U.S. Physical Therapy (NYSE:USPH) Q2 2021 Earnings Call

0:01 Good day and thank you for standing by. Welcome to the U.S. Physical Therapy's second quarter 2021 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. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to Chris Reading, President and CEO. Thank you. Please go ahead. Good morning and thanks, everybody. Welcome to U.S. Physical Therapy Second Quarter 2021 Earnings Call.

0:46 With me on the call today include Carrie Hendrickson, our CFO, Graham Reeve and Eric Williams, our co-COOs, Rick Binstein, our General Counsel, John Bates, our Controller, and importantly, Glenn McDowell, who's winding up an incredible 18 years with our company, the vast majority of that time as a Chief Operating Officer. I want to thank Glenn for his incredible faithful service. Glenn helped us to achieve a lot over the many years he was with us. I know he's going to enjoy his much improved view, trading out the Houston Beltway for the beautiful mountains in Colorado right outside his new front door. I also want to welcome Eric Williams to his first call as COO at COO East. Eric was able to attend our last board meeting as a guest, and he started officially on July 1st. Having known Eric for over 25 years, I know he's going to be a great addition, a great leader for our company, and he, Graham, and Glenn have been working seamlessly together to allow this transition to proceed smoothly without missing a beat. Before I start with an overview of a very good news quarter, I will ask John to cover a brief disclosure.

2:00 John, if you would. Thanks, Chris. This presentation contains forward-looking statements which involve certain risks and uncertainties. These forward-looking statements are based on a company's current views and assumptions, and the company's actual results can vary materially from those anticipated. Please see the company's filings with the Securities and Exchange Commission for more information. Thanks, John. I want to start this morning by thanking our entire team for the work throughout the entirety of this pandemic. Our partners and our clinical staff in particular, who donned with PPE through the second hot summer, are doing a fantastic job with our patients, as evidenced this quarter by our record visits per clinic per day, coming in for the quarter at 30. I'm also very proud of all of them driving visits back up over pre-pandemic levels with more than a 60% improvement compared to where we were this time last year. I also want to thank our sales and marketing teams and our home office staff who support and guide them. They have helped to drive record new patients into our facilities, allowing even more lives to be positively impacted as a result of our clinicians' great care.

3:18 I want to thank our home office support departments and teams who have largely worked remotely this past year and a half, but working very effectively in support of our partners' efforts on the ground in the many communities we serve around the country. In special mention to our clinical services and compliance teams, you've worked tirelessly to keep our staff and our patients safe and up to date with constantly evolving trends and issues surrounding this pandemic, ultimately keeping facilities open, and very productive while serving the needs of our patients, employers and families. The end result of all that great work is a records earning quarter for our company and on track for a record year.

4:04 Again, in spite of rate reductions, pandemic challenges, including those that impact job seekers and employers alike, our team has been together a long time. Our partners stay with us for the long haul and together we find ways to overcome challenges as we have in the past, allowing us to forge ahead. Some quick highlights on the quarter. So we're reporting 96 cents for operating results, which is an all-time high for us, comparing favorably to the strong quarter two we had pre-pandemically in 2019 at 81 cents. In spite of some closed and sold clinics, Our revenues were ahead of 2019, and our operating profit and EBITDA were well ahead on a pre-pandemic basis. Our margins have stayed healthy.

4:55 Our gross profit margin for our overall company in quarter two was 27%. Our physical therapy margins were 27.3%, and our injury prevention margins were 25.3%, both continuing to perform very well. All of that helped to push our operating income up 116% compared to a heavily impacted Q2 of last year. Additionally, we increased our operating income margin to 17.5%. Other highlights in the quarter include the announced acquisition of a great group of partners and an eight clinic practice. These guys are a great fit for us. They're highly motivated to grow. We are excited about helping them do just that to expand their already prominent sports medicine related services.

