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Share Name | Share Symbol | Market | Type |
---|---|---|---|
PACS Group Inc | NYSE:PACS | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.50 | -1.68% | 29.25 | 29.84 | 29.01 | 29.45 | 194,262 | 01:00:00 |
Conference Call and Webcast scheduled for tomorrow, May 14, 2024, at 4:00 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 first quarter of 2024, reporting net income of $49.1 million, Adjusted EBITDA of $88.5 million and Adjusted EBITDAR of $152.5 million.
Highlights:
Select KPIs:
“We’re proud of our teams across the country and their continued dedication to the clinical excellence that drives our financial results. We look forward to carrying that momentum through 2024,” said Jason Murray, PACS’s Chief Executive Officer. “We had a very strong quarter, highlighted by 158 of our facilities having a 4 or 5 star CMS Quality Measures rating. We believe this is a key driver of our revenue growth year over year of 31.9% or $226.3 million on a same quarter basis.”
“Our revenue growth was also driven in significant part by our adding 5,194 beds to the company over the last year, leading to a 35.3% increase in patient days year-over-year. Additionally, our occupancy remained strong across all facilities — 91.1% in the first quarter of 2024,” said Derick Apt, PACS’s Chief Financial Officer. “We're also proud of our teams for adding 68 facilities and 12 real estate acquisitions over the last 15 months, bringing total operated facilities to 218 and wholly owned properties to 35.”
Business Outlook
Based on information available as of May 13, 2024, PACS is providing the following guidance for full year 2024:
PACS's growing portfolio consists of 218 healthcare operations, 16 of which also include senior living operations, across 9 states. PACS owns 47 real estate assets with purchase options on an additional 27 real estate assets, including both wholly owned and owned in a joint venture. Apt noted that PACS’s overall strategy will continue to include both leasing and acquiring real estate and that the Company is actively considering 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, gain on lease termination, 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 March 31, 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 Tuesday, May 14, 2024, at 4:00 p.m. Eastern time to discuss PACS’s first quarter financial results. To listen to the webcast please visit the Investors Relations section of PACS’s website at https://IR.pacs.com. 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 200 post-acute care facilities across nine 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. 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 March 31, 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 values)
(unaudited)
March 31, 2024
December 31, 2023
ASSETS
Current Assets:
Cash and cash equivalents
$
81,213
$
73,416
Accounts receivable, net
622,737
547,807
Other receivables
66,014
52,259
Prepaid expenses and other current assets
61,761
48,665
Total Current Assets
831,725
722,147
Property and equipment, net
660,157
577,528
Operating lease right-of-use assets
2,175,169
2,007,812
Insurance subsidiary deposits and investments
25,201
—
Escrow funds
21,456
15,649
Goodwill and other indefinite-lived assets
65,291
65,291
Other assets
87,329
124,312
Total Assets
$
3,866,328
$
3,512,739
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable
$
157,000
$
140,947
Accrued payroll and benefits
143,811
92,234
Current operating lease liabilities
113,617
109,438
Current maturities of long term debt
16,837
16,822
Current portion of accrued self-insurance liabilities
29,210
27,536
Other accrued expenses
71,073
69,949
Total Current Liabilities
531,548
456,926
Long-term operating lease liabilities
2,123,865
1,961,997
Accrued benefits, less current portion
6,738
6,738
Lines of credit
537,000
520,000
Long-term debt, less current maturities, net of deferred financing fees
230,855
195,708
Accrued self-insurance liabilities, less current portion
154,892
146,167
Other liabilities
147,837
123,477
Total Liabilities
$
3,732,735
$
3,411,013
Commitments and contingencies
Equity:
PACS Group, Inc. stockholders' equity:
Common stock - 64,361,693,000 shares authorized, $0.001 par value, 128,723,386 shares issued and outstanding as of March 31, 2024 and December 31, 2023
129
129
Accumulated other comprehensive income
201
—
Retained earnings
127,661
95,997
Total stockholders' equity
127,991
96,126
Noncontrolling interest in subsidiary
5,602
5,600
Total Equity
$
133,593
$
101,726
Total Liabilities and Equity
$
3,866,328
$
3,512,739
PACS GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED COMBINED/CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(dollars in thousands, except for share and per share values)
Three Months Ended March 31,
2024
2023
Revenue
Patient and resident service revenue
$
934,298
$
707,826
Additional funding
—
375
Other revenues
423
241
Total Revenue
$
934,721
$
708,442
Operating Expenses
Cost of services
735,992
538,772
Rent - cost of services
63,961
45,104
General and administrative expense
46,906
59,442
Depreciation and amortization
7,902
5,829
Total Operating Expenses
$
854,761
$
649,147
Operating Income
$
79,960
$
59,295
Other (Expense) Income
Interest expense
(15,391
)
(10,636
)
Gain on lease termination
8,046
—
Other income, net
440
440
Total Other Expense, net
$
(6,905
)
$
(10,196
)
Income before provision for income taxes
73,055
49,099
Provision for income taxes
(23,915
)
(11,501
)
Net Income
$
49,140
$
37,598
Less:
Net income attributable to noncontrolling interest
2
1
Net income attributable to PACS Group, Inc.
