QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
(State or Other Jurisdiction of | (I.R.S. Employer | ||||
Incorporation or Organization) | Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Large accelerated filer | ☐ | ☒ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company |
March 31, 2024 | December 31, 2023 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash | $ | $ | |||||||||
Accounts receivable—less allowance for doubtful accounts of $ | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Right-of-use assets | |||||||||||
Restricted and other assets | |||||||||||
Goodwill | |||||||||||
Other indefinite-lived intangibles | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued wages and related liabilities | |||||||||||
Operating lease liabilities—current | |||||||||||
Other accrued liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term operating lease liabilities—less current portion | |||||||||||
Deferred tax liabilities. net | |||||||||||
Other long-term liabilities | |||||||||||
Long-term debt, net | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Equity: | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Retained earnings | |||||||||||
Treasury stock, at cost, | ( | ( | |||||||||
Total The Pennant Group, Inc. stockholders’ equity | |||||||||||
Noncontrolling interest | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Revenue | $ | $ | |||||||||
Expense | |||||||||||
Cost of services | |||||||||||
Rent—cost of services | |||||||||||
General and administrative expense | |||||||||||
Depreciation and amortization | |||||||||||
Gain on disposition of property and equipment, net | ( | ||||||||||
Total expenses | |||||||||||
Income from operations | |||||||||||
Other income (expense), net: | |||||||||||
Other income | |||||||||||
Interest expense, net | ( | ( | |||||||||
Other expense, net | ( | ( | |||||||||
Income before provision for income taxes | |||||||||||
Provision for income taxes | |||||||||||
Net income | |||||||||||
Less: Net income attributable to noncontrolling interest | |||||||||||
Net income attributable to The Pennant Group, Inc. | $ | $ | |||||||||
Earnings per share: | |||||||||||
Basic | $ | $ | |||||||||
Diluted | $ | $ | |||||||||
Weighted average common shares outstanding: | |||||||||||
Basic | |||||||||||
Diluted |
Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Non-controlling Interest | |||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Total | |||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2023 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net income attributable to The Pennant Group, Inc. | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Noncontrolling interests assumed related to acquisitions | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interests | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of common stock from the exercise of stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Net issuance of restricted stock | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2024 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Retained Earnings | Treasury Stock | Non-controlling Interest | |||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Total | |||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Net income attributable to The Pennant Group, Inc. | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interests | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance of common stock from the exercise of stock options | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Net issuance of restricted stock | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Amortization of deferred financing fees | |||||||||||
Gain on disposition of property and equipment, net | ( | ||||||||||
Provision for doubtful accounts | |||||||||||
Share-based compensation | |||||||||||
Deferred income taxes | |||||||||||
Change in operating assets and liabilities, net of acquisitions: | |||||||||||
Accounts receivable | ( | ||||||||||
Prepaid expenses and other assets | ( | ||||||||||
Operating lease obligations | ( | ( | |||||||||
Accounts payable | ( | ||||||||||
Accrued wages and related liabilities | ( | ( | |||||||||
Other accrued liabilities | ( | ||||||||||
Income taxes payable | |||||||||||
Other long-term liabilities | |||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Purchase of property and equipment | ( | ( | |||||||||
Cash payments for business acquisitions | ( | ||||||||||
Cash payments for asset acquisitions | ( | ( | |||||||||
Escrow deposits | |||||||||||
Other | |||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from Revolving Credit Facility | |||||||||||
Payments on Revolving Credit Facility | ( | ( | |||||||||
Finance lease obligations | |||||||||||
Issuance of common stock upon the exercise of options | |||||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
Net (decrease) increase in cash | ( | ||||||||||
Cash beginning of period | |||||||||||
Cash end of period | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | $ | |||||||||
Income taxes | $ | $ | |||||||||
Lease liabilities | $ | $ | |||||||||
Right-of-use assets obtained in exchange for new operating lease obligations | $ | $ | |||||||||
Non-cash investing activity: | |||||||||||
Capital expenditures in accounts payable | $ | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Numerator: | |||||||||||
Net income attributable to The Pennant Group, Inc. | $ | $ | |||||||||
Denominator: | |||||||||||
Weighted average shares outstanding for basic net income per share | |||||||||||
Plus: assumed incremental shares from exercise of options and assumed conversion or vesting of restricted stock(a) | |||||||||||
Adjusted weighted average common shares outstanding for diluted income per share | |||||||||||
Earnings Per Share: | |||||||||||
Basic net income per common share | $ | $ | |||||||||
Diluted net income per common share | $ | $ |
(a) | The diluted per share amounts do not reflect common share equivalents outstanding of |
Three Months Ended March 31, 2024 | ||||||||||||||||||||||||||||||||
Home Health and Hospice Services | ||||||||||||||||||||||||||||||||
Home Health Services | Hospice Services | Senior Living Services | Total Revenue | Revenue % | ||||||||||||||||||||||||||||
Medicare | $ | $ | $ | $ | % | |||||||||||||||||||||||||||
Medicaid | ||||||||||||||||||||||||||||||||
Subtotal | ||||||||||||||||||||||||||||||||
Managed care | ||||||||||||||||||||||||||||||||
Private and other(a) | ||||||||||||||||||||||||||||||||
Total revenue | $ | $ | $ | $ | % |
(a) | Private and other payors in the Company’s home health and hospice services segment includes revenue from all payors generated in the Company’s home care operations. |
Three Months Ended March 31, 2023 | ||||||||||||||||||||||||||||||||
Home Health and Hospice Services | ||||||||||||||||||||||||||||||||
Home Health Services | Hospice Services | Senior Living Services | Total Revenue | Revenue % | ||||||||||||||||||||||||||||
Medicare | $ | $ | $ | $ | % | |||||||||||||||||||||||||||
Medicaid | ||||||||||||||||||||||||||||||||
Subtotal | ||||||||||||||||||||||||||||||||
Managed care | ||||||||||||||||||||||||||||||||
Private and other(a) | ||||||||||||||||||||||||||||||||
Total revenue | $ | $ | $ | $ | % |
(a) | Private and other payors in the Company’s home health and hospice services segment includes revenue from all payors generated in the Company’s home care operations. |
March 31, 2024 | December 31, 2023 | ||||||||||
Medicare | $ | $ | |||||||||
Medicaid | |||||||||||
Managed care | |||||||||||
Private and other | |||||||||||
Accounts receivable, gross | |||||||||||
Less: allowance for doubtful accounts | ( | ( | |||||||||
Accounts receivable, net | $ | $ |
Home Health and Hospice Services | Senior Living Services | All Other | Total | |||||||||||||||||||||||
Three Months Ended March 31, 2024 | ||||||||||||||||||||||||||
Revenue | $ | $ | $ | $ | ||||||||||||||||||||||
Segment Adjusted EBITDAR from Operations | $ | $ | $ | ( | $ | |||||||||||||||||||||
Three Months Ended March 31, 2023 | ||||||||||||||||||||||||||
Revenue | $ | $ | $ | $ | ||||||||||||||||||||||
Segment Adjusted EBITDAR from Operations | $ | $ | $ | ( | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Segment Adjusted EBITDAR from Operations | $ | $ | |||||||||
Less: Depreciation and amortization | |||||||||||
Rent—cost of services | |||||||||||
Other income | |||||||||||
Adjustments to Segment EBITDAR from Operations: | |||||||||||
Less: Costs at start-up operations(a) | ( | ||||||||||
Share-based compensation expense and related taxes(b) | |||||||||||
Acquisition related costs and credit allowances(c) | |||||||||||
Costs associated with transitioning operations(d) | ( | ||||||||||
Unusual, non-recurring or redundant charges(e) | |||||||||||
Add: Net income attributable to noncontrolling interest | |||||||||||
Condensed Consolidated Income from Operations | $ | $ |
(a) | Represents results related to start-up operations. This amount excludes rent and depreciation and amortization expense related to such operations. | |||||||
(b) | Share-based compensation expense and related payroll taxes incurred. Share-based compensation expense and related payroll taxes are included in cost of services and general and administrative expense. | |||||||
(c) | Non-capitalizable costs associated with acquisitions, credit allowances, and write offs for amounts in dispute with the prior owners of certain acquired operations. | |||||||
(d) | During the three months ended March 31, 2023, an affiliate of the Company placed its memory care units into transition and is actively seeking to sublease the units to an unrelated third party. The amount above represents the net operating impact attributable to the units in transition. The amounts reported exclude rent and depreciation and amortization expense related to such operations and include legal settlement costs associated with one of the entities transitioned to Ensign. | |||||||
(e) | Represents unusual or non-recurring charges for legal services, implementation costs, integration costs, and consulting fees in general and administrative and cost of services expenses. |
March 31, 2024 | December 31, 2023 | ||||||||||
Land | $ | $ | |||||||||
Building | |||||||||||
Leasehold improvements | |||||||||||
Equipment | |||||||||||
Furniture and fixtures | |||||||||||
Less: accumulated depreciation | ( | ( | |||||||||
Property and equipment, net | $ | $ |
Home Health and Hospice Services | Senior Living Services | Total | |||||||||||||||
December 31, 2023 | $ | $ | $ | ||||||||||||||
Additions | |||||||||||||||||
March 31, 2024 | $ | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
Trade name | $ | $ | |||||||||
Medicare and Medicaid licenses | |||||||||||
Total | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
Refunds payable | $ | $ | |||||||||
Deferred revenue | |||||||||||
Resident deposits | |||||||||||
Property taxes | |||||||||||
Deferred state relief funds | |||||||||||
Accrued self-insurance liabilities | |||||||||||
Other | |||||||||||
Other accrued liabilities | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||
Revolving Credit Facility | $ | $ | |||||||||
Less: unamortized debt issuance costs(a) | ( | ( | |||||||||
Long-term debt, net | $ | $ |
(a) | Amortization expense for debt issuance costs was $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Share-based compensation expense related to stock options | $ | $ | |||||||||
Share-based compensation expense related to Restricted Stock | |||||||||||
Share-based compensation expense related to Restricted Stock to non-employee directors | |||||||||||
Total share-based compensation | $ | $ |
Unrecognized Compensation Expense | Weighted Average Recognition Period (in years) | ||||||||||
Unvested Stock Options | $ | ||||||||||
Unvested Restricted Stock | |||||||||||
Total unrecognized share-based compensation expense | $ |
Grant Year | Options Granted | Risk-Free Interest Rate | Expected Life(a) | Expected Volatility(b) | Dividend Yield | Weighted Average Fair Value of Options | ||||||||||||||||||||||||||||||||
2024 | % | % | % | $ | ||||||||||||||||||||||||||||||||||
2023 | % | % | % | $ | ||||||||||||||||||||||||||||||||||
(a) | Under the midpoint method, the expected option life is the midpoint between the contractual option life and the average vesting period for the options being granted. This resulted in an expected option life of | |||||||
(b) | Because the Company’s equity shares have been traded for a relatively short period of time, expected volatility assumption was based on the volatility of related industry stocks. |
Number of Options Outstanding | Weighted Average Exercise Price | Number of Options Vested | Weighted Average Exercise Price of Options Vested | ||||||||||||||||||||
