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Pennant (PNTG)

Participants
Derek Bunker Chief Investment Officer
Danny Walker Chief Executive Officer
Jen Freeman Chief Financial Officer
Brent Guerisoli President
Scott Fidel Stephens
Frank Morgan RBC Capital Markets
Call transcript
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Operator

Good day, and thank you for standing by. Welcome to the Penn Group Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. To ask a question during the session. today’s being that advised be conference recorded. is Please

go assistance I conference would you Bunker. to require like Starz. further any Please Derek Mr. the If now for to speaker today, ahead. your over hand

Derek Bunker

Thank you, thanks joining today. us everyone all for and Chino, welcome and

today, Danny Here President; CEO; our Walker, Brent COO. with me Freeman, Gochnour, our our our Guerisoli, Jen CFO I have and John

earnings. anyone should from have our remind which call. circumstances for to differ affiliates at arise that call been, I about November those have are and based result this securities forward-looking begin, beliefs results of to for a SEC announcement or Except any reason. want discussion could quarter press expressed our X laws, nor may that statements to available on publicly place any be filings of and that we matters. listening X, review changing our section filed as federal statements are update will they our our to implied few reliance assumptions not a or other by and call on Before future We as of pennantgroup.com. We subsequent our encouraged do risks where complete statements available XXXX. uncertainties website impact PM undue all undertake statements XXXX, be factors materially yesterday results. for XX, current release XX-Q more changes third that and These today’s Relations of to Friday, of made events, expectations, information, a the of not this a the Pennant or new as we not until This today’s management’s environment and its today revise Any will required could business made is Time statements in housekeeping operate. Mountain and forward-looking subject replay statements on also actual are on Listeners A today, to call. are cause to Investor forward-looking on these replay our be website our and December updated on

Inc., addition, Pennant no with Inc. direct holding In subsidiaries, assets, the Certain subsidiaries. provide independent a legal, and or we, subsidiaries. and such management accounting, company, other is subsidiaries referred revenues. services payroll, Pennant, The to contractual risk other us the relationships our Group, IT, The to our to consolidated operating of and company words its HR, Service employees Pennant Group operating refer collectively through The Center, as with

yesterday’s not Also, believe we complete we GAAP our provide of a that GAAP reporting Danny? should A these call upon by can together Walker, over viewed and of as the or of to turn by use available be All reconciliation The nor activities release similar terms that, the it I’ll Service today or more independent to in of as supplement are the employees CEO. meaning and our us, has revenue business, should assets, our relied Group, we, to terms direct Group. exclusion When to press imply, be are with and GAAP used operated are management, that our XX-Q. in operating our non-GAAP operated company our have and Inc. that and not metrics. non-GAAP as assets. the consolidated of subsidiaries is its the Pennant The and their subsidiaries assets any results, References Danny With they but meant that herein Pennant separate Center own the to operating companies the employees measures with our GAAP reports. understanding well construed

Danny Walker

Thank stronger achieved employees call. welcome to return and over efforts Derek, third that growth taking steps much earnings us provide today of methodically and for quarter are you results we've to our for quarter a the our XXXX healthy us the served XXXX. more for discuss you, the during quarter. we and Thank importantly, joining will exceptional resources patients frontline everyone the to our to rate third our residents grateful We're ongoing These history. continue XX,XXX multi-faceted care position to we and third

growth growth. all financial know organic followed sustainable clinical concerted results and our on have the our of missteps acquisitions, have current our volume the and hospice of to demands quarter with the well by in retrenchment of the are Throughout operating past our living years high over the results and We given for when the us business of and coupled pressures of of unique our with and actions substantial time public activity and standards. successfully, the are established to health operations of overhaul of the periods sobering, the new COVID-XX ourselves review periods resources. segment resources In company. investment bandwidth caused Our a two and history, of off and high early as home investment senior identify our pandemic effectiveness when leaders completing we we have expectations and we've health our through diluted to ventures, leadership general, stage third spin gone focus achieved calibrated that the the is our our taken

