PACS Group, Inc.

Hello and welcome to PACS Group's third quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After today's presentation, there will be an opportunity to ask questions. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star followed by the number two on your telephone keypad. The speakers on today's call are Pax Group's Chief Executive Officer, Jason Murray, Mark Hancock, Interim Chief Financial Officer, and Joss Jurgensen, President and Chief Operating Officer. The call today is being recorded and a replay of the call will be available on the Pax Group Investor Relations website an hour after the completion of this call. A replay of this webcast will be available for approximately 30 days. Information to access the replay is listed on today's press release, which is available on our website under the Investor Relations section. Before we begin, I would like to remind everyone that during today's call, we will be making forward-looking statements regarding future events and financial performance. I'd now like to turn the conference over to Mark Hancock, Interim Chief Financial Officer. Please go ahead.

Thank you, and good afternoon, everyone. Thank you all for joining us for this earnings call. Before we begin our prepared remarks, we would like to remind you this afternoon that Pax Group issued a press release announcing its third quarter 2025 results and other filings. An investor presentation was published and is available on the investor relations section of our website at pax.com. I'd also like to remind everyone that during the course of today's conference call, we will discuss certain forward-looking information that is based on our current expectations, assumptions, and beliefs about our business. Any forward-looking 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. You should carefully consider the risk factors that may affect our future results as described in our 2024 Form 10-K. and our other SEC filings. During this call, we will discuss certain non-GAAP financial measures, including adjusted EBITDA and adjusted EBITDAR. These non-GAAP financial measures should be considered as a supplement to and not a substitute for measures prepared in accordance with GAAP. For a reconciliation of non-GAAP financial measures discussed during this call to the most directly comparable GAAP measures, please refer to the earnings release and the appendix included in the investor presentation, which are both published and available on the investor relations section of PACS Group's website. I'll now turn the call over to Jason.

