The Pennant Group, Inc.

Good day and thank you for standing by. Welcome to the Pettit Group third quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After this presentation, there will be a question and answer session. To ask a question during that session, you will need to press star 11 on your phone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded, and I would now like to hand the conference over to your speaker today, Mr. Kirk Cheney. Sir, please go ahead.

Thank you, Chris. Welcome, everyone, and thank you for joining us today. Here with me today, I have Brent Garasoli, our CEO, John Gochner, our president and COO, and Lynette Walbaum, our CFO. Before we begin, I have a few housekeeping matters. We filed our earnings press release in 10-2 yesterday. This announcement is available on the investor relations section of our website at www.panicgroup.com. A replay of this call will also be available on our website until 5 p.m. Mountain on November 8, 2024. We want to remind anyone who may be listening to a replay of this call that all statements made are as of today, November 8, 2023, and these statements have not been nor will they be updated after 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 forward-looking statements where changes arise as a result of new information, future events, changing circumstances, or for any other reason. In addition, Independent Group, Inc. is a holding company with no direct operating assets, employees, or revenues. Certain of our independent operating subsidiaries, collectively referred to as a service center, provide accounting, payroll, human resources, information technology, 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, Inc. 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, 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 be construed as meaning that the Pennant Group, Inc. has direct operating assets, employees, or revenues, or that any of the subsidiaries are operated by the Pennant 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 that they should not be relied upon to the exclusion of GAAP reports. The 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 Brent Garasoli, our CEO. Brent?

Thanks, Kirk, and welcome, everyone, to our third quarter 2023 earnings call. First, I'd like to recognize our remarkable local teams and service center partners who work tirelessly to provide life-changing service to our patients, residents, and clients each day. The results we share today are the culmination of the passion, commitment, and hard work of nearly 6,000 talented individuals across the organization. We truly appreciate your consistent contributions. We are pleased to report another quarter of strong growth and solid execution. Collectively, our Q3 consolidated results reflect revenue of $140.2 million and increase of $21.8 million or 18.5% over the prior year quarter. Adjusted EBITDA also grew significantly to $10.9 million, an increase of $3 million or 37.8% over the prior year quarter. Adjusted earnings per share for the quarter were $0.20, an increase of $0.06 or 42.9% over the prior year quarter. We also generated a healthy $12.4 million of cash flow from operations in the third quarter. Given our solid performance in both business segments, we are increasing our full year 2023 guidance to revenue of $526 million to $531 million, adjusted EBITDA of $39.4 million to $42.6 million, and adjusted earnings per share of $0.69 to $0.75. These gains are the result of our continued commitment to the five key focus areas we have discussed throughout 2023. leadership development, clinical excellence, enhanced employee experience, acquisitions and organic growth, and margin improvement. The focused efforts of our local teams and clusters, which are at the heart of our unique operating model, have generated steady progress across our home health, hospice, and assisted living business lines. Our strong operational results are exciting, and we are just beginning to see the fruits of our investment in leadership, As we have pursued this long-term leadership initiative, we have seen positive impacts in our local operations and culture, turnover, and quality outcomes, which in turn have established them as the local providers of choice and driven strong top-line growth. Building on the 140 basis point improvement in the second quarter, our consolidated adjusted EBITDA margin improved another 10 basis points sequentially in Q3. We are driving bottom line improvement through the remainder of 2023 and beyond by prudently managing utilization and productivity, optimizing service line and reimbursement mix, and urgently addressing underperforming operations. As home health, hospice, and senior living industries continue to experience change, our operating model is ideally suited to excel in this environment. Our model enables us to adapt and respond to changing circumstances and market needs on a macro and local level. It also allows us to be nimble and take advantage of unique opportunities, including payer relationships, preferred provider networks, and localized reimbursement programs. In this dynamic environment, our local leaders and clusters use technology and transparent data reporting to accelerate their clinical and financial results. With momentum in our results and a 1.3 times net debt to adjusted EBITDA leverage ratio, we are poised to pursue our disciplined acquisition strategy, which begins with answering the question, first who, then what? A relentless focus on recruiting and developing talented leaders has created a bench of prepared CEO caliber leaders capable of stepping into transitions and driving immediate improvement through the principles of our operating model. Next, we grow in areas where we have strong existing leaders, operations, and clusters prepared to wrap their arms around new operations to help improve clinical, cultural, and financial results. Finally, we look at potential opportunities in the marketplace that meet our valuation criteria. Over the last decade, we have seen that our disciplined approach to pricing has created unique opportunities for local leaders to generate solid financial returns. Today, we are seeing more potential acquisitions that are consistent with our valuation expectations. This existing strong alignment between able and eager local leaders and compelling acquisitions and growth opportunities will be a powerful catalyst for future growth under our model. With that, I'll turn the call over to John to provide more detail on our third quarter operational results.