Wdesk | Document
false0001125376 0001125376 2019-10-30 2019-10-30


 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 30, 2019
The Ensign Group, Inc.
(Exact name of registrant as specified in its charter)
 
 
 
 
 
Delaware
 
001-33757
 
33-0861263
 
 
 
 
 
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
29222 Rancho Viejo Road, Suite 127,
 
 
San Juan Capistrano,
CA
 
92675
 
 
 
(Address of principal executive offices)
 
(Zip Code)
Registrant's telephone number, including area code: (949) 487-9500
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, par value $0.001 per share
ENSG
Nasdaq Global Select Market

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

Emerging growth company

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





Item 2.02. Results of Operations and Financial Condition.
On October 30, 2019 The Ensign Group, Inc. (the Company) issued a press release reporting the financial results of the Company for its third quarter ended September 30, 2019. A copy of the press release is attached to this Current Report as Exhibit 99.1.
The press release includes “non-GAAP financial measures.” Specifically, the press release refers to EBITDA, Adjusted EBITDA and Adjusted EBITDAR. EBITDA, Adjusted EBITDA and Adjusted EBITDAR are supplemental non-GAAP financial measures. Regulation G, Conditions for Use of Non-GAAP Financial Measures, and other provisions of the Securities Exchange Act of 1934, as amended, define and prescribe the conditions for use of certain non-GAAP financial information. EBITDA consists of net income before (a) interest expense, net, (b) provisions for income taxes and (c) depreciation and amortization. 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 in start-up phase, excluding depreciation, interest and income taxes, (e) results of operations not at full capacity, excluding depreciation, interest and income taxes, (f) share-based compensation expense, (g) return of unclaimed class action settlement, (h) patient base and other acquisition-related costs, (i) spin-off transaction costs, (j) gain on sale of/impairment charges to fixed assets, (k) impairment of intangible assets and goodwill and (l) business interruption recoveries. 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 in start-up phase, excluding rent, depreciation, interest and income taxes, (f) results operations not at full capacity, excluding rent, depreciation, interest and income taxes, (g) share-based compensation expense, (h) return of unclaimed class action settlement, (i) patient base and other acquisition-related costs, (j) spin-off transaction costs, (k) gain on sale of/impairment charges to fixed assets, (l) impairment of intangible assets and goodwill and (m) business interruption recoveries. The company believes that the presentation of EBITDA, adjusted EBITDA, adjusted net income and adjusted earnings per share provides important supplemental information to management and investors to evaluate the company’s operating performance. Adjusted EBITDAR is a financial valuation measure that is not specified in GAAP. This measure is not displayed as a performance measure as it excludes rent expense, which is a normal and recurring operating expense. The company believes disclosure of adjusted net income, adjusted net income per share, EBITDA, adjusted EBITDA and adjusted EBITDAR has substance because the excluded revenues and expenses are infrequent in nature and are variable in nature, or do not represent current revenues or cash expenditures. A material limitation associated with the use of these measures as compared to the GAAP measures of net income and diluted earnings per share is that they may not be comparable with the calculation of net income and diluted earnings per share for other companies in the Company's industry. These non-GAAP financial measures should not be relied upon to the exclusion of GAAP financial measures. For further information regarding why the Company believes that this non-GAAP measure provides useful information to investors, the specific manner in which management uses this measure, and some of the limitations associated with the use of this measure, please refer to the Company's periodic filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Report on Form 10-Q. The Company’s periodic filings are available on the SEC's website at www.sec.gov or under the "Financial Information" link of the Investor Relations section on Ensign’s website at http://www.ensigngroup.net.










Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
 
 
 
Exhibit No.
 
Description
 
 
 
 
Press Release of the Company dated October 30, 2019
104
 
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.








SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
Dated: October 30, 2019
THE ENSIGN GROUP, INC.
 
 
By:  
/s/ Suzanne D. Snapper  
 
 
 
Suzanne D. Snapper 
 
 
 
Chief Financial Officer and Executive Vice President
 
 







EXHIBIT INDEX
 
 
 
Exhibit No.
 
Description
 
 
 
 
Press Release of the Company dated October 30, 2019
104
 
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.



Wdesk | Exhibit


https://cdn.kscope.io/f96e0c4dc4ce2c87f95cef8d3eb8ce04-ensigngrouplogoa02a01a26.gif

The Ensign Group Reports Third Quarter Results, Raises Guidance

Conference Call and Webcast scheduled for tomorrow, October 31, 2019 at 10:00 am PT
SAN JUAN CAPISTRANO, California - October 30, 2019 - The Ensign Group, Inc. (Nasdaq: ENSG), the parent company of the Ensign(TM) group of companies, which provide skilled nursing and assisted living services, physical, occupational and speech therapies and other rehabilitative and healthcare services, announced its operating results for the third quarter of 2019, reporting a GAAP diluted earnings per share of $0.48 for the quarter with adjusted earnings per share of $0.55 for the quarter (1).
Highlights Include:

