Awesome. Good afternoon, and welcome again to the Jefferies 2026Healthcare Services Conference. I am Brian Tanquilut, healthcare services analyst here at Jefferies. With us next is The Pennant Group, one of the largest operators of home health services and senior housing as well. Joining us this afternoon are Brent and John. Sorry about that. Brent, I will start with you. Maybe if we can do a quick state of the union. You reported some really strong Q2 numbers, and if you can talk about the expectations for the back half of the year. Yeah, sure. Well, excited to be here today. A lot of what I will focus on a little bit is just obviously there has been a lot of conversation around the transition of the Amedisys and LHC Group assets. We have been really excited about the performance in our same-store or existing operations. Anytime you do an acquisition that is the size of what we have been in the midst of the last year, it can be really disruptive. Yet in the middle of all of that, our operators, because of our model, their drive to be successful, have continued to drive value. We have seen improvements from a margin front. We have had a major focus on operational excellence, creating productivity gains, and just really driving value across the business lines. That is tough to do when you are in transition mode. In our model, we require a lot of our local teams to support anytime we do an acquisition. I think that same-store improvement and growth, and we have seen census growth, we have seen margin improvement, we have seen revenue, and then bottom-line performance as well. In addition to that, obviously, we have also been transitioning these new assets in the Southeast, and so far so good. We have been a little bit ahead of schedule. As a result of that, our performance has been stronger in 2026. Now we are cautiously optimistic. As I think as we look to the end of the year and then going into 2027, what you are really seeing is significant momentum across our businesses, whether that is home health, hospice, in these new acquisitions, existing operations, but also in our senior living business as well, as we have done a number of acquisitions there too. We have got leaders in place. We have got momentum in the business. We recognize, though, that there is still some waves going on within the transition of these assets in the Southeast. We want to make sure we are conservative enough through looking through the end of the year to acknowledge that there might be some lumpiness in the results there too. So maybe let's break that down, the growth side and the guidance adjustment into two pieces. First, on the same-store side, you guys have done really well even on the same. Take Amedisys aside for a minute. Same-store has been really strong, and the core has grown really well, both in top line and EBITDA. So maybe, John, if you can walk us through what's driving this upside right now in the core? Yeah, Brian, thanks for the question. And like Brent said, we're really excited to be here. I think when you look at our core business, there's a couple of things that are really important. I think first, our operating model is based on this principle that if you empower local leaders, you give them transparent data, you give them decision-making, and then you support them with cluster accountability, so peer accountability in the right way, they're going to be able to make decisions that are in concert with their aligned incentive programs. And so when you look at how do you achieve 9%, 10%, 11% same-store growth over the course of the last three years, it really comes back to how do you meet the needs of the local community in a way that differentiates you. And I think what our teams have been able to do is they've been able to recruit talent, they've retained that talent, and they have set themselves apart by being willing to adapt to whatever the unique needs of the particular community they're serving is. And that's really our recipe. It's really about empowering local leaders, aligning their incentives, and then facilitating their growth by giving them transparent data and best practice sharing across the organization. Maybe I'll push that question further. When we think of the demand environment for home health, what does that look like right now? And then as we think through the drivers, and then how are you feeling about the improving regulatory environment, and what does that do for the way you approach a business today? Yeah. The demand environment, obviously, we are in the early stages of what we call the silver wave. That means that our average home health patient, 77, 78 years old, our average hospice patient, 82 to 83 years old, our senior living patient is sort of right there in that middle area. You think 80 years ago, World War II is ending, the baby boom is beginning, and we've got approximately 4,000 seniors every day aging into a need for our services. From a demand standpoint, particularly in certain communities, there is more volume than we can service with the staff we have. It is more a workforce question than it is a volume availability question. But I think as you sort of zoom out, the ability to grow comes back to meeting the needs clinically, and I think that's where we've been able to sort of differentiate ourselves and set ourselves apart, is just in producing clinical outcomes that health systems, that payers, they have wanted to partner with us. That's opened avenues for our local leaders to take more volume, and has helped us take market share. I would just add, we are a leadership company first. The reason for that is we fundamentally believe if we have the right leaders in place in our local operations, they're going to create an environment where employees want to work, and by extension, we'll have opportunities to