(MENAFN- GlobeNewsWire - Nasdaq) Conference Call and Webcast scheduled for tomorrow, November 6, 2025 at 10:00 am MT

EAGLE, Idaho, Nov. 05, 2025 (GLOBE NEWSWIRE) -- The Pennant Group, Inc. (NASDAQ: PNTG), the parent company of the Pennant group of affiliated home health, hospice and senior living companies, today announced its operating results, reporting GAAP diluted earnings per share of $0.17 for the third quarter of 2025. Pennant also reported adjusted diluted earnings per share of $0.30 for the quarter⁽¹⁾.

Third Quarter Highlights

• Total revenue for the third quarter was $229.0 million, an increase of $48.4 million or 26.8% over the prior year quarter;
  
• Net income for the third quarter was $6.1 million, a decrease of $0.1 million or 2.0% over the prior year quarter;
  
• Adjusted net income for the third quarter was $10.4 million, an increase of $2.3 million or 27.6% over the prior year quarter;
  
• Consolidated Adjusted EBITDAR for the third quarter was $29.3 million, an increase of $3.3 million or 12.8% over the prior year quarter;
  
• Consolidated Adjusted EBITDA for the third quarter was $17.3 million, an increase of $2.2 million or 14.5% over the prior year quarter;
  
• Home Health and Hospice Services segment revenue for the third quarter was $173.6 million, an increase of $37.9 million or 27.9% over the prior year quarter;
  
• Home Health and Hospice Services segment adjusted EBITDAR from operations for the third quarter was $29.1 million, an increase of $5.3 million or 22.5% over the prior year quarter; and segment adjusted EBITDA from operations for the third quarter was $26.8 million, an increase of $5.0 million or 22.7% over the prior year quarter;
  
• Total home health admissions for the third quarter were 20,426, an increase of 5,433 or 36.2% over the prior year quarter; total Medicare home health admissions for the third quarter were 8,221, an increase of 2,150 or 35.4% over the prior year quarter;
  
• Hospice average daily census for the third quarter was 4,044, an increase of 600 or 17.4% compared to the prior year quarter;
  
• Senior Living Services segment revenue for the third quarter was $55.5 million, an increase of $10.5 million or 23.2% over the prior year quarter; average occupancy for the third quarter was 80.9%, an increase of 180 basis points over the prior year quarter, and average monthly revenue per occupied room for the third quarter was $5,195, an increase of $359 or 7.4% over the prior year quarter;
  
• Senior Living segment adjusted EBITDAR from operations for the third quarter was $15.3 million, an increase of $1.9 million or 14.1% over the prior year quarter; and segment adjusted EBITDA from operations for the third quarter was $5.6 million, an increase of $1.2 million or 26.2% over the prior year quarter.
  ^{(1) See "Reconciliation of GAAP to Non-GAAP Financial Information.”}

Operating Results

“In the third quarter we achieved record breaking performance in each of our segments, including all-time highs in senior living occupancy, hospice average daily census, and home health admissions,” said Brent Guerisoli, the Company's Chief Executive Officer.“These results demonstrate the power of our model to drive strong same-store improvement through periods of dynamic growth. Despite an ever-changing environment, our investments in leadership and operational excellence have positioned us to accelerate clinical and financial success across our platform.”

“On October 1, we completed the acquisition of 54 home health, hospice and home care operations from UnitedHealth Group and Amedisys. We are thrilled to welcome a new group of talented leaders and clinicians to the Pennant family. This expansion into the Southeast allows new communities to experience the Pennant model and the life changing service that it supports,” said John Gochnour, the Company's Chief Operating Officer.“This is the largest transaction we've completed in our history, but it fits squarely within our disciplined acquisition strategy. We are well-positioned to effectively transition and unlock additional potential in these assets and further expansion in the region.”

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 three and nine months ended September 30, 2025, which has been filed with the SEC today and can be viewed on the Company's website at

2025 Guidance

Management is providing updated 2025 annual guidance as follows: total revenue is anticipated to be between $911.4 million and $948.6 million; full year 2025 adjusted earnings per diluted share is anticipated to be between $1.14 and $1.18; and full year 2025 adjusted EBITDA is anticipated to be between $70.9 million and $73.8 million.

Mr. Guerisoli remarked,“Our updated earnings guidance midpoint of $1.16 represents 23.4% growth on our 2024 adjusted earnings per share. Our guidance update is based on continued strong operational performance across our segments and the addition of the UnitedHealth and Amedisys assets, which will be in a transitional phase during the fourth quarter of 2025.”