struck haven't balance enough the over months. XX delicate this We well past

around believe local is without historical in have and ensure immediate yield short significant taking term a led core one, results at model our level success. that across the long-term each will three high help. reinforce principles the of operating team efforts actions our We that retrench are both two these segments, executing that We and core to to opportunities distractions, local the ensure

solid and $XX.X home up segment we with XX.X% or Now over turning or health segment both revenue the prior quarter. year $X.X produce million EBITDA our first up results to hospice performance, continue million adjusted to of and X.X%

of the acquisitions. The pressures the in reflect new in of in our large our environment and integrating the several both results quarter platform. strength agencies a challenges key store third by quarter third number markets rise the across labor and same of COVID-XX ongoing the operating was impacted of Our cases the

the in in the acquired the admissions declined procedures relate total metroplex, home quarter, where we've health a total Utah home Fort delay as second of example, attributable X.X% to nearly XX% the third and health key past which markets over from our Approximately Dallas to agencies. For in the quarter Worth elective recently of decline XX Idaho, home health months. quarter, admissions in Arizona, our such is agencies acquired

and pressures business acquisitions. COVID-XX related to Our steady our produce continued recent despite hospice results similar to

past prior increased admissions prior the increased in within quarter quarter. the agencies months, average XX over the third year Excluding and hospital our X.X% year census acquired quarter, daily XX% the over

While we a third impacts quarter, in admit it to we quarantine and ability protocol. are the as see temporarily like when – see cases saw we our spike of staff services half enter cost more COVID-XX our in and of increases latter us the more

our in growth increase bedrock October on patients residents. As as providing see of focus traction we and markets third our in care COVID-XX X.X% normalized continued business and admissions we over home by total quarter, the exited in an is September. in relentless are evidenced exceptional health in The our long-term cases help our confidence clinical to our beginning to our

home home achieve We marks with scores across in to to average segment star according hospice an health stars X.X rating our several quality health time third-party of CMS stars and high analytics. continue and according to X.XX real

quarter, XX% third the to compared hospice quality national well end reported of trend the XX%. at Our composite at to average of score continues the

agencies participated purchasing expansion XXXX, rewarded increasingly model Our achieved value-based health revenue will emphasis each the in purchase through the programs. of Washington, XX the on of positive clinical reporting quality in quality and and value-based home – Iowa, be hospice have is out as adjustments net the year. through rolled clinical and model outcomes our expansion nationwide hospice Since of Arizona we health home

Just our demonstrate In presented clinical are look groupings senior our nationwide living model our by in senior prior value-based by as or value-based leaders segment, the quarter implementation second the executing of believed the the the and for – operating communities ongoing health that the model PDGM, into for the teams disrupted we third to and we the our be reimbursement to successfully cases, model support markets effort program navigated reimbursement within home our and provide. continue in have sharp COVID-XX changes, living the unique models quality and in forward we to talented rewarded driven reimbursement particularly prepared in where would continues. and concentrated. related achieved our the opportunity patient care The of purchasing was rise quarter and improvement

communities pressures of levers pulling of the marketing for wellness of address their directly and also help sales impact. implementation cases the are tools delivery are our completed COVID-XX in and these offset that across full And suite spike the There quarter, our labor help IT living our and amplified we we labor felt now analytics processes, improving available the senior and management. systems, XXXX. we've several the to are pressures During most

operations the addressable begin senior serving growing build we As of population. a moved stronger senior past living worst and COVID-XX

source segment living has of Pennant. the strength to be potential senior a for Our

to we $X.XX year per year As in full we $XXX the earnings $X.XX. to range guidance revenue XXXX. press range full share announced of adjusted are and in in We yesterday, providing million anticipate $XXX release our the the of for million of

we XX the assumed we COVID-XX, pressure XX to over consider has have months, some guidance in As experienced we've believe past ongoing impact COVID had businesses on our what of XXXX. and the our in similar

the transitory likely effects we We in also experienced to dissipate third external in normalize. more cases as believe the quarter that are and

field results home say us ask transition shareholders. that, and acquisitions, for to proposition to accelerated our agencies update and provide to our in unlock senior team value for the I'll rate segment. With grateful historical and recent we’re improvement long activity, in term growth at need our in that members more the opportunity hope an continued for our remains that, in hospice that just that changes I place and would investment incremental line strong are service making Derek. assumes guidance in value Derek our that center our Our our living important on store take the the deeply recent our with With health same in and

Derek Bunker

Thank you, Danny.

