Q3 2024 Concentra Group Holdings Parent Inc Earnings Call

Operator: Good morning and thank you for joining us today for Concentra Group Holdings Parent, Inc. earnings conference call to discuss the third quarter 2024 results.

Good morning, and thank you for joining us today for concentric Group Holdings parent Inc. Earnings conference call to discuss the third quarter 2024 results.

Operator: Speaking today are the company's Chief Executive Officer, Keith Newton, and the company's President and Chief Financial Officer, Matt DiCanio. Management will give you an overview of the quarter and then open the call for questions.

Speaker Change: Speaking today are the company's Chief Executive Officer, Keith New N and the company's President and Chief Financial Officer, Matt <unk>.

Speaker Change: Management will give you an overview of the quarter and then open the call for questions.

Operator: 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 Concentra's plans, expectations, strategies, intentions, and beliefs. These forward-looking statements are based on the information available to management of Concentra today, and the company assumes no obligation to update these statements as circumstances change.

Speaker Change: 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 Concentrix plans.

Speaker Change: Expectations strategies intentions and beliefs. These.

Speaker Change: These forward looking statements are based on the information available to management of concentric today and the company assumes no obligation to update these statements as circumstances change at this time I'd like to turn the conference call over to Mr. Keith New end.

Keith Newton: At this time, I'd like to turn the conference call over to Mr. Keith Newton. Thanks, operator. Good morning, everyone. Welcome to Concentra's third quarter 2024 earnings call. I would like to start today with a brief refresher on our business. We previously provided comments during our second quarter earnings call, but we know we continue to gain new followers of our company. Concentra is the largest provider of occupational health services in the United States. We have over 700 locations across 45 states, including both our occupational health centers and our on-site health clinics at employers' workplaces. We see approximately 50,000 patients per day and serve approximately 200,000 employer customers across our occupational health centers, on-site health clinics, and our telemedicine platform.

Speaker Change: Thanks, operator, good morning, everyone welcome to Concentrix third quarter 2024 earnings call I.

Speaker Change: I would like to start today with a brief refresher on our business. We previously provided comments during our second quarter earnings call, but we know we continue to gain new followers of our company.

Speaker Change: And central is the largest provider of occupational health services in the United States, we have over 700 locations across 45 states, including both our occupational health centers and our on site health clinics at employers workplace.

Speaker Change: Approximately 50000 patients per day and serve approximately 200000 employer customers across our occupational health centers on site health clinics, and our telemedicine platform. We serve almost every industry and have little to no industry concentration manufacturing distribution.

Keith Newton: We serve almost every industry and have little to no industry concentration. Manufacturing, distribution, transportation, retail, healthcare, government, schools, construction, hospitality are just some of the examples. Our mission is to improve the health of America's workforce, one patient at a time. We provide employer-focused health care services, and we are patient-centric in everything we do. We deliver a consistent, high-quality patient experience, as exemplified by our high patient satisfaction scores. Our value proposition is focused on supporting the improvement of injured workers' health with a timely and safe return to work. Injured employees tend to recover better through early intervention and a quick return to normal activities.

Speaker Change: Transportation retail health care government schools construction hospitality or just some of the examples.

Speaker Change: Our mission is to improve the health of America's workforce, one patient at a time, we provide employer focused health care services and we are patient centric in everything we do we deliver a consistent high quality patient experience as exemplified by our high patient satisfaction scores.

Speaker Change: Our value proposition is focused on supporting the improvement of injured workers health with a timely and safe return to work.

Speaker Change: <unk> employees tend to recover better through early intervention and a quick return to normal activities, we expedite employees safe and sustainable work returned to work and help lower medical and indemnity claims cost incurred by employers.

Keith Newton: We expedite employees' safe and sustainable return to work and help lower medical and indemnity claims costs incurred by employers. Workers' compensation patients treated in a Concentra Health Center have an approximate 25% lower average total claim costs than in non-Concentra centers. Within our Occupational Health Centers Operating Segment, which represents 94% of total revenue for the third quarter, we provide three service lines consisting of workers' compensation, employer services, and consumer health. Reimbursement for our workers' compensation services is guided by the various state workers' compensation fee schedules, which are set by legislative bodies and paid for by employers typically through their workers' compensation insurance company or their third-party claims administrator.

Workers compensation patients treated in a can central health center have an approximate 25% lower average total claim cost then and Nonconsensual centers.

Speaker Change: Within our occupational health centers operating segment, which represents 94% of total revenue for the third quarter, we provide three service lines, consisting of workers' compensation employer services and consumer health.

Speaker Change: Members, but for our workers compensation services is guided by the various state workers' compensation fee schedules.

Speaker Change: By late Legislative bodies and paid for by employers typically through their workers compensation insurance company or are there third party claims administrator.

Keith Newton: The reimbursement for our employer services line is paid directly by employers at market rates or through entities who manage these types of visits on an employer's behalf. We have virtually no reimbursement from government programs such as Medicare or Medicaid or from commercial health care insurance. As existing and potential investors look at Concentra on a stand-alone basis as compared to other companies in the healthcare services sector, we would point you to the unique reimbursement environment in which we operate, our growth opportunities, our margin profile, our cash flow statistics, our diversification across geographies and industries, our experienced management and leadership teams, and our strong track record over a sustained period of time.

Speaker Change: The reimbursement for our employer services line is paid directly by employers at market rates or through entities, who manage these types of visits on an employer behalf. We have virtually no reimbursement from government programs, such as Medicare or Medicaid or from commercial health care insurance.

Speaker Change: As existing and potential investors look at concert draw on a standalone basis.

Speaker Change: As compared to other companies in the health care services sector, We would point you to the unique reimbursement environment in which we operate our growth opportunities our margin profile, our cash flow statistics, our diversification across geographies and industries, our experienced management and leadership.

Speaker Change: <unk> teams and our strong track record over a sustained period of time.

Keith Newton: For those interested in learning more about our business, we welcome you to spend time reviewing our publicly filed registration statement and other quarterly filings, or by following the company through one of our many communication channels.

Speaker Change: For those interested in learning more about our business. We welcome you to spend time, reviewing our publicly filed registration statement and other quarterly filings or by following the company through one of our many communication channels.

Keith Newton: Now, switching to our third quarter performance where we saw a continuation of themes from our Q2 2024 performance. Overall, we had a successful quarter in line with our expectations, made progress on strategic initiatives, grew our development pipeline, and continued to execute on the steps to separate from select medical. Concentra ended the quarter with 549 occupational health centers and 156 on-site health clinics for a total of 705 locations, which is 21 more than at the end of Q3 2023. In the quarter, revenue was $489.6 million compared to $474.0 million in the prior year, representing a 3.3% growth year over year.

Speaker Change: Now switching to our third quarter performance, where we saw a continuation of themes from our Q2 2024 performance overall, we had a successful quarter in line with our expectations made progress on strategic initiatives through our development pipeline and continue to execute on the steps to separate from <unk>.

Speaker Change: Medical.

Speaker Change: Ken Sentra ended the quarter with 549, occupational health centers and 156 on site health clinics for a total of 705 locations, which is 21 more than at the end of Q3 2023.

Speaker Change: In the quarter revenue was $489 6 million compared to 474.0 million in the prior year, representing a three 3% growth year over year adjusted.

