0001766400-22-000071 | 10-Q | XBRL Viewer

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COVER PAGE - shares	3 Months Ended
COVER PAGE - shares	Mar. 31, 2022	May 09, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2022
Document Transition Report	false
Entity File Number	001-38900
Entity Registrant Name	THE PENNANT GROUP, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	83-3349931
Entity Address, Address Line One	1675 East Riverside Drive
Entity Address, Address Line Two	Suite 150
Entity Address, City or Town	Eagle
Entity Address, State or Province	ID
Entity Address, Postal Zip Code	83616
City Area Code	(208)
Local Phone Number	506-6100
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	PNTG
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		28,534,431
Entity Central Index Key	0001766400
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q1
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Current assets:
Cash	$ 3,627	$ 5,190
Accounts receivable—less allowance for doubtful accounts of $868 and $902, respectively	56,918	53,940
Prepaid expenses and other current assets	20,967	16,711
Total current assets	81,512	75,841
Property and equipment, net	17,941	16,788
Right-of-use assets	272,477	300,997
Deferred tax assets, net	2,099	3,848
Restricted and other assets	5,412	4,828
Goodwill	74,265	74,265
Other indefinite-lived intangibles	53,730	53,730
Total assets	507,436	530,297
Current liabilities:
Accounts payable	10,910	10,553
Accrued wages and related liabilities	22,686	23,480
Operating lease liabilities—current	16,379	16,118
Other accrued liabilities	18,630	21,484
Total current liabilities	68,605	71,635
Long-term operating lease liabilities—less current portion	259,092	287,753
Other long-term liabilities	5,306	5,293
Long-term debt, net	56,501	51,372
Total liabilities	389,504	416,053
Commitments and contingencies
Equity:
Common stock, $0.001 par value; 100,000 shares authorized; 28,849 and 28,530 shares issued and outstanding, respectively, at March 31, 2022; and 28,826 and 28,499 shares issued and outstanding, respectively, at December 31, 2021	29	28
Additional paid-in capital	98,124	95,595
Retained earnings	15,655	14,641
Treasury stock, at cost, 3 shares at March 31, 2022 and December 31, 2021	(65)	(65)
Total Pennant Group, Inc. stockholders’ equity	113,743	110,199
Noncontrolling interest	4,189	4,045
Total equity	117,932	114,244
Total liabilities and equity	$ 507,436	$ 530,297

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 868	$ 902
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	28,849,000	28,826,000
Common stock, shares outstanding (in shares)	28,530,000	28,499,000
Treasury stock, at cost (in shares)	3,000	3,000

CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Income Statement [Abstract]
Revenue	$ 113,910	$ 105,663
Expense
Cost of services	90,353	83,622
Rent—cost of services	10,051	9,965
General and administrative expense	10,033	9,288
Depreciation and amortization	1,147	1,175
Total expenses	111,584	104,050
Income from operations	2,326	1,613
Other income (expense):
Other income	3	0
Interest expense, net	(629)	(360)
Other income (expense), net	(626)	(360)
Income before provision for income taxes	1,700	1,253
Provision for income taxes	542	340
Net income	1,158	913
Less: net income/ (loss) attributable to noncontrolling interest	144	(37)
Net income attributable to The Pennant Group, Inc.	$ 1,014	$ 950
Earnings per share:
Basic (in dollars per share)	$ 0.04	$ 0.03
Diluted (in dollars per share)	$ 0.03	$ 0.03
Weighted average common shares outstanding:
Basic (in shares)	28,572	28,291
Diluted (in shares)	30,143	30,907

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Retained Earnings/ (Accumulated Deficit)	Treasury Stock	Non-Controlling Interest
Equity, beginning balance (in shares) at Dec. 31, 2020		28,696			(3)
Equity, beginning balance at Dec. 31, 2020	$ 101,172	$ 28	$ 84,671	$ 11,945	$ (65)	$ 4,593
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to The Pennant Group, Inc.	950			950
Net income (loss) attributable to Non-Controlling Interest	(37)					(37)
Share-based compensation	2,416		2,416
Issuance of common stock from the exercise of stock options (in shares)		21
Issuance of common stock from the exercise of stock options	218		218
Issuance/ (cancellation) of restricted stock (in shares)		3
Equity, ending balance (in shares) at Mar. 31, 2021		28,720			(3)
Equity, ending balance at Mar. 31, 2021	104,719	$ 28	87,305	12,895	$ (65)	4,556
Equity, beginning balance (in shares) at Dec. 31, 2021		28,826			(3)
Equity, beginning balance at Dec. 31, 2021	114,244	$ 28	95,595	14,641	$ (65)	4,045
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income attributable to The Pennant Group, Inc.	1,014			1,014
Net income (loss) attributable to Non-Controlling Interest	144					144
Share-based compensation	2,440		2,440
Issuance of common stock from the exercise of stock options (in shares)		21
Issuance of common stock from the exercise of stock options	90	$ 1	89
Issuance/ (cancellation) of restricted stock (in shares)		2
Equity, ending balance (in shares) at Mar. 31, 2022		28,849			(3)
Equity, ending balance at Mar. 31, 2022	$ 117,932	$ 29	$ 98,124	$ 15,655	$ (65)	$ 4,189

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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- Definition

Amount of stockholders' equity (deficit), net of receivables from officers, directors, owners, and affiliates of the entity, attributable to both the parent and noncontrolling interests. Amount excludes temporary equity. Alternate caption for the concept is permanent equity.

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Reference 23: http://www.xbrl.org/2003/role/disclosureRef
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Reference 26: http://www.xbrl.org/2003/role/disclosureRef
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Reference 27: http://www.xbrl.org/2003/role/disclosureRef
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Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 848
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-Publisher FASB
-Subparagraph (a)(3)(iii)(03)

+ Details

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Cash flows from operating activities:
Net income	$ 1,158	$ 913
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	1,147	1,175
Amortization of deferred financing fees	129	87
Impairment of long-lived assets	97	0
Provision for doubtful accounts	184	261
Share-based compensation	2,440	2,416
Deferred income taxes	1,749	128
Change in operating assets and liabilities, net of acquisitions:
Accounts receivable	(3,161)	(3,795)
Prepaid expenses and other assets	(4,665)	(3,309)
Operating lease obligations	120	639
Accounts payable	367	(930)
Accrued wages and related liabilities	(794)	(5,896)
Other accrued liabilities	1,635	1,305
Contract liabilities (CARES Act advance payments)	(4,722)	0
Other long-term liabilities	245	(261)
Net cash used in operating activities	(4,071)	(7,267)
Cash flows from investing activities:
Purchase of property and equipment	(2,392)	(754)
Cash payments for business acquisitions	0	(3,100)
Other	(190)	(141)
Net cash used in investing activities	(2,582)	(3,995)
Cash flows from financing activities:
Proceeds from Revolving Credit Facility	11,000	39,000
Payments on Revolving Credit Facility	(6,000)	(21,000)
Payments for deferred financing costs	0	(1,394)
Issuance of common stock upon the exercise of options	90	218
Net cash provided by financing activities	5,090	16,824
Net (decrease) increase in cash	(1,563)	5,562
Cash beginning of period	5,190	43
Cash end of period	3,627	5,605
Cash paid during the period for:
Interest	499	269
Income taxes	(55)
Income taxes		133
Lease liabilities	9,516	9,713
Right-of-use assets obtained in exchange for new operating lease obligations	631	1,678
Non-cash adjustment to right-of-use assets and lease liabilities from lease modifications	9,349	0
Non-cash adjustment to right-of-use assets and lease liabilities from lease terminations	(33,804)	0
Non-cash investing activity:
Capital expenditures in accounts payable	$ 720	$ 250

DESCRIPTION OF BUSINESS	3 Months Ended
DESCRIPTION OF BUSINESS	Mar. 31, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
DESCRIPTION OF BUSINESS	DESCRIPTION OF BUSINESS The Pennant Group, Inc. (herein referred to as “Pennant,” the “Company,” “it,” or “its”), is a holding company with no direct operating assets, employees or revenue. The Company, through its independent operating subsidiaries, provides healthcare services across the post-acute care continuum. As of March 31, 2022, the Company’s subsidiaries operated 88 home health, hospice and home care agencies and 52 senior living communities located in Arizona, California, Colorado, Idaho, Iowa, Montana, Nevada, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin and Wyoming. Certain of the Company’s subsidiaries, collectively referred to as the Service Center, provide accounting, payroll, human resources, information technology, legal, risk management, and other services to the operations through contractual relationships. Each of the Company’s affiliated operations are operated by separate, independent subsidiaries that have their own management, employees and assets. References herein to the consolidated “Company” and “its” assets and activities is not meant to imply, nor should it be construed as meaning, that Pennant has direct operating assets, employees or revenue, or that any of the subsidiaries are operated by Pennant.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2022
Accounting Policies [Abstract]
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation - The accompanying unaudited condensed consolidated financial statements of the Company (the “Interim Financial Statements”) reflect the Company’s financial position, results of operations and cash flows of the business. The Interim Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the regulations of the Securities and Exchange Commission (“SEC”). Management believes that the Interim Financial Statements reflect, in all material respects, all adjustments which are of a normal and recurring nature necessary to present fairly the Company’s financial position, results of operations, and cash flows for the periods presented in conformity with GAAP. The results reported in these Interim Financial Statements are not necessarily indicative of results that may be expected for the entire year. The Condensed Consolidated Balance Sheet as of December 31, 2021 is derived from the Company’s annual audited Consolidated Financial Statements for the fiscal year ended December 31, 2021, which should be read in conjunction with these Interim Financial Statements. Certain information in the accompanying footnote disclosures normally included in annual financial statements was condensed or omitted for the interim periods presented in accordance with GAAP. All significant intercompany transactions and balances between the various legal entities comprising the Company have been eliminated in consolidation. The Company presents noncontrolling interests within the equity section of its Condensed Consolidated Balance Sheets and the amount of consolidated net income that is attributable to the Company and the noncontrolling interest in its Condensed Consolidated Statements of Income. The Company consists of various limited liability companies and corporations established to operate home health, hospice, home care, and senior living operations. The Interim Financial Statements include the accounts of all entities controlled by the Company through its ownership of a majority voting interest. Estimates and Assumptions - The preparation of the Interim Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Interim Financial Statements and the reported amounts of revenue and expenses during the reporting periods. The most significant estimates in the Interim Financial Statements relate to revenue, intangible assets and goodwill, right-of-use assets and lease liabilities for leases greater than 12 months, self-insurance reserves, and income taxes. Actual results could differ from those estimates. CARES Act: The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020 in the United States. The CARES Act allowed for deferred payment of the employer-paid portion of social security taxes through the end of 2020, with 50% due on December 31, 2021 and the remainder due on December 31, 2022. The Company deferred approximately $7,836 of the employer-paid portion of social security taxes, of which $4,129 remains as of March 31, 2022 and is included in current liabilities in accrued wages and related liabilities. The CARES Act also expanded the Centers for Medicare & Medicaid Services’ (“CMS”) ability to provide accelerated/advance payments intended to increase the cash flow of healthcare providers and suppliers impacted by COVID-19. During 2020, the Company applied for and received $27,997 in funds under the Accelerated and Advance Payment (“AAP”) Program, of which $26,508 has been recouped since the start of repayment in 2021 through March 31, 2022.

