PACS Group, Inc.(US:PACS)2025-11-19 21:04Facility Operations - As of June 30, 2025, the company operates 316 facilities across 17 states, serving over 30,500 patients daily[190] - The number of facilities at period end rose to 287, representing a 34.1% increase from 214 in 2024[204] - The total number of post-acute care facilities increased from 220 to 316, marking a 43.6% growth[238] - The company added 119 skilled nursing beds and 175 assisted living beds during the six months ended June 30, 2025[197] - The company disposed of one facility with 120 skilled nursing beds during the six months ended June 30, 2025[197] Revenue and Financial Performance - Skilled nursing services revenue for the three months ended June 30, 2025, was $1,278,145, a 37.9% increase from $926,955 in the same period of 2024[201] - Skilled nursing services revenue for the six months ended June 30, 2025, increased to $2,532,220, a 37.7% increase from $1,839,529 in 2024[204] - Patient and resident service revenue increased by $373.6 million to $1.3 billion for the three months ended June 30, 2025, representing a 39.9% increase year-over-year[232] - Skilled nursing services revenue rose by $351.2 million to $1.3 billion, driven by a 28.3% increase in patient days[234] - Patient and resident service revenue increased by $731.2 million to $2.6 billion for the six months ended June 30, 2025, a 39.4% increase compared to the same period in 2024[245] - Skilled nursing services revenue rose by 37.7%, or $692.7 million, to $2.5 billion for the six months ended June 30, 2025, driven by an increase in patient days of 1,188,351 or 29.7%[246] Occupancy and Patient Metrics - The occupancy rate for skilled nursing services was 88.6% for the three months ended June 30, 2025, down from 91.0% in 2024[201] - Actual patient days for skilled nursing services increased to 5,182,818, a 29.7% increase from 3,994,467 in 2024[204] - Available patient days for skilled nursing services increased to 5,829,409, a 32.8% increase from 4,389,269 in 2024[204] - The occupancy rate for skilled nursing services decreased to 81.2%, down by 2.5% from 83.7% in 2024[205] Cost and Expenses - Cost of services increased by $258.7 million to $1.0 billion, primarily due to a $168.6 million rise in salaries and wages[238] - General and administrative expenses decreased by 26.6% to $100.3 million, reflecting operational efficiencies[232] - Total operating expenses increased by $630.3 million to $2.5 billion for the six months ended June 30, 2025, a 34.5% increase compared to the same period in 2024[244] - General and administrative expense increased by $15.5 million to $199.1 million for the six months ended June 30, 2025, driven by a 36.0% increase in salaries and wages[252] Income and Profitability - The net income for the three months ended June 30, 2025, was $50.97 million, a 259.9% increase compared to a loss of $31.88 million in the prior year[232] - Net income for the six months ended June 30, 2025, was $79.3 million, compared to $2.9 million for the same period in 2024, reflecting a significant increase[244] Cash Flow and Liquidity - Cash and cash equivalents were $294.2 million as of June 30, 2025, with total principal amount outstanding under the credit facility at $142.0 million[259] - Net cash provided by operating activities for the six months ended June 30, 2025, was $202.8 million, an increase of $109.3 million compared to the same period in 2024[266] - Cash, cash equivalents, and restricted cash at the end of the period on June 30, 2025, totaled $297.6 million, up from $77.9 million at the end of the same period in 2024[264] Debt and Interest Rates - The company had $142.0 million of variable rate debt as of June 30, 2025, with no interest rate hedge in place, exposing it to interest rate fluctuations[282] - A hypothetical 10% increase in interest rates would increase annual interest expense by approximately $0.9 million, while a 10% decrease would decrease it by the same amount[282] - The company had $256.2 million in outstanding indebtedness under mortgage loans and promissory notes, all at fixed interest rates as of June 30, 2025[284] Regulatory and Strategic Considerations - Approximately 72% of SNF revenue in 2022 was derived from government sources, with Medicaid representing 51% and Medicare 21%[195] - The company expects patient and resident service revenue to continue to grow as it executes its acquisition strategy[221] - The company is in a state of forbearance with lenders associated with the credit facility and is in discussions regarding terms for an amendment and waiver[260] - The company is in active discussions with Required Lenders regarding terms of an amendment and waiver to its Amended and Restated Credit Facility[276] - The company has a liquidity requirement to maintain unrestricted cash and certain permitted investments of at least $100 million until audited financial statements for the fiscal year ended December 31, 2024 are delivered[272]