The Pennant Group’s senior living segment is stable and growing, with second-quarter revenues improving 16.6% compared with the same quarter in 2023, John Gochnour, president and chief operating officer, said Wednesday on the Eagle, ID-based holding company’s earnings call.
Segment revenue for the quarter was $43.4 million, an increase of $6.2 million over the second quarter in 2023.
“It’s an outstanding start to the year,” he said. ‘We anticipate the senior living business will continue to get stronger. We’ve had a remarkable run in that business over the last year and a half as a new group of operators settled in and is making gradual progress toward target margins.”
Pennant reported same-store senior living occupancy of 79.2%. Total senior living occupancy in the second quarter reached 78.8%, up from 78% from the second quarter of 2023. Occupancy rate growth remains steady, according to the company, with an overall increase of 80 basis points over the prior year quarter and a focus on rate and revenue quality, Gochnour said.
Senior living segment adjusted earnings from operations before interest, taxes, depreciation and amortization for the second quarter were $12.8 million, an increase of $1.1 million, or 9.6%, over the prior year quarter. Segment adjusted EBITDA from operations for the second quarter was $4.1 million, an increase of $0.5 million, or 14.8%, compared with the same quarter in 2023.
CEO Brent Guerisoli said the company’s investment in recruiting strong financial leaders — central to its operating model — contributed to its growth, and the company expects performance to improve.
Overall, a “robust” first quarter led to a “record-breaking” second quarter as Pennant continued to experience momentum across its entire portfolio, according to Guerisoli.
The financial performance and growth trajectory, the CEO said, reflect Pennant’s effort to apply its five key focus areas — leadership development, clinical excellence, employee engagement, margin and growth — to every aspect of its business.
“The tangible financial fruits of these efforts are now coming to bear,” Guerisoli said, adding that the performance is the result of the company’s “relentless focus” on fundamentals; steady, incremental improvement; and a proactive approach to growth as it builds its leadership pipeline. “They also demonstrate the firm foundation we have laid over the last several years upon which we are now positioned to build.”
Guerisoli said it’s an “exciting time in its history as organic and acquisitional growth for the company is at all-time highs.
“With solid performance across the portfolio, capable leaders ready to seize opportunities and a healthy balance sheet, we are excited for the remainder of 2024 and beyond,” he said.
Gochnour said that the company’s “inspiring” clinical and operational results were driven by local leaders who continued to execute on existing operations.