December 31, 2023 | $ | ||||||||||||||||||||||
Granted | |||||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Forfeited | ( | ||||||||||||||||||||||
Expired | ( | ||||||||||||||||||||||
March 31, 2024 | $ | $ |
Non-Vested Restricted Stock | Weighted Average Grant Date Fair Value | ||||||||||
December 31, 2023 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited | ( | ||||||||||
March 31, 2024 | $ |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Operating Lease Costs: | |||||||||||
Community Rent—cost of services | $ | $ | |||||||||
Office Rent—cost of services | |||||||||||
Rent—cost of services | $ | $ | |||||||||
General and administrative expense | $ | $ | |||||||||
Variable lease cost (a) | $ | $ |
(a) | Represents variable lease cost for operating leases, which costs include property taxes and insurance, common area maintenance, and consumer price index increases, incurred as part of the Company’s triple net lease, and which is included in cost of services for the three months ended March 31, 2024 and 2023. |
Year | Amount | ||||
2024 (Remainder) | $ | ||||
2025 | |||||
2026 | |||||
2027 | |||||
2028 | |||||
Thereafter | |||||
Total lease payments | |||||
Less: present value adjustments | ( | ||||
Present value of total lease liabilities | |||||
Less: current lease liabilities | ( | ||||
Long-term operating lease liabilities | $ |
December 31, | March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||
Home health and hospice agencies | 39 | 46 | 54 | 63 | 76 | 88 | 95 | 111 | 112 | ||||||||||||||||||||||||||||||||||||||||||||
Senior living communities | 36 | 43 | 50 | 52 | 54 | 54 | 49 | 51 | 53 | ||||||||||||||||||||||||||||||||||||||||||||
Senior living units | 3,184 | 3,434 | 3,820 | 3,963 | 4,127 | 4,127 | 3,500 | 3,588 | 3,811 | ||||||||||||||||||||||||||||||||||||||||||||
Total number of home health, hospice, and senior living operations | 75 | 89 | 104 | 115 | 130 | 142 | 144 | 162 | 165 |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Home health services: | |||||||||||
Total home health admissions | 14,649 | 10,910 | |||||||||
Total Medicare home health admissions | 6,346 | 4,948 | |||||||||
Average Medicare revenue per 60-day completed episode(a) | $ | 3,535 | $ | 3,419 | |||||||
Hospice services: | |||||||||||
Total hospice admissions | 3,080 | 2,451 | |||||||||
Average hospice daily census | 2,962 | 2,439 | |||||||||
Hospice Medicare revenue per day | $ | 187 | $ | 183 |
(a) | The year-to-date average Medicare revenue per 60-day completed episode includes post period claim adjustments for prior quarters. |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Occupancy | 78.5 | % | 78.1 | % | |||||||
Average monthly revenue per occupied unit | $ | 4,667 | $ | 4,300 |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
Total revenue | 100.0 | % | 100.0 | % | |||||||
Expense: | |||||||||||
Cost of services | 80.3 | 81.1 | |||||||||
Rent—cost of services | 6.6 | 7.6 | |||||||||
General and administrative expense | 7.3 | 6.9 | |||||||||
Depreciation and amortization | 0.9 | 1.0 | |||||||||
Gain on disposition of property and equipment, net | (0.5) | — | |||||||||
Total expenses | 94.6 | 96.6 | |||||||||
Income from operations | 5.4 | 3.4 | |||||||||
Other expense: | |||||||||||
Other income | 0.1 | — | |||||||||
Interest expense, net | (1.1) | (1.1) | |||||||||
Other expense, net | (1.0) | (1.1) | |||||||||
Income before provision for income taxes | 4.4 | 2.3 | |||||||||
Provision for income taxes | 1.2 | 0.7 | |||||||||
Net income | 3.2 | 1.6 | |||||||||
Less: net income attributable to noncontrolling interest | 0.1 | 0.1 | |||||||||
Net income attributable to Pennant | 3.1 | % | 1.5 | % |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(In thousands) | |||||||||||
Consolidated GAAP Financial Measures: | |||||||||||
Total revenue | $ | 156,915 | $ | 126,464 | |||||||
Total expenses | $ | 148,391 | $ | 122,184 | |||||||
Income from operations | $ | 8,524 | $ | 4,280 |
Home Health and Hospice Services | Senior Living Services | All Other | Total | |||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||
Segment GAAP Financial Measures: | ||||||||||||||||||||||||||
Three Months Ended March 31, 2024 | ||||||||||||||||||||||||||
Revenue | $ | 116,490 | $ | 40,425 | $ | — | $ | 156,915 | ||||||||||||||||||
Segment Adjusted EBITDAR from Operations | $ | 19,550 | $ | 12,011 | $ | (10,161) | $ | 21,400 | ||||||||||||||||||
Three Months Ended March 31, 2023 | ||||||||||||||||||||||||||
Revenue | $ | 91,079 | $ | 35,385 | $ | — | $ | 126,464 | ||||||||||||||||||
Segment Adjusted EBITDAR from Operations | $ | 14,412 | $ | 10,241 | $ | (7,514) | $ | 17,139 | ||||||||||||||||||
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(In thousands) | |||||||||||
Segment Adjusted EBITDAR from Operations(a) | $ | 21,400 | $ | 17,139 | |||||||
Less: Depreciation and amortization | 1,331 | 1,280 | |||||||||
Rent—cost of services | 10,384 | 9,597 | |||||||||
Other (expense) income | 85 | 30 | |||||||||
Adjustments to Segment EBITDAR from Operations: | |||||||||||
Less: Costs at start-up operations(b) | (82) | 203 | |||||||||
Share-based compensation expense(c) | 1,526 | 1,419 | |||||||||
Acquisition related costs and credit allowances(d) | 137 | 32 | |||||||||
Costs associated with transitioning operations(e) | (628) | 47 | |||||||||
Unusual, non-recurring or redundant charges(f) | 275 | 398 | |||||||||
Add: Net income attributable to noncontrolling interest | 152 | 147 | |||||||||
Condensed Consolidated Income from Operations | $ | 8,524 | $ | 4,280 |
(a) | Segment Adjusted EBITDAR from Operations is net income (loss) attributable to the Company's reportable segments excluding interest expense, provision for income taxes, depreciation and amortization expense, rent, and, in order to view the operations performance on a comparable basis from period to period, certain adjustments including: (1) costs at start-up operations, (2) share-based compensation, (3) acquisition related costs and credit allowances, (4) the costs associated with transitioning operations, (5) unusual, non-recurring or redundant charges, and (6) net income attributable to noncontrolling interest. General and administrative expenses are not allocated to the reportable segments, and are included as “All Other”, accordingly the segment earnings measure reported is before allocation of corporate general and administrative expenses. The Company's segment measures may be different from the calculation methods used by other companies and, therefore, comparability may be limited. | |||||||
(b) | Represents results related to start-up operations. This amount excludes rent and depreciation and amortization expense related to such operations. | |||||||
(c) | Share-based compensation expense and related payroll taxes incurred. Share-based compensation expense and related payroll taxes are included in cost of services and general and administrative expense. | |||||||
(d) | Non-capitalizable costs associated with acquisitions, credit allowances, and write offs for amounts in dispute with the prior owners of certain acquired operations. | |||||||
(e) | During the three months ended March 31, 2023, an affiliate of the Company placed its memory care units into transition and is actively seeking to sublease the units to an unrelated third party. The amount above represents the net operating impact attributable to the units in transition. The amounts reported exclude rent and depreciation and amortization expense related to such operations and include legal settlement costs associated with one of the entities transitioned to Ensign. | |||||||
(f) | Represents unusual or non-recurring charges for legal services, implementation costs, integration costs, and consulting fees in general and administrative and cost of services expenses. |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(In thousands) | |||||||||||
Consolidated Non-GAAP Financial Measures: | |||||||||||
Performance Metrics | |||||||||||
Consolidated EBITDA | $ | 9,788 | $ | 5,443 | |||||||
Consolidated Adjusted EBITDA | $ | 11,224 | $ | 7,916 | |||||||
Valuation Metric | |||||||||||
Consolidated Adjusted EBITDAR | $ | 21,400 |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(In thousands) | |||||||||||
Segment Non-GAAP Measures:(a) | |||||||||||
Segment Adjusted EBITDA from Operations | |||||||||||
Home health and hospice services | $ | 17,886 | $ | 13,182 | |||||||
Senior living services | $ | 3,499 | $ | 2,248 |
(a) | General and administrative expenses are not allocated to any segment for purposes of determining segment profit or loss. |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(In thousands) | |||||||||||
Consolidated net income | $ | 5,058 | $ | 1,997 | |||||||
Less: Net income attributable to noncontrolling interest | 152 | 147 | |||||||||
Add: Provision for income taxes | 1,759 | 907 | |||||||||
Interest expense, net | 1,792 | 1,406 | |||||||||
Depreciation and amortization | 1,331 | 1,280 | |||||||||
Consolidated EBITDA | 9,788 | 5,443 | |||||||||
Adjustments to Consolidated EBITDA | |||||||||||
Add: Costs at start-up operations(a) | (82) | 203 | |||||||||
Share-based compensation expense(b) | 1,526 | 1,419 | |||||||||
Acquisition related costs and credit allowances(c) | 137 | 32 | |||||||||
Costs associated with transitioning operations(d) | (628) | 47 | |||||||||
Unusual, non-recurring or redundant charges(e) | 275 | 398 | |||||||||
Rent related to items (a) and (d) above | 208 | 374 | |||||||||
Consolidated Adjusted EBITDA | 11,224 | 7,916 | |||||||||
Rent—cost of services | 10,384 | 9,597 | |||||||||
Rent related to items (a) and (d) above | (208) | (374) | |||||||||
Adjusted rent—cost of services | 10,176 | 9,223 | |||||||||
Consolidated Adjusted EBITDAR | $ | 21,400 |
(a) | Represents results related to start-up operations. This amount excludes rent and depreciation and amortization expense related to such operations. | |||||||
(b) | Share-based compensation expense and related payroll taxes incurred. Share-based compensation expense and related payroll taxes are included in cost of services and general and administrative expense. | |||||||
(c) | Non-capitalizable costs associated with acquisitions, credit allowances, and write offs for amounts in dispute with the prior owners of certain acquired operations. | |||||||
(d) | During the three months ended March 31, 2023, an affiliate of the Company placed its memory care units into transition and is actively seeking to sublease the units to an unrelated third party. The amount above represents the net operating impact attributable to the units in transition. The amounts reported exclude rent and depreciation and amortization expense related to such operations and include legal settlement costs associated with one of the entities transitioned to Ensign. | |||||||
(e) | Represents unusual or non-recurring charges for legal services, implementation costs, integration costs, and consulting fees in general and administrative and cost of services expenses. |
Three Months Ended March 31, | |||||||||||||||||||||||
Home Health and Hospice | Senior Living | ||||||||||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Segment Adjusted EBITDAR from Operations | $ | 19,550 | $ | 14,412 | $ | 12,011 | $ | 10,241 | |||||||||||||||
Less: Rent—cost of services | 1,729 | 1,323 | 8,655 | 8,274 | |||||||||||||||||||
Rent related to start-up and transitioning operations | (65) | (93) | (143) | (281) | |||||||||||||||||||
Segment Adjusted EBITDA from Operations | $ | 17,886 | $ | 13,182 | $ | 3,499 | $ | 2,248 |
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | 2023 | ||||||||||||||||||||||
Revenue Dollars | Revenue Percentage | Revenue Dollars | Revenue Percentage | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Home health and hospice services | |||||||||||||||||||||||
Home health | $ | 57,212 | 36.5 | % | $ | 41,780 | 33.0 | % | |||||||||||||||
Hospice | 54,607 | 34.8 | 43,289 | 34.2 | |||||||||||||||||||
Home care and other(a) | 4,671 | 3.0 | 6,010 | 4.8 | |||||||||||||||||||
Total home health and hospice services | 116,490 | 74.3 | 91,079 | 72.0 | |||||||||||||||||||
Senior living services | 40,425 | 25.7 | 35,385 | 28.0 | |||||||||||||||||||
Total revenue | $ | 156,915 | 100.0 | % | $ | 126,464 | 100.0 | % |
(a) | Home care and other revenue is included with home health revenue in other disclosures in this Quarterly Report. |
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | 2023 | Change | % Change | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Home health and hospice revenue | |||||||||||||||||||||||
Home health services | $ | 57,212 | $ | 41,780 | $ | 15,432 | 36.9 | % | |||||||||||||||
Hospice services | 54,607 | 43,289 | 11,318 | 26.1 | |||||||||||||||||||