Texas, operations one bringing we quarter, of XXXX the of total the acquisition agency in new During third beginning since the to XX. the of hospice number announced

acquired and we've in during the including acquired teams As caused results. existing temporary complexities just operating the new that remain chop expected performance acquisitions, we ongoing many our new appears model, of to much our the procedure in of delays in which long-term in fundamentals Danny of number potential and environment, current some contributing delays the are the before with this our markets in of of and our coupled as operating agencies many segment, pressures which to our contribute of senior year-after-year. meaningful stretched living new the The each our grow sheer have to a mentioned confident to in results, elective continue our operations agencies, the pandemic, immediately ramp, to short-term pressure way underlying

business often way teams, such our periods of of that, led the that create teams growth the in retrench capital when growth we model into from bursts from that which refocus of lead operating financials energy teams of are leadership a acquisitions Our and opportunistically for ensuring local unique I'll local foundation local years leads reinforce to review to in activity by stronger it high our Jen model, of successful are as opportunities our With Jen? activity, the a deploying is through we operating owing opportunities XXXX. focus leadership strategy of talented priority core will the - around principles results, these to would the pass pursue new our transitioned energy we of our to leaders, our

Jen Freeman

quarter. specifically XXXX, advance three and of the have our lost diluted including our XXXX the our you and million for $XXX.X non-GAAP Cash of months the loss been second per million Medicare estimate that $X.X quarter ended results X, we through on the within ended XXXX, over payback expenses time filed results have September the revenue, revenue our impacts identify debt in continue at the for at the prior Detailed and good that XX, $XX.X for total of months time in million XXXX $X.X have X.XX our well and and COVID adjusted expect repaid increase the $X.XX which morning, the the ended April difficult and were in began revolving credit yesterday. earnings provided $XXX.X our we to out on remaining will Derek, for metrics automatic approximately XXXX quarter Medicare million request XX, XX:XX:XX Difficulty] sequestration Automatic quarter. the million to our of adjusted end financial ended September payments all negatively are by to such final to payment. adjusted of over reported million payments million non-GAAP we $X.XX. three and the $X.X September paid and on The the [Technical operations Please XXXX, X.XX Key compared EBITDA recruitment least everyone of November over we the note million, released likely advance Advance all in earnings GAAP on hand months third impact excluding of end, of impact back contained September share The cash share payments of capture the million, year $X.X anticipated to impact times XX, as in repay the times as include of remaining of the on three expenses GAAP wages, quarter line increase expenses as $XX.X phase of impacted million to $XX.X recruitment X. of of advance XX.X% COVID-XX and per of an flows the holiday diluted considered the earnings net November XX-Q results updated through Thank we in and the share which from release or business per segments XX, guidance across results effects year, of benefit combined Well include lost related amount approximately revenue. revenue, quarter perfectly end. both period. press is $X.X

revenue Danny year XXXX earnings of adjusted to yesterday full guidance million As in we provided to million $X.XX mentioned of of and share our press $XXX release, $XXX per $X.XX.

