Pennant Group Inc (PNTG) 2023 Q2 法說會逐字稿

Good day, and thank you for standing by. Welcome to the Pennant Group Second Quarter 2023 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加 Pennant Group 2023 年第二季度收益電話會議。 （操作員指示）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to Kirk Cheney, Corporate Secretary. Please begin.

我現在想將會議交給公司秘書柯克·切尼。請開始。

Thank you, Norma. Welcome, everyone, and thank you for joining us today. Here with me today, I have Brent Guerisoli, our CEO; John Gochnour, our President and COO; and Lynette Walbom, our CFO.

謝謝你，諾瑪。歡迎大家，感謝您今天加入我們。今天和我在一起的還有我們的首席執行官 Brent Guerisoli； John Gochnour，我們的總裁兼首席運營官；和我們的首席財務官 Lynette Walbom。

Before we begin, I have a few housekeeping matters. We filed our earnings press release and 10-Q yesterday. This announcement is available on the Investor Relations section of our website at www.pennantgroup.com. A replay of this call will also be available on our website until 5:00 p.m. [Mountain] on August 8, 2024.

在我們開始之前，我有一些家務事。我們昨天提交了收益新聞稿和 10-Q 報告。本公告可在我們網站 www.pennantgroup.com 的投資者關係部分獲取。本次電話會議的重播也將在我們的網站上提供，直至下午 5:00。 [山] 2024 年 8 月 8 日。

We want to remind anyone who may be listening to a replay of this call that all statements are made as of today, August 9, 2023, and these statements have not been nor will they be updated after today's call.

我們想提醒任何可能正在收聽本次電話會議重播的人，所有聲明均截至今天（2023 年 8 月 9 日），並且這些聲明在今天的電話會議後尚未也不會更新。

Also, any forward-looking statements made today are based on management's current expectations, assumptions and beliefs about our business and the environment in which we operate. These statements are subject to risks and uncertainties that could cause our actual results to materially differ from those expressed or implied on today's call. Listeners should not place undue reliance on forward-looking statements and are encouraged to review our SEC filings for a more complete discussion of factors that could impact our results.

此外，今天做出的任何前瞻性陳述均基於管理層當前對我們的業務和運營環境的預期、假設和信念。這些陳述存在風險和不確定性，可能導致我們的實際結果與今天電話會議中明示或暗示的結果存在重大差異。聽眾不應過分依賴前瞻性陳述，並鼓勵聽眾查看我們向 SEC 提交的文件，以更全面地討論可能影響我們業績的因素。

Except as required by federal securities laws, and its affiliates do not undertake to publicly update or revise any forward-looking statements where changes arise as a result of new information, future events, changing circumstances or for any other reasons.

除聯邦證券法要求外，其附屬公司不承諾公開更新或修改因新信息、未來事件、情況變化或任何其他原因而發生變化的任何前瞻性聲明。

In addition, the Pennant Group incorporated as a holding company with no direct operating assets, employees or revenues. Certain of our independent subsidiaries, collectively referred to as the service center, provide accounting, payroll, human resources, information technology, legal, risk management and other services to the operating subsidiaries through contractual relationships with such subsidiaries.

此外，Pennant Group 是一家控股公司，沒有直接運營資產、員工或收入。我們的某些獨立子公司（統稱為服務中心）通過與運營子公司的合同關係向運營子公司提供會計、工資、人力資源、信息技術、法律、風險管理和其他服務。

The words Pennant, company, we, our and us refer to the Pennant Group Inc. and its consolidated subsidiaries. All of our operating subsidiaries and the service center are operated by separate independent companies that we -- that have their 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, our and similar terms used today are not meant to imply nor should it be construed as meaning that the Pennant Group, Inc. has direct operating assets, employees or revenue or that any of the subsidiaries are operated by the Pennant Group.

Pennant、公司、我們、我們的和我們這些詞均指 Pennant Group Inc. 及其合併子公司。我們所有的運營子公司和服務中心均由獨立的公司運營，我們擁有自己的管理層、員工和資產。本文中提及的合併公司及其資產和活動以及使用術語“我們”、“我們的”以及今天使用的類似術語並不意味著也不應被解釋為 Pennant Group, Inc. 直接擁有經營資產、員工或收入或任何子公司由Pennant 集團經營。

Also, we supplement our GAAP reporting with non-GAAP metrics. When viewed together with our GAAP results, we believe that these measures can provide a more complete understanding of our business, but they should not be relied upon to the exclusion of GAAP reports. A GAAP to non-GAAP reconciliation is available in yesterday's press release and is available in our 10-Q.

此外，我們還用非 GAAP 指標來補充我們的 GAAP 報告。當與我們的 GAAP 結果一起查看時，我們相信這些措施可以提供對我們業務的更全面的了解，但不應依賴它們來排除 GAAP 報告。昨天的新聞稿和我們的 10 季度報告中提供了 GAAP 與非 GAAP 調節表。

And with that, I will turn the call over to Brent Guerisoli, our CEO. Brent?

接下來，我會將電話轉給我們的首席執行官布倫特·格里索利 (Brent Guerisoli)。布倫特？

Thanks, Kirk, and welcome, everyone, to our second quarter 2023 earnings call. To begin, I'd like to recognize and thank our incredible frontline partners across the Pennant footprint. We are committed each day to providing life-changing service to our patients, residents and clients. We are here because of you and appreciate your consistent contributions.

謝謝柯克，歡迎大家參加我們的 2023 年第二季度財報電話會議。首先，我要感謝我們在彭南特足跡中令人難以置信的一線合作夥伴。我們每天都致力於為患者、居民和客戶提供改變生活的服務。我們因為您而來到這裡，並感謝您一貫的貢獻。

We are pleased to report that Q2 was a solid execution quarter. Collectively, our Q2 consolidated results reflect revenue of $132.3 million, an increase of $16 million or 13.7% over the prior year quarter. Adjusted EBITDA, a of $10.1 million significantly outpaced revenue growth with an increase of $2.5 million or 32.3% over the prior year quarter, and adjusted EPS of $0.18, an increase of $0.04 or 28.6% over the prior year quarter.

