August 3, 2017

The Ensign Group Reports Second Quarter 2017 Results; Reaffirms 2017 Guidance

MISSION VIEJO, Calif., Aug. 03, 2017 (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 2017, reporting GAAP diluted earnings per share for the quarter of $0.23 and fully diluted adjusted earnings per share for the quarter of $0.31 (1).

Quarter Highlights Include:

  • Consolidated EBITDA increased 10.4% to $32.6M and adjusted EBITDA increased 169 basis points to $38.1M over the prior year quarter;
  • Same store managed care revenue for transitional and skilled services grew by 10.8%, with growth of 5.5% in managed care days, over the prior year quarter;
  • Same store skilled mix revenue for transitional and skilled services as a percentage of revenue for all segments increased 56 basis points to 51.6% over the prior year quarter;
  • Transitioning revenue for transitional and skilled services increased 8.2% to $77.8M, with occupancy growth of 268 basis points to 73.9%, over the prior year quarter;
  • Transitioning Medicare and Medicaid skilled revenue for transitional and skilled services increased 8.2% and 16.9%, respectively, over the prior year quarter;
  • Transitioning Medicare and Medicaid skilled days increased 2.9% and 27.0%, respectively, over the prior year quarter;
  • Bridgestone Living LLC, Ensign's assisted and independent living subsidiary, grew its segment income by 12.1% to $3.7 million over the prior year quarter; and
  • Cornerstone Healthcare, Inc., Ensign's home health and hospice subsidiary, grew its segment income by 13.2% to $4.9 million and revenue by $6.1 million or 21.5% to $34.6 million all over the prior year quarter.          

 (1) See "Reconciliation of GAAP to Non-GAAP Financial Information".

Operating Results

“We continue to make progress in both occupancy and skilled revenue in both same-store and transitioning operations,” said Ensign’s President and Chief Executive Officer Christopher Christensen.  He continued, “We were particularly pleased to see increases in skilled revenue and skilled Medicare and Medicaid days in transitioning operations of 8.2% and 16.9%, respectively, and an improvement in skilled occupancy of 268 basis points all over the prior year quarter.” 

Mr. Christensen also reported that results are on track with Management’s expectations and that Management is confident that the company can achieve its previously-announced 2017 annual guidance.  Ensign reaffirmed projected revenues of $1.76 billion to $1.80 billion and annual earnings per share guidance of $1.46 to $1.53 per diluted share. He continued, “We are not satisfied with the results achieved during the quarter, but we are very encouraged with the improvements our local leaders have made and we expect to see continued growth in the third and fourth quarter and beyond,” he added.

Pointing to the large number of newly acquired and transitioning operations within the portfolio, he commented, “We are encouraged to see the tremendous organic growth potential that exists within our portfolio continuing to take shape, even during one of our historically slower quarters.”  Noting that Ensign’s adjusted earnings per share was $0.31 for the quarter, Mr. Christensen indicated that a few slower-than-expected transitions and a substantial spike in health insurance claims have created a short-term drag on performance, but that the progress in most of the portfolio sets the stage for strong third and fourth quarter results.  He continued, “We believe that as the quality of our service offerings, our superior clinical outcomes and our local connections to our individual markets continue to strengthen, we will increasingly draw market share across the portfolio.”

Mr. Christensen also highlighted the continued success of the company’s new business ventures, including assisted living, home health, hospice care, and other post-acute care businesses.  He pointed to their income growth as further evidence of the organization’s agility and ability to apply its operating principles in other healthcare service businesses. “We are grateful to our local leaders in each of these businesses as they strive to make their organizations the “go-to” providers in the markets they serve, and thereby extending Ensign’s growing influence in the healthcare world. It is through them that we continue to realize our mission of bringing a new level of quality and dignity to the post-acute care industry, doing it one operation at a time,” he said.

Commenting on the variability of short-term results, Chief Financial Officer Suzanne Snapper observed that, “As we have noted in the past, our business can be a bit lumpy from quarter to quarter, which is why we only provide annual earnings guidance.”  She added that “Operating results in the quarter were impacted by a number of non-operational factors, including a spike in healthcare costs, the drag created by several new acquisitions during the quarter, and seasonal softness in same-store occupancy and skilled mix, all of which are already significantly improving in July.”

