The Pennant Group, Inc. has announced second quarter earnings for the year, coming out with adjusted diluted earnings of $0.14 per share, which is down from the year-ago quarter’s $0.17 per share but in line with various expectations. It seemed that more focused operations and portfolio pruning offset labor and inflationary headwinds.
It also appears that momentum is building in the seniors housing market as strong occupancy and revenue per occupied room growth occurred throughout the quarter. Senior living average occupancy for the second quarter was 76.5%, an increase of 380 basis points over the prior year quarter, and average monthly revenue per occupied room for the second quarter was $3,470, an increase of $294 or 9.3% over the prior year quarter and 2.9% over the first quarter of 2022. As Pennant divested some struggling operations, segment EBITDA grew 17.5% year over year and 45.3% quarter over quarter, with margin improving 110 basis points from previous quarter to 3.0%.
The company also improved its occupancy, as senior living average occupancy for the second quarter was 76.5%, an increase of 380 basis points over the prior year quarter. Excluding the impact of six senior living operations exited during 2022, its same store average occupancy was 77.2% in Q2:22, an increase of 180 basis points over the first quarter 2022.
In M&A activity, the company transferred five seniors housing communities to The Ensign Group. Pennant also acquired the real estate of an 82-unit assisted living and memory care community in Twin Falls, Idaho. Then, just after quarter end the company acquired the operations of Barber Station Assisted Living and Memory Care, a community comprising 39 assisted living units and 45 memory care units in Boise, Idaho, placing the community in a favorable triple-net lease. And the company seems primed for more acquisitions in the coming quarter.
