My name is Joanna Badger. I cover healthcare facilities managed care at Bank of America, and thanks so much for joining our conference and this session today. Now we're going to talk to Concentra Group. They're the largest occupational health therapy provider in the U.S. Today with us, we have Keith Newton, who's the CEO, and Matt DiCanio, who's the CFO. I guess we decided to go right into Q&A, right? Okay. Sure. Since it feels like not everyone is up to speed on the story, I figured maybe we should just start with just if there's anybody in the room, just in case, to levels that kind of walk us through your main business lines, kind of what services you provide, and who pays for those services. Okay. I'll start it. Matt, feel free to chime in. Basically, when we talk about Concentra, we're the largest primary care provider of occupational healthcare services in the United States. Basically, the company doctor, our focus is all about the workplace, working with employers to keep their employees healthy, back to work, returning to work from an injury standpoint, doing all the other things an employer needs from an occupational standpoint as far as an employed workforce, whether it's pre-employment drug screening, Department of Transportation physicals, Border Patrol physicals, anything of that nature that employer needs relative to keeping a productive workforce in place. If you look at Concentra today, we will treat one out of every five workers' comp injuries that occurs in the United States will go to one of our facilities. Basically, a national market share based on our footprint of about 20% of the injuries that occurred in the United States. We work with over 215,000 employers. Pretty much every employer in the United States is probably utilizing us somewhere, maybe not everywhere if we're not there, but they utilize us somewhere. Basically, we're working to keep America's workforce working and functionally well as far as being able to produce what they need to produce. There's really two lines of visits, types of patients that will walk into that center. There are the work comp patients. A work comp patient has just got hurt on the job. Their employer has notified their employer. Their employer is going to try to direct them to Concentra based on a predetermined relationship that we've set up with that employer. Patients, it depends on the state. Every state is different. Patients could have some choice. They could have no choice in going to that Concentra facility. In the majority of the instances, they're going to go because hopefully they've had a prior experience, maybe through a pre-employment drug screen or a physical, where they had a good experience at Concentra. They know they can walk into Concentra. There's not going to be any out-of-pocket payments. There's no hurdles. The employer has provided Concentra with all the information that's needed to treat that employee. It is seamless to them as they walk into the practice. That is a new injury. That new injury is going to generate some additional workers' comp visits. It's going to generate a follow-up visit, typically to see the primary care provider after their initial injury. It could potentially generate a therapy visit. About 80% of what we see on a workers' comp injury standpoint is musculoskeletal in nature. About 40-50% of those musculoskeletal injuries get referred into therapy. We have therapy in every practice. Our therapists and our primary care physicians talk about every patient every time they're there. It is a very integrated practice. I think a lot of people don't really understand that. They think it's pieces out there. It's all within the four walls. It is a very close collaboration as far as the clinical care that's being provided to that patient. Those are the type of workers' comp visits that get generated as a result of that patient visit. The other type of visits are what we call employer services. Employer services are primarily the drug screening that an employer needs, whether it's pre-employment or reasonable suspicion or anything of that nature. It's physicals. Again, it could be a pre-employment physical, hazmat physical, TSA physical, Department of Transportation physicals for commercial drivers, all those type things. Now, the difference between those from a reimbursement standpoint, the majority of the reimbursement associated with work comp visit patients, whether it's the initial visit, the recheck, or the therapy, is going to be based on a state fee schedule where states have set a fee schedule within their state. Every state does it different, but the majority of them will set a fee schedule. The state really acts as a referee to put the rules in place on how providers and employers will act within the workers' comp system in their state. They establish the fee schedule. We bill at the fee schedule. The employer ultimately pays that bill through their third-party administrator. If they're a large employer and they're self-insured and they have somebody administering their claims, or if they're fully insured, they bought insurance, and the insurer is going to be paying that claim again based on that state fee schedule. That's the reimbursement mechanism relative to that. On the employer services visit, drug screens and physicals, that's a direct negotiation with an employer. Basically, we are negotiating with that employer relative to using our centers and sending