PNTG - Earnings call transcript Q4 2021

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Operator

Thank you for standing by and welcome to The Pennant Group Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today's conference call is being recorded. I would now like to turn the conference over to your host, Mr. Officer. Investment Chief Bunker, Derek Please go ahead.

Derek Bunker

Welcome Thank joining thank for and today. you, Valerie. us you everyone,

Here I CFO; me our our with today, President; Brent our COO. Jen Guerisoli, CEO; Freeman, our and Gochnour, have John Danny Walker,

or or result as other complete required a of a revise events, for materially call. about forward to from to our of we and be its undue of reason. looking that more cause where forward-looking environment operate. or today We March of our encouraged changes we will results. until matters. review undertake our are Friday, pennantgroup.com. discussion which our securities call. any updated circumstances, website yesterday. are expectations, by announcement subsequent do website earnings that future subject to in made, results on few information, remind or the We made available have on XXXX, listening federal and replay Also want statements XX-K arise statements any current filed business is factors and this they be any today, impact laws, at of statements begin, our available Listeners Mountain are I actual anyone or should this Except release X, to update Investor PM Before filings to changing assumptions, not in also These Time of to a publicly SEC not updated could a today's replay statements as expressed could all based XX, This March new to today's the housekeeping on and those risks for be call our looking implied that affiliates reliance management's have beliefs on forward will that press our as Relations uncertainties X statements call A differ place on these section statements, on XXXX. and Pennant may not

Pennant management, direct our a The subsidiaries, accounting as employees Inc. service no addition, is information of to collectively Certain the with and through resources, Inc., or human referred company provide subsidiaries. holding center, and subsidiaries. Pennant, other company, with The technology, the independent Group our consolidated operating payroll, refer Group Pennant legal subsidiaries assets, services In operating contractual other revenues. to to such risk we, and us relationships The its words

References operated service GAAP The When management, and separate complete All Also, own of business, provide are operated and we Group. independent non-GAAP not we GAAP with that the can supplement are our use the consolidated activities understanding center with Pennant company its and operating employees and our a results, GAAP that they viewed release of Walker, Danny over by to is CEO. yesterday’s non-GAAP our in available exclusion and our reports. the to A Danny? call to press that, upon With relied together believe measures more our our of be the turn XX-K. should these reporting herein subsidiaries assets. by GAAP I'll their metrics. well the of in reconciliation to that have companies as as direct similar it should our not the that assets, has revenue terms The be meant or terms Pennant us, operating that Group, we, to today Inc. construed subsidiaries or and employees are of any imply, the meaning as used nor assets

Danny Walker

and the operational quality teams top quarter deeply everyone collective environment. we outcomes, The and our here, while Home and segment, have in grateful. and for XX and Hospice Health Omicron our to harrowing and produced record heroic earnings Derek, we outset fourth first double-digit to they operating both strong this thank difficult At our that XXXX our and clinical full-year you, done and surge. recent the and like results a welcome work portfolio through to Thank I'd have despite call. individual are adding full-year efforts achieving XXXX, In bottom-line agencies been growth most

overhaul better systems; the pandemic Health the to. and short we including investment of completely in resources Senior our to leadership surges unique recover a three Living three, results markets; throughout acquisitions, early ventures data overhauling an In general, Texas for Oxley COVID-XX COVID-XX new spinoff high record and and segment ability results and full four, now our IT environment. system Our the the demands high and expectations and stage Home accustomed pressures with; of robust in winter Sarbanes completing with volume our poised Hospice the storm achieve of the two, our time signs administrative is with associated the operating temporarily the XXXX Senior of stronger XXX limited of established fell operating Living the we infrastructure, been our ourselves. the and compliance requirements and in Ultimately, successfully improved business more weathered one, segment; to of clusters of have have exceptional segment and waves combined leadership of XXXX

