Conference Call and Webcast scheduled for today, August 12,
2024, at 5:00 pm ET.
PACS Group, Inc. (NYSE: PACS) (“PACS” or the “Company”), which
together with its subsidiaries is one of the largest post-acute
healthcare companies in the United States, announced operating
results for the second quarter of 2024.
Highlights:
- GAAP net income (loss) was $38.2 million for the six months
ended June 30, 2024 and $(10.9) million for the second quarter of
2024, which was driven down by an increase in stock-based
compensation expense of $90.9 million associated with restricted
stock units, granted at the time of the Company’s April 2024
initial public offering.
- Consolidated GAAP revenue for the first six months of 2024 was
$1.9 billion, an increase of 31% over the first six months of the
prior year, driven largely by increased facility count and
reimbursement rates, and for the second quarter of 2024 was $981.8
million, an increase of 29% over the second quarter of 2023 and an
increase of 5% over the first quarter of 2024.
- Adjusted EBITDA was $188.2 million and $99.7 million for the
first six months of 2024 and the second quarter of 2024,
respectively. Adjusted EBITDAR was $318.0 million and $165.6
million over the same periods, respectively.
- Increase in guidance for full year 2024 Revenue and Adjusted
EBITDA
- Revenue expected to be in the range of $3.85 billion to $3.95
billion
- Adjusted EBITDA expected to be in the range of $370 million to
$380 million
Select KPIs:
- Total Facilities occupancy was 91.0% during the second quarter
of 2024. Ramping and Mature Facilities occupancy increased by 1.4%
and 1.0%, respectively, over the same quarter of the prior
year.
- Average Medicare and Medicaid daily rates increased 9.5% and
3.5%, respectively, for the second quarter of 2024, as compared to
the same quarter of the prior year.
- In the second quarter of 2024 the Company added 2 operating
facilities, including 167 skilled nursing beds, respectively.
“Our facilities across the nation continue to focus on clinical
excellence, and we couldn’t be more pleased about the outcomes they
are achieving,” said Jason Murray, PACS’s Chief Executive Officer.
“Their dedication to their patients and to serving their
communities leads to their individual success, and to our
collective success as a company. We’re looking forward to keeping
that positive momentum through the end of the year and beyond.”
Murray continued, “We had another strong quarter, again
highlighted by 165 of our facilities having a 4 or 5 star CMS
Quality Measures rating. We believe this is a key driver of our
revenue growth in the second quarter of 2024 of 29.1% or $221.2
million as compared to the second quarter of 2023.”
“Our revenue growth was also driven in significant part by our
adding 3,947 operational beds to the company over the twelve months
ending June 30, 2024, leading to a 24.8% increase in patient days
for the second quarter of 2024 compared to the same quarter of the
prior year. Additionally, our occupancy remained strong across all
facilities — 91.0% in the second quarter of 2024,” said Derick Apt,
PACS’s Chief Financial Officer. “We're also proud of our teams for
adding 32 facilities and 12 real estate acquisitions during the 12
months ending June 30, 2024. We have added another 28 facilities
since the end of the second quarter across four new states,
bringing our total operated facilities today to 248 and our
properties wholly owned or owned through JV partnerships to
87.”
Business Outlook
Based on information available as of today, PACS is providing
the following guidance for full year 2024:
- Revenue expected to be in the range of $3.85 billion to $3.95
billion
- Adjusted EBITDA expected to be in the range of $370 million to
$380 million
As of today, PACS's growing portfolio consists of 248 healthcare
operations, 30 of which also include senior living operations,
across 13 states. PACS owns 87 real estate assets with purchase
options on an additional 31 real estate assets, including both
wholly owned and owned in a joint venture. The Company's overall
strategy continues to include both leasing and acquiring real
estate and the Company continues to actively consider opportunities
to acquire both performing and underperforming operations in
several states.
A discussion of the Company's use of non-GAAP financial measures
and reconciliation to the most directly comparable GAAP measure is
set forth below. A reconciliation of Adjusted EBITDA guidance to
Net Income on a forward-looking basis cannot be provided without
unreasonable efforts, as the Company is unable to provide
reconciling information with respect to provision for income taxes,
interest expense, depreciation and amortization, acquisition
related costs, losses incurred from debt restructuring, gains on
lease termination, stock-based compensation expenses, losses from
equity method investment in joint ventures, and other adjustment
items all of which are adjustments to Adjusted EBITDA. Further
discussion about the Company's results is contained in its
Quarterly Report on Form 10-Q for the period ended June 30, 2024,
which is expected to be filed with the SEC today and can be viewed
on the Company’s website at https://IR.pacs.com.