$
49,138
$
37,597
Net income per common share attributable to PACS Group, Inc.
Basic and diluted
$
0.38
$
0.29
Weighted-average shares outstanding
Basic and diluted
128,723,386
128,723,386
Other comprehensive income, net of tax:
Unrealized gain on available-for-sale debt securities, net of tax
$
201
$
—
Total other comprehensive income
201
—
Comprehensive income
$
49,341
$
37,598
Less:
Comprehensive income attributable to noncontrolling interest
2
1
Comprehensive income attributable to PACS Group, Inc.
$
49,339
$
37,597
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:
Three Months Ended March 31,
2024
2023
Net cash provided by/(used in):
Operating activities
$
58,787
$
79,290
Investing activities
(118,669
)
(57,554
)
Financing activities
34,453
14,915
Net change in cash
(25,429
)
36,651
Cash, cash equivalents, and restricted cash - beginning of period
118,704
98,206
Cash, cash equivalents, and restricted cash - end of period
$
93,275
$
134,857
PACS GROUP, INC. AND SUBSIDIARIES
UNAUDITED KEY SKILLED SERVICES METRICS
Three Months Ended March 31,
2024
2023
Change
% Change
(Dollars in thousands)
Total facility results:
Skilled nursing services revenue
$
927,456
$
705,574
$
221,881
31.4
%
Skilled mix by revenue
52.0
%
63.7
%
(11.7
)%
Skilled mix by nursing patient days
29.8
%
40.3
%
(10.5
)%
Occupancy for skilled nursing services:
Available patient days
2,164,061
1,586,384
577,677
36.4
%
Actual patient days
1,970,602
1,456,412
514,190
35.3
%
Occupancy rate (operational beds)
91.1
%
91.8
%
(0.7
)%
Number of facilities at period end
212
174
38
21.8
%
Number of operational beds at period end
24,315
19,121
5,194
27.2
%
Three Months Ended March 31,
2024
2023
Change
% Change
(Dollars in thousands)
Mature facility(1) results:
Skilled nursing services revenue
$
286,419
$
271,541
$
14,877
5.5
%
Skilled mix by revenue
55.6
%
65.8
%
(10.2
)%
Skilled mix by nursing patient days
32.5
%
42.0
%
(9.5
)%
Occupancy for skilled nursing services:
Available patient days
634,543
596,042
38,501
6.5
%
Actual patient days
600,003
555,494
44,509
8.0
%
Occupancy rate (operational beds)
94.6
%
93.2
%
1.4
%
Number of facilities at period end
65
63
2
3.2
%
Number of operational beds at period end
6,973
6,665
308
4.6
%
(1)
Mature facilities represent facilities purchased more than 36 months before the date presented.
Three Months Ended March 31,
2024
2023
Change
% Change
(Dollars in thousands)
Ramping facility(1) results:
Skilled nursing services revenue
$
403,938
$
33,207
$
370,731
1116.4
%
Skilled mix by revenue
57.6
%
63.3
%
(5.7
)%
Skilled mix by nursing patient days
34.1
%
38.0
%
(3.9
)%
Occupancy for skilled nursing services:
Available patient days
825,990
82,025
743,965
907.0
%
Actual patient days
784,834
76,478
708,356
926.2
%
Occupancy rate (operational beds)
95.0
%
93.2
%
1.8
%
Number of facilities at period end
84
18
66
366.7
%
Number of operational beds at period end
9,380
1,838
7,542
410.3
%
(1)
Ramping facilities represent facilities purchased within 18-36 months of the date presented.
