Grayson McAllister

Gracy McAllister from Truist Securities asked for a breakdown of the strong Resident Count growth between organic and acquisition contributions, and for an update on the M&A pipeline's health amidst economic uncertainties.

Answer

Executive Fred Burke confirmed that organic resident growth met the high single-digit guidance, with the remainder coming from acquisitions. Executive David Morris described the M&A pipeline as 'robust and as strong as it's ever been,' citing pressures on smaller pharmacies as a contributing factor to the strong flow of opportunities.

Grayson McAllister, on behalf of Truist Securities, asked for an update on technologist hiring trends, the status of the previously guided $45 million labor headwind, and the early results from the TechLive rollout.

Answer

CFO Mark Stolper confirmed the $45 million labor headwind is still factored into 2025 guidance but noted improving technologist availability. CEO Howard Berger added that the TechLive remote technology solution is now on 255 MRI scanners, has been positively received, and is instrumental in managing staffing shortages, with full rollout expected by year-end. He anticipates the financial benefits will be more visible in 2026.

Grayson McAlister, on for David MacDonald of Truist Securities, asked about the Home Health & Hospice segment, specifically why total episodes were flat despite a strong episodic mix, and the outlook for volume growth.

Answer

CEO Jeff Shaner explained that the focus has been on establishing the right operating model with a strong margin profile and high clinical outcomes, which is now 'dialed in.' With 45 episodic agreements in place and a bolstered sales team, he expressed confidence that the segment is now positioned for smart volume growth, targeting 1-3% organic volume growth on top of rate increases.

Grayson Joshua McAlister, on behalf of David MacDonald, asked for an update on cost-saving initiatives and for color on hiring trends in Georgia and Massachusetts following recent rate increases.

Answer

CEO Jeff Shaner explained that major cost reduction efforts are largely complete, with the current focus shifting to the Medical Solutions segment. He provided a detailed case study on Georgia, where passing rate increases directly to nurses significantly improved fill rates, cleared hospital discharge backlogs, and increased caregiver hours. CFO Matt Buckhalter added that savings are being reinvested into technology and automation to create future leverage.