Conference Call and Webcast Scheduled for August 10, 2010 at 8:00 am PT
MISSION VIEJO, Calif., Aug. 6 /NEWS.GNOM.ES/ — The Ensign Group, Inc. (Nasdaq: ENSG), the parent company of the Ensign™ group of skilled nursing, rehabilitative care services, home health, hospice care and assisted living companies, today reported record results for the second quarter of 2010.
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Financial Highlights Include:
- Adjusted earnings were a record $0.46 per diluted share, up 15.0% over the second quarter of 2009;
- Total revenue was a record $157.9 million, up 19.5% on a consolidated basis;
- Same-store skilled mix increased by 284 basis points to 52.9%;
- Same-store skilled revenue increased by 10.4%;
- Consolidated EBITDAR climbed 19.9% to $25.7 million, with consolidated EBITDAR margins of 16.3%; and
- Net income rose 17.5% to $9.6 million for the quarter.
Operating Results
Ensign’s President and Chief Executive Officer Christopher Christensen praised Ensign’s operational leaders and their teams for the outstanding quality standards maintained during the quarter, noting that financial performance follows clinical excellence. “We understand that our patients, our staff and our business all benefit from one essential thing: high quality care,” he said.
He also remarked on progress in the 19 facility acquisitions completed by the Company in 2009 and 2010 to date, noting that all but one are already profitable, and nearly all are running at or ahead of proforma since acquisition. He also reported that Horizon Home Health and Hospice, Ensign’s Idaho home health and hospice business which was acquired on May 1, is seeing a surge in census and is also running ahead of proforma.
Mr. Christensen also referenced Ensign’s balance sheet and its industry-low adjusted net-debt-to-EBITDAR ratio of approximately 2.1x. He further noted that the company continues to generate strong cash flow, with net cash from operations of $14.9 million through June 30, 2010. “Our balance sheet, together with our accumulated operating and turnaround expertise, position us well to continue our pattern of disciplined growth,” he added.
Fully diluted GAAP earnings per share were $0.46 for the quarter, compared to $0.39 per share in the prior year. Excluding $0.1 million in acquisition expenses and amortization of recently-acquired patient bases, adjusted net income was $9.7 million or $0.46 per diluted share for the quarter.
A discussion of the company’s use of non-GAAP financial measures is set forth below. A reconciliation of net income to EBITDAR and EBITDA, as well as a reconciliation of GAAP earnings per share and 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 10-Q, which was filed with the SEC today and can be viewed on the Company’s website at http://www.ensigngroup.net.
2010 Guidance Increased
Management increased its 2010 annual guidance, projecting revenues of $628 million to $638 million, and net income of $1.79 to $1.83 per diluted share for the year. The guidance is based on diluted weighted average common shares outstanding of 21.4 million and assumes, among other things, no additional acquisitions or dispositions beyond those made to date, and an aggregate 1.0% projected decline in overall reimbursement rates. It also assumes that tax rates do not materially increase, and no negative impact associated with the implementation of RUGs IV and MDS 3.0.
Quarter Highlights
During the quarter, the company’s Board of Directors declared a quarterly cash dividend of $0.05 per share of Ensign common stock. Ensign has been a dividend-paying company since 2002.
The company also announced the acquisition of two long-term care facilities and a home health and hospice business in two separate transactions during the quarter. The real estate and operations were purchased with cash, and include:
- In Texas, Heritage Gardens Healthcare Center, a 140-bed skilled nursing facility in Carrollton, Texas, and Silver Springs Healthcare Center, a 144-bed skilled nursing facility in Houston, Texas, on May 1, 2010.
- And in Idaho, Horizon Home Health and Hospice, a well-regarded home health and hospice agency based in Meridian, Idaho, also on May 1, 2010.
The two facility acquisitions brought Ensign’s growing portfolio to 81 facilities, 51 of which are Ensign-owned, with Ensign affiliates holding purchase options on eight of Ensign’s 30 leased facilities. Ensign also owns one home health and two hospice businesses. Management reaffirmed that Ensign is actively seeking additional opportunities to acquire both well-performing and struggling long-term care operations across the Western United States.
Conference Call
A live webcast will be held on Tuesday, August 10, 2010, at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time) to discuss Ensign’s second quarter results. To listen to the webcast, or to view any financial or statistical information required by SEC Regulation G, please visit the Investors section of the Ensign website at http://investor.ensigngroup.net. The webcast will be recorded, and will be available for replay via the website until 5:00 p.m. Pacific Time on Tuesday, August 17, 2010.
