The Pennant Group delivered a strong first quarter and a great start to the year, CEO Brent Guerisoli told investors on Tuesday’s earnings call.
“We remain committed to our five key focus areas: leadership development, clinical excellence, employee experience, margin improvement and growth. Focusing on these fundamentals has created a firm foundation in our core business and significant momentum across the company, with our investments in people, systems and growth are bearing fruit,” Guerisoli said.
The Eagle, ID-based holding company’s senior living services segment revenue for the first quarter was $40.4 million, an increase of $5 million, or 14.2%, over the prior year quarter, according to a press release issued in conjunction with the earnings call.
Average occupancy for the first quarter was 78.5%, an increase of 40 basis points over the same quarter in 2023, and average monthly revenue per occupied room for the first quarter was $4,667 an increase of $367 or 8.5% over the prior-year quarter.
“On the senior living side, we have steadily increased our revenue per occupied unit as local teams effectively manage resident mix and adjust their prices to reflect the true costs of services they provide,” Guerisoli said Tuesday.
Same-store senior living services segment revenue for the first quarter was $38.9 million, an increase of $3.6 million, or 10.2%, over the prior-year quarter; same-store senior living average occupancy for the first quarter was 79.7%, an increase of 60 basis points over the same quarter in 2023, and average monthly revenue per occupied room for the first quarter was $4,643, an increase of $349, or 8.1%, over the prior-year quarter.
“The momentum we’ve seen in Q1 demonstrates the power of our model to access the latent opportunity that exists in our current operations, while also transitioning new operations into the platform,” Guerisoli said.
Pennant saw positive performance in both the senior living and home health and hospice segments, according to President and COO John Gochnour.
On the senior living side, the company revenue increased 14.2% over the prior-year quarter. Additionally, in March, Pennant acquired two senior living properties in Utah.
“As an operator of senior living communities with a strong track record of producing excellent clinical and financial results, we are frequently approached by landlords looking to install a new operator under a long-term lease. And depending on the terms of the proposed transaction, we often see value in such lease arrangements,” Gochnour said. “In other cases, we have the opportunity to purchase the associated real estate and thus capture the upside that accrues as we improve operating results.”
Chief Financial Officer Lynette Walbom said Pennant expects cash flow from operations to ramp throughout 2024 and total $30 million to $35 million on the year, “reflecting organic revenue growth, strong cash collections and bottom line improvement.”
For additional coverage of the earnings call, see McKnight’s Home Care.
