Q4 2022 Select Medical Holdings Corp Earnings Call
Okay.
Good morning, and thank you for joining us today for select Medical Holdings Corporation's earnings conference call to discuss the fourth quarter 2022 results and the company's business outlook.
Speaking today are the company's executive Chairman and co founder Robert Ortenzio, and the company's executive Vice President and Chief Financial Officer Martin Jackson.
Management will give you an overview of the quarter and then open the call for questions.
Before we get started we would like to remind you that this conference call may contain forward looking statements regarding future events or the future financial performance of the company, including without limitation statements regarding operating results growth opportunities and other statements that refer to select medical's plans expectations strategies.
Intentions and beliefs.
These forward looking statements are based on the information available to management of select medical today and the company assumes no obligation to update these statements as circumstances change at this time I would turn the conference over to Mr. Robert Ortenzio.
Thank you operator, good morning, everyone welcome to select Medicals earnings call for the fourth quarter of 2022.
As I have done in previous calls I'll first give some overall commentary on the quarter.
Before providing some details on each of our four operating.
Division's after that at all.
Turn it over to Marty Jackson, who will provide further detail on our progress.
<unk> Q4, and an outlook on labor cost for Q1 for that critical illness recovery Hospital Division.
As most of you are aware and we've discussed in detail.
<unk> 2022, our most significant headwinds.
It's been staffing challenges in our critical illness recovery Hospital Division.
This past quarter, we've seen some encouraging signs and results as we head into 2023.
Our credit loss recovery Hospital division salary raises and benefits to revenue ratio improved each month throughout the quarter.
I am extremely pleased that our combined focus on recruitment training and retention of personnel has begun to yield positive results.
This would not have been possible without all of the efforts of our company and colleagues during an extremely challenging macro labor environment.
The progress achieved reducing labor costs has resulted in an 80% improvement in our Q4 critical illness recovery Hospital division's adjusted EBITDA compared to the same quarter prior year.
Our focus on labor continues to yield positive results in 2023.
As previously highlighted we believe one of our company's greatest strengths is our diversification.
Even as the critical illness recovery Hospital division struggle with labor headwinds, both our inpatient rehab and concentric divisions continued to exceed expectations this past quarter.
Inpatient rehab division exceeded prior year Q4 revenue occupancy and adjusted EBITDA.
We recently announced a definitive agreement with our joint venture partner, Ohio Health to acquire reunion rehabilitation Hospital in Dublin, Ohio, which will feature 40 private rooms that will be renamed Ohio Health Rehabilitation Hospital.
We have also reached an agreement to enter into a joint venture with Atlanta care, a leading multi service health care system in South Jersey to build a new inpatient rehabilitation hospital.
Contingent upon regulatory approval the hospital call Bacharach Institute for rehabilitation.
Slated to open either in late 2024 or 2025.
As previously noted noted on our last call. We are expanding our partnership with you PMC to open a second inpatient rehab hospital in Central Pennsylvania.
The development pipeline for inpatient rehab Division remained strong and the division is poised poised for a successful 2023.
Concentrix had another successful quarter and has done a tremendous job offsetting decline in COVID-19 related testing and evaluation services from prior year with increased worker's comp volume in their existing centers consents.
Concentrix Workers' comp volume continues to be strong in 2020 and 2023. This past quarter can center opened three de Novo clinics, two in Pennsylvania, and one in Green Bay, Wisconsin with the new joint venture partner.
And Central also acquired a center in Tulsa, Oklahoma, along with transitioning 18 outpatient work net centers and three outpatient physical therapy centers from our outpatient rehabilitation division into 17 full service consensus centers in Pennsylvania, and New Jersey.
Concentrix has a strong pipeline of development opportunities with signed purchase agreements for three fold in acquisitions in Pennsylvania, and Connecticut is expected to close in Q1, along with signed leases for three new medical centers in Ohio, Virginia, and Florida that we expect to open in the latter half of 2023.
In addition, there are several more acquisitions and de novo opportunities in advanced stages that should provide further growth growth throughout the rest of 'twenty three.