serve the communities in a greater way. Really, our growth is tied to the leaders that we have in place. It's why we've invested in our leadership training programs. It's why we've continued to focus on our core value of customer second, creating an environment where employees want to be. Because if the demand is there and it's just a function of having the staff, if we can be the best employer in the markets that we operate in, then naturally we'll be able to meet the demands as well. Brent, maybe let's extrapolate that to the second part of the growth equation. You stood up a business here in Nashville after the Amedisys LHC asset acquisition. What does that look like today, and how are you driving that upside versus expectations? I'm guessing that's part of the answer to that question, but would love to tee that up for you. Well, there's a number of different things. One is, obviously you've got the transition. We've got to move all of the teams onto our systems and create the value that's there. We think we have a technology stack that is at the top of the market, and so therefore it allows us to drive better efficiencies through our services. We can have higher productivity. It's also a matter of providing clarity to the leaders that are in place and the teams that are in place. What we've found is what we measure, we improve. We scoreboard and we work together closely. Those clusters work together to establish goals and expectations and commitments, and then we hold each other accountable to achieving those things. That's just our operating model going into effect, and then we're overlaying that with this technology stack that's driving the value. From that standpoint, that's one of the levers. The other thing that I would think about, John referenced this earlier in our model, in many cases, we're either bringing in new leaders that have gone through our CEO and training program, or we have existing leaders that maybe were managing to budgets and just had surface level targets that they had to achieve. Whereas now we're turning over the entire P&L and all decision making at the local level. So they're working in their communities. They're understanding how to pull the right levers, which partners in the community to collaborate with. They can come up with real time solutions for challenges in those communities. They can be selective about which payers to work with, if there's better MA rates with one payer versus another. What you have is you have these individual, almost entrepreneurial leaders at the local level now who were managing business, but as John referenced, they own their businesses now. Because they're aligned from an incentive standpoint, their target, if they grow, their opportunity grows with it. It's just natural that you will see organic growth as an extension of that. Going back to the original question about growth and performance, it's all tied to the model and making sure we're aligning our leaders appropriately with the expectations of the business. So maybe I'll take this one step further. I think you've called out that the Amedisys acquisition was going through a fifth round or fifth wave of transition or integration through October. Just curious, any updates you could share with us, and then how do we think about the margin ramp opportunity from sub 10% to kind of like a 15%-18% goal? Yeah. We have started wave five. When we embarked on the acquisition, this is really a continuation. We started the Signature transition August of 2024. Since then, we did the Signature transition, we did the Hartford transition, and now we have done the Amedisys and United transition. That meant looking at the whole gamut and dividing this acquisition amongst multiple waves to ensure that our team could really meet the needs of those local employees and staff in a way that would allow us to retain them. I think that what has been really exciting and most meaningful to us is that we have been able to retain that staff, and in doing so, we have also been able to retain the census. When we talk about being a little bit ahead of schedule, we always build into our pro formas an expectation that as we go through a system transition, we are pulling clinicians from the field to train and get familiarized with our systems. They are carrying multiple devices as they go out, and we generally see a little bit of a drop-off in census and admissions. Throughout the first three waves, we did not see that. Going into wave four, we did not see that. That was really a result of, one, the things that we have learned through the course of this two-year journey of improving our acquisition process. Two, it is indicative of the excellence of these teams and the fact that these are great employees who have, in many cases, been with these organizations for a long time and gave us a chance to show who we were culturally, how we would operate these businesses, and that we would do it in a way that was compatible with their long-term goals. As we did that, we have now entered wave five, which is the Amedisys West Tennessee and Central Tennessee assets. It is the largest wave. This was really multiple transitions. You had Amedisys Hospice, you had Amedisys Home Health, you have LHC Hospice, you have LHC Home Health. We really had to figure out how to do that in a way that was conducive to the likelihood of success. When you look out at the margin profile, we projected that we would be between 9.5% and 11.5% this year. We have come in a little bit above that so far, but certainly right on target. As we look out to getting to that 18%, we normally look at a nine-quarter business optimization where we are taking a business that is underperforming relative to our targets and bringing it up to par. I think here we have some really strong performers. The UT JV is an