Akumin Inc. (AKU) Q1 2023 Earnings Call Transcript
Good morning. My name is Laura, and I will be your conference operator today. At this time, I would like to welcome everyone to Akumin Inc.’s 2023 First Quarter Results Research Analyst call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.
Mr. Zine, you may begin your conference.
Thank you. Good morning, everyone, and thank you for joining us for today’s presentation. My name is Riadh Zine, and I’m the Chairman and CEO of Akumin. I’m joined today by David Kretschmer, our Chief Financial Officer. I want to thank all of you for taking the time to join us on this call.
In today’s call, I will provide an overview of Akumin’s Q1 results and discuss some of the factors that impacted our results in the first quarter. I will also review our recent progress regarding our key transformation and growth initiatives. David will go over some of our key operating and financial metrics. I will then conclude the presentation and then we’ll proceed to Q&A.
There’s a slide deck that is meant to go along with our presentation today. A copy of it is available for download from the Investor Relations section of our website at akumin.com under Events & Presentations.
Before we begin, let me remind you that certain matters discussed in today’s conference call or answers that may be given to questions asked could constitute forward-looking statements or information that are subject to risks or uncertainties relating to Akumin’s future financial and business performance. Actual results could differ materially from those anticipated in these forward-looking statements.
Please refer to the disclaimer at Slide 2 of our presentation as well as the full forward-looking statements section of our earnings press release. The risk factors that may affect results and these forward-looking statements are detailed Akumin’s periodic results and public disclosure. These documents can be accessed under our public disclosure at sec.gov and sedar.com.
We may also refer to certain non-GAAP measures during this conference call, such as EBITDA, adjusted EBITDA, and adjusted EBITDA margin. You can find information regarding these non-GAAP measures, including definitions again, on Slide 2 of our presentation, as well as the non-GAAP measures section of our earnings release. A reconciliation of EBITDA and adjusted EBITDA to net loss, the most comparable GAAP measure, is included in the presentation as an appendix. We have not provided a reconciliation for any forward-looking non-GAAP measure referred to in this presentation as we would not be able to produce such a reconciliation without unreasonable efforts.
Turning to our Q1 results. On Slide 3, you can see the same-store consolidated volume growth in our key radiology services and our patient starts in our oncology segment versus our results in Q1 on 2022. Specifically, our MRI volumes were up 4%, which reflected strong demand for MRI procedures and alleviation of some of the clinical staff shortages that persisted in prior quarters.
Our PET/CT volumes were up an impressive 16.1%, a strong demand, particularly from our hospital partners, continued for that modality. Total oncology patient starts were up 7.6% as momentum continues to build in this segment after repositioning efforts in 2022. Q1 revenue of $187.6 million was up 0.7% from $186.3 million in the first quarter of last year. Adjusted EBITDA of $33.1 million was up $1.1 million, a 3.4% increase from $32 million in the first quarter of last year.
Adjusted EBITDA margin of 17.7% is also up 0.5% from the first quarter of 2022 levels. Recall that Q1 is our seasonally slowest quarter. And given our high operating leverage, lower volumes in the first quarter typically put downward pressure on margins in that period.
On a consolidated basis, accounts receivable at quarter end were $114.7 million versus $114.2 million at the end of Q4 2022. This equates to 56 days of sales outstanding near record low levels.
Turning to Slide 4, we were pleased to see renewed growth in volumes within our radiology segment. We experienced a return to normal growth in our MRI volume because of reduced impact from the constraints we faced in the second half of 2022. More specifically, clinical labor shortages were less impactful as the labor market pressures are moderating and our initiatives to address them begun to pay off.
Our PET/CT volumes continue to demonstrate very robust growth as demand for that modality remains strong, particularly from our hospital partners. This impressive growth in our PET/CT volume is driven by an expansion of clinical applications and the development of new tracers. However, in the first quarter, this organic growth in our radiology segment was negatively impacted by a revenue loss from certain Florida facilities closed for renovations in the period.
In our Oncology segment, our focus is now firmly on organic growth following the repositioning efforts we undertook in 2022. We were pleased to see growth continues in patient starts.
As you also know, we embarked on a significant organizational transformation in 2022 to align and streamline all areas of our business. These initiatives resulted in the realization of approximately $23 million in synergies. Although last year, they were somewhat offset by inflationary pressures and other cost increases during the year.
