The Pennant Group, Inc. (NASDAQ: PNTG), the parent company of the
Pennant group of affiliated home health, hospice and senior living
companies, today announced its operating results for the second
quarter 2022, reporting GAAP diluted loss per share of $0.09 and
adjusted diluted earnings per share of $0.14 for the quarter(1).
Second Quarter Highlights
- Total revenue for the quarter was
$116.3 million, an increase of $6.0 million or 5.4% over the prior
year quarter;
- Net loss for the second quarter was
$2.7 million, adjusted EBITDA for the quarter was $7.6 million, an
increase of $1.5 million or 23.8% over the first quarter of 2022,
and adjusted EBITDAR for the quarter was $16.6 million;
- Home Health and Hospice Services
segment revenue for the second quarter was $85.3 million, an
increase of $7.2 million or 9.3% over the prior year quarter,
segment adjusted EBITDAR from Operations was $15.7 million, and
segment adjusted EBITDA was $14.5 million, an increase $0.7 million
or 4.8% over the prior year quarter;
- Total home health admissions for
the second quarter was 10,055, total Medicare home health
admissions for the second quarter was 4,682, an increase of 6.3%
over the prior year quarter;
- Total hospice admissions for the
second quarter was 2,119, an increase of 3.5% over the prior year
quarter, and hospice average daily census for the second quarter
was 2,285, an increase of 2.4% compared to the first quarter 2022
and a decrease of 0.5% compared to the prior year quarter;
- Senior Living Services segment
revenue for the second quarter was $31.0 million, a decrease of
$1.3 million or 3.9% over the prior year quarter, segment adjusted
EBITDAR from Operations for the quarter was $8.8 million, and
segment adjusted EBITDA for the second quarter was $0.9 million, an
increase of $0.1 million over the prior year quarter; and
- Senior living average occupancy for
the second quarter was 76.5%, an increase of 380 basis points over
the prior year quarter, and average monthly revenue per occupied
room for the second quarter was $3,470, an increase of $294 or 9.3%
over the prior year quarter and $99 or 2.9% over the first quarter
of 2022.
(1 |
) |
|
See "Reconciliation of GAAP to Non-GAAP Financial
Information.” |
Operating Results
“We are pleased to report our second quarter
results showing continued operational momentum in each segment,”
said Brent Guerisoli, Pennant’s Chief Executive Officer. “We are
grateful to each of our local teams and our service center partners
for navigating ongoing operational headwinds and a challenging
labor environment. As we face further economic and regulatory
uncertainty, our unique operating model and leadership depth give
us confidence in the abilities of our teams to be successful and
create value for our long-term stakeholders.”
Commenting on the Company’s operating results,
Mr. Guerisoli said, “Our home health and hospice business posted
another solid quarter despite persistent labor and inflationary
pressures. Our revenue of $85.3 million in the second quarter was
driven largely by strong Medicare home health admissions, which
increased 6.3% over the prior year quarter, and total hospice
admissions, which increased 3.5% over the prior year quarter.
Segment adjusted EBITDA margin expanded 120 basis points over the
first quarter of 2022, leading to segment adjusted EBITDA growth of
$1.8 million or 14.4% over the same period. Underpinning these
strong results is our focus on producing quality clinical outcomes,
with over half of our home health agencies have a CMS star rating
of 4.5 or 5 stars, and an average rehospitalization rate 340 basis
points below the national average according to real-time third
party analytics. We continue to see tremendous opportunities in our
home health and hospice segment to drive stronger performance
across our existing platform and expand our footprint by acquiring
high-quality agencies in adjacent markets. ”
“Our senior living segment continues to build
momentum even in the face of lingering labor pressures,” said Mr.
Guerisoli. “Strong occupancy and RevPOR results highlight the solid
demand for quality senior living services that we are poised to
address in our markets. Excluding the impact of the six senior
living operations exited during 2022, our same store average
occupancy for the second quarter was 77.2%, an increase of 180
basis points over the first quarter 2022 and 190 basis points over
the prior year quarter, and same store average revenue per occupied
room would have increased 0.5% over the first quarter 2022 and 5.8%
over the prior year quarter. Across the segment, as we continue
developing leadership teams, improving our data and systems, and
driving accountability around our core opportunities, we know we
can execute with operational excellence and continue to achieve
financial, cultural and clinical success.”
During the quarter, the Company completed the
transfer of five senior living communities to Ensign affiliates,
acquired the real estate underlying the operations of its 82-unit
assisted living and memory care community in Twin Falls, Idaho,
which will continue to be operated by an affiliate of the Company,
and closed on the acquisition of one home health agency in Montana.
After quarter-end, the Company acquired the operations of Barber
Station Assisted Living and Memory Care, a Class A senior living
community with 39 assisted living and 45 memory care units in
Boise, Idaho, signing a favorable long-term triple-net
lease. “We see increasing opportunity across the home health
and hospice landscape to acquire quality agencies at prices
consistent with our disciplined investment strategy. Our pipeline
of potential acquisitions is healthy, our strong balance sheet and
access to capital allow us to invest opportunistically, and the
uncertainties facing providers--particularly home health
operators--are substantial, creating opportunities for us to work
with high-quality business owners looking for a strategic partner
to amplify the legacy they’ve built. We are poised to be the
buyer-of-choice for these providers, and we’re excited about
deploying capital and growing in a significant way over the next
several quarters,” said Derek Bunker, Pennant’s Chief Investment
Officer.
Jennifer Freeman, Pennant's Chief Financial
Officer, reported that the Company ended the second quarter with
strong liquidity, with $3.2 million of cash on hand and $90.8
million of availability on its revolving line of credit. Ms.
Freeman reported that the Company had a net debt-to-adjusted EBITDA
ratio of 1.96x and a lease-adjusted net debt-to-adjusted EBITDAR
ratio of 5.67x as of quarter-end. “Our cash position and liquidity
in the second quarter improved sequentially over the first quarter.
We completed the process of returning $28.0 million in Medicare
advance payments received in 2020. Aside from acquisitions which
may cause our leverage to temporarily remain elevated, we look
forward to our leverage ratio and cash flow improving. We are
excited to deploy growing dry powder in what we believe will be a
compelling investment environment on the horizon,” said Ms.
Freeman.
A discussion of the company's use of non-GAAP
financial measures is set forth below. A reconciliation of net
income to EBITDA, adjusted EBITDAR and adjusted EBITDA, as well as
a reconciliation of GAAP earnings per share, net income to adjusted
net earnings per share and adjusted net income, appear in the
financial data portion of this release. More complete
information is contained in the company’s Quarterly Report on Form
10-Q,Form 10-Q for the three and six months ended June 30, 2022,
which has been filed with the SEC today and can be viewed on the
company’s website at www.pennantgroup.com.