Our outpatient rehabilitation division surpassed prior year revenue for the quarter.
But did experience elevated cost margins in labor and other operating expenses compared to Q4 prior year.
Thus far in 2023, we have seen improvement and positive results in both our outpatient volume and cost margins when compared to the same period prior year.
The Division has 43 executed leases for de Novo clinics, which are scheduled to open throughout 2023. There are also many additional opportunities that are under consideration.
Overall, when compared to prior year Q4, we experienced revenue growth of one 4% and a seven 6% increase in adjusted EBITDA.
The impact of the restatement of the magic of Medicare.
Reinstatement of Medicare sequestration was $9 million headwind compare when comparing Q4 to prior year same period.
For the quarter total company adjusted EBITDA was $148 $9 million compared to $138 4 million in.
In the prior year.
Our consolidated adjusted EBITDA margin was nine 4% for Q4 compared to eight 9% in the prior year.
Cares grant income was.
It was recognized in Q4 of this year as well as Q4 prior year. This quarter, we recognized only 630000 of grant income.
Compared to $8 million in prior year Q4.
At this point I will provide some further data points as commentary on each of our operating divisions. Our critical illness recovery Hospital Division adjusted EBITDA margin was 8% for the quarter compared to 4% and.
In prior year Q4 at 2% in Q3 of 2022.
Our salary wages and benefits to revenue ratio improved 10% compared to prior year and 8% compared to prior sequential quarter.
Nursing agency rates decreased 33% and nursing agency utilization decreased 52% when compared to prior year Q4.
Nursing agency rates increased 7%, while nursing agency utilization decreased 17% compared to Q3 of 2022.
Orientation hours.
Increased 28% compared to prior year, Q4, but decreased 22% compared to Q3 2022.
Nursing sign on and incentive bonuses.
Decreased 35% from prior year, Q4, and 24% from prior quarter.
Revenue decreased 3% compared to prior year compared.
Primarily related to volume occupancy decreased from 71% to 70%, while our revenue per patient day remain consistent compared to prior year.
Thus far in 2023, we have seen an increase in occupancy compared to the same period prior year as ICU volumes within our referral short term acute care hospitals have increased.
On the development front in January we opened a rehab distinct part unit in our Springfield, Missouri critical illness recovery hospitals and in February we opened a 31 bed satellite.
Of our current fleet to a hospital critical illness hospitals.
We'll be opening three hospitals with JV partners in the first half of this year and Jackson, Tennessee, Tucson, Arizona in Alexandria, Virginia. We also have an agreement to open our critical illness recovery hospital with a rehab distinct part units in Chicago with our joint venture partner Rush University system for health.
In 2024.
As previously noted our inpatient rehabilitation Hospital division continued to perform very well compared to prior year Q4 revenue increased 10% with patient volumes increasing by 4%.
Occupancy was 85% compared.
To prior year, which was 83% revenue per patient day increased $123 from 1888 to 2011.
The adjusted EBITDA margin for inpatient rehab was 23, 6% for Q4 compared to 18, 2%.
In the prior year.
Concentrix continued their strong performance with revenue increasing over prior year by 1% in spite of the decline in demand for Covid related testing and evaluation services.
Prior year Q4, these services generated $10 4 million in revenue and $4 million and adjusted EBITDA.
<unk> to $1 6 million in revenue and 600000 and adjusted EBITDA in Q4 of this year.
The revenue decline from Covid testing services was offset by positive performance in our centers.
Center volume increased over prior year in both work comp and consumer health, but was offset by a reduction employer service visits resulting in a visit decrease of less than 1%.
Consensus adjusted EBITDA margin was 15% compared to 17% in prior year Q4.
Our outpatient rehabilitation division experienced an increase up 1% in net revenue with patient volumes, increasing by 3% compared to same quarter. Prior year net revenue per visit remained flat at $102. In spite of a 3% decline in Medicare reimbursement rates adjusted EBITDA.
Margin decreased compared to prior year with the decrease in margin to 6% from 10%. The decrease in adjusted EBITDA margin is primarily related to an increase in both labor and other operating costs.
