LHC (LHCG) 5 Aug 182018 Q2 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the LHC Group Second Quarter 2018 Earnings Conference Call. At this time all participants are in a listen only mode. [Operator Instructions] Later we will conduct a question and answer session and instructions will follow at that time.

As a reminder, today’s conference is being recorded. I’d now like to introduce your host for today’s conference, Mr. President Vice Senior Elliott, of Finance. Eric go please ahead. Sir,

of to Thank Don quarter conference earnings you And, may a ended If copy last everyone you, welcome LHC copy received call have with XX, obtain Everyone Group’s earnings not, XXXX. release night. Liz. June should our along Chief for a the second a hear from and Keith other key and President Group Financial we’ll LHC Stelly, Josh industry on Chief Chairman Operating moment, LHC and Executive Chief information about our Officer; Proffitt, website. Officer In Group. and Myers, Officer; of

and Before remind our not Reform because statements update in include, in reflect press regarding included forward-looking number LHC’s Actual provided of those to, would events. projected for the within SEC to quarterly have beyond. that, in in constitute Act. this Group this call These factors on XXXX which information subsequent comments and materially from filings. may of I Litigation statements forward-looking shall could no like of everyone a that results annual limited and our Securities are uncertainties, obligation statements the release and but financial the are differ to conference risk results call to our meaning statements discussed Private

Now the Keith and Chairman to Myers. I’m introduce pleased CEO of Group, LHC

Thank everyone. and you, morning, good Eric,

partnering industry-leading growth and to the the in has quarter of to second deploy health performance to for strong growth commitment and progress our as with hospitals in of integration decades efficiency post-merger making quality, systems. pleased Almost we companywide and that success the very are are Family led with We same and we with locations,

this We’ve growth of excellence in as acquisitions an earnings a is growth national of related opportunities commitment strong increasing track deliver level organically serve. our scale, commitment measurable continue families the to demonstrate and ever, all and delivering company-wide leverage to platform is build care. our this on ventures. pipeline capitalizing integration across and operational ever as as our to scale number as importantly, have clinical is this growth resulting organic care and integration to our for partners, for we on communities growing service for we in-home quality, fronts. extended industry-leading to national multiple results activity of and to of our strategy that joint and expectations well The payers, to significant privileged are our Berkeley cultures lines and overlap of focused transaction strong work great have exceeding months-long the opportunities expertise Our support as a that of Since Almost other are with this date Research our delivering and on process. The most we year and advance value to overall our we partners, on The earlier clinical the health Group with to created us did privileged foundation exceptional footprints for serve in by and through shared founding, are small those patients, Family. we our existing amount on

are We surprises. into haven’t on any and run track

share correlation we’re ability a moving quality consistently patient combined our admissions job organic with satisfaction. among our making this highest have to will XXXX commitment As drive attention do our the penetration. Quality leverage a much happen. And all best are the have doubt and us There mention of focus our are in the market to into, six multiple greatly no but disciplines and all later, share patient market that detail trumps each have and today, on opportunities there and of to to anchor satisfaction deliver to our with improvement typical those culture work sales definite we and we to enhanced along. growth delivering direct successful quality is X record the the the in There going distractions willingness leaders from in and well patient reach integrations. a we’ve to continue and go platform, across in Josh front satisfaction our are ourselves of expanded opportunity right these markets all we community good between if large enough We’ve size, industry-leading We instilling we this we enables That’s Don stress geographic on and I synergies market. generate as do primary and selecting seen service how throughout and levers company. with additional of is Almost strategy. to in quality line We’ll across to great and what to That operations Family behind detail growth and more can’t practices every sales same without as after serve. there’s growth collaborate Family. attention have pillars and to disciplined secret we shown great diversification. continual priority track Almost excellence we share XXXX, toward a a is we

differentiators by service offering under systems alternative our Technology of now Officer, arrangements for in care care or and which markets of and William release. we practitioners partner with [indiscernible] strategy. structures be market-by-market our someone Family who recently We opportunities, into just more only payment Bruce have you intend us prepared through strategy, also his nurse the Yarmuth co-location create implement our and technology-enabled momentum management, joint are share -- will in of after and multiple start segment is hospitals partners, through assessment to managed better aggressively our PS leading many engagement, include choice care be value We our continue our is payers, models including joint Chief for expanding patients models, leadership, who primarily from allow And see Greenstein earnings of strategy. reporting, to health and for creating By We’ll because Innovation’s to very assessments limited. time line to partnerships a on risk-based going course, tap us potential the HCI Bruce’s that by we begun to services energy the Almost the value-based with separate fully and core as partnership of focus home development country. and business we’ve care in ACO The who segment and growth coordination, Healthcare of successful wholly-owned service venture the managed leverage establishing the and created and, head venture that helps to investing pursuing our our the leadership. Innovation primary we interact have across homebound as as through under develop adding market

with pipeline robust small as joint mostly comprised large ventures both that’s as systems a ever, health as well of as have We and individual hospitals.

