The Ensign Group, Inc. (Nasdaq: ENSG), the parent company of the
Ensign(TM) group of companies, which provide post-acute healthcare
services and invest in the post-acute healthcare industry,
primarily in skilled nursing and senior living facilities,
announced operating results for the second quarter of 2023,
reporting GAAP diluted earnings per share of $1.12 and adjusted
earnings per share(1) of $1.16 for the quarter ended June 30, 2023.
Highlights Include:
- GAAP diluted earnings per share for
the quarter was $1.12 and adjusted diluted earnings per share(1)
was $1.16, an increase of 10.9% and 14.9%, respectively, over the
prior year quarter.
- GAAP net income was $64.0 million
and adjusted net income(1) was $66.3 million for the quarter, an
increase of 10.9% and 15.4%, respectively, over the prior year
quarter.
- Total skilled services(2) revenue
for the quarter was $884.2 million, an increase of 25.9% over the
prior year quarter, and total skilled services(2) segment income
was $117.0 million, or an increase of 14.4% over the prior year
quarter.
- Same store and transitioning
occupancy increased by 4.0% and 3.3%, respectively, over the prior
year quarter.
- Same store and transitioning
skilled revenue increased by 8.8% and 7.4%, respectively, over the
prior year quarter.
- Same store and transitioning
combined managed care revenue increased by 12.2% and managed care
census increased by 8.2%.
- Standard Bearer(2) revenue was
$19.9 million for the quarter, an increase of 13.2% from prior year
quarter and FFO was $13.3 million for the quarter, an increase of
10.1% from the prior year quarter.(1) See "Reconciliation of GAAP
to Non-GAAP Financial Information".(2) Our Skilled Services and
Standard Bearer Segments are defined and outlined in Note 7 on Form
10-Q.
Operating Results
“We are very happy with the record results we
reported this quarter as our local leaders and their teams achieved
excellent clinical and financial results, even when the operating
environment continues to present challenges,” said Barry Port,
Ensign’s Chief Executive Officer. “During the quarter we saw
continued improvement in occupancies, skilled revenue, skilled days
and managed care revenues, which is particularly impressive given
persistent labor market pressures and the return of more typical
seasonality. As of the end of the quarter, our same store occupancy
was 78.5%, which was an increase of 3.97% over the prior year
quarter. All of these results are all made possible by the
relentless efforts of our caregivers and their continued endurance
and strength, all while many of our same store leaders and
clinicians were helping transition 45 recently acquired operations.
We look forward to even more clinical and financial success during
the remainder of the year as our focus is following and protecting
the operational principles that got us here,” Port added.
Port continued, “In addition, we are also very
excited about the enormous potential we have to continue to drive
organic growth within our same store and transitioning operations.
Our local leaders continue to share and apply best practices to
respond to the labor market challenges, including building a
culture at each operation that leads to reduced turnover with
existing staff and relying less and less on third party nursing
agencies. We also see enormous growth opportunities in same store
occupancy, which is still below pre-Covid levels, and enhancing our
ability to serve skilled patients in a way that best serves each
unique healthcare market. During the quarter, our same store
operations grew skilled mix revenue and skilled mix days by 8.8%
and 5.6%, respectively, over the prior year quarter. We also
continue to build stronger relationships with our managed care
partners due to better coordination of care, increased capabilities
and strong clinical outcomes. As a result, we saw increased volume
in our same store and transitioning combined managed care census
and managed care revenue, which increased during the quarter by
8.2% and 12.2%, respectively, over the prior year. This continued
growth in skilled mix demonstrates the increasing and sustainable
demand for skilled post-acute services, including within the
context of our managed care patients.”
Mr. Port, added, “Due to our solid skilled mix
and occupancy growth, as well as continued strength from our recent
acquisitions, we are increasing and narrowing our annual 2023
earnings guidance to between $4.70 to $4.78 per diluted share, up
from $4.64 to $4.77 per diluted share. This new midpoint of our
2023 earnings guidance represents an increase of 14.5% over our
2022 results and is 30.2% higher than our 2021 results. We are also
raising our annual revenue guidance to between $3.69 billion to
$3.73 billion, up from our previous guidance of $3.68 billion to
$3.73 billion. We are excited about the upcoming year and are
confident that our partners will continue to manage and innovate
through all the lingering challenges on the labor front."
Chad Keetch, Ensign’s Chief Investment Officer
and Executive Vice President noted the progress the Company is
making with its newly acquired operations. He said, “After adding
19 operations last quarter, we took some much-needed time to
continue to work together with our new teams in all 45 of our newly
acquired operations as they continue to adopt Ensign’s cultural
principles. We couldn’t be more excited about the organic growth
potential within our entire portfolio, including our recently
acquired operations that are already contributing to our results.
As a result of skilled services expansions in the first half of
2023, occupancy and skilled mix days for the skilled nursing
operations in the recently acquired bucket was 77.2% and 28%,
respectively, for the quarter. For those that have been following
us for years will note, this is a very impressive starting point
from which to build. However, when compared to our same store
occupancy and skilled mix days of 78.5% and 32.3%, respectively,
there is enormous upside in each of these operations as they
continue to transform into “same store” caliber operations. We
expect these operations to face some transitional growth pains
during the year, including some pressures on occupancy that are
typical during the summer months, but we are looking forward to the
contribution they will continue to make to this organization this
year and over the long term.”
Speaking to the Company’s financial health, Ms.
Snapper, Ensign’s Executive Vice President and Chief Financial
Officer reported that the Company’s liquidity remains strong with
approximately $420.0 million of cash on hand and $593.3 million of
available capacity under its line-of-credit. Ms. Snapper also
indicated that, “Management’s guidance is based on diluted weighted
average common shares outstanding of approximately 57.7 million and
a 25.0% tax rate. In addition, the guidance assumes, among other
things, normalized health insurance costs, management’s current
expectations regarding reimbursement rates and recovery of the
COVID-19 pandemic. It also excludes one-time charges,
acquisition-related costs and amortization costs related to
intangible assets acquired and share-based compensation.”
A discussion of the Company's use of non-GAAP
financial measures is set forth below. A reconciliation of net
income to adjusted EBT, EBITDA, adjusted EBITDAR, adjusted EBITDA
and FFO for our real estate segment, as well as, a reconciliation
of GAAP earnings per share, net income to adjusted net income and
adjusted net earnings per share appear in the financial data
portion of this release. More complete information is contained in
the company’s Interim Report on Form 10-Q for the period ended June
30, 2023 which is expected to be filed with the SEC today and can
be viewed on the Company’s website at
http://www.ensigngroup.net.