Increase in labor is primarily attributed to a decrease in clinical productivity in Q4 compared to prior year.
Increase in other operating expenses is primarily comprised of an investment in our outpatient electronic medical record systems, along with travel expenses returned to pre pandemic levels.
Thus far in Q1 of this year, we have seen improvements in volume revenue and expense margins compared to the same period prior year.
Earnings per fully diluted share were <unk> 22 cents in the fourth quarter compared to 37 per share in the same quarter. Prior year. Prior year Q4 had a tax benefit related to our purchase of some centers remaining membership interest along with lower interest expense on our debt, which had a positive impact on Q4 prior year EPS.
For the full year earnings per fully diluted share or $1 23, compared to $2 98 per share in the prior year.
In regards to our allocation and deployment of capital our board of directors declared a cash dividend of $12.05 payable on March 15, 2023 to shareholders of record as of the close of business on March 3rd 2023.
This past quarter, we did not repurchase shares under our board authorized share repurchase program. We will continue to evaluate stock repurchases reduction of debt and development opportunities.
That concludes my prepared remarks, and with that I'll turn it over to Marty Jackson for some additional financial detail and then we will open the call up for questions.
Thanks, Bob Good morning, everyone.
Consistent with the prior two quarters I would like to provide some additional details with the progress we've made regarding our labor costs within the critical illness recovery.
This past quarter, we got a sequential reduction from Q3 to Q4.
Our total oriented agency costs and our utilization of agency.
We did have a modest increase in our in the agency REIT from Q3 to Q4.
The reductions, we realized 3% and agency costs.
Representing a reduction of $2 5 million.
Quarter over quarter basis.
17% drop in utilization of agency from.
From 21, 9%.
81%.
Agency hourly rates increased sequentially by 7% from $86 to $92.
Consistent with prior quarters, we did experience a reduction of our agency utilization.
As the quarter progressed from October to December of 13%.
The last month of the year at 16.
<unk>.
We fluctuate within the quarter and both are in agency costs.
Of $9 $3 million in October $95 million in November and this decreased $4 million in DCF.
And our agency rates, which were $88 in October $99.
Remember this decreased to $91 in December .
This quarter, we saw a 21% decline in orientation hours compared to Q3 of 'twenty two.
We experienced a 39% decline orientation hours.
As the quarter progressed from October to December .
Other areas, we saw improvement compared to sequence.
Turning to the sequential quarter.
Within declining nursing sign on an incentive bonus dollars.
4%.
An area of opportunity, we mentioned last quarter. It was hospital administration costs and we did experience modest.
Benefit through the third quarter.
We expect a continued decline in this area over the next several quarters.
Overall, our view would be to net revenue ratio improved over 8% compared to the third quarter.
64, 7% to 59, 8%.
We experienced an 11% reduction in the rest of you would be to revenue ratio from October to December .
Dropped from 62, 7% down to 55, 8%.
With the strides we've made in the past quarter and the progress we have seen thus far this quarter.
Confidence in our ability to achieve our previously stated target for critical illness recovery hospitals, SW would be to revenue ratio.
55 to 50, 357% for the first quarter of this year.
Moving onto our financials in Q4 equity and earnings of unconsolidated subsidiaries were $6 8 million.
This compares to 11 2 million in the same quarter. Prior year decline in earnings was the result of decreased earnings on a few of our unconsolidated joint ventures.
Net income attributable to Noncontrolling interest was $2 2 million.
This compares to $16 5 million in the same quarter prior year.
Decrease is primarily due to our purchase of the membership interest in Concentrix in Q4 of 2021 now.
100% of the voting interest.
Interest expense was $47 $3 million in the fourth quarter as compared to $33 3 million.
Prior year.
The increase in interest expense was primarily attributable to an increase in.
And the one month LIBOR rate compared to Q group 2021.
As well as borrowings made on our revolving credit facility.
The interest rate on $2 billion of our term loan is capped at 1%.
Plus 250 basis point spread through September 32024, which provides us with a level of protection and predictability.
So the currency.
At the end of the quarter, we had $3 9 billion.
Debt outstanding.
$9 million of cash on the balance sheet.
