When it comes to senior living, 2019 was a positive year for the Pennant Group, a senior living, home health and hospice company. Still, significant work remains to unlock the tremendous potential within the company’s portfolio, according to Pennant Group CEO and President Danny Walker, who spoke Thursday on the Eagle, ID-based holding company’s fourth-quarter and full-year 2019 year end earnings call.
Total revenue for the full year was $338.5 million, an increase of $52.5 million, or 18.3%, over 2018. Total revenue for the quarter was $89.5 million, an increase of $14.2 million or 18.8% over the fourth quarter of 2018, the company reported. Revenue for the senior living services segment for the full year totaled $131.9 million, an increase of $14.9 million or 12.7% over 2018. Segment revenue for the fourth quarter was $34.4 million, an increase of $3.2 million or 10.3% over the fourth quarter of 2018.
“The fourth quarter marked our first full quarter as a separate public company following our spin-off from our partners at the Ensign Group,” Walker said. “We are pleased to see this revenue growth and total occupancy increasing 70 basis points sequentially and year-over-year, and our average monthly revenue per occupied room increased 2.5% over 2018.”
In 2019, the company acquired 11 operations across five states: two senior living communities, two home health agencies, five hospice agencies and two home care agencies. The acquired operations bring Pennant’s growing portfolio to 65 home health and hospice agencies and 53 senior living communities located across 14 states.
“We will continue to be disciplined when it comes to investment activity and are excited about our ability to grow,” said Derek Bunker, Pennant’s chief investment officer. “As we focus on ensuring our existing operations are healthy and we have local teams ready to step in and lead newly acquired businesses, we will be ready to deploy capital toward deals of all sizes that align with our strategic mission.”
Looking ahead, the company is not changing its guidance for 2020, noted Jennifer Freeman, Pennant’s chief financial officer. Total revenue is anticipated to be in the range of $376 million to $386 million, the midpoint of which represents an increase of 12.5% over the midpoint of our full year 2019 revenue. In addition, adjusted earnings per share is anticipated to be in the range of $0.53 to $0.58 per diluted share, the midpoint of which represents an increase of 15.6% over our full year spin-adjusted 2019 adjusted earnings per share of $0.48.
“We continue our transition to a fully self-sufficient, publicly traded company,” she said. “While many systems and processes were transitioned simultaneously with the spin-off, our guidance assumes elevated general and administrative expenses resulting from the remaining work to complete the separation from Ensign systems and build internal capabilities and capacity.”