PNTG - Earnings call transcript Q2 2022

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Operator

Thank you for standing by, and welcome to the Pennant Group Second Quarter 2022 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I will now hand today's call over to Derek Bunker, Chief Investment Officer. Please go ahead.

Derek Bunker

welcome, and Tamica, you, everyone. Thank joining Thank today. you for us

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

or events, federal reason. any update a new information, discussion publicly of Pennant laws, business on securities or and actual arise are are our subject on changing Friday, by remind anyone short our Before on any of they any results. also August will have matters. Listeners place our to is beliefs be about X, statements forward-looking current call website and or at available as September undertake section statements our operate. statements as XX-Q a differ that those pennantgroup.com. want I cause IR statements to circumstances for its risks where to we could may are SEC announcement reliance required and nor to until few Also, and assumptions expressed should expectations, available the today, Mountain and a we changes this made be for complete more our made which begin, our yesterday. our call. This today from that on We do be result as updated undue press of replay X, factors filings of Time earnings impact We X:XX forward-looking implied will of management's filed on release all uncertainties these been, to listening to XXXX, forward-looking Replay These that and subsequent materially future and other have Except this results call a based affiliates not statements to statements could that today's on housekeeping not XXXX. p.m. revise in website environment call. encouraged are not the review of today's

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

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

Brent Guerisoli

decade. moment to take call. to the to XXXX Danny a friendship second our you and today earnings results. thank his To joining begin, personally Thank I'd quarter Derek, Walker welcome, over and us like our everyone, and for quarterly Thanks, discuss for last partnership

and a early role continues instrumental as the we company history days was CEO August Chairman. experienced this we X as growth continue and leadership the leadership as across announced, previously in influence forever be the in be and midst the grateful. a of Pennant, Danny the built and the public felt was pandemic. challenges tremendous start-up, of As all will of will Danny's company on the new behalf fledgling to of from team aside our His stepped of expansion we navigated organization, a as and on

service As performance. in critical have another and beginning have prepared across chapter enter to we segments deep our bench in been seasoned leaders since both growth the and our accelerate to our we story, of a talented that are the center

decade CEO articulate the the our Now operational reiterate role, the to so our commitment our history success future. instrumental as and to core I want we're principles and why have been I step to for of cultural over into that excited

differentiators our disciplined operating two, lower outcomes developing achieve our and three, one, leaders; settings. innovative quality focused our model growth empowering care strong and to are: Our and cost ability strategy; on

First, innovative success. of is our operating the foundation model our

driving operational endeavor key Pennant's where successful top-down community Our approach close two, most is and more from providers local to financial to are partners accountability peer that two operational care needs meets structures. operating effective occurs and and is model results accountability clinical when at resource one fundamental traditional our than on is employees; care and health founded patients decision-making and to services: hierarchical local a health or

operating at is peer choose prospective localized our recommend care level. referral leads clinical model, leaders key of of cluster, data operations. is to is typical and practices and under key needs to and and working and the each where model patient This together the clinical operational decisions corporate through program unique geographically make models and to benchmark independent our local are part operation or group implemented operations of direction financial partners partners. financial their Our communicate leaders, of they our success cluster unique allow is We successful every where and operations. to sources real-time control to because of contrast This each patients, accountability is drives performance to the and proximate which innovative functions our approach outcomes our the This leaders is to whom other. patients provide share believe for The accountability each to that against that a to communities and on and defined empowered serve. of creates is the in incentives and development support based future model cluster best operation cluster clinical centralized the decision-making

When agencies strong Second, staff look be health our quality, disciplined clinical investment expertise We growth occupancy strategy. of with a potential communities reputations of senior Much expertise and improvement management. and historical and attributed operations provide operational, and living opportunistically drive platform our strategic physical in and look hospice care a financial that into for marketing organic operational for growth to acquisitions, additional leaders where transforming our with for medium-sized capabilities with to revenue home and acquiring them can our through cost clinical and growth, small- performance. we quality evaluating competency rate wellness plant disciplined management. and can increases and census expense sales

have towards in DNA our done we and strategic As put and disciplined organic continue growth. in existing new throughout of to drive and our resources, we're part a additional will we operations to our manner. capital markets growth acquire the of more ready leaders and are history, Acquisitions

