Pacs Group, Inc. · NYSE:PACS
Pacs — Q1 2024 Earnings Presentation
25 slides from Pacs's earnings presentation, May 2024
Slide 1: Q1 2024 Earnings Presentation
Q1 2024 Earnings Presentation May 2024 1
Slide 2: Disclaimer
Disclaimer This presentation contains, and other communications of PACS Group, Inc. (the “Company”) may insurance organizations; reforms to the U.S. healthcare system; various government and third-party contain, forward-looking statements within the meaning of the Private Securities Litigation Refor
Slide 3: PACS: Healthcare Elevated
PACS Healthcare Elevated PACS is elevating healthcare in the post-acute care space by delivering on our mission and values to create real ivery, change. By striving for the best while staying true to who leagorinrors we are, we're forging a bright future for post-acute care post-acute care . . ional
Slide 4: Our Story
Our Story Founded in 2013 Strategic Scale Decentralized Leading Post- and Density (1) Operating Model Acute Company Founded by Jason Murray Today, the company Facility administrators and Owner and operator of and Mark Hancock in 2013 operates 218 facilities local leadership teams post-acute faciliti
Slide 5: Executive Team
Executive Team Jason Murray, Chief Executive Officer Mark Hancock, Executive Vice Chairman • 10+ years at PACS • 10+ years at PACS • 20+ years of experience as a healthcare executive • 20+ years of experience as a finance professional • Licensed nursing home administrator, MHA • Licensed nursing hom
Slide 6: Post-Acute Continuum of Care
Post-Acute Continuum of Care Skilled Nursing Facilities represent 43% of spend at 1/3 the cost Higher Acuity, Higher Cost Lower Acuity, Lower Cost Short-Term Acute Long-Term Acute Inpatient Transitional Care & Assisted Living / Home Health / Care Hospital Care Hospital Rehabilitation Long-Term Indep
Slide 7: PACS at a Glance
PACS at a Glance (1) 218 Facilities 47 Owned/JV Facilities 171 Leased Facilities 22,000+Patients 4 6 ~34,000 Employees 20 138 5 7 9 24 94.6% Occupancy Rate for Mature Facilities 5 32.5% Avg. Skilled Mix for Mature Facilities (1) All numbers as of 3/31/2024. 4.2 Avg. QM Rating for Mature Facilities 7
Slide 8: PACS Growth Over Time
PACS Growth Over Time Poised to Continue Leading Industry Consolidation Significant Potential for Consolidation (2) 218 10 89% Other Operators Number of SNF Facilities Operated Cumulative Facility Count ~15,000 150 SNF Facilities in 138 the US 208 Founded in Southern California 11% with 2 Acquired F
Slide 9: PACS Flywheel: Focus on continuous improvement of best practices drives patient mix and occupancy
PACS Flywheel: Focus on continuous improvement of best practices drives patient mix and occupancy Flywheel effect drives Drive Better Patient Care improved clinical outcomes, superior financial results and creates a virtuous cycle Higher Revenue PPD centered around delivering the best care Lower Re-
Slide 10: Our Focus on Quality Drives Consistent and Differentiated Results
Our Focus on Quality Drives Consistent and Differentiated Results PACS Has a Proven Track Record in Improving Facility QM Rating to 4 or 5 Stars (1,2) Discrete Levers 78.6% facilities Aimed at Improving Quality with 4 or 5 Stars 3.5x increase in 4- and 5- Star facilities 1 Highly coordinated care 19
Slide 11: Our Local CEOs and Their Teams Run our Facilities Autonomously with Full Support from Regional Teams
2 Our Local CEOs and Their Teams Run our Facilities Autonomously with Full Support from Regional Teams Post Acute Services Facility administrator (“Local CEO”) Our Regional Teams ü Each region has a PACS Services Regional Vice President Interdisciplinary Team (“IDT”) (“RVP”) and cross-functional sup
Slide 12: We Attract, Train and Retain Highly Capable Clinicians, Administrators and Leadership
We Attract, Train and Retain Highly Capable Clinicians, Administrators and Leadership Our Leaders Are Highly Motivated and Entrepreneurial Our Aligned Incentive Structure is Attractive & Empowering Administrators Clinicians • Recent college graduates and • Training & tuition support for experienced
Slide 13: Maturing Cohorts of Facilities
Maturing Cohorts of Facilities Facilities & Bed Count (1) 22,950 24,315 • 19% improvement in Occupancy from 14,841 16,345 203 212 New to Mature (2) 150 62 63 • 0.4 improvement in 138 QM Star rating from 72 84 76 84 New to Mature (2) 17 4 • Revenue PPD 49 62 65 65 increase by 15.6% on FY 2021 FY 2022
Slide 14: Historical Improvement in Occupancy Rate and QM Star Rating
Historical Improvement in Occupancy Rate and QM Star Rating Facilities Acquired and Matured Since 2018 Average Facility Occupancy Rate from “New” to “Mature” ~19% increase in 89.6% 90.5% occupancy rate 87.5% 86.6% 85.7% 83.6% 83.1% 81.6% 82.8% 83.1% 79.5% 80.7% 71.1% New Q2 Q3 Q4 Q5 Q6 Ramping Q8 Q9
Slide 15: We Strategically Own and Acquire Real Estate
We Strategically Own and Acquire Real Estate Roadmap to Unlock Value Through Ownership of beds PACS Operates (1)(2)(3) Operational and Financial Improvements Beds with Purchase Acquire underperforming Options (PO): long-term custodial care 3,340 (2) facilities Improve local leadership, quality & 13.