Earnings Conference Call Details
A live webcast will be held Monday, August 12 at 5:00 p.m.
Eastern time to discuss PACS’s second quarter financial results. To
listen to the webcast please visit the Investors Relations section
of PACS’s website at https://IR.pacs.com or by dialing 877-407-0621
/ +1 215-268-9899. The webcast will be recorded and will be
available for replay via the website for 30 days following the
call.
About PACS™
PACS Group, Inc. is a holding company investing in post-acute
healthcare facilities, professionals, and ancillary services.
Founded in 2013, PACS Group is one of the largest post-acute
platforms in the United States. Its independent subsidiaries
operate over 240 post-acute care facilities across 13 states
serving over 22,000 patients daily. References herein to the
consolidated “Company,” as well as the use of the terms “we,” “us,”
“our,” “its” and similar verbiage, refer to PACS Group, Inc. and
its consolidated subsidiaries, taken as a whole. PACS Group, Inc.
and its subsidiaries that are not licensed healthcare providers do
not provide healthcare services to patients, residents or any other
person, and do not direct or control the provision of services
provided or the operations of those provider subsidiaries. All
healthcare services are provided solely by its applicable
subsidiaries that are licensed healthcare providers, under the
direction and control of licensed healthcare professionals in
accordance with applicable law. More information about PACS is
available at https://IR.pacs.com. The information on our website is
not part of this press release.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995:
This press release contains, and other communications of the
Company may contain, forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These
statements can be identified by the fact that they do not relate
strictly to historical or current facts. Forward-looking statements
often use words such as “believe,” “expect,” “anticipate,”
“intend,” “estimate,” “project,” “outlook,” “forecast,” “target,”
“trend,” “plan,” “goal,” or other words of comparable meaning or
future-tense or conditional verbs such as “may,” “will,” “should,”
“would,” or “could.”
Statements concerning the Company’s future are forward-looking
statements, and are based on management’s current expectations,
assumptions and beliefs about the Company’s business, financial
performance, operating results, the industry in which we operate
and possible future events. These statements include, but are not
limited to, statements regarding the Company’s anticipated growth
prospects and future operating and financial performance, including
guidance. Forward-looking statements convey the Company’s
expectations, intentions, or forecasts about future events,
circumstances, results, or aspirations. Forward-looking statements
are not guarantees of future results and are subject to risks,
uncertainties and assumptions, which may change over time and many
of which are beyond the Company’s control, and that could cause the
Company’s actual results to materially and adversely differ from
those expressed in any forward-looking statement, including our
dependence on reimbursement from third-party payors and the impact
of changes in the acuity mix of patients in our facilities and
changes in payor mix and payment methodologies and new cost
containment initiatives; failure to be reimbursed for all services
for which each facility bills; increased competition for, or
shortage of, nurses, nurse assistants or other skilled personnel;
state efforts to regulate or deregulate the healthcare services
industry or the construction expansion, or acquisition of
healthcare facilities; numerous risks related to the expiration of
COVID-19 PHE and surrounding wind-down and uncertainty; failure to
attract patients and residents to compete effectively with other
healthcare providers; risks associated with our review and audit of
the care delivery, recordkeeping and billing processes of our
operating subsidiaries; risks associated with litigation; our
reliance on information technology; our inability to complete
future facility or business acquisitions at attractive prices or at
all; risks associated with undertaking acquisitions; risks
associated with leased real property; our reliance on payments from
third-party payors, including Medicare, Medicaid and other
governmental healthcare programs and private insurance
organizations; reforms to the U.S. healthcare system; various
government and third-party payor reviews, auditors and
investigations; risks associated with being a “controlled company,”
and the other risks described in our Quarterly Report on Form 10-Q
for the three months ended June 30, 2024 and other SEC filings.
These documents are available in the Investor Relations section
of the Company’s website at www.pacs.com (information on the
website is not incorporated by reference into this presentation and
should not be considered part of this document).