5:48 As a result of management's outlook for the remainder of the year, we are increasing our operating results guidance for the full year 2021 to between $3.05 to $3.15 per diluted share. In addition, our board has voted to increase the company's quarterly dividend from 35 cents per share per quarter to 38 cents which will be paid on September 17th, 2021 to shareholders of record as of August 20th. In closing, let me say that I'm happy to see the increased attention to our space. Physical therapy on a very pure basis is one of the last health professions where we truly get to know and spend quality time with our patients while at the same time helping them to move and to function again so they can enjoy their lives. Being part of my profession for the past 36 years has been one of the great blessings in my life, and I am truly thankful that I get to work with so many friends and beloved colleagues across our many partnerships as well as within our home office team. While we will always have challenges, whether they come in the form of reimbursement, staffing, or even a pandemic, this team will continue to focus on doing things the right way internally for our staff and patients. And when that happens, as it should, we know that our shareholders will be well cared for also.

7:20 Externally, we will continue to work with a growing group of member companies within APTQI, as well as collaboratively with the APTA and the private practice section, who represent smaller practices, in order to make progress with CMS, as well as to help our lawmakers understand The huge embedded value in physical therapy as the primary care of musculoskeletal health. We will continue to do our best to reflect the good, worthy, and worthwhile attributes of the profession while at the same time following our own path with our partners and our team to further grow our company while creating shareholder and stakeholder value. Thanks so much for your continued support.

8:05 It means a lot to all of us. Now I'd like to turn things over to Kerry to walk through the financials in greater detail. Go ahead, Kerry. Thank you, Chris, and good morning, everyone. As Chris noted in his outline in our earnings release today, our financial performance in the second quarter of 2021 and through the first six months of the year has been very strong. We reported record highs in many of our most important metrics in the second quarter, including volumes per clinic per day, total revenues, adjusted EBITDA, and operating results per share. As Chris noted, we reported second quarter 2021 operating results per share of $0.96, a record high for the company. The $0.96 per share is $0.57 higher than the $0.39 per share we reported in the second quarter of 2020 without relief funds and $0.22 higher than the $0.74 for the second quarter of 2020, including relief funds. It's also $0.15 or 18.5% higher than the $0.81 we reported in the second quarter of 2019.

9:04 You'll note in the release that in addition to comparisons to 2020, we provided comparisons of our key metrics to pre-pandemic periods in 2019, and we'll continue to do that through the remainder of this year since 2020 metrics are skewed by the impact of COVID. Our adjusted EBITDA of $21.8 million for the second quarter of 2021 was also a record high for the company, excluding relief funds in the fourth quarter of 2020. The $21.8 million was $2.8 million or 14.5% higher than the adjusted EBITDA of $19 million including relief funds for the second quarter of 2020 and was $10.7 million or 97.1% higher than the second quarter of 2020 excluding relief funds. Compared to the second quarter of 2019, our second quarter 2021 adjusted EBITDA increased $2.7 million or 14.1%. from $19.1 million in second quarter of 19 to $21.8 million in the second quarter of 21. Revenues in the second quarter of 2021 were $126.9 million, another record high for the company. They were $43.1 million higher than the second quarter of 2020 and $0.6 million or 0.4% higher than the second quarter of 2019 revenues, even though we had 21 fewer clinics open on average in the second quarter of this year due to sales and closures of underperforming clinics that we completed at the onset of the pandemic.

10:32 Our physical therapy patient volumes per day per clinic were record high, 30.0 in the second quarter of 2021. Our previous high was 28.2, which was in the second quarter of 2019, which we beat by 6.4%. Our volumes per day per clinic were 58.7% higher than our 18.9 average visits per day per clinic in the second quarter of 2020. We noted on our first quarter earnings call that we had record high volumes in March of this year at 29.3. Our April volumes were slightly higher than March at 29.4, and then May and June were both above 30 at 30.4 and 30.2, respectively. Our net rate for our physical therapy operations was $104.46 in the second quarter of 2021, which was consistent with the $104.72 we reported for the first quarter of 21.