我們很高興地報告第二季度是一個執行力強勁的季度。總的來說，我們第二季度的合併業績反映了收入 1.323 億美元，比去年同期增加了 1600 萬美元，即 13.7%。調整後 EBITDA 為 1,010 萬美元，明顯超過收入增長，比去年同期增長 250 萬美元，即 32.3%；調整後每股收益為 0.18 美元，比去年同期增長 0.04 美元，即 28.6%。

This progress is largely due to our concentrated efforts and rigorous commitment to the 5 key focus areas we discussed last quarter: leadership development, top and bottom line growth, clinical excellence and employee experience. As a result, we've generated significant growth in all business lines, improved margins, reduced turnover and achieve strong clinical outcomes, keeping us on track with 2023 earnings guidance.

這一進展很大程度上歸功於我們對上季度討論的 5 個關鍵重點領域的集中努力和嚴格承諾：領導力發展、頂線和底線增長、臨床卓越和員工體驗。因此，我們在所有業務領域都實現了顯著增長，提高了利潤率，減少了營業額，並取得了強勁的臨床成果，使我們能夠實現 2023 年的盈利指引。

Senior Living segment made a remarkable progress in the quarter. As our segment adjusted EBITDAR increased 33.2% over the prior year quarter and 14.1% sequentially, and segment adjusted EBITDA increased 277.4% over the prior year quarter to 58.5% sequentially. The Senior Living results demonstrates the power of our model and the importance of local leadership with strong cluster support. The cluster support, we mean peer support, which enhances leadership development and execution at the local level.

老年生活板塊在本季度取得了顯著進展。我們的部門調整後EBITDA 比上年同期增長33.2%，比上一季度增長14.1%，而部門調整後EBITDA 比上年同期增長277.4%，比上年同期增長277.4%，比上一季度增長58.5% 。老年生活的結果證明了我們模型的力量以及當地領導力和強大集群支持的重要性。集群支持，我們指的是同行支持，可以增強地方層面的領導力發展和執行力。

The turnaround in this business truly is a leadership story. In 2021, our Senior Living business was at a nadir as many of our local leaders struggle to embrace and harness the power of our unique operating model. One by one, new leaders were added, existing leaders transformed, clusters rebuilt and collectively, we deepened our commitment to our core values and our operating model. Now, the segment has entrepreneurial local leaders to function like owners and strong clusters, which thrive on peer accountability.

這個行業的轉變確實是一個領導力的故事。 2021 年，我們的高級生活業務陷入最低谷，因為我們的許多當地領導人都在努力接受和利用我們獨特運營模式的力量。我們一一地增加了新的領導者，改變了現有的領導者，重建了集群，共同加深了對我們的核心價值觀和運營模式的承諾。現在，該細分市場擁有企業家般的當地領導者，他們像業主一樣發揮作用，並且擁有強大的集群，這些集群在同行問責制的基礎上蓬勃發展。

The Senior Living business now has a deep bench of current and future leaders and contribute meaningfully to our earnings. We are also trying to grow thoughtfully and opportunistically and to further unlock the latent potential that has existed in this platform since our spin-off in 2019.

老年生活業務現在擁有一批當前和未來的領導者，為我們的收入做出了有意義的貢獻。我們還試圖深思熟慮和機會主義地發展，並進一步釋放這個平台自 2019 年分拆以來所存在的潛在潛力。

Our model continues to demonstrate its effectiveness in our Home Health and Hospice segment as well. Last quarter, we discussed the census pressures we experienced to begin the year and the reduction in our home health Medicare reimbursement rate. Despite these headwinds, our home health and hospice segment adjusted EBITDA increased $1.2 million or 9.2% over the prior quarter, and segment adjusted EBITDA margin improved 70 basis points. We are pleased with this progress and also see opportunity to continue to build momentum.

我們的模型在家庭健康和臨終關懷領域也繼續證明其有效性。上個季度，我們討論了年初經歷的人口普查壓力以及家庭健康醫療保險報銷率的降低。儘管存在這些不利因素，我們的家庭健康和臨終關懷部門調整後 EBITDA 比上一季度增長了 120 萬美元，即 9.2%，部門調整後 EBITDA 利潤率提高了 70 個基點。我們對這一進展感到高興，也看到了繼續增強勢頭的機會。

With that said, let me take a moment to comment on the home health proposed rule. We are disappointed in CMS' aggressive pets to home health reimbursement, which contrasts with its more nuanced treatment of other post-acute care services and risks dramatically reducing access to critical care in the most cost-effective health care setting as providers are still facing staffing pressures and rising costs. Together with partners throughout the industry, we look forward to working with CMS and the legislative branch to pursue solutions that work better for beneficiaries and providers.

話雖如此，讓我花點時間對家庭健康擬議規則發表評論。我們對CMS 激進的寵物家庭健康報銷感到失望，這與它對其他急性後護理服務的更細緻的處理形成鮮明對比，並且由於提供者仍然面臨人員配備問題，因此存在極大減少在最具成本效益的醫療保健環境中獲得重症護理的風險壓力和成本上升。我們期待與整個行業的合作夥伴一起，與 CMS 和立法部門合作，尋求更適合受益人和提供者的解決方案。

Our commitment to leadership development remains our top priority. As we discussed last quarter, we are diligently focused on developing a robust pipeline of exceptional leaders will make us better and drive our future growth. We have made tremendous progress in these efforts and our leadership bench in both business lines is as strong as it's ever been. We are also on the way to achieving our goal of developing 100 local CEOs as well as dramatically increasing the total number of C-level leaders over the next several years.

我們對領導力發展的承諾仍然是我們的首要任務。正如我們上季度所討論的那樣，我們正在努力致力於培養一批傑出的領導者，這將使我們變得更好並推動我們未來的增長。我們在這些努力中取得了巨大進展，我們在這兩個業務領域的領導力一如既往地強大。我們還正在努力實現在未來幾年內培養 100 名本地首席執行官以及大幅增加 C 級領導人總數的目標。

As we explained last quarter, to earn the title of CEO, our leaders must not only achieve extraordinary clinical outcomes, culture and growth but also drive significant financial improvement in their operations. Progress in this key initiative is essential and will be the foundation upon which our growth and success will thrive for many years to come.

