Good day and thank you for standing by. Welcome to the U.S. Physical Therapy Third Quarter 2024 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speaker’s presentation there will be a question-and-answer session. Please be advised that today’s conference is being recorded. I’d now like to turn the call over to Chris Reading, Chairman and CEO. Please go ahead, sir.

Thank you. Good morning. And welcome everyone to our Q3 2024 U.S. Physical Therapy earnings call. With me on the line this morning, I’ve got our executive team including Carey Hendrickson, our CFO; Eric Williams, the President and COO; Graham Reeve, Chief Operating Officer, West; Rick Binstein, our Executive Vice President and General Counsel. Also with us on the call is Jake Martinez, our Senior Vice President of Finance and Accounting. I’ve got a lot to discuss with you this morning but before we begin, we need to cover a brief disclosure statement. So, Jake, if you would please.

Thank you, Chris. This presentation includes forward-looking statements, which involve certain risks and uncertainties. These forward-looking statements are based on the company’s current views and assumptions. The company’s actual results may vary materially from those anticipated. Please see the company’s filings with the Securities and Exchange Commission for more information. This presentation also contains certain non-GAAP measures as defined in Regulation G and the related reconciliations can be found in the company’s earnings release and the company’s presentation on our website. Chris?

Thank you, Jake. So we’ve got a lot to unpack here, a lot of things going on in this quarter, but I want to begin by thanking our partners and all of our operations support for the focus around care and the grind in general on what has been a little bit of a challenging market for a while now. The good news is that in a number of key areas we’re making steady forward progress. First visit volume which directly correlates to our referrals ties most closely with the tremendous care that our partners and clinicians deliver every day in more than 700 locations around the country. It’s continued to be very strong. We’ve seen solid demand all year. This Q3 our patient visits increased 6% and our visits per clinic per day which is really our measure of local clinic demand hit an all-time high for any third quarter with 30.1 visits. Coupled with that, our net rate continued to climb year-over-year to $105.65 versus $102.37 in the prior year quarter. This combination drove revenue up 9.3% to $142.2 million for Q3 and adjusted EBITDA increased 13.4% for the quarter. All of this during a time of sequential rate pressure from Medicare and wage and other inflation overall. On the cost side, we made some decisions this quarter which will have an impact next year particularly as we look ahead. We closed and we’ll sell some of our underperforming facilities in secondary markets which are no longer working for us and creating a disproportionate investment in time. This is never easy but with recent incoming investments in great markets like Wyoming, Oregon and most recently New York we have to focus our time and attention on where we can create the greatest return. So, net of closures we are operating in an owned and managed capacity now totaling 750 locations and continuing to grow in 43 states. In order to get all this done we have some cleaning up to do considering our current slate of opportunities and our expectations around growth and return. Other additions in the quarter beyond New York Metro included a previously announced eight-clinic practice in the northeast. To the end of October we have opened or acquired 20 de novo or aqua novo facilities in addition to our larger announced acquisitions with other opportunities in the pipeline yet to come making for some good momentum as we look ahead to 2025. Also on the highly positive side of the equation was our performance in our injury prevention business which continues to grow at an outsized pace. Revenue this quarter grew approximately 30% compared to Q3 last year and operating profit was up over 27% in the same period. We continue to invest in that space and I’m pleased to announce that we just started a very substantial auto manufacturing contract and a further expansion of one of our largest, longest tenured clients among many other organic opportunities in our development pipeline. I want to take a minute to thank both of our IIP leadership teams for their work this year and the growth they’ve delivered underpinned by exceptional service and care that they provide within many of our