Pennant Group (NASDAQ: PNTG) delivered record service revenue in the first quarter of this year, driven in part by growth in its hospice and home health services segments.
Meanwhile, Pennant CEO Brent Gerisoli said the Idaho-based home health, hospice and senior housing company is moving full speed ahead with its same-store growth and acquisition plans. It is said that there is
“The first quarter was the culmination of the tremendous efforts we have made on both the organic and acquisition side, leading to a record quarter,” Gerisoli said on Tuesday's earnings call. “While we are encouraged by the progress we have made, we are even more excited about the foundation we have built for the future that lies ahead.”
Pennant is a holding company of independent subsidiaries that operate 112 home health and hospice agencies and 53 senior living communities in 13 states.
Gerisoli said double-digit year-over-year increases in same-store home health admissions and hospice daily average census were central to the company's strong start to 2024. Ta.
Pennant's consolidated revenue reached $156.9 million in the first quarter of 2024, an increase of 24.1% year over year. The home health and hospice divisions brought in the bulk of the revenue with $57.2 million and $54.6 million, respectively. These segments had a total increase of 27.9% compared to the first quarter of 2023.
The company's average hospice daily population reached 2,962 people in the first quarter, an increase of 21.4% year-over-year. Meanwhile, the number of home medical inpatients reached 14,649, an increase of 34.3% compared to the first quarter of last year.
A further growth factor was the successful consolidation of Pennant's recent transactions, Gerisoli said.
Earlier this month, Pennant acquired Utah-based South Davis Home Health and South Davis Hospice.
The company acquired Arizona-based Southwestern Palliative Care Hospice in December 2023, after acquiring five Medicare hospice providers in multiple states in the previous month. Financial terms of these transactions were not disclosed.
Historically, Pennant has focused on M&A targets that underperform, but are highly profitable. Gerisoli said developing strong regional leadership has been the pinnacle of sustainable growth as the company continues to hone its organic and same-store strategies. The company is also targeting business expansion in rural areas.
“We are pleased to report record census growth, clinical performance and improved margins in our Home Health and Hospice segment,” said John Goschner, President and Chief Operating Officer of Pennant. ” he said. “Many of our businesses operate as both home health and hospice providers, so we will continue to look at this segment as a mix.”
Combined with the company's traditional acquisition approach, the company's strategic vision also focuses on senior housing real estate, Gochenor said.
Recent senior real estate transactions include the purchase of two Utah-based communities, Capitol Hill Senior Living and Southgate Senior Living. Mr. Gochenor said the acquisition of his two assisted living and memory care communities marked an important milestone in Pennant's strategic expansion across the aging care continuum.
“With a strong regional leadership team in place, strong cluster support, favorable pricing, and a location in a region where Pennant has significant strength in home health, hospice, provider services, and home care operations, [Capitol Hill and Southgate] “This transaction perfectly demonstrates our ability to execute win-win real estate transactions within our disciplined, operations-focused acquisition approach,” said Mr. Goschner. “We apply the same disciplined approach to this asset class as we take to traditional acquisitions. We ask first who does what, then what, and assess the strength of local businesses, including home health, hospice, seniors, Consider the opportunity cost of putting capital into real estate rather than residential housing projects.
