News Release Details
The Ensign Group Reports Third Quarter 2016 Results
Quarter Highlights Include:
- Consolidated GAAP EBITDAR for the quarter was
$64.3 million , an increase of 19.7% over the prior year quarter, and consolidated adjusted EBITDAR was$68.1 million , an increase of 19.4% over the prior year quarter(1); - Same Store revenue for all segments grew by 4.0% over the prior year quarter to
$251.0 million , and same storeTSA revenue grew by 3.3% over the prior year quarter to$233.6 million ; - Transitioning operational occupancy increased by 278 basis points over the prior year quarter to 74.7% and transitioning managed care days increased by 7.2% over the prior year quarter;
- Transitioning revenue for all segments grew
by 4.6% over the prior year quarter to
$62.4 million , and transitioningTSA revenue grew by 5.6% over the prior year quarter; Cornerstone Healthcare, Inc. , our home health and hospice subsidiary, grew its segment income by 10.6% over the prior year quarter and revenue by$4.3 million to$29.5 million for the quarter, an increase of 16.9% over the prior year quarter; and- Consolidated GAAP revenues for the quarter were up
$77.0 million or 21.9% over the prior year quarter to$428.1 million and consolidated adjusted revenues for the quarter were up$66.5 million or 19.3% over the prior year quarter to$411.2 million (1).
(1) See "Reconciliation of GAAP to Non-GAAP Financial Information".
Operating Results
Ensign's President and Chief Executive Officer
"As we have discussed over and over again, our results are not symmetrical on a quarter by quarter basis, and we continue to focus on the fundamentals of our ever-changing business and driving clinical and financial performance over the long-term," Christensen said. "Although we expect some of the lumpiness we have experienced recently to continue as referral and managed care networks continue to narrow on varying timelines, we are pleased that we have increased revenue and earnings under challenging circumstances," he added.
Commenting on some of the factors that impacted the quarter,
Chief Financial Officer
GAAP diluted earnings per share were
More complete information is contained in the Company's 10-Q, which was filed with the
Quarter Highlights
During the quarter, the Company paid a quarterly cash dividend of
Also during the quarter and since, the company announced the acquisition of the operations and real estate of Riverbend Post Acute Rehabilitation, a 152-bed skilled nursing facility located in
In addition, during the quarter Ensign affiliated operating companies opened two
The Healthcare Resort ofWaco , with a 70-bed licensed transitional care operation and 30 private assisted living suites; andThe Healthcare Resort of Topeka, with a 70-bed licensed transitional care operation and 35 private assisted living suites.
Ensign announced during the quarter that its urgent care subsidiary, Immediate Clinic Seattle, Inc., agreed to sell substantially all of its assets relating to its 14 urgent care operations in the greater Seattle market. The asset sale includes 14 clinics in the greater Seattle, Washington area, as well as two additional locations that are currently under development. The sale of Immediate Clinic, together with the sale of Integrity Urgent Care in Colorado in the third quarter, represents all of the Ensign-affiliated urgent care operations. The parties expect to consummate the sale on December 11, 2016, and the transaction remains subject to certain closing conditions.
This brings Ensign's growing portfolio to 209 healthcare operations, thirty-five of which are owned, eighteen hospice agencies, seventeen home health agencies and three home care businesses across fourteen states.
2016 Guidance Reaffirmed
Management
reaffirmed its 2016 annual revenue guidance of
2017 Guidance Affirmed
Management also affirmed its guidance for 2017, with annual revenue guidance of
Conference Call
A live webcast will be held
About Ensign™
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
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue | $ | 428,065 | $ | 351,086 | $ | 1,221,816 | $ | 968,671 | |||||||
Expense: | |||||||||||||||
Cost of services | 348,971 | 280,545 | 985,817 | 770,293 | |||||||||||
(Gain)/loss related to divestitures | (2,505 | ) | — | 5,430 | — | ||||||||||
Rent—cost of services | 33,342 | 24,500 | 91,074 | 62,531 | |||||||||||
General and administrative expense | 17,306 | 17,165 | 54,351 | 46,917 | |||||||||||
Depreciation and amortization | 10,911 | 7,288 | 28,981 | 20,185 | |||||||||||
Total expenses | 408,025 | 329,498 | 1,165,653 | 899,926 | |||||||||||
Income from operations | 20,040 | 21,588 | 56,163 | 68,745 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense | (2,135 | ) | (802 | ) | (4,951 | ) | (2,035 | ) | |||||||
Interest income | 236 | 242 | 749 | 603 | |||||||||||
Other expense, net | (1,899 | ) | (560 | ) | (4,202 | ) | (1,432 | ) | |||||||
Income before provision for income taxes | 18,141 | 21,028 | 51,961 | 67,313 | |||||||||||
Provision for income taxes | 6,957 | 7,869 | 20,124 | 25,833 | |||||||||||
