Healthcare Services (HCSG) 21 Oct 202020 Q3 Earnings call transcript

Company Profile

Participants

Ted Wahl	President and Chief Executive Officer
Matt McKee	Chief Communications Officer
Andrew Wittmann	Baird
A.J. Rice	Credit Suisse
Sean Dodge	RBC Capital Markets
Nick Spiekhout	RBC
Brian Tanquilut	Jefferies
James Terwilliger	Northland Capital
Mitra Ramgopal	Sidoti

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Healthcare Services Group Inc. 2020 Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] At this time, I would like to hand the call over to your host today, Mr. Chief and President Wahl, Executive Officer. Ted discussed statements about matters Inc. today Healthcare on forward-looking include call conference the Group, today’s Services The business of prospects the Reform Securities within the XXXX. of Litigation of meaning Act Private

plans, often are or such expects, intends, by Forward-looking will, expressions. statements may, preceded goal, similar as words believes, anticipates, other assumes

we current light are of involve the reflect the other circumstances. our and risks Forward-looking are based certain believe and of this assumptions The of our appropriate in developments that management’s factors historical conditions, uncertainties. statements statements have date industry experience expectations trends, under we as and forward-looking of expected on that and made conference perceptions call future current

changes differ statements in results guarantees result Healthcare Inc.’s performance. any actual from as forward-looking and Group, materially the circumstances. with forward-looking are or are projection inherently and As Services could anticipated they various factors a statements not forecast, in those of these the susceptible uncertainty of to

as or in financial SEC well could adversely SEC another as litigation and not result in the cause factors SEC’s Some earnings investigation significant potential further press results could projected this are can or Commission, the and/or our in that regulatory variability our Securities make results filings to included will our penalties no in issued There costs the further body forward-looking and of prior those that management. pursue related in expenses, or recent to that from could including call release to regulatory or inquiries affect The the results. any action ongoing or sanctions with distraction differ investigation. statements, materially future and be including ongoing Exchange cause assurance

presenter, a obligation and And of to disclaim events result may statements are such as whether update begin. or under or obligation new otherwise. changes, alter you subsequent the forward-looking information, We any no expressly

Ted Wahl

for joining today’s and by our we morning, XX-Q conference all results I released morning the of Matt quarter call. outstanding filing us week. and everyone. of appreciate Thank on you, McKee third This end good Sharon you plan and the

our to of quarter, customers innovation, the the During their the caregivers resolve meet and pandemic, challenges and compassion. with continue

heroes HCSG communities ensure frontline the on most remain well-being we supporting vulnerable. of will our since helping tirelessly beginning, with priority. there and the been them customers serve Our employees the safety our and The right the and have to our highest America’s of health

Our on as strong regulatory service pleased even financial were customer underscore challenging focus extraordinary particularly the our results environments. operational our systems in with relentless satisfaction, adherence thrive quarter outcomes. the during ability We our delivered and to most execution compliance

operating pandemic the enhanced the industry around uncertainty and and better winter to While prepared months PPE, to access the point-of-care trends, cost testing occupancy near-term for and fall much increased is create with continues protocols.

government’s by continue bridge we the and challenges necessary to a Additionally, which as encouraged of to support recovery. ongoing from short-term environment and more stable financial the a view census a vaccine ultimately operating industry, be we the

operational and adjust the new QX. results on our strong financial maintain focus to As we the sharp to delivering in industry normal, continues

While Above more to will With discussion for before. those the to on than term, the to turn all, that making positive on over quarter. we Matt the cautious committed value us necessitates our a position decisions our call view value. shareholder longer remains compelling deliver is current as a I more introductory ever proposition growth remain environment best outlook comments, detailed