2022 Guidance
Management reaffirms its 2022 annual guidance of
total revenue between $450 million and $460 million. Full year 2022
adjusted earnings per diluted share is anticipated to be between
$0.60 and $0.68 and full year 2022 adjusted EBITDA is anticipated
to be between $33.2 million and $35.7 million.
The Company’s 2022 annual guidance is based on
diluted weighted average shares outstanding of approximately 30.4
million and a 25.8% effective tax rate. The guidance assumes, among
other things, anticipated reimbursement rate adjustments, no
unannounced acquisitions, and the lingering effects of COVID-19. It
excludes the tax-effected costs at start-up operations, share-based
compensation, acquisition-related costs, and loss on disposition of
assets and impairments.
Ms. Freeman stated, “We believe providing annual
adjusted consolidated EBITDA guidance in addition to annual revenue
and adjusted earnings per share guidance is helpful in
understanding our expectations for our business and operational
cash flow. While the first half of 2022 presented unique concerns
making guidance more challenging, we are on track with the
operational ramp we expected.”
Conference Call
A live webcast will be held tomorrow,
August 9, 2022 at 10:00 a.m. Mountain time (12:00 p.m. Eastern
time) to discuss Pennant’s second quarter 2022 financial results.
To listen to the webcast, or to view any financial or statistical
information required by SEC Regulation G, please visit the
Investors Relations section of Pennant’s website at
https://investor.pennantgroup.com. The webcast will be recorded and
will be available for replay via the website until 5:00 p.m.
Mountain time on Friday, September 9, 2022.
About Pennant
The Pennant Group, Inc. is a holding company of
independent operating subsidiaries that provide healthcare services
through 89 home health and hospice agencies and 49 senior living
communities located throughout Arizona, California, Colorado,
Idaho, Iowa, Montana, Nevada, Oklahoma, Oregon, Texas, Utah,
Washington, Wisconsin and Wyoming. Each of these businesses is
operated by a separate, independent operating subsidiary that has
its own management, employees and assets. References herein to the
consolidated "company" and "its" assets and activities, as well as
the use of the terms "we," "us," "its" and similar verbiage, are
not meant to imply that The Pennant Group, Inc. has direct
operating assets, employees or revenue, or that any of the home
health and hospice businesses, senior living communities or the
Service Center are operated by the same entity. More information
about Pennant is available at www.pennantgroup.com.
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995
This press release contains, and the related
conference call and webcast will include, forward-looking
statements that are based on management’s current expectations,
assumptions and beliefs about its business, financial performance,
operating results, the industry in which it operates and other
future events. Forward-looking statements can often be identified
by words such as "anticipates," "expects," "intends," "plans,"
"predicts," "believes," "seeks," "estimates," "may," "will,"
"should," "would," "could," "potential," "continue," "ongoing,"
similar expressions, and variations or negatives of these words.
These forward-looking statements include, but are not limited to,
statements regarding growth prospects, future operating and
financial performance, and acquisition activities. They are not
guarantees of future results and are subject to risks,
uncertainties and assumptions that could cause actual results to
materially and adversely differ from those expressed in any
forward-looking statement.
These risks and uncertainties relate to the
company’s business, its industry and its common stock and include:
reduced prices and reimbursement rates for its services; its
ability to acquire, develop, manage or improve operations, its
ability to manage its increasing borrowing costs as it incurs
additional indebtedness to fund the acquisition and development of
operations; its ability to access capital on a cost-effective basis
to continue to successfully implement its growth strategy; its
operating margins and profitability could suffer if it is unable to
grow and manage effectively its increasing number of operations;
competition from other companies in the acquisition, development
and operation of facilities; its ability to defend claims and
lawsuits, including professional liability claims alleging that our
services resulted in personal injury, and other regulatory-related
claims; and the application of existing or proposed government
regulations, or the adoption of new laws and regulations, that
could limit its business operations, require it to incur
significant expenditures or limit its ability to relocate its
operations if necessary. Readers should not place undue reliance on
any forward-looking statements and are encouraged to review the
company’s periodic filings with the Securities and Exchange
Commission, including its Form 10-Q, for a more complete discussion
of the risks and other factors that could affect Pennant’s
business, prospects and any forward-looking statements. Except as
required by the federal securities laws, Pennant does not undertake
any obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events,
changing circumstances or any other reason after the date of this
press release.
Contact Information
Investor RelationsThe Pennant Group, Inc.(208)
506-6100ir@pennantgroup.com
SOURCE: The Pennant Group, Inc.