Net income | 11,184 | 13,159 | 31,837 | 41,480 | |||||||||||
Less: net income (loss) attributable to noncontrolling interests | 29 | (313 | ) | 184 | (351 | ) | |||||||||
Net income attributable to | $ | 11,155 | $ | 13,472 | $ | 31,653 | $ | 41,831 | |||||||
Net income per share attributable to | |||||||||||||||
Basic: | $ | 0.22 | $ | 0.26 | $ | 0.63 | $ | 0.84 | |||||||
Diluted | $ | 0.21 | $ | 0.25 | $ | 0.61 | $ | 0.81 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 50,541 | 51,144 | 50,498 | 49,981 | |||||||||||
Diluted | 52,045 | 53,070 | 52,102 | 51,880 | |||||||||||
Dividends per share | $ | 0.0400 | $ | 0.0375 | $ | 0.1200 | $ | 0.1125 | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 40,414 | $ | 41,569 | |||
Accounts receivable — less allowance for doubtful accounts of | 232,465 | 209,026 | |||||
Investments — current | 7,511 | 2,004 | |||||
Prepaid income taxes | 1,325 | 8,141 | |||||
Prepaid expenses and other current assets | 18,569 | 18,827 | |||||
Assets held for sale — current | 8,466 | — | |||||
Total current assets | 308,750 | 279,567 | |||||
Property and equipment, net | 350,255 | 299,633 | |||||
Insurance subsidiary deposits and investments | 27,655 | 32,713 | |||||
Escrow deposits | 1,298 | 400 | |||||
Deferred tax asset | 21,427 | 20,852 | |||||
Restricted and other assets | 14,869 | 9,631 | |||||
Intangible assets, net | 42,975 | 45,431 | |||||
67,100 | 40,886 | ||||||
Other indefinite-lived intangibles | 19,086 | 18,646 | |||||
Total assets | $ | 853,415 | $ | 747,759 | |||
Liabilities and equity | |||||||
Current liabilities: | |||||||
Accounts payable | 38,005 | 36,029 | |||||
Accrued wages and related liabilities | 71,597 | 78,890 | |||||
Accrued self-insurance liabilities — current | 22,076 | 18,122 | |||||
Liabilities held for sale — current | 1,709 | — | |||||
Other accrued liabilities | 57,531 | 46,205 | |||||
Current maturities of long-term debt | 8,141 | 620 | |||||
Total current liabilities | 199,059 | 179,866 | |||||
Long-term debt — less current maturities | 162,474 | 99,051 | |||||
Accrued self-insurance liabilities — less current portion | 45,717 | 37,881 | |||||
Deferred rent and other long-term liabilities | 8,545 | 3,976 | |||||
Total equity | 437,620 | 426,985 | |||||
Total liabilities and equity | $ | 853,415 | $ | 747,759 | |||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) | |||||||
The following table presents selected data from our condensed consolidated statements of cash flows for the periods presented: | |||||||
Nine Months Ended | |||||||
2016 | 2015 | ||||||
Net cash provided by operating activities | $ | 71,184 | $ | 13,300 | |||
Net cash used in investing activities | (112,424 | ) | (120,576 | ) | |||
Net cash provided by financing activities | 40,085 | 96,937 | |||||
Net decrease in cash and cash equivalents | (1,155 | ) | (10,339 | ) | |||
Cash and cash equivalents at beginning of period | 41,569 | 50,408 | |||||
Cash and cash equivalents at end of period | $ | 40,414 | $ | 40,069 | |||
REVENUE BY SEGMENTS | |||||||||||||||||||||||||||||
The following table sets forth our total revenue by segments and as a percentage of total revenue for the periods indicated: | |||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||||
Revenue Dollars | Revenue Percentage | Revenue Dollars | Revenue Percentage | Revenue Dollars | Revenue Percentage | Revenue Dollars | Revenue Percentage | ||||||||||||||||||||||
(Dollars in thousands) | (Dollars in thousands) | ||||||||||||||||||||||||||||
TSA Services: | |||||||||||||||||||||||||||||
Skilled nursing facilities | $ | 357,315 | 83.5 | % | $ | 289,475 | 82.5 | % | $ | 1,012,946 | 82.9 | % | $ | 819,655 | 84.6 | % | |||||||||||||
Assisted and independent living facilities | 31,248 | 7.3 | 27,686 | 7.9 | 92,124 | 7.5 | 57,916 | 6.0 | |||||||||||||||||||||
Total | 388,563 | 90.8 | 317,161 | 90.4 | 1,105,070 | 90.4 | 877,571 | 90.6 | |||||||||||||||||||||
Home health and hospice services: | |||||||||||||||||||||||||||||
Home health | 15,529 | 3.6 | 12,794 | 3.6 | 43,852 | 3.6 | 34,452 | 3.6 | |||||||||||||||||||||
Hospice | 13,991 | 3.3 | 12,456 | 3.5 | 40,827 | 3.4 | 29,057 | 3.0 | |||||||||||||||||||||
Total home health and hospice services | 29,520 | 6.9 | 25,250 | 7.1 | 84,679 | 7.0 | 63,509 | 6.6 | |||||||||||||||||||||
All other (1) | 9,982 | 2.3 | 8,675 | 2.5 | 32,067 | 2.6 | 27,591 | 2.8 | |||||||||||||||||||||
Total revenue | $ | 428,065 | 100.0 | % | $ | 351,086 | 100.0 | % | $ | 1,221,816 | 100.0 | % | $ | 968,671 | 100.0 | % | |||||||||||||
(1) Includes revenue from services provided at our urgent care clinics and other ancillary operations. | |||||||||||||||||||||||||||||
SELECT PERFORMANCE INDICATORS | ||||||||||||||||
The following tables summarize our selected performance indicators for our | ||||||||||||||||
Three Months Ended | ||||||||||||||||
2016 | 2015 | |||||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||||
Total Facility Results: | ||||||||||||||||
Skilled nursing revenue | $ | 357,315 | $ | 289,475 | $ | 67,840 | 23.4 | % | ||||||||