Growth and Real Estate
Highlights
Mr. Keetch added additional commentary on the
Company’s continued acquisition activity. “As we evaluate the
horizon for new deals, we are well down the road on several
opportunities and, assuming all goes as planned, we expect to
announce a handful of new acquisition announcements in the very
near future. The pipeline has been steady over the summer and we
expect more opportunities to arise in the fall as we approach the
end of the year. With our local leadership model, we have lots of
operational bandwidth to grow across dozens of markets. In
addition, with our line of credit and a healthy amount of cash on
hand, we have over $1 billion in dry powder to grow. We expect some
of the industry-wide changes to lead to even more opportunities in
the near- and long-term future. However, we do not set arbitrary
growth goals and will remain true to our disciplined acquisition
strategy, only growing when we have the right leadership in place
and the pricing is right,” Keetch said.
Ensign's growing portfolio consists of 290
healthcare operations, 26 of which also include senior living
operations, across thirteen states. Ensign now owns 108 real estate
assets, 79 of which it operates. Keetch noted that Ensign’s overall
strategy will continue to include both leasing and acquiring the
real estate and that the Company is actively looking for performing
and underperforming operations in several states.
The Company continues to provide additional
disclosure on Standard Bearer, which is comprised of 103 properties
owned by the Company and leased to 75 affiliated skilled nursing
and senior living operations and 29 senior living operations that
are leased to The Pennant Group, Inc. Keetch noted that each of
these properties are subject to triple-net, long-term leases and
generated rental revenue of $19.9 million for the quarter, of which
$16.1 million was derived from Ensign affiliated operations. Also,
for the quarter, Ensign reported $13.3 million in FFO.
The Company paid a quarterly cash dividend of
$0.0575 per share of Ensign common stock. Keetch noted that the
Company’s liquidity remains strong and that the Company plans to
continue its long history of paying dividends into the future,
noting that in December of 2022 that the Company increased the
annual dividend for the 20th consecutive year.
Conference Call
A live webcast will be held Friday, July 28,
2023 at 10:00 a.m. Pacific time (1:00 p.m. Eastern time) to discuss
Ensign’s second quarter of 2023 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 Ensign’s 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 Friday, August 25,
2023.
About Ensign™
The Ensign Group, Inc.'s independent operating
subsidiaries provide a broad spectrum of skilled nursing and senior
living services, physical, occupational and speech therapies and
other rehabilitative and healthcare services at 290 healthcare
facilities in Arizona, California, Colorado, Idaho, Iowa, Kansas,
Nebraska, Nevada, South Carolina, Texas, Utah, Washington and
Wisconsin. As part of its investment strategy, the Company will
also acquire, lease and own healthcare real estate to service the
post-acute care continuum through acquisition and investment
opportunities in healthcare properties. Ensign’s new business
venture operating subsidiaries also offer several other
post-acute-related services, including mobile x-ray, non-emergency
transportation services and other consulting services also across
several states. Each of these operations 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 Ensign Group, Inc. has direct operating assets,
employees or revenue, or that any of the facilities, the Service
Center, Standard Bearer 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, 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. Additionally, our business and operations
in 2023 continue to be impacted by the COVID-19 environment.
Because of the unprecedented nature of the changes in the
regulations and environment, we are unable to predict the full
extent and duration of the financial impact of COVID-19 on our
business, financial condition and results of operations. Therefore,
our actual results could differ materially and adversely from those
expressed in any forward-looking statements as a result of various
factors. 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 10-K, 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.
Contact
InformationInvestor/Media Relations, The Ensign Group,
Inc., (949) 487-9500, ir@ensigngroup.net.
SOURCE: The Ensign Group, Inc.
THE ENSIGN GROUP, INC.UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
(In thousands, except per share data) |
REVENUE |
|
|
|
|
|
|
|
Service revenue |
$ |
916,101 |
|
|
$ |
728,347 |
|
|
$ |
1,798,019 |
|
|
$ |
1,437,503 |
|
Rental revenue |
|
5,244 |
|
|
|
4,139 |
|
|
|
10,167 |
|
|
|
8,428 |
|
TOTAL REVENUE |
$ |
921,345 |
|
|
$ |
732,486 |
|
|
$ |
1,808,186 |
|
|
$ |
1,445,931 |
|
Expense: |
|
|
|
|
|
|
|
Cost of services |
|
722,685 |
|
|
|
563,641 |
|
|
|
1,419,011 |
|
|
|
1,119,282 |
|
Rent—cost of services |
|
49,760 |
|
|
|
37,228 |
|
|
|
96,397 |
|
|
|
72,990 |
|
General and administrative expense |
|
53,430 |
|
|
|
38,527 |
|
|
|
105,321 |
|
|
|
76,783 |
|
Depreciation and amortization |