The Company's updated 2025 annual guidance is based on diluted weighted average shares outstanding of approximately 35.7 million and a 26.0% effective tax rate. The guidance includes additional revenue and expenses related the transaction with UnitedHealth and Amedisys, as well as anticipated increased interest expense. The guidance assumes, among other things, reimbursement rate adjustments and no unannounced acquisitions. It excludes net income attributable to noncontrolling interest, the tax-effected costs at start-up operations, share-based compensation, acquisition-related costs, and gain (loss) on disposition of assets and impairments.

Lynette Walbom, the Company's Chief Financial Officer, also stated,“We believe providing updated annual adjusted consolidated EBITDA guidance in addition to updated annual revenue and adjusted earnings per share guidance is helpful to understanding our expectations for our business and operational cash flow. This updated guidance reflects management's expectations based on 2025 year-to-date performance and current operating conditions as well as the fourth quarter impacts of the transaction with UnitedHealth and Amedisys.”

Conference Call

A live webcast will be held tomorrow, November 6, 2025 at 10:00 a.m. Mountain time (12:00 p.m. Eastern time) to discuss Pennant's third quarter 2025 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 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 141 home health and hospice agencies and 61 senior living communities located throughout Arizona, California, Colorado, Idaho, 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

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
...

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 September 30,		Nine Months Ended September 30,
		2025				2024				2025				2024
Revenue	$	229,039			$	180,688			$	658,382			$	506,348
Expense
Cost of services		185,430				144,468				531,450				405,776
Rent-cost of services		12,063				10,906				35,703				31,814
General and administrative expense		19,296				13,023				51,733				36,337
Depreciation and amortization		2,063				1,493				6,179				4,292
(Gain) loss on disposition of property and equipment, net		(51	)			4				(1,099	)			(751	)
Total expenses		218,801				169,894				623,966				477,468
Income from operations		10,238				10,794				34,416				28,880
Other (expense) income, net:
Other income		182				109				368				192
Interest expense, net		(1,016	)			(2,892	)			(3,425	)			(6,306	)
Other expense, net		(834	)			(2,783	)			(3,057	)			(6,114	)
Income before provision for income taxes		9,404				8,011				31,359				22,766
Provision for income taxes		2,518				1,354				7,970				4,957
Net income		6,886				6,657				23,389				17,809
Less: Net income attributable to noncontrolling interest		805				452				2,448				1,008
Net income attributable to The Pennant Group, Inc.	$	6,081			$	6,205			$	20,941			$	16,801
Earnings per share:
Basic	$	0.18			$	0.20			$	0.61			$	0.56
Diluted	$	0.17			$	0.20			$	0.59			$	0.54
Weighted average common shares outstanding:
Basic		34,600				30,281				34,534				30,157
Diluted		35,270				31,363				35,274				30,869

THE PENNANT GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except par value)
	September 30, 2025		December 31, 2024
Assets
Current assets:
Cash	$	2,336			$	24,246
Accounts receivable-less allowance for doubtful accounts of $532 and $232, at September 30, 2025 and December 31, 2024 respectively		96,082				81,302
Prepaid expenses and other current assets		15,553				17,308
Total current assets		113,971				122,856
Property and equipment, net		55,862				43,296
Operating lease right-of-use assets		274,285				270,586
Deferred tax assets, net		848				-
Restricted and other assets		25,689				17,477
Goodwill		161,534				129,124
Other indefinite-lived intangibles		121,452				96,182
Total assets	$	753,641			$	679,521
Liabilities and equity
Current liabilities:
Accounts payable	$	21,634			$	18,737
Accrued wages and related liabilities		40,722				43,106
Operating lease liabilities-current		21,969				19,671
Other accrued liabilities		25,027				20,186
Total current liabilities		109,352				101,700
Long-term operating lease liabilities-less current portion		254,845				253,420
Deferred tax liabilities, net		-				1,861
Other long-term liabilities		20,401				10,575
Long-term debt		26,000				-
Total liabilities		410,598				367,556
Commitments and contingencies
Equity:
Common stock, $0.001 par value; 100,000 shares authorized; 34,803 and 34,570 shares issued and outstanding at September 30, 2025, respectively; and 34,670 and 34,373 shares issued and outstanding at December 31, 2024, respectively		35				35
Additional paid-in capital		243,780				236,091
Retained earnings		78,163				57,222
Treasury stock, at cost, 3 shares at September 30, 2025 and December 31, 2024		(65	)			(65	)
Total The Pennant Group, Inc. stockholders' equity		321,913				293,283
Noncontrolling interest		21,130				18,682
Total equity		343,043				311,965
Total liabilities and equity	$	753,641			$	679,521