to opportunities. strategic market to time, any are have we in And very want the picking into. move been given at XX We and XX that different selective we analyzing

and in value are the yesterday we Region and right we’ve large create there, lot the Reno such but substantial of St. as transactions that smaller Missouri, in experience Some have morning. on a closed which Capital locations Mary’s and in again, and proven a time quite we announced

has of and venture joint continue a a growing attention powder partner. dry particular lot substantial base growth of LifePoint. have and this gotten in to that’s One We of late,

reimbursement programs care and then lobbying been never opportunity pronouncements. be topic done The I’d to HHGM did expansion constructive cover like in Patient-Driven on government industry that there conducive The is in opportunity care work lot we likely Budget the patient-preferred a the are quality is year, and of In briefly health a payers, very in the even and what our of January continue more, have call be in than currently home has be role delivering November, of mandates last expand ones will, the anticipate we and care is Model, to of July for to like is pipeline, great be last outcomes proposal unlike health course, are expected that One a us greater. expand care. health cost with continue effort in already been strong or May, to partnership. note, will positive regulatory the to the of we effort, industry. efforts our proving with that The health involved to result manner. on by with to the and of Grouping behalf our was we -- significant have in LifePoint CMS, Balanced a The to in acquisition is and made proposal advocacy addition and with health institutional home build the between but more to the messaging growth-oriented home lower course, than for upon joint XXXX ruling managed-care largest, at from now front. The PDGM, we be that unified of to work on industry a of evaluating, heavily in-home to last much in its X the the changes growth year. in-home closed Act footprint in integrated would venture there a LifePoint’s environment On to will ever and into means and final as CMS Since the budget-neutral last any XXXX. implemented few

comprehensive demand remain for and our fulfill proven prepared to uniquely growing health in-home As and from proven, has the history care health partner. an well systems experienced integrated we hospitals

throughout being needs that be there that committed to organization a the counted are those we of communities XX/X, serve on to XXX, to country. healthcare and always in never privilege are to We be sleeps can our meet

to responsibility. of deliver personnel and on support this efforts consistently administrative of able grateful all areas dedication exceptional exceed our are many commitment, their respective clinicians I you. only so We because Thank am the expectations and who in to of and honor you. of consistently

extra do communities our all to the promise. we many deliver Our is for family mile by are serve. on privileged to each every you and for LHC the families Thank you personal your day to blessed commitment and patients, Group go that

here’s our Josh? provide color our some and on Josh to Now financial for guidance results XXXX.

Thank and joining good for Keith, our all call. everyone. you morning, Thanks,

merger. they do and to the to quality like families to to that able for members exceptional service of teams patients, to To saying you star prepared like home professionals worked our I’d and LHC how we each thank day. all, you a Group and would we ratings that so the Family Almost do industry-leading due much satisfaction second big quarter support provide special. and Every and family clinical remarks the what results, to and always, ensure As you are also blessed care With very is the been for. appreciate tirelessly and that have I transition I heartfelt makes all thank a quality from every our my our office that share smooth all takeaways. patient to here have from are financial CMS, high quarter, to our this new our you by regard with communities family who begin

$X service $X.XX tax same $X income to a to the expenses adjusted net of serving XXXX. or and First, that million are a deductible revenue of in increase and income the to certain related increased net after-tax million income effect the net and Almost tax. associated closure, transaction the and approximately transaction costs record aggregate deal year. consists share. and consolidation X to lease hospitals costs, relocations X after Texas That’s adjustment XX% closure $XXX million merger over compared fees, expenses; approximately transaction-related tax share, $X.XX termination costs which Adjusted following. charges The to period expenses per prior intangible in diluted consolidation income relocation the community These items expenses and per million and not fees, transition-related like long-term due the excludes adjustments acute associated the of in X diluted amount of of of which care with was million, closures increased other Texas. for X payments, Family rural severance other LTACH include Beaumont, LTACHs $X.X transition of stay-on impairments agencies or the of $X.X consultant home after health a of cost includes legal of and million and bonuses and $X.X XXX% with

higher capacity X also facilities the we the patients other into LTACHs during the and host quarter relocated new our of expect host referral hospitals We of ICU and legacy sources. with collaboration where hospital benefits X from better

deductible transaction are Lastly, related to not Family certain our due effective increased that the tax Almost to rate transaction. XX.X% deal to and costs

tax due effective increase same-store as normalized a X.X% period of our anticipate growth acuity compared grew year. rate health to of in in admissions and the X% continue XX% to the to health quarter We patient Home home in revenue same-store in quarter in to second our XX%. last same the an

consolidated Now consolidated was for the in the in On gross transaction-related margins. to XX.X% gross to the last just was increase margin was expenses XX.X% quarter compared second margins year. to costs XX.X% health XX.X% year. gross basis, XX.X% which while LHC compared moving on our margin margin last stand-alone year. as last a the Adjusting an our other Group quarter and for is gross described, and Home to period same XX.X% quarter, compared for were second the I

XX.X% last XX.X% revenue year. last to that to margin for of important for from year XX.X% and up stand-alone EBITDA XX.X%, Group XX.X% in note of period quarter the to quarter, same was quarter up it’s the quarter, home However, X.X% the gross are quarter. the in up health last sequentially from up up second LHC of margins sequentially in year, the LHC hospice from XX.X% in XXXX. the EBITDA last standalone quarter Group XX.X% health again, gross sequentially last adjusted the last margins and Hospice XX.X% quarter. from the up year’s of margins LHC from the XX.X% XX.X% compare again the to the in up are was margin last of XX.X% basis, and from up stand-alone XX.X% to second On adjusted quarter a quarter. second compared Home

Moving to hospice. for EBITDA on

adjusted Our sequentially from X.X%, the X.X% and it quarter. the the same was year margin last quarter. which the last as year up from was stand-alone second second EBITDA was X.X% quarter was last up in for LHC X.X%, the