|
17,596 |
|
|
|
14,858 |
|
|
|
34,708 |
|
|
|
29,534 |
|
TOTAL EXPENSES |
$ |
843,471 |
|
|
$ |
654,254 |
|
|
$ |
1,655,437 |
|
|
$ |
1,298,589 |
|
Income from operations |
|
77,874 |
|
|
|
78,232 |
|
|
|
152,749 |
|
|
|
147,342 |
|
Other income (expense): |
|
|
|
|
|
|
|
Interest expense |
|
(2,023 |
) |
|
|
(2,688 |
) |
|
|
(4,059 |
) |
|
|
(4,756 |
) |
Other income (expense) |
|
5,202 |
|
|
|
(2,587 |
) |
|
|
10,745 |
|
|
|
(3,403 |
) |
Other income (expense), net |
$ |
3,179 |
|
|
$ |
(5,275 |
) |
|
$ |
6,686 |
|
|
$ |
(8,159 |
) |
Income before provision for income taxes |
|
81,053 |
|
|
|
72,957 |
|
|
|
159,435 |
|
|
|
139,183 |
|
Provision for income
taxes |
|
16,963 |
|
|
|
15,154 |
|
|
|
35,376 |
|
|
|
31,292 |
|
NET INCOME |
$ |
64,090 |
|
|
$ |
57,803 |
|
|
$ |
124,059 |
|
|
$ |
107,891 |
|
Less: net income (loss) attributable to noncontrolling
interests |
|
97 |
|
|
|
112 |
|
|
|
214 |
|
|
|
(140 |
) |
Net income attributable to The Ensign Group,
Inc. |
$ |
63,993 |
|
|
$ |
57,691 |
|
|
$ |
123,845 |
|
|
$ |
108,031 |
|
|
|
|
|
|
|
|
|
NET INCOME PER SHARE
ATTRIBUTABLE TO THE ENSIGN GROUP INC. |
|
|
|
|
|
|
|
Basic |
$ |
1.15 |
|
|
$ |
1.05 |
|
|
$ |
2.23 |
|
|
$ |
1.97 |
|
Diluted |
$ |
1.12 |
|
|
$ |
1.01 |
|
|
$ |
2.17 |
|
|
$ |
1.90 |
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING |
|
|
|
|
|
|
|
Basic |
|
55,611 |
|
|
|
54,906 |
|
|
|
55,456 |
|
|
|
54,788 |
|
Diluted |
|
57,260 |
|
|
|
56,853 |
|
|
|
57,190 |
|
|
|
56,862 |
|
THE ENSIGN GROUP, INC.UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
|
June 30, 2023 |
|
December 31, 2022 |
|
|
|
|
|
(In thousands) |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
419,974 |
|
$ |
316,270 |
Accounts receivable—less allowance for doubtful accounts of $9,281
and $7,802 at June 30, 2023 and December 31, 2022,
respectively |
|
446,025 |
|
|
408,432 |
Investments—current |
|
20,018 |
|
|
15,441 |
Prepaid expenses and other current assets |
|
41,618 |
|
|
40,982 |
Total current assets |
|
927,635 |
|
|
781,125 |
Property and equipment,
net |
|
1,008,744 |
|
|
992,010 |
Right-of-use assets |
|
1,771,936 |
|
|
1,450,995 |
Insurance subsidiary deposits
and investments |
|
85,770 |
|
|
67,652 |
Deferred tax assets |
|
39,596 |
|
|
39,643 |
Restricted and other
assets |
|
35,534 |
|
|
37,291 |
Intangible assets, net |
|
6,272 |
|
|
6,437 |
Goodwill |
|
76,869 |
|
|
76,869 |
TOTAL ASSETS |
$ |
3,952,356 |
|
$ |
3,452,022 |
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
78,207 |
|
$ |
77,087 |
Accrued wages and related liabilities |
|
287,173 |
|
|
289,810 |
Lease liabilities—current |
|
78,733 |
|
|
65,796 |
Accrued self-insurance liabilities—current |
|
49,907 |
|
|
48,187 |
Other accrued liabilities |
|
121,086 |
|
|
97,309 |
Current maturities of long-term debt |
|
3,883 |
|
|
3,883 |
Total current liabilities |
|
618,989 |
|
|
582,072 |
Long-term debt—less current maturities |
|
147,401 |
|
|
149,269 |
Long-term lease
liabilities—less current portion |
|
1,657,782 |
|
|
1,355,113 |
Accrued self-insurance
liabilities—less current portion |
|
92,794 |
|
|
83,495 |
Other long-term
liabilities |
|
41,997 |
|
|
33,273 |
Total equity |
|
1,393,393 |
|
|
1,248,800 |
TOTAL LIABILITIES AND EQUITY |
$ |
3,952,356 |
|
$ |
3,452,022 |
THE ENSIGN GROUP, INC.UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
The following table presents selected data from our condensed
consolidated statements of cash flows for the periods
presented:
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
|
|
|
NET CASH PROVIDED BY/(USED IN): |
(In thousands) |
Operating activities |
$ |
168,082 |
|
|
$ |
129,813 |
|
Investing activities |
|
(62,435 |
) |
|
|
(76,596 |
) |
Financing activities |
|
(1,943 |
) |
|
|
(29,838 |
) |
Net increase in cash and cash equivalents |
|
103,704 |
|
|
|
23,379 |
|
Cash and cash equivalents
beginning of period |
|
316,270 |
|
|
|
262,201 |
|
Cash and cash equivalents at end of period |
$ |
419,974 |
|
|
$ |
285,580 |
|
THE ENSIGN GROUP, INC.UNAUDITED
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION(In
thousands, except per share data)
RECONCILIATION OF GAAP TO NON-GAAP NET
INCOME
The following table reconciles net income to Non-GAAP net income
for the periods presented:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Net income attributable to The Ensign Group, Inc. |
$ |
63,993 |
|
|
$ |
57,691 |
|
|
$ |
123,845 |
|
|
$ |
108,031 |
|
Non-GAAP
adjustments |
|
|
|
|
|
|
|
Stock-based compensation expense(a) |
|
8,881 |
|
|
|
5,616 |
|
|
|
15,454 |
|
|
|
10,783 |
|
Cost of services - gain on business interruption recoveries and
sale of assets |
|
(750 |
) |
|
|
(2,567 |
) |
|
|
(750 |
) |
|
|
(2,567 |
) |
Cost of services - legal adjustments(b) |
|
(885 |
) |
|
|
— |
|
|
|
(818 |
) |
|
|
3,353 |
|
Interest expense - write off deferred financing fees(c) |
|
— |
|
|
|
566 |
|
|
|
— |
|
|
|
566 |
|
Cost of services - acquisition related costs(d) |
|
112 |
|
|
|
65 |
|
|
|
572 |
|
|
|
171 |
|
Depreciation and amortization - patient base(e) |
|
— |
|
|
|
71 |
|
|
|
47 |
|
|
|
127 |
|
General and administrative - costs incurred related to new systems
implementation(f) |
|
60 |
|
|
|
4 |
|
|
|
875 |
|
|
|
69 |
|
Provision for income taxes on Non-GAAP adjustments(g) |
|
(5,155 |
) |
|
|
(4,024 |
) |