正如我們上季度所解釋的，要獲得首席執行官的頭銜，我們的領導者不僅必須取得非凡的臨床成果、文化和增長，而且還要推動其運營的財務顯著改善。這一關鍵舉措的進展至關重要，並將成為我們未來多年成長和成功的基礎。

While we are pleased with this progress in each of the 5 key initiatives, we remain laser-focused on driving bottom line improvement. We know that entrepreneurial leaders who exercise discipline and diligence in their operations, and deliver exceptional results in all types of macroeconomic cycles and rate environments. Many of our local leaders are doing just that, and their efforts are showing in the bottom line.

雖然我們對 5 項關鍵舉措中每一項的進展感到高興，但我們仍然專注於推動利潤改善。我們知道，企業家領導者在經營中恪守紀律和勤勉，並在各種宏觀經濟周期和利率環境中取得卓越的業績。我們的許多地方領導人正在這樣做，他們的努力正在體現在利潤上。

In Q2, our adjusted EBITDA margin improved on a consolidated basis to 7.8% from 6.6%, a 120 basis point increase over the prior year quarter and a 140 basis point increase sequentially. We are encouraged by the overall improvement that we recognize there remains significant upside opportunity. We continue to appropriately drive bottom line improvement but carefully managing utilization staff productivity, optimizing service line and reimbursement mix and urgently addressing underperforming operations.

第二季度，我們調整後的 EBITDA 利潤率在綜合基礎上從 6.6% 提高到 7.8%，比去年同期增長 120 個基點，比上一季度增長 140 個基點。我們對整體改善感到鼓舞，因為我們認識到仍然存在巨大的上行機會。我們繼續適當推動利潤改善，但仔細管理利用率員工的生產力，優化服務線和報銷組合，並緊急解決績效不佳的運營問題。

Finally, we are excited to see movement on the acquisition front as we have completed multiple transactions in both segments in the first half of the year. With the growth of our leadership bench and a robust pipeline of attractive acquisitions, we are poised to unlock the potential of our future leaders through our disciplined growth strategy.

最後，我們很高興看到收購方面的進展，因為我們在今年上半年完成了這兩個領域的多項交易。隨著我們領導層的壯大和一系列有吸引力的收購，我們準備通過嚴格的增長戰略來釋放未來領導者的潛力。

With that, I'll turn the call over to John to provide more detail on our second quarter operational results.

接下來，我會將電話轉給約翰，以提供有關我們第二季度運營業績的更多詳細信息。

Thank you, Brent, and good morning, everyone. We are pleased to report solid performance with existing untapped potential in both operating segments. Our Home Health and Hospice business experienced significant, growth with revenue of $95 million, an increase of $9.7 million or 11.3% over the prior year quarter. Our census progress was highlighted by robust growth in our hospice programs, where revenue increased 18.3%, admissions grew 9.6% and average daily census increased 9.1%, each over the prior year quarter.

謝謝你，布倫特，大家早上好。我們很高興地報告兩個運營部門的穩健業績和尚未開發的潛力。我們的家庭健康和臨終關懷業務經歷了顯著的增長，收入達到 9500 萬美元，比去年同期增加 970 萬美元，即 11.3%。我們的臨終關懷計劃的強勁增長突顯了我們的人口普查進展，與去年同期相比，收入增長了 18.3%，入院人數增長了 9.6%，平均每日人口普查增長了 9.1%。

Our home health business also continued its steady growth as home health revenue increased 5.4% and Medicare home health admissions grew 3.6%, and total home health admissions improved 3.8% each over the prior year quarter. Segment adjusted EBITDA of $14.4 million decreased by $0.1 million or 1% over the prior year quarter. This decrease is a result of calculated investment in additional segment-level leadership to accelerate growth and continued but abating margin pressure from labor and cost increases.

我們的家庭健康業務也繼續穩定增長，與去年同期相比，家庭健康收入增長了 5.4%，醫療保險家庭健康入院人數增長了 3.6%，家庭健康入院總數增長了 3.8%。部門調整後 EBITDA 為 1,440 萬美元，比去年同期減少 10 萬美元，即 1%。這一下降是由於為加速增長而對額外的細分市場領導力進行了有計劃的投資，並持續但減輕了勞動力和成本增加帶來的利潤壓力。

In addition, the negative reimbursement impact of the home health final rule and the reimplementation of sequestration together had a negative impact of approximately $1.1 million. We have started to see the benefits of our investment in leadership in the growth described above and in sequential margin improvement over the prior quarter.

此外，家庭健康最終規則的負面報銷影響和重新實施隔離措施共同產生了約 110 萬美元的負面影響。我們已經開始看到我們對上述增長的領導力投資以及與上一季度相比連續利潤率改善的好處。

Home health and hospice adjusted EBITDA margin improved to 15.5%, a 70 basis point increase and segment adjusted EBITDA improved $1.2 million or 9.2%, each sequentially over the first quarter. Our focus on clinical outcomes continues to yield strong results with hospitalization rates, star ratings and hospice quality composite scores significantly above national and community averages. In Q2, our percentage of home health agencies with a star rating above 4, increased to 80% versus 77% in the prior quarter.

家庭健康和臨終關懷調整後 EBITDA 利潤率提高至 15.5%，比第一季度提高了 70 個基點，部門調整後 EBITDA 提高了 120 萬美元，即 9.2%。我們對臨床結果的關注繼續產生強勁的成果，住院率、星級評定和臨終關懷質量綜合評分顯著高於國家和社區平均水平。第二季度，星級評分高於 4 的家庭健康機構比例從上一季度的 77% 上升至 80%。

Strong clinical outcomes drive growth by enhancing our ability to enter and deepen preferred provider relationships with acute care systems and other key referral sources and positions us to see positive adjustments to our home health revenue through CMS' home health value-based purchasing program.