You should not place undue reliance on forward-looking
statements. The information in this press release is provided as of
today’s date only, and, except as required by federal securities
law, we do not undertake to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events, changing circumstances or for any other reason after
today.
PACS GROUP, INC. AND
SUBSIDIARIES
CONDENSED
COMBINED/CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except for
share and per share values)
(unaudited)
June 30,
December 31,
2024
2023
ASSETS
Current Assets:
Cash and cash equivalents
$
73,374
$
73,416
Accounts receivable, net
610,577
547,807
Other receivables
50,396
52,259
Prepaid expenses and other current
assets
66,301
48,665
Total Current Assets
800,648
722,147
Property and equipment, net
763,904
577,528
Operating lease right-of-use assets
2,112,914
2,007,812
Insurance subsidiary deposits and
investments
35,476
—
Escrow funds
19,531
15,649
Goodwill and other indefinite-lived
assets
65,291
65,291
Other assets
98,584
124,312
Total Assets
$
3,896,348
$
3,512,739
LIABILITIES AND
EQUITY
Current Liabilities:
Accounts payable
$
125,746
$
140,947
Accrued payroll and benefits
107,077
92,234
Current operating lease liabilities
113,278
109,438
Current maturities of long term debt
15,745
16,822
Current portion of accrued self-insurance
liabilities
31,252
27,536
Other accrued expenses
75,003
69,949
Total Current Liabilities
468,101
456,926
Long-term operating lease liabilities
2,068,585
1,961,997
Accrued benefits, less current portion
6,738
6,738
Lines of credit
248,000
520,000
Long-term debt, less current maturities,
net of deferred financing fees
227,107
195,708
Accrued self-insurance liabilities, less
current portion
172,111
146,167
Other liabilities
127,472
123,477
Total Liabilities
$
3,318,114
$
3,411,013
Commitments and contingencies
Equity:
Common stock: $0.001 par value;
1,250,000,000 shares authorized, 152,399,733 shares issued and
outstanding as of June 30, 2024, and 64,361,693,000 shares
authorized, 128,723,386 shares issued and outstanding as of
December 31, 2023
152
129
Additional paid-in capital
471,472
—
Retained earnings
100,504
95,997
Total stockholders' equity
572,128
96,126
Non-controlling interest in subsidiary
6,106
5,600
Total Equity
$
578,234
$
101,726
Total Liabilities and Equity
$
3,896,348
$
3,512,739
PACS GROUP, INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED
COMBINED/CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE
(LOSS) INCOME
(dollars in thousands, except for
share and per share values)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Revenue
Patient and resident service revenue
$
981,398
$
760,424
$
1,915,696
$
1,468,250
Additional funding
—
—
—
375
Other revenues
448
240
871
481
Total Revenue
$
981,846
$
760,664
$
1,916,567
$
1,469,106
Operating Expenses
Cost of services
762,147
590,815
1,498,139
1,129,587
Rent - cost of services
65,833
51,456
129,794
96,560
General and administrative expense
144,380
62,695
191,286
122,137
Depreciation and amortization
8,776
6,159
16,678
11,988
Total Operating Expenses
$
981,136
$
711,125
$
1,835,897
$
1,360,272
Operating Income
$
710
$
49,539
$
80,670
$
108,834
Other (Expense) Income
Interest expense
(9,187
)
(15,306
)
(24,578
)
(25,942
)
Gain on lease termination
—
—
8,046
—
Other income (expense), net
(3,905
)
(2,643
)
(3,465
)
(2,203
)
Total Other Expense, net
$
(13,092
)
$
(17,949
)
$
(19,997
)
$
(28,145
)
(Loss) income before provision for income
taxes
(12,382
)
31,590
60,673
80,689
Provision for income taxes
1,474
(10,370
)
(22,441
)
(21,871
)
Net (Loss) Income
$
(10,908
)
$
21,220
$
38,232
$
58,818
Less:
Net income attributable to noncontrolling
interest
2
2
4
3
Net (loss) income attributable to PACS
Group, Inc.
$
(10,910
)
$
21,218
$
38,228
$
58,815
Net (loss) income per share
attributable to PACS Group, Inc.