'XX, we see. However, encouraged as by we what look we're to

throughout model executed two, immediately limit last fourth executing quarter, After return described opportunities core across how and opportunities have to initiatives growth to action retrench segments; we team three, we and significant our core around steps that principles healthy and to; one, distractions, local took could successes. quarter, our the ensure throughout do each segments operating so key on ensure end. will careful is at and we our led a we In level that without we to this to performance history. our both historical our of have and in a since, of both high several we took these As XXXX patterns that to review the continue reinforce distractions; core we the achieved

skilled campus complex, communities, we these combining operations. five operations In in care, residents Continuum, and these of that First, underscores operating our environment, better the refinements our announced for a laundry impacted allow beneficial families partners all of Living partnership a sharing and we mutually of where and that costly our Ensign to facilities COVID share other This to through where strategic affiliated will the at allow believe we have staff compliance. the inherent services geographic completed became Sarbanes-Oxley third, operations Senior the and while of second, a of entered each that value we we these transfer re-structured mobile infrastructure needs performance our recently communities into with on portfolio; system, accretive potential and upside Ensign taking tighter mix a of campus kitchen, across these Ensign changes Living transaction continue that the will with with Care our to the earnings to transaction ongoing in our implementation have development increasingly address staffing footprint. steps realize leadership the involved. nursing explore Senior collaborations, Based better and which to on Ensign will them to settings Pennant our allow agencies -- focus the and many pandemic, contain related these and we largely we value home expenses, to care of the have and XXX we reconstitution and expect one, from just of five been mildly in lines XXXX, pair recover the business; to Section representing; of spin retaining physician be fewer and the optimize effects of setting this

these invested have will our The in our XXXX also on our upside allow results. invest of Center their to operational position the in to highest ability opportunities efforts and footprint We accelerate in of beyond. combination teams to continue in development us will and focus for and us to continue existing Service and grow to our

fruit these quarter. first seeing in We the are efforts bear

both realize significant in in opportunities are and segments there XXXX, we many to years remains to that Although for come. excited

opportunities. We relentlessly focus biggest on continued our

we anticipate $X.XX assumed experience based Throughout XXXX, throughout full at the COVID-XX of the transferring and time on five landscape COVID-related were are we $X.XX in we the guidance ramp XXXX, revised XXXX. Ensign of $XXX in $XXX full the in adjusted to ADC, impacts our of hospice consider providing to impacts release revenue press share Living wouldn't the for guidance have earnings revenue As per of in that impact range lingering to expected to labor XXXX, to And Senior staffing, that, our year communities the fourth million announced in navigate to and throughout we and the light year. of difficult we want which efforts we our and the lessons we we've detail in provided and with operating on greater in cents. the we tireless surges, thank clinical of consistently range issued from year We the serve. million predictability a stability further many guidance and from and operational to environment with grateful becoming operators turn a partners communities for quarter over into and to view endemic results. again used are is operating their in have results. learned our impacts our provide have its the of our COVID very XXXX, operating changed XXXX Brent and with time to a guidance, that We the XXXX, Brent? In look I'll our prior yesterday,

Brent Guerisoli

Thanks, Danny.

over Hospice $X.X markets, adjusted Turning many of yet COVID-XX the revenue while or million X.X% XX.X% performance. we of first million our EBITDA quarter. Through declined quarter, segment year Home prior increased to surge the Health million of $XX.X in cases and year $XX.X our another prior from to

which Even year a from of ADC cases that a well of softness were modest which higher Hospice Home admissions, other third admissions, a The in daily saw by a in quarter, of headwinds, our more first over of was the acute quarter. Health decline the the rose more of the decline have mix length the continued result as prior markets we and lower referrals to concentrated effects as as down hospice quarter. in largely COVID-XX average in admissions handful X% total hospice tend for have into our This acutely growth staying. is settings operational census average impacted and and solid higher

care with focus key communities, clinical of existing confidence meeting bedrock can and our continue improve. exceptional future we talents, focus census to we produce are relentless grow and as The local strengthening of growth our our providing confident and operating new in to partners However, our key adding patients. results on conditions the on is we as needs healthcare stronger relationships

care high national Home the CMS Home to We marks a reported star achieve acute X.X quarter. average our meaningfully with an the continue XX.X% in XX.X% below, real-time of Health of and several quality according rating scores analytics, segment, and and Hospice to fourth rate average third-party hospitalization Health across

to improved Home Health X.X our stars X.X with well in recent acquisition stars in successfully quality improving the have our star the of agencies our acquisitions rating from currently. CMS as time We acquired measure at average of XXXX,