Ms. Snapper added that, “We believe that Ensign still has the cleanest balance sheet in the industry,” noting that even after the company’s significant acquisition activity, Ensign’s lease-adjusted net-debt-to-EBITDAR ratio was 4.17x as of the end of the quarter.  She noted that even though this debt ratio is higher than Ensign’s historical averages, the ratio has improved over the last few quarters and that she expects the ratio to return to historical levels as the new acquisitions add EBITDAR to consolidated operating results.  She cited the company’s acquisition history and business model to explain that the debt ratio rises during periods with higher acquisition activity, emphasizing the fact that the Company has acquired approximately $190 million in new assets in just the last 9 months.  She also indicated that the company’s credit relationships remain strong, with approximately $162 million in borrowing capacity available on its existing credit line and 58 unlevered real estate assets that add additional liquidity.

GAAP diluted earnings per share were $0.23 and fully diluted adjusted earnings per share were $0.31 for the quarter.  GAAP net income was $12.2 million and adjusted net income was $16.1 million. A discussion of the company's use of non-GAAP financial measures is set forth below. A reconciliation of net income to adjusted EBITDAR and adjusted EBITDA, as well as a reconciliation of GAAP earnings per share and net income to adjusted net earnings per share and adjusted net income, appear in the financial data portion of this release.

More complete information is contained in the Company’s 10-Q, which was filed with the SEC today and can be viewed on the Company’s website at http://www.ensigngroup.net.

Quarter Highlights

During the quarter, the Company paid a quarterly cash dividend of $0.0425 per share of Ensign common stock. Ensign has been a dividend-paying company since 2002 and has increased its dividend every year for 14 years.

Also during the quarter and since, the company announced the following acquisitions:

  • On April 1, 2017, Rehabilitation Center of Des Moines, a 74-bed skilled nursing operation in Des Moines, Iowa;
  • On May 1, 2017, Meadow View Nursing and Rehabilitation, a 112-bed skilled nursing facility in Nampa, Idaho;
  • Also on May 1, 2017, Voto Home Health, a Medicare-certified home health agency servicing King County, Washington;
  • On June 1, 2017, Heritage Park Healthcare and Rehabilitation, a 115-bed skilled nursing facility in Roy, Utah and Wide Horizons Intermediate Care Facility, an 83-bed intermediate care facility for individuals with intellectual disability in Ogden, Utah;
  • On June 16, 2017, Meadowcreek Senior Living, a 37-unit assisted living facility in Lancaster, Texas; Paris Chalet Senior Living, a 37-unit assisted living facility in Paris, Texas; Maple Meadows Assisted Living, a 19-unit assisted living facility in Fond du Lac, Wisconsin; North Point Senior Living, a 19-unit assisted living facility in Kenosha, Wisconsin; and Lake Pointe Villa Assisted Living, a 19-unit assisted living facility in Oshkosh, Wisconsin;
  • On July 1, 2017, The Villas at Sunny Acres, a post-acute care and retirement community with 134 skilled nursing beds, 35 assisted living units and 198 independent living units set on 64 acres in Thornton, Colorado; and Medallion Post Acute Rehabilitation, a 60-bed skilled nursing operation, and Medallion Villas, a 44-unit assisted living and 64-unit independent living operation, both set on a single healthcare campus in Colorado Springs, Colorado; and
  • On August 1, 2017, Parkside Senior Living, a 20-unit assisted living facility in Neenah, Wisconsin.

During the quarter, the Company also completed the sale and simultaneous lease of two skilled nursing facilities and one assisted living community to Mainstreet Health Investments Inc. (TSX:HLP.U) ("MHI").   The triple-net master lease includes an initial 20-year term and CPI-based annual escalators. The properties are located within high-density neighborhoods of the Los Angeles and Phoenix metro markets and have been owned and operated by Ensign for many years. Simultaneously, MHI released Ensign from its lease obligations on three transitional care facilities in Kansas and Texas.