THE PENNANT GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

The following table presents selected data from our condensed consolidated statements of cash flows for the periods presented:

	Nine Months Ended September 30,
		2025				2024
Net cash provided by operating activities	$	27,336			$	18,729
Net cash used in investing activities		(74,950	)			(66,287	)
Net cash provided by financing activities		25,704				45,963
Net decrease in cash		(21,910	)			(1,595	)
Cash beginning of period		24,246				6,059
Cash end of period	$	2,336			$	4,464

THE PENNANT GROUP, INC.
REVENUE BY SEGMENT
(unaudited, dollars in thousands)

The following table sets forth our total revenue by segment and as a percentage of total revenue for the periods indicated:

	Three Months Ended September 30,
		2025				2024
	Revenue Dollars		Revenue Percentage		Revenue Dollars		Revenue Percentage
Home health and hospice services
Home health	$	81,496		35.6	%		$	60,988		33.8	%
Hospice		76,384		33.3				62,757		34.7
Home care and other(a)		15,685		6.9				11,927		6.6
Total home health and hospice services		173,565		75.8				135,672		75.1
Senior living services		55,474		24.2				45,016		24.9
Total revenue	$	229,039		100.0	%		$	180,688		100.0	%

(a)		Home care and other revenue is included with home health revenue in other disclosures in this press release.

	Nine Months Ended September 30,
		2025				2024
	Revenue Dollars		Revenue Percentage		Revenue Dollars		Revenue Percentage
Home health and hospice services
Home health	$	234,808		35.7	%		$	172,773		34.1	%
Hospice		220,740		33.5				176,711		34.9
Home care and other(a)		43,907		6.7				27,979		5.5
Total home health and hospice services		499,455		75.9				377,463		74.5
Senior living services		158,927		24.1				128,885		25.5
Total revenue	$	658,382		100.0	%		$	506,348		100.0	%

(a)

Home care and other revenue is included with home health revenue in other disclosures in this press release.

THE PENNANT GROUP, INC.
SELECT PERFORMANCE INDICATORS
(unaudited, total revenue dollars in thousands)

The following table summarizes our overall home health and hospice performance indicators for the each of the dates or periods indicated:

	Three Months Ended September 30,
		2025			2024		Change		% Change
Total agency results:
Home health and hospice revenue	$	173,565		$	135,672		$	37,893		27.9	%
Home health services:
Total home health admissions		20,426			14,993			5,433		36.2	%
Total Medicare home health admissions		8,221			6,071			2,150		35.4	%
Average Medicare revenue per 60-day completed episode(a)	$	3,793		$	3,687		$	106		2.9	%
Hospice services:
Total hospice admissions		3,483			2,987			496		16.6	%
Average daily census		4,044			3,444			600		17.4	%
Hospice Medicare revenue per day	$	189		$	183		$	6		3.3	%

	Three Months Ended September 30,
		2025			2024		Change		% Change
Same agency (b) results:
Home health and hospice revenue	$	130,757		$	118,191		$	12,566		10.6	%
Home health services:
Total home health admissions		13,423			12,541			882		7.0	%
Total Medicare home health admissions		5,392			5,125			267		5.2	%
Average Medicare revenue per 60-day completed episode(a)	$	3,642		$	3,514		$	128		3.6	%
Hospice services:
Total hospice admissions		3,056			2,915			141		4.8	%
Average daily census		3,529			3,327			202		6.1	%
Hospice Medicare revenue per day	$	187		$	183		$	4		2.2	%

	Nine Months Ended September 30,
		2025			2024		Change		% Change
Total agency results:
Home health and hospice revenue	$	499,455		$	377,463		$	121,992		32.3	%
Home health services:
Total home health admissions		57,135			43,782			13,353		30.5	%
Total Medicare home health admissions		22,800			18,155			4,645		25.6	%
Average Medicare revenue per 60-day completed episode(a)	$	3,782		$	3,598		$	184		5.1	%
Hospice services:
Total hospice admissions		10,766			9,118			1,648		18.1	%
Average daily census		3,916			3,209			707		22.0	%
Hospice Medicare revenue per day	$	190		$	182		$	8		4.4	%