11:26 Our rates held up well considering the 3.5% Medicare rate adjustment that went into effect in January of 2021. Our rate was down only 1.3% in the second quarter compared to the 2020 full year rate of 105.66. Physical therapy revenues were $113.2 million in the second quarter of 2021, an increase of 56.7% from the $72.3 million we reported in the second quarter of 2020. The $113.2 million in the second quarter of 21 is only slightly less than the $113.4 million that we had in physical therapy revenues in the second quarter of 2019, again, despite having 21 fewer clinics open on average this quarter versus the second quarter of 19.

12:12 Revenues for the industrial injury prevention business were $10 million in the second quarter of 21, which was a 3.9% increase over the second quarter 2020 revenues of $9.7 million. Our team also continues to do a great job managing our cost and keeping our cost increases aligned with our growth in volumes and revenue. Our operating costs excluding closure costs were $92.6 million in the second quarter of 21, or 73.0% of net revenues. This was an improvement of 390 basis points as a percentage of revenue over the second quarter of 2020, which was at 76.9%, and it was 210 basis points better than the second quarter of 2019, which was at 75.1%. Our 73.0% in the second quarter of 2021 also compares favorably to the first quarter of this year when operating costs excluding closure costs were 76.9% of revenues.

13:08 Looking specifically at salaries and related costs, they were 54.3% of revenues in the second quarter of 2021 versus 51.8% for the second quarter of 2020, which was lower than normal due to salary reductions and furloughs put in place as a result of COVID. And the 54.3% this quarter was 160 basis points better than the second quarter of 2019's 55.9%. Salaries as a percentage of revenue in the second quarter of 21 were also 250 basis points better than the first quarter of 2021, which was at 56.8%. Our gross profit increased $15 million or 77.9% in the second quarter of 2021 compared to the second quarter of 2020. Our gross profit in the second quarter of 2021 was also higher than the second quarter of 2019 by $2.9 million or 9.2%.

13:56 And as Chris noted, our gross profit margin was a very healthy 27.0% in the second quarter of 2021 . . . . . Corporate office costs were $11.5 million in the second quarter of 2019.

14:45 As a percentage of revenue, our corporate costs were 9.5% of revenues in the second quarter of 2021, which compares to 9.1% in the second quarter of 2019 and then 9.4% for the full year of 2019. Interest expense in our debt was $237,000 in the second quarter of 2021, which is down from $653,000 in the second quarter of 2020 due to reduced borrowings under our credit line. And our weighted average interest rate in the second quarter of 2021 was 2.37%. The proportion of our gross profit attributable to non-controlling interest was $5 million or 14.7% in the second quarter of 2021. Our balance sheet remains in an excellent position and our cash generation remains strong.

15:32 We ended the second quarter with $38 million drawn on our $125 million revolving credit facility, which includes $10 million that was drawn on June 30 to fund our eighth clinic acquisition on that date. And we had $20.4 million of cash at June 30, 2021. Our net debt at June 30, 2021 was $27.8 million, which includes the $38 million on our line of credit, 8.3 million dollars in the payroll taxes that were deferred in 2020 under the CARES Act and 1.8 million dollars in notes payable net of our 20.4 million dollars in cash. Our net debt position at December 31, 2020 was 11.0 million dollars. So this year we have funded acquisitions totaling approximately 22 million dollars, paid back 14.1 million dollars in Medicare advance payments that we received last year, purchased non-controlling interest from our partners of nine and a half million dollars, paid dividends of $9 million and paid off $3.7 million in notes payable, but our net debt position has increased by less than $17 million, with $10 million of that coming right on June the 30th due to the acquisition.

16:42 Our low leverage and our strong cash generation provides us with tremendous flexibility and sufficient capacity for the right growth opportunities. Our financial performance in the second quarter of 2021 was strong and our management team is confident in the ability of our team to continue to perform well through the end of 2021 and forward as signaled by the raising of our full year 2021 guidance range for the second time this year and the interim increase in our quarterly dividend rate. Our people and our operations have proven to be engaged and resilient over the last year plus. and our partners are clearly focused on the continued growth and success of their business and ours as evidenced in our results, which has and will result in increased shareholder value. Now, Chris, I'll turn the call back to you.