Three Months Ended March 31,
2024
2023
Change
% Change
(Dollars in thousands)
New facility(1) results:
Skilled nursing services revenue
$
237,099
$
400,826
$
(163,727
)
(40.8
)%
Skilled mix by revenue
38.4
%
62.4
%
(24.0
)%
Skilled mix by nursing patient days
21.4
%
39.3
%
(17.9
)%
Occupancy for skilled nursing services:
Available patient days
703,528
908,317
(204,789
)
(22.5
)%
Actual patient days
585,765
824,440
(238,675
)
(28.9
)%
Occupancy rate (operational beds)
83.3
%
90.8
%
(7.5
)%
Number of facilities at period end
63
93
(30
)
(32.3
)%
Number of operational beds at period end
7,962
10,618
(2,656
)
(25.0
)%
(1)
New facilities represent facilities purchased less than 18 months from the date presented.
Three Months Ended March 31,
Skilled mix by revenue
Mature
Ramping
New
Total
2024
2023
2024
2023
2024
2023
2024
2023
Medicare
37.6
%
50.3
%
39.2
%
42.4
%
22.1
%
46.3
%
34.3
%
47.6
%
Managed care
18.0
15.5
18.4
20.9
16.3
16.1
17.7
16.1
Skilled mix
55.6
65.8
57.6
63.3
38.4
62.4
52.0
63.7
Medicaid
37.8
29.4
35.2
29.8
52.7
31.7
40.5
30.7
Private and other
6.6
4.8
7.2
6.9
8.9
5.9
7.5
5.6
Total
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Three Months Ended March 31,
Skilled mix by nursing patient days
Mature
Ramping
New
Total
2024
2023
2024
2023
2024
2023
2024
2023
Medicare
18.6
%
28.8
%
20.2
%
22.3
%
9.7
%
26.2
%
16.6
%
27.0
%
Managed care
13.9
13.2
13.9
15.7
11.7
13.1
13.2
13.3
Skilled mix
32.5
42.0
34.1
38.0
21.4
39.3
29.8
40.3
Medicaid
59.4
50.2
56.9
51.1
68.6
52.4
61.2
51.5
Private and other
8.1
7.8
9.0
10.9
10.0
8.3
9.0
8.2
Total
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Three Months Ended March 31,
Mature
Ramping
New
Total
2024
2023
2024
2023
2024
2023
2024
2023
Medicare
$
937.66
$
845.94
$
968.59
$
836.27
$
917.80
$
863.92
$
949.23
$
855.41
Managed care
601.48
569.00
660.85
587.46
558.19
604.14
614.99
589.76
Total for skilled patient payors (1)
794.16
758.81
843.08
733.66
721.10
777.52
800.91
767.90
Medicaid
295.05
283.07
308.88
256.67
308.60
296.15
304.70
289.23
Private and other
380.32
299.68
408.15
278.98
354.26
350.11
382.61
326.93
Total (2)
$
464.08
$
484.08
$
500.21
$
440.48
$
401.37
$
489.75
$
459.83
$
485.00
(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.
PACS GROUP, INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(dollars in thousands)
Three Months Ended March 31,
2024
2023
Net income
$
49,140
$
37,598
Less: net income attributable to noncontrolling interest
2
1
Add: Interest expense
15,391
10,636
Provision for income taxes
23,915
11,501
Depreciation and amortization
7,902
5,829
EBITDA
$
96,346
$
65,563
Acquisition related costs
207
503
Gain on lease termination
(8,046
)
—
Adjusted EBITDA
$
88,507
$
66,066
Rent - cost of services
63,961
45,104
Adjusted EBITDAR
$
152,468
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 below, 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, gains on lease termination, 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.
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/20240513066996/en/
Investor/Media Relations, PACS Group, Inc., 385-988-3596, IR@pacs.com
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