nation’s largest and most prominent employers. Let’s shift gears for a minute and discuss one topic that continues to be the big area of focus for us operationally and that is dealing with and responding to the increased cost for people, as well as products and services that have resulted in our cost per visit increasing on a year-over-year basis. First let’s look at where we are for the quarter before we speak about what we’ve done to adjust the trajectory going forward. For the quarter our salary-related cost per visit which includes not only our clinical costs, but all of our clinic level salaries including our billing and collection schemes and our front desk staff. That subset finished the quarter at $62.47 per visit, compared to $60.35 in the 2023 third quarter, a 3.5% increase. Looking at our salary and related cost as a percentage of revenue we were able to hold our cost flat year-over-year at approximately 57.6%, which I feel we can continue to improve upon especially as we get continued rate lift. Let’s talk about what we did to make some adjustments as we look forward. In the quarter the ops team went back and remapped our clinics to where we were in 2021. Why 2021? That was a fairly lean year coming out of the first year of COVID. Where possible they worked to use that as a template adjusted for visit changes and wage inflation to a certain extent. That roadmap of sorts should help us as we finish the year. Excuse me one second, to better understand this and why it’s taken us a little longer than normal to be able to fully address it, for the most part we’re talking about small daily cost numbers. Now with approximately 750 facilities, the difference each day of just $50 in total cost increase, that’s across salary, hours, goods and services, rent, electricity, the list goes on. A difference of only $50 aggregates quickly to $9.5 million over the course of the year. So our team is down in the weeds pruning and pulling very carefully so as not to disturb the flowers. Fruit of what we’re trying to do which is to take great care of our patients and ensure we have the right available resources to do that on a consistent basis. So it’s tedious work but just like in a beautiful garden it’s necessary work. And once through won’t be enough, it will have to be repeated often to ensure we maintain our clinical garden in the way that we desire, bearing great fruit in terms of continued visit and referral growth, fueled by patients and physicians alike who have a great experience as a result of our care and service, while being careful to have the right resource allocation. It’s a tough balancing act for sure. So even though that took a good deal of time this past quarter to sort through, a gross profit excluding closure cost increased 14.5% from the prior year’s third quarter and a gross margin for PT increased 90 basis points to 18.9%. Not yet where we want it to be but moving in the right direction. Before I wrap up, let me speak to one thing that I think some of our investors have been concerned with since we did our capital raise late spring of last year and that has been our pace of deployment of those funds by way of acquisitions. As many of you may remember when we raised that money, we said we would be disciplined in deploying it with partners whom we believe would be a great long-term fit for our company, sharing our values around the importance of people delivering great patient care. I will tell you that way it has been worth it. Partnerships we have acquired this year, strengthening our core injury prevention business and the PT partnerships we have acquired over these past 17 months have been and will be outstanding additions to our company. For the longest time we waited on New York, that patience has paid off in a big way with our partnership with the Metro PT team. Those guys are on fire to deliver strong growth and exceptional care and we are excited to work alongside them and all of our partners to make a difference to our patients, as well as our shareholders. Sometimes it takes us a little time but this team generally does what we say we are going to do. We appreciate your patience as we work to build a sustainable and bright future for us, our partners and staff, and certainly for all of our patients and companies who count on us to show up and deliver results for them every day. So thank you. That concludes my prepared comments at least until we open things up for questions. So, Carey, you always do such a good job of covering the intricate details of our overall quarter and year-to-date financial performance. So I’m handing you the ball.