Matt McKee

tax SG&A supplemental result more pay food laundry goal initiated million our with purchasing to below or Thanks million at X.X%. $XX.X of of segment efficient cost million and and housekeeping credit segment quarter by reductions, was were actual primarily continued revenues our along respectively. accrued decrease were increase range, morning, to those in billings. from XXXX deferred by be SG&A quarter cash premiums, in $XXX.X and and and as and under the offset deferred for $XXX.X the related payroll as bad nutrition $X.X line costs, was Revenue to and includes in everyone. million, for X.X% for of billings, was quarter-to-quarter labor Ted. CECL fixed, of the as for for are was employee driven Revenue share. result Act. $XXX.X X.X%, million around the adjusting million customers including the continue and the COVID-related primary X.X% of XX.X% range This per QX dining nutrition was compensation, and deferred at $XX.X direct that or rate operations increase lower Good COVID We remains the and related QX, and which benefits. out at tax to actual any income full XX% of quarter, expect compared $X.X to decrease the direct Investment of ultimately taxes or WOTC the reported customers. the $XX the the relates we the the top of to after was And through services and CARES SG&A of again, expecting dining of QX payroll accruals, in Direct SEC Ultimately, driven we $XX.X expect only previously other collections the cost of because payroll near-term XXXX impact washing to levels or $XXX.X remain accrual or $XX.X adjusting reported which the payroll for strong million cost laundry management to we for million. was million, compensation, expense After timing $XX.X out for million as but census days. but in recurring our rate pathway of flow the quarter an $X.X in existing income called change passed $XXX,XXX. came in Cash investment was X% respectively. SG&A and of million to by and services Net impact year. XX.X%. XX%. at Overall, $X.XX that and X.X% million Housekeeping benefit target costs earnings, included excluding effective accrual payroll to XX% to with was XX.X% growth. to $X with manage our a million was in largely margins and are debt a passed an a through million XX cost in to a leverage a reported income The

under payroll incremental the from paid so $XX CARES or we accrual resulting tax in to be at the of Act XXXX an deferrals Additionally, and payroll QX end back million from expect the XXXX.

XXth for announced and rate continuing amount the dividend to long-term ongoing while HCSG to the free get December to cash since Directors performance important cash to then the period under future, down cash stock the return from sheet shareholders. now it XXth this We supported is like with the capital would is current ultimately balances to such, the included of to $X.XXX the and our record. with business dividend efficient The track opening to quarter Board mark in quarter recognized is an the now the and splits. XX, now X the XXXX. that return the cash will cash and our with questions. previous program those other the a continues per we in the call maximize instituted foreseeable flow for other our was increase was place have flows dividend We This the increase, remarks, quarterly strength to approved X for consecutive program balance to share dividend increased rather line be than tax tax open which and way shareholders. of we days, the payable pleased in payment With X-for-X that’s XX support As and the the XXXX days up most liabilities. classified are DSO shareholders consecutive ability now and liabilities XX-year we on in

Operator

[Operator Wittmann question Instructions] comes Andrew with Baird. from First

Andrew Wittmann

that guys the you that quantify guess other how from gross in efficient managers, last the driven time kind debt know you much benefit for probably pull I and particular? are or you drivers that of of common Great. to the was questions. of significantly, bad drill excess kind contribution what just if was get be was margins And debt into quarter, the would the I could little more. the if Thanks better from one those key any of on and the any of that more were given including more managers it helpful bad by a started to here of up your through my use labor taking there could quantification so wondering I bit of utilization

Matt McKee

last census customer with customers as efficiently was I in some morning, certainly as managing focus And possible, And of but especially the capacity we Andy. focus, service as many past. includes and Yes. that called talked part our good that services of of in management of pressure pull-through the the experience ongoing light are it have the about really on think quarter, as laser out we our Hey, overall there some have facing.