Keith Newton: Adjusted EBITDA was $101.6 million in the quarter versus $98.9 million in the same quarter prior year, or a 2.7% increase. EBITDA margin decreased slightly to 20.7% for the quarter compared to 20.9% for the same quarter prior year. Net income was $45.8 million, and earnings per common share were $0.37 for the third quarter 2024. The lower net income in EPS versus prior year was due to the recapitalization of the company at the time of the IPO, and the associated higher interest expense as compared to prior year. From a patient visit standpoint, we had a very similar quarter to the second quarter of 2024 in terms of year-over-year comparisons.

Speaker Change: Adjusted EBITDA was $101 6 million in the quarter versus $98 9 million in the same quarter prior year or a two 7% increase EBITA margin decreased slightly to 27% for the quarter compared to 29% for the same quarter.

Speaker Change: Higher year.

Speaker Change: Net income was $45 8 million and earnings per common share were <unk> 37 for the third quarter 2024.

Speaker Change: Lower net income and EPS versus prior year was due to the recapitalization of the company at the time of the IPO and the associated higher interest expense as compared to prior year.

Speaker Change: From a patient visit standpoint, we had a very similar quarter to the second quarter of 2024 in terms of year over year comparisons total visits decreased 7% in Q3 2024 as compared to the prior year. This was driven by a two 6% decline.

Keith Newton: Total visits decreased 0.7% in Q3 2024 as compared to the prior year. This was driven by a 2.6% decline in our employer services visit. This decline is something we have been experiencing for several quarters now on a year-over-year basis. The employer services decrease was offset by a 1.7% increase in our workers' compensation volume. After adjusting for the one additional revenue day in Q3 2024 versus Q3 2023, employer services and workers' compensation per business day visit volumes were 4.1 percent lower and 0.2 percent higher than the prior year respectively. Our workers' compensation and employer services visits are driven by employment levels and hiring events across the United States.

Speaker Change: In our employer services visit.

Speaker Change: This decline is something we had been experiencing for several quarters now on a year over year basis. The employer services decrease was offset by a 1.7% increase in our workers' compensation volume.

Speaker Change: After adjusting for the one additional revenue day in Q3 2024 versus Q3 2023.

Speaker Change: Florida services and workers compensation per business day visit volumes were $4, 1%, lower and 0.2% higher than the prior year respectively.

Speaker Change: Our workers' compensation employer services visits are driven by employment levels and hiring events across the United States approximately two thirds of our employer service visit volumes are driven by hiring of beds, which had experienced a slowdown over the last year has quit rates and job openings have fallen Q3.

Keith Newton: Approximately two-thirds of our employer service visit volumes are driven by hiring events which have experienced a slowdown over the last year as quit rates and job openings have fallen. Q3 saw some positive and negative economic news prints which we are following closely. Within our occupational health centers, our visits were softer in July but trended better in August and September. Hurricane Beryl and the CrowdStrike-related IT outage contributed to the softer July visit. The takeaway for Concentra is that the number of people employed has continued to rise, which is a positive driver for our workers' compensation visit volumes.

Speaker Change: <unk> saw some positive and negative economic news spreads, which we are following closely within our occupational health centers. Our visits were softer in July but trended better in August and September.

Speaker Change: Okay, and barrel and the crowd strike related I T outage contributed to the softer July visits the takeaway for Concentrix is that the number of people employed has continued to rise which is a positive driver for our workers compensation visit volumes.

Keith Newton: The decline in employer services volume is not a new trend, as hiring events, employee quit rates, and job openings have all receded. It has been something we have been experiencing for more than a year now. We have adjusted to it accordingly and have continued to show profit growth and stable margins. From a rate standpoint, we had a 3.9% increase in revenue per visit, principally due to increases in the reimbursement rates payable pursuant to certain state fee schedules for workers' compensation visits and increases in our employer services rates per visit, which we negotiate and set directly with employer customers.

Speaker Change: The decline in employer services volume is not a new trend is hiring of beds employee quit rates and job openings have all receded.

Speaker Change: It has been something we had been experiencing for more than a year now we have adjusted to it accordingly, and it's continued to show profit growth and stable margins.

Speaker Change: From a rate standpoint, we had a three 9% increase in revenue per visit principally due to increases in the reimbursement rates payable pursued to certain state fee schedules for workers' compensation visits and increases in our employer services rates per visit which we negotiate and set directly with important customers.

Keith Newton: The higher percentage mix of the workers' compensation visits with their higher revenue rates per visit also contributed to the blended higher rate per visit. Overall, we are proud of our company's performance and our team's continued dedication to our mission. We are optimistic for the coming quarters and 2025. We are well positioned to continue our growth trajectory, especially with a more normalized visit volume profile. Matt will share more details as well as some guidance for full year 2024 in a few minutes.

Speaker Change: Higher percentage mix of the workers' compensation visits with their higher revenue rates per visit also contributed to the blended higher rate per visit.

Speaker Change: Overall, we are proud of our company's performance and our team's continued dedication to our mission. We are optimistic for the coming quarters. In 2025, we are well positioned to continue our growth trajectory, especially with a more normalized visit volume profile.

Speaker Change: Matt will share more details as well as some guidance for full year 2024 in a few minutes before I hand, it over to Matt I wanted to highlight some other important developments in the quarter, including some great work. The team has done to advance our development pipeline.

Keith Newton: Before I hand it over to Matt, I wanted to highlight some other important developments in the quarter, including some great work the team has done to advance our development pipeline, the early but significant progress we've made as it relates to the separation from select medical, and our continued advancement of key technology initiatives. We spoke about all three of these areas during our IPO process in our last quarter's call. I'm excited about the continued accomplishments in these areas and the roadmap we have in the coming quarters.

Speaker Change: The early but significant progress we've made as it relates to the separation from select medical and our continued advancement of key technology initiatives. We spoke about all three of these areas during our IPO process and are in our last quarter's call.

I'm excited about the continued accomplishments in these areas and the roadmap we had in the coming quarters.

Keith Newton: This concludes my overall company remarks.

Speaker Change: This concludes my overall company remarks, and now I'll turn the call over to Matt to provide more color on our operating segments key operating metrics cost and expenses cash flow and balance sheet and full year 2024 guidance as well as provide further detail on some important strategic work streams.

Matt DiCanio: I now turn the call over to Matt to provide more color on our operating segments, key operating metrics, cost and expenses, cash flow and balance sheet, and full year 2024 guidance, as well as provide further detail on some important strategic work streams. Thanks, Keith. Good morning, everyone. I'll begin with some additional commentary on our operating segments and our major expense categories, as well as other key performance. In our Occupational Health Center operating segment, revenue of $463.1 million in Q3 2024 was 3.3% higher than the same quarter prior year. Keith outlined our 0.7% visit decline year-over-year driven by the continued and expected lower employer services volume, which are lower revenue visits.

Speaker Change: Matt.

Matt: Thanks, Keith good morning, everyone.

Matt: I'll begin with some additional commentary on our operating segments and our major expense categories as well as other key performance indicators.

Matt: And our occupational Health Center operating segment revenue of $463 1 million in Q3, 'twenty 'twenty four was $3, 3% higher than the same quarter prior year eats outlined our 0.7% visit decline year over year, driven by the continued and expected lower employer.