Basic
$
(0.07
)
$
0.16
$
0.27
$
0.46
Diluted
$
(0.07
)
$
0.16
$
0.27
$
0.46
Weighted-average common shares
outstanding
Basic
149,463,655
128,723,386
139,093,520
128,723,386
Diluted
149,463,655
128,723,386
139,684,618
128,723,386
PACS GROUP, INC. AND
SUBSIDIARIES
UNAUDITED CONDENSED
COMBINED/CONSOLIDATED STATEMENTS OF (LOSS) INCOME AND COMPREHENSIVE
(LOSS) INCOME (CONTINUED)
(dollars in thousands, except for
share and per share values)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Other comprehensive loss, net of
tax:
Unrealized loss on available-for-sale debt
securities, net of tax
$
(201
)
$
—
$
—
$
—
Total other comprehensive loss
(201
)
—
—
—
Comprehensive (loss) income
$
(11,109
)
$
21,220
$
38,232
$
58,818
Less:
Comprehensive income attributable to
noncontrolling interest
2
2
4
3
Comprehensive (loss) income
attributable to PACS Group, Inc.
$
(11,111
)
$
21,218
$
38,228
$
58,815
PACS GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED COMBINED/CONSOLIDATED STATEMENTS OF CASH
FLOWS (dollars in thousands)
The following table presents selected data from our condensed
consolidated statements of cash flows for the periods
presented:
Six Months Ended June
30,
2024
2023
Net cash provided by/(used in):
Operating activities
$
93,600
$
58,212
Investing activities
(239,634
)
(67,261
)
Financing activities
105,184
(8,627
)
Net change in cash
(40,850
)
(17,676
)
Cash, cash equivalents, and restricted
cash - beginning of period
118,704
98,206
Cash, cash equivalents, and restricted
cash - end of period
$
77,854
$
80,530
PACS GROUP, INC. AND SUBSIDIARIES
UNAUDITED KEY SKILLED SERVICES METRICS
The following tables present the above key skilled services
metrics by category for all facilities, Mature facilities, Ramping
facilities and New facilities as of and for the three months ended
June 30, 2024 and 2023:
Three Months Ended June
30,
2024
2023
Change
% Change
(dollars in thousands)
Total facility results:
Skilled nursing services revenue
$
973,082
$
755,994
$
217,088
28.7
%
Skilled mix by revenue
51.2
%
58.0
%
(6.8
)%
Skilled mix by nursing patient days
29.2
%
34.7
%
(5.5
)%
Occupancy for skilled nursing
services:
Available patient days
2,225,208
1,773,346
451,862
25.5
%
Actual patient days
2,023,865
1,621,868
401,997
24.8
%
Occupancy rate (operational beds)
91.0
%
91.5
%
(0.5
)%
Number of facilities at period end
214
185
29
15.7
%
Number of operational beds at period
end
24,483
20,536
3,947
19.2
%
Three Months Ended June
30,
2024
2023
Change
% Change
(dollars in thousands)
Mature facility(1) results:
Skilled nursing services revenue
$
298,199
$
272,629
$
25,570
9.4
%
Skilled mix by revenue
55.2
%
60.1
%
(4.9
)%
Skilled mix by nursing patient days
32.2
%
37.0
%
(4.8
)%
Occupancy for skilled nursing
services:
Available patient days
634,361
621,374
12,987
2.1
%
Actual patient days
597,657
579,008
18,649
3.2
%
Occupancy rate (operational beds)
94.2
%
93.2
%
1.0
%
Number of facilities at period end
65
65
—
—
%
Number of operational beds at period
end
6,971
6,959
12
0.2
%
__________________
(1)
Mature facilities represent facilities
purchased more than 36 months before the date presented.
Three Months Ended June
30,
2024
2023
Change
% Change
(dollars in thousands)
Ramping facility(1) results:
Skilled nursing services revenue
$
413,207
$
237,944
$
175,263
73.7
%
Skilled mix by revenue
56.1
%
58.5
%
(2.4
)%
Skilled mix by nursing patient days
33.0
%
35.6
%
(2.6
)%
Occupancy for skilled nursing
services:
Available patient days
853,398
545,557
307,841
56.4
%
Actual patient days
805,472
507,200
298,272
58.8
%
Occupancy rate (operational beds)
94.4
%
93.0
%
1.4
%
Number of facilities at period end
84
72
12
16.7
%
Number of operational beds at period
end
9,378
7,882
1,496
19.0
%
__________________
(1)
Ramping facilities represent facilities
purchased within 18-36 months of the date presented.