|
|
(8,328 |
) |
|
|
(6,698 |
) |
Non-GAAP Income |
$ |
66,256 |
|
|
$ |
57,422 |
|
|
$ |
130,897 |
|
|
$ |
113,835 |
|
|
|
|
|
|
|
|
|
Average number of diluted
shares outstanding |
|
57,260 |
|
|
|
56,853 |
|
|
|
57,190 |
|
|
|
56,862 |
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share |
|
|
|
|
|
|
|
Net Income |
$ |
1.12 |
|
|
$ |
1.01 |
|
|
$ |
2.17 |
|
|
$ |
1.90 |
|
|
|
|
|
|
|
|
|
Adjusted Diluted
Earnings Per Share |
|
|
|
|
|
|
|
Net Income |
$ |
1.16 |
|
|
$ |
1.01 |
|
|
$ |
2.29 |
|
|
$ |
2.00 |
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
|
|
|
|
|
(a) Represents
stock-based compensation expense incurred. |
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of services |
$ |
5,911 |
|
|
$ |
3,670 |
|
|
$ |
10,218 |
|
|
$ |
7,045 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative |
|
2,970 |
|
|
|
1,946 |
|
|
|
5,236 |
|
|
|
3,738 |
|
Total Non-GAAP adjustment |
$ |
8,881 |
|
|
$ |
5,616 |
|
|
$ |
15,454 |
|
|
$ |
10,783 |
|
|
|
|
|
|
|
|
|
(b) Legal adjustments relate to findings attributable to our
ancillary services subsidiary, which includes the portion
attributable to non-controlling interest. |
(c) Represents the write off of deferred financing fees associated
with the amendment of the credit facility. |
(d) Represents costs incurred to acquire operations that are not
capitalizable. |
(e) Included in depreciation and amortization are amortization
expenses related to patient base intangible assets at newly
acquired skilled nursing and senior living facilities. |
(f) Represents system implementation costs that are not
capitalizable. |
(g) Represents an adjustment to the provision for income tax to our
historical year to date effective tax rate of 25.0%. |
THE ENSIGN GROUP, INC.UNAUDITED
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION(In
thousands)
The table below reconciles net income to EBITDA, Adjusted EBITDA
and Adjusted EBITDAR for the periods presented:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Consolidated Statements of Income Data: |
|
|
|
|
|
|
|
Net income |
$ |
64,090 |
|
|
$ |
57,803 |
|
|
$ |
124,059 |
|
|
$ |
107,891 |
|
Less: net income (loss)
attributable to noncontrolling interests |
|
97 |
|
|
|
112 |
|
|
|
214 |
|
|
|
(140 |
) |
Add: Other (income) expense,
net |
|
(3,179 |
) |
|
|
5,275 |
|
|
|
(6,686 |
) |
|
|
8,159 |
|
Provision for income taxes |
|
16,963 |
|
|
|
15,154 |
|
|
|
35,376 |
|
|
|
31,292 |
|
Depreciation and amortization |
|
17,596 |
|
|
|
14,858 |
|
|
|
34,708 |
|
|
|
29,534 |
|
EBITDA |
$ |
95,373 |
|
|
$ |
92,978 |
|
|
$ |
187,243 |
|
|
$ |
177,016 |
|
Adjustments to EBITDA: |
|
|
|
|
|
|
|
Stock-based compensation expense |
|
8,881 |
|
|
|
5,616 |
|
|
|
15,454 |
|
|
|
10,783 |
|
Legal adjustments(a) |
|
(885 |
) |
|
|
— |
|
|
|
(818 |
) |
|
|
3,353 |
|
Gain on business interruption recoveries and sale of assets |
|
(750 |
) |
|
|
(2,567 |
) |
|
|
(750 |
) |
|
|
(2,567 |
) |
Acquisition related costs(b) |
|
112 |
|
|
|
65 |
|
|
|
572 |
|
|
|
171 |
|
Costs incurred related to new systems implementation |
|
60 |
|
|
|
4 |
|
|
|
875 |
|
|
|
69 |
|
ADJUSTED EBITDA |
$ |
102,791 |
|
|
$ |
96,096 |
|
|
$ |
202,576 |
|
|
$ |
188,825 |
|
Rent—cost of services |
|
49,760 |
|
|
|
37,228 |
|
|
|
96,397 |
|
|
|
72,990 |
|
ADJUSTED EBITDAR |
$ |
152,551 |
|
|
|
|
$ |
298,973 |
|
|
|
(a) Legal adjustments relate to findings
attributable to our ancillary services subsidiary, which excludes
the portion attributable to non-controlling interests. |
(b) Costs incurred to acquire operations that are
not capitalizable. |
THE ENSIGN GROUP, INC.UNAUDITED
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION(In
thousands, except per share data)
The table below reconciles income before provision for income
taxes to Adjusted EBT for the periods presented:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
Consolidated Statements of Income
Data: |
(In thousands) |
Income before provision for income taxes |
$ |
81,053 |
|
|
$ |
72,957 |
|
|
$ |
159,435 |
|
|
$ |
139,183 |
|
Stock-based compensation
expense |
|
8,881 |
|
|
|
5,616 |
|
|
|
15,454 |
|
|
|
10,783 |
|
Legal adjustments(a) |
|
(885 |
) |
|
|
— |
|
|
|
(818 |
) |
|
|
3,626 |
|
Gain on business interruption
recoveries and sale of assets |
|
(750 |
) |
|
|
(2,567 |
) |
|
|
(750 |
) |
|
|
(2,567 |
) |
Write off deferred financing
fees(b) |
|
— |
|
|
|
566 |
|
|
|
— |
|
|
|
566 |
|
Acquisition related
costs(c) |
|
112 |
|
|
|
65 |
|
|
|
572 |
|
|
|
171 |
|
Costs incurred related to new systems implementation |
|
60 |
|
|
|
4 |
|
|
|
875 |
|
|
|
69 |
|
Depreciation and amortization - patient base(d) |
|
— |
|
|
|
71 |
|
|
|
47 |
|
|
|
127 |
|
ADJUSTED EBT |
$ |
88,471 |
|
|
$ |
76,712 |
|
|
$ |
174,815 |
|
|
$ |
151,958 |
|
(a) Legal adjustments relate to findings attributable to our
ancillary services subsidiary, which includes the portion
attributable to non-controlling interests. |
(b) Represents the write off of deferred financing fees associated
with the amendment of the credit facility. |
(c) Costs incurred to acquire operations that are not
capitalizable. |
(d) Included in depreciation and amortization are amortization
expenses related to patient base intangible assets at newly
acquired skilled nursing and senior living facilities. |
THE ENSIGN GROUP, INC.UNAUDITED