GAAP earnings per share for the quarter was $0.48, an increase of 26.3% over the prior year quarter, and adjusted earnings per share was $0.55, up 19.6% over the prior year quarter (1);

Consolidated GAAP Net Income for the quarter was $27.2 million, an increase of 30.2% over the prior year quarter, and adjusted Net Income was $30.9 million, an increase of 24.0% over the prior year quarter(1);

Consolidated EBITDA for the quarter was $52.6 million, an increase of 26.1% over the prior year quarter, and adjusted EBITDA was $58.5 million, an increase of 20.9% over the prior year quarter(1);

Total Transitional and Skilled Services segment revenue was $485.9 million, an increase of 15.2% over the prior year quarter, and segment income was $56.8 million for the quarter, an increase of 22.6% over the prior year quarter(2);

Same store skilled services occupancy was 80.0%, an increase of 210 basis points over the prior year quarter, and skilled managed care revenue was up 11.2%;

Transitioning skilled services occupancy was 77.9%, an increase of 240 basis points over the prior year quarter; and skilled managed care revenue was up 19.9%;

(1) See "Reconciliation of GAAP to Non-GAAP Financial Information".
(2) Segment income is defined and outlined in Note 7 on Form 10-Q. Segment income excludes general and administrative expenses and interest expense, as well as the elimination of intercompany transactions.

Operating Results

“As we celebrate the completion of the spin-off of The Pennant Group, Inc. we are very pleased to announce one of our largest third quarter improvements in our history, with GAAP earnings per share for the quarter of $0.48, an increase of 26.3% over the prior year quarter, and adjusted earnings per share of $0.55, up 19.6% over the prior year quarter,” said Ensign’s Chief Executive Officer Barry Port. He continued, “These extraordinary results are a testament to the quality outcomes that are being achieved by our local leaders and caregivers, as they continue to drive impressive increases to occupancy, and are even more noteworthy given that in third quarter of 2018 we had the largest quarter over quarter improvements in our history.”
Port noted that much of the improvement has come from strong quarter over quarter improvements in occupancy and skilled mix across all operations, including same store, transitioning and newly acquired operations. He added, “We are excited about the momentum we continue to see in occupancy, as this is the second quarter in a row where we have experienced an increase of over 200 basis points in occupancy in both same store and transitioning operations. We believe these results demonstrate that even in a period where occupancies across the industry are down, and in what is historically one of our slowest quarters, we are able to consistently drive results across all payor types, including Medicaid, Medicare, managed care and private pay.”





Pointing to the enormous effort that went into consummating the spin-off of Pennant, Port added, “We are especially grateful to our Service Center partners who worked tirelessly to prepare for and complete the spin-off while simultaneously providing support to our local leaders. While it would have been easy to allow the spin-off to become a distraction, our unique operating model of local leadership, combined with the support of a world class Service Center, has been proven once more. The results also show, yet again, that our local approach to healthcare is scalable even in the midst of a transformational spin and acquisitions,” he said.
For the second time this year, Ensign raised its pre-spin 2019 annual earnings guidance. “Because we are ahead of schedule on our results this year, we again increased our 2019 annual earnings guidance to between $2.24 and $2.31 per diluted share and annual revenue of between $2.35 billion and $2.40 billion. Overall, the midpoint of this guidance represents an increase of 21.2% over Ensign’s 2018 annual earnings,” Port said.
“When adjusting for only the fourth quarter impact of the Pennant spin-off, this newly increased 2019 annual guidance translates to between $2.15 to $2.21 per diluted share and annual revenue of between $2.27 billion and $2.30 billion. We are very excited about our performance so far this year and are confident that, even with the implementation of PDPM, which took effect October 1st, as our local leaders continue to adjust to local market conditions, we will carry this momentum into the fourth quarter and beyond,” Port added.
“We are also very pleased to give you our 2020 annual earnings guidance of between $2.22 and $2.30 per diluted share and annual revenue guidance of between $2.30 billion and $2.35 billion, which does not include any of the results from the spun-out Pennant businesses. We are very optimistic that with the continued upside that is inherent in our portfolio and the attractive acquisitions on the horizon, that we will be able to continue to meet or exceed our pre-spin growth rates. To underline this confidence, the midpoint of our 2020 guidance represents an increase of 18.3% over the midpoint of our 2019 full-year spin-adjusted earnings guidance, which is between $1.88 and $1.94 per diluted share.” Port said. He concluded, “We believe we are on a path to make up for all of Pennant’s 2019 earnings by the end of 2020. We have not even come close to reaching our full potential, and to do so it will take a relentless commitment to our culture and the repetitious adherence to sound fundamentals.”
Chad Keetch, Ensign’s Chief Investment Officer also highlighted Ensign’s unique entrepreneurial culture and its history of incubating other post-acute related healthcare businesses, including the home health, hospice and senior living businesses that were spun off as Pennant. “We have several other post-acute related new ventures we are growing and look forward to watching them follow the same path as our Pennant partners. While these businesses are relatively small today, we are excited to support them in their growth as they apply proven Ensign leadership and operational principles to their respective businesses,” Keetch said.
Chief Financial Officer, Suzanne Snapper reported that the company’s liquidity remains strong with approximately $195 million of availability on its new $350 million credit facility, which also has a built-in expansion option, and 62 unlevered real estate assets that add additional liquidity. Snapper also indicated that the company maintained a lease-adjusted net-debt-to-adjusted EBITDAR ratio of 3.72x at quarter end, even after continued acquisitions, which tend to temporarily raise the ratio while EBITDAR from new acquisitions catches up. She also indicated that cash generated from operations was $137.6 million during the nine months ended September 30, 2019, which was primarily driven by an increase in operating results.
A discussion of the company's use of non-GAAP financial measures is set forth below. A reconciliation of net income to EBITDA, adjusted EBITDAR and adjusted EBITDA, as well as a reconciliation of GAAP earnings per share, net income to adjusted net earnings per share and adjusted net income, appear in the financial data portion of this release. More complete information is contained in the company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2019, which is expected to be filed with the SEC today and can be viewed on the company’s website at http://www.ensigngroup.net.
Quarter Growth
During the quarter, Ensign paid a quarterly cash dividend of $0.0475 per share of its common stock. Ensign has been a dividend-paying company since 2002 and has increased its dividend every year for 16 years.
Also during the quarter and since, Ensign’s affiliates acquired the following skilled nursing and healthcare campus operations:
Valley of the Moon Post Acute, a 27-bed hospital-based skilled nursing operation that is being operated under a management arrangement with Sonoma Valley Hospital in Sonoma, California;
The Terrace at Mount Ogden, a 114-bed skilled nursing operation in Ogden, Utah;
Surprise Health and Rehabilitation Center, a skilled nursing facility with 100 skilled nursing beds located in Surprise, Arizona;
Temple View Transitional Care Center, a 119-bed skilled nursing facility located in Rexburg, Idaho; and
St. Joseph’s Villa Independent Living, a 58-unit independent living operation in Salt Lake City, Utah.