financial investment take we summary, favorable an clinical proven care quality yield our creates unique needs demographic well of the that operating a believe achieve offerings, are stakeholders. and home hospital and as the improve generate more Third, business, better as clinical of volume settings. to unique and and short results, industry term, readmission positioned dependent that rates care term with to to thus as our revenue health in emphasis acute market service experience solutions that of outcomes, equipped talented and allows us combination to offer allow our we generate life designed living and and In we of customized the trends clinical to in shifts as that an industry a quality equips a appealing that by meet setting, of the evolve lower as critical lineup to of offering value-based deep at population. profitability. health over senior strong quality grow hospice relationship-based outcomes strategy care, time. operating us With reward platform well leadership as operations our which to decision-making metrics over affordable value cost are our a accelerates believe model unique a greater long growth providers local the in local qualities, broader and leaders We In long and toward number value lower experience better model continues and advantage our and cost these many industry us develop programs residents, outcomes continues our patient increasing complementary to of turn on to expertise cost, and over such measured all provider an acquire for

We've growth several years pandemic momentum building last that and year, pace this acquisition the of have strength several the propel foundational improving we and system we to quarters, the are over strategic and transitions. balance Over been poised built flow our through cash sheet, return to a spinoff-related and brisk course over of next will our beyond.

-- toward still have our operational we have challenges continue our progress we're how generate ability and where we our of overcome to and about but there, have deploy get know we and of the to an significant share significant cash we value to share to to we are landscape. M&A challenges continue growth accretive active We to in overcome, and going, unlock, and to excited toward inherent are making excellence

EPS introducing yesterday, adjusted for our As release in adjusted we our EBITDA guidance our mentioned revenue and we affirming guidance press guidance. XXXX, narrowing modestly are

operating is evaluating and EBITDA provide to cash picture overall and additional in our our help expect this of We flow. better a measure going obtaining results guidance annual adjusted forward helpful

results We expect we to as operationally. to ramp up our sequentially improve this continue year

our of update I've second over with year. build anticipate incremental the far, the And that, consistent with expectations. John performance to so on of an course our provide a And half those asked We similar results. is operational the

John Gochnour

Brent. Thanks,

second performance with operational results consistent our Our quarter expectations. ramp are

in health improving to with turbulent and teams in lingering our and living systems economic flare-ups. pleased hospice and quarter to in the report in local are conditions results face improved focus Key our was operational and empowering of solid our We results COVID excellence senior our performance on and home ongoing support. segment the

top increase admissions results and in to segment, admissions, over stronger prior X.X% hospice strong the and of near and increase second forward, there X.X% remain headwinds future. more the were year quarter. the bottom by half our are labor, growth led results strategic XXXX health hospice health in While line in and anticipate organic in each In poised home inflationary a Medicare and a home going regulatory and deliver we

from communities of care XX.X% the acquisitions XXXX we serve, our grew year to census, is performed hospice average relationships as sequentially as the is strong over partners better. Our the revenue a some first our prior continue still quarter strengthen home health there our we XXXX. with and daily health across grow quarter momentum saw softness ADC in over Though building X.X% we

strong stay increases, leading first continue to our ADC our of As adjusted to cost of EBITDA fuel normalize compared margin length rigorous to improve. improvement basis leaders in quarter, local continues labor, and XXX and of emissions, XXXX. our the to average other the exercised we expect our discipline of the face quarter cost teams to points continue Throughout inflation-sensitive

CMS the majority above. of metrics agencies health rating or our achieving Our of with X.X a solid clinical home remain star

continue XX% hospice Our of national rate real-time the trend quality is above to below our And industry of averages. acute average notably hospitalization scores XX.X%. composite care

rule, solutions hospice basket front, rate related applies during rule. inflationary during making payment intense the We framework permanent were data incomplete to of of the XXX regulatory were truncated the of legislative the base in a would X.X% with pandemic the XX-day update payment proposed industry, X.X%, reduce than services points came throughout with of of adjustment and disappointed of and a CMS' cut cuts to working pursue the by methodology partners CMS a to that permanent and health forward higher for market beneficiaries branch by which from final X.X%. providers. Together encouraged a work home period in with On the Medicare the home the in dramatically release offset health which update look better for pressure. we period global we behavioral to uses a proposed reimbursement peers basis

the introduced the We legislation thorough the would adjustments. conduct Representatives are and bipartisan more in and provide these by encouraged that CMS conclusions House analysis to Senate the before delay regarding for drawing of behavioral a cuts opportunity

uncertainty While strong on and the that of like leadership, our much our sheet model and our flexible proposed began periods balance the rule create to providers scalability our commitment difficulty to in local Pennant has outlines through maintaining acquisitive built approach changes a and operating industry, of will thrived growth. to today, in opportunistic significant for thanks