強大的臨床成果通過增強我們與急症護理系統和其他關鍵轉診來源建立和加深首選提供商關係的能力來推動增長，並使我們能夠通過CMS 的基於家庭健康價值的購買計劃看到我們的家庭健康收入的積極調整。

In addition, our clinical performance has resulted in opportunities to renegotiate contract rates with existing payer partners that more accurately reflect the cost of providing care and to establish new relationships with managed care payers who see our excellent clinical outcomes, geographic diversity and effective and efficient care delivery as a necessary part of their provider networks.

此外，我們的臨床表現還為我們提供了與現有付款合作夥伴重新協商合同費率的機會，以更準確地反映提供護理的成本，並與看到我們出色的臨床結果、地理多樣性和有效且高效的護理的管理式護理付款人建立新的關係交付作為其提供商網絡的必要組成部分。

We are just now beginning to experience the impact of these efforts as our managed care visits are up 5.1% and revenue per visit is up 4.9%, each over the prior year quarter. As we've done on the operations side, we will continue to invest in clinical leadership and improve systems to support our local leaders and clusters in driving extraordinary outcomes.

我們現在剛剛開始體驗這些努力的影響，與去年同期相比，我們的管理式醫療就診次數增加了 5.1%，每次就診收入增加了 4.9%。正如我們在運營方面所做的那樣，我們將繼續投資於臨床領導力並改進系統，以支持我們的當地領導者和集群取得非凡的成果。

On the regulatory front, CMS released the 2024 Hospice Final Rule, which included a final payment update of 3.1% and will result in an estimated 2.8% increase in reimbursement per day for us. In late July, CMS also issued the 2024 Proposed Home Health Rule, which applies a net 5.1% total permanent behavioral adjustment for all payments, offset by a market basket update of 2.7% and yield a proposed aggregate net reduction of 2.2% in Medicare fee-for-service payments in 2024. These behavioral adjustments are in addition to the adjustments contained in last year's final rule.

在監管方面，CMS 發布了 2024 年臨終關懷最終規則，其中包括 3.1% 的最終付款更新，預計我們每天的報銷金額將增加 2.8%。 7 月下旬，CMS 還發布了2024 年擬議家庭健康規則，該規則對所有付款實行淨5.1% 的永久性行為調整，並被2.7% 的市場籃子更新所抵消，並提議醫療保險費用總計淨減少2.2 % - 2024 年的服務付款。這些行為調整是對去年最終規則中包含的調整的補充。

The home health cuts in the proposed rule, combined with the significant increase in costs we've experienced over the last few years, risk reducing access to quality services and create significant uncertainty for providers in our industry. While another disruption to the industry is unwise and unwelcome, Pennant began in and has thrived through periods of difficulty much like today, thanks to the scalability of our locally led operating model, strong and flexible balance sheet and opportunistic approach to acquisitive growth.

擬議規則中的家庭健康削減，加上過去幾年我們經歷的成本大幅增加，可能會減少獲得優質服務的機會，並給我們行業的提供者帶來巨大的不確定性。雖然行業的另一次顛覆是不明智和不受歡迎的，但彭南特從像今天這樣的困難時期開始並蓬勃發展，這要歸功於我們本地主導的運營模式的可擴展性、強大而靈活的資產負債表以及收購增長的機會主義方法。

Even as we work closely with industry partners to change the rule, we will thoughtfully prepare for the potential impact should it be finalized. Much like the change to reimbursement with PDGM, we are confident in our ability to pull the right levers and continue to create long-term value even in an ever-changing reimbursement environment.

即使我們與行業合作夥伴密切合作來改變規則，我們也會為最終確定的潛在影響做好深思熟慮的準備。就像 PDGM 報銷的變化一樣，即使在不斷變化的報銷環境中，我們也有能力拉動正確的槓桿並繼續創造長期價值。

As Brent described at the beginning of this call, our Senior Living business has undergone a remarkable transformation over the last 2 years and we see it continuing to build momentum throughout the remainder of 2023. Our local leaders and dedicated resource partners continue to push on every facet of the business, which is showing in the financial results. Senior Living segment revenue of $37.3 million is up 20.3% over the prior year quarter and 5.3% sequentially. As our leaders grew revenue and rigorously managed costs in Q2 and Senior living adjusted EBITDA margin increased to 9.8% from 6.5%, a 330 basis point increase over the prior quarter, and segment adjusted EBITDA increased 58.5% sequentially and 277.4% over the prior year quarter.

正如布倫特在本次電話會議開始時所描述的那樣，我們的高級生活業務在過去2 年裡經歷了顯著的轉變，我們看到它在2023 年剩餘時間裡將繼續發展勢頭。我們的當地領導者和專門的資源合作夥伴將繼續推動每一項業務業務的一個方面，這體現在財務業績中。高級生活部門收入為 3730 萬美元，比去年同期增長 20.3%，比上一季度增長 5.3%。 As our leaders grew revenue and rigorously managed costs in Q2 and Senior living adjusted EBITDA margin increased to 9.8% from 6.5%, a 330 basis point increase over the prior quarter, and segment adjusted EBITDA increased 58.5% sequentially and 277.4% over the prior year四分之一.

The pieces are in place for this ramp to continue as same-store occupancy nears pre-pandemic levels at 79.6%, up 240 basis points over the prior year quarter and average revenue per occupied room is up 13.2% over the prior year quarter. We also continue to make important investments in our finance, IT and other service center teams to support our growth. Throughout 2023, our leaders have carefully managed these investments that correspond with our revenue growth, allowing us to achieve improved scale in our adjusted G&A expense.

隨著同店入住率接近大流行前的 79.6% 水平，比去年同期增長 240 個基點，每個入住房間的平均收入比去年同期增長 13.2%，這一增長勢頭已準備就緒。我們還繼續對財務、IT 和其他服務中心團隊進行重要投資，以支持我們的發展。整個 2023 年，我們的領導者精心管理了這些與我們的收入增長相對應的投資，使我們能夠擴大調整後的一般管理費用規模。

In Q2, adjusted G&A as a percentage of revenue was 6.1%, down from 6.8% in Q2 of '22 and below our internal target. While G&A will fluctuate with the needs of the organization, we are pleased that our leaders have applied the same rigor in the service center that we expect in the field to outperform our internal targets.

