PACS Group, Inc.

Greetings and welcome to the Pax Group Q1 2026 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Ryan Welch, Director of Corporate Finance. Thank you. You may begin.

Thank you, and good morning, everyone. Thank you for joining us for our conference call. Before we begin the prepared remarks, we would like to remind you that yesterday, Pax Group issued a press release announcing its first quarter 2026 results. An investor presentation was published and is available on the investor relations section of 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, including our expectations for 2026 revenue and adjusted EBITDA that is based on our current expectations, assumptions, and beliefs about our business. Any forward-looking statements are subject to risks and uncertainties that can 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 annual report on Form 10-K for the year ended December 31, 2025 and our other SEC filings. During this call, we will discuss certain non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDAR, and net leverage. These non-GAAP financial measures should be considered as a supplement to and not a substitute for measures prepared in accordance with GAAP. For reconciliation of non-GAAP financial measures discussed during this call to the most directly comparable GAAP measure, 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 the tax group's website. I'll now turn the call over to Jason Murray, Chairman and CEO.

Thanks, Ryan, and thank you all for joining us this morning. We're very pleased to report a strong start to 2026 with continued operational consistency across our platform and measurable progress across the facilities we've integrated over this past several years. Our performance this quarter reflects both the durability of our operating model and the continued execution of our teams across the organization, as well as the strength of the foundation we built throughout 2025. As we enter 2026, our priorities remain consistent, drive performance across our existing portfolio, continue advancing facilities through their integration lifecycle, and allocate capital in a disciplined manner. We are seeing that play out across the platform. As of March 31st, 2026, PACS operates 323 facilities across 17 states with approximately 35,500 total beds. including roughly 32,700 skilled nursing beds and 2,700 assisted living beds. Across this platform, we are caring for approximately 31,900 patients daily. We believe the scale and geographic diversity of our platform combined with the consistency of our operating model position us to deliver reliable performance while continuing to grow thoughtfully over time. In addition, our density within key markets continues to improve, allowing us to leverage local leadership, clinical resources, and referral relationships more effectively as we scale. We believe this localized scale is an important driver of both operational consistency and long-term growth. Our mature facilities continue to operate at high levels of occupancy and clinical consistency, providing a stable base of strong performance. while our ramping facilities are progressing as expected as they adopt PACS clinical systems and operating processes and move toward mature levels of occupancy and skilled mix. We continue to view this progression from new to ramping to mature as a meaningful and embedded source of organic growth within our existing portfolio. We recognize that there has been ongoing discussion around managed care providers potentially reducing admissions into skilled nursing facilities. While we continue to monitor the evolving landscape closely, we have not seen those concerns impact our business and our operating metrics, admission trends, and skilled mix, which includes managed care, remain very strong across the portfolio as evidenced in our first quarter results. More importantly, we believe high-quality operators with strong clinical outcomes, reliable discharge partnerships, and proven patient care capabilities will continue to play an essential role in the post-acute continuum. Our focus on quality and execution positions us well to continue earning the trust of hospitals, payers, patients, and families, regardless of broader market noise. From a clinical perspective, we remain encouraged by the consistency of outcomes across our facilities. As of the end of the first quarter, 222 of our facilities are rated four or five stars under CMS quality measure ratings, up from 207 at the end of 2025. Among our mature facilities, our average CMS quality measure star rating remains 4.4, consistent with the prior quarter and meaningfully above the industry average of 3.6. While these improvements may appear incremental at this level of performance, we believe they reflect continued consistency in clinical execution, patient outcomes, and operational discipline across a large and growing platform. At the center of that performance remains our locally led, centrally supported model. Our facility leaders are empowered to make decisions at the point of care where they can have the greatest impact on patient outcomes, while PAC Services provides the infrastructure, systems, and support necessary to drive consistency, accountability, and compliance across a growing and increasingly complex organization. We believe this structure allows us to deliver both strong and repeatable results, even as we continue to scale the platform. A key component of sustaining this performance is our investment in leadership development. Through our administrator and training program, we continue to build a scalable bench of operators prepared to step into leadership roles across both existing and newly acquired facilities. We currently have 40 AITs in the program, which we believe is an important indicator of our ability to integrate facilities effectively and maintain operational continuity as we grow. Just as importantly, that investment ensures we have the right leadership in place when facilities require focused operational and clinical improvement. Across our portfolio, we continue to see examples of how disciplined leadership supported by operating model can drive meaningful improvement in both clinical and financial performance over relatively short periods of time. To bring that to life, I'd like to highlight one of our facilities in Arizona. This facility was acquired in 2023 and entered our portfolio with significant operational and clinical challenges. Subsequently, the facility was designated as a special focus facility after failing a special focus survey with more than 20 deficiencies, including high severity findings. New administrative and clinical leadership was put in place, supported by additional PACS clinical resources and PACS services, and the team implemented targeted changes across key areas of clinical performance and operational execution. Importantly, this required more than process changes. It required a fundamental shift in culture. The team moved from reacting to deficiencies to owning outcomes. with a clear focus on accountability, consistency, and system-level improvement. The results have been significant. In subsequent surveys, deficiencies were reduced to fewer than five, all within acceptable thresholds under the special focus program requirements. As a result of that progress, the facility has now successfully graduated from the special focus facility program. At the same time, the facility has maintained occupancy above 90% and continues to demonstrate improving financial and clinical performance. We believe this example reflects what our model is designed to do, identify operational opportunities, install strong local leadership supported by PAC services, and drive measurable improvement over time. Stepping back, we believe the performance we are seeing across the platform reflects the continued maturation of a significantly expanded portfolio combined with ongoing investment in our people, systems, and infrastructure. We also believe our positioning within the broader skilled nursing landscape remains compelling. Demographic trends continue to support long-term demand, and the industry remains highly fragmented, which we believe creates opportunities for operators with scale, clinical capability, and disciplined execution. As we look ahead, we remain focused on continuing to drive performance within our existing portfolio, advancing our facilities through the integration lifecycle and allocating capital in a disciplined manner. I'd like to take a moment to briefly address our previously disclosed government investigations. These matters continue to progress through the normal course, and we remain fully cooperative and engaged with the government throughout the process. While we were unable to estimate the timing of resolution at this stage, we are confident in our ability to navigate these matters responsibly and thoughtfully, just as we have navigated other challenges throughout our company's history. Importantly, we believe the work we have done to strengthen our organization, enhance our infrastructure, and reinforce our compliance and reporting processes has positioned the company well for the future. Our focus remains firmly on executing our strategy, supporting our local leaders and caregivers, and continuing to build a stronger, more resilient organization for the long term. Before I turn the call over, I'd like to take a moment to address the leadership transition we announced a few weeks ago. We're excited to welcome Kerry Hendrickson, our new Chief Financial Officer. Kerry brings a strong background in healthcare and many years of experience as a public company CFO. We are confident he will play an important role as we continue to scale the organization. At the same time, I want to recognize and thank Mark Hancock, our co-founder and longtime CFO, who will be retiring from his role. Mark and I started the company in 2013 with a shared vision, which was to build a lasting healthcare organization that delivers high-quality care, supports the people doing the work every day, and create long-term value across the communities we serve. What we built since then is a direct reflection of that vision and of Mark's leadership. From the early days of the company through the growth and scale we see today, Mark has been instrumental in shaping not just the financial foundation of PACS, but the culture, the discipline, and the long-term mindset that define how we operate. On a personal level, I'm incredibly grateful for Mark's partnership that we've had over the years and for the role Mark has played in building PACS into what it is today. With that, I'll turn it over for Mark for a few words.