budget operational to imperative, the that I to So powerful operational adherence, overall actual I just systems to continue think first operationally think simplest that and maybe has customer otherwise. margin a our and the would is and drivers and to will our walk have results through what they performance tailwind that be compliance calling that way and satisfaction, out be foremost to unwavering testament regulatory commitment to our a been team

about baseline, $XX about And right revenue, U.S. less with million in you expense. once put the services. use million debt the would QX of in that, or of to that so CECL of about as as the or QX bad million so if cost if debt a the $X out $X and factor in cost quarter-to-quarter, were XX% Beyond bad around again, that you you you pull million of $XX then change baseline,

have well idea pretty of Matt landed result a XX%. of got those clear below target that target, you below how cash we As of strong a collections, continued highlighted, that

Andrew Wittmann

is helpful. you to guess last $XX And that in my follow-up mentioned you question That��s come would about I million. free million on cash $XX it. you quarter, think then Got flow, I thought

I better here You at the while. haven’t XX a that. saw DSO the been in XXs you for than did

the you earlier? to cash besides expecting upside there the there from versus AR quarter that’s Was anything that flow So, the of performance the drove in collections terms are good. what

Ted Wahl

million that side primary in we was higher otherwise maybe came the $XX cash collection expected. have driver, the would on No, we nearly really than

be to what we quarter. collect and goal Our build to every continues each

business, done the follow integrity, of that continuing payment one. and just financial but been and themselves work Here couple operational they than largely here customer particularly a services monthly. of over the to positions cash XX% due conversations the integrity of to contract that paying clients, although past the as to we the which financial frequency certainly the greater where the not customers part up funding of have in of we the with our has we path are them us of and transformational been initiative, some ensuring at having we maybe six, some leadership contract over of the that, environment, are timely then side the just in to today in lives again, this have on have stronger this the to team of again, terms passed with committed have of quarters found weekly also of than last are with Andy, we five implementing the And years in

Andrew Wittmann

Okay, it leave good. Thanks. I guys. there will

Ted Wahl

care. Take

Operator

comes question Rice A.J. from Next Credit Suisse. with

A.J. Rice

of that lead next not as in the in quarter quarter. which the outperformance to just margin, go gross are year? Would could understand that Hi. of moving place uptake the of I think the to on going forward again of of it. it, When the trying level was certainly think place into be stay main a about lower seems you to you you level gross bad about debt think in proportion margin the am that to all fourth then drivers the

Matt McKee

client and which back made satisfaction grow a segment to bottom on a with leaders there, nimbler and level, of margin real R&D taken to bit services ‘XX think only continue the lighter, would and ongoing half we basis. have to to of but base the dietician kind a to registered callout provided into other the restructuring who of to outcomes, contributes not strong line. adjustments we I those But bit business side of which have we did on margins, dining of kind also that contract outstanding a and have really AJ, patient whole team specifically some respect from the the an the Yes, I the ‘XX us and will our resident in of evaluate the and some

will margins assess the we is company is for impact we on focused continue really as will long making reality the and quarter-to-quarter services and our decisions are continue is have efficiently the that COVID a sustainability does not really the view possible. of and to although we steps that as position make, the those the taking taking of So, discipline and less And the some drive as to that of to continue to census. manage goal one quarter certainly future trend to and best always so variability efficiencies

ongoing opportunities improvement XX the So, we well. target, of are identifying but to for as committed remains course

A.J. Rice

range, to is sort know has or figure and a your bandwidth I and to of midst trying forth your higher just the I it we out too you something are should have level what’s upside this just Okay. to the guess am out of to of where past of with this trying I landing that in of really I a are to true all, is been go especially is moderation quarter, you the I operate customers pandemic where changed not on am and now – forward, about I and sharing or have profitability in the that’s within going guess so on you said I am some margin something there target to trying you there that some about dietary tell? happening sure but early I am I we up don’t are you like step allowed we dynamics that that as figure expect understand

