Greetings. Welcome to the Assure Holdings Second Quarter 2023 Conference Call. At this time, all participants are in a listen-only mode. Please note this conference is being recorded. I will now turn the conference over to your host, Brett Maas of Hayden IR. .

Hello, everyone, and thank you for participating in today's conference call to discuss Assure Holdings' financial results for the second quarter of 2023. On the call today are Executive Chairman and CEO, John Farlinger; CFO, John Price. Premarket this morning, the company issued a press release announcing its results.

The release is available in the Investors section of the company's website. Before we begin the prepared remarks, I'd like to remind everyone that some of the statements made today will be forward-looking statements and are made under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those projected or implied due to a variety of factors. We refer you to Assure's recent filings with the SEC, including its annual report on Form 10-K for the full year or a more detailed discussion of the risks that could impact the company's future operating results and financial condition.

Also on today's call, management will reference certain non-GAAP financial measures, which we believe provide useful information for investors.

For reconciliation of these non-GAAP measures, please consult the most recently filed 10-Q associated with the filing of the earnings release for the quarter ended June 30, 2023, which is available on the SEC website. This call is being recorded and will be made available for replay via a link on the company's website.

Now I'd like to turn the call over to Executive Chairman and CEO, John Farlinger, of Assure Holdings.

John?.

adding profitable volume in core markets; and two, continuing to reduce operating costs to run leaner. We remain optimistic about improving cash flow from operations during the latter part of 2023. And lastly, an update on a couple of non-operating items that could positively impact our financial position in 2023. First has to do with litigation.

We're involved in two pieces of litigation in Louisiana, where we are seeking payment for services provided to two former partners. One is scheduled to go to trial in early October and the other is scheduled for trial in early 2024. We have a settlement discussion on this latter piece of litigation in early September.

These claims represent 7-finger amounts of restitution. Second, as mentioned last -- in our last earnings call, we have filed for the employee retention credit, or ERC, a refundable tax credit for businesses that continue to pay employees while shut down during the COVID-19 pandemic. We have filed amended tax returns for the years ended 2020 and '21.

We expect cash refunds from the IRS of approximately $3.2 million. In summary, neuromonitoring is widely considered to be the standard of care and surgeons agree it is a vital resource in the operating room during complicated surgeries.

Demand for our services is strong, and our business proposition is compelling despite the reimbursement challenges that are facing the broader industry in the short term. We remain optimistic that these disbursement headwinds are not long term and that we can improve our results during the latter part of 2023.

Next, John Price will walk us through the financial results for the second quarter.

John?.

Thanks, John, and thank you, everyone, for joining us today. Our total managed case volume for the second quarter was 4,900, a decrease year-over-year and sequentially. This decrease was largely attributed to exiting unprofitable markets during 2022.

For the second quarter of 2023, we reported gross revenue of $4 million and net revenue of $1.5 million. Net loss was $5.3 million and adjusted EBITDA was a loss of $4.9 million. Gross revenue for the second quarter was negatively impacted by both a decrease in volume and weakness in reimbursement rates, as John previously discussed.

Our second quarter case volume was down slightly to approximately 4,900 managed cases from 5,200 in Q1 of 2023. We attribute this to continue to task by our team to exit some of our unprofitable markets as well as revenue share MSA agreements.

We collected approximately $5 million in cash and our average days to collect remained essentially the same, moving from 46 days during the first quarter of 2023 to 48 days during the second quarter of 2023, a significant improvement over our prior year collection experience.

Our strong cash collections continue to reduce our exposure to accounts receivable reserves. During the second quarter 2023, bad debt was approximately $2.5 million.

The increase in bad debt is primarily related to collecting cash more quickly, resulting in a reduction to aged accounts receivable and a reduction in reimbursement rates has significantly impacted the aged AR. We anticipate a similar amount of bad debt during the third quarter.

Cost of revenues for the second quarter of 2023 were $3.4 million compared to $4 million for the year ago quarter, a decrease of 15%, primarily related to the decrease in volume of cases and the benefit from our efforts to reduce our cost of delivery.

Operating expenses for the second quarter of 2023 were $3.6 million compared to $4.1 million in the year ago quarter, a decrease of 12% related to the cost-cutting initiatives management implemented during the prior year. We continue to focus on diligently managing our costs, both cost of revenue and operating costs.

Year-to-date, our operating expenses are down nearly 20%, and we expect another decrease in overall expenses with the cost reduction plan John discussed earlier. During the second quarter, we continued to transition away from our legacy MSAs in order to preserve the revenue generated by the professional component of our IONM services.

As of the end of the second quarter, we transitioned the majority of the remaining MSA volume to wholly owned entities and expect to have fully exited all MSAs by the end of this year. .

Assure Holdings would like to let participants know that the CEO and CFO are available this week for one-on-one meetings. Please coordinate with Brett Maas. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation..

End of Q&A:.