their patients to us, what it's going to cost them to do a drug screen with us, what it's going to cost them to do a physical, maybe some other surveillance type stuff that we do that they need. Basically, when we bill that one, it'll be a bill to that employer directly, and the employer pays us directly. Basically, those are all fee-for-service type visits. No capitation, no at-risk, no Medicare, no Medicaid, very little federally funded programs in our centers. It's typically just workers' comp and the employer services that we're seeing. There's a little bit of, many people have asked us, "Why does it say urgent care on it?" We do see urgent care patients. Anybody in here can walk in. We are actually contracted with commercial payers out there, the Cignas and all those folks. That was done for several years back just to open up the centers to more foot traffic. We don't really focus on it at this point. We don't really market it. If you look at the 50,000 patients a day that we see across the United States that are walking into our facilities, there's approximately 1,000 of those will be urgent care. There is an access point for that. If you walked into a true urgent care facility, you're going to see the flip of that. First off, they're not going to be seeing 50,000 patients. If they happen to see 100 patients in their practice, there might be 4 to 5 that might be occupational medicine, but 95 are going to be urgent care. We're really the exact opposite of what you would see in a traditional urgent care setting when you come to one of the Concentra practices. That was great. The only thing I would add is we also have some other business segments. Keith was talking about our medical centers, which is 95% of what we do. We have an on-site segment where we go to the employer's location. We also have a telemedicine platform as well. We go to employers and we say, "You can access us at our 620 medical centers across 43, 44 states, or we can come to you, part-time, full-time, episodic offerings where we do both occupational health and some advanced primary care. Or you can access our virtual network in pretty much every state." It is really a comprehensive solution for our employer customers. I guess maybe just digging in some of these topics. On the occupational health, right, the demand is really driven over a long period of time by employment, right? The employment is not really growing much. You guys talk about your long-term target growth for revenues, right, low to mid-single digits. Can you break it into pieces? How much is same-to-volumes versus pricing versus De Novos and acquisitions? How do How do you build to that number? Yeah, I could take that. We always talk about our revenue growth, mid to high single digits. There are three components. Same-center visits over a long period of time in our history, we have been around for 45 years, has been low single digits. In that range from a visit standpoint. From a rate standpoint, Keith talked about the different components. Workers' comp is guided by fee schedules over a 5-10-20 year period, any time period you look at. On average, it has averaged 3%. Employer services, where we control the pricing, follows very closely with that 3%. Low single-digit visits, ± 3% for rate. On top of that, for 45 years, we have been doing De Novos, small acquisitions. We call that our core growth strategy. We have seven or eight that we are going to open this year through De Novos. We have added some small M&A as well. That will add a couple% to the top line. That is what gets us to the mid to high- single- digit. Not included in that is any larger acquisition that we layer on, like Nova Medical Centers, for example. That will bump us up into the double-digit revenue category where we are this year. Maybe first we can talk about a little bit of what happened in Q1. Workers' comp volumes, I guess the visit per day, excluding the recent acquisition—we can talk about the acquisition later—were essentially flattish, right, in the quarter, and it was slowing down somewhat from Q4. How should we think about the organic growth in workers' comp specifically for the rest of the year, based on that? I'll start with that. Workers' comp through the years, it can be a little misleading looking at it just on a quarterly trend at times. I mean, when you look at first quarter, it was very similar volume to what was in the third quarter. It popped up in the fourth quarter, came back down in the first quarter. It just started out slow this year, January, February. A combination of many things. It could be whether it's the way the holidays fell at the end of December into January. All those type things can impact our business. The weather can impact our business. We weren't too concerned with it. Since that time, we've seen positive growth in the succeeding months since March as far as positive workers' compensation growth. I feel good about where it is. Comp visits are going to be based on total employment. As long as total employment is growing, that'll be a nice base upon which those visits will be derived. If injury incidence rates stay fairly stable, which they have over the last few years, then there's a base of injuries that occur in the United States. As long as we continue to do what we do, execute on our value proposition, continue to expand, we're going to get a greater and greater market share of those than we have today. I feel good about