average of diluted weighted Our approximately on tax based a shares guidance and effective million is outstanding XX.X% rate. $XX.X

of of impacted startup No guidance anticipated rate costs. ongoing our development, In assumes reimbursement guidance COVID we share-based things, other among compensation effect COVID-XX. the acquisitions and the estimated at operations. how excludes the In and unannounced addition, acquisition-related operations, It has our adjustments. cost reality consider

effects some throughout as includes revenue segments Our accounting for incremental our COVID XXXX on our guidance improvements XXXX. of in and growth and the as year, census lingering the recognizing occupancy, well costs through

with And principles, improvement historical XXXX, moderate can an I’m slight focus over core our of Despite challenging at percentage focus service a mind, execution, local results a We we included on our our cost to pandemic, days to XXXX impact we’ve and growth have local COVID highlight the that lens environments it is proven create better on a picture the over match XXXX, our across COVID in of expect recovery leaders year. the emphasis markets through in to a of moderate what revenue to the XXXX hand of we’ve adjusted the XXXX we that two calendar their XXXX heavily our that, the a success. looked adjusting predicting and our be opportunities with early compared adept have although more core of some XXXX of impacted in on Brent COVID setbacks than with benefited used be in our our revenue. difficult, to confident to leaders. XXXX to of appears experience in challenging included as peaks in to in segments, retrenching both ways XXXX couple experienced and throughout to the I'll XXXX in

Brent Guerisoli

top of Their in growth serve, It's Chief be across communities increasing better an Director, families. Thank accomplishments in over the Wisconsin and a whole XX% days living Executive team in shown The Director, great Franklin, assisted and possible of Susie Staying Jeannie grow Executive core building to as has Park Wisconsin, incredible real-time Wisconsin, leadership with [indiscernible], focused Preceptor, by Wellness residents, a built and prior strong today. star choice. it's you, executing EBIT year quarter supported of period environments. Carr environment. success acknowledge to our Darmody delivery the continuum have Shelly With Brentwood, the their you challenging basis. of team accomplished in same pandemic, turn lead a quality the Sarah, our four operating clinical Danny. on of saw including their the our revenue my solutions [indiscernible] midst over Jen. period and providing third serve to the all the to in in of very leadership The Preceptor in our patients leaders through to reputation Shelly in the and I'll of occupancy rating, organization. to XX% living achieving led of in the Health what up in at XXXX. three same helped developed Martel and communities tailored XXXX quarter of to their Park value senior Home team exemplified and examples back Sarah the also during of and of results, XX% and the Wisconsin financial It's a the needs that, Officer several over Hospice the prior third Chief At pressure growth even revenue the improved [indiscernible] X% strong they growth effectively, provider of tremendous to consistently other of They've to line operating the are of the the year Milwaukee, operating first growth period. success, have EBIT the Brentwood This quarter occurred strong care services Clinical the Officer grow quickly the it pleasure over growth care have few quarter quarters when of managing the our of over and significant while and model a of unique stars communities on culture percent occupancy. team on and CMS to be difficult quality same at team can state ownership also of many unique period. Brentwood business XX% their also contributing residents, preceptor historically Susie early

Danny Walker

and contributions today. ensure Jen express Thank you, the short-term I’d and to gratitude maintain that for thank like Pennant and operating to improve results through for environment the also process. our the Derek, fighting the members your you, complexities organization are just health of the current again Brent, long-term throughout team in

we gratitude on to to our continued work for proposition long-term also the We Tino, that Thank to so shareholders headwinds in unlock through can please you their deeply the value want our the temporary please? drive ability believe procedure, these express Q&A and instruct all. you in. and belief long-term-minded audience

Operator

Instructions] Q&A Please the while compile by stand All roster. we right. [Operator

line question the Fidel First Stephens. Scott comes from of from

is line open. now Your

Scott Fidel

everyone. Hi, thanks. Hi,

in throughout into baking is just in Or can sort that tempo next margin EBITDA improvement the XXXX around some relates of margin you you’re First and guidance? improvement guidance improvement. of talk the that about ratably the guidance. of you out wanted sort to the the the of year. just just you’re this the the basis you’re works Do question, out there if playing for targeting XXX year? see expecting into interested just drill that adjusted margin tempo that implied just And points seasonality margin and It of applied to as that to improvement it