第二季度，調整後的一般行政費用佔收入的百分比為 6.1%，低於 22 年第二季度的 6.8%，也低於我們的內部目標。雖然一般管理費用會隨著組織的需求而波動，但我們很高興我們的領導者在服務中心採用了與我們期望在該領域一樣嚴格的標準，以超越我們的內部目標。

During the quarter, we continued to execute on our long-term growth strategy by acquiring 2 strategically attractive operations within our existing footprint. In May, we acquired Benefit Home Health Care and Benefit By Your Side, a home health and home care agency located in Colorado Springs, Colorado. This acquisition complements our existing footprint in Denver and Southwest Colorado, deepening our Colorado continuum.

本季度，我們在現有業務範圍內收購了 2 個具有戰略吸引力的業務，繼續執行我們的長期增長戰略。 5 月，我們收購了 Benefit Home Health Care 和 Benefit By Your Side，這是一家位於科羅拉多州科羅拉多斯普林斯的家庭健康和家庭護理機構。此次收購補充了我們在丹佛和科羅拉多州西南部的現有足跡，加深了我們在科羅拉多州的連續性。

In June, we acquired Bluebird Health, a home health hospice and home care provider in the Boise, Idaho market. Bluebird is a critical part of the Treasure Valley health care ecosystem. Bluebird Health and deep community relationships make it a strategic acquisition in a core operating market, it shares with our service center, existing home health and hospice operations and a recently acquired assisted living operation.

六月，我們收購了愛達荷州博伊西市場的家庭健康臨終關懷和家庭護理提供商 Bluebird Health。藍鳥是寶藏谷醫療保健生態系統的重要組成部分。 Bluebird Health 和深厚的社區關係使其成為核心運營市場的戰略收購，它與我們的服務中心、現有的家庭健康和臨終關懷業務以及最近收購的輔助生活業務共享。

With our cash flow from operations continuing to improve, as Lynette will describe, plenty of dry powder in our revolver and a robust flow of meaningful acquisition opportunities in both segments, we see significant opportunity for growth. As we have stated before, our growth is not the result of arbitrary goals for capital deployment. We focus first on the who, making sure that we have the right operational and clinical leadership to make an impact on a new community or market.

正如 Lynette 所描述的那樣，隨著我們的運營現金流持續改善，我們的左輪手槍中充滿了乾火藥，並且這兩個領域都有大量有意義的收購機會，我們看到了巨大的增長機會。正如我們之前所說，我們的增長並不是任意資本配置目標的結果。我們首先關注誰，確保我們擁有正確的運營和臨床領導力來對新社區或市場產生影響。

With the growth of our leadership pipeline, we are well positioned to step into new operations and successfully improve that clinical, cultural and financial results. While our pipeline for new acquisitions is more robust than it has been in several years, we will remain extremely disciplined in our capital allocation, prioritizing investments where we have healthy clusters and markets or opportunities for strategic partnerships at pricing that makes sense for the long-term health of our organization.

隨著我們領導梯隊的增長，我們已做好準備進入新業務並成功改善臨床、文化和財務業績。雖然我們的新收購渠道比過去幾年更加強勁，但我們將在資本配置方面保持嚴格的紀律，優先投資那些擁有健康集群和市場的投資，或以對長期有意義的定價建立戰略合作夥伴關係的機會。我們組織的長期健康狀況。

With that, I'll hand it over to Lynette for a review of the financials. Lynette?

這樣，我會將其交給 Lynette 進行財務審查。萊內特？

Thank you, John, and good morning, everyone. Detailed financial results for the 3 months ended June 30, 2023, are contained in our 10-Q and press release filed yesterday. For the quarter ended June 30, 2023, we reported total GAAP revenue of $132.3 million, an increase of $16 million or 13.7% over the prior year quarter. We also reported GAAP diluted earnings per share of $0.09, a 200% increase over the prior year quarter and non-GAAP diluted earnings per share of $0.18, a 28.6% increase over the prior year quarter. These results are consistent with our full year 2023 guidance, which we are reaffirming at this time.

謝謝約翰，大家早上好。截至 2023 年 6 月 30 日的 3 個月的詳細財務業績包含在我們昨天提交的 10 季度和新聞稿中。截至 2023 年 6 月 30 日的季度，我們報告的 GAAP 總收入為 1.323 億美元，比去年同期增加 1600 萬美元，即 13.7%。我們還公佈了 GAAP 攤薄每股收益 0.09 美元，比上年同期增長 200%；非 GAAP 攤薄每股收益為 0.18 美元，比上年同期增長 28.6%。這些結果與我們目前重申的 2023 年全年指導一致。

Key metrics for the 3 months ended June 30, 2023, include; $60.5 million outstanding on our $150 million revolving line of credit and $2.8 million in cash on hand at quarter end. We ended Q2 with a 1.57x net debt to adjusted EBITDA leverage ratio and cash flows provided from operations of $6.5 million for the quarter. We expect cash flow from operations to remain healthy throughout 2023, which reflects robust organic revenue growth, solid cash collections and continued bottom line improvement. Our strong operating cash flows enable us to respond opportunistically to potential acquisitions while maintaining a healthy balance sheet.

截至 2023 年 6 月 30 日止 3 個月的關鍵指標包括：截至季度末，我們的 1.5 億美元循環信貸額度中尚未償還 6,050 萬美元，手頭現金為 280 萬美元。第二季度末，我們的淨債務與調整後 EBITDA 槓桿率為 1.57 倍，本季度運營產生的現金流為 650 萬美元。我們預計 2023 年運營現金流將保持健康，這反映出強勁的有機收入增長、穩健的現金回籠和持續的盈利改善。我們強勁的運營現金流使我們能夠對潛在收購做出機會性反應，同時保持健康的資產負債表。

Since joining the organization, I have seen how the focus on developing entrepreneurial local leaders has driven significant change in both top line and margin performance in both segments. In addition, the culture that our leaders infused in our -- their operations has been a driver for change in reducing turnover, improving employee satisfaction and producing strong clinical outcomes.

自從加入該組織以來，我看到了對培養當地企業家領導者的關注如何推動這兩個領域的營收和利潤表現發生重大變化。此外，我們的領導者在我們的運營中註入的文化一直是減少人員流動、提高員工滿意度和產生強大臨床成果等變革的驅動力。

I'd like to hand it back to Brent to highlight some of our local leaders that exemplify this culture and strong operational performance. Brent?