TRANSACTIONS WITH ENSIGN	3 Months Ended
TRANSACTIONS WITH ENSIGN	Mar. 31, 2022
Related Party Transactions [Abstract]
TRANSACTIONS WITH ENSIGN	TRANSACTIONS WITH ENSIGN On October 1, 2019, The Ensign Group, Inc. (“Ensign”) completed the separation of Pennant (the “Spin-Off”). In connection with the Spin-Off, Pennant entered into several agreements with Ensign that set forth the principal actions taken or to be taken in connection with the Spin-Off and govern the relationship of the parties following the Spin-Off. The Transitions Services Agreement with Ensign (the “Transition Services Agreement”) provided Pennant primarily administrative support. The Transitions Services Agreement expired two years from the Spin-Off date. The Company incurred costs of $643 and $988 for the three months ended March 31, 2022 and March 31, 2021, respectively that related primarily to administrative support under the Transitions Services Agreement. Services included in cost of services were $574 and $868 for the three months ended March 31, 2022 and March 31, 2021, respectively. Additionally, the Company’s independent operating subsidiaries leased 32 and 31 communities from subsidiaries of Ensign under a master lease arrangement as of March 31, 2022 and March 31, 2021. See further discussion below at Note 8, Leases.

COMPUTATION OF NET INCOME PER COMMON SHARE

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

COMPUTATION OF NET INCOME PER COMMON SHARE

Basic net income per share is computed by dividing net income attributable to stockholders of the Company by the weighted average number of outstanding common shares for the period. The computation of diluted net income per share is similar to the computation of basic net income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued.

The following table sets forth the computation of basic and diluted net income per share for the periods presented:


	Three Months Ended March 31,
		2022		2021
Numerator:
Net income		$	1,158	$	913
Less: net income/ (loss) attributable to noncontrolling interests		144		(37)
Net income attributable to The Pennant Group, Inc.		$	1,014	$	950

Denominator:
Weighted average shares outstanding for basic net income per share		28,572		28,291
Plus: assumed incremental shares from exercise of options and assumed conversion or vesting of restricted stock(a)		1,571		2,616
Adjusted weighted average common shares outstanding for diluted income per share		30,143		30,907

Earnings Per Share:
Basic net income per common share		$	0.04	$	0.03
Diluted net income per common share		$	0.03	$	0.03


(a)						The calculation of dilutive shares outstanding excludes out-of-the-money stock options (i.e., such options’ exercise prices were greater than the average market price of our common shares for the period) because their inclusion would have been antidilutive. Options outstanding which are anti-dilutive and therefore not factored into the weighted average common shares amount above were 1,690 and 14 for the three months ended March 31, 2022 and 2021, respectively.

REVENUE AND ACCOUNTS RECEIVABLE

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

REVENUE AND ACCOUNTS RECEIVABLE

REVENUE AND ACCOUNTS RECEIVABLERevenue is recognized when services are provided to the patients at the amount that reflects the consideration to which the Company expects to be entitled from patients and third-party payors, including Medicaid, Medicare and managed care programs (Commercial, Medicare Advantage and Managed Medicaid plans), in exchange for providing patient care. The healthcare services in home health and hospice patient contracts include routine services in exchange for a contractual agreed-

upon amount or rate. Routine services are treated as a single performance obligation satisfied over time as services are rendered. As such, patient care services represent a bundle of services that are not capable of being distinct within the context of the contract. Additionally, there may be ancillary services which are not included in the rates for routine services, but instead are treated as separate performance obligations satisfied at a point in time, if and when those services are rendered.

Revenue recognized from healthcare services are adjusted for estimates of variable consideration to arrive at the transaction price. The Company determines the transaction price based on contractually agreed-upon amounts or rate, adjusted for estimates of variable consideration. The Company uses the expected value method in determining the variable component that should be used to arrive at the transaction price, using contractual agreements and historical reimbursement experience within each payor type. The amount of variable consideration which is included in the transaction price may be constrained, and is included in the net revenue only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. If actual amounts of consideration ultimately received differ from the Company’s estimates, the Company adjusts these estimates, which would affect net service revenue in the period such variances become known.

Revenue from the Medicare and Medicaid programs accounted for 61.9% of the Company’s revenue, for the three months ended March 31, 2022, and 64.0% for the three months ended March 31, 2021. The Company records revenue from these governmental and managed care programs as services are performed at their expected net realizable amounts under these programs. The Company’s revenue from governmental and managed care programs is subject to audit and retroactive adjustment by governmental and third-party agencies. Consistent with healthcare industry accounting practices, any changes to these governmental revenue estimates are recorded in the period the change or adjustment becomes known based on final settlement.

Disaggregation of Revenue

The Company disaggregates revenue from contracts with its patients by reportable operating segments and payors. The Company has determined that disaggregating revenue into these categories achieves the disclosure objectives to depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

The Company’s service specific revenue recognition policies are as follows:

Home Health Revenue

Medicare Revenue

Net service revenue is recognized in accordance with the Patient Driven Groupings Model (“PDGM”). Under PDGM, Medicare provides agencies with payments for each 30-day payment period 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 payment period 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 payment under the Medicare program is also adjusted for certain variables including, but not limited to: (a) a LUPA 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 episodes; (e) changes to the acuity of the patient during the previous 30-day payment period; (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.

The Company adjusts Medicare revenue on completed episodes to reflect differences between estimated and actual payment amounts, an inability to obtain appropriate billing documentation and other reasons unrelated to credit risk. Therefore, the Company believes that its reported net service revenue and patient accounts receivable will be the net amounts to be realized from Medicare for services rendered.

In addition to revenue recognized on completed episodes and periods, the Company also recognizes a portion of

revenue associated with episodes and periods in progress. Episodes in progress are 30-day payment periods that begin during the reporting period but were not completed as of the end of the period. As such, the Company estimates revenue and recognizes it on a daily basis. The primary factors underlying this estimate are the number of episodes in progress at the end of the reporting period, expected Medicare revenue per period of care or episode of care and the Company’s estimate of the average percentage complete based on the scheduled end of period and end of episode dates.

Non-Medicare Revenue

Episodic Based Revenue - The Company recognizes revenue in a similar manner as it recognizes Medicare revenue for episodic-based rates that are paid by other insurance carriers, including Medicare Advantage programs. These rates can vary based upon the negotiated terms.

Non-episodic Based Revenue - Revenue is recognized on an accrual basis based upon the date of service at amounts equal to its established or estimated per visit rates, as applicable.

Hospice Revenue

Revenue is recognized on an accrual basis based upon the date of service at amounts equal to the estimated payment rates. The estimated payment rates are calculated as daily rates for each of the levels of care the Company delivers. Revenue is adjusted for an inability to obtain appropriate billing documentation or authorizations acceptable to the payor and other reasons unrelated to credit risk. Additionally, as Medicare hospice revenue is subject to an inpatient cap and an overall payment cap, the Company monitors its provider numbers and estimates amounts due back to Medicare if a cap has been exceeded. The Company regularly evaluates and records these adjustments as a reduction to revenue and an increase to other accrued liabilities.

Senior Living Revenue

The Company has elected the lessor practical expedient within ASC Topic 842, Leases (“ASC 842”) and therefore recognizes, measures, presents, and discloses the revenue for services rendered under the Company’s senior living residency agreements based upon the predominant component, either the lease or non-lease component, of the contracts. The Company has determined that the services included under the Company’s senior living residency agreements each have the same timing and pattern of transfer. The Company recognizes revenue under ASC Topic 606, Revenue from Contracts with Customers for its senior residency agreements, for which it has determined that the non-lease components of such residency agreements are the predominant component of each such contract.

The Company’s senior living revenue consists of fees for basic housing and assisted living care. Accordingly, the Company records revenue when services are rendered on the date services are provided at amounts billable to individual residents. Residency agreements are generally for a term of 30 days, with resident fees billed monthly in advance. For residents under reimbursement arrangements with Medicaid, revenue is recorded based on contractually agreed-upon amounts or rates on a per resident, daily basis or as services are rendered.

Revenue By Payor

Revenue by payor for the three months ended March 31, 2022 and 2021, is summarized in the following tables:


	Three Months Ended March 31, 2022
	Home Health and Hospice Services
	Home Health Services		Hospice Services		Senior Living Services		Total Revenue		Revenue %
Medicare	$	21,357	$	33,721	$	—	$	55,078	48.4	%
Medicaid	2,506		3,265		9,623		15,394		13.5
Subtotal	23,863		36,986		9,623		70,472		61.9
Managed care	13,252		784		—		14,036		12.3
Private and other(a)	5,537		53		23,812		29,402		25.8
Total revenue	$	42,652	$	37,823	$	33,435	$	113,910	100.0	%


	Three Months Ended March 31, 2021
	Home Health and Hospice Services
	Home Health Services		Hospice Services		Senior Living Services		Total Revenue		Revenue %
Medicare	$	20,330	$	33,409	$	—	$	53,739	50.9	%
Medicaid	2,196		2,725		8,932		13,853		13.1
Subtotal	22,526		36,134		8,932		67,592		64.0
Managed care	10,452		637		—		11,089		10.5
Private and other(a)	4,715		143		22,124		26,982		25.5
Total revenue	$	37,693	$	36,914	$	31,056	$	105,663	100.0	%


(a)						Private and other payors in our home health and hospice services segment includes revenue from all payors generated in our home care operations.

Balance Sheet Impact

Included in the Company’s Condensed Consolidated Balance Sheets are contract assets, comprised of billed accounts receivable and unbilled receivables, which are the result of the timing of revenue recognition, billings and cash collections, as well as, contract liabilities, which primarily represent payments the Company receives in advance of services provided. As of March 31, 2022, the Company had contract liabilities in the amount of $1,489 related to Advance Payments received in connection with the CARES Act reported in other current liabilities.

Accounts receivable, net as of March 31, 2022 and December 31, 2021 is summarized in the following table:


	March 31, 2022		December 31, 2021
Medicare	$	31,933	$	31,327
Medicaid	13,136		11,793
Managed care	8,535		7,901
Private and other	4,182		3,821
Accounts receivable, gross	57,786		54,842
Less: allowance for doubtful accounts	(868)		(902)
Accounts receivable, net	$	56,918	$	53,940

Concentrations- Credit Risk

The Company has significant accounts receivable balances, the collectability of which is dependent on the availability of funds from certain governmental programs, primarily Medicare and Medicaid. These receivables represent the only

significant concentration of credit risk for the Company. The Company does not believe there are significant credit risks associated with these governmental programs. The Company believes that an appropriate allowance has been recorded for the possibility of these receivables proving uncollectible, and continually monitors and adjusts these allowances as necessary. The Company’s gross receivables from the Medicare and Medicaid programs accounted for approximately 78.0% and 78.6% of its total gross accounts receivable as of March 31, 2022 and December 31, 2021, respectively. Revenue from reimbursement under the Medicare and Medicaid programs accounted for 61.9% for the three months ended March 31, 2022, and 64.0% of the Company’s revenue for the three months ended March 31, 2021.

Practical Expedients and Exemptions

As the Company’s contracts have an original duration of one year or less, the Company uses the practical expedient applicable to its contracts and does not consider the time value of money. Further, because of the short duration of these contracts, the Company has not disclosed the transaction price for the remaining performance obligations as of the end of each reporting period or when the Company expects to recognize this revenue. In addition, the Company has applied the practical expedient provided by ASC 340, Other Assets and Deferred Costs (“ASC 340”), and all incremental customer contract acquisition costs are expensed as they are incurred because the amortization period would have been one year or less.

