Executive Summary

Q2 2022 showed strong operational momentum (managed cases +36% YoY to 5,800) but reported results were depressed by a $7.6M accounts receivable reserve taken on aged 2020 receivables; net revenue was $1.6M and Adjusted EBITDA was ($5.9)M .
Management introduced 2H22 guidance: gross revenue >$22M, AR reserve expense <$4M, and Adjusted EBITDA >$2M; FY22 managed cases guidance maintained at 25,000+ (40%+ YoY) .
Collections velocity and AR quality improved materially: DSO fell to 311 days (from 332 in Q1 and 590 in FY20), and 83% of AR moved into ≤12 months bucket vs 68% in Q1; management expects to recover a portion of the fully reserved 2020 receivables .
Cost actions (20% workforce reduction, >$4.5M annualized savings) and mix shift to higher-margin professional/remote neurology underpin management’s expectation for positive adjusted operating cash flow and profitability in 2H22 .

What Went Well and What Went Wrong

What Went Well
- Case volume and collections strength: “Assure outperformed in managed case volume and cash collections,” with 5,800 cases (+36% YoY) and record $7.7M total cash collected ($6.0M from owned entities) in Q2 .
- AR quality and velocity improved: DSO fell to 311 (vs 332 in Q1, 590 in FY2020), and 83% of AR shifted to ≤12 months at Q2-end (vs 68% in Q1), reducing exposure to future reserves .
- Strategic cost reductions and scalable model: >$4.5M annualized savings and a pivot to professional/remote neurology services expected to drive margin expansion; CEO: “we expect to become cash flow positive on an adjusted operating basis in the second half of 2022” .
What Went Wrong
- Significant AR reserve depressed P&L: A conservative $7.564M AR reserve was netted against gross revenue of $9.209M, resulting in $1.645M net revenue and ($5.912)M Adjusted EBITDA for Q2 .
- EPS and profitability deteriorated YoY: Q2 net loss widened to ($4.726)M and diluted EPS to ($0.37) vs ($0.11) a year ago, reflecting the reserve and seasonality .
- Continued noise from legacy 2020 claims: Management acknowledged execution issues in revenue cycle management for legacy periods, though emphasized recovery efforts and improved processes going forward .

Financial Results

Metric ($USD Millions except per-share and cases)	Q4 2021	Q1 2022	Q2 2022
Gross Revenue (pre-reserve)	N/A	$9.2	$9.209
Accounts Receivable Reserve	N/A	$(4.4)	$(7.564)
Revenue, net	$9.659	$4.701	$1.645
Gross Profit	$5.297	$0.824	$(2.357)
Total Operating Expenses	$5.013	$4.751	$4.094
Adjusted EBITDA	$1.400	$(1.661)	$(5.912)
Net Loss	$(0.309)	$(2.459)	$(4.726)
Diluted EPS	$(0.03)	$(0.19)	$(0.37)
Managed Cases (units)	5,485	5,113	5,800
Remote Neurology Managed Cases (units)	1,222	1,303	1,900

Segment revenue breakdown ($USD Thousands):

Revenue Component	Q4 2021	Q1 2022	Q2 2022
Technical Services	$1,799	$1,396	$67
Professional Services	$8,193	$2,473	$854
Other	$(333)	$832	$724
Total Revenue	$9,659	$4,701	$1,645

KPIs and operating metrics:

KPI	Q4 2021	Q1 2022	Q2 2022
Total Cash Collected ($M)	$5.4	$7.2	$7.7
Cash Collected – Owned Entities ($M)	$4.2	$5.6	$6.0
DSO (days)	—	332	311
AR ≤12 months (% of total)	—	68%	83%

Notes: Management indicated Q2 mix was unusually impacted on the technical component by the reserve; the drop in technical revenue reflects write-downs tied to aged 2020 claims .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Managed Cases	FY 2022	25,000+ (40%+ YoY)	25,000+ (40%+ YoY)	Maintained
Gross Revenue	2H 2022	N/A	>$22M	New
AR Reserve Expense	2H 2022	N/A	< $4M	New
Adjusted EBITDA	2H 2022	N/A	>$2M	New
Adjusted Operating Cash Flow	2H 2022	N/A	Expect positive	New
Annualized Cost Savings	Ongoing	N/A	>$4.5M savings	New/Announced