Matt: Services volume, which are lower revenue visit.

Matt DiCanio: and the 3.9% increase in revenue per visit from $136.11 in Q3 2023 to $141.42 in Q3 2024. Within the center operating segment, workers' compensation revenue of $298.7 million was 4.5% higher than prior year. Q3 2024 work comp visits increased 1.7% from prior year, or 0.2% on a per day basis. Q3 2024 Work Comp revenue per visit increased 2.7% versus prior year. Workers' compensation revenue represents 64.5% of our total center operating segment revenue in Q3 2024. versus 63.8% in Q3 2023, or a 0.7 percentage point increase. Employer services revenue in the center operating segment of $154.8 million increased 0.9% from prior year.

Matt: And that three 9% increase in revenue per visit from $136, an 11 cents Q.

Matt: Q3, 2023 to $141.42 in Q3 2024.

Matt: Within the center operating segment Workers' compensation revenue of $298 7 million was four 5% higher than prior year Q3, 2020 for work comp visits increased one 7% from prior year.

Matt: Or <unk>, 2% on a per day basis.

Matt: Q3, 2020 for work comp revenue per visit increased 2.7% versus prior year.

Matt: Workers' compensation revenue represents 64, 5% of our total center operating segment revenue in Q3, 'twenty 'twenty four.

Matt: Versus 63, 8% from Q3, 2023 or eight seven percentage point increase.

Matt: Employer services revenue in the center operating segment of $154 8 million increased <unk>, 9% from prior year.

Matt DiCanio: Employer services visits decreased 2.6% from prior year, or 4.1% on a per day basis, and in line with expectations and continued trends from recent quarters. The Q3 2024 employer services revenue per visit increased 3.6% versus prior year. On-site revenue of $15.6 million in Q3 increased 3.9% from the same quarter prior year. We had a solid business development quarter in this operating segment, winning more than 10 new onsites that will open in the coming months, including additional onsites with our advanced primary care service offering that we recently launched. Other business revenue of $11 million increased 4.4% against same-quarter priorities.

Employer services visits decreased two 6% from prior year or four 1% on a per day basis and in line with expectations and continued trends from recent quarters.

Matt: Q3, 2020 for employer services revenue per visit.

Matt: <unk>, 3.6% versus prior year.

Matt: Onsite revenue of $15 6 million in Q3 increased three 9% from the same quarter prior year.

Matt: We had a solid business development quarter in this operating segment, winning more than 10, new on site that will open in the coming months, including additional onsite with our advanced primary care service offering that we recently launched.

Other business revenue of $11 million increased four 4% against same quarter prior year.

Matt DiCanio: Our cost of services expense, excluding depreciation and amortization, a major component of which is personnel costs, includes all direct and indirect support costs related to providing services to our customers. Positive Services was $351.1 million for 71.7% of revenue. in Q3 2024, compared to 71.1% of revenue for the same quarter per year.

Matt: Our cost of services expense, excluding depreciation and amortization a major component of which is personnel cost includes all direct and indirect support costs related to providing services to our customers.

Matt: Cost of services was $351 1 million or 71, 7% of revenue.

Matt: Q3, 2024, compared to 71, 1% of revenue for the same quarter prior year.

Matt DiCanio: General and administrative expense includes corporate overhead such as finance, legal, human resources, marketing, corporate offices, and other administrative areas. Our general and administrative expenses were $37.1 million, or 7.6% of revenue in Q3 2024, compared to 8.1% of revenue in the same quarter prior year. Our total company labor cost in the quarter was helped by fewer full-time equivalents, or FTEs, quarter over quarter despite having 10 more occupational health centers and 11 more on-site health clinics compared to the same quarter prior year. The lower FTEs are primarily in the center operating segment, consistent with prior quarters, where we have fewer FTEs year-over-year, largely due to the lower employer services visits.

Matt: General and administrative expense includes corporate overhead such as finance legal human resources marketing corporate offices and other administrative areas.

Matt: Our general and administrative expenses were $37 1 million or seven 6% of revenue in Q3 2024 compared to eight 1% of revenue in the same quarter prior year.

Matt: Our total company labor costs in the quarter was helped by fewer full time equivalents or ftes quarter over quarter.

Matt: <unk>, having 10 more occupational health centers, and 11, more onsite health clinics compared to the same quarter prior year.

Matt: The lower Ftes are primarily in the center operating segment consistent with prior quarters, where we have fewer ftes year over year, largely due to the lower employer services visits.

Matt DiCanio: For the third quarter, we had strong cash flow generation with operating activities providing $65.9 million. in cash flow and our Days Sales Outstanding or DSO at 44 days at September 30, 2024, which was three days better than prior year. Our cash flow metrics continue to improve over a historical level. Investing activities used $17 million of cash in the third quarter. This includes $15.1 million in purchases of property and equipment and $1.8 million for the one-center acquisition in the quarter. Our teams have done a nice job of managing two consistent levels of maintenance and growth capital expenditures each quarter.

Matt: For the third quarter, we had strong cash flow generation with operating activities provided $65 9 million.

And cash flow and our days sales outstanding or DSO at 44 days at September 32024, which was three days better than prior year.

Matt: Our cash flow metrics continue to improve over historical levels.

Matt: Investing activities used $17 million of cash in the third quarter. This includes $15 1 million in purchases of property and equipment and $1 8 million for the one center acquisition in the quarter.

Matt: Our teams have done a nice job of managing to consistent levels of maintenance and growth capital expenditures each quarter.

Matt DiCanio: Financing activities provided $37.2 million of cash for the third quarter and with the cash retained by the company from the debt and equity transactions in the quarter, we now have a cash balance of $137 million. With our cash flow in the quarter and our higher TTM EBITDA versus June 30, 2024, our total net debt is now $1.35 billion, and our net leverage came down from 3.9 times at IPO to 3.7 times at September 30, 2024. We still have our undrawn revolver of $400 million, less $14 million of outstanding letters of credit.

Matt: Financing activities provided $37 2 million of cash for the third quarter and with the cash retained by the company from the debt and equity transactions in the quarter. We now have a cash balance of $137 million.

Matt: With our cash flow in the quarter and our higher TTM EBITDA versus June 32024, our total net debt is now 1.35 billion and our net leverage came down from three nine times at IPO to three seven times at September 30th 'twenty 'twenty four we still.

Have our undrawn revolver of 400 million less $14 million of outstanding letters of credit.

Matt DiCanio: Given the solid financial performance and following up on previous quarter's comments about a potential dividend, we are pleased to announce that on October 28, 2024, Concentra's Board of Directors declared a cash dividend of $0.625. per share. The dividend will be payable on or about November 22, 2024 to stockholders of record as of the close of business on November 13, 2020. From a capital standpoint, we remain focused on growth efforts and deleveraging, in addition to this return of capital to stock. The dividend does not change our growth outlook and process.

Matt: Given the solid financial performance and following up on previous quarters' comments about a potential dividend. We are pleased to announce that October October 'twenty eight 'twenty 'twenty four and centers board of directors declared a cash dividend of Dick's what two five cents.

Matt: Per share the dividend will be payable on or about November 22024 to stockholders of record as of the close of business on November 13 2024.

Matt: From a capital standpoint, we remain focused on growth efforts and deleveraging. In addition to this return of capital to stockholders.