Assisted and independent living revenue | 31,248 | 27,686 | 3,562 | 12.9 | % | |||||||||||
Total | $ | 388,563 | $ | 317,161 | $ | 71,402 | 22.5 | % | ||||||||
Number of facilities at period end | 209 | 178 | 31 | 17.4 | % | |||||||||||
Actual patient days | 1,551,461 | 1,317,323 | 234,138 | 17.8 | % | |||||||||||
Occupancy percentage — Operational beds | 75.5 | % | 77.9 | % | (2.4 | ) | % | |||||||||
Skilled mix by nursing days | 30.0 | % | 30.2 | % | (0.2 | ) | % | |||||||||
Skilled mix by nursing revenue | 51.3 | % | 52.5 | % | (1.2 | ) | % | |||||||||
Three Months Ended | ||||||||||||||||
2016 | 2015 | |||||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||||
Same Facility Results(1): | ||||||||||||||||
Skilled nursing revenue | $ | 224,205 | $ | 217,044 | $ | 7,161 | 3.3 | % | ||||||||
Assisted and independent living revenue | 9,424 | 9,145 | 279 | 3.1 | % | |||||||||||
Total | $ | 233,629 | $ | 226,189 | $ | 7,440 | 3.3 | % | ||||||||
Number of facilities at period end | 106 | 106 | — | — | % | |||||||||||
Actual patient days | 848,094 | 867,403 | (19,309 | ) | (2.2 | ) | % | |||||||||
Occupancy percentage — Operational beds | 78.4 | % | 80.4 | % | (2.0 | ) | % | |||||||||
Skilled mix by nursing days | 29.5 | % | 29.9 | % | (0.4 | ) | % | |||||||||
Skilled mix by nursing revenue | 50.2 | % | 52.4 | % | (2.2 | ) | % | |||||||||
Three Months Ended | ||||||||||||||||
2016 | 2015 | |||||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||||
Transitioning Facility Results(2): | ||||||||||||||||
Skilled nursing revenue | $ | 43,131 | $ | 41,163 | $ | 1,968 | 4.8 | % | ||||||||
Assisted and independent living revenue | 4,950 | 4,381 | 569 | 13.0 | % | |||||||||||
Total | $ | 48,081 | $ | 45,544 | $ | 2,537 | 5.6 | % | ||||||||
Number of facilities at period end | 29 | 29 | — | — | % | |||||||||||
Actual patient days | 191,827 | 184,693 | 7,134 | 3.9 | % | |||||||||||
Occupancy percentage — Operational beds | 74.7 | % | 71.9 | % | 2.8 | % | ||||||||||
Skilled mix by nursing days | 31.8 | % | 32.3 | % | (0.5 | ) | % | |||||||||
Skilled mix by nursing revenue | 53.3 | % | 54.9 | % | (1.6 | ) | % | |||||||||
Three Months Ended
| ||||||||||||||||
2016 | 2015 | |||||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||||
Recently Acquired Facility Results(3): | ||||||||||||||||
Skilled nursing revenue | $ | 89,979 | $ | 29,432 | $ | 60,547 | NM | |||||||||
Assisted and independent living revenue | 16,874 | 14,160 | 2,714 | NM | ||||||||||||
Total | $ | 106,853 | $ | 43,592 | $ | 63,261 | NM | |||||||||
Number of facilities at period end | 74 | 42 | 32 | NM | ||||||||||||
Actual patient days | 511,540 | 256,306 | 255,234 | NM | ||||||||||||
Occupancy percentage — Operational beds | 71.3 | % | 74.9 | % | NM | |||||||||||
Skilled mix by nursing days | 30.2 | % | 30.8 | % | NM | |||||||||||
Skilled mix by nursing revenue | 53.0 | % | 51.0 | % | NM | |||||||||||
Three Months Ended | ||||||||||||||||
2016 | 2015 | |||||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||||
Facility Closed(4): | ||||||||||||||||
Skilled nursing revenue | $ | - | $ | 1,836 | $ | (1,836 | ) | NM | ||||||||
Assisted and independent living revenue | - | - | - | NM | ||||||||||||
Total | $ | - | $ | 1,836 | $ | (1,836 | ) | NM | ||||||||
Actual patient days | - | 8,921 | (8,921 | ) | NM | |||||||||||
Occupancy percentage — Operational beds | 0 | % | 70.8 | % | NM | |||||||||||
Skilled mix by nursing days | 0 | % | 13.2 | % | NM | |||||||||||
Skilled mix by nursing revenue | 0 | % | 27.0 | % | NM | |||||||||||
_______________________ | ||||||||||||||||
(1) Same Facility results represent all facilities purchased prior to | ||||||||||||||||
(2) Transitioning Facility results represents all facilities purchased from | ||||||||||||||||
(3) Recently Acquired Facility (Acquisitions) results represent all facilities purchased on or subsequent to | ||||||||||||||||
(4) Facility Closed represent the result of one facility closed during the first quarter of 2016. These results were excluded from Same Facility results for the three months ended | ||||||||||||||||
Nine Months Ended | ||||||||||||||||
2016 | 2015 | |||||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||||
Total Facility Results: | ||||||||||||||||
Skilled nursing revenue | $ | 1,012,946 | $ | 819,655 | $ | 193,291 | 23.6 | % | ||||||||
Assisted and independent living revenue | 92,124 | 57,916 | 34,208 | 59.1 | % | |||||||||||
Total | $ | 1,105,070 | $ | 877,571 | $ | 227,499 | 25.9 | % | ||||||||
Number of facilities at period end | 209 | 178 | 31 | 17.4 | % | |||||||||||
Actual patient days | 4,393,965 | 3,515,719 | 878,246 | 25.0 | % | |||||||||||
Occupancy percentage — Operational beds | 76.2 | % | 78.2 | % | (2.0 | ) | % | |||||||||
Skilled mix by nursing days | 31.2 | % | 30.2 | % | 1.0 | % | ||||||||||
Skilled mix by nursing revenue | 52.8 | % | 52.9 | % | (0.1 | ) | % | |||||||||
Nine Months Ended
| ||||||||||||||||
2016 | 2015 | |||||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||||
Same Facility Results(1): | ||||||||||||||||
Skilled nursing revenue | $ | 673,751 | $ | 644,594 | $ | 29,157 | 4.5 | % | ||||||||