17:27 Great. With that, that concludes our prepared comments. I'm sure we'll have a lot of questions. We'd like to go ahead, operator, and open it up for questions. As a reminder, to ask a question, you will need to press star 1 on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Your first question comes from the line of Larry Salo with CJS Securities. Hey, Larry. Good morning, Chris. Good morning, Carrie. Thanks for taking the questions. Congratulations on a really strong quarter. The visits per day, really impressive. Can you maybe just share with us, you know, maybe hard to gauge, but this is a really strong rebound. And I don't know if there's any really sort of recovery or makeup for lost time, right?

18:23 So this seems like it's probably a, you know, I don't know if you can really catch up in physical therapy, right? So any feel for that? Any feel for a mix? Or are there still groups, maybe older folks who are not coming back as rapidly? Or do you think you're really back to normal? and then the follow-up question is, you know, in your guidance, are you, without, you know, I know there's some seasonality, but are you sort of building in this strength or are you assuming that we tail off a little bit from these record numbers? So, a few things. One, I think our partners have done a phenomenal job taking care of folks, turning out, you know, great, happy patients, good results, which creates more opportunity. I think We're probably moving market share. I don't know that there's, and I've been saying this for a while, I don't know that there's a lot of pent-up demand.

19:16 But naturally, as sports and things come back, I think as fall school comes back and recreational sports, that will help us as well. So we kind of feel like we can continue to do this. I will note one thing. We typically drop off in June, you know, July in the summer months. People take vacations, and that certainly is happening now. But volume from, you know, volume has continued to be very strong. We haven't seen yet the normal seasonal, you know, ebb that occurs in the summertime. And so what we've built in on the guidance page is a little conservatism, I think, maybe relative to this COVID wave that we're seeing right now. And that is really built in in the fourth quarter.

20:23 But it's minor. It's not a lot. So we think these numbers that we put out are are definitely doable, and we're doing everything we can. The team's done a fantastic job to get this quarter, you know, back under our belt and continue to build from here. So I don't know if that hit all your points. The one group that hasn't come back yet fully is the Work Comp group. Industry continues, you know, really is evidenced by the fact that As we said it would, it's going to take a little longer time to rebuild the momentum within the injury prevention business.

21:08 The comp visits are still slower than they have been historically, and we expect as companies are able to find and hire people that that will improve over time, but that's been affected a bit to date. Okay. And then just shifting gears real quickly on the cost side, it's interesting if you look back to the 19, you're sort of at a similar patient revenue and total revenue number. And obviously your margins are somewhat better. Is it? And there's obviously a lot of moving parts there. First and foremost, I guess you certainly closed, I think, 20 or so clinics and perhaps they were underperforming. So that was probably a plus for you guys. But also I know There's probably been some pressure on salaries and whatnot.

21:56 Just trying to parse those things out. Maybe you guys also become more efficient post-COVID. Any thoughts on that as we look out? I think we have, for sure. I think we've become more efficient. I think our partners are doing an exemplary job keeping staff and volume dialed in, our ops team working with them to keep a good handle on things. and so I do expect that we'll see some salary pressure potentially. I know the recruiting department is working hard and I have some commentary on that when the time is right, but we have some open positions and we're working to fill those. They've been doing a great job there, but I think we can hang on to a lot of this margin improvement.

22:48 shared with you the numbers since 2019. We have made some pretty good progress, and the team's done a good job to hang on to it so far. Okay, great. I appreciate the thoughts and call. Thanks, guys. Thank you. Your next question comes from the line of Steph Wessink with Jefferies. Thank you. Good morning, everyone. I wanted to follow up on the question regarding patient volumes per day. Just seeing those record numbers, quite eye-popping. So I'm wondering what your business has the capacity to process, just given your current labor model. How should we think about the ceiling on that number, and is there anything that you're doing to raise the ceiling or kind of rethink about how you flow patients through your visits each day?