Great. Thank you, Chris, and good morning, everyone. I will start with a few highlights and notes inside of our third quarter results. Our net rate, as Chris mentioned, increased again in the third quarter to $105.65 per visit. That’s the highest our net rate has been since late 2020, which was prior to the four consecutive years of Medicare rate reductions by CMS which also at that time benefited from a 2% sequestration rate relief. Our average visits per day in the third quarter were a record high for a third quarter at 30.1. Our contract labor costs decreased by $600,000 from the second quarter to the third quarter and our PT margin improved by 90 basis points over the third quarter of last year. We optimized our portfolio with the closure of 32 clinics which will improve our metrics going forward and will also allow our ops team to focus on growth initiatives and acquisition opportunities. And then our IIP business grew more than 13% in the third quarter even before adding the acquisition that we made earlier this year. We reported adjusted EBITDA for the third quarter of 2024 of $21.1 million, compared to $18.6 million in the prior year. Our adjusted EBITDA margin was 15.5% in the third quarter of this year which was up slightly from 15.3% in the third quarter of last year. Our operating results were $10.4 million in the third quarter of 2024, an increase of $1.2 million or 12.4% over the third quarter of 2023. On a per share basis, operating results were $0.69 in the third quarter of this year versus $0.62 in the third quarter of last year. Our average visits per clinic per day, as I mentioned, was 30.1. That was the highest volume for a third quarter in the company’s history. July and August were both at 29.9, consistent with our seasonal patterns for summer months. And then September increased to 30.7. Each of those months was a record high volume for that particular month, July, August, and September. Our net rate of $105.65 in the third quarter of 2024 was $3.28 per visit or 3.2% higher than the third quarter of last year, even with the 1.8% Medicare rate reduction that was put into effect at the beginning of 2024. If you exclude Medicare, our rate was at $4.17 per visit or 3.9% over the third quarter of last year. The increase was largely related to our continuing strategic priority of increasing reimbursement rates through contract negotiations with commercial and other payers and our focus on growing our workers’ compensation. We’re also focused on maximizing our cash collections through improvements in our revenue cycle management. Each major category of payers increased year-over-year. And workers’ comp, which is one of our highest rate categories, continues to increase as the percentage of revenue mix, moving from 9.6% of our revenue in the third quarter of 2023 to 10.4% in the third quarter of 2024, and it was also up on a sequential basis, increasing from 10.1% in the second quarter of 2024 to 10.4% in the third quarter of this year. These rate enhancing initiatives remain a high priority for us. Physical therapy revenues were $142.7 million in the third quarter of 2024, an increase of $12.2 million or 9.3% from the third quarter of last year. The increase was driven by our higher net rate, an increase in visits in our mature clinics, as well as having 21 more clinics on average in the third quarter of 2024 than we had in the third quarter of 2023. Physical therapy operating costs were $119.2 million, which includes $3.4 million of closure costs related to the 32 clinics that we closed during the third quarter. Excluding closure costs, our PT expenses were $115.8 million, which was up 8.2% from the prior year due to having 21 more clinics on average than in the third quarter of last year. On a per visit basis, our salaries and related costs were $62.47 in the third quarter of 2024. That compares to $60.35 in the third quarter of 2023, which is an increase of 3.5%. When you look at our total operating costs, they increased just 2.2%, moving from $84.47 in the third quarter of 2023 to $86.37 in the third quarter of this year. Our PT margin was 18.9%, excluding closure costs in the third quarter, up from 18.0% in the third quarter of last year. As Chris mentioned, our IIP team produced excellent growth in the third quarter. Our IIP net revenues were up $5.8 million or almost 30% over the third quarter of 2023, with IIP income up $1.2 million or 27.1% over the prior year. Excluding the IIP acquisition we made earlier this year, our net revenues were still up 12.9%, but our gross profit up 13.2% and our IIP margin was a very healthy 22.2%. Our corporate office costs are in line for both the third quarter and the full year. Through the first nine months of 2024, our corporate costs were 8.7% of net revenue, as compared to 8.5% in the first nine months of 2023. Our balance sheet continues to be in an excellent position. We have $140.6 million of debt on our term loan, with a swap agreement in place that places the rate on our debt at 4.7%, which, as you know, is a very favorable rate in today’s market and well below the current Fed funds rate. Under that swap, our one-month term SOFR is fixed at 2.8% and that extends to the middle of 2027. In addition to the term loan, we also have a $175 million revolving credit facility that had nothing drawn on it during the third quarter. Our cash balance at the end of September was $117 million, with approximately $90 million of that cash available for acquisitions and other growth initiatives. As we’ve announced, we used $75 million from the Metro acquisition, which we made on October 31st, leaving us with approximately $15 million in available cash before we have to draw on our revolving credit facility. We have deployed, so far this year, $117 million of cash into acquisitions. We continue to expect our EBITDA to come within the range previously provided, at $80 million to $85 million. There’s no update to guidance. Our volumes have continued strong in the early part of the fourth quarter, with October trending similarly to September. And the recent measures we’ve taken to impact expenses and optimize our portfolio are important steps in keeping our cost structure in proper alignment and focusing our efforts on areas with the greatest potential impact. And finally, we’re excited about the recent acquisition of Metro Physical Therapy in New York, even beyond its initial significant contribution. They have a great team and they’re a great fit with USPH, and we expect Metro to be an excellent growth engine for us in the years ahead. And with that, Chris, I’ll turn the call back to you, and we’ll take questions after.