discharge Additionally, compares to the the or reported which average our quarter, with national XX.X% discharged care average. level of measures XX% to in the same the was patients lower percentage which community rate, of fourth favorably

score composite quality the continues the fourth hospice end of average to at trend the Our of XX% well reported national of quarter, XX%. compared to as

on referral be clinical our our quality high standards outcomes we as We emphasis confident these will continue by partners, recognized areas. are in our increasingly performance

surge segment Our continues that its the another throughout XXXX. in it as staffing cases of COVID-XX our Senior impacted in Living recovery census the this quarter face and has of

basis and average pleased completed separation services We this we've same XXXX. which began, are the occupancy we tools the in occupancy despite care the increase including that in decline, not compared rate data segment, able to heavy were to XXX offset than first deploying more of our are a decrease year-over-year we resident half distraction quarterly system our that and rent although, increases since targeted We since in been first wins better was period. a of drive pandemic such see rapidly with spinoff assessment to to revenue, the some thanks through segment the points satisfied results,

and we drive accelerating results. In million to best equipping and a in margin informed by addition, and accelerate stronger having ultimately local as our increase and of we the rigor growth. analytics highlighting our EBITDA incremental them expanding elevating quarter, expertise significant by by upside around instilling fourth professionals and we improved our revenue further field talented key driving sequentially accountability data dedicated foundation, more since resident over recruiting and decision systems and practices quarter, adjusted X achievable leadership the million sales our and in the progress The over benefits better market results our areas turnaround made this X.X time, IT the revenue third will fourth developing building of focus that the with making, ongoing compound care, segment. tools, will marketing and around financial quarter, over and leaders, stronger robust have control complete cluster In resources the

Senior As Danny of our campus in concentrate a taken on Ensign benefits. and footprint mentioned, immediate with pairing which we us recent to steps in efforts opportunities. long-term of transaction we our geographic will outliers, months significant allowing that Living retool leadership are have is one-time based believe generate way operations, to some a The core

activity. first provide significant investment operations portfolio, this update occupancy a we of continue in lost we sequentially in field this and systems, service families. are Derek? the potential I'll the and of Derek an leaders our can that, seeing residence to leaner far and better are we quarter, the their our confident data our new Living With So center, on realize Senior to a segment. growth recent recover the bench ground ask deepening in and win as With trust

Derek Bunker

Thanks, Brent.

fourth ongoing Omicron the focused the with Hospice Home in Home no quiet Health, XX we and the the agencies, and XXXX, surge. in impacts on of of closed Care and added as added transition earlier XXXX was navigated uncharacteristically acquisitions Our quarter XX the we

new for in stride they are their operations hit of their operating excited each We model. these as

they work As we most agencies our back the the agencies our many ways leaders rigor to more to in are acquired year, build agencies and after like we've right to around as continue they certain and support investment acquired which for each than for over. growth or confident slower these times operation identify culture mature, of been we paid we of The them the as expected still practices. have potential much XX% many average year and development of grow recently established has best history,

performance XXXX lead and We look in will are the our forward Hospice beyond segment. growth that and confident are overall Home to fundamentally these driving in Health deals the we sound, and better

expanding acquired Home operations, In family. Pennant Jen? to excited and hand continue as we for addition, recently review the operations Senior And as to our add Jen quality to in pipeline of And over opportunities. potential new financials. execute it now, Living Hospice, deals and source continue to of is we our we're quality I’ll Health to the

Jen Freeman

release in yesterday. you, morning and good XX-K months Detailed December and our the full-year ended Thank and are Derek, for results everyone. three financial XXXX press contained XX, filed

million, the reported $X.XX. of share adjusted over earnings GAAP December increase XX.X% For prior $XX.X that earnings note per total diluted the million Ensign. earnings non-GAAP XX, XX, losses full-year the December the include adjustments XXXX results share ended GAAP of share XXXX, Medicare the for Senior of and or sequestration our of for five the with we $XXX.X to year. revenue communities the full-year Living ended of adjusted benefit impairment an Please non-GAAP per $X.XX transferring diluted and associated holiday, months per three