example of that. We have got some weaker performers, but we really believe that through 2027 and into 2028, we are going to see those margins come right in line with our other businesses. Brent, since John brought up the JV, one of the things that is kind of unique to you guys, at least from the public companies we have seen in the past in the space, is the JV strategy. Maybe if you can just walk us through why you like the JV strategy, and what does that bring to the table? I know UT here in Tennessee is a key partner, so let us touch on that. Yeah. Just to maybe level set, we have essentially four JV partnerships now. We started with Scripps in Southern California, San Diego area. Then we expanded into the Bay Area with John Muir. More recently, we have partnered with Hartford HealthCare in Connecticut, and now UT up in Knoxville area. When you think about, I work back from the point of view of how can we be a solution in the communities and with the partners that are out there? Oftentimes in not-for-profit healthcare systems, there is a lot of overhead, there is a lot of opportunity to, especially when you have got these ancillary businesses, to drive real value. That is where we come in. We are experts in home health and hospice. So when we can come and partner with a group like Hartford who are, they are incredible. They are incredible operators. They are incredible partners. We have the opportunity to help just drive efficiency in those businesses. We want to take that up, because there is so much value that can be added, and there is a continuum of care piece that is so critical there. We can bring in, again, our technology stack. We can bring in our expertise. We can bring in our efficiencies and drive real value there. The other thing is we drive value for the hospital system because as we decant the hospital, we can improve our capacity, the ability to take on more patients and serve the communities in a healthier way. So for us, it makes sense. The other piece of this is, there is kind of multiple aspects to this. But generally, there is a management fee relationship, so there is opportunity on that front. But then there is also the bottom line. We are aligned to be able to drive value there. So overall, we see this as a long-term play. As we continue to get experience working with these healthcare systems, we think we can have a meaningful impact over time. The other thing that it does is it allows us oftentimes, especially going into new markets, to have a much bigger footprint. So in the case of Connecticut, they are a large system and a large home health and hospice business. So it is easier for us to invest in leadership there, to have a service center there, and then potentially have an expansion, not necessarily through the JV, but to expand into the Northeast and other markets in the Northeast. So it is a way for us to expand our operations as well. I think one other thing that I would add that we're excited about is, for example, UT is a really strong hospice joint venture. They've struggled a little bit on the home health side. Our partnership at Hartford HealthCare at Home is predominantly a home health joint venture. They serve more than 4,000 patients every day on the home health side. We see opportunities now to sort of cross-pollinate and take learnings from Knoxville up to Hartford and from Hartford back to Knoxville, just as we've done in California with Scripps and Muir. Really, we're about how do we create the most value for the communities we serve, for the health system, ultimately for the partnership. So maybe just to that point, when I think of capital allocation for acquisitions specifically, as you think about the growth that you've had in home health, some hospice growth, obviously. How do we think about going forward, the strategy around pursuing more deals in hospice, potentially, or even, we see personal care, we saw a personal care deal announced yesterday. Just curious how you're both thinking about the strategy as you wrap around some of these JVs and relationships. Well, our approach to acquisitions is sort of threefold. The first thing we do is we're a leadership company. Do we have leadership in the pipeline ready to step in? The second thing is, what is the strength of our operations? Do we have, whether they're clusters or markets that are successful, and they can support the expansion. As we mentioned before, we don't have an acquisitions team. It's the local teams that come in and support and help the growth. Then lastly, is the opportunity right? Can we get an ROI? Can we get that 20% return year over year? That's how we're evaluating any deal. For the most part, we're agnostic to which line of business it is. If we meet those criteria, then we can invest. If we invest in home health, then we can always add a hospice and grow the hospice. If we invest in a hospice, we can always add a home health. Across the continuum of care, where we have our senior living communities, we can invest there, and we can provide our home health and hospice services there. But also, there's ample opportunity to grow the bottom line performance as well. So, that's how we kind of think through it. The other piece of this is we're always disciplined around the way we invest our dollars. We have a very conservative approach to managing our balance sheet. We have a low net debt to adjusted EBITDA ratio in terms of our leverage. We want to be in a position where regardless of what the opportunity is, we are in a position where we can grow and expand. We will continue to approach acquisitions in that way going forward. Yeah. I would just add, I think we now have seven portfolios across our home health and hospice organization. Each of those portfolios has leaders who, one, are incentivized to find amazing talent for that