GMRS earnings call transcript, November 10, 2026

Thanks, Elizabeth.

Yeah, no, we're expecting the kind of continued momentum out of NRTs. Again, we've seen good collection activity. We have the payer mix shift that we've talked about all year associated with the exchanges. We did have the benefit of the change in estimate, the error change in estimate that we talked about in the call. Which, you know, we're that that volume is decreasing quarter over quarter as we go into the fourth quarter, but no real change in our in our broader thinking. Long term, fourth quarter is always, you know, a little bit weaker from a seasonality perspective because it's just a mix between commercial and some of the other payers during the fourth quarter or then first. Quarter, but no real change from our from our underlying trends. OK, great. That's good to hear. And then I think a couple of times you talked about, obviously, with the increase in fuel costs and things like that, some of these efficiency gains that you're you're seeing. You've been seeking out. Can you talk to us a little bit more about operationally what those are and sort of how you're been evaluating that as unfortunately the oil cost trend seems to be less transitory than we had hoped. Elizabeth, this is Nick. One of the things I think we've stated a few times is we've got a lot of dials we can turn and tighten up. We've used a measure internally which is UHU on utilization. Really tight on how we're deploying, how we're, you know, stationing folks. So operationally, we kind of turn those dials where we need them and tighten up. So it just goes back.

To our ability to manage fleet and demand. Also, as you know, we've said with some of the weather, you've seen some of our capture down. So the pluses and minuses have allowed us at least from upper. Operational perspective to smooth out some of those. OK, so it sounds like what you're saying is sort of just continued strong operational thing, but not necessarily like a shift versus things you were doing earlier in the year. Is that fair? Yes. Yeah. Yeah. OK, perfect.

Thank you very much.

Hey, Scott, this is Nick.

I'll start in reverse with the overview of how we're tackling some of the noise that you're all seeing and hearing in IDR. And then I'll ask Brian to get to some of the more. Annular points at the beginning of your question. What we, we feel confident. I think we, you know, we said it and we put it down in writing with respect to emergency health, you know, the EMS environment. And I think. There was a Paragon report as well that went out probably a month or two ago that stated almost exactly what I had spoken to Dr. Oz about several months ago, where you've got to treat EMS, you know, especially 911 response. very differently, you know, emergency versus elective, which is where I think most of the noise is. And when I spend my time on the hill, which I spend a lot of time on the hill with legislators, you know, the lawmakers get it, the administration gets it. We remain highly confident that we have a lot of support there with the differentiation. And then even from a scale perspective, and Brian can get into some of the numbers, you know, you'll recall, this is a very small portion. One of our overall interventions, and even from an air perspective, we continue to grow our in-network partnerships with payers. So look, we get it. We see the noise. We fight it. Recently, I've engaged with state lawmakers as well, and even AGs on getting their attention with some of the behavior we're seeing out of the payers. So, you know, our bias.

We're being thrown into a mix unfairly. We believe that what we've gone into the process with, one or all, not only eligible, but justifiable. And we'll continue to win at the rates we do and continue to demand and get justification for payment on all of these. I don't know, Brian, if you want to add a little bit more to Scott's question.

Yeah, this is not a...

Yeah, thanks. This is Ted. The teams continue and it's kind of core to our culture and teams and how we operationalize every single business unit and how to look. leaders actually manage their teams. So it is a market by market and it's a very broad program that we have on the utilization of the assets and we use the right employees for the right types of calls and the labor rates. We've also seen quite a bit with nurse navigation improving our operational efficiency and some of these really large. markets. You see the growth we've had with nurse navigation and that makes the systems overall more efficient. The right ambulance is going to the right calls in the emergency side. So it provides for quite a bit efficiency throughout the operations where we have it rolled out. Just fundamentally and how we operate, you know, in the air and ground side, that's a core piece to what we do is utilization management of our teams. Yeah, and Scott, this is Nick. Just to add to that and probably segue from the question Elizabeth asked earlier in my, you know. Alluding to the proverbial dials we talk about, one of the things we continue to see as we deploy nurse navigation in our own markets is that efficiency that we've referred to in the past. So that helps us avoid some of the dry runs. Catching the wrong teams. And so you continue to see that improvement inherent in the numbers that we're presenting.

is why it's a change of estimate when we, when we do collect it. Second quarter, I think was about 5 million. Third quarter was, was in the 18 million range. So it's going to be low and we're going to continue to try to, to, to, to collect. On that really old stuff related to the exchanges, $16 million run rate is I think the right number. We saw a little bit of it in the first quarter next, last, this year of 26. So there'll be a little. bit of impact there. What we're watching right now for 27 is the work requirements for Medicaid. There's a number of different estimates out there. We're trying to refine as we think about 27. So that's the known headwind that we see from an NRT perspective.

Great.

Thanks for the details there.

As a follow-up on IDR, for the 18 million and IDR claims received this quarter, can you just remind us what the breakdown is between claims that occurred during 3Q versus claims that came through from prior periods?

Yeah, this is all related to claims for a much older date. It's a service. Our revenue recognition process for both air and ground, although they have slightly different timing, is to make an estimate at the time. That we provide the service and then wait six months for the air, 12 months for the ground to update those. And then so these changes are older than six months on the air side. And frankly, most of them are. You know, in the 18 to 24 month range from a perspective. So this is not change of estimate. Change of estimate by definition is an older date of service.

