LHC (LHCG) 8 Aug 212021 Q2 Earnings call transcript

Good morning, and welcome to the LHC Group Second Quarter 2021 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Eric Elliott, Senior Vice President of Finance. Please go ahead.

Thank you, Danielle, and good morning, everyone. you quarter Group's ended welcome for conference to second the June like to earnings LHC call I'd XX, XXXX. earnings highlight posted Relations page. our also Quarterly Results the issued release our and the night We Investor of I quarter like on to supplemental that some have section we information on last would on call, The as a as the well supplemental can when release, transcript available ultimately, and a copy XX-Q this be found deck of of this page. the earnings

our includes of on breakdown deck Our XXXX impact among year supplemental assumptions, the full COVID-XX guidance performance. and the detail sector

of of well. as All reconciliations non-GAAP our and adjustments are breakdown included

We will reference this information remarks today. our in

Officer, today's Josh approximately XX to Chief comments prepared for Myers, Keith minutes Executive to expect allow Proffitt, Chairman Dale Officer; and time and Financial run We President; Q&A. for from Chief Mackel,

start, forward-looking our and this presentation them supplemental Before information. made to everyone like our statements financial in encourage statements on would carefully. you we point supplemental press X release to in read our of apply and to to our I They call, Page in

over the Now to call Keith. I'll turn

treat the this only home by patients SHP, XXXX. families XXXX administrative This patient to quality our X.XX Thank industry frontline allied by my and rating many of continues published leader appreciation you, like respect patients, to everyone. June morning, that Data Group shows health and every of caregivers commitment of October Strategic the LHC communities possible our of improved because health star extenders, voicing Thank day. again. professionals support to Programs on care an are X.XX of quality LHC growing to commitment Health number staff the and Group ground, and or from quality nurses, satisfaction. you deep be providing as begin, physician growing Eric, we family for good boots in excellence and of in their in our overall to unwavering of to is and customer service serve. customary, privileged unwavering in I'd

policy Now time, introduction have option care in and week's in provide more last that, the first the the clinically the privacy turning Home With of to SNF. inpatient appropriate settings the stay as safely Choose following legislative XXXX Senate, for we own would an bipartisan Act and to to tailwinds. legislation an beneficiaries such home Medicare restrictive their recover as post-acute of inpatient of alternative costly acute

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to XXXX turning favorable final regulatory hospice rules both LTACHs. Now for updates. fiscal to and CMS published has related

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it terms range from in a EBITDA XXXX add acquired our been compared of for our increase far, doubled XXXX Excluding will with provide of in nature to to revenue. contributions exclusive Dale previous in And announced Based year pipeline operations, the to pipeline, Josh only M&A would history XXXX I'll range we alone Josh? in we our more to of The a XXXX our XX% provide over to best adjusted acquisitions $XXX XX-year $XXX turn EBITDA. Group. our opportunities has more growth to target the results to-date current million XXXX thus these detail more then of our million acquired and strong LHC now revenue XX% Family, and on financial have the revenue to when color our incremental Q&A. on on prior adjusted of guidance success our Almost acquired in than for our and majority merger

of inspired positive to implied health the all excited confidence our on than expectations growth as I as morning. you take high-quality our our members operations Thank to continue much-needed, as leaders and services your to you, thank good moment during everyone. frontline emergency support colleagues this Keith, Thank of just we for and public the across quality, all also want team growth patients on country of in underlies work the and the a you details revenue very the I'm operational morning, outlook explain time well to acquired to the provide and and doubling annual their just contributions trajectories truly doing. for our more described by for to all success. of the I'm that amazing Keith all our are more many provide current XXXX. our

note leave overall, that our pipeline line on QX activity and we provided SCP to operating anticipated we one, the our overarching is, what addition The deck usual all-time EBITDA improvements before our supplemental will and is with into and earnings I and with metrics. partnership In as accelerated liquidity in activity our and census will admit-to-discharge updates with an growth ratios, begin length in trends, have want we value to blocks, our in that partners our commentary, you messages health growth segment our strong with debt our building our momentum compelling. in further sequential high our in Health, you organic at two, home and continued hospice M&A more growth XXXX for lead with well growth admissions of never heading as admissions stay is three, proposition been to has which

turn metrics. now Let's our to key

X momentum are quarters. key the the the indicators. as positive Slides and last year-over-year in of admissions show growth our across organic delivering performance over strong We in progression and as board sequential our census XX deck XX well

a up the that level organic home are additional on the organically from When home for that XX%. was discharge of You year-to-date the it home admits quarter back health grew and of for July last for performance are which sequentially early are organic admits Non-Medicare positive admits physician the health, shy home in admissions XXX,XXX. details growth X.X% above consecutive you to health last up X.X% segment admits that at up up QX, want up QX. X% ratio is onset will X%, sequentially since was for days and average note year census QX would we from first hospice, and were of for X.X% has census stabilized episodic just daily episodic us same-store was of north X.X% back growth continued of growth strong in XX QX-over-QX first the A admissions non-Medicare note same-store and our health in the levels. up and running north just Sequentially, days for has health of of to all-time are and ahead that In in and hospice X.X% now August, our few same-store XXX,XXX time and organic back gives into organic positive QX I Medicare new admit-to-discharge average QX home Medicare in X.X% total to twoX home the same-store in up performance by quarter year-to-date. pandemic the quarter in X.X%. length peel with highlight quarters our been admissions XX.X% pre-pandemic health also June, XX also with the indicators which up by stay X% same-store X.X%. achieved our while referrals and improvement up total which were since high QX, year, I