Ted Wahl

think what quarter not I said. I It’s Matt agree a is too to tell. early does And One couldn’t more that. trend make with

of revamping of side past place in the registered a out lot have We have particularly Matt there. work, couple team, leadership dining we on the we the have the that that called restructurings done years. all over the contract our done, dietitian

to opportunities we or sharing committed but to today. be will committed pleased So, as execution, you with sustain on so able ways comment into we – efficiently are least a to then of And which customers, to that terms really housekeeping margins, identified to also more where in them about always are more we us there lot manage we along but your is a be too more the it, make either the services we looking more make after to efficiencies have quarter came are in passed we for again, out be the – or to for right goes confidently any to attractive these not partner that to dining is position a sites. of they be early another that maybe will say, couldn’t – yes, able we are are identifying and we always tell to

recovers, the that we but have hope way up be recovers, able we efficiently we when effectively even more to prior maybe down, identified census the only things not efficiencies So do as are on or the on would than census were to. way

an from So right are percentage, early too terms a we precise perspective. on the of sustainability financial certainly operational path tell, in or again, but but number to to and

A.J. Rice

have even COVID we a like a they how sounds facilities base Do CARES how make more or underlying it to that your pandemic. out can Guys, mentioned were customer underlying supporting of really importance the of like much going the with feel you growth that is a) the the prices rates of at dealing outsourcing fared whatever on wanting of side they occupancy that this? housekeeping it customer a that long-term seen? quarters is on gating your changes and of the that you on rebound people underlying back getting you there coming base before this of or to they see like of sounds still Sure. in extent still how a sense assess of now a base to really it’s still the your you relative all care and looks to question are second into see you I the point the sort quarter, know of with is out where couple at has then or how though pressured? obviously is the customer dining are be it faced major And we bit base of somewhat of underlying was the them point what where to weren’t How were little relative partly trajectory customer the to census money industry Act coming factor or

Matt McKee

side in our I are have range is areas, resident the and Northeast the to seeing some population XX%, long-term terms and particularly a think have the some we geographies segment areas customer And some between with the population. we base that continued there within pronounced, – seeing others pressure, of Yes, patient then that data other or population are areas and the in suggesting wide seen of within the obviously are of are have you care recovery, acute but un-impacted, pretty XX% are the of occupancy, what industry segment, and more differences Mid-Atlantic. we then patient the that post-acute

there. is there variability So

were AJ, month, it’s difficult the of revenue next alone next in forecast to asking year. quarter think how, environment, you or for this the let terms I think I In about revenue,

revenue alluded business and opportunities. of in thinking existing business into you heading two we our them, new think to are really I and QX, categories

customer. if or there this costs business to then recovers, as in census and environment, think, staffing revenue. our For if again, and along depending census passing will and And but when being we supply are on as erosion, our continued possible our unpredictable, conversely, to is supply decline and those I existing timing, cost will our flexible as census committed again increase in labor efficiencies reducing the is

heading visitors. The difficult new and impacts to new it’s would The second environment. this the add business it’s that in category strict straightforward rules pretty has the and the for revenue for more business why into to as industry quarter, be how is, reality us,

changes I earlier Some operators it any the The impacted through are demand to is is those we which for some that continue we referred of environment literally geographies take roof, our that are going view. to less cautious parts And to where of make in in that are current reluctant regard. disruption. fear the for country. to many be in disciplined of And that necessitates services more

are they that the revenue and in So, play. really takes are puts

So, it and revenue cross stabilization until take are ultimately today that just line. that doesn’t be there and present recovery, where then given to are other going going vaccine more to of we than difficult mean factors as ultimately census mean is we we bridge to different advantage not impact we top to going from I not quarter any opportunities It forecast. grow are the they but themselves, past and the to are that think is years doesn’t

A.J. Rice

your question, Sure. year-to-date. you cash and securities, marketable have obviously built just that on out one Maybe nicely last

of on more just environment repurchase You any to the million. cash or the about in think have or thoughts way in make maybe sheet at some it just this that? Is $XXX share upping about terms you dividend are does balance better

