MISSION VIEJO, Calif., Aug. 7, 2014 (GLOBE NEWSWIRE) -- The Ensign Group, Inc. (Nasdaq:ENSG), the parent company of the Ensign™ group of skilled nursing, rehabilitative care services, assisted and independent living, home health, hospice care and urgent care companies, today reported operating results for the second quarter of 2014.

Quarterly Financial Highlights Include:

• Same-store skilled revenue grew by 10.1% over the prior year quarter, resulting in a skilled revenue mix of 53.0%, and an increase of 156 basis points;
   
• Same-store occupancy was 81.9%, an increase of 217 basis points over the prior year quarter;
   
• Adjusted consolidated EBITDAR was $37.6 million, an increase of 296 basis points over the prior year quarter;
   
• Consolidated revenues were up 13.6% over the prior year quarter to a record $250.0 million in the quarter; and
   
• Same-store skilled days were up 8.4% over the prior year quarter.

Operating Results

"We are pleased to report that the second quarter saw performance improving in nearly every aspect of the organization, as skilled nursing, assisted living, home health, hospice, urgent care and relatively young ancillary businesses all gained strength," said Ensign's President and Chief Executive Officer Christopher Christensen. "Although these improvements have been somewhat diluted with the noise in this quarter's numbers surrounding our recently-completed spin-off of CareTrust REIT, Inc., we are very encouraged by the progress we've made so far this year and we are confident in our ability to continue with our upward trend," he added.

Mr. Christensen reported that operating results are running on schedule and that Management is "pleased to be reaffirming 2014 annual revenue guidance, with projected revenues of $1.01 billion to $1.025 billion in revenues," and that he expects the Company "to achieve its updated annual earnings guidance of $50.1 million to $51.2 million and $2.16 to $2.21 per diluted share for the year."

"With many of the challenges we faced in 2013 and the spin-off transaction behind us, we were able to build on many of the improvements we began to see last quarter into this quarter," he added. He also noted that the Company continues to have substantial organic upside within the company's existing portfolio, as evidenced by the growth in same-store occupancy, skilled revenue and skilled days experienced during the quarter, adding that "the Company also saw growth in occupancy for the sixth consecutive quarter in our Transitioning facilities to 71% for the quarter, representing an increase of 164 basis points over that period." 

Suzanne Snapper, Ensign's Chief Financial Officer, observed that same-store occupancy improved in the second quarter to 81.9%, an increase of 217 basis points over the prior year second quarter.  Ms. Snapper also noted that same-store managed care days were up 857 basis points and stated "our transitioning managed care days were up 82.6% as compared to the prior year quarter, our same-store managed care revenue was up over 17.8% and our transitioning managed care revenue was up over 101.7% over the prior year quarter."   

She further noted that the company continues to generate strong cash flow, with cash on hand of $22.4 million on June 30, 2014, and net cash from operations of $37.1 million for the quarter. Consolidated revenues were up 13.6% to a record $250.0 million in the quarter. Adjusted EBITDAR grew by 296 basis points to $37.6 million in the quarter. 

Adjusted non-GAAP earnings for the quarter were $0.54 per diluted share. Diluted GAAP earnings per share from continuing operations were $0.09 for the quarter, compared to $0.55 per share in the prior year quarter. However, Ms. Snapper noted that due to the impact of the spin off and the related transaction expenses, the GAAP earnings on a quarter over quarter basis are not comparable.

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.

2014 and 2015 Guidance

Management reaffirms guidance for projected revenue at $1.01 billion to $1.025 billion and updated 2014 annual earnings guidance, projecting net income of $50.1 million to $51.2 million and $2.16 to $2.21 per diluted share for the year. The updated guidance is based on the impact of the separation of Ensign's healthcare business and certain real estate assets that was completed on June 1, 2014, which resulted in an increase in rent and diluted weighted average common shares to 23.2 million, and a reduction in depreciation and interest expenses. The guidance also assumes, among other things, acquisitions closed to date, anticipated Medicare and Medicaid reimbursement rate increases net of provider taxes, and tax rates of 38.5%. It excludes acquisition-related costs and amortization costs related to intangible assets, acquired start-up losses at newly-created operations and transaction-related costs connected with the spin-off.

"Going forward, we will provide projections for net income, as well as earnings per share, to provide more visibility into increases in our earnings that are diluted by the increase in our share count, which is the result of our deeply held philosophy of sharing ownership broadly with our outstanding operations and service center leaders," Mr. Christensen said. 

Management also issued 2015 annual guidance, projecting revenues of $1.14 billion to $1.16 billion in revenues, with net income of $58.1 million to $60.2 million and $2.44 to $2.53 per diluted share for the year. "Given the unusual spin-off transaction, we are giving guidance for 2015 now in order to give our investors better visibility into our future earnings," Mr. Christensen added. The 2015 guidance is based on diluted weighted average common shares outstanding of 23.8 million and assumes, among other things, acquisitions anticipated to be closed by the end of 2014, anticipated Medicare and Medicaid reimbursement rate increases net of provider taxes, and tax rates of 38.5%. It also excludes acquisition-related costs and amortization costs related to intangible assets acquired and start-up losses at newly-created operations.

Quarter Highlights

During the quarter, the company's Board of Directors declared a quarterly cash dividend of $0.07 per share of Ensign common stock. Ensign has been a dividend-paying company since 2002 and has increased its dividend every year.