Great.

Thanks for the details.

customers have so you know we're going to continue reinvest in there on it not only the technology that the new aircraft bring in but then obviously the ability to grow further and as the business continues to generate cash we're going to use. some of that to de-lever like we did during the third quarter we did reprice the term loan bought down about 200 million dollars worth of the term loan as well. we thought that was the right time we're generating plenty. of cash to continue to operate uh you know and do the m a when when the time comes and to do the aircraft purchases when the time comes and so feel good about our position helpful context. Thanks. And Brian, just to follow up to you on the back of you know solid EBIT.B in Q2 and Q3, you guys talked about kind of the revenue range for Q4. Anything you're considering in terms of implied guide for Q4? In terms of any headwinds or tailwinds that you would call out? Just the inflationary environment continues to be more challenging than I think any of us would like. You've got the variability of fuel prices, but they're much higher than even earlier in the year. We've seen that continue to trickle through other lines. The P&L initially started with, you know, transport related things like freight and travel, but we've seen it really start to pop into all of the other lines as well. And we continue to work. We've got a very good purchasing team that manages all of our contracts. Our frontline staff do a great job making sure we're we're using only what we need. But we are

seeing that inflation pop through into other lines. And so we've incorporated that into our into our guidance. Thank you.

We can move some of those rotor assets to other markets that are not having some of the weather issues and maybe to pick up some volume as well. So we continue to, you know, look at those patterns and how do we mitigate this with your question on, you know, what is what is. Del Nino do next year. I can't tell you what, you know, what those patterns are going to be, but we continue to look inward. Ted mentioned earlier, continued investment in IFR technologies, training. Training on, you know, how we can mitigate some of these weather patterns as they move through the system. Yeah, let me pile onto the IFR comment. The aircraft, the Bell aircraft that we ordered during the quarter, our instrument flight. rules, IFR, which means that you can use GPS and other things to flying conditions that you can't do if you're flying visual flight rules or VFR. And so we continue to invest. in that those types of aircraft. You know, the order of those aircraft will come in in 27. So that's our plan is all aircraft as we go forward from Bell that will come in will come. in with the IFR aircraft. All twin engines will come in with IFR. And so as we continue to change that mix, then hopefully we will eventually decrease a little bit the weather impacts.

Great. And can you talk a little bit more about the pace of air bases we can expect over the next five quarters or so? Just remind us what the targets are and cadence. Thanks. I don't have the numbers at hand. And we're still working with the suppliers on the delivery timeline. I think we had mentioned we had on the previous call, we had seen some delays from one of the suppliers. We've worked through a lot of that. We don't have complete line of sight yet, but we do have a lot of aircraft. Coming, a couple at the very end of this year that will fund bases to start early next year and then a number throughout 2027. So as we get into 27, you know, to doing the 27 guidance, we'll have a clearer picture and share that at that time. Andrew, I want to come back to a point, says Nick, that we've realized as we've messaged out to all of you, we talk about bases, but I think one of the things we've not highlighted as well, I'll go back to a point I raised earlier, is as we look at demand around our current base, we have the ability again to move some of those assets in higher demand areas and pick up more volume so we can still get the ultimate impact of increased volume without necessarily opening up new bases. I like that point and and we'll continue to improve how we report against that as well.

Great thank you.

uh in that two three four percent and then we'll benefit from a little bit of makeshift as we continue to focus on uh the emergent business and then the non-emergent business that that makes economic sense um our goal in the long term and uh we always view this from a long-term perspective is mid single digit plus revenue growth high single digit EBITDA growth leveraging uh the size and scale of the business that hasn't changed great thanks thanks for that and if i may um i guess as it relates to next year um another question about um the role health transformation fund so i guess by now all the states have received some approvals right for funding so can you help us understand how material if at all could this be for the company maybe you know how many projects you involved in you know when we should expect to see some revenue contribution flowing from that any color will be appreciated thank you yeah Joanna this is Nick look I am I will be candid this first year rollout we saw a lot of confusion and a lot of the dollars just ultimately went back to the hospitals where we had understood it was not the intention we've worked hard with all of the states to come up with these innovative models I think it's a little premature to give you an assessment of what the potential is we know that they are looking at targeting and earmarking dollars for EMS we also believe that we GMR can benefit from a few other categories you know we I know we mentioned there's NAB we mentioned some of other other innovations

and that that's the REACT model that we went out we believe this year we should start being able to see some of the contracts we're engaged with some states and respective counties in those states to look at getting some traction with our models and benefiting from some of those dollars still a little bit of noise and how the government is allocating those funds and what they're awarding on the true innovative models aside from your recall the first half of dollars were just prorated out to every state now they're getting a little more prescriptive around what what programs and what innovative models will be awarded the dollars so we remain optimistic about this we're still promoting and actually engaged with a few states and a few counties on getting the contracts great thank you we've reached the end of the Q&A session I will now turn the call back to Nick for closing remarks thank you Tracy thank you all again for joining us today as you see the third quarter demonstrated continued momentum and resiliency across our business and continues to reinforce our confidence in GMR strategy we continue to grow our core services expand innovative solutions like nurse navigation maintain discipline across our operations and strengthen our financial position we believe our national scale integrated model and clinical capabilities position GMR well to capture the opportunities ahead and create sustainable long-term value our exceptional clinicians pilots mechanics dispatchers support personnel and regional leaders are what may