Pennant Group (Nasdaq: PNTG) just posted a record quarter.
“This was highlighted by double-digit percentage increases year-over-year in total same-store home health admissions and average daily hospice census,” Pennant CEO Brent Guerisoli said during the company’s first-quarter earnings call on Tuesday. “This store growth is an example of the significant potential that exists in our established operations as they mature and expand.”
Based in Eagle, Idaho, Pennant is a holding company of independent subsidiaries throughout the U.S. and has a network that includes 112 home health and hospice agencies and 53 senior living communities.
Guerisoli also revealed that Pennant is still on track to reach its goal of promoting 100 local CEOs, as well as chief clinical officers and other C-suite level executives.
“As a reminder, to achieve the title of CEO, our local leaders must not only achieve exceptional clinical performance, culture and growth, but also drive significant financial improvements in their operations,” he said.
The company now has 44 CEOs and 42 COOs. Further strengthening this pipeline remains an important priority for the company.
During the call, Pennant leadership also commented on the wage pressure the company is facing.
“We continue to see significant wage pressures, and I think you’re seeing that translate into about 5% increases in both services lines, leading to general wage inflationary pressures,” said John J. Gochnour, president and COO of Pennant. said during the call. “I think in the first quarter we actually saw a little bit of a turn in the wrong direction, which was disappointing. We remain hopeful that we will see increasing normalization, back to wage inflation that corresponds in some way to the changes in the reimbursements we receive. That’s not the case yet.”
However, Gochnour noted that Pennant saw improvements in revenue, employee engagement and margins.
“You’re seeing improvement on the margin side, partly because we’re able to handle that amount of work [in a more effective manner]“even despite the inflation and cost pressures we are experiencing,” he said.
In general, Guerisoli is convinced that Pennant has been able to develop further as a company.
“Since our spinoff and through the challenges of a global pandemic, we have matured as an organization and added leaders to our field and service center management teams across the company,” he said. “As a result, we have delivered nine consecutive quarters of strong performance, with revenues in each quarter exceeding the same period last year, and we have achieved triple-digit percentage growth and Adjusted EBITDA. We have repeatedly and consistently done what we promised. While we are encouraged by the progress we have made, we are even more excited about the foundation we have built and the future that lies ahead.”
For the first quarter, Pennant’s total revenue was $156.9 million, an increase of 24.1% compared to $126.4 million in the same period last year.
Home health and hospice services segment revenue was $116.5 million in the first quarter, compared to $91 million a year ago, an increase of 27.9% from the year-ago quarter.
“Approximately 50% of the year-over-year increase in segment revenue was due to same-store growth, while the other 50% was due to successful transition and improvement of new operations,” Gochnour said.