American Renal Associates Holdings (ARA) Q3 2019 Earnings Call Transcript

American Renal Associates Holdings (ARA)
Q3 2019 Earnings Call
Nov 06, 2019, 9:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings, and welcome to the American Renal Associates third-quarter 2019 earnings conference call. [Operator instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Darren Lehrich, senior vice president. Thank you, sir.

You may begin.

Darren Lehrich -- Senior Vice President

Thank you, operator. Good morning, everyone, and welcome to our third-quarter 2019 earnings conference call and webcast. It is nice to be back into a normal rhythm for our quarterly reporting, and we thank you for your interest in ARA. Joining me for today's presentation are Joe Carlucci, our chairman and CEO; Mark Herbers, our interim CFO; and Dr.

Michael Anger, our national chief medical officer. Also joining on the call today are Syed Kamal, our president; Dr. Don Williamson, our COO; and Julian Bernard, our controller. I want to remind everyone that we may make certain remarks today that constitute forward-looking statements within the meaning of the federal securities laws.

The company's actual results may differ materially from such statements due to a number of risks and uncertainties, including those described in our most recent Form 10-K and subsequent filings with the SEC. Any forward-looking statements made on this call are effective only as of today, and the company undertakes no obligation to revise or update any forward-looking statement for any reason. On today's call, we will refer to certain non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most comparable GAAP measures are available as is important information concerning the use of non-GAAP measures, generally, in the press release and our current Investor Relations presentation deck.

Both of which are available within the Investor Relations section of our website at americanrenal.com. On today's call, we will also be discussing our guidance for 2019 and our preliminary outlook for 2020. I want to note that our guidance ranges could be impacted by a variety of factors that are discussed in greater detail in the Risk Factors section of our SEC filings, including our most recent 10-K and press release. The biggest swing factor to our financial results continues to be changes to our commercial rates and commercial treatment mix.

I also want to remind you that our adjusted EBITDA, less NCI calculations, do not include cost of certain legal and other matters, including costs related to certain litigation in the SEC investigation. And with that, I'm pleased to turn the call over to Joe Carlucci.

Joe Carlucci -- Chairman and Chief Executive Officer

Thank you, Darren, and good morning, everyone. I'm pleased to share some of the measurable progress experienced during our third quarter. At a very high level, our third-quarter 2019 results were consistent with our internal expectations. We delivered strong treatment growth and commercial treatment mix trends were stable with that of the second quarter of 2019.

We made further progress to improve efficiency during this quarter with operating expense initiatives. At the same time, we strengthened our balance sheet by reducing debt and improving leverage. Let me outline the key elements of our third quarter in a little more detail. First and foremost, we are committed to delivering high quality, clinically integrated patient care, and we believe our physician partnership operating model remains positioned well to sustain this commitment.

By staying true to this operating model, we believe we can continue to grow our market share and take great care of even more patients into the future. Along these lines, we remain very pleased with our treatment growth performance this year. Our volume trends continue to track above many of our industry peers and in fact, and demonstrates that more patients continue to choose ARA facilities for their dialysis care. During the third quarter of 2019, normalized treatment growth was 7.9%, and year to date, this growth metric was 7.7%.

We remain on track to deliver 7% to 7.5% normalized treatment growth in 2019, and we continue to expect approximately 2% of this growth to come from acquisitions. Second, we believe our payer contracting efforts over the past year have yielded stability with our commercial payer treatment mix over the past six months. Commercial treatment mix remains stable with the second quarter of 2019 at approximately 12%. And as a result, we believe our revenue per treatment performance for the year should be consistent with the guidance we provided you in September.

Third, our Q3 performance benefited from favorable expense trends. At the clinic level, we've also maintained discipline with our processes to thoughtfully manage labor productivity while also sustaining low clinic-level staff turnover. Our year-to-date 2019 voluntary clinic turnover rate was 7.8% through September 30, which is consistent with the turnover rates we experienced during both 2017 and 2018. Low clinic staff turnover not only helps us operate more efficiently, but it is important and we think about delivering high-quality care to chronically ill patients, who receive the benefit of having good continuity with their local dialysis facility caregivers.