that. You never know economically if you had a global crystal ball as to what ultimately is going to happen with all the noise that we have out there. It seems to be moving along in the right direction for us, both from a workers' comp visit. Again, started out a little slow, January, March, but again, positive ever since then. Same thing from employer services. We had year-over-year negative comps for the last couple of years for a variety of reasons. A big portion of it initially is we had inflated volumes coming out of the COVID years as that great hiring spree took place and there was the churn. A lot of employment was happening. We were seeing a lot of drug screening and physicals as a result of that. Once that normalized on a year-over-year comp, we were feeling the pressures of that. We saw that through most of last year, I think, as employers, I think, were being conservative to see what was going to potentially happen from an economic standpoint, what was going to happen with any administration change that potentially takes place in November. I think there was just cautiousness through the year. We get into January and significantly improved from a year-over-year comp, still slightly down, but ever since February, I'm sorry, yeah, slightly down in January from a year-over-year comp perspective on the employer services. Ever since then, they've been positive as we move forward through this year, even with the uncertainty that's out there from an employer standpoint with the tariffs and trade policy and a lot of those type things. We feel pretty good about where the trends are heading right now. Right. It sounds like you're not really seeing those worries, I guess, impacting your business. To that end, can you talk about the diversification? You put out this interesting pie chart where you talk about manufacturing is only 9% of revenues and healthcare is 9%, business services is 8%. Very, very diversified ways. Can you also maybe give us some examples of different employers and also maybe how this business behaved in prior recessions? Sure. Yeah. I think one of the great characteristics about our business is diversification across industries. We have an investor slide deck that shows the breakdown. It is really 10%, 9%, 8%, 7% across all industries, geographies, customer sizes. We do business with small, medium, large-sized customers. Basically, the who's who, the Fortune 100, Fortune 500, Fortune 1000, etc. A significant amount of diversification. On your question on prior down periods, the last two that we had to point to were very extreme cases. The global financial crisis in 2008, 2009, and obviously the pandemic. During GFC, our visits declined, but through a series of levers that we pulled as an organization from 2008 to 2009, our EBITDA went down $1.5 million. Really pretty much flat, relatively modest decline through a very extreme cycle. What we're seeing right now, and you touched on it at the beginning of your question, we're tracking our visits through yesterday. Specifically from post-quarter end, from liberation day going forward, we haven't seen any impact to our business. We look every single day at the employer services and the work comp visit volumes. The hope here is that we can get through this period of uncertainty. We should also talk about the potential tailwind of all the administration's policies bringing jobs back to the U.S. and the potential impact that could have on us in the medium term. Yeah. I think an important fact is a lot of times everybody's waiting around for the ADP jobs reports on a monthly basis. Those are typically in arrears as far as what happened several weeks back. We know through 45 states as of yesterday exactly what was happening from a drug screening and physical standpoint for probably 200,000-plus employers that are utilizing the centers. At times, we almost feel like we're a better leading economic indicator of potentially what's happening out there just by virtue of what we do. Right. The access to the data that you have versus the government. Maybe we can, I guess, relate a topic around your pay mix and how the rates are set. Like you mentioned, the states set the rates, but actually they do not pay them, right? The employers pay them. Can you talk about how often and what the mechanism is out there to reflect the cost inflation in these rate outlets? As in how quickly, if there is a spike in cost for whatever reason, tariffs or labor, how quickly you see the rates go up? Yeah. Basically, the majority of the states have established a fee schedule. It's different in each state as far as who the governing body is that oversees that, either a work comp commission, could be the legislative branch that oversees it, but somebody in the state is responsible for setting that fee schedule. Over the years, we've done a lot of work with the various states in educating them on what a lot of the other states are doing. It's been very beneficial. They'll establish their fee schedule, typically based on the resource-based relative value system. Then they hit it with their own conversion factors. They have a choice at that point in time. They can leave it and have it set like that and just continue on, and it doesn't adjust and it's the same. They may evaluate it periodically. What we've been able to do in many states is educate them. If you've established it based on a certain point in time, based on your determining