be living net continued Living community our now Assisted and potential and and A to excited preparing a segment PDGM a growth. confident taking Memory much for end, real will to the we community levers of Group. forward We In our change the reducing impact strong across several the should center modest many in we completed triple community are are Falls, and partners, of in at we our step Ensign of quality by the in living of and even To highly right cheaper improving of assisted with the physical metrics. first positioning a the finalized, our operations completed transactions Twin Station get to reimbursement portfolio, In the our service into communities We affected living to underlying average Senior challenging streamlining key a our year, pull organic half of liability recovery lease, cost the living Care, a favorable affiliates transfer the our capital acquired the & we senior years Boise, in Idaho, Class through care series are acquisitive acquired the growth growth hospice this of use memory accelerate portfolio. ago, to proposed aimed proximity and like that and plants through segment, to ourselves rule environment. our continue Living health Idaho, reimbursement senior home we the Barber close we back to assisted five welcome estate our strategic of long-term the

segment momentum year to footprint We same over of maintain quarter. increased adjusted year represented as $XX prior to be while in revenue disciplined $XXX,XXX of ensuring over look our the communities. $X.X XX.X% we million store of existing of EBITDA we prior will Living continue XX.X% growth million grow, Senior quarter, the or

third increases July quarter we Excluding second the improving several year the increased will occupied X.X% our a XXXX revenue year we half XXXX, our impact exited room with per prior believe rate communities going X.X% quarter, prior over year-to-date, positively and occupancy into average in improved that the EBITDA leading The X.X% improvement demonstrated over quarter, living are by to occupancy senior RevPAR. million over the leaders first of half represents quarter $X.X momentum generating the XXXX. of is first over that effect

up sales by and occupancy us and with high While us average to tools linger a our across tick as that challenges efforts second than contributing portfolio. residents, allow was it new leads marketing better of multiple so attract across solid target the growth labor invested we've and ROI additional To channels. track pace efficiently far and These much outreach, in up to saw with aid in leads our saw our and resources from are quarter expand XXXX follow X.X%, wages is line we we at in we slower expectations.

living to in contributing to We attract senior in this leaders and instrumental our continue and will who develop be turnaround segment. are

We have with services several pre-pandemic levels. more of cost accomplish points and higher to occupancy below

see However, and we been in this resources we're the progress pleased environment. local made achieving operational are support. that the key beginning quarter our know to we we've a the of building in leaders as challenging segment, starts And Overall, that with in results effort. strength second leadership exceptional with talented fruits

can exceptional it to singular on partners that, operators, With to focus are for activity. And hard dedication all achieve persistence, perform, investment clinical and and on grateful Derek we I'm as we service share to excellence. work. our results. center financial we I'll clinicians, over Our continue update confident hand and operational a provide their resources an

Derek Bunker

Thanks, John.

of acquired operations community As mentioned, the underlying living Boise, to the and Idaho. of year-to-date, at our operations the operations transferred Ensign, one communities estate acquired senior our senior five living living partners senior real we in asset

we can start-up and for these we services, care we quarter, a the hospice growth. combination a Montana, our and acquired patients expanding home of offer currently transactions agency also the sources. state position The better in referral health provide of continuum operations During which in strength

provides a continue growth in the advantage our portfolio of senior streamlined which overall our improving Our while rationalization to platform living portfolio. more us for quality the segment,

Our medium-sized can strong reputations potential operations our opportunity significant communities pipeline that of small- operational with of with acquisitions operations to to focused their robust upside in remain continues We on segments. expand criteria where for evaluating in fit our our both expertise stakeholders. organic capture strategic growth potential with that

exceptional to very maintaining and deploy to a strategic on are favor legacy regularly owners disciplined flow quality of forward look be into market business we and our strong off of that partnering improving, We as delivering that is to experience have sellers, and the dynamics high-quality continue capital, with we we an sheet, are and look on several in employee Pennant pleased providing family we the bringing balance focused clinical buyers care. future. them ourselves businesses, their While engage to the and both cash like see with

Our over front for several accomplish to for tremendous, I'll it strategic we're opportunities hand the are Jen? what Jen of organic a can the quarters. and excited With on and financials. upcoming review this that, in investment we

