The Pennant Group, Inc.

Good day, and thank you for standing by. Welcome to the Pennant Group fourth quarter 2023 earnings conference 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 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today. Kirk Cheney, please go ahead.

Thank you, Daniel. Welcome, everyone, and thank you for joining us today. Here with me today, I have Brent Gerasole, our CEO, John Gogner, our president and COO, and Lynette Walden, our CFO. Before we begin, I have a few housekeeping matters. We filed our earnings press release and 10K 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 February 29, 2025. All statements made on this call are as of today, February 29, 2024, and will not be updated after the call. Also, any forward-looking statements made today are based on management's current expectations and assumptions 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 from 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 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 and its assets and activities, as well as the use of the terms We, Us, Our, and similar terms, do not imply that the Pennant Group, Inc. has direct operating assets, employees, or revenue, 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, 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 10-K. And with that, I'll turn it over to Brent Garasoli, our CEO. Brent? Thanks, Kirk.

and welcome everyone to our fourth quarter and full year 2023 earnings call. Before we share results, I want to express deep appreciation to the local leaders and teams who care for our patients and residents across our platform every day. Your compassion and dedication are the bedrock of Pennant's clinical and financial success. We are grateful to work alongside you and partner with you in providing life-changing service. We are pleased to announce strong fourth quarter results to cap off a year of consistent progress and steady growth. In Q4, we generated adjusted earnings per share of 22 cents, bringing full year 2023 adjusted earnings per share to 73 cents. This exceeds our earnings guidance midpoint of 72 cents, which we raised in our last earnings call. Collectively, our full-year consolidated results reflect revenue of $544.9 million, an increase of $71.7 million or 15.1% over the prior year, an adjusted EBITDA of $40.7 million, an improvement of $9.2 million or 29.1% over the prior year. During 2023, our consolidated EBITDA margin increased 80 basis points to 7.6% from 6.8%. In short, we delivered on our commitments in 2023. These results were achieved by focusing on five key areas, leadership development, clinical excellence, employee experience, margin improvement, and growth. As we've outlined on prior quarterly calls, we saw progress in each of these areas throughout the year, and our positive financial results are the outcome of these efforts. No priority has been more important to our success than leadership development. We are pleased with the progress we made in this area in 2023. During the year, we added over 50 CEOs in training, or CITs, and 38 local leaders earned C-level designations in their operations, including 11 local CEOs. As we've explained before, CEOs and other C-level leaders earn this designation by acting as true owners and creating significant financial, clinical, and cultural value. We have found that CEOs typically generate roughly $1 million more in annual earnings than our non-CEO executive directors. In conjunction with better clinical and cultural outcomes, these most recent C-level recipients along with our current C-level leaders and new CITs, will be the foundation of our success moving forward, and their contributions are reflected in our 2023 results. Clinical excellence is at the heart of everything we do, and clinical leadership development is a major focus. Just as we continue to train and elevate operational leaders to become CEOs, we are making similar investments in future clinical leaders to help create chief clinical, therapy, and wellness officers in local operations. Our clinical onboarding, training, and development programs were strengthened and enhanced in 2023, and 16 clinical leaders were elevated to C-level status, which is driving excellent quality outcomes as well as patient and resident satisfaction. In addition to leadership development and clinical excellence, I'd like to provide some data points that highlight the progress we've made in the other three focus areas. We made great strides in our employee engagement and recruiting during the year, as demonstrated by double-digit improvement in our turnover rate. And with additional hires in the first two months of 2024, we have now surpassed 6,000 employees, a double-digit increase over year-end 2022. On the margin front, our adjusted consolidated EBITDA margin improved 80 basis points year-over-year. And from a growth perspective, our 2023 revenue increased a robust $71.7 million, approximately three-quarters of which was organic, same-store growth. As we announced in our press release yesterday, we are providing guidance for the full year of 2024. We anticipate full-year revenue in the range of $596.8 million is 633.7 million in adjusted earnings per share in the range of 82 cents to 91 cents. The midpoint of 87 cents represents 19.2% growth on our 2023 adjusted earnings and 52.6% growth over our 2022 results. Our 2024 guidance is based on the compelling momentum in both our segments, the readiness of our local leaders to drive organic and inorganic growth, and the latent potential that remains in our existing operations. We look forward to another year of strong performance and growth in 2024. With that, I'll turn the call over to John to provide more detail on our operational results.