Document


 
 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 2, 2018
The Ensign Group, Inc.
(Exact name of registrant as specified in its charter)
 
 
 
 
 
Delaware
 
001-33757
 
33-0861263
 
 
 
 
 
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
 
27101 Puerta Real, Suite 450,
Mission Viejo, CA
 
 
92691
 
 
 
(Address of principal executive offices)
 
(Zip Code)
Registrant's telephone number, including area code: (949) 487-9500
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
o
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
o
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
 
 
 
 
 






Item 2.02. Results of Operations and Financial Condition.
On August 2, 2018, The Ensign Group, Inc. (the Company) issued a press release reporting the financial results of the Company for its second quarter ended June 30, 2018. A copy of the press release is attached to this Current Report as Exhibit 99.1.
The press release includes “non-GAAP financial measures.” Specifically, the press release refers to EBITDA, Adjusted EBITDA and Adjusted EBITDAR. EBITDA, Adjusted EBITDA and Adjusted EBITDAR are supplemental non-GAAP financial measures. Regulation G, Conditions for Use of Non-GAAP Financial Measures, and other provisions of the Securities Exchange Act of 1934, as amended, define and prescribe the conditions for use of certain non-GAAP financial information. 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) rent-cost of services. Adjusted EBITDA consists of net income before (a) interest expense, net, (b) provisions for income taxes, (c) depreciation and amortization, (d) (earnings)/losses related to operations currently being constructed and other start-up operations, excluding depreciation, interest and income taxes, (e) results of closed operations and facilities not at full operation, excluding depreciation, interest and income taxes, (f) share-based compensation expense, (g) return of unclaimed class action settlement and charges related to class action lawsuit, (h) business interruption recoveries, and (i) patient base and other transaction-related costs. Adjusted EBITDAR consists of net income before (a) interest expense, net, (b) provisions for income taxes, (c) depreciation and amortization, (d) rent-cost of services, (e) (earnings)/losses related to facilities currently being constructed and other start-up operations, excluding rent, depreciation, interest and income taxes, (f) results of closed operation and facilities not at full operation, excluding rent, depreciation, interest and income taxes, (g) share-based compensation expense, (h) return of unclaimed class action settlement and charges related to class action lawsuit, (i) business interruption recoveries and (j) patient base and other transaction-related costs. The company believes that the presentation of EBITDA, adjusted EBITDA, 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 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 www.sec.gov or under the "Financial Information" link of the Investor Relations section on Ensign's website at http://www.ensigngroup.net.









Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
 
 
 
Exhibit No.
 
Description
 
 
 
 
Press Release of the Company dated August 2, 2018








SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
Dated: August 7, 2018
THE ENSIGN GROUP, INC.
 
 
By:  
/s/ Suzanne D. Snapper  
 
 
 
Suzanne D. Snapper 
 
 
 
Chief Financial Officer 
 
 







EXHIBIT INDEX
 
 
 
Exhibit No.
 
Description
 
 
 
 
Press Release of the Company dated August 2, 2018



Exhibit


http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12395320&doc=3

The Ensign Group Reports Second Quarter Results

Conference Call and Webcast Scheduled for tomorrow, August 3, 2018 at 10:00 am PT

MISSION VIEJO, Calif., August 02, 2018 (GLOBE NEWSWIRE) --

The Ensign Group, Inc. (Nasdaq: ENSG), the parent company of the Ensign™ group of skilled nursing, rehabilitative care services, home health, home care, hospice care and assisted living companies, today announced its operating results for the second quarter of 2018, reporting GAAP diluted earnings per share of $0.41 for the quarter with adjusted earnings per share of $0.44 for the quarter (1).
Highlights Include:

GAAP earnings for the quarter was up 78.3% over the prior year quarter to $0.41 per diluted share, and adjusted earnings per share was up 41.9% over the prior year quarter to $0.44 per diluted share(1)(2);

Consolidated GAAP Net Income for the quarter was $22.0 million, and consolidated adjusted Net Income was $23.7 million, an increase of 47.3% over the prior year quarter(1)(2);

Total Transitional and Skilled Services segment income was $43.2 million for the quarter, an increase of 36.3% over the prior year quarter;

Same-store skilled nursing revenue was $286.3 million, an increase of 4.2% over the prior year quarter and same-store skilled mix revenue was $143.8 million, an increase of 3.1% over the prior year quarter(3);

Transitioning skilled occupancy was 73.4%, an increase of 274 basis points over the prior year quarter and transitioning skilled nursing revenue was $98.7 million, an increase of 6.3% over the prior year quarter(3);

Transitioning skilled managed care revenue and managed care days were up 7.1% and 8.8%, respectively, over the prior year quarter(3);

Total Assisted Living Services segment revenue was up 12.6% to $37.2 million and Assisted Living Services segment income was up 35.8% to $5.0 million, both over the prior year quarter; and

Total Home Health and Hospice Services segment revenue was up 20.7% to $41.8 million and segment income was up 27.3% to $6.3 million, both over the prior year quarter(3).