Cash payback expect repay EBITDA affiliates. from X.XXx prior in $X.X service rates results automatic and hand which and million we that and $XX payments While end. in negatively on credit over of Key of to the XXXX, and February million the Medicare X XXXX respectively overtime million paid months expenses payments of Living perfectly ended difficult million $X COVID-XX respectively included five XX, the amount revolving quarter for overtime $X.X fourth flows and and payments, which remaining of drawn full-year in through our the million, at excluding end, quarter are began we within revenue, have XXXX advanced have were of the period. and provided as impact of XX% revenue full-year million Ensign Automatic to to and recoupment such include operations if all estimate increased and comparable period. million $X.X quarter transferring cost we by lost of million on $XX.X and net wage the related in in X.X the line XX, the communities we XX to on capture lost primarily recoupment in million repaid expenses X the debt-to-adjusted of back Senior our are cash December and metrics impairment been million the three advanced advanced X.XXx of impacted April,

As adjusted $XXX XXXX full of of Danny provided we million in release, of year earnings guidance per mentioned, to yesterday and $X.XX million $XXX press revenue our to share $X.XX.

Our guidance XX.X% average shares is $XX.X million based on weighted of rate. diluted outstanding a approximately tax effective and

X, with At and at impairments other among related sequestration an Senior occurred results a In It in communities revenue the excludes our revised share-based are operations, to associated unannounced adjustments rate the increase losses had midpoint, compensation, no and as XXXX restarting anticipated acquisitions disposition Living on adjusted the Living the things XXXX and guidance the increase being and transferred costs, of X, cost XX.X% addition, acquisition of in reflects July affiliates. estimated the when of XXXX. guidance assumes, XXXX Ensign's startup effect if annual reimbursement Senior five EPS, COVID-XX. communities January X.X%

read includes during guidance headwinds environment XXXX that quarter, the fourth Our of our also and XXXX. lingering the first seeing the quarter the in consider current which arose we of operating are

continue half and challenges staffing, affect our other first results, we confident census, in may While leaders. our operating are to

to stronger in hospice and some anticipating the increase Senior hospice increase and some capable health these headwinds our our rates leaders are confronting to home, are a in than and X% Across organization, in XX% our Living. as a before. and final home, revenue, from health We from census, a X% the of ever improved more result rule X%

of of lines improvement business in will acquired reflects our core revised performance unique operations are and in to healthier and recently we strengthen taking in the in growth Living that our business. confidence our actions same-store model, to Senior Our principles agencies, the operating both opportunities our guidance lead our emphasize

While anticipates of cost basis the XX improvement our points. of by the guidance rates from increased ability half improving service during midpoint impacts latter staffing the of to and experienced the XX of incorporating wage approximately costs, challenges our XXXX, manage to rates

Brent? CAGR for historical is persistence, revenues with to we excited And of to and to Brent XX% of I'll our are with excellence. leaders. discipline, have we couple experienced hand We by to operational executing achievable EBITDA that, which back of XXXX, know, our return a it and local and plus, CAGR highlight XX%

Brent Guerisoli

Jen. Thanks,

quarter Pleasant following community, Gillis; From now centered This Heather each the an in led cluster is the time the of communities over operation their back this celebration. our Racine, in This Development, right residents. quarter. market of values talented their other added second several Heather, year transformation a incredible a across work acquired additional operations in supporting arrived, second sister pleasure drive Shalonda of They a we growth actions As awarded talented revenue the of highlight translated and communities turn available in in the accountability, sales values Tiffany rating. are partners application intelligent of the focus growth a Morton, year, on in for people, Pleasant first same was agency customer Sound on individuals of CEO, 'XX. can At foundation investing This share fourth ownership extraordinary marketing of organization. culture customer hospice fourth remarkable Morth; like quarter XX.X% focused store these community. and team in accelerate achieve taking. to Director King of Senior and to to growth in supporting and to do, impact core to partners stewardship prior and board the of it right into the at Rothwell; clinical Because XX.X% results need operating CCO, strong Sound the represents. strategically right Pierce and that, quality from through the Tiff, and strategically the Gomez, COO, in Point is have outcomes Point in time At have and in a gone since of Home and quality and model. their the turnaround the the the what year, that local fourth A methodically results throughout in professionals, the the many of what and care XX.X% It's went their Hospice XX.X% in ownership, Health elsewhere, exceptional the possible increase Devin finding compound to three Christine, local years achieve providing Their star culture agency difficult many of typically of clinical core helped service on by occupancy quality beyond of I'll Living XXXX Business under lose risk of of leaders. practices and Sound Health and Danny. them I'd emblematic in to invested rate quarter Community, culture building Wisconsin certificates XXXX leaders revenue the producing growth of in purchased Home team our expanding Wisconsin X.X first of above the in the have prior that immediately leaders CMS instill the newly growth in stories. few achieving and acquisition. and on in and the XXXX in remarkable the agency's our impact typical we The of these led care are Puget Wisconsin, invested of traction would then The trajectory, saw Christine XXXX. and of continued growth community combined to offerings that vision operations my helped a had best Counties the are With XXXX. some the Puget Washington, of in built annual which over other team, and CEO, EBITDAR during what in change X% whom during a EBIT investments which The XX.X% XX% and Puget XXX% has they