Three Months Ended June
30,
2024
2023
Change
% Change
(dollars in thousands)
New facility(1) results:
Skilled nursing services revenue
$
261,676
$
245,421
$
16,255
6.6
%
Skilled mix by revenue
39.0
%
55.2
%
(16.2
)%
Skilled mix by nursing patient days
21.3
%
31.5
%
(10.2
)%
Occupancy for skilled nursing
services:
Available patient days
737,449
606,415
131,034
21.6
%
Actual patient days
620,736
535,660
85,076
15.9
%
Occupancy rate (operational beds)
84.2
%
88.3
%
(4.1
)%
Number of facilities at period end
65
48
17
35.4
%
Number of operational beds at period
end
8,134
5,695
2,439
42.8
%
__________________
(1)
New facilities represent facilities
purchased less than 18 months from the date presented.
The following tables present the above key skilled services
metrics by category for all facilities, Mature facilities, Ramping
facilities and New facilities as of and for the six months ended
June 30, 2024 and 2023:
Six Months Ended June
30,
2024
2023
Change
% Change
(dollars in thousands)
Total facility results:
Skilled nursing services revenue
$
1,900,538
$
1,461,568
$
438,970
30.0
%
Skilled mix by revenue
51.6
%
60.8
%
(9.2
)%
Skilled mix by nursing patient days
29.5
%
37.3
%
(7.8
)%
Occupancy for skilled nursing
services:
Available patient days
4,389,269
3,359,730
1,029,539
30.6
%
Actual patient days
3,994,467
3,078,280
916,187
29.8
%
Occupancy rate (operational beds)
91.0
%
91.6
%
(0.6
)%
Number of facilities at period end
214
185
29
15.7
%
Number of operational beds at period
end
24,483
20,536
3,947
19.2
%
Six Months Ended June
30,
2024
2023
Change
% Change
(dollars in thousands)
Mature facility(1) results:
Skilled nursing services revenue
$
584,618
$
544,170
$
40,448
7.4
%
Skilled mix by revenue
55.4
%
63.0
%
(7.6
)%
Skilled mix by nursing patient days
32.3
%
39.4
%
(7.1
)%
Occupancy for skilled nursing
services:
Available patient days
1,268,904
1,217,416
51,488
4.2
%
Actual patient days
1,197,660
1,134,502
63,158
5.6
%
Occupancy rate (operational beds)
94.4
%
93.2
%
1.2
%
Number of facilities at period end
65
65
—
—
%
Number of operational beds at period
end
6,971
6,959
12
0.2
%
__________________
(1)
Mature facilities represent facilities
purchased more than 36 months before the date presented.
Six Months Ended June
30,
2024
2023
Change
% Change
(dollars in thousands)
Ramping facility(1) results:
Skilled nursing services revenue
$
817,146
$
271,152
$
545,994
201.4
%
Skilled mix by revenue
56.8
%
59.1
%
(2.3
)%
Skilled mix by nursing patient days
33.6
%
35.9
%
(2.3
)%
Occupancy for skilled nursing
services:
Available patient days
1,679,388
627,582
1,051,806
167.6
%
Actual patient days
1,590,306
583,678
1,006,628
172.5
%
Occupancy rate (operational beds)
94.7
%
93.0
%
1.7
%
Number of facilities at period end
84
72
12
16.7
%
Number of operational beds at period
end
9,378
7,882
1,496
19.0
%
__________________
(1)
Ramping facilities represent facilities
purchased within 18-36 months of the date presented.
Six Months Ended June
30,
2024
2023
Change
% Change
(dollars in thousands)
New facility(1) results:
Skilled nursing services revenue
$
498,774
$
646,246
$
(147,472
)
(22.8
)%
Skilled mix by revenue
38.7
%
59.7
%
(21.0
)%
Skilled mix by nursing patient days
21.3
%
36.2
%
(14.9
)%
Occupancy for skilled nursing
services:
Available patient days
1,440,977
1,514,732
(73,755
)
(4.9
)%
Actual patient days
1,206,501
1,360,100
(153,599
)
(11.3
)%
Occupancy rate (operational beds)
83.7
%
89.8
%
(6.1
)%
Number of facilities at period end
65
48
17
35.4
%
Number of operational beds at period
end
8,134
5,695
2,439
42.8
%
__________________
(1)
New facilities represent facilities
purchased less than 18 months from the date presented.