We the negative year. positive and service our in a this continue X.X% margin to compared are pleased for came expected at line, with The see as to facility-based EBITDA great hospice in quarter last trajectory. X.X% improvement

described basis, same in that the facility-based to last and compared the up LHC cost the is X.X% from is first the LTACHs in last was X.X% period I that the an year the quarter. the and to and the is was Group million EBITDA Adjusted margin others closing was EBITDA which quarter the the X.X% quarter. earlier. $X.X community-based for margin included X second in from line in segment year. segment and quarter the standalone margin X.X% is X.X%, up Home for X last year as X.X% X.X% quarter, However, X% which associated On sequentially relocation the for for the from adjusted up with while in last the EBITDA margin of of in up that with our quarter sequentially second

business. segments see illustrated just by Family improved As in breakdowns Almost I margins the definitely and that we across discussed, upside margins all the the opportunity legacy of

a stability, with we the expansion smooth a expect focus do segments business the head to been, first post-closing growth XXXX. the operational our During of the but integration quarter see all back-office to and we have margin be, on throughout benefits continue of from priorities XXXX, and into and across balance as along

for acquisitions. Now update on an our XXXX

We to reported, and the quarter, and of deals XX.X% very to sequential quarter gross XX% came in each in previously up quarter in continue XX.X% the see of up they were, the are this first XX.X% year, in the which year, with to year, in at quarter third last the quarter. in margin improvement as fourth this last for the we pleased brought consolidated

administrative Moving expense. on and to general

the our XX.X% adjusted to transaction-related consolidated year. and XX% second to QX as of percent was same Our a compared as expense down or G&A the XXX revenue period Adjusting last percent of reduction costs, G&A from of revenue as quarter XX.X% G&A other basis was expense last for year. a for revenue of to in a point

bad implicit to on Moving concessions. or debt price

increase the Free quarter revenue price our Our LHC revenue X.X% negative Group in stand-alone of concession last which the as Family to with was million the outlays X% second represented by was to range reduction cash quarter new related within in the in year. approximately XX.X XX compared million second for an in the that receivable accounts transaction X.X%, was year. cash implicit renewals Almost quarter, in connection million, the concessions of expected and price investments IT an X.X flow to and of and is caused second implicit increase from in all to related insurance merger.

described quarter. the cash have that for and costs flow million would earlier, transaction I’ve been free the positive items a those XX.X Excluding

guidance. Turning now annual to our

issued our on reaffirming XXXX, X. for are We back fiscal year was which May guidance

of revenue service the net the and diluted the expect quarter. X.XX synergies range adjusted the to be transaction earnings be company guidance with the million of in to realized XX of share with range assumes to to achieve which realized one, expects second $X.XX. the XXXX, million X a following: billion billion been to has to of $X.XX XX through pretax continue We in approximately X total in This X.XX connection in million Almost per million to in Family

Second, of XX the tax of to rate million weighted from approximately and which an and of effective average diluted XX% the for year. the lastly, Tax shares reflects estimated of positive passage XX%, the Act XXXX; Jobs Cuts impact

realized a synergies regard further Let in me quarter. the million to and comment pause little the with X of second

the to provided year. with factored of $XX was synergies was this of First in to in realized to number and million the prior in range synergies realized QX. our and do QX earlier million to higher our that all, to closing escalate we a expect amount expectations we in transaction $X in line Also, continue

guidance. to back Now

reimbursement necessary. the estimating to any; opened; if the locations, Family its take made; not if novo future of account legal if expenses, in difficulty the into changes, diluted future net Almost cost for turn future Due concludes That we of do acquisitions, happy questions de transaction to adjusted with GAAP prepared if on impact or session. income I’m and ranges guidance call the Our Q&A impact per pleased now are the my remarks, to XXXX. income further Don. guidance providing to any to and net answer I during am address share, only over and the

everyone. And Josh. morning, you, good Thank

far. momentum our would We year up make our I, thank family. the to like in a year and what the who established team members have too, strong so Goodness, Group maintained LHC earlier

I’ll were over up drilling Now results, X.X% same organic well. these year, second service, into up prior In the period with admissions quarter down our our this health. with as begin admissions among home acuity

Now that more LHC this a at look instructive same-store quarter. each, although and bit it’s Almost Family are combined, separate admissions to for

STAR concurrent Quality organic of a excelled I’m it’s is, indeed, X.X%, while LHC, Medicare most in patient For assets. was a And and increase across same-store that all management primary of And upon that, acquisitions, become number nonorganic X.X% quality driver Combined were were to CMS and of same-store as care the merged monitoring acquired growth all and X.X%. agencies, norm X.X%. recent has our both total up admissions. that same-store and merged report with hold programmatic Strong, pleased differentiator. this same-store was clearly detail, build will up structural admissions but little a leads with and and admissions that we again, and our we for more in take XX% changes us one Medicare for satisfaction. To the and to been, ratings recent underscore admissions.

of of a a basis X.XX, rating, quality that quality patient greater, LHC same-store care, and produced On for of we stand-alone have stars the X health score our for is locations satisfaction, April X.XX a an XX%. last XX% LHC home For while that number score for over X.XX within favorably is This average excluding been with X from the national improvement of has recent X.XX a quarters. the range the to acquisitions, compares release. for the which report, July or