BUSINESS SEGMENTS

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

BUSINESS SEGMENTS

The Company classifies its operations into the following reportable operating segments: (1) home health and hospice services, which includes the Company’s home health, hospice and home care businesses; and (2) senior living services, which includes the operation of assisted living, independent living and memory care communities. The reporting segments are business units that offer different services and are managed separately to provide greater visibility into those operations. Our Chief Executive Officer, who is our Chief Operating Decision Maker (“CODM”), reviews financial information at the operating segment level. We also report an “all other” category that includes general and administrative expense from our Service Center.

As of March 31, 2022, the Company provided services through 88 affiliated home health, hospice and home care agencies, and 52 affiliated senior living operations. The Company evaluates performance and allocates capital resources to each segment based on an operating model that is designed to maximize the quality of care provided and profitability. The Company’s Service Center provides various services to all lines of business. The Company does not review assets by segment and therefore assets by segment are not disclosed below.

The CODM uses Segment Adjusted EBITDAR from Operations as the primary measure of profit and loss for the Company's reportable segments and to compare the performance of its operations with those of its competitors. Segment Adjusted EBITDAR from Operations is net income attributable to the Company's reportable segments excluding interest expense, provision for income taxes, depreciation and amortization expense, rent, and, in order to view the operations performance on a comparable basis from period to period, certain adjustments including: (1) costs at start-up operations, (2) share-based compensation, (3) acquisition related costs, (4) redundant and nonrecurring costs associated with the Transition Services Agreement, (5) the operating results of senior living facilities transferred to Ensign, and (6) net income (loss) attributable to noncontrolling interest. General and administrative expenses are not allocated to the reportable segments, and are included as “All Other”, accordingly the segment earnings measure reported is before allocation of corporate general and administrative expenses. The Company's segment measures may be different from the calculation methods used by other companies and, therefore, comparability may be limited.

The following tables present certain financial information regarding our reportable segments, general and administrative expenses are not allocated to the reportable segments and are included in “All Other” for the three months ended March 31, 2022 and 2021:


	Home Health and Hospice Services		Senior Living Services		All Other		Total
Three Months Ended March 31, 2022
Revenue	$	80,475	$	33,435	$	—	$	113,910
Segment Adjusted EBITDAR from Operations	$	13,948	$	9,432	$	(8,146)	$	15,234
Three Months Ended March 31, 2021
Revenue	$	74,607	$	31,056	$	—	$	105,663
Segment Adjusted EBITDAR from Operations	$	13,791	$	8,834	$	(6,398)	$	16,227

This following table provides a reconciliation of Segment Adjusted EBITDAR from Operations to income from operations:


	Three Months Ended March 31,
		2022		2021
Segment Adjusted EBITDAR from Operations		$	15,234	$	16,227
Less: Depreciation and amortization		1,147		1,175
Rent—cost of services		10,051		9,965
Other income		3		—
Adjustments to Segment EBITDAR from Operations:
Less: Costs at start-up operations(a)		131		112
Share-based compensation expense(b)		2,440		2,416
Acquisition related costs(c)		—		7

Transition services costs(d)		37		902

Operating results of transferred senior living facilities(e)		(757)		—
Add: Net income/(loss) attributable to noncontrolling interest		144		(37)
Condensed Consolidated Income from Operations		$	2,326	$	1,613


(a)						Represents results related to start-up operations. This amount excludes rent and depreciation and amortization expense related to such operations.
(b)						Share-based compensation expense incurred which is included in cost of services and general and administrative expense.
(c)						Acquisition related costs related to business combinations during the periods.
(d)						Costs identified as redundant or nonrecurring incurred by the Company as a result of the Spin-off. The 2021 amounts represents part of the costs incurred under the Transition Services Agreement. All amounts are included in general and administrative expense. Fees incurred under the Transition Services Agreement were $988 for the three months ended March 31, 2021.
(e)						On January 27, 2022, affiliates of the Company, entered into certain operations transfer agreements (collectively, the “Transfer Agreements”) with affiliates of Ensign, providing for the transfer of the operations of certain senior living communities (the “Transaction”) from affiliates of the Company to affiliates of Ensign. The closing of the Transaction was completed in two phases with the transfer of two operations on March 1, 2022 and the remainder transferred on April 1, 2022. The amount above represents the net impact on revenue and cost of service attributable to the all of the transferred entities. This amount excludes rent and depreciation and amortization expense related to such operations.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
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+ Details

ACQUISITIONS	3 Months Ended
ACQUISITIONS	Mar. 31, 2022
Business Combination and Asset Acquisition [Abstract]
ACQUISITIONS	ACQUISITIONSThe Company’s acquisition focus is to purchase or lease operations that are complementary to the Company’s current businesses, accretive to the Company’s business or otherwise advance the Company’s strategy. The results of all the Company’s independent operating subsidiaries are included in the Interim Financial Statements subsequent to the date of acquisition. Acquisitions are accounted for using the acquisition method of accounting. During the three months ended March 31, 2022 the Company did not acquire any new operations. 2021 Acquisitions During the three months ended March 31, 2021, the Company expanded its operations with the addition of two home health and two hospice agencies. The aggregate purchase price for these acquisitions was $3,685. A subsidiary of the Company entered into a separate operations transfer agreement with the prior operator of each acquired operation as part of each transaction. The fair value of assets for home health acquisitions was mostly concentrated in goodwill and as such, these transactions were classified as business combinations in accordance with ASC Topic 805, Business Combinations (“ASC 805”). The purchase price for the business combinations was $3,100, which consisted of equipment and other assets of $39, goodwill of $1,735, and indefinite-lived intangible assets of $1,326 related to Medicare and Medicaid licenses. The Company anticipates that the total goodwill recognized will be fully deductible for tax purposes. There were no material acquisition costs that were expensed related to the business combinations during the three months ended March 31, 2021. The hospice agencies were acquired Medicare licenses and are considered asset acquisitions. The fair value of assets for the hospice licenses acquired totaled $585 and was allocated to indefinite-lived intangible assets. Subsequent EventsSubsequent to March 31, 2022, the Company announced it closed on the acquisition of a home health provider that will provide services in Bozeman, Montana. The purchase price for the home health agency was $775. As of the date of this report, the preliminary allocation of the purchase price for the acquisition was not completed as necessary valuation information was not yet available. As such, the determination regarding whether the acquisition should be classified as a business combination or an asset acquisitions under ASC 805 will be determined upon completion of the allocation of the purchase price.

PROPERTY AND EQUIPMENT—NET

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT—NET

Property and equipment, net consist of the following:


	March 31, 2022		December 31, 2021
Leasehold improvements	$	12,507	$	11,660
Equipment	23,846		22,415
Furniture and fixtures	1,189		1,199
	37,542		35,274
Less: accumulated depreciation	(19,601)		(18,486)
Property and equipment, net	$	17,941	$	16,788

Depreciation expense was $1,114 and $1,171 for the three months ended March 31, 2022 and 2021, respectively.

The Company measures certain assets at fair value on a non-recurring basis, including long-lived assets, which are evaluated for impairment. Long-lived assets include assets such as property and equipment, operating lease assets and certain intangible assets. The inputs used to determine the fair value of long-lived assets and a reporting unit are considered Level 3 measurements due to their subjective nature. Management has evaluated its long-lived assets and determined there was no impairment during the three months ended March 31, 2022 and 2021.

GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS

The following table represents activity in goodwill by segment for the three months ended March 31, 2022:


	Home Health and Hospice Services		Senior Living Services		Total
December 31, 2021	$	70,623	$	3,642	$	74,265
Additions	—		—		—

March 31, 2022	$	70,623	$	3,642	$	74,265

Other indefinite-lived intangible assets consist of the following:


	March 31, 2022		December 31, 2021
Trade name	$	1,355	$	1,355
Medicare and Medicaid licenses	52,375		52,375
Total	$	53,730	$	53,730

No goodwill or intangible asset impairments were recorded during the three months ended March 31, 2022 and 2021.

OTHER ACCRUED LIABILITIES

3 Months Ended

Mar. 31, 2022

Payables and Accruals [Abstract]

OTHER ACCRUED LIABILITIES

Other accrued liabilities consist of the following:


	March 31, 2022		December 31, 2021
Refunds payable	$	3,515	$	3,095
Deferred revenue	1,468		1,456
Contract Liabilities (CARES Act advance payments)	1,489		6,211
Resident deposits	5,099		5,111
Property taxes	912		1,102
Accrued self-insurance liabilities - current portion	1,520		1,613
Other	4,627		2,896
Other accrued liabilities	$	18,630	$	21,484

Refunds payable includes payables related to overpayments, duplicate payments and credit balances from various payor sources. Deferred revenue occurs when the Company receives payments in advance of services provided. Resident deposits include refundable deposits to residents and a small portion consists of non-refundable deposits recognized into revenue over a period of time.

DEBT

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

DEBT

Long-term debt, net consists of the following:


	March 31, 2022		December 31, 2021
Revolving Credit Facility	$	58,500	$	53,500
Less: unamortized debt issuance costs(a)	(1,999)		(2,128)
Long-term debt, net	$	56,501	$	51,372


(a)						Amortization expense for debt issuance costs was $129 and $87 for the three months ended March 31, 2022 and 2021, respectively, and is recorded in interest expense, net on the Condensed Consolidated Statements of Income.

On February 23, 2021, Pennant entered into an amendment to its existing credit agreement (as amended, the “Credit Agreement”), which provides for an increased revolving credit facility with a syndicate of banks with a borrowing capacity of $150,000 (the “Revolving Credit Facility”). The interest rates applicable to loans under the Revolving Credit Facility are, at the Company’s election, either (i) Adjusted LIBOR (as defined in the Credit Agreement) plus a margin ranging from 2.3% to 3.3% per annum or (ii) Base Rate plus a margin ranging from 1.3% to 2.3% per annum, in each case, based on the ratio of Consolidated Total Net Debt to Consolidated EBITDA (each, as defined in the Credit Agreement). In addition, Pennant pays a commitment fee on the undrawn portion of the commitments under the Revolving Credit Facility which ranges from 0.35% to 0.50% per annum, depending on the Consolidated Total Net Debt to Consolidated EBITDA ratio of the Company and its subsidiaries. The Company is not required to repay any loans under the Credit Agreement prior to maturity in 2026, other than to the extent the outstanding borrowings exceed the aggregate commitments under the Credit Agreement. As of March 31, 2022, the Company’s weighted average interest rate on its outstanding debt was 3.04%. As of March 31, 2022, the Company had available borrowing on the Revolving Credit Facility of $87,314, which is net of outstanding letters of credit of $4,186.

The fair value of the Revolving Credit Facility approximates carrying value, due to the short-term nature and variable interest rates. The fair value of this debt is categorized within Level 2 of the fair value hierarchy based on the observable market borrowing rates.

