As the pandemic challenges that affected first-quarter results lingered into the second quarter, Pennant Group CEO Daniel Walker said Tuesday that opportunities across its portfolio leave him optimistic for future growth.
During a second-quarter earnings call for the Eagle, ID-based company, Walker said the pace of recovery in its senior living segment has been slower than projected due to the pandemic, the winter storm in Texas and continuing wage and hiring headwinds in the first half of the year. Pennant is responding by continuing to develop its senior living leaders, strengthening its cluster-centered operating model and improving its resources and systems, he added.
And although some of those pressures will persist in the second half of 2021, Walker said that Pennant is “far ahead of where we were two years ago” when the company spun off from the Ensign Group.
“Today, we have stronger leaders and clusters, a deeper leadership pipeline, better quality measures, more robust IT solutions, a stronger balance sheet, greater drive power and more favorable debt terms,” Walker said, adding that the “embedded upside” of both its senior living and home health and hospice segments is “as compelling as ever.”
Despite such optimism, earnings of 17 cents per share were down from the 24 cents seen a year earlier. Revenues hit $110.35 million for the quarter ended June 30.
President Brent Guerisoli said that Pennant is seeing a census uptick in senior living. Senior living average occupancy for the quarter was 72.7%, an increase of 60 basis points (0.6%) over the first quarter. As of Aug. 9, occupancy was 74.1%, a 280 basis point (2.8%) improvement over a low point in mid-March.
“With a largely vaccinated resident population and communities open for tours and visitation, there is a measurable increase in the demand for quality senior living settings,” Walker said. “Barring a return to the challenging operating environment prevalent during the peak of the pandemic, we are positioning ourselves to accelerate the momentum generated in the second quarter during the second half of the year and beyond.”
