Nick Westfall: I’ll start at the end of that question which is, yes, continue to absolutely look at opportunities. Valuation ranges. Obviously, there’s a larger range and a lot of it has to do with the circumstances of those existing providers the markets in which they operate, as well as whether it is a platform or whether it is just a desirable location that maybe has restrictions around accessing the market that really influence those multiples. With all that being said, not just multiples from an attraction standpoint, but really the environment which we’re in is, a lot of providers looking at their outlook and where and how they’re operating today. And for many providers particularly those that have been in the business or in the industry for very long, and that’s why I go back to long-standing mission-focused providers, I think it’s one in which we’re looking amongst one another around that mission and cultural alignment to find the right partnerships.
And so, it’s less about multiple components as it is, what’s the right partner to look to continue to fulfill that mission and service the community. And we think we’re very well-positioned. And obviously my opinion is biased, but we do things the right way. We have since our founders founded not only the hospice benefit but VITAS as part of itself. And so we believe we’re really well-positioned, which lead us to continuing to look at those opportunities.
Mike Witzeman: We would be interested in any opportunities, but as Nick mentioned particularly in restricted states. Particularly Florida we would be even more interested.
Michael Murray: Okay. All right. Thank you so much. Appreciate it.
Operator: One moment for your next question. The next question comes from the line of Joanna Gajuk of Bank of America. Joanna, please go ahead.
Joanna Gajuk: Hi, good morning. So I guess I have a couple of follow-ups here. So maybe first, we didn’t talk about guidance. So maybe you can frame to us. It sounds like VITAS was better, Roto-Rooter was lower than your internal. But how would you characterize overall at the consolidated level against the results versus your internal expectations? Because in the press release you said you reiterated guidance. So should we read into this as saying that Q1 was roughly in line or maybe it was inside the range? So maybe let’s start there.
Kevin McNamara: I’ll do it again. There’s another element that is we don’t give quarterly guidance. We give yearly guidance and sometimes the compared to let’s say analyst estimates. They tend to more — not necessarily exactly align with our seasonal expectations. But I’ll say if you just wanted to starting at the end Mike and feel free to jump in. We think we were about $0.12 a share below what we would’ve expected. And again we didn’t change our guidance. We don’t give quarterly guidance but again that’s not that much of a hill to overcome. And we will change our guidance, but it was certainly a blip that’s very unusual for us. We don’t have many quarters where we’re below analyst estimates. But more importantly we were say about $0.12 to $0.13 below our own expectations. So Mike if you have anything to add.
Mike Witzeman: Yeah, Joanna. I think that at the moment with the VITAS outperforming with Roto-Rooter may be a little disappointing, but certainly plans in place we didn’t feel like changing our range that we gave back in February made a lot of sense. Having said that, there’s no doubt that as Kevin alluded to that in the second quarter we’re going to change certainly the components of how we get to that range and certainly the range might change. But at the moment given the differing ways that VITAS and Roto-Rooter when we didn’t have any reason to say, we don’t think that that original range was still within the realm of reason.
Joanna Gajuk: Okay. That makes sense. And I guess the other piece of this I assume is the deal that you closed right in mid-April. So I assume you’re going to include it in your updated guidance. So thank you for giving some color on the top-line when it comes to the number of patients and potential offset over time. But how should we think about margins there, because obviously this asset was a nonprofit. So I would assume that maybe different margin profile there. And so how do you think about how quickly those margins will get to the VITAS segment level essentially?
Nick Westfall: Yeah, Joanna as you alluded to, we will include it in our second quarter update. When you think about outlook from a marginal expectation standpoint, realize of the markets two of them we already operate in. And so there’s a lot of operational opportunities that are included inside of there. And then similarly the ways in which we approach the market may be slightly different than how in this instance Covenant did. So we were prepared and making investments and we have all of that modeled inside of our internal guidance and feel very good about it. So from — to answer your question on overall marginal profile, it’s going to look relatively similar once it’s all integrated in. And given the size of what we’re talking about compared to the overall enterprise it’s not like there’s some material impact to overall company marginal outlooks because of the deal on a go-forward basis.
It’s one that is very opportunistic for us and we’re just excited about servicing the existing communities as well as the new communities we entered into last Wednesday.
Mike Witzeman: Our models at the moment we — I would tell you that because of some of the uncertainty just with the integration the short-term integration costs, I would tell you that 2024 we’ve been a little conservative from a margin perspective. But going forward past 2024 certainly, we expect margins to come in line to the rest of the VITAS company as well.
Nick Westfall: When you think about SG&A whether — and you get into call centers back office et cetera all those operations are able to be folded in immediately without any incremental investment. So as with any acquisition that’s the opportunity.
Kevin McNamara: They have a shorter ADC average length of stay. So the margin would be a little bit lower.
Nick Westfall: Yes. As I alluded to with the previous question for Michael I think we have an opportunity for day of care expansion as we look at execution of our strategy to help the community and the referral sources better identify patient eligibility earlier in their disease trajectory. So we’re very encouraged about the outlook of that acquisition. And just as importantly just as excited about bringing on those team members that are now part of our VITAS family going forward.
Joanna Gajuk: Okay. So I guess it sounds like the margins will look pretty close to the similar margin in 2025. So I guess would you say is it going to be kind of exiting 2024 kind of already close to that margin? Call it I guess Q4 is also the best quarter of the year. But I guess it sounds like you’re going to get there fairly quickly.