"This transaction not only demonstrates the significant value inherent in our owned real estate, but it also shows that we have several levers we can pull to strengthen our already healthy balance sheet." said Christopher Christensen, Ensign's President and Chief Executive Officer. "We were pleased to capture some of the value we've created in these real estate assets while simultaneously ensuring that we will continue serving each of these communities for decades to come," he said, noting that the EBITDAR to lease ratios exceeded two times as of the commencement date.   

Ensign affiliates own the real estate of 61 of the 227 healthcare facilities within the portfolio, with twenty hospice agencies, eighteen home health agencies and three home care businesses in 14 states.  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.

2017 Guidance

Management reaffirmed its 2017 annual revenue guidance of $1.76 billion to $1.80 billion and annual earnings per share guidance of $1.46 to $1.53 per diluted share.  Management’s guidance is based on diluted weighted average common shares outstanding of 53.7 million and a 35.5% tax rate, both of which reflect the impact of ASU 2016-09.  In addition, the guidance assumes, among other things, normalized health insurance costs, anticipated Medicare and Medicaid reimbursement rate increases net of provider taxes and acquisitions closed to date. It also excludes acquisition-related costs and amortization costs related to intangible assets acquired, share-based compensation, costs incurred from closed operations, costs incurred to recognize income tax credits and costs incurred for facilities currently being constructed and other start-up operations.

Conference Call

A live webcast will be held Friday, August 4, 2017 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, September 1, 2017.

About Ensign

The Ensign Group, Inc.'s independent operating subsidiaries provide a broad spectrum of skilled nursing and assisted living services, physical, occupational and speech therapies, home health and hospice services and other rehabilitative and healthcare services at 227 healthcare facilities, twenty hospice agencies, eighteen home health agencies and three home care businesses in California, Arizona, Texas, Washington, Utah, Idaho, Colorado, Nevada, Iowa, Nebraska, Oregon, Wisconsin, Kansas and South Carolina. 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.

SOURCE: The Ensign Group, Inc.

 

 
THE ENSIGN GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
         
  Three Months Ended
June 30,
  Six Months Ended
June 30,
    2017       2016       2017       2016  
Revenue $   448,279     $   410,517     $   890,019     $   793,750  
Expense:              
Cost of services    366,946        330,538        722,433        636,846  
Charge related to class action lawsuit     —        —        11,000        —  
(Gain)/losses related to operational closures     (1,286 )      —        2,731        7,935  
Rent—cost of services     32,585        30,741        64,485        57,732  
General and administrative expense    17,253        19,657        38,523        37,045  
Depreciation and amortization    10,750        9,772        21,264        18,069  
Total expenses    426,248        390,708        860,436        757,627  
Income from operations    22,031        19,809        29,583        36,123  
Other income (expense):              
Interest expense    (3,053 )      (1,446 )      (6,498 )      (2,816 )
Interest income    288        278        578        513  
Other expense, net    (2,765 )      (1,168 )      (5,920 )      (2,303 )
Income before provision for income taxes    19,266        18,641        23,663        33,820  
Provision for income taxes    6,886        7,278        8,326        13,167  
Net income    12,380        11,363        15,337        20,653  
Less: net income attributable to noncontrolling interests    163        37        279        155  
Net income attributable to The Ensign Group, Inc. $   12,217     $   11,326     $   15,058     $   20,498  
               
Net income per share              
Basic: $   0.24     $   0.23     $   0.30     $   0.41  
Diluted: $   0.23     $   0.22     $   0.29     $   0.39  
               
Weighted average common shares outstanding:              
Basic    50,705        50,274        50,736        50,476  
Diluted    52,548        51,931        52,593        52,134  
               
Dividends per share $   0.0425     $   0.0400     $   0.0850     $   0.0800  
               

 

THE ENSIGN GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands)
(Unaudited)
       
  June 30, 2017   December 31, 2016
Assets      
Current assets:      
Cash and cash equivalents $   33,476     $   57,706  
Accounts receivable—less allowance for doubtful accounts of $39,759 and $39,791 at June 30,               
 2017 and December 31, 2016, respectively    243,248        244,433  
Investments—current    13,643        11,550  
Prepaid income taxes    10,343        302  
Prepaid expenses and other current assets    23,135        19,871  
Total current assets    323,845        333,862  
Property and equipment, net    490,386        484,498  
Insurance subsidiary deposits and investments    25,899        23,634  
Escrow deposits    23,925        1,582  
Deferred tax asset    23,013        23,073  
Restricted and other assets    13,329        12,614  
Intangible assets, net    34,184        35,076  
Goodwill    73,159        67,100  
Other indefinite-lived intangibles    24,444        19,586  
Total assets $   1,032,184     $   1,001,025  
       