factors, why not put some sort of inflationary escalator in it that's automatic so that it stays at the level that you thought it would stay? I believe there's. About 20 states have a CPI or MEI tied to their fee schedule. If we see higher inflation for a longer period of time, we would expect our work comp rate growth to be higher than that 3% I talked about earlier. If inflation returns to more historical levels, 2.5%, 3% or so, it will move closer to that long-term average of 3%. They typically will implement any fee schedule changes relative to that in January of each year. The majority of the states do it. There are some other laggards that come in later. The majority, probably 75%-80% of the states, actually will update their fee schedules with that MEI or CPI or whatever they are using in January. We start to get some indications as we kind of get into the fourth quarter of what is going to happen. The states, it may be they may take the annual rate for last year. They may take the last trailing six months that they are seeing. They may just take the last quarter. That can be a little different across the board. These 20 states that have these CPI type increases, how much, I guess, of your volumes or revenues do they represent? I don't have that stat offhand, but it's basically half our states. Our two largest states, California and Texas, both have it. Yeah. Okay. Yeah. Okay. That's 200 of the centers. That's a third at least. And then there's 18 more states. Even if they don't have that automatic CPI or MEI, they still can look towards that and update their fee schedule with that information. Right. Exactly. Because to that end, pricing was actually really strong in Q1, right? It was up like 7% workers' comp. Even if you exclude the Florida, it was 5%. Is that still sort of the catch-up of the prior cycle of inflation? That is why you are seeing the 5%. Should we assume, based on what you said, most of the states update in January, so should we assume that this is kind of the rate update for the rest of the year? Yeah. The only thing I'd add there is that our Q1 prior year was a little bit lower than average. We had a stronger year-over-year Q1. It should be pretty consistent as we move through the year because, as Keith mentioned, approximately 80% of states update in the first quarter. Those rates will stay constant throughout the year. I guess switching to employer services, because if you mentioned the visits, were they actually accelerated, right, in Q1 if you exclude the acquisition? Is this a sign that you kind of went over the peak and the normalization? From here, do you expect employer services visits to grow this year? The magnitude of the growth that you would expect? Yeah. I would expect very consistent growth from what we're seeing right now for the rest of this year, absent any major change in the economy. We had seven or eight quarters of minus 5% employer services as we were coming out of COVID, the great resignation period. Our employer services volume was up 10-15%. As that normalized, that's where we saw the decline. Keith and I always predicted that it'd be plus or minus year-end. As we noted, it really flipped from Q4 to Q1. There was about a 5-6% positive swing. We believe we've just leveled off from a year-over-year comp perspective, and then we'll continue to grow from here. Yeah. I think if there can continue to be more clarity from an economic standpoint as far as what's happening out there and give employers a clearer picture of tariffs and trade policy, those type things, that's going to benefit and allow it to start to grow at a more normal rate than what we've historically seen, kind of a 2-3-4% range on an employer service on a normal basis. On employer services, I guess, small question to what I had on workers' comp, how quickly those rates adjust for something like tariffs or cost inflation? I guess here you negotiate directly with employers. Does it mean that maybe you can even move faster? With the states, you don't have to wait. You can kind of. Yeah. Yeah. Typically what we do November of every year, we will determine what we want to adjust our employer services, drug screening, and physicals by what kind of rate. We'll typically look at kind of what's happened from an inflationary standpoint. Typically, like this last year, we ended up going in with a 4% increase. We determined that in November. We don't go out and negotiate with 200,000 employers because we don't have contracts. I mean, there's no formal contract between us. It's just been a verbal agreement when they initially started. What we will then do is send out that generic letter that talks about all the great things we're doing and all the benefits that happened this last year. Oh, by the way, we're going to have a slight adjustment in our services that we're providing you from a drug screen and physical. It'll be 4% for this, 5% for an HPE, and 1% for a drug screen. It can be a mix. That's just a letter that goes out to every single one of them. There are a few where under an RFP, we actually have an agreement, and we can't do that, but it's few and far between, typically like a municipality, a city, or something like that. We will typically, if it's a large employer like Amazon or UPS, have a sit-down with them and basically tell them, "January 1st, all this goes in." It's pretty much the process we go through in November. We will typically just base it on