PNTG 10-K & 10-Q changes, risk factors and insider trading

Our revenue could be impacted by federal changes to reimbursement and other aspects of Medicare. We derived 48.3%48.4% of our revenue from the Medicare program for the year ended December 31, 2024,2025, which is typical.typical for our business. In addition, other payors may use published Medicare rates as a basis for reimbursements. The Medicare program and its reimbursement rates, caps, deductibles and rules are subject to frequent change for a variety of reasons, which is discussed in Item 1., Government Regulation. Budget pressures also frequently lead the federal government to reduce or limit reimbursement rates under Medicare, and to adjust when or how those reductions or limitations are implemented, including sometimes doing so retroactively. Additionally, Medicare payments can be delayed or denied (including retroactively) due to determinations that certain costs, services or providers are not covered. Accordingly, if Medicare reimbursement rates are reduced or fail to increase as quickly as our costs, if we do not realize an adequate percentage of billed Medicare charges, or if there are changes in the way these programs pay for services or what services or providers are covered, our business and results of operations would be adversely affected. CMS has also introduced in the past, and will likely introduce in the future, new payment models, such as value-based arrangements or payment models that look to numerous factors in order to issue full payment,payment or determine the maximum amount payable, in markets in which we operate. Those models may depend on the formation of preferred provider relationships among payors and providers. Our operations may not successfully implement or adapt to these changes and our operations could be materially impacted.

Reductions in Medicaid reimbursement rates or changes in the rules governing the Medicaid program could have a material, adverse effect on our revenues, financial condition and results of operations. We derived 13.2%13.1% of our revenue from Medicaid programs for the year ended December 31, 2024,2025, which is typical.typical for our business. Any budget reductions or funding restrictions, discontinuance or reduction of federal matching, change in payment methodology or delays in states in which we operate could adversely affect our net patient service revenue and profitability. Like Medicare payments, Medicaid payments can be delayed due to budgetary constraints of the state or state agencies responsible for making such payments, and Medicaid payments may be declined (including retroactively) due to determinations that certain costs, services or providers are not covered by the state Medicaid agency or its intermediary organizations. Additionally, in many states where we operate Medicaid benefits are administered through Medicaid Managed Care Organizations (“MCOs”), which are operated by private insurance companies. These MCOs may apply different, stricter standards for reimbursement and prior authorization of our services, which may further adversely affect our ability to be paid for our services. We can expect continuing cost containment pressures on Medicaid outlays, whether administered directly by a state program or through an MCO, for our services. Also, the OBBBA’s enactment may result in significant impacts to how states fund their Medicaid programs, including who is eligible to participate, potentially resulting in significant and adverse effects on our revenues, financial condition, and operations.

Reforms to the U.S. healthcare system continue to impose new requirements upon us and may lower our reimbursements. Healthcare reform is a key political and legislative focal point. We cannot predict what effect legislative or regulatory changes (including, for instance, proposals for Medicare-for-All or public option insurers operated by one or more individual states), will have on our business, including the demand for our services or the amount of reimbursement available for those services. Such changes may impact the structure, organization, and priorities of the Department of Health and Human Services and its sub-agencies, including CMS. The full impact of the current presidential administration, outcomes of the mid-term elections in 2026, and the legislative consequences of those mid-term elections are not yet fully known for this industry, and our industry may be affected by presidentialthe and2026 congressionalmid-term election outcomes. It is possible new laws may lower reimbursement or increase the cost of doing business and adversely affect our business.

We are subject to various government reviews, audits and investigations that could adversely affect our business, including an obligation to refund amounts previously paid to us, potential criminal charges, the imposition of fines, and/or the loss of our right to participate in Medicare and Medicaid programs. As discussed in greater detail in Item 1., Government Regulation, as a result of our participation in the Medicaid and Medicare programs, we are frequently subject to various governmental reviews, audits and investigations to verify our compliance with these programs. In addition to routine audits, in its November 2023 Final Rule, CMS finalized a provisional period of enhanced oversight, including prepayment medical reviews, for all hospice providers that are newly enrolled or undergo a change of ownership, which expanded in June 2024 to include reactivated hospice providers in states where we operate. In January 2025, CMS increased the number of states subject to the provisional period of enhanced oversight, and in January 2026 further expanded the number of states subject to this enhanced oversight to six. Private pay sources also reserve the right to conduct audits. Disagreements about billing and reimbursement are common in our industry due in part to the subjectivity inherent in patient diagnosis and care, record keeping, claims processing and other aspects of the patient service and reimbursement processes. An adverse review, audit or investigation could result in (1) an obligation to refund amounts previously paid to us by payors in amounts that could vastly exceed the revenue derived from claims actually reviewed in the audit, and could be material to our business; (2) state or federal agencies imposing fines, penalties and other sanctions on us; (3) suspension of Medicare or Medicaid payments (4) loss of our right to participate in the Medicare or Medicaid programs or one or more private payor networks; (5) an increase in private litigation against us; and (6) damage to our reputation with potential residents, referral sources, and others in various markets.