Thanks, Carey. Okay, Operator, we’ll go ahead and open the line for questions.

Absolutely. We’ll take our first question from Brian Tanquilutit with Jefferies. Please go ahead. Your line is open.

Good morning, Brian.

Good morning, guys. Good morning. So maybe, Chris, I’ll just ask you about these moves that you’ve made, exiting some markets and some of the labor initiatives that you’ve put in place. So how should we be thinking about the flow-through impact of these over the next six months to 12 months, number one? And then are you thinking of any incremental moves, whether it’s further evaluations of markets and clinics or anything else in the labor front that you can walk us through in terms of what those moves exactly are?

Sure. I think we need a little time for the changes to take effect. The most significant impact will be next year, especially in two areas. First, we won't have the aggregate burden of those facilities, and more importantly, our ops team will have more time and focus to work with our partners who are in a better position for growth. That's the overall perspective. Regarding the possibility of making adjustments in other markets and times, the answer is definitely yes. This is an evolving situation and we must adapt. Our business revolves around people, and they don’t operate like numbers. There will be fluctuations and changes over time. The good news is that many of these facilities have been with us for years and have performed well. We now see a better opportunity to redirect our time and focus to other areas, while still engaging in a careful process of pruning where necessary. We have completed a significant amount of that already, and some facilities will be sold as we carry on with positioning ourselves for the required resources going forward.

That makes sense. And then maybe just on the Metro acquisition, Carey, number one, is that going to be consolidated going forward? And then maybe, Chris, for you, given the size of that deal, it’s larger than what you’ve normally been doing, how should we be thinking about your appetite and capability to do chunk deals at least for the next 12 months as you work on the integration of this asset? Thanks.

Yeah. Brian, I’ll just say, yes, we do expect to be able to consolidate Metro into all of our metrics, our revenue, expenses, all along our P&L. Yes.

And then, the answer to the question, Brian, is really about what’s the right fit. So, I think, we’re going to be well-positioned because the Metro team’s in really good shape. They have a great team. They have a great plan on the year. We certainly are in the middle and have been in the middle of integration-related things even before the deal closed. We were on the ground, had people on the ground working on some key things. So, it really depends on what becomes available, I think. And we don’t have anything today, immediately, that we’re working on that’s of the same size. But if there was something that came along that ended up like Metro, will be and is, which is a great fit, then sure, we have the resources and I think the appetite to tackle it. Now, whether that happens in the next 12 months or not, we’ll have to see. But we’re still working on good things. We have other things that we expect to get done this year and into the early part of next year that are kind of typical for us. And certainly de novo expansions and a lot of planned expansion within the Metro partnership as well. So, I don’t see us changing our tact. It’s just about looking for the right fit at the right time.

I agree with that. Thank you.

Thanks, Brian.

We’ll take our next question from Joanna Gajuk with Bank of America. Please go ahead. Your line is open.

Good morning, Joanna.

Hi. Good morning. Thanks so much for taking the question. So, first, I guess, just to make sure to confirm this, since you did not mention the guidance or should I read it as no change to your EBITDA guidance for the year?

That’s right. Yeah. We still expect it to come within the range we previously provided of $80 million to $85 million.

And also to confirm, this Metro acquisition we were talking about, was that already contemplated in this guidance range?

Yes. It was.

So, if I do the math, the rough math, I guess, for EBITDA versus NIC, right, so adjusted EBITDA number, so this deal adds maybe a $1 million or so, right, and you still have some clinics in there, but it sounds like you’re including that deal. So, I guess, that’s why no change in the guidance rate. And if I may just follow up on the Metro acquisition. So, you mentioned, clearly, better metrics. We know the margins here are higher than USPH. Can you give us a little bit of color what’s driving that? Is it because they are management companies, there’s a cost structure or there’s something market-specific that’s driving the better metrics for that asset?

Yeah, Joanna…

We are ready to proceed.

No. I am sorry.

They operate larger clinics than we do, on average, which allows them to achieve between 45 and 47.5 visits per day. This will naturally affect our average visits per clinic per day. Their net rate is quite similar to ours, so we don't expect significant changes there. They also have a comprehensive support system at Metro, including a finance support team for billing and collections. As a result, their margin is comparable to ours from an adjusted EBITDA standpoint, and it will align closely with the margins for the rest of the group.