Jen Freeman

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

half line of expectations with first in are the for our results year. quarter second the Our

results of $X.XX non-GAAP sequestration do revenue ended total share to expenses of adjusted continue lost $XXX.X endemic, navigate three or our prior through ended over not XXXX, include June the per million, XXXX. per Please and revenue. $X.XX, results expenses. increase on so and Medicare diluted quarter. benefit effects the earnings over revenue share the operational and the non-GAAP our June of the of XX, reality quarter X% our holiday COVID-XX will adjust that first adjusted as $X.XX earnings note a three months an for impact share and we an XX, X.X% COVID-related or XX.X% months or as for view as increase the For year well million of reported an we of $X ongoing of XXXX, loss per We GAAP our its GAAP

this five $X.X on the needs portion the recognized amount note in eventual at loss a in which approximates million, senior our of of a you'll the As the of Ensign to financials, living some of transfer communities estimated of will we CapEx expenditures The XXXX portfolio and our beyond, flows on our our of focus those benefit seen their quality buildings. transaction remaining be communities to enhance on capital amenities. cash and as in we

of sequential with improvement in from of cash in $X.X are of We QX XXXX GAAP to for operations $X flow million pleased QX compared used of XXXX. million our in cash operations our

a on which the the advanced payments, Also have began million automatic credit our improvements cash without and EBITDA in from of for XXXX, the recruitment months been key $X.X million our highlights net during cash April ratio second payments, operations in in Falls, estate include As free $X to debt communities. ended flow of leverage $XX XX, purchase and $X.X quarter $XXX,XXX adjusted line million for including Other CapEx completion quarter. X.XXx revolving $XX.X in $X.X of and end. drawn million advanced QX note, flow concluded Twin excluding Medicare to at and of improved the of hand XXXX three advanced would on June of would the of Idaho versus million, payments cash have real in QX. QX, million million in $XX.X

$XXX and per affirming As our revenue and earnings mentioned annual press guidance our between share year fiscal release $XXX between million to yesterday, million narrowing and diluted adjusted our $X.XX XXXX are annual in $X.XX. we

XXXX, the operational cash are incremental We supplementing our levels in rate impact measure financial hospice results. year margin $XX.X provides over we can million. be our see this to the current our QX, we and which adjusted and improvement we $XX.X million operating growth believe EBITDA, with addition, Medicare annual window home If In range. to end and and continue hospice guidance additional the confident in for expect flow and a our through into better between expectations we efficiencies of reach census health senior improvement low the of modest we living, are fiscal

margin would us and opportunities allow end. reach Additional high to the revenue

these and persist confronting across that, we've highlight and our performance of inflation other future will headwinds ramp QX And it QX. and likely the Company have and leaders. in challenges a for Brent staffing of capable to leaders I'll hurdles to that expect are hand and continue the we While we overcome, foreseeable and to experienced continuing with to in year-to-date our couple operating create know the local

Brent Guerisoli

Travis, organization Kinder in of Kinder have pleasure to team meet critical Thanks, growing my Travis our while sought in Abilene, they've strong the on In serve health truly CEO, the and year, Home local and reach advantages driven Jen. communities, clinical the Jones; excellence. of of Texas. our results produced and led a their operational community. patients going Lisa Abilene results years, model. to to It's to Year West recent organically has DCS the be financial beyond needs locally above care the spotlight Hospice Health outcomes, their leaders few exemplifies achieved through provide they Hearts financial as partners provider and as the Texas, to produced and that remarkable Flores, community. remarkable choice care adjacent in operating by expanded throughout they they've and unique after Lisa Hearts

provider Allen culture the is have [Ray XX% consistently Travis, Kinder Resort and others continued identified lead employer employer them Fuentes second quarter increasing bottom success top XXXX helped the they EBIT and a and leaders Officer, has life-changing to and developed Prescott, growing providing their team in occupancy top of Las by Arizona; built Libby; achieve reputation residents they've leaders for at the team community by a community led another and steady emphasis being year choice Director, Hearts. bottom a and thanks Ray success dedication senior area. first employees, Village expand living and Rogers], achieving to bright as markets. of EBITDA preferred agencies quarter. helped Doug and in a with of build This At line in and and adjacent and West Operating Chief Executive growth results, their Allen Doug many prior the choice in and Fuentes As to a they on communities in revenue caring surrounding acquired Las service the and The over opportunities multiple excellent to to Texas future years support of Lisa, to and strategically, over as have growth, to invest to line destination while Doug like financial and in top the and quarter growth. leading XX% have culture, and to of Ray over successful being year revenue, Allen Prescott

becoming two to our solution Arizona store helping and future. have senior the true as throughout living what partners amazing ported community's cluster local market Their Pennant. in Las results Fuentes and communities. actively for living culture exemplifies over their team has a these addition the build the ownership In their partners in We're leaders community, Fuentes premier results drive and and and the in in shared act team team throughout excited Las discipline senior at

lighting want we'll every who provide a thank please I to frontline the can we audience make us make who of Q&A service partners sure open you are. that, instruct Q&A, and day our to and it clinical patients all incredible to workers for to and and our procedure? Tamica, up questions. on With we residents recognize Before move