Home care and other | 4,671 | 6,010 | (1,339) | (22.3) | |||||||||||||||||||
Total home health and hospice revenue | $ | 116,490 | $ | 91,079 | $ | 25,411 | 27.9 | % | |||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | 2023 | Change | % Change | ||||||||||||||||||||
Home health services: | |||||||||||||||||||||||
Total home health admissions | 14,649 | 10,910 | 3,739 | 34.3 | % | ||||||||||||||||||
Total Medicare home health admissions | 6,346 | 4,948 | 1,398 | 28.3 | |||||||||||||||||||
Average Medicare revenue per 60-day completed episode(a) | $ | 3,535 | $ | 3,419 | $ | 116 | 3.4 | ||||||||||||||||
Hospice services: | |||||||||||||||||||||||
Total hospice admissions | 3,080 | 2,451 | 629 | 25.7 | |||||||||||||||||||
Average daily census | 2,962 | 2,439 | 523 | 21.4 | |||||||||||||||||||
Hospice Medicare revenue per day | $ | 187 | $ | 183 | $ | 4 | 2.2 | ||||||||||||||||
Number of home health and hospice agencies at period end | 112 | 96 | 16 | 16.7 |
(a) | The year-to-date average for Medicare revenue per 60-day completed episode includes post period claim adjustments for prior periods. |
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | 2023 | Change | % Change | ||||||||||||||||||||
Revenue (in thousands) | $ | 40,425 | $ | 35,385 | $ | 5,040 | 14.2 | % | |||||||||||||||
Number of communities at period end | 53 | 51 | 2 | 3.9 | |||||||||||||||||||
Occupancy | 78.5 | % | 78.1 | % | 0.4 | % | |||||||||||||||||
Average monthly revenue per occupied unit | $ | 4,667 | $ | 4,300 | $ | 367 | 8.5 |
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | 2023 | Change | % Change | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Home Health and Hospice | $ | 97,320 | $ | 77,406 | $ | 19,914 | 25.7 | % | |||||||||||||||
Senior Living | 28,675 | 25,196 | 3,479 | 13.8 | |||||||||||||||||||
Total cost of services | $ | 125,995 | $ | 102,602 | $ | 23,393 | 22.8 | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | 2023 | Change | % Change | ||||||||||||||||||||
Cost of service (in thousands) | $ | 97,320 | $ | 77,406 | $ | 19,914 | 25.7 | % | |||||||||||||||
Cost of services as a percentage of revenue | 83.5 | % | 85.0 | % | (1.5) | % |
Three Months Ended March 31, | |||||||||||||||||||||||
2024 | 2023 | Change | % Change | ||||||||||||||||||||
Cost of service (in thousands) | $ | 28,675 | $ | 25,196 | $ | 3,479 | 13.8 | % | |||||||||||||||
Cost of services as a percentage of revenue | 70.9 | % | 71.2 | % | (0.3) | % |
Three Months Ended March 31, | |||||||||||
2024 | 2023 | ||||||||||
(In thousands) | |||||||||||
Net cash provided by operating activities | $ | 545 | $ | 8,996 | |||||||
Net cash used in investing activities | (23,636) | (2,326) | |||||||||
Net cash provided by (used in) financing activities | 19,754 | (5,797) | |||||||||
Net (decrease) increase in cash | (3,337) | 873 | |||||||||
Cash at beginning of period | 6,059 | 2,079 | |||||||||
Cash at end of period | $ | 2,722 | $ | 2,952 |
Exhibit | Description | |||||||
Amended and Restated Certificate of Incorporation of The Pennant Group, Inc., effective as of September 27, 2019 (incorporated by reference to Exhibit 3.1 to The Pennant Group, Inc.’s Current Report on Form 8-K (File No. 001-38900) filed with the SEC on October 3, 2019). | ||||||||
Second Amended and Restated Bylaws of The Pennant Group, Inc., effective as of February 21, 2022 (incorporated by reference to Exhibit 3.1 to The Pennant Group, Inc.’s Current Report on Form 8-K (File No. 001-38900) filed with the SEC February 22, 2022). | ||||||||
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||||||
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||||||
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||||||
Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
The Pennant Group, Inc. | ||||||||
Dated: May 6, 2024 | BY: | /s/ LYNETTE B. WALBOM | ||||||
Lynette B. Walbom | ||||||||
Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer) |
/s/ BRENT J. GUERISOLI | ||||||||||||||
Name: | Brent J. Guerisoli | |||||||||||||
Title: | Chief Executive Officer (Principal Executive Officer) |
/s/ LYNETTE B. WALBOM | |||||||||||||||||||||||||||||
Name: | Lynette B. Walbom | ||||||||||||||||||||||||||||
Title: | Chief Financial Officer (Principal Financial Officer, Principal Accounting Officer and Duly Authorized Officer) |
1 | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||||||||||||||||||||||
2 | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. | ||||||||||||||||||||||
/s/ BRENT J. GUERISOLI | |||||||||||||||||||||||
Name: | Brent J. Guerisoli | ||||||||||||||||||||||
Title: | Chief Executive Officer (Principal Executive Officer) | ||||||||||||||||||||||
May 6, 2024 |
1 | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and | ||||||||||||||||||||||
2 | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. | ||||||||||||||||||||||
/s/ LYNETTE B. WALBOM | |||||||||||||||||||||||
Name: | Lynette B. Walbom | ||||||||||||||||||||||
Title: | Chief Financial Officer (Principal Financial Officer, Principal Accounting Officer and Duly Authorized Officer) | ||||||||||||||||||||||
May 6, 2024 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 197 | $ 259 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 30,371,000 | 30,297,000 |
Common stock, shares outstanding (in shares) | 30,036,000 | 29,948,000 |
Treasury stock, at cost (in shares) | 3,000 | 3,000 |
DESCRIPTION OF BUSINESS |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS | DESCRIPTION OF BUSINESS The Pennant Group, Inc. (herein referred to as “Pennant,” the “Company,” “it,” or “its”), is a holding company with no direct operating assets, employees or revenue. The Company, through its independent operating subsidiaries, provides healthcare services across the post-acute care continuum. As of March 31, 2024, the Company’s subsidiaries operated 112 home health, hospice and home care agencies and 53 senior living communities located in Arizona, California, Colorado, Idaho, Montana, Nevada, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin and Wyoming. Certain of the Company’s subsidiaries, collectively referred to as the Service Center, provide accounting, payroll, human resources, information technology, legal, risk management, and other services to the operations through contractual relationships. Each of the Company’s affiliated operations are operated by separate, independent subsidiaries that have their own management, employees and assets. References herein to the consolidated “Company” and “its” assets and activities are not meant to imply, nor should they be construed as meaning, that Pennant has direct operating assets, employees or revenue, or that any of the subsidiaries are operated by Pennant.
|
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The accompanying unaudited condensed consolidated financial statements of the Company (the “Interim Financial Statements”) reflect the Company’s financial position, results of operations, and cash flows of the business. The Interim Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the regulations of the Securities and Exchange Commission (“SEC”). Management believes that the Interim Financial Statements reflect, in all material respects, all adjustments which are of a normal and recurring nature necessary to present fairly the Company’s financial position, results of operations, and cash flows for the periods presented in conformity with GAAP. The results reported in these Interim Financial Statements are not necessarily indicative of results that may be expected for the entire year. The Condensed Consolidated Balance Sheet as of December 31, 2023 is derived from the Company’s annual audited Consolidated Financial Statements for the fiscal year ended December 31, 2023, which should be read in conjunction with these Interim Financial Statements. Certain information in the accompanying footnote disclosures normally included in annual financial statements was condensed or omitted for the interim periods presented in accordance with GAAP. All significant intercompany transactions and balances between the various legal entities comprising the Company have been eliminated in consolidation. The Company presents noncontrolling interests within the equity section of its Condensed Consolidated Balance Sheets and the amount of consolidated net income that is attributable to the Company and the noncontrolling interest in its Condensed Consolidated Statements of Income. The Company consists of various limited liability companies and corporations established to operate home health, hospice, home care, and senior living operations. The Interim Financial Statements include the accounts of all entities controlled by the Company through its ownership of a majority voting interest. Estimates and Assumptions - The preparation of the Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Financial Statements and the reported amounts of revenue and expenses during the reporting periods. The most significant estimates in the Financial Statements relate to self-insurance reserves, revenue recognition, and intangible assets and goodwill. Actual results could differ from those estimates. State relief funding. The Company receives state relief funding through programs from various states, including healthcare relief funding under the American Rescue Plan Act (ARPA), and other state specific relief programs. The funding generally incorporates specific use requirements primarily for direct patient care including labor related expenses that are attributable to the COVID-19 pandemic or are associated with providing patient care. These funds are recognized as a reduction of cost of services expenses when related expenses are incurred. As of March 31, 2024 and December 31, 2023, the Company had $383 and $780 in unapplied state relief funds, respectively. The unapplied state relief funds received are recorded in other accrued liabilities. The Company recognized state relief funding totaling $453 for the three months ended March 31, 2024, and $685 for the three months ended March 31, 2023, which the Company recognized as a reduction of cost of services expense. Recent Accounting Pronouncements Except for rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws and a limited number of grandfathered standards, the FASB ASC is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. For any new pronouncements announced, the Company considers whether the new pronouncements could alter previous generally accepted accounting principles and determines whether any new or modified principles will have a material impact on the Company's reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of the Company's financial management and certain standards are under consideration. In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which requires the Company to expand the breadth and frequency of segment disclosures to include additional information about significant segment expenses, the chief operating decision maker and other items, and also require the annual disclosures on an interim basis. This guidance is effective for annual periods beginning after December 15, 2023, which will be the Company's fiscal year 2024, with early adoption permitted. The Company is currently evaluating the impact of the ASU on its Quarterly and Annual Reports. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which requires the Company to disclose disaggregated jurisdictional and categorical information for the tax rate reconciliation, income taxes paid and other income tax related amounts. This guidance is effective for annual periods beginning after December 15, 2024, which will be the Company's fiscal year 2025, with early adoption permitted. The Company doesn’t expect it to have any material impacts.
|
TRANSACTIONS WITH ENSIGN |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Related Party Transactions [Abstract] | |
TRANSACTIONS WITH ENSIGN | TRANSACTIONS WITH ENSIGN On October 1, 2019, The Ensign Group, Inc. (“Ensign”) completed the separation of Pennant (the “Spin-Off”). Pennant and Ensign continue to partner in the provision of services along the healthcare continuum. The Company incurred costs of $280 for the three months ended March 31, 2024, and $273 for the three months ended March 31, 2023, that related primarily to shared services at proximate operations. Expenses related to room and board charges at Ensign skilled nursing facilities for hospice patients were $1,500 for the three months ended March 31, 2024, and $940 for the three months ended March 31, 2023, and are included in cost of services. The Company’s independent operating subsidiaries leased 29 communities from subsidiaries of Ensign under a master lease arrangement as of both March 31, 2024 and March 31, 2023. See further discussion below at Note 13, Leases.