Okay. Thank you. And I know you don’t have a guidance for next year, but our next question will be, so now we know this acquisition at a close, so that’s good to know it now. But other than that, any, I guess, tailwinds and headwinds to think about as we think about next year? I guess we have the final Medicare date update, but anything else we should be thinking about to think about next year? Thank you.

Yeah. Not that I know of. I mean, the most recent thing is the Medicare final rule update, which, as you know, we know all too well, has been typically on an annual basis and further modified by Congress, all of which is in motion and shifting sands, as we speak right now, as a result of the election last night. And so, that’s all going to have to shake out. Other than that, I don’t know of anything that is on the horizon, plus or minus that is material for next year.

Right. And of course, we’ll benefit from the full year’s performance of some of the acquisitions we’ve made. And Metro, in particular, we have two months this year. We’ll have 12 months next year and that’s a significant acquisition. So, that’ll be an add to our 2025.

Joanna, I want to add one thing, and Carey made some valid points. This year, we’ve made significant progress around net rate, thanks to the excellent job done by the team. We are seeing meaningful increases in key contracts that are yet to start, which gives us hope for rate lift. Another area that has performed particularly well is workers’ compensation. I want to acknowledge the dedicated efforts of those involved, as they have done an outstanding job. Our work comp visits increased by over 16.5% year-over-year compared to last third quarter. Additionally, our revenue for work comp rose by nearly 19% year-over-year due to increased rates in that space, stemming from the team's efforts. We are optimistic that this combination will continue to provide us with the positive momentum we’ve experienced thus far and will support ongoing improvements moving forward.

So, if I may, a last follow-up on the last comment, because it just begs the question there. So, where should we expect these workers' comp next year to get to, I guess, there was a time, years ago where you were maybe more like 14% workers comp, so is that achievable or should we just kind of continue to grow from this goal at 10.5% going forward and maybe over time get there, but maybe not? So, any color, I guess, how do you think about where it could get to? Thank you.

I wish I had a really, really clear, great crystal ball. I don’t. All I can tell you is the team has been focused on it. We’ve discussed it with all of you that it’s a focus. We put it out there that we were going to move the needle. The needle’s definitely moving and it’s moving in the right direction at an outsized rate, and where we end up, I don’t honestly know. I’d be making up a number, which I’m not going to do. So, I think for now, where we are and that it’s changing slowly, and there are going to be things that happen in between in lots of different areas, some expected, some not, and so, just kind of mix it all together and I think the net overall is definitely more progress to be made.

Thank you.

Thank you.

We’ll take our next question from Larry Solow with CJS Securities. Please go ahead. Your line is open.

Hi, Larry.

Hey. Good morning, Chris.

Good morning.

Hey, good morning, Carey. I have a few follow-up questions regarding pricing. You mentioned that the net rate this quarter increased by 3%, which is clearly not a result of a CMS decline. As these rates continue to trend positively, it seems like you're gaining good momentum. It's fair to assume that, as you indicated, you also have annual increases in these rates. Are you feeling more confident that we are entering a phase where, at least on the commercial side, rates should grow by 2% to 3% a year? Does that seem like a reasonable outlook for the next few years?

Carey, let me start with this, and then you can jump in. So…

Yeah.

I would say, Larry, the rates that we’ve, just to be really clear, the rates, most of the rates that we’ve re-contracted, many have been a multiyear contract. So, it might be 4% or 5% in year one, and then 2% or 3% for two years or three years thereafter. I don’t know that many of the contracts have a perpetual annual increase associated with them. They’re contracted for a period of time and then they just renew after that, and we’ve got to go back and get after it again before these contracts expire. But for the near-term, many are going to have additional boosts, not all, but many. And so, that is helping us to offset the continued pressure, unfortunately, that we’re feeling from Medicare, at least for this one more year.

Right. And on that Medicare, so the 2.9%, right, I think it’s a 2.9% cut for you guys, right, or something like that. Is that what it works out to?

Yeah. It’s just under 3%...

Around there I think. Right. And assuming, there may or may not be some congressional action, obviously, there’s been in the last few years. I feel like there probably, there’s a good chance, reasonable chance there will be, but let’s just assume it could be a similar rate decline to what we’re seeing this year. Any thoughts, from a high level, I’ve heard from various sources that this should be the last year, right, on the physician fee schedule and any thoughts as we look out, 2026 and beyond, that hopefully Medicare, which historically has been more of a little bit of a good guy for you guys, at least becomes neutral?