This is further borne out from the results of CMS just released for performance year 2018 in the ICH-CAHPS, patient satisfaction Star ratings. Based on our analysis of the CMS data, ARA's average I-CAHPS star rating was 3.93 and is 16% above the industry average of 3.38. At the corporate level, we've also made further progress with these cost initiatives, which have included targeted reductions in certain G&A expenses, increased virtual meetings to reduce travel and other actions that have reduced the cost structure within certain departments in our corporate office. We believe there are still opportunities to improve our operating efficiency and reduce manual processes.

Fourth, we are encouraged by our cash flow and collections performance during the third quarter of 2019. We generated $27.4 million of cash from operating activities during the third quarter of 2019, which compares to $25.4 million and the third quarter of 2018 and $7.7 million during the first six months of 2019. We reduced consolidated borrowings on our balance sheet by more than $18 million during the third quarter of 2019, including $5 million of payments made on our revolving credit facility. We are delivering on the plan to moderate capital expenditures in the near term.

The combination of debt reduction and higher trailing 12-month adjusted EBITDA, less NCI, drove an improvement to our leverage ratio to 5.6 times from 5.9 times at June 30, 2019. Fifth, as a result of our third-quarter 2019 performance and our internal outlook for the fourth quarter of 2019. We are increasing and tightening our guidance range for 2019 adjusted EBITDA, less NCI. We expect 2019 adjusted EBITDA, less NCI, to be in the range of $87 million to $89 million, up from $85 million to $88 million previously.

Mark Herbers will provide some additional thoughts about our 2019 guidance and preliminary 2020 outlook in his section. And finally, let me close by saying that we recently held our 16th Annual Medical Directors meeting in Boston, Massachusetts, in mid-October. We had a robust attendance among our physician partners who represented many of our affiliated nephrology groups from across the country for this two-day clinical symposium. I'm pleased to report to you that our physician and partners at this meeting were highly engaged, and we believe their interactions with our senior team experienced during the meeting demonstrated that our physician base remains aligned with us as our clinical and business partners.

Along these lines, I'm very pleased to have our National Medical Director, Dr. Michael Anger, back to our quarterly earnings calls to provide the clinical update. Mike?

Michael Anger -- National Chief Medical Officer

Thank you, Joe. I'm pleased to join everyone today to provide you the third-quarter 2019 clinical update. As you know, ARA's business model allows its physician partners to take the lead in the care of their patients. In this physician-driven model, our goal is to provide the highest quality of care.

As you may already be familiar with the two clinical metrics we've been sharing in our quarterly press releases. So I'm going to focus my comments on recent developments related to home therapies and our performance with transplant readiness. The two clinical measures in our earnings press release are Kt/V greater than or equal to 1.2, and prolonged catheter use. I am pleased to report that these measures remain fairly consistent with recent results and are being well managed.

And with respect to home therapies, this has been a significant area of focus for our organization and many of our nephrology groups, and there has been even greater focus on the topic of home therapies within the Kidney Care community since the president's executive order this past summer. From a corporate perspective, ARA has been developing additional resources for its clinics to provide additional training and support, and we are exploring ways to further enhance this education process for patients prior to starting dialysis. At a recent Annual Medical Directors meeting in October, a prominent part of our program during the first day covered topics related to how successful home programs are managed with strong physician and nursing leadership and how kidney disease education can be better incorporated into the overall process to help patients make informed modality choices. ARA's physician-driven model allows these choices to be made by patients and their families in conjunction with the support of the local caregiver team.

This is also consistent with our operating philosophy and reinforces the physician's perspective that these types of clinical decisions cannot be made from a corporate office or made on a top-down basis. During the third quarter of 2019, 10.3% of ARA's treatments were in home therapies, including peritoneal dialysis and home hemodialysis. Since the fourth quarter of 2018, the home modality treatment mix has increased by 0.5 percentage points. Given the additional focus in this area by nephrologists and coupled with ARA's commitment to increasing its corporate support, we believe it is likely that ARA's home treatment mix should continue to move higher in the coming quarters.

With respect to transplant readiness, I am pleased to share some data just released by CMS in the dialysis facility compare system, which is based on Medicare performance year 2018. In the clinical measure for the percent of prevalent patients waitlisted for transplant, ARA's companywide average is 19.2% and above the industry average of 18.7%. CMS also reported that ARA's standardized first kidney transplant waitlist ratio clinical measure averaged 1.165, which is above the industry average of 0.997. We believe these results demonstrate that ARA-affiliated nephrologists are working closely with ESRD patients and transplant centers make appropriate referrals for transplant evaluation in an effort to position as many patients as possible for transplant.