Slide 16: Historical Performance
Historical Performance Quarter ending March 31, 2024 Total Revenue ($ in millions) Adjusted EBITDA ($ in millions)(1) % R 51 .1 % R 6 3 .3 CAG CAG $3,111 $255.5 $237.5 $2,422 $1,167 $104.1 $88.5 $935 FY 2021 FY 2022 FY 2023 Q1 2024 FY 2021 FY 2022 FY 2023 Q1 2024 Note: Financials shown are on a full
Slide 17: Quarterly Performance
Quarterly Performance Quarter ending March 31, 2024 Skilled Patient Revenue ($ in millions)(1,2) Average Medicare Revenue $PPD (1,2) $226.1 $969 $154.8 $938 $90.3 $918 New Ramping Mature New Ramping Mature Occupancy (1,2) Skilled Days (1,2) 95.0% 94.6% 784,834 585,765 600,003 83.3% New Ramping Matur
Slide 18: 2024 Guidance
2024 Guidance $3.65B to $351M to $3.75B $361M 19% over 2023 Annual Revenue Adj. EBITDA(1) Revenue Growth to Midpoint (1) A reconciliation of Adjusted EBITDA guidance to Net Loss on a forward-looking basis cannot be provided without unreasonable efforts, as the Company is unable to provide reconcilin
Slide 19: Appendix
Appendix 19
Slide 20: Balance Sheet
Balance Sheet ($ in millions) March 31, 2024 December 31, 2023 ASSETS Cash and cash equivalents $81.2 $73.4 Accounts receivable, net 622.7 547.8 Other receivables 66.0 52.3 Prepaid expenses and other current assets 61.8 48.6 Total current assets 831.7 722.1 Property and Equipment, Net 660.2 577.5 Op
Slide 21: Income Statement
Income Statement Three Months Ended March 31, ($ in millions) 2024 2023 Revenue Patient and resident service revenue $934.3 $707.8 Other revenue 0.4 0.6 Total Revenue $934.7 $708.4 Operating Expenses Cost of services 736.0 538.8 Rent - cost of services 64.0 45.1 General and administrative expenses 4
Slide 22: Summary of Cash Flow
Summary of Cash Flow ($ in millions) Three Months Ended 31-Mar-24 31-Mar-23 Net Cash provided by (used) Operating activities 58.8 79.3 Investing activities(1) (118.7) (57.5) Financing activities 34.5 14.9 Net Increase (Decrease) ($25.4) $36.7 Cash at Beginning of Period 118.7 98.2 Cash at End of Per
Slide 23: Reconciliation of Net Income to Adjusted EBITDA and Adjusted EBITDAR
Reconciliation of Net Income to Adjusted EBITDA and Adjusted EBITDAR ($ in millions) Three Months Ended March 31, 2024 2023 Net income $49.1 $37.6 Less: net income attributable to 0.0 0.0 noncontrolling interest Add: interest expense 15.4 10.6 Provision for income taxes 23.9 11.6 Depreciation and am
Slide 24: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA ($ in millions) Years ended December 31, 2023 2022 2021 Net income $112.9 $150.5 $47.9 Less: net income attributable to 0.0 0.0 0.0 noncontrolling interest Add: interest expense 49.9 25.5 5.3 Provision for income taxes 44.4 56.5 33.5 Depreciation and a
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