Pacs Group, Inc. · NYSE:PACS
Pacs — Q2 2024 Earnings Presentation
28 slides from Pacs's earnings presentation, August 2024
Slide 1: Q2 2024 Earnings Presentation
NENT AV el SE® rye ° PACS) | treated Q2 2024 Earnings Presentation August 2024
Slide 2: Disclaimer
Disclaimer This presentation contains, and other communications of PACS Group, Inc. (the “Company,” *PACS") 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 stric
Slide 3: 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 change. By striving for the best while staying true to who we are, we're forging a bright future for post-acute care MISSION delivery and support across the natio
Slide 4: Our Story
Our Story Founded in 2013 Founded by Jason Murray and Mark Hancock in 2013 with two facilities in Southern California The company has grown through transforming long-term care facilities into high-value transitional care facilities (Numbers pres f 6/30/2024, Strategic Scale and Density“) The company
Slide 5: PACS at a Glance
PACS at a Glance’ 4 ‘s 4 oo 2 19 . 1 4 . ‘s (Me for Q2 2024 (6/30/2024). (2) Includes 3 facilities in Kansas that closed after Q2 (July 1th) and acquisition of 53 facilities (25 acquired and 28 pending) across 8 states (Prestige transaction announced May 22nd). (3) Pro forma for acquisition statisti
Slide 6: PACS Growth Over Time
PACS Growth Over Time “PACS Poised to Continue Leading Industry Consolidation (2) ze" Significant Potential for Consolidation | 56 | 89% it Other Operators Number of Facilities Operated 208 Cumulative Facility Count ~15,000 SNF Facilities in, 150 the US 138 220 Founded in Southern Californi 61 65 49
Slide 7: Operational Improvements Flywheel
Financial improvements Implement & Superior decentralized unit economics leadership model Drive Better Higher Revenue PPD Flywheel effect drives Patient Care improved clinical outcomes, Operat nal impr superior financial results and ements creates a virtuous cycle io centered around delivering the b
Slide 8: Our Focus on Quality Drives Consistent and Differentiated Results
Our Focus on Quality Drives Consistent and Differentiated Results ::pacs PACS Has a Proven Track Record in Improving Facility QM Rating to 4 or 5 Stars (0 crete Levers ed at Improving Quality 79.7% facilities C1) Highly coordinated care with 4 or 5 Stars 3.5x increase in 4- and 5-Star facilities 136
Slide 9: Our Local CEOs and Their Teams Run our Facilities
Our Local CEOs and Their Teams Run our Facilities Autonomously with Full Support from Regional Teams PACS. =PACS Post Acute Services ) Our Regional Teams “PACS | Facility administrator (“Local CEO”) Each region has a PACS Services Regional Vice President Interdisciplinary Team (“IDT”) (“RVP") and cr
Slide 10: Administrators and Leadership
Administrators and Leadership PACS Our Leaders Are Highly Motivated and Entrepreneurial Our Aligned Incentive Structure is Attractive & Empowering Administrators Clinicians oes are * Recent college graduates and * Training & tuition support for PAC S A Pe BEST COMPANIES fy 4 We Attract, Train and Re
Slide 11: Maturing Cohorts of Facilities
Maturing Cohorts of Facilities Facilities & Bed Count” 24,483 22,950 ~ 16,34) 24 208 150 cr * 138 n 84 * FY 2021 FY 2022 FY 2023 Q2 2024 facilities (0-18 months since acquisition) Total SNF Bed Count facilities (18-36 months since acquisition) “Mature” facilities (6+ months since acquisition) () Ski
Slide 12: Historical Improvement in Occupancy Rate and QM Star Rating
Historical Improvement in Occupancy Rate and QM Star Rating Facilities Acquired and Matured Since 2018 PACS Average Facility Occupancy Rate from “New” to “Mature” { 19% increase in 905% occupancy rate 875% 86.6% 89.6% 83.6% 83.1% 83.1% 85.7% Tee : . B16% 80.79% 82.8% uJ i New az G3 Qa (or) Ramping Q
Slide 13: We Strategically Own and Acquire Real Estate
We Strategically Own and Acquire Real Estate ©PAcs lock Value Throt Roadmap to erational and Financial Improvements + . Improve local leadership, Acquire underperforming . . long-term custodial care quality, and operational “Unlock” value by exercising facili performance real estate purchase options
