The Pennant (US:PNTG)2021-11-08 21:09Operations and Expansion - As of September 30, 2021, the company operated 88 home health and hospice agencies and 54 senior living communities across 14 states[116] - The company expanded operations by acquiring five home health, four hospice, and two home care agencies for a total purchase price of $14.1 million during the nine months ended September 30, 2021[123] - The company established one start-up hospice agency in Washington during the three months ended September 30, 2021[125] - The company added 16 home health, hospice, and home care operations, contributing $10.5 million or 10.6% to revenue growth[178] - The number of home health and hospice agencies increased by 22.2% to 88 agencies at the end of the period[179] Financial Performance - Total revenue for the three months ended September 30, 2021, was $111.9 million, an increase from $98.4 million in the same period of 2020, representing a growth of 13.4%[150] - Total revenue increased by $44.9 million, or 15.9%, during the nine months ended September 30, 2021, primarily driven by $29.6 million from acquired home health and hospice operations[189] - Income from operations for Q3 2021 was $1.7 million, down from $4.5 million in Q3 2020, indicating a decline of 62.2%[150] - Consolidated Net Income for Q3 2021 was $1,121, down from $4,407 in Q3 2020, reflecting a decline of 74.6%[157] - Segment revenue for Home Health and Hospice Services was $79.0 million in Q3 2021, up from $64.4 million in Q3 2020, a growth of 22.7%[150] Revenue and Admissions - Home health services saw total admissions increase to 9,213 in Q3 2021 from 6,771 in Q3 2020, a rise of 36.5%[135] - Total hospice admissions increased to 2,219 in Q3 2021 from 2,133 in Q3 2020, marking a growth of 4.0%[135] - Average daily census for hospice services increased by 7.3% to 2,337, while hospice Medicare revenue per day increased by 6.1% to $174[180] - Home health and hospice services revenue grew by $52.6 million, or 29.4%, with a 54.6% increase in total home health admissions and a 51.0% increase in Medicare home health admissions[190] Costs and Expenses - Total expenses for the three months ended September 30, 2021, were $110.2 million, compared to $93.9 million in Q3 2020, reflecting an increase of 17.3%[150] - Total cost of services increased by $14.1 million, or 18.7%, with costs as a percentage of revenue rising from 76.7% to 80.1%[182] - Cost of services for home health and hospice increased by $13.0 million, or 24.7%, with costs as a percentage of revenue rising from 81.7% to 83.0%[183] - General and administrative expenses rose by $5.4 million, or 25.1%, primarily due to a $4.2 million increase in wages and benefits[196] Adjusted Earnings and Margins - Segment Adjusted EBITDAR from Operations for Q3 2021 was $16,732, a decrease of 8.8% from $18,357 in Q3 2020[152] - Consolidated Adjusted EBITDA for the nine months ended September 30, 2021, was $21,415, down from $27,619 in the same period of 2020, representing a decline of 22.4%[155] - Home health and hospice services segment reported Adjusted EBITDA of $12,702 for Q3 2021, compared to $13,194 in Q3 2020, a decrease of 3.7%[163] - Senior living services segment Adjusted EBITDA for Q3 2021 was $2,839, significantly up from $84 in Q3 2020[163] COVID-19 Impact - Home health admissions were impacted by staff quarantines and a significant decline in elective procedures due to rising COVID-19 cases[119] - Senior living occupancy increased in the second quarter of 2021 but began to decline in September, with overall occupancy decreasing since the onset of the COVID-19 pandemic[120] - The company is monitoring the ongoing impact of COVID-19 response actions on revenue and expenses, including labor acquisition and turnover costs[121] Medicare and Revenue Metrics - Average Medicare revenue per 60-day completed episode for home health services was $3,404 in Q3 2021, slightly down from $3,448 in Q3 2020[135] - Total Medicare revenue per 60-day completed episode increased by 2.1% to $3,382[190] - Average Medicare revenue per 60-day completed episode decreased by $44, or 1.3%, to $3,404[179] Cash Flow and Financing - As of September 30, 2021, the company had $3.7 million in cash and $101.7 million of available borrowing capacity on its Revolving Credit Facility[202] - The company entered into a Revolving Credit Facility with a borrowing capacity of $150.0 million, maturing in 2026[200] - Net cash used in operating activities decreased by $66.2 million compared to the prior year, primarily due to a $42.6 million change in cash flows related to the AAP[204] - Net cash provided by financing activities increased by approximately $52.4 million for the nine months ended September 30, 2021, compared to the same period in 2020[206] Tax and Obligations - The effective tax rate for the nine months ended September 30, 2021, was 18.4%, up from 17.2% in the prior year[197] - There have been no material changes to total obligations outside of the normal course of business during the period covered by the Quarterly Report[207] Interest Rate Risk - The company is exposed to risks associated with market changes in interest rates due to its Revolving Credit Facility[208] - The company manages its exposure to interest rate risk by monitoring available financing alternatives[208]