The Company completed its spin-off of CareTrust REIT, Inc. In the spin-off, Ensign stockholders received one share of CareTrust common stock for each share of Ensign common stock held at the close of business on May 22, 2014. The spin-off was effective from and after June 1, 2014, with CareTrust shares distributed on June 2, 2014. Shares of CareTrust common stock trade on the NASDAQ Global Select Market (Nasdaq:CTRE).

Also during the quarter and since, the company acquired seven skilled nursing facilities, one hospice agency, one home health agency and opened one urgent care clinic. The following operations were added during the quarter:

• In Arizona, Casas Adobes Post-Acute Rehabilitation Center, a 230-bed skilled nursing facility located in Tucson;
   
• In California, California Mission Inn, a 143-unit assisted living facility in Rosemead, California, and the underlying real estate of Mission Care Center, a 59-bed skilled nursing facility that has been operated by an Ensign subsidiary as a leased facility since 2005;
   
• In Utah, Ensign acquired Mount Ogden Health & Rehabilitation Center, a 108-bed skilled nursing facility located in Ogden, which has been operated by an Ensign subsidiary since 2006;
   
• In Colorado, Englewood Post-Acute and Rehabilitation, an 82-bed skilled nursing facility;
   
• In Washington, Rainier Rehabilitation, a 117-bed skilled nursing facility in Puyallup and Beacon Hill Rehabilitation, a 67-bed skilled nursing facility in Longview;
   
• In Wisconsin, two skilled nursing facilities located in Clintonville, Wisconsin: Pine Manor Healthcare Center, a 95-bed skilled nursing facility and Greentree Health & Rehabilitation Center, a 60-bed skilled nursing facility;
   
• In Idaho, Life's Doors Hospice, Life's Doors Home Health, and Life's Doors Home Care Solutions located in Boise;
   
• In Colorado, Namaste Hospice located in Denver, adding to Ensign's home health subsidiary already operating a home health agency in that market;
   
• In California, Angeles Home Health Care, a home health agency in Los Angeles, adding to Ensign's home health subsidiary already operating a hospice agency in that market; and
   
• In the Seattle area Ensign's urgent care subsidiary, Immediate Clinic Healthcare, Inc., also opened one new urgent care clinic.

These acquisitions brought Ensign's growing portfolio to 126 healthcare facilities, nine hospice companies, eleven home health agencies and twelve urgent care clinics across 12 states. Management reaffirmed that Ensign is actively seeking additional opportunities to acquire real estate or to lease both well-performing and struggling skilled nursing, assisted living and other healthcare related businesses across the United States.

Conference Call

A live webcast will be held on Friday, August 8, 2014 at 10:00 a.m. Pacific Time (1:00 p.m. Eastern) 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 section of the Ensign website at http://investor.ensigngroup.net. The webcast will be recorded, and will be available for replay via the website until 5:00 p.m. Pacific Time on Friday, August 29, 2014.

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, urgent care services and other rehabilitative and healthcare services at 126 facilities, nine hospice companies, eleven home health businesses and twelve urgent care clinics in California, Arizona, Texas, Washington, Utah, Idaho, Colorado, Nevada, Iowa, Nebraska, Oregon and Wisconsin. 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 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 the entry into final settlement documents. They are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to materially and adversely differ from those expressed in any forward-looking statement.

These risks and uncertainties relate to the company's business, its industry and its common stock and include: reduced prices and reimbursement rates for its services; its ability to acquire, develop, manage or improve facilities, its ability to manage its increasing borrowing costs as it incurs additional indebtedness to fund the acquisition and development of facilities; its ability to access capital on a cost-effective basis to continue to successfully implement its growth strategy; its operating margins and profitability could suffer if it is unable to grow and manage effectively its increasing number of facilities; competition from other companies in the acquisition, development and operation of facilities; and the application of existing or proposed government regulations, or the adoption of new laws and regulations, that could limit its business operations, require it to incur significant expenditures or limit its ability to relocate its facilities if necessary. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the company's periodic filings with the Securities and Exchange Commission, including its Form 10-Q, which was filed today, for a more complete discussion of the risks and other factors that could affect Ensign's business, prospects and any forward-looking statements. Except as required by the federal securities laws, Ensign does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changing circumstances or any other reason after the date of this press release.

Discussion of Non-GAAP Financial Measures

EBITDA consists of net income (loss) from continuing operations, adjusted for net losses attributable to noncontrolling interests, before (a) interest expense, net, (b) provisions for income taxes, and (c) depreciation and amortization. EBITDAR consists of EBITDA adjusted to exclude facility rent-cost of services.  Adjusted EBITDA and EBITDAR are EBITDA and EBITDAR adjusted for non-core business items. The Company believes that the presentation of EBITDA, EBITDAR, 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 per share, EBITDA, EBITDAR, 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 Report on Form 10-Q filed today with the SEC. The Form 10-Q is available on the SEC's website at www.sec.gov or under the "Financial Information" link of the Investor Relations section on Ensign's website at http://www.ensigngroup.net.

CONTACT: Investor/Media Relations, The Ensign Group, Inc.,

         (949) 487-9500, ir@ensigngroup.net.

News Provided by Acquire Media