23:34 Yeah, so we're not changing our care model, Stephanie. And our facilities do physically, they certainly do have the capacity to see more patients. The vast majority do. We've got to hire more people to do that, and we've been working on that. The last three or four months, April, May, June, and into July, we've hired more people, actually not quite double the number of people compared to the ones that we've lost, but we are still in a deficit. We've staffed up our recruiting department.

24:20 We're working hard locally. In fact, I'm here in one of our facilities in Richmond, Virginia. They're interviewing some people here today. I talked with our partner when I got here this morning, and he was walking into an interview, a nice young lady just out of school. So we're looking for key people. We're hopeful that once the subsidies to not work go away, hopefully this fall, that things will get a little bit easier. But the team's done a great job to date in staffing and keeping people engaged and productive, and that's what's allowed us to deliver the volume that we've delivered this quarter. That's really helpful. Thank you. And then just a follow-up question on your growth plan.

25:06 So just considering that there might be some constraints on labor, How should we be thinking about acquisitions versus de novos and maybe anything that you're seeing in the pipeline of potential acquisitions? The last few you've done have been really high quality and multi-units. I'm just curious what you're seeing in the pipeline. Thank you. Yeah, the pipeline's good. We're as busy as we've ever been. It's a little crazy out there right now with A lot of different people representing companies in the market, many of whom haven't done physical therapy in the past. Maybe on one hand, it's taken a little bit longer to sort through some of it. We'll only do high-quality things. We're not in a race just to chunk things into the company just to hype short-term earnings if they're going to be a bad long-term fit.

26:00 Stuff we do, which I'm sure we'll get done here this year and next year, it'll be high quality. There are a lot of good opportunities out there right now. It's competitive, as ever, with a lot of companies interested in this space, but we've got room to grow and we'll continue to attract a lot of good people. In terms of DeNovo versus Acquired, it doesn't It doesn't change our strategy at all. Our de novos, we open with our strongest partnerships. By and large, those partnerships are doing a great job with their staffing and have people ready to go. And so our de novo flow this year has been good, and I don't expect that to change.

26:51 And frankly, you know, I think the staffing thing is hopefully more short-term. But we've held up well, and it won't affect our interest in acquisitions either. We're just looking for the right people, good people. Thank you very much. Thank you. Your next question is from Mike Pateskas with Barrington. Hey, Mike. Hey, guys. Good morning, Mike. I missed just a tiny bit of the call, so forgive if you touched on this, but Chris, have you touched on just your initial take on 22 reimbursement? I know there was a little bit of confusion within the industry, maybe exactly how to read some of that. Can you talk about that at all?

27:44 Thanks. Yeah, so what Mike refers to is in About the third week in July, normally beginning of July, CMS comes out with its proposed rules, and it's 1,800 pages of stuff across all of healthcare, and we're certainly part of that. When they initially published their rates for 2022, they had physical therapy at a minus 2% reduction. We had our folks do the modeling and the math. And we came up with a different number. And then we're in the APTQI group with all these other big companies, and everybody else did the same thing. And we came up with about a 3.5% reduction.

28:37 We then conferred with CMS, who admittedly didn't do their own math properly and mispublished The overall rate hit at 2%. It's really more like 3.5%. So, look, it's early. I just got back from a meeting last week with the APTA and the private practice section, and our APTQI colleagues were very focused on this for next year. We think it's very short-sighted to hit physical therapy at all, let alone again. There's also on the books, and it's been on the books for a while, although there may be some sentiment growing to forestall it, but there's a rate reduction if PT assistants are involved in care.