This concludes my remarks for our clinical section. So let me turn it over to Mark Herbers, our interim chief financial officer.

Mark Herbers -- Interim Chief Financial Officer

Thank you, Dr. Anger, and good morning, everyone. I plan to cover three key topics this morning. First, I will provide some additional details regarding the third-quarter financial and ongoing trends.

Second, I will review our balance sheet position and cash flow performance for Q3 and provide an update on certain legal and professional fee costs expected for the remainder of 2019. And third, I will review our 2019 guidance and preliminary 2020 outlook. First, let me cover the third-quarter trends. Volume performance remained solid this year.

In terms of normalized treatment growth, Q3 2019 treatments increased 7.9%, consistent with the results we reported for Q2 of 2019. Our third-quarter non-acquired treatment growth was 5.7%. Acquisitions contributed 2.2% to our total normalized treatment growth. Year to date, for the nine months ended September 30, 2019, normalized total treatment was 7.7%.

Our solid year-to-date volume trends are being driven by a combination of same market growth, ramping de novo performance and three acquisitions we completed during Q4 of 2018 and first quarter 2019. We remain on track to deliver on the 7% to 7.5% normalized total treatment growth guidance for 2019, and we continue to expect approximately 2% of this growth to come from our acquisitions this year. We do not expect to complete additional acquisitions during 2019, and there are none currently in our pipeline for 2020. In Q3 2019 revenue per treatment was $338, and our year-to-date nine months ended September 30, 2019, revenue per treatment was $337.

Recall, our guidance range for revenue per treatment is 2% to 3% below the full year 2018 revenue per treatment of $349, which implies a range of $338 to $342. Based on our mix, trending and expectations for quarter four revenue per treatment, we are on -- we are tracking to the revenue per treatment guidance range for the year, although it is more than likely, it will be toward the lower end. Revenue per treatment from calcimimetics in the third-quarter 2019 remains fairly consistent with the first half of 2019 at approximately $30 per treatment. The lower revenue per treatment trend on a year-over-year basis is explained primarily by the impact from moving in network with certain payers and a slightly higher Veterans administration or VA mix within our commercial treatment mix category.

As planned, we continue to see growth with in-network payers at rates that are generally below that of out-of-network payers. Our commercial treatment mix overall, including the VA was relatively stable year over year and quarter over quarter at approximately 12%. In terms of patient care costs, Q3 of 2019, patient care costs per treatment were $247 or $5 per treatment improvement as compared to Q3 of 2018, and a $2 improvement sequentially as compared to quarter two of 2019. With respect to personnel costs, we are now seeing consistent efficiency in labor productivity and experiencing normal wage increases.

The year-over-year comparison also reflects a more normal trend with respect to employee health benefit costs. With respect to other patient care costs, we are seeing general improvements in ancillary costs, including ESAs, labs, and calcimimetics as a result of the greater generic availability of the oral form. In terms of general and administrative expense, Q3 2019 adjusted G&A expense per treatment was $32 as compared to $39 in Q2 of 2019. We implemented certain G&A savings initiatives during the first half of 2019 and experienced additional savings during the third quarter, driven by a number of factors, including lower corporate headcount, and our efforts to drive greater efficiency by reducing manual processes.

Please note, our adjusted G&A is delineated on Page 9 of our press release in the supplemental business metrics table and the $32 per treatment figure excludes approximately $0.8 million related to our prior-year bonus adjustment and approximately $0.3 million related to other nonrecurring items, such as the gains on the clinic sales. On a reported basis, G&A expense per treatment was $30. From a modeling standpoint, please bear in mind that we held our Medical Director meeting in the fourth quarter of 2019, and there are other seasonal factors that we expect to cause our Q4 adjusted G&A to step up sequentially from the third quarter by approximately $2 on per-treatment basis. So for the third quarter of 2019, our adjusted EBITDA was $38.7 million and adjusted EBITDA, less NCI, was $26.5 million as compared to $37.6 million and $24.3 million, respectively, in the second quarter of 2019.

