The Pennant (US:PNTG)2022-03-01 21:19Financial Data and Key Metrics Changes - For the full year ended December 31, 2021, total GAAP revenue was $439.7 million, an increase of $48.7 million or 12.5% over the prior year [36] - GAAP diluted earnings per share were $0.09, while non-GAAP adjusted earnings per diluted share were $0.46 [36] - The company estimated that COVID-19 negatively impacted full-year results by approximately $10 million in lost revenue and $5.4 million in expenses [38] Business Line Data and Key Metrics Changes - In the Home Health and Hospice segment, revenue increased by 4.5% to $77.9 million, while adjusted EBITDA declined by 19.1% to $11.2 million [21] - Total Home Health and Hospice admissions rose by 9% over the prior year quarter, despite a decline in hospice average daily census [21][22] - The Senior Living segment saw its first year-over-year revenue increase since the pandemic began, despite a decrease in average occupancy [25] Market Data and Key Metrics Changes - The average Home Health CMS star rating improved to 4.2, with a 12.7% acute care hospitalization rate, below the national average of 15.4% [23] - The average discharge to community rate was 79%, compared to the national average of 72.8% [24] - The company anticipates a 7% to 10% increase in Home Health and Hospice revenue and a 4% to 6% increase in Senior Living revenue for 2022 [44] Company Strategy and Development Direction - The company is focusing on core opportunities and reinforcing its operating model principles to return to healthy growth patterns [13][45] - A transaction with Ensign to transfer five Senior Living communities is expected to be mildly accretive to earnings and allows for a more concentrated leadership focus [14][15] - The company plans to continue investing in Service Center teams to accelerate operational results [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about recovery in 2022, citing improved leadership, better data systems, and signs of an improved operating environment [11][20] - The company is taking a conservative approach to guidance, factoring in potential ongoing COVID-19 impacts while aiming for stability and predictability in operations [66][75] - Management emphasized the importance of quality clinical care and strong relationships with referral partners as key drivers for future growth [23][24] Other Important Information - The company has drawn $53.5 million on its revolving line of credit and had $5.2 million cash on hand at the end of the quarter [39] - The guidance for 2022 includes revenue expectations of $450 million to $460 million and adjusted earnings per share of $0.60 to $0.72 [41][44] - The company is confident in its ability to manage costs and improve service rates despite increased wage rates and staffing challenges [46] Q&A Session Summary Question: Can you provide context on the performance differences between Home Health and Hospice? - Management noted that the challenges in scaling new agencies were related to referral sources and system implementation, but they are seeing significant improvement [56][58] Question: What assumptions have changed in the guidance? - Management explained that the guidance reflects a conservative approach, incorporating the impact of COVID-19 and the transfer of Senior Living entities to Ensign [66][68] Question: Can you provide visibility into the first quarter forecast? - Management indicated that they are using a conservative approach based on Q4 performance, anticipating some improvement in the second half of the year [72][75] Question: What is the current status of cash flows and Medicare advance payments? - Management confirmed that $3 million remains to be paid back on Medicare advance payments, with expectations for improved cash flows as operations stabilize [84][87] Question: What is the current trend in Senior Living occupancy? - Management reported a 100 basis point improvement in occupancy since mid-December, with confidence in continued growth throughout the year [91][92]