Our debt balance at the end of the quarter included $2 $1 billion of term loans.
$145 million in.
The revolving loans.
2 billion six in a quarter percent senior notes and $104 $7 million.
Okay.
We ended the quarter with net leverage for our senior secured credit agreement with nine six times.
As of December 31, we had $100 million of availability on our revolving loans.
For the fourth quarter operating activities provided $12 $5 million in cash flow.
Of which included $1 million recouped in the quarter related to repayment of Medicare advances.
As of the end of 2022, all Medicare advances have to repeat.
Our operating cash flow in the quarter was also reduced by $53 billion for repayment of deferred taxes.
All of which have been repaid.
Our days sales outstanding or DSO was 55 days.
31, 2022 compared to 52 days.
<unk> 2021 to 53 days at September 32022.
Investing activities used $57 $2 million of cash in the fourth quarter.
This includes $55 3 million in purchases of property and equipment.
$5 million in acquisition and investment activities less 3 billion proceeds from the sale of assets.
<unk>.
Financing activities provided $34 $4 million of cash from the fourth quarter.
Primarily due to $65 million net borrowing on our revolving line of credit offset in part by dividends on our common stock.
$9 million.
As stated previously.
We did not repurchase any shares under our board authorized repurchase program this quarter.
Have the capacity to purchase an additional.
Close to $400 million.
Yeah.
This program remains in effect until December 31, 2023 and was further extended.
Earlier terminated.
We are issuing our revenue outlook for 2023 and expect revenue to be in the range of six five to $6 7 billion.
Capital expenditures are expected to be in the range of $190 million to $210 million for 2023.
We will address in our business outlook for adjusted EBITDA and earnings per share per common share later in the year as the labor market further stabilize.
Stabilizes and is more predictable.
This concludes our prepared remarks at this time, we would like to turn it back over to the operator open the call up for questions.
Ladies and gentlemen, if you have a question or comment at this time. Please press star one one on your telephone keypad.
If your question has been answered or you wish to remove yourself from the queue simply press star one again.
And then if you have a question or comment at this time. Please press star one one on your telephone keypad.
Please standby, while we compile the Q&A roster.
Our first question or comment comes from the line of Justin Bowers from Deutsche Bank. Mr. Bowers. Your line is open.
Hi, good morning, everyone.
So.
Starting with <unk>.
It sounds like Theres, a lot of development activity.
Going into 2023 and into 2024 can you can you just give us a sense of.
How much how many additional beds.
Our plan for 2023.
Then just wanted to clarify what the what the <unk> was <unk> <unk> and <unk>.
The exit rate in December I think you said 55, eight is that is that sort of where you're trending now.
In this segment core during the first couple of months.
Thanks, Jeff This is Bob let me address the first part of your question, which is development on the critical illness, Yes, I think that over the last year, we have seen an increase in development opportunities and deals.
That we're signing.
Interestingly many of those.
Notice are also joint ventures, which is a bit of a departure, what we seen in the past to your specific question I don't have exactly the number of beds that will come on but.
Around probably you've got to think about it 110 to 120, new beds that will be coming on with current sign deals.
And Rx patient expectations just based on.
What we're seeing out there is that we may see more development opportunities on the critical illness side.
In the norm they will be hospital within a hospital, but there may be an occasional freestanding, but if we do a freestanding typically be in conjunction with a rehabilitation hospital distinct part units. So if you look at the model for that not necessarily.
Of this size, but if you look at our project in Chicago with Rush that is what we're characterizing as a post acute care building that has both rehab.
And critical wellness beds in the building and we have a few more of those that are in progress in the development pipeline throughout the country. So.
I do think that that's a testimony to.
An appreciation of the role that the that al Tac or in our case critical wellness plays in the continuum of care in a post pandemic world, where you have a greater recognition of the importance to decompress the intensive care units of large acute care hospitals and they are more interested in having.
Those in their market and their continuum of care.
On a go forward basis, so on the salary wage I'll turn that over to Marty and let him address the second part of your question.
Just on the <unk> as a percentage of revenue we are experiencing what we saw in January and for the most part of February we are in that 55% to 57% range.
