The Pennant Group, Inc. (NASDAQ: PNTG) brought in record-high service revenue during the first quarter of the year, in part fueled by growth in its hospice and home health service lines.
Meanwhile, the Idaho-based home health, hospice and senior living provider is full-speed ahead on its same-store growth and acquisition plans, according to Pennant CEO Brent Guerisoli.
“Q1 represented a culmination of the significant efforts we have made on both the organic and acquisition side, leading to a record quarter,” Guerisoli said in Tuesday’s earnings call. “While we are encouraged by the progress that we’ve made, we’re even more excited about the foundation that we’ve built in the future that lies ahead.”
Pennant is the holding company of independent subsidiaries that operate 112 home health and hospice agencies and 53 senior living communities across 13 states.
Double-digit, year-over-year percentage increases in same-store home health admissions and hospice average daily census were a core part of the company’s strong start to 2024, Guerisoli said.
Pennant’s consolidated revenue reached $156.9 million during 2024’s first quarter, a 24.1% year-over-year increase. Its home health and hospice segments brought in a large portion of that revenue at $57.2 million and $54.6 million, respectively. These segments saw a combined 27.9% raise compared to Q1 in 2023.
The company’s average daily hospice census reached 2,962 patients in the first quarter, a 21.4% year-over-year climb. Meanwhile, home health admissions reached 14,649 patients, up 34.3% from last year’s first quarter.
An additional growth factor was the successful integration of Pennant’s recent transactions, Guerisoli stated.
Earlier this month Pennant acquired Utah-based South Davis Home Health and South Davis Hospice.
The company in December 2023 picked up Arizona-based Southwestern Palliative Care & Hospice after acquiring five Medicare hospice providers in multiple states the prior month. Financial terms were not disclosed in these deals.
Historically, Pennant has focused on underperforming M&A targets with high turnaround upside. Developing strong local leadership has been a pinnacle of sustainable growth as the company continues to hone its organic and same-store strategy, Guerisoli said. The company has also targeted operations in more rural areas.
“We are pleased to report record-breaking census growth, clinical outperformance and margin improvement in our home health and hospice segment,” Pennant President and COO John Gochnour said. “We continue to look at that segment combined, because so many of our operations operate as both a home health and hospice provider.”
Combined with the company’s traditional acquisition approach, its strategic sights are also focused in senior living real estate, Gochnour indicated.
Recent senior living real estate transactions include the purchase of two Utah-based communities, Capitol Hill Senior Living and Southgate Senior Living. The acquisitions of these two assisted living and memory care communities marked an important milestone in Pennant’s strategic sprawl across the aging care continuum, according to Gochnour.
“With strong local leadership teams in place, robust cluster support, favorable pricing and locations in areas where Pennant has significant strength in our home health, hospice, provider services and home care operations, the [Capitol Hill and Southgate] deal perfectly illustrates our ability to execute a win-win real estate transaction within our disciplined, operations-focused acquisition approach,” Gochnour said. “We will apply the same disciplined approach to this asset class as we do to our traditional acquisitions; Asking first who, then what, evaluating the strength of our local operations and weighing the opportunity cost of deploying capital to real estate instead of home health, hospice or senior living operations.”
Companies featured in this article:
South Davis Home Health, South Davis Hospice, Southwestern Palliative Care & Hospice, The Pennant Group