Ted Wahl

growth do the one have would by before. number strategy, value evaluate efficient going capital continue closely that growth, shareholders. we basis. I an return dividend, remains followed most no after that Again, we organic to list, we on But There’s the to se. know are per allocation way I tax on say, Yes, is this talked which ongoing our about ratio we which to organic believe to payout A.J.,

are of dividend preclude from we And guideposts are consistency long-term. But over here dividend this sustainability of further. kind and increasing the us would consecutive the staying to we XXth within nothing So, dividend quarter, of true our counting. those and the program

to and will heading but, explored to the deeply into organic for some year, explore the growth continued alternatives of other have and there, we next are continue out committed So, the moment, again, QX that dividend. and

A.J. Rice

Thanks Alright. lot. a

Ted Wahl

Thank you, A.J.

Operator

comes from RBC Next Markets. with Sean question Dodge Capital

Sean Dodge

with continuing the activity managers spare a mentioned of of the you for it development ones? recruit Ted, Are Is state of the given business the kind uncertain from morning. and you are Good train of as now, paused time Thanks. there that manager you new of deployment lot a being? standpoint? most usual things, to new have where you or

Ted Wahl

bring census. usual. opportunities why wanted insights within business business managers we in different And to the that’s to environment that’s this that existing that’s environments, what impacts in some board. of And least into as than again, revenue the No, again, new on business deploy we and revenue other at and continue those share namely I

So, business, the adding be with but customers may growing. not could not in but providing it be doesn’t relief, reflected existing we mean are census-related we top it because we are line,

Sean Dodge

then, regions guess And been you you are And early have that? Now, adjusted of some density? of Has of okay. the of flexible a talked adjustments were Where be back staffed in the services ones have some there maybe on cases? before that for facilities some normal that more to continuing there. experiencing recovering? Have clients those of adjusted you made I occupancy. early to you are the do kind declines to experiencing big it, of the with mentioned spikes stand in you Got about in more that any any have that up you

Matt McKee

is in and different positive and significantly to and One like a or like right. elective the show even COVID, state that flows, been would by and although mentioned. it had there other and is but Northeast The and some increased country key some whereas of direction. a may moving that census I the in geographies Northwest parts a and ebbs the Southeast Ted improvement in driver, Minnesota continue point significant been as geography, factor, providers regards, impacted obvious have There procedures Pacific the differences be Sean, Southwest, has Mid-Atlantic to

one had of the long-term was right. residents walls direction But, we though, demographic the specific of of both to course, pressure it nature facility that likely and relates rehab true other expect surgery-related, And of short-term of and additional – Ted care post-acute near-term most but customers this That’s population procedure, other. and because vaccine, alluded will in to do even mix of, most within significant And until resident or the typically would the long-term the in as The a patients, overall, elective see like have occupancy we see to facility. a milestone course, of the that elective more component, sort industry-wide are patient ahead. recovery that ultimately, industry. that a difference a needs-based within census trends weighted lies

the but patient relates Healthcare also it’s kind to primarily Really I billings, specific geography, walls within touched Group just So, on, of upon heavily and as Services that everything it Sean, mix of our a facility. bag. dependent mixed the

billing while cost by the structure So, ongoing and a adjust to to will which to-date, structures adjusting a of experiences some timing-related see some then billing our bit fact cost downward we to but in the recovery, there with perhaps in the time, that can direction, a well, as from lag, the at a see our dip it there’s do may we of to time bit along again that geographies, but we customer are corresponding are able we pressure ongoing and in some that way ultimately time in ongoing census that and be geographies, customer same issues there a pass a a seeing which adjustment, lag as to suggests customers. some downward some likely we areas in relates of us other ultimately see adjustments

Sean Dodge

Okay, Thank again. you helpful. very

Matt McKee

Thanks, Sean.

