Akumin Inc. (NASDAQ:AKU) Q4 2022 Earnings Call Transcript

So we’re laser focused on exiting 2024 in the $210 million range of EBITDA, which will get the leverage to 4% or around 4%. I was going to tell me, I’ll answer your next question. So now you are going to tell me, okay, if that’s actually really what you are trying to do, so why your guidance is low? Our guidance is low because we’ve lifted in 2022 you come out and you think you’re firing at all cylinders and the needle. There are always things that are outside your control. Now if what we start to see in the first quarter of this year continues for the rest of the year. That’s a huge step towards the right direction. But we wanted to be, David and I, we wanted to be on the conservative side and not have a guidance that we will actually end up sort of taken down again mid of the year, we prefer to take it upwards midyear, if what we’re seeing in the volume improvements continue throughout the year.

David Kretschmer: I think that Riadh’s point is after disappointing 2022, given what happened in the back half of the year. We’d rather be sitting here in 2023 with a beat and raise quarter after quarter. Again, our guidance is what our guidance is. But I’d like Greenspan reference about the green shoots and agreed to Riadh’s point that to continue. And just to highlight the achievability of bidding at 4x Riadh took you through the cost ways that we get there and said, well, there was still a $30 million EBITDA gap. But again, as you look at our, say, 55% ish margin, on organic growth, you’re only talking $50 million ish of additional revenue. So again, the guidance is the guidance. But I think that what you can see is there is opportunities there, which aren’t crazy to get to that 4x.

Noel Atkinson: Yes. Okay. And then secondly, thanks for the breakout on the free cash flow. That chart is actually quite useful. What do you guys see for €˜23. If you guys can kind of hit the midpoint of your guidance, not assuming all these other incremental benefits, but just the midpoint of what you put out there for €˜23 and assuming that Stonepeak goes off the pick and I think it’s September or something like that. Like do you €“ are you able to be cash flow breakeven or cash flow positive in €˜23.

David Kretschmer: We end up being in a similar neighborhood where we are now in that additional cash flow we’re generating from operations, those that help cover the Stonepeak. Keep in mind, benefited, as Riadh noted, from the $29 million on the sale of the AR that was kind of a one-time pickup. And so we’ve got to cover that. We’ve got to cover snow peak, just to get back to where we have similar cash flow we had this year.

Noel Atkinson: Okay. And then, Riadh, maybe if you could just talk a bit about sort of demand trend in your €“ I know you guys don’t break out radiology between hospital and your sort of your legacy freestanding centers that much. But could you give us a sense of what you’re seeing for demand at those independent centers as compared to sort of the headwinds of not having enough labor to maybe do all the hours and all the procedures that you hoped.