THE PENNANT GROUP,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
INCOME(unaudited, in thousands, except for
per-share amounts)
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
Revenue |
$ |
116,316 |
|
|
$ |
110,345 |
|
|
$ |
230,226 |
|
|
$ |
216,008 |
|
|
|
|
|
|
|
|
|
Expense |
|
|
|
|
|
|
|
Cost of services |
|
92,716 |
|
|
|
86,667 |
|
|
|
182,978 |
|
|
|
170,289 |
|
Rent—cost of services |
|
9,078 |
|
|
|
10,156 |
|
|
|
19,129 |
|
|
|
20,121 |
|
General and administrative expense |
|
9,741 |
|
|
|
8,783 |
|
|
|
19,774 |
|
|
|
18,071 |
|
Depreciation and amortization |
|
1,279 |
|
|
|
1,170 |
|
|
|
2,426 |
|
|
|
2,345 |
|
Loss on asset dispositions and impairment, net |
|
6,617 |
|
|
|
— |
|
|
|
6,708 |
|
|
|
— |
|
Total expenses |
|
119,431 |
|
|
|
106,776 |
|
|
|
231,015 |
|
|
|
210,826 |
|
(Loss) income from operations |
|
(3,115 |
) |
|
|
3,569 |
|
|
|
(789 |
) |
|
|
5,182 |
|
Other income (expense): |
|
|
|
|
|
|
|
Other expense |
|
(35 |
) |
|
|
(24 |
) |
|
|
(32 |
) |
|
|
(24 |
) |
Interest expense, net |
|
(821 |
) |
|
|
(472 |
) |
|
|
(1,450 |
) |
|
|
(832 |
) |
Other income (expense), net |
|
(856 |
) |
|
|
(496 |
) |
|
|
(1,482 |
) |
|
|
(856 |
) |
(Loss) income before provision for income taxes |
|
(3,971 |
) |
|
|
3,073 |
|
|
|
(2,271 |
) |
|
|
4,326 |
|
(Benefit) provision for income taxes |
|
(1,375 |
) |
|
|
604 |
|
|
|
(833 |
) |
|
|
944 |
|
Net (loss) income |
|
(2,596 |
) |
|
|
2,469 |
|
|
|
(1,438 |
) |
|
|
3,382 |
|
Less: net income (loss) attributable to noncontrolling
interest |
|
80 |
|
|
|
(181 |
) |
|
|
224 |
|
|
|
(218 |
) |
Net (loss) income and other comprehensive (loss) income
attributable to The Pennant Group, Inc. |
$ |
(2,676 |
) |
|
$ |
2,650 |
|
|
$ |
(1,662 |
) |
|
$ |
3,600 |
|
(Loss) earnings per share: |
|
|
|
|
|
|
|
Basic |
$ |
(0.09 |
) |
|
$ |
0.09 |
|
|
$ |
(0.06 |
) |
|
$ |
0.13 |
|
Diluted |
$ |
(0.09 |
) |
|
$ |
0.09 |
|
|
$ |
(0.06 |
) |
|
$ |
0.12 |
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
28,605 |
|
|
|
28,356 |
|
|
|
28,589 |
|
|
|
28,324 |
|
Diluted |
|
28,605 |
|
|
|
30,647 |
|
|
|
28,589 |
|
|
|
30,785 |
|
THE PENNANT GROUP,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS(unaudited, in thousands, except par
value)
|
June 30, 2022 |
|
December 31, 2021 |
Assets |
|
|
|
Current assets: |
|
|
|
Cash |
$ |
3,200 |
|
|
$ |
5,190 |
|
Accounts receivable—less allowance for doubtful accounts of $974
and $902, respectively |
|
53,154 |
|
|
|
53,940 |
|
Prepaid expenses and other current assets |
|
18,283 |
|
|
|
16,711 |
|
Total current assets |
|
74,637 |
|
|
|
75,841 |
|
Property and equipment, net |
|
22,423 |
|
|
|
16,788 |
|
Right-of-use assets |
|
257,395 |
|
|
|
300,997 |
|
Deferred tax assets, net |
|
2,831 |
|
|
|
3,848 |
|
Restricted and other assets |
|
10,386 |
|
|
|
4,828 |
|
Goodwill |
|
74,785 |
|
|
|
74,265 |
|
Other indefinite-lived intangibles |
|
53,974 |
|
|
|
53,730 |
|
Total assets |
$ |
496,431 |
|
|
$ |
530,297 |
|
Liabilities and equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
12,717 |
|
|
$ |
10,553 |
|
Accrued wages and related liabilities |
|
23,446 |
|
|
|
23,480 |
|
Operating lease liabilities—current |
|
15,662 |
|
|
|
16,118 |
|
Other accrued liabilities |
|
23,043 |
|
|
|
21,484 |
|
Total current liabilities |
|
74,868 |
|
|
|
71,635 |
|
Long-term operating lease liabilities—less current portion |
|
244,620 |
|
|
|
287,753 |
|
Other long-term liabilities |
|
5,825 |
|
|
|
5,293 |
|
Long-term debt, net |
|
53,131 |
|
|
|
51,372 |
|
Total liabilities |
|
378,444 |
|
|
|
416,053 |
|
Commitments and contingencies |
|
|
|
Equity: |
|
|
|
Common stock, $0.001 par value; 100,000 shares authorized; 28,886
and 28,601 shares issued and outstanding, respectively, at June 30,
2022; and 28,826 and 28,499 shares issued and outstanding,
respectively, at December 31, 2021 |
|
29 |
|
|
|
28 |
|
Additional paid-in capital |
|
100,775 |
|
|
|
95,595 |
|
Retained earnings |
|
12,979 |
|
|
|
14,641 |
|
Treasury stock, at cost, 3 shares at June 30, 2022 and December 31,
2021 |
|
(65 |
) |
|
|
(65 |
) |
Total Pennant Group, Inc. stockholders' equity |
|
113,718 |
|
|
|
110,199 |
|
Noncontrolling interest |
|
4,269 |
|
|
|
4,045 |
|
Total equity |
|
117,987 |
|
|
|
114,244 |
|
Total liabilities and equity |
$ |
496,431 |
|
|
$ |
530,297 |
|
THE PENNANT GROUP,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(unaudited, in thousands)
The following table presents selected data from
our condensed consolidated statement of cash flows for the periods
presented:
|
Six Months Ended June 30, |
|
2022 |
|
2021 |
|
|
|
|
Net cash provided by (used in) operating activities |
$ |
4,899 |
|
|
$ |
(11,806 |
) |
Net cash used in investing activities |
|
(8,750 |
) |
|
|
(15,477 |
) |
Net cash provided by financing activities |
|
1,861 |
|
|
|
30,119 |
|
Net (decrease) increase in cash |
|
(1,990 |
) |
|
|
2,836 |
|
Cash beginning of period |
|
5,190 |
|
|
|
43 |
|
Cash end of period |
$ |
3,200 |
|
|
$ |
2,879 |
|
THE PENNANT GROUP,
INC.REVENUE BY SEGMENT(unaudited,
dollars in thousands)
The following table sets forth our total revenue by
segment and as a percentage of total revenue for the periods
indicated:
|
Three Months Ended June 30, |
|
2022 |
|
2021 |
|
Revenue Dollars |
|
Revenue Percentage |
|
Revenue Dollars |
|
Revenue Percentage |
|
|
|
|
|
|
|
|
Home health and hospice services |
|
|
|
|
|
|
|
Home health |
$ |
40,669 |
|
35.0 |
% |