The Credit Agreement is guaranteed, jointly and severally, by certain of the Company’s independent operating subsidiaries, and is secured by a pledge of stock of the Company's material independent operating subsidiaries as well as a first lien on substantially all of each material operating subsidiary's personal property. The 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 March 31, 2022, the Company was compliant with all such financial covenants.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

OPTIONS AND AWARDS

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

OPTIONS AND AWARDS

Outstanding options held by employees of the Company under the Ensign stock plans (collectively the “Ensign Plans”) and outstanding options and restricted stock awards under the Company Subsidiary Equity Plan (together with the Ensign Plans the “Pre-Spin Plans”) were modified and replaced with Pennant awards under the Pennant Plans at the Spin-Off date. Additionally, in connection with the Spin-Off, the Company issued new options and restricted stock awards to Pennant and Ensign employees under the 2019 Omnibus Incentive Plan (the “OIP”) and Long-Term Incentive Plan (the “LTIP”, together referred to as the “Pennant Plans”).

Under the Ensign Plans and the Pennant Plans, stock-based payment awards, including employee stock options, restricted stock awards (“RSA”), and restricted stock units (“RSU” and together with RSA, “Restricted Stock”) are issued based on estimated fair value. The following disclosures represent share-based compensation expense relating to employees of the Company’s subsidiaries and non-employee directors who have awards under the Ensign and Pennant Plans.

Total share-based compensation expense for all Plans for the three months ended March 31, 2022 and 2021 was:


	Three Months Ended March 31,
		2022		2021
Share-based compensation expense related to stock options		$	842	$	637
Share-based compensation expense related to Restricted Stock		1,519		1,520
Share-based compensation expense related to Restricted Stock to non-employee directors		79		259
Total share-based compensation		$	2,440	$	2,416

In future periods, the Company estimates it will recognize the following share-based compensation expense for unvested stock options and unvested Restricted Stock as of March 31, 2022:


	Unrecognized Compensation Expense		Weighted Average Recognition Period (in years)
Unvested Stock Options	$	12,753	3.7
Unvested Restricted Stock	3,019		0.5
Total unrecognized share-based compensation expense	$	15,772

Stock Options

Under the Pennant Plans, options granted to employees of the subsidiaries of Pennant generally vest over five years at 20% per year on the anniversary of the grant date. Options expire ten years after the date of grant.

The Company uses the Black-Scholes option-pricing model to recognize the value of stock-based compensation expense for share-based payment awards under the Plans. Determining the appropriate fair-value model and calculating the fair value of stock-based awards at the grant date requires considerable judgment, including estimating stock price volatility and expected option life. The Company develops estimates based on historical data and market information, which can change significantly over time.

The fair value of each option is estimated on the grant date using a Black-Scholes option-pricing model with the following weighted average assumptions for stock options granted:


Grant Year	Options Granted	Risk-Free Interest Rate		Expected Life(a)	Expected Volatility(b)		Dividend Yield		Weighted Average Fair Value of Options
2022	213	1.9	%	6.5	40.0	%	—	%	$	6.03
2021	137	1.0	%	6.5	37.8	%	—	%	$	18.99


(a)						Under the midpoint method, the expected option life is the midpoint between the contractual option life and the average vesting period for the options being granted. This resulted in an expected option life of 6.5 years for the options granted.
(b)						Because the Company’s equity shares have been traded for a relatively short period of time, expected volatility assumption was based on the volatility of related industry stocks.

The following table represents the employee stock option activity during the three months ended March 31, 2022:


	Number of Options Outstanding	Weighted Average Exercise Price		Number of Options Vested	Weighted Average Exercise Price of Options Vested
December 31, 2021	2,242	$	21.38	840	$	12.28
Granted	213	14.13
Exercised	(20)	4.50
Forfeited	(30)	26.43
Expired	(26)	7.82
March 31, 2022	2,379	$	20.96	854	$	13.83

Restricted Stock

A summary of the status of Pennant’s non-vested Restricted Stock, and changes during the three months ended March 31, 2022, is presented below:


	Non-Vested Restricted Stock	Weighted Average Grant Date Fair Value
December 31, 2021	1,493	$	15.00
Granted	5	17.45
Vested	(16)	13.08
Forfeited	(3)	13.40
March 31, 2022	1,479	$	15.03

LEASES

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

LEASES

LEASESThe Company’s independent operating subsidiaries lease 52 senior living communities and its administrative offices under non-cancelable operating leases, most of which have initial lease terms ranging from five to 21 years. Most of these leases contain renewal options, most involve rent increases and none contain purchase options. The lease term excludes lease renewals because the renewal rents are not at a bargain, there are no economic penalties for the Company to renew the lease,

and it is not reasonably certain that the Company will exercise the extension options. The Company’s independent operating subsidiaries leased 32 and 31 communities from subsidiaries of Ensign (the “Ensign Leases”) under a master lease arrangement as of March 31, 2022 and March 31, 2021, respectively. Each of the leases have a initial term of between 14 and 20 years from the lease commencement date. The total amount of rent expense included in rent - cost of services paid to subsidiaries of Ensign was $3,484 and $3,073 and for the three months ended March 31, 2022 and 2021, respectively. In addition to rent, each of the operating companies are required to pay the following: (1) all impositions and taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor); (2) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties; (3) all insurance required in connection with the leased properties and the business conducted on the leased properties; (4) all community maintenance and repair costs; and (5) all fees in connection with any licenses or authorizations necessary or appropriate for the leased properties and the business conducted on the leased properties.

Fourteen of the Company’s affiliated senior living communities, excluding the communities that are operated under the Ensign Leases (as defined herein), are operated under two separate master lease arrangements. Under these 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 Medicare and Medicaid provider requirements is a default under several of the Company’s leases and master leases. With an indivisible lease, it is difficult to restructure the composition of the portfolio or economic terms of the master lease without the consent of the landlord.

On January 27, 2022, affiliates of the Company, entered into Transfer Agreements with affiliates of Ensign, providing for the transfer of the operations of certain senior living communities. The closing of the Transaction was completed in two phases with the transfer of two operations on March 1, 2022 and the remainder transferred on April 1, 2022. As a result of the transaction, the Company terminated the leases of two senior living facilities transferred to Ensign on March 1, 2022. As a result of the lease terminations, the Company reduced both the right of use assets and the lease liabilities by $33,804. One of the terminated leases was part of a master lease agreement. As a result of one of the transferred leases being removed from a master lease arrangement, the remaining lease components under the master lease arrangement were modified which resulted in a increase to the lease liability and ROU asset balance of $9,349 as of March 1, 2022.

The components of operating lease cost, are as follows:


	Three Months Ended March 31,
		2022		2021
Operating Lease Costs:
Facility Rent—cost of services		$	8,789	$	8,835
Office Rent—cost of services		1,262		1,130
Rent—cost of services		$	10,051	$	9,965

General and administrative expense		$	81	$	64
Variable lease cost (a)		$	1,575	$	1,499


(a)						Represents variable lease cost for operating leases, which costs include property taxes and insurance, common area maintenance, and consumer price index increases, incurred as part of our triple net lease, and which is included in cost of services for the three months ended March 31, 2022 and 2021.

The following table shows the lease maturity analysis for all leases as of March 31, 2022, for the years ended December 31:


Year	Amount
2022 (Remainder)	$	26,621
2023	34,648
2024	33,571
2025	32,389
2026	31,674
Thereafter	274,321
Total lease payments	433,224
Less: present value adjustments	(157,753)
Present value of total lease liabilities	275,471
Less: current lease liabilities	(16,379)
Long-term operating lease liabilities	$	259,092

Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at each lease’s commencement date to determine each lease's operating lease liability. As of March 31, 2022, the weighted average remaining lease term is 13.3 years and the weighted average discount rate is 7.3%.

INCOME TAXES	3 Months Ended
INCOME TAXES	Mar. 31, 2022
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXESThe Company recorded income tax expense of $542 or 31.9% of earnings before income taxes for the three months ended March 31, 2022, and income tax expense of $340 or 27.1% of earnings before income taxes for the three months ended March 31, 2021, respectively. The effective tax rate for both three month periods includes excess tax benefits from share-based compensation which were offset by non-deductible expenses including non-deductible compensation.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