Jen Freeman

your question. Yes, for This Scott, Jen. you is thank

our improve in that throughout line We be year our the seasonality. will anticipating and would that are typical the seasonality with margins

the quarter. cost second and have some do We seasonality we occur pressures So in well that quarter. do have as third fourth the in

So improvement we expect year. that would seasonality margin the the occur to throughout with increasing

Scott Fidel

the just segments, And a one each if Okay. on I could. just of then follow-up,

industry. rate health what home increase business, about a talked hospice for and the had on rate home increase just Pennant health the the be you’re First, estimating CMS X.X% would specific

for for if what estimating Pennant. us that thinking interested it’s assumptions then be on and all the you’re some can in the you volume may with takes same-store XXXX? about And thoughts any Just HHH of puts that give you

Jen Freeman

Yes.

we of away. the guidance a rate the increase, on that, So our that assuming we rate And X.X%. estimated in are goes about increase sequestration also with holiday

is that reinstated. So sequestration

sort rate. on that the flat year-over-year on a So is assumption of rate side

our On we that the revenue. volume, would volume anticipate increase do our in

same We continue in grow, to store both acquisitions. our and our

have year-over-year. as a expect our we lot opportunity And we we same-store, growth are mentioned. our Danny I our anticipating that in in normal would margin think of acquisitions,

around the about side. in XX% XX% a it’s top home health on So hospice segment increase to and the

Derek Bunker

home is way comment versus Scott, our add, environment can maybe health has that. The same-store on just the John a little fairly I’ll bit operations Dr. operating meaningful. the affected new in acquisitions

do you to... So Don, want

Danny Walker

I’m happy bit to on little Scott. comment a I question. appreciate that, And Yes. the

move been think through facing these occurred and year-over-year process taking of little period and of expectations time. margin that experienced acquisitions resides where bit and more are of long the operate the time transforming those I the consistent talked some at them. see these COVID side, shown able you the potential in taking our for operation we’ve about relatively a what from X show the over our through through we’ve – level. our years, team, we’ve an to is that that think I that And that’s is weak to And been the a lot labor a to and some of about. talked of an that’s and what sort we’ve admission headwinds acquisitions meet standpoint, opportunity portfolio untapped from we’ve standpoint of situation for how think kind of clinical a last over and a had moving have headwinds the in X-quarter is strengths a results acquisition we’ve a that develop often we’ve in our the year that really opportunity a the And of I throughout the time, from

like can potential we’re optimistic feel a think very expectation. there. why we of And that untapped the margin in that lot We is that’s untapped I reach. potential there’s So

Derek Bunker

We’ve look really storm weathered on the to even the new versus John. future. forward store clarity the Thanks, front, and same-store same-store Yes. in we well more Ken? providing on

Jen Freeman

just to clarification. Scott, a provide wanted I

rates on rule. about us was on quoting Home the proposed still rule. and actually So the impact the the Care was Homebase what of that was the I updating rule final with is

have So be to estimate week should we sometime. this able that

Scott Fidel

Got Okay. it.

a So the I to upside would just there’s that with cut. assume an final of probably right, didn’t tad right X.X%, then

Jen Freeman

Okay.

Scott Fidel

I’ll get back in the queue and let others ask a question.

Jen Freeman

Okay.

Operator

Right.

Next is one Frank on Morgan. queue a

line open. Your now is

Frank Morgan

a Good quarters, in to this you in – morning. differential the that talk the margin two bucket. are or or relative between then could all I things mean, we contribution guess sort my on bps What’s is. staying any what relative same-store would on that’s or would bps I margins, that maybe you’ve a portfolio about the years, two of of the that be of have bought enterprise basis, the versus talking more weight in measure what’s weighting Like the you help just that last there the And weight there? the nine subject XXX and And be whatever years relative that the XXX appreciated. the – question. had, sort about of non-same-store first or