|
NET INCOME PER COMMON SHARE |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
NET INCOME PER COMMON SHARE | NET INCOME PER COMMON SHARE Basic net income per share is computed by dividing net income attributable to stockholders of the Company by the weighted average number of outstanding common shares for the period. The computation of diluted net income per share is similar to the computation of basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. The following table sets forth the computation of basic and diluted net income per share for the periods presented:
|
REVENUE AND ACCOUNTS RECEIVABLE |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE AND ACCOUNTS RECEIVABLE | REVENUE AND ACCOUNTS RECEIVABLE Revenue is recognized when services are provided to the patients at the amount that reflects the consideration to which the Company expects to be entitled from patients and third-party payors, including Medicare, Medicaid, and managed care programs (Commercial, Medicare Advantage and Managed Medicaid plans). The healthcare services in home health and hospice patient contracts include routine services in exchange for a contractual agreed-upon amount or rate. Routine services are treated as a single performance obligation satisfied over time as services are rendered. As such, patient care services represent a bundle of services that are not capable of being distinct within the context of the contract. Additionally, there may be ancillary services which are not included in the rates for routine services, but instead are treated as separate performance obligations satisfied at a point in time, if and when those services are rendered. Revenue recognized from healthcare services is adjusted for estimates of variable consideration to arrive at the transaction price. The Company determines the transaction price based on contractually agreed-upon amounts or rates, adjusted for estimates of variable consideration. The Company uses the expected value method in determining the variable component that should be used to arrive at the transaction price, using contractual agreements and historical reimbursement experience within each payor type. The amount of variable consideration which is included in the transaction price may be constrained, and is included in the net revenue only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. If actual amounts of consideration ultimately received differ from the Company’s estimates, the Company adjusts these estimates, which would affect net service revenue in the period such variances become known. The Company records revenue from these governmental and managed care programs as services are performed at their expected net realizable amounts under these programs. The Company’s revenue from governmental and managed care programs is subject to audit and retroactive adjustment by governmental and third-party agencies. Consistent with healthcare industry accounting practices, any changes to these governmental revenue estimates are recorded in the period the change or adjustment becomes known based on final settlement. Disaggregation of Revenue The Company disaggregates revenue from contracts with its patients by reportable operating segments and payors. The Company has determined that disaggregating revenue into these categories achieves the disclosure objectives to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Company’s service specific revenue recognition policies are as follows: Home Health Revenue Medicare Revenue Net service revenue is recognized in accordance with the Patient Driven Groupings Model (“PDGM”). Under PDGM, Medicare provides agencies with payments for each 30-day payment period provided to beneficiaries. If a beneficiary is still eligible for care after the end of the first 30-day payment period, a second 30-day payment period can begin. There are no limits to the number of periods of care a beneficiary who remains eligible for the home health benefit can receive. While payment for each 30-day payment period is adjusted to reflect the beneficiary’s health condition and needs, a special outlier provision exists to ensure appropriate payment for those beneficiaries that have the most expensive care needs. The payment under the Medicare program is also adjusted for certain variables including, but not limited to: (a) a low utilization payment adjustment if the number of visits is below an established threshold that varies based on the diagnosis of a beneficiary; (b) a partial payment if the patient transferred to another provider or the Company received a patient from another provider before completing the period of care; (c) adjustment to the admission source of claim if it is determined that the patient had a qualifying stay in a post-acute care setting within 14 days prior to the start of a 30-day payment period; (d) the timing of the 30-day payment period provided to a patient in relation to the admission date, regardless of whether the same home health provider provided care for the entire series of episodes; (e) changes to the acuity of the patient during the previous 30-day payment period; (f) changes in the base payments established by the Medicare program; (g) adjustments to the base payments for case mix and geographic wages; and (h) recoveries of overpayments. The Company adjusts Medicare revenue on completed episodes to reflect differences between estimated and actual payment amounts, an inability to obtain appropriate billing documentation and other reasons unrelated to credit risk. Therefore, the Company believes that its reported net service revenue and patient accounts receivable will be the net amounts to be realized from Medicare for services rendered. In addition to revenue recognized on completed episodes and periods, the Company also recognizes a portion of revenue associated with episodes and periods in progress. Episodes in progress are 30-day payment periods that begin during the reporting period but were not completed as of the end of the period. As such, the Company estimates revenue and recognizes it on a daily basis. The primary factors underlying this estimate are the number of episodes in progress at the end of the reporting period, expected Medicare revenue per period of care or episode of care and the Company’s estimate of the average percentage complete based on the scheduled end of period and end of episode dates. Non-Medicare Revenue Episodic Based Revenue - The Company recognizes revenue in a similar manner as it recognizes Medicare revenue for episodic-based rates that are paid by other insurance carriers, including carriers administrating Medicare Advantage programs. These rates can vary based upon the negotiated terms. Non-episodic Based Revenue - Revenue is recognized on an accrual basis based upon the date of service at amounts equal to its established or estimated per visit rates, as applicable. Hospice Revenue Revenue is recognized on an accrual basis based upon the date of service at amounts equal to the estimated payment rates. The estimated payment rates are calculated as daily rates for each of the levels of care the Company delivers. Revenue is adjusted for an inability to obtain appropriate billing documentation or authorizations acceptable to the payor and other reasons unrelated to credit risk. Additionally, as Medicare hospice revenue is subject to an inpatient cap and an overall payment cap, the Company monitors its provider numbers and estimates amounts due back to Medicare if a cap has been exceeded. The Company regularly evaluates and records these adjustments as a reduction to revenue and an increase to other accrued liabilities. Senior Living Revenue The Company has elected the lessor practical expedient within ASC Topic 842, Leases and therefore recognizes, measures, presents, and discloses the revenue for services rendered under the Company’s senior living residency agreements based upon the predominant component, either the lease or non-lease component, of the contracts. The Company has determined that the services included under the Company’s senior living residency agreements each have the same timing and pattern of transfer. The Company recognizes revenue under ASC Topic 606, Revenue from Contracts with Customers for its senior residency agreements, for which it has determined that the non-lease components of such residency agreements are the predominant component of each such contract. The Company’s senior living revenue consists of fees for basic housing and assisted living care. Accordingly, the Company records revenue when services are rendered on the date services are provided at amounts billable to individual residents. Residency agreements are generally for a term of 30 days, with resident fees billed monthly in advance. For residents under reimbursement arrangements with Medicaid, revenue is recorded based on contractually agreed-upon amounts or rates on a per resident, daily basis or as services are rendered. Revenue By Payor Revenue by payor for the three months ended March 31, 2024 and 2023, is summarized in the following tables:
Balance Sheet Impact Included in the Company’s Condensed Consolidated Balance Sheets are contract assets, comprised of billed accounts receivable and unbilled receivables, which are the result of the timing of revenue recognition, billings and cash collections, as well as, contract liabilities, which primarily represent payments the Company receives in advance of services provided. Accounts receivable, net as of March 31, 2024 and December 31, 2023 is summarized in the following table:
Concentrations - Credit Risk The Company has significant accounts receivable balances, the collectability of which is dependent on the availability of funds from certain governmental programs, primarily Medicare and Medicaid. These receivables represent the only significant concentration of credit risk for the Company. The Company does not believe there are significant credit risks associated with these governmental programs. The Company believes that an appropriate allowance has been recorded for the possibility of these receivables proving uncollectible, and continually monitors and adjusts these allowances as necessary. The Company’s gross receivables from the Medicare and Medicaid programs accounted for approximately 74.7% and 77.0% of its total gross accounts receivable as of March 31, 2024 and December 31, 2023, respectively. Combined revenue from reimbursement under the Medicare and Medicaid programs accounted for 65.1% for the three months ended March 31, 2024, and 62.0% of the Company’s revenue for the three months ended March 31, 2023. Practical Expedients and Exemptions As the Company’s contracts have an original duration of one year or less, the Company uses the practical expedient applicable to its contracts and does not consider the time value of money. Further, because of the short duration of these contracts, the Company has not disclosed the transaction price for the remaining performance obligations as of the end of each reporting period or when the Company expects to recognize this revenue. In addition, the Company has applied the practical expedient provided by ASC 340, Other Assets and Deferred Costs, and all incremental customer contract acquisition costs are expensed as they are incurred because the amortization period would have been one year or less.
|
BUSINESS SEGMENTS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BUSINESS SEGMENTS | BUSINESS SEGMENTS The Company classifies its operations into the following reportable operating segments: (1) home health and hospice services, which includes the Company’s home health, hospice and home care businesses; and (2) senior living services, which includes the operation of assisted living, independent living and memory care communities. The reporting segments are business units that offer different services and are managed separately to provide greater visibility into those operations. The Company’s Chief Executive Officer, who is the Company’s Chief Operating Decision Maker (“CODM”), reviews financial information at the operating segment level. The Company also reports an “all other” category that includes general and administrative expense from the Company’s Service Center. As of March 31, 2024, the Company provided services through 112 affiliated home health, hospice and home care agencies, and 53 affiliated senior living operations. The Company evaluates performance and allocates capital resources to each segment based on an operating model that is designed to maximize the quality of care provided and profitability. The Company’s Service Center provides various services to all lines of business. The Company does not review assets by segment and therefore assets by segment are not disclosed below. The CODM uses Segment Adjusted EBITDAR from Operations as the primary measure of profit and loss for the Company's reportable segments and to compare the performance of its operations with those of its competitors. Segment Adjusted EBITDAR from Operations is net income (loss) attributable to the Company's reportable segments excluding interest expense, provision for income taxes, depreciation and amortization expense, rent, and, in order to view the operations performance on a comparable basis from period to period, certain adjustments including: (1) costs at start-up operations, (2) share-based compensation, (3) acquisition related costs and credit allowances, (4) the costs associated with transitioning operations, (5) unusual, non-recurring or redundant charges, and (6) net income attributable to noncontrolling interest. General and administrative expenses are not allocated to the reportable segments, and are included as “All Other”, accordingly the segment earnings measure reported is before allocation of corporate general and administrative expenses. The Company's segment measures may be different from the calculation methods used by other companies and, therefore, comparability may be limited. The following tables present certain financial information regarding the Company’s reportable segments, general and administrative expenses are not allocated to the reportable segments and are included in “All Other” for the three months ended March 31, 2024 and 2023:
The following table provides a reconciliation of Segment Adjusted EBITDAR from Operations to income from operations:
|
ACQUISITIONS |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
ACQUISITIONS | ACQUISITIONS The Company is focused on acquiring operations that are complementary to the Company’s current businesses, accretive to the Company’s business or otherwise advance the Company’s strategy. The results of all the Company’s independent operating subsidiaries are included in the Interim Financial Statements subsequent to the date of acquisition. Acquisitions are accounted for using the acquisition method of accounting. 2024 Acquisitions During the three months ended March 31, 2024, the Company expanded its operations with the addition of one home health agency described below and two senior living communities. The Company acquired the real estate of the two senior living communities. These new communities included 223 operational senior living units to be operated by the Company's independent subsidiaries. On January 1, 2024, the Company announced it closed on a home health joint venture with John Muir Health (“Muir”), a leading nonprofit integrated health system serving communities throughout the east bay region of San Francisco, California. The transaction combines certain assets and the operations of Muir’s home health business and the assets and operations of a local Pennant-affiliated home health agency. The joint venture is majority-owned and managed by an independent operating subsidiary of the Company and provide home health services to patients throughout the San Francisco east bay region. Along with the assets contributed by a local Pennant-affiliated home health agency, the Company paid Muir $11,680 for a majority interest in the joint venture. The fair value of assets for the joint venture acquired was mostly concentrated in goodwill and intangible assets and as such, these transaction was classified as business combination in accordance with ASC Topic 805, Business Combinations (“ASC 805”). The fair value of assets acquired for the business combination was $23,406, which preliminarily consisted of goodwill of $16,206 and indefinite-lived intangible assets of $7,200 related to a Medicare and Medicaid license. The Company acquired 60.0% ownership interest in the joint venture. The contributions of assets by Muir to the joint venture, resulted in the Company recording a noncontrolling interest with a fair value of $11,726. The Company anticipates that the total goodwill recognized will be fully deductible for tax purposes. The aggregate purchase price of the real estate of the two senior living communities acquired was $10,380 which preliminarily consisted primarily of land and building. There were no material acquisition costs that were expensed related to the business combinations during the three months ended March 31, 2024. 2023 Acquisitions During the three months ended March 31, 2023, the Company expanded its operations with the addition of one home health agency as well as two senior living communities. In connection with the addition of the two senior living communities, the Company entered into a new long-term “triple-net” lease. A subsidiary of the Company entered into a separate operations transfer agreement with the prior operator of each acquired operation as part of each transaction. The one home health agency acquired was a Medicare license and is considered an asset acquisition. The fair value of the home health license acquired was $210 and was allocated to indefinite-lived intangible assets. Subsequent Events On April 12, 2024, the Company closed on an acquisition of one home health agency in Washington. On May 1, 2024, the Company expanded its operations with one senior living community in Idaho and the acquisition of one home health and one hospice agency in Utah. In connection with the addition of the senior living community, the Company entered into a new long-term “triple-net” lease. The total purchase price of the two home health agencies and the one hospice agency was $1,000. As of the date of this report, the preliminary allocation of the purchase price for the acquisitions acquired subsequent to March 31, 2024 were not completed as necessary valuation information was not yet available. As such, the determination whether these acquisitions should be classified as business combinations or asset acquisitions under ASC 805 will be determined upon completion of the allocation of the purchase price.