Liabilities and equity      
Current liabilities:      
Accounts payable $   32,915     $   38,991  
Accrued charge related to class action lawsuit    11,000        —  
Accrued wages and related liabilities    72,701        84,686  
Accrued self-insurance liabilities—current    21,010        21,359  
Other accrued liabilities    58,787        58,763  
Current maturities of long-term debt    8,165        8,129  
Total current liabilities    204,578        211,928  
Long-term debt—less current maturities    284,465        275,486  
Accrued self-insurance liabilities—less current portion    48,658        43,992  
Deferred rent and other long-term liabilities    11,119        9,124  
Deferred gain related to sale-leaseback    12,403        —  
Total equity    470,961        460,495  
Total liabilities and equity $   1,032,184     $   1,001,025  
 
       
 
THE ENSIGN GROUP, INC.
CONDENSED 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,
    2017       2016  
Net cash provided by operating activities    24,920        36,828  
Net cash used in investing activities    (48,626 )      (99,857 )
Net cash (used in) provided by financing activities    (524 )      54,979  
Net decrease in cash and cash equivalents    (24,230 )      (8,050 )
Cash and cash equivalents at beginning of period    57,706        41,569  
Cash and cash equivalents at end of period $   33,476     $   33,519  
 

 

THE ENSIGN GROUP, INC.  
REVENUE BY SEGMENT  
   
The following table sets forth our total revenue by segment and as a percentage of total revenue for the periods indicated:                
 
    Three Months Ended June 30,   Six Months Ended June 30,    
     2017        2016        2017        2016      
  $   %   $   %   $   %   $   %    
                                                     
    (Dollars in thousands)   (Dollars in thousands)    
Transitional and skilled services   $   375,217   83.7 %   $   340,417   82.9 %   $   747,556   84.0 %   $   655,631   82.6 %    
Assisted and independent living facilities      33,009   7.4 %      30,708   7.5 %      65,355   7.3 %      60,877   7.7 %    
Home health and hospice services:                                    
Home health      17,871   4.0 %      14,416   3.5 %      34,922   3.9 %      28,324   3.6 %    
Hospice      16,750   3.7 %      14,077   3.4 %      31,832   3.6 %      26,835   3.4 %    
Total home health and hospice services      34,621   7.7 %      28,493   6.9 %      66,754   7.5 %      55,159   7.0 %    
All other (1)      5,432   1.2 %      10,899   2.7 %      10,354   1.2 %      22,083   2.7 %    
Total revenue   $   448,279   100.0 %   $   410,517   100.0 %   $   890,019   100.0 %   $   793,750   100.0 %    
(1) Includes revenue from services generated in our other ancillary services for both the three and six months ended June 30, 2017 and 2016 and urgent care centers for three and six months ended June 30, 
2016.

 

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,        
     2017        2016          
                       
  (Dollars in thousands)   Change   % Change
Total Facility Results:              
Transitional and skilled revenue $   375,217     $   340,417     $   34,800     10.2 %
Number of facilities at period end    155        148        7     4.7 %
Number of campuses at period end*    21        18        3     16.7 %
Actual patient days    1,232,842         1,136,724        96,118     8.5 %
Occupancy percentage — Operational beds   74.7 %     75.6 %       (0.9 )%
Skilled mix by nursing days   30.7 %     31.3 %       (0.6 )%
Skilled mix by nursing revenue   52.1 %     52.7 %       (0.6 )%
  Three Months Ended June 30,        
     2017        2016          
                       
  (Dollars in thousands)   Change   % Change
Same Facility Results(1):              
Transitional and skilled revenue $   240,404     $   236,717     $   3,687     1.6 %
Number of facilities at period end    93        93        —     %
Number of campuses at period end*    11        11        —     %
Actual patient days    767,862         768,324        (462 )   (0.1 )%
Occupancy percentage — Operational beds   78.2 %     77.8 %       0.4 %
Skilled mix by nursing days   30.2 %     30.2 %       %
Skilled mix by nursing revenue   51.6 %     51.1 %       0.5 %
  Three Months Ended June 30,        
     2017        2016          
                       