We are our also growth with and hard recruiting this XX. hiring efforts, working as on Slide to support demonstrated

in quarter, unwavering These we validation and the be statistics industry the well have market. patient consecutive have a growth are of In order correlation in last and happy number deployed frontline a pressured get direct averages. quality I our be year labor on my these employees, tactics to that short, a prepared during record our year differentiated turnover culture, first results outcomes. keep comments satisfaction third continued our to Q&A, into the more For hired will our and continues census and than headcount this with below we have strategies some half and to of while focus of positive yielding

in into get of to partnership in advanced jointly recently I briefly service offering the and higher Before talent in-home develop care care, experience the technologies. want with organic clinical acuity in-home the physician SCP strategic This will announced and Health capabilities, partner our clinical as proprietary home. expanded growth, care deliver innovative, as well services clinician-led, care and elevate discuss physicians combined nurses, industry-leading deliver and to of our I model by an modeling home with analytics patient therapists and extenders our proprietary data harnessing

we we share expanded joint this where we stress home where that in service later I is also not this As have this and already would non-hospitals hospitals ventures offering have health presence. XXX in where roll capture near-term we year, exclusive have XX we the an arrangement. to opportunity overlap a out

that While footprint. safe of It and with is received same number ahead of operate hospitals that we've that since the hospitalists providers venture assume we joint partners of within existing of have that to announcement us SCP's potential other doing hospital operate outside the in partnership, calls with country just XXX hospitals. a from addition easily in other will the across we this ED work and inbound be the runway as other lot can our for to we

completed growth the with or XXXX which year pipeline now which contribution in million that have of doubled to than announced total of Since impact $XX will a revenue million last for be target in to revenue EBITDA $XXX.X year-end we following months to provide time, XXXX up contribution full or our inorganic XX the significantly the a acquisition. layer $XX.X pace size on biggest XX track acquired These drivers. we range completed. in annual benefit of from a of are XXXX. million announced our of Keith to a the mostly have in increasing over and acquired transactions the exclusive, revenue continues Based Now million highlighted acquisitions given have will XXXX, but incremental the the that the further earlier. to that call, our growth record to-date more $XX acquired remain annual of the we turning have of time to for we At

record XXXX shaping XXXX consolidation. also an M&A strong health year remain with up us, is and While having JVs for confident we for a be home to another in in further M&A more year expectation

Our outlook as growth in direction, and and regulatory with us the sequential ever forward are heading tailwinds levers as our that growth in inorganic organic propelling prioritizing and is right bright care. our trends home with policy

to Dale, on we half second deliver big of to are over a color us have it to well guidance. and results you those We on opportunities. ahead positioned and our our add turn I'll on additional

everyone. consistent morning, demonstrating guidance. quarter the our line half provided would year first the in second on with QX half with in how out second and results were play full we am our good the pleased Josh, and the our the originally you, expectations of the I year of terms compared year call, report bridge with Thank to of

to Adjusted sequentially. For year-over-year and and was per increased the EBITDA $X.XX XX.X% year-over-year revenue up service and XX% share. net X% XX.X% Adjusted sequentially. XX.X% XX% increased second year-over-year quarter, net diluted income sequentially

our on we and it throughout guidance range track lighter EBITDA spread results therefore, was well. intact. as our are revenue lines, The all revenue little earnings what nominally While adjusted were had we a than service projected, XXXX keeping and was

performance where initiatives, at want past underlying point, to detailed we halfway metrics spend this XXXX. the our with I the and for supporting morning for key call I be refer want commentary release community-based home your first strong the and we our practice, where I to full and service results. Consistent hospice health, deck are for would new need right our to sitting earnings for time to trends to on deck So key growth growth means close you our and the here on and supplemental factors my and XX broken guidance in expanded with we've out then what facility segments. factors Page recent home the behind supplemental a announcement and our the that our our trajectory. attention XXXX credit year revenue on

both and Our and delivered XX.X%, Medicare by hospice and well year-over-year X% of declining Medicare performance points procedure strong up guide was the referrals The in from census elective The channel. how a on stood only up per growth coming heading quarter on exposure XXX per while up case segment episodes our driven home sequential an up of centers with episode X.X% modest are PDGM up the senior LUPA our improving. increases business with on segment to the EBITDA with with our basis institutional of X.X% and in revenue revenue our this our our challenges as were second admission into quarter. mix X.X%. hospice with increase well sequential we health points of is prior by XX.X% XX.X% documented, year-over-year by percentage of sequentially rate driven encouraged double-digit line This living but are revenues in along increase X% industry-wide quarter margin basis. margin X.X% EBITDA Hospice increased results basis versus revenue XX was admits sequentially, year-over-year and a and a up impressive episode recovery, revenue to

of XX% health to operational around emergency. in face we the EBITDA challenges our present personal continues to can care segment improvements quarter that discussed margins staffing the public remain well-documented year. during The hospice With by sustained headwinds confident the the Josh, XX% by this business drivers fourth of achieve

hours billable and from of care down QX Our of were the very we personal down is versus important care an X.X% Demand quarter. robust, sequentially remains component were X.X% last XXXX and deliver.