Danny Walker

it. and Yes. we appreciate Frank, Great question,

that done we’ve underperformed significant pretty a you’re that is between couple have a and – large what think acquisitions And a a those two. seeing couple primarily margin. that’s by driven of I from by differential

outcomes. They’ve they some for that while, when which those really pretty of from increased since in There’s costs faced business. reflected – quarter, by this you that we’ve acquisition the same-store same financials, at same so that look that increased boost it. joint on that took margin these think our And labor impacted, that opportunity we’ve exists. but that but we’ve – carried the during of a been tremendous increased a venture $X.X a you XX% in I you our untapped acquisitions, it by direct And the census potential they’ve managed And at through Scripps, about million quality that in very we’ve over, we period. see pressures. revenue XX% well have And and see a about acquisition, included acquisition, I’ll the couple quarter’s with and minimal the was significant and highlight our declined acquisitions that’s

expect see into to the that of potential effectively, next first year. in we to fourth really untapped so both And quarter quarter and the realized start be

there’s has bucket our performed some well. in Jen, same-store impact so significant an exact do that And no while really have number. we

Jen Freeman

Yes.

you if margin on X.X%. your State were our looking to compared XX.X% at it’s year-to-date So about acquirers EBITDA store,

Derek Bunker

then we kind And in bucket are percentage that think roughly. percentage, new of the Frank was asking call I the XX what were those same-store our, of store versus

Frank Morgan

a Not quarter.

Derek Bunker

Yes.

margin... I fair. that’s Frank, that And the on provided margin, So then on you the guess perspective

Frank Morgan

I’m same And quarter? what quarter new store? the sorry, – the is Is that the store or the

Derek Bunker

XX% about operations. is stores total of New our

Frank Morgan

maybe it’s of guess, a... or agencies I yes, that’s And Okay.

Derek Bunker

Yes.

Frank Morgan

you. Okay. Got

else and was like it COVID, kind a the that there issue? to say all basically of it’s beyond in integration insignificant. these is happened which similar just So was just the Or it locations? something happened anything lack unexpected above of management there this, a that some seasoned is team in having lot But that place fair sounds pressures, of obviously to not impact that of of

Derek Bunker

our with kinds teams. quarter. those our of management we’re in period newer The elective of team to vaccination where better the a there’s normal been we of of for quarantine, really none in, teams of all No, down deal that new the much integration combination of our then complexities And have disruption seasoned But unexpected shut acquisitions, of to were time procedures having environment not processes. did is in number major a that issues. in navigate you’re any leadership is just a than those COVID acquisition and states the process. complexities It the new

to And attribute expected to it to We’re – factors. behind external just we like we don’t – where performing we frankly,

We’re at things we see the we improvement. ways looking missteps, hard and for opportunities have control, made that we

tough changes from is We’re more somebody for rookie that’s really, that a like soft that’s the season little story it’s learning process. But on. going what’s making a and and season, a that being or those

Frank Morgan

I’ll Maybe you. two hop. more Got just and

in rate on growth things in in senior And updated home living... starting color also, hospice about was October care the on just up health Just gave the Any on how day. curious, are the color about living you then occupancy what’s remarkably appreciate driving per But going color on trends any the side. I that? X.X% side, senior

Derek Bunker

Yes.

of A on seen hospice that first the that board, discharges. lot So the period we’ve the about venture, pocket referrals SNFs in – of referrals but is post-acute of its Scripps of typically and decline been that what’s trajectory. just not those are from systems happening a sort acuity higher a in just of across that we’re We’ve a increase census talked joint front, we’ve about world. the and an been overall Most setting. in excited reside. really in where a our of function hospital And the acquisition happening seen is actually the organization, what’s of mid-tier patients overall

unless and living, the one. John. But to from really have So Brent then senior – or story occupancy the Jan side I’ll that’s there’s that something on main add on tackle

Brent Guerisoli

Yes.

in dip we September frame, of pretty there’s started August, sustained we the as and because September to time – a growth seasonality partially and of well. middle up see COVID, some a So then saw until that

impacted So being right by now that still we’re COVID.