Assisted and independent living revenue | 27,890 | 27,425 | 465 | 1.7 | % | |||||||||||
Total | $ | 701,641 | $ | 672,019 | $ | 29,622 | 4.4 | % | ||||||||
Number of facilities at period end | 106 | 106 | — | — | % | |||||||||||
Actual patient days | 2,546,746 | 2,562,390 | (15,644 | ) | (0.6 | ) | % | |||||||||
Occupancy percentage — Operational beds | 79.1 | % | 80.3 | % | (1.2 | ) | % | |||||||||
Skilled mix by nursing days | 30.4 | % | 30.2 | % | 0.2 | % | ||||||||||
Skilled mix by nursing revenue | 51.6 | % | 53.1 | % | (1.5 | ) | % | |||||||||
Nine Months Ended | ||||||||||||||||
2016 | 2015 | |||||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||||
Transitioning Facility Results(2): | ||||||||||||||||
Skilled nursing revenue | $ | 129,353 | $ | 121,802 | $ | 7,551 | 6.2 | % | ||||||||
Assisted and independent living revenue | 14,290 | 13,137 | 1,153 | 8.8 | % | |||||||||||
Total | $ | 143,643 | $ | 134,939 | $ | 8,704 | 6.5 | % | ||||||||
Number of facilities at period end | 29 | 29 | — | — | % | |||||||||||
Actual patient days | 566,172 | 549,248 | 16,924 | 3.1 | % | |||||||||||
Occupancy percentage — Operational beds | 74.0 | % | 71.9 | % | 2.1 | % | ||||||||||
Skilled mix by nursing days | 33.6 | % | 31.7 | % | 1.9 | % | ||||||||||
Skilled mix by nursing revenue | 55.4 | % | 54.4 | % | 1.0 | % | ||||||||||
Nine Months Ended | ||||||||||||||||
2016 | 2015 | |||||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||||
Recently Acquired Facility Results(3): | ||||||||||||||||
Skilled nursing revenue | $ | 209,222 | $ | 47,764 | $ | 161,458 | NM | |||||||||
Assisted and independent living revenue | 49,944 | 17,354 | 32,590 | NM | ||||||||||||
Total | $ | 259,166 | $ | 65,118 | $ | 194,048 | NM | |||||||||
Number of facilities at period end | 74 | 42 | 32 | NM | ||||||||||||
Actual patient days | 1,277,802 | 377,219 | 900,583 | NM | ||||||||||||
Occupancy percentage — Operational beds | 72.0 | % | 74.7 | % | NM | |||||||||||
Skilled mix by nursing days | 32.2 | % | 29.1 | % | NM | |||||||||||
Skilled mix by nursing revenue | 55.0 | % | 49.4 | % | NM | |||||||||||
Nine Months Ended | ||||||||||||||||
2016 | 2015 | |||||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||||
Facility Closed(4): | ||||||||||||||||
Skilled nursing revenue | $ | 620 | $ | 5,495 | $ | (4,875 | ) | NM | ||||||||
Assisted and independent living revenue | - | - | - | NM | ||||||||||||
Total | $ | 620 | $ | 5,495 | $ | (4,875 | ) | NM | ||||||||
Actual patient days | 3,245 | 26,862 | (23,617 | ) | NM | |||||||||||
Occupancy percentage — Operational beds | 70.7 | % | 71.8 | % | NM | |||||||||||
Skilled mix by nursing days | 9.6 | % | 13.1 | % | NM | |||||||||||
Skilled mix by nursing revenue | 14.0 | % | 30.1 | % | NM | |||||||||||
_______________________ | ||||||||||||||||
(1) Same Facility results represent all facilities purchased prior to | ||||||||||||||||
(2) Transitioning Facility results represents all facilities purchased from | ||||||||||||||||
(3) Recently Acquired Facility (Acquisitions) results represent all facilities purchased on or subsequent to | ||||||||||||||||
(4) Facility Closed represent the result of one facility closed during the first quarter of 2016. These results were excluded from Same Facility results for nine months ended | ||||||||||||||||
SKILLED NURSING AVERAGE DAILY REVENUE RATES AND PERCENT OF SKILLED NURSING REVENUE AND DAYS BY PAYOR | |||||||||||||||||||||||||||||||
The following table reflects the change in the skilled nursing average daily revenue rates by payor source, excluding services that are not covered by the daily rate: | |||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||
Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||
Skilled Nursing Average Daily Revenue Rates: | |||||||||||||||||||||||||||||||
$ | 583.82 | $ | 559.32 | $ | 565.61 | $ | 559.12 | $ | 485.97 | $ | 481.03 | $ | 549.31 | $ | 549.74 | ||||||||||||||||
Managed care | 425.23 | 421.83 | 464.33 | 458.62 | 404.24 | 408.76 | 425.91 | 426.75 | |||||||||||||||||||||||
Other skilled | 474.97 | 451.25 | 341.37 | 324.39 | 403.36 | 425.29 | 449.50 | 430.03 | |||||||||||||||||||||||
Total skilled revenue | 505.33 | 492.52 | 485.86 | 476.43 | 450.05 | 447.69 | 487.37 | 484.90 | |||||||||||||||||||||||
211.47 | 190.99 | 202.53 | 185.35 | 170.67 | 189.56 | 199.35 | 189.82 | ||||||||||||||||||||||||
Private and other payors | 203.92 | 190.06 | 177.55 | 193.00 | 179.69 | 200.88 | 193.87 | 191.20 | |||||||||||||||||||||||
Total skilled nursing revenue | $ | 297.30 | $ | 281.11 | $ | 290.06 | $ | 280.18 | $ | 256.27 | $ | 270.29 | $ | 285.00 | $ | 279.09 | |||||||||||||||
Nine Months Ended | |||||||||||||||||||||||||||||||
Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||
Skilled Nursing Average Daily Revenue Rates: | |||||||||||||||||||||||||||||||
$ | 581.30 | $ | 562.85 | $ | 559.92 | $ | 557.24 | $ | 489.68 | $ | 468.53 | $ | 554.01 | $ | 555.32 | ||||||||||||||||
Managed care | 423.77 | 418.24 | 464.02 | 460.52 | 407.70 | 409.74 | 427.06 | 426.19 | |||||||||||||||||||||||