We continue to implement initiatives related to rationalizing business processes, consolidating systems, and optimizing our procurement by leveraging our enhanced scale. As we indicated in our Q4 call, we expect to realize an additional $25 million in synergies from these efforts on a run-rate basis by the end of 2023.
As we have highlighted in the past, there is significant operating leverage in Akumin’s business model. As such, we are very focused on increasing our capacity utilization and drive additional volumes through existing sites. On that front, we continue to focus on improving scans and treatments per labor hour, especially in an environment where clinical labor shortage is an important consideration. We have also enhanced our scheduling and call center capabilities, and we are starting to see the benefits of these measures in reduced abandoned rates and improved utilization. We also continue to evaluate our fixed site footprint to identify opportunities for further operational improvements related to underperforming sites.
As you know, another key element of Akumin’s strategy is to digitize the business to streamline operations in order to enhance patient care and the patient experience. The investments we’ve made in the patient journey and our remote technologist capabilities are examples of the initiatives we have underway.
Part of the strategic rationale for the Alliance acquisition in 2021 was to better position Akumin to service hospitals and health systems partners in their ever-growing needs for out-patient service delivery functionality and capability. With the extensive suite of services and facilities we have in place, including network density in key markets, we are an attractive out-patient partner for hospitals and health systems. While these relationships will take time to formalize, we continue to explore potential opportunities to leverage our capabilities for the mutual benefit of Akumin’s hospital partners.
I will now turn the presentation over to David, who will walk us through some of our key operating and financial metrics.
Thank you, Riadh. And good morning, everyone. As Riadh mentioned at the outside, I will review some key operating and financial metrics of our business for the first quarter.
Starting with Slide 6, we illustrate that while Akumin’s platform offers a diverse suite of services, we are very focused on areas of high growth and high value-added modalities. As you can see, 54% of our radiology revenues derived from MRI procedures making MRI volumes a key driver of that segment. Akumin is also a significant player in cancer diagnosis and treatment with 26% of our radiology revenues from PET/CT and 16% of our total revenues coming from our oncology division.
These modalities are critical to delivery of quality patient care and are utilized by a variety of physician specialties across the care continuum from screening to diagnosis to treatment. As we have highlighted previously, we undertook an initiative in 2022 to consolidate our fixed-site radiology footprint to eliminate underperforming sites. We now operate 100 radiology fixed sites and continue to evaluate all sites to identify opportunities to optimize our fixed site footprint and improve operations.
As you know, Akumin is clearly well-positioned to benefit from the ongoing shift to out-patient service delivery as we partner with hospitals and hospital systems to transition care to lower cost sites of delivery. We continue to generate over 95% of our revenues from out-patient procedures as you can see on Slide 7. We have a balanced revenue mix between third-party payers for out-patient services and hospitals with no one customer representing more than 4% of our consolidated pro forma revenues.
As preferred out-patient solution provided to hospitals, half of our revenues come from our hospital customers. Balance of revenues or reimbursement for patient procedures paid by third-party and government payers. We expect the revenue share of hospitals to continue to grow as both existing and new hospital customers and partners search for out-patient solutions in both radiology and oncology.
Our financial performance is primarily driven by procedure volumes. Given that the current mix of our business includes both hospitals and independent sites, we track actual scans by modality across our radiology platform. Previously noted MRI and PET/CT scan procedure volumes are the biggest contributors to the performance in our radiology segment. These volumes, together with the radiology procedures as a percent of revenues as illustrated on Slide 6, are the key metrics we use to track our operating and financial performance in radiology.
In Slide 8, you can see the MRI, PET/CT procedure volumes over the last four quarters in 2022 and the percentage same-store changes in those periods. As we noted in our last call, growth in MRI volumes in the second half of 2022 were negatively impacted by labor constraints, particularly in shortage of clinical staff.
We took measures in late 2022 to mitigate these pressures and have started to see some benefits augmenting our ability to perform more MRI procedures. It’s important to note that as the market leader in PET/CT, we have seen strong growth in that modality in recent years as pharmaceutical industry continues to develop improved tracers, which can allow for earlier detection of diseases.
As we previously mentioned, labor constraints are less of a factor in PET/CT, given the highly specialized skill sets of clinical personnel for this modality, and we are better able to capitalize on the strong demand for these services.
In Oncology segment, we track activity level by patient starts volume. As you can see, patient starts grew in Q4 as we completed the review and repositioning that business in Q2 and Q3 of last year. We expect our oncology division to continue this improving growth trajectory over time, given the compelling value proposition of radiation therapy we bring to our hospital partners in this modality, including our mobile fleet, which keeps programs treating patients while replacing equipment and our significant experience with Varian’s Halcyon, new treatment platform which provide faster and more cost-effective treatments.
