Conference Call and Webcast scheduled for tomorrow, August 9, 2023 at 10:00 am MT
EAGLE, Idaho, Aug. 08, 2023 (GLOBE NEWSWIRE) -- The Pennant Group, Inc. ( PNTG), the parent company of the Pennant group of affiliated home health, hospice and senior living companies, today announced its operating results for the second quarter of 2023, reporting GAAP diluted earnings per share $0.09 and adjusted diluted earnings per share of $0.18 for the quarter (1).
Second Quarter Highlights
- Total revenue for the quarter was $132.3 million, an increase of $16.0 million or 13.7% over the prior year quarter;
- Net income for the second quarter was $2.8 million, an increase of $5.5 million or 204.5% over the prior year quarter, and adjusted net income for the second quarter was $5.4 million, an increase of $1.3 million or 30.4% over the prior year quarter;
- Segment Adjusted EBITDAR from Operations for the second quarter was $19.5 million, an increase of $2.8 million or 17.1% over the prior year quarter; adjusted EBITDA for the second quarter was $10.1 million, an increase of $2.5 million or 32.3% over the prior year quarter;
- Home Health and Hospice Services segment revenue for the second quarter was $95.0 million, an increase of $9.7 million or 11.3% over the prior year quarter;
- Home Health and Hospice Services segment adjusted EBITDAR from operations for the second quarter was $15.7 million, essentially flat to the prior year quarter; and segment adjusted EBITDA from operations for the second quarter was $14.4 million, a decrease of $0.1 million or 1.0% over the prior year quarter;
- Total home health admissions for the second quarter were 10,441, an increase of 386 or 3.8% over the prior year quarter; total Medicare home health admissions for the second quarter were 4,849, an increase of 167 or 3.6% over the prior year quarter;
- Total hospice admissions for the second quarter were 2,322, an increase of 203 or 9.6% over the prior year quarter. Hospice average daily census for the second quarter was 2,494, an increase of 209 or 9.1% compared to the prior year quarter;
- Senior Living Services segment revenue for the second quarter was $37.3 million, an increase of $6.3 million or 20.3% over the prior year quarter; average occupancy for the second quarter was 78.0%, an increase of 150 basis points over the prior year quarter, and average monthly revenue per occupied room for the second quarter was $3,939 an increase of $469 or 13.5% over the prior year quarter;
- Same store(2) Senior Living Services segment revenue for the second quarter was $36.0 million, an increase of $5.0 million or 16.1% over the prior year quarter; same store senior living average occupancy for the second quarter was 79.6%, an increase of 240 basis points over the prior year quarter, and average monthly revenue per occupied room for the second quarter was $3,929 an increase of 459 or 13.2% over the prior year quarter;
- Senior Living segment adjusted EBITDAR from operations for the second quarter was $11.7 million, an increase of $2.9 million or 33.2% over the prior year quarter; and segment adjusted EBITDA from Operations for the second quarter was $3.6 million, an increase of $2.6 million or 277.4% over the prior year quarter.
| (1 | ) | See "Reconciliation of GAAP to Non-GAAP Financial Information.” | |
| (2 | ) | “Same store Senior Living Services” is defined as all senior living communities excluding those transferred to Ensign and new senior living operations acquired in 2022 or 2023. | |
Operating Results
“We are pleased to report continued growth and sound execution in the second quarter,” said Brent Guerisoli, Pennant’s Chief Executive Officer. “In addition to robust top line growth, we saw increased census and improved margin and earnings on a consolidated basis. The leaders in our senior living segment have produced an inspiring turnaround and our home health and hospice segment continued to accelerate its growth ramp. We are well-positioned to execute throughout the remainder of the year and deliver on our 2023 commitments.”
Lynette Walbom, Pennant’s Chief Financial Officer, also commented on the Company’s solid cash and balance sheet position: “Our operations produced $15.5 million of cash in the first half of the fiscal year. With this cash, and its positive impact on our leverage ratios, we are well-positioned to take advantage of an increasing number of attractive acquisition opportunities flowing our direction.” She noted that the Company had $2.8 million of cash on hand and $85.3 million available on its revolving line of credit, with a net debt-to-adjusted EBITDA ratio of 1.57x and a lease-adjusted net debt-to-adjusted EBITDAR ratio of 4.99x.