Got it and then maybe just a follow up on outpatient rehab it sounds like volumes and margins are improving year over year.
And the question would be.
Is.
Do we expect that trajectory to persist.
2023, and <unk> and sort of what what.
Changes have you made.
In the segment there to ensure that that.
That happens.
Yes on the outpatient side, what we've seen is.
We've had some difficulty actually throughout the entire Europe 22, with a lot of Covid call offs and what we've seen is that it's really trending downwards. So was that trending downward will be able to seal equally.
We believe some obligations.
I think the other thing is just the clinical efficiency.
Which we've really focused a lot on which is when we talk about that we're really talking about visits.
Her therapists per day.
We're seeing net increase.
I think it's proper your characterization of us feeling confident about the trajectory and what we see in the early part of the year.
It gives us some good confidence that we have something.
The momentum on the outpatient side.
Appreciate it I'll jump back in queue.
Thanks.
Operator, you want to let the next question from.
Operator are you there.
For their participants on the call we're showing that.
The call is still connected so if you bear with us this week.
Get the operator to let the next question in the queue.
Okay.
Okay.
The participants on the call it looks like were.
Having problem with the.
The operator of the manager of the call. So.
Why don't we give it another minute or two.
If we can.
Yes.
Admit people at the end of the call to ask questions.
Okay.
Okay for those on the call, while while were waiting to admit more questions.
Marty and I give some more commentary and maybe.
We anticipate some of the questions that.
We've got and we have gotten some questions in the past about the seasonality of the Concentrix segment and Marty wanted autographs that sure.
One of the things we've noticed with some of the analyst reports as they are talking about the drop off.
From Q3 to Q4.
You take a look at Concentrix creep.
The pandemic.
Historically, what we've seen is about a 390 basis point drop so and when I say that I take a look at years 2016, 2019, and Thats really just a reflection of the seasonality.
So we thought that was important to point out.
Okay.
Okay.
Thank you.
Thank you.
Okay.
Yes, a question that we typically get.
And just.
Just as an update we do have some people on the.
The call lines that are working on restoring the ability to let questions here, but.
While we continue we think Martin I do get questions from time to time about allocation of capital.
Certainly as we progress through 2023 with the increased.
The EBITDA generation over last year, we do expect that.
Leverage will continue to come down, but we do have a target over the next year or two to <unk>.
Bring leverage down considerably from where we are right now at the same time, we do have we.
We are allocating capital to <unk>.
Development activities and I think what you can expect to see through 2023 is not any big transactions.
Anything that could in any way be proceed this.
Transformational, but we're seeing great opportunities for one off transactions in each of our divisions you notice I commented on the.
Individual transactions have deals that can tetris doing with bolt ins, we certainly would like to.
Sign on a couple of the bank rehab joint ventures with large systems.
And on the <unk> side will continue to see opportunities to do a hospital within a hospital and outpatient you can continue to grow through de novo sign leases as well as small acquisitions.
So I.
I think we're ready to light in the next question. So if someone's in the Q I think we've restored the question line.
Thank you.
Next question comes from Ben Hendrix from RBC capital markets. Your line is open.
Hey, Thanks, guys.
Given the staffing progress in critical illness, and the roll off of training hours.
How do we think about the timeline from here to pre pandemic margins and what are those key levers that you can pull to affect that timing.
Then related what do we need to see before you get enough comfort to provide full year guidance. Thanks.
Yes, Ben.
This is Marty.
We anticipate for 'twenty three.
That we will probably remain in that that higher range, 55% to 57%.
In 'twenty three remember, it's not just the expenses that we see but it's also the increases that we're getting on our con.
Contracts.
So we would anticipate that that would go into 'twenty, four and possibly even 25 to see us get back to historical range, which is in that 52%.
With regards to comfort I think that where we're continuing to gain comfort with where we are in the labor side.
And I.
I think we're going to evaluate.
This first quarter see where we are and then make a determination as to whether we provide guidance on EBITDA and EPS.
Moving forward and whether it's next quarter to quarter after that.
Have to wait and see.