On Slide 9, we present quarterly revenue and adjusted EBITDA trends for Radiology and Oncology segments. As you can see, the contribution from our Radiology and Oncology segments have been consistent over the past five quarters, with Radiology ranging between 83% and 84% of total revenues and Oncology making up the balance of the 16% to 17%.
For Radiology segment, our first quarter adjusted EBITDA margin was 19.3% before allocation of corporate services. Our Oncology segment is higher margin with an adjusted EBITDA margin of 32.6% for the allocation of those corporate services. Note, as we had already mentioned, that first quarter is typically our seasonally weakest quarter as annual benefit plans rollover and winter weather in some regions results in lower volumes.
As you can see on the chart on the left, the seasonality impact was less pronounced in 2022 part because of the impact of Hurricane Ian in Q3 and the clinical labor shortage we discussed in our Radiology segment, which impacted us negatively in the second half of 2022. In addition, our Oncology segment revenues were essentially flat in 2022 as we undertook the repositioning of that business. As we have previously stated, our Oncology segment is typically a high growth activity and we expect to see stronger growth in this segment in future years as business development efforts are now our renewed focus.
The chart on the right illustrates the quarterly adjusted EBITDA and EBITDA margin over the past five quarters. The impact of seasonality in our business can be seen more clearly in this chart. Given the high operating leverage in our business, the segment volumes in Q1 with higher labor costs put a bit of downward pressure on margins for the period. That noted, we did see some modest year-over-year growth in both revenue and adjusted EBITDA in Q1 2023, and we believe we have established a solid foundation in which to build.
Turning to Slide 10, you see the annual last trailing 12-months financial performance in our radiology and oncology segments and the consolidated adjusted EBITDA. Note that the 2021 results and pro forma results, assuming the legacy Akumin Alliance businesses with the combination of which was completed in September 2021 were combined for the entire period as well as the adjusted for the fourth quarter 2021 divestiture of Alliance Oncology of Arizona.
As you see in the chart on the left, the radiology segment contributed $627 million of revenue for the trailing 12-month period, while representing approximately 83% of total revenues; and oncology segment contributed $124 million of revenue or approximately 17% of the total.
As we have mentioned on prior calls, growth in consolidated adjusted EBITDA as reviewed in recent periods, we have focused on internal integration and transformation initiatives and address labor constraints in 2022. Going forward, we are confident that we’ll see volume growth driving revenue and EBITDA, given the demand for our services and the operational improvements we have made in improving labor market conditions.
Slide 11 is a bridge from our adjusted EBITDA to our free cash flow in the first quarter. As you can see from the slide, our cash position decreased by approximately $14 million in the quarter. When you look at our balance sheet, you’ll note that our accounts payable fell by $11 million as we accelerated payments at the end of the quarter in anticipation of our migration to a single general ledger platform on April 1. Business is the largest driver of the change in working capital. And in past quarters in that service, finance lease payments continue to have meaningful impact on free cash flow.
And as you know, cash minority interest primarily relates to oncology joint ventures with hospital partners and as a function of performance of these centers is not a fixed obligation as these partnerships become more profitable and generate more cash for cash distributions to our minority partners increase as well.
It should be noted that we incurred over $7.1 million of cash costs in Q1, which were related to site repairs in our Port Charlotte facility, which was particularly hard hit by Hurricane Ian, as well as our ongoing restructuring efforts. We have receive partial reimbursement on the Port Charlotte repairs and will be recovering more.
In 2023, we continue to expect to reduce burden of restructuring charges together with the additional synergy capture we had discussed earlier, which will benefit our free cash flow. This will be offset somewhat by additional cash interest payments related to the Stonepeak subordinated notes, which will cash pay in the later part of the year.
Turning to Slide 12, we present an overview of our 2023 guidance announced in the Q4 call. As a reminder, for 2023, we expect consolidated revenues to be in the range of $765 million to $775 million and adjusted EBITDA to be in the range $150 million to $160 million. Our 2023 guidance reflects the fact that some ongoing labor constraints and cost inflation persists in some markets, although we have seen some improvement on these fronts thus far this year.