November pressures back will be beginning tougher a the year the things then will of and going up so but generally, anticipate And tend standpoint, of be be – seasonality pick that it December into some bit the a the year. end may there we little from at occupancy to

Danny Walker

that opportunity. And of little just we changed our Frank, rate add as color one piece the a have grown, our And is on bit. – geographies have I’d more as that hospice

traditional Pacific post, we’ve Idaho, strong years many the as our our Arizona, going been very we’ve affect grown in for So business, on Utah, rates. that’s to

So we’ve CONs Washington been in awarded several year. this

very a We’re We’ve down start-up Washington. as those. Washington excited about well up Olympia, in in as completed Everett,

those thing come of And growth just areas. higher so in as same our our affecting some reimbursement in receive rates because geographic we California. true is that’s those have online, The of

we in different of fluctuate as so you’ll our that as well. see And grow parts platform

Frank Morgan

Got you.

would adjustment more. So affect that the geographic wage

on how just loss hospice at we’re about What in great. a stays? That’s stay, of MediaLink Okay. length

Danny Walker

length to question. quarter third Yes. pleased It’s really Frank. second That’s We’ve constant has fairly remained see the from that median the stay actually a quarter. been of to our great

been have – experienced it’s declining pandemic. – throughout fairly the for We a

And so bit, stabilize very to optimistic. we’re that a see

some is driven of the of ever by is that setting, our said, percentage coming patients out Danny acute which it’s of are As the than this been. higher

We’re excited about that.

the We’re us their other community, with to be excited continuum can our patients. stabilize resource enzyme facility the which the work partners to we numbers. in I care systems be continue and think facility Avnet trusting that fact with about the are those to will that we partners acute And

Frank Morgan

Thanks. Frank. Thanks,

Operator

one Next on Instructions] queue the [Operator is [inaudible].

now Your line is open.

Analyst

Hey. guys. about to Good wanted morning, guidance. ask the I XXXX just

million In in seems in imply I’m quarter. of million, tack decrease to what to the that. that it $XXX question fourth $XXX the revenue guidance, terms just just wondering a to revenue of driving revenue decline a kind on sequentially? is And

EBITDA to or any the EPS guide If given you versus the look your this with you using the EPS? point at volatility guide EBITDA at associated way you higher prefer reason operations,

Jen Freeman

So Jen. revenue. on guide you Tal, We to is this revenue the adjusted side, thank

and going Scripps is account second third included the the the quarters first or So not is into revenue that included be the take in will to in fourth X quarter. that and

So need you’ll that particular piece. adjust to for just

revenue, the just not traditionally – on looking quarter – anticipating puts invested it’s EPS. just probably service, increasing. that, revenue on of in a that if of decline various So difference we on GAAP revenue. of cost takes revenue have at we’ve netted is we’ve that’s and be And various looking will that then historically the guided as We’re items into EPS, your EPS and versus at It’s you’re part actually fourth in so –

Derek Bunker

for that, review into take a Thanks it though. that. do review We’ll consideration. We’ll question. of the We’ll

Analyst

when Sounds front, agency the take did quarter health the good. you year next know in And you hospice How a bit briefer hospice guys and that position think during more acquisition just on I guys going front up we on side, more the strength focus you forward of a hospital the about I the investment the kind given on front? another started pipeline think and this of home quarter. should of see you

Derek Bunker

we taking break in for not a script. or Yes. It’s of natural process we’re And trying that’s sort that say from already best I and significant acquired something the continuing of our operations, sort to that what is would from we’re just sign wrong. we it. case. those a opportunity that’s the transition in when coming see see to return the a acquisitions that’s It’s communicate ensure

to But prolonged we have where a will opportunities and harder us that opportunity start quickly, lifting cycle may that portfolio Our if who certain kind our return externally. more to internally of deploying than capital perhaps for actually taking in a much do. little make deploying sooner it’s in progress others this more so of more typical see to fairly will is resources they different acquisition uneven markets be capital justify types