And as we feel comfortable even if it is before the next quarter's earnings release I mean, we would we would certainly consider putting guidance out after the after the first quarter, but to be even before we file the Q cell.
That's a topic of discussion internally at the company because we do appreciate the analyst community would like to see us.
To give some more guidance on EBITDA and EPS at what we feel.
We just don't want to go out prematurely and then have to constantly revise it and update itself, but I do think you will see it at some point during the first half of this year.
Yes.
Okay.
Okay.
Thank you.
Our next question.
Will come from William Sutherland from Benchmark Company. Your line is open.
Hey, good morning, guys.
I was curious Bob as you look across the tour groups.
Are you.
Is hiring.
Been an issue as far as being able to kind of grind those groups.
The productivity levels.
Yeah.
Yes, they are built to do.
Well, it's a great question and I think the answer is that it in batteries.
In each of the divisions.
This fits very evident how difficult it has been in the critical illness recovery Hospital division because where.
We were competing with the short term acute care hospitals for highly trained near ICU level nursing staff and our thinking.
It's well known that that has just been a really big challenge.
The past year now on the rehab side, you'd think while our specialty hospitals and specialty hospital, but the rehab of employment tends to be a bit more sticky because of the nature of the work and the longer tenured employees that are theyre being a little bit more therapy, driven as well as some nursing so the rehab.
Hospital Division hasn't been near the challenge anywhere near the challenge.
The critical and it has been outpatient has been a little bit of a surprise I mean and for a different reason it is impacted by the macro labor environment, particularly on our front desk people, but.
It's also because of the smaller nature of outpatient clinics that are call off for illness or suspected illness or pre COVID-19 test really disrupts the efficiency of that business model. So that I think you've seen that to a lesser extent in the outpatient but it's still.
It still exists and.
And as we commented earlier, we seem to be coming out of that here now and then that leaves concern truck.
Consensual because of the nature of that business. They have had their staffing challenges of course, they have as every employer has but the nature of the content for medical center is that it puts stress on the existing staff when theyre short staffed but the volume does not fall off because it's a yes.
A walk in business. So what we see there is potentially increased wait times.
And.
And those kind of difficulties, but you havent seen it show up in that.
And in the revenue or the margin line, but you know each of these businesses have a little bit of a different dynamic speaking of concentric zelle. We've talked about this in the past they will have a bigger challenge in a really down economic cycle.
That would be a bit of a headwind with certainly have not seen.
To date, mainly because that whatever downturn E. Comm. When we've had it's really not had labor Ed as employers are still hiring contactor is going to continue to have a robust business. So hope that answers your question.
That's helpful color.
How should we think about the high and low end of revenue range.
I mean, I know a lot of things go through current O&M as you put together your model but.
What would be some of the key.
Factors for being at one end or the other.
Okay.
Yes, it's really expenses bill when we take a look at.
Sensus, especially hospital side certainly.
The volume on the outpatient rehab side and centers.
Pretty predictable.
Thats. The reason, we put a range in there just because of uncertainty.
Okay.
And.
I think.
I appreciate your help.
It's been stated.
Guide on EBITDA before.
You know you have a real handle.
Feels like with all the information you provided that.
There's a range. There then I think you guys have it.
<unk> been just just kind of curious.
What else can you kind of need to see at this point.
Okay.
Sure.
Yes, so we just need to see consistency if you take a look at what transpired the end of 'twenty, one and all through 'twenty. Two there was a lot of fluctuations and we just need to.
To see a period of time, where.
Sure.
We can kind of predict what's going to happen.
Next couple of quarters.
Yes, Bill as I mentioned earlier this has been the subject of.
A fair amount of discussion internally with the with the management and with the audit Committee of our board and of course, where we stand here, we could give guidance without a real a fairly wide range and would feel pretty confident on that.
I think it's just more of a philosophical thing internally that if we are going to come out with guidance, we'll try to make it a little tighter range as we've done in the past.
We just don't want to come out with guidance and then and then have to revise it so.
I think that that's just a style thing.
For us relative to other companies that may be providing guidance now rather than.