Also during the quarter, our Pennant partners acquired the following operations:
Agape Hospice, a hospice agency providing services in Tucson, Arizona; and
Mainplace Senior Living, a 91-unit senior living center, located in Orange, California.

“Even though we’ve had a solid year on the acquisition front so far, we expect several acquisitions that we have been working on for months to close in the fourth quarter or early in the first quarter of next year,” Keetch said. “Our pipeline remains very healthy but we continue to be very selective and are keeping plenty of dry powder on hand for what we believe will be an increasingly more attractive buyer’s market,” he added.
These additions bring Ensign's growing portfolio to 202 skilled nursing operations, 27 of which also include senior living operations across fourteen states.  Ensign owns the real estate at 81 of its 260 healthcare facilities.  Keetch reaffirmed that Ensign continues to actively seek transactions to acquire real estate and to lease both well-performing and struggling skilled nursing, senior living and other healthcare related businesses in new and existing markets.
2019 Guidance
Management raised its 2019 annual earnings per share guidance and translated the guidance to include the fourth quarter impact of the spin-off of Pennant, to between $2.15 and $2.21 per diluted share and revenue to between $2.27 billion and $2.30 billion. Snapper indicated that the 2019 guidance excludes the spin-off transaction costs, share-based compensation and costs incurred for start-up operations. The guidance includes, among other things, self-insured healthcare costs, anticipated Medicare and Medicaid reimbursement rates, the implementation of the new Patient Driven Payment Model (PDPM) and acquisitions completed through the end of the year.
2020 Guidance
Management provided guidance for 2020, with annual earnings per share guidance of $2.22 to $2.30 per diluted share and annual revenue guidance of $2.30 billion to $2.35 billion. The midpoint of this 2020 guidance represents an increase of 18.3% over the midpoint of Ensign’s 2019 full-year spin-adjusted earnings guidance, which is between $1.88 and $1.94 per diluted share. Management’s guidance is based on diluted weighted average common shares outstanding of approximately 57.6 million and a 25% tax rate. In addition, the guidance assumes, among other things, normalized health insurance costs, anticipated Medicare and Medicaid reimbursement rate increases, net of provider taxes, the implementation of the new Patient Driven Payment Model (PDPM) and acquisitions closed in the first half of 2020. It also excludes acquisition-related costs and amortization costs related to intangible assets acquired, share-based compensation and start-up losses.
Conference Call
A live webcast will be held Thursday, October 31, 2019 at 10:00 a.m. Pacific time (1:00 p.m. Eastern time) to discuss Ensign’s third 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, December 6, 2019.

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 and other rehabilitative and healthcare services at 212 healthcare facilities in Arizona, California, Colorado, Idaho, Iowa, Kansas, Nebraska, Nevada, South Carolina, Texas, Utah, Washington and Wisconsin. Ensign’s new business venture operating subsidiaries also offer several other post-acute-related services, including mobile x-ray, lab, non-emergency transportation services and other consulting services also across several states. 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 Service Center or the captive insurance subsidiary are operated by the same entity. More information about Ensign is available at http://www.ensigngroup.net.






Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This press release contains, and the related conference call and webcast will include, forward-looking statements that are based on management’s current expectations, assumptions and beliefs about its business, financial performance, operating results, the industry in which it operates and other future events. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding growth prospects, future operating and financial performance, and acquisition activities. They are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to materially and adversely differ from those expressed in any forward-looking statement.
These risks and uncertainties relate to the company’s business, its industry and its common stock and include: reduced prices and reimbursement rates for its services; its ability to acquire, develop, manage or improve operations, its ability to manage its increasing borrowing costs as it incurs additional indebtedness to fund the acquisition and development of operations; its ability to access capital on a cost-effective basis to continue to successfully implement its growth strategy; its operating margins and profitability could suffer if it is unable to grow and manage effectively its increasing number of operations; competition from other companies in the acquisition, development and operation of facilities; its ability to defend claims and lawsuits, including professional liability claims alleging that our services resulted in personal injury, and other regulatory-related claims; and the application of existing or proposed government regulations, or the adoption of new laws and regulations, that could limit its business operations, require it to incur significant expenditures or limit its ability to relocate its operations if necessary. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the company’s periodic filings with the Securities and Exchange Commission, including its Form 10-Q, for a more complete discussion of the risks and other factors that could affect Ensign’s business, prospects and any forward-looking statements. Except as required by the federal securities laws, Ensign does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changing circumstances or any other reason after the date of this press release.
Contact Information
Investor/Media Relations, The Ensign Group, Inc., (949) 487-9500, ir@ensigngroup.net.
SOURCE: The Ensign Group, Inc.

















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


Three Months Ended September 30,
 
Nine Months Ended September 30,

2019
 
2018
 
2019
 
2018
Revenue
$
600,507

 
$
514,364

 
$
1,725,372

 
$
1,502,884

Expense
 
 
 
 

 
 
Cost of services
477,805

 
413,723

 
1,364,807

 
1,200,098

Return of unclaimed class action settlement

 

 

 
(1,664
)
Rent—cost of services
37,728

 
34,851

 
110,574

 
103,173

General and administrative expense
31,710

 
24,601

 
95,295

 
72,091

Depreciation and amortization
14,319

 
11,902

 
40,101

 
35,145

Total expenses
561,562

 
485,077

 
1,610,777

 
1,408,843

Income from operations
38,945

 
29,287

 
114,595

 
94,041

Other income (expense):
 
 
 
 

 
 
Interest expense
(3,900
)
 
(3,989
)
 
(11,513
)
 
(11,471
)
Interest income
736

 
467

 
1,883

 
1,477

Other expense, net
(3,164
)
 
(3,522
)
 
(9,630
)
 
(9,994
)
Income before provision for income taxes
35,781

 
25,765

 
104,965

 
84,047

Provision for income taxes
7,953

 
5,415

 
20,605

 
18,078

Net income
27,828

 
20,350

 
84,360

 
65,969

Less: net income/(loss) attributable to noncontrolling interests
669

 
(511
)
 
1,220

 
(35
)
Net income attributable to The Ensign Group, Inc.
$
27,159

 
$
20,861

 
$
83,140

 
$
66,004

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

 
 
Basic
$
0.50

 
$
0.40

 
$
1.55

 
$
1.27

Diluted
$
0.48

 
$
0.38

 
$
1.48

 
$
1.22

Weighted average common shares outstanding:
 
 
 
 

 
 
Basic
53,941

 
52,139

 
53,470

 
51,870

Diluted
56,364

 
54,632

 
56,054

 
54,176







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


September 30, 2019

December 31, 2018
Assets
 

 
Current assets:
 

 
Cash and cash equivalents
$
44,396


$
31,083

Accounts receivable—less allowance for doubtful accounts of $3,707 and $2,886 at September 30, 2019 and December 31, 2018, respectively
308,093


276,099

Investments—current
13,026


8,682

Prepaid income taxes
2,536


6,219

Prepaid expenses and other current assets
25,150


24,130

Assets held for sale - current

 
1,859

Total current assets
393,201


348,072

Property and equipment, net
708,224


618,874

Right-of-use assets
1,062,219

 

Insurance subsidiary deposits and investments
34,561


36,168

Escrow deposits
50


7,271

Deferred tax assets
8,105


11,650

Restricted and other assets
17,351


20,844

Intangible assets, net
3,541


31,000

Goodwill
96,199


80,477

Other indefinite-lived intangibles
36,098


27,602

Total assets
$
2,359,549


$
1,181,958

 



Liabilities and equity
 

 
Current liabilities:
 

 
Accounts payable
$
40,019


$
44,236

Accrued wages and related liabilities
132,659


119,656

Lease liabilities—current
60,817

 