Excluding the $0.8 million bonus adjustment for prior years that is in our adjusted EBITDA, less NCI, our Q3 adjusted EBITDA would have been $37.9 million, and our adjusted EBITDA, less NCI, would have been $25.7 million. I will now move on to a review of our balance sheet and cash flow and discuss the legal and professional fees associated with completed restatement and other matters. At September 30, 2019, we had consolidated cash of $60.2 million and consolidated debt of $593.4 million net of unamortized discounts and fees. Our debt balance includes $64.5 million of borrowings drawn on our $100 million revolving credit facility, which is down $5 million from June 30, 2019.

In the aggregate, our consolidated debt balances decreased by approximately $18 million, including the $5 million revolver repayment, $1.1 million of mandatory quarterly amortization payments on our Term Loan B facility and approximately $12 million principal payments on a clinic-level term loans. Quarterly principal payments on the Term Loan B facility will step up to $2.2 million per quarter beginning of 2020. We will assess our cash flow performance each quarter to determine the pace at which we will continue to reduce our outstanding revolving credit facility balance. Adjusted for our pro rata ownership of clinic cash and a pro rata portion of the clinic level debt that we guarantee, our adjusted owned net debt was $497.4 million at September 30, 2019 of approximately $8 million lower sequentially from June 30, 2019.

Our leverage ratio, defined as adjusted owned net debt divided by last 12 months adjusted EBITDA, less NCI, was 5.6 times at September 30, 2019. And this is lower by 0.3 times from the second quarter of 2019 and is ahead our plan due in part to strong cash collections. Trailing last 12 months adjusted EBITDA, less NCI, improved $3.2 million to $89.3 million. We now expect leverage to remain around the mid- five times level through year-end 2019.

However, we expect it to begin to improve in 2020, particularly as the weaker first quarter of 2019 results pulls off in the last 12-month calculation. Moving on to capital expenditures. For the third quarter of 2019, capital expenditures totaled $3.7 million as compared to $10.7 million during the third quarter of 2018. Development capex in Q3 of 2019 was $2.9 million as compared to $6.6 million in the prior year quarter.

And routine capex was $0.8 million as compared to $4 million in the prior year quarter. Our capital expenditures reflect more moderate development activity and careful prioritization of routine capex needs. Our development pipeline remains active, and we plan to continue to expand our footprint into new markets as well as expand in existing markets with new clinics and additional capacity. We are approaching our development activity in a thoughtful manner as we balance these growth opportunities carefully against our objective to strengthen the balance sheet.

During the third quarter, we opened one de novo clinic and the divested two clinics. The divestitures generated $3 million of gross proceeds and after taking into account our share of the ownership, the asset sales yielded net cash proceeds to ARA of $1.5 million. At September 30, 2019, we had $13.3 million of remaining assets held for sale in the balance sheet, and we plan to execute on these selected asset sales over the next six to 12 months. For the remainder of 2019, we expect to open one to three additional clinics before the year-end and consistent with our 2019 expectations to add six to eight de novo clinics, plus the two acquisitions completed earlier in Q1 of 2019.

Moving on to legal and professional fees. Professional fees associated with the restatement, the SEC investigation and other legal matters that we believe do not reflect our core business operations totaled $9.6 million during the third quarter of 2019 and have totaled $23.3 million year to date through September 30. Given this timing of the 2018 10-K filing on September 5, the heaviest activity related to the restatement was during the third quarter. We expect these costs during the fourth quarter of 2019 to decline as the restatement costs wind down, although we still believe there will be some ongoing expense associated with other legal matters.

Let me now conclude my remarks with a brief discussion related to our guidance. We are updating our 2019 adjusted EBITDA, less NCI, to be in a range of $87 million to $89 million, an increase from the previous range of $85 million to $88 million. The narrowing of the range is due to the fact that there is only one more quarter remaining in the year and the primary drivers of change are the improved visibility we have on Q4, given the stability in our commercial treatment mix in recent months, and the $0.8 million favorable bonus adjustment for prior years, which is now included in the range. Our preliminary outlook for 2020 adjusted EBITDA, less NCI range, for $90 million to $95 million remains unchanged.

We issued this preliminary outlook on September 5th to provide directional feasibility to next year, and we believe it is prudent to table a more granular set of 2020 guidance until we complete our annual budget process. And as a result, we will provide detailed 2020 guidance when we report our fourth-quarter 2019 results in early March. With that, let me turn it back to Joe for closing remarks.

