The Pennant Group (Nasdaq: PNTG) is more than halfway to meeting its goal of building a pipeline of 100 CEOs.
The company announced that it added more than 50 CEOs in training, and that 38 local leaders earned C-level designations in their operations. Pennant CEO Brent Guerisoli noted that leadership development has been one of the most important keys to the company’s success.
“As we’ve explained before, CEOs and other C-level leaders earn this designation by acting as true owners in creating significant financial, clinical and cultural value,” Guerisoli said during the company’s fourth-quarter earnings call. “We have found that CEOs typically generate roughly $1 million more in annual earnings than non-CEO executive directors, in conjunction with better clinical and cultural outcomes.”
Eagle, Idaho-based Pennant is a holding company of independent operating subsidiaries located across the U.S., with a network that includes 104 home health and hospice agencies and 51 senior living communities.
Guerisoli made it clear that Pennant isn’t just focusing on training and elevating operational leaders. The company has also set its sights on future clinical leaders as well.
“We are making similar investments in future clinical leaders to help create chief clinical therapy and wellness officers in local operations,” he said. “Our clinical onboarding, training and development programs were strengthened and enhanced in 2023, and 16 clinical leaders were elevated to C-level status, which is driving excellent quality outcomes, as well as patient and resident satisfaction.”
In addition to leadership development and clinical excellence, Pennant also revealed its three other areas of strategic focus — employee experience, margin improvement and growth.
Last year, Pennant saw improvement when it came to employee engagement and recruiting. Specifically, the company achieved double-digit improvement in its turnover rate percentage. The company also surpassed 6,000 employees, a double-digit percent increase compared to 2022.
Pennant’s adjusted consolidated EBITDA margin improved 80 basis points year over year, too.
From a growth perspective, the company’s 2023 revenue increased by $71.7 million. Three quarters of this was organic same store growth.
During the call, Pennant also offered an update on the company’s efforts regarding the Home Health Value-Based Purchasing (HHVBP) Model.
“As part of the expansion of CMS’ home health value-based purchasing program, we are carefully tracking and managing performance against the value-based purchasing criteria,” John J. Gochnour, president and COO of Pennant, said. “Based on initial data, we are well-positioned to capture positive financial incentives that the program creates to reward providers who deliver exceptional value and clinical outcomes.”
Overall, Pennant’s full year 2023 revenue was $544.9 million, an increase of 15.1% compared to 2022.
In Q4, Pennant’s revenue was $146.0 million, a 17.1% increase compared to the same period in 2022.
The company’s home health and hospice services segment revenue for the full year 2023 was $394.5 million, a 15.3% increase over the prior year. For Q4, this segment brought in $106.9 million, a 17.9% increase over the prior year quarter.
The company credits strong momentum on the hospice side for this growth. Pennant is also seeing steady growth on the home health side, according to Gochnour.
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