The Pennant (US:PNTG)2022-05-09 20:09Part I. Financial Information Financial Statements Presents unaudited condensed consolidated financial statements for Q1 2022 vs Q1 2021, including balance sheets, income statements, cash flows, and notes Condensed Consolidated Balance Sheet Highlights | Account | March 31, 2022 ($ thousands) | December 31, 2021 ($ thousands) | | :--- | :--- | :--- | | Total Current Assets | $81,512 | $75,841 | | Total Assets | $507,436 | $530,297 | | Total Current Liabilities | $68,605 | $71,635 | | Total Liabilities | $389,504 | $416,053 | | Total Equity | $117,932 | $114,244 | Condensed Consolidated Statements of Income | Metric | Three Months Ended March 31, 2022 ($ thousands) | Three Months Ended March 31, 2021 ($ thousands) | | :--- | :--- | :--- | | Revenue | $113,910 | $105,663 | | Income from operations | $2,326 | $1,613 | | Net income | $1,158 | $913 | | Diluted EPS | $0.03 | $0.03 | Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Three Months Ended March 31, 2022 ($ thousands) | Three Months Ended March 31, 2021 ($ thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | $(4,071) | $(7,267) | | Net cash used in investing activities | $(2,582) | $(3,995) | | Net cash provided by financing activities | $5,090 | $16,824 | | Net (decrease) increase in cash | $(1,563) | $5,562 | Notes to the Condensed Consolidated Financial Statements Details accounting policies and financial items, covering business, revenue, segment performance, debt, leases, and contingencies - As of March 31, 2022, the Company's subsidiaries operated 88 home health, hospice and home care agencies and 52 senior living communities21 Revenue by Payor - Q1 2022 vs Q1 2021 | Payor | Q1 2022 Revenue ($ thousands) | Q1 2021 Revenue ($ thousands) | | :--- | :--- | :--- | | Medicare | $55,078 | $53,739 | | Medicaid | $15,394 | $13,853 | | Managed care | $14,036 | $11,089 | | Private and other | $29,402 | $26,982 | | Total Revenue | $113,910 | $105,663 | Segment Performance - Q1 2022 vs Q1 2021 | Segment | Q1 2022 Revenue ($ thousands) | Q1 2022 Segment Adjusted EBITDAR ($ thousands) | Q1 2021 Revenue ($ thousands) | Q1 2021 Segment Adjusted EBITDAR ($ thousands) | | :--- | :--- | :--- | :--- | :--- | | Home Health and Hospice | $80,475 | $13,948 | $74,607 | $13,791 | | Senior Living Services | $33,435 | $9,432 | $31,056 | $8,834 | - The company has a $150 million Revolving Credit Facility, with $58.5 million outstanding and $87.3 million available as of March 31, 20227273 - One hospice provider is subject to a Medicare payment suspension, with $4,263 thousand recorded in accounts receivable, net, as of March 31, 2022103 Management's Discussion and Analysis of Financial Condition and Results of Operations Analyzes Q1 2022 financial performance, covering COVID-19 impacts, business trends, segment performance, and liquidity - The company continues to be impacted by COVID-19, particularly through labor challenges such as increased wage rates and staffing shortages across the healthcare industry116117119 - Under the CARES Act, the company deferred approximately $7.8 million in employer-paid social security taxes, with $4.1 million remaining payable as of March 31, 2022, and $26.5 million of $28.0 million in accelerated Medicare payments recouped by CMS125126 Key Performance Indicators - Q1 2022 vs Q1 2021 | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Home Health Services | | | | Total home health admissions | 10,182 | 9,097 | | Hospice Services | | | | Total hospice admissions | 2,409 | 2,154 | | Average hospice daily census | 2,232 | 2,308 | | Senior Living Services | | | | Occupancy (%) | 72.6% | 72.1% | | Avg. monthly revenue per occupied unit ($) | $3,371 | $3,186 | Reconciliation to Consolidated Adjusted EBITDA | Metric | Three Months Ended March 31, 2022 ($ thousands) | Three Months Ended March 31, 2021 ($ thousands) | | :--- | :--- | :--- | | Consolidated Net income | $1,158 | $913 | | Consolidated EBITDA | $3,332 | $2,825 | | Consolidated Adjusted EBITDA | $6,145 | $6,296 | Quantitative and Qualitative Disclosures About Market Risk Details market risk exposure, primarily interest rate risk from the Revolving Credit Facility, and the planned LIBOR transition by June 2023 - The company is exposed to interest rate risk through its Revolving Credit Facility, which has variable interest payments based on LIBOR195 - The company does not expect to transition away from the LIBOR benchmark for its Credit Facility until June 2023, when certain USD LIBOR settings are scheduled to cease196 Controls and Procedures Confirms effective disclosure controls and procedures and reports no material changes to internal control over financial reporting - Based on an evaluation by management, including the CEO and CFO, the company's disclosure controls and procedures were concluded to be effective as of March 31, 2022197 - There were no material changes in the company's internal control over financial reporting during the first fiscal quarter of 2022198 Part II. Other Information Legal Proceedings Reports involvement in various claims and lawsuits from ordinary business, not expected to materially affect financial condition or operations - The company is involved in various claims and lawsuits arising in the ordinary course of business, which management does not expect to have a material adverse effect on its financial condition or operations201 Risk Factors Updates risk factors from the 2021 Annual Report, including Medicare payment suspension and expiring COVID-19 emergency waivers - A Uniform Program Integrity Contractor (UPIC) has suspended Medicare payments for one of the company's independent operating subsidiaries, totaling $4,263 thousand as of March 31, 2022203 - The expiration of COVID-19 Emergency Waivers, particularly those related to telehealth reimbursement and facility safety requirements, could result in increased expenses and materially affect operations, revenues, and profits205 Exhibits Lists exhibits filed with Form 10-Q, including an Operations Transfer Agreement, corporate governance documents, and CEO/CFO certifications - The Exhibit Index lists key documents filed with the report, including an Operations Transfer Agreement with affiliates of Ensign, corporate governance documents, and CEO/CFO certifications pursuant to the Sarbanes-Oxley Act207