  (Dollars in thousands)   Change   % Change
Transitioning Facility Results(2):              
Transitional and skilled revenue $   77,827     $   71,946     $   5,881     8.2 %
Number of facilities at period end    37        37        —     %
Number of campuses at period end*    3        3        —     %
Actual patient days    245,387        238,892        6,495     2.7 %
Occupancy percentage — Operational beds   73.9 %     71.2 %       2.7 %
Skilled mix by nursing days   36.1 %     37.0 %       (0.9 )%
Skilled mix by nursing revenue   55.1 %     57.6 %       (2.5 )%
  Three Months Ended June 30,        
     2017        2016          
                       
  (Dollars in thousands)   Change   % Change
Recently Acquired Facility Results(3):              
Transitional and skilled revenue $   56,813     $   30,981     $   25,832     NM
Number of facilities at period end    25        18        7     NM
Number of campuses at period end*    7        3        4     NM
Actual patient days    219,044        125,481        93,563     NM
Occupancy percentage — Operational beds   65.3 %     73.4 %       NM
Skilled mix by nursing days   26.2 %     28.0 %       NM
Skilled mix by nursing revenue   49.7 %     54.0 %       NM
  Three Months Ended June 30,        
     2017        2016          
                       
  (Dollars in thousands)   Change   % Change
Facility Closed Results(4):              
Skilled nursing revenue $   173     $   773     $   (600 )   NM
Actual patient days    549        4,027        (3,478 )   NM
Occupancy percentage — Operational beds   50.0 %     46.6 %       NM
Skilled mix by nursing days   13.8 %     7.6 %       NM
Skilled mix by nursing revenue   35.6 %     19.1 %       NM
               
*Campus represents a facility that offers both skilled nursing assisted and/or independently 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, 2014.             
(2) Transitioning Facility results represents all facilities purchased from January 1, 2014 to December 31, 2015.    
(3) Recently Acquired Facility (Acquisitions) results represent all facilities purchased on or subsequent to January 1, 2016.    
(4) Facility Closed results represents closed operations during the second quarter of 2017 and 2016, for which the results were excluded from Same Facility results and Recently Acquired results for the three
 months ended June 30, 2017 and 2016, for comparison purposes.
               
  Six Months Ended June 30,        
     2017        2016          
                       
  (Dollars in thousands)   Change   % Change
Total Facility Results:              
Transitional and skilled revenue $   747,556     $   655,631     $   91,925     14.0 %
Number of facilities at period end    155        148        7     4.7 %
Number of campuses at period end*    21        18        3     16.7 %
Actual patient days    2,442,106         2,189,460        252,646     11.5 %
Occupancy percentage — Operational beds   74.8 %     76.2 %       (1.4 )%
Skilled mix by nursing days   31.4 %     31.9 %       (0.5 )%
Skilled mix by nursing revenue   52.7 %     53.6 %       (0.9 )%
  Six Months Ended June 30,        
     2017        2016          
                       
  (Dollars in thousands)   Change   % Change
Same Facility Results(1):              
Transitional and skilled revenue $   480,543     $   471,615     $   8,928     1.9 %
Number of facilities at period end    93        93        —     %
Number of campuses at period end*    11        11        —     %
Actual patient days    1,529,579         1,552,937        (23,358 )   (1.5 )%
Occupancy percentage — Operational beds   78.3 %     78.6 %       (0.3 )%
Skilled mix by nursing days   30.6 %     30.6 %       %
Skilled mix by nursing revenue   51.8 %     52.3 %       (0.5 )%
  Six Months Ended June 30,        
     2017        2016          
                       