Any economic downturn, deepening of an economic downturn, continued deficit spending by the Federal Government or state budget pressures may result in a reduction in payments and covered services. Adverse economic developments in the United States could lead to a reduction in Federal Government expenditures, including government-funded programs in which we participate, such as Medicare and Medicaid. In addition, if at any time the Federal Government is not able to meet its debt payments due to Congress failing to appropriate funds for the payment of these obligations, the Federal Government may stop or delay making payments on its obligations, including funding for government programs in which we participate, such as Medicare and Medicaid. Failure of the government to make payments under these programs could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. Further, any failure by the United States Congress to complete the federal budget process and fund government operations may result in a Federal Government shutdown, potentially causing us to incur substantial costs without reimbursement under the Medicare program, which could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows. As an example, the failure of the 2011 Joint Select Committee to meet its Deficit Reduction goal resulted in an automatic reduction in Medicare home health and hospice payments of 2% beginning April 1, 20132013. (However, these automatic reductions, known as “sequestrationsequestration,” -have suspendednot frombeen Mayimplemented 1,due 2020to throughnumerous Marchlegislative 31,efforts 2022;to furthersuspend extendedthese byreductions since 2020, including most recently: the Infrastructure Investment and Jobs Act of 2023, the Consolidated Appropriations Act of 2023, and the Consolidated Appropriations Act of 2024; the continuing resolution for further spending passed in the2024, American Relief Act of 20252025, (“ARA”)and didmost waiverecently the 4%OBBBA. pay-as-you-goNevertheless, sequestration,this butsequestration the ARA did not halt reductions found in Medicare payment rules that tooktaking effect forremains fiscala year 2025, including those reductions that exceeded 2%).possibility. In addition, the Federal Reserve has increased interest rates repeatedly and significantly in recent quarters and may further increase or decrease interest rates in future quarters, impacting our cost of capital, our operating costs, and the economy as a whole.

Increased competition for, or a shortage of, nurses and other skilled personnel could increase our staffing and labor costs and negatively impact our operations. Our success depends upon our ability to retain and attract nurses, certified nurse assistants, social workers and speech, physical and occupational therapists, as well as skilled personnel who are responsible for the day-to-day operations of each of our affiliated operations. If we fail to attract and retain qualified and skilled personnel, or if the associated costs to do so increase, our independent operating subsidiaries’ ability to conduct their business operations effectively could be harmed. Staffing challenges increased during the pandemic and have persisted due to health care worker burnout, COVID-19 exposures, vaccine mandates, and wage inflation, increasing the competition for qualified staff and cost of retaining personnel, and continue to affect our operations. There can be no assurance that we will be able to attract and retain key personnel going forward.

Security breaches and other cyber-security incidents could subject us to significant liability. Data breaches and leaks, which represent a material risk to our business, are reported to have occurred with greater frequency and severity in 20242025 than in prior years.years, in which there had already been a drastic increase in the frequency of these incidents. Our business depends on the proper functioning and availability of our computer systems and networks. Our security measures designed to protect our information systems, data and patient health information and disaster recovery plan may not prevent damage, interruption, or breach of our information systems and operations. In addition, hardware, software or applications we use may contain defects in design or manufacture or other problems that could unexpectedly compromise the security of our information systems. Unauthorized parties may attempt to gain access to our systems or operations, or those of third parties with whom we do business, through fraud or other forms of deceiving our employees or contractors. In addition, costs and potential problems and interruptions associated with the implementation of new or upgraded systems and technology or with maintenance or support of existing systems also could disrupt or reduce the efficiency of our operations. If a cyber-security attack or other unauthorized attempt to access our systems, such as a ransomware attack, were to be successful, the incident could result in the theft, destruction, loss, misappropriation or release of confidential information or intellectual property, and could cause delays or disruptions that may materially impact our ability to provide various healthcare services. Any successful cyber-security attack or other unauthorized attempt to access our systems or operations also could result in negative publicity which could damage our reputation or brand with our patients, referral sources, payors or other third parties and could subject us to substantial regulatory, civil or criminal penalties, fines, investigations and enforcement actions, including under HIPAA and other federal and state privacy laws, including, for example, the California Consumer Privacy Act and Nevada Privacy Law, which includes a private right of action that may expose us to private litigation regarding our privacy practices and significant damages awards or settlements in civil litigation.

