clinical items, as DR Ron talked about. Know investing in. You know our, our surgical trainers, I mean those are. That's critical in that you know, if we're going to be able to open up new centers- and maybe open up new centers at a faster pace, we have got to be able to only recruit the doctors but also to train the doctors and so adding that second, you know, full time dedicated physician trainer just speaks to how we see the volume out in front of us and the opportunities to there and so. So those are two of out. We didn't have a little bit COVID-19 impact where we had over time and duplicate staffing in those types of things. Most of that was in the first two months of the quarter. We're not really seeing a lot of that and hope that be the case the remainder of the year. But we'll see. I know in the past we've been very resilient, we've been very effective in working around.

Speaker 12: The covidt impact that we've had. We've been able to keep the revenue numbers going and by rescheduling cases in a timely fashion, So we feel good about that. But that obviously hit us a bit in the quarter. And then from a margin percentage standpoint, I don't think we've.

Speaker 12: Spoken to this very much on the call yet, but we open three centers in the last four months and that's a little bit heavier than what we've ever done in our history at at one time and that's driving our margins down and and the reason being is because, as you guys know, it takes us about three to four months for these centers to become cash flow positive. But it gives us a great platform for EBITDA growth as we kind of run throughout the rest of the to the year. That hit us for probably about one hundred and Thirty basis points in margins this quarter. So we really feel good where we are. We're excited again. Making these investments now just really prepares us for what we see coming down, the coming on a line forus.

Speaker 14: No I think I get. It seems like you guys kind of come out of this quarter with a little bit more enthusiasm than when you entered the quarter. Can I just ask one other question on the relocations?

Speaker 14: Any way to size disruption that you historically feel when you do a relocation. I think you stagger these pretty efficiently, but just trying to get a sense that there is any expected disruption from a relocation such as Sacramento or whateverdrawn.

Speaker 5: Number one appreciate the question. The answer is, you know, we don't we. The way we do it is we do it over a long weekend and the last one we did in Dallas, which was a large relocation for us. Again, Friday afternoon comes along, Friday evening, and we're already, you know, been packing up and then we move over the weekend and we start to new cases on Monday. So that's how we, that's how we go ahead and do these, So there's no disruption whatsoever. I to de like to but very happy to say that we recently used all three procedure rooms in a relocated office for the first time at the same time, and that's that's really big for us.

Speaker 14: Okay thanks, cusysthank you, Thank you. Our next question is from line of John planson with rayman James. Please go ahead.

Speaker 15: Good I guess, as soon as per dennes, I mean normally too. Q is your highwater Mark? Is that going to be even more of the case this year? If we think about sequential revenues, given the pretty openings, than maybe the first quarter has some aacproduonfect.

Speaker 6: I think on a sequential basis John , how we're seeing it is obviously Q2 is going to, is going to ramp up significantly. I mean, that's that's been our history. You know how we look at youknow. I'm looking at the mid 40 range for revenue for the next, actually for the next two quarters, and then you upper forty's for the fourth quarter on a revenue perspective. Obviously the fourth quarter is getting benefit from from additional ramp and some new centers that will bring online throughout the year. But that's kind of how I see it laying out for the remaining, the remaining quarter, from a revenue perspective.

Speaker 16: And I know you mentioned the extra, the audit costs- right word, but the extra public company costs in the first quarter. But how? How should we think about your pxed cost kind of one Q to two Q if? If we fully quarterizas, if you will, the investment that you made, what's the, what's the kind of step up TA few N?

Speaker 12: Sure one thing I wouldn't make a point is also if you look at the numbers on a sequential basis. Q4, we were only public for two months and our public company costs run on average about 650 to 700 a month.

Speaker 12: So that's a sequential impact that you beared in the first quarter that we didn't necessarily see in the fourth quarter. Now that's going to run with us and in the first quarter we usually see about a 650 to $7 thousand increase over future quarters because of the annual SEC requirements.

Speaker 17: Act Ion. Was there anything else in the first quarter that maybe you layered in the expen mid quarter, that'll be a whole full which is depending relatively just.

Speaker 12: I think from that standpoint I would run with it. I mean again, we've made the majority, if not all, of our clinical investments, So we feel good about that, and so now we're just again have prepared for, for that growth it's coming upand then last one for me. Could you remind us com kind of what your expectations are for the balance of the year there any any seasonality to it and what's the wholell about? You need to invest.

Speaker 18: howbefore it level. Know that was part of the PO of discussion, but maybe this level set everybody for that. Yes, So we, we there's. There's not really going to be what I would consider a significant seasonalleally to that, most of what we see on the stop comp line is due to the the, the original IPO grants that took place. It's about seven point three a quarter. But what I would also add to that, just for for modeling purposes, is that you know, due to one six 2, him requirements for tax purposes and the deductibility of various Executive comp, you know our we won't get the benefit, if you will from from an income tax perspective for that, and so that will definitely impact our. You know our effective income tax rate this year long you going to be running at their level. That's all fully absorb PO grant. Yes, So So you will be running for three years and so we're what? Basically six months into it. So about another two and a half years, joh.

Speaker 14: Okay very good, and then just remind me if you would. I know you haven't seen. I guess to other thing. First of all, how far out are your booking? typicallywell, you going to be ahead?

Speaker 5: Our bookings run depending on facility. There can be anywhere from just two weeks to six to eight weeks. It just depends on our one room or one room. Existing legacy centers, those tend to be a little longer, but on our newer, on our newer centers it's not long at allokay. That's why you're sitting here almost in that quarter. I mean you've got probably maybe three weeks of book, So you ve got pretty solid visibility onif you.

Speaker 18: That's my without qu figure comment. This just to be cappt obviously right right. We do have we have some pretty good view on a John cap okay and.

Speaker 19: Lastly you know maybe I'm just Thin about this because I'm in AMPA and they've got one in orlandando butdo. You think you know we look down the Ro three years or something that company might think about you know deifying a little bit or maybe like doing a couple of days a week and there's a satellite market. An hour and a half awayway. How do how doyou think about something like that you know you think about building this out what the if you thought any more about like maybe we can bit more of these out there than we thought we didi'll take that Thank you so you know. We're currently building our support team both clarically an operationally to increase our growth point. We don't want to jeopardize quality of results for the sake of growing faster and that's why we're making. These investments in the business. Now is is because we do see that opportunity moving forwardand if you're you quite unquote secondary market. So not not the traditional superm as but places like Charlotte and.

Speaker 20: Orlando. They ramped consistent with some of your bigger market opening. Frankly, our midmarkets are performing exceptionally well. So some recent, some recent openings have really exceed my ramping predictions and's. They're perform and the ramp up and the performances is better than I've ever seen in this business for me, Thank you.

Speaker 6: Bye thanks, John . Thank you, Ladies and gentlemen. We have reached the end of the question-and-answer session and I would like to turn the call back to DR rollins for closing remarks.

Speaker 4: Thank you. I'd like to conclude by thanking you all for listening, and I'd like to thank all of our employees and doctors for such excellent work. I couldn't be more excited about our growth and our performance, and I'm looking forward to the future. Thank you all.

Speaker 10: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.