Operator

comes William question from Daniels Blair. with Next Ryan

Nick Spiekhout

Spiekhout Hey, guys. for Ryan. Thanks for question. my taking Nick on

you a is changed So, anything recruitment much business dynamic? management wondering anything in seen talent you find as if far wondering, potentially has said that changed little there was recruitment bit pretty Have harder goes, kind or as has I usual. maybe of easier, as there? to

Ted Wahl

That’s again, are years. And are as are usual, at of and that’s is particular level pronounced good geography model a the a targeting are to the which appropriately world you take just transparent hearing training more need the thing, management levels, folks there we to specifically a upon ever have right. remind we as recruit, much possible, have If happening we about built. to what the all us, we relied recruiting of business for that local speaking recruiting, that everybody kind efforts means those interview, which appropriate Nick, as is view back of as challenges management hiring will another, as more a in into but steps than our into than for much provide they now not of in That’s program.

still Slower many recovery of the the labor overall to part in parts a labor country. challenging geographies than some assign in to in right, market that environment, have you think dynamic I others. of

employees say even as important certainly levels retain been and for that’s well. that who beneficial. importance the fortunate appropriate to in line greater is employees, the hugely appropriately, and and that line every a pool challenges the to significant management any So, of trickles we seen been inasmuch would staff obviously well, employees But in well larger down serves us hiring creates as expanded us staff candidates, a based not normal fully we have that have down during course are at staff as us for have as up and able it to been and hire census. able on adjusting and attract, to facility we And pandemic staff be I

Nick Spiekhout

kind of of And I on guess, with in DSOs DSOs, related kind improvement sort prior big issues and, of I of then, much of kind would say was what And your how government Great, virus? recommencing this sort thanks. up, the clients any you of going as of to you some guess, happening kind that the of dries expect a is then would to assistance? of lack

Ted Wahl

quarters not of collected five we of we and last know have we frequency I billed the greater XX% paying than sure understand six monthly, what your question. vast of a majority us are at of am I weekly. customers have over our I Yes, have the which

our that prior to we and the it customers, notion maybe stay. if funding, past and in not So, all year the place, this, the most trends was at perspective. of we have the as is able that say to closing. the contract That’s with quarter true not result to of you to going the cash that leading lesser that’s is But, the a exist does of numbers. be. to willing this goal them ages from first we here where that our fall majority maybe of and terms in have that direction benefit a to systems have, there what integrity be were we reflected look in we And evident could customer degree. we are think a again, of a collection if team the some a may accommodated of quarter, in And and DSO it have up it the But Opportunistically, are they short going arrear into that’s related. I

Nick Spiekhout

it. Got

straight? of should kind trend assistance, So, we regardless that trend government see keep of this the positive going general year,

Ted Wahl

past in QX of we over saw but extent said, over is that QX quarters, prior call to quarter QX, not also out just that this the last next look and we last we’ll our To of are Yes, hasn’t the again, we QX year. simply expectation. what year, it is, our out, year, goal we in and changed. collect that, When bill like

bill. call our again, will But simply is, very that out. We said, what to collect we goal otherwise,

Nick Spiekhout

Great. Thanks, Awesome. guys.

Ted Wahl

Thank you.

Operator

Tanquilut Brian Jefferies. Next from question comes with

Brian Tanquilut

well. guess question last question from on I follow the first will as up Ryan, I just that

You as for the driver bad quarter. out called margin of expansion debt a

mind, as that how about that and If to are relates you thinking funds just you CARES don’t [indiscernible]. Act quantify it

As about your squeezed the again, debt on clients bad get you side that is we that as variability accrual think XXXX? in do there cash think

Matt McKee

we of think debt CECL, implemented – new could very is was guidance, Yes accounting debt there or the variability that we year. the know bad don’t nature I the at there there expense the of because bad say beginning be in would of

a really have of for particular a record item. to based collecting higher collections; degree, maybe off driven years. us, we think what So, It’s level line us on variability a and all of companies, bill of in I that track

and if better and trailing have poor type performing the But of subjective into off, And an that rest mechanical, performing come could conversely, the years is that is could year accounting more, off, as the a worst and impact of public is way. and for impact. adopted us performing year for there that So, what have driving bad one say, expense. the other driving falls debt periods is guidance universe comes performing better I is less large, and it. company the in a what would that by Again, years CECL fall a

Brian Tanquilut

give quantification you Any can for Understand. on that quarter? the

Matt McKee

had right expense Yes. I We debt of around bad earlier. that $X mentioned million.