(1) See "Reconciliation of GAAP to Non-GAAP Financial Information".
(2) Adjusted earnings per share and Consolidated Adjusted Net Income increased by 22.2% and 26.6%, respectively, over the prior year quarter if we applied a 25% tax rate to both periods.
(3) Excludes the impact of ASC 606.

Operating Results

Commenting on the quarter’s operating results, Ensign’s President and Chief Executive Officer Christopher Christensen said, “We are pleased to report that the improvements we experienced in the first quarter continued, resulting in a very strong second quarter, especially in our most mature operations.” Christensen said, “We are excited about the positive momentum in same-store skilled nursing revenue and same-store skilled mix revenue, which increased by 4.2% and 3.1%, respectively, over the prior year quarter.” Noting that the Company expected to experience some typical second quarter seasonality, he highlighted the significant quarter over quarter improvement in adjusted earnings per share and consolidated adjusted net income, which increased by 41.9% and 47.3%, respectively, over the prior year quarter.






“We are reaffirming our 2018 annual earnings per share guidance to between $1.80 and $1.87 per diluted share. Overall, the midpoint of this guidance represents a 31.1% increase over our annual earnings for 2017,” Christensen said. He also remarked that even without the Company’s lower effective income tax rate, which was reduced from 35.5% in 2017 to an estimated 25.0% for 2018, the midpoint of management’s guidance represents a 15.7% increase over 2017 results. “We are very excited about the future and look forward to continuing to drive quality healthcare outcomes and corresponding financial results,” he said.
Christensen also stated that the Company’s operating subsidiaries in several states have renewed their focus on applying proven best-practices in every transition. As a result of these efforts, during the quarter the Company’s 2017 and 2018 acquisitions collectively achieved an EBIT margin that is 760 basis points higher than its 2015 and 2016 acquisitions. “These results not only show healthier transitions, but also demonstrate the enormous potential that remains in our overall portfolio. We have great confidence that the combination of our locally-driven operating model, along with the backing of our world-class Service Center, will continue to create enormous organic growth in our newly acquired, transitioning and same-store buckets,” Christensen said.
    
“We are also pleased to report that Bridgestone Living LLC, Ensign’s assisted living and independent living portfolio company, which now consists of 51 stand-alone operations and 22 campuses in 12 states, grew its segment revenue and income by 12.6% and 35.8%, respectively, over the prior year quarter,” Christensen stated. He also noted that Cornerstone Healthcare, Inc., Ensign’s home health and hospice portfolio subsidiary, grew its segment revenue and income by 20.7% and 27.3%, respectively, over the prior year quarter. “Each segment’s leadership team has independently driven their respective businesses to achieve outstanding results. As they do so, we continue to evaluate ways in which we can enhance operational synergies while also ensuring that all of our affiliated operations will continue to create long-term shareholder value,” Christensen added.
Chief Financial Officer Suzanne Snapper reported that, “Our liquidity remains strong with approximately $235 million of availability as of today on Ensign’s $450 million credit facility, which also has a built-in expansion option, and 48 unlevered real estate assets that add additional borrowing capacity.” She also noted that the Company’s net-debt-to-EBITDAR ratio went down again this quarter to 4.0x in spite of additional borrowings incurred during the quarter to acquire certain real estate assets. She also indicated that cash generated from operations was $101.2 million in the six months ended June 30, 2018, which was primarily driven by an increase in operating results, stronger collections and lower taxes.
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 Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, which is expected to be filed with the SEC today and can be viewed on the company’s website at http://www.ensigngroup.net.