	Nine Months Ended September 30,
		2025			2024		Change		% Change
Same agency (b) results:
Home health and hospice revenue	$	379,800		$	343,551		$	36,249		10.6	%
Home health services:
Total home health admissions		40,805			37,648			3,157		8.4	%
Total Medicare home health admissions		16,562			15,869			693		4.4	%
Average Medicare revenue per 60-day completed episode(a)	$	3,625		$	3,490		$	135		3.9	%
Hospice services:
Total hospice admissions		9,265			8,707			558		6.4	%
Average daily census		3,392			3,152			240		7.6	%
Hospice Medicare revenue per day	$	188		$	184		$	4		2.2	%

(a)		The year to date average for Medicare revenue per 60-day completed episode includes post period claim adjustments for prior periods.
(b)		Same agency results represent all agencies purchased or licensed prior to January 1, 2024.

The following table summarizes our senior living performance indicators for the periods indicated:

	Three Months Ended September 30,
		2025				2024			Change		% Change
Total senior living results:
Senior living revenue	$	55,474			$	45,016			$	10,458			23.2	%
Occupancy		80.9	%			79.1	%			1.8	%
Average monthly revenue per occupied unit	$	5,195			$	4,836			$	359			7.4	%

	Three Months Ended September 30,
		2025				2024			Change		% Change
Same store senior living (a) results:
Senior living revenue	$	46,114			$	42,279			$	3,835			9.1	%
Occupancy		81.8	%			80.2	%			1.6	%
Average monthly revenue per occupied unit	$	5,136			$	4,790			$	346			7.2	%

The following table summarizes our senior living performance indicators for the periods indicated:

	Nine Months Ended September 30,
		2025				2024			Change		% Change
Total senior living results:
Senior living revenue	$	158,927			$	128,885			$	30,042			23.3	%
Occupancy		79.4	%			78.9	%			0.5	%
Average monthly revenue per occupied unit	$	5,180			$	4,758			$	422			8.9	%

	Nine Months Ended September 30,
		2025				2024			Change		% Change
Same store senior living (a) results:
Senior living revenue	$	133,930			$	122,885			$	11,045			9.0	%
Occupancy		80.4	%			79.7	%			0.7	%
Average monthly revenue per occupied unit	$	5,121			$	4,724			$	397			8.4	%

(a)

Same store senior living results represent all senior living communities purchased or licensed prior to January 1, 2024, excluding affiliate memory care units in transition.

THE PENNANT GROUP, INC.
REVENUE BY PAYOR SOURCE
(unaudited, dollars in thousands)

The following table presents our total revenue by payor source as a percentage of total revenue for the periods indicated:

		Three Months Ended September 30,
			2025				2024
		Revenue Dollars		Revenue Percentage		Revenue Dollars		Revenue Percentage
Revenue:
Medicare		$	108,831		47.5	%		$	86,919		48.1	%
Medicaid			31,466		13.7				22,715		12.6
Subtotal			140,297		61.2				109,634		60.7
Managed Care			32,935		14.4				24,652		13.6
Private and Other(a)			55,807		24.4				46,402		25.7
Total revenue		$	229,039		100.0	%		$	180,688		100.0	%

(a)		Private and other payors includes revenue from all payors generated in the Company's home care operations and management services agreement.

		Nine Months Ended September 30,
			2025				2024
		Revenue Dollars		Revenue Percentage		Revenue Dollars		Revenue Percentage
Revenue:
Medicare		$	313,777		47.7	%		$	245,746		48.5	%
Medicaid			89,602		13.6				66,386		13.1
Subtotal			403,379		61.3				312,132		61.6
Managed Care			94,268		14.3				66,084		13.1
Private and Other(a)			160,735		24.4				128,132		25.3
Total revenue		$	658,382		100.0	%		$	506,348		100.0	%

(a)

Private and other payors includes revenue from all payors generated in the Company's home care operations and management services agreement.