State efforts to regulate or deregulate the healthcare services industry or the construction or expansion of the number of home health, hospice or senior living operations could impair our ability to expand or result in increased competition. As discussed in greater detail in Item 1., Government Regulation, our ability to acquire or establish new home health, hospice or senior living operations or expand or provide new services at existing operations would be adversely affected if we are unable to obtain the necessary approvals, if there are changes in the standards applicable to those approvals, new laws or changes in applicable laws governing CON requirements (or increasing the circumstances where a CON is needed), or if we experience delays and increased expenses associated with obtaining those approvals. We may not be able to obtain licensure, CON approval, Medicare or Medicaid certification, Attorney General approval or other necessary approvals for future expansion projects. In recent years, states including, but not limited to, California and Oregon have introduced additional regulatory reviews and other barriers to health care transactions. As of December 31, 2025, five (5) of the states we operate in have a state law requiring clearance from state authorities to engage in certain healthcare-related transactions within the state (California, Colorado, Connecticut, Nevada, and Oregon), and more states where our independent operating subsidiaries operate, or in which we seek to expand, may enact similar laws. Moratoriums on hospice or home enrollments or transfers, such as California’s moratorium on hospice licensing, could also be imposed at the federal level. Conversely, and specific to the highly competitive senior living industry, the elimination or reduction of state regulations that limit the construction, expansion or renovation of new or existing communities could result in increased competition to us. In general, regulatory and other barriers to entry in the senior living industry are not prohibitive. Over the last several years, there has been a significant increase in the construction of new senior living communities, including in the markets where we provide services. This has resulted in increased competition in many of our markets. Such new competition may limit our ability to attract new residents, raise rents or otherwise expand our senior living business, which could have a material adverse effect on our revenues, results of operations and cash flow.

Changes in federal and state employment-related laws and regulations could increase our cost of doing business. Our independent operating subsidiaries are subject to a variety of federal and state employment-related laws and regulations, including, but not limited to, the U.S. Fair Labor Standards Act which governs such matters as minimum wages, overtime and other working conditions, the Americans with Disabilities Act (the “ADA”) and similar state laws that provide civil rights protections to individuals with disabilities in the context of employment, public accommodations and other areas, the National Labor Relations Act, regulations of the Equal Employment Opportunity Commission, regulations of the Office of Civil Rights,OCR, regulations of state Attorneys General, family leave mandates and a variety of similar laws. Because labor represents a large portion of our operating costs, changes in federal and state employment-related laws and regulations could increase our cost of doing business. We also may be subject to employee-related claims such as wrongful discharge, discrimination or violation of equal employment law. Employment claims, such as wage and hour claims, frequently are the subject of class action lawsuits in many states in which our independent affiliates operate, including, for example, California.

Required regulatory approvals could delay or prohibit transfers of our healthcare operations, which could result in periods in which we are unable to receive reimbursement for such properties. Our independent operating subsidiaries must be licensed under applicable state law and, depending upon the type of operation, certified or approved as providers under the Medicare and/or Medicaid programs. In the process of acquiring or transferring operating assets, our operations must receive change of ownership approvals from state licensing agencies, Medicare and Medicaid, and third-party payors. If there are any delays in receiving regulatory approvals from the applicable federal, state or local government agencies, or from independent accreditation authorities that may be required by federal, state or local government agencies, or the inability to receive such approvals, such delays could result in delayed or lost reimbursement related to periods of service prior to the receipt of such approvals. ByAs waymentioned of example, in 2022above, California passedlegislatively Assemblyprohibited Billthe 2673 which prohibits issuancelicensing of new hospice licenseshospices, and limitslimited the transfer of existing licenses,licenses through January 1, 2027, and other states where we operate may introduce similar legislation in the future.future (see Licensure and CON). In 2024, CMS implemented a rule prohibiting hospiceMedicare-enrolled hospices from transferring a majority of ownership fromor beingengaging transferredin any similar transaction more than once in a 36-month period. States, including Oregon, have also passed or proposed laws inhibiting the corporate ownership or management of health care entities.

Our revenue, financial condition and results of operations could be negatively impacted by any changes in the acuity mix of patients in our affiliated operations as well as payor mix and payment methodologies. Our revenue is determined in part by the acuity of home health and hospice patients and senior living residents. Changes in the acuity level of patients we attract, as well as our payor mix among Medicare, Medicaid, managed care organizations and private payors, may significantly affect our profitability because we generally receive higher reimbursement rates for high acuity patients and because the payors reimburse us at different rates. For the year ended December 31, 2024,2025, 61.5% of our revenue was provided by government payors that reimburse us at predetermined rates, which is typical.typical for our business. If we fail to maintain our proportion of high acuity patients or if there is any significant increase in the percentage of the patients of our independent operating subsidiaries for whom we receive Medicaid reimbursement, our results of operations may be adversely affected. Among other initiatives, these payors attempt to control healthcare costs by contracting with healthcare providers to obtain services on a discounted basis. We believe that this trend will continue and may limit reimbursements for healthcare services. If insurers or managed care companies from whom we receive substantial payments were to reduce the amounts they pay for services, we may lose patients if we choose not to renew our contracts with these insurers at lower rates.

