Concentra Group Holdings Parent (CON) risk factors, FY2024 10-K

Risks Related to Our Business, Industry and Operations

1. 01If the frequency of work-related injuries and illnesses decline, including if employment trends in the United States shift to industries that are less prone to workplace injuries and illness, our business, financial condition and results of operations may be negatively affected
2. 02If we have adverse changes to our relationships with our significant employer customers, third-party payors, workers’ compensation provider networks or employer services networks, our business, financial condition and results of operations may be adversely affected
3. 03We conduct business in a heavily regulated industry and changes to regulations, new interpretations of existing regulations, or violations of regulations may result in increased costs or sanctions that reduce our revenue and profitability
4. 04government will continue to devote substantial resources to investigating healthcare providers’ compliance with the FCA and other applicable fraud and abuse laws
5. 05Cost containment initiatives or state fee schedule changes undertaken by state workers’ compensation boards or commissions and other third-party payors may adversely affect our revenue, profitability, and financial condition
6. 06The nature of the markets that we serve may constrain our ability to realize reimbursement increases at rates sufficient to keep pace with the inflation of our costs
7. 07Labor shortages, increased employee turnover, increases in employee-related costs, and union activity could have adverse effects including significant increases in our operating costs and a reduction in profitability
8. 08If we fail to compete effectively with other occupational health centers, onsite health clinics at employer worksites, and healthcare providers in the local areas we serve, our revenue and profitability may decline
9. 09We may be adversely affected by a failure or security breach of our, or our third-party vendors’, information technology systems, such as a cyber attack, which may subject us to potential legal and reputational harm and have an adverse impact on our business
10. 10We may be adversely affected by negative publicity which can result in increased governmental and regulatory scrutiny and possibly adverse regulatory changes
11. 11Significant legal actions could subject us to substantial uninsured liabilities
12. 12We currently maintain professional malpractice liability insurance and general liability insurance coverages through a number of different programs that are dependent upon such factors as the state where we are operating and whether the operations are wholly owned or operated through a joint venture
13. 13We are subject to a variety of litigation, investigations and audits and other legal and regulatory proceedings and payor audits in the course of our business that could adversely affect our business and financial statements
14. 14Noncompliance with billing and documentation requirements could result in non-payment or subject us to billing, coding or other compliance audits or investigations by government authorities or private payors
15. 15Insurance coverage, even where available, may not be sufficient to cover losses we may incur
16. 16Recent state laws that regulate healthcare costs, access to care and quality may impact our ability as a healthcare support service provider to do certain transactions
17. 17Current and future acquisitions may use significant resources, may be unsuccessful, and could expose us to unforeseen liabilities
18. 18We rely on third parties in many aspects of our business, which exposes us to additional risks that could adversely affect our business, financial condition and results of operations
19. 19In conducting our business, we are required to comply with applicable laws regarding the corporate practice of medicine and therapy and professional fee-splitting
20. 20or staff of state agencies, licensing boards or attorney general offices could lead to increased enforcement of these laws and regulations
21. 21We are dependent on our relationships with affiliated professional entities that we do not own to provide healthcare services, and our business would be harmed if those relationships were disrupted or if our arrangements with these entities become subject to legal challenges
22. 22We are subject to extensive federal and state laws and regulations relating to the privacy of personal information, including protected health information, and any actual or perceived failure to comply could adversely affect our business, financial condition and results of operations
23. 23If we fail to comply with applicable data interoperability and information blocking rules, it could materially adversely impact our business
24. 24If we are unable to maintain, protect or enforce our rights in our proprietary technology, brands or other intellectual property, our competitive advantage, business, financial condition and results of operations could be harmed
25. 25If third parties claim that we infringe upon their intellectual property rights, our operations could be adversely affected

Risks Related to Financial and Economic Market Condition

1. 26Adverse economic conditions in the U.S. or globally could adversely affect us
2. 27volatility in credit and capital markets, as well as supply chain interruptions. We are continuing to monitor the conflicts and assessing their potential impact on our business
3. 28Impairment of our goodwill and other intangible assets would result in a reduction in net income