X.XX most the patient of as Our satisfaction a of X.XX. industry STAR to recent rating score was average compared

us report. a is score as this respectively, X.XX the one Again, and the hospice we patient stars, the organic allows compelling you improvement quarter and company still combined For the fourth XXXX. their with since ahead, our point in in team. our do we year and more April not most X.XX to changing X.X% in X.XX the to recent at to this bring mark now quarter. evident quarterly of growth vital release QX are expect our is In talked more our make agencies, last for we operational to pleased informed scores this these but XXX quality a the could to commitment so. continuum improvement, of full and about rating and structuring processes compares sat the improvements and up There’s newer report from Hospice we work segment, X% in opportunities STAR continue merged hit last that margin the as basis to from is for the that I our our have with keep as excellence of be X.XX, what we’ll LHC, we

historically you Next, release what Family called what have that we services, earnings care. Group in noticed called Almost community-based have personal historically renamed may LHC and our

across combined allow and a home naming services. and it service definition services the providers skilled offerings CMS us these we refer non-skilled follows our build as to for network out segment, as This country. to from offer that in-home will Now ranging broaden we the community-based to

come integration May joint-venture these on JV the Erlanger, with seize XXXX, along our the fundamentals we front, allowing entirely venture in fully on joint financial supporting model, Along integration. with network and St. a of X, of health LifePoint, Mary’s December with and Next, focus ventures announced. we just is is standpoint, a way, with Sticking completed expansion joint From on Keith ahead Baptist plan, the seamless X great systems. I’ll health as we partnering touch the so both integrated, opportunities which with CHRISTUS the quality are that we improvement. and the will now mentioned,

that during so to specifics, relates it recent course, Q&A. merger, be me addressed There As say sort of let involved. can much the of is any

our focused that seeing integration is collective plan in planning simply clearly show sets these improvement key The year, of is plans areas but the our during as sincere of alongside Group on on detail we’re great company into and far. such up better thus positions go is growth, my to nice very is In track. than LHC infrastructure assigned, do you efforts the and fellow BRG. right this a already beyond. half merger this in even and prepared several the send on say support commentaries, listening at news members, and everyone rather well place, back and XXXX Leadership good to team its call I’ll family created for quality up news thank improvement, margin is that the in thank open I floor morning and this questions. also Liz, a all we’re now ready for up closing, So

Instructions] Ellich Our line with the Kevin comes of [Operator from question first Craig-Hallum.

regulatory doing need what Keith, industry health for just us you’re guess, and detail how home PDGM a get not of first can of as I you you update, the but little the changes XXXX. done is all, give to thanks viewing more for kind whatever bit in

NOC comments in of all state Yes, working submit with we Well, sure. CMS. and collaboration through the are and in partnership association the to to preparing course, formal

the I’m to the we’re advance and pursuing having HHS. a also with CMS and legislation efforts and with encouraged tone it. Plan successful. comments hill our aren’t -- as and those we’re But on B dialogue encouraged with We’re of the

but just seated in its form, morning really afternoon, encouraged XX Washington, there X D.C. so current I’m a in I’m it. that, I yesterday was think they maybe ago. that even level even about from ago, feel rule the comments. We in are so good table, I years improve have that. us fresh not to us I at years just by genuinely wasn’t up Washington yesterday opportunities are There’s it. are there really, night that nothing Baltimore keeps really And to and back a listening at these

and then, expansion LifePoint guess, in What’s the margin talked the seen the acquisitions behind And main drivers the the improvement real that XXXX success you’re we’ve I been seeing about. gross that JV and Don there? nice

This is Don.

portfolio such but first the think as LifePoint as is across it that I thing the a announced thing the one, JV was found went that LifePoint. we multitude we was of

So the in a model, and in course, margin. of a predictive execute vernacular the consistent when getting line. in us model, in top the operate gave consistently it the really force, it we you concurrently way becomes that sales boost But the manage then, pretty and

would to think be the not is were that that longer. concepts ventures in the the I last concurrent team to little poised I whereas other they in ready. management, LifePoint managing some may really joint of a offer that -- and thing of P&L bit sometimes and that take They metrics, speed is the the understood up realm, us

a So see readiness they guess, big were we told, all little for why I more than bit for this and the so such a that’s poised a turnaround happened asset. little bit quicker

the I agencies plan I STAR quality but improve really improvement ratings, and quality ratings guess, what’s Family? scoring you, from and your nice acquired on STAR Almost to since have Don, the the And for

sales, direct that way the to outside for presidents it ideas Family responsibility. division thoughts structurally are for better a go. there. sales and this of leg, operation’s structure. improvement taking already know Almost were and different line ask meaning the that great the And you We’ve a done what, well improvement starts a as that to bit, It Almost structure, quality question. operations team of team the found in as We quality. had In the that. although with It’s you We’ve jump both didn’t performance doing Family under-tucked is I’ll and there been

So the things are us that’s able betterment. going anchor to to prepare and that statistically to execute some correlated be what of to we duties call these the

Homecare in sales, Homebase, even the then in improve I the as has that X we start into and And converting months. the X specific growing unless quality through to that putting before did similar could we question. ready so go faster And the model that so won’t to somebody it’s got next we a

then So last data the is about using management. for comment concurrent that the

look SHP don’t that in to the we people keep going some created managing ground. -- this many that trend internally Use that the were is so business. released lose today, the and and today that key episodes at CMS reporting, your So you we’ve ratings you of July. things that or announced concurrently to The manage don’t

at improvement are both the flows that process and So those the are level, two proprietary things: that the a high put, and not. we structural

Let real Josh for me quick. sneak one in

and, with the is operating turned. you income LTACHs, announced Or a the that looks that have it on there do with segment. like closures and of On the Does something consolidation but to guess, merger? couple going profitability else I

we’re has nothing do Kevin. adjusting to put last into we to just all get comment bear and I lot Yes, and which opportunity when see also starting really model we that, and reimbursement them year really merger, we’re seeing. ICU the of place the brought to percentages out in new had to we with those, is that improve some CHRISTUS It better and LTACHs, things it operationalize would the of the the fruit. a margins

LTACHs So can performing our if well and the adjusted right the relos, the really in you as the numbers, around are it wasn’t for closures see now. noise

comes question RBC Morgan Capital Our from with Frank next Markets.