If we are unable to obtain insurance, or if insurance becomes more costly for us to obtain, our business may be adversely affected. It may become more difficult and costly for us to obtain coverage for patient care liabilities and other risks, including property and casualty insurance. Our claims history, asset mix, or other factors may adversely affect our ability to obtain insurance at favorable rates. Recent legislation in Nevada that prohibits the reduction of funds available to pay claims based on the costs of defending claims or litigation may result in higher premiums for our operations within that state. Similarly, recent legislation in CaliforniaCalifornia, Iowa, and Nevada increasing the amounts of non-economic damages recoverable in actions based on professional negligence against healthcare providers may also result in higher premiums for our operations within those states and limit the options for available coverage. Our insurance carriers may require us to pay substantially higher premiums for the same or reduced coverage for insurance, including workers compensation, property and casualty, automobile, employment practices liability, directors and officers liability, employee healthcare insurance benefits, and general and professional liability coverages. Further, many claims and other risks we face are not insurable. Climate change and the proliferation of natural disasters may increase the cost of coverage or make coverage impossible to obtain.

The unionization of our workers may adversely affect our revenue and profitability. To date, with the exception of one joint venture, where certain employees had elected to unionize prior to our acquisition, our employees have chosen not to unionize. ThroughoutIn 2023recent and 2024,years, however, there has been a nationwide trend of increasing union activity, including strikes in the healthcare industry and in states, such as California, in which we operate. Increasing trends of service workers successfully organizing to unionize their workplaces may increase the likelihood of our employees seeking to unionize their activities at one or more additional locations controlled by our independent operating subsidiaries. If union activity among our employees increases, our cost of doing business could increase, our operations could experience disruption, and affected operations may no longer be economical to continue operating. Further, labor disputes and unionization efforts, among our own employees or among the employees of our referral partners, payors, vendors, joint venture partners, acquisition targets, or other parties, could lead to work stoppages, slowdown, strikes, lockouts, and increased costs, which could materially and adversely impact our operations.

Because we lease most of our affiliated senior living communities, we could experience risks associated with leased property, including risks relating to lease termination, lease extensions and special charges, which could adversely affect our business, financial position or results of operations. As of December 31, 2024,2025, we leased alla majority of our senior living communities, except for three.communities. We also leased all of our administrative offices. Most of our leases are triple-net leases, which means that, in addition to rent, we are required to pay for the costs related to the property (including property taxes, insurance, and maintenance and repair costs), the cost of which tend to increase year-over year and may adversely affect us with future increases and operating expense reconciliations due for prior years. Under certain master leases, a breach at a single community could subject one or more of the other communities covered by the same master lease to the same default risk. Failure to comply with provider requirements is a default under several of the leases and master lease agreements. In addition, lease defaults could trigger cross-default provisions in our outstanding debt arrangements and other leases. With an indivisible lease, it is difficult to restructure the composition of the portfolio or economic terms of the lease without the consent of the landlord.

Inflation may negatively impact profitability. The annual inflation rate in recent years has impacted our operations, placing upward pricing pressure on all things from wages to supplies to energy costs. Inflation is expected to ease in 2025 but may continue to affect the Company’s profit in providing services. We have historically derived a substantial portion of our revenue from the Medicare program. We also derive revenue from state Medicaid and similar reimbursement programs. Payments under these programs generally provide for reimbursement levels that are adjusted for inflation annually. These inflation-based increases may not continue in the future, such as in the case of Medicare payments subject to reduction under sequestration required by prior legislation. Even if these reimbursement rate increases continued, such adjustments may not reflect the actual increase in our costs for providing healthcare services. Labor and supply expenses make up a substantial portion of our cost of services. Those expenses are subject to increase in periods of rising inflation and when labor shortages occur in the marketplace. Inflation has led, and may continue to lead, to increased interest rates, which have and could continue to increase our cost of capital, impair consumers’ ability to purchase our services, or otherwise harm us financially.

Changes to immigration law or enforcement could adversely affect our results from operations. Changes to immigration laws and policies, or increased enforcement of existing laws and regulations, could impact our employees or the labor pool from which we hire future employees. Throughout 2025, enforcement of immigration laws has intensified, and these increased efforts may continue through 2026. Such changes could reduce the number of eligible workers and increase wage costs, including for skilled workers who may work or receive professional training in the United States under various visa programs, making it more difficult or impossible for us to staff our operations.

Delays in reimbursement may cause liquidity problems. If we experience problems with our billing information systems or if payment issues arise with Medicare, Medicaid or other payors, we may encounter delays in our payment cycle or delays in submitting required cost reports. From time to time, we have experienced such delays as a result of government payors instituting planned reimbursement delays for budget balancing purposes or as a result of prepayment reviews. Some states in which we operate experience or have experienced budget deficits or could have a budget deficit in the future, including as a result of changes to federal funds matching for state Medicaid programs under OBBBA, which may delay reimbursement in a manner that would adversely affect our liquidity. In addition, from time to time, procedural issues require us to resubmit claims before payment is remitted, which contributes to aged receivables. Unanticipated delays in receiving reimbursement from state programs due to changes in their policies or billing or audit procedures may adversely impact our liquidity and working capital. Failure to timely submit required cost reports may result in financial penalties.

