The Pennant Group posted full-year and fourth-quarter results that demonstrated progress in 2022 and “meaningful momentum” heading into 2023 due to investments in people, CEO Brent Guerisoli during a Friday earnings call.
Guerisoli said the Eagle, ID-based company’s senior living and home health / hospice segments both saw top line growth despite labor and inflationary pressures.
“Our senior living business continued to stabilize,” he said. “Throughout 2022, we invested in the next generation of leaders who are positioned to accelerate our growth in 2023.”
“The significant improvement in this segment is evidence that strong leaders and strong clusters drive strong results over time,” he said. “We are excited to see this turnaround story become a growth story in 2023 and beyond.”
Leadership investments expected to drive growth
Pennant — the parent company of the Pennant group of affiliated senior living, home health and hospice companies — has experienced elevated turnover — up to 25% — and staffing shortages over the past two years, which has affected growth, the CEO said, adding that the results have led the company to transition to a focus on people.
Guerisoli attributed the senior living segment’s “transformational” fourth-quarter operational improvements to its local leaders responding to “extraordinary” inflationary and labor increases.
This year, Pennant plans to enhance its efforts to find, train and develop operational, clinical and local leaders. Those leaders will be expected to drive improvement in clinical outcomes, operating margins, growth and elevated employee experiences, Guerisoli said.
He said that Pennant is more than a healthcare company and called it a leadership company committed to creating opportunity for entrepreneurial individuals. Leaders who achieve results over an extended period of time are awarded C-level designations — CEO, chief clinical officer or chief operating officer, he added.
Guerisoli said that developing C-level leaders is his No. 1 priority, with Pennant committed to tripling its number of CEOs over the next three years. That means redoubling efforts to recruit, train and develop more leaders, as well as working to improve data, tools and resources.
Operating results show improvement
That investment in leadership is paying off, according to President and Chief Operating Officer John Gochnour.
Senior living services segment revenue for the full year was $131 million, an increase of 0.7% over 2021. Fourth-quarter revenue was $34 million, up 0.3% over the same quarter in 2021 and 4.4% over the third quarter of 2022.
Same-store senior living services segment revenue was $126.8 million for the full year, an increase of 11.2% over 2021. Fourth-quarter revenue was $33.5 million, a 12.9% increase over the same quarter in 2021.
Same-store senior living average occupancy for the fourth quarter was 78.6%, a 330-basis-point increase over the same quarter in 2021 and a 100-basis-point improvement over the third quarter of 2022.
Gochnour said that Pennant is continuing to expand its acquisition pipeline.
“We see attractive acquisition targets within our footprint, including off-market opportunities from sellers drawn to our reputation, culture and quality record,” he said.