SELECT PERFORMANCE INDICATORS
The following tables summarize our selected performance
indicators for our skilled services segment along with other
statistics, for each of the dates or periods presented:
|
Three Months Ended June 30, |
|
2023 |
|
2022 |
|
Change |
|
% Change |
|
|
|
|
|
|
|
|
TOTAL FACILITY RESULTS: |
(Dollars in thousands) |
Skilled services revenue |
$ |
884,200 |
|
|
$ |
702,478 |
|
|
$ |
181,722 |
|
25.9 |
% |
Number of facilities at period end |
|
253 |
|
|
|
215 |
|
|
|
38 |
|
17.7 |
% |
Number of campuses at period end* |
|
26 |
|
|
|
25 |
|
|
|
1 |
|
4.0 |
% |
Actual patient days |
|
2,124,862 |
|
|
|
1,745,027 |
|
|
|
379,835 |
|
21.8 |
% |
Occupancy percentage — Operational beds |
|
78.0 |
% |
|
|
75.2 |
% |
|
|
|
2.8 |
% |
Skilled mix by nursing days |
|
30.8 |
% |
|
|
31.1 |
% |
|
|
|
(0.3 |
)% |
Skilled mix by nursing revenue |
|
50.7 |
% |
|
|
50.9 |
% |
|
|
|
(0.2 |
)% |
|
Three Months Ended June 30, |
|
2023 |
|
2022 |
|
Change |
|
% Change |
|
|
|
|
|
|
|
|
SAME FACILITY RESULTS:(1) |
(Dollars in thousands) |
Skilled services revenue |
$ |
684,011 |
|
|
$ |
634,382 |
|
|
$ |
49,629 |
|
7.8 |
% |
Number of facilities at period end |
|
189 |
|
|
|
189 |
|
|
|
— |
|
— |
% |
Number of campuses at period end* |
|
24 |
|
|
|
24 |
|
|
|
— |
|
— |
% |
Actual patient days |
|
1,623,806 |
|
|
|
1,559,081 |
|
|
|
64,725 |
|
4.2 |
% |
Occupancy percentage — Operational beds |
|
78.5 |
% |
|
|
75.5 |
% |
|
|
|
3.0 |
% |
Skilled mix by nursing days |
|
32.3 |
% |
|
|
31.8 |
% |
|
|
|
0.5 |
% |
Skilled mix by nursing revenue |
|
51.8 |
% |
|
|
51.8 |
% |
|
|
|
— |
% |
|
Three Months Ended June 30, |
|
2023 |
|
2022 |
|
Change |
|
% Change |
|
|
|
|
|
|
|
|
TRANSITIONING FACILITY
RESULTS:(2) |
(Dollars in thousands) |
Skilled services revenue |
$ |
62,202 |
|
|
$ |
56,857 |
|
|
$ |
5,345 |
|
9.4 |
% |
Number of facilities at period end |
|
22 |
|
|
|
22 |
|
|
|
— |
|
— |
% |
Number of campuses at period end* |
|
1 |
|
|
|
1 |
|
|
|
— |
|
— |
% |
Actual patient days |
|
162,245 |
|
|
|
154,303 |
|
|
|
7,942 |
|
5.1 |
% |
Occupancy percentage — Operational beds |
|
75.5 |
% |
|
|
72.2 |
% |
|
|
|
3.3 |
% |
Skilled mix by nursing days |
|
21.5 |
% |
|
|
21.8 |
% |
|
|
|
(0.3 |
)% |
Skilled mix by nursing revenue |
|
38.7 |
% |
|
|
39.8 |
% |
|
|
|
(1.1 |
)% |
|
Three Months Ended June 30, |
|
2023 |
|
2022 |
|
Change |
|
% Change |
|
|
|
|
|
|
|
|
RECENTLY ACQUIRED FACILITY RESULTS:(3) |
(Dollars in thousands) |
Skilled services revenue |
$ |
137,987 |
|
|
$ |
11,239 |
|
|
$ |
126,748 |
|
NM |
Number of facilities at period end |
|
42 |
|
|
|
4 |
|
|
|
38 |
|
NM |
Number of campuses at period end* |
|
1 |
|
|
|
— |
|
|
|
1 |
|
NM |
Actual patient days |
|
338,811 |
|
|
|
31,643 |
|
|
|
307,168 |
|
NM |
Occupancy percentage — Operational beds |
|
77.2 |
% |
|
|
76.8 |
% |
|
|
|
NM |
Skilled mix by nursing days |
|
28.0 |
% |
|
|
37.8 |
% |
|
|
|
NM |
Skilled mix by nursing revenue |
|
51.0 |
% |
|
|
57.5 |
% |
|
|
|
NM |
* Campus represents a facility that
offers both skilled nursing and senior living services. Revenue and
expenses related to skilled nursing and senior living services have
been allocated and recorded in the respective operating
segment. |
(1) Same Facility results represent all facilities
purchased prior to January 1, 2020. |
(2) Transitioning Facility results represent all
facilities purchased from January 1, 2020 to December 31,
2021. |
(3) Recently Acquired Facility (Acquisitions)
results represent all facilities purchased on or subsequent to
January 1, 2022. |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
Change |
|
% Change |
|
|
|
|
|
|
|
|
TOTAL FACILITY RESULTS: |
(Dollars in thousands) |
Skilled services revenue |
$ |
1,735,123 |
|
|
$ |
1,389,249 |
|
|
$ |
345,874 |
|
24.9 |
% |
Number of facilities at period end |
|
253 |
|
|
|
215 |
|
|
|
38 |
|
17.7 |
% |
Number of campuses at period end* |
|
26 |
|
|
|
25 |
|
|
|
1 |
|
4.0 |
% |
Actual patient days |
|
4,172,567 |
|
|
|
3,440,991 |
|
|
|
731,576 |
|
21.3 |
% |
Occupancy percentage — Operational beds |
|
78.0 |
% |
|
|
74.7 |
% |
|
|
|
3.3 |
% |
Skilled mix by nursing days |
|
31.5 |
% |
|
|
32.4 |
% |
|
|
|
(0.9 |
)% |
Skilled mix by nursing revenue |
|
51.7 |
% |
|
|
52.6 |
% |
|
|
|
(0.9 |
)% |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
Change |
|
% Change |
|
|
|
|
|
|
|
|
SAME FACILITY RESULTS:(1) |
(Dollars in thousands) |
Skilled services revenue |
$ |
1,366,034 |
|
|
$ |
1,259,697 |
|
|
$ |
106,337 |
|
8.4 |
% |
Number of facilities at period end |
|
189 |
|
|
|
189 |
|
|
|
— |
|
— |
% |
Number of campuses at period end* |
|
24 |
|
|
|
24 |
|
|
|
— |
|
— |
% |
Actual patient days |
|
3,234,621 |
|
|
|
3,083,226 |
|
|
|
151,395 |
|
4.9 |
% |
Occupancy percentage — Operational beds |
|
78.6 |
% |
|
|
75.0 |
% |
|
|
|
3.6 |
% |
Skilled mix by nursing days |
|
33.0 |
% |
|
|
33.2 |
% |
|
|
|
(0.2 |
)% |
Skilled mix by nursing revenue |
|
52.8 |
% |
|
|
53.5 |
% |
|
|
|
(0.7 |
)% |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
Change |
|
% Change |
|
|
|
|
|
|
|
|
TRANSITIONING FACILITY
RESULTS:(2) |
(Dollars in thousands) |
Skilled services revenue |
$ |
123,969 |
|
|
$ |
111,655 |
|
|
$ |
12,314 |
|
11.0 |
% |
Number of facilities at period end |
|
22 |
|