Other skilled | 469.96 | 465.47 | 348.01 | 324.72 | 394.29 | 502.69 | 442.83 | 446.08 | |||||||||||||||||||||||
Total skilled revenue | 503.80 | 497.92 | 480.78 | 479.35 | 451.19 | 452.43 | 488.32 | 492.12 | |||||||||||||||||||||||
208.06 | 190.28 | 193.96 | 183.80 | 173.44 | 187.74 | 198.66 | 188.78 | ||||||||||||||||||||||||
Private and other payors | 203.69 | 189.98 | 208.51 | 199.05 | 185.15 | 195.12 | 199.84 | 191.48 | |||||||||||||||||||||||
Total skilled nursing revenue | $ | 297.73 | $ | 283.16 | $ | 291.89 | $ | 279.36 | $ | 264.53 | $ | 265.74 | $ | 289.37 | $ | 280.70 | |||||||||||||||
The following tables set forth our percentage of skilled nursing patient revenue and days by payor source for the three months ended | |||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||
Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Percentage of Skilled Nursing Revenue: | |||||||||||||||||||||||
26.1 | % | 28.6 | % | 23.2 | % | 24.4 | % | 32.1 | % | 28.2 | % | 27.2 | % | 27.9 | % | ||||||||
Managed care | 15.8 | 16.2 | 25.2 | 24.8 | 17.7 | 17.9 | 17.4 | 17.6 | |||||||||||||||
Other skilled | 8.3 | 7.6 | 4.9 | 5.7 | 3.2 | 4.9 | 6.7 | 7.0 | |||||||||||||||
Skilled mix | 50.2 | 52.4 | 53.3 | 54.9 | 53.0 | 51.0 | 51.3 | 52.5 | |||||||||||||||
Private and other payors | 8.9 | 7.9 | 6.5 | 8.3 | 10.2 | 8.3 | 8.9 | 8.0 | |||||||||||||||
Quality mix | 59.1 | 60.3 | 59.8 | 63.2 | 63.2 | 59.3 | 60.2 | 60.5 | |||||||||||||||
40.9 | 39.7 | 40.2 | 36.8 | 36.8 | 40.7 | 39.8 | 39.5 | ||||||||||||||||
Total skilled nursing | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
Three Months Ended | |||||||||||||||||||||||
Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Percentage
of Skilled | |||||||||||||||||||||||
13.3 | % | 14.4 | % | 11.9 | % | 12.2 | % | 16.9 | % | 15.9 | % | 14.1 | % | 14.2 | % | ||||||||
Managed care | 11.0 | 10.8 | 15.7 | 15.1 | 11.2 | 11.8 | 11.6 | 11.5 | |||||||||||||||
Other skilled | 5.2 | 4.7 | 4.2 | 5.0 | 2.1 | 3.1 | 4.3 | 4.5 | |||||||||||||||
Skilled mix | 29.5 | 29.9 | 31.8 | 32.3 | 30.2 | 30.8 | 30.0 | 30.2 | |||||||||||||||
Private and other payors | 13.0 | 11.7 | 10.6 | 12.1 | 14.5 | 11.2 | 13.1 | 11.8 | |||||||||||||||
Quality mix | 42.5 | 41.6 | 42.4 | 44.4 | 44.7 | 42.0 | 43.1 | 42.0 | |||||||||||||||
57.5 | 58.4 | 57.6 | 55.6 | 55.3 | 58.0 | 56.9 | 58.0 | ||||||||||||||||
Total skilled nursing | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
The following tables set forth our percentage of skilled nursing patient revenue and days by payor source for the nine months ended | |||||||||||||||||||||||
Nine Months Ended | |||||||||||||||||||||||
Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Percentage of Skilled Nursing Revenue: | |||||||||||||||||||||||
27.4 | % | 30.2 | % | 23.0 | % | 24.0 | % | 32.4 | % | 29.5 | % | 27.8 | % | 29.2 | % | ||||||||
Managed care | 16.2 | 15.7 | 26.4 | 25.6 | 18.7 | 14.7 | 18.0 | 17.0 | |||||||||||||||
Other skilled | 8.0 | 7.2 | 6.0 | 4.8 | 3.9 | 5.2 | 7.0 | 6.7 | |||||||||||||||
Skilled mix | 51.6 | 53.1 | 55.4 | 54.4 | 55.0 | 49.4 | 52.8 | 52.9 | |||||||||||||||
Private and other payors | 8.3 | 8.0 | 7.6 | 8.5 | 9.3 | 11.6 | 8.4 | 8.4 | |||||||||||||||
Quality mix | 59.9 | 61.1 | 63.0 | 62.9 | 64.3 | 61.0 | 61.2 | 61.3 | |||||||||||||||
40.1 | 38.9 | 37.0 | 37.1 | 35.7 | 39.0 | 38.8 | 38.7 | ||||||||||||||||
Total skilled nursing | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
Nine Months Ended | |||||||||||||||||||||||
Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Percentage of Skilled | |||||||||||||||||||||||
14.0 | % | 15.2 | % | 12.0 | % | 12.0 | % | 17.5 | % | 16.7 | % | 14.5 | % | 14.8 | % | ||||||||
Managed care | 11.4 | 10.6 | 16.6 | 15.5 | 12.1 | 9.6 | 12.2 | 11.2 | |||||||||||||||
Other skilled | 5.0 | 4.4 | 5.0 | 4.2 | 2.6 | 2.8 | 4.5 | 4.2 | |||||||||||||||
Skilled mix | 30.4 | 30.2 | 33.6 | 31.7 | 32.2 | 29.1 | 31.2 | 30.2 | |||||||||||||||
Private and other payors | 12.3 | 11.9 | 10.7 | 12.0 | 13.3 | 15.8 | 12.3 | 12.3 | |||||||||||||||
Quality mix | 42.7 | 42.1 | 44.3 | 43.7 | 45.5 | 44.9 | 43.5 | 42.5 | |||||||||||||||
57.3 | 57.9 | 55.7 | 56.3 | 54.5 | 55.1 | 56.5 | 57.5 | ||||||||||||||||
Total skilled nursing | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
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 dates or periods indicated: | ||||||||||||||||
Three Months Ended | ||||||||||||||||
2016 | 2015 | Change | % Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Results: | ||||||||||||||||
Home health and hospice revenue: | ||||||||||||||||
Home health services | $ | 15,529 | $ | 12,794 | $ | 2,735 | 21.4 | % | ||||||||
Hospice services | 13,991 | 12,456 | 1,535 | 12.3 | ||||||||||||
Total home health and hospice revenue | $ | 29,520 | $ | 25,250 | $ | 4,270 | 16.9 | % | ||||||||
Home health services: | ||||||||||||||||
Medicare Episodic Admissions | 2,040 | 1,856 | 184 | 9.9 | % | |||||||||||
Average Medicare Revenue per Completed Episode | $ | 2,978 | $ | 2,920 | $ | 58 | 2.0 | % | ||||||||
Hospice services: | ||||||||||||||||
Average Daily Census | 907 | 764 | 143 | 18.7 | % | |||||||||||
Nine Months Ended | ||||||||||||||||