Joe Carlucci -- Chairman and Chief Executive Officer

Thank you, Mark. In closing, I want to thank our entire organization for their contributions and for their unwavering dedication to providing excellent patient care. With that, we'll be happy to take your questions. Operator, can you please open up the Q&A session? Thank you.

Questions & Answers:

Operator

Thank you. [Operator instructions] Our first question comes from the line of Stephen Tanal with Goldman Sachs. Please proceed with your question.

Unkown speaker

Hi. This is Harris on for Steve. Maybe just to start off, I wanted to get a better sense of what drove patient care cost per treatment lower in the quarter? It looked like you were down 3% year over year and maybe down a little bit sequentially. I just wanted to dig into that a little bit.

Will you expect to be sustainable going forward? Thanks.

Joe Carlucci -- Chairman and Chief Executive Officer

Darren, can you take that? And then maybe Mark can give some additional color.

Darren Lehrich -- Senior Vice President

Thanks. Good morning, Harris, and thanks for the questions. So in terms of the patient care cost trending, I think the main pieces are pretty stable labor with wage rates up about 2% and still some benefit that we're seeing from labor productivity. And then really, the -- I think the biggest driver is from the ancillary side of things, and that would be a combination of lower ESA, lower calcimimetic because of greater availability of the oral form in generic and in labs.

So those are the ancillary components. And sequentially, it was down just a little bit. We're still, in terms of the calcimimetics, not seeing this much of the benefit as you're hearing from some of our larger peers because of their much higher oral usage.

Unkown speaker

Got it. Thanks. And then maybe going on to G&A. Just what were you seeing there that helped in the quarter? On a per-treatment basis, looks like, this is the lowest it's been on that metric, even on an adjusted basis.

I'm just wondering how much of that you expect to sustain going forward?

Joe Carlucci -- Chairman and Chief Executive Officer

Mark can take that.

Mark Herbers -- Interim Chief Financial Officer

Sure. During the quarter, we're beginning to see the results of some of the initiatives we put into place earlier in the year. We have replaced a lot of travel with dollar costs with videoconferencing internally and for our training. We've made other headcount reductions and efficiencies.

We're automating a lot of our processes that were heavily labor-intensive. So we're beginning to see the results of those impacts. But we're also expecting that number in --  to tick up about $2 per treatment in the fourth quarter because of the bonus adjustment we talked about earlier and the presentation that is now embedded in the forecast going forward. So I would see it return -- going up a little bit from the third-quarter number, but still well below prior year.

Joe Carlucci -- Chairman and Chief Executive Officer

Yes, and in addition to that, I think, in the fourth quarter will be our medical directors costs, which will contribute to that tick-up that Mark just mentioned. Last year, we had a Medical Directors meeting in Q3.

Unkown speaker

Thanks. That's helpful. And then on commercial, we understand an uptick in network commercial weighed on RPT for the quarter. Could you maybe tell us how that would have compared to 2Q, if not for the uptick in-network commercial?

Joe Carlucci -- Chairman and Chief Executive Officer

Yes, Darren can go with that one.

Darren Lehrich -- Senior Vice President

Yes. So Harris, I think really, the increase in our in-network mix is really more gradual sequentially, so that's not the driver. If you think about the third quarter, RPT was $338 year to date, it was $337 The guidance for the year essentially implies $338 to $342. So we'd expect it to be in range.

And that would imply that the fourth quarter is sequentially a little higher than third quarter. In terms of the sequential trend from the second quarter to the third quarter, we did have a little bit of a stronger month in June and then saw the trends settle in closer to the guidance range. There's really no other major drivers to call out besides, what we refer to as the typical ups and downs, and that's based on the commercial mix of the plans that we're seeing in also the gradual shift that I made reference to, with our in-network payers.

Unkown speaker

All right. Thanks. And then maybe going on to 2019 guidance. I just wanted to get a sense of what drove that for you guys, if that was expense-driven or otherwise? And then maybe a little bit on why you didn't flow that through to your reiterated 2020 guidance? Thanks.

Joe Carlucci -- Chairman and Chief Executive Officer

Darren?

Darren Lehrich -- Senior Vice President

Yes. So I can take the last part first. Really, the -- I think the plan was to just give you the preliminary view on 2020 when we filed a restatement in September and to come back to a more granular, more detailed set of guidance for 2020 when we reported the fourth quarter. So that was just the objective there.