Danny Walker

Thank you, Brent.

Valerie, the you questions. open it for procedure? we'll up Now, the please instruct audience Q&A could on

Operator

question First Qiu of from Instructions] Stifel. Tao [Operator comes

is line Your open.

Tao Qiu

Hi, good morning.

First you agency the for of statistics. same agency providing on new all, disclosure more thank and

I the quarter, that agencies admission there. out lagging recently contributed called think decline Home the kind Health of the performance acquired last you of to

I the agency quarter, a Health but pool non-same drag Home now, in think this was on hospice relative outperformance we've some side. the seen

environment, some some So maybe the of there? investment could improving you labor short on performance the few performance drivers rely challenges would medium matter agencies provide maybe and labor you some in Just the of the be understand wave? in term more fast on bifurcating get do up between the what buckets it And quickly Omicron to term? through two how context positive And a less the how scaling get back unique on Is new or agency you expect can to making of and more trying leadership? development track?

Danny Walker

Good. Yes. Thanks Tao. for the question,

how heavily related services. on transitioning other the subtle agency are swaying issues and not market of relying aren't ours other rate, things sources implementation We're it related through to we referral to labor systems. to at our normal these external make On clear. The first our we're to more agencies, from

them. had our taking bread little elongated more bit which And is process operations well-regarded smaller infrastructure clinical difficulty a and butter, into need that so, more of we've and more

those in improvement the seen into improvement, feel first And quarter. so And continuing we've significant fourth we like our of quarter. the rate is during

these our existing side. ADC don't But operations shift we've on differences significant Home hospice coming said them but Gochnour we also or challenging I excited more the of environment see seeing ADC fairly patients wants weathered about that, acute care in Having XXXX. service, acuity that. little that. to through Many add We're between pressures, you the are if seen their in settings. the of drag mostly don't we Home Brent on to on we're referrals John later like volumes continuing have a feel be know from volume Health Hospice we process, on in and mentioned coming a acquisitions, success a so perspective disease that. Health And new a where

are All on nursing of residents housing pressure living the for senior made skilled properties of little the absence a ADC are longer-term which of hospice maybe positive, has but that facilities or bit front. in

So able from we're first as seeing in John Jen add anticipating to Brent, that. that recover We're the color well to we'll be any mentioned, that quarter. there? persist, or

Brent Guerisoli

I'll just add, Danny.

us With newer Tao, I the was that softness look is see a we've think well place an seeing, in the extended and And we're the what established been our those year. in strong throughout management, performed of for expense quarter, time, operations, in but of community, fourth strong course you where community. formulating place really you across same-store culture those you there period with you're year, have see they really the the growth. the those acquisitions, still and our

entering We are often into new geographies.

to And where referral place a so sources it become choice, of employer turn. just takes little longer to the the

a see pressure. of that margin bit little you And more so

had a fourth have you that seen labor changes seen some really environment, standpoint. impact has on where the the of in the where on quarter pressure think I think I account everyone that margin has from the is And in higher kind more COVID as Danny so little optimistic. is us business, and softening that's results. for hospice that margin the in the softening ADC, we is where of our traditionally mentioned, which But couldn't then be impacting

We and take have at of volume where we pretty back those capacity that's surge, and and to able out Home with a really feel there. CEOs a saw the significant not. like and both across are Omicron we're a organizations, who referrals we Health our talented out full group people And illness, of COVID-related weathering Hospice lot

Tao Qiu

Got you.