|
|
22 |
|
|
|
— |
|
— |
% |
Number of campuses at period end* |
|
1 |
|
|
|
1 |
|
|
|
— |
|
— |
% |
Actual patient days |
|
323,665 |
|
|
|
303,992 |
|
|
|
19,673 |
|
6.5 |
% |
Occupancy percentage — Operational beds |
|
75.8 |
% |
|
|
71.5 |
% |
|
|
|
4.3 |
% |
Skilled mix by nursing days |
|
22.7 |
% |
|
|
23.5 |
% |
|
|
|
(0.8 |
)% |
Skilled mix by nursing revenue |
|
40.3 |
% |
|
|
42.6 |
% |
|
|
|
(2.3 |
)% |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
Change |
|
% Change |
|
|
|
|
|
|
|
|
RECENTLY ACQUIRED FACILITY RESULTS:(3) |
(Dollars in thousands) |
Skilled services revenue |
$ |
245,120 |
|
|
$ |
17,897 |
|
|
$ |
227,223 |
|
NM |
Number of facilities at period end |
|
42 |
|
|
|
4 |
|
|
|
38 |
|
NM |
Number of campuses at period end* |
|
1 |
|
|
|
— |
|
|
|
1 |
|
NM |
Actual patient days |
|
614,281 |
|
|
|
53,773 |
|
|
|
560,508 |
|
NM |
Occupancy percentage — Operational beds |
|
75.9 |
% |
|
|
75.9 |
% |
|
|
|
NM |
Skilled mix by nursing days |
|
28.3 |
% |
|
|
37.2 |
% |
|
|
|
NM |
Skilled mix by nursing revenue |
|
51.4 |
% |
|
|
55.7 |
% |
|
|
|
NM |
* Campus represents a facility that offers both
skilled nursing and senior living services. Revenue and expenses
related to skilled nursing and senior living services have been
allocated and recorded in the respective operating segment. |
(1) Same Facility results
represent all facilities purchased prior to January 1,
2020. |
(2) Transitioning Facility
results represent all facilities purchased from January 1,
2020 to December 31, 2021. |
(3) Recently Acquired Facility
(Acquisitions) results represent all facilities purchased on or
subsequent to January 1, 2022. |
THE ENSIGN GROUP, INC.SKILLED
NURSING AVERAGE DAILY REVENUE RATES ANDPERCENT OF SKILLED NURSING
REVENUE AND DAYS BY PAYOR(Unaudited)
The following table reflects the change in skilled nursing
average daily revenue rates by payor source, excluding services
that are not covered by the daily rate(1):
|
Three Months Ended June 30, |
|
Same Facility |
|
Transitioning |
|
Acquisitions |
|
Total |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SKILLED NURSING AVERAGE DAILY REVENUE RATES |
Medicare |
$ |
713.25 |
|
$ |
689.52 |
|
$ |
688.93 |
|
$ |
669.27 |
|
$ |
779.52 |
|
$ |
745.30 |
|
$ |
724.65 |
|
$ |
688.61 |
Managed care |
|
529.37 |
|
|
511.11 |
|
|
514.98 |
|
|
491.90 |
|
|
554.92 |
|
|
469.14 |
|
|
531.37 |
|
|
509.64 |
Other skilled |
|
598.17 |
|
|
572.30 |
|
|
552.95 |
|
|
545.25 |
|
|
491.76 |
|
|
439.37 |
|
|
583.35 |
|
|
560.62 |
Total skilled revenue |
|
611.66 |
|
|
593.63 |
|
|
607.45 |
|
|
587.69 |
|
|
671.86 |
|
|
509.80 |
|
|
620.17 |
|
|
591.41 |
Medicaid |
|
273.49 |
|
|
259.73 |
|
|
265.68 |
|
|
247.42 |
|
|
248.56 |
|
|
231.14 |
|
|
268.64 |
|
|
258.48 |
Private and other payors |
|
261.94 |
|
|
247.13 |
|
|
251.31 |
|
|
248.55 |
|
|
264.11 |
|
|
183.00 |
|
|
261.47 |
|
|
246.87 |
Total
skilled nursing revenue |
$ |
381.35 |
|
$ |
364.70 |
|
$ |
337.67 |
|
$ |
321.67 |
|
$ |
368.72 |
|
$ |
334.65 |
|
$ |
376.00 |
|
$ |
360.65 |
(1) These rates exclude state relief funding and for the three
months ended June 30, 2022 include sequestration reversal of
1%. |
|
Six Months Ended June 30, |
|
Same Facility |
|
Transitioning |
|
Acquisitions |
|
Total |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SKILLED NURSING AVERAGE DAILY REVENUE RATES |
Medicare |
$ |
713.29 |
|
$ |
693.23 |
|
$ |
683.91 |
|
$ |
664.33 |
|
$ |
764.02 |
|
$ |
721.51 |
|
$ |
720.06 |
|
$ |
691.10 |
Managed care |
|
523.72 |
|
|
508.09 |
|
|
521.97 |
|
|
494.79 |
|
|
541.34 |
|
|
459.28 |
|
|
525.35 |
|
|
506.90 |
Other skilled |
|
600.24 |
|
|
572.70 |
|
|
523.75 |
|
|
543.70 |
|
|
489.03 |
|
|
430.25 |
|
|
584.16 |
|
|
561.53 |
Total skilled revenue |
|
610.86 |
|
|
596.37 |
|
|
606.19 |
|
|
591.03 |
|
|
656.54 |
|
|
486.74 |
|
|
616.65 |
|
|
594.06 |
Medicaid |
|
270.52 |
|
|
258.89 |
|
|
264.99 |
|
|
244.69 |
|
|
243.19 |
|
|
231.46 |
|
|
265.79 |
|
|
257.26 |
Private and other payors |
|
263.10 |
|
|
249.01 |
|
|
255.27 |
|
|
252.19 |
|
|
256.27 |
|
|
183.55 |
|
|
261.44 |
|
|
249.02 |
Total
skilled nursing revenue |
$ |
382.11 |
|
$ |
369.78 |
|
$ |
341.42 |
|
$ |
327.01 |
|
$ |
361.77 |
|
$ |
325.14 |
|
$ |
375.96 |
|
$ |
365.45 |
(1) These rates exclude state relief funding and
include sequestration reversal of 1% for the second quarter in 2022
and 2% for the first quarter of 2022. |
The following tables set forth our percentage of
skilled nursing patient revenue and days by payor source for the
periods presented:
|
Three Months Ended June 30, |
|
Same Facility |
|
Transitioning |
|
Acquisitions |
|
Total |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERCENTAGE OF SKILLED NURSING REVENUE |
Medicare |
23.1 |
% |
|
24.5 |
% |
|
22.1 |
% |
|
22.9 |
% |
|
33.1 |
% |
|
17.9 |
% |
|
24.6 |
% |
|
24.2 |
% |
Managed care |
19.9 |
|
|
19.2 |
|
|
12.0 |
|
|
12.6 |
|
|
12.7 |
|
|
9.5 |
|
|
18.2 |
|
|
18.5 |
|
Other
skilled |
8.8 |
|
|
8.1 |
|
|
4.6 |
|
|
4.3 |
|
|
5.2 |
|
|
30.1 |
|
|
7.9 |
|
|
8.2 |
|
Skilled mix |
51.8 |
|
|
51.8 |
|
|
38.7 |
|
|
39.8 |
|
|
51.0 |
|
|
57.5 |
|
|
50.7 |
|
|
50.9 |
|
Private and other payors |
7.4 |
|
|
7.2 |
|
|
8.2 |
|
|
8.5 |
|
|
7.9 |
|
|
2.0 |
|
|
7.6 |
|
|
7.2 |
|
Medicaid |
40.8 |
|
|
41.0 |
|
|
53.1 |
|
|
51.7 |
|
|