Yeah. I think so. I mean, look, trying also to predict what the government’s going to do is, it’s been kind of a foolish business, but yeah, this should be the last year and we believe it’ll be the last year, and nobody we talked to in Congress thinks these cuts were right to begin with. In fact, they were based on all the assumptions that medtech now admits erroneous assumptions that were unintended. We ended up with the unintended consequences, and so I can’t see that they’re going to perpetuate that, but we’ll have to wait and see. Unfortunately, Medicare is a year-to-year thing and really should be probably a two-year or three-year rolling kind of a look so that companies like ours had the opportunity to know what the landscape was going to look like. It’s not that way yet, but we’re expecting this to be the last year that we have a headwind there, for sure.

Good. Good. We’ll cross our fingers there. On the volumes, Chris, obviously, at a record high, so I can’t complain, per se, but only up about 1%-ish in the last couple quarters and I think flash for the year. It was a little bit of a difficult comp in the beginning of the year, but is that more like what you’ve had bigger volume growth as we look over the last 10 years, probably average more like 2% to 3%? Does that just kind of move around a little bit? I know you had some staffing challenges, too, which may have led to some inability to meet all the demand, but just any thoughts on volume as we look forward?

Yeah. And Larry, I don’t have it at my fingertips, and I’m trying to remember what same store was this quarter. I thought it was two-something. But, yeah, you’re right.

No. It was about 2.5% of the volumes.

Yeah. No question. I’d love for that to be 3.5%. Staffing, it’s tight right now.

Right.

It’s tight everywhere, and at the same time, as you heard, we’re trying to balance, not having resources that are standing around with good patient demand and trying to hone that in because small dollars aggregate pretty quickly and so it’s a little bit tricky. But I can tell you the team’s working very, very hard to create that, to keep that demand up and to create that growth. We are where we are right now and we’ve had a lot to deal with in terms of rate pressure and response on that side and cost pressure and response on that side, and I think, all in all, it’s been perfect. It’s not perfect, but not too bad, either. It’s been pretty good, net-net, so we continue to work hard at that and none of us are satisfied with where we are. We have things that we can do better and we’re working hard at, so that will continue to be one of them.

Great. Thanks. I appreciate the color.

Yes, sir. Thank you.

We'll take our next question from Mike Petusky with Barrington Research. Please go ahead. Your line is open.

Hey, Mike. Good morning.

Hey. Good morning, guys. Hey. Could you all give, just real quick, on housekeeping, the payer mix breakout, if you have it?

Sure. Hold on just one second. The third quarter is pretty typical. Commercial is 47%. Medicare is 33%, which is right in line with where it has been. As I mentioned, workers’ comp went up. It was 10.4%, and then, there’s everything else. There’s Medicaid, personal insurance, health pay, so pretty consistent. It’s very consistent with the second quarter, other than, workers’ comp inching up a little bit.

It was Medicaid somewhere around, like, 6%, something like that, 5%, 6%?

No. It’s about 3.5% right now.

Okay. Great. So…

Yeah. 6.5% Medicaid.

Okay. So, curious on the injury prevention business, Chris. This, obviously, the topline is great because of the M&A, but it’s also great ex the M&A double-digit growth and I’m just curious, I mean, is that new business? Are you getting deeper with existing customers? What’s driving that?

Yeah. Yeah. I would say yes and yes. So, new business and deeper with existing customers. The nice thing about this business is, and this is true of anything, it truly, truly works, and so it’s designed to save companies money. It does that. It does that on a very consistent basis and so typically, we’ll start with the company, maybe a national company, but we’ll start with one or two locations, and they tend to be the hardest, worst locations in terms of injury management or injury exposure, and we start with that and the team does a great job, and then we get embedded organic expansion kind of opportunities with that company based on the great job that the team has done. And then there are new companies, risk managers, and certain industries move between companies. They’ve had experience, and they’ve heard about us, and so we get brought in either on a direct basis or through an RFP process and win those opportunities. And again, I’m really proud that both teams have done a really good job this year. Our core team, our legacy team, their largest customer has decided to put us in every one of their locations around the country, and so that’s been, we’re already in hundreds of locations, so that’s been a fantastic relationship. And then the other team, we have a lot of auto industry business. We’ve displaced one of the biggest providers in the injury prevention industry in their home state with a major auto manufacturer and that’s a 50 FTE book of business where we have 50 people now on site full time or nearly so within a given footprint. And so that’s a big win. That’s a new win. And so it’s really both. And so as you point out, we’ve done some very good acquisitions that have worked out really well for us that have opened and broadened not only our service delivery, the products and services that we are able to sell to industry, so it’s created more cross-selling opportunities, but it’s also increased our exposure in different industry verticals, so it may be that we were primarily in distribution and warehousing and now manufacturing and now auto manufacturing and now construction and transportation, and so once you get a foothole or a customer in each of those industry verticals, you open yourself up to a world of other people who think, okay, they understand my business, now maybe we can talk. And so it’s been great overall. Like I said, really proud of both of those teams.