The second question is about guidance.

revenue Housing the we guidance, the you Senior look million if at you Given the assets lingering the from quarter from five the last headwinds mentioned, guidance. exclude flat essentially the effect in when first you $XX sold,

a the also the last the of in rates sequester think developments I of or few positive increase states. there guidance, from since some either the phasing are the Medicaid

versus low the flat assumptions and last the guidance one? kind run Given softness give the may of the in to this since update last XQ you changed of rate XQ, what have

Danny Walker

do I surges going difficult noted as to where led a you to we us was in what repeatedly to up. I'll were of those to in for Jen going to specifics. And a tried to people environment not Yes. when -- to understand give surge my game end the come. of COVID projecting just let it's prepared we're remarks, some get think actually going we I

we've in an this so -- to endemic kind of an draw attempt back this build with COVID view things And of view of guidance and in our XXXX. made some

or affected some Delta with that we're our to that set find of realistically But have a view above Now, achieve. nothing what periodic taken that we're we've seen actually in, going we've don't still, of us can ourselves assumed expectations how are XXXX, we've baking what surges. so that like ideally in we've where COVID kind situation Hopefully, we we in Omicron. and

Jen Freeman

just speak So to specifics. some to

impacted to Ensign. As is by transfer the you the bottom That's the accretive mentioned, slightly on entities in $XX about the line. revenue Living million revenue of and Senior

So sure is I make just want to that recognized. that

operated loss, So those in loss. XXXX, net that slight in entities

our of COVID. other that's mentioned, on So that as the we impact And adjust then wage in incorporated, also as when guidance. the the impacts from there I adjustment about, and XXXX, we've seen part increases talked just you Danny

remarks, to revenue accounting to the looking impairment just revenue. that, So improvement in also is in those service that by fourth fourth as about quarter while in percentage service of, And that XX point helps we percentage the took as we at improvement we're I that five Hopefully, mind communities. our an loss prepared the a the quarter in of related bridge the a million impacted $X.X cost of gap. keep to of cost mentioned as in are XX of incorporating our basis

of first forward related into is effects and piece mentioned, carried just hospice on the as it hospice to The census the other we Omicron lingering the quarter.

Operator

Our Scott of comes Instructions] next Stephens. [Operator question from Fidel

Your line is open.

Scott Fidel

give Hi, around everyone. guidance. think on just Good in helpful And the curveballs pandemic but quarterly last actually quarter that some insight of guidance, perspective, sort of visibility the well a and with morning. guidance building you're you upon more just for really all thrown anticipates follow that? to into given -- comfortable the us you're the sort EPS forecasting To you don't relative revenue that have how some been first and point extent discussion. sort knowing first that to how to I just at maybe of us the reset that then just the the and it base into provide wanted quarter be starting providing more line the may of just I continue from

Danny Walker

some provide revenue estimate conservative of from significant guidance deliberate Jen in we've more Yes. info. Scott, be pressure kind current But and to tried specific to our step and pressure more a generally maybe cost operating the make to try can environment. ongoing speaking,

with improvement tough we've kind QX at QX the where of half. QX, really mild looked can go of of we use and pretty So, some our a that in as second point starting kind in

quarters, where in our go. last to clarity we've know the and where on that that at can think us providing we Now we're guidance we and couple missed we're concerning of it's we more not

the unknowns the to in build and with be quickly conservative labor to this of how hospice to an is recover, try some be the will So items. of how through some navigate for we'll able census contingencies attempt

before tried hopefully in operating we a say, we look better, be it ahead and of the to a more we that conservative to get can But we've plans the these internal those expectations that will of of be and in revenue to -- assume think this that past, the some elevated ability exactly really Yes, And Omicron? it's that to think that the in there pressures, and of have lot even messy. of baked a the that take get we've on we if at And even we've think sit revenue offset rates in tough feel we past I terms how really without kind we where in to we on that. these last like, XXXX structures in environment we had paying types excited quite optimize all we there's sort we've moving appropriately had and patient based project room and good is success Now how approach been our and in but is, operating affected setting. waves you we've feel staffing, lot our of of this a to looked about we've do we're the of areas and affected need. from we're opportunity We cycle. year. optimize labor environment used in we're internally a XXXX lot of can at, about looked our wouldn't When it's weather feel going costs. year, rebounding what as of not try kind And there's been But parts prior can approach. reality achieve those at our a the have

