The Pennant (US:PNTG)2025-05-06 20:12Operations Overview - As of March 31, 2025, the company operates 137 home health and hospice agencies and 60 senior living communities across 13 states[126]. - The company added five home health agencies, four hospice agencies, and three senior living communities during the three months ended March 31, 2025[128]. - The number of home health and hospice agencies increased to 137 at the end of Q1 2025, up from 112 a year earlier, representing a growth of 22.3%[179]. - The company added seven senior living communities between March 31, 2024, and March 31, 2025, contributing to revenue growth[180]. Revenue Growth - Total revenue for the three months ended March 31, 2025, was $209,842,000, an increase from $156,915,000 in the same period of 2024, representing a growth of 33.5%[152]. - Total revenue increased by $52.9 million, or 33.7%, to $209.8 million for the three months ended March 31, 2025, compared to $156.9 million in the same period of 2024[178]. - Home health and hospice services revenue grew by $43.4 million, or 37.2%, driven by a 28.9% increase in total home health admissions and a 22.8% increase in total hospice admissions[179]. - Senior living services revenue increased by $9.5 million, or 23.6%, attributed to an 11.3% rise in average monthly revenue per occupied unit[180]. Admissions and Census - Total home health admissions increased to 18,878 in Q1 2025 from 14,649 in Q1 2024, representing a growth of approximately 28.5%[136]. - Total hospice admissions increased to 3,783 in Q1 2025 from 3,080 in Q1 2024, reflecting a growth of approximately 22.8%[136]. - Average hospice daily census improved to 3,794 in Q1 2025 compared to 2,962 in Q1 2024, indicating a significant increase of about 28%[136]. - The average daily hospice census increased by 28.1%, reaching 3,794 in Q1 2025, compared to 2,962 in Q1 2024[179]. Financial Performance - Net income attributable to the company for the three months ended March 31, 2025, was $8,522,000, compared to $5,058,000 in 2024, reflecting a year-over-year increase of 68.8%[159]. - Consolidated Adjusted EBITDA for the three months ended March 31, 2025, was $16,373,000, compared to $11,224,000 in 2024, marking an increase of 45.8%[157]. - Segment revenue from Home Health and Hospice Services was $159,443,000 for Q1 2025, up from $114,490,000 in Q1 2024, indicating a growth of 39.2%[154]. - Segment Adjusted EBITDAR from Operations for Home Health and Hospice Services was $25,139,000 in Q1 2025, up from $17,886,000 in Q1 2024, a growth of 40.5%[157]. Cost and Expenses - Total expenses for the three months ended March 31, 2025, were $197,192,000, compared to $148,391,000 in the same period of 2024, reflecting an increase of 32.8%[152]. - Total consolidated cost of services increased by $42.8 million, or 33.9%, for the three months ended March 31, 2025, compared to the same period in 2024[181]. - Cost of services related to Home Health and Hospice Services segment increased by $35.4 million, or 36.4%, primarily due to increased volume of services provided[182]. - Cost of services for Senior Living Services segment increased by $7.3 million, or 25.5%, primarily due to increased wages and benefits and acquisition activity[183]. Cash Flow and Financing - Net cash used in operating activities decreased by $21.8 million for the three months ended March 31, 2025, primarily due to a decrease in cash flows from operating assets and liabilities[194]. - Net cash used in investing activities increased by $26.7 million, primarily driven by an increase in business and asset acquisitions[195]. - Net cash provided by financing activities increased by approximately $32.8 million, primarily due to a net increase in the balance on the line of credit[196]. - As of March 31, 2025, the company had $5.2 million of cash and $193.3 million of available borrowing capacity on its Amended Revolving Credit Facility[192]. Regulatory and Market Insights - The Hospice Payment Proposed Rule for 2026 includes a payment update percentage of 2.4%, estimated to increase payments by $695 million from fiscal year 2025[133]. - The hospice cap amount for the 2026 fiscal year is set at $35,292.51, an increase from the 2025 fiscal year cap of $34,465.34[133]. - The company anticipates fluctuations in consolidated and segment margins during years of acquisition growth due to lower occupancy rates and higher costs at recently acquired operations[130]. Non-GAAP Financial Measures - Consolidated Adjusted EBITDAR is used as a valuation measure for prospective acquisitions, excluding rent-cost of services and start-up operations[174]. - The company emphasizes the importance of Non-GAAP Financial Measures for a comprehensive understanding of operational performance, despite their limitations[162].