About Ensign™
The Ensign Group, Inc.’s independent operating subsidiaries provide a broad spectrum of skilled nursing and assisted living services, physical, occupational and speech therapies, home health and hospice services, and other rehabilitative and healthcare services for both long-term residents and short-stay rehabilitation patients at 81 facilities, two hospice companies and a home health business in California, Arizona, Texas, Washington, Utah, Idaho and Colorado. Each of these facilities is operated by a separate, wholly-owned 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 Ensign Group, Inc. has direct operating assets, employees or revenue, or that any of the facilities, the hospice business, the Service Center or the captive insurance subsidiary are operated by the same entity. More information about Ensign is available at http://www.ensigngroup.net.
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. 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 facilities, its ability to manage its increasing borrowing costs as it incurs additional indebtedness to fund the acquisition and development of facilities; 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 facilities; competition from other companies in the acquisition, development and operation of facilities; 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 facilities 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, which was filed today, for a more complete discussion of the risks and other factors that could affect Ensign’s business, prospects and any forward-looking statements. Except as required by the federal securities laws, Ensign 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.
THE ENSIGN GROUP, INC.SELECT PERFORMANCE INDICATORS(Dollars in thousands)
The following table summarizes our selected performance indicators, along with other statistics, for each of the dates or periods indicated:
Three Months Ended
June 30,
2010
2009
Change
% Change
(Dollars in thousands)
Total Facility Results:
Revenue
$
157,948
$
132,178
$
25,770
19.5
%
Number of facilities at period end
81
70
11
15.7
%
Actual patient days
667,858
576,738
91,120
15.8
%
Occupancy percentage — Operational beds
79.3
%
79.4
%
(0.1)
%
Skilled mix by nursing days
24.8
%
24.3
%
0.5
%
Skilled mix by nursing revenue
48.2
%
48.0
%
0.2
%
Three Months Ended
June 30,
2010
2009
Change
% Change
(Dollars in thousands)
Same Facility Results(1):
Revenue
$
120,899
$
116,296
$
4,603
4.0
%
Number of facilities at period end
56
56
—
—
%
Actual patient days
488,508
495,981
(7,473)
(1.5)
%
Occupancy percentage — Operational beds
82.5
%
81.6
%
0.9
%
Skilled mix by nursing days
28.6
%
25.9
%
2.7
%
Skilled mix by nursing revenue
52.9
%
50.1
%
2.8
%
Three Months Ended
June 30,
2010
2009
Change
% Change
(Dollars in thousands)
Transitioning Facility Results(2):
Revenue
$
8,753
$
7,924
$
829
10.5
%
Number of facilities at period end
6
6
—
—
%
Actual patient days
40,901
39,249
1,652
4.2
%
Occupancy percentage — Operational beds
70.6
%
67.7
%
2.9
%
Skilled mix by nursing days
18.5
%
18.2
%
0.3
%
Skilled mix by nursing revenue
39.7
%
41.7
%
(2.0)
%
Three Months Ended
June 30,
2010
2009
Change
% Change
(Dollars in thousands)
Recently Acquired Facility Results(3):
Revenue
$
28,296
$
7,958
$
20,338
NM
%
Number of facilities at period end
19
7
12
NM
%
Actual patient days
138,449
41,508
96,941
NM
%
Occupancy percentage — Operational beds
72.2
%
68.1
%
4.1
%
Skilled mix by nursing days
13.5
%
10.8
%
2.7
%
Skilled mix by nursing revenue
29.5
%
23.3
%
6.2
%
THE ENSIGN GROUP, INC.SELECT PERFORMANCE INDICATORS(Dollars in thousands)
The following table summarizes our selected performance indicators, along with other statistics, for each of the dates or periods indicated:
Six Months Ended
June 30,
2010
2009
Change
% Change
(Dollars in thousands)
Total Facility Results:
Revenue
$
312,122
$
262,463
$
49,659
18.9
%
Number of facilities at period end
81
70
9
12.9
%
Actual patient days
1,316,942
1,143,357
173,585
15.2
%
Occupancy percentage — Operational beds
79.4