|
PROPERTY AND EQUIPMENT—NET |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY AND EQUIPMENT—NET | PROPERTY AND EQUIPMENT—NET Property and equipment, net consist of the following:
Depreciation expense was $1,331 for the three months ended March 31, 2024, and $1,275 for the three months ended March 31, 2023. The Company measures certain assets at fair value on a non-recurring basis, including long-lived assets, which are evaluated for impairment. Long-lived assets include assets such as property and equipment, operating lease assets and certain intangible assets. The inputs used to determine the fair value of long-lived assets in the impairment analysis are considered Level 3 measurements due to their subjective nature. Management has evaluated its long-lived assets and determined there was no impairment recorded during the three months ended March 31, 2024 and 2023.
|
GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS | GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS The following table represents activity in goodwill by segment for the three months ended March 31, 2024:
Other indefinite-lived intangible assets consist of the following:
|
OTHER ACCRUED LIABILITIES |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER ACCRUED LIABILITIES | OTHER ACCRUED LIABILITIES Other accrued liabilities consist of the following:
|
DEBT |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT | DEBT Long-term debt, net consists of the following:
On February 23, 2021, Pennant entered into an amendment to its existing credit agreement (as amended, the “Credit Agreement”), which provides for an increased revolving credit facility with a syndicate of banks with a borrowing capacity of $150,000 (the “Revolving Credit Facility”). On June 12, 2023, Pennant entered into a second amendment to the Credit Agreement that modified the reference rate from LIBOR to Standard Overnight Financing Rate (“SOFR”). The interest rates applicable to loans under the Revolving Credit Facility are, at the Company’s election, either (i) Adjusted Term SOFR (as defined in the Credit Agreement) plus a margin ranging from 2.25% to 3.25% per annum or (ii) Base Rate plus a margin ranging from 1.25% to 2.25% per annum, in each case, based on the ratio of Consolidated Total Net Debt to Consolidated EBITDA (each, as defined in the Credit Agreement). In addition, Pennant pays a commitment fee on the undrawn portion of the commitments under the Revolving Credit Facility which ranges from 0.35% to 0.50% per annum, depending on the Consolidated Total Net Debt to Consolidated EBITDA ratio of the Company and its subsidiaries. The Company is not required to repay any loans under the Credit Agreement prior to maturity in 2026, other than to the extent the outstanding borrowings exceed the aggregate commitments under the Credit Agreement. As of March 31, 2024, the Company’s weighted average interest rate on its outstanding debt was 8.22%. As of March 31, 2024, the Company had available borrowing on the Revolving Credit Facility of $61,564, which is net of outstanding letters of credit of $4,186. The fair value of the Revolving Credit Facility approximates carrying value, due to the short-term nature and variable interest rates. The fair value of this debt is categorized within Level 2 of the fair value hierarchy based on the observable market borrowing rates. The Credit Agreement is guaranteed, jointly and severally, by certain of the Company’s independent operating subsidiaries, and is secured by a pledge of stock of the Company's material independent operating subsidiaries as well as a first lien on substantially all of each material operating subsidiary's personal property. The Credit Agreement contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its independent operating subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations, amend certain material agreements and pay certain dividends and other restricted payments. Financial covenants require compliance with certain levels of leverage ratios that impact the amount of interest. As of March 31, 2024, the Company was compliant with all such financial covenants.
|
OPTIONS AND AWARDS |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OPTIONS AND AWARDS | OPTIONS AND AWARDS Outstanding options and restricted stock awards of the Company were granted under the 2019 Omnibus Incentive Plan (the “OIP”) and Long-Term Incentive Plan (the “LTIP”, and together with the OIP, the “Pennant Plans”). Under the Pennant Plans, stock-based payment awards, including employee stock options, restricted stock awards (“RSA”), and restricted stock units (“RSU” and together with RSA, “Restricted Stock”) are issued based on estimated fair value. The following disclosures represent share-based compensation expense relating to employees of the Company’s subsidiaries and non-employee directors who have awards under the Pennant Plans. Total share-based compensation expense for all Plans for the three months ended March 31, 2024 and 2023 was:
In future periods, the Company estimates it will recognize the following share-based compensation expense for unvested stock options and unvested Restricted Stock as of March 31, 2024:
Stock Options Under the Pennant Plans, options granted to employees of the subsidiaries of Pennant generally vest over five years at 20% per year on the anniversary of the grant date. Options expire ten years after the date of grant. The Company uses the Black-Scholes option-pricing model to recognize the value of stock-based compensation expense for share-based payment awards under the Plans. Determining the appropriate fair-value model and calculating the fair value of stock-based awards at the grant date requires considerable judgment, including estimating stock price volatility and expected option life. The Company develops estimates based on historical data and market information, which can change significantly over time. The fair value of each option is estimated on the grant date using a Black-Scholes option-pricing model with the following weighted average assumptions for stock options granted as of March 31:
The following table represents the employee stock option activity during the three months ended March 31, 2024:
Restricted Stock A summary of the status of Pennant’s non-vested Restricted Stock, and changes during the three months ended March 31, 2024, is presented below:
|
LEASES |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES The Company’s independent operating subsidiaries lease senior living communities and its administrative offices under non-cancelable operating leases, most of which have initial lease terms ranging from 15 to 25 years. The Company’s independent operating subsidiaries also lease the administrative offices of home health and hospice agencies which generally range from to 11 years. Most of these leases contain renewal options, most involve rent increases and none contain purchase options. The lease term excludes lease renewals because the renewal rents are not at a bargain, there are no economic penalties for the Company to renew the lease, and it is not reasonably certain that the Company will exercise the extension options. The Company elected the accounting policy practical expedients in ASC 842 to: (i) combine associated lease and non-lease components into a single lease component; and (ii) exclude recording short-term leases as right-of-use assets and liabilities on the consolidated balance sheets. Non-lease components, which are not significant overall, are combined with lease components. As of March 31, 2024, the Company’s independent operating subsidiaries leased 29 senior living communities from subsidiaries of Ensign (“Ensign Leases”) under a master lease arrangement. The existing leases with subsidiaries of Ensign are for initial terms of between 14 to 20 years. The total amount of rent expense included in rent - cost of services paid to subsidiaries of Ensign was $3,488 for the three months ended March 31, 2024, and $3,416 for the three months ended March 31, 2023. In addition to rent, each of the operating companies are required to pay the following: (1) all impositions and taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor); (2) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties; (3) all insurance required in connection with the leased properties and the business conducted on the leased properties; (4) all community maintenance and repair costs; and (5) all fees in connection with any licenses or authorizations necessary or appropriate for the leased properties and the business conducted on the leased properties. Fourteen of the Company’s affiliated senior living communities, excluding the communities that are operated under the Ensign Leases (as defined herein), are operated under three separate master lease arrangements. Under these master leases, a breach at a single community could subject one or more of the other communities covered by the same master lease to the same default risk. Failure to comply with Medicare and Medicaid provider requirements is a default under several of the Company’s leases and master leases. With an indivisible lease, it is difficult to restructure the composition of the portfolio or economic terms of the master lease without the consent of the landlord. The components of operating lease cost, are as follows:
The following table shows the lease maturity analysis for all leases as of March 31, 2024, for the years ended December 31:
Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at each lease’s commencement date to determine each lease's operating lease liability. As of March 31, 2024, the weighted average remaining lease term is 12.3 years and the weighted average discount rate is 8.1%.
|
INCOME TAXES |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company recorded income tax expense of $1,759 and $907, or 25.8% and 31.2% of earnings before income taxes for the three months ended March 31, 2024 and 2023, respectively. The decrease in the effective tax rate is primarily due to the increase in deductible equity compensation.
|
DEFINED CONTRIBUTION PLAN |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Retirement Benefits [Abstract] | |
DEFINED CONTRIBUTION PLAN | DEFINED CONTRIBUTION PLAN The Company has a 401(k) defined contribution plan (the “401(k) Plan”), whereby eligible employees may contribute up to 90% of their annual basic earnings, subject to applicable annual Internal Revenue Code limits. Additionally, the 401(k) Plan provides for discretionary matching contributions (as defined in the 401(k) Plan) by the Company. The Company expensed matching contributions to the 401(k) Plan of $291 and $213 during the three months ended March 31, 2024 and 2023, respectively. During fiscal year 2021, the Company implemented a non-qualified deferred compensation plan (the “DCP”) for executives, other highly compensated employees, independent contractors and non-employee directors which went into effect on June 1, 2021, effective for compensation to be paid in 2022 and thereafter. The independent contractors and non-employee directors are otherwise ineligible for participation in the Company's 401(k) plan. The DCP allows participants to defer the receipt of a portion of their base compensation, and further allows certain participants to defer up to 80% of their base salary and bonus compensation or director fees. At the participant’s election, payments can be deferred until a specific date at least one year after the year of deferral or until termination of engagement with the Company and can be paid in a lump sum or in up to ten annual installments. Separate deferral elections can be made for each year, and in limited circumstances, existing payment elections may be changed. The amounts deferred are credited with earnings and losses based upon the actual performance of the deemed investments selected by the participant. The rate of return for each participant varies depending on the specific investment elections made by the participant. Additionally, the plan deposits the employee deferrals into a rabbi trust and the funds are generally invested in individual variable life insurance contracts owned by the Company that are specifically designed to informally fund savings plans of this nature. The Company paid for related administrative costs, which were immaterial during the fiscal years presented. As of March 31, 2024 and 2023, the Company’s deferred compensation liabilities were $1,965 and $855, respectively, in other long-term liabilities on the consolidated balance sheets. The cash surrender value of the individual variable life insurance contracts is based on investment funds that shadow the investment allocations specified by participants in the DCP. As of March 31, 2024 and 2023, the cash surrender value of the company owned life insurance (“COLI”) policies were $1,997 and $852, respectively, and were included as a component of restricted and other assets on the consolidated balance sheets. There are no outstanding loan amounts offset against the cash surrender value of the COLI policies. The losses recorded for the change in cash surrender value were immaterial for each period presented.