We are a leading provider of high-quality healthcare services to patients and residents of all ages, including the growing senior population, in the United States. We strive to be the provider of choice in the communities we serve through our innovative operating model. We operate in multiple lines of businesses including home health, hospice and senior living services across Alabama, Arizona, California, Colorado, Georgia, Idaho, Montana, Nevada, Oklahoma, Oregon, Tennessee, Texas, Utah, Washington, Wisconsin and Wyoming. We also provide home health and hospice operational support through a management service agreement in Connecticut. As of December 31, 2024,2025, our home health and hospice business provided home health, hospice and home care services from 123172 agencies operating across 1316 states, and our senior living business operated 5763 senior living communities throughout seven states.

Acquisitions. During 2024,2025, we expanded our operations with the addition of eight30 home health agencies, threenine hospice agencies, four home care agencies, and six senior living communities. A subsidiary of the Company entered into a separate purchase agreements with the prior operator of each acquired operation as part of each transaction.

We have experienced stableimprovement in senior living revenue per occupied unit and occupancy through the year ended December 31, 2025, compared to the same period in 2024. AlthoughThough we sawhave steadyseen improvements in occupancyrevenue throughoutper 2023occupied as a result of renewed consideration of senior living communities as the negative impacts of the global pandemic subsided,unit and stable occupancy duringyear 2024,over year, the highly competitive environment for senior living residents and inflationary factors will continue to impact the rate at which our revenue per occupied unit and occupancy levels change in our senior living communities.

We have two reportable segments: (1) home health and hospice services, which includes our home health, hospice, home care, and geriatric primary and palliative care businesses; and (2) senior living services, which includes our assisted living, independent living and memory care services. Our Chief Executive Officer, who is our Chief Operating Decision Maker (“CODM”), reviews financial information at the operating segment level using segment adjusted EBITDAR from operations. We also report an “all other” category that includes general and administrative expense from our Service Center.

Hospice. We derive the majority of our hospice business revenue from Medicare reimbursement. The estimated payment rates are calculated as daily rates for each of the levels of care we deliver. Rates are set based on specific levels of care, are adjusted by a wage index to reflect healthcare labor costs across the country and are established annually through federal legislation. The following are the four levels of care provided under the hospice benefit:

•Self-insurance reserves - The Company is self-insured for general and professional liability, workers’ compensation, automobile, and its employee health plans while maintaining stop-loss coverage with third-party insurers to limit its total liability exposure. The valuationCompany methodsaccrues andamounts assumptions used in estimating costs upequal to retentionthe amountsactuarial estimated costs to settle open claims of insuredsinsureds, andas well as an estimate of the costcosts of insured claims up to retention amounts that have been incurred but not reportedreported. We develop information about the size of the ultimate claims based on historical experience, current industry information, and actuarial analysis;

•costsresults at start-up operations;

•acquisition related costs and credit allowances;

•costsactivities associated with transitioning operations; and

•unusualunusual, non-recurring, or non-recurringredundant charges.

The adjustments made and previously described in the computation of Consolidated Adjusted EBITDA are also made when computing Consolidated Adjusted EBITDAR. We calculate Consolidated Adjusted EBITDAR by excluding rent-cost of services and rent related to start upstart-up operations from Consolidated Adjusted EBITDA.

Home health and hospice revenue increased $125.0$213.2 million, or 31.7%.41.0%. Revenue grew due to an increase in almost all key performance indicators including an increase in total home health admissions of 37.3%,44.1%, an increase in Medicare home health admissions of 26.9%,41.8%, an increase in average Medicare revenue per 60-day completed episode of 6.0%,3.5%, an increase of 25.3%24.4% in total hospice admissions, and an increase of 25.4%28.6% in hospice average daily census, whileand an increase in Hospice Medicare revenue per day decreasedof by 1.1%.4.9%. The improvement in these metrics resulted in net organic revenue growth of $46.4$52.8 million for the year ended December 31, 2024.2025. Growth was also driven by the acquisition of elevenforty-three home healthhealth, home care and hospice operations during the year ended December 31, 2024,2025, and the acquisition of thirteeneleven home health, home care, and hospice operations during the year ended December 31, 2023,2024, resulting in an increase in revenue of $78.6$160.5 million, or 19.9%30.9% overall.

Senior living revenue increased $25.3$39.2 million, or 16.8%,22.3%, for the year ended December 31, 20242025 when compared to the same period in the prior year primarily due to aan 8.3%8.0% increase in average monthly revenue per occupied unit and a 0.3%90 basis point increase in occupancy rate. Growth in revenue was also driven by the acquisition of six senior living communities during the year ended December 31, 2024,2025, and the acquisition of twosix senior living communities during the year ended December 31, 2023,2024, resulting in an increase of $12.5$24.6 million, or 8.3%14.0% overall.