41.1 |
|
|
40.5 |
|
|
41.7 |
|
|
41.9 |
|
TOTAL SKILLED NURSING |
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
Three Months Ended June 30, |
|
Same Facility |
|
Transitioning |
|
Acquisitions |
|
Total |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERCENTAGE OF SKILLED NURSING DAYS |
Medicare |
12.3 |
% |
|
13.0 |
% |
|
10.8 |
% |
|
11.0 |
% |
|
15.7 |
% |
|
8.0 |
% |
|
12.8 |
% |
|
12.7 |
% |
Managed care |
14.3 |
|
|
13.7 |
|
|
7.9 |
|
|
8.3 |
|
|
8.4 |
|
|
6.8 |
|
|
12.9 |
|
|
13.1 |
|
Other
skilled |
5.7 |
|
|
5.1 |
|
|
2.8 |
|
|
2.5 |
|
|
3.9 |
|
|
23.0 |
|
|
5.1 |
|
|
5.3 |
|
Skilled mix |
32.3 |
|
|
31.8 |
|
|
21.5 |
|
|
21.8 |
|
|
28.0 |
|
|
37.8 |
|
|
30.8 |
|
|
31.1 |
|
Private and other payors |
10.8 |
|
|
10.6 |
|
|
11.0 |
|
|
11.0 |
|
|
11.0 |
|
|
3.5 |
|
|
10.9 |
|
|
10.5 |
|
Medicaid |
56.9 |
|
|
57.6 |
|
|
67.5 |
|
|
67.2 |
|
|
61.0 |
|
|
58.7 |
|
|
58.3 |
|
|
58.4 |
|
TOTAL SKILLED NURSING |
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
Six Months Ended June 30, |
|
Same Facility |
|
Transitioning |
|
Acquisitions |
|
Total |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERCENTAGE OF SKILLED NURSING REVENUE |
Medicare |
24.2 |
% |
|
26.3 |
% |
|
23.6 |
% |
|
25.6 |
% |
|
32.9 |
% |
|
14.2 |
% |
|
25.4 |
% |
|
26.1 |
% |
Managed care |
20.0 |
|
|
19.3 |
|
|
12.6 |
|
|
12.6 |
|
|
13.1 |
|
|
11.4 |
|
|
18.5 |
|
|
18.6 |
|
Other
skilled |
8.6 |
|
|
7.9 |
|
|
4.1 |
|
|
4.4 |
|
|
5.4 |
|
|
30.1 |
|
|
7.8 |
|
|
7.9 |
|
Skilled mix |
52.8 |
|
|
53.5 |
|
|
40.3 |
|
|
42.6 |
|
|
51.4 |
|
|
55.7 |
|
|
51.7 |
|
|
52.6 |
|
Private and other payors |
7.3 |
|
|
6.9 |
|
|
8.4 |
|
|
8.0 |
|
|
7.7 |
|
|
1.6 |
|
|
7.4 |
|
|
7.0 |
|
Medicaid |
39.9 |
|
|
39.6 |
|
|
51.3 |
|
|
49.4 |
|
|
40.9 |
|
|
42.7 |
|
|
40.9 |
|
|
40.4 |
|
TOTAL SKILLED NURSING |
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
Six Months Ended June 30, |
|
Same Facility |
|
Transitioning |
|
Acquisitions |
|
Total |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PERCENTAGE OF SKILLED NURSING DAYS |
Medicare |
13.0 |
% |
|
14.0 |
% |
|
11.8 |
% |
|
12.6 |
% |
|
15.6 |
% |
|
6.4 |
% |
|
13.3 |
% |
|
13.8 |
% |
Managed care |
14.6 |
|
|
14.0 |
|
|
8.3 |
|
|
8.3 |
|
|
8.8 |
|
|
8.1 |
|
|
13.2 |
|
|
13.4 |
|
Other
skilled |
5.4 |
|
|
5.2 |
|
|
2.6 |
|
|
2.6 |
|
|
3.9 |
|
|
22.7 |
|
|
5.0 |
|
|
5.2 |
|
Skilled mix |
33.0 |
|
|
33.2 |
|
|
22.7 |
|
|
23.5 |
|
|
28.3 |
|
|
37.2 |
|
|
31.5 |
|
|
32.4 |
|
Private and other payors |
10.6 |
|
|
10.3 |
|
|
11.2 |
|
|
10.4 |
|
|
10.9 |
|
|
2.8 |
|
|
10.7 |
|
|
10.2 |
|
Medicaid |
56.4 |
|
|
56.5 |
|
|
66.1 |
|
|
66.1 |
|
|
60.8 |
|
|
60.0 |
|
|
57.8 |
|
|
57.4 |
|
TOTAL SKILLED NURSING |
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
THE ENSIGN GROUP, INC.UNAUDITED
REVENUE BY PAYOR SOURCE
The following table sets forth our service
revenue by payor source and as a percentage of total service
revenue for the periods presented:
|
Three Months Ended June 30, |
|
2023 |
|
2022 |
|
Revenue |
|
% of Revenue |
|
Revenue |
|
% of Revenue |
Medicaid(1) |
$ |
359,781 |
|
39.3 |
% |
|
$ |
294,128 |
|
40.4 |
% |
Medicare |
|
248,081 |
|
27.1 |
|
|
|
190,494 |
|
26.2 |
|
Medicaid — skilled |
|
62,015 |
|
6.7 |
|
|
|
49,763 |
|
6.8 |
|
Total Medicaid and Medicare |
|
669,877 |
|
73.1 |
|
|
|
534,385 |
|
73.4 |
|
Managed care |
|
161,101 |
|
17.6 |
|
|
|
128,587 |
|
17.7 |
|
Private
and other(2) |
|
85,123 |
|
9.3 |
|
|
|
65,375 |
|
8.9 |
|
SERVICE REVENUE |
$ |
916,101 |
|
100.0 |
% |
|
$ |
728,347 |
|
100.0 |
% |
(1) Medicaid payor includes revenue for senior
living operations and revenue related to state relief funding. |
(2) Private and other payors also includes revenue
from senior living operations and all payors generated in other
ancillary services. |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
Revenue |
|
% of Revenue |
|
Revenue |
|
% of Revenue |
Medicaid(1) |
$ |
700,045 |
|
38.9 |
% |
|
$ |
560,476 |
|
39.0 |
% |
Medicare |
|
495,804 |
|
27.6 |
|
|
|
398,905 |
|
27.7 |
|
Medicaid — skilled |
|
119,942 |
|
6.7 |
|
|
|
95,712 |
|
6.7 |
|
Total Medicaid and Medicare |
|
1,315,791 |
|
73.2 |
|
|
|
1,055,093 |
|
73.4 |
|
Managed care |
|
317,764 |
|
17.7 |
|
|
|
256,373 |
|
17.8 |
|
Private
and other(2) |
|
164,464 |
|
9.1 |
|
|
|
126,037 |
|
8.8 |
|
SERVICE REVENUE |
$ |
1,798,019 |
|
100.0 |
% |
|
$ |
1,437,503 |
|
100.0 |
% |
(1) Medicaid payor includes revenue for senior living operations
and revenue related to state relief funding. |
(2) Private and other payors also includes revenue from senior
living operations and all payors generated in other ancillary
services. |
THE ENSIGN GROUP, INC.UNAUDITED
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION BY
SEGMENT(In thousands)
Skilled Services
The table below reconciles net income to EBITDA
and Adjusted EBITDA for the skilled services reportable segment for
the periods presented:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Statements of Income
Data: |
|
|
|
|
|
|
|
Segment income(a) |
$ |
117,008 |
|
|
$ |
102,266 |
|
$ |
230,353 |
|
|
$ |
200,522 |
Depreciation and amortization |
|
9,417 |
|
|
|
8,113 |
|
|
18,481 |
|
|
|
16,014 |
EBITDA |
$ |
126,425 |
|
|
$ |
110,379 |
|
$ |
248,834 |
|
|
$ |
216,536 |
Adjustments to EBITDA: |
|
|
|
|
|
|
|
Business interruption recoveries |