  (Dollars in thousands)   Change   % Change
Transitioning Facility Results(2):              
Transitional and skilled revenue $   156,222     $   144,693     $   11,529     8.0 %
Number of facilities at period end    37        37        —     %
Number of campuses at period end*    3        3        —     %
Actual patient days    489,694        479,134        10,560     2.2 %
Occupancy percentage — Operational beds   74.2 %     71.4 %       2.8 %
Skilled mix by nursing days   37.2 %     37.2 %       %
Skilled mix by nursing revenue   56.1 %     57.8 %       (1.7 )%
  Six Months Ended June 30,        
     2017        2016          
                       
  (Dollars in thousands)   Change   % Change
Recently Acquired Facility Results(3):              
Transitional and skilled revenue $   108,924     $   37,092     $   71,832     NM
Number of facilities at period end    25        18        7     NM
Number of campuses at period end*    7        3        4     NM
Actual patient days    417,258        145,956        271,302     NM
Occupancy percentage — Operational beds   65.6 %     71.6 %       NM
Skilled mix by nursing days   27.1 %     30.1 %       NM
Skilled mix by nursing revenue   51.4 %     55.7 %       NM
  Six Months Ended June 30,        
     2017        2016          
                       
  (Dollars in thousands)   Change   % Change
Facility Closed Results(4):              
Skilled nursing revenue $   1,867     $   2,231     $   (364 )   NM
Actual patient days    5,575        11,433        (5,858 )   NM
Occupancy percentage — Operational beds   34.3 %     52.3 %       NM
Skilled mix by nursing days   46.7 %     10.7 %       NM
Skilled mix by nursing revenue   71.6 %     23.2 %       NM
               
*Campus represents a facility that offers both skilled nursing, 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, 2014. 
(2) Transitioning Facility results represents all facilities purchased from January 1, 2014 to December 31, 2015. 
(3) Recently Acquired Facility (Acquisitions) results represent all facilities purchased on or subsequent to January 1, 2016. 
(4) Facility Closed results represents closed operations during the six months ended 2017 and 2016, for which the results were excluded from Same Facility results and Recently Acquired results for the six 
months ended June 30, 2017 and 2016, for comparison purposes.
 

 

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:
 
  Three Months Ended June 30,
  Same Facility   Transitioning   Acquisitions   Total
     2017      2016      2017      2016      2017      2016      2017      2016
Skilled Nursing Average Daily Revenue Rates:                              
Medicare $   596.97   $   577.63   $   549.52   $   526.88   $   500.71   $   489.55   $   567.65   $   555.11
Managed care    449.02      427.66      451.06      436.42      416.10      396.68      444.65      427.43
Other skilled    478.83      467.65      359.28      367.44      600.90      —      446.94      440.25
Total skilled revenue    518.72      505.49      473.86      460.83      468.32      456.59      500.59      489.49
Medicaid    211.39      212.92      215.68      194.08      161.53      150.39      203.49      202.11
Private and other payors    197.62      205.79      230.22      228.18      187.83      156.03      199.90      201.41
Total skilled nursing revenue $   302.13   $   301.00   $   310.14   $   295.97   $   246.53   $   237.14   $   293.84   $   292.40
 
  Six Months Ended June 30,
  Same Facility   Transitioning   Acquisitions   Total
     2017      2016      2017      2016      2017      2016      2017      2016
Skilled Nursing Average Daily Revenue Rates:                              
Medicare $   596.51   $   577.00   $   544.27   $   524.33   $   501.42   $   483.73   $   566.07   $   556.51
Managed care    443.23      426.48      445.57      437.62      419.45      389.81      440.45      427.65
Other skilled    477.49      466.79      363.37      368.61      497.72      —      446.23      439.46
Total skilled revenue    516.43      502.96      470.80      460.90      469.99      452.19      498.60      488.82
Medicaid    212.83      203.83      217.15      194.46      156.66      153.09      204.17      198.28
Private and other payors    200.55      203.04      226.52      229.05      192.42      163.09      202.29      203.59
Total skilled nursing revenue $   303.92   $   295.51   $   312.31   $   296.74   $   247.96   $   244.96   $   296.08   $   291.81
 

 

                                 
The following tables set forth our percentage of skilled nursing patient revenue and days by payor source for the three and six months ended June 30, 2017 and 2016:
 