THE PENNANT GROUP, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(unaudited, in thousands, except per share data)

The following table reconciles net income to Non-GAAP net income for the periods presented:

	Three Months Ended September 30,		Nine Months Ended September 30,
		2025				2024				2025				2024
Net income attributable to The Pennant Group, Inc.	$	6,081			$	6,205			$	20,941			$	16,801
Non-GAAP adjustments
Costs at start-up operations(a)		109				66				141				244
Share-based compensation expense(b)		2,480				2,342				6,859				5,817
Acquisition related costs(c)		3,047				494				5,485				996
Interest expense - write off deferred financing fees(e)		-				428				-				428
Costs associated with transitioning operations(d)		96				68				(811	)			(418	)
Unusual, non-recurring or redundant charges(e)		34				239				101				546
Provision for income taxes on Non-GAAP adjustments(f)		(1,426	)			(1,675	)			(3,259	)			(2,942	)
Non-GAAP net income	$	10,421			$	8,167			$	29,457			$	21,472
Dilutive Earnings Per Share As Reported
Net Income	$	0.17			$	0.20			$	0.59			$	0.54
Average number of shares outstanding		35,270				31,363				35,274				30,869
Adjusted Diluted Earnings Per Share
Net Income	$	0.30			$	0.26			$	0.84			$	0.70
Average number of shares outstanding		35,270				31,363				35,274				30,869

(a)		Represents results related to start-up operations.
					Three Months Ended September 30,		Nine Months Ended September 30,
						2025				2024			2025				2024
		Revenue	$	(1,615	)		$	-		$	(4,871	)		$	(4,956	)
		Cost of services		1,608				65			4,784				4,884
		Rent		22				-			41				306
		Depreciation & amortization		94				1			187				10
		Total Non-GAAP adjustment	$	109			$	66		$	141			$	244
(b)		Represents share-based compensation expense incurred for the periods presented.
					Three Months Ended September 30,		Nine Months Ended September 30,
						2025				2024			2025				2024
		Cost of services	$	1,430			$	1,069		$	3,858			$	2,814
		General and administrative		1,050				1,273			3,001				3,003
		Total Non-GAAP adjustment	$	2,480			$	2,342		$	6,859			$	5,817
(c)		Represents costs incurred to acquire an operation that are not capitalizable.

(d)		During 2024 and 2025, an affiliate of the Company held its memory care units in transition and is converting the facility into an assisted living community. We received insurance proceeds related to the property in 2024 and 2025 which were recorded in gain on disposition of property and equipment, net on the consolidated statements of income.
					Three Months Ended September 30,		Nine Months Ended September 30,
						2025			2024			2025				2024
		Revenue	$	-		$	-		$	-			$	(1	)
		Cost of services		40			12			85				168
		Rent		53			53			157				157
		Depreciation		3			3			8				8
		Gain on disposition of property and equipment, net		-			-			(1,061	)			(750	)
		Total Non-GAAP adjustment	$	96		$	68		$	(811	)		$	(418	)
(e)		Represents unusual or non-recurring charges for legal services, implementation costs, integration costs, and consulting fees in general and administrative and cost of services expenses.
(f)		Represents an adjustment to the provision for income tax to the year-to-date effective tax rate of 26.0% for both the three and nine months ended September 30, 2025 and 2024, respectively. This rate excludes the tax benefit of share-based payment awards.

The table below reconciles Consolidated net income to the Consolidated Non-GAAP financial measures, Consolidated Adjusted EBITDA, and to the Non-GAAP valuation measure, Consolidated Adjusted EBITDAR, for the periods presented:

	Three Months Ended September 30,		Nine Months Ended September 30,
		2025				2024				2025				2024
Consolidated net income	$	6,886			$	6,657			$	23,389			$	17,809
Less: Net income attributable to noncontrolling interest		805				452				2,448				1,008
Add: Provision for income taxes		2,518				1,354				7,970				4,957
Net interest expense		1,016				2,892				3,425				6,306
Depreciation and amortization		2,063				1,493				6,179				4,292
Consolidated EBITDA		11,678				11,944				38,515				32,356
Adjustments to Consolidated EBITDA
Add: Start-up operations(a)		(7	)			65				(87	)			(72	)
Share-based compensation expense(b)		2,480				2,342				6,859				5,817
Acquisition related costs(c)		3,047				494				5,485				996
Activities associated with transitioning operations(d)		40				12				(976	)			(583	)
Unusual, non-recurring or redundant charges(e)		34				239				101				546
Rent related to items (a) and (d) above		75				53				198				463
Consolidated Adjusted EBITDA		17,347				15,149				50,095				39,523
Rent-cost of services		12,063				10,906				35,703				31,814
Rent related to items (a) and (d) above		(75	)			(53	)			(198	)			(463	)
Adjusted rent-cost of services		11,988				10,853				35,505				31,351
Consolidated Adjusted EBITDAR(f)	$	29,335					$	85,600

