PACS Group, Inc.(US:PACS)2025-11-19 21:01Operations and Facilities - As of September 30, 2024, the company operates 276 facilities across 15 states, serving over 26,400 patients daily[240] - The company added 46 stand-alone skilled nursing operations and 22 assisted living facilities during the nine months ended September 30, 2024, increasing capacity by 4,390 skilled nursing beds and 1,508 assisted living beds[248] - Subsequent to September 30, 2024, the company expanded operations by adding 45 facilities, contributing 5,030 skilled nursing beds and 271 assisted living beds[249] - The number of facilities at period end rose to 249, representing a 26.4% increase from 197 in the previous year[255] - The company acquired 75 facilities since September 30, 2023, contributing to improved operational performance[314] Financial Performance - Skilled nursing services revenue for the three months ended September 30, 2024, was $1,010,277, reflecting a 28.9% increase from $783,834 in the same period of 2023[252] - Skilled nursing services revenue for the nine months ended September 30, 2024, increased to $2,849,806, a 26.9% increase from $2,245,707 in 2023[255] - Total revenue for the three months ended September 30, 2024, was $1.026 billion, a 30.0% increase from $789.2 million in the same period of 2023[279] - Patient and resident service revenue increased by $235.3 million to $1.0 billion for the three months ended September 30, 2024, a 29.8% increase compared to the same period in 2023[280] - Patient and resident service revenue increased by $621.8 million to $2.9 billion for the nine months ended September 30, 2024, a 27.5% increase compared to the same period in 2023[291] - Total revenue for the nine months ended September 30, 2024, was $2.88 billion, a 27.6% increase from $2.26 billion in the same period of 2023[291] Occupancy and Patient Metrics - The occupancy rate for skilled nursing services was 90.5% for the three months ended September 30, 2024, compared to 90.4% in the prior year[252] - Occupancy rate for skilled nursing services decreased slightly to 90.8% from 91.2% year-over-year[255] - Actual patient days for skilled nursing services increased to 6,165,899, a 26.5% rise from 4,873,494 in the previous year[255] - Available patient days for the total facilities increased by 1,442,887 to 6,788,832, a 27.0% increase[255] Revenue Sources and Mix - Approximately 72% of SNF revenue in 2022 was derived from government sources, with Medicaid accounting for 51% and Medicare for 21%[245] - The skilled mix by revenue increased to 50.5% for the three months ended September 30, 2024, up from 49.4% in the same period of 2023[252] - For the three months ended September 30, 2024, Medicare revenue as a percentage of total skilled mix increased to 33.3% from 31.8% in 2023[256] - The skilled mix by revenue for new facilities was 39.3% in 2024, down from 54.6% in 2023[256] Cost and Expenses - Cost of services increased by $211.1 million to $849.6 million, a 33.1% rise compared to the same period in 2023, primarily due to increased salaries and wages[285] - General and administrative expenses rose by $21.0 million to $70.6 million for the three months ended September 30, 2024, with stock compensation expense accounting for $12.3 million of the increase[287] - Rent - cost of services increased to $72.6 million for the three months ended September 30, 2024, compared to $58.4 million in the same period of 2023, driven by new facility additions[286] - Operating expenses increased by $717.7 million to $2.83 billion for the nine months ended September 30, 2024, representing a 34.0% increase compared to the prior year[291] Profitability and Income - Net income decreased by 75.7% to $19.2 million for the nine months ended September 30, 2024, down from $78.7 million in the same period of 2023[291] - The effective tax rate increased to 52.5% for the nine months ended September 30, 2024, compared to 27.1% for the same period in 2023[303] Cash Flow and Financing - Cash and cash equivalents were $49.5 million as of September 30, 2024, compared to $355.7 million as of September 30, 2025[307] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $302.8 million, an increase of $229.4 million compared to the same period in 2023[314] - Net cash used in investing activities for the nine months ended September 30, 2024, was $338.3 million, an increase of $225.5 million compared to the same period in 2023, driven by $140.3 million for real estate acquisitions[316] - The company is in discussions with lenders regarding amendments to its credit facility, with potential borrowing capacity of up to $586.7 million[308] - The total long-term debt additions during the nine months ended September 30, 2024, amounted to $70.1 million, with favorable terms compared to existing debt[319] Market Trends and Industry Insights - The skilled nursing facility industry in the U.S. has seen a decline in the number of facilities from approximately 15,650 in 2017 to about 14,800 in 2024, indicating a growing demand for skilled nursing services[244] - The company’s operational model focuses on acquiring underperforming facilities and converting them into higher-value transitional care facilities, enhancing clinical quality and operational metrics[241]