我想把它交還給布倫特，以強調我們的一些當地領導人，他們體現了這種文化和強大的運營績效。布倫特？

Thanks, Lynette. It's my pleasure to spotlight a few leaders and teams in our organization who have achieved exceptional results. At Citrus Hills assisted living in Orange, California, Executive Director and future CEO, [Itsy Barbaguire]; and Wellness Director and future CWO, [Yahya Garcia], have driven impressive growth and success. And stepping into their roles in 2022, Itsy and Yahya, have established a culture of clinical excellence and resident satisfaction and has resulted in Citrus Hill's occupancy increasing from 74.2% in Q2 2022 and to 96.7% in Q2 2023.

謝謝，萊內特。我很高興能夠重點關注我們組織中取得卓越成果的幾位領導者和團隊。在 Citrus Hills 擔任加利福尼亞州奧蘭治市的執行董事兼未來首席執行官 [Itsy Barbaguire] 的協助生活；健康總監兼未來的 CWO [Yahya Garcia] 推動了令人矚目的增長和成功。 Itsy 和 Yahya 於 2022 年上任，建立了卓越臨床和居民滿意度的文化，導致 Citrus Hill 的入住率從 2022 年第二季度的 74.2% 增加到 2023 年第二季度的 96.7%。

As the community increasingly turns to Citrus Hills as a trusted provider of assisted living service, the financial performance is followed with a 2.5x increase in revenue and an incredible 46.5x increase in EBITDAR over the prior year quarter.

隨著社區越來越多地選擇 Citrus Hills 作為值得信賴的輔助生活服務提供商，財務業績隨之而來，收入比去年同期增長了 2.5 倍，EBITDAR 令人難以置信地增長了 46.5 倍。

In the Bay Area, CEO, Jordan Baker; and newly appointed CCO, Vanessa Alcaraz, have established Sequoia Home Health and Hospice as a provider and employer of choice in their local market. Since becoming the Executive Director at Sequoia in early 2019, Jordan has led a remarkable 7x improvement in revenue and 221x improvement in earnings. In addition, current revenue grew 36.3% and earnings grew 72.6% over the prior year quarter.

在灣區，首席執行官喬丹·貝克（Jordan Baker）；和新任命的 CCO Vanessa Alcaraz 已將 Sequoia Home Health and Hospice 建立為當地市場的首選提供商和雇主。自 2019 年初成為紅杉資本執行董事以來，Jordan 帶領公司收入顯著提高了 7 倍，盈利提高了 221 倍。此外，當期收入較去年同期增長 36.3%，盈利較去年同期增長 72.6%。

At the same time, Sequoia has demonstrated strong clinical results with the real-time home health Star rating of 5 stars. Sequoia's people are the foundation of its consistent performance and a part of that success is in the continued development and elevation of key leaders from within the operation. All of this growth in development comes while enjoying one of the highest employee satisfaction scores in the company.

同時，Sequoia 也展示了強大的臨床效果，實時家庭健康星級評級為 5 顆星。紅杉資本的員工是其持續業績的基礎，成功的一部分在於運營內部關鍵領導者的持續發展和提升。所有這些發展增長都是在享受公司員工滿意度最高的公司之一的同時實現的。

Both of these stories are tremendous examples of the power of our leadership model at work. We are grateful to these leaders for owning and leading their operations in a way that benefits patients, residents, employees and community partners.

這兩個故事都是我們領導力模式發揮作用的絕佳例子。我們感謝這些領導者以有利於患者、居民、員工和社區合作夥伴的方式擁有和領導他們的業務。

With that, we'll open it up for questions. Norma, can you please instruct the audience on the Q&A procedure?

至此，我們將開放提問。 Norma，您能指導一下觀眾問答程序嗎？

(Operator Instructions) The first question comes from the line of Raj Kumar with Stephens.

（操作員說明）第一個問題來自 Raj Kumar 和 Stephens 的線路。

This is Raj on for Scott Fidel. Just wanted to kind of go through senior living. Could you just talk to how much rate elasticity (inaudible) upside there is given the sequential rate bump? But we saw a sequential decline in total occupancy? So overall, we saw industry level and peer occupancy increase sequentially. So just kind of wanted to parse out what was like the key drivers when it came to Pennant operations given the slight sequential occupancy down trend in the quarter.

這是斯科特·菲德爾的拉吉。只是想經歷一下老年生活。您能否談談在連續利率上漲的情況下，利率彈性（聽不清）有多少上升空間？但我們看到總入住率連續下降？總體而言，我們看到行業水平和同行佔有率依次上升。因此，鑑於本季度入住率略有下降的趨勢，我只是想解析一下三角旗運營的關鍵驅動因素。

Yes. And I think when you're referencing sequential occupancy down, you're referencing the overall. And when we look at it from a same-store standpoint, our overall occupancy has actually increased. I think we referenced 79.6%. So from that standpoint, we're seeing growth in occupancy continue over time. And in addition to that, we have also implemented rate changes across most of our platform. And while I think there's a little more sensitivity to rate increases versus what we saw over the last 2 years, we haven't seen significant attrition that has come from that.

是的。我認為當你提到連續入住率下降時，你指的是整體。當我們從同店的角度來看時，我們的整體入住率實際上有所增加。我認為我們參考了 79.6%。因此，從這個角度來看，我們看到入住率隨著時間的推移持續增長。除此之外，我們還在我們的大部分平台上實施了費率調整。雖然我認為與過去兩年相比，人們對利率上漲的敏感度更高一些，但我們並沒有看到由此產生的重大人員流失。

So we're pretty confident that as we continue to drive those rate levels back to levels where they are probably appropriate to cover the cost of the services that we're providing that we can see those occupancy gains maintain at the pace that they're going now. So I mean, from that standpoint, I think overall, we're pretty optimistic that we can drive our occupancy levels back to where we were and perhaps above the levels that we were at pre pandemic.