A discussion of the Company's use of Non-GAAP financial measures is set forth below. A reconciliation of net income to EBITDA, adjusted EBITDAR and adjusted EBITDA, as well as a reconciliation of GAAP earnings per share, net income to adjusted net earnings per share and adjusted net income, appear in the financial data portion of this release. More complete information is contained in the Company’s Form 10-Q for the quarter ended June 30, 2023, which has been filed with the SEC today and can be viewed on the Company’s website at www.pennantgroup.com.
Conference Call
A live webcast will be held tomorrow, August 9, 2023 at 10:00 a.m. Mountain time (12:00 p.m. Eastern time) to discuss Pennant’s second quarter 2023 financial results. To listen to the webcast, or to view any financial or statistical information required by SEC Regulation G, please visit the Investors Relations section of Pennant’s website at https://investor.pennantgroup.com. The webcast will be recorded and will be available for replay via the website.
About Pennant
The Pennant Group, Inc. is a holding company of independent operating subsidiaries that provide healthcare services through 101 home health and hospice agencies and 51 senior living communities located throughout Arizona, California, Colorado, Idaho, Iowa, Montana, Nevada, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin and Wyoming. Each of these businesses is operated by a separate, independent operating subsidiary that has its own management, employees and assets. References herein to the consolidated "company" and "its" assets and activities, as well as the use of the terms "we," "us," "its" and similar verbiage, are not meant to imply that The Pennant Group, Inc. has direct operating assets, employees or revenue, or that any of the home health and hospice businesses, senior living communities or the Service Center are operated by the same entity. More information about Pennant is available at www.pennantgroup.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This press release contains, and the related conference call and webcast will include, forward-looking statements that are based on management’s current expectations, assumptions and beliefs about its business, financial performance, operating results, the industry in which it operates and other future events. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding growth prospects, future operating and financial performance, and acquisition activities. They are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to materially and adversely differ from those expressed in any forward-looking statement.
These risks and uncertainties relate to the company’s business, its industry and its common stock and include: reduced prices and reimbursement rates for its services; its ability to acquire, develop, manage or improve operations, its ability to manage its increasing borrowing costs as it incurs additional indebtedness to fund the acquisition and development of operations; its ability to access capital on a cost-effective basis to continue to successfully implement its growth strategy; its operating margins and profitability could suffer if it is unable to grow and manage effectively its increasing number of operations; competition from other companies in the acquisition, development and operation of facilities; its ability to defend claims and lawsuits, including professional liability claims alleging that our services resulted in personal injury, and other regulatory-related claims; and the application of existing or proposed government regulations, or the adoption of new laws and regulations, that could limit its business operations, require it to incur significant expenditures or limit its ability to relocate its operations if necessary. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the company’s periodic filings with the Securities and Exchange Commission, including its Form 10-Q and/or 10-K, for a more complete discussion of the risks and other factors that could affect Pennant’s business, prospects and any forward-looking statements. Except as required by the federal securities laws, Pennant does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changing circumstances or any other reason after the date of this press release.
Contact Information
Investor Relations
The Pennant Group, Inc.
(208) 506-6100
[email protected]
SOURCE: The Pennant Group, Inc.
