MISSION VIEJO, Calif., Aug. 4, 2015 (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, assisted living and urgent care companies, today reported operating results for the second quarter of 2015.

Quarter Highlights Include:

• Consolidated adjusted EBITDAR was $50.3 million, an increase of 33.8% over the prior year quarter;
• Consolidated adjusted net income climbed 27.5% over the prior year quarter to $15.8 million, while adjusted earnings per share outpaced the prior year quarter at $0.60 per share, compared to $0.54 per share;
• Same-store skilled mix revenue grew by 159 basis points over the prior year quarter to 53.9% due to an increase in Medicare and managed care days of 288 and 796 basis points, respectively, over the prior year quarter;
• Cornerstone Healthcare, Inc., our home health and hospice subsidiary, grew its revenue by $7.2 million, an increase of 57.0% over the prior year quarter and adjusted EBITDA by 40.3% over the prior year quarter to $3.3 million; and
• Consolidated revenues for the quarter were up 24.4% over the prior year quarter to $311.1 million.

Operating Results

Ensign's President and Chief Executive Officer, Christopher Christensen, thanked all of the organization's leaders and their teams for achieving new heights on both clinical and financial performance during the quarter. "Each of our business segments gained strength as many of our newly acquired and transitioning operations outpaced even our fairly aggressive projections." He also added that "the strength of this quarter's results is only possible due to our disciplined focus on the basics even during the most acquisitive period in our history."

He also noted that as of August 4, 2015, the company had 60 operations in the recently acquired bucket, which is the highest number of operations in that bucket ever. "Now more than ever before, our recent growth puts us in a very strong position for significant organic growth potential as skilled mix and occupancy continue to climb and recently acquired and transitioning operations start to mature through 2015 and 2016," Christensen said.

Mr. Barry Port, Chief Operating Officer for Ensign Services, Inc., indicated that Ensign's balance sheet remains strong, leaving ample liquidity to facilitate additional growth. "Though we expect to take a short breather as we focus on our newest operations, our pipeline remains strong," he added. He also reaffirmed that Ensign is actively seeking several transactions to acquire real estate and to lease both well-performing and struggling skilled nursing, assisted living and other healthcare related businesses.

Mr. Christensen added that with operating results running ahead of schedule, improving reimbursement taking effect later this year in key states, and the record number of acquisitions this quarter, management is increasing previously-announced guidance. Revised projections for 2015 are $1.29 billion to $1.315 billion in revenues and $65.8 million to $68.0 million in net income. Management also increased its 2015 annual earnings per share guidance to $2.47 to $2.56 per diluted share for 2015, even after taking into account the effect of the spin-off and the issuance of an additional 2.7 million shares in an equity issuance completed in February of 2015.

Chief Financial Officer Suzanne Snapper reported that "we continue to have flexibility under our revolving line of credit, with approximately $100 million of availability and a built-in expansion option that adds liquidity." She further noted that the company continues to generate strong cash flow, with cash on hand of $51.2 million on August 3, 2015.

Ms. Snapper also reported that consolidated revenues in the quarter were up 24% over the prior year quarter to a record $311.1 million and consolidated adjusted EBITDAR for the quarter grew by 33.8% to $50.3 million, with adjusted EBITDAR margins for the quarter of 16.5%. Fully diluted adjusted earnings per share were $0.60 for the quarter and adjusted net income was $15.8 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, Ensign paid a quarterly cash dividend of $0.075 per share of its common stock. Ensign has been a dividend-paying company since 2002 and has increased its dividend every year for 13 years.

Also during the quarter and since, Ensign announced the acquisition of 14 skilled nursing operations, 23 assisted and independent living operations, one home health business, one hospice agency and one home care business, including:

• In Saint George, Utah, Coral Desert Rehabilitation and Care, a 60-bed all-private/Medicare transitional care facility;
• In Panorama City, California, the underlying real estate of Panorama Gardens Nursing and Rehabilitation Center, a 143-bed skilled nursing facility that had been operated by an Ensign subsidiary since September 2000 under a lease;
• In Boise and Twin Falls, Idaho, Heritage Assisted Living of Boise, a 100-unit assisted living operation; Heritage Assisted Living of Twin Falls, a 78-unit assisted living operation; and Woodstone Assisted Living, an 85-unit assisted living facility;
• In Ogden and Saint George, Utah, Wasatch Healthcare and Rehabilitation, a 63-bed skilled nursing facility and St. George Rehabilitation, a 130-bed skilled nursing facility;
• In Bainbridge Island, Washington, Bainbridge Island Health and Rehabilitation, a 69-bed skilled nursing facility;
• In Saint George, Utah, Gentle Touch home care, a private home care business;
• In San Jose, California, Managed Care at Home, a Medicare and Medi-Cal certified home health agency;
• In Whittier, California, the underlying ground lease for The Orchard Post-Acute Care Center, a 162-bed skilled nursing facility that had been operated by an Ensign subsidiary since September 2006 under a lease;
• In Arizona, seven skilled nursing operations with a total of 730 skilled nursing beds and three independent and assisted living operations with a total of 784 units, all under a new long-term master lease;
• In Olympia, Washington, Olympia Transitional Care and Rehabilitation, a 125-bed skilled nursing facility;
• In Westlake Village, California, Buena Vista Hospice, a Medicare and Medi-Cal certified hospice agency serving the Ventura County area;
• In Wisconsin, fifteen assisted and independent living operations with a total of 761 units under a long-term master lease with an option to purchase the real estate; and
• In Orange and Whittier, California, two assisted living operations with a total of 188 units under a long-term lease.

These acquisitions bring Ensign's growing portfolio to 178 healthcare operations, twenty-seven of which are owned, thirteen hospice agencies, fourteen home health agencies, three home care businesses and seventeen urgent care clinics across 12 states. 

"In the midst of unprecedented growth, our team of expert operators and clinicians across the organization has successfully transitioned dozens of new operations while simultaneously driving record improvements in our same-store operations," Mr. Christensen emphasized. "All of this while maintaining an industry-low debt to Adjusted EBITDAR ratio," he added.

2015 Guidance Information

Management's 2015 guidance is based on diluted weighted average common shares outstanding of 26.6 million, which includes the newly issued shares, and assumes, among other things, anticipated Medicare and Medicaid reimbursement rate increases net of provider taxes, tax rates of 38.5% and acquisitions closed. It also excludes acquisition-related costs and amortization costs related to intangible assets acquired, stock based compensation, implementation costs for system improvements, a one-time break-up fee earned in an unsuccessful bankruptcy auction and start-up losses at newly-created operations.

Conference Call

A live webcast will be held Wednesday, August 5, 2015 at 10:00 a.m. Pacific time (1:00 p.m. Eastern time) to discuss Ensign's second quarter 2015 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 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 28, 2015.

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 178 operations, thirteen hospice agencies, fourteen home health agencies, three home care businesses and seventeen 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 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.

Discussion of Non-GAAP Financial Measures

EBITDA consists of net income before (a) interest expense, net, (b) provisions for income taxes, and ^© depreciation and amortization. EBITDAR consists of net income before (a) interest expense, net, (b) provisions for income taxes, ^© 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, ^© depreciation and amortization, (d) costs incurred for operations currently being constructed, (e) expenses incurred in connection with the Spin-Off, (f) stock-based compensation expense, (g) costs incurred related to new systems implementation, (h) breakup fee, net of costs, received in connection with a public auction in which we were the priority bidder, (i) costs incurred to recognize income tax credits which contributed to a decrease in effective tax rate, (j) costs incurred to acquire operations which are not capitalized, (k) operating results at urgent care centers,  excluding depreciation, interest and income taxes and (l) results at three independent living operations which were transferred to Care Trust REIT as part of the Spin-Off transaction, excluding rent, depreciation, interest and income taxes. Adjusted EBITDAR consists of net income before (a) interest expense, net, (b) provisions for income taxes, ^© depreciation and amortization, (d) rent-cost of services, (e) costs incurred for facilities currently being constructed, (f) expenses incurred in connection with the Spin-Off, (g) stock-based compensation expense, (h) costs incurred related to new systems implementation, (i) breakup fee, net of costs, received in connection with a public auction in which we were the priority bidder , (j) costs incurred to recognize income tax credits which contributed to a decrease in effective tax rate, (k) costs incurred to acquire operations which are not capitalized, (l) operating results at urgent care centers,  excluding rent, depreciation, interest and income taxes and (m) results at three independent living operations which were transferred to Care Trust REIT as part of the Spin-Off transaction, excluding rent, depreciation, interest and income taxes. 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 periodic filings with the Securities and Exchange Commission, including its 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.

CONTACT: Investor/Media Relations

         The Ensign Group, Inc.

         (949) 487-9500

         ir@ensigngroup.net

Source: The Ensign Group, Inc.

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