And so as far as in 2019. There's only one quarter left in the year, so it made sense to tighten the range. We did increase it slightly, and we did roll in the bonus adjustment, which was this prior year adjustment that we referred to because in terms of the overall full year guide, it represents just a little under 1%. So while that's a prior year adjustment, it's not moving the range in any material way.

Unkown speaker

Thanks. And then maybe just one last one from me. It looked like there was one additional treatment day sequentially. Do you have maybe a number for how much that might have helped the total treatments in the quarter? Thanks.

I'll end with that.

Joe Carlucci -- Chairman and Chief Executive Officer

Think it was -- what -- no. Go ahead.

Darren Lehrich -- Senior Vice President

No. So that's -- the normalization really takes that into account. So that's already reflected in the normalized treatment growth figure that we're presenting.

Joe Carlucci -- Chairman and Chief Executive Officer

Right. Right. Thanks, Darren.

Operator

[Operator instructions] Our next question come from the line of Pito Chickering with Deutsche Bank. Please proceed with your question.

Justin Bowers -- Deutsche Bank -- Analyst

It's Justin Bowers on for Pito.

Joe Carlucci -- Chairman and Chief Executive Officer

Good morning, Justin.

Justin Bowers -- Deutsche Bank -- Analyst

Good morning. So just wanted to go back on the SG&A that you guys are taking some efforts there. Is -- so if we think about kind of the run rate, is it fair to say somewhere like in between kind of where you guys -- the level between this quarter and what you're looking at next -- for next quarter?

Darren Lehrich -- Senior Vice President

I think that's a reasonable starting point, Justin. The $2 per treatment step-up in the fourth quarter will include some seasonal factors, but we also have some seasonality as well in the first quarter of every year with higher payroll taxes and shorter or fewer treatment days in the first quarter. So I think -- but that's a reasonable way to think about it.

Justin Bowers -- Deutsche Bank -- Analyst

OK. Thanks. And then in terms of commercial, the mix there, it's been -- seems like it's been fairly steady over the last two years. And just in terms of -- can you just give us a little more color on your commercial environment, like the mix there? Is it -- is that something we think we're stable there as well? And you guys have -- obviously, you brought more folks in-network.

What's kind of the contracting posture looking like for 2020 at this point?

Darren Lehrich -- Senior Vice President

Yes, thanks for the question, Justin. So we will give a more specific range for 2020 RPT when we issue our detailed set of guidance with the fourth quarter. But just that being said, the general framework, underlying the preliminary 2020 outlook, essentially is, number one, mix is stable around 12% in our in-network position, also stable around 80% or just slightly above that. We expect our like-for-like commercial rates stable, generally speaking.

And on the Medicare side, and we expect a tailwind from the base rate of about 1.7% or so, but also expect that to be offset by the headwind of the lower calcimimetic ASP reimbursement. And so those are sort of the puts and takes on the RPT side of things. And hopefully, that's a helpful framework, Justin.

Justin Bowers -- Deutsche Bank -- Analyst

Yes, that's great. Thanks, Darren. And maybe just one more quick one. What was the -- for calcimimetics in the quarter on the cost side, are you guys -- what was that?

Darren Lehrich -- Senior Vice President

Calcimimetics really were a slight tailwind for us in 2019, and we expect that to be a headwind in 2020. We're not getting into the details of our per cost treatments in calcimimetics, but they've been generally stable with some benefit in the small portion of our patients that are being prescribed, the oral version. Generic availability has increased a bit from the second quarter to the third quarter for us.

Justin Bowers -- Deutsche Bank -- Analyst

OK. Got it. Thank you, Darren.

Darren Lehrich -- Senior Vice President

Thank you.

Joe Carlucci -- Chairman and Chief Executive Officer

Thanks, Justin.

Operator

We have no further questions at this time. I would now like to turn the floor back over to management for closing comments.

Joe Carlucci -- Chairman and Chief Executive Officer

Yes, thanks very much. Thanks for participating on the call today, and we look forward to talking to you next quarter. Have a great afternoon. Thanks.

Operator

[Operator signoff]

Duration: 42 minutes

Call participants:

Darren Lehrich -- Senior Vice President

Joe Carlucci -- Chairman and Chief Executive Officer

Michael Anger -- National Chief Medical Officer

Mark Herbers -- Interim Chief Financial Officer

Unkown speaker

Justin Bowers -- Deutsche Bank -- Analyst

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