The following tables present additional detail regarding our
skilled mix, including our percentage of nursing patient days and
revenue by payor source for all facilities, Mature facilities,
Ramping facilities and New facilities for the three months ended
June 30, 2024 and 2023:
Three Months Ended March
31,
Skilled mix by revenue
Mature
Ramping
New
Total
2024
2023
2024
2023
2024
2023
2024
2023
Medicare
37.3
%
43.0
%
37.3
%
39.6
%
22.7
%
40.7
%
33.3
%
41.2
%
Managed care
17.9
17.1
18.8
18.9
16.3
14.5
17.9
16.8
Skilled mix
55.2
60.1
56.1
58.5
39.0
55.2
51.2
58.0
Medicaid
38.0
34.2
36.1
34.7
51.5
39.3
40.9
36.0
Private and other
6.8
5.7
7.8
6.8
9.5
5.5
7.9
6.0
Total
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Three Months Ended June
30,
Skilled mix by nursing patient
days
Mature
Ramping
New
Total
2024
2023
2024
2023
2024
2023
2024
2023
Medicare
18.5
%
23.3
%
19.1
%
21.3
%
9.8
%
21.4
%
16.1
%
22.0
%
Managed care
13.7
13.7
13.9
14.3
11.5
10.1
13.1
12.7
Skilled mix
32.2
37.0
33.0
35.6
21.3
31.5
29.2
34.7
Medicaid
59.8
54.8
58.0
54.8
67.7
61.1
61.5
56.9
Private and other
8.0
8.2
9.0
9.6
11.0
7.4
9.3
8.4
Total
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
The following tables present additional detail regarding our
skilled mix, including our percentage of nursing patient days and
revenue by payor source for all facilities, Mature facilities,
Ramping facilities and New facilities for the six months ended June
30, 2024 and 2023:
Six Months Ended June
30,
Skilled mix by revenue
Mature
Ramping
New
Total
2024
2023
2024
2023
2024
2023
2024
2023
Medicare
37.5
%
46.7
%
38.2
%
39.9
%
22.4
%
44.2
%
33.8
%
44.3
%
Managed care
17.9
16.3
18.6
19.2
16.3
15.5
17.8
16.5
Skilled mix
55.4
63.0
56.8
59.1
38.7
59.7
51.6
60.8
Medicaid
37.9
31.8
35.6
34.1
52.1
34.6
40.7
33.5
Private and other
6.7
5.2
7.6
6.8
9.2
5.7
7.7
5.7
Total
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Six Months Ended June
30,
Skilled mix by nursing patient
days
Mature
Ramping
New
Total
2024
2023
2024
2023
2024
2023
2024
2023
Medicare
18.5
%
25.9
%
19.7
%
21.4
%
9.7
%
24.3
%
16.3
%
24.3
%
Managed care
13.8
13.5
13.9
14.5
11.6
11.9
13.2
13.0
Skilled mix
32.3
39.4
33.6
35.9
21.3
36.2
29.5
37.3
Medicaid
59.6
52.6
57.5
54.3
68.1
55.9
61.3
54.4
Private and other
8.1
8.0
8.9
9.8
10.6
7.9
9.2
8.3
Total
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
The following table presents average daily rates by payor
source, excluding services that are not covered by the daily rate,
for the three months ended June 30, 2024 and 2023:
Three Months Ended June
30,
Average daily rate
Mature
Ramping
New
Total
2024
2023
2024
2023
2024
2023
2024
2023
Medicare
$
942.19
$
860.20
$
964.00
$
874.26
$
941.43
$
877.56
$
952.39
$
870.03
Managed care
607.42
578.47
669.00
622.60
576.64
660.87
625.09
615.61
Total for skilled patient payors (1)
799.34
755.50
840.05
773.19
744.55
808.09
805.42
776.92
Medicaid
295.91
289.89
307.71
297.55
308.84
296.27
304.70
294.46
Private and other
391.41
320.93
426.07
336.44
346.27
341.17
388.39
332.40
Total (2)
$
465.52
$
464.61
$
494.08
$
470.60
$
405.66
$
460.82
$
458.53
$
465.23
__________________
(1)
Represents weighted average of revenue
generated by Medicare and managed care payor sources.