Matt: Dividend does not change our growth outlook and prospects.

Matt DiCanio: Now, switching gears to our corporate development efforts. In July, we acquired a practice in Bolingbrook, Illinois, to further expand our presence in the greater Chicago area. In September, we opened a new center in Chattanooga, Tennessee, and we are close to opening a new center in nearby Knoxville. Both are new areas for Concentra, and we look forward to providing additional access points nearby in the future. Post-quarter end in early October, we opened a new center in Orlando, Florida. We also had a very good quarter in terms of building or acquisition in DeNovo Piper. We are excited about some opportunities we're working on and hope to have more information available.

Now switching gears to our corporate development efforts in July we acquired a practice in Bolingbrook, Illinois to further expand our presence in the greater Chicago area. In September we'll bird opened a new center in Chattanooga, Tennessee, and we are close to opening a new center in nearby Knoxville, Tennessee, both are new.

Matt: New areas for Concentrix, and we look forward to providing additional access points nearby in the future.

Matt: Quarter end in early October we opened a new center in Orlando, Florida as well.

Matt: We also had a very good quarter in terms of building our acquisition acquisition and de Novo pipeline.

Matt: We are excited about some opportunities we're working on and hope to have more information available soon.

Matt DiCanio: We intend to pursue continued organic growth within our existing occupational health centers and on-site health clinics at employer worksites and to take advantage of opportunities to continue to grow our footprint and base of customers via strategic acquisitions and the opening of new centers in key areas.

Matt: We intend to pursue continued organic growth within our existing occupational health centers and onsite health clinics had employer work sites and to take advantage of opportunities to continue to grow our footprint and base of customers via strategic acquisitions, and the opening of new centers in key areas.

Matt DiCanio: Regarding our separation process from Select Medical, as Keith mentioned in his opening remarks, we made solid progress with these efforts, though it is early in the process. We recruited and successfully hired some key senior leaders that will help support the transition, and they have already taken productive steps towards achieving our end goal of operating completely independently from Select Medical before the end of 2026. Our hires include a new chief legal counsel who has 30 plus years of health care experience. A Vice President of Transition Services and HR, who is an individual with years of prior experience at Concentra and in healthcare.

Matt: Regarding our separation process from select medical as Keith mentioned in his opening remarks, we've made solid progress with these efforts, though it is early in the process.

Matt: We recruited and successfully hired some key senior leaders that will help support the transition and they have already taken productive steps towards achieving our angle.

Matt: Of operating completely independently from select medical before the end of 2026.

Matt: Our hires including a new chief legal counsel, who has 30 plus years of healthcare experience.

Matt: Vice President of transition services, and HR, who is an individual with years of prior experience at Concentrix and in health care.

Matt DiCanio: A chief information security officer with many years of experience in this area, as well as leaders in accounting and tax to help us replace the services we currently pay select medical fees. It has been a solid start to the process. Our teams are well-synced on what we need to do, the associated costs, which have not materially changed from previous S&Ps.

Matt: A chief information Security officer with many years of experience in this area as well as leaders in accounting and tax to help us replace the services. We currently pay select medical fourth.

Matt: It has been a solid start to the process. Our teams are well synced on what we need to do the associated costs.

Matt: Which have not materially changed from previous estimates.

Matt DiCanio: And finally, just some overarching comments from me on the results from the quarter and our outlook for the remainder of the year and beyond. Looking back on what we discussed during the IPO process, we feel good about the progress and execution we have shown since becoming a public company. We discussed how we navigate as a company through economic headwinds, including the negative employer services decline, and we showed that through our execution in the second and third quarter. Our reimbursement rate growth has been strong, it is predictable, and is insulated from any election-related uncertainty. Cost of services remains consistent as a percentage of revenue, as our teams have managed staffing levels very effectively.

Matt: And finally, just some overarching comments for me and the results from the quarter and our outlook for the remainder of the year and beyond.

Matt: Looking back on what we discussed during the IPO process.

Matt: We feel good about the progress and execution, we have shown since becoming a public company.

Matt: We discussed how we navigate as a company through economic headwinds, including the negatives employer services declined and we showed that through our execution in the second and third quarters.

Matt: Our reimbursement rate growth has been strong it is predictable and as in insulated from any election related uncertainty.

Matt: Cost of services remains consistent as a percentage of revenue as our teams have managed staffing levels very effectively.

Matt DiCanio: Cash flow remains robust and margins consistent with prior periods. Our development pipeline continues to grow. We declared a dividend to show our commitment to returning capital to our stockholders. And we have made good progress with our separation from select and our latest technology. As we continue our path forward as a public company, we will continue with transparency.

Matt: Cash flow remains robust and margins consistent with prior periods, our development pipeline continues to grow.

Matt: We declared a dividend to show our commitment to returning capital to our stockholders.

Matt: And we have made good progress with our separation from select and our latest technology efforts.

Matt: As we continue our path forward as a public company, we will continue with transparency to that end, we are providing guidance on where we believe we will end the full year for 2024, we expect revenue to be approximately $1 9 billion.

Matt DiCanio: To that end, we are providing guidance on where we believe we will end the full year for 2024. We expect revenue to be approximately $1.9 billion, adjusted EBITDA to be in the range of $370 to $375 million, capital expenditures to be in the range of $65 to $70 million, and our net leverage ratio to be in the range of 3.5 to 3.6 times. We will have guidance for 2025 early into the new year. With this information and all the remarks from myself and Keith, we hope investors are becoming more familiar with and excited about Concentra.

Matt: Adjusted EBITDA to be in the range of $370 million to $375 million capital expenditures to be in the range of $65 million to $70 million and our net leverage ratio to be in the range of three 5% to three six times.

Matt: We will have guidance for 2025 early into the new year.

With this information and all the remarks from myself and Keith We hope investors are becoming more familiar with and excited about concentrix.

Matt DiCanio: We believe we remain very well positioned for continued success.

Matt: We believe we remain very well positioned for continued success.

Matt DiCanio: With that, this concludes our prepared remarks. Thank you for your time today to go through Concentra's business update and third quarter financial results.

Matt: With that this concludes our prepared remarks. Thank you for your time today to go through consensus business update and third quarter financial results at this time, we'd like to turn it back to the operator to open the call for any questions.

Operator: At this time, we'd like to turn it back to the operator to open the call for any questions. Thank you.

Speaker Change: Thank you at this time, we will be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.

Operator: At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. One moment, please, while we poll for questions.

Speaker Change: A confirmation tone will indicate your line is in the question queue.

Speaker Change: You May press star two if he would like to remove your question from the queue.

Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

John Stancil: Your first question for today is from John Stancil with J.P. Morgan. Great, thanks for taking my question. Strong revenue per visit in the workers' comp side of the business this quarter.

Your first question for today is from John Stanfill with J P. Morgan.

John Stanfill: Great. Thanks for taking my question strong revenue per visit in the workers comp.

Side of the business. This quarter just wanted to get a sense of how you're thinking about as we think over the next couple of quarters. How are rates are kind of progressing the workers' comp side, what visibility you have into that and I guess embedded in my question is a little bit of what you think now few months on the Florida rate up and it could contribute as we think about next year. Thank you.

