Concentra Group Holdings Parent, Inc. (CON) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Stockholders of Concentra Group Holdings Parent, Inc. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Mr. Keith Newton, the company's Chief Executive Officer. Mr. Newton, the floor is yours.

Welcome, everyone. Today's virtual-only meeting is a live webcast. We are pleased that you could join us today. Your interest in the company is appreciated. I will serve as Chairman of this meeting. Before we proceed with this meeting itself, however, I would like to introduce you to Matthew DiCanio, who is the President and Chief Operating Officer of Concentra Group Holdings Parent, Inc.; Thomas Devasia, the company's Executive Vice President and Chief Marketing and Innovation Officer; and Timothy Ryan, Executive Vice President and Chief Legal Counsel of the company. Mr. Ryan will act as Secretary of this meeting. I would also like to introduce you, the directors of the company who, in addition to me, are participating today, Robert A. Ortenzio; Dr. Cheryl B. Pegus, Daniel J. Thomas and Dr. Marc R. Watkins. Will the meeting please come to order? I now would like to introduce to you again, Mr. Timothy Ryan, Executive Vice President and Chief Legal Counsel.

Good morning. I would first like to introduce to you Mr. Mark Rexroat of PricewaterhouseCoopers LLP, the company's independent public accountant. In addition, with us today is Ms. Susan Nelson of Computershare, who will serve as the Inspector of Election for this meeting. I'd like to start by discussing our agenda for today's meeting. First, our President and Chief Financial Officer, Matthew DiCanio, will make a few brief remarks. We will then vote on 4 proposals today, which will be followed by a question-and-answer session in which stockholders may ask questions. Stockholders who have entered the 15-digit control number from their proxy cards in the designated field on the web portal may submit their questions online at any time prior to the question-and-answer session by clicking on the dialogue icon in the upper right corner of the meeting center screen. The polls are open. If you have not voted or wish to change your vote, you may do so now by clicking on the link provided online. Any stockholder who has sent in proxies or who has already voted via the Internet or telephone and does not want to change her or his vote need not take any further action. The polls will close once the question-and-answer session is finished. I'd now like to introduce you to, again, Mr. Matthew DiCanio.