We cost are service effect service administration supply and labor per did basis, Congress or well pre-COVID not cost headwind a tough supporting would right and unmet and remiss how hour But now. working lines is to assistance if our per prevalent initiatives that are service. line checks On be the are point a this cumulative are actively the out the visit demand demonstrated cost lines of the strong billable cost Biden and and day, several increase capture health all and I stimulus either annualized valued unemployment care increases. management, pressures managing per sector. trends keeping labor across sequential with cost in control merit like flat I

by efforts, net around resulted invested growth numbers which recruiting on of costs. record innovating the employee Josh, mentioned As intently company in our hires, has and new and increasing meaningful stabilizing has

growth We to best initiative by committed industry. are will prospects in extremely remain our to supported and the focused ensure the this talent

million second in with XXXX. prevalence indications variant, spend in $XX.X saw resurgence revisit we quarter, the expecting decreased we would now virus possible gone presence certainly not $XX COVID million While in has expenditures constantly will We to quarter COVID-XX quarter. quarter, COVID we with coupled early the in away. the second we by in to based of delta driven our lessened $XX COVID-related $XX the incur are which COVID-related million are we and what that a million on second compared the the this impact quarter, spend last of first reminded noted in

only of Turning release, our to year the made range we've the in outlined is earnings. to our full adjusted guidance earnings adjustment

depreciation. XX.X% into range X.X% adjusted to these reflect visibility due $X.XX rate EPS raised less per to EBITDA have ranges non-controlling $X.XX share, from our EPS revenue up effective to and We At the XX.X% growth growth, $X.XX, adjusted our tax interest. growth, midpoint, and $X.XX better to adjusted

Luz to X% we growth our in core guidance Heart X% guidance and previously, our Casa XX% Our that range on 'n near-term assumptions, to to the our offset with assumptions are de X% closed organic X that consistent X, fully previous the the versus is with remain acquisitions largely XXXX rate, exception only hospice adjusting la hospice inclusion Home. down which of July being being by

a and up We close prepared be driven amply surge the to experienced keeping end resurgence. virus assured on are are recent eye being a COVID fully should we it variant this the but sustained deal by with delta

billion, filed are we've powder keep for hard Lastly, to Page of feature and us, that improvement Relief our been have July we of we now an our the will sheet. that inorganic leverage point million. of XX I paying our borrowing in that that of increases $XXX to all and earlier capacity would $X.X nearly proud of worked our very $X.X of million growth $XX.X XX total on from our that's with costs balance million million capacity expanded current $XXX after recouping accordion credit refer borrowing the X-K CMS you XX. payments low billion to a see upon and accelerated liquidity and Funds our week growth Provider dry projecting. Medicare increased an facility back million advanced the basis We've double supplemental, revolver our On you to With approximately through this borrowing $XXX $XX

days strong service second up flow by flow. business quarter sequentially quarter. from from days strong The driven core million is $XX by year-to-date days versus the Our lower in free June in cash underlying XXXX, days $XX.X to down outstanding last Adjusted free lines, and cash XX sales free growth of flow decreased fundamentals spending. in year-to-date is adjusted our cash and QX, year's the million, down capital in driven comparable XX XX improvement cash collections

competitive remarks. the for support fronts. the We and a as us legislative to execute on questions. That to activity pursuing. it with ready Operator, Thank growth true organic we ahead look you. how the prepared balance are great open frees sheet opportunities balance up level on we in of historic the tailwinds we can't M&A behind our the advantage look year, us the place take the floor and advantage of inorganic regulatory a tremendous to past and are and many our we're to As an concludes to business, of strength

of first from [Operator Deutsche Instructions] Bowers Bank. question Justin The comes

I the transparency. disclosures continuously First, really appreciate increasing and

You give work a lot with. to us

Just one for question strategy/DC kind of Josh. Keith a and

can thinking of acknowledging impact And SCP on of with the of some longer of been sizing, terms still where about partners? from And give just the you sense go? has your the you us kind secondarily, think addressable In you kind this how it's can And thinking partnership, market then, that the the of kind then, Home market days? term, legislation, how what Choose a do size kind of are receptivity of early of of does that SCP your for kind partnership? the business

Justin. first. I'll Yes. Thanks, go

hospital. the to with So after the chance the say S don't there, think Schumacher, regard had LAC's That that. he and I at was physician hospital originally the company on ran this for Schumacher, venture in one-minute joint the emergency to start just SCP in Schumacher was stands let's I but SCP, Kip was the Group first emergency and room XXXX. room an

with became at wife, in fact, Schumacher investor Dr. one my was original Ginger, In to an be what going LHC point, Group.

say, can was history back. a time. LAC goes some I Schumacher director quite for Kip for way medical with all Just our And them

nurses Schumacher that, XX/X. telemedicine the to patients need strong acuity with that support program physician our developed take And robust with quite home. a So we on-demand understand physicians that has into we higher can now support

overwhelmingly work. could it really so already receptivity acuity overwhelming, doing. key the from I but work partners, we been positive from has a This -- in far from -- was say our because so was The expected component. it diversion really much hospital doing were just up that's dialing we're has to So I be

four our So to far, program. major want the and forward for we've four to of four partners so with presented move

further to four that out going we'll begin develop from learn these we're roll partnership hospitals, of then So and strong after that. and the to advance the and those rounds first programs program

health in I these that think Choose to to in home natural the connects start Home anyway. things that have Choose we're going very way. do are coming a under in Home to And

than advanced it? the care higher us it. of the way What to model probably even cover part the question? do Choose was you Just want patients to It's take Do will allow best the Home. it, you Josh, say take to other want to acuity

Justin, the Home. SCP know or doing Yes, of and of things years. couple we've advanced maybe been mentioned Choose -- number one I model. this on how a clinical for Keith I the care to Keith thing a would add services

isn't think, But this and continued that is I the much acuity higher service home us this JV for model is, not momentum. even with these thing a momentum So picking cookie-cutter new, and has but years for model. having one so progression proven this in partners our we're the Keith, in four into up would conversations it's

go then it You approach and can't create over an all deploy everywhere.