THE PENNANT GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited, in thousands, except for per-share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Revenue | $ | 132,281 | $ | 116,316 | $ | 258,745 | $ | 230,226 | |||||||
| Expense | |||||||||||||||
| Cost of services | 106,176 | 92,716 | 208,778 | 182,978 | |||||||||||
| Rent—cost of services | 9,836 | 9,078 | 19,433 | 19,129 | |||||||||||
| General and administrative expense | 8,791 | 9,741 | 17,496 | 19,774 | |||||||||||
| Depreciation and amortization | 1,214 | 1,279 | 2,494 | 2,426 | |||||||||||
| Loss on asset dispositions and impairment, net | 3 | 6,617 | 3 | 6,708 | |||||||||||
| Total expenses | 126,020 | 119,431 | 248,204 | 231,015 | |||||||||||
| Income (loss) from operations | 6,261 | (3,115 | ) | 10,541 | (789 | ) | |||||||||
| Other income (expense): | |||||||||||||||
| Other income (expense) | 35 | (35 | ) | 65 | (32 | ) | |||||||||
| Interest expense, net | (1,453 | ) | (821 | ) | (2,859 | ) | (1,450 | ) | |||||||
| Other expense, net | (1,418 | ) | (856 | ) | (2,794 | ) | (1,482 | ) | |||||||
| Income (loss) before provision for income taxes | 4,843 | (3,971 | ) | 7,747 | (2,271 | ) | |||||||||
| Provision (benefit) for income taxes | 1,921 | (1,375 | ) | 2,828 | (833 | ) | |||||||||
| Net income (loss) | 2,922 | (2,596 | ) | 4,919 | (1,438 | ) | |||||||||
| Less: net income attributable to noncontrolling interest | 125 | 80 | 272 | 224 | |||||||||||
| Net income (loss) and other comprehensive income attributable to The Pennant Group, Inc. | $ | 2,797 | $ | (2,676 | ) | $ | 4,647 | $ | (1,662 | ) | |||||
| Earnings (loss) per share: | |||||||||||||||
| Basic | $ | 0.09 | $ | (0.09 | ) | $ | 0.16 | $ | (0.06 | ) | |||||
| Diluted | $ | 0.09 | $ | (0.09 | ) | $ | 0.15 | $ | (0.06 | ) | |||||
| Weighted average common shares outstanding: | |||||||||||||||
| Basic | 29,809 | 28,605 | 29,780 | 28,589 | |||||||||||
| Diluted | 30,193 | 28,605 | 30,171 | 28,589 | |||||||||||
THE PENNANT GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited, in thousands, except par value)
| June 30, 2023 | December 31, 2022 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash | $ | 2,838 | $ | 2,079 | |||
| Accounts receivable—less allowance for doubtful accounts of $957 and $592, respectively | 57,252 | 53,420 | |||||
| Prepaid expenses and other current assets | 11,549 | 18,323 | |||||
| Total current assets | 71,639 | 73,822 | |||||
| Property and equipment, net | 27,252 | 26,621 | |||||
| Right-of-use assets | 260,730 | 260,868 | |||||
| Deferred tax assets, net | 214 | 2,149 | |||||
| Restricted and other assets | 10,940 | 10,545 | |||||
| Goodwill | 83,614 | 79,497 | |||||
| Other indefinite-lived intangibles | 61,025 | 58,617 | |||||
| Total assets | $ | 515,414 | $ | 512,119 | |||
| Liabilities and equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 12,037 | $ | 13,647 | |||
| Accrued wages and related liabilities | 22,848 | 23,283 | |||||
| Operating lease liabilities—current | 17,412 | 16,633 | |||||
| Other accrued liabilities | 16,180 | 16,684 | |||||
| Total current liabilities | 68,477 | 70,247 | |||||
| Long-term operating lease liabilities—less current portion | 246,307 | 247,042 | |||||
| Other long-term liabilities | 7,779 | 6,281 | |||||
| Long-term debt, net | 59,153 | 62,892 | |||||
| Total liabilities | 381,716 | 386,462 | |||||
| Commitments and contingencies | |||||||
| Equity: | |||||||
| Common stock, $0.001 par value; 100,000 shares authorized; 30,251 and 29,799 shares issued and outstanding, respectively, at June 30, 2023; and 30,149 and 29,692 shares issued and outstanding, respectively, at December 31, 2022 | 29 | 29 | |||||
| Additional paid-in capital | 102,886 | 99,764 | |||||
| Retained earnings | 25,931 | 21,284 | |||||
| Treasury stock, at cost, 3 shares at June 30, 2023 and 2022 | (65 | ) | (65 | ) | |||
| Total Pennant Group, Inc. stockholders’ equity | 128,781 | ||||||