Operator

Scott first question Your Instructions] Inc. of Stephens Fidel the with line [Operator from is

Jordan Bernstein

is half like additional of This quarter question the quarter on Scott. guidance. strength the my driven via volume in I view first strong rate. the segment adjusted health of appreciate and And the you breakdown I versus the Bernstein in home year. some then home actually on in for between is, was second rate health the EBITDA Jordan color guys this how wondering was

John Gochnour

This I John. is Jordan. Yes. Thanks, appreciate question. that

In admits fact, about we rates. and health it by revenue strong growth, equally also was really driven have by home and

services. things the place couple at continue the go community we clusters in expect manage our a forward, to of identify PDGM. to will effectively reimbursement by work that there. there's think to structure those continue. play we put I We're is sometimes need who in our effective early to out at continues are the periods. hospitals. hard institutional identify so of we'll be focus. We're been we've to that's who getting And work the in new And patients settings, a patients those that One that, something And those out -- very also of as working just

effectively from effectively so the We'll in making it'll transition to that proposed the growth volume that, on would the we those for half we focus year, a second prepare rule. And expect and of I standpoint, continue. manage revenue the in rates that will continue but also be sure that

Jordan Bernstein

but I between the in more for the a more quarter? I that. color to down modeling you and bit spoke break one appreciate half, Appreciate the the fourth the on I can the that ramp, question us general maybe you guess have And on then And third side. second

Jen Freeman

Yes.

the quarter. the So experienced with we've consistent between we ramp and what in are first third seeing quarter and the fourth second

final And we consistent what And the growth we've census so in continue seen rule about of as in living, our would continued to in the quarter, a modest fourth expect we realize the to is senses which hospice to to have -- improvement senior impact and rate well X.X% so with both well, continued as our as then census in in hospice us. far. growth for continue

Jordan Bernstein

dynamics any if you be us able may. to quantify or for guess be I would of more Appreciate on Would one hiring quantifiable us it. identify and whether anything currently, And ongoing turnover, question, appreciated? I the for labor

John Gochnour

Yes.

California think work I that really Northern continue as recruit market-by-market in tight. markets, we We for evaluation. a that our by a have we've staff. In significant environment. a of business. labor senior some before, volume a unique In where living the increase reduction turnover, highlight ease. to ability our limited back We've to it we're markets, in other sort talked that of and And about enough remains pressure Northwest our are to I'll to example, within seeing seen comes continue labor Pacific

And so we we expect our in that lessening. of that markets. there would pressure. certainly will say anecdotally, be it many We continued And easing it's see

those our to front. second little will continue be teams, easing labor for developing can focus of so identifying, strength to but seeing we who And year the on are half of the a our the bit add recruiting, individuals

Operator

Your with next question is from the line Stifel. Tao of Qiu

Tao Qiu

I look It EBITDA to adjusted million $XXX for I range. about $XXX looks the $XXX half, total you at the you providing if reaffirmed revenue the But revenue. like think guidance. ask did the revenue to wanted first million we for you Thank million guidance.

seems else revenue reaffirmed other very the the should housing activity, line, than small to increase? suggest growth is top we interpret senior how there operations that the here? I'm something little So on guidance missing And

Jen Freeman

the is No, those of revenue. Tao. the the The communities transfer year of half main the impact for second of out

our and the that on grow. We're expecting to we end And of we're revenue. towards reaffirming to at we are continue would upper so revenue guidance and expecting looking it be our

and transfer of the take taking that just to we're revenue that out of consideration. an that evaluating approach into wanted we number So where

Tao Qiu

like it's sounds It you. [indiscernible] more conservative. Got Okay.

Jen Freeman

Yes.

the other all experience. impact will The sequestration into fourth quarters we taking is the in note of that account. the to thing and third that We're

Tao Qiu

two new question, terms that quarters. much pool margin I'm of most the second could curious we you. quantify or over upside? to additional for I of And -- of expect the done that if upside growth number you have past you the either how us assets, in on really can volume bucket think That's well helpful. Got contributed with that And those agencies the saw.