Accrued self-insurance liabilities—current
26,707


25,446

Other accrued liabilities
84,250


69,784

Current maturities of long-term debt
10,177


10,105

Total current liabilities
354,629


269,227

Long-term debt—less current maturities
265,692


233,135

Long-term lease liabilities—less current portion
974,496

 

Accrued self-insurance liabilities—less current portion
58,958


54,605

Other long-term liabilities
3,968


11,234

Deferred gain related to sale-leaseback


11,417

Total equity
701,806


602,340

Total liabilities and equity
$
2,359,549


$
1,181,958















THE ENSIGN GROUP, INC.
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 September 30,

2019

2018
Net cash provided by operating activities
$
137,593


$
157,277

Net cash used in investing activities
(149,388
)

(95,269
)
Net cash provided by/(used in) financing activities
25,108


(58,688
)
Net increase in cash and cash equivalents
13,313


3,320

Cash and cash equivalents beginning of period
31,083


42,337

Cash and cash equivalents end of period
$
44,396


$
45,657


 
THE ENSIGN GROUP, INC.
 
 
REVENUE BY SEGMENT
 
 
(Unaudited)
 

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


Three Months Ended September 30,


2019
 
2018


$
 
%
 
$
 
%
 
 
 
 
 
 
 
 
 


(Dollars in thousands)
Transitional and skilled services

$
485,973


80.9
%
 
$
421,764


82.0
%
Senior living services

43,796


7.3

 
38,058


7.4

Home health and hospice services:



 
 



Home health

25,983


4.3

 
22,260


4.3

Hospice

29,188


4.9

 
21,577


4.2

Total home health and hospice services

55,171


9.2

 
43,837


8.5

All other (1)

15,567


2.6

 
10,705


2.1

Total revenue

$
600,507


100.0
%
 
$
514,364


100.0
%
(1) Includes revenue from services generated in our other ancillary services.
 
 
Nine Months Ended September 30,
 
 
2019
 
2018
 
 
$
 
%
 
$
 
%
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
Transitional and skilled services
 
$
1,404,469

 
81.4
%
 
$
1,237,298

 
82.3
%
Senior living services
 
126,536

 
7.3

 
111,335

 
7.4

Home health and hospice services:
 
 
 
 
 
 
 
 
Home health
 
74,630

 
4.3

 
63,765

 
4.2

Hospice
 
76,866

 
4.5

 
61,079

 
4.1

Total home health and hospice services
 
151,496

 
8.8

 
124,844

 
8.3

All other (1)
 
42,871

 
2.5

 
29,407

 
2.0

Total revenue
 
$
1,725,372

 
100.0
%
 
$
1,502,884

 
100.0
%
(1) Includes revenue from services generated in our other ancillary services.





 
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 September 30,
 
 
 
 
 
2019
 
2018
 
Change
 
% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Total Facility Results:
 

 

 

 
Transitional and skilled revenue
$
485,973

 
$
421,764

 
$
64,209

 
15.2
 %
Number of facilities at period end
175

 
163

 
12

 
7.4
 %
Number of campuses at period end*
27

 
22

 
5

 
22.7
 %
Actual patient days
1,516,697

 
1,367,142

 
149,555

 
10.9
 %
Occupancy percentage — Operational beds
78.9
%
 
77.3
%
 
 
 
1.6
 %
Skilled mix by nursing days
28.5
%
 
28.3
%
 
 
 
0.2
 %
Skilled mix by nursing revenue
47.8
%
 
47.9
%
 
 
 
(0.1
)%
 
Three Months Ended September 30,
 
 
 
 
 
2019
 
2018
 
Change
 
% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Same Facility Results(1):
 

 

 

 
Transitional and skilled revenue
$
353,745


$
329,461


$
24,284

 
7.4
%
Number of facilities at period end
127


127



 
%
Number of campuses at period end*
14


14



 
%
Actual patient days
1,066,467


1,032,002


34,465

 
3.3
%
Occupancy percentage — Operational beds
80.0
%

77.9
%

 
 
2.1
%
Skilled mix by nursing days
30.4
%

29.8
%

 
 
0.6
%
Skilled mix by nursing revenue
49.9
%

49.5
%

 
 
0.4
%
 
Three Months Ended September 30,
 
 
 
 
 
2019
 
2018
 
Change
 
% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Transitioning Facility Results(2):
 

 

 

 
Transitional and skilled revenue
$
91,776


$
82,535


$
9,241


11.2
%
Number of facilities at period end
33


33



 

Number of campuses at period end*
7


7



 

Actual patient days
313,858


302,868


10,990


3.6
%
Occupancy percentage — Operational beds
77.9
%
 
75.5
%

 

2.4
%
Skilled mix by nursing days
25.1
%
 
24.0
%

 

1.1
%
Skilled mix by nursing revenue
44.1
%
 
43.5
%

 

0.6
%





 
Three Months Ended September 30,
 
 
 
 
 
2019
 
2018
 
Change
 
% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Recently Acquired Facility Results(3):


 

 