Turning to CapEx, as we did in 2022, we continue to refine our capital expenditure plans to ensure the most efficient deployment of equipment better aligned with our strategic priorities. We continuously evaluate our markets and prioritize those based on our criteria that have the greatest near-term potential for growth.
We continue to expect total CapEx to be in the range of $55 million to $65 million, with approximately 50% allocated to growth CapEx for new customers and new sites and the balance for maintenance CapEx.
Recall that we define maintenance CapEx we spend for existing customers at existing sites for growth CapEx is primarily oriented towards new hospital customer partner acquisition, as well as capacity expansion. Our investments in new customers and sites continue to the high return, typically with a four-year payback on the growth capital. We anticipate total CapEx to be funded by approximately 20% in cash and the balance to be financed by combination of OEMs, equipment, finance companies, and local banks. Higher financing cost may be a bit of a headwind in coming quarters.
Turning to Slide 13, we depict our capital structure at the end of Q1 2023. As you can see, Akumin secured leverage of 5.6 times for unsecured leverage is now 2.8 times. As an organization, we are focused on reducing this leverage over time. Near term drivers deliver reduction will come from increasing EBITDA as a result of synergy capture, network rationalizations, technology-driven standardization, and the streamlining of service delivery, as we outlined in our Q4 call.
Note that as very significant shareholders, we are highly incentivized to prudently optimized capital structure, and we’ll continue to evaluate options to do so as the market conditions permit.
And I’ll turn it back over to Riadh to wrap up before we take questions.
Thanks, David. That concludes the prepared remarks portion of the presentation. I hope that we provided more color on the performance of the first quarter. We would now ask the operator to start the question-and-answer period.
Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Noel Atkinson from Clarus Securities. Please go ahead.
Hi. Good morning, Riadh and David and well done in Q1. Thanks for taking our questions this morning. First off, I was wondering if you could provide, give us a sense of what the impact was in Q1 in terms of revenue and adjusted EBITDA if you can from those center closures that are ongoing in Florida and then when you think they might be back on line.
Sure. Thanks. Good morning, Noel, and thanks for the question. We’ll give you the impact on the top line. So in the first quarter of 2023, that would be a couple of millions just in the first quarter and I think you know the operating leverage in the business. So it will — the impact that would have as well on EBITDA.
One has already reopened in the second quarter of 2023 and others are later this year. And some of that was — the reason for the closures, there were obviously other closures that we did, as you know, last year, but those are permanent closures where — it was part of what David discussed, a rationalization of the network. But these are actually closures that have nothing to do with rationalization, some are related to just a much bigger opportunity in the markets and we’ve upgraded the equipment and it was planned long time ago.
Others were actually outside our control and it was related to the hurricane and the weather issues we had.
I’ll jump in real quick. The bulk of what we had mentioned in terms of the closures were the ones that are temporarily closed due to hurricane. Those sites that we proactively closed consolidated really, as you can imagine, were closed because they weren’t generating a lot of revenue and weren’t generating a lot of EBITDA. So the good news is the bulk of what closed right now is coming back on line.
Okay, great. Then I guess can we talk a little bit about the PET/CT. So your same-store volume growth accelerated pretty sharply in Q1. Is this kind of level of growth rate? Is it sustainable over an extended period of time or do you start running into capacity utilization issues?
Again, another good question here. What we know — obviously, this is a new trend as you’ve outlined, Noel. But what we know is there’s no reason to believe that it will slow down. We’re still experiencing that type of organic growth, but it’s recent shift. So we’re not going to sit here and say, this is going to keep going for the next five years. To be honest with you, we don’t know yet. But what we know is it’s not slowing down. And we know that the demand is not a pent-up demand. It’s not a COVID-related. It’s actually fundamental demand from growing applications and huge development of new tracers.
And in terms of utilization in markets with customers where the volume is picking up, we already have plan as part of normal CapEx upgrades in our PET/CT. And the new digital PET/CT equipment comes with much better throughput that is 2x to 3x, so we don’t foresee utilization or capacity constraints, as you outlined.
So we are excited about this fundamental shift. And as it continues and we got up higher share, it’s a very high margin, very profitable business for us.
Okay. And then lastly, could you just maybe remind us again kind of what you’re expecting for in this next round of cost savings? So you say that’s now more than $25 million that you’re hoping to get out of this sort of next couple of phases of cost savings and integration efforts. Can you remind us again how you see that rolling out over the next few quarters?
I’ll give you just one example, and I’ll let David build on that. But I just want to illustrate it. So the $23 million of last year was duplication of functions, as you know. And unfortunately, a significant portion was offset with the inflation that hit us in both labor and medical supplies.