COMMITMENTS AND CONTINGENCIES	3 Months Ended
COMMITMENTS AND CONTINGENCIES	Mar. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Regulatory Matters - The Company provides services in complex and highly regulated industries. The Company’s compliance with applicable U.S. federal, state and local laws and regulations governing these industries may be subject to governmental review and adverse findings may result in significant regulatory action, which could include sanctions, damages, fines, penalties (many of which may not be covered by insurance), and even exclusion from government programs. The Company is a party to various regulatory and other governmental audits and investigations in the ordinary course of business and cannot predict the ultimate outcome of any federal or state regulatory survey, audit or investigation. While governmental audits and investigations are the subject of administrative appeals, the appeals process, even if successful, may take several years to resolve. The Department of Justice, CMS, or other federal and state enforcement and regulatory agencies may conduct additional investigations related to the Company's businesses. The Company believes that it is presently in compliance in all material respects with all applicable laws and regulations. Cost-Containment Measures - Government and third-party payors have instituted cost-containment measures designed to limit payments made to providers of healthcare services, and there can be no assurance that future measures designed to limit payments made to providers will not adversely affect the Company. Indemnities - From time to time, the Company enters into certain types of contracts that contingently require the Company to indemnify parties against third-party claims. These contracts primarily include (i) certain real estate leases, under which the Company may be required to indemnify property owners or prior operators for post-transfer environmental or other liabilities and other claims arising from the Company’s use of the applicable premises, (ii) operations transfer agreements, in which the Company agrees to indemnify past operators of agencies and communities the Company acquires against certain liabilities arising from the transfer of the operation and/or the operation thereof after the transfer, (iii) certain Ensign lending agreements, and (iv) certain agreements with management, directors and employees, under which the subsidiaries of the Company may be required to indemnify such persons for liabilities arising out of their employment relationships. The terms of such obligations vary by contract and, in most instances, a specific or maximum dollar amount is not explicitly stated therein. Generally, amounts under these contracts cannot be reasonably estimated until a specific claim is asserted. Consequently, because no claims have been asserted, no liabilities have been recorded for these obligations on the Company’s Condensed Consolidated Balance Sheets for any of the periods presented. Litigation - The Company’s businesses involve a significant risk of liability given the age and health of the patients and residents served by its independent operating subsidiaries. The Company, its operating companies, and others in the industry may be subject to a number of claims and lawsuits, including professional liability claims, alleging that services provided have resulted in personal injury, elder abuse, wrongful death or other related claims. Healthcare litigation (including class action litigation) is common and is filed based upon a wide variety of claims and theories, and the Company is routinely subjected to these claims in the ordinary course of business, including potential claims related to patient care and treatment, and professional negligence, as well as employment related claims. If there were a significant increase in the number of these claims or an increase in amounts owing should plaintiffs be successful in their prosecution of these claims, this could materially adversely affect the Company’s business, financial condition, results of operations and cash flows. In addition, the defense of these lawsuits may result in significant legal costs, regardless of the outcome, and may result in large settlement amounts or damage awards. In addition to the potential lawsuits and claims described above, the Company is also subject to potential lawsuits under the False Claims Act (the “FCA”) and comparable state laws alleging submission of fraudulent claims for services to any healthcare program (such as Medicare) or payor. A violation may provide the basis for exclusion from federally funded healthcare programs. Such exclusions could have a correlative negative impact on the Company’s financial performance. Some states, including California, Arizona and Texas, have enacted similar whistleblower and false claims laws and regulations. In addition, the Deficit Reduction Act of 2005 created incentives for states to enact anti-fraud legislation modeled on the FCA. As such, the Company could face increased scrutiny, potential liability and legal expenses and costs based on claims under state false claims acts in markets in which it conducts business. Under the Fraud Enforcement and Recovery Act (“FERA”) and its associated rules, healthcare providers face significant penalties for the knowing retention of government overpayments, even if no false claim was involved. Providers have an obligation to proactively exercise “reasonable diligence” to identify overpayments and return those overpayments to CMS within 60 days of “identification” or the date any corresponding cost report is due, whichever is later. Retention of overpayments beyond this period may create liability under the FCA. In addition, FERA protects whistleblowers (including employees, contractors, and agents) from retaliation. The Company cannot predict or provide any assurance as to the possible outcome of any litigation. If any litigation were to proceed, and the Company and its operating companies are subjected to, alleged to be liable for, or agree to a settlement of, claims or obligations under federal Medicare statutes, the FCA, or similar state and federal statutes and related regulations, the Company’s business, financial condition and results of operations and cash flows could be materially and adversely affected. Among other things, any settlement or litigation could involve the payment of substantial sums to settle any alleged civil violations, and may also include the assumption of specific procedural and financial obligations by the Company or its independent operating subsidiaries going forward under a corporate integrity agreement and/or other arrangement with the government. Medicare Revenue Recoupments - The Company is subject to probe reviews relating to Medicare services, billings and potential overpayments by Unified Program Integrity Contractors (“UPIC”), Recovery Audit Contractors (“RAC”), Zone Program Integrity Contractors (“ZPIC”), Program Safeguard Contractors (“PSC”), Supplemental Medical Review Contractors (“SMRC”) and Medicaid Integrity Contributors (“MIC”) programs, each of the foregoing collectively referred to as “Reviews.” As of March 31, 2022, eight of the Company’s independent operating subsidiaries had Reviews scheduled, on appeal or in dispute resolution process, both pre- and post-payment. If an operation fails an initial or subsequent Review, the operation could then be subject to extended Review, suspension of payment, or extrapolation of the identified error rate to all billing in the same time period. The Company, from time to time, receives record requests in reviews which have resulted in claim denials on paid claims. The Company has appealed substantially all denials arising from these reviews using the applicable appeals process. As of March 31, 2022, and through the filing of this Quarterly Report on Form 10-Q, the Company’s independent operating subsidiaries have responded to the Reviews that are currently ongoing, on appeal or in dispute resolution process. The Company cannot predict the ultimate outcome of any regulatory and other governmental reviews. While such reviews are the subject of administrative appeals, the appeals process, even if successful, may take several years to resolve. The costs to respond to and defend such reviews may be significant and an adverse determination in such reviews may subject the Company to sanctions, damages, extrapolation of damage findings, additional recoupments, fines, other penalties (some of which may not be covered by insurance), and termination from Medicare programs which may, either individually or in the aggregate, have a material adverse effect on the Company's business and financial condition. One hospice provider number is subject to a Medicare payment suspension imposed by a Uniform Program Integrity Contractor (UPIC). As of March 31, 2022, the total amount due from the government payor impacted by the suspension was $4,263 and was recorded in accounts receivable, net. The amounts suspended represent all Medicare payments due to the provider number since the start of the suspension and are not an overpayment finding. Any recoupment determined from the review will first be recovered from the suspended funds. In May 2022, the Company received communication that the Medicare payment suspension was terminated and the UPIC’s review was complete. The UPIC reviewed 107 patient records covering a 10-month period to determine whether, in its view, a Medicare overpayment was made. Based on the results of the review, the UPIC has alleged sampled and extrapolated overpayments which are consistent with the amounts impacted by the suspension. The Company has not yet received a demand from the Company’s Medicare Administrative Contractor regarding an alleged overpayment. Any demand amount will first be withheld from the suspended payments. The Company is in the process of evaluating the findings of the review. Insurance - The Company retains risk for a substantial portion of potential claims for general and professional liability, workers’ compensation and automobile liability. The Company recognizes obligations associated with these costs, up to specified deductible limits in the period in which a claim is incurred, including with respect to both reported claims and claims incurred but not reported. The general and professional liability insurance has a retention limit of $150 per claim with a $500 corridor as an additional out-of-pocket retention we must satisfy for claims within the policy year before the carrier will reimburse losses. The workers’ compensation insurance has a retention limit of $250 per claim, except for policies held in Texas and Washington which are subject to state insurance and possess their own limits. Effective January 1, 2022 the Company was self-insured for claims related to employee health, dental, and vision care. To protect itself against loss exposure, the Company has purchased individual stop-loss insurance coverage that insures individual health claims that exceed $325 for each covered person for fiscal year 2022.

SUBSEQUENT EVENTS	3 Months Ended
SUBSEQUENT EVENTS	Mar. 31, 2022
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	SUBSEQUENT EVENTSOn January 27, 2022, affiliates of the Company, entered into Transfer Agreements with affiliates of Ensign, providing for the transfer of the operations of certain senior living communities. The closing of the Transaction was completed in two phases with the transfer of two operations on March 1, 2022 and the remainder transferred on April 1, 2022. The company terminated the leases of the remaining three properties as of April 1, 2022. As a result of the lease terminations, the Company reduced both the right of use assets and the lease liabilities by approximately $8,711. The terminated leases was part of two separate master lease agreements. As a result of the removal of the properties from the master lease agreements, the Company has modified the remaining leases in the pools and is reassessing the classification of the leases and revalued the right of use assets and lease liabilities. On April 29, 2022, the Company entered into an agreement with Ensign that resulted in the termination of a lease of two buildings. One of the properties was sold by Ensign to a third party. The Company acquired real estate and personal property of the other building for $2,007 and will continue to operate the facility.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2022
Accounting Policies [Abstract]
Basis of Presentation	The accompanying unaudited condensed consolidated financial statements of the Company (the “Interim Financial Statements”) reflect the Company’s financial position, results of operations and cash flows of the business. The Interim Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the regulations of the Securities and Exchange Commission (“SEC”). Management believes that the Interim Financial Statements reflect, in all material respects, all adjustments which are of a normal and recurring nature necessary to present fairly the Company’s financial position, results of operations, and cash flows for the periods presented in conformity with GAAP. The results reported in these Interim Financial Statements are not necessarily indicative of results that may be expected for the entire year.
Consolidation	The Company consists of various limited liability companies and corporations established to operate home health, hospice, home care, and senior living operations. The Interim Financial Statements include the accounts of all entities controlled by the Company through its ownership of a majority voting interest.
Estimates and Assumptions	The preparation of the Interim Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Interim Financial Statements and the reported amounts of revenue and expenses during the reporting periods. The most significant estimates in the Interim Financial Statements relate to revenue, intangible assets and goodwill, right-of-use assets and lease liabilities for leases greater than 12 months, self-insurance reserves, and income taxes. Actual results could differ from those estimates.
Revenue Recognition	Revenue is recognized when services are provided to the patients at the amount that reflects the consideration to which the Company expects to be entitled from patients and third-party payors, including Medicaid, Medicare and managed care programs (Commercial, Medicare Advantage and Managed Medicaid plans), in exchange for providing patient care. The healthcare services in home health and hospice patient contracts include routine services in exchange for a contractual agreed-upon amount or rate. Routine services are treated as a single performance obligation satisfied over time as services are rendered. As such, patient care services represent a bundle of services that are not capable of being distinct within the context of the contract. Additionally, there may be ancillary services which are not included in the rates for routine services, but instead are treated as separate performance obligations satisfied at a point in time, if and when those services are rendered.Revenue recognized from healthcare services are adjusted for estimates of variable consideration to arrive at the transaction price. The Company determines the transaction price based on contractually agreed-upon amounts or rate, adjusted for estimates of variable consideration. The Company uses the expected value method in determining the variable component that should be used to arrive at the transaction price, using contractual agreements and historical reimbursement experience within each payor type. The amount of variable consideration which is included in the transaction price may be constrained, and is included in the net revenue only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. If actual amounts of consideration ultimately received differ from the Company’s estimates, the Company adjusts these estimates, which would affect net service revenue in the period such variances become known.et service revenue is recognized in accordance with the Patient Driven Groupings Model (“PDGM”). Under PDGM, Medicare provides agencies with payments for each 30-day payment period 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 payment period 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 payment under the Medicare program is also adjusted for certain variables including, but not limited to: (a) a LUPA 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 episodes; (e) changes to the acuity of the patient during the previous 30-day payment period; (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. The Company adjusts Medicare revenue on completed episodes to reflect differences between estimated and actual payment amounts, an inability to obtain appropriate billing documentation and other reasons unrelated to credit risk. Therefore, the Company believes that its reported net service revenue and patient accounts receivable will be the net amounts to be realized from Medicare for services rendered. In addition to revenue recognized on completed episodes and periods, the Company also recognizes a portion of revenue associated with episodes and periods in progress. Episodes in progress are 30-day payment periods that begin during the reporting period but were not completed as of the end of the period. As such, the Company estimates revenue and recognizes it on a daily basis. The primary factors underlying this estimate are the number of episodes in progress at the end of the reporting period, expected Medicare revenue per period of care or episode of care and the Company’s estimate of the average percentage complete based on the scheduled end of period and end of episode dates. Non-Medicare Revenue Episodic Based Revenue - The Company recognizes revenue in a similar manner as it recognizes Medicare revenue for episodic-based rates that are paid by other insurance carriers, including Medicare Advantage programs. These rates can vary based upon the negotiated terms. Non-episodic Based Revenue - Revenue is recognized on an accrual basis based upon the date of service at amounts equal to its established or estimated per visit rates, as applicable. Hospice Revenue Revenue is recognized on an accrual basis based upon the date of service at amounts equal to the estimated payment rates. The estimated payment rates are calculated as daily rates for each of the levels of care the Company delivers. Revenue is adjusted for an inability to obtain appropriate billing documentation or authorizations acceptable to the payor and other reasons unrelated to credit risk. Additionally, as Medicare hospice revenue is subject to an inpatient cap and an overall payment cap, the Company monitors its provider numbers and estimates amounts due back to Medicare if a cap has been exceeded. The Company regularly evaluates and records these adjustments as a reduction to revenue and an increase to other accrued liabilities. Senior Living Revenue The Company has elected the lessor practical expedient within ASC Topic 842, Leases (“ASC 842”) and therefore recognizes, measures, presents, and discloses the revenue for services rendered under the Company’s senior living residency agreements based upon the predominant component, either the lease or non-lease component, of the contracts. The Company has determined that the services included under the Company’s senior living residency agreements each have the same timing and pattern of transfer. The Company recognizes revenue under ASC Topic 606, Revenue from Contracts with Customers for its senior residency agreements, for which it has determined that the non-lease components of such residency agreements are the predominant component of each such contract.

- Definition

Disclosure of accounting policy for revenue from contract with customer.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

COMPUTATION OF NET INCOME PER COMMON SHARE (Tables)

3 Months Ended

Mar. 31, 2022

Earnings Per Share [Abstract]

Computation of basic and diluted net income per share

The following table sets forth the computation of basic and diluted net income per share for the periods presented:


	Three Months Ended March 31,
		2022		2021
Numerator:
Net income		$	1,158	$	913
Less: net income/ (loss) attributable to noncontrolling interests		144		(37)
Net income attributable to The Pennant Group, Inc.		$	1,014	$	950

Denominator:
Weighted average shares outstanding for basic net income per share		28,572		28,291
Plus: assumed incremental shares from exercise of options and assumed conversion or vesting of restricted stock(a)		1,571		2,616
Adjusted weighted average common shares outstanding for diluted income per share		30,143		30,907

Earnings Per Share:
Basic net income per common share		$	0.04	$	0.03
Diluted net income per common share		$	0.03	$	0.03


(a)						The calculation of dilutive shares outstanding excludes out-of-the-money stock options (i.e., such options’ exercise prices were greater than the average market price of our common shares for the period) because their inclusion would have been antidilutive. Options outstanding which are anti-dilutive and therefore not factored into the weighted average common shares amount above were 1,690 and 14 for the three months ended March 31, 2022 and 2021, respectively.