XXXX. do so we're to not that And to repeat from there? you add know, don't attempting have I anything Jen,

Jen Freeman

think don't Dan. so, I

far we for When seeing -- I in in were that QX and of also quarter covered results. looked took making in the modest XXXX. as it. running to what especially think all at wage we're things as first rates XXXX, we And but of settle our specifically, we're incorporated to experienced the incorporating we sure what approach as how our QX quarter you've start increases go, we fourth

trajectory also it's that Brent, that one of to think Senior and Living. to we our some in QX, you best add to do Also there? I note had quarters in important want our

Brent Guerisoli

takes time we're the mean progress. term. to navigating time But not of that close in where Living -- anywhere you're made investments expect be pandemic, It I It's in near just especially And add step side, frame forward was of optimistic the that. some us XXXX quarter, take. going but to of out a to opportunity But going it in see it's to And those we're prior build the all encouraging time. for relative an And of is fruits same the realism that the we've just to to just and some realistic the to starting but Senior you're a when to the Yes. leadership turning at we starting the complexity. a efforts. foundation. to in building that over so on we're making be optimism, QX realize in

Danny Walker

to close it, how we expecting point, of on quarter-by-quarter we're did pretty that a looked out kind is So sort it. just we at flat of Scott, this and

should progress where spread and little we're the if aggressive in As could materialize, effective avenue improvements, right, And going which and up lets view best we're the expecting obviously take we and view that of every our flare-ups. now at out without of and right, seek helps. improvement, define right first assuming we COVID navigating kind to in going becoming or at bit, our that's lot surges But But assuming be COVID, a quarter there's is that. all their to teams endemic continue to that's evenly throughout more that said, of we're of into it an where year. a where hopefully,

Scott Fidel

importantly, the the then qualitative of Yes, comment then stable and that and about just fourth most building of does. you thinking sort that. I of being all XQ directionally and sort feedback made quarter appreciate upon relatively the about sort versus

of just want last a affected meaningful relatively think to you -- to maybe had I of sort couple then have that payments on said cash to about can flows Medicare you you're then as sort flows. sheet you little cash quarter release, recruitments first that fully you $X and I to at through settling the just advance up relative close Medicare want payments? normalization least If around as ask the the to I'm for to Obviously, soon cash the quite that I mention we a guess, expectations. then the want loop second you advance flow the of on thinking quarters. CARES, payment on the I question million I terms the want the And confirm set just is just how to piece of Just advance help update payroll deferred and issues to the think left us mentioned of, show lap the and the the flows up start finish related Jen, optics I press XXXX. in us if confirm, expecting reports cash into Medicare just in dynamics. in to in these appropriately balance I the cares. important around did that. move showing give get assuming you're to about level improved of and did more on confirm how payroll that, just of cash insight also, go the could flows, to deferred to sort move

of sort around just your here cash is year. question flow the course of on really, trajectory the the thoughts So the over

Jen Freeman

Yes.

that take the acquired to cash our think on stable, the flow course improved also businesses. them operations we as producing we'll flows we are definitely So new accustomed become cash see as I more of over year,

of April. payments, Two, out in of get on left that's The recruitments would starting and to being expect we one. you the So we $X taken amount advanced June. end million the pay March back, go the full do at that say, outer have through I limit the smaller do by a sort end of then

will we that time the -- that back pay will frame So with easily.

that come flow. And for recruitments. Group, So in of then affect cash million first Ensign do a those the settlement with $X.X cash the quarter out will the for flow will the part that that mostly we as have,

see assets We That's for we'll the for year, then will deferral payment a our we out. the in approximately social at that's million the of onetime end end security sale $X.X cash. be And due holding that have for XXXX and the of payments. so the

So are the us. big affecting be those items will that

operating course, some that's all Of -- we'll the on have side.

cash So, as things flows we'll have and acquisitions well. like for out that

Danny Walker

level, that of money available. High the in we was all of the was the Scott, we're really all back took with rate though, that. advantage paying pleased That one thing of