Quarter Highlights

During the quarter, Ensign paid a quarterly cash dividend of $0.045 per share of its common stock. Ensign has been a dividend-paying company since 2002 and has increased its dividend every year for 16 years.
In April, Ensign announced that Bandera Healthcare, Inc., the Company’s Arizona-based portfolio company, acquired the real estate and operations of Peoria Post Acute and Rehabilitation, a 128-bed skilled nursing facility located in Peoria, Arizona. The acquisition was effective April 1, 2018. The facility also included an adjacent 50-bed long-term acute care hospital that is currently operated by a third party under a lease arrangement. “While we continue to evaluate many potential acquisition opportunities with extreme care and thought, this operation stood out as one that shows significant long-term potential while adding strength to our growing footprint in Arizona,” he added.
In May, Keystone Care LLC, the Company’s Texas-based portfolio company, acquired the real estate and operations of Grace Presbyterian Village, a 26-acre post-acute care and retirement campus located in Dallas, Texas. The acquisition was effective May 1, 2018. “This acquisition adds to our expanding footprint in the Dallas area and adds to our ability to accelerate the quality of care we can provide to our patients and their loved ones,” Mr. Christensen said.
In June, Bandera also acquired the operations of Sun West Choice Healthcare and Rehabilitation, a 140-bed skilled nursing facility in Sun City West, Arizona, and entered into a new long-term lease. The acquisition was effective June 1, 2018. “Sun West Choice is a perfect example of an off-market acquisition resulting from relationships built by our local operators over many years,” said Mr. Christensen.
In July, Ensign also announced that Pennant Healthcare, Inc., its Northwest-based portfolio subsidiary, acquired the real estate and operations of McCall Rehabilitation and Care Center, a 40-bed skilled nursing facility located in McCall, Idaho. “Our history and track record of successful acquisitions, together with the talented leaders and staff in Idaho that seek to be the provider of





choice in their respective communities, give us the confidence to pursue opportunities in the state both big and small,” Christensen said. 
Ensign also recently announced during the quarter that a wholly-owned subsidiary acquired an office building located in San Juan Capistrano, California. “We are thrilled about our purchase of office space in nearby San Juan Capistrano to accommodate our growing Service Center team,” Christensen said. “With our existing lease in Mission Viejo set to expire in 2019, we diligently reviewed current market conditions as well as the Service Center’s short- and long-term real estate needs.  After considering dozens of possibilities over the last 18 months, we determined that owning the Service Center made the most sense financially and operationally,” he added.
Ensign reported that the commercial real estate property consists of approximately 115,517 square feet of usable office space, and that the building was 92% occupied by third-party tenants at the time of acquisition.  The Company closed with cash drawn from its revolver.
"We carefully selected this space based on the attractive and convenient location for our current and future team members, as well as our third-party tenants.  With this ownership, we not only expect to save millions of dollars in future rental increases for decades to come, but we are most excited about the ability this will give us to continue to attract and retain the best and brightest Service Center leaders,” he added. 
The Company expects Ensign Services to occupy a portion of the space upon termination of its existing office leases in 2019.  Ensign also expects to continue market-rate third-party leasing arrangements for any space not occupied by Ensign Services.
These additions bring Ensign's growing portfolio to 185 skilled nursing operations, 22 of which also include assisted living operations, 51 assisted and independent living operations, 22 hospice agencies, 21 home health agencies and five home care businesses across fifteen states.  Ensign owns the real estate at 68 of its 236 healthcare facilities.  Mr. Christensen reaffirmed that Ensign continues to actively seek transactions to acquire real estate and to lease both well-performing and struggling skilled nursing, assisted living and other healthcare related businesses in new and existing markets.
Conference Call

A live webcast will be held Friday, August 3, 2018 at 10:00 a.m. Pacific time (1:00 p.m. Eastern time) to discuss Ensign’s second quarter 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 31, 2018.

About EnsignTM 

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 at 236 healthcare facilities, 22 hospice agencies, 21 home health agencies and five home care businesses in California, Arizona, Texas, Washington, Utah, Idaho, Colorado, Nevada, Iowa, Nebraska, Oregon, Wisconsin, Kansas, South Carolina, and Oklahoma. 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 terms, are not meant to imply that The Ensign Group, Inc. has direct operating assets, employees or revenue, or that any of the operations, the home health and hospice businesses, 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, 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, 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 Information

Investor/Media Relations, The Ensign Group, Inc., (949) 487-9500, ir@ensigngroup.net.

SOURCE: The Ensign Group, Inc.






THE ENSIGN GROUP, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)
(Unaudited)


Three Months Ended June 30,

Six Months Ended June 30,

2018
 
2018
Pro forma (1)

2017

2018
 
2018
Pro forma (1)

2017
Revenue
 
 
 
 
 
 
 
 
 
 
 
Service revenue
$
459,222

 
$
468,300

 
$
415,270

 
$
915,243

 
$
933,125

 
$
824,664

Assisted and independent living revenue
37,164

 
37,164

 
33,009

 
73,277

 
73,277

 
65,355

Total revenue
496,386

 
505,464


448,279


$
988,520

 
1,006,402


$
890,019

Expense

 





 



Cost of services
396,132

 
405,210


366,946


786,375

 
804,257


722,433

(Return of unclaimed class action settlement)/charges related to class action lawsuit