Slide 14: Historical Performance
Historical Performance Six months ending June 30, 2024 Total Revenue ($ in millions) $3,111 $2,422 $1,917 $1,167 Q2: $982 Q1: $935 FY 2021 FY 2022 FY 2023 1H 2024 $104.1 Fy 2021 PACS Adjusted EBITDA ($ in millions) ° $255.5 FY 2022 Note: Financials shown are on afully consolidated basis, including O
Slide 15: Quarterly Performance by Cohort
Quarterly Performance by Cohort “ PACS Quarter ending June 30, 2024 Skilled Patient Revenue ($ in millions) Average Medicare Revenue $PPD Ramping Mature Ramping Mature Occupancy Skilled Days 94.4% 94.2% 805,472 [eed] “ Ramping, Mature New Ramping, Mature “New” facilities (0-18 months since acquisiti
Slide 16: Financial Snapshot and Business Updates
AND ala’ ANS on Financial Snapshot and Business Updates PACS Financial Snapshot as of 06/30/24 Last Twelve Months Revenue $3.56B Last Twelve Months Adj. EBITDA Ing illed nursing across 8 Scie including 5 new states $3 03 rm} M ised $87.7M in real estate purchase options o Acquired 2 skilled nursing
Slide 17: 2024 Guidance
2024 Guidance > §3.85Bto $370Mto a $3.95B $380M ~29 over 2023 g ‘4 Annual Revenue Adj. EBITDA Revenue Growth to Midpoint () Areconeiliation of Adjusted EBITDA guidance to Net Loss on a forward-1ooking basis cannot be provided without unreasonable efforts, as the Company is unable to provide reconcil
Slide 18: Michelle Lewis Accounting Services, PLLC
• • • • • • • • • • • • • • • • • • Michelle Lewis Accounting Services, PLLC • • • • • •
Slide 19: Appendix
Slide 20: Post-Acute Continuum of Care
4A’ At A’ ee r\ ‘ye 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 + > Pp oO a ¢€ Pant Ox Short-Term Acute Long-Term Acute Inpatient Transitional Care & Assisted Living / Home Health / Care Hospita
Slide 21: Case Study: Kansas Acquisition
Case Study: Kansas Acquisition Transaction Overview + OndJuly 15%, PACS acquired 3 additional skilled nursing facilities in Kansas * The facilities located in Wichita, Topeka, and Overland Park collectively comprise 378 skilled nursing beds + These 3 facilities are leased from third-party landlord,
Slide 22: Case Study: Prestige Acquisition
Case Study: Prestige Acquisition “’ Transaction Overview + On May 224, PACS announced the agreement to acquire 53 skilled nursing and independent living facilities across 8 states, including 5 new states (Oregon, Washington, Idaho, Alaska and Montana) from Prestige + PACS will also invest approximat
Slide 23: Balance Sheet
Balance Sheet June 30, 2024 December 31, 2023 ‘ASSETS ‘Cash and cash equivalents S734 S734 Accounts receivable, net 6106 5478 ‘Other receivables 504 523 Prepaid expenses and other current assets 662 43.6 Total current assets 300.6 722.1 Property and Equipment, Net 763.9 S77S Operating lease right-of
Slide 24: Income Statement
Income Statement “PACS a Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Revenue Patient and resident service revenue sexi $7605 S19157 $1,468.2 Other revenue 04 02 09 09 Total Revenue $981.8 $760.7 $1,916.6 $1,469.1 Operating Expenses Cost of services 762.1 5907 1498.1 1,1
Slide 25: Summary of Cash Flow
Summary of Cash Flow (S in millions) Net Cash provided by (used) Operating activities 93.6 58.2 Investing activities “ (239.6) (67.3) Financing activities 105.2 8.6 Cash at Teac of Period 118.7 98.2 ($35.0 milion invested from captive insurance into investment grade bond mutual funds in the six mont
Slide 26: Reconciliation of Net Income to Adjusted EBITDA and Adjusted EBITDAR
Reconciliation of Net Income to Adjusted “PACS EBITDA and Adjusted EBITDAR Symons Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Net (loss) income ($10.9) $212 $38.2 $58.8 Less: Net income attributable to noncontrolling interest 0.0 00 0.0 0.0 Add: Interest expense 92 153
Slide 27: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted “PACS EBITDA cu December 3 2023 2022 2021 Net income $129 $150.5 $47.9 Less: net income attributable to noncontrolling interest 0.0 0.0 0.0 Add: interest expense 49.9 25.5 53 Provision for income taxes 444 565 335 Depreciation and amortization 25.7 22.4 72 EB
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