Operational Drivers and Strategic Framework

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• Performance was driven by the continued maturation of the facility portfolio, moving assets through the integration life cycle from new to ramping to mature status.

• Management attributes high occupancy and skilled mix stability to a locally led, centrally supported model that empowers facility leaders at the point of care.

• The company successfully graduated a 'special focus facility' in Arizona by implementing a fundamental culture shift and targeted clinical leadership changes.

• Despite industry concerns regarding managed care admission reductions, PACS reported strong admission trends and skilled mix growth across all cohorts.

• Strategic density in key markets is being leveraged to improve referral relationships and clinical resource sharing as the platform scales.

• The Administrator-in-Training (AIT) program serves as a critical human capital bench, ensuring leadership continuity for future acquisitions and turnarounds.

2026 Outlook and Guidance Methodology

• Adjusted EBITDA guidance was increased by $50 million to a range of $605 million to $625 million, reflecting Q1 outperformance and favorable skilled mix trends.

• Guidance methodology has been refined to exclude future acquisitions, providing a clearer view of underlying organic performance expectations.

• Revenue guidance was reaffirmed at $5.65 billion to $5.75 billion, implying stronger organic growth to offset the removal of $120 million in projected M&A revenue.

• Management expects to remain active in the M&A market, evaluating both individual 'tuck-in' facilities and larger portfolios that offer immediate EBITDA impact.

• Future payments from California's W-Equip and Ohio's quality incentive programs are excluded from guidance due to timing and amount uncertainty.

Capital Allocation and Governance

• A new $250 million share repurchase authorization was approved to provide flexibility for opportunistic buybacks when shares are perceived as undervalued.

• The company transitioned to a new CFO, Carey Hendrickson, while co-founder Mark Hancock moved into the role of Vice Chairman of the Board.

• Remediation of previously disclosed material weaknesses in internal controls is ongoing, with substantial progress expected through 2026.

• PACS deployed $86.5 million in strategic real estate investments, focusing on exercising fixed-price purchase options within its existing operating footprint.