 




(1,664
)
 
(1,664
)

11,000

(Gains)/Losses related to divestitures

 


(1,286
)


 


2,731

Rent—cost of services
34,472

 
34,472


32,585


68,322

 
68,322


64,485

General and administrative expense
22,386

 
22,386


17,253


47,490

 
47,490


38,523

Depreciation and amortization
11,621

 
11,621


10,750


23,243

 
23,243


21,264

Total expenses
464,611

 
473,689


426,248


923,766

 
941,648


860,436

Income from operations
31,775

 
31,775


22,031


64,754

 
64,754


29,583

Other income (expense):

 





 



Interest expense
(3,869
)
 
(3,869
)

(3,053
)

(7,482
)
 
(7,482
)

(6,498
)
Interest income
562

 
562


288


1,010

 
1,010


578

Other expense, net
(3,307
)
 
(3,307
)

(2,765
)

(6,472
)
 
(6,472
)

(5,920
)
Income before provision for income taxes
28,468

 
28,468


19,266


58,282

 
58,282


23,663

Provision for income taxes
6,142

 
6,142


6,886


12,663

 
12,663


8,326

Net income
22,326

 
22,326


12,380


45,619

 
45,619


15,337

Less: net income attributable to noncontrolling interests
315

 
315


163


476

 
476


279

Net income attributable to The Ensign Group, Inc.
$
22,011

 
$
22,011


$
12,217


$
45,143

 
$
45,143


$
15,058



 





 



Net income per share attributable to The Ensign Group, Inc.:

 





 



Basic
$
0.42

 
$
0.42


$
0.24


$
0.87

 
$
0.87


$
0.30

Diluted
$
0.41

 
$
0.41


$
0.23


$
0.84

 
$
0.84


$
0.29

 

 





 



Weighted average common shares outstanding:

 





 



Basic
51,880

 
51,880


50,705


51,733

 
51,733


50,736

Diluted
54,251

 
54,251


52,548


53,909

 
53,909


52,593

 


 








 





Dividends per share
$
0.0450

 
$
0.0450


$
0.0425


$
0.0900

 
$
0.0900


$
0.0850




 
 






 
 


(1) The pro forma amounts in the table demonstrate the impact of adopting Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (ASC 606), for the three and six months ended June 30, 2018 by presenting the dollars as if the previous accounting guidance was still in effect.






THE ENSIGN GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)


June 30, 2018

December 31, 2017
Assets
 

 
Current assets:
 

 
Cash and cash equivalents
$
27,184


$
42,337

Accounts receivable—less allowance for doubtful accounts of $1,643 and $43,961 at June 30, 2018 and December 31, 2017, respectively
251,042


265,068

Investments—current
12,952


13,092

Prepaid income taxes
8,590


19,447

Prepaid expenses and other current assets
27,801


28,132

Total current assets
327,569


368,076

Property and equipment, net
591,580


537,084

Insurance subsidiary deposits and investments
31,396


28,685

Escrow deposits
2,652


228

Deferred tax assets
12,731


12,745

Restricted and other assets
21,046


16,501

Intangible assets, net
32,605


32,803

Goodwill
81,019


81,062

Other indefinite-lived intangibles
25,249


25,249

Total assets
$
1,125,847


$
1,102,433

 



Liabilities and equity
 

 
Current liabilities:
 

 
Accounts payable
$
39,018


$
39,043

Accrued wages and related liabilities
89,462


90,508

Accrued self-insurance liabilities—current
24,826


22,516

Other accrued liabilities
66,972


63,815

Current maturities of long-term debt
10,058


9,939

Total current liabilities
230,336


225,821

Long-term debt—less current maturities
268,066


302,990

Accrued self-insurance liabilities—less current portion
53,775


50,220

Deferred rent and other long-term liabilities
11,645


11,268

Deferred gain related to sale-leaseback
11,746


12,075

Total equity
550,279


500,059

Total liabilities and equity
$
1,125,847


$
1,102,433



















THE ENSIGN GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

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

Six Months Ended June 30,

2018

2017
Net cash provided by operating activities
101,240


24,920

Net cash used in investing activities
(81,244
)

(48,626
)
Net cash used in financing activities
(35,149
)

(524
)
Net decrease in cash and cash equivalents
(15,153
)

(24,230
)
Cash and cash equivalents beginning of period
42,337


57,706

Cash and cash equivalents end of period
$
27,184


$
33,476



 
THE ENSIGN GROUP, INC.
 