So expect want first the sure I fourth year. we in more quarter, we’ll be capital would the to to be a be it in quarter, next then make little trajectory maybe would I the think into lighter we’re and deploying

Analyst

guys And good. you Sounds that are you program on you agencies the on among that there out about be the of mentioned revenue XX when to? you should and we purchasing, value-based positive Could program the total in kind quantify impact are think see will have already adjustment. What getting health gets that participating And revenue portfolio? the rolled nationwide? the your how home the

Derek Bunker

really numbers cases front. we those percentage test is fairly right? the other Collectively, good data not for revenue. – we’re specific a made on important a do home from little more small feel we’ve are we’ve reporting really test made that that right them the on represent it Jen, lot or our like That sure John have and But those lot cases overall positive is I’m a numbers... There’s question. been learned concrete experiences, – we have a And health you those tracking and of – that coming. But a up us. we agencies But – number sure viewed now. have looking of as will

Danny Walker

agencies. a those – the of again, was Danny total impact our are So And said, positive of very as those about small. some $XXX,XXX across

address – been them and to scoreboard been these majority metrics, the been think Some at a positive we’ve training. have education And out are local have that and the those have pleased outcomes way clinical local measure the way I We provide But that as impact teams really around leaders has and our of because on overall And country. we markets. provide to and focus see the partners resulting in we purchasing model that’s a to very with data excited as of clinical potential results because has ability the rolling year-over-year. helped service our the how a how have our our impact in data had health the our reasons taken midsized center agencies clusters transparent unique opportunities their operational one leaders value-based them it home positive impact – about across and of of of are their the

So we’re excited...

Derek Bunker

that’s year-to-date health And And of and that’s a accounted revenue XX% what terms in to about for whole X%, those agencies a just year-to-date of our number. is dollar revenue translates home stuff. that our increase

Analyst

yes, I are vice about And What’s you wanted state that where and have in OSHA through. markets Yes, are obviously. the kind CMS the on states turnover gone I in impact pushing cinema is that experience know that mandates. helpful. very What That’s the – certain of they through... already ask your to expecting lastly, already

Derek Bunker

question. for that you Thank Yes.

mandates states that. There to We some who mandates states and have frankly, There’s been forces dealing been with from done it. are that gone various counter have states. have away in

I are the a situation, there’s it is states directions underway. had high – closely, the that now. contributed rate mandate turnover it on have mandates When enormously that fairly driven lot depending a on a going lot moving in hasn’t believe but seen issues, to markets, overall Now our adoption those really in we right very federal process of There’s have the that dynamics watching by both specific it. although modest a and turnover we labor market

Now marketplace. decision-making. done It that’s certainly rest to careful it’s is reviews. factoring say into for But the we’ve how people’s affecting us difficult the of

reviewing now a vaccine in their the and that lot individual go We’re circumstances, report we reporting status with individuals to good – one-on-one data systems decision of into spending nuances have vaccination. around the it’s time

turnover move a these a significant best and they’re individually at, We’re making they We’ve with understanding how members where time lot of and them not mandates forward. spent our as spike in the we a of why are staff they they’re way anticipating their that support through. as can result place

our something through regard. able be in decision-making the But trust is significantly here weeks. another difficult has adds major of won’t we any that that but see well is us And that get dynamic. that we’ll it culture several We to like local of to effects disruptions So the served problematic it we high environment, – feel the and to labor probably it full we it anticipate already don’t without anticipate for being for us.

Analyst

you for my the color. thank taking questions. And for Thanks

Derek Bunker

Thank you, [inaudible].

Operator

questions further call now turn queue. over presenters. the back the on no to are the will I there And

Danny Walker

Thank to great you thank us. for amazing you, Thank you on the of basis. stakeholders our for again, your all thank you work you day. and do daily in all, joining Okay. and for story, a continued a leaders our belief that Have

Operator

you This today’s participating. for conference concludes call. Thank

disconnect. now may You