Consolidated cost of services increased $120.4$210.1 million, or 27.5%,37.6%, for the year ended December 31, 20242025 when compared to the year ended December 31, 2023.2024. The increase in the amount of cost of services was driven primarily by volume of services provided and increased wages and benefits. Cost of services as a percentage of revenue decreasedincreased by 1080 basis points from 80.4%80.3% to 80.3%81.1% over the same time period.

Cost of services related to our Home Health and Hospice services segment increased $101.6$179.0 million, or 30.6%,41.3%, primarily due to increased volume of services from the growth in admissions and average daily census as well as increased wages and benefits. Cost of services as a percentage of revenue for the year ended December 31, 20242025 decreasedincreased by 7020 basis points compared to the year ended December 31, 20232024 primarily due to increased efficiencywages inand our operations.benefits.

(Gain) loss on Asset Dispositions and Impairment, Net. (Gain) loss on asset dispositions and impairment, net iswas a$1.0 gainmillion offor the year ended December 31, 2025 compared to $0.7 million for the year ended December 31, 2024 compared to a loss of $0.1 million for the year ended December 31, 2023 primarily due to insurance proceeds related to one of our senior living communities.

Provision for Income Taxes. Our effective tax rate for the year ended December 31, 20242025 was 22.4%26.0% of earnings before income taxes compared with an effective tax rate of 29.0%22.4% for the year ended December 31, 2023.2024. The decreaseincrease in the effective tax rate is primarily duedriven toby athe change in deductiblediscrete equitytax compensationeffects expenses.of share-based compensation. See Note 14, Income Taxes, to the Consolidated Financial Statements included elsewhere in this report filed on Form 10-K for further discussion.

Our primary sources of liquidity are cash generated through operating activities and borrowings under our revolving credit facility.agreement.

Our net cash flow from operating activities for the year ended December 31, 20242025 increased by $6.2$9.0 million when compared to the year ended December 31, 2023.2024. The primary drivers of this difference waswere a $10.4$9.4 million increase in net income,income offset byand a $2.5 million net decrease in cash flows from the change in operating assets and liabilities and a net decrease of $1.7 million in non-cash expenses.liabilities.

Our net cash used in investing activities for the year ended December 31, 20242025 increased by $40.5$157.3 million compared to the year ended December 31, 2023,2024, primarily driven by a $40.4$154.7 million increase in business acquisitions, asset acquisitions, and escrow deposits and a $3.0 million increase in purchases of property and equipment during the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024.

Our net cash provided by financing activities increased by $48.5$122.9 million for the year ended December 31, 20242025 when compared to the year ended December 31, 20232024, primarily duedriven toby an issuanceincrease in net proceeds from our Amended Revolving Credit Facility of equity$140.0 million and an increase in proceeds from our Incremental Term Loans of $100.0 million. During the year ended December 31, 2024, we received $118.1 million through a secondary offeringoffering. totaling $118.1 million offset by a net repayment of debt totaling $65.0 million and paymentsPayments for deferred financing costs ofdecreased $3.9$2.7 million during the year ended December 31, 2025 compared to the year ended December 31, 2024.

•federal and state changes to, or delays receiving, reimbursement and other aspects of Medicaid and Medicare, including proposed Medicare reimbursement reductions in the Calendar Year 2026 Home Health Prospective Payment System Rate Update Final Rule and changes to Medicaid funding and eligibility within the One Big Beautiful Bill Act;

We are a leading provider of high-quality healthcare services to patients and residents of all ages, including the growing senior population, in the United States. We strive to be the provider of choice in the communities we serve through our innovative operating model. We operate in multiple lines of businesses including home health, hospice and senior living services across Alabama, Arizona, California, Colorado, Georgia, Idaho, Montana, Nevada, Oklahoma, Oregon, Tennessee, Texas, Utah, Washington, Wisconsin and Wyoming. We also provide home health and hospice operational support through a management service agreement in Connecticut. See Note 9, Equity Method Investments, for further details about our investment in these operations. As of MarchJune 31,30, 2026, our home health and hospice business provided home health, hospice and home care services from 174175 agencies operating across these 16 states, and our senior living business operated 6369 senior living communities throughout seven states.

On AprilJuly 2,30, 2026, CMS issued the Calendar Year (“CY”) 2027 Hospice Wage Index and Payment Rate Update proposed rule (“Hospice Payment ProposedFinal Rule”). The 2027 Hospice Payment Proposed Rule includes several changes that, if finalized, could materially impact reimbursement of hospice providers. The Hospice Payment ProposedFinal Rule’s net payment update percentage is 2.4%,2.3%, which is an estimated increase of $785$755 million in payments from fiscal year 2026 in the aggregate across all hospice providers. The payment update percentage is based on a 3.2% market basket percentage increase, reduced by a 0.8%0.9% productivity adjustment. In addition, the Hospice Payment ProposedFinal Rule proposes to updateupdates the statutory aggregate cap of the total overall payments per patient that may be made to a hospice annually to $36,210.11$36,174.75 for fiscal year 2027, which is an increase of 2.4%2.3% from the 2026 fiscal year cap of $35,361.44.