 
REVENUE BY SEGMENT
 

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


Three Months Ended June 30,
 


2018 (As Reported)
 
2018 (Pro Forma (2))

2017
 


$

%
 
$

%

$

%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


(Dollars in thousands)
 
Transitional and skilled services

$
408,518


82.3
%
 
$
417,061


82.5
%

$
375,217


83.7
%
 
Assisted and independent living services

37,164


7.5

 
37,164


7.4


33,009


7.4

 
Home health and hospice services:




 







 
Home health

21,321


4.3

 
21,701


4.3


17,871


4.0

 
Hospice

19,928


4.0

 
20,083


4.0


16,750


3.7

 
Total home health and hospice services

41,249


8.3

 
41,784


8.3


34,621


7.7

 
All other (1)

9,455


1.9

 
9,455


1.8


5,432


1.2

 
Total revenue

$
496,386


100.0
%
 
$
505,464


100.0
%

$
448,279


100.0
%
 
(1) Includes revenue from services generated by our other mobile diagnostic and ancillary services.
 
(2) The pro forma amounts in the table demonstrate the impact of adopting ASC 606 for the three months ended June 30, 2018 by presenting the dollars and percentages as if the previous accounting guidance was still in effect.
 
 
 
 
 
 
 
 
 
 
 
 
 
 






 
 
Six Months Ended June 30,
 
 
2018 (As Reported)
 
2018 Pro Forma (2)
 
2017
 
 
$
 
%
 
$
 
%
 
$
 
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
Transitional and skilled services
 
$
815,534


82.5
%

$
832,282


82.7
%

$
747,556


84.0
%
Assisted and independent living services
 
73,277


7.4


73,277


7.3


65,355


7.3

Home health and hospice services:
 











Home health
 
41,505


4.2


42,297


4.2


34,922


3.9

Hospice
 
39,502


4.0


39,844


4.0


31,832


3.6

Total home health and hospice services
 
81,007


8.2


82,141


8.2


66,754


7.5

All other (1)
 
18,702


1.9


18,702


1.8


10,354


1.2

Total revenue
 
$
988,520


100.0
%

$
1,006,402


100.0
%

$
890,019


100.0
%
(1) Includes revenue from services generated by our other mobile diagnostic and ancillary services.
(2) The pro forma amounts in the table demonstrate the impact of adopting ASC 606 for the six months ended June 30, 2018 by presenting the dollars and percentages as if the previous accounting guidance was still in effect.
 
 
 
 
 
 
 
 
 
 
 
 
 







 
THE ENSIGN GROUP, INC.
 
 
SELECT PERFORMANCE INDICATORS
 
 
(Unaudited)
 

The following tables summarize our selected performance indicators for our transitional and skilled services segment along with other statistics, for each of the dates or periods indicated:

Three Months Ended June 30,




 
2018

2017

Change

% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)




Total Facility Results:
 

 

 

 
Transitional and skilled revenue (As Reported)
$
408,518


$
375,217


$
33,301


8.9
 %
Transitional and skilled revenue (Pro forma (5))
417,061

 
375,217

 
41,844

 
11.2
 %
Number of facilities at period end
162


155


7


4.5
 %
Number of campuses at period end*
22


21


1


4.8
 %
Actual patient days
1,330,057


1,232,842


97,215


7.9
 %
Occupancy percentage — Operational beds
76.6
%

74.7
%

 

1.9
 %
Skilled mix by nursing days
29.7
%

30.7
%

 

(1.0
)%
Skilled mix by nursing revenue
50.2
%

52.1
%

 

(1.9
)%

Three Months Ended June 30,




 
2018

2017

Change

% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)




Same Facility Results(1):
 

 

 

 
Transitional and skilled revenue (As Reported)
$
280,477


$
274,680


$
5,797


2.1
 %
Transitional and skilled revenue (Pro forma (5))
286,330

 
274,680

 
11,650

 
4.2
 %
Number of facilities at period end
108


108




 %
Number of campuses at period end*
11


11




 %
Actual patient days
871,035


868,397


2,638


0.3
 %
Occupancy percentage — Operational beds
78.3
%

78.0
%

 

0.3
 %
Skilled mix by nursing days
31.3
%

31.2
%

 

0.1
 %
Skilled mix by nursing revenue
52.1
%

52.3
%

 

(0.2
)%

Three Months Ended June 30,




 
2018

2017

Change

% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)




Transitioning Facility Results(2):
 

 

 

 
Transitional and skilled revenue (As Reported)
$
96,690


$
92,875


$
3,815


4.1
 %
Transitional and skilled revenue (Pro forma (5))
98,693

 
92,875

 
5,818

 
6.3
 %
Number of facilities at period end
40


40




 %
Number of campuses at period end*
9


9




 %
Actual patient days
348,385


335,472


12,913


3.8
 %
Occupancy percentage — Operational beds
73.4
%

70.7
%

 