program when that of individually them. to seen those make have really you You've customized one, needs with because clinical you've meets one, to got work CNOs health the and their systems and very closely the a with departments work and you've CMO, seen the

to clinical we working be a of So by with a lot going team and our our partners it's CMO these hospital led together program. put a team members one-size-fits-all not that on but are

are cares health All local.

change. never things Some

call Got cadence Can the through quick moving And understand rest just the follow-up. year, what to just quarter-to-quarter? parts? you then, it. out a kind anything Like are first help the of of second us And half maybe half? bridge to the the from

Yes, Justin, this Thanks. is Dale.

where adjusted is la and our here how X/X. organic prepared highlight business one offsetting we hospice Casa as our 'n Luz we're acquisitions, I mentioned we've growth really, would on Heart as guide Home but in the look that remarks, the new closed de at Here's rate, -- around completely that really you our with

million way half out to from $XXX the in at look have $XX of look estimated the a and perspective, see revenue revenue then the $XX And would as and EBITDA about $XX a million to $XX given guide. million I I million million QX, to range of And range $XX right way the would in that our of midpoint full $XXX of million back in So the results. in a you playing guide our range gets million. That $XXX half a at see we of second in to then, to the million year QX range. we range we MSSP $XXX first year reminder, the payment the EBITDA XQ, million

Got it. Thank you.

kind looks we from it of health, to or saw another sequential similar that home XQ like step-up magnitude XQ. So

I'll much, Okay. Thanks in so queue. hop back

The Brian next Jefferies. comes Tanquilut question from of

mentioned labor. about addressing remarks Josh, on questions your in you prepared something

hospitals staffers labor the market? do So What maybe topic And let's first. are you in the see we saying. what and hit track the that obviously

seeing you're So addressing just how curious what that and you're issue.

Brian. morning. Yes, Good

getting are of a is want As we market. I more just recruiting scheduling, people lot stay I've dedicated earnings labor to say, recruiting a throughout labor start is retention then program. as health talked them highly and for the are feeling retaining really continuing is to we've different in much package, We're first asked pressures focusing competitive from which the online our our directly a flexible on few staff Keith a qualified a Brian, of reimbursement, care tuition it's so do And markets local feel begin as the said structure, across variable is recruiters and this And them, pivot really [indiscernible] attention or small-company side. with education to by either side, to country, kind our flexible and earlier family, often others. strategy, to pressures pay the and benefits education, why and and our of is market From kind with. LHC than right, standpoint, the big-company invested directly join real. comprehensive Group. in But pressured conversation whole and past pay at resources. choose the retention and in I'll what quarters, season the so

from on we all bottom specificity, that doing the you staff. give our so So the up, benefits. all I'll retain the feedback Brian, us received acquisition, that we talent way are our many things is through to some of differentiate

but really not do the got only having to that our XX% group to break studies our we in competitive competitive covered we year group from two So right? are I are mean, in plan first and XX% our that Under very a offering to foremost, are But benefits by employee. a include pay, our we premiums that perspective, be package peer ensure at and that you below market your our every into leading comprehensive the peer workforce, and than PPO in more down categories be the it you when offerings. of we're

for an children, employee for and that's that's only, $X,XXX $X,XXX about a So year. about employee

some we've in We've programs, invested that education discounts. So them formal also education rolled lot a standpoint. really out reimbursement from

over And the Louisiana additional about You year, and program the we've program our talked about. to really University our know all assistance support COVID. due we've past with enhanced stress throughout of employee that needs the

year. over continuing have just then, So has when vacancy turnover yielded, low about we've had quarters for in I rates last would strong That kind too, of X start the I my first you area. in invested think there. And to in retention. consecutive said But that, the us prepared with hiring, we've remarks,

gone up has to today. recruiters as our year XX for from headcount last XX, of QX Our of

new So we've get family LHC increase that come this was a which that specific employees have hired back. the some call we on acquisition. we've it. and out to our Brian. with with of leave we more return-to-home mean those put enhanced employee of a some through we've the of, But And put kind when out the we former in point had year I referral than XXX And queue alumni month more LHC already of bore in first it, rolled a We've to think, members last to hired over alone, this a alumni we've that programs headcount really talent I'll program. I quarter then, I program other saw do mounting time to year-to-date go for pieces program fruit, last to definitely XX% dedicated XXX pressure fine that XX% want year other could Brian, but And on topics. some increase strategy. in another XX

office We of in people proud over years and who not has through a really do lip through of lot recruiting team the for our we end been but put our in I XX that support benefits, field, from that. a with our it home guess they're Administrative proud throughout our of division Extremely we on this members programs team. just doing We I job. and of the effort Officer, and would our retention all all everybody leaders Chief of we've do area of and bedrock is been great have invested service. and and and presidents it the it's

about I I the the looking guidance you're and little guys bit on that No, mean guidance, you a to here. back question, I my And fell I original maintaining ADC guide second color, was guess that. in assumptions Josh. I appreciate obviously, below think as

it to what's think and XXXX I in $XX $XXX target, of million million contribution I think year. original are think guidance about coming there? $XX in above to this talked acquisitions to the as your million about right $XXX the And plugging is So that you for the year, million plan from EBITDA hole that's

number? color assumed and to So organic the holes terms plugging to some on acquisitions get getting on in what unannounced guidance any Just range. of to how the is the we're on guidance that of