executive director and clinical director role. They are incentivized to find acquisitions and create opportunities for those people. Then they have a group of CEOs who have been part of this generational growth. So they have been part of the Signature transition, the Hartford transition, the Tennessee transition, so they have built organizational muscle. We have many more leaders than we had three years ago who understand how to make a transition successful. So when we look out into the future, I think we have got sort of seven growth engines that can now take opportunities, and we sort of look at those opportunities in four different buckets. There is sort of our traditional single site, mom-and-pop operation that we have been doing for 15 years. There are joint ventures like we referenced before. We think that is an important part of our strategy because we think we can offer something unique to our non-profit, even for-profit health system partners. Then there are larger deals like the Amedisys United transaction, the Signature transaction, where we can pull the organization together to accomplish something that maybe one portfolio couldn't do. Finally, there is also startup growth. Obviously, there is a moratorium. I am sure you will have questions about that. But we do see that as a long-term sort of part of our strategy, the ability to use de novos. You have seen us invest a lot in home health over the last couple of years, in part because we are opportunistic buyers, and we feel like because of the reimbursement structure, people haven't been willing to. There has just been opportunities that fit nicely within our return quality, as opposed to hospice, where multiples have remained elevated, and we have felt like we would rather buy a home health, attach a hospice to it, and build it ourselves. No, that makes a lot of sense. Brent, since we are talking regulatory environment here now, I will start with you. How are you feeling about the home health proposed rule and just the broader view of legislators and CMS on home health reimbursement and PDGM and other things that have been headwinds for the industry over the last several years? Yeah, I will make a comment, and then I will let John spend a little more time on this as well. Obviously, we are happy that it is a positive rate increase. I think it is a signal at least going forward that maybe there is going to be a little bit more stability on the home health reimbursement front. One of the things that we recognize is the value of home health to the system. It is the lowest cost setting, and there is so much opportunity to really manage across the continuum of care, and that the quality and the clinical requirements based in home health, it is such that we have got to be strong, and we have got to be able to provide great care, and if reimbursement does not follow, it becomes more and more difficult to do that. So, like I said, there will be a positive impact for us. It is not quite the 2.5% or 2.3% that they are proposing. But it is a step in the right direction. And we continue to work closely with CMS and with legislators to try to get better outcomes in that space. But I think there is still a lot of work to be done there. Yeah, I think you hit it with regard to the proposed rule. I was going to ask you a different regulatory question. Oh, yeah. Moratorium, since you brought it up earlier. How is that impacting your strategy right now, whether that's M&A, building the pipeline, thinking about the long-term growth, both through de novos and acquisitions? Yeah, I'd kind of put the moratorium along with the broader regulatory environment because I think it's all playing a role. The moratorium specifically is affecting us. We had four planned de novos this year that we had to sort of mothball for a period of time. There's still lots of preparatory work that can be done, but as far as actually getting the provider number, that will push that out. But I think when you look at the broader regulatory environment, we're seeing an impact, particularly in states like California and Arizona, where the enforcement environment is resulting in providers who may be really solid providers but are having cash flow issues because they have so many claims under review, and that's resulting in them reaching out and saying, "Hey, would you be interested in acquiring? Would you be able to take our patients if we're not able to continue?" There's been a little bit of a, it's been a difficult environment. It's a unique time in our space right now. For our part, we've been very grateful that we've invested so heavily in our compliance program. We've invested so heavily in our, we call it our denials management team, the group that responds to those requests, those post-payment audits. Overall, because we've performed so well, it's positioned us to take market share and to have opportunities to grow during this difficult time. At the same time, we feel like the moratorium is a very blunt instrument. We're optimistic that it will be at least the nationwide moratorium will end, and there may be a more targeted moratorium in states like California going forward. But obviously, there's been signals both ways. We're waiting to see what CMS does there. But we're also collaborating closely with CMS and with our partners in the industry in trying to draft proposed rulemaking and legislation that would enhance protections against fraud, waste, and abuse, while at the same time being nuanced enough to recognize that penalizing good providers isn't helping anyone. No, that's very helpful, very insightful. Thank you. Maybe, Brent, I'll turn to the senior living side of things. You've done some acquisitions, I think Copper Canyon, River Center. When we think about capital deployment, how do you make that decision on weighting