2.7
 %
Skilled mix by nursing days
28.5
%

30.1
%

 

(1.6
)%
Skilled mix by nursing revenue
48.3
%

52.0
%

 

(3.7
)%






Three Months Ended June 30,




 
2018

2017

Change

% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)




Recently Acquired Facility Results(3):


 

 

 
Transitional and skilled revenue (As Reported)
$
31,351


$
7,489


$
23,862


NM
Transitional and skilled revenue (Pro forma (5))
32,038

 
7,489

 
24,549

 
NM
Number of facilities at period end
14


7


7


NM
Number of campuses at period end*
2


1


1


NM
Actual patient days
110,637


28,424


82,213


NM
Occupancy percentage — Operational beds
74.1
%

45.9
%




NM
Skilled mix by nursing days
21.6
%

23.0
%

 


NM
Skilled mix by nursing revenue
38.5
%

44.0
%

 


NM

Three Months Ended June 30,




 
2018

2017

Change

% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)




Facility Closed Results(4):


 

 

 
Skilled nursing revenue
$


$
173


$
(173
)

NM
Actual patient days


549


(549
)

NM
Occupancy percentage — Operational beds
%

50.0
%



NM
Skilled mix by nursing days
%

13.8
%

 

NM
Skilled mix by nursing revenue
%

35.5
%

 

NM
 
 
 
 
 
 
 
 
* Campus represents a facility that offers both skilled nursing and assisted and/or independent living services. Revenue and expenses related to skilled nursing, assisted and independent living services have been allocated and recorded in the respective reportable segment.
(1)
Same Facility results represent all facilities purchased prior to January 1, 2015.
(2)
Transitioning Facility results represents all facilities purchased from January 1, 2015 to December 31, 2016.
(3)
Recently Acquired Facility (Acquisitions) results represent all facilities purchased on or subsequent to January 1, 2017.
(4)
Facility Closed results represents closed operations during the three months ended June 30, 2017, which were excluded from Same Store and Transitioning results for the three months ended June 30, 2017, for comparison purposes.
(5)
The pro forma amounts in the table demonstrate the impact of adopting ASC 606 for the three months ended June 30, 2018 by presenting the dollars and percentages as if the previous accounting guidance was still in effect.

 
Six Months Ended
June 30,
 
 
 
 
 
2018
 
2017
 
Change
 
% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Total Facility Results:
 

 

 

 
Transitional and skilled revenue (As Reported)
$
815,534


$
747,556


$
67,978


9.1
 %
Transitional and skilled revenue (Pro forma (5))
832,282


747,556


84,726


11.3
 %
Number of facilities at period end
162


155


7


4.5
 %
Number of campuses at period end*
22


21


1


4.8
 %
Actual patient days
2,645,027


2,442,106


202,921


8.3
 %
Occupancy percentage — Operational beds
77.2
%

74.8
%

 

2.4
 %
Skilled mix by nursing days
30.7
%

31.4
%

 

(0.7
)%
Skilled mix by nursing revenue
51.2
%

52.7
%

 

(1.5
)%





 
Six Months Ended
June 30,
 
 
 
 
 
2018
 
2017
 
Change
 
% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Same Facility Results(1):
 

 

 

 
Transitional and skilled revenue (As Reported)
$
560,724


$
548,410


$
12,314


2.2
%
Transitional and skilled revenue (Pro forma (5))
572,170


548,410


23,760


4.3
%
Number of facilities at period end
108


108




%
Number of campuses at period end*
11


11




%
Actual patient days
1,741,558


1,730,523


11,035


0.6
%
Occupancy percentage — Operational beds
78.8
%

78.2
%

 

0.6
%
Skilled mix by nursing days
31.7
%

31.5
%

 

0.2
%
Skilled mix by nursing revenue
52.6
%

52.6
%

 

%
 
Six Months Ended
June 30,
 
 
 
 
 
2018
 
2017
 
Change
 
% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Transitioning Facility Results(2):
 

 

 

 
Transitional and skilled revenue (As Reported)
$
198,537


$
188,605


$
9,932


5.3
 %
Transitional and skilled revenue (Pro forma (5))
202,656


188,605


14,051


7.4
 %
Number of facilities at period end
40


40




 %
Number of campuses at period end*
9


9




 %
Actual patient days
705,192


672,779


32,413


4.8
 %
Occupancy percentage — Operational beds
74.7
%

71.3
%

 

3.4
 %
Skilled mix by nursing days
30.4
%

31.2
%

 

(0.8
)%
Skilled mix by nursing revenue
50.5
%

53.2
%

 