Your line is open.

And timing either be have it, kind margins the in the really, there a on markets? that of get in color maybe their around maybe RegionalCare in in transaction terms secondly, LifePoint the how of both in are give but more may to or RegionalCare to this with some overlapping and hoping milestones out? yes, can kind home expected in of opportunity alluded you to line was time date? expansion already of Capella, maybe us you plays And health improvement Capella AFAM you additional some just pending to what with portfolio, I relation this then

take is and Keith point, last the well. to jump first kick in this piece Frank, it I’ll the over Josh. Yes, on Don to then as and one

reviews, been that smooth in are about, eagerness, the to it would a business operations really four division tools As or a utilizing improvement would the MORs, with and as my Family, wanting manage they’re toward margins reporting remarks, we And the on, the far of I little you receptiveness our Almost spoke incremental operation we’ve ensuring sure readiness, they’re and you utilize Almost than expectations dashboards as colleagues the president kind which some that period-over-period expect, been now differently ensuring monthly concurrently tell a their prepared do, really Family. their for we’ve bit in to for in the new the they that of of mentioned for Don trajectory, the positive growth it. focusing transition, hungry as the this, in concurrent I cycles and running of past through we the some stable. making and had from

we that do We’re mentioned, at is actually and smoothly pace the first thing that to business. the grow which ensure I integrate keeping a

there. I mean, that’s really opportunity real in think I what see to of back you’ll So XXXX going year, mean the some there’s about excited some because for but I’m improvement the and incremental half beyond

too can a that work home-office in that we’re qualified put And people. we but other they is basis high. we’re they now some as excited allocation, about I’ll of our drag going say cost not we not when away Frank, is the the about such is last to And too fourth alone, half back go really on net even we’ll that this sales that Don. XXX They many the believe component improvement add many we the ready that have quarter. not too as how any people percent as into producing just then things our of see PlayMaker. before the much to start It’s revenue because is have on margin right is which we points know elimination

first give So the but that on we G&A I takes longer, and to little are Josh. really shot about the would half, the The two so you in SWB see mature the that of agree those going [indiscernible] look bit And little year a and quarter recognized I with Capella. fully out jump the back working a in guess, LifePoint Keith, I’ll I us next are beyond. and talk to

Yes.

see Capella LifePoint So we announcement. were delighted the track to

CEO Regional. with as past a Don So was system. there, may not of colleague we’ve in Rash worked, former you in is know, Marty discussions the a their had Don.

never had anywhere. We So we discussions. got really

they think they in directionally a something. were interested I just toward were distracted, bit moving

move footprint. or leadership in huge us more of Capella still for Regional quickly to forward is a announced, take the and the the opportunities in advantage combined going think got So when this being they’re David I positive to organization because role Bill of the

Matt Blair. Our next comes question from with William Larew

I the timing of of some ask wanted AFAM. to about the with synergies

back was with good must throughout That the of sight for? you the in that you’re sense ratable track and back you the a half you’re incorrectly year? assumed what to million to have what synergies of going perhaps half. line mentioned Can us here seeing in mean on pretty You $X give those I your What a schedule the [indiscernible] a occurs on year. what’s the projecting more to be bit are

million, we somewhere number. it so you. QX I’ll between with mean, spitballing. or or say was not call a million which got probably would million. for nugget want go still in And that’s somewhere plan the June at team QX $X the in million I pretty QX. of feel detailed million I just a $X.X a in pretty to on let of $XX confident is so that million significant to $X then middle wanted in executing to back on million very We’re $X and million million $X.X there’s QX line that line to was give if to to between get anticipating we $X $X of and in $X.X the why a are of back-office you upon, plan. number million but and and QX, million million around But sure $X One make remarks range I prepared that my we $XX to $XX members the around I sight $X you the XX. million good got pretty of quarter in There

So I to with go dollar quantify XXth. QX, we in not in help on figures, but synergy that in were QX. and clarity they it June needed obviously already can let them but Their see a transition the

about feel good the I really So numbers.

Keith, I a sounds is the it you just on. all focusing going perhaps wanted from like interesting strategy to that get revenue your now some have perspective on incorporating Obviously, standpoint, HCI over time, Bruce isn’t broader and meaningful ideas. right be to but what

Yes.

competencies management of we providers. in I the HCI, within care company skill set Imperium, or development business, models. all that alternative there’s of the core ACOs models use value-based value-based and only structure ACO the will managed in at arrangements And in that with that’s we the expand but our So think part same to the payment not same approaches huge opportunity

uniquely set that our progress in experience Bruce been with accelerate So comes to prepared skill has and area. that

did a of maybe a below. bit the X% And here want Okay. in that why year. I is number just And an achievable could in understand us number changes to of know hospice. ask about [indiscernible] you’re Don, I help to made obviously the you but still QX, back comfortable you X% half

Yes.

changes that made, increase home specifically the force sales health side. the With we the we we did as on didn’t

we up only the account beginning three legs we’re from the of Specifically, got under us. executives operational year until back our

between operational of our those end year markets, are share planned January specific and another of we next XX June the and have plans X that XX planned we very already. that, market the readiness. this And Now the and and now XX have year to between

and into entire in do leader. for I now internally really the with even And it we last not of nugget, is pleased. number I our So locations book example, of cautioned -- transparent and two extremely two in business my our everyone that progress split I’m the have really call And that separate yes, did. last we separate so footprint sales was divisions, the