This hand Dale start, Brian. to then to guidance. and through Josh. is of I'll the walk over Yes, it impact on kind I'll

Luz I takes the to is are, that the have we've once the hit you know, on year, 'n puts hospice closing de they not those once think include to our their we've take of there nail the Casa Dale revenue I different level the practice from when say wouldn't got rest going real a But you closed, that but Home expected From mentioned. head. the as you performing the standpoint, we the throughout of and the we've announced. la bring than they're So that in because point guide and Heart are my included mean in at I

example, on is So not Hospice, for deal, Heart of it's but an the as board included. announced

upside the once back of the that that half more So closes. year be for would

from beginning well tell you, second that that we see May, saw brought health half I'd hadn't hospice. kind half where you XXXX then do to typical, well. health the as metrics. back for comp have that's of But home is good helping as has that's we as 'XX, seasonal of -- happens the norms seasonality and were When health May offset home to a we But in been about which XXXX the census some the back spoke you ignore the down would home in, we as in some revenue the like of June XXXX, And So back on acquisitions mentioned positive 'XX at and mention we're the these piece I census the levels the better yet. or XX,XXX were of kind a bit that census. May of little of I'll of of feeling time pleased May, started But really at census down. occur back home June in of and we'll in I'm seasonality. north weird like health it of July seasonality two that because those I'll previous than was yesterday say, census and say, and Dale?

that really is around X.X%. what the But hit each of year-to-date, half kind think our on about space where Josh that's change hospice focus really, there. guidance offset think highlights really the the I organic first year, is I is other of at growth Brian, is Yes. in main

that's that come deals rate that to where in. the back growth range made but we two on X.X% the now closed being right organic adjusting so And have feel fully our up with

we're deals. forward obviously, will where good. And guide move again, and at. So close very change that's as our And we really feel we

The comes of William Matt from next Blair. question Larew

category. wanted mentioned a that ask, revenue little light of the each in sort I to you being sort just across board of

hospice, was and point the help to were things good key operating like pretty curious there's maybe Others Josh, Generally staffing. for It highlighted environment. turnover it Just think and just sounds what speaking, QX us some seasonality. could but health you that you a drivers anything the home on there? case wasn't you you have mentioned like out seemed like there. us

Matt. this. to everything I'll good going Thanks, you And hopefully, with Sure. of more yours. that new But baby about say girl offline, is

about I months probably think old now. she's X

You're Thank spot Josh. on. you,

about was Okay. I thought that right.

health, home really it is seasonality. for So

So that. I won't of restate any

there of as hospice the kind see is expectation issues it's industry-specific you On just the ALFs. around the not recruiting the annual as and the of and IRFs, we headwinds on there as well, side pulled SNFs, it some much where down staffing

job very want hospice in gave kind But head Dale our to be miss of but hospice into think maybe stay in was performance. as sub-XX. and I earlier I us I think team that done bit the length-of-stay positives still as to admissions a setting of not some we we our hit really you. because half, there. going has of back where of We're is length I those still itself great position for were the the the the differentiating months few of percentage thought where we're past Part by we numbers quite for a a was strong evidenced mentioned apart little of

normalized really community that getting that's more Now to and attributable has referrals.

between and occupancy and and SNFs their XX% levels, and yet running not volume that around capacity it's our hospice now of rebounded X% X.X% have for in the referral XX%, us. As ALs historically, be would

portion our a not big of volume. that's Fortunately,

different our others that's we great numbers. remarks, But job big We have some I a my some don't much out teams those have of is length-of-stay risk ratio, as which a admit-to-discharge strategy have very the and done deal. bolster also offsetting And prepared hospice into going and there. in community then, that a maybe that helping of than highlighted to Matt,

see and better continue think I'm incredibly as dynamics. it's is even you should start is census length your So seeing to already census hospice now back admit-to-discharge at a we grow seeing stay But are clip. we with even that could of growth positive, better. those grow we growing pleased it if improving, all ratio I to start

mixed about on of or for opinions Bruce, for a you're And like And even it the Choose passage Keith somewhat Thanks. sounds likelihood happening. maybe think that we've then, positive more Okay. bit heard I Home.

it of great. So internally for maybe maybe quickly maybe both it how and sense color give out in if to would place And the of little meaningful capabilities vehicle most sort you've see passed, be. kind just handicapping Obviously, SCP. a that the likely us how on clinical with that more you playing could But a be then would become for put you're what how begun LHC? just is

Yes, sure.

probability on on bullish we're sponsors it Senate. in the with that is, becoming reason law the of this the So let's start so the

sponsors better quite be in of Todd So month. Young last Finance couldn't have X positioned leads. preference, and for X we the I've bit the a think Debbie Senate Stabenow That, with inclusion especially a and are over spent the I COVID in Washington package. of two Committee pandemic, consumer on either or combined year-end post in we the the experience, being reconciliation time

what nearly with so got to House this. and the hearsay, visits not doing personal both work the I've XX Hill for my from I've key is members for saying in the of And this it's I'm been you And somewhat feel on years. a Senate.