Risks Related to Our Indebtedness

1. 29Our substantial indebtedness may limit the amount of cash flow available to invest in the ongoing needs of our business
2. 30and we may not be able to borrow money, sell assets or otherwise raise funds on acceptable terms, or at all, to service or refinance our debt
3. 31Our Credit Facilities require us to comply with certain covenants and obligations, the default of which may result in the acceleration of certain of our indebtedness
4. 32Payment of interest on, and repayment of principal of, our indebtedness is dependent in part on cash flow generated by our subsidiaries
5. 33Despite our substantial level of indebtedness, we may be able to incur additional indebtedness. This could further exacerbate the risks described above, especially in the current rising interest rate environment
6. 34We may be unable to refinance our debt on terms favorable to us or at all, which would negatively impact our business and financial condition
7. 35Failure to maintain satisfactory credit ratings could adversely affect our liquidity, capital position, borrowing costs and access to capital markets

Risks Related to the Separation and the Distribution

1. 36We have a limited history of operating as a standalone public company, and our historical financial information may not necessarily reflect the results that we would have achieved as a standalone public company or what our results may be in the future
2. 37We may not achieve all of the expected benefits of the Separation and the Separation could adversely affect our business, financial condition and results of operations
3. 38If we fail to fully achieve all of the benefits expected to result from the Separation, or if the benefits are delayed, our business, financial condition and results of operations could be adversely affected
4. 39We may be affected by significant restrictions, including on our ability to engage in certain corporate transactions, for a two-year period following the completion of the Distribution in order to avoid triggering significant tax-related liabilities
5. 40We have incurred and continue to incur significant charges in connection with the Separation and incremental costs as an independent, publicly traded company

Risks Related to Our Relationship with Select

1. 41SMC may fail to perform under the Transition Services Agreement, or we may fail to have replacement systems and services in place when the Transition Services Agreement expires
2. 42Potential indemnification obligations to SMC in connection with the Separation could adversely affect our business, financial condition and results of operations
3. 43In connection with the Separation, SMC agreed to indemnify us for certain liabilities. However, we cannot assure you that the indemnity will be sufficient to insure us against the full amount of such liabilities or that Select’s ability to satisfy its indemnification obligation will not be impaired in the future
4. 44We may have received better terms from unaffiliated third parties than the terms we will receive in our agreements with Select and SMC

Risks Related to Ownership of Our Common Stock

1. 45We cannot be certain that an active trading market for our common stock will be sustained
2. 46We cannot predict the prices at which shares of our common stock may trade
3. 47The market price of shares of our common stock may be volatile, which could cause the value of your investment to decline
4. 48If we are unable to implement and maintain effective internal control over financial reporting in the future, investors could lose confidence in the accuracy and completeness of our financial reports and the market price of shares of our common stock could be adversely affected
5. 49The obligations associated with being an independent, publicly traded company require significant resources and management attention
6. 50Your percentage ownership in us may be diluted in the future
7. 51We are a holding company and our only material assets are our equity interests in our subsidiaries. As a consequence, we depend on the ability of our subsidiaries to pay dividends and make other payments and distributions to us in order to meet our obligations
8. 52We cannot guarantee the payment of dividends on our common stock, or the timing or amount of any such dividends
9. 53If our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our results of operations could be adversely affected, resulting in a decrease in the market price of shares of our common stock
10. 54Certain provisions in our amended and restated certificate of incorporation and our amended and restated bylaws, and of Delaware law, may prevent or delay an acquisition of us, which could decrease the trading price of our common stock
11. 55Public health threats such as a global pandemic, or widespread outbreak of infectious disease, similar to the COVID-19 pandemic, may create uncertainties about our future operating results and financial conditions
12. 56Our business operations could be significantly disrupted if we lose key members of our management team
13. 57Our business depends on our ability to attract and retain talented, highly skilled employees and a diverse workforce, and on the succession of our senior management
14. 58Climate change, or legal, regulatory or market measures to address climate change, could adversely affect our business, financial condition and results of operations
15. 59Increasing scrutiny and rapidly evolving expectations from stakeholders regarding ESG matters could adversely affect our business, financial condition and results of operations
16. 60Changes in tax laws or exposures to additional tax liabilities could adversely affect our business, financial condition and results of operations