The Pennant (US:PNTG)2021-05-10 20:09Financial Data and Key Metrics Changes - Total GAAP revenue for Q1 2021 was $105.7 million, an increase of $13.8 million or 15% compared to the prior year [24] - GAAP diluted earnings per share were $0.03, while non-GAAP adjusted earnings per diluted share were $0.11 [25] - Operating cash flows declined due to the final phaseout of anticipated payment requests and one-time cash outflows for software costs [26] - The company has $119.2 million available on its revolving line of credit and $5.6 million cash on hand at quarter end [25] Business Line Data and Key Metrics Changes - Home Health and Hospice segment revenue grew 31% year-over-year, driven by a 48% increase in total home health admissions and a 36% increase in hospice admissions [9] - Adjusted EBITDA for the Home Health and Hospice segment reached $12.8 million, with an adjusted EBITDA margin 250 basis points higher than the prior year [10] - Senior living segment faced challenges with occupancy declining due to COVID-19, but there are signs of recovery with increased net move-ins in March and April [17][56] Market Data and Key Metrics Changes - The operating environment for senior living communities has improved, with a significant portion of residents vaccinated and restrictions on in-person visitation eased [17] - The company reported that 76% of residents received vaccines, and all communities have had at least their second vaccination clinic [17] Company Strategy and Development Direction - The company is focused on expanding its Home Health and Hospice operations through acquisitions, with several agencies acquired in Arizona and Colorado [21][22] - In the senior living segment, the company is prioritizing leadership development and operational improvements rather than new acquisitions [23] - The pandemic is seen as an opportunity to transform senior living communities to enhance the quality of care and life [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges faced in Q1 due to COVID-19 and the Texas winter storm, but expressed confidence in achieving full-year guidance of $430 million to $440 million in revenue [20][28] - The company anticipates a more significant contribution from the Home Health and Hospice segment, while expecting modest improvement in senior living [66] Other Important Information - The company has not allocated capital for acquisitions in the senior living space in the near term, focusing instead on improving existing operations [23] - COVID-related expenses are becoming part of normal operations, with approximately $700,000 to $800,000 incurred in Q1 [45] Q&A Session Summary Question: Impact of weather and COVID-related challenges in Q1 - Management acknowledged a $1.5 million adverse impact from the Texas winter storm and noted disruptions in Home Health and Hospice operations due to weather [40][42] Question: Trajectory towards achieving guidance - Management expects gradual improvement in margins and occupancy, with more significant contributions anticipated in the second half of the year [48][56] Question: Length of stay in hospice and its impact - Hospice average daily census (ADC) held up well, but length of stay declined by 8% due to pandemic-related factors [58][60] Question: Guidance sustainability without senior housing improvement - Management indicated that while modest improvement in senior living is anticipated, the Home Health and Hospice segment is expected to drive growth [62][66]