REVENUE AND ACCOUNTS RECEIVABLE (Tables)

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue by major payor source

Revenue by payor for the three months ended March 31, 2022 and 2021, is summarized in the following tables:


	Three Months Ended March 31, 2022
	Home Health and Hospice Services
	Home Health Services		Hospice Services		Senior Living Services		Total Revenue		Revenue %
Medicare	$	21,357	$	33,721	$	—	$	55,078	48.4	%
Medicaid	2,506		3,265		9,623		15,394		13.5
Subtotal	23,863		36,986		9,623		70,472		61.9
Managed care	13,252		784		—		14,036		12.3
Private and other(a)	5,537		53		23,812		29,402		25.8
Total revenue	$	42,652	$	37,823	$	33,435	$	113,910	100.0	%


	Three Months Ended March 31, 2021
	Home Health and Hospice Services
	Home Health Services		Hospice Services		Senior Living Services		Total Revenue		Revenue %
Medicare	$	20,330	$	33,409	$	—	$	53,739	50.9	%
Medicaid	2,196		2,725		8,932		13,853		13.1
Subtotal	22,526		36,134		8,932		67,592		64.0
Managed care	10,452		637		—		11,089		10.5
Private and other(a)	4,715		143		22,124		26,982		25.5
Total revenue	$	37,693	$	36,914	$	31,056	$	105,663	100.0	%


(a)						Private and other payors in our home health and hospice services segment includes revenue from all payors generated in our home care operations.

Schedule of accounts receivable

Accounts receivable, net as of March 31, 2022 and December 31, 2021 is summarized in the following table:


	March 31, 2022		December 31, 2021
Medicare	$	31,933	$	31,327
Medicaid	13,136		11,793
Managed care	8,535		7,901
Private and other	4,182		3,821
Accounts receivable, gross	57,786		54,842
Less: allowance for doubtful accounts	(868)		(902)
Accounts receivable, net	$	56,918	$	53,940

Concentrations- Credit Risk

BUSINESS SEGMENTS (Tables)

3 Months Ended

Mar. 31, 2022

Segment Reporting [Abstract]

Financial data combined by business segment


	Home Health and Hospice Services		Senior Living Services		All Other		Total
Three Months Ended March 31, 2022
Revenue	$	80,475	$	33,435	$	—	$	113,910
Segment Adjusted EBITDAR from Operations	$	13,948	$	9,432	$	(8,146)	$	15,234
Three Months Ended March 31, 2021
Revenue	$	74,607	$	31,056	$	—	$	105,663
Segment Adjusted EBITDAR from Operations	$	13,791	$	8,834	$	(6,398)	$	16,227

Reconciliation of total combined adjusted EBITDAR from operations for our reportable segments to combined income from operations

This following table provides a reconciliation of Segment Adjusted EBITDAR from Operations to income from operations:


	Three Months Ended March 31,
		2022		2021
Segment Adjusted EBITDAR from Operations		$	15,234	$	16,227
Less: Depreciation and amortization		1,147		1,175
Rent—cost of services		10,051		9,965
Other income		3		—
Adjustments to Segment EBITDAR from Operations:
Less: Costs at start-up operations(a)		131		112
Share-based compensation expense(b)		2,440		2,416
Acquisition related costs(c)		—		7

Transition services costs(d)		37		902

Operating results of transferred senior living facilities(e)		(757)		—
Add: Net income/(loss) attributable to noncontrolling interest		144		(37)
Condensed Consolidated Income from Operations		$	2,326	$	1,613


(a)						Represents results related to start-up operations. This amount excludes rent and depreciation and amortization expense related to such operations.
(b)						Share-based compensation expense incurred which is included in cost of services and general and administrative expense.
(c)						Acquisition related costs related to business combinations during the periods.
(d)						Costs identified as redundant or nonrecurring incurred by the Company as a result of the Spin-off. The 2021 amounts represents part of the costs incurred under the Transition Services Agreement. All amounts are included in general and administrative expense. Fees incurred under the Transition Services Agreement were $988 for the three months ended March 31, 2021.
(e)						On January 27, 2022, affiliates of the Company, entered into certain operations transfer agreements (collectively, the “Transfer Agreements”) with affiliates of Ensign, providing for the transfer of the operations of certain senior living communities (the “Transaction”) from affiliates of the Company to affiliates of Ensign. The closing of the Transaction was completed in two phases with the transfer of two operations on March 1, 2022 and the remainder transferred on April 1, 2022. The amount above represents the net impact on revenue and cost of service attributable to the all of the transferred entities. This amount excludes rent and depreciation and amortization expense related to such operations.

PROPERTY AND EQUIPMENT—NET (Tables)

3 Months Ended

Mar. 31, 2022

Property, Plant and Equipment [Abstract]

Schedule of property and equipment, net

Property and equipment, net consist of the following:


	March 31, 2022		December 31, 2021
Leasehold improvements	$	12,507	$	11,660
Equipment	23,846		22,415
Furniture and fixtures	1,189		1,199
	37,542		35,274
Less: accumulated depreciation	(19,601)		(18,486)
Property and equipment, net	$	17,941	$	16,788

GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS—NET (Tables)

3 Months Ended

Mar. 31, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Activity in goodwill by segment

The following table represents activity in goodwill by segment for the three months ended March 31, 2022:


	Home Health and Hospice Services		Senior Living Services		Total
December 31, 2021	$	70,623	$	3,642	$	74,265
Additions	—		—		—

March 31, 2022	$	70,623	$	3,642	$	74,265

Other indefinite-lived intangible assets

Other indefinite-lived intangible assets consist of the following:


	March 31, 2022		December 31, 2021
Trade name	$	1,355	$	1,355
Medicare and Medicaid licenses	52,375		52,375
Total	$	53,730	$	53,730

OTHER ACCRUED LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2022

Payables and Accruals [Abstract]

Schedule of other accrued liabilities

Other accrued liabilities consist of the following:


	March 31, 2022		December 31, 2021
Refunds payable	$	3,515	$	3,095
Deferred revenue	1,468		1,456
Contract Liabilities (CARES Act advance payments)	1,489		6,211
Resident deposits	5,099		5,111
Property taxes	912		1,102
Accrued self-insurance liabilities - current portion	1,520		1,613
Other	4,627		2,896
Other accrued liabilities	$	18,630	$	21,484

DEBT (Tables)

3 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Schedule of long-term debt

Long-term debt, net consists of the following:


	March 31, 2022		December 31, 2021
Revolving Credit Facility	$	58,500	$	53,500
Less: unamortized debt issuance costs(a)	(1,999)		(2,128)
Long-term debt, net	$	56,501	$	51,372


(a)						Amortization expense for debt issuance costs was $129 and $87 for the three months ended March 31, 2022 and 2021, respectively, and is recorded in interest expense, net on the Condensed Consolidated Statements of Income.

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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+ Details

OPTIONS AND AWARDS (Tables)

3 Months Ended

Mar. 31, 2022

Share-based Payment Arrangement [Abstract]

Total share-based compensation expense

Total share-based compensation expense for all Plans for the three months ended March 31, 2022 and 2021 was:


	Three Months Ended March 31,
		2022		2021
Share-based compensation expense related to stock options		$	842	$	637
Share-based compensation expense related to Restricted Stock		1,519		1,520
Share-based compensation expense related to Restricted Stock to non-employee directors		79		259
Total share-based compensation		$	2,440	$	2,416

In future periods, the Company estimates it will recognize the following share-based compensation expense for unvested stock options and unvested Restricted Stock as of March 31, 2022:


	Unrecognized Compensation Expense		Weighted Average Recognition Period (in years)
Unvested Stock Options	$	12,753	3.7
Unvested Restricted Stock	3,019		0.5
Total unrecognized share-based compensation expense	$	15,772

Stock options granted fair value assumptions

The fair value of each option is estimated on the grant date using a Black-Scholes option-pricing model with the following weighted average assumptions for stock options granted:


Grant Year	Options Granted	Risk-Free Interest Rate		Expected Life(a)	Expected Volatility(b)		Dividend Yield		Weighted Average Fair Value of Options
2022	213	1.9	%	6.5	40.0	%	—	%	$	6.03
2021	137	1.0	%	6.5	37.8	%	—	%	$	18.99


(a)						Under the midpoint method, the expected option life is the midpoint between the contractual option life and the average vesting period for the options being granted. This resulted in an expected option life of 6.5 years for the options granted.
(b)						Because the Company’s equity shares have been traded for a relatively short period of time, expected volatility assumption was based on the volatility of related industry stocks.

Employee stock option activity

The following table represents the employee stock option activity during the three months ended March 31, 2022:


	Number of Options Outstanding	Weighted Average Exercise Price		Number of Options Vested	Weighted Average Exercise Price of Options Vested
December 31, 2021	2,242	$	21.38	840	$	12.28
Granted	213	14.13
Exercised	(20)	4.50
Forfeited	(30)	26.43
Expired	(26)	7.82
March 31, 2022	2,379	$	20.96	854	$	13.83

Summary of non-vested restricted stock awards

A summary of the status of Pennant’s non-vested Restricted Stock, and changes during the three months ended March 31, 2022, is presented below:


	Non-Vested Restricted Stock	Weighted Average Grant Date Fair Value
December 31, 2021	1,493	$	15.00
Granted	5	17.45
Vested	(16)	13.08
Forfeited	(3)	13.40
March 31, 2022	1,479	$	15.03

LEASES (Tables)

3 Months Ended

Mar. 31, 2022

Leases [Abstract]

Components of operating lease cot

The components of operating lease cost, are as follows:


	Three Months Ended March 31,
		2022		2021
Operating Lease Costs:
Facility Rent—cost of services		$	8,789	$	8,835
Office Rent—cost of services		1,262		1,130
Rent—cost of services		$	10,051	$	9,965

General and administrative expense		$	81	$	64
Variable lease cost (a)		$	1,575	$	1,499


(a)						Represents variable lease cost for operating leases, which costs include property taxes and insurance, common area maintenance, and consumer price index increases, incurred as part of our triple net lease, and which is included in cost of services for the three months ended March 31, 2022 and 2021.

