What happened

Shares of ATI Physical Therapy (NYSE: ATIP) stock were rocked on Monday, falling 36.5% through 11:15 a.m. EDT after the physical therapy chain reported a big revenue miss and an even bigger reduction in forward guidance as part of its Q2 2021 earnings report.

Heading into Q2, analysts had forecast that the recent SPAC IPO would report in excess of $175 million in revenue for the quarter. In fact, ATI said its revenues were only $164 million -- with a $5.5 million pre-tax loss.

Image source: Getty Images.

So what

Visits per day across the chain grew 71% to 21,600, but the revenue collected per visit declined 10% to $106.26. The company's $164 million in revenue, although missing estimates, grew 52% year over year.

Weirdly, while the company was able to calculate its pre-tax loss for the quarter ($5.5 million), ATI was unable to calculate its net loss, because "we are not yet able to calculate income tax expense without unreasonable efforts."

That's not a comment you often see in earnings reports from publicly traded companies -- and it's not the kind of comment calculated to give investors any confidence whatsoever in the company's financials.

Now what

Topping off all this bad news, ATI decided today to roll back its guidance for full-year fiscal 2021, and now projects that its revenues will be only $640 million to $670 million, far below the $731 million that management had previously promised. And management said its "adjusted" earnings before interest, taxes, depreciation, and amortization (EBITDA) on those revenues could be as low as $60 million -- or about half of the $119 million it had guided investors to expect before completing its IPO.

No wonder investors are upset.

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