 
Transitional and skilled revenue
$
40,452


$
9,768


$
30,684


NM
Number of facilities at period end
15


3


12


NM
Number of campuses at period end*
6


1


5


NM
Actual patient days
136,372


32,272


104,100


NM
Occupancy percentage — Operational beds
73.4
%
 
75.0
%




NM
Skilled mix by nursing days
21.5
%
 
19.5
%

 


NM
Skilled mix by nursing revenue
37.0
%
 
32.0
%

 


NM
*
Campus represents a facility that offers both skilled nursing and senior living services. Revenue and expenses related to skilled nursing and senior living services have been allocated and recorded in the respective reportable segment.
(1)
Same Facility results represent all facilities purchased prior to January 1, 2016.
(2)
Transitioning Facility results represent all facilities purchased from January 1, 2016 to December 31, 2017.
(3)
Recently Acquired Facility (Acquisitions) results represent all facilities purchased on or subsequent to January 1, 2018.
 
Nine Months Ended September 30,
 
 
 
 
 
2019
 
2018
 
Change
 
% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Total Facility Results:
 
 
 
 
 
 
 
Transitional and skilled revenue
$
1,404,469

 
$
1,237,298

 
$
167,171

 
13.5
 %
Number of facilities at period end
175

 
163

 
12

 
7.4
 %
Number of campuses at period end*
27

 
22

 
5

 
22.7
 %
Actual patient days
4,395,864

 
4,012,169

 
383,695

 
9.6
 %
Occupancy percentage — Operational beds
79.2
%
 
77.2
%
 
 
 
2.0
 %
Skilled mix by nursing days
29.1
%
 
29.9
%
 
 
 
(0.8
)%
Skilled mix by nursing revenue
48.7
%
 
50.1
%
 
 
 
(1.4
)%
 
Nine Months Ended September 30,
 
 
 
 
 
2019
 
2018
 
Change
 
% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Same Facility Results(1):
 
 
 
 
 
 
 
Transitional and skilled revenue
$
1,046,925

 
$
977,456

 
$
69,469

 
7.1
 %
Number of facilities at period end
127

 
127

 

 
 %
Number of campuses at period end*
14

 
14

 

 
 %
Actual patient days
3,160,286

 
3,066,751

 
93,535

 
3.0
 %
Occupancy percentage — Operational beds
80.1
%
 
77.9
%
 
 
 
2.2
 %
Skilled mix by nursing days
31.0
%
 
31.3
%
 
 
 
(0.3
)%
Skilled mix by nursing revenue
50.8
%
 
51.4
%
 
 
 
(0.6
)%





 
Nine Months Ended September 30,
 
 
 
 
 
2019
 
2018
 
Change
 
% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Transitioning Facility Results(2):
 
 
 
 
 
 
 
Transitional and skilled revenue
$
269,559

 
$
244,279

 
$
25,280

 
10.3
 %
Number of facilities at period end
33

 
33

 

 

Number of campuses at period end*
7

 
7

 

 

Actual patient days
934,292

 
893,771

 
40,521

 
4.5
 %
Occupancy percentage — Operational beds
78.2
%
 
75.0
%
 
 
 
3.2
 %
Skilled mix by nursing days
25.5
%
 
25.5
%
 
 
 
 %
Skilled mix by nursing revenue
44.7
%
 
45.6
%
 
 
 
(0.9
)%
 
Nine Months Ended September 30,
 
 
 
 
 
2019
 
2018
 
Change
 
% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Recently Acquired Facility Results(3):
 
 
 
 
 
 
 
Transitional and skilled revenue
$
87,985

 
$
15,563

 
$
72,422

 
NM
Number of facilities at period end
15

 
3

 
12

 
NM
Number of campuses at period end*
6

 
1

 
5

 
NM
Actual patient days
301,286

 
51,647

 
249,639

 
NM
Occupancy percentage — Operational beds
73.8
%
 
75.2
%
 
 
 
NM
Skilled mix by nursing days
20.8
%
 
21.0
%
 
 

 
NM
Skilled mix by nursing revenue
35.3
%
 
34.5
%
 
 

 
NM
*
Campus represents a facility that offers both skilled nursing and senior living services. Revenue and expenses related to skilled nursing and senior living services have been allocated and recorded in the respective reportable segment.
(1)
Same Facility results represent all facilities purchased prior to January 1, 2016.
(2)
Transitioning Facility results represent all facilities purchased from January 1, 2016 to December 31, 2017.
(3)
Recently Acquired Facility (Acquisitions) results represent all facilities purchased on or subsequent to January 1, 2018.