The $25 million that we’re working on that is a run rate by the end of the year, it does require more work and there is significant overlap. So to give you an example of a business process, your HR delivery from recruiting all the way to the end. From the two legacy systems, the legacy systems that were around to do the whole workflow we had in excess of seven or eight different systems and applications.
So what we’ve done there is we went to an ERP platform that does it all from end to end. So it’s a new business process,. It’s more contained. But in the meantime, you’re paying for all the legacy systems as you come out of those, and you’re paying for the new one you brought in place, and you’re paying for some consulting and third-party cost for implementation.
So it does — that’s why it takes time for these. These are actually type of synergies to be in place. And that’s why we said our goal is to get there by the end of the year. So just want to provide that example in what we mean by business process. Sounds like a fancy concept, but it’s not really that fancy. I just gave you a real example of what we’re doing.
Okay, great. All right, I’ll get back in the queue. Thanks very much.
Thank you. Your next question comes from the line of Endri Leno from National Bank. Please go ahead.
Hi, good morning. It’s Andre Bodo sitting in for Endri. My first question is related to CapEx. Maybe some color on why it was lower on the quarter and how do you expect it to evolve over the year?
Riadh, you want me to jump in on that.
Yes. Please, David.
Andre, thank you for your question. I think we started talking and discussing this little bit in Q3 last year in Q4 about time to be — I’ll talk about more discipline, a more intention hold with how we deploy CapEx. And we did close a couple of facilities that does free up a little bit of equipment. We’ve put a focus and EBITDA generation in IRR in that and preserving revenues.
So I think we made a bunch of examples in past years where that maintenance CapEx, which is the CapEx which we spend to maintain existing customers. May be some of that CapEx was generated maintaining customers that weren’t all that profitable for us. So we kind of refocused and say well, let’s just really focus on profitability, whether it’s growth CapEx or maintenance CapEx or even thinking about de novos at some point. Let’s just make draw it up, optimizing every power of we put out there, getting their appropriate at IRR in free cash flow.
So towards that end, there’s been a couple things that we may have anticipated and predicting the maintenance CapEx side that we anticipated to invest in some new equipment in the new site and upon evaluation, we thought, well, we’re not really generating the return that we need to get on that. So that’s why it looked perhaps a little bit muted in Q1.
Also keep in mind that you pay for the equipment as you take delivery. So some things as we outsourced types of the oncology side of the business. Well, we brought a new leader in that department, 2022. Well, you can imagine we appropriately put projects on hold because we wanted to give that new leader a chance to see whether he wanted to go forward or not with some of those projects. Now as things get moving again, those projects which might have come on line in Q1, or maybe Q2-Q3. So cash throughout this part of the time, we take a quick delivery, not so much at the time with a partner.
So I think we’re still on track as we said for the target, but maybe just deferred to a little bit later in the year.
Okay, great. Thank you. NCI was higher year on year. Maybe you could share some color on that and how do we look at that for the rest of 2023?
I think if you can look at that as a positive. I know you see the negative side of it, though. The minority — and payments going out to minority partners. But what that means is that the actual joint venture, I’m very proud. It’s a little bit more than anticipated and therefore, you kind of pay out more to your minority partners. So we had, particularly in oncology, signed a handful of partnerships, which has performed exceptionally well in Q1.
And the good news is they performed exceptionally well. The flip side is we didn’t have to pay out distributions to those minority partners [technical difficulty] the continued performance, there’s higher cash distribution, that doesn’t mean there was more cash generation that the company has hold.
Riadh, I don’t know if you like it. But like I said, it’s not a fixed obligation —
Totally agree, David.
Okay. And then for my last question on — any updates on evaluating options for the take note?
Yeah, I think it’s the same we said before. Stonepeak has always been supportive. We’re having a constructive dialogue in the quarter like we’re obviously aware of September 1, and we will address accordingly. So it’s the same update as last quarter.
Okay. Thank you.
Thank you. [Operator Instructions] Your next question comes from the line of Rishi Parekh from JPMorgan.
Hi. Thanks for taking my questions. First, on the top-line, so your volumes are pretty strong. MRI up 4%, PET scans of 16%; and obviously, your oncology starts at 7.6%. These are high-dollar RVUs, but your revenue is flattish year-over-year and just up slightly sequentially. So I’m just trying to reconcile, given the strong volumes and given the fact that it sounded to me that Florida was only a couple of million dollars in terms of impact.
