Financial Data and Key Metrics Changes - The company reported core earnings growth in the low double-digit percentage range, which is consistent with the impact of acquisitions and despite the loss of the Optum contract [5][11] - The pharma segment, particularly pharma and specialty solutions, had a strong year with 11% growth in the quarter and 12% for the year [21][70] - The company anticipates a slower growth rate moving forward, although still above normalized long-term rates [11][12] Business Line Data and Key Metrics Changes - The distribution business has grown consistently at mid-teens rates, significantly above market growth [8] - Biopharma solutions, which are higher margin parts of the specialty business, have been growing around 20% and are expected to reach about a billion-dollar business by fiscal 2028 [9] - Generic products have shown stable growth rates of 2% to 3%, with expectations of increased value from the loss of exclusivity of branded products in the next three years [29] Market Data and Key Metrics Changes - The company is confident in the underlying demographic trends that support growth, despite potential policy changes impacting Medicaid funding [25][24] - The retail pharmacy market remains important, with independent pharmacies benefiting from volume, although they face challenges on the reimbursement side [32][33] Company Strategy and Development Direction - The company is focused on diversifying its business to ensure participation in the fastest-growing parts of the market, particularly in specialty areas [13] - Recent acquisitions, such as Solaris, are seen as strategic additions that align with the company's focus on autoimmune and urology sectors [41][42] - The company plans to prioritize organic investments while maintaining a strong balance sheet and returning capital to shareholders [72][73] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the rising tide of utilization trends and the effectiveness of their operational strategies [11][12] - There is awareness of potential impacts from policy changes, particularly regarding Medicaid and COVID vaccine restrictions, but overall confidence in the business model remains strong [25][12] - The company expects to manage any potential impacts from the most favored nations policy, viewing them as relatively minor [58][59] Other Important Information - The company has raised its share repurchase program from $500 million to $750 million, committing to $1 billion in capital deployment back to shareholders annually [72][73] - The integration of the ADS acquisition is expected to create significant synergies, increasing revenue without heavily impacting distribution capacity [62][63] Q&A Session Summary Question: What are the key factors driving strong performance? - Management highlighted broad-based utilization trends and effective operational execution as key drivers of performance [6][7] Question: How does the company view the impact of COVID vaccine trends? - Management indicated it is too early to provide specifics but expects a slight headwind from COVID vaccine contributions compared to previous years [15][16] Question: What is the outlook for the retail pharmacy market? - Management noted that while independent pharmacies face reimbursement challenges, they benefit from volume and the company's advocacy efforts [32][33] Question: How does the company plan to deploy capital moving forward? - The company will focus on organic investments, maintaining a strong balance sheet, and returning capital to shareholders while remaining opportunistic about acquisitions [72][73]

Thanks to Donald Trump's so-called One Big Beautiful Bill Act, access to reproductive health care in the United States just took another devastating hit. The Atlantic is calling it the biggest anti-abortion victory since DOBS. And here's why. Buried in the mega bill is a provision that blocks healthc care nonprofits that offer abortions from receiving Medicaid funds for other services that they provide. So, to be clear, this is not a ban on Medicaid funds being used for abortion. Federal Medicaid funds are ...

Financial Data and Key Metrics Changes - The company reported a GAAP diluted earnings per share of $1.37, an increase of 15.1% year-over-year, and adjusted diluted earnings per share of $1.52, an increase of 16.9% [27] - Consolidated GAAP revenue and adjusted revenues were both $1,200,000,000, reflecting a 16.1% increase [27] - GAAP net income was $80,300,000, up 16.6%, while adjusted net income reached $89,000,000, an increase of 18% [28] Business Line Data and Key Metrics Changes - Same store occupancy increased to 82.6%, while transitioning occupancy rose to 83.5% compared to the prior year [9] - Skilled census increased by 7.6% for same store operations and 9.9% for transitioning operations [9] - Managed care census grew by 8.9% for same store and 15.6% for transitioning operations [9] Market Data and Key Metrics Changes - The company added 47 new operations since January 2024, including 19 new operations in Q1 2025 across various states [13] - The company is expanding its presence in Tennessee, Alabama, Oregon, and Alaska, indicating growth in these new markets [14][16] Company Strategy and Development Direction - The company is raising its annual 2025 earnings guidance to between $6.22 and $6.38 per diluted share, reflecting a 14.5% increase over 2024 results [10] - Annual revenue guidance has been increased to $4,890,000,000 to $4,940,000,000, up from $4,830,000,000 to $4,910,000,000 [11] - The company emphasizes disciplined growth and a focus on local leadership to drive operational improvements and acquisitions [18][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to continue achieving sustainable growth despite external challenges [32] - The operating environment is expected to present both near-term and long-term opportunities for acquisitions due to struggles faced by many operators in the industry [18] - Management is actively involved in advocacy regarding potential changes in Medicaid funding and is optimistic about the focus on the expansion population [42][45] Other Important Information - The company reported cash and cash equivalents of $282,700,000 and cash flow from operations of $72,200,000 [28] - A quarterly cash dividend of $6.25 per common share was paid, marking 22 consecutive years of annual dividend increases [30] - The company completed a $20,000,000 stock repurchase program, indicating confidence in its share valuation [30] Q&A Session Summary Question: Overview of managed care contracting and its impact on guidance - Management highlighted their long history with managed care and the importance of local partnerships to drive clinical success and financial returns [35][36] Question: Thoughts on potential Medicaid cuts and policy changes - Management is actively involved in advocacy and has met with congressional leaders to educate them on the implications of potential funding changes [41][43] Question: Changes in deal volume and market dynamics - The company noted a strong deal flow and emphasized a disciplined approach to acquisitions, with a focus on real estate [49][50] Question: Staffing constraints and their impact on admissions - Management indicated that while the sector has not fully recovered, their operators have successfully filled positions to maintain occupancy levels [55][56] Question: Competitive landscape and economics in new markets - Management stated that competition remains consistent and expressed optimism about achieving similar economics in new markets as in established ones [66][70]