John Stancil: Just wanted to get a sense of how you're thinking about, you know, as we think over the next couple of quarters, how rates are gonna progress in the workers' comp side, what visibility you have into that, and I guess embedded in my question is a little bit of what you think now, a few months on, the Florida rate update could contribute as we think about next year.

Keith Newton: Hey, John, this is Keith. Yeah, what we're seeing so far as we go into this coming quarter is a continued strong workers comp reimbursement from a rate perspective. So we don't see anything any different than what we've been seeing continues. where it is, it's stable, you know, those, those, uh, increases that we put into place and will continue on.

Speaker Change: Hey, John This is Keith Yeah, what we're seeing so far as we go into this coming quarter as continued strong.

Speaker Change: Workers' comp.

Speaker Change: Reimbursement from a rate perspective, so we.

Speaker Change: We don't see anything any different than what we've been saying it continues to be where it is it's stable.

Speaker Change: Those are.

Speaker Change: The increase has been put into place and will continue on.

Keith Newton: We've got good, starting to get some visibility into 2025 and feel very good about what outlined and what our projects. for that, also. Regarding Florida, that's still in line to be put into place in February. Believe we're not forecasting that number publicly yet.

Speaker Change: We've got good starting to get some visibility into 2025 and feel very good about what we've outlined.

Speaker Change: Outlined in what our projections are going to be for that also.

Speaker Change: Guarding Florida, where that's still in line to be put into place in February.

Speaker Change: We're not forecasting that number publicly yet.

Speaker Change: At this point that you haven't yes, John I'll, just add to that so Florida is still on track no changes from prior quarter.

Matt DiCanio: Yeah, John, I'll just add to that. So Florida still on track. No changes from prior quarter.

Matt DiCanio: We will give more guidance early into 2025 on all on where all the states shake out from a reimbursement standpoint. But again, expect that it's going into place January 1st, 2025.

Speaker Change: We will give more guidance early into 2025 on on where all the states shake out from a reimbursement standpoint, but again expect that it's going into place January one 2025 in Florida.

John Stancil: Great, if I can just squeeze a follow up in here, just you called out some of the weather impacts in 3Q and obviously there have been a few in the early part of 4Q. Anything you could do to kind of size how that, you know, may have impacted the business on either employer services or workers? Sure.

Great and if I can just squeeze a follow up in here.

Just you called out some of the weather impacts in <unk>, and obviously there've been a few in the early part of <unk>.

Speaker Change: Anything you can do to kind of size, how that may have impacted the business on either employer services in workers' comp.

Keith Newton: Yeah, I could take that. So we had Hurricane Beryl in July in Texas. We had Hurricane Helene in late September.

Speaker Change: Sure Yeah, I can take that so we had hurricane barrel in July in Texas, We had hurricane Helene in late September and then also in July was the global cyber outage that impacted US primarily on one day in July.

Keith Newton: And then also in July was the global cyber outage that impacted us primarily on one day in July. The total impact from all three of those, we estimate to be approximately $1.7 million in revenue and about $600,000 in EBITDA. So definitely contributed to some of the softness we saw in July, but things were much better in August and September. Thanks so much.

Speaker Change: Total impact from all three of those we estimate to be approximately $1 7 million in revenue and about $600000 in EBITDA.

Speaker Change: So definitely contributed.

Speaker Change: Some of the softness we saw in July but.

Speaker Change: Things were much better than in August and September.

Speaker Change: Thanks, so much.

Speaker Change: Yep.

Jamie Perse: Your next question is from Jamie Perse with Goldman Sachs. Hey, thanks. Good morning. I wanted to start with the workers' comp visits per day. I mean, that was up, you know, 0.2%. You know, sounds like there were some of these headwinds across the quarter. But, you know, overall, how does that compare to your expectations? And how should we think about trends developing in the workers' comp visit side of the equation going forward?

Your next question is from Jamie Paris with.

Speaker Change: Goldman Sachs.

Hey, Thanks, good morning.

Jamie Paris: I wanted to start with the the workers' comp visits per day, I mean that that was out.

To your 0.2% you know it sounds like there there were some of these headwinds across the quarter, but you know overall, how does that compare to your expectations and how should we think about that trend is developing in the workers comp side of the equation going forward.

Matt DiCanio: Sure, Jamie, this is Matt. Good morning. Thanks for the question. So yeah, we saw positive work comp visit growth in the quarter, not as strong as we saw in Q1 and Q2. But we talked about some of the events that took place that muted the visit growth. But as Keith mentioned his remarks, the work comp visits are tied to total employment, and we continue to see total employment increase. So our expectations are for work comp visits will be in line with Q1, Q2, and Q3, pretty much on a blended average. Okay.

Jamie Paris: Sure Jamie This is Matt and good morning. Thanks for the question. So yeah, we saw positive work comp.

Visit growth in the quarter not as strong as we saw in Q1 and Q2, but we had talked about some of the.

Jamie Paris: Events that took place that that muted the visit growth that is.

Jamie Paris: As Keith mentioned in his remarks.

Jamie Paris: Work comp visits are tied to total employment and we continue to see total employment increase so.

Jamie Paris: Our expectations are for work comp business will be in line with our Q1 Q2 and Q3.

Pretty much on a blended average.

Jamie Perse: And then I guess a related follow-up. You mentioned some of the sensitivity to the hiring and labor environment and that you're watching that closely. I guess as I look at estimates for next year, consensus assessments for volume growth in both businesses within the occupational health segment, it's up about 2%. You know, I guess, do you need improvement in the hiring and labor environment to get to just roughly that type of level? Is the current labor environment conducive to that level of growth? Just any connection in terms of what you're seeing on the macro front and tying that back to implications for volume growth.

Speaker Change: Okay, and then I guess a related follow up you mentioned some of the sensitivity to the hiring and labor environment and that you're watching that closely I guess as I look at estimates for next year consensus estimates for volume growth in both but both businesses are within the occupancy.

Ill health segment.

Speaker Change: About 2%.

Speaker Change: I guess do you need improvement in the hiring and labor environment to get to that just roughly that type of level is the current labor environment conducive to that level of growth just any connection in terms of what youre seeing on the.

Speaker Change: The macro front and tying that back to implications for volume growth. Thank you.

Jamie Perse: Thank you.

Speaker Change: Yes.

Matt DiCanio: Yeah, I would, I would say that we would definitely need to see a little bit of improvement with the Hiring and the labor force and some of the statistics out there, but, you know, we've mitigated it in other ways, and we're kind of weathering that right now, and our expectation is, you know, I think some of the employers and the hiring. things we're seeing right now.

Speaker Change: Yeah, I would I would say that we would definitely need to see a little bit of improvement with the.

The hiring in the Labor force and some of the statistics out there, but we've mitigated it in other ways and we're kind of weathering that right now in irons is our expectation is.

Speaker Change: Some of the employers and the hiring and things.

Speaker Change: Things were seeing right now.

Matt DiCanio: Hope that as we get through the election process. Insurance rates. question as far as what happens there. That should start to settle that down a little bit from our expectations as far as what we All right, that's really helpful.

Speaker Change: We would hope that as we get through the election process.

And the in service rates.

Speaker Change: The question as far as what happens there that that should start to settle that down a little bit from our expectations as far as what we're seeing.

Speaker Change: Alright, Thats really helpful. Thank you.

Matt DiCanio: Thank you.

Speaker Change: Okay.