29:35 That's been on the books for three or four years. That becomes effective in 2022. We will work to staff around that so PTAs don't get involved in the care of Medicare patients to the extent possible. But that's what we face right now. Again, going back more than a year ago, we faced a 9.5% reduction. We were able to beat that back. We were able to grow through that this year. I don't know what the end result will be yet for 2022, but we'll figure it out and we'll find a way. Chris, could I just follow up on that and ask, I mean, at some point, does CMS risk sort of access to care issues in your view with sort of this sort of recent behavior the last couple years around pricing? I mean, obviously, Medicare is not one of the better priced payer groups now and getting worse. I'm just curious if you have any thoughts on that.

30:44 Yeah, no, I think they risk a lot of things. I think they risk access to care. I think they risk not recognizing that physical therapy really should be considered the primary care provider for musculoskeletal injuries. We know from a study perspective that people with spine problems who access physical therapy first, for the next year or two, The entirety of their health care spend goes down. The reason is because we know the impact that exercise and mobility has on people. It's helpful for so many different health-related areas. And so, yeah, we've got to continue to beat that drum.

31:29 CMS, I think, is a little slow on the uptake sometimes, unfortunately. But we're spending more and more time with key congressional agencies Thank you. Thank you. Just one quick question on the Delta variant. Obviously, you guys being based in Texas, Texas being one of the states that seems like it's being most impacted.

32:16 Have you guys either through data, July data, or even anecdotally gotten any sense that patients have patient flow has dissipated in a place like Texas where obviously there is some spread of the Delta variant. I'm going to kick this over to Graham and give him a second to prepare, but when we look at our aggregation in terms of our volume, I'm not seeing it in aggregate. Graham, what are your thoughts on Texas? No, Chris, we have not seen a degradation in patient volumes in Texas at all. Okay, fair enough. Thanks, guys. Thanks, Mike.

33:04 Thank you. Your next question is from Matt LaRue with William Blair. Yeah, hi, good morning. I just wanted to ask you about IIP. You mentioned last quarter that obviously a number of kind of Pipeline discussions have taken a pause with COVID. Just curious if those, obviously the revenue at 10 million hasn't necessarily accelerated yet, but just curious what you're hearing from folks in terms of interest or willingness to reengage in those discussions. Yeah, we're definitely having some good discussions and we're getting things done, Matt. You know, the challenge has been historically a lot of these leads came through Big events, national meetings, you know, Chicago or Las Vegas or wherever they might be held around different industry verticals.

33:59 And so those haven't come back yet. We're beginning to see those being scheduled in the fourth quarter. And so we've approached our sales cycle a little bit differently, and it's being effective. I think the main thing is, you know, it's like anything else. It just takes time. takes time, and these companies have different priorities. Right now they're trying to hire people. And so a certain part of our business on the post-offer testing part is going crazy, really busy. And some of the other prevention business is a little bit slower than it has been, but it hasn't built as much as we have been seeing normally.

34:45 But I think that will come back as well. I told people at the beginning of this, this was going to be a rebuilt year for that sales pipeline. Now, interestingly, we have opportunities to continue to grow, you know, outside of just organic growth in this space, and we're looking at some of those right now, and they're good opportunities. And I don't know whether they'll all happen or none will happen, but my sense is we'll get something done. Okay, thanks, Chris. And then last one for me, then I'll jump off is, you know, obviously staffing and kind of labor issues is in focus, you know, broadly in the services space, but I guess specifically within physical therapy as well, I think based on some of the peer commentary. So maybe is there anything that you would just highlight in terms of either your staffing or compensation model that you think really distinguishes the company from the broader space?

35:39 It might just be interesting to get that perspective now. Yeah, you know, it's no secret that I love the model that we have, having partners who aren't just hired guns, you know, in these local markets, who live there, who go to church there, who are high school boosters, who are on the sidelines of the high school sports games. And honestly, I think that makes a difference. You know, and our directors, we don't have to... We, at least in our model, we don't feel like we've got to throw open de novos, you know, at a certain rate or pace. We do them when and where we have the right people ready to go, and that's how we've always done it. And so those people, when they're ready, you know, we open centers, and so we're not having to go out and hire somebody who's never been an employee before to go lead a new center. And so as a result, our visits per clinic are where they are.