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

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 September 30,
 
Same Facility

Transitioning

Acquisitions

Total
 
2019

2018

2019

2018

2019

2018

2019

2018
Skilled Nursing Average Daily Revenue Rates:
 
 
 
 
 
 
 
 
 
 
 

 

 
Medicare
$
616.19


$
596.41


$
537.04


$
519.26


$
607.90


$
541.46


$
597.82


$
577.09

Managed care
468.06


462.02


417.52


406.74


433.30


420.98


455.48


450.07

Other skilled
488.46


479.57


488.95


546.70


336.04


241.31


482.68


480.62

Total skilled revenue
527.58


518.06


478.97


471.07


504.83


462.02


517.16


508.31

Medicaid
232.70


226.90


206.58


193.34


233.84


238.19


227.48


219.54

Private and other payors
233.36


223.74


198.26


195.44


249.94


238.54


225.04


216.49

Total skilled nursing revenue
$
322.89


$
313.78


$
274.02


$
260.46


$
294.25


$
281.90


$
310.18


$
301.19







 
Nine Months Ended September 30,
 
Same Facility
 
Transitioning
 
Acquisitions
 
Total
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Skilled Nursing Average Daily Revenue Rates:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Medicare
$
614.39

 
$
597.81

 
$
534.36

 
$
518.26

 
$
579.11

 
$
534.74

 
$
594.51

 
$
577.88

Managed care
465.90

 
455.68

 
417.45

 
409.21

 
428.21

 
423.68

 
453.94

 
446.17

Other skilled
491.11

 
471.66

 
489.42

 
501.73

 
330.02

 
245.09

 
487.06

 
471.84

Total skilled revenue
528.59

 
515.54

 
478.03

 
471.49

 
489.11

 
462.37

 
517.24

 
506.68

Medicaid
230.69

 
222.86

 
202.51

 
190.61

 
236.25

 
231.45

 
225.10

 
215.68

Private and other payors
234.47

 
225.18

 
204.44

 
199.46

 
240.68

 
237.91

 
226.66

 
217.91

Total skilled nursing revenue
$
323.81

 
$
315.12

 
$
273.25

 
$
263.69

 
$
289.78

 
$
281.02

 
$
310.71

 
$
303.20


The following tables set forth our percentage of skilled nursing patient revenue and days by payor source for the three and nine months ended September 30, 2019 and 2018:
 
Three Months Ended September 30,
 
Same Facility
 
Transitioning
 
Acquisitions
 
Total
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Percentage of Skilled Nursing Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Medicare
21.7
%
 
22.2
%
 
24.3
%
 
25.3
%
 
20.6
%
 
16.6
%
 
22.1
%
 
22.6
%
Managed care
18.4

 
17.6

 
18.1

 
16.4

 
14.0

 
14.2

 
18.0

 
17.3

Other skilled
9.8

 
9.7

 
1.7

 
1.8

 
2.4

 
1.2

 
7.7

 
8.0

Skilled mix
49.9

 
49.5

 
44.1

 
43.5

 
37.0

 
32.0

 
47.8

 
47.9

Private and other payors
7.6

 
7.9

 
11.6

 
11.3

 
10.5

 
15.5

 
8.5

 
8.8

Quality mix
57.5

 
57.4

 
55.7

 
54.8

 
47.5

 
47.5

 
56.3

 
56.7

Medicaid
42.5

 
42.6

 
44.3

 
45.2

 
52.5

 
52.5

 
43.7

 
43.3

Total skilled nursing
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
Three Months Ended September 30,
 
Same Facility
 
Transitioning
 
Acquisitions
 
Total
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Percentage of Skilled Nursing Days:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Medicare
11.3
%
 
11.6
%
 
12.3
%
 
12.6
%
 
10.0
%
 
8.6
%
 
11.4
%
 
11.8
%
Managed care
12.6

 
11.9

 
11.8

 
10.5

 
9.5

 
9.5

 
12.2

 
11.5

Other skilled
6.5

 
6.3

 
1.0

 
0.9

 
2.0

 
1.4

 
4.9

 
5.0

Skilled mix
30.4

 
29.8

 
25.1

 
24.0

 
21.5

 
19.5

 
28.5

 
28.3

Private and other payors
10.9

 
11.5

 
16.4

 
15.2

 
12.7

 
18.4

 
12.2

 
12.5

Quality mix
41.3

 
41.3

 
41.5

 
39.2

 
34.2

 
37.9

 
40.7

 
40.8

Medicaid
58.7

 
58.7

 
58.5

 
60.8

 
65.8

 
62.1

 
59.3

 
59.2

Total skilled nursing
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%






 
Nine Months Ended September 30,
 
Same Facility
 
Transitioning
 
Acquisitions
 
Total
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Percentage of Skilled Nursing Revenue:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Medicare
22.9
%
 
23.8
%
 
24.8
%
 
27.4
%
 
19.1
%
 
18.2
%
 
23.0
%
 
24.4
%
Managed care
18.4

 
18.4

 
18.3

 
16.8

 
14.2

 
15.1

 
18.1

 
18.0

Other skilled
9.5

 
9.2

 
1.6

 
1.4

 
2.0

 
1.2

 
7.6

 
7.7

Skilled mix
50.8

 
51.4

 
44.7

 
45.6

 
35.3

 
34.5

 
48.7

 
50.1

Private and other payors
7.5

 
7.7

 
11.4

 
11.8

 
11.7

 
14.8

 
8.5

 
8.5

Quality mix
58.3

 
59.1

 
56.1

 
57.4

 
47.0

 
49.3

 
57.2

 
58.6

Medicaid
41.7

 
40.9

 
43.9

 
42.6

 
53.0

 
50.7

 
42.8

 
41.4

Total skilled nursing
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
Nine Months Ended September 30,
 