Management also cited seasonality (higher commercial mix in 2H) and potential upside from GPO-driven facility agreements and M&A pipeline .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’21 and Q1’22)	Current Period (Q2’22)	Trend
Revenue cycle management, AR reserves/collections	FY21: improving collections; platform build . Q1’22: $4.4M reserve on 24-month aged AR; expected another in Q2; collections velocity record (65% in 6 months; 85% in 12 months for owned entities) .	Q2’22: $7.6M reserve; conservative, front-loaded; DSO 311; 83% of AR ≤12 months; anticipate recovering portion of fully reserved 2020 claims .	Improving AR quality; reserve tail risk reduces in 2H (<$4M) .
Cost reductions/operating leverage	FY21: investing to scale . Q1’22: higher Opex due to growth/M&A; plan to run leaner .	~20% workforce reduction; >$4.5M annualized savings; June 2 release: >$200k monthly cost reduction; aim for positive adjusted operating cash flow .	Leaner cost base; margin tailwind.
Remote neurology expansion (professional revenue mix)	Launched in 2021; 1,222 remote cases in Q4; plan for 10k+ in 2022 . Q1’22: 1,303 cases; higher margin and faster collection .	1,900 remote cases; shift away from revenue-sharing models; expectation of margins “exceeding 50%” longer term as reserves normalize .	Accelerating and mix-enhancing.
GPO/facility contracts & in-network	Premier sole-contracted supplier; added Yankee & Conductiv in Q1; pipeline building .	Expect “sizable new business wins” from facility-wide outsourcing agreements across GPO networks; pursuing in-network deals .	Pipeline maturing; potential 2H catalysts.
Regulatory/IDR (No Surprises Act)	Q1: crafting IDR strategy; early settlements improving visibility .	“Greater than anticipated success” in independent dispute resolution improving cash collections and accrual rates .	Positive collections driver.
Seasonality/mix	Q1: 1H more government mix; 2H ramps commercial mix .	Reiterated expected 2H volume and mix tailwinds .	Favorable into 2H.
M&A and industry fragmentation	FY21 deals (Sentry, Elevation) . Q1: watching valuations; patient on pricing .	“Multiple M&A opportunities” as peers struggle to collect; potential consolidation .	Optionality improving.

Management Commentary

“We will show why Assure's second quarter and first half were strong operationally, challenging on an accounting basis… important groundwork for a significantly stronger, more financially stable second half of 2022 and beyond.”
“Assure began a strategic cost reduction effort… over $4.5 million of annualized savings… expect to become cash flow positive on an adjusted operating basis in the second half of 2022.”
On reserves: “We chose to be conservative on reserving accounts receivable… anticipated second half exposure is forecasted to be less than $4 million… expect to recover a portion of these accounts receivable reserves.”
CFO: “Assure continued to generate strong procedure growth up 36% to 5,800… gross revenue of $9.2 million and net revenue of $1.6 million… Adjusted EBITDA loss of $5.9 million… DSO decreased… to 311 days.”
Guidance: “We expect third and fourth quarter to be much clearer… AR reserve… less than $4 million… sharp reduction in operating costs… positive adjusted EBITDA and operating cash flow during the second half of 2022.”

Q&A Highlights

Reserve trajectory and end-of-line: Management expects material reserve risk to subside after Q2; backlog team focused on recovering written-down claims; “we expect to recover a meaningful share… as its net new revenue and new margin” .
Margin outlook excluding reserves: In response to a question, CEO said gross margin “exceeding 50% would be expected” as reserves normalize and mix shifts toward professional revenue .
2H revenue confidence: Visibility driven by rate × volume, stable accrual rates, forecasted (reduced) reserve, and 60% lower overhead by Q4; expectation of strong Q4 and set-up for 2023 .
Competitive landscape and IDR: Industry-wide AR challenges; arbitration/IDR is leveling the field; Assure’s data analytics and in-house RCM seen as competitive advantages .
Revenue per case and mix: Shift away from surgeon revenue-sharing toward keeping professional revenue to bolster margins; seasonality to improve margins in 2H .
Cash flow: Management reiterated goal for positive operating cash flow in 2H; June 2 press release noted positive operating cash flow in May and >$200k monthly cost cuts .

Estimates Context

Wall Street consensus (S&P Global) for revenue and EPS was unavailable for IONM for Q2 2022 (and prior quarters) due to missing CIQ mapping; therefore, no vs-estimates comparison is provided. Values would be retrieved from S&P Global if available.

Key Takeaways for Investors

The Q2 print was optically weak due to a front-loaded $7.6M reserve, but underlying operations (volume, collections velocity, AR quality) strengthened, setting up cleaner 2H comps .
Cost actions (> $4.5M annualized) and mix shift to remote neurology/professional revenue support a credible path to positive adjusted operating cash flow and Adjusted EBITDA in 2H22, with seasonality adding tailwinds .
AR risk is increasingly contained: DSO fell to 311 and 83% of AR is ≤12 months; management expects to recover a portion of fully reserved 2020 receivables, which would be net new revenue/margin when collected .
Facility-wide GPO relationships (Premier, Yankee, Conductiv) and improving IDR dynamics present incremental growth and cash collection catalysts in 2H22 .
Near-term stock catalysts: execution vs. 2H guidance (> $22M gross rev, > $2M Adj. EBITDA), visibility on AR recoveries, announced facility agreements, and evidence of sustained cash generation .
Key risks: execution on collections of legacy AR, cadence/timing of facility wins, macro/capital market constraints, and potential reimbursement variability typical of out-of-network claims .

Appendices

Prior Quarter Context (for trend analysis):
- Q1 2022: Revenue $4.7M; Adjusted EBITDA ($1.7)M; net loss ($2.5)M; record $7.2M total cash collected; ~5,100 cases; $4.4M AR reserve; FY22 managed cases guidance 25k+ .
- Q4 2021: Revenue $9.7M; Adjusted EBITDA $1.4M; net loss ($0.3)M; ~5,485 cases; remote neurology launched and scaling; Premier sole-contracted supplier .

All citations: .

Assure Holdings Corp. (IONM)·Q2 2022 Earnings Summary