Thank you, Tim, and thank you all for being here today. I'd like to begin my comments by expressing my heartfelt appreciation on behalf of everyone at Concentra to you and all our colleagues, our patients, our employer customers and ecosystem partners. For those of you with us today, along with many others, it's your support that made our July 2024 initial public offering possible and continues to shape our success. Today, I'll provide a brief overview of our business, especially for any new followers. Over 40 years ago, we started with a small medical practice in Amarillo, Texas. Today, Concentra is the largest provider of occupational health services in the United States. We proudly operate approximately 620 occupational health centers and over 150 on-site health clinics at employer workplaces across the country. Concentra has 3 operating segments: occupational health centers, on-site health clinics and a third segment comprising other businesses. Within our occupational health centers operating segment, we provide 3 service lines of workers' compensation, employer services and consumer health. Workers' compensation services supports the delivery of medical care and rehabilitation for work-related injuries. Employer Services provides drug screens, physicals and preventative care. Consumer health facilitates patient-directed urgent care for injuries and illnesses. We see approximately 50,000 patient visits per day and serve approximately 200,000 employers annually, including nearly all Fortune 500 companies and 100% of Fortune 100 company. Our reach extends to businesses of every size and industry, and we estimate that 65% of U.S. employer locations are within approximately 12 miles of our occupational health centers. Each year, we address approximately 1 in every 5 workplace injuries, a significant accomplishment for a company with such humble beginning. But our size and experience are just a part of our story. As pioneers in occupational health services, we have played a vital role in shaping the workplace health model we see today. The cornerstone of our success lies in our core value proposition, which focuses on quality clinical care and early intervention to support injured employees. We believe this approach not only accelerates recovery but also paves the way for a safe and sustainable return to work. And in doing so, we help employers lower their medical and indemnity claims costs. Recent data shows our patients experience about 25% lower average total claims costs compared to those treated at non-Concentra centers. It's why employers nationwide trust Concentra to help keep their workforce healthy and productive. At the heart of everything we do is Concentra's mission, vision and values. Our mission - to improve the health of America's workforce one patient at a time. Our vision - to deliver high-quality clinical care and a positive customer experience. Our values - embodying a healing focus, a selfless heart and a tireless resolve. These principles drive our operational excellence and energize our colleagues in their commitment to our patients. Transitioning to reflections on 2024, it was certainly a transformative year for Concentra with our successful IPO, our spin-off from Select Medical and our continued execution of strategic initiatives. These achievements were underscored by strong financial performance, with revenue growing to $1.9 billion. Revenue growth, operational efficiency and cost management contributed to our ability to generate an adjusted EBITDA of $377 million, an increase of more than 4% over 2023. Our 2024 momentum and growth has carried us into 2025 on several fronts. Most notably, we added Nova Medical Centers to our Concentra family. Bringing together the 2 industry leaders in providing occupational health services, this acquisition creates additional access to Concentra's unique brand for their employers and their employees by adding 67 centers in 5 states with favorable demographic and industry trends. This is in addition to several previously announced de novo locations and tuck-in acquisitions. More recently, we announced the signing of a definitive agreement to acquire Pivot Onsite Innovations from Athletico Physical Therapy, which doubles the size of our growing on-site health operating segment. Pivot is a leader in the on-site health industry with over 200 on-site health clinics at employer locations in over 40 states, providing occupational health, wellness, prevention and performance services for over 2 decades for employees at leading organizations across the country. Our cultural alignment and combined strengths will ensure customers continue to receive exceptional service and high-quality clinical care as well as access to Concentra Onsite Health's advanced primary care offering. In the months ahead, we will seamlessly transition our recent acquisitions to Concentra brand, systems and processes. We will continue to take ground on our separation from Select Medical. Additionally, we will advance our various clinical, operational and technology initiatives as well as our development pipeline, all while achieving strong satisfaction scores from our patients and customers and improving our colleague retention. In closing, we remain relentless in our mission to improve the health of America's workforce, one patient at a time. As we continue this journey, we want to once again express our gratitude for your support. We are excited and optimistic about the future. Together, we will elevate the standards of occupational health care and improve the well-being of America's workforce. Thank you.

This meeting has been called pursuant to the notice dated March 18, 2025, that was made available to all stockholders of record as of the close of business on March 7, 2025. Proxies were solicited on behalf of the Board of Directors of the company for this meeting. Susan Nelson of Computershare has been appointed as Inspector of Election for this meeting and any adjournment or postponement thereof to conduct the vote with respect to the proposals set forth in the company's proxy statement and other questions that will be voted upon by ballot, if any. Ms. Nelson has already delivered to me her oath of office. The bylaws of the company provide that each stockholder of record is entitled to 1 vote for each share of common stock held as of the record date. The Board of Directors set March 7, 2025, as the record date. Computershare Inc., the transfer agent for the company, reports that there were 128,171,952 shares of Concentra Group Holdings Parent, Inc. common stock outstanding as of the close of business on the record date. The record of this meeting will reflect that the notice of annual meeting, proxy statement, the proxy card and the company's annual report on Form 10-K were made available to all stockholders entitled to vote at this meeting beginning on March 18, 2025, as evidenced by an affidavit of mailing provided by Computershare, Inc. A copy of these materials will be made a permanent part of the company's corporate records. More than half of the shares outstanding as of the record date must be represented at this meeting either by stockholders participating online or by proxy to have a quorum as determined under the bylaws. Ms. Nelson?

Apologies. A total of 122,596,290 shares of Concentra Group Holdings Parent Inc. common stock are represented at today's meeting, which constitutes 95.65% of the total shares outstanding on record date. I, therefore, certify that a quorum has been achieved.

Will the secretary present the notice of meeting and proxy statement?