X We’re right for leader the in our final second interviews two. those now, sales of

really quarter. we as do this than people, really, division the how attribute poised next we ever is and forward got feel know year. results go fourth good as we so trail And So turn I we to it more to before into that the will into the

comes Gajuk America. with Our of Joanna from next Bank question

a In the terms performance, home talk we about of that. can just health little bit

the about to X% it’s right? you organic to continues But talked for the -- year. in X%, so, growth X% past, the be And quite impressive the

year? So of again -- should going to beat you that assume are kind be that this number

AFAM into on that, part Well, exceed business. Florida’s we but remember, the Joanna, we bringing going of could of seasonality, when book especially we’re hardest

because for right right -- So to watch, don’t AFAM know I -- you getting on too Florida to the I I’d caution ahead on of to the our guide now, against far what of now. be candid, Florida’s that

and come range. that, of to to want go because we that So -- higher X% didn’t I out than want X% didn’t

the store you same up Medicare, No, that makes or said sense. And Medicare was X% then so. for the

growing. non-Medicare business like the sounds So

of plan? Or contracts? us great. color us shifting just an be Any can give the Advantage more progress stand episodic-based would on you plans, the with on there at contracts? where So can you MA you Medicare give update to risk-based Any least

free flow Josh that anyone go of and we mix and said very right specificity right that. a Well, about which to Josh towards on will just I think we you we strategic But I that, ones that’s we But I give be It’s year at Josh? those some extremely disparity. ago want excited don’t and of gear will have think out a planned and [indiscernible] now. on it’s to is to what allude am to that want were unplanned where selection going we this take. at time, that to

great vantage And Don, it’s couple Joanna, And attack a Yes. it points. question. lead great a from in. I’ll

and business. just the First foremost, core on

You models? at and asked and and of of anything we upside are to in is before. answer are a place got we’ve conversation a at we continue short never any seen in The is place few payers those there the tell seeing engage I’ll you we have a innovative, having level risk-based conversations. table we’ve receptiveness the value the pilots the seat

to not we’re team operations some seen company something turn in entire just intentionality any want shift as within to can intentional spoke efficiencies years, not of the last standpoint. that kind it. you It’s from of about how going mix across our confident greater applaud throughput there we’ve the X.X about, a also back-office the just of that the that our because it’s Don over prove able we’re the I But value incremental very some really I’m that But the to yet pilots then in scale. So into future. large be

than better ever are before. collections Our

Our our has going improved. and in DSOs debt business, bad down are so that

We have seen rates. in improvement a little the bit

negotiating the visit So up gone have have our great rates doing a cost contracts per our direct team and and down. of is gone job year-over-year, our

course that the going value-based throughout the we arrangements marginalizing we while we’re to the of toward So business into. these and the some of year better are enter look future

already just That’s final And the terms in great appreciate proposal, do? come rule how are before proposed you was looks you on you I or also out what Are waiting Any plan can of than clarify. And to you comments to prepare? PDGM you much of starting color. obviously that year. the it then last better the comments for kind

be be They So prior January on where admitted fact with to you XXXX, have system. will have under the going under will there will of paid you, situation X of given X, January it’s right? prior to patients that the after the admitted system will XXXX of systems those will kind effective the because stay and be X then January some current

that? guys of about you because disruption of preparing Are for sort some it? thinking create that you does So that? Are

Okay, thanks, Joanna.

essentially currently how hear the is So in One I’m I going as think got rule to it would that the in the be half current form that second. asking January as if XXXX. disruptive I’ll will I questions. Don implemented X you’re take its and proposed, is distinct first -- take

other going lead that is on that, disruptive management issues, disease the is Keith here patient nonevent rule, because with since want What don’t important to on define underscore to it’s on I said we of I you how Joanna, our plan been regardless non-issue, a that’s guess, say the you and one with but is the a to coincide the would see care plans of my we years, to processes. I’ve to care got are these I for in of stretch, XX what that, we’ve accordingly. want side, do, also Well, caution answer think I when that

going going are saturated be payment outcomes choose. still whatever to or expected methodology they’re whether it’s Our of to kind XXP

So that the any provide while have be right and disruptive don’t. it’s in just going I don’t obviously, changes offsets I we operational would coincide But with I way now now, can’t we to care to patients. it’s say score that it. right think to really way totally the

it. clarify Maybe this will help

if X.X%, be indicates but are current the our that operations So [indiscernible], would us would were they Eric basket. implemented our as impact base to negative X.X%, offset then now a that be today, analysis our with it by under a patient market

If could a should night say that higher at Joanna. good that its that for up as but I it make current reason, it that’s at it’s level, So form, be, as be, even when us in sense. not something it’s keeping not

I But through earlier any your change to this comments planning year? way you in terms to some are how to operate guess, work to it plans you waiting of and will see Are of you, next making you sort already Or final start under start when it’s the or more year? current then reg model? you

middle-of-the-road for a approach approach. the a LHC’s benefit so to long that been has talk about Yes, let’s minute.

had target the group of Tauzin So specific would don’t one ‘XXs, to those because groups independent, and Breaux reduce to margins board board and back is two tell the on I’ve careful organization eventually not they’ll in focusing any former our than payers will start we to our to the others. government and certain along Chairman lead way, in any have better costs opportunities members, rebound. mentors groups member, patient Senator that they allow me be certain identify

all home hit, any the average from health, mirrors health when which they will, distribution area. home us you beneficiaries patient protects target disproportionate our that an if receive So having distribution of

model in but X is, this So the of not is risk in another to group there’s to a patients don’t what that patients, of means also the lot impact opportunity -- of on less we is focusing pivot from group situation. kind our to us of that

change, long said, we track to All as And least able operations. there improve opportunities to else at to are being anyone in of always certainly of well believe, industry. I the a as that our have of, record adapt

there I a with disruptive, you guess, more through. master It’s going great It’s no And what it’s Keith is within [indiscernible] necessity I [indiscernible] we but plan is because do. the to thing forth have and coming this, live no it’s say way it. because, would framework. same the and there’s I back of how just

knowledge, to care. plans mitigate the and that got education You’ve stick through with of

I think is about in I would this that’s say potentially disruptive business. but what because, management all

able be change to always have to You and adapt. for be ready

Exactly.