|
$ |
35,287 |
|
32.0 |
% |
Hospice |
|
39,359 |
|
33.8 |
|
|
|
36,838 |
|
33.4 |
|
Home care and other(a) |
|
5,316 |
|
4.6 |
|
|
|
5,980 |
|
5.4 |
|
Total home health and hospice services |
|
85,344 |
|
73.4 |
|
|
|
78,105 |
|
70.8 |
|
Senior living services |
|
30,972 |
|
26.6 |
|
|
|
32,240 |
|
29.2 |
|
Total revenue |
$ |
116,316 |
|
100.0 |
% |
|
$ |
110,345 |
|
100.0 |
% |
(a) |
|
Home care and other revenue is included with home health revenue in
other disclosures in this press release. |
|
Six Months Ended June 30, |
|
2022 |
|
2021 |
|
RevenueDollars |
|
RevenuePercentage |
|
RevenueDollars |
|
RevenuePercentage |
|
|
|
|
|
|
|
|
Home health and hospice services |
|
|
|
|
|
|
|
Home health |
$ |
78,089 |
|
33.9 |
% |
|
$ |
68,491 |
|
31.7 |
% |
Hospice |
|
77,182 |
|
33.5 |
|
|
|
73,752 |
|
34.1 |
|
Home care and other(a) |
|
10,548 |
|
4.6 |
|
|
|
10,469 |
|
4.9 |
|
Total home health and hospice services |
|
165,819 |
|
72.0 |
|
|
|
152,712 |
|
70.7 |
|
Senior living services |
|
64,407 |
|
28.0 |
|
|
|
63,296 |
|
29.3 |
|
Total revenue |
$ |
230,226 |
|
100.0 |
% |
|
$ |
216,008 |
|
100.0 |
% |
(a) |
|
Home care and other revenue is included with home health revenue in
other disclosures in this press release. |
THE PENNANT GROUP,
INC.SELECT PERFORMANCE
INDICATORS(unaudited, total revenue dollars in
thousands)
The following table summarizes our overall home
health and hospice performance indicators for the each of the dates
or periods indicated:
|
Three Months Ended June 30, |
|
|
|
|
|
2022 |
|
2021 |
|
Change |
|
% Change |
Total agency results: |
|
|
|
|
|
|
|
Home health and hospice revenue |
$ |
85,344 |
|
$ |
78,105 |
|
|
7,239 |
|
|
9.3 |
% |
|
|
|
|
|
|
|
|
Home health services: |
|
|
|
|
|
|
|
Total home health admissions |
|
10,055 |
|
|
10,069 |
|
|
(14 |
) |
|
(0.1 |
)% |
Total Medicare home health admissions |
|
4,682 |
|
|
4,406 |
|
|
276 |
|
|
6.3 |
% |
Average Medicare revenue per 60-day completed episode(a) |
$ |
3,629 |
|
$ |
3,390 |
|
$ |
239 |
|
|
7.1 |
% |
Hospice services: |
|
|
|
|
|
|
|
Total hospice admissions |
|
2,119 |
|
|
2,047 |
|
|
72 |
|
|
3.5 |
% |
Average daily census |
|
2,285 |
|
|
2,296 |
|
|
(11 |
) |
|
(0.5 |
)% |
Hospice Medicare revenue per day |
$ |
176 |
|
$ |
171 |
|
$ |
5 |
|
|
2.9 |
% |
|
Three Months EndedJune 30, |
|
|
|
|
|
2022 |
|
2021 |
|
Change |
|
% Change |
Same
agency(b)results: |
|
|
|
|
|
|
|
Home health and hospice revenue |
$ |
78,001 |
|
$ |
75,101 |
|
$ |
2,900 |
|
|
3.9 |
% |
|
|
|
|
|
|
|
|
Home health services: |
|
|
|
|
|
|
|
Total home health admissions |
|
9,184 |
|
|
9,817 |
|
|
(633 |
) |
|
(6.4 |
)% |
Total Medicare home health admissions |
|
4,196 |
|
|
4,213 |
|
|
(17 |
) |
|
(0.4 |
)% |
Average Medicare revenue per 60-day completed episode(a) |
$ |
3,652 |
|
$ |
3,414 |
|
$ |
238 |
|
|
7.0 |
% |
Hospice services: |
|
|
|
|
|
|
|
Total hospice admissions |
|
1,960 |
|
|
2,030 |
|
|
(70 |
) |
|
(3.4 |
)% |
Average daily census |
|
2,141 |
|
|
2,285 |
|
|
(144 |
) |
|
(6.3 |
)% |
Hospice Medicare revenue per day |
$ |
174 |
|
$ |
171 |
|
$ |
3 |
|
|
1.8 |
% |
|
Three Months Ended June 30, |
|
|
|
|
|
2022 |
|
2021 |
|
Change |
|
% Change |
New
agency(c)results: |
|
|
|
|
|
|
|
Home health and hospice revenue |
$ |
7,343 |
|
$ |
3,004 |
|
$ |
4,339 |
|
|
144.4 |
% |
|
|
|
|
|
|
|
|
Home health services: |
|
|
|
|
|
|
|
Total home health admissions |
|
871 |
|
|
252 |
|
|
619 |
|
|
245.6 |
% |
Total Medicare home health admissions |
|
486 |
|
|
193 |
|
|
293 |
|
|
151.8 |
% |
Average Medicare revenue per 60-day completed episode(a) |
$ |
3,384 |
|
$ |
2,751 |
|
$ |
633 |
|
|
23.0 |
% |
Hospice services: |
|
|
|
|
|
|
|
Total hospice admissions |
|
159 |
|
|
17 |
|
|
142 |
|
|
835.3 |
% |
Average daily census |
|
144 |
|
|
11 |
|
|
133 |
|
|
1209.1 |
% |
Hospice Medicare revenue per day |
$ |
212 |
|
$ |
298 |
|
$ |
(86 |
) |
|
(28.9 |
)% |
|
Six Months Ended June 30, |
|
|
|
|
|
2022 |
|
2021 |
|
Change |
|
% Change |
Total agency results: |
|
|
|
|
|
|
|
Home health and hospice revenue |
$ |
165,819 |
|
$ |
152,712 |
|
$ |
13,107 |
|
|
8.6 |
% |
|
|
|
|
|
|
|
|
Home health services: |
|
|
|
|
|
|
|
Total home health admissions |
|
20,237 |
|
|
19,166 |
|
|
1,071 |
|
|
5.6 |
% |
Total Medicare home health admissions |
|
9,315 |
|
|
8,904 |
|
|
411 |
|
|
4.6 |
% |
Average Medicare revenue per 60-day completed episode(a) |
$ |
3,561 |
|
$ |
3,394 |
|
$ |
167 |
|
|
4.9 |
% |
Hospice services: |
|
|
|
|
|
|
|
Total hospice admissions |
|
4,528 |
|
|
4,201 |
|
|
327 |
|
|
7.8 |
% |
Average daily census |
|
2,259 |
|
|
2,301 |
|
|
(42 |
) |
|
(1.8 |
)% |
Hospice Medicare revenue per day |
$ |
177 |
|
$ |
172 |
|
$ |
5 |
|
|
2.9 |
% |
|
Six Months Ended June 30, |
|
|
|
|
|
2022 |
|
2021 |
|
Change |
|
% Change |
Same
agency(b)results: |
|
|
|
|
|
|
|
Home health and hospice revenue |
$ |
152,025 |
|
$ |
148,710 |
|
$ |
3,315 |
|
|
2.2 |
% |
|
|
|
|
|
|
|
|
Home health services: |
|
|
|
|
|
|
|
Total home health admissions |
|
18,588 |
|
|
18,867 |
|
|
(279 |
) |
|
(1.5 |
)% |
Total Medicare home health admissions |
|
8,362 |
|
|
8,651 |
|
|
(289 |
) |
|
(3.3 |
)% |
Average Medicare revenue per 60-day completed episode(a) |
$ |
3,594 |
|
$ |
3,408 |
|
$ |
186 |
|
|
5.5 |
% |
Hospice services: |
|
|
|
|
|
|
|
Total hospice admissions |
|
4,180 |
|
|
4,182 |
|
|
(2 |
) |
|
— |
% |
Average daily census |
|
2,129 |
|
|
2,296 |
|
|
(167 |
) |
|
(7.3 |
)% |
