Occupancy and revenue grew for The Pennant Group (Nasdaq: PNTG) in the third quarter of 2023 – and operational flexibility is a big reason why, according to the company’s top leader.
Average occupancy for Pennant’s 51 senior living communities registered at 78.9% in the third quarter of 2023, an increase of 240 basis points over the same period in 2022.
At the same time, revenue from the company’s senior living segment grew to $38.7 million, representing an increase of 18.9% over the prior year’s third quarter. That was due in part to the company’s average monthly revenue per occupied room (RevPOR) of $3,991 in the third quarter of this year, an increase 12.1% over 3Q22.
At the cusp of 2024, the senior living industry is undergoing an effective sea change as myriad forces reshape the financial landscape for operators and owners. Pennant is “ideally suited to excel in this environment” given its focus on continual improvement and local accountability, said CEO Brent Guerisoli.
“Our model enables us to adapt and respond to changing circumstances and market needs on a macro and local level. It also allows us to be nimble and take advantage of unique opportunities, including payer relationships, preferred provider networks and localized reimbursement programs,” he said during the Nov. 8 call with investors and analysts. “In this dynamic environment, local leaders in clusters use technology and transparent data reporting to accelerate their clinical and financial results.”
To enhance its flexibility in providing care, the company has been acquiring hospice practices across the country, including in Arizona, Oklahoma, Texas and California.
Thanks to its positive momentum, the company is “poised to pursue our disciplined acquisition strategy, which begins with answering the question: First who, then what?” Guerisolis said.
“We are seeing more potential acquisitions that are consistent with our valuation expectations,” he said. “Existing strong alignment between able and eager local leaders and compelling acquisitions and growth opportunities will be a powerful catalyst for future growth under our model.”
Staffing is also moving in a positive direction. The company at the start of the year set out to train and create 50 new company leaders. Pennant is “well on pace to be able to achieve that next year,” Guerisolis said.
“We’re just at the beginning,” he said. “A lot of these leaders are still in development, and so we can deploy them, whether it’s a new opportunity in existing operations or in branch expansions.”