2016 | 2015 | Change | % Change | |||||||||||||
(Dollars in thousands) | ||||||||||||||||
Results: | ||||||||||||||||
Home health and hospice revenue: | ||||||||||||||||
Home health services | $ | 43,852 | $ | 34,452 | $ | 9,400 | 27.3 | % | ||||||||
Hospice services | 40,827 | 29,057 | 11,770 | 40.5 | ||||||||||||
Total home health and hospice revenue | $ | 84,679 | $ | 63,509 | $ | 21,170 | 33.3 | % | ||||||||
Home health services: | ||||||||||||||||
Medicare Episodic Admissions | 6,234 | 5,343 | 891 | 16.7 | % | |||||||||||
Average Medicare Revenue per Completed Episode | $ | 2,955 | $ | 2,960 | $ | (5 | ) | (0.2 | ) | % | ||||||
Hospice services: | ||||||||||||||||
Average Daily Census | 881 | 622 | 259 | 41.6 | % |
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 | Nine Months Ended | ||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||||||
$ | % | $ | % | $ | % | $ | % | ||||||||||||||||||||
Revenue: | (Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||||
$ | 140,487 | 32.8 | % | $ | 114,106 | 32.5 | % | $ | 390,825 | 32.0 | % | $ | 316,608 | 32.7 | % | ||||||||||||
122,292 | 28.6 | 101,212 | 28.8 | 352,013 | 28.8 | 290,964 | 30.0 | ||||||||||||||||||||
Medicaid—skilled | 22,172 | 5.2 | 18,924 | 5.4 | 64,499 | 5.3 | 51,206 | 5.3 | |||||||||||||||||||
Total | 284,951 | 66.6 | 234,242 | 66.7 | 807,337 | 66.1 | 658,778 | 68.0 | |||||||||||||||||||
Managed care | 67,381 | 15.7 | 54,411 | 15.5 | 197,102 | 16.1 | 148,374 | 15.3 | |||||||||||||||||||
Private and other(1) | 75,733 | 17.7 | 62,433 | 17.8 | 217,377 | 17.8 | 161,519 | 16.7 | |||||||||||||||||||
Total revenue | $ | 428,065 | 100.0 | % | $ | 351,086 | 100.0 | % | $ | 1,221,816 | 100.0 | % | $ | 968,671 | 100.0 | % | |||||||||||
(1) Private and other payors also includes revenue from our urgent care centers and other ancillary operations. | |||||||||||||||||||||||||||
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 | Nine Months Ended | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income attributable to | $ | 11,155 | $ | 13,472 | $ | 31,653 | $ | 41,831 | |||||||
Non-GAAP adjustments | |||||||||||||||
Results at urgent care centers, including noncontrolling interests(a) | 123 | 422 | (25 | ) | 445 | ||||||||||
Costs incurred for facilities currently being constructed and other start-up operations(b) | 4,753 | 934 | 10,345 | 1,552 | |||||||||||
Results at a closed facility, including continued obligations and closing expenses(c) | 136 | — | 8,538 | — | |||||||||||
Stock-based compensation expense(d) | 2,242 | 1,722 | 6,907 | 4,948 | |||||||||||
Cost of services - Insurance reserve in connection with the settlement of claims(e) | 3,115 | — | 4,701 | — | |||||||||||
General and administrative - Acquisition related costs(f) | 45 | 203 | 938 | 793 | |||||||||||
Gain on sale of urgent care centers(g) | (2,505 | ) | — | (2,505 | ) | — | |||||||||
General and administrative - Costs incurred related to new systems implementation and professional service fees(h) | 126 | 920 | 1,073 | 2,119 | |||||||||||
General and administrative - Break up fee, net of costs, received in connection with a public auction(i) | — | — | — | (1,019 | ) | ||||||||||
Depreciation and amortization - Patient base(j) | 669 | 205 | 1,660 | 797 | |||||||||||
Interest expense - Write off of deferred financing fees and amortization of deferred financing fees related to spin-off debt(k) | 124 | 46 | 349 | 138 | |||||||||||
Provision for income taxes on Non-GAAP adjustments(l) | (3,437 | ) | (2,070 | ) | (12,195 | ) | (4,035 | ) | |||||||
Non-GAAP Net Income | $ | 16,546 | $ | 15,854 | $ | 51,439 | $ | 47,569 | |||||||
Diluted Earnings Per Share As Reported | |||||||||||||||
Net Income | $ | 0.21 | $ | 0.25 | $ | 0.61 | $ | 0.81 | |||||||
Average number of shares outstanding | 52,045 | 53,070 | 52,102 | 51,880 | |||||||||||
Adjusted Diluted Earnings Per Share | |||||||||||||||
Net Income | $ | 0.32 | $ | 0.30 | $ | 0.99 | $ | 0.92 | |||||||
Average number of shares outstanding | 52,045 | 53,070 | 52,102 | 51,880 | |||||||||||
(a) Represent operating results at urgent care centers, including noncontrolling interest. | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue | $ | (5,931 | ) | $ | (6,366 | ) | $ | (20,573 | ) | $ | (20,007 | ) | |||
Cost of services | 5,326 | 6,284 | 18,077 | 18,519 | |||||||||||
Rent | 499 | 537 | 1,615 | 1,546 | |||||||||||
Depreciation and amortization | 257 | 303 | 860 | 880 | |||||||||||
Non-controlling interest | (28 | ) | (336 | ) | (4 | ) | (493 | ) | |||||||
Total Non-GAAP adjustment | $ | 123 | $ | 422 | $ | (25 | ) | $ | 445 | ||||||
(b) Represent operating results for facilities currently being constructed and other start-up operations. | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue | $ | (10,908 | ) | $ | - | $ | (21,561 | ) | $ | - | |||||
Cost of services | 12,247 | 918 | 24,711 | 1,526 | |||||||||||
Rent | 3,185 | 3 | 6,673 | 10 | |||||||||||
Depreciation and amortization | 229 | 13 | 522 | 16 | |||||||||||
Total Non-GAAP adjustment | $ | 4,753 | $ | 934 | $ | 10,345 | $ | 1,552 | |||||||