Brian Tanquilut

a remain growing then, And I earnings solvent or out okay. called said it, Got client be obviously, the or it government question, guess, since largest and last need concern. to last your they funding industry my your call,

about Genesis risk what how struggle thinking you and financially? those So, like are are face with you conversations as they that the

Ted Wahl

Genesis is great a Well, partner.

and with terms. continued within they us pay have frequent incredibly have to communication them We

So, and on there that’s are great believe leadership their a team plan. team I executing to have management – committed they a

continue to report. are closely, going really that, updates situation monitor is beyond no We there to but that to

Brian Tanquilut

you. Alright. Got it. Thank

Ted Wahl

Take care.

Operator

Capital. Next question Terwilliger James from comes with Northland

James Terwilliger

hear me? Hey, you Can guys.

Ted Wahl

we you, have James. got Yes,

James Terwilliger

all I the in quarter COVID when quickly, great. for part of housekeeping release, impacts first COVID. considering split missed and food apologize look that supplement at My that’s is of the how – between call, the the services? that. I Nice Very press question so you Okay,

Matt McKee

XX-XX so million, that or housekeeping dining. XX of to to $X and James XX about split, It’s

James Terwilliger

guess one it want If you secondly, Ted. as is not I then I And it for speak seemed and again, nursing turning and And XXXX, macro level got the an back from the good. this was I How to the COVID. health to you, of hit home? we customer. look Okay, individual like is by

the You’ve before. CARES Act mentioned

macro How a on daily on nursing and stimulus one health? from terms do your federal basis. doing waiting are you are Not of individual their We the level view home government customers your another from customer. in the how customers

Ted Wahl

what be Yes. skilled healthcare of And level, the Right? be ongoing industry will just and remain at critical Well, shall macro an industry, a think homes out, highest that look, with demographic absolutely I the with going ever-growing at if part pie, look of you along continuum. that independent is of vital nursing just living, an assisted you along health, level, the called component the in that to continuum, along with care. particular, nursing and home other the points

regulations and in think responsible I what’s gotten important the the gotten also had, programs would priorities, that add, take would to a impact – industry. think. of often light To patient to the skilled always, share has the has I going I little of over seat adequate how reimbursement bright have going front-row and I thought, few many the I forward. industry a So, of Clearly, has resident say have left and past ahead I reporting I’d that go SNFs those going been care, at under-reported vast environment or shined that’s to and heightened we be the bad facilities, specifically the months, provided a the these if the the – is if I the have focus focus requirements industry are it’s inspiring think critically be be. the their press change gotten put, And regulatory it, future on to on are level, that’s industry care. what that highest of it exceptional to terms be bit, micro attention of – James, think important to the the say majority got behind that’s a yet But funding has caregivers stories. for resulting nursing by and to that happen is determined the it’s only going

there So, I my funding a this in I political is perspective, regulatory Look, structure environment. think reporting believe and landscape, at corresponding evolution in as is thrive payment be from as well. there point insomuch in would evolution an and/or enough that any will there the to we’re positioned

So, well we’re situated.

proposition ever compelling value before. is than more Our

about, we’re the good of So, again, very also again, I I the the spite of how headlines future feel positioned. industry. But of some in good, feel about

James Terwilliger

frontlines a patient high-risk for population. No, the care on you providing are right

family As earlier pleased stories you the the members these you of care much got I’ve I occupancy census any or the in who within from and at age for – said degree is within rates, factors level? a question been occupancy so a with something My macro and question a call quantify terms which associated really I particular I thank that last you hit know that focused with the lots these of very their on question, headlines the on recovery with Can been I it? tough is as their of type have from that hit quantify the color. institutions. are Can you customers. bad, it facilities think have census your it’s perspective. myself in COVID of friends from or macro My last