Ben Hendrix: Your next question for today is from Ben Hendrix with RBC Capital Markets. Thank you very much and congratulations on the progress guys. Just wanted to ask a question about continuing on the hurricane theme. What is implied or what do you have included in guidance related to Hurricane Milton and its impact on Florida?

Speaker Change: Your next question for today is from Ben Hendrix with RBC capital markets.

Thank you very much and congratulations on the progress guys. Just wanted to ask a question about continuing on the hurricane theme.

Ben Hendrix: What is implied or what is what do you have included in guidance related to hurricane Milton.

Ben Hendrix: Yeah, and its impact on Florida, and then looking further ahead is that is there any hurricane damage out there or indicate hurricane disruption out there that's putting down speed bumps as it pertains to your to your expansion strategy, especially in Florida, given that it's becoming a more influential state. Thanks.

Ben Hendrix: And then looking further ahead, is there any hurricane damage out there or any hurricane disruption out there that's putting down speed bumps as it pertains to your expansion strategy, especially in Florida, given that it's becoming a more influential state? Thanks.

Matt DiCanio: Chair, thanks for the question, Ben. So we had Hurricane Milton in October in Florida. It had an impact on us, but not incredibly material. When you look at the impact I just outlined for Barrow, Helene, and Stiber, it was in line with what we saw for the prior storms. And that is included in the guidance that we outlined for full year 2024. And it has not slowed down our efforts as far as M&A and development in that state at this point in time. We still have a nice pipeline that we're looking at right now relative to that, and I think the other impact, potentially, Milton is actually a positive impact to us.

Speaker Change: Sure. Thanks for the question Ben So we had hurricane Milton in October in Florida.

Speaker Change: It had an impact on us, but but not not incredibly material.

When you look at the impact I, just outlined for barrel Helene and cyber.

Speaker Change: It was in line with what we saw for the prior storms. So.

Speaker Change: And that is included in the guidance that we outlined it.

Speaker Change: For full year 2024.

And it has not slowed down our efforts as far as M&A and development in that state at this point in time, we still have a nice pipeline that we're looking at right now relative to that.

Speaker Change: I think the other impact potentially.

Speaker Change: Milton is actually a positive impact to us as it is as far as the rebuilding that takes place in some of those areas and the potential of visit volume to our centers in support of that.

Matt DiCanio: As far as the rebuilding that takes place in some of those areas and the potential visit volume to our centers in support.

Ben Hendrix: Great, thank you very much.

Speaker Change: Great. Thank you very much.

Justin Bowers: Your next question for today is from Justin Bowers with Deutsche Bank. Hey, good morning, everyone. Can you remind us about the seasonality in the business? Now that 4Q is seasonally, usually the lowest quarter, looks like last year it was down 7% sequentially. Q over Q. This year, it looks like, just based on the guide, it's in The implication is down 5% sequentially, so what are some of the moving pieces there?

Speaker Change: Your next question for today is from Justin Bowers with Deutsche Bank.

Speaker Change: Okay.

Justin Bowers: Hey, good morning, everyone can you remind us about the seasonality in the business.

Justin Bowers: Now that <unk> is seasonally usually the lowest quarter.

Justin Bowers: Looks like last year, it was down 7% sequentially.

Justin Bowers: Q over Q.

Justin Bowers: This year it looks like just based on the guide.

The implication is down 5% sequentially. So.

Justin Bowers: What are some of the moving pieces there.

Keith Newton: Yeah, I'll give an overview and Matt can comment on any specifics. But typically in our business, the hotter the weather, the more volume we see. We've got the outdoor landscaping and a lot of the construction activities that drive that.

Speaker Change: Yeah, I'll give an overview, Matt can comment on any specifics, but typically in our business. The hotter the weather the more volume we see.

Speaker Change: Don't forget the outdoor landscaping and a lot of the construction activities that drive that fourth quarter is by far our lowest.

Matt DiCanio: Fourth quarter is by far our... lowest quarter with the holiday season. Weather Cooling. That's what we've experienced year after year and have historical trends that show that. What we see here in the fourth quarter of this year is no different than what we've seen. Past history, many, many years. It's pretty much in line with exactly what we've always...

Speaker Change: Well this quarter with the holiday season.

Speaker Change: Weather cooling and that's what we've experienced year after year and historical trends that show that what we see here in the fourth quarter of this year is no different than what we've seen for you know cause past history of many many years so.

Speaker Change: It's pretty much in line with exactly what we've always seen.

Matt DiCanio: Yeah, and I'll add to that, Justin. Obviously, we put out guidance for the full year, but you can apply our thoughts for Q4. But we expect to have a nice Q4 that will be up versus prior year.

Speaker Change: Yeah, and I'll add to that Justin.

Speaker Change: Obviously, we put out guidance for the full year, but you can you can imply our thoughts for Q4, but.

Speaker Change: We expect to have a nice Q4 that'll be up versus prior year. We had some one time items last Q4.

Justin Bowers: We had some one-time items last Q4. So when you do the calculation on what's implied, you'll see that we are estimating to do better year over year than we have for the first three quarters. Got it.

Speaker Change: So when you when you do the calculation on what's implied youll see that will be it will be we are estimating to do better year over year than we have for the first three quarters.

Speaker Change: Got it thank you and just a couple of clarifying.

Justin Bowers: Thank you. And just a couple clarifying questions. It looks like, from the prepared remarks, you have two new centers in Ock Health coming on in the fourth quarter, and then 10 onsites as well.

Speaker Change: Questions.

It looks like from the prepared remarks, we have two new centers in <unk> coming on in the fourth quarter and then two.

Justin Bowers: Are those coming online in 4Q, or is some of that going to spill over into 1Q? And then Part 2 is just on the guidance early in the year.

Speaker Change: Turn on sites as well as are those coming online in <unk> or some of that is going to spill over into <unk> and then part two is just on the guidance early in the year are you going to issue that.

Justin Bowers: Are you going to issue that prior to when you release 4Q results?

Speaker Change: Prior to when you released 40 results.

Matt DiCanio: Sure, I'll take the first question first. So we have two more sites coming in Q4. We've got six or seven signed leases for next year.

Speaker Change: Sure I'll take the first question first.

Speaker Change: So we have we have two more sites coming on in Q4.

Speaker Change: We've got six or seven signed leases for next year.

Matt DiCanio: The onsites that you referenced, the 10 additional ones that we had comments about, those are onsite wins that will come over Q4 and into 2025. So they'll be spread over time as those employers are ready for those onsites to come online.

Speaker Change: On the on sites that you referenced that 10 additional ones that we had.

Heard comments about those.

Speaker Change: Those were onsite wins that will come over Q, <unk> Q4, and into 2025, so they'll they'll be spread over time as.

Speaker Change: As those employers or ready to for those onsite to come come online.

Matt DiCanio: And then the second question, remind me, your second question, just around, you said guidance early into the new year. So I wasn't sure if that if that meant you plan on releasing prior to when you issue, you know, four key results or. Sure. So we'll have Q4 results late February, early March. Good chance that we'll provide guidance before that, but still TBD. We'll be at some of the major conferences in early January and February. Understood.

Speaker Change: And then the second question remind me. Your second question just around you said guidance early into the new year. So I wasn't sure if that if that meant you plan on releasing prior to when you issue.