(c) Represent results at closed facility during the three and nine months ended | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue | $ | - | $ | - | $ | (105 | ) | $ | - | ||||||
Cost of services | 131 | - | 8,567 | - | |||||||||||
Rent | 5 | - | 62 | - | |||||||||||
Depreciation and amortization | - | - | 14 | - | |||||||||||
Total Non-GAAP adjustment | $ | 136 | $ | - | $ | 8,538 | $ | - | |||||||
(d) Represent stock-based compensation expense incurred. | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Cost of services | $ | 1,216 | $ | 1,078 | $ | 3,745 | $ | 3,160 | |||||||
General and administrative | 1,026 | 644 | 3,162 | 1,788 | |||||||||||
Total Non-GAAP adjustment | $ | 2,242 | $ | 1,722 | $ | 6,907 | $ | 4,948 | |||||||
(e) Included in cost of services are insurance reserves in connection with the settlement of claims. | |||||||||||||||
(f) Included in general and administrative expense are costs incurred to acquire an operation which are not capitalizable. | |||||||||||||||
(g) Included in (gain)/loss related to divestitures is gain on sale of urgent care centers. | |||||||||||||||
(h) Included in general and administrative expense are costs incurred related to new systems implementation and income tax credits which contributed to a decrease in effective tax rate. | |||||||||||||||
(i) Included in general and administrative expense is a breakup fee, net of costs, received in connection with a public auction. | |||||||||||||||
(j) Included in depreciation and amortization are amortization expenses related to patient base intangible assets at newly acquired skilled nursing and assisted living facilities. | |||||||||||||||
(k) Included in interest expense are write-offs of deferred financing fees associated with the amendment of credit facility and amortization of deferred financing fees related to the former revolving credit facility as part of the spin-off transaction. | |||||||||||||||
(l) Represents an adjustment to provision for income tax to our historical year to date effective tax rate of 38.5% | |||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION (In thousands) (Unaudited) | |||||||||||||||
The table below reconciles net income to EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR for the periods presented: | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Consolidated Statements of Income Data: | |||||||||||||||
Net income | 11,184 | 13,159 | 31,837 | 41,480 | |||||||||||
Less: net income (loss) attributable to noncontrolling interests | 29 | (313 | ) | 184 | (351 | ) | |||||||||
Interest expense, net | 1,899 | 560 | 4,202 | 1,432 | |||||||||||
Provision for income taxes | 6,957 | 7,869 | 20,124 | 25,833 | |||||||||||
Depreciation and amortization | 10,911 | 7,288 | 28,981 | 20,185 | |||||||||||
EBITDA | 30,922 | 29,189 | 84,960 | 89,281 | |||||||||||
Facility rent—cost of services | 33,342 | 24,500 | 91,074 | 62,531 | |||||||||||
EBITDAR | 64,264 | 53,689 | 176,034 | 151,812 | |||||||||||
EBITDA | $ | 30,922 | $ | 29,189 | $ | 84,960 | $ | 89,281 | |||||||
Adjustments to EBITDA: | |||||||||||||||
Urgent care center earnings(a) | (634 | ) | (418 | ) | (2,501 | ) | (1,982 | ) | |||||||
Costs incurred for facilities currently being constructed and other start-up operations(b) | 1,338 | 918 | 3,150 | 1,526 | |||||||||||
Results at closed facility, including continued obligations and closing expenses (c) | 131 | - | 8,462 | - | |||||||||||
Stock-based compensation expense(d) | 2,242 | 1,722 | 6,907 | 4,948 | |||||||||||
Gain on sale of urgent care centers(e) | (2,505 | ) | - | (2,505 | ) | - | |||||||||
Insurance reserve in connection with the settlement of claims(f) | 3,115 | - | 4,701 | - | |||||||||||
Acquisition related costs(g) | 45 | 203 | 938 | 793 | |||||||||||
Costs incurred related to new systems implementation and professional service fees(h) | 126 | 920 | 1,073 | 2,119 | |||||||||||
Breakup fee, net of costs, received in connection with a public auction(i) | - | - | - | (1,019 | ) | ||||||||||
Rent related to items(a), (b), and (c) above | 3,689 | 540 | 8,350 | 1,556 | |||||||||||
Adjusted EBITDA | $ | 38,469 | $ | 33,074 | $ | 113,535 | $ | 97,222 | |||||||
Rent—cost of services | 33,342 | 24,500 | 91,074 | 62,531 | |||||||||||
Less: rent related to items(a), (b) and (c) above | (3,689 | ) | (540 | ) | (8,350 | ) | (1,556 | ) | |||||||
Adjusted EBITDAR | $ | 68,122 | $ | 57,034 | $ | 196,259 | $ | 158,197 | |||||||
(a) Operating results at urgent care centers. This amount excludes rent, depreciation and interest of | |||||||||||||||
(b) Costs incurred for facilities currently being constructed and other start-up operations. This amount excludes rent, depreciation and interest of | |||||||||||||||
(c) Results at closed facility during three and nine months ended | |||||||||||||||
(d) Stock-based compensation expense incurred during the three and nine months ended | |||||||||||||||
(e) Gain on the sale of urgent care centers. | |||||||||||||||
(f) Insurance reserves in connection with the settlement of claims. | |||||||||||||||
(g) Costs incurred to acquire an operation which are not capitalizable. | |||||||||||||||