I when have that something but you being in. to when really polite they they're So really know mean no you believe

country Care@Home. Advanced But does doing happen. assume that especially I likely. we're fast But XX% term that with So acuity SNF are we health you're there it I hospitals to can mean don't SNF-at-home, XX% so the acuity think XX% focusing it to that where of at that capable home higher are hospital-at-home. the like fast of when because on But about I patients care. happen, of a that it's could Anything scale meaningful? providing already, dialing XX% up patients. to lot providers talking use on SNF-level of do to that's are hospital health lot do. no how lowest providers become implies are it's home highly meaningful it of level, things can We that do there across think acuity a it now that let's because we're become guarantees. can a could very When the lower

question The Joanna Gajuk Bank America. comes of from next of

of way like seems it and a coming lot on So the being deals you're I your target, to confident able in guess those. M&A very close clearly, seeing

about talk should think on I how equation here? pressure we you guess, that multiples the part any and about seeing can So of any, competition you're

Let the me Joanna. question, Thanks for start that. with

I or the think important this I minute. only Josh, maybe, to a So forward with throw I'll it's move But less. probably to next level to X/X think in maybe you we that understand

yes. Less,

opportunities our into come the Less, pipeline. that

and was time, opportunities equity long one For of a for culling And built we've reviewing a model lack our first since members them, a investor. Board term. then before private LHC efficiently was a of of better public, a

there? the exists with. to we sift department speak analysis ever rigor lot the can go then and to of and level Josh, that when in So opportunities But don't next through LHC you a we do, that maybe we

trying no, to morning, Yes, keep in, good Joanna.

already First passed in on XX around that on. to Keith's some XXXX, point color deals year-to-date that, to in we've closed details the X we've and of we've got

X/X maybe XXX passed that's or different So and at Since XXXX, we either various on in diligence through roughly or stages a reviewed of so. even being at deals. we've transaction process looking a

all tied that that up that and so transaction into We're on Joanna, trained kind buy hospice. that described we've Keith platform at all so growth a and process We're lot or meet SNFs how just has going look just diversified sources, EPS. it's have standards. not up going which portfolio our talked or to has we ensure department referral ones we trajectory a to that that standards, out before, not about earnings growth got a the at a very where across been one go of for to deals, those have has or the going to do M&A our you. the that of it foundation what And board we're look we've the tied system So with into

to of or at are you are we've the ones profile. excited that some we a that showed meet that have IR we XX medium-sized so think closed, lot first do, our growth put why go going ones be it of very we've for even these we was discussions I year the those contribute QX the we out from but deals there's they're just them, when in out contribution not only in to of to about going exclusive next there definitely the more excited some and year and are incremental on this growth disciplined slide going saying know are larger acquired we announced, of if that revenue the because that looked but the to like potential but are XXXX acceleration that's we're to out deck And back even last even that of that's XX forward. about deals So do not deals, and and

how M&A we're and strategy it. So really pleased executing with our

makes partnership, cost materializing of there you I around guess kind investments drag, in programs of launching you to And partnership but when picture, on also are this that. of target there that do Right, programs And these contributing it in kind associated of of expect is guess, And So piece. guess, outlays kind the I somehow, with, see or any is just SCP, and of kind any on margin early initially? actually revenues? very like something I I know, these any on related lucky frame with whether that big but sense. can to actually? on the anything obviously, process, long-term kind the, question terms

we that, like If kind about think like for kind kind something or you programs, this profile this health of should it of style these is a home of different up program? stand

and -- go-to-market operating up by I quickly can XXXX. of to our So have end I'll these, with part think take two first we'll regard stood With least. at the of first that, we how the

the we're those will planning there be development. optimized They and think process with two be actively I we're won't but now. in

So what was -- the

How investment? much

incremental any them, -- guidance? expect. do any you included I you investments also if in the guess or are Yes, costs And that cost those

Yes.

question. really that's So a great

a stand One between approach all of the like a having separate to model benefits to low model, the very up with overhead we of this components because it of without necessary model hire LHC, have operate and that overhead we and is SCP staff. low

have ground. boots the the on We

the already what telemonitoring, we to have, markets. is don't we the have. So do We meals, those the things have in The that already we coordinate DME. do

have So hospital we're overhead partners management go fee model no to cover. to because we able don't to with

that game we a we the create. in create share and we partnership So

investment zero. So is the

fees for some is from with that consultants million have will to but aren't agreed on in we that consulting with aspects just did the what to drawing that use to will. different that no we on we there we'll markets us model. in SCP, at what capital investment. $X we I'm is put And -- we'll So of some we for there are really different all. local use people hire will other sure advise But and capitalize

Joanna, the And I go. That's just add, investment will variability the this is would Dale, the that scale scale as the that programs. they'll programs with

it, sizing of to like size. de given of when kind minimis just terms business terms But to of how Right. of in be targeted much the it it's what's revenue year, sounds you out, of But obviously, in in guess, going this kind normal your it are margin? and your going then or as target kind terms in of your incremental, kind view growth in of look terms of you I

to on what patients color I be many But being We a to certainly know going hospitals. we'll focus how that don't little are less opportunity quarter. I for more mean per there's next there. revenue program. by on have and what individual hospitals margin patient. will to think can want their the we is we savings calculate patients And think XX% the hospitals the want cost in some more put And acuity specific, lower in

the interest return. their moving So the so then a But acuity example, and patients again, is is lowest good those will others, home. be in XX% lower to Ochsner,

savings. So to we data patients that know volume opportunity all we patients generate acuity in the much until that. yet look like and there, of have process those higher analyze doing don't what you and and will a we're greater how And

from and program standing now. doing we're and to then out what a to partner want Now score collect of and the up is data step they X then hear in what that that's

may Yes. can really you appreciate I whether but if I I the about that just the just And very there's great it's early, talk now I'd but appreciate I color. one. color. last squeeze asked And anything figured. That's

margins, in this you terms mentioned In like home quarter. health strong very of

So about coming about sustainable, there's I Obviously, year, out-years? the cut how whatnot, question we can margins. sequestration for how next guess we Thank think think back this you should us are those you. frame of but in a when and

margin that our is a Joanna, messaging behind as we've mean business. health home being XX% Yes, very think stood we've I our this Dale. been there in I consistent EBITDA business

on will continue the EBITDA We we allow as revenue, believe growth growth with the business that's state inorganic as replace also organic we appropriate to well as forward scale you the the as look but us to bigger. the not margin. improve opportunities just margins to sequestration, continue And our