I question. squeeze it. high have That’s this something If great I there color. must may a unusual. was very CapEx I million. guess, quick appreciate XX quarter, been

combined should under the how run a we sort think number of CapEx So the entities? about rate

take Joanna. Josh. Yes, is that. This I’ll

million quarter you’re in any $X our usually million. given As between $X familiar, rate and run stays CapEx

lot Almost in quarter, in was investments business. so platforms This put unusually spoke it new of some side my place, about IT, in the with I remarks prepared of high. in a Family the

of run an So this CapEx back probably into I Almost see increase million have transaction. definitely a we around rate think $X in From down a us seen standpoint, going you’ll the quarter kind to $X of Family It million the but for the company, just an anomaly. be was year. bit little has little quarter remainder the in will think a bit the of of higher I historically a than size it been change because this

with comes Our Baird. next Matt Gillmor question from

just follow-ups. I a had couple of

were opportunities, pipeline, On several LifePoint that think the there RegionalCare. seemed and Keith in and mentioned like large was addition it to JV I

may kind characterize those could of sort those of was larger hoping size you I conversations So meaningful how ones up and be. of some

that Josh the because the attorney also going room. take I’m he’s to let in

the level, line you full. high is this robust is and top Matt, I’ll a Josh. very at tell

all currently ranges from a TTM between, $XX few in of opportunities million systems keeping in or maturity that on top announced way and a million conversations, with looking to the to $XX we’re As of very are individual pipeline conversations conversations would going actively prepared some million the the when feel that so to I from remarks, good both, different $X speak. hospitals to the there But few having mentioned somewhere at see health about home to JV and hospice but side, that anywhere the those line making They’re his have revenue, through. ranges to there. in up in a you’re got kind don’t get put that Keith we’ve and working $XX in all we’re for that there on, at any just that stages engaged the call it, so million we’re freestanding tires have out we’re that want of be of promises revenue

on And then or changes. the a model follow-up group

also that make comments you’d that you’re rule curious I Or really mentioned the some other final intend to the like of see the are that on? what of you the change elements you focused talking legislation? think to if change are kind incorporated through the neutrality? Are just we budget Keith I was The of may there in about legislation to turn adjustments? behavioral areas rule.

it’s great clarify the question. for Yes, that. to a I mean, Thanks opportunity such

think clarification I would I describe through a pursuing technical as really legislation corrections. So what and we’re

not end costly to intent would think more believe intent. settings a the payment about on home costs. truly period not cap that’s that, more then a clear. in a make don’t So but certification around payment everyone that course, the sure periods could on as be to be to patient clarification we We to around to XX home we not period, within reimbursement neutrality, budget that, interfere to be patients the from to we’d downstream which that And then additional with interpreted Meaning health. days certification or have And state XXX-day says, back extent we another that spending. But there XX-day aggregate could for cap written, what physician that’s we every momentum would health. impact home period. we XX-day but talked ensuring like specifically for the that certification, is go home all XXX that to as come adversely it we slow that’s have of health process to if mean, want it it’s that that’s more And an spending no patients health, moving days

comes Our Brian next question Jefferies. from with Tanquilut

the and a and up per in this done levers that growth? how sit job high driving single-digit then And terms a improvements, margin you keep today? do taking pull that the many growth that you’ve better? what back can legacy to business I sustainability -- the do performance of mean, mean, is think where visit, just in else you cost mid- there organic looking so you at there. about guys the I to you good organic of how Keith, put have step

I That’s lower think the market growth, sustainable providers. more Patients I with coming it for I But -- scores, should all had primary mean, as reason: share these of sniff. to quality previously a being Washington. have we’re high go, digits, quality levels single as we -- from certainly the think mentioned, everywhere also home patients taking went to at Don in taking So conversation that levels we should we that -- mid- That’s it’s to hospital that’s systems work. even this be how health. and to that’s

maybe harvest want is lot there a us to... left for that. think Don, of room I So you to

our for in Brian, counties in roughly patients data counties Year-to-date that, preparing the these NewCo, combined just X,XXX words. XX% call, of the of In we reran to put our a generate received Keith’s from XXX Of those admissions. portfolio. numbers. I behind little

tangential opportunity had tremendous sales that which really to a I that these increase force see coordinates we in so markets. out go into And about talked

So up over and quarter listen, put your your quarter years. I over industry-leading we appreciate for quarter point because growth point, actually have

really out year is quarters it that the years. sustainable thing. in So few do it sustain I’m one To ran next pop we in just this fact, what shows is is, going and point. out your it a into about data two that one happy or is And