The Hospice Payment ProposedFinal Rule seeks to makemakes a technical change extending a hospice’s ability to use telehealth to conduct encounters that otherwise have to be conducted face-to-face through December 31, 2027, to align with the CAAConsolidated Appropriations Act of 2026. Further, CMS ishas proposing to makemade the hospice election statement addendum, which was originally only provided to hospice patients upon request, mandatory for all hospice elections. In publishing the 2027 Hospice Payment ProposedFinal Rule, CMS explained that this requirement will provide beneficiaries additional transparency regarding the items, services, and drugs not covered under Medicare’s hospice benefits, so that those beneficiaries can make appropriate treatment decisions. Finally, as part of the Hospice Quality Reporting Program, CMS is proposing towill add an icon to the Medicare.gov Compare Tool that will identify hospices failing to submit any data or submitting less than the required quality data beginning in the 2028 fiscal year.

Home Health. We derive the majority of our home health revenue from Medicare and managed care. The Medicare payment is adjusted for differences between estimated and actual payment amounts, an inability to obtain appropriate billing documentation or authorizations acceptable to the payor, and other reasons unrelated to credit risk. Net service revenue is recognized in accordance with PDGM methodology. Under PDGM, Medicare provides agencies with payments for each 30-day period of care provided to beneficiaries. If a beneficiary is still eligible for care after the end of the first 30-day payment period, a second 30-day payment period can begin. There are no limits to the number of periods of care a beneficiary who remains eligible for the home health benefit can receive. While payment for each 30-day period of care is adjusted to reflect the beneficiary’s health condition and needs, a special outlier provision exists to ensure appropriate payment for those beneficiaries that have the most expensive care needs. The PDGM payment under the Medicare program is also adjusted for certain variables including, but not limited to: (a) a low utilization payment adjustment if the number of visits is below an established threshold that varies based on the diagnosis of a beneficiary; (b) a partial payment if the patient transferred to another provider or the Company received a patient from another provider before completing the period of care; (c) adjustment to the admission source of claim if it is determined that the patient had a qualifying stay in a post-acute care setting within 14 days prior to the start of a 30-day payment period; (d) the timing of the 30-day payment period provided to a patient in relation to the admission date, regardless of whether the same home health provider provided care for the entire series of episodespayment periods; (e) changes to the acuity of the patient during the previous 30-day period of care; (f) changes in the base payments established by the Medicare program; (g) adjustments to the base payments for case mix and geographic wages; and (h) recoveries of overpayments. These variables are subject to periodic adjustments set by CMS regulations. For further detail regarding PDGM see the Government Regulation section of our 2025 Annual Report.

The following table presents our consolidated GAAP Financial measures for the three and six months ended MarchJune 31,30, 2026 and 2025:

Three Months Ended MarchJune 31,30, 2026 Compared to the Three Months Ended MarchJune 31,30, 2025

Our total revenue increased $75.5$78.5 million, or 36.0%,35.8%, during the three months ended MarchJune 31,30, 2026. We experienced growth of $69.2$71.8 million from increased operational performance in our Home Health and Hospice segment from increased admissions and census, primarily driven by newly acquired agencies when compared to the three months ended MarchJune 31,30, 2025. The growth in our Senior Living segment resulted in an increase in revenue of $6.3$6.7 million driven by acquired senior living communities and an improved average rate per occupied room and improved occupancy.

Home health and hospice revenue increased $69.2$71.8 million, or 43.3%,43.2%, for the three months ended MarchJune 31,30, 2026 compared to the prior year quarter. Revenue grew due to an increase in certain key performance indicators, including an increase of 62.7%62.3% in total home health admissions, an increase in total hospice admissions of 27.0%,38.4%, and an increase in average daily hospice census of 37.0%40.1% during the three months ended MarchJune 31,30, 2026 compared to the prior year quarter. Growth was also driven by the addition of thirty-seventhirty-eight home health and hospice operations between MarchJune 31,30, 2025 and MarchJune 31,30, 2026. Agencies acquired during calendar year 2025 and year-to-date MarchJune 31,30, 2026 drove an increase in revenue of $53.3$55.8 million, representing a 33.3%an increase of 33.6% compared to the prior year quarter.

Senior living revenue increased $6.3$6.7 million, or 12.6%, for the three months ended MarchJune 31,30, 2026 compared to the prior year quarter. Revenue grew due to a 3.8%an increase of 3.9% in average monthly revenue per occupied unit and an increase of 10 basis points in occupancy between MarchJune 31,30, 2025 and MarchJune 31,30, 2026. Growth was also driven by the addition of threeeight senior living communities between MarchJune 31,30, 2025 and MarchJune 31,30, 2026. Communities acquired during calendar year 2025 and year-to-date MarchJune 31,30, 2026 drove an increase in revenue of $2.7$3.2 million, representing a 5.4%an increase of 6.0% compared to the prior year quarter.