|
COMMITMENTS AND CONTINGENCIES |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Regulatory Matters - The Company provides services in complex and highly regulated industries. The Company’s compliance with applicable U.S. federal, state and local laws and regulations governing these industries may be subject to governmental review and adverse findings may result in significant regulatory action, which could include sanctions, damages, fines, penalties (many of which may not be covered by insurance), and even exclusion from government programs. The Company is a party to various regulatory and other governmental audits and investigations in the ordinary course of business and cannot predict the ultimate outcome of any federal or state regulatory survey, audit or investigation. While governmental audits and investigations are the subject of administrative appeals, the appeals process, even if successful, may take several years to resolve and penalties subject to appeal may remain in place during such appeals, which may include suspension, termination, or revocation of participation in governmental programs for the payment of the services the Company provides. The Department of Justice, CMS, or other federal and state enforcement and regulatory agencies may conduct additional investigations related to the Company's businesses. The Company believes it is presently in compliance in all material respects with all applicable laws and regulations. Cost-Containment Measures - Government and third-party payors have instituted cost-containment measures designed to limit payments made to providers of healthcare services, may propose future cost-containment measures, and there can be no assurance that future measures designed to limit payments made to providers will not adversely affect the Company. Indemnities - From time to time, the Company enters into certain types of contracts that contingently require the Company to indemnify parties against third-party claims. These contracts primarily include (i) certain real estate leases, under which the Company may be required to indemnify property owners or prior operators for post-transfer environmental or other liabilities and other claims arising from the Company’s use of the applicable premises, (ii) operations transfer agreements, in which the Company agrees to indemnify past operators of agencies and communities the Company acquires against certain liabilities arising from the transfer of the operation and/or the operation thereof after the transfer, (iii) certain Ensign lending agreements, and (iv) certain agreements with management, directors and employees, under which the subsidiaries of the Company may be required to indemnify such persons for liabilities arising out of their employment relationships. The terms of such obligations vary by contract and, in most instances, a specific or maximum dollar amount is not explicitly stated therein. Generally, amounts under these contracts cannot be reasonably estimated until a specific claim is asserted. Consequently, because no claims have been asserted, no liabilities have been recorded for these obligations on the Company’s Condensed Consolidated Balance Sheets for any of the periods presented. Litigation - The Company’s businesses involve a significant risk of liability given the age and health of the patients and residents served by its independent operating subsidiaries. The Company, its operating companies, and others in the industry may be subject to a number of claims and lawsuits, including professional liability claims, alleging that services provided have resulted in personal injury, elder abuse, wrongful death or other related claims. Healthcare litigation (including class action litigation) is common and is filed based upon a wide variety of claims and theories, and the Company is routinely subjected to these claims in the ordinary course of business, including potential claims related to patient care and treatment, and professional negligence, as well as employment-related claims. Certain of the states where we conduct business, including California, recently adopted laws that increase the maximum amount of non-economic damages that may be awarded to a successful plaintiff in a claim for professional negligence or malpractice arising from care provided by our independent operating subsidiaries. These changes in applicable law may also increase the cost of obtaining and maintaining professional liability insurance to pay for the defense of, and any liability arising under, such claims. If there were a significant increase in the number of these claims or an increase in amounts owing should plaintiffs be successful in their prosecution of these claims, this could materially adversely affect the Company’s business, financial condition, results of operations and cash flows. In addition, the defense of these lawsuits may result in significant legal costs, regardless of the outcome, and may result in large settlement amounts or damage awards. In addition to the potential lawsuits and claims described above, the Company also is subject to potential lawsuits under the False Claims Act (the “FCA”) and comparable state laws alleging submission of fraudulent claims for services to any governmental healthcare program (such as Medicare) or commercial payor. A violation may provide the basis for exclusion from federally funded healthcare programs. Such exclusions could have a correlative negative impact on the Company’s financial performance. Some states, including California, Arizona and Texas, have enacted similar whistleblower and false claims laws and regulations. In addition, the Deficit Reduction Act of 2005 created incentives for states to enact anti-fraud legislation modeled on the FCA, for which 18 states have qualified, including California and Texas, where we conduct business. As such, the Company could face scrutiny, potential liability and legal expenses and costs based on claims under state false claims acts in markets in which it conducts business. Under the Fraud Enforcement and Recovery Act (“FERA”) and its associated rules, healthcare providers face significant penalties for the knowing retention of government overpayments, even if no false claim was involved. Providers have an obligation to proactively exercise “reasonable diligence” to identify overpayments and return those overpayments to CMS within 60 days of “identification” or the date any corresponding cost report is due, whichever is later. Retention of overpayments beyond this period may create liability under the FCA. In addition, FERA protects whistleblowers (including employees, contractors, and agents) from retaliation. The Company cannot predict or provide any assurance as to the possible outcome of any litigation. If any litigation were to proceed, and the Company and its operating companies are subjected to, alleged to be liable for, or agree to a settlement of, claims or obligations under federal Medicare statutes, the FCA, or similar state and federal statutes and related regulations, the Company’s business, financial condition and results of operations and cash flows could be materially and adversely affected. Among other things, any settlement or litigation could involve the payment of substantial sums to settle any alleged civil violations, and may also include the assumption of specific procedural and financial obligations by the Company or its independent operating subsidiaries going forward under a corporate integrity agreement and/or other arrangement with the government. Medicare Revenue Recoupments - The Company is subject to probe reviews relating to Medicare services, billings and potential overpayments by Unified Program Integrity Contractors (“UPIC”), Recovery Audit Contractors (“RAC”), Zone Program Integrity Contractors (“ZPIC”), Program Safeguard Contractors (“PSC”), Supplemental Medical Review Contractors (“SMRC”) and Medicaid Integrity Contributors (“MIC”) programs, each of the foregoing collectively referred to as “Reviews.” As of March 31, 2024, ten of the Company’s independent operating subsidiaries had Reviews scheduled, on appeal or in dispute resolution process, both pre- and post-payment. If an operation fails an initial or subsequent Review, the operation could then be subject to extended Review, suspension of payment, or extrapolation of the identified error rate to all billing in the same time period. The Company, from time to time, receives record requests in Reviews which have resulted in claim denials on previously paid claims. The Company has appealed substantially all denials arising from these Reviews using the applicable appeals process. As of March 31, 2024, and through the filing of this Quarterly Report on Form 10-Q, the Company’s independent operating subsidiaries have responded to the Reviews that are currently ongoing, on appeal or in dispute resolution process. The Company cannot predict the ultimate outcome of any regulatory and other governmental Reviews. While such Reviews are the subject of administrative appeals, the appeals process, even if successful, may take several years to resolve. The costs to respond to and defend such Reviews may be significant and an adverse determination in such Reviews may subject the Company to sanctions, damages, extrapolation of damage findings, additional recoupments, fines, other penalties (some of which may not be covered by insurance), and termination from Medicare programs which may, either individually or in the aggregate, have a material adverse effect on the Company's business and financial condition. From June 2021 to May 2022, one hospice provider number was subject to a Medicare payment suspension imposed by a UPIC. The total amounts suspended was $5,105, which represents all Medicare payments due to the provider number during the suspension. As of March 31, 2024, the total amount due from the government payor impacted by the suspension was $1,774 and was recorded in long-term other assets. In May 2022, the Company received communication that the Medicare payment suspension, for the above-referenced hospice provider number, was terminated and the UPIC’s review was complete. The UPIC reviewed 107 patient records covering a 10-month period to determine whether, in its view, a Medicare overpayment was made. Based on the results of the review, the UPIC initially alleged sampled and extrapolated overpayments of $5,105, and withheld that amount through continued recoupment of Medicare payments. The Company is pursuing its appeal rights through the administrative appeals process, including contesting the methodology used by the UPIC to perform statistical extrapolation. To date the Company has been successful in appealing most of the previously denied claims. The Company received the refund of previously withheld amounts totaling $3,363 as of March 31, 2024. Subsequent to March 31, 2024, the Company received refund payments totaling $1,431. The Company continues to work through the appeals process for the remaining denied claims and expects to be successful in those appeals. Based on the information currently available to the Company, the Company cannot predict the timing or the ultimate outcome of this review including refunds to be received. As of March 31, 2024, the Company has an accrued liability that is immaterial for this review which was recorded as an offset to revenue. Insurance - The Company retains risk for a substantial portion of potential claims for general and professional liability, workers’ compensation and automobile liability. Based on changes in law that increase the maximum damages that may be recovered for professional negligence or malpractice claims in states where we operate, including, California, the costs of maintaining some of these insurance policies may increase in the future. The Company recognizes obligations associated with these costs, up to specified deductible limits in the period in which a claim is incurred, including with respect to both reported claims and claims incurred but not reported. The general and professional liability insurance has a retention limit of $150 per claim with a $500 corridor as an additional out-of-pocket retention we must satisfy for claims within the policy year before the carrier will reimburse losses. The workers’ compensation insurance has a retention limit of $250 per claim, except for policies held in Texas, Washington and Wyoming which are subject to state insurance and possess their own limits. The Company is self-insured for claims related to employee health, dental, and vision care. To protect itself against loss exposure, the Company has purchased individual stop-loss insurance coverage that insures individual health claims that exceed $350 for each covered person for fiscal year 2024 and fiscal year 2023.
|
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements of the Company (the “Interim Financial Statements”) reflect the Company’s financial position, results of operations, and cash flows of the business. The Interim Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the regulations of the Securities and Exchange Commission (“SEC”). Management believes that the Interim Financial Statements reflect, in all material respects, all adjustments which are of a normal and recurring nature necessary to present fairly the Company’s financial position, results of operations, and cash flows for the periods presented in conformity with GAAP. The results reported in these Interim Financial Statements are not necessarily indicative of results that may be expected for the entire year. |
Consolidation | The Company consists of various limited liability companies and corporations established to operate home health, hospice, home care, and senior living operations. The Interim Financial Statements include the accounts of all entities controlled by the Company through its ownership of a majority voting interest. |
Recent Accounting Pronouncements | Except for rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws and a limited number of grandfathered standards, the FASB ASC is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company. For any new pronouncements announced, the Company considers whether the new pronouncements could alter previous generally accepted accounting principles and determines whether any new or modified principles will have a material impact on the Company's reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of the Company's financial management and certain standards are under consideration. In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”, which requires the Company to expand the breadth and frequency of segment disclosures to include additional information about significant segment expenses, the chief operating decision maker and other items, and also require the annual disclosures on an interim basis. This guidance is effective for annual periods beginning after December 15, 2023, which will be the Company's fiscal year 2024, with early adoption permitted. The Company is currently evaluating the impact of the ASU on its Quarterly and Annual Reports. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which requires the Company to disclose disaggregated jurisdictional and categorical information for the tax rate reconciliation, income taxes paid and other income tax related amounts. This guidance is effective for annual periods beginning after December 15, 2024, which will be the Company's fiscal year 2025, with early adoption permitted. The Company doesn’t expect it to have any material impacts.