36:53 And so, again, I think having people at all levels tied into the business through incentives, through ownership, I think it makes a difference. Yep, it makes a lot of sense. Thanks, Chris. Thank you. And again, if you would like to ask a question at this time, simply press star, then the number one on your telephone keypad. Your next question is from Mitra Ramgopul with Sidoti. Hi, Mitra. Hi, Chris. Hi, guys. Thanks for taking the questions. Just a couple for me. I just wanted to get a little more sense maybe on the volumes. As we look at pent-up demand, obviously a lot of elective procedures coming back, helping to drive some of that. Also, maybe curious if from a competitive standpoint, COVID may be hurting a lot of your small mom-and-pop competitors.

37:54 If that's also maybe something that could be driving the volumes you're seeing. Yeah, you know, yeah, we have such a fragmented industry, Mitra. My honest answer is it's hard to tell. It really is. And, you know, I could give you some supposition. I think, I mean, it's certainly not been ever hospitals' first priority. I think it's become evident to patients. So many more of our patients come to us through direct access than ever before. and I think we're so much easier than hitting a hospital campus and parking and trying to navigate that situation. I think we have more resources than many of our small competitors and we're very resilient.

38:44 We have experts in certain areas and support. I think when you have an owner or ownership group and they have to do everything, they have to negotiate benefits and payroll Thank you for joining us. because they have those resources. And so, yeah, I think it does make a difference.

39:29 But exactly how to parse that and knowing exactly where one patient comes and might have gone previous, it's almost impossible to do. No, that's fair. Definitely appreciate the call there. And then slightly related to the labor market, more specifically on sales reps, I know last quarter you added about 14. Just curious if you think you need to make more investments on that front or you feel pretty comfortable with the coverage you have right now. Guys, I don't know, Glenn and Graham and Eric, if you'd like to speak to that at all. I think in general, our industry is moving not away from sales reps, because I think reps are going to continue to be important for us. More and more people access our care directly, and so that happens through a variety of different mediums, and as a result of their friends and family hearing about great care and and other reviews and posts. But I think it'll be a combination.

40:43 Guys, what do you think in terms of our rep level right now, where we are? Chris, this is Graham. I think, you know, we have 72 reps total around the country right now. They're distributed through our regions. And, you know, we think we have the right number of reps right now. We add them when we need to. We're using them in various ways, but we think we have the right number of reps. Mitra, what that means to me is as we grow as a company, and for instance, as we acquire or partner with these companies like we did a few times this year and late in 2020, often in those, they don't have reps, and so we're adding reps.

41:34 in those opportunities to accelerate their growth as we go forward. But to Graham's point, the team feels like we're well-positioned right now. Okay. Thanks for taking the questions, and congrats on a great quarter. Yes, thank you. You do have an additional question in queue from Mike Petusky with Barrington. Yeah, on the good part, Revenue Per Visit figure. Was there a shift towards workers' comp? Carrie, can you just sort of give a sense of the payer mix and if there was sort of a positive shift there?

42:21 Sure, yeah, and as Chris talked about, workers' comp is a little bit less this quarter, so workers' comp decreased a little as a percentage of the total mix, and then both commercial and Medicare is where that picked up a little bit. And as Chris talked about, we expect those workers' comp visits to come back in the back half of the year as businesses staff up and then begin to hire. What was Medicare for the quarter and what was workers' comp? Medicare was 31%, and workers' comp was about 10.5%. All right. And I did actually mean to say this earlier. Congratulations to Glenn. You were a huge part of creating a lot of shareholder value here over the last many, many years, and congratulations on a well-deserved retirement.

43:09 Thanks. Thank you. Thanks, Mike. And there are no further questions at this time. I'll turn the call back over to management for closing remarks. Terrific. Well, thanks, everybody. I know this is a busy day. We have calls scheduled after this release. If you have follow-up questions, feel free to reach out to Carrie or I, and we'll be sure to circle back up. Have a great day. Bye now. This concludes today's conference call. Thank you for participating.