Hospice Medicare revenue per day |
$ |
175 |
|
$ |
172 |
|
$ |
3 |
|
|
1.7 |
% |
|
Six Months Ended June 30, |
|
|
|
|
|
2022 |
|
2021 |
|
Change |
|
% Change |
New
agency(c)results: |
|
|
|
|
|
|
|
Home health and hospice revenue |
$ |
13,794 |
|
$ |
4,002 |
|
$ |
9,792 |
|
|
244.7 |
% |
|
|
|
|
|
|
|
|
Home health services: |
|
|
|
|
|
|
|
Total home health admissions |
|
1,649 |
|
|
299 |
|
|
1,350 |
|
|
451.5 |
% |
Total Medicare home health admissions |
|
953 |
|
|
253 |
|
|
700 |
|
|
276.7 |
% |
Average Medicare revenue per 60-day completed episode(a) |
$ |
3,221 |
|
$ |
2,705 |
|
$ |
516 |
|
|
19.1 |
% |
Hospice services: |
|
|
|
|
|
|
|
Total hospice admissions |
|
348 |
|
|
19 |
|
|
329 |
|
|
1731.6 |
% |
Average daily census |
|
130 |
|
|
5 |
|
|
125 |
|
|
2500.0 |
% |
Hospice Medicare revenue per day |
$ |
227 |
|
$ |
296 |
|
$ |
(69 |
) |
|
(23.3 |
)% |
(a) |
|
The year to date average for Medicare revenue per 60-day completed
episode includes post period claim adjustments for prior
periods. |
(b) |
|
Same agency results represent all communities purchased or licensed
prior to January 1, 2021. |
(c) |
|
New agency results represent all agencies acquired on or subsequent
to January 1, 2021 and all startup operations that have a start
date or license date subsequent to January 1, 2021. |
The following table summarizes our senior living
performance indicators for the periods indicated:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
Occupancy |
|
76.5 |
% |
|
|
72.7 |
% |
|
|
74.4 |
% |
|
|
72.4 |
% |
Average monthly revenue per occupied unit |
$ |
3,470 |
|
|
$ |
3,176 |
|
|
$ |
3,418 |
|
|
$ |
3,181 |
|
THE PENNANT GROUP,
INC.REVENUE BY PAYOR
SOURCE(unaudited, dollars in
thousands)
The following table presents our total revenue
by payor source and as a percentage of total revenue for the
periods indicated:
|
Three Months Ended June 30, |
|
2022 |
|
2021 |
|
Revenue Dollars |
|
Revenue Percentage |
|
Revenue Dollars |
|
Revenue Percentage |
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
Medicare |
$ |
57,698 |
|
49.6 |
% |
|
$ |
53,801 |
|
48.8 |
% |
Medicaid |
|
15,343 |
|
13.2 |
|
|
|
14,237 |
|
12.9 |
|
Subtotal |
|
73,041 |
|
62.8 |
|
|
|
68,038 |
|
61.7 |
|
Managed Care |
|
15,413 |
|
13.3 |
|
|
|
12,890 |
|
11.7 |
|
Private and Other(a) |
|
27,862 |
|
23.9 |
|
|
|
29,417 |
|
26.6 |
|
Total revenue |
$ |
116,316 |
|
100.0 |
% |
|
$ |
110,345 |
|
100.0 |
% |
(a) |
|
Private and other payors in our home health and hospice services
segment includes revenue from all payors generated in home care
operations. |
|
Six Months Ended June 30, |
|
2022 |
|
2021 |
|
Revenue Dollars |
|
Revenue Percentage |
|
Revenue Dollars |
|
Revenue Percentage |
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
Medicare |
$ |
112,776 |
|
49.0 |
% |
|
$ |
107,540 |
|
49.8 |
% |
Medicaid |
|
30,737 |
|
13.4 |
|
|
|
28,090 |
|
13.0 |
|
Subtotal |
|
143,513 |
|
62.4 |
|
|
|
135,630 |
|
62.8 |
|
Managed Care |
|
29,449 |
|
12.7 |
|
|
|
23,979 |
|
11.1 |
|
Private and Other(a) |
|
57,264 |
|
24.9 |
|
|
|
56,399 |
|
26.1 |
|
Total revenue |
$ |
230,226 |
|
100.0 |
% |
|
$ |
216,008 |
|
100.0 |
% |
(a) |
|
Private and other payors in our home health and hospice services
segment includes revenue from all payors generated in home care
operations. |
THE PENNANT GROUP,
INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
INFORMATION(unaudited, in thousands, except per
share data)
The following table reconciles net income to
Non-GAAP net income for the periods presented:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
Net income attributable to The Pennant Group, Inc. |
$ |
(2,676 |
) |
|
$ |
2,650 |
|
|
$ |
(1,662 |
) |
|
$ |
3,600 |
|
Add: Net loss attributable to noncontrolling interest |
|
80 |
|
|
|
(181 |
) |
|
|
224 |
|
|
|
(218 |
) |
Net income |
|
(2,596 |
) |
|
|
2,469 |
|
|
|
(1,438 |
) |
|
|
3,382 |
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments |
|
|
|
|
|
|
|
Costs at start-up operations(a) |
|
431 |
|
|
|
513 |
|
|
|
586 |
|
|
|
659 |
|
Share-based compensation expense(b) |
|
2,380 |
|
|
|
2,499 |
|
|
|
4,820 |
|
|
|
4,915 |
|
Acquisition related costs(c) |
|
14 |
|
|
|
30 |
|
|
|
14 |
|
|
|
37 |
|
Transition services costs(d) |
|
40 |
|
|
|
687 |
|
|
|
77 |
|
|
|
1,589 |
|
Loss related to senior living operations transferred to
Ensign(e) |
|
6,701 |
|
|
|
— |
|
|
|
6,882 |
|
|
|
— |
|
Provision for income taxes on Non-GAAP adjustments(f) |
|
(2,796 |
) |
|
|
(1,088 |
) |
|
|
(3,441 |
) |
|
|
(2,156 |
) |
Non-GAAP net income |
$ |
4,174 |
|
|
$ |
5,110 |
|
|
$ |
7,500 |
|
|
$ |
8,426 |
|
|
|
|
|
|
|
|
|
Dilutive Earnings Per Share As Reported |
|
|
|
|
|
|
|
Net Income |
$ |
(0.09 |
) |
|
$ |
0.09 |
|
|
$ |
(0.06 |
) |
|
$ |
0.12 |
|
Average number of shares outstanding |
|
28,605 |
|
|
|
30,647 |
|
|
|
28,589 |
|
|
|
30,785 |
|
|
|
|
|
|
|
|
|
Adjusted Diluted Earnings Per Share |
|
|
|
|
|
|
|
Net Income |
$ |
0.14 |
|
|
$ |
0.17 |
|
|
$ |
0.25 |
|
|
$ |
0.27 |
|
Average number of shares outstanding |
|
30,231 |
|
|
|
30,647 |
|
|
|
30,188 |
|
|
|
30,785 |
|
(a) |
|
Represents results related to start-up operations. |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
Revenue |
$ |
(1,103 |
) |
|
$ |
(5,631 |
) |
|
$ |
(1,589 |
) |
|
$ |
(10,186 |
) |
|
|
Cost of services |
|
1,480 |
|
|
|
5,978 |
|
|
|
2,097 |
|
|
|
10,645 |
|
|
|
Rent |
|
47 |
|
|
|
165 |
|
|
|
71 |
|
|
|
199 |
|
|
|
Depreciation |
|
7 |