(2)
Represents weighted average.
The following table presents average daily rates by payor
source, excluding services that are not covered by the daily rate,
for the six months ended June 30, 2024 and 2023:
Six Months Ended June
30,
Average daily rate
Mature
Ramping
New
Total
2024
2023
2024
2023
2024
2023
2024
2023
Medicare
$
939.91
$
852.46
$
966.33
$
869.07
$
930.02
$
868.65
$
950.80
$
862.37
Managed care
604.43
573.93
664.97
617.61
567.60
623.11
620.08
603.11
Total for skilled patient payors (1)
796.73
757.22
841.57
767.70
733.14
787.99
803.17
772.32
Medicaid
295.48
286.70
308.29
292.51
308.72
296.20
304.70
292.11
Private and other
385.84
310.77
417.29
328.06
349.97
346.82
385.59
329.83
Total (2)
$
464.80
$
474.14
$
497.10
$
466.65
$
403.58
$
478.36
$
459.17
$
474.58
__________________
(1)
Represents weighted average of revenue
generated by Medicare and managed care payor sources.
(2)
Represents weighted average.
Key Skilled Services Metrics
We monitor the below key skilled services metrics across all of
our facilities and by Mature facilities, Ramping facilities, and
New facilities. Mature facilities are defined as facilities
purchased more than 36 months prior to a respective measurement
date. Ramping facilities are defined as facilities purchased within
18 to 36 months prior to a respective measurement date. New
facilities are defined as facilities purchased less than 18 months
prior to a respective measurement date.
- Skilled nursing services revenue —
Skilled nursing services revenue reflects the portion of patient
and resident service revenue generated from all patients in skilled
nursing facilities, excluding revenue generated from our assisted
and independent living services.
- Skilled mix — We measure both
revenue and nursing patient days by payor. Medicare and managed
care patients, whom we refer to as high acuity patients, typically
require a higher level of skilled nursing care. As a result,
Medicare and managed care reimbursement rates are typically higher
than those from other payors. In most states, Medicaid
reimbursement rates are generally the lowest of all payor types.
Changes in the payor mix can significantly affect our revenue and
profitability. To monitor this performance, we evaluate two
different measures of skilled mix:
- Skilled mix by revenue — Skilled
mix by revenue represents the portion of routine revenue generated
from treating high acuity Medicare and managed care patients.
Routine revenue refers to skilled nursing services revenue
generated by contracted daily rates charged for skilled nursing
services. Services provided outside of routine contractual
agreements are recorded separately as ancillary revenue, including
Medicare Part B therapy services, and are not routine revenue. The
inclusion of therapy and other ancillary treatments in the
contracted daily rate varies by payor source and by contract.
Revenue associated with calculating skilled mix is based on
contractually agreed-upon amounts or rates, excluding the estimates
of variable consideration under the revenue recognition standard,
Financial Accounting Standards Board (FASB) Accounting Standards
Codification (ASC) Topic 606.
- Skilled mix by nursing patient
days — Skilled mix by nursing patient days represents the
number of days our high acuity Medicare and managed care patients
receive skilled nursing services at skilled nursing facilities as a
percentage of the total number of days that patients from all payor
sources receive skilled nursing services at skilled nursing
facilities for any given period.
- Occupancy — The total number of
patients occupying a bed in a skilled nursing facility as a
percentage of the beds in such facility that are available for
occupancy during the period.
- Number of facilities — The total
number of skilled nursing facilities that we operate.
- Number of operational beds — The
total number of operational beds associated with the skilled
nursing facilities that we own.