(2.7
)%
 
Six Months Ended
June 30,
 
 
 
 
 
2018
 
2017
 
Change
 
% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Recently Acquired Facility Results(3):


 

 

 
Transitional and skilled revenue (As Reported)
$
56,273


$
8,673


$
47,600


NM
Transitional and skilled revenue (Pro forma (5))
57,456


8,673


48,783


NM
Number of facilities at period end
14


7


7


NM
Number of campuses at period end*
2


1


1


NM
Actual patient days
198,277


33,229


165,048


NM
Occupancy percentage — Operational beds
73.0
%

36.1
%




NM
Skilled mix by nursing days
22.5
%

23.2
%

 


NM
Skilled mix by nursing revenue
39.7
%

44.6
%

 


NM
 
Six Months Ended
June 30,
 
 
 
 
 
2018
 
2017
 
Change
 
% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Facility Closed Results(4):


 

 

 
Skilled nursing revenue
$


$
1,868


$
(1,868
)

NM
Actual patient days


5,575


(5,575
)

NM
Occupancy percentage — Operational beds
%

34.3
%



NM
Skilled mix by nursing days
%

46.7
%

 

NM
Skilled mix by nursing revenue
%

71.5
%

 

NM
 
 
 
 
 
 
 
 
* Campus represents a facility that offers both skilled nursing and assisted and/or independent living services. Revenue and expenses related to skilled nursing, assisted and independent living services have been allocated and recorded in the respective reportable segment.





(1)
Same Facility results represent all facilities purchased prior to January 1, 2015.
(2)
Transitioning Facility results represents all facilities purchased from January 1, 2015 to December 31, 2016.
(3)
Recently Acquired Facility (Acquisitions) results represent all facilities purchased on or subsequent to January 1, 2017.
(4)
Facility Closed results represents closed operations during the six months ended June 30, 2017, which were excluded from Same Store and Transitioning results for the six months ended June 30, 2017, for comparison purposes.
(5)
The pro forma amounts in the table demonstrate the impact of adopting ASC 606 for the six months ended June 30, 2018 by presenting the dollars and percentages as if the previous accounting guidance was still in effect.

THE ENSIGN GROUP, INC.
SKILLED NURSING AVERAGE DAILY REVENUE RATES AND
PERCENT OF SKILLED NURSING REVENUE AND DAYS BY PAYOR

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, and revenue associated with these metrics are generated based on contractually agreed-upon amounts or rate, excluding the estimates of variable consideration under ASC 606:

 
Three Months Ended June 30,
 
Same Facility

Transitioning

Acquisitions

Total
 
2018

2017

2018

2017

2018

2017

2018

2017
Skilled Nursing Average Daily Revenue Rates:
 
 
 
 
 
 
 
 
 
 
 

 

 
Medicare
$
615.55


$
599.86


$
516.78


$
504.49


$
534.46


$
499.43


$
582.05


$
567.65

Managed care
461.65


455.74


410.59


417.24


422.43


377.38


445.48


444.65

Other skilled
486.12


456.99


349.01


379.94


444.55


650.86


467.19


446.94

Total skilled revenue
528.70


516.37


455.64


459.54


484.99


481.16


507.68


500.59

Medicaid
221.75


213.21


194.38


179.62


212.69


179.72


213.86


203.49

Private and other payors
225.93


202.58


196.96


194.61


230.57


196.36


217.35


199.90

Total skilled nursing revenue
$
318.56


$
305.91


$
269.45


$
266.13


$
274.57


$
251.58


$
302.01


$
293.84

 
Six Months Ended June 30,
 
Same Facility
 
Transitioning
 
Acquisitions
 
Total
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Skilled Nursing Average Daily Revenue Rates:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Medicare
$
612.97

 
$
598.57

 
$
515.68

 
$
503.88

 
$
527.57

 
$
495.95

 
$
578.24

 
$
566.07

Managed care
460.62

 
449.01

 
409.68

 
418.85

 
421.00

 
374.41

 
444.31

 
440.45

Other skilled
484.37

 
458.35

 
357.20

 
373.36

 
460.15

 
650.86

 
467.16

 
446.23

Total skilled revenue
526.67

 
513.76

 
456.62

 
460.06

 
485.62

 
478.44

 
505.91

 
498.60

Medicaid
221.47

 
214.02

 
193.93

 
179.50

 
212.72

 
175.92

 
213.61

 
204.17

Private and other payors
225.56

 
204.56

 
202.76

 
198.19

 
229.50

 
193.64

 
218.67

 
202.29

Total skilled nursing revenue
$
319.20

 
$
307.20

 
$
275.13

 
$
269.58

 
$
276.69

 
$
249.30

 
$
304.24

 
$
296.08


The following tables set forth our percentage of skilled nursing patient revenue and days by payor source for the three and six months June 30, 2018 and 2017:






 
Three Months Ended June 30,
 
Same Facility

Transitioning

Acquisitions

Total
 
2018

2017

2018

2017

2018

2017

2018

2017
Percentage of Skilled Nursing Revenue:
 

 

 

 

 

 

 

 
Medicare
24.5
%

25.4
%

25.9
%

29.6
%

22.7
%

35.3
%

24.7
%

26.7
%
Managed care
18.0


18.4


19.4


19.0


11.8


6.6


17.8


18.3

Other skilled
9.6


8.5


3.0


3.4


4.0


2.1


7.7


7.1

Skilled mix
52.1


52.3


48.3


52.0


38.5


44.0


50.2


52.1

Private and other payors
7.7


7.9


10.5


10.8


12.1


11.9


8.6


8.7

Quality mix
59.8


60.2


58.8


62.8


50.6


55.9


58.8


60.8

Medicaid
40.2


39.8


41.2


37.2


49.4


44.1


41.2


39.2

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
 
2018

2017

2018

2017

2018

2017

2018

2017
Percentage of Skilled Nursing Days:
 

 

 

 

 

 

 

 
Medicare
12.6
%

13.1
%

13.5
%

15.6
%

11.6
%

17.8
%

12.8
%

13.9
%
Managed care
12.3


12.4


12.7


12.1


7.6


4.4


12.0


12.2

Other skilled
6.4


5.7


2.3


2.4


2.4


0.8


4.9


4.6

Skilled mix
31.3


31.2


28.5


30.1


21.6


23.0


29.7


30.7

Private and other payors
11.1


11.5


14.5


14.7


15.0


15.3


12.4


12.5

Quality mix
42.4


42.7


43.0


44.8


36.6


38.3


42.1


43.2

Medicaid
57.6


57.3


57.0


55.2


63.4


61.7


57.9


56.8

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
 
2018

2017

2018

2017

2018

2017

2018

2017
Percentage of Skilled Nursing Revenue:
 

 

 

 

 

 

 

 
Medicare
24.7
%

25.9
%

27.4
%

30.7
%

24.6
%

36.5
%

25.3
%

27.3
%
Managed care
18.5


18.6


20.0


19.2


11.4


6.3


18.4


18.6

Other skilled
9.4


8.1


3.1


3.3


3.7


1.8


7.5


6.8

Skilled mix
52.6


52.6


50.5


53.2


39.7


44.6


51.2


52.7

Private and other payors
7.5


7.8


10.3


10.4


11.2


13.7


8.5


8.5

Quality mix
60.1


60.4


60.8


63.6


50.9


58.3


59.7


61.2

Medicaid
39.9


39.6


39.2


36.4


49.1


41.7


40.3


38.8

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
 
2018

2017

2018

2017

2018

2017

2018

2017
Percentage of Skilled Nursing Days:
 

 

 

 

 

 

 

 
Medicare
12.8
%

13.3
%

14.6
%

16.4
%

12.8
%

18.3
%

13.3
%

14.3
%
Managed care
12.8


12.8


13.4


12.3


7.5


4.2


12.6


12.5

Other skilled
6.1


5.4


2.4


2.5


2.2


0.7


4.8


4.6

Skilled mix
31.7


31.5


30.4


31.2


22.5


23.2


30.7


31.4

Private and other payors
11.1


11.5


14.1


14.1


14.0


17.7


12.1


12.2

Quality mix
42.8


43.0


44.5


45.3


36.5


40.9


42.8


43.6

Medicaid
57.2


57.0


55.5


54.7


63.5


59.1


57.2


56.4

Total skilled nursing
100.0
%

100.0
%

100.0
%

100.0
%

100.0
%

100.0
%

100.0
%

100.0
%

 
THE ENSIGN GROUP, INC.
 
 
SELECT PERFORMANCE INDICATORS
 
 
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
The following tables summarize our selected performance indicators for our assisted and independent living segment along with other statistics, for each of the dates or periods indicated:
 
 
 
 
 
 
 
 
 
 
 
 


Three Months Ended
June 30,




 
2018

2017

Change

% Change
 
 
 
 
 
 
 
 

(Dollars in thousands)




Resident fee revenue
$
37,164


$
33,009


$
4,155


12.6
 %
Number of facilities at period end
51


46


5


10.9
 %
Number of campuses at period end
22


21


1


4.8
 %
Occupancy percentage (units)
75.2
%

77.4
%