The Pennant Group, Inc.

your conference will begin shortly until that time you want to again be placed on home thank you for your patience again ladies and gentlemen today's conference will begin shortly until that time let's again be played from home thank you for your patience Thank you. Thank you. Thank you. Good day and thank you for standing by. Welcome to the tenant group first quarter 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to Mr. Derek Bunker, Chief Investment Officer. Sir, please go ahead.

Thank you, Lee. Welcome, everyone. Thanks for joining us today. Here with me today I have Danny Walker, our CEO, Brent Garasoli, our President, Jen Freeman, our CFO, and John Gochner, our COO. Before we begin, I have a few housekeeping matters. We followed our earnings press release in 10Q yesterday. This announcement is available on the Investor Relations section of our website at www.PennantGroup.com. A replay of this call will also be available on our website until 5 p.m. Mountain on Friday, June 4, 2021. We want to remind anyone that may be listening to a replay of this call that all statements made are as of today, May 7, 2021. and these statements have not been nor will they be updated subsequent to today's call. Also, any forward-looking statements made today are based on management's current expectations, assumptions, and beliefs about our business and the environment in which we operate. These statements are subject to risks and uncertainties that could cause our actual results to materially differ from those expressed or implied on today's call. Listeners should not place undue reliance on forward-looking statements and are encouraged to review our SEC filings for a more complete discussion of factors that could impact our results. Except as required by federal securities laws, Pennant and its affiliates do not undertake to publicly update or revise any form of a new statement, changes, as a result of new information, future events, changing circumstances, or for any other reason. In addition, the Pennant Group Inc. is a holding company with no direct operating assets, employees, or revenues. Certain of our independent subsidiaries, collectively referred to as the service center, provide accounting, payroll, HR, IT, legal, risk management, and other services to the other operating subsidiaries through contractual relationships with such subsidiaries. The words pennant, company, we, our, and us refer to the pennant group and its consolidated subsidiaries. All of our operating subsidiaries and the service center are operated by separate independent companies that have their own management, employees, and assets. References herein to the consolidated company and its assets and activities, as well as the use of the terms we, us, our, and similar terms used today are not meant to imply, nor should it be construed as meaning that the tenant group has direct operating assets, employees, or revenue, or that any of the subsidiaries are operated by the tenant group. Also, we supplement our GAAP reporting with non-GAAP metrics. When viewed together with our GAAP results, we believe that these measures can provide a more complete understanding of our business, but they should not be relied upon to the exclusion of GAAP reports. A GAAP to non-GAAP reconciliation is available in yesterday's press release and is available in our 10Q. And with that, I'll turn the call over to Danny Walker, our CEO. Danny?