What drove this low where you’re just getting paid less on the hospital side on a per RVU basis where you’re seeing a squeeze on the commercial side — what was driving that revenue number lower relative to the volumes that you’re showing?
I think — and I’ll let David also build on this and good morning again, Rishi. So on your question, there really three — I mentioned it in my script, there are really three things that we’re still working on.
One, like you mentioned, couple of millions from sites that — in the comparison, obviously, you don’t see. The other thing is we’re really not done with rationalization yet. Like we are still — like I said in my script, we are still working on underperforming regions that have done somewhat better in the prior period and then we’ve made changes and we haven’t seen the impact of the changes yet. And so there is some overlap.
And I think also, David, you mentioned in your comments like last year, last quarter of — in the first quarter of 2022, it was not actually really a horrible quarter from a seasonality perspective relative to 2022. So I think missing some of that revenues from what we closed and from some turnaround that we’re still working on would have made a much bigger impact in the same — in the first quarter.
And real quick reality, you’re exactly right. Well put. The only thing is we tend to focus a little bit on the radiology side or they’re kind of gets shut down. We also did have a pop of portions, which we handed in our oncology partners, and that also impacts the revenues. That’s not make as much the bottom line but it does impact the revenues as well.
Just on that, can you just quantify what that impact was? And so it seems to me that your non-consolidated volumes were down pretty significantly, and that’s what’s probably driving the total revenue number lower. Is that — and I just want to make sure that this is not a rate situation and that is it’s these underperforming sites that are materially bringing down your total volumes.
No. That’s very well put. It’s not —
That’s exactly — well said, yeah.
Okay. And then on the cost side, I could see that it’s come down. I apologize. I’m in between a few calls, but I know you’ve highlighted challenges around the medtech cost and bonuses that you had to pay out to drivers. Can you just update us on where you stand? What are rates today on medtechs? Are you fully staffed? What’s your capacity utilization within your facilities as it relates to clearing out some of these MRIs?
We’re not fully staffed yet and we’re definitely not back to normal. But I think like we said in our remarks, the pressure is moderating, which is why you start to see 4% in MRI. The cost is stable, but it’s not back to where it was. But we’re addressing it as the year goes on and we’re bringing more and more labor full time versus contracted labor. So we’re hoping as we go throughout the year. If the positive trend continues, we’ll see more and more improvement on that front. But you have all what you’ve seen in Q1. It’s some stability and some relief. But it doesn’t matter what measure you look at. Q1 is not a return-to-normal environment.
And then just the last question I want to ask is in the future, if you can provide total volumes as well just so we could better understand or follow the trend especially as you may lap some of those challenges.
And then just lastly, can you just provide us with your incremental secured debt capacity? And that’s it for me. Thanks.
Yeah, I’ll talk about the total volume and let David talk about the second one. I think with the total volume, we drop it because actually its fluctuation has no impact on revenues. That’s why we drop it because MRI and PET/CT really drives, as you know, 75%, 80% of our revenues. And the rest, we could have much higher volume, but really means nothing to revenues because it’s x-rays that could make a big difference. And that’s not a modality that we’re going to grow in every single facility. It’s the opposite. So that’s why we really don’t provide the total volume because it’s not going to really help you does stand any trend. It’s the opposite. It’s just noise.
Sorry, just to be clear what I was referring to was — and I apologize for this. Not necessarily the non-same-store volumes or MRI and PET/CT.
Okay. Got it. I thought you mentioned the volume of procedures. And David, maybe the second part of your question.
Yeah, real quick. We do have the $55 million line of credit, the revolver. And that is actually fully available to us. Not only have we not drawn upon it, but we could draw our — with meaning all of our leverage constraints. We could draw the entire amount.
Thank you. There are no further questions at this time. I’d now like to turn the call back over to Mr. Zine for any closing remarks.
Thank you very much again. Thanks, everyone, for your participation today. Again, I hope we provided more color on the first quarter. And we want to again thank all of our stakeholders, thank all of our staff and team members for their continued effort and support in transforming Akumin.
And hopefully, the platform that we’re building will only see a return as we’ve witnessed in the first quarter to more organic growth, which will further position the company as we streamline our service delivery for more hospital partnerships, which we — really is the ultimate goal is more partnerships on both radiology and oncology side.
Thank you again and have a wonderful day.
Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and ask that you please disconnect your line. Have a lovely day.