  Three Months Ended June 30,  
  Same Facility   Transitioning   Acquisitions   Total  
   2017     2016     2017     2016     2017     2016     2017     2016   
Percentage of Skilled Nursing Revenue:                                
Medicare 25.8 %   27.9 %   25.3 %   25.5 %   32.3 %   37.3 %   26.7 %   28.2 %  
Managed care 17.3 %   15.8 %   22.5 %   25.0 %   17.1 %   16.7 %   18.3 %   17.8 %  
Other skilled 8.5 %   7.4 %   7.3 %   7.1 %   0.3 %   %   7.1 %   6.7 %  
Skilled mix 51.6 %   51.1 %   55.1 %   57.6 %   49.7 %   54.0 %   52.1 %   52.7 %  
Private and other payors 8.1 %   8.1 %   6.9 %   7.2 %   13.7 %   10.9 %   8.7 %   8.1 %  
Quality mix 59.7 %   59.2 %   62.0 %   64.8 %   63.4 %   64.9 %   60.8 %   60.8 %  
Medicaid 40.3 %   40.8 %   38.0 %   35.2 %   36.6 %   35.1 %   39.2 %   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  
   2017     2016     2017     2016     2017     2016     2017     2016   
Percentage of Skilled Nursing Days:                                
Medicare 13.2 %   14.4 %   14.3 %   14.3 %   15.9 %   18.1 %   13.9 %   14.8 %  
Managed care 11.7 %   11.1 %   15.5 %   16.9 %   10.2 %   9.9 %   12.2 %   12.1 %  
Other skilled 5.3 %   4.7 %   6.3 %   5.8 %   0.1 %   %   4.6 %   4.4 %  
Skilled mix 30.2 %   30.2 %   36.1 %   37.0 %   26.2 %   28.0 %   30.7 %   31.3 %  
Private and other payors 12.0 %   12.5 %   9.3 %   9.4 %   18.0 %   16.7 %   12.5 %   12.3 %  
Quality mix 42.2 %   42.7 %   45.4 %   46.4 %   44.2 %   44.7 %   43.2 %   43.6 %  
Medicaid 57.8 %   57.3 %   54.6 %   53.6 %   55.8 %   55.3 %   56.8 %   56.4 %  
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  
   2017     2016     2017     2016     2017     2016     2017     2016   
Percentage of Skilled Nursing Revenue:                                
Medicare 26.3 %   28.0 %   25.6 %   26.0 %   33.7 %   39.5 %   27.3 %   28.2 %  
Managed care 17.3 %   16.8 %   23.2 %   24.5 %   17.6 %   16.2 %   18.6 %   18.4 %  
Other skilled 8.2 %   7.5 %   7.3 %   7.3 %   0.1 %   %   6.8 %   7.0 %  
Skilled mix 51.8 %   52.3 %   56.1 %   57.8 %   51.4 %   55.7 %   52.7 %   53.6 %  
Private and other payors 8.0 %   8.1 %   6.5 %   6.9 %   13.7 %   11.3 %   8.5 %   8.1 %  
Quality mix 59.8 %   60.4 %   62.6 %   64.7 %   65.1 %   67.0 %   61.2 %   61.7 %  
Medicaid 40.2 %   39.6 %   37.4 %   35.3 %   34.9 %   33.0 %   38.8 %   38.3 %  
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  
   2017     2016     2017     2016     2017     2016     2017     2016   
Percentage of Skilled Nursing Days:                                
Medicare 13.4 %   14.3 %   14.7 %   14.7 %   16.7 %   20.0 %   14.3 %   14.7 %  
Managed care 11.9 %   11.6 %   16.3 %   16.6 %   10.3 %   10.1 %   12.5 %   12.5 %  
Other skilled 5.3 %   4.7 %   6.2 %   5.9 %   0.1 %   %   4.6 %   4.7 %  
Skilled mix 30.6 %   30.6 %   37.2 %   37.2 %   27.1 %   30.1 %   31.4 %   31.9 %  
Private and other payors 11.9 %   12.2 %   8.9 %   8.9 %   17.6 %   17.1 %   12.2 %   11.8 %  
Quality mix 42.5 %   42.8 %   46.1 %   46.1 %   44.7 %   47.2 %   43.6 %   43.7 %  
Medicaid 57.5 %   57.2 %   53.9 %   53.9 %   55.3 %   52.8 %   56.4 %   56.3 %  
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 date or periods indicated:
 