So we feel with EBITDA XX% very that level. comfortable

Yes, absolutely, the Dale. And the X.X%, think home Joanna, as Josh. a going will in reimbursement. know, you I help rule got That sequestration mean, like that out, I will health came this that we've it's help, is also bump offset away. X.X%,

reimbursement everything about very couldn't we more, plus Dale of the talk there, more and improvements Dale, agree rate combine So sustainability. the growth, episodic when things in you team confident leading lift, I non-Medicare that with are the and some just on

Rice of from A.J. question next Credit The comes Suisse.

getting of you Does over benefit in improve you are sticky of Maybe referral referral time? quarter. they year, How away? half now right first, you're new I there new way source the time once the period to -- of sources. you on over be XX% last referrals or sources the year-to-year perspective source? pace of tend current and year-to-year growth? see had new amount physician or rather, -- stay the a they XX%, I Do wonder, with since those some mature good do does from have that it's now think very that that back some have guys in referral is your of in growth several to

does some it this A.J., time. is would good take I say Josh. morning.

of is got So you've just instances that into been growth are getting pandemic been to got health of relationship. may now group course so the where of taking we've it what our broader the some that the this then, but our referral kind the a previously. be are growth a over is of And home And that we're now may somewhere thing home other good referring us leader they've market home much have And what's that referring team got referral and and share. new into seen is excited physicians that's first you've initial health. referring source supporter got already else you've

building in I be good little remarks. takes think like source to a improve for our one, referral really longer that's So you little first job the bit be it scores got your in have second to At those phrase. to our it volume. differentiator And frankly, bit more may may that prepared both referral quality one dynamics of play. is But in doing either And scenario, longer under to a use the the those get take continuing going relationship his making a of and team what the mentioned partners to the day, end sticky. of Keith stickier,

surge, chore with support early and the call by that latest of and pandemic. does that much is the As trust and to? on this far impacted trend when and as services the make long that over how last to deliver would to what our it's emergency too sustainability public how And business. of XX%, down high-quality to health their normalize those to physicians more and of sure that gain But we is continue is

temporary growth think Yes. where think these you was case. sounds [indiscernible]? revert the are other quarter don't continue wasn't but do they out It XX% I I more was you like concerned, something you that to may assuming quarter that's see to in,

to We all. don't good contrary We there. real at the get feedback,

Right.

positive impact the get home it are you of industry-leading health about I when thing perspective a per from other in your quite your bit asked visits about is probably margin. episode on think The

range level? perspective sort You've now. Is makes a think there XX.X, XX.X ultimately but Do for latest about that's sustainable the environment quarters out of settle think something that two on been current that it will your you lower that? you in than that what's

and in you mishap great the that the our When continued there not that those X.XX whatnot. PDGM, but have VPE A.J., [Technical for on Difficulty] quality. improvement based to would rolling Yes. in stars our and Based primary, the occurred apologies to that to with for put we resume. And all that operator level. rehash we've in think on to side that sincere definitely it's our to clinical Frank, patients going out sustainable team reading are stars the back know, work a we the of I most you things. just all want have that we are today, or see leadership those on the X.XX from extremely still confidence in transcript queue But for question. gone would jump proud look and try secondary comorbidities next what later, hanging are like of we technical the diagnosis this, and and us would always in all I be highlight

Before I question, we wrap to question. wanted just up to on go quickly your now A.J.'s

in the think I with to the kind continued of SHP the X.XX, quality confidence kind more middle scores, care are recent X.XX gives pleased the clinical we the and I pathways of most data, our our PDGM. which modeling even in was in from So the describing execution under of and going how of improvement proud

back the sustainability bit lift our you procedures as a ortho, to more in see thing that you little we referrals, come more a AFAM of per have otherwise. uptick in about, The but of as case bit episode, to in that's say may visits little started company. that has VPE, agencies, some from continued whether would ortho last we've with I'll well. As to combined mix help improvement elective see from continued increase or And see a corresponding

Frank. So operator, hand it I'll over for back

comes Morgan Markets. The Frank RBC of next Capital from question

the hospice? health type are dramatically of from? wanted come the of the mix? business a you acquiring, it revenue back characterize Can revenue will this I to I care? guess of you're Is increasing. assumptions, Any around color side go I the mean those to acquired it it characteristics is home Is which

is This Josh. Frank. Yes,

Of $XXX million so about in about a So we a million million over we million, hospice home or a $XXX pipeline. of that $XXX said our bucket, had million of $XXX over so pipeline current little or exclusive and health. in and $XXX little it's exclusivity,

of And So so. and million split the down non-exclusive how between $XXX health that or you gives right those of that's then kind home out. another It's XX-XX deals, hospice.

home year So with bit starting big a we've in health more coming a pipeline now our this activity we're but to see the ramp hospice rebalance seen through. little

the about the expect now talking new for you under that's add acquired these We're mix assumptions, revenue to that that?