(a)		Represents results related to start-up operations. This amount excludes rent and depreciation and amortization expense related to such operations.
(b)		Share-based compensation expense and related payroll taxes incurred. Share-based compensation expense and related payroll taxes are included in cost of services and general and administrative expense.
(c)		Non-capitalizable costs associated with acquisitions and write-offs for amounts in dispute with the prior owners of certain acquired operations.
(d)		During 2024 and 2025, an affiliate of the Company held its memory care units in transition and is converting the facility into an assisted living community. We received insurance proceeds related to the property in 2024 and 2025 which were recorded in gain on disposition of property and equipment, net on the consolidated statements of income.
(e)		Represents unusual or non-recurring charges for legal services, implementation costs, integration costs, and consulting fees in general and administrative and cost of services expenses.
(f)		This measure is a valuation measure and is displayed thusly, it is not a performance measure as it excludes rent expense, which is a normal and recurring operating expense and, as such, does not reflect our cash requirements for leasing commitments. Our presentation of Consolidated Adjusted EBITDAR should not be construed as a financial performance measure.

The following table present certain financial information regarding our reportable segments. General and administrative expenses are not allocated to the reportable segments:

	Home Health and Hospice Services		Senior Living Services		All Other		Total
Three Months Ended September 30, 2025
Revenue	$	173,545		$	53,880		$	1,614		$	229,039
Segment Cost of Services	$	144,475		$	38,572
Segment Adjusted EBITDAR from Operations	$	29,070		$	15,308				$	44,378
Three Months Ended September 30, 2024
Revenue	$	135,672		$	45,016		$	-		$	180,688
Segment Cost of Services	$	111,948		$	31,605
Segment Adjusted EBITDAR from Operations	$	23,724		$	13,411				$	37,135

	Home Health and Hospice Services		Senior Living Services		All Other		Total
Nine Months Ended September 30, 2025
Segment Revenue	$	498,236		$	155,276		$	4,870		$	658,382
Segment Cost of Services		414,209			110,731
Segment Adjusted EBITDAR from Operations	$	84,027		$	44,545				$	128,572
Nine Months Ended September 30, 2024
Segment Revenue	$	373,495		$	127,896		$	4,957		$	506,348
Segment Cost of Services		309,007			89,670
Segment Adjusted EBITDAR from Operations	$	64,488		$	38,226				$	102,714

The table below provides a reconciliation of Segment Adjusted EBITDAR from Operations above to income from operations:

	Three Months Ended September 30,		Nine Months Ended September 30,
		2025				2024			2025				2024
Segment Adjusted EBITDAR from Operations(a)	$	44,378			$	37,135		$	128,572			$	102,714
Less: Unallocated corporate expenses		15,043				11,133			42,972				31,840
Less: Depreciation and amortization		2,063				1,493			6,179				4,292
Rent-cost of services		12,063				10,906			35,703				31,814
Other income		182				109			368				192
Adjustments to Segment EBITDAR from Operations:
Less: Start-up operations(b)		(7	)			65			(87	)			(72	)
Share-based compensation expense(c)		2,480				2,342			6,859				5,817
Acquisition related costs(d)		3,047				494			5,485				996
Activities associated with transitioning operations(e)		40				12			(976	)			(583	)
Unusual, non-recurring or redundant charges(f)		34				239			101				546
Add: Net income attributable to noncontrolling interest		805				452			2,448				1,008
Income from operations	$	10,238			$	10,794		$	34,416			$	28,880

