Q2 2024 Pennant Group Inc Earnings Call Transcript
Key Points
- Pennant Group Inc (PNTG) reported record-breaking second-quarter results with revenue of $168.7 million, adjusted EBITDA of $13.2 million, and adjusted earnings per share of $0.24, each exceeding the top end of consensus.
- The company has experienced significant organic and acquisitional growth, including the Muir Home Health joint venture and the largest acquisition in its history, Signature Healthcare at Home.
- Pennant Group Inc (PNTG) raised its annual guidance, anticipating full-year revenue between $654 million and $694.5 million and adjusted earnings per share between $0.89 and $0.95.
- The home health and hospice segment showed strong performance with a 31.9% increase in revenue and a 36.3% increase in adjusted EBITDA over the prior year quarter.
- The senior living segment also demonstrated growth, with revenue improving by 16.6% and adjusted EBITDA increasing by 14.8% over the prior year quarter.
- The CMS proposed 2025 home health rule includes a negative behavioral adjustment of 4.1%, offset by a market basket increase of 2.5%, yielding a projected net negative impact of 1.7%.
- Despite strong performance, the company faces challenges with CMS' proposed rule, which uses flawed methodology and does not reflect the ongoing and significant increases in the cost of providing home health services.
- The integration of Signature Healthcare at Home is being done in two phases, which may present operational and logistical challenges.
- The company has a 1.7x net debt to adjusted EBITDA ratio and $83 million drawn on its revolving line of credit, indicating a significant level of leverage.
- There is a slight softening in same-store occupancy in the senior living segment, with a 40 basis points decrease over the prior year quarter.
Good day, and thank you for standing by. Welcome to The Pennant Group's second-quarter 2024 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your first speaker today, Kirk Cheney, Corporate Secretary. Please go ahead.
Thank you, Ripka. Welcome, everyone, and thank you for joining us today. Here with me today, I have Brent Guerisoli, our CEO; John Gochnour, our President and COO; and Lynette Walbom, our CFO.
Before we begin, I have a few housekeeping matters. We filed our earnings press release and 10-Q yesterday. This announcement is available on the Investor Relations section of our website at www.pennantgroup.com.
A replay of this call will also be available on our website until 5:00 PM Mountain Time on August 6, 2025. We want to remind anyone who may be listening to a replay of this call that all statements made are as of
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