The we've built the able that to to into There's flow. always so, don't period interruption this we've collections new is wanted we had And acquisition. every strong collect. do do. on good deals where been cash We've dead

the we've then elimination with of RAP. and -- that coupled so And the

in million going kind back regular -- cash to $XX processes, but trajectory million paid the our lot so a on And there's with been through we're collections, a over cash overall $XX our pleased overall, a from standpoint. have of we're on little flow

Scott Fidel

model. of to bit. that Senior Understood. at and We the one though better it margin in And pricing relative even for Living. the in just last was that see the my quarter, the having did drop fourth pressure actually, least certainly having occupancy SL, a actually, just improvement one show terms then to did interesting And me, in on

during Omicron remarks give If had seen the the XQ, even that to effects. possible, you able us actually occupancy said Brent you despite in have maybe improvement I in be prepared the would think some the sort of of is guidance occupancy a the will occupancy now SL over And for that the course spot on in where is the first trend how year? trending SL then, update anticipating quarter?

Brent Guerisoli

the part give And was can for of the detail. confidence got We impact of customer look January February continued buildings. experience slowed wave some And of pretty then that down have and in a even and our from I it's a through then And occupancy March. see Omicron we've December. incline we that of hard to to you'd now middle But Jen at really hit of that trend. and you'd hasn't an impact Yes. standpoint. right that can't our staffing continual yes, over sort pretty that providing course into from that into in have of about would XXXX, guidance, middle another hit you we number We're Maybe improvement, numbers. specific in December, challenges we see experienced and excited something this going episodes these started of

to in we as lessening we've we've out that process. again. little bit we're And those, build so, Omicron a weathered of the starting impact, ourselves seen that about as a learned of And

continue. And not of mean just lessening growth so, it's -- COVID impact. that will we the feel confident that of I because the and

community, focusing fill changing those marketing effort can and empty we and spent conservative We a our relationships making on our our go in significant on teams, a business time strengthening development that the out of teams efforts amount improve building so local and the our to strategies beds. have

the to occupancy And and anticipate see throughout confident. We're so year. forward, improvement we're we'll moving continue that we

Danny Walker

-- been has improvement XXX about basis points, the mid-December. So so since

So be if to say the that's occupancy by of Omicron out get wiped seen. updates see surge on next thing. lying, Scott, we've them didn't what provided I I'd we've another or just

assuming, that to future team difficulties where worst materialize, kind really COVID COVID ability right? we're our position. should to lost to pretty so is extreme culture we we've having of with kind our coming deeply in challenges gains, there's to is confidence And we all about. those of if we're back good of related going made strong, are be is we the the feel really And that and so the don't operating again, approach others sense a that environment. pressures our guidance of though even And pressure we adherence kind finish of XXXX, over, and care One focused really, behind control even is thing kind we've in the across members what our team dealt But this implemented excited about that sure our We've and is us on SOX can that as compliance, Brent's the those a that on to emerge making that systems that we've is navigate tough can really to mentioned morale cut from organization we our growing COVID process. increasing. things we're

that's so the picture. And

we're the But some On a we're things the to see may until occupancy where hopeful neglected care preventative taking those that's at. of a a lead improvements front, from approach. We're further even we conservative materialize, driven that been again, of excited. and kind we're cautious

Operator

any for at questions to closing Instructions] further showing back I'd Walker over like I'm this time. no [Operator call to the turn Danny remarks.

Danny Walker

a in the want I challenging this. and XXXX, that had XXXX of years And I XX-year view, in both the shareholders, public like but couple the XXXX. our only us would Valerie. history. outside inside Thank to through of you, for remember thank friends organization a We've organization supporting our wasn't organization, just a stakeholders, very in

we move And for us in unusual up the forward XXXX beyond. short and come it's forward organization confidence expectations, our and we building restoring to look and to so, of as into

to involved care. you what joining thank So everyone us Take you in Pennant helping is. be who's thank today it for and

Operator

you you. does Thank conference. today's participating. for and Thank this Ladies conclude gentlemen, all

day. a Have disconnect. may You now great

The Pennant Group, Inc. (PNTG) 1 Mar 222021 Q4 Earnings call transcript