PACS GROUP, INC. AND
SUBSIDIARIES
UNAUDITED RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL INFORMATION
(dollars in thousands)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net (loss) income
$
(10,908
)
$
21,220
$
38,232
$
58,818
Less: Net income attributable to
noncontrolling interest
2
2
4
3
Add: Interest expense
9,187
15,306
24,578
25,942
(Benefit) provision for income taxes
(1,474
)
10,370
22,441
21,871
Depreciation and amortization
8,776
6,159
16,678
11,988
EBITDA
$
5,579
$
53,053
$
101,925
$
118,616
Adjustments to EBITDA:
Acquisition related costs
486
205
692
708
Loss resulting from debt restructuring
—
3,109
—
3,109
Gain on lease termination
—
—
(8,046
)
—
Stock-based compensation expense
90,936
—
90,936
—
Loss from equity method investment in
joint venture
2,736
—
2,736
—
Adjusted EBITDA
$
99,737
$
56,367
$
188,243
$
122,433
Rent - cost of services
65,833
51,456
129,794
96,560
Adjusted EBITDAR
$
165,570
$
318,037
Non-GAAP Financial Measures
In addition to our results provided throughout that are
determined in accordance with GAAP, we also present the following
non-GAAP financial measures: EBITDA, Adjusted EBITDA and Adjusted
EBITDAR (collectively, Non-GAAP Financial Measures). EBITDA and
Adjusted EBITDA are performance measures. Adjusted EBITDAR is a
valuation measure. These Non-GAAP Financial Measures have no
standardized meaning defined by GAAP, and therefore have
limitations as analytical tools, and they should not be considered
in isolation, or as a substitute for analysis of our results as
reported in accordance with GAAP. You should review the
reconciliation of net income to the Non-GAAP Financial Measures in
the table above, together with our audited combined/consolidated
financial statements and the related notes in their entirety, and
should not rely on any single financial measure. Additionally,
other companies may define these or similar Non-GAAP Financial
Measures with the same or similar names differently, and because
these Non-GAAP Financial Measures are not standardized, it may not
be possible to compare these financial measures to those of other
companies.
Performance Measures
We use EBITDA and Adjusted EBITDA to facilitate internal
comparisons of our historical operating performance on a more
consistent basis, as well as for business planning and forecasting
purposes. In addition, we believe the presentation of EBITDA and
Adjusted EBITDA is useful to investors, analysts and other
interested parties in comparing our operating performance across
reporting periods on a consistent basis by excluding items that we
do not believe are indicative of our ongoing operating
performance.
EBITDA – We calculate EBITDA as net income, adjusted for net
losses attributable to noncontrolling interest, before: other
expense, net; provision for income taxes; and depreciation and
amortization.
Adjusted EBITDA – We calculate Adjusted EBITDA as EBITDA further
adjusted for non-core business items, which for the reported
periods includes, to the extent applicable, costs incurred to
acquire operations that are not capitalizable, losses incurred from
debt restructuring, gains on lease termination, stock-based
compensation expense, loss from equity method investment in joint
venture and certain one-time expenses that are not representative
of our underlying operating performance. Costs related to
acquisitions include costs related to our acquisition of SNF
facilities and providers, including related costs such as legal
fees, financial and tax due diligence, consulting and escrow fees.
The loss related to our equity method investment in joint venture
is a loss allocated to us from a discrete disposal recognized by
one of our joint ventures.
Valuation Measure
We use Adjusted EBITDAR as a measure to determine the value of
prospective acquisitions and to assess the enterprise value of our
business without regard to differences in capital structures and
leasing arrangements. In addition, we believe that Adjusted EBITDAR
is also a commonly used measure by investors, analysts and other
interested parties to compare the enterprise value of different
companies in the healthcare industry without regard to differences
in capital structures and leasing arrangements, particularly for
companies with operating and finance leases. For example, finance
lease expenditures are recorded in depreciation and interest and
are therefore removed from Adjusted EBITDA, whereas operating lease
expenditures are recorded in rent expense and are therefore
retained in Adjusted EBITDA. Adjusted EBITDAR is a financial
valuation measure that is not specified in GAAP, and is not
displayed as a performance measure as it excludes rent expense,
which is a normal and recurring cash operating expense, and is
therefore presented only for the current period. While we believe
that Adjusted EBITDAR provides useful insight regarding our
underlying operations, excluding the impact of our operating
leases, we must still incur cash operating expenses related to our
operating leases and rent and such expenses are necessary to
operate our leased operations. As a result, Adjusted EBITDAR may
understate the extent of our cash operating expenses for the
respective period relative to our actual cash needs to operate our
leased operations and business.
Adjusted EBITDAR – We calculate Adjusted EBITDAR as Adjusted
EBITDA less rent-cost of services.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240812652150/en/
Investor/Media Relations, PACS Group, Inc., 385-988-3596,
IR@pacs.com
PACS (NYSE:PACS)
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PACS (NYSE:PACS)
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