|
(750 |
) |
|
|
— |
|
|
(750 |
) |
|
|
— |
Stock-based compensation expense |
|
5,705 |
|
|
|
3,539 |
|
|
9,861 |
|
|
|
6,813 |
ADJUSTED EBITDA |
$ |
131,380 |
|
|
$ |
113,918 |
|
$ |
257,945 |
|
|
$ |
223,349 |
(a) Segment income reflects profit or loss from
operations before provision for income taxes and impairment charges
from operations. General and administrative expenses are not
allocated to the skilled services segment for purposes of
determining segment profit or loss. |
Standard Bearer
The following table sets forth details of
operating results for our revenue and earnings, and their
respective components, by Standard Bearer for the periods
presented:
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
Rental revenue generated from third-party tenants |
$ |
3,786 |
|
$ |
3,704 |
|
$ |
7,572 |
|
$ |
7,472 |
Rental
revenue generated from Ensign affiliated operations |
|
16,128 |
|
|
13,894 |
|
|
32,059 |
|
|
27,319 |
TOTAL RENTAL REVENUE |
$ |
19,914 |
|
$ |
17,598 |
|
$ |
39,631 |
|
$ |
34,791 |
Segment income(a) |
|
7,133 |
|
|
6,838 |
|
|
14,352 |
|
|
13,738 |
Depreciation and amortization |
|
6,133 |
|
|
5,216 |
|
|
12,099 |
|
|
10,237 |
FFO(b) |
$ |
13,266 |
|
$ |
12,054 |
|
$ |
26,451 |
|
$ |
23,975 |
(a) Segment income reflects profit or loss from operations before
provision for income taxes, excluding gain or loss from sale of
real estate and insurance recoveries and charges from real estate.
Included in Standard Bearer expenses for the three and six months
ended June 30, 2023 is the management fee of $1.2 million and $2.4
million, respectively, and interest of $2.9 million and $5.7
million, respectively, from intercompany agreements between
Standard Bearer and The Ensign Group, Inc. and other affiliated
entities, including the Service Center. Included in Standard Bearer
expenses for the three and six months ended June 30, 2022 is the
management fee of $1.1 million and $2.1 million, respectively, and
interest of $1.9 million and $3.8 million, respectively, from
intercompany agreements between Standard Bearer and The Ensign
Group, Inc. and other affiliated entities, including the Service
Center. |
|
(b) FFO, in accordance with the definition used by the National
Association of Real Estate Investment Trusts, means net income
attributable to common stockholders, computed in accordance with
U.S. GAAP, excluding gains (or losses) from sales of real estate
and impairment of depreciable real estate assets, while including
depreciation and amortization related to real estate to
earnings. |
Discussion of Non-GAAP Financial
Measures
EBITDA consists of net income before (a) other
(income) expense, net, (b) provisions for income taxes and (c)
depreciation and amortization. Adjusted EBITDA consists of net
income before (a) other (income) expense, net, (b) provisions for
income taxes, (c) depreciation and amortization, (d) stock-based
compensation expense, (e) acquisition related costs, (f) costs
incurred related to new systems implementation, (g) legal
adjustments and (h) gain on business interruption recoveries and
sale of assets. Adjusted EBITDAR consists of net income before (a)
other (income) expense, net, (b) provisions for income taxes, (c)
depreciation and amortization, (d) rent-cost of services, (e)
stock-based compensation expense, (f) acquisition related costs,
(g) costs incurred related to new systems implementation, (h) legal
adjustments and (i) gain on business interruption recoveries and
sale of assets. Adjusted EBT consists of (a) income before
provision for income taxes, (b) stock-based compensation expense,
(c) acquisition related costs, (d) costs incurred related to new
systems implementation, (e) legal adjustments, (f) gain on business
interruption recoveries and sale of assets, (g) write off deferred
financing fees and (h) depreciation and amortization of patient
base intangible assets. Funds from Operations (FFO) for our real
estate segment consists of segment income, excluding depreciation
and amortization related to real estate, gains or losses from sales
of real estate, insurance recoveries related to real estate and
impairment of depreciable real estate assets. The Company believes
that the presentation of adjusted net income, adjusted earnings per
share, EBITDA, adjusted EBITDA, adjusted EBT and FFO provides
important supplemental information to management and investors to
evaluate the Company’s operating performance. Adjusted EBITDAR is a
financial valuation measure that is not specified in GAAP. This
measure is not displayed as a performance measure as it excludes
rent expense, which is a normal and recurring operating expense.
The Company believes disclosure of adjusted net income, adjusted
net income per share, EBITDA, adjusted EBITDA, adjusted EBITDAR,
adjusted EBT and FFO has 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 measures provide useful information to investors, the
specific manner in which management uses these measures, and some
of the limitations associated with the use of these measures,
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 www.sec.gov or under the
"Financial Information" link of the Investor Relations section on
Ensign’s website at http://www.ensigngroup.net.
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