因此，我們非常有信心，隨著我們繼續將這些費率水平推回到可能適合支付我們提供的服務成本的水平，我們可以看到這些入住率增長保持在原來的速度。正要去。所以我的意思是，從這個角度來看，我認為總體而言，我們非常樂觀，我們可以將入住率恢復到原來的水平，甚至可能高於大流行前的水平。

And I would just add this, too, Raj. I mean, we've mentioned this in the past, but a big part of our efforts around leadership development is not just on the overall operating leadership, but also in our ability to build and grow marketing and sales talent and create a better path in each of our buildings. And so that's also leading to a lot of the occupancy gains. So in many ways, we approach things very differently now than we did 2 or 3 years ago. And so we're seeing the benefit of that as well.

我也想補充一點，拉傑。我的意思是，我們過去已經提到過這一點，但我們圍繞領導力發展所做的努力的很大一部分不僅在於整體運營領導力，還在於我們培養和培養營銷和銷售人才以及在行業中創造更好道路的能力。我們的每棟建築。因此，這也導致了入住率的大幅增長。因此，在很多方面，我們現在處理事情的方式與兩三年前截然不同。所以我們也看到了這樣做的好處。

Our investment in marketing, our investment in sales and just the overall product as we've invested in each of our buildings to put something in place where we can be proud of and be a critical part of the communities we serve in.

我們對營銷、銷售以及整體產品的投資，因為我們對每棟建築進行了投資，以便讓我們感到自豪，並成為我們所服務的社區的重要組成部分。

Okay. Great. And then I kind of wanted to focus on M&A. As you kind of look towards the future within the next couple of quarters, and now that we have the proposed home health rate, how are valuations settling out? I mean, are they still high or are sale expectations still high? Or what's like the availability of assets now since we have more visibility into the rates from a performance standpoint?

好的。偉大的。然後我有點想專注於併購。當您展望未來幾個季度的未來時，現在我們已經有了擬議的家庭健康率，估值如何確定？我的意思是，它們仍然很高還是銷售預期仍然很高？或者，既然我們從績效的角度對費率有了更多的了解，那麼現在資產的可用性如何？

Yes. Raj, that's a great question. What we're seeing is exciting. And I think that is we're seeing more opportunities come to market in the valuation zone that we feel comfortable pursuing in our disciplined acquisition strategy. And so primarily, you're seeing home health, but you're also seeing hospice multiples kind of return to more normalized rates. And that's really helpful.

是的。拉吉，這是一個很好的問題。我們所看到的令人興奮。我認為，我們在估值區域看到了更多的機會進入市場，我們在嚴格的收購策略中可以放心地追求這些機會。因此，首先，您會看到家庭健康狀況，但您也會看到臨終關懷倍數恢復到更正常化的水平。這真的很有幫助。

What we saw the last time we experienced significant home health reimbursement challenges in the mid 2010 to 2017, we sort of had this opportunity where we were able to acquire assets at favorable valuations that really built the platform we have now. And so we're seeing people -- and it's taking a little bit for sellers to get comfortable that what they had before isn't worth the same amount as it was but their financials tell that story. And so they're becoming more comfortable with that.

上次我們在 2010 年中期到 2017 年經歷了重大的家庭健康報銷挑戰時，我們看到了這樣的機會，我們能夠以有利的估值收購資產，真正構建了我們現在擁有的平台。所以我們看到人們 - 賣家需要一點時間才能接受他們以前擁有的東西的價值不如現在，但他們的財務狀況說明了這一點。所以他們對此變得更加適應。

And we see a number of attractive opportunities coming to the table. We'll continue to evaluate as we work through the proposed rule and into the final rule, what the actual impact is going to be. and we're continuing to pursue acquisition opportunities in all 3 areas. We feel like valuations on the senior living side are coming a little bit better into focus. Valuations on hospice are becoming more realistic. And with home health, certainly, the impact of the final rule coupled with last year's -- the impact of last year's final rule, is really creating some unique opportunities for us.

我們看到許多有吸引力的機會即將出現。在製定擬議規則並製定最終規則的過程中，我們將繼續評估實際影響。我們將繼續在這三個領域尋求收購機會。我們認為老年生活領域的估值正在變得更加受到關注。對臨終關懷的估值變得更加現實。當然，對於家庭健康來說，最終規則的影響加上去年的影響，確實為我們創造了一些獨特的機會。

Great. And then a quick follow-up on hospice. I think you guys called out that your impact on the final rate would be a 2.8% increase. So when we think about the originally issued guidance back earlier this year, how does that -- how is that fair against what you had baked into that guidance versus what we have now?

偉大的。然後對臨終關懷進行快速跟進。我想你們已經說過你們對最終費率的影響將是增加 2.8%。因此，當我們思考今年早些時候最初發布的指導意見時，與您納入該指導意見的內容相比，我們現在的指導意見是否公平？

So you're absolutely right. We estimate about a 2.8% impact on our revenue per day from that home health final rule. And so that will affect our revenue in the fourth quarter. We do have baked into the guidance of modest increase but that increase is a little bit higher than that. And so we do think it will be a net positive as we seek to meet and exceed our commitments for this year.

所以你是完全正確的。我們估計家庭健康最終規則對我們每日收入的影響約為 2.8%。這將影響我們第四季度的收入。我們確實已經接受了適度增長的指導，但增長幅度略高於此。因此，我們確實認為，當我們尋求實現並超越今年的承諾時，這將是一個淨積極的結果。

And the next question comes from the line of Ben Hendrix with RBC Capital Markets.

下一個問題來自加拿大皇家銀行資本市場 (RBC Capital Markets) 的本·亨德里克斯 (Ben Hendrix)。

I appreciate all the comments on the local leadership model. And I was just wondering, can you give us an idea of what inning we're in with your local leadership strategy? And is there a margin target that we should think about as you get closer to achieving the optimal leadership profile for each of your clusters?

我感謝所有關於當地領導模式的評論。我只是想知道，您能否告訴我們您的本地領導力策略目前處於哪一階段？當您越來越接近實現每個集群的最佳領導力形象時，我們是否應該考慮一個利潤目標？

Yes. So I'll let Lynette answer the question on margin. But I guess I would put it this way. In terms of developing the program, we put a lot of time and effort at the beginning of the year to really build out this robust program. So just in the -- from a program development standpoint where you asked an inning, so we're probably halfway through that or maybe a little bit further. We made some good progress there.