(h) Costs incurred related to new systems implementation and income tax credits which contributed to a decrease in effective tax rate. | |||||||||||||||
(i) Breakup fee, net of costs, received in connection with a public auction in which we were the priority bidder. | |||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION (In thousands) (Unaudited) | ||||||||||||||||||||||||||||||||
The table below reconciles net income to EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR for each reportable segment for the periods presented: | ||||||||||||||||||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||||||||
TSA Services | TSA Services | |||||||||||||||||||||||||||||||
Statements of Income Data: | ||||||||||||||||||||||||||||||||
Income from operations, excluding general and administrative expense(a) | $ | 31,807 | $ | 36,226 | $ | 4,499 | $ | 4,067 | $ | 98,761 | $ | 108,592 | $ | 12,024 | $ | 9,738 | ||||||||||||||||
Depreciation and amortization | 8,680 | 5,542 | 215 | 258 | 22,757 | 15,368 | 711 | 703 | ||||||||||||||||||||||||
EBITDA | $ | 40,487 | $ | 41,768 | $ | 4,714 | $ | 4,325 | $ | 121,518 | $ | 123,960 | $ | 12,735 | $ | 10,441 | ||||||||||||||||
Rent—cost of services | 32,338 | 23,574 | 404 | 332 | 88,071 | 59,950 | 1,151 | 866 | ||||||||||||||||||||||||
EBITDAR | $ | 72,825 | $ | 65,342 | $ | 5,118 | $ | 4,657 | $ | 209,589 | $ | 183,910 | $ | 13,886 | $ | 11,307 | ||||||||||||||||
EBITDA | $ | 40,487 | $ | 41,768 | $ | 4,714 | $ | 4,325 | $ | 121,518 | $ | 123,960 | $ | 12,735 | $ | 10,441 | ||||||||||||||||
Adjustments to EBITDA: | ||||||||||||||||||||||||||||||||
Costs at facilities currently being constructed and other start-up operations(b) | 1,299 | 836 | 39 | 59 | 3,072 | 1,983 | 78 | — | ||||||||||||||||||||||||
Results at closed facility, including continued obligations and closing expenses (c) | 131 | — | — | — | 8,462 | — | — | — | ||||||||||||||||||||||||
Stock-based compensation expense(d) | 1,123 | 997 | 66 | — | 3,460 | 2,890 | 204 | 181 | ||||||||||||||||||||||||
Insurance reserve in connection with the settlement of claims(e) | 3,115 | — | — | — | 4,701 | — | — | — | ||||||||||||||||||||||||
Rent related to item(b) and (c)above | 3,175 | — | 9 | — | 6,645 | — | 27 | — | ||||||||||||||||||||||||
Adjusted EBITDA | $ | 49,330 | $ | 43,601 | $ | 4,828 | $ | 4,384 | $ | 147,858 | $ | 128,833 | $ | 13,044 | $ | 10,622 | ||||||||||||||||
Rent—cost of services | 32,338 | 23,574 | 404 | 332 | 88,071 | 59,950 | 1,151 | 866 | ||||||||||||||||||||||||
Less: rent related to items(b) and (c)above | (3,175 | ) | — | (9 | ) | — | (6,645 | ) | — | (27 | ) | — | ||||||||||||||||||||
Adjusted EBITDAR | $ | 78,493 | $ | 67,175 | $ | 5,223 | $ | 4,716 | $ | 229,284 | $ | 188,783 | $ | 14,168 | $ | 11,488 | ||||||||||||||||
(a) General and administrative expenses are not allocated to any segment for purposes of determining segment profit or loss. | ||||||||||||||||||||||||||||||||
(b) Costs incurred for facilities currently being constructed and other start-up operations. This amount excludes rent, depreciation and interest of | ||||||||||||||||||||||||||||||||
(c) Results at closed facility during three and nine months ended | ||||||||||||||||||||||||||||||||
(d) Stock-based compensation expense incurred during the three and nine months ended | ||||||||||||||||||||||||||||||||
(e) Insurance reserves in connection with the settlement of claims. |
Discussion of Non-GAAP Financial Measures
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) costs incurred for operations currently being constructed and other start-up operations, excluding depreciation, interest and income taxes, (e) results of a single closed operation, excluding depreciation, interest and income taxes, (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) professional service fees include 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) insurance reserves in connection with legal settlements, (l) gain on sale of urgent care centers and (m)operating results at urgent care centers, excluding depreciation, interest and income taxes. 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) costs incurred for facilities currently being constructed and other start-up operations, excluding rent, depreciation, interest and income taxes, (f) results of a single closed operation, excluding depreciation, interest and income taxes, (g) stock-based compensation expense, (h) costs incurred related to new systems implementation, (i) break-up fee, net of costs, received in connection
with a public auction in which we were the priority bidder , (j) professional service fees include 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) insurance reserves in connection with legal settlements, (m) gain on sale of urgent care centers and (n) operating results at urgent care centers, 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
Contact Information Investor/Media Relations,Source:The Ensign Group, Inc. , (949) 487-9500, ir@ensigngroup.net.
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