The Pennant (US:PNTG)2020-03-05 21:40Financial Data and Key Metrics Changes - For the full year 2019, the company reported GAAP earnings per share of $0.11 and a loss per share of $0.14 for the fourth quarter [25] - Adjusted earnings per share for the year was $0.61, with $0.16 for the quarter, primarily due to costs related to the spin-off transaction and share-based compensation [26][28] - Non-GAAP revenue for 2019 was $337.7 million, slightly below guidance, while adjusted earnings per share exceeded guidance due to lower-than-expected general and administrative costs [27][30] Business Line Data and Key Metrics Changes - Home health and hospice revenue reached nearly $207 million in 2019, a 22% increase from 2018, driven by a 24% increase in home health admissions and a 30% increase in hospice admissions [12] - Senior living segment revenue for 2019 was $132 million, a 13% increase from 2018, with total occupancy increasing by 70 basis points [16] Market Data and Key Metrics Changes - The company has been actively monitoring the spread of the coronavirus and has implemented measures to enhance screening practices and infection control [17][18] - The joint venture with Scripps Health is expected to close in the third quarter of 2020, indicating a strategic move to strengthen market presence [14] Company Strategy and Development Direction - The company aims to support local operators in navigating opportunities and challenges in their markets while focusing on organic growth and disciplined acquisition strategies [11][21] - The joint venture with Scripps Health is seen as a way to leverage the company's operating model and expand its market reach [15][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for growth in both home health and hospice segments, particularly in light of the new Patient Driven Groupings Model (PDGM) [13][49] - The company remains focused on helping the senior living team transition effectively while capitalizing on opportunities in home health and hospice [48] Other Important Information - The company acquired 11 operations across five states in 2019, including two home health agencies and five hospice agencies [20] - The company reported cash generated from operations of $9.6 million and a net debt to adjusted EBITDA ratio of 4.82 times as of December 31, 2019 [29] Q&A Session Summary Question: Can you provide more details on the cost related to leadership systems and business alignment changes in the senior living segment? - Management indicated that realignment is ongoing, particularly in Texas and California, and improvements are already being observed [40] Question: Which business segment is more at risk regarding the coronavirus? - Management noted that the senior living segment faces greater risks due to potential outbreaks, while home health and hospice operations are focused on infection control measures [42][44] Question: Where do you see the most opportunities for capital deployment this year? - Management stated that the majority of growth is expected in the home health and hospice arena, while senior housing will focus on transitioning effectively [48] Question: Can you provide details on the hospice acquisition in Missoula? - The hospice agency is relatively small, with an average daily census in the 30 to 40 range, and offers expansion opportunities in Montana [50] Question: Is the Scripps joint venture included in guidance? - Management confirmed that the joint venture is not included in current guidance as it is expected to close later in the year [51]