|
|
|
1 |
|
|
|
7 |
|
|
|
1 |
|
|
|
Total Non-GAAP adjustment |
$ |
431 |
|
|
$ |
513 |
|
|
$ |
586 |
|
|
$ |
659 |
|
|
|
|
|
|
|
|
|
|
|
(b) |
|
Represents share-based compensation expense incurred for the
periods presented. |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
Cost of services |
$ |
528 |
|
|
$ |
501 |
|
|
$ |
1,121 |
|
|
$ |
936 |
|
|
|
General and administrative |
|
1,852 |
|
|
|
1,998 |
|
|
|
3,699 |
|
|
|
3,979 |
|
|
|
Total Non-GAAP adjustment |
$ |
2,380 |
|
|
$ |
2,499 |
|
|
$ |
4,820 |
|
|
$ |
4,915 |
|
|
|
|
|
|
|
|
|
|
|
(c) |
|
Represents costs incurred to acquire an operation that are not
capitalizable. |
|
|
|
|
|
|
|
|
|
|
(d) |
|
Costs identified as redundant or nonrecurring incurred by the
Company as a result of the Spin-off. The 2021 amounts represents
part of the costs incurred under the Transition Services Agreement.
All amounts are included in general and administrative expense.
Fees incurred under the Transition Services Agreement were $458 and
$1,101 for the three and six months ended June 30, 2022, and $747
and $1,735 for the three and six months ended June 30, 2021. |
THE PENNANT GROUP,
INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
INFORMATION(unaudited, in thousands, except per
share data)
|
|
|
|
|
|
|
|
|
|
(e) |
|
On January 27, 2022, affiliates of the Company, entered into
certain operations transfer agreements (collectively, the “Transfer
Agreements”) with affiliates of Ensign, providing for the transfer
of the operations of certain senior living communities (the
“Transaction”) from affiliates of the Company to affiliates of
Ensign. The closing of the Transaction was completed in two phases
with the transfer of two operations on March 1, 2022 and the
remainder transferred on April 1, 2022. The amount includes $6,500
for the three and six months ended June 30, 2022 to cover
post-closing capital expenditures and operating losses related to
one of the communities transferred on April 1, 2022. The amount
above also includes $191 and $(566) for the three and six months
ended June 30, 2022, respectively, for the related net impact on
revenue and cost of service attributable to the transferred
entities. This amount excludes rent and depreciation and
amortization expense related to such operations. |
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
Revenue |
$ |
— |
|
$ |
— |
|
$ |
(3,336 |
) |
|
$ |
— |
|
|
Cost of services |
|
6,691 |
|
|
— |
|
|
9,270 |
|
|
|
— |
|
|
Rent |
|
10 |
|
|
— |
|
|
948 |
|
|
|
— |
|
|
Total Non-GAAP adjustment |
$ |
6,701 |
|
$ |
— |
|
$ |
6,882 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
(f) |
|
Represents an adjustment to the provision for income tax to our
year-to-date effective tax rate of 25.8% and 26.9% for the three
and six months ended June 30, 2022 and 2021, respectively. This
rate excludes the tax benefit of shared-based payment awards. |
THE PENNANT GROUP,
INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
INFORMATION(unaudited, in thousands)
The tables below reconcile Consolidated net
income to the consolidated Non-GAAP financial measures,
Consolidated and Consolidated Adjusted EBITDA, and to the Non-GAAP
valuation measure, Consolidated Adjusted EBITDAR, for the periods
presented:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
Consolidated net income |
$ |
(2,596 |
) |
|
$ |
2,469 |
|
|
$ |
(1,438 |
) |
|
$ |
3,382 |
|
Less: Net loss attributable to noncontrolling interest |
|
80 |
|
|
|
(181 |
) |
|
|
224 |
|
|
|
(218 |
) |
Add: Provision for income taxes (benefit) |
|
(1,375 |
) |
|
|
604 |
|
|
|
(833 |
) |
|
|
944 |
|
Net interest expense |
|
821 |
|
|
|
472 |
|
|
|
1,450 |
|
|
|
832 |
|
Depreciation and amortization |
|
1,279 |
|
|
|
1,170 |
|
|
|
2,426 |
|
|
|
2,345 |
|
Consolidated EBITDA |
|
(1,951 |
) |
|
|
4,896 |
|
|
|
1,381 |
|
|
|
7,721 |
|
Adjustments to Consolidated EBITDA |
|
|
|
|
|
|
|
Add: Costs at start-up operations(a) |
|
377 |
|
|
|
347 |
|
|
|
508 |
|
|
|
459 |
|
Share-based compensation expense(b) |
|
2,380 |
|
|
|
2,499 |
|
|
|
4,820 |
|
|
|
4,915 |
|
Acquisition related costs(c) |
|
14 |
|
|
|
30 |
|
|
|
14 |
|
|
|
37 |
|
Transition services costs(d) |
|
40 |
|
|
|
687 |
|
|
|
77 |
|
|
|
1,589 |
|
Loss related to senior living facilities transferred to
Ensign(e) |
|
6,691 |
|
|
|
— |
|
|
|
5,934 |
|
|
|
— |
|
Rent related to items (a) and (e) above |
|
57 |
|
|
|
165 |
|
|
|
1,019 |
|
|
|
199 |
|
Consolidated Adjusted EBITDA |
|
7,608 |
|
|
|
8,624 |
|
|
|
13,753 |
|
|
|
14,920 |
|
Rent—cost of services |
|
9,078 |
|
|
|
10,156 |
|
|
|
19,129 |
|
|
|
20,121 |
|
Rent related to items (a) and (e) above |
|
(57 |
) |
|
|
(165 |
) |
|
|
(1,019 |
) |
|
|
(199 |
) |
Adjusted rent—cost of services |
|
9,021 |
|
|
|
9,991 |
|
|
|
18,110 |
|
|
|
19,922 |
|
Consolidated Adjusted EBITDAR |
$ |
16,629 |
|
|
|
|
$ |
31,863 |
|
|
|
(a) |
|
Represents results related to start-up operations. This amount
excludes rent and depreciation and amortization expense related to
such operations. |
(b) |
|
Share-based compensation expense incurred which is included in cost
of services and general and administrative expense. |
(c) |
|
Acquisition related costs related to business combinations during
the periods. |
(d) |
|
Costs identified as redundant or nonrecurring incurred by the
Company as a result of the Spin-off. The 2021 amounts represents
part of the costs incurred under the Transition Services Agreement.