是的。那麼我就讓 Lynette 來回答這個問題吧。但我想我會這樣說。在開發該程序方面，我們在年初投入了大量的時間和精力來真正構建出這個強大的程序。因此，從程序開發的角度來看，您要求一局，所以我們可能已經完成了一半，或者可能更遠了一點。我們在那裡取得了一些良好進展。

In terms of like the overall development of the leaders, this is a multiyear. I mean, this is going to go on forever because it's what our focus is. We're a leadership company. And so from that standpoint, we're seeing really strong returns. The talent that's coming into the organization is incredible. But we shared 2 examples, recognizing Sequoia and Citrus Hill's 2 incredible leaders, one that was already internal to the organization and developed through the program, another that joined us a couple of years ago that stepped in and has really changed us.

就領導者的整體發展而言，這是一個多年期。我的意思是，這將永遠持續下去，因為這是我們的重點。我們是一家領導力公司。因此從這個角度來看，我們看到了非常強勁的回報。進入該組織的人才令人難以置信。但我們分享了兩個例子，表彰紅杉資本和Citrus Hill 的兩位令人難以置信的領導者，其中一位已經在組織內部並通過該計劃發展起來，另一位幾年前加入我們，介入並真正改變了我們。

And so the impact of these leaders coming in really is over multiple years and is incredible increase, right? So from that standpoint, I think right now, we want to get to 100 CEOs, but in the next several years, once we hit that number, we're going to get to 200 and beyond that, right? And so that's our model for growth for the future. So from that standpoint, we're still at the beginning stages because we're just now really hitting our stride in bringing those leaders in.

因此，這些領導者的加入確實產生了多年的影響力，而且增長令人難以置信，對嗎？因此，從這個角度來看，我認為現在我們希望擁有 100 名首席執行官，但在接下來的幾年中，一旦我們達到這個數字，我們將達到 200 名甚至更多，對嗎？這就是我們未來的增長模式。因此，從這個角度來看，我們仍處於起步階段，因為我們現在才真正在吸引這些領導者方面取得進展。

And on the margin front, really the target that we're looking at from a margin for home health and hospice in the long term is an 18% margin. And then on the senior living side, getting our margin up to about 15%. So that's where we're looking for those long-term targets on margin.

在利潤率方面，我們從長遠來看家庭健康和臨終關懷的利潤率目標實際上是 18%。然後在老年生活方面，我們的利潤率達到了 15% 左右。這就是我們尋找長期利潤目標的地方。

And Ben, we'll just emphasize margin is always going to be lumpy in our business and in our strategic model, the way that we approach things we're buying underperforming assets and that can pull our margin down. And then as those assets kind of fully integrated into our model and we get a CEO in place, we see that outperformance going forward. And so I think those targets are hopefully helpful to the modeling, but we will always expect some lumpiness as we acquire these underperforming assets and then turn them into real resources and solutions in that community.

本，我們只想強調，在我們的業務和戰略模型中，利潤率總是不穩定的，在我們處理購買表現不佳資產的方式時，這可能會拉低我們的利潤率。然後，隨著這些資產完全融入我們的模式，並且我們任命了一位首席執行官，我們看到了未來的優異表現。因此，我認為這些目標有望對建模有所幫助，但當我們獲得這些表現不佳的資產，然後將它們轉化為該社區的真正資源和解決方案時，我們總是會期望一些混亂。

Yes. And maybe just to add a little bit more color to tie those 2 things together, right? Our investment in leadership and improvement in margin we're seeing it now on the senior living side, right, we're seeing this pretty significant ramp in margin improvement and overall bottom line improvement. It's because we invested not only in the local leaders, the local EDs and future CEOs, but also in each of the markets, there is a team that helps to develop those leaders and to look for acquisition opportunities. And so some of that investment, it just takes time for that to pay off.

是的。也許只是添加一點顏色來將這兩件事聯繫在一起，對嗎？我們對領導力的投資和利潤率的提高，我們現在在老年生活方面看到了這一點，對吧，我們看到利潤率的提高和整體底線的改善非常顯著。這是因為我們不僅投資於當地的領導者、當地的執行董事和未來的首席執行官，而且在每個市場都有一個團隊來幫助培養這些領導者並尋找收購機會。因此，其中一些投資需要時間才能獲得回報。

And John alluded to this in the script. But we're also seeing that, especially acutely on the home health and hospice side, we strategically made a decision to invest in a number of additional market leaders and building those teams so that we can grow. We can invest in new leaders at the local level, and we can grow strategically from an acquisition an expansion standpoint.

約翰在劇本中提到了這一點。但我們也看到，特別是在家庭健康和臨終關懷方面，我們戰略性地做出了投資一些額外的市場領導者並建立這些團隊的決定，以便我們能夠成長。我們可以在地方層面投資新的領導者，我們可以從收購和擴張的角度進行戰略性增長。

So some of the pressure that we're feeling right now is a result of those investments that we made at the beginning of the year. And as the year goes on and as time goes on, those will just pay off because those investments will become less and less a percentage of the overall revenue that we bring in.

因此，我們現在感受到的一些壓力是我們年初進行的投資的結果。隨著時間的推移，隨著時間的推移，這些投資將會得到回報，因為這些投資在我們帶來的總收入中所佔的比例將越來越小。

I'm currently showing no further questions at this time. I'd like to turn the conference back over to Mr. Brent Guerisoli for closing remarks.

我目前沒有提出任何進一步的問題。我想請 Brent Guerisoli 先生致閉幕詞。

Okay. Well, thank you, Norma, and thank you, everyone, for joining us today, and we hope you have a great rest of your day.

好的。好吧，謝謝你，諾瑪，謝謝大家今天加入我們，我們希望你今天休息得愉快。

Ladies and gentlemen, thank you for your participation in today's conference. You may now disconnect. Everyone, have a wonderful day.

女士們、先生們，感謝你們參加今天的會議。您現在可以斷開連接。祝大家度過美好的一天。