The Pennant Group (NASDAQ: PNTG) plans to ramp up acquisition activity in the second half of the year and into 2023, with a number of hospice and home health deals in its pipeline. 

The company has been aggressive on acquisitions for the past two years, but paused in early 2022 to integrate its most recently acquired assets and accumulate capital. But executives indicated in a second-quarter earnings call that more deals will be coming to fruition in the coming months. 

“We’ve been building momentum over the course of this year, and improving our cash flow and balance sheet,” CEO Brent Guerisoli said in the earnings call. “And we are poised to return to a brisk pace of strategic acquisition that will propel our growth over the next several years and beyond.”

Guerisoli, formerly the company’s chief operating officer, took the helm as CEO effective August 1, succeeding Daniel Walker as Pennant’s top executive. Walker has retired from the CEO position but remains board chairman.

Looking ahead, the Pennant Group in the near term expects to deploy more dollars to fuel transactions, targeting small- to medium-sized companies with a positive clinical and operational track record and strong potential for growth, Guerisoli indicated.

Pennant, which owns and operates hospice provider Cornerstone Healthcare, was spun off in 2019 from The Ensign Group (NASDAQ: ENSG). Pennant retained Ensign’s hospice, home health and senior living operations.

“As we have done throughout our history, we will continue to drive organic growth and acquire additional operations and existing and new markets in a disciplined manner. Acquisitions are part of the DNA of our leaders and our resources,” Guerisoli said. “And we’re ready to put more capital toward strategic growth.”

The company’s consolidated revenue in Q2 totaled $116.3 million, up 5.4% from the prior year’s quarter. Its home health and hospice segment accounted for $85.3 million, a 9.3% increase from Q2 2021.

Pennant also saw hospice admissions growth during Q2, reaching 2,119 patients, a 3.5% jump from the same period last year. Average daily hospice census was rose 2.4% sequentially, but was down 0.5% from Q2 2021.

“Though there is still some softness. Our hospice average daily census momentum is building as our average length of stay continues to normalize, and our local teams continue strong admissions,” COO John Gochnour said in the earnings call. “We expect our ADC to continue to improve throughout the quarter.”