of the capital towards senior housing versus the home health side of the business? Yeah. Well, I mentioned it before. We're somewhat agnostic in terms of the opportunity and how we approach it. The other thing I would think about with senior living, there are sort of two elements to it. We can expand without upfront capital, or we can expand by investing in the real estate. In most cases, in most of the growth that we've done more recently, it's through triple net leases. So we walk in and we're the operators, but we don't have to put any upfront capital. But where the real estate makes sense, then we have, on occasion, invested in the real estate as well. We do see that as a lever for us to be able to pull to create value in those real estate businesses. Normally, we're acquiring these businesses, they're distressed assets or underperforming assets. In the world of senior living real estate, we can acquire something at a distressed level, turn around the operations, and increase the value exponentially. Then over time, we potentially can pull value out of that to reinvest in future real estate. That's really how we're trying to think about it in terms of a sustainable process to create value through the real estate investments. Then it's just a matter of capacity from a transition standpoint or an acquisition standpoint. If we have the leaders in place and we have the teams in place, the markets to support it, then we'll be able to grow. That's why you've seen growth in places like Wisconsin and Arizona over the last six months or so, because we've got strong teams there, and we've had great opportunities to step in. Maybe, John, just to that point, right? This business is a little different from home health, where you can Home health is a human capital business. Here, I think the asset itself has some influence on the performance going forward. With the strategy that you guys employ where you buy relatively underperforming assets, how I appreciate the leadership strategy. So how does that all come together, and what are the levers that a good leader can pull to drive occupancy and gains in a relatively underperforming community? Yeah. I think ultimately, when you're looking for a community, I just My grandmother just passed away a few weeks ago, and six months ago, she had severe dementia. We needed to place her in a home. My mother had been caring for her for a year and a half. She just couldn't do it anymore. As we started looking at the different options from a senior living community standpoint, there's obviously a minimum quality of the asset. But we weren't looking for a $12,000 a month luxury resort. What we were looking for is we knew she had significant medical needs, and we were looking for a team that we knew could provide for those needs. So where the leadership component, and where I think we differentiate ourselves is we're a healthcare company. We started as part of The Ensign Group. We operate home health and hospice. We are a company that operates from a foundation of skilled clinical offerings. When we go, we are looking at the real estate as one component of the offering, but we're not a real estate company. We differentiate ourselves by putting the right leaders in place to build a team that can care for people in a way that you can be comfortable that your loved one is going to get the skill and the care and the love that they need in that phase of their life. I think that's where it sort of all comes together. You add to that, we have unique partnerships with our home health and hospice business, with skilled nursing partners. We have provider services in many communities, which allows us to offer geriatric primary and palliative care. This whole continuum sort of allows us to support a senior through their final stages of life. I think that's really where we differentiate ourselves and where it comes together. Leadership plus the quality of the physical asset yields a different offering than just a real estate play or a building that you wouldn't be comfortable putting your loved one in. That makes sense. Brent, we've got 1 minute and 42 seconds here. Okay. Maybe if you can just share with the audience any thoughts, like parting thoughts, on why they should be looking at Pennant as an investment opportunity, but also anything that you think is underappreciated about your story today. Well, I would just say this. We are a leadership company. We are about providing life-changing opportunities to our people and to the people that we serve. When you think about healthcare and the challenges of healthcare in the future, the end of life years, last year of life and the years before that, are the most difficult and challenging, whether it is from a financial standpoint, from a care standpoint. John just referenced his family, his grandmother. It is really difficult at times to take care of loved ones in the right way. Our goal is to provide care in the home setting, whatever that is. We are very strong from a home health and a hospice standpoint. We are very strong from a senior living standpoint. We continue to invest in our personal care services. We continue to invest in our provider services. We continue to invest in all aspects along that continuum of care. Over time, the goal. We also continue to invest in technology that allows those transitions to go well. Our goal over the long term is to create a safety net across that post-acute continuum of care and give our patients and their family members in the communities the care that they deserve and really the end of life experience that they need. That is one of the primary focuses of where we are going, and we are doing that through the services that we have today. Amazing. Thank you guys so much. Appreciate it. Thank you. Thank you, Brian. Thank you. Thanks, everyone.