All amounts are included in general and administrative expense.
Fees incurred under the Transition Services Agreement were $458 and
$1,101 for the three and six months ended June 30, 2022, and $747
and $1,735 for the three and six months ended June 30, 2021. |
(e) |
|
On January 27, 2022, affiliates of the Company, entered into
certain operations transfer agreements (collectively, the “Transfer
Agreements”) with affiliates of Ensign, providing for the transfer
of the operations of certain senior living communities (the
“Transaction”) from affiliates of the Company to affiliates of
Ensign. The closing of the Transaction was completed in two phases
with the transfer of two operations on March 1, 2022 and the
remainder transferred on April 1, 2022. The amount includes $6,500
for the three and six months ended June 30, 2022 to cover
post-closing capital expenditures and operating losses related to
one of the communities transferred on April 1, 2022. The amount
above also includes $191 and $(566) for the three and six months
ended June 30, 2022, respectively, for the related net impact on
revenue and cost of service attributable to the transferred
entities. This amount excludes rent and depreciation and
amortization expense related to such operations. |
THE PENNANT GROUP,
INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
INFORMATION(unaudited, in thousands)
The following table present certain financial
information regarding our reportable segments. General and
administrative expenses are not allocated to the reportable
segments and are included in “All Other”:
|
Three Months Ended June 30, |
|
Home Health and Hospice Services |
|
Senior Living Services |
|
All Other |
|
Total |
Segment GAAP Financial Measures: |
|
|
|
|
|
|
|
Three Months Ended June 30, 2022 |
|
|
|
|
|
|
|
Revenue |
$ |
85,344 |
|
$ |
30,972 |
|
$ |
— |
|
|
$ |
116,316 |
Segment Adjusted EBITDAR from Operations |
$ |
15,728 |
|
$ |
8,771 |
|
$ |
(7,870 |
) |
|
$ |
16,629 |
Three Months Ended June 30, 2021 |
|
|
|
|
|
|
|
Revenue |
$ |
78,105 |
|
$ |
32,240 |
|
$ |
— |
|
|
$ |
110,345 |
Segment Adjusted EBITDAR from Operations |
$ |
14,931 |
|
$ |
9,752 |
|
$ |
(6,068 |
) |
|
$ |
18,615 |
|
Six Months Ended June 30, |
|
Home Healthand HospiceServices |
|
Senior LivingServices |
|
All Other |
|
Total |
Segment GAAP Financial Measures: |
|
|
|
|
|
|
|
Six Months Ended June 30, 2022 |
|
|
|
|
|
|
|
Revenue |
$ |
165,819 |
|
$ |
64,407 |
|
$ |
— |
|
|
$ |
230,226 |
Segment Adjusted EBITDAR from Operations |
$ |
29,676 |
|
$ |
18,203 |
|
$ |
(16,016 |
) |
|
$ |
31,863 |
Six Months Ended June 30, 2021 |
|
|
|
|
|
|
|
Revenue |
$ |
152,712 |
|
$ |
63,296 |
|
$ |
— |
|
|
$ |
216,008 |
Segment Adjusted EBITDAR from Operations |
$ |
28,722 |
|
$ |
18,586 |
|
$ |
(12,466 |
) |
|
$ |
34,842 |
The table below provides a reconciliation of
Segment Adjusted EBITDAR from Operations above to Condensed
Consolidated Income from Operations:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
Segment Adjusted EBITDAR from Operations(a) |
$ |
16,629 |
|
|
$ |
18,615 |
|
|
$ |
31,863 |
|
|
$ |
34,842 |
|
Less: Depreciation and amortization |
|
1,279 |
|
|
|
1,170 |
|
|
|
2,426 |
|
|
|
2,345 |
|
Rent—cost of services |
|
9,078 |
|
|
|
10,156 |
|
|
|
19,129 |
|
|
|
20,121 |
|
Other Income |
|
(35 |
) |
|
|
(24 |
) |
|
|
(32 |
) |
|
|
(24 |
) |
Adjustments to Segment EBITDAR from Operations: |
|
|
|
|
|
|
|
Less: Costs at start-up operations(b) |
|
377 |
|
|
|
347 |
|
|
|
508 |
|
|
|
459 |
|
Share-based compensation expense(c) |
|
2,380 |
|
|
|
2,499 |
|
|
|
4,820 |
|
|
|
4,915 |
|
Acquisition related costs(d) |
|
14 |
|
|
|
30 |
|
|
|
14 |
|
|
|
37 |
|
Transition services costs(e) |
|
40 |
|
|
|
687 |
|
|
|
77 |
|
|
|
1,589 |
|
Operating results of transferred senior living communities(f) |
|
6,691 |
|
|
|
— |
|
|
|
5,934 |
|
|
|
— |
|
Add: Net loss attributable to noncontrolling interest |
|
80 |
|
|
|
(181 |
) |
|
|
224 |
|
|
|
(218 |
) |
Consolidated Income from Operations |
$ |
(3,115 |
) |
|
$ |
3,569 |
|
|
$ |
(789 |
) |
|
$ |
5,182 |
|
(a) |
|
Segment Adjusted EBITDAR from Operations is net income (loss)
attributable to the Company's reportable segments excluding
interest expense, provision for income taxes, depreciation and
amortization expense, rent, and, in order to view the operations
performance on a comparable basis from period to period, certain
adjustments including: (1) costs at start-up operations, (2)
share-based compensation, (3) acquisition related costs, (4)
redundant and nonrecurring costs associated with the Transition
Services Agreement, (5) the loss related to senior living
operations transferred to Ensign, and (6) net income (loss)
attributable to noncontrolling interest. General and administrative
expenses are not allocated to the reportable segments, and are
included as “All Other”, accordingly the segment earnings measure
reported is before allocation of corporate general and
administrative expenses. The Company's segment measures may be
different from the calculation methods used by other companies and,
therefore, comparability may be limited. |
(b) |
|
Represents results related to start-up operations. This amount
excludes rent and depreciation and amortization expense related to
such operations. |
(c) |
|
Share-based compensation expense incurred which is included in cost
of services and general and administrative expense. |
(d) |
|
Acquisition related costs related to business combinations during
the periods. |
(e) |
|
Costs identified as redundant or nonrecurring incurred by the
Company as a result of the Spin-off. The 2021 amounts represents
part of the costs incurred under the Transition Services Agreement.