|
Revenue Recognition | Revenue is recognized when services are provided to the patients at the amount that reflects the consideration to which the Company expects to be entitled from patients and third-party payors, including Medicare, Medicaid, and managed care programs (Commercial, Medicare Advantage and Managed Medicaid plans). The healthcare services in home health and hospice patient contracts include routine services in exchange for a contractual agreed-upon amount or rate. Routine services are treated as a single performance obligation satisfied over time as services are rendered. As such, patient care services represent a bundle of services that are not capable of being distinct within the context of the contract. Additionally, there may be ancillary services which are not included in the rates for routine services, but instead are treated as separate performance obligations satisfied at a point in time, if and when those services are rendered. Revenue recognized from healthcare services is adjusted for estimates of variable consideration to arrive at the transaction price. The Company determines the transaction price based on contractually agreed-upon amounts or rates, adjusted for estimates of variable consideration. The Company uses the expected value method in determining the variable component that should be used to arrive at the transaction price, using contractual agreements and historical reimbursement experience within each payor type. The amount of variable consideration which is included in the transaction price may be constrained, and is included in the net revenue only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. If actual amounts of consideration ultimately received differ from the Company’s estimates, the Company adjusts these estimates, which would affect net service revenue in the period such variances become known.Medicare Revenue Net service revenue is recognized in accordance with the Patient Driven Groupings Model (“PDGM”). Under PDGM, Medicare provides agencies with payments for each 30-day payment period provided to beneficiaries. If a beneficiary is still eligible for care after the end of the first 30-day payment period, a second 30-day payment period can begin. There are no limits to the number of periods of care a beneficiary who remains eligible for the home health benefit can receive. While payment for each 30-day payment period is adjusted to reflect the beneficiary’s health condition and needs, a special outlier provision exists to ensure appropriate payment for those beneficiaries that have the most expensive care needs. The payment under the Medicare program is also adjusted for certain variables including, but not limited to: (a) a low utilization payment adjustment if the number of visits is below an established threshold that varies based on the diagnosis of a beneficiary; (b) a partial payment if the patient transferred to another provider or the Company received a patient from another provider before completing the period of care; (c) adjustment to the admission source of claim if it is determined that the patient had a qualifying stay in a post-acute care setting within 14 days prior to the start of a 30-day payment period; (d) the timing of the 30-day payment period provided to a patient in relation to the admission date, regardless of whether the same home health provider provided care for the entire series of episodes; (e) changes to the acuity of the patient during the previous 30-day payment period; (f) changes in the base payments established by the Medicare program; (g) adjustments to the base payments for case mix and geographic wages; and (h) recoveries of overpayments. The Company adjusts Medicare revenue on completed episodes to reflect differences between estimated and actual payment amounts, an inability to obtain appropriate billing documentation and other reasons unrelated to credit risk. Therefore, the Company believes that its reported net service revenue and patient accounts receivable will be the net amounts to be realized from Medicare for services rendered. In addition to revenue recognized on completed episodes and periods, the Company also recognizes a portion of revenue associated with episodes and periods in progress. Episodes in progress are 30-day payment periods that begin during the reporting period but were not completed as of the end of the period. As such, the Company estimates revenue and recognizes it on a daily basis. The primary factors underlying this estimate are the number of episodes in progress at the end of the reporting period, expected Medicare revenue per period of care or episode of care and the Company’s estimate of the average percentage complete based on the scheduled end of period and end of episode dates. Non-Medicare Revenue Episodic Based Revenue - The Company recognizes revenue in a similar manner as it recognizes Medicare revenue for episodic-based rates that are paid by other insurance carriers, including carriers administrating Medicare Advantage programs. These rates can vary based upon the negotiated terms. Non-episodic Based Revenue - Revenue is recognized on an accrual basis based upon the date of service at amounts equal to its established or estimated per visit rates, as applicable. Hospice Revenue Revenue is recognized on an accrual basis based upon the date of service at amounts equal to the estimated payment rates. The estimated payment rates are calculated as daily rates for each of the levels of care the Company delivers. Revenue is adjusted for an inability to obtain appropriate billing documentation or authorizations acceptable to the payor and other reasons unrelated to credit risk. Additionally, as Medicare hospice revenue is subject to an inpatient cap and an overall payment cap, the Company monitors its provider numbers and estimates amounts due back to Medicare if a cap has been exceeded. The Company regularly evaluates and records these adjustments as a reduction to revenue and an increase to other accrued liabilities. Senior Living Revenue The Company has elected the lessor practical expedient within ASC Topic 842, Leases and therefore recognizes, measures, presents, and discloses the revenue for services rendered under the Company’s senior living residency agreements based upon the predominant component, either the lease or non-lease component, of the contracts. The Company has determined that the services included under the Company’s senior living residency agreements each have the same timing and pattern of transfer. The Company recognizes revenue under ASC Topic 606, Revenue from Contracts with Customers for its senior residency agreements, for which it has determined that the non-lease components of such residency agreements are the predominant component of each such contract.
|
NET INCOME PER COMMON SHARE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of basic and diluted net income per share | The following table sets forth the computation of basic and diluted net income per share for the periods presented:
|
REVENUE AND ACCOUNTS RECEIVABLE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of revenue by major payor source | Revenue by payor for the three months ended March 31, 2024 and 2023, is summarized in the following tables:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accounts receivable | Accounts receivable, net as of March 31, 2024 and December 31, 2023 is summarized in the following table:
|
BUSINESS SEGMENTS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of financial data combined by business segment | The following tables present certain financial information regarding the Company’s reportable segments, general and administrative expenses are not allocated to the reportable segments and are included in “All Other” for the three months ended March 31, 2024 and 2023:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of total combined adjusted EBITDAR from operations for our reportable segments to combined income from operations | The following table provides a reconciliation of Segment Adjusted EBITDAR from Operations to income from operations:
|
PROPERTY AND EQUIPMENT—NET (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of property and equipment, net | Property and equipment, net consist of the following:
|
GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of activity in goodwill by segment | The following table represents activity in goodwill by segment for the three months ended March 31, 2024:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other indefinite-lived intangible assets | Other indefinite-lived intangible assets consist of the following:
|
OTHER ACCRUED LIABILITIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other accrued liabilities | Other accrued liabilities consist of the following:
|
DEBT (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt | Long-term debt, net consists of the following:
|
OPTIONS AND AWARDS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of total share-based compensation expense | Total share-based compensation expense for all Plans for the three months ended March 31, 2024 and 2023 was:
In future periods, the Company estimates it will recognize the following share-based compensation expense for unvested stock options and unvested Restricted Stock as of March 31, 2024:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of stock options granted fair value assumptions | The fair value of each option is estimated on the grant date using a Black-Scholes option-pricing model with the following weighted average assumptions for stock options granted as of March 31:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of employee stock option activity | The following table represents the employee stock option activity during the three months ended March 31, 2024:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of non-vested restricted stock awards | A summary of the status of Pennant’s non-vested Restricted Stock, and changes during the three months ended March 31, 2024, is presented below:
|
LEASES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of operating lease cost | The components of operating lease cost, are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of future minimum lease payments | The following table shows the lease maturity analysis for all leases as of March 31, 2024, for the years ended December 31:
|
DESCRIPTION OF BUSINESS (Details) |
Mar. 31, 2024
facility
agency
|
---|---|
Home Health and Hospice Services | |
Segment Reporting Information [Line Items] | |
Number of service providers | agency | 112 |
Senior Living Services | |
Segment Reporting Information [Line Items] | |
Number of properties under lease | facility | 53 |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Accounting Policies [Abstract] | |||
Deferred state relief funds | $ 383 | $ 780 | |
State relief funds, reduction | $ 453 | $ 685 |
TRANSACTIONS WITH ENSIGN (Details) - Related Party $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024
USD ($)
property
|
Mar. 31, 2023
USD ($)
property
|
|
Related Party Transaction [Line Items] | ||
Cost of services | $ 1,500 | $ 940 |
Senior Living Services | ||
Related Party Transaction [Line Items] | ||
Number of operating facilities | property | 29 | 29 |
Transition Services Agreement | ||
Related Party Transaction [Line Items] | ||
Expenses from transactions with related party | $ 280 | $ 273 |
NET INCOME PER COMMON SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Numerator: | ||
Net income attributable to The Pennant Group, Inc. | $ 4,906 | $ 1,850 |
Denominator: | ||
Weighted average shares outstanding for basic net income per share (in shares) | 30,046 | 29,751 |
Plus: assumed incremental shares from exercise of options and assumed conversion or vesting of restricted stock (in shares) | 357 | 396 |
Adjusted weighted average common shares outstanding for diluted income per share (in shares) | 30,403 | 30,147 |
Earnings Per Share: | ||
Basic net income per common share (in dollars per share) | $ 0.16 | $ 0.06 |
Diluted net income per common share (in dollars per share) | $ 0.16 | $ 0.06 |
Anti-dilutive effect of common equivalent shares outstanding (in shares) | 2,043 | 2,002 |
REVENUE AND ACCOUNTS RECEIVABLE - NARRATIVE (Details) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Disaggregation of Revenue [Line Items] | |||
Payment terms | Residency agreements are generally for a term of 30 days, with resident fees billed monthly in advance. For residents under reimbursement arrangements with Medicaid, revenue is recorded based on contractually agreed-upon amounts or rates on a per resident, daily basis or as services are rendered. | ||
Customer Concentration Risk | Revenue | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, percent | 100.00% | 100.00% | |
Customer Concentration Risk | Revenue | Subtotal | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, percent | 65.10% | 62.00% | |
Customer Concentration Risk | Receivables | Subtotal | |||
Disaggregation of Revenue [Line Items] | |||
Revenue, percent | 74.70% | 77.00% |
REVENUE AND ACCOUNTS RECEIVABLE - ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Accounts Receivable [Abstract] | ||
Accounts receivable, gross | $ 71,551 | $ 61,375 |
Less: allowance for doubtful accounts | (197) | (259) |