that, kind of what's going on from an inflationary standpoint, what else do we want to do, and then implement it January 1 of every year and leave it that way for the rest of the year. I guess in terms of this employer services as a business, right? It sounds like you have some influence on those. In terms of the growth in that business, is it something around the lines of just adding incremental services? This is how you grow to kind of where you already saw kind of penetrated with different services. Is there some additional growth you might have in employer services by just adding more over time? From an employer services standpoint, yeah, we're always looking to figure out new services. Can we do background checks as a component? Can that be another revenue stream that goes along with the drug screen or the pre-employment drug screening, things like that? We're always looking for more arrows to put in the quiver from that standpoint. Every day we wake up, and we have a 200-person sales group, which has a strong sales operations analytics group that's getting all kinds of data information in about concentration of employers within a 5-10 minute drive time of every center, trying to take that information, whether it's Dun & Bradstreet or something else, and try to find employers that potentially could utilize our services that may not be utilizing our services, and ultimately trying to generate hot leads for a face-to-face salesperson to go in there. We continue to go after market share from that standpoint. We continue to look at what other services can we add to just expand more for that employer. We've been in the business so long, 40, 45 years, it's kind of hard to find the nuggets relative to new services to add per se. Where we are in other areas, like our on-sites, expanding into the advanced primary care. Yeah. We should talk about that because I feel like we only have a few minutes. On-site, right, it's sort of a little bit separate, but it sounds like there's more growth because it's also a very small base. There, it sounds like you're doing some interesting things too because you're adding this primary care offering as well. Actually, when we were visiting your centers, I was asking whether, I mean, these are not, this wasn't on-site. This was occupational health. I was asking also about what about behavioral health because we're hearing a lot from payers about increased demand and such. Maybe talk for a couple of minutes about on-site and the outputs of the growth. Yeah. I can hit on that and also hit on work comp behavioral health. What we're trying to do is continuously expand our services. We are heavily investing in our on-site portfolio, $60 million in revenue out of $2.1 billion. We always thought it should be much larger in proportion to the center business. We just announced an acquisition of Pivot OnSite, which effectively doubles our revenue from $60 million to $120 million. That gives us access to another set of customers, leadership team, G&A infrastructure to continue to scale that even more than we have today. Both organizations have a full pipeline. We also, last year, I believe it was last year, about a year, year and a half or so ago, we launched advanced primary care as an offering at our on-sites. We partnered with Epic, who has the leading technology in that space. The reason we did that, we have a history, obviously, in occupational health. 80% of our on-site portfolio was occupational health. About 15%-20% was primary care. This gives us the additional technology and platform to bring it to a more advanced, more preventative type offering where a lot of large employers are looking for both the advanced primary care and the occupational medicine offering at their on-sites. Now we have the best technology, and we have a 45-year history in occupational health. We think it's a very powerful combination. Lastly, you talked about behavioral health. We launched work comp behavioral health, but that is through our telemedicine platform. That is growing very nicely. We continue to hire more and more providers, but we make that accessible to all of our employers, whether they access us at our centers, we have an on-site, or they just do business with us through telehealth. Maybe the very last question on balance sheet, right? The leverage, I guess, depending on how you calculate, I guess you guys have certain targets and such. I guess the way we calculate is a little bit higher. Maybe talk about that in terms of your targets and how you want to get there and when you're going to get there, I guess. Sure. We are currently at 3.9 times the leverage ratio, same ratio we were at the time of the IPO last year. Last year, if you remember, we were at 3.9. By the end of the year, in less than six months, we went to 3.5. We ticked back up to 3.9 through the acquisition of Nova Medical Centers. Our stated target at the end of this year is 3.5 times. At the end of next year, within 18-24 months, we're targeting 3.0 times. Right now, we're focused on integrating our two acquisitions, finishing out the separation with Select Medical and delivery. Next year, we're going to have all the tools available to us to assess from a capital standpoint. The second half of the year is really the heavy cash flow period for us. It's going to be a repeat of what we did last year. All right. Thank you so much. That's all. Thank you. All right. Thank you, Joanna. Thanks.