Ted Wahl

Yes.

the geography Even depending If for a at. can again, type the same report variability – variability. within that to on or be XX% the there XX% one looking there significant about of is even resident data there’s closer you on are geography, again, operator. impact, population, depending mix, geography to is patient James, XX%, looking but, the to to Overall, operator and been

there different is on recovery. again funding side there funding I to billion have bridging that throughout One or weeks, past couple significant really place is is between a been which funding. has more now point to you, than to those the developments that That’s over availability in substantially care talked and targeted census game it’s we X how Mid-Atlantic. increase those Northeast is to call and again, that happens, to was when losses. back, which going then, experienced access bit is it think say think just different that the or gap get few been bridge testing we operators the recently, have I more been changer highlight CMS think ago. providers to Phase a is that, really Certainly $XX COVID, developments be is a And what them. adequate were a and consistent and impacted a even I few by sure been the of I target help really better for in of COVID provider especially has the maybe industry. there benefit because those by to has answer one would And relief, keys, inevitable, really making few months of of the census keys what PPE, but for just which And must the six about recovery disproportionately the providers that

cash we got and payments is the the that until not have advance stay of now providers, three-day Medicare end waiver impactful until postponing the is know first flow those especially hospital first The benefit that January. to for other repaid all a and quarter, the the how be on, which the who end of hit do early is major extends

I included be And to way. So, testing, again, between that funding to But significant in I believe the be in for going those industry. PPE now gap potentially are two another bridging industry, keys is a could opportunity stimulus vaccine. the understand, and a from everything and that

James Terwilliger

guys, considering environment back quarter will great. But Thanks, Well, in. COVID again, nice jump that in you’re operating I Okay. guys. queue. the

Ted Wahl

Thanks, James.

Matt McKee

James. Thanks,

Operator

Next question Mitra from comes Sidoti. with Ramgopal

Mitra Ramgopal

Yes, hi. Good morning.

as bring you wanted having business Just sensing willingness the you conversations if to with a or in on a and potential new to look in you the greater get world? mindset change post-COVID sense, to a a customers, are outsource are

Matt McKee

value our our light shone the on a as specifically world, services without very and say important would more it to doubt, question, say, Mitra, demand right. there was a I relates on to that, post-COVID has increasingly I would proposition, COVID appealing the add bright for your right.

facilities And right level regards, the done. and think when market right. that’s are you outcomes, in many in really us that many think operational healthcare across the line country the about healthcare regulatory If financial delivering in we’ve what of we you course, in but servicing, cleaning, to outcomes, always about in with industries, moving outcomes other the outcomes is

infection prevention, disinfection, you infection about norm. healthcare retail, become control level you and cleaning and the will You dining, education, about about think new think think

many wide Mitra, lens, instances value resonates proposition through a than So, and more in ever. that

time the significant a prospective the is in among an you with of looming, can this approaching appetite while a in there influenza season, new So, customers engage moment – with and operations our pandemic disrupt not midst and their of as potentially election to new imagine outsourcing for prospects partner very out of build that in the we look post-COVID, horizon significant certainly, But, to continuing business about this our out, cultivate be we moment. to you better which opportunities. couldn’t called would pipeline as feel that and

Mitra Ramgopal

for Thanks taking Okay. the question.

Matt McKee

Thanks, Mitra.

Operator

will time, Ted at And to Wahl. Mr. turn call the I over this

Ted Wahl

Okay, thank you.

And staffing innovate in to in ahead, and us flexible partners client shareholder level, business evolving chain committed to position we to to responding continue above service supply needs. managing our decisions remain value. and remaining all, deliver our will making that best Looking we

Healthcare again, and all on to hosting everyone wanted Services at Matt Group, today So, to for thank you behalf the of us thank Sharon for and participating. of I call

Operator

call. This concludes conference today’s

disconnect. now may You

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