Total consolidated cost of services increased $63.9$65.4 million, or 37.9%,36.9%, for the three months ended MarchJune 31,30, 2026 when compared to the three months ended MarchJune 31,30, 2025. Cost of services as a percentage of revenue increased by 11060 basis points from 80.4%80.8% to 81.5%81.4% for the three months ended MarchJune 31,30, 2026 when compared to the three months ended MarchJune 31,30, 2025.

Cost of services related to our Home Health and Hospice Services segment increased $59.3$59.5 million, or 44.6%,43.1%, for the three months ended MarchJune 31,30, 2026 when compared to the three months ended MarchJune 31,30, 2025, primarily due to increased volume of services provided and transition costs related to acquisitions. Cost of services as a percentage of revenue for the three months ended MarchJune 31,30, 2026 increaseddecreased 8010 basis points when compared to the three months ended MarchJune 31,30, 2025.

Cost of services related to our Senior Living Services segment increased $4.7$5.8 million, or 13.0%,14.9%, for the three months ended MarchJune 31,30, 2026 when compared to the three months ended MarchJune 31,30, 2025, primarily due to increased wages and benefits and acquisition activity. As a percentage of revenue, costs of service increased by 20150 basis points for the three months ended MarchJune 31,30, 2026 when compared to the three months ended MarchJune 31,30, 20252025, primarily due to decreaseshigher incost statepatterns reliefat funding.newly acquired operations.

Rent—Cost of Services. Rent expense increased 11.8%12.6% from $11.7$11.9 million to $13.1$13.4 million in the three months ended MarchJune 31,30, 2026 when compared to the three months ended MarchJune 31,30, 2025, primarily as a result of the new leases related to the acquired home health and hospice operations and senior living communities. Rent as a percentage of total revenue decreased 10090 basis points from 5.6%5.4% for the three months ended MarchJune 31,30, 2025, compared to 4.6%4.5% for the three months ended MarchJune 31,30, 2026.

General and Administrative Expense. Our general and administrative expense increased $4.8$4.0 million, or 32.7%,22.8%, from $14.8$17.6 million to $19.7$21.6 million for the three months ended MarchJune 31,30, 2026 when compared to the three months ended MarchJune 31,30, 2025. General and administrative expense as a percentage of revenue decreased 2070 basis points from 7.1%8.0% to 6.9%7.3% during the period. The primary driver of the increase in general and administrative expense was due to an increase in payrollpayroll, incentives, and related benefits and an increase in professional services related to acquisition activities for the three months ended MarchJune 31,30, 2026 when compared to the three months ended MarchJune 31,30, 2025.

Depreciation and Amortization. Depreciation and amortization expense increased $0.7$0.9 million, or 38.3%,39.9%, from $1.9$2.2 million to $2.6$3.1 million for the three months ended MarchJune 31,30, 2026 when compared to the three months ended MarchJune 31,30, 2025. The increase in depreciation and amortization was due to the increase in overall property and equipment, net balances driven in part by acquisition activity.

Provision for Income Taxes. We recorded income tax expense of $3.8$3.9 million and $2.9$2.6 million, or 26.9%26.5% and 25.1%24.6% of earnings before income taxes, for the three months ended MarchJune 31,30, 2026 and 2025, respectively. The increase in the effective tax rate is primarily attributable to higher state income taxes driven by changes in the geographic mix of earnings, net of the relatedassociated federal tax benefit.

The Amended Credit Agreement contains customary covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company and its independent operating subsidiaries to grant liens on their assets, incur indebtedness, sell assets, make investments, engage in acquisitions, mergers or consolidations, amend certain material agreements and pay certain dividends and other restricted payments. Financial covenants require compliance with certain levels of leverage ratios that impact the amount of interest. As of MarchJune 31,30, 2026, the Company was compliant with all such financial covenants.

As of MarchJune 31,30, 2026, we had $4.9$15.3 million of cash and $174.6$145.6 million of available borrowing capacity on our Amended Revolving Credit Facility.

ThreeSix Months Ended MarchJune 31,30, 2026 Compared to the ThreeSix Months Ended MarchJune 31,30, 2025

Our net cash usedprovided inby operating activities for the threesix months ended MarchJune 31,30, 2026 decreasedincreased by $17.8$5.0 million when compared to the threesix months ended MarchJune 31,30, 2025. The primary driver of this difference was an increase in net income of $1.8$4.7 million, an increase of $2.0$6.0 million in non-cash expenses,adjustments, and ana increasedecrease in cash flows from the change in operating assets and liabilities of $14.1$5.7 million, net.

Our net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 decreased by $44.9$15.1 million compared to the threesix months ended MarchJune 31,30, 2025, primarily driven by a decrease in business acquisitions.

Our net cash usedprovided inby financing activities decreased by approximately $55.8$12.0 million for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025. The decrease was primarily due to a net decrease in the balancenet amount drawn on our line of credit used primarily to fund acquisition activity during the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025. The three months ended March 31, 2025 included a large draw on our Amended Revolving Credit Facility related to acquisition activity.