View that we have that much uncertainty about the business right. So it doesn't really.
Anthony.
Yes.
It's not an issue it sounds like in terms of your.
Overall view of the business. So that's appreciated alright, that's it from me. It does it does not and Thats, well said and that's clear to me that this is not a signal that we think that the that the business is going to be that volatile across 2023 is really just more of a signal that since we suspended guidance.
That we just want to be pretty comfortable and have a pretty tight range before we issue again.
Alright, Thank you Jeff.
Okay.
Thank you.
And our next question will come from miles Highsmith from Deutsche Bank. Your line is open.
Hey, good morning, guys. Thanks for taking my questions.
I had just a few clarifications and then a couple of questions after that.
Thank you gave me so I apologize if I'm re asking but I was hoping.
Core numbers for the full quarter of Q4.
You'd be able to give me.
The agency rates on a dollar basis.
The full quarter utilization rates.
Percentage wise.
And then the Q4 on a dollar basis with total agency costs in the Q4.
Yeah.
Regiment nurse.
Cost on a dollar basis, and then I have a couple of follow ups.
Sure Myles, let's see where he got cut a lot there.
Yeah Myles greenhorn.
Thanks.
Okay, Okay miles get your pen and paper ready.
I'm ready.
Q4.
Our and agency expenses.
Was 27 1 million.
Billion.
Okay.
The Q4 or in hourly agency staffing right.
$92.
And the.
Utilization rates.
In Q4.
It was 18, 1%.
Yes.
Okay great.
And did you.
Quantify the Q4 dollars related to investments in.
Nursing.
No we did not.
Okay.
Thanks.
Thanks Ben.
A couple of others I guess is there any way you'd be able to just characterize that.
The proportion of your.
More recent hires that are in that kind of 78 week period.
Their training and you have some duplications still maybe Q4 versus Q3, or however, you might be willing to characterize it and then just lastly on the.
Potential for EBITDA guidance.
I definitely heard what you said in the last caller.
Response, I'm, just wondering seeing that stability is that largely L tax still or critical illness still or is it now a function of immune to see kind of.
Where.
Productivity is also on the outpatient rehab side or other variables.
But while Marty is looking for that earlier Stephane, Let me I'll comment on the second part of your question I would say, yes, it's probably critical illness and outpatient.
Those are the areas that we would see the greatest improvement I mean, if you look at the business and even over the last couple of quarters. The rehab hospital business and the <unk> has been pretty stable and.
Craig Wellness, obviously is the one that would have done the most improvement over 2022 because of that.
The labor environment, which is as you see it as Marty pointed out we were giving you monthly splits on how that has increased so you can see that the improvement in the staffing and critical illnesses.
Is I think fairly dramatic and so.
If that continues that's obviously going to be the biggest mover outpatient to a lesser extent, but at the same think youre going to see more improvement in the outpatient and in critical illness, and you will see an inpatient rehab and conjecture, which has been pretty stable.
Yes Myles.
Okay.
On a sequential Q3.
Q4 over Q3, we saw a 21% decline in the number of orientation hours. So obviously, it's coming down and then within the quarter.
From October <unk>.
December we saw 39% decline.
So.
A lot of that is running off now they are still going to be orientation, Alex because we're going to continue to have Irene.
But we're getting back.
More towards normal processes as opposed to what we saw over the past five quarters.
Got it okay. That's super helpful. Thank you so much guys I appreciate the detail.
Sure.
Thank you and I am showing no further questions from our phone lines I'd now like to turn the conference back over to management for any closing remarks.
Okay. Thank you everybody for joining us and we apologize for the the <unk>.
White space, there and the kind of the middle of the Q&A.
Thanks for your questions and look forward to updating you again next quarter.
This concludes.
Today's conference call. Thank you for your participation you may now disconnect everyone have a wonderful day.
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And lower Johan during Q&A, you can dial one one.
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The conference will begin shortly to raise and lower Johan during Q&A you can dial one one.
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Thank you.
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[music].
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[music].
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[music].
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[music].
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[music].
Yes.
[music].
Thank you.
[music].
Okay.
[music].