By clicking a tab entitled Meeting Materials, you can access and review copies of the notice of annual meeting, proxy statement, proxy card and the company's annual report on Form 10-K. The copies of the notice of meeting, proxy statement, proxy card, the company's annual report on Form 10-K, together with the original affidavit of mailing of Computershare Inc. and the certificate with respect to the stockholder list will be filed with the minutes of the meeting.

I now declare this meeting duly convened, properly organized and competent to transact business.

The first order of business on our agenda for a stockholder vote is the election of 2 Class 1 directors to hold office subject to the provision of the bylaws, each for a 3-year term until their successors have been duly elected and qualified. Each stockholder of record as of March 7, 2025, is entitled to one vote for each share of common stock held. As of March 7, 2025, there were 128,171,952 shares of Concentra Group Holdings Parent, Inc. common stock outstanding. The 2 nominees for Class I director are Cheryl B. Pegus and Daniel J. Thomas. The second order of business on our agenda for a stockholder vote is to hold a nonbinding advisory vote on the compensation of the company's named executive officers. The third order of business on our agenda is to hold a nonbinding advisory vote on the frequency of the advisory vote on the compensation of the company's named executive officers. And the fourth and final order of business on our agenda for a stockholder vote is the proposal to ratify the appointment of PricewaterhouseCoopers LLP certified public accountants as the company's independent registered public accounting firm for the year ended December 31, 2025.

We will now attempt to answer questions posed through the virtual meeting web portal by our stockholders. As mentioned earlier, stockholders who have entered the 15-digit control number from their proxy card in the designated field on the web portal may submit their questions through the portal by clicking on the dialogue icon in the upper right corner of the meeting center screen. Thomas Devasia, the company's Executive Vice President and Chief Marketing and Innovation Officer, will now provide the questions, if any, submitted by stockholders during the meeting.

Thank you, Keith. There are no questions from shareholders.

Thank you, Tom. The online voting will now be closed. Based on the review of the votes cast, will the Inspector of Election please submit her report on the results of the balloting?

Having conducted the election and vote at the Annual Meeting of Stockholders of Concentra Group Holdings Parent, Inc. held on May 1, 2025, I hereby satisfy that, one, each of the 2 nominees for Class I director received the majority of the votes of the common stock cast for election as a director; two, the stockholders have approved the compensation of the company's named executive officers; three, stockholders have approved the 1-year frequency for holding advisory votes on the compensation of the company's named executive officers as recommended by the company's Board of Directors; and four, the stockholders have ratified the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the year ending December 31, 2025. The report of election prepared by Computershare evidences that: one, all nominees for Class I director were elected by an affirmative vote of 95.42% or more of the shares voted; two, the compensation of the company's named executive officers was approved by an affirmative vote of holders of 92,051,122 shares or 78.17% of the shares voted. 25,350,156 shares were voted against approval and 347,823 shares abstained. And the 1-year frequency for holding -- apologies; three, the 1-year frequency for holding advisory notes on the compensation of the company's named executive officers was approved by affirmative vote of the holders of 113,659,054 shares or 96.52% of the shares voted. 19,206 shares were voted for a 2-year frequency, 4,052,275 shares were voted for a 3-year frequency, and 18,566 shares abstained. The appointment for -- the appointment of PricewaterhouseCoopers LLP was ratified by an affirmative vote of the holders of 122,300,023 shares or 99.76% of the votes of the shares voted. 291,151 shares were voted against ratification and 5,116 shares abstained.

Based on the report of the inspector of election, I therefore declare that, one, the nominees have been duly elected as Class I directors of the company; two, the shareholders have approved the compensation of the company's named executive officers; three, the shareholders, stockholders have approved the 1-year frequency for holding advisory votes on the compensation of the company's named executive officers; and four, the stockholders have ratified the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the year ending December 31, 2025. The Inspector of Election will execute a certificate as to the results of the balloting and the certificate will be filed in the minutes books of the company, along with the minutes of this meeting. There being no further business to come before this meeting, I hereby adjourn the meeting. Thank you for your participation.

This concludes the meeting. You may now disconnect.