Speaker Change: <unk> results or.

Speaker Change: Sure. So we'll we'll have our Q4 results late February early March.

Speaker Change: Good chance that we'll provide guidance before that but still TBD will be at some of the major conferences in early January and February.

Ann Hynes: Thank you. Your next question for today is from Ann Hynes with Mizzou. Hi. Good morning.

Speaker Change: Understood. Thank you.

Speaker Change: Yes.

Speaker Change: Your next question for today is from Ann Hynes with Mizuho.

Ann Hynes: Hi, good morning.

Matt DiCanio: I know you're not providing 2025 guidance, but are there any major headwinds and tailwinds that you want to call out that we should consider while we're finalizing models? No, nothing significant from what we've said in the past, in prior quarters, and during the roadshow process. I think the visit trends have been pretty consistent, and Keith talked about Expectations for getting through the the election and some interest rates coming down and and our viewpoint there. We talked about our growth trajectory and our pipeline and we've also hit the the Florida increase which will which will help us next year as well.

Ann Hynes: We are not providing 2025.

Ann Hynes: Are there any major headwind and tailwind that you wanted to call out that we should consider while we're finalizing models.

No nothing significant from what we've said in the past in prior quarters and during the roadshow process.

Ann Hynes: I think the visit trends have been pretty consistent and Keith talked about.

Ann Hynes: Expectations for getting through the election, and some interest rates coming down and in our viewpoint there.

Ann Hynes: We talked about our growth trajectory and our pipeline.

Ann Hynes: And we've also hit the Florida.

Ann Hynes: Increase which will which will help us next year as well.

Matt DiCanio: And I think we've taken good steps on the separation from select and are well on our way down that pathway with no material differences than what we were anticipating, so I think we've got good visibility into that.

Ann Hynes: And I think we've taken good steps on the separation from select and are well on our way down that pathway with no.

Ann Hynes: Material differences in what we were anticipating so we think we've got good visibility into that.

Ann Hynes: I think we're fairly excited about what 2025 shows. Perfect. And I know in a Florida state that you're getting a nice bump.

I think we're fairly excited about what 2025 shows for us.

Ann Hynes: Perfect and I know you know, Florida is the state that you are getting a nice.

Matt DiCanio: Are there any other states in the pipeline that you think you could get positive rate increases that haven't done it for a while? I wouldn't say, I would say no, you know, it depends on what the states that have been doing it, what they come back with as far as MEIs and CPIs and those type things. And like I said, we're starting to see a few of those, but it's still a little early before. those into place, but there's always surprises every year. that we see and. But we feel pretty good about the visibility we have as far as what's going to happen from a workers' comp standpoint.

Speaker Change: Any other states in the pipeline that you think you can't get positive rate increases that haven't been on it for awhile.

Speaker Change: I wouldn't say I would say no.

Speaker Change: It depends on what the states that had been doing it what they come back with as far as in the eyes of CPI and those type things and like I said, it's we're.

Speaker Change: We're starting to see a few of those but it's still a little early before.

We'll put those into place, but there's always surprises every year.

Speaker Change: That we see but we feel pretty good about the visibility we have as far as what's going to happen from a workers comp standpoint.

Matt DiCanio: And we're already sticking a stake in the ground relative. Employer Service. I feel pretty good about.

Speaker Change: And we're already sticking a stake in the ground relative to what we think we're going to do from an employer services. So I think we feel pretty good about where we're going to end up on both of those.

Matt DiCanio: where we're going to end up on both.

Stephen Baxter: Great, thank you. Your next question for today is from Stephen Baxter with Wells Fargo. Hi, thanks for the question. Obviously, I understand the focus on the economic backdrop, which obviously is out of your control.

Speaker Change: Great. Thank you.

Your next question for today is from Stephen Baxter with Wells Fargo.

Stephen Baxter: Hi, Thanks for the question, obviously I understand the focus on that the economic backdrop is obviously is out of your control I'd love to hear a little bit more about what's within your control in terms of what youre doing to work more closely with employers potentially to support you know maybe a greater percentage of their workers copper employer services.

Keith Newton: I'd love to hear a little bit more about, you know, what's in your control in terms of, you know, what you're doing to work more closely with employers potentially to support, you know, maybe a greater percentage of their workers' comp or employer services needs. I guess what I'm wondering is, in the past, you know, have there been periods where, you know, maybe those employers are under more pressure and have looked to you for a greater percentage of their needs? Or in general, how do we think about the economic sensitivity of the sales cycle into employers?

Stephen Baxter: I guess, what I'm wondering is in the past you know have there been periods where.

Stephen Baxter: Those employers are under more pressure.

Stephen Baxter: Look to you for a greater percentage of their knees or in general how do we think about the economic sensitivity of the day.

Stephen Baxter: <unk> cycle into employers. Thank you.

Keith Newton: Thank you. Yeah, I would say for the most part, whether it's a down economic or an up economic trend, we work pretty consistent with the employers as far as trying to penetrate further both their injuries and their workers comp and their employer service. We're really prospecting every single channel, it's just not the employers that can direct that business. Third Party Claims Administrators, like on the workers' comp side. Sedgwick, or a. Workers Comp Insurance Company, similar to a Liberty Mutual or a Travelers where we're putting Pipelines. things in place to try to create. Ease of them potentially getting patients to us.

Speaker Change: Yeah, I would say for the most part whether it's sit down economic or an up economic trend.

Speaker Change: We work pretty consistent with the employers as far as trying to penetrate further.

Their injuries and there they are.

Speaker Change: Workers comp and their employer services, where we're really prospecting every single channel. Its just not the employers that are can direct that business to us its third party claims administrators like on.

Speaker Change: On the workers' comp side.

Speaker Change: Like I said with a garage or a.

Speaker Change: Workers' comp insurance company, similar to a liberty mutual or a travelers where we're putting.

Pipelines and things in place to try to create an ease of them potentially getting patients to a same thing on the employer services side, where some of these aggregators. These third party administrator aggregators on the employer services like E screen or a first advantage.

Keith Newton: Same thing on the employer services side where some of these aggregators, these third-party administrator aggregators on the employer services like an e-screen or a first advantage. or a good example is Certify, which basically. Coordinates, DOT, Driver, Fiscal. Drug Screens. Developing those pipelines with them. It's going to be their choice for directing those individuals to us for whatever their needs are. So it's prospecting.

Speaker Change: Or good example is <unk>.

Speaker Change: Certified which basically.

Speaker Change:

Speaker Change: H D O T driver physicals and drug screens really developing those pipelines with them.

Speaker Change: To be their choice for directing those individuals' to us for whatever their needs are.

Speaker Change: So it's prospecting.

Keith Newton: a multitude of pathways within the workers' comp and employer services ecosystem, not just the employer.

Speaker Change: A multitude of pathways within the workers comp and employer services ecosystem not just the employers.

Speaker Change: Okay.

Speaker Change: Okay.

Joanna Gajuk: Your next question for today is from Joanna Gajuk with Bank of America. Hi, good morning. Thanks so much for taking the question. So I guess, first, I want to follow up on the comments you were making on workers' comp rate increases. So I guess, this year, year-to-date, I guess rates are on average, I'll call it 2% year-over-year. So is it a fair number to assume into next year, you know, 2% call it, but maybe a little bit more because of the Florida rate update?