  Three Months Ended June 30,        
    2017       2016     Change   % Change
                       
  (Dollars in thousands)        
Revenue $   33,009     $   30,708     $   2,301   7.5 %
Number of facilities at period end    46        40        6   15.0 %
Number of campuses at period end    21        18        3   16.7 %
Occupancy percentage (units)   77.4 %     76.0 %       1.4 %
Average monthly revenue per unit $   2,799     $   2,757     $   42   1.5 %
 
  Six Months Ended June 30,        
    2017       2016          
                       
  (Dollars in thousands)   Change   % Change
Revenue $   65,355     $   60,877     $   4,478   7.4 %
Number of facilities at period end    46        40        6   15.0 %
Number of campuses at period end    21        18        3   16.7 %
Occupancy percentage (units)   77.1 %     75.9 %       1.2 %
Average monthly revenue per unit $   2,818     $   2,752     $   66   2.4 %
 

 

THE ENSIGN GROUP, INC.
SELECT PERFORMANCE INDICATORS
(Unaudited)
               
The following tables summarize our selected performance indicators for our home health and hospice segment along with other statistics, for each of the date or periods indicated:
 
  Three Months Ended June 30,        
    2017     2016   Change   % Change
                   
  (Dollars in thousands)        
Home health and hospice revenue:              
Home health services $   17,871   $   14,416   $   3,455   24.0 %
Hospice services    16,750      14,077      2,673   19.0 %
Total home health and hospice revenue $   34,621   $   28,493   $   6,128   21.5 %
Home health services:              
Average Medicare Revenue per Completed Episode $   3,140   $   2,950   $   190   6.4 %
Hospice services:              
Average Daily Census    1,020      898      122   13.6 %
 
  Six Months Ended June 30,        
    2017     2016   Change   % Change
                   
  (Dollars in thousands)        
Home health and hospice revenue              
Home health services $   34,922   $   28,324   $   6,598   23.3 %
Hospice services    31,832      26,835      4,997   18.6 %
Total home health and hospice revenue $   66,754   $   55,159   $   11,595   21.0 %
Home health services:              
Average Medicare Revenue per Completed Episode $   3,058   $   2,937   $   121   4.1 %
Hospice services:              
Average Daily Census    1,011      871      140   16.1 %
 

 

THE ENSIGN GROUP, INC.
REVENUE BY PAYOR SOURCE
 
The following table sets forth our total revenue by payor source and as a percentage of total revenue for the periods indicated:
 
    Three Months Ended June 30,   Six Months Ended June 30,
       2017        2016        2017        2016  
    $   %   $   %   $   %   $   %
                                                 
    (Dollars in thousands)   (Dollars in thousands)
Revenue:                                
Medicaid(2)   $   152,637   34.0 %   $   139,226   33.9 %   $   300,908   33.8 %   $   262,867   33.1 %
Medicare      128,151   28.6 %      119,443   29.1 %      258,072   29.0 %      229,721   28.9 %
Medicaid-skilled      24,913   5.6 %      20,661   5.0 %      47,930   5.4 %      42,327   5.3 %
Total      305,701   68.2 %      279,330   68.0 %      606,910   68.2 %      534,915   67.3 %
Managed Care      74,925   16.7 %      65,178   15.9 %      150,486   16.9 %      129,721   16.4 %
Private and Other(1)      67,653   15.1 %      66,009   16.1 %      132,623   14.9 %      129,114   16.3 %
Total revenue   $   448,279   100.0 %   $   410,517   100.0 %   $   890,019   100.0 %   $   793,750   100.0 %
 
(1) Private and other payors also includes revenue from all payor generated in other ancillary services for both the three and six months ended June 30, 2017 and 2016 and urgent care centers for the three and 
six months ended June 30, 2016. 

 

THE ENSIGN GROUP, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands, except per share data)
(Unaudited)
               
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME              
               
  Three Months Ended June 30,   Six Months Ended June 30,
    2017       2016       2017       2016  
Net income attributable to The Ensign Group, Inc. $   12,217      $   11,326      $   15,058      $   20,498