Thanks, Derek, and welcome, everyone, to our first quarter 2021 earnings call. Before I share an update on the progress of our operations, I wanted to say thank you to the many individuals across Pennant that continue to provide care to our patients and residents and serve their peers across the organization. It's been a historic and unique quarter. We celebrate their committed effort to drive their local operations forward and in the face of challenges that we've had to navigate. We are excited to report a record quarter for our home health and hospice segment as our local leaders continue to produce excellent results across the board. The extraordinary financial and clinical development throughout the segment is further evidence that our unique operating model provides the toolkit for leaders to drive significant long-term value. Our segment revenue grew 31% over the prior year quarter, thanks in part to a 48% growth in total home health admissions and 36% growth in hospice admissions, as well as a approximately 12% growth in home health Medicare revenue per 60-day episode, and a 5.5% growth in hospice Medicare revenue per day. While we continue to acquire both home health and hospice agencies over the prior 12 months, it is noteworthy that much of this growth occurred in agencies acquired prior to 2020, thanks to the locally tailored quality care provided by our local operational and clinical leaders. As a case in point, our hospice ADC in agencies acquired before January of 2020 has increased 8% year over year. And while we continue to grow and serve more patients than ever before, we were able to do so with greater efficiency as reflected in our record segment adjusted EBITDA of 12.8 million and adjusted EBITDA margin of 250 basis points higher than the prior year quarter. Simultaneously, our clinical outcomes continue to improve as well. While CMS has stated that they are not updating their home health or hospice compare tools in 2021, third-party real-time analytics reveal positive trends in our home health star rating with the number of agencies with five stars improving to 43% on a real-time basis and hospice quality composite trends improving to 96% or 7% over the industry average. We are pleased with the progress being made across our home health and hospice segment and are excited for the countless opportunities ahead for us to provide life-changing service to the communities that we operate in. In our senior living segment, the first quarter of 2021 marked perhaps the most challenging period of our history. As we described during our last earnings call, we experienced relative stability in our segment occupancy in September and October of 2020. However, from November to February, our occupancy declined at an accelerated rate due to the rapid rise of COVID, which peaked in mid-January in many of our key markets and severely depressed our operating results. In the midst of this challenging COVID-affected operating environment, the severe winter storm in Texas significantly impacted operations in our 12 Texas communities. Because of the disruption to the power grid caused by the storm, we had to coordinate the relocation of residents of three of our 12 senior living communities into nearby facilities. Many of our employees in Texas in both segments continue to provide care to our patients, residents, and their families despite feeling the impact of the storm at home. We are proud that we were able to ensure the safety of our residents and employees during such a difficult time. But this effort drew resources from across the organization and resulted in over $1.5 million of identifiable or emergency-related expenses. While we expect most or all of this to be covered by our business interruption insurance, The impacts of this event are difficult to fully quantify and were felt throughout the segment. That this storm came only a few weeks following the highest COVID rates in the pandemic created a unique taxing short-term headwind. The complexity and challenges of the trial by fire we experienced in the first quarter acted as an accelerant for improvement and revealed unique opportunities for further development on our leadership strength, the health of our teams, our ability to manage costs more rigorously and attract new residents. One of our core functions as an organization has been and continues to be the recruiting, development, and retention of highly talented leaders committed to becoming the providers of choice in every market in which we operate. In the aftermath of the peak of COVID-19 cases and the winter storm, in Texas, we've moved methodically to expand and deepen the bench of entrepreneurial leaders that are supporting and driving our senior living business. We are seeing progress resulting from these efforts. As we continue to develop the leadership in our senior living business, there are several factors worth noting that contribute to our enthusiasm about our ability to recover and the long-term value in this segment. The operating environment has improved for our senior living communities. Since the peak of COVID-19 cases in mid-January in many of our markets, the number of cases continues to decline rapidly, and the vaccine rollout has reached a significant portion of the population. The restrictions on in-person touring and visitation that were prevalent during the pandemic and presented a challenge for some potential residents and their families have been eased. We are pleased to report that 76% of our residents received vaccines and all of our communities have had at least their second vaccination clinic and are open for in-person visitation in some form. We are also encouraged by our growth in net move-ins in both March and April. Additionally, the single largest fixed expense in our senior living segment is our real estate costs. Because of our disciplined growth strategy, Many of the triple net leases underlying our buildings have below-market rents and inherent operator-friendly advantages that provide short-term flexibility and long-term upside. Also, since the completion of our SPIN-related system cutovers, we have been able to direct more resources toward improving the operational and wellness data that we collect and share amongst our field clusters, which will accelerate the quality of care We provide and drive better decision-making and peer accountability as well as cost management in each of our communities. The pandemic is accelerating the transformation of the senior living community into a setting where the quality of care is elevated on par with the quality of life amenities that may be provided. As the industry continues to evolve and through our clinical expertise, world-class systems and data-driven best practices, In spite of these short-term headwinds we face this quarter, we are positioned to thrive in the highly fragmented senior living industry, just as we have done and continue to do on a consistent basis in our home health and hospice segment. Now, before I turn the time over to Derek to discuss our recent investment activities, I just wanted to say a quick word about our guidance for 2021, which we are reaffirming. Although we are not satisfied with our performance in the quarter, We know our results tend to be cyclical, and we anticipated pandemic-related challenges in the first two quarters that would likely cause lumpiness in our quarterly results. However, we remain confident in our ability to affirm and achieve our full year guidance ranges as our local leaders move their operations forward and continue the flywheel of success that they have already started to move. Now, with that, I'll turn it over to Derek for an update on our acquisition activity. during the quarter. Derek?