All amounts are included in general and administrative expense.
Fees incurred under the Transition Services Agreement were $458 and
$1,101 for the three and six months ended June 30, 2022, and $747
and $1,735 for the three and six months ended June 30, 2021. |
(f) |
|
On January 27, 2022, affiliates of the Company, entered into
certain operations transfer agreements (collectively, the “Transfer
Agreements”) with affiliates of Ensign, providing for the transfer
of the operations of certain senior living communities (the
“Transaction”) from affiliates of the Company to affiliates of
Ensign. The closing of the Transaction was completed in two phases
with the transfer of two operations on March 1, 2022 and the
remainder transferred on April 1, 2022. The amount includes $6,500
for the three and six months ended June 30, 2022 to cover
post-closing capital expenditures and operating losses related to
one of the communities transferred on April 1, 2022. The amount
above also includes $191 and $(566) for the three and six months
ended June 30, 2022, respectively, for the related net impact on
revenue and cost of service attributable to the transferred
entities. This amount excludes rent and depreciation and
amortization expense related to such operations. |
THE PENNANT GROUP,
INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
INFORMATION(unaudited, in thousands)
The table below reconcile Segment Adjusted EBITDAR
from Operations to Segment Adjusted EBITDA from Operations for each
reportable segment for the periods presented:
|
Three Months Ended June 30, |
|
Home Health and Hospice |
|
Senior Living |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
Segment Adjusted EBITDAR from Operations |
$ |
15,728 |
|
|
$ |
14,931 |
|
|
$ |
8,771 |
|
|
$ |
9,752 |
|
Less: Rent—cost of services |
|
1,241 |
|
|
|
1,199 |
|
|
|
7,837 |
|
|
|
8,957 |
|
Rent related to start-up and transferred operations |
|
(47 |
) |
|
|
(135 |
) |
|
|
(10 |
) |
|
|
(30 |
) |
Segment Adjusted EBITDA from Operations |
$ |
14,534 |
|
|
$ |
13,867 |
|
|
$ |
944 |
|
|
$ |
825 |
|
|
Six Months Ended June 30, |
|
Home Health and Hospice |
|
Senior Living |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|
|
|
|
|
|
|
|
Segment Adjusted EBITDAR from Operations |
$ |
29,676 |
|
|
$ |
28,722 |
|
|
$ |
18,203 |
|
|
$ |
18,586 |
Less: Rent—cost of services |
|
2,503 |
|
|
|
2,329 |
|
|
|
16,626 |
|
|
|
17,792 |
Rent related to start-up and transferred operations |
|
(71 |
) |
|
|
(249 |
) |
|
|
(948 |
) |
|
|
50 |
Segment Adjusted EBITDA from Operations |
$ |
27,244 |
|
|
$ |
26,642 |
|
|
$ |
2,525 |
|
|
$ |
744 |
Discussion of Non-GAAP Financial
Measures
EBITDA consists of net (loss) income before (a)
interest expense, net, (b) (benefits) provisions for income taxes,
and (c) depreciation and amortization. Adjusted EBITDA consists of
net (loss) income attributable to the Company before (a) (benefits)
provisions for income taxes, (b) depreciation and amortization, (c)
costs incurred for start-up operations, including rent and
excluding depreciation, interest and income taxes, (d) share-based
compensation expense, (e) non-capitalizable acquisition related
costs, (f) redundant or non-recurring transition services costs,
(g) loss related to senior living operations transferred to Ensign,
and (h) net income (loss) attributable to noncontrolling interest.
Consolidated Adjusted EBITDAR is a valuation measure applicable to
current periods only and consists of net (loss) income attributable
to the Company before (a) interest expense, net, (b) (benefits)
provisions for income taxes, (c) depreciation and amortization, (d)
rent-cost of services, (e) costs incurred for start-up operations,
excluding rent, depreciation, interest and income taxes, (f)
share-based compensation expense, (g) acquisition related costs,
(h) redundant or non-recurring transition services costs, (i) loss
related to senior living operations transferred to Ensign, and (j)
net income (loss) attributable to noncontrolling interest. The
company believes that the presentation of EBITDA, adjusted EBITDA,
consolidated adjusted EBITDAR, adjusted net income and adjusted
earnings per share provides important supplemental information to
management and investors to evaluate the company’s operating
performance. The company believes disclosure of adjusted net
income, adjusted net income per share, EBITDA, adjusted EBITDA and
consolidated adjusted EBITDAR has economic substance because the
excluded revenues and expenses are infrequent in nature and are
variable in nature, or do not represent current revenues or cash
expenditures. A material limitation associated with the use of
these measures as compared to the GAAP measures of net income and
diluted earnings per share is that they may not be comparable with
the calculation of net income and diluted earnings per share for
other companies in the company's industry. These non-GAAP financial
measures should not be relied upon to the exclusion of GAAP
financial measures. For further information regarding why the
company believes that this non-GAAP measure provides useful
information to investors, the specific manner in which management
uses this measure, and some of the limitations associated with the
use of this measure, please refer to the company's periodic filings
with the Securities and Exchange Commission, including its Annual
Report on Form 10-K and Quarterly Report on Form 10-Q. The
company’s periodic filings are available on the SEC's website at
www.sec.gov or under the "Financial Information" link of the
Investor Relations section on Pennant’s website at
http://www.pennantgroup.com.
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