%
79.6
%
(0.2)
%
Skilled mix by nursing days
25.4
%
24.8
%
0.6
%
Skilled mix by nursing revenue
49.0
%
48.3
%
0.7
%
Six Months Ended
June 30,
2010
2009
Change
% Change
(Dollars in thousands)
Same Facility Results(1):
Revenue
$
242,049
$
232,600
$
9,449
4.1
%
Number of facilities at period end
56
56
—
—
%
Actual patient days
974,009
992,838
(18,829)
(1.9)
%
Occupancy percentage — Operational beds
82.6
%
82.0
%
0.6
%
Skilled mix by nursing days
29.0
%
26.3
%
2.7
%
Skilled mix by nursing revenue
53.5
%
50.2
%
3.3
%
Six Months Ended
June 30,
2010
2009
Change
% Change
(Dollars in thousands)
Transitioning Facility Results(2):
Revenue
$
16,917
$
16,164
$
753
4.7
%
Number of facilities at period end
6
6
—
—
%
Actual patient days
80,878
78,041
2,837
3.6
%
Occupancy percentage — Operational beds
70.2
%
67.7
%
2.5
%
Skilled mix by nursing days
18.7
%
18.7
%
—
%
Skilled mix by nursing revenue
40.0
%
43.2
%
(3.2)
%
Six Months Ended
June 30,
2010
2009
Change
% Change
(Dollars in thousands)
Recently Acquired Facility Results(3):
Revenue
$
53,156
$
13,699
$
39,457
NM
%
Number of facilities at period end
19
7
12
NM
%
Actual patient days
262,055
72,478
189,577
NM
%
Occupancy percentage — Operational beds
71.8
%
65.9
%
5.9
%
Skilled mix by nursing days
14.2
%
9.6
%
4.6
%
Skilled mix by nursing revenue
30.6
%
20.8
%
9.8
%
THE ENSIGN GROUP, INC.SKILLED NURSING AVERAGE DAILY REVENUE RATES AND REVENUE BY PAYOR
The following table reflects the change in the skilled nursing average daily revenue rates by payor source, excluding therapy and other ancillary services that are not covered by the daily rate:
Three Months EndedJune 30,
Six Months EndedJune 30,
Same Facility
Same Facility
2010
2009
% Change
2010
2009
% Change
Skilled Nursing Average Daily Revenue Rates:
Medicare
$
551.53
$
552.06
—
%
$
553.30
$
543.66
1.8
%
Managed care
343.52
340.15
1.0
%
341.68
334.46
2.2
%
Other skilled
543.60
620.88
(12.4)
%
547.19
632.38
(13.5)
%
Total skilled revenue
469.43
470.83
(0.3)
%
469.74
463.42
1.4
%
Medicaid
163.44
160.44
1.9
%
163.86
160.95
1.8
%
Private and other payors
189.80
185.21
2.5
%
187.63
183.81
2.1
%
Total skilled nursing revenue
$
253.53
$
243.42
4.2
%
$
254.99
$
243.14
4.9
%
The following table sets forth our total revenue by payor source and as a percentage of total revenue for the periods indicated:
Three Months EndedJune 30,
Six Months EndedJune 30,
2010
2009
2010
2009
$
%
$
%
$
%
$
%
Revenue:
Medicaid
$
64,002
40.5
%
$
53,603
40.6
%
$
125,656
40.3
%
$105,839
40.3
%
Medicare
50,589
32.1
43,156
32.7
101,711
32.6
86,362
32.9
Medicaid-skilled
4,624
2.9
2,705
2.0
9,041
2.9
4,988
1.9
Total
119,215
75.5
99,464
75.3
236,408
75.8
197,189
75.1
Managed Care
20,222
12.8
17,182
13.0
40,791
13.0
34,679
13.2
Private and Other
18,511
11.7
15,532
11.7
34,923
11.2
30,595
11.7
Total revenue
$
157,948
100.0
%
$
132,178
100.0
%
$
312,122
100.0
%
$262,463
100.0
%
Discussion of Non-GAAP Financial Measures
EBITDA consists of net income before (a) interest expense, net, (b) provisions for income taxes, and (c) depreciation and amortization. EBITDAR consists of net income before (a) interest expense, net, (b) provisions for income taxes, (c) depreciation and amortization, and (d) facility rent-cost of services. The Company believes that the presentation of EBITDA and EBITDAR provides important supplemental information to management and investors to evaluate the Company’s operating performance. The Company believes disclosure of adjusted non-GAAP net income and non-GAAP diluted earnings per share has economic substance because the excluded expenses are infrequent in nature and are variable in nature, or do not represent current 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 Report on Form 10-Q filed today with the SEC. The Form 10-Q is available on the SEC’s website at www.sec.gov or under the “Financial Information” link of the Investor Relations section on Ensign’s website at http://www.ensigngroup.net.
SOURCE The Ensign Group, Inc.
http://www.ensigngroup.net
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