John Gochnour

Yes, some several to acquired take in are Others more assets, a off we've right. in environment take We've of We still been call. our spoke the saw Tao, experience that markets prior earlier were Brent those within significant have year they're and bit what it's labor a consistent just of and calls. strong our his where really number upside. There's continued in seen still the significant that's and as those new absolutely turn, growth and lot the We of what opportunity portfolio the we of type tradition, In earnings that little store to Derek a of in longer in XXXX described assets. competitive. with situations, -- of through have of kind XXXX. in them to piece described growth have has

need the of. results rapidly dynamic contributors gap those they've been so our opportunity. see home several or in significant had last ecosystem have quarter of our effectively we use Arizona, met of communities. And example they're in the our and community whom part care and -- those of that have the in to upside California, highlighted continued local And hospice provider in that operating choice Tucson, health Sacramento, have each health I'll they a we But down the we of grown

of So as news continued XXXX. there's small set upside the of the in we 'XX and as the we good is that plenty 'XX in of part well did first acquisitions that in did acquisition

Tao Qiu

on really is And my outlook. last question you. the Got investment

came that both home of health tone does mentioned really pipeline contains sounds your How conversation you more change the You it like than propose but and some the that is in you hospice, peers. negotiation terms bullish your of the think accelerate do before sellers that that? row the view do they you potential can Or of final with kind after you already and you think close growth out? will

Brent Guerisoli

take for side. the want was that mean, the good I acquisition our discussions and in of health would things home impact lot uncertainty there a there's seen emphasize and a saw rates. aggressive lot in the this on XXXXs, And see to several past, the in I significant highlighted, of change impact. you'll a opened our that more early it partners us think in really an is and with any a lot any we reimbursement, will years. Tao. growth we I I of our one have in to that pretty step anticipate question, got able into valuations be It's for to and And will a more we we've up started -- targets. potential in around the decline time It activity have here when be that that does valuations, and It reimbursement. account and Yes. we

sort type similar And of trend. of so a anticipating we're

each thing, rule. we think expectations the I And perspective, but just based a proposed the that of that as evaluate on utilize the that we're continue projected -- we from operation positive so impact see and tools -- to of our

Operator

RBC [Operator Hendrix of the Instructions] with line Your next question Ben is from Capital Markets.

Ben Hendrix

I out any was growth you and senior there skilled us like referral drivers referrals key or wondering earlier little can nursing hospice mix of the are living if sources would could a you saw quarter, be in or the the from there overall? Any occupancy give commentary you call and the more impact on detail helpful. improving ADC sequentially of first the

John Gochnour

Thanks, Ben. is This John.

years highlighted have and sequential in key factors. We partners. We just in-home occupancy their earlier senior significant We a of there's lot great course to improved care. We've referral but our the in of provider, -- our two has those always you throughout identify seeing prognosis in facility census. we're facility our with on see the hospice that strong a disease seen our decline business, been patients with like the living need saw when growth, last one a they that opportunities of

that it course its of what varied is of been of contributed normal kind couple from the that's stay just so last length does over years. a to And

those about we're partners, flow excited to referral normalized of seeing increase levels some we're what so resulting And with that's return in is from facility partners. in our occupancy and

in the nursing and that continue to living senior are going we're our housed expect of length to we skilled of percent the communities positive of percent so things of those to to our stay related that normalization some see and and referrals facilities. And patients the related

to challenging environment. what returns And away as received of the services. but people a passed -- partners excited ordinarily who still represents. number people have so when to a There's number normal is very set -- and our There Sacramento, example. across drive in lot and of another in able we're There's to to we're that forward as but Area ourselves like really apart and that country significant hospice in community more the our a still still we're global the Bay pandemic, been are different have and in as about the more. beginning where partners places I about occupancy described But choice, decline. a of that It's able admissions, the would during of push is we've markets trust us provider that seeing

more On is growth also that couple of been we're the the ADC a and sequential been of the see some stabilization who some nice starting pandemic. growth of those to about there's specifically And one in during markets impacted things side, have markets.

And gives it certainly so for of a sense momentum us future. the

Operator

there time, are no this questions. At further

Brent Guerisoli

Okay. have you, thank We us hope Well, a Tamica, everyone, today. you great joining you, and day. thank for

Jen Freeman

you. Thank

Operator

This call. you joining. concludes today's for Thank

disconnect your lines. may now You

The Pennant Group, Inc. (PNTG) 13 Aug 222022 Q2 Earnings call transcript