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

Riadh Zine: Yes. No, actually, that’s a great question. And like you noted, although we don’t break it down, I’m more than happy to provide that color because that color is consistent with our vision. And like I said, what we focused on early on, I think before anybody else in the industry, the outpatient trend with health systems and hospitals, which we really when we were sitting here more than 2 years ago, that was the only rationale as you remember, Noel, for the acquisition of Alliance Healthcare. So although we don’t break it down, I’m actually more than happy to provide that color, because the growth with the health systems and hospitals is higher, right? And that is actually a validation that we actually did buy the right assets and it’s also another validation that our independent fixed sites would do a lot better going forward as well.

Now having said that, there was a lot of management time and focus on the transformation in 2022, whether it’s even the time David spent. I mean, if you were to ask, he’s going to say 80% transformation, 20% business. The top team, the whole top team that’s kind of their focus in 2022. But then from that exercise, came a lot of opportunities. That’s why I said, now as we come out of this stuff here because people probably don’t have an appreciation for what it takes to integrate two businesses at the same size. Most of actually those mergers, as you know, more than half of them completely failed. The integration doesn’t need to happen. It doesn’t work. So not only for us, it worked. We have one management team on the same page, driving towards the future.

And that’s going to benefit now our fixed sites, and it’s going to continue to see some bigger momentum in the hospitals and health systems. As I said earlier in my comments and remarks, the hospitals are looking for that capacity. The reason the growth is very high is they have unmet demand, right? And in the regions where we have those dense networks, they are very useful to the unmet demand for those hospitals and health systems. So we will continue to do what we need to do in terms of sales effectiveness in our fixed sites, and we’re confident that we will get back to that mid-single digit growth of those fixed sites again, just like we did in the first half of this year before the second half because the clinical labor short is now behind us, and we start to see signs of that.

But the growth of the hospital and health system side in the status quo situation. It is higher. And we are €“ and that’s where our confidence also comes from in terms of our ability to increase the EBITDA of the company in a significant way.

Noel Atkinson: Excellent. Alright, I will get back in the queue. Thanks a lot.

Operator: We will go next to Endri Leno with National Bank.

Endri Leno: Hey. Good morning. Thanks for taking my questions. I was wondering if you guys can talk a little bit about the oncology unit. What drove that second impairment that you had in Q4 potential or any further impairments in €˜23. And the other thing I was trying to kind of bridge on that oncology or you can help us bridge in there is that we are taking impairments, but then the NCI is also increasing in Q4, which we indicated the business is doing well. So, if you could help me bridge that as well, proceed?

Riadh Zine: Thank you, Endrio. Maybe David, you could take the question? Yes, sorry, go ahead please.