The Pennant Group saw “continued positive momentum” in operating results in the third quarter, according to Pennant CEO Brent Guerisoli.
On a Wednesday earnings call and in a press release issued on Tuesday, the Eagle, ID-based holding company said that across its 51 affiliated senior living companies, average occupancy was 78.9% in the quarter, an increase of 240 basis points over the same quarter in 2022. Comparing results in communities that were owned by Pennant affiliates in both 2022 and 2023, senior living average occupancy for the quarter was 80.1%, an increase of 250 basis points over the prior year quarter.
In a filing with the Securities and Exchange Commission, Pennant said that the “modest senior living occupancy improvement” in 2023 through the third quarter was partially due to “improving COVID-19 case trends and renewed consideration of senior living communities as a home-based care setting.” The company, however, said that despite the steady improvements in occupancy seen throughout 2022 and 2023, it could not be sure when occupancy levels in its senior living communities will return to pre-pandemic levels.
Revenue in the senior living segment in the quarter was $38.7 million, an increase of $6.1 million, or 18.9% over the same period in 2022. Average monthly revenue per occupied room for the quarter was $3,991, an increase of $431, or 12.1%, over the same quarter last year.
Same-store senior living services segment revenue for the third quarter was $37.2 million, an increase of $5 million, or 15.5%, over the prior year quarter, and same-store average monthly revenue per occupied room for the third quarter was $3,973, an increase of 416, or 11.7%, over the prior year quarter.
Overall, senior living segment adjusted earnings before interest, taxes, depreciation, amortization and restructuring or rent costs from operations for the third quarter was $11.5 million, an increase of $2.1 million, or 22.4%, over the same quarter in 2022. Segment-adjusted EBITDA from operations for the third quarter was $3.1 million, an increase of $1.6 million, or 109.6%, over the prior year quarter.
Pennant’s portfolio as of Sept. 30 also included 103 home health, hospice and home care agencies, according to the SEC filing.
“We are pleased to report continued positive momentum in the third quarter,” Guerisoli said in a statement, commenting on overall results of all business segments. “With solid census gains, robust top-line growth and improved margin and earnings, we are poised to execute through the remainder of 2023 and beyond.”
Pennant Chief Financial Officer Lynette Walbom said that all-segment operations produced $27.9 million of cash through the third quarter, which will enable the company to execute on its short-term and long-term growth plans. Pennant, she said, has $3.4 million of cash on hand and $90.8 million available on its revolving line of credit.
“We see attractive growth opportunities in the current market and are well-positioned to take advantage of an increasingly favorable acquisition environment,” Guerisoli said.
In 2023 through Sept. 30, the company had added two senior living communities, three home health agencies, three hospice agencies and two home care agencies.
For the quarter, Pennant reported diluted earnings per share of $0.15 and adjusted diluted earnings per share of $0.20.