Thanks, Mark, and thank you all for joining us today. Today, as you might imagine, is an exciting day for all of us at PACS Group. I'd like to extend our collective appreciation for your patience and support. We have worked expeditiously over the past several months and are once again current with all of our reporting obligations. We're ready to move forward with renewed commitment to our mission of delivering high quality care to our patients and driving value for our shareholders. Our results, which we will detail shortly, demonstrate that our team rose to the occasion. Together, we've navigated through recent challenges and turned those into momentum and motivation. With the previously announced restatement now completed and our internal controls strengthened in the process, we're operating today from a position of strength, transparency, and discipline. I'd like to thank everyone on the PACS team for their hard work, focus, and dedication throughout this period. We feel we have the best team in the business, and I'm excited about the opportunities that are ahead. In November 2024, the company's independent audit committee supported by external counsel and advisors, began an independent investigation of the allegations made in a short seller report. That work has concluded. The committee's work and its resulting recommendations, which have been or are being implemented, reinforced our commitment to transparency, accountability, and strong governance. Now our focus is squarely on the future, executing our strategy, delivering exceptional care, and continuing to build trust with our stakeholders. PACS moves forward with confidence, strength, and an unwavering commitment to doing things the right way. In short, today is the start of a new chapter for PACS. As I noted, we remain focused on executing our strategy, and our results demonstrate the strong progress we have made. We delivered a tremendous start to fiscal year 2025 and delivered another quarter of growth and execution in the third quarter. In fact, we delivered record revenue and adjusted EBITDA in the first nine months of 2025. We believe this record performance validates PAC's core strengths, our commitment to clinical and operational excellence, our industry-leading talent, and a strategy designed for sustainable growth. I'll touch on all of these themes Throughout my remarks, and Mark will also provide more specifics on our financial performance and full year 2025 outlook. But first, I want to take a step back and talk briefly about PAC's business and our strategy. We're a leading post-acute healthcare company, primarily focused on delivering high-quality skilled nursing care through a portfolio of locally operated facilities. Our mission is to be a leading provider of post-acute clinical care across the country and elevate care for America's most vulnerable. This has been our mission since I co-founded the company with Mark, starting with two facilities in 2013. Over the last decade, PAC's team has worked to create value, trust, and confidence for our patients and residents. We are now at 320 facilities across the country, and we feel like our journey is just starting. We're very thankful for the more than 47,000 employees across the country who provide care to over 30,000 residents each day. We're inspired and driven by their commitment to quality and excellence, and they are the foundation behind our success. We believe that healthcare is local, and we recognize that every patient, facility, and community is unique. For that reason, PACS operates with a locally led, centrally supported model that empowers local leaders to make day-to-day operational and clinical decisions at the facility level, ensuring that care is responsive, personal, and community driven. At the same time, We maintain robust regional and central support systems that provide resources, oversight, and regulatory expertise, establishing clear guardrails that help our local teams remain compliant with local, state, and federal requirements. This coordinated model, local leadership supported by strong centralized systems, enables us to deliver excellent clinical outcomes, operational consistency, and the highest standards of integrity across the organization. our model is centered on what matters most, which is putting patients first, empowering strong bedside leadership, and holding ourselves accountable at every level. It's a simple approach, but it's very powerful. It's what makes PACS different, and it's why we're confident in our ability to deliver exceptional value to our patients and the communities we serve. We're proud of what this team has built, and we're excited to keep raising the bar of what's possible for PACS. We're applying these competitive strengths to a compelling market opportunity. The skilled nursing industry, or SNF, is large and growing, with CMS expecting total industry expenditures to increase to $337.4 billion by 2032. At the same time, America is experiencing a significant demographic shift, with estimates showing that nearly 20% of the US population will be age 65 or older by 2030. This aging curve, driven by the baby boomer generation, is expected to meaningfully increase demand for post-acute and long-term care services over the coming decade. As one of the largest SNF operators in the U.S., we believe that our increasing scale and focus on clinical and operational excellence, coupled with our disciplined and sustainable growth strategy, uniquely positions PACS to capitalize on these demographic trends and drive further growth both organically and through acquisitions. Taken together, we believe our competitive strengths will continue to drive our growth and success, delivering meaningful value to healthcare stakeholders, employees, and shareholders alike. Now let's turn to an update on some of our recent operational and clinical advances. We continue to prioritize exceptional clinical outcomes across both our mature and newly acquired facilities. And that focus is reflected in our quality ratings. Based on CMS quality measure or QM star ratings, 192 of our facilities representing 68.6% of our skilled nursing portfolio are rated four or five stars. This sustained improvement across the organization underscores the strength of our teams and supports the strong financial performance we continue to deliver. To better illustrate our facility's dedication to quality, I'd like to share a quick anecdote that highlights how our teams consistently rise to meet the needs of the communities we serve. In Q3 of 2023, we acquired a facility in Colorado. At the time of acquisition, the facility was on CMS's special focus facility list, and members of the local community openly shared that it had been considered by some to be the worst skilled nursing facility in the state. For many operators, this combination of reputational and clinical challenges would have been reason enough to walk away. But for us, it represented exactly the kind of opportunity where our model can make the deepest impact. More importantly, we believed without hesitation that the residents, families, and communities deserved better. After many months of focused efforts and dedicated caregivers and leadership team at this facility, supported closely by the regional PACS team, execute a comprehensive operational and clinical turnaround. By Q3 of 2024, they had passed their second consecutive health inspection survey, meeting the requirements to graduate from the special focus facility program. As of March of this year, the facility officially came off the special focus facility list, and the team has since achieved a four-star overall CMS rating, which is remarkable, milestone given where the facility started just a couple years ago at acquisition. This example, is just one that reflects a broader pattern across our portfolio. These types of clinical success stories are becoming increasingly common, underscoring the strength of our clinically driven operating model and the dedication of our caregivers in every market. In fact, through the first nine months of 2025 alone, five additional facilities that were acquired while on the special focus facility candidate list have successfully graduated from the list. Each has its own unique story, its different challenges, different starting points, different community needs, but all share a common thread, the ability of our teams to restore stability, rebuild trust, and deliver meaningful improvements in patient care. These results reinforce what we believe at PACS. When supported with the right structure, leadership, and resources, even the most challenged facilities can achieve dramatic sustained improvement. And most importantly, our patients and communities are better served because of it. These clinical achievements reflect the same operational discipline and team excellence that continue to drive momentum across our broader portfolio, momentum that has been especially evident over the last 15 months as we've expanded our footprint, strengthened operations, and integrated a significant number of newly acquired facilities. Our third quarter performance reflects both sustained operational strength and the growth of the business through the meaningful expansion of our portfolio over the last 15 months. In that time, We've executed a series of strategic acquisitions, strengthened our presence in key markets, and continued delivering high occupancy in our mature facilities. In the second half of 2024 alone, we acquired 94 facilities as part of 106 total acquisitions for the full year. The largest of these was the acquisition of the Prestige portfolio, which added 53 facilities across eight states, five of which were new markets for us, significantly expanding our geographic footprint. In total, The acquisitions completed during the back half of 2024 added 7,424 skilled nursing beds and 1,334 assisted living units, more than 8,700 beds overall. This expansion meaningfully increased our scale and broadened the reach of our operating model. In 2025, we've continued to deploy capital to fuel growth. rooted in a disciplined approach focused on driving returns from our investments. Year to date, we've acquired the operations of seven additional facilities. Today, our portfolio includes 35,202 total operating beds, 32,677 skilled nursing beds, and 2,525 assisted living beds across 17 states, reflecting a significantly expanded geographic footprint. Portfolio performance remains strong. Total occupancy stands at 89%, with our mature facilities delivering exceptional 95% occupancy, up from 94% last year. Occupancy in our new facilities, those acquired within the last 18 months, including the large 2024 acquisitions, is 81%, compared with 83% in the prior year. This reflects the intentional onboarding period as newly acquired facilities begin adopting PACS operating systems and clinical processes. As these facilities progress through stabilization and ultimately move into ramping status, we expect to see continued improvement in both occupancy and skilled mix over time. Our locally led, centrally supported model is foundational to driving increased occupancy, which prioritizes matching patient acuity with the right clinical capabilities at each facility. As hospitals continue to discharge higher acuity patients into skilled nursing settings, our team remains well positioned to meet that need, which supports both patient outcomes and continued occupancy strength. That means we also continue to invest in leadership development through our administrator and training or AIT program, better equipping local leaders to deliver responsive personal and community-driven care, which ultimately drives higher occupancy. Since our founding, we have hired 261 AITs, with 203 currently employed in licensed administrator or other leadership roles, reflecting an approximate 78% retention rate. We now have 36 AITs in the program, providing a strong pipeline of leaders to support both existing operations and future growth. We enter the fourth quarter of 2025 with confidence and momentum, but most importantly, the depth and quality of our people gives us a competitive advantage that can't be replicated. Our teams are motivated, they're focused, and they're ready to prove once again that PACS doesn't just adapt to challenges, we turn them into fuel. We're building on strength, executing with urgency, and driving toward being the best in our sector. I'll now turn the time back over to Mark to cover our financial highlights for the quarter.