That’s fantastic. In terms of the Metro deal, I’m just curious, is there any ability for you guys to, I think, Carey may have said that the net rate is pretty favorable for Metro, but I’m just curious if there’s anything on the contracting side that you guys can bring to them where maybe your contracting is a little bit more favorable to certain insurers, just curious if there’s any opportunity for some uplift from your contracts? Thanks.

So, I will tell you that the Metro team did a great job historically and even leading up to our acquisition in terms of what they’ve done with their own contract rates. Now they have some additional resources that we can bring to bear with and for their team. Some of the rates that Metro has re-contracted haven’t really kicked in yet or are just now kicking in or will kick in shortly. And so, yeah, I think there’s some additional lift and we’re looking at that whole New York market very strategically to see how we can continue to add to that and time will tell based on our ability to execute on this, but I feel pretty confidently over a period of time, we can do really good things. But I will tell you that they themselves did the heavy lift so far and we’ll see if we can help them with that as they go forward.

Very good. Last question for me, just in terms of the election results last night, is there anything that came out of that last night that makes you think that the U.S. Congress would be more or less likely to sort of do their typical week before Christmas action on the proposed reduction in reimbursement?

Yeah. That’s an interesting question and I kind of expected it, and I don’t really know how to answer it. We’ll see if both houses of Congress end up being Republican controlled. It looks like that’s going to happen. Look, I’m not going to predict. I don’t know. I think they’re on the road and this isn’t a political statement by me in any way, shape or form, so I don’t want anybody to read into it. I think most of us understand that Republicans are more deficit-focused and smaller government-focused than their counterparts on the Democratic side of things. So, we’ve been in kind of a little bit of a more balanced relationship the last couple of years. That may change a bit as we go forward, and any time you have change, pieces get moved around, so I don’t know that I can predict. We’re prepared for the cut that’s been announced, regardless of what happened last night and we’re going to be working to try to get that cut that was announced here a week or so ago, mitigated as we have over the last number of years. And I feel reasonably confident that, let me say, I feel reasonably hopeful that we can get that done, but the political landscape, it’s hard to predict.

Can I just ask a quick follow-up to that? Are you aware of any…

Yeah.

… folks that were particularly, in Congress that were particularly friendly to outpatient PT that will no longer be part of Congress going forward? I mean, did you all lose anybody that’s been particularly helpful in terms of your advocacy for PT and the industry in general?

I think the folks on our side through APTQI, which I’m very much part of and proud to be part of, have done great work. Liberty Partners has done great work to help us long ago understand that we have to have broad connectivity on both houses of Congress and across both parties. And so I think we’re pretty well positioned. Many of our primary advocates are key people that are very secure on both sides, again, both parties and both sides of Congress. And so I think we’re okay there. I definitely don’t think we’re starting over, if that’s the question.

It was. Thank you.

Thanks, Mike.

And there are no further questions on the line. I’ll return the call to our speakers for any additional or closing remarks.

Yeah. Thank you, everybody. I appreciate your time today. Again, team’s working very hard. Give us a chance to finish out this year the way that we have described to you and we’re focused on delivering continued growth next year with some of the capital deployments that we’ve made and some of the adjustments that we’ve made ongoing and even the ones here more recently. So again, we thank you for your patience and your trust and we hope you have a great day. Take care. Bye now.

This does conclude today’s program. Thank you for your participation and you may now disconnect.