The Pennant Group, Inc. Q4 FY2025 earnings call

• Anticipation that the Southeast will become a strength area with significant growth potential, having added to the team and seeing ample opportunities. • Regarding senior living, a 1% increase in occupancy allows about 30% of the rent break - even to flow to the bottom line as adjusted EBITDA, and a 100 basis point occupancy increase calculates to just under $1 million in value. • Operating cash flow expected to be between $45 and $55 million in the year, and CapEx forecasted at roughly $15 million in 2026 due to needed capex for acquired buildings. • Hospice business benefits from the silver wave of aging population, with over 8% quarter - over - quarter same store growth and 7.5% year - over - year same store growth showing teams are meeting community needs, and it's noted that not everyone in the market is seeing such growth, with those able to meet local community needs doing well.

No specific absolute financial performance figures or revenue contribution percentages provided for product segments. However, it is mentioned that the Southeast is anticipated to be a growth area, with the senior living and home health & hospice segments having expansion opportunities. The Southeast has a competitive landscape where the local operating model provides an advantage over national competitors, creating an opportunity to gain market share in the acquired business and during expansion in the Southeast.

• Operating cash flow for the year is expected to be between $45 and $55 million. • CapEx is forecasted at roughly $15 million in 2026. • Goal for the EBITDA exit run rate is to reach the current operational level of 15 - 16%, with an optimal level around 18%.

Q: Following up on senior living occupancy improvement and mid - single - digit EBITDA guides, what are the underlying cost assumptions and long - term occupancy trajectory?

A: When talking about the 1% increase in occupancy, about 30% of the rent break - even can flow to the bottom line as adjusted EBITDA, and a 100 basis point occupancy increase calculates to just under $1 million in value. The long - term goal is to reach the current 15 - 16% level with an optimal level around 18%.

Q: About operating cash flow and CapEx view?

A: Operating cash flow is expected to be between $45 and $55 million in the year, and CapEx is forecasted at roughly $15 million in 2026 due to needed capex for acquired buildings.

Q: About 2026 exit run rate for EBITDA and hospice competitive backdrop?

A: The goal is to reach the current 15 - 16% EBITDA level, with an optimal level around 18%. Hospice benefits from the silver wave of aging population, with same store growth showing teams are meeting community needs as others may not all see the same growth due to being able to meet local community needs.