And then on that? what Don, thoughts in margins, are your

-- At just to not any up door of our we that XX% It’s we [ph]. given this attributable that the that you have cleaning these better we as know XX% some business can today. through big, XX% marginalize really growth. that’s to the things Again, of you coming old know, get portfolio, time, to really

as you that same trends follow. grow, and those as to So continue will do you

really we’ve time marginalize our think an Almost floor to Family It exciting I certainly is merger. our So with doors. to seen the what’s coming

quarter side, there look know on and and at have I then, one switch AFAM, And I slightly an I probably to gears you’ve if Don, great mean, was AFAM guys And it, just got up a job. I growth done the organic I mean, as flattish you basis. to

hiccups. it You any are big without and it stabilizing integrating

about AFAM? So, of accelerate what’s growth, ability to growth accelerating that thinking your at how thinking should and I timing in of be your cadence, the terms

the X.X% because the things to that’s is go detail seeing. into now, absolutely floor and -- incentive don’t want of it’s some that are I even those look then conducive at Well, we’re you structured, there way too right if not to the much but plans

now single clinically. (inaudible) have I still So putting much remember, in we’re towards wouldn’t in bake to now instance. We the attention because, turn Homebase right our Homecare OASIS

seeing we’re the you’ll accelerate beyond. really I not up year. don’t at that start as we into of in this growth X% that think And QX and any to go I next see way X% summer months

seasonality How of run should the business, last innovation and that used as about me. think for to And you. was be when seasonality there AFAM. thinking be year? question it by the about for the the rest Got we we Josh,

throughout to the in has year year Program MSSP, it to on clearly QX the from the PMPM, Imperium. half second Savings have tells of the For you call pickup have revenue course works comes mean, a but sight of X, the Medicare year, year, the line I piece that of is you which the and/or historical the of the followed business way in, you’re is lot the that that those that a a ACO you AFAM, from getting varied Shared from revenue. the on a And

increased some that with I see with same QX. there you or either them, So expect saw would in us, QX we’ll the as revenues

with from The question comes Bill Our Benchmark next Sutherland Company.

X home Don, you X turned out have I be point. as there AFAM. Homebase, think since up Homecare the years with at think system should this mentioned ago? impact How you it on think we line the and to really that your roll time or implemented by I beginning the about was Just getting just

through probably is is the expect was the what we do configurations of of we’re existing a the going Homecare Group. Homebase but In unified, is portfolio. Good words, calling timing that But inside legacy we Homecare Thank rollout commentary about so vehicle Bill. the question, Homebase LHC to the My you. margin as workflow of The complete, instance. other don’t are not previous, any that. QX. like go The decay unlike in is

And so be that. Josh’s next upside to numbers our think it I that he March. announce And incorporates has when will guidance we guided

sense, in Don? Upside what

we keep the that talking about. In margin

XXX begin it’s being the For going example, of basis place all attributed to directly that as to we in SWB, XXXX. be point

Okay. And real quick, Josh.

reason up for they were I about at missed have think X AR. talked may XX. there ARs and the you The I outlook when

happening I balance timing unusual flow transition It’s know sheet just what’s statements, that nothing came there’s the AR. cash on AR the it’s over. AFAM and just factor with the of and a within this

So we cash QX in through a here were that. expect quite really bit the door coming for good. Collections of solid. flow were DSOs

the question with line of And Hambly Dana last Stephens. from our comes

Your open. now line is

question clarifying said the you to bps on a then XXX follow-up. I Don, B. and a and XXX think SW Just

points, and margin improving to You’re by AFAM’s all basis XXX correct? XXX, about talking that you, that’s is legacy

and It is, straight down, that we yes. expect to Dana, drop

$XX the million from correct? And that’s synergies, in separate

It is.

important, difficult talked to you culture And companies measure. two the us of think just how into the very importance the a outside shared and similar for then it’s And going I is merger, on one. but it the about right. All do

trended could think turnover So just just ago? he closed talk employee indicator. if it, talk few I months a employee the would just you maybe Can wonder turnover has deal how I be an since just about about

Yes.

I be that’s spend little So do. and we the pleased a area with Keith. This more integration. an And couldn’t time all we specifically is on cultural

the the lot over culture Family and years that I organizations Almost of to has created do William a with two at think a how number of it brought we together.

as we mattered. else So everything challenging how the integration, we issues such How handled the employee benefits. approached

people that went back were everyone address that whenever time. are common work our doing we all as through one groups That issues and So of people lessened those. fall starting proactively to the percentage that we we the of had November through with to BRG, We and transitioned platform. we identified in ahead process gaps, able would

to for issues, So how they one and respond above just weekends there beyond positive people people that working it. about ones And on gotten employees make from then to thought crack. the fell just the much those, as the those organization that had the we even just no through we’ve feedback were a sure that much whole clock to That immediately. and appreciate went around so

appreciative of in everybody close legacy built employees meetings our And to as any organization side that leadership benefit with proud formerly is but happen. with by so one in all even we’ve that gained the together working have goodwill I being trust. now on way, in think really one to combined very Almost either and location saying team, level were as lot legacy super we a and much our refer I the that a confidence of organizational higher that a made Almost or incredible our in that when formerly team Family I’ll or real room Leaders think wants either so together. LHC LHC no Family. goes

have So better. could I don’t just think it gone

way I’m didn’t knowledge about transaction we in especially make we so we biggest BRG and that integrations was as it was our contemplate engaged I it today, admit, in past. this we go how we’d concern be integrate other and that having the did well began to is that this went of the that as I organizations happy think because larger so

further I’m like I’d remarks. to in Myers back queue showing the turn time. to questions call closing at no for this Mr.

next for quarter. to morning. Okay. forward to Thank joining you, this you Thank you, I us everyone, talking again look operator.

you As please available the support. contact team, from and thanks would to have to us confidence or to joining myself Eric always, management like make any for you. and the speak himself interim, in or questions who Thanks your for if anyone Relations, Investor Elliott, will

program. you concludes Ladies participation This conference. and for in the gentlemen, today’s thank your

day. great a have Everyone, disconnect. now may You