Correct. Correct.

also of talked you of about, ask of staffing issues. may loss those Did development I difficulties, has either any neighbor of seen? any to Okay. I a you staffing of staff that softness do guess development? it reason experience more business any Your just disruptions kind way about wanted kind attributed shifting have business you Was levels or been for to changes the patterns? in in related these referral attribute or purely to --

longer team at for of been Yes, may for experienced had just the whatever the not production per but those turnover reason. are is growth definitely seats, an reasons. and We've leaving us healthy back for But in of no and the turnover Frank. with turnover lack folks executive executive account and We've say especially some look, our where account latter, leadership with us. from I they role, production those more I be and meet issues it's step that all-time the us BD of high when would

we've additions So any has on not throughout quarter. had now numbers way and netting even our and but this it turnover, healthy last AE we're early affected positive some in quarter signs

So feel street. about feet good on the

Yes.

chime Let just on me that, Josh.

heard. our we've Josh in That's all I the from hit are the a about health and now. important that and table And nail we culture ever. on workers those lines head. decades. it's where than seat X where of generation front breakfast. everybody trucker's investing The just organization operating people is and that, care flat I hear the very is more term, I but benefits matters this Frank, eats mean what bar now they for also like pays culture at they're feels strategy off. So culture the enough this been an of that's things of paying agree with, And for to it's think on have that

question. the appreciate I So

head. hit think, the you just Josh, it on I

that, do be? Obviously, would is And think just the you recurring? call of give would mean to maybe this at, become think COVID-related COVID number be last whatnot, expense up that expenses? the might PPE, out of would maybe recurring that what a And of just you of Thanks. with be a care would I point? you have and I what expenses of out a that agree And some if one COVID-related business more, stab one. is might you do this some sort testing so, you peg a know but at some level part if sense number to bumping you for going recurring

Yes, Frank, Dale. this is

Here's $XX.X of I had view go all, think our $XX we of million we QX. stats, is, in how first it spend clearly, to million just QX, in back COVID-related

coming we are So down.

the at million in year would of of we're to neighborhood $XX somewhere look our total $XX that you guide year to balance that assume year. of for million million $XX If of balance million the for the the $X the

because that and coming downward it It's So see the will continue the future. But towards we a sustained in resurgence, or when it this not you look at now, a is really trajectory get predict sustained? we number nominal clearly a believe right thing down. on to hard

you come hard that And pay this hazard is now so that's look on going limited as COVID our our toward to clinicians And right really predict kind go-forward, are it's virus of suspected or COVID-positive very is perspective taking But spend, of patients. do. thing down. what a on our care to right to continue now. we it to to It's hard understand expect because

of comes next Stephens. Raj The from question Kumar

technical Fidel Actually, here line, it's had Scott Raj's just some on difficulties.

at in First question, that of provided. budgeting, revenue? acquired of looking be interested you corresponding the revenue Would deploy there just that the expecting just capital around annualized a of range level targeted that terms target to you're

So yes.

million correct? million to So referring revenue, $XXX $XXX acquired to Scott, our you're

That's right, Dale.

us on as $X.X into want available mentioned Thanks. not this an up modeled future. Yes, this out we the have so opening to dry mean is, we've capacity borrowing powder the and but just we for comments, closed I the of extended credit which as facility, year billion way gives we plenty in

these to balanced will. modeling as a we continues you and Our show deals, of deployment of if if all look right at now, equity, we debt complete

have plus the this have equity balance we support $XXX So out right, with of well. to $XXX of model depending year deployed minus, on, debt million shelf the in shows as million our registration million an of about that would of the $XXX that we that, or balance there

to to is So keep X, leverage our range. net goal in X.X ratio our continue the

So that's how modeled it. we've

terms XXXX. additive think That's forma aspiring of the it's example, there about that? the guidance being interested pretty then we follow-up should adjusted EBITDA that how cataloged about us mean, is towards for And some business, headwinds contribution know particularly today. that early about growth mid-teens talked hospice, you've and But revenue significant question, are that as EBITDA contributor know in Okay. as of helpful. a to it Should because the the the both the is key this or absorbing you've my for acquisitions to I on pro year. those type of sort of acquired I just giving here in industry in just sort clearly, release in we rate. that think I

that's that about talked aspiring out target relative dynamic and just growth it And me. longer-term So just for organic that inorganic to sort interested, could parse you maybe to. that you've if of try to

is this definitely It's Scott, Yes, Josh. additive. I'll start.

I and if an So that even year, million additive us about would the under our lines and on you range a each expect it to in definitely what is we XX we're us then additive with think that to now that expected far where mean even would is of to all for that end most million high service be you if one we margin tell year's we to because puts different closing contribution have $XXX year. expectations of plus standpoint, this throw acquisitions and exceeding puts sequestration the in that's part XX between have organic of low of an guide on top that, position accelerated right growth incremental revenue range, and them $XXX that, and then going And previously already. EBITDA part you can for the the late and very are XXXX. year these the And is takes from next

of starts performance. kind improve. to contribution assets year the up and we also year that's that first of margins them expect it Where level contribute when those to really start their the So to in is ramp next grow

that's and to we million expect XX%, better and the If in have XX XXX obviously, XXXX to to so you're million a forth. XX margins it seeing off accrete signaling would XXX,

of asked next the bullish year reasons question, and you about kind for the glad main So us. outlook taken we're the one of so off really

over This conference concludes the question-and-answer turn would to session. I like back closing to the Myers Keith for remarks.

apologies Okay. Thank the again, those Well, our for dialing you technical And for and difficulties. who especially thank everyone. in returned. you,

So I look quarter. forward to for next dialing Thanks talking to you in.

Thank concluded. you presentation. now has conference The attending for today's

now may You disconnect.