Accounts receivable, net | 71,354 | 61,116 |
Medicare | ||
Accounts Receivable [Abstract] | ||
Accounts receivable, gross | 38,107 | 35,665 |
Medicaid | ||
Accounts Receivable [Abstract] | ||
Accounts receivable, gross | 15,359 | 11,578 |
Managed care | ||
Accounts Receivable [Abstract] | ||
Accounts receivable, gross | 15,890 | 11,752 |
Private and other | ||
Accounts Receivable [Abstract] | ||
Accounts receivable, gross | $ 2,195 | $ 2,380 |
BUSINESS SEGMENTS - NARRATIVE (Details) |
Mar. 31, 2024
facility
agency
|
---|---|
Home Health and Hospice Services | |
Segment Reporting Information [Line Items] | |
Number of service providers | agency | 112 |
Senior Living Services | |
Segment Reporting Information [Line Items] | |
Number of properties under lease | facility | 53 |
BUSINESS SEGMENTS - FINANCIAL DATA (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Segment Reporting Information [Line Items] | ||
Revenue | $ 156,915 | $ 126,464 |
Segment Adjusted EBITDAR from Operations | 21,400 | 17,139 |
Senior Living Services | ||
Segment Reporting Information [Line Items] | ||
Revenue | 40,425 | 35,385 |
Operating Segments | Home Health and Hospice Services | ||
Segment Reporting Information [Line Items] | ||
Revenue | 116,490 | 91,079 |
Segment Adjusted EBITDAR from Operations | 19,550 | 14,412 |
Operating Segments | Senior Living Services | ||
Segment Reporting Information [Line Items] | ||
Revenue | 40,425 | 35,385 |
Segment Adjusted EBITDAR from Operations | 12,011 | 10,241 |
All Other | ||
Segment Reporting Information [Line Items] | ||
Revenue | 0 | 0 |
Segment Adjusted EBITDAR from Operations | $ (10,161) | $ (7,514) |
BUSINESS SEGMENTS - INCOME FROM OPERATIONS (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Segment Reporting [Abstract] | ||
Segment Adjusted EBITDAR from Operations | $ 21,400 | $ 17,139 |
Less: Depreciation and amortization | 1,331 | 1,280 |
Rent—cost of services | 10,384 | 9,597 |
Other income | 85 | 30 |
Less: Costs at start-up operations | (82) | 203 |
Share-based compensation expense and related taxes | 1,526 | 1,419 |
Acquisition related costs and credit allowances | 137 | 32 |
Costs associated with transitioning operations | (628) | 47 |
Unusual, non-recurring or redundant charges | 275 | 398 |
Add: Net income attributable to noncontrolling interest | 152 | 147 |
Condensed Consolidated Income from Operations | $ 8,524 | $ 4,280 |
PROPERTY AND EQUIPMENT—NET (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 66,973 | $ 53,675 | |
Less: accumulated depreciation | (26,381) | (25,077) | |
Property and equipment, net | 40,592 | 28,598 | |
Depreciation | 1,331 | $ 1,275 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 5,389 | 96 | |
Building | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 8,180 | 1,890 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 19,662 | 21,204 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 32,496 | 29,247 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 1,246 | $ 1,238 |
GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS - ACTIVITY IN GOODWILL (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | $ 91,014 |
Additions | 16,206 |
Goodwill, ending balance | 107,220 |
Home Health and Hospice Services | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 87,372 |
Additions | 16,206 |
Goodwill, ending balance | 103,578 |
Senior Living Services | |
Goodwill [Roll Forward] | |
Goodwill, beginning balance | 3,642 |
Additions | 0 |
Goodwill, ending balance | $ 3,642 |
GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS - INDEFINITE-LIVED INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Indefinite-lived Intangible Assets [Line Items] | ||
Other indefinite-lived intangibles | $ 74,942 | $ 67,742 |
Trade name | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Other indefinite-lived intangibles | 1,385 | 1,385 |
Medicare and Medicaid licenses | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Other indefinite-lived intangibles | $ 73,557 | $ 66,357 |
GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS - NARRATIVE (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible asset impairments | $ 0 | $ 0 |
OTHER ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Other Accrued Liabilities, Current [Abstract] | ||
Refunds payable | $ 1,835 | $ 1,566 |
Deferred revenue | 1,793 | 1,658 |
Resident deposits | 2,154 | 2,367 |
Property taxes | 1,157 | 1,255 |
Deferred state relief funds | 383 | 780 |
Accrued self-insurance liabilities | 6,504 | 4,392 |
Other | 5,717 | 3,312 |
Other accrued liabilities | $ 19,543 | $ 15,330 |
DEBT - SCHEDULE OF LONG-TERM DEBT (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Debt Instrument [Line Items] | |||
Less: unamortized debt issuance costs | $ (956) | $ (1,086) | |
Long-term debt, net | 83,294 | 63,914 | |
Amortization of deferred financing fees | 130 | $ 130 | |
Revolving Credit Facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Revolving Credit Facility | $ 84,250 | $ 65,000 |
DEBT - NARRATIVE (Details) - USD ($) |
Jun. 12, 2023 |
Mar. 31, 2024 |
Feb. 23, 2021 |
---|---|---|---|
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Borrowing capacity | $ 150,000,000 | ||
Revolving Credit Facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Weighted average interest rate | 8.22% | ||
Borrowing availability | $ 61,564,000 | ||
Revolving Credit Facility | Minimum | |||
Debt Instrument [Line Items] | |||
Margin | 0.35% | ||
Revolving Credit Facility | Minimum | SOFR | |||
Debt Instrument [Line Items] | |||
Margin | 2.25% | ||
Revolving Credit Facility | Minimum | Base Rate | |||
Debt Instrument [Line Items] | |||
Margin | 1.25% | ||
Revolving Credit Facility | Maximum | |||
Debt Instrument [Line Items] | |||
Margin | 0.50% | ||
Revolving Credit Facility | Maximum | SOFR | |||
Debt Instrument [Line Items] | |||
Margin | 3.25% | ||
Revolving Credit Facility | Maximum | Base Rate | |||
Debt Instrument [Line Items] | |||
Margin | 2.25% | ||
Letters of Credit | Line of Credit | |||
Debt Instrument [Line Items] | |||
Letters of credit outstanding | $ 4,186,000 |
OPTIONS AND AWARDS - SHARE-BASED COMPENSATION (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation | $ 1,440 | $ 1,367 |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation | 997 | 850 |
Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation | 93 | 177 |
Restricted Stock Awards | Non-employee Directors | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation | $ 350 | $ 340 |
OPTIONS AND AWARDS - UNVESTED STOCK OPTIONS AND RESTRICTED STOCK (Details) - The Ensign Plans $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total unrecognized share-based compensation expense | $ 16,507 |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unvested Stock Options | $ 14,536 |
Weighted Average Recognition Period (in years) | 3 years 8 months 12 days |
Restricted Stock Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unvested Restricted Stock | $ 1,971 |
Weighted Average Recognition Period (in years) | 3 years 3 months 18 days |
OPTIONS AND AWARDS - NARRATIVE (Details) - The Ensign Plans |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Restricted Stock Awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 5 years |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options, vesting percent per year | 20.00% |
Options, expiration period | 10 years |
OPTIONS AND AWARDS - EMPLOYEE STOCK OPTION ACTIVITY (Details) - The Ensign Plans - $ / shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Number of Options Outstanding | ||
Beginning balance, outstanding (in shares) | 2,924 | |
Granted (in shares) | 498 | |
Exercised (in shares) | (73) | |
Forfeited (in shares) | (64) | |
Expired (in shares) | (11) | |
Ending balance, outstanding (in shares) | 3,274 | |
Weighted Average Exercise Price | ||
Beginning of period, weighted average exercise price (in dollars per share) | $ 18.79 | |
Granted (in dollars per share) | 18.79 | |
Exercised (in dollars per share) | 6.90 | |
Forfeited (in dollars per share) | 23.73 | |
Expired (in dollars per share) | 32.32 | |
End of period, weighted average exercise price (in dollars per share) | $ 18.89 | |
Number of options vested (in shares) | 1,279 | 1,190 |
Weighted average exercise price of options vested (in dollars per share) | $ 19.77 | $ 19.14 |
OPTIONS AND AWARDS - RESTRICTED STOCK (Details) - The Ensign Plans - Restricted Stock Awards shares in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2024
$ / shares
shares
| |
Non-Vested Restricted Stock | |
Beginning balance, outstanding (in shares) | shares | 265 |
Granted (in shares) | shares | 23 |
Vested (in shares) | shares | (26) |
Forfeited (in shares) | shares | (20) |
Ending balance, outstanding (in shares) | shares | 242 |
Weighted Average Grant Date Fair Value | |
Beginning of period, weighted average exercise price (in dollars per share) | $ / shares | $ 14.27 |
Granted (in dollars per share) | $ / shares | 15.55 |
Vested (in dollars per share) | $ / shares | 15.73 |
Forfeited (in dollars per share) | $ / shares | 16.26 |
End of period, weighted average exercise price (in dollars per share) | $ / shares | $ 14.07 |
LEASES - IMPACT OF NEW LEASES GUIDANCE (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Operating Lease Costs: | ||
Variable lease cost | $ 2,030 | $ 1,730 |
Cost of Services | ||
Operating Lease Costs: | ||
Operating lease costs | 10,384 | 9,597 |
Cost of Services | Community | ||
Operating Lease Costs: | ||
Operating lease costs | 8,627 | 8,274 |
Cost of Services | Office | ||
Operating Lease Costs: | ||
Operating lease costs | 1,757 | 1,323 |
General and administrative expense | ||
Operating Lease Costs: | ||
Operating lease costs | $ 87 | $ 93 |
LEASES - FUTURE MINIMUM LEASE PAYMENTS (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Leases, Under Adoption of ASC 842 [Abstract] | ||
2024 (Remainder) | $ 28,189 | |
2025 | 36,403 | |
2026 | 34,894 | |
2027 | 33,963 | |
2028 | 33,227 | |
Thereafter | 249,086 | |
Total lease payments | 415,762 | |
Less: present value adjustments | (154,204) | |
Present value of total lease liabilities | 261,558 | |
Less: current lease liabilities | (17,378) | $ (17,122) |
Long-term operating lease liabilities | $ 244,180 | $ 248,596 |
INCOME TAXES (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Income Tax Disclosure [Abstract] | ||
Income tax expense (benefit) | $ 1,759 | $ 907 |
Effective income tax rate reconciliation, percent | 25.80% | 31.20% |
DEFINED CONTRIBUTION PLAN (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024
USD ($)
installment
|
Mar. 31, 2023
USD ($)
|
|
Retirement Benefits [Abstract] | ||
Employee contribution (as a percent) | 90.00% | |
Contribution | $ 291 | $ 213 |
Percentage of compensation | 80.00% | |
Payment deferred (in years) | 1 year | |
Number of annual installments | installment | 10 | |
Accrued other long term liabilities | $ 1,965 | 855 |
Cash surrender value of life insurance | $ 1,997 | $ 852 |
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | 12 Months Ended | |
---|---|---|---|---|
May 06, 2024
USD ($)
|
May 31, 2022
agency
|
Mar. 31, 2024
USD ($)
review
|
Dec. 31, 2023
USD ($)
|
|
Concentration Risk [Line Items] | ||||
Number of operating subsidiaries with reviews scheduled | review | 10 | |||
Suspended payments | $ 5,105 | |||
Sampled and extrapolated overpayments | 1,774 | |||
Number of patient records under review | agency | 107 | |||
Period of review | 10 months | |||
Previously withheld amounts | (3,363) | |||
General and professional liability, retention limit | 150 | |||
Out-of-pocket retention | 500 | |||
Workers' compensation, retention limit | 250 | |||
Subsequent Event | ||||
Concentration Risk [Line Items] | ||||
Previously withheld amounts | $ 1,431 | |||
Maximum | ||||
Concentration Risk [Line Items] | ||||
Self insurance, individual coverage limit | $ 350 | $ 350 |
>&YF!LYM
M^?\/=)AS0YW8[Y4TUV:_HE_B%D/Q?EIX# H +E&*!5IAEA%T#MLRY(QA(5%*X-J*8 =?U DO^-TM45;#LIKO
MI)^*VA'?KL2W/R ^ER@1SE3$!?U#PMQ$,5JKO"!O;Z?<*G_OU/]+Y(Z#3N6@
M\W$'5,KLM/K.GB;' VQ)P!P /CH !@ !X
M;"]W;W)K 2$9]T6:1A9^XXZ*V$W%.I8%*Y?#BO+UL6AB 'D1Z3,'L IL7,0=
M%[&;B_=O78N#PDT,AH&AVS2:Q+&ERN(.EO@(+'N;P+S<4?&6_0,^*1%/Y>TP
M"AT1L9N(CUN>KG3%MBUNP1 @"2^L6*$S##9*Z2'HCM 8C<@]=#)>5MO%-4B
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M*=O8.V!R,8C[VQ_ "'O$TH<.G>3XP:^Q7'O7%*KWX(P'>V#BT9?YTE\ &;#
M,+*=$I..I,1-4M6+=QE-N4J7]^I(1E^I6JLZ!RH&X$@(B?J*3;-)9(MZAU#B
M1J@NK'.ZS,M2Q5:MM2C/608*-3$Y]L*XKQ,@KA?%%J$=3XF;IUHH5<<-3HDF
M-G%D[-X@JSBT[(])1U V4EX]MF>
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MZ#!Y\X2GD\[3R5/:'RW ?TN)#T8O?O)D2\!PYOM"HXM?QHO1RV]P/XO<
MS[Y%_<_LUW]$4 5U603,M-8?]E,G6_-84BV6QJG-*54?NJO+/8<567JM[B
MNZZM*6J\K/F[WI5-01_Q'8Y'7NGX15K"PS-3:?92S+[?VG3+KV[*W5X7!V4>
M]C*\5"NC0-76.5;B'6S7*;#VUE;9\[VNZ@->',K*)
M,@ \!?4M&]'Q2RPWO"?,H8?:HTB+LC],=XT,5
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M;?+0UGJ05WWA6TEU7_Z9A&
!^LY@_PO)N-O^X
MO%MNYF]7R\_S&3DVD[M/R^EJ#I/U>KY9#P-+U X@R$XTTX8F?H$F@5LE;6E@
M+G/,?XX/*.4V[_B<]S2^"GC+] TDD0]Q&'>NX"6M#DF-E[RD@U+YD0L!3.:P
ME);)@F\%PL08M 9FW&1"F8-&^#K9&JNIF_Y^3H:&I?,\B_O"!F;/,AQY] D9
MU-_1&[]Y%?7"]U=JZ+0U=*ZA_[F[O$KS?!'_BQLV)<)."9H,7!9@F5-<8XTJ
M2?7ZD^7V";B$XGQ!VR-!;6K]6@E'?S*]GLA&\UR!,E(
M'B+VDWZW76\QYQFCEG>"-0;/09 NTI T*:7=3:'7\Q-:&J%>0]KQW]5%]%(_
MI3P_Q?]1/CO"[
MSV=H'_?3UQ/6/NZ_'DV"W'G4+$/STAU8R'$X=J^AM73BQ6B<;WV,,<%G5OG60 T>YGSE3*%R
MZ7'SQ>,'U!;K]%YGIJ2!^*3%%