(a)		Segment Adjusted EBITDAR from Operations is net income attributable to the Company's reportable segments excluding interest expense, provision for income taxes, depreciation and amortization expense, rent, unallocated corporate and administrative expenses, and, in order to view the operations' performance on a comparable basis from period to period, certain adjustments including: (1) activities associated with start-up operations, (2) share-based compensation expense, (3) acquisition related costs, (4) activities associated with transitioning operations, (5) unusual, non-recurring, or redundant charges, and (6) net income attributable to noncontrolling interest.“All Other” consists of revenues generated at operating locations not included in the segment financial information reviewed by the CODM. Revenue included in the“All Other” category is insignificant individually, and therefore does not constitute a reportable segment. General and administrative expenses are not allocated to the reportable segments, and are included as“Unallocated corporate expenses”, accordingly the segment earnings measure reported is before allocation of corporate general and administrative expenses. The Company's segment measures may be different from the calculation methods used by other companies and, therefore, comparability may be limited.
(b)		Represents results related to start-up operations. This amount excludes rent and depreciation and amortization expense related to such operations.
(c)		Share-based compensation expense and related payroll taxes incurred. Share-based compensation expense and related payroll taxes are included in cost of services and general and administrative expense.
(d)		Non-capitalizable costs associated with acquisitions and write-offs for amounts in dispute with the prior owners of certain acquired operations.
(e)		During 2024 and 2025, an affiliate of the Company held its memory care units in transition and is converting the facility into an assisted living community. We received insurance proceeds related to the property in 2024 and 2025 which were recorded in gain on disposition of property and equipment, net on the consolidated statements of income.
(f)		Represents unusual or non-recurring charges for legal services, implementation costs, integration costs, and consulting fees in general and administrative and cost of services expenses.

The tables below reconcile Segment Adjusted EBITDAR from Operations to Segment Adjusted EBITDA from Operations for each reportable segment for the periods presented:

	Three Months Ended September 30,
	Home Health and Hospice		Senior Living
		2025				2024			2025				2024
Segment Adjusted EBITDAR from Operations	$	29,070			$	23,724		$	15,308			$	13,411
Less: Rent-cost of services		2,277				1,861			9,786				9,045
Rent related to start-up and transitioning operations		(22	)			-			(53	)			(53	)
Segment Adjusted EBITDA from Operations	$	26,815			$	21,863		$	5,575			$	4,419

	Nine Months Ended September 30,
	Home Health and Hospice		Senior Living
		2025				2024				2025				2024
Segment Adjusted EBITDAR from Operations	$	84,027			$	64,488			$	44,545			$	38,226
Less: Rent-cost of services		6,645				5,254				29,058				26,560
Rent related to start-up and transitioning operations		(41	)			(122	)			(157	)			(341	)
Segment Adjusted EBITDA from Operations	$	77,423			$	59,356			$	15,644			$	12,007

Discussion of Non-GAAP Financial Measures

EBITDA consists of net income, adjusted for net income attributable to noncontrolling interest, before (a) interest expense, net, (b) provisions for income taxes, and (c) depreciation and amortization. Adjusted EBITDA consists of net income attributable to the Company before (a) interest expense, net (b) provisions for income taxes, (c) depreciation and amortization, (d) results related to start-up operations, including rent and excluding depreciation, interest and income taxes, (e) share-based compensation expense, (f) non-capitalizable acquisition related costs, (g) activities associated with transitioning operations, (h) unusual, non-recurring or redundant charges and (i) net income attributable to noncontrolling interest. Consolidated Adjusted EBITDAR is a valuation measure applicable to current periods only and consists of net income attributable to the Company before (a) interest expense, net, (b) provisions for income taxes, (c) depreciation and amortization, (d) rent-cost of services, (e) results related to start-up operations, excluding rent, depreciation, interest and income taxes, (f) share-based compensation expense, (g) acquisition related costs, (h) activities associated with transitioning operations, (i) unusual, non-recurring or redundant charges and (j) net income attributable to noncontrolling interest. The company believes that the presentation of EBITDA, adjusted EBITDA, consolidated adjusted EBITDAR, adjusted net income and adjusted earnings per share provides important supplemental information to management and investors to evaluate the company's operating performance. The company believes disclosure of adjusted net income, adjusted net income per share, EBITDA, adjusted EBITDA and consolidated adjusted EBITDAR has economic substance because the excluded revenues and expenses are infrequent in nature and are variable in nature, or do not represent current revenues or cash expenditures. A material limitation associated with the use of these measures as compared to the GAAP measures of net income and diluted earnings per share is that they may not be comparable with the calculation of net income and diluted earnings per share for other companies in the company's industry. These non-GAAP financial measures should not be relied upon to the exclusion of GAAP financial measures. For further information regarding why the company believes that this non-GAAP measure provides useful information to investors, the specific manner in which management uses this measure, and some of the limitations associated with the use of this measure, please refer to the company's periodic filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Report on Form 10-Q. The company's periodic filings are available on the SEC's website at or under the "Financial Information" link of the Investor Relations section on Pennant's website at

MENAFN05112025004107003653ID1110301685