Future minimum lease payments

The following table shows the lease maturity analysis for all leases as of March 31, 2022, for the years ended December 31:


Year	Amount
2022 (Remainder)	$	26,621
2023	34,648
2024	33,571
2025	32,389
2026	31,674
Thereafter	274,321
Total lease payments	433,224
Less: present value adjustments	(157,753)
Present value of total lease liabilities	275,471
Less: current lease liabilities	(16,379)
Long-term operating lease liabilities	$	259,092

DESCRIPTION OF BUSINESS (Details) - Mar. 31, 2022	agency	facility
Home Health and Hospice Services
Segment Reporting Information [Line Items]
Number of service providers	88
Senior Living Services
Segment Reporting Information [Line Items]
Number of properties under lease	52	52

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Unusual or Infrequent Item, or Both [Line Items]
The coronavirus aid, relief, and economic security act, advance payments received	$ 1,489
CARES Act
Unusual or Infrequent Item, or Both [Line Items]
Accrued payroll taxes employer portion	7,836
The coronavirus aid, relief, and economic security act, advance payments received	27,997
Repayment of the coronavirus aid, relief, and economic security act	26,508
Accrued Wages and Related Liabilities \| CARES Act
Unusual or Infrequent Item, or Both [Line Items]
Accrued payroll taxes employer portion	$ 4,129

TRANSACTIONS WITH ENSIGN (Details) - Related party - USD ($) $ in Thousands		3 Months Ended
	Jan. 01, 2022	Mar. 31, 2022	Mar. 31, 2021
Related Party Transaction [Line Items]
Cost of services		$ 574	$ 868
Transition Services Agreement
Related Party Transaction [Line Items]
Expiration period	2 years
Expenses from transactions with related party		$ 643	$ 988

- Definition

Direct costs arising from transactions with related parties who are not affiliates or joint Ventures. These costs are categorized as cost of goods sold.

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+ Details

COMPUTATION OF NET INCOME PER COMMON SHARE - RECONCILIATION (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Numerator:
Net income	$ 1,158	$ 913
Less: net income/ (loss) attributable to noncontrolling interest	144	(37)
Net income attributable to The Pennant Group, Inc.	$ 1,014	$ 950
Denominator:
Weighted average shares outstanding for basic net income per share (in shares)	28,572	28,291
Plus: assumed incremental shares from exercise of options and assumed conversion or vesting of restricted stock (in shares)	1,571	2,616
Adjusted weighted average common shares outstanding for diluted income per share (in shares)	30,143	30,907
Earnings Per Share:
Basic net income per common share (in dollars per share)	$ 0.04	$ 0.03
Diluted net income per common share (in dollars per share)	$ 0.03	$ 0.03
Options which are anti-dilutive and not factored into the weighted average common shares amount (in shares)	1,690	14

REVENUE AND ACCOUNTS RECEIVABLE - NARRATIVE (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Disaggregation of Revenue [Line Items]
Payment terms	Residency agreements are generally for a term of 30 days, with resident fees billed monthly in advance. For residents under reimbursement arrangements with Medicaid, revenue is recorded based on contractually agreed-upon amounts or rates on a per resident, daily basis or as services are rendered.
The coronavirus aid, relief, and economic security act, advance payments received	$ 1,489
Customer concentration risk \| Receivables \| Subtotal
Disaggregation of Revenue [Line Items]
Revenue %	78.00%	78.60%
Customer concentration risk \| Revenue
Disaggregation of Revenue [Line Items]
Revenue %	100.00%	100.00%
Customer concentration risk \| Revenue \| Subtotal
Disaggregation of Revenue [Line Items]
Revenue %	61.90%	64.00%

REVENUE AND ACCOUNTS RECEIVABLE - REVENUE BY MAJOR PAYOR (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Disaggregation of Revenue [Line Items]
Revenue	$ 113,910	$ 105,663
Revenue \| Customer concentration risk
Disaggregation of Revenue [Line Items]
Revenue %	100.00%	100.00%
Medicare
Disaggregation of Revenue [Line Items]
Revenue	$ 55,078	$ 53,739
Medicare \| Revenue \| Customer concentration risk
Disaggregation of Revenue [Line Items]
Revenue %	48.40%	50.90%
Medicaid
Disaggregation of Revenue [Line Items]
Revenue	$ 15,394	$ 13,853
Medicaid \| Revenue \| Customer concentration risk
Disaggregation of Revenue [Line Items]
Revenue %	13.50%	13.10%
Subtotal
Disaggregation of Revenue [Line Items]
Revenue	$ 70,472	$ 67,592
Subtotal \| Revenue \| Customer concentration risk
Disaggregation of Revenue [Line Items]
Revenue %	61.90%	64.00%
Managed care
Disaggregation of Revenue [Line Items]
Revenue	$ 14,036	$ 11,089
Managed care \| Revenue \| Customer concentration risk
Disaggregation of Revenue [Line Items]
Revenue %	12.30%	10.50%
Private and other
Disaggregation of Revenue [Line Items]
Revenue	$ 29,402	$ 26,982
Private and other \| Revenue \| Customer concentration risk
Disaggregation of Revenue [Line Items]
Revenue %	25.80%	25.50%
Home Health and Hospice Services \| Home Health Services
Disaggregation of Revenue [Line Items]
Revenue	$ 42,652	$ 37,693
Home Health and Hospice Services \| Home Health Services \| Medicare
Disaggregation of Revenue [Line Items]
Revenue	21,357	20,330
Home Health and Hospice Services \| Home Health Services \| Medicaid
Disaggregation of Revenue [Line Items]
Revenue	2,506	2,196
Home Health and Hospice Services \| Home Health Services \| Subtotal
Disaggregation of Revenue [Line Items]
Revenue	23,863	22,526
Home Health and Hospice Services \| Home Health Services \| Managed care
Disaggregation of Revenue [Line Items]
Revenue	13,252	10,452
Home Health and Hospice Services \| Home Health Services \| Private and other
Disaggregation of Revenue [Line Items]
Revenue	5,537	4,715
Home Health and Hospice Services \| Hospice Services
Disaggregation of Revenue [Line Items]
Revenue	37,823	36,914
Home Health and Hospice Services \| Hospice Services \| Medicare
Disaggregation of Revenue [Line Items]
Revenue	33,721	33,409
Home Health and Hospice Services \| Hospice Services \| Medicaid
Disaggregation of Revenue [Line Items]
Revenue	3,265	2,725
Home Health and Hospice Services \| Hospice Services \| Subtotal
Disaggregation of Revenue [Line Items]
Revenue	36,986	36,134
Home Health and Hospice Services \| Hospice Services \| Managed care
Disaggregation of Revenue [Line Items]
Revenue	784	637
Home Health and Hospice Services \| Hospice Services \| Private and other
Disaggregation of Revenue [Line Items]
Revenue	53	143
Senior Living Services
Disaggregation of Revenue [Line Items]
Revenue	33,435	31,056
Senior Living Services \| Medicare
Disaggregation of Revenue [Line Items]
Revenue	0	0
Senior Living Services \| Medicaid
Disaggregation of Revenue [Line Items]
Revenue	9,623	8,932
Senior Living Services \| Subtotal
Disaggregation of Revenue [Line Items]
Revenue	9,623	8,932
Senior Living Services \| Managed care
Disaggregation of Revenue [Line Items]
Revenue	0	0
Senior Living Services \| Private and other
Disaggregation of Revenue [Line Items]
Revenue	$ 23,812	$ 22,124

REVENUE AND ACCOUNTS RECEIVABLE - ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Accounts Receivable [Abstract]
Accounts receivable, gross	$ 57,786	$ 54,842
Less: allowance for doubtful accounts	(868)	(902)
Accounts receivable, net	56,918	53,940
Medicare
Accounts Receivable [Abstract]
Accounts receivable, gross	31,933	31,327
Medicaid
Accounts Receivable [Abstract]
Accounts receivable, gross	13,136	11,793
Managed care
Accounts Receivable [Abstract]
Accounts receivable, gross	8,535	7,901
Private and other
Accounts Receivable [Abstract]
Accounts receivable, gross	$ 4,182	$ 3,821

BUSINESS SEGMENTS - NARRATIVE (Details) - Mar. 31, 2022	agency	facility
Home Health and Hospice Services
Segment Reporting Information [Line Items]
Number of service providers	88
Senior Living Services
Segment Reporting Information [Line Items]
Number of properties under lease	52	52

BUSINESS SEGMENTS - FINANCIAL DATA (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Segment Reporting Information [Line Items]
Revenue	$ 113,910	$ 105,663
Segment Adjusted EBITDAR from Operations	15,234	16,227
Senior Living Services
Segment Reporting Information [Line Items]
Revenue	33,435	31,056
Operating segments \| Home Health and Hospice Services
Segment Reporting Information [Line Items]
Revenue	80,475	74,607
Segment Adjusted EBITDAR from Operations	13,948	13,791
Operating segments \| Senior Living Services
Segment Reporting Information [Line Items]
Revenue	33,435	31,056
Segment Adjusted EBITDAR from Operations	9,432	8,834
All Other
Segment Reporting Information [Line Items]
Revenue	0	0
Segment Adjusted EBITDAR from Operations	$ (8,146)	$ (6,398)

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

BUSINESS SEGMENTS - INCOME FROM OPERATIONS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Revenue, Major Customer [Line Items]
Segment Adjusted EBITDAR from Operations	$ 15,234	$ 16,227
Less: Depreciation and amortization	1,147	1,175
Rent—cost of services	10,051	9,965
Other income	3	0
Less: Costs at start-up operations	131	112
Share-based compensation expense	2,440	2,416
Acquisition related costs	0	7
Transaction services costs	37	902
Operating results of transferred senior living facilities	(757)	0
Less: net income/ (loss) attributable to noncontrolling interest	144	(37)
Condensed Consolidated Income from Operations	2,326	1,613
Transition Services Agreement \| Related party
Revenue, Major Customer [Line Items]
Fees incurred	$ 643	$ 988

ACQUISITIONS - NARRATIVE (Details) $ in Thousands	1 Months Ended	3 Months Ended
ACQUISITIONS - NARRATIVE (Details) $ in Thousands	May 09, 2022 USD ($)	Mar. 31, 2022 USD ($) agency	Dec. 31, 2021 USD ($)	Mar. 31, 2021 USD ($)
Business Acquisition [Line Items]
Goodwill		$ 74,265	$ 74,265
Series of Individually Immaterial Business Acquisitions
Business Acquisition [Line Items]
Business combination, purchase price		3,685
Total acquisition			3,100
Equipment and other assets		39
Goodwill		1,735
Other indefinite-lived intangible assets		1,326
Acquisition costs				$ 0
Hospice Services \| Series of Individually Immaterial Business Acquisitions
Business Acquisition [Line Items]
Other indefinite-lived intangible assets		585
Home Health and Hospice Services
Business Acquisition [Line Items]
Goodwill		$ 70,623	$ 70,623
Home Health and Hospice Services \| Subsequent event
Business Acquisition [Line Items]
Business combination, purchase price	$ 775
Home Health and Hospice Services \| Home Health Services
Business Acquisition [Line Items]
Number of businesses acquired and assets acquisitions \| agency		2
Home Health and Hospice Services \| Hospice Services
Business Acquisition [Line Items]
Number of businesses acquired and assets acquisitions \| agency		2

PROPERTY AND EQUIPMENT—NET (Details) - USD ($)	3 Months Ended
PROPERTY AND EQUIPMENT—NET (Details) - USD ($)	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 37,542,000		$ 35,274,000
Less: accumulated depreciation	(19,601,000)		(18,486,000)
Property and equipment, net	17,941,000		16,788,000
Depreciation	1,114,000	$ 1,171,000
Long-lived asset impairment	0	$ 0
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	12,507,000		11,660,000
Equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	23,846,000		22,415,000
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 1,189,000		$ 1,199,000

GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS - ACTIVITY IN GOODWILL (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Goodwill [Roll Forward]
Goodwill, beginning balance	$ 74,265
Additions	0
Goodwill, ending balance	74,265
Home Health and Hospice Services
Goodwill [Roll Forward]
Goodwill, beginning balance	70,623
Additions	0
Goodwill, ending balance	70,623
Senior Living Services
Goodwill [Roll Forward]
Goodwill, beginning balance	3,642
Additions	0
Goodwill, ending balance	$ 3,642

GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS - INDEFINITE-LIVED INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Indefinite-lived Intangible Assets [Line Items]
Other indefinite-lived intangibles	$ 53,730	$ 53,730
Trade name
Indefinite-lived Intangible Assets [Line Items]
Other indefinite-lived intangibles	1,355	1,355
Medicare and Medicaid licenses
Indefinite-lived Intangible Assets [Line Items]
Other indefinite-lived intangibles	$ 52,375	$ 52,375

GOODWILL AND OTHER INDEFINITE-LIVED INTANGIBLE ASSETS - NARRATIVE (Details) - USD ($)	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible asset impairments	$ 0	$ 0

OTHER ACCRUED LIABILITIES (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Other Accrued Liabilities, Current [Abstract]
Refunds payable	$ 3,515	$ 3,095
Deferred revenue	1,468	1,456
Contract Liabilities (CARES Act advance payments)	1,489	6,211
Resident deposits	5,099	5,111
Property taxes	912	1,102
Accrued self-insurance liabilities - current portion	1,520	1,613
Other	4,627	2,896
Other accrued liabilities	$ 18,630	$ 21,484

DEBT - SCHEDULE OF LONG-TERM DEBT (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021	Dec. 31, 2021
Debt Instrument [Line Items]
Less: unamortized debt issuance costs	$ (1,999)		$ (2,128)
Long-term debt, net	56,501		51,372
Amortization of deferred financing fees	129	$ 87
Revolving Credit Facility \| Line of credit
Debt Instrument [Line Items]
Revolving Credit Facility	$ 58,500		$ 53,500

- Definition

Amount, after unamortized (discount) premium and debt issuance costs, of long-term debt. Includes, but not limited to, notes payable, bonds payable, debentures, mortgage loans and commercial paper. Excludes capital lease obligations.

+ References + Details

DEBT - NARRATIVE (Details) - USD ($)	Feb. 23, 2021	Mar. 31, 2022
Maximum \| Revolving Credit Facility
Debt Instrument [Line Items]
Margin	0.50%
Revolving Credit Facility
Debt Instrument [Line Items]
Borrowing capacity	$ 150,000,000
Revolving Credit Facility \| Line of credit
Debt Instrument [Line Items]
Weighted average interest rate		3.04%
Borrowing availability		$ 87,314,000
Revolving Credit Facility \| Minimum
Debt Instrument [Line Items]
Margin	0.35%
Revolving Credit Facility \| Minimum \| LIBOR
Debt Instrument [Line Items]
Margin	2.30%
Revolving Credit Facility \| Minimum \| Base Rate
Debt Instrument [Line Items]
Margin	1.30%
Revolving Credit Facility \| Maximum \| LIBOR
Debt Instrument [Line Items]
Margin	3.30%
Revolving Credit Facility \| Maximum \| Base Rate
Debt Instrument [Line Items]
Margin	2.30%
Letters of credit \| Line of credit
Debt Instrument [Line Items]
Letters of credit outstanding		$ 4,186,000

OPTIONS AND AWARDS - SHARE-BASED COMPENSATION (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	$ 2,440	$ 2,416
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	842	637
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	1,519	1,520
Restricted stock awards \| Non-employee director
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation	$ 79	$ 259

OPTIONS AND AWARDS - SHARE-BASED COMPENSATION EXPENSE AND NARRATIVE (Details) - The Ensign Plans $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total unrecognized share-based compensation expense	$ 15,772
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested Stock Options	$ 12,753
Weighted Average Recognition Period (in years)	3 years 8 months 12 days
Options, vesting percent per year	20.00%
Options, expiration period	10 years
Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested Restricted Stock	$ 3,019
Weighted Average Recognition Period (in years)	6 months
Vesting period	5 years

OPTIONS AND AWARDS - OPTIONS GRANTED (Details) - The Ensign Plans - $ / shares shares in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)	213
2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)	213
Weighted average fair value of options (in dollars per share)	$ 6.03
2022 \| Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-Free Interest Rate	1.90%
Expected life	6 years 6 months
Expected volatility	40.00%
Dividend Yield	0.00%
2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)		137
Weighted average fair value of options (in dollars per share)		$ 18.99
2021 \| Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-Free Interest Rate		1.00%
Expected life		6 years 6 months
Expected volatility		37.80%
Dividend Yield		0.00%

OPTIONS AND AWARDS - EMPLOYEE STOCK OPTION ACTIVITY (Details) - The Ensign Plans - $ / shares shares in Thousands	3 Months Ended
	Mar. 31, 2022	Dec. 31, 2021
Number of Options Outstanding
Beginning balance, outstanding (in shares)	2,242
Granted (in shares)	213
Exercised (in shares)	(20)
Forfeited & Expired (in shares)	(30)
Expired (in shares)	(26)
Ending balance, outstanding (in shares)	2,379
Weighted Average Exercise Price
Beginning of period, weighted average exercise price (in dollars per share)	$ 21.38
Granted (in dollars per share)	14.13
Exercised (in dollars per share)	4.50
Forfeited & Expired (in dollars per share)	26.43
Expired (in dollars per share)	7.82
End of period, weighted average exercise price (in dollars per share)	$ 20.96
Number of options vested (in shares)	854	840
Weighted average exercise price of options vested (in dollars per share)	$ 13.83	$ 12.28

OPTIONS AND AWARDS - RESTRICTED STOCK (Details) - The Ensign Plans - Restricted stock awards shares in Thousands	3 Months Ended
	Mar. 31, 2022 $ / shares shares
Non-Vested Restricted Stock
Beginning balance, outstanding (in shares) \| shares	1,493
Granted (in shares) \| shares	5
Vested (in shares) \| shares	(16)
Forfeited (in shares) \| shares	(3)
Ending balance, outstanding (in shares) \| shares	1,479
Weighted Average Grant Date Fair Value
Beginning of period, weighted average exercise price (in dollars per share) \| $ / shares	$ 15.00
Granted (in dollars per share) \| $ / shares	17.45
Vested (in dollars per share) \| $ / shares	13.08
Forfeited (in dollars per share) \| $ / shares	13.40
End of period, weighted average exercise price (in dollars per share) \| $ / shares	$ 15.03

LEASES - NARRATIVE (Details) $ in Thousands	3 Months Ended
LEASES - NARRATIVE (Details) $ in Thousands	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($) property	Apr. 01, 2022 building lease agreement	Mar. 31, 2022 USD ($)	Mar. 31, 2022 agency	Mar. 31, 2022 property	Mar. 31, 2022	Mar. 31, 2022 facility	Mar. 31, 2022 arrangement
Lessee, Lease, Description [Line Items]
Non-cash adjustment to right-of-use assets and lease liabilities from lease terminations	$ (33,804)	$ 0
Non-cash adjustment to right-of-use assets and lease liabilities from lease modifications		0		$ 9,349
Weighted average remaining lease term	13 years 3 months 18 days
Weighted average discount rate							7.30%
Subsequent event
Lessee, Lease, Description [Line Items]
Number of terminated leases under master lease agreement \| agreement			2
Related party \| Operating lease, rent expense
Lessee, Lease, Description [Line Items]
Fees incurred	$ 3,484	$ 3,073
Senior Living Services
Lessee, Lease, Description [Line Items]
Number of properties under lease					52			52
Senior Living Services \| Related party
Lessee, Lease, Description [Line Items]
Number of operating facilities \| property		31				32
Number of properties under lease, master lease agreement \| facility								14
Number of separate master lease arrangements \| arrangement									2
Senior Living Services \| Related party \| Subsequent event
Lessee, Lease, Description [Line Items]
Number of buildings involved in termination of lease \| building			2
Number of terminated leases under master lease agreement \| lease			1
Senior Living Services \| Minimum
Lessee, Lease, Description [Line Items]
Lease term	5 years
Senior Living Services \| Minimum \| Related party
Lessee, Lease, Description [Line Items]
Lease term	14 years
Senior Living Services \| Maximum
Lessee, Lease, Description [Line Items]
Lease term	21 years
Senior Living Services \| Maximum \| Related party
Lessee, Lease, Description [Line Items]
Lease term	20 years

LEASES - IMPACT OF NEW LEASES GUIDANCE (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2022	Mar. 31, 2021
Lease, Cost [Abstract]
Variable lease cost	$ 1,575	$ 1,499
Cost of services
Lease, Cost [Abstract]
Operating lease costs	10,051	9,965
Cost of services \| Facility
Lease, Cost [Abstract]
Operating lease costs	8,789	8,835
Cost of services \| Office
Lease, Cost [Abstract]
Operating lease costs	1,262	1,130
General and administrative expense
Lease, Cost [Abstract]
Operating lease costs	$ 81	$ 64

LEASES - FUTURE MINIMUM LEASE PAYMENTS (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Dec. 31, 2021
Leases, Under Adoption of ASC 842 [Abstract]
2022 (Remainder)	$ 26,621
2023	34,648
2024	33,571
2025	32,389
2026	31,674
Thereafter	274,321
Total lease payments	433,224
Less: present value adjustments	(157,753)
Present value of total lease liabilities	275,471
Less: current lease liabilities	(16,379)	$ (16,118)
Long-term operating lease liabilities	$ 259,092	$ 287,753

INCOME TAXES - NARRATIVE (Details) - USD ($) $ in Thousands	3 Months Ended
INCOME TAXES - NARRATIVE (Details) - USD ($) $ in Thousands	Mar. 31, 2022	Mar. 31, 2021
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 542	$ 340
Effective income tax rate reconciliation, percent	31.90%	27.10%

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands		3 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	May 02, 2022 agency	Mar. 31, 2022 USD ($) review
Concentration Risk [Line Items]
Number of operating subsidiaries with reviews scheduled \| review		8
Suspended payments		$ 4,263
General and professional liability, retention limit		150
Out-of-pocket retention		500
Workers' compensation, retention limit		250
Maximum
Concentration Risk [Line Items]
Self insurance, individual coverage limit		$ 325
Subsequent event
Concentration Risk [Line Items]
Number of patient records under review \| agency	107
Period of review	10 months

SUBSEQUENT EVENTS (Details) $ in Thousands			3 Months Ended
SUBSEQUENT EVENTS (Details) $ in Thousands	Apr. 29, 2022 USD ($) building	Apr. 01, 2022 USD ($) property agreement	Mar. 31, 2022 USD ($)	Mar. 31, 2021 USD ($)
Subsequent Event [Line Items]
Reduction to lease liabilities			$ (120)	$ (639)
Subsequent event
Subsequent Event [Line Items]
Number of properties involved in lease termination \| property		3
Reduction to right of use assets		$ 8,711
Reduction to lease liabilities		$ 8,711
Number of terminated leases under master lease agreement \| agreement		2
Real estate and personal property acquired	$ 2,007
Subsequent event \| Ensign
Subsequent Event [Line Items]
Number of buildings sold in termination of lease \| building	1
Subsequent event \| Ensign
Subsequent Event [Line Items]
Number of buildings involved in termination of lease \| building	2