Speaker Change: Your next question for today is from Joanna <unk> with Bank of America.

Speaker Change: Hi, good morning. Thanks, so much for taking the question. So I guess the first one just following up on that.

So I'm going to I mean workers' comp rate increases.

Speaker Change: This year year to date, I guess rates are on Opex, you're up call it 2% year over year stated that for.

Speaker Change: I guess number to assume into next year, 2% caused by maybe a little bit more because of the Florida rate update.

Speaker Change: Yeah.

Joanna Gajuk: Yeah, so Joanna, good morning. Thanks for the question. So yes, 2% year to date 2.7% for the quarter from a work comp standpoint.

Speaker Change: Yeah. So Joanna good morning. Thanks for the question. So, yes, 2% year to date, a two 7% for the quarter from a work comp standpoint.

Joanna Gajuk: Longer term, as we've mentioned in the past, we still expect plus or minus 3% on an annual basis, and we expect it will be slightly higher next year given the Florida income. Great.

Speaker Change: Longer term yes.

Speaker Change: As we've mentioned in the past year, we still expect plus or minus 3% on an annual basis and we expect it will be slightly higher next year given the.

Speaker Change: The Florida increase.

Joanna Gajuk: And another, I guess, follow up on the, I guess, economic backdrop and exposure there. So can you can you talk about your exposure to different industries? And is it different for your workplace versus your employer services? Yeah, good. I was gonna say, you know, from a employer services side, when there's Lower quit rates. Less hiring. Job Growth and certainly you'll feel the headwinds there before you fill that on the workers comp side. Typically on the workers comp side, you don't fill it as much until they're actually in a layoff position where that employed workforce actually Drop, which we have not.

Speaker Change: Great.

Speaker Change: Just a follow up on <unk>.

Speaker Change: Is economic backdrop and exposure there. So can you can you talk about your exposure to different industries.

Speaker Change: Is it different way of workers' comp versus your employer services.

Speaker Change: Yeah go ahead, Keith So I was going to say from our employer services side when there's a.

Speaker Change: Lower quit rates and less.

Speaker Change: Less hiring less job growth and certainly you'll feel the headwinds there before you build out on the workers comp side typically on the workers comp side, you don't feel it as much until they're actually.

Speaker Change: In a layoff position without employee workforce actually begins to drop which we have not seen that happening and when you look at our kind of the the.

Keith Newton: that happening, and when you look at Layoff situation out there. We haven't really felt any. of the Year, so that's kind of plugging along as it historically has. And we would hope that as we continue, like we mentioned earlier, getting through the election cycle, some of the interest rate changes that Employee Hiring Activity starts to pick up. We'll pick that up with our employer services volume starting to pick back up.

Layoff situation out there, we haven't really felt anything any different than other years. So that's kind of plugging along as it historically has.

Speaker Change: We would hope that as we continue like.

What we mentioned earlier getting through the election cycle some of the interest rate changes that.

Speaker Change: The.

Speaker Change: Employee hiring activity starts to pick up.

Speaker Change: We will pick that up with our employer services volumes starting to pick back up in.

Matt DiCanio: And Joanna, we added a new chart in our investor deck on page six that shows our industry mix. And the main takeaway there is we're highly diversified from an industry standpoint, as you can see on that page. At any point in time, there'll be some industries that are up, some industries that are down from a visit perspective at Concentra. But the diversification is key, and we wanted to call that out here on this slide six here. Yeah, thank you. But I guess I was asking whether there's any difference between the workers' comp and employers' services businesses, or they kind of look, the pie charts would look the same if you would try to split.

Speaker Change: And Joanna.

Speaker Change: We added a new chart on our in our Investor deck on page six this shows our industry mix and the main takeaway. There is we're highly diversified from an industry standpoint, as you can see on that page.

Speaker Change: At any point in time there'll be some industries that are there are some industries that are down from a visit perspective that can center of that.

Speaker Change: The diversification is key.

Speaker Change: And we wanted to call that out here on this slide six here.

Speaker Change: Yeah. Thank you, but I guess I was asking you whether there's any difference between the workers comp and plant services business. It where are they kind of look at the pie charts would look the same if you were trying to split.

Matt DiCanio: Uh, no. They would look very similar.

Speaker Change: No they would look very similar.

Matt DiCanio: Okay, I just want to confirm that. Thank you.

Speaker Change: Okay, I just want to confirm that thank you and if I may get spent a last one.

Matt DiCanio: And if I may just say the last one, you know, I guess, Philip, you mentioned the onsite, right, adding more location, but then also these advanced care, primary care offering that you announced. So, can you give us a little bit more flavor how they're tracking and what this could be? I guess, over time, is there any target you have in mind? You know, how big this business could be? I'm asking about this advanced care, primary care offering. Thank you.

Speaker Change: Hum.

Speaker Change: You know I could fill up you mentioned.

Speaker Change: Inside right, adding more location, but then also these exact kind of primary care offering that you announced so can you just give us a little bit of my favorite topics rocking on what it could be I guess over time is there any target you have in mind, you know how big this business could be I'm asking about the sandbox kind of care offering. Thank you.

Matt DiCanio: Yeah, sure. So we launched officially during the quarter the advanced primary care offering at our onsites. We won 10 additional sites, as we mentioned. Some of those were primary care, some of those were occupational health. And we're early innings with that new service line, but we'll continue to grow that business, we think, be a nice contributor, and we can be much larger in size with that portfolio as it relates to our total company.

Speaker Change: Yeah sure. So we launched a officially during the quarter the advanced primary care offering and are on sites. We we.

Speaker Change: 110 additional sites as we mentioned.

Speaker Change: Those some of those were primary care some of those were occupational health and.

Speaker Change: We're early innings of what that new service line.

Speaker Change: But we will continue to grow that business, we think.

Speaker Change: Be a nice contributor and we can be much larger in size with that portfolio as it relates to our total total company.

Matt DiCanio: Stephen Baxter And also, there's a lot of opportunity there from an M&A activity for us also. You know, you look at where we are as an organization, we're probably, you know, a top 10 as far as size. Some of the bigger ones are several million larger than us, but I think there's some real opportunity relative to that industry and our ability. evaluates some M&A and opportunity here.

Speaker Change: Also there's a lot of opportunity there from an M&A activity for US also you look at where we are as an organization, we're probably the top 10 as far as size.

Speaker Change: Some of the bigger ones are several million.

Speaker Change: Million larger than us, but I think there's some real opportunity relative to that industry and our ability to.

Speaker Change: Evaluate some M&A an opportunity here in the near future.

Matt DiCanio: Thank you.

Speaker Change: Thank you thanks for the color.

Keith Newton: Thanks for the call.

Speaker Change: Sure.

Keith Newton: We have reached the end of the question and answer session, and I will now turn the call over to Keith for closing remarks. Thank you, operator. Appreciate everybody joining us today.

Speaker Change: We have reached the end of our question and answer session and I will now turn the call over to Keith for closing remarks.

Keith New: Thank you operator.

Keith New: I appreciate everybody joining us today, and we look forward to speaking with you early 2025. Thank you.

Keith Newton: We look forward to speaking with you early 2025. Thank you.

Operator: This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.

Speaker Change: This concludes today's conference and you may disconnect your lines at this time. Thank you.

You for your participation.