Same Facility
 
Transitioning
 
Acquisitions
 
Total
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
Percentage of Skilled Nursing Days:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Medicare
12.0
%
 
12.5
%
 
12.7
%
 
13.9
%
 
9.5
%
 
9.6
%
 
12.0
%
 
12.8
%
Managed care
12.8

 
12.6

 
11.9

 
10.8

 
9.6

 
10.0

 
12.4

 
12.2

Other skilled
6.2

 
6.2

 
0.9

 
0.8

 
1.7

 
1.4

 
4.7

 
4.9

Skilled mix
31.0

 
31.3

 
25.5

 
25.5

 
20.8

 
21.0

 
29.1

 
29.9

Private and other payors
10.8

 
11.1

 
15.4

 
15.7

 
14.4

 
17.5

 
12.0

 
12.2

Quality mix
41.8

 
42.4

 
40.9

 
41.2

 
35.2

 
38.5

 
41.1

 
42.1

Medicaid
58.2

 
57.6

 
59.1

 
58.8

 
64.8

 
61.5

 
58.9

 
57.9

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 senior living services segment along with other statistics, for each of the date or periods indicated:
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
September 30,
 
 
 
 
 
2019
 
2018
 
Change
 
% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Resident fee revenue
$
43,796

 
$
38,058

 
$
5,738

 
15.1
 %
Number of facilities at period end
57

 
51

 
6

 
11.8
 %
Number of campuses at period end
27

 
22

 
5

 
22.7
 %
Occupancy percentage (units)
75.2
%
 
76.0
%
 
 
 
(0.8
)%
Average monthly revenue per unit
$
2,907

 
$
2,855

 
$
52

 
1.8
 %






 
Nine Months Ended
September 30,
 
 
 
 
 
2019
 
2018
 
Change
 
% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Resident fee revenue
$
126,536

 
$
111,335

 
15,201

 
13.7
 %
Number of facilities at period end
57

 
51

 
6

 
11.8
 %
Number of campuses at period end
27

 
22

 
5

 
22.7
 %
Occupancy percentage (units)
75.3
%
 
75.6
%
 
 
 
(0.3
)%
Average monthly revenue per unit
$
2,917

 
$
2,858

 
59

 
2.1
 %

 
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 dates or periods indicated:
 
 
 
 
 
 
 
 
 
 
 
 

Three Months Ended
September 30,




 
2019

2018

Change

% Change
 
 
 
 
 
 
 
 

(Dollars in thousands)




Home health and hospice revenue







Home health services
$
25,983

 
$
22,260

 
$
3,723

 
16.7
%
Hospice services
29,188

 
21,577

 
7,611

 
35.3

Total home health and hospice revenue
$
55,171

 
$
43,837

 
$
11,334

 
25.9
%
 
 
 
 
 
 
 
 
Home health, hospice and home care agencies
63

 
49

 
14

 
28.6
%
Home health services:
 
 
 
 
 
 
 
Average Medicare revenue per completed episode
$
3,173

 
$
3,001

 
$
172

 
5.7
%
Hospice services:
 
 
 
 
 
 
 
Average daily census
1,788

 
1,379

 
409

 
29.7
%
 
Nine Months Ended
September 30,
 
 
 
 
 
2019
 
2018
 
Change
 
% Change
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
 
 
 
 
Home health and hospice revenue
 
 
 
 
 
 
 
Home health services
$
74,630

 
$
63,765

 
$
10,865

 
17.0
%
Hospice services
76,866

 
61,079

 
15,787

 
25.8

Total home health and hospice revenue
$
151,496

 
$
124,844

 
$
26,652

 
21.3
%
 
 
 
 
 
 
 
 
Home health, hospice and home care agencies
63

 
49

 
14

 
28.6
%
Home health services:
 
 
 
 
 
 
 
Average Medicare revenue per completed episode
$
3,072

 
$
2,968

 
$
104

 
3.5
%
Hospice services:
 
 
 
 
 
 
 
Average daily census
1,625

 
1,310

 
$
315

 
24.0
%






THE ENSIGN GROUP, INC.
REVENUE BY PAYOR SOURCE
(Unaudited)

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 September 30,
 
 
2019

2018
 
 
$
 
%
 
$
 
%
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
Revenue:
 
 

 

 

 
Medicaid
 
$
218,725

 
36.4
%
 
$
188,486

 
36.6
%
Medicare
 
157,046

 
26.2

 
133,554

 
26.0

Medicaid-skilled
 
34,080

 
5.7

 
30,684

 
6.0

Total Medicaid and Medicare
 
409,851

 
68.3

 
352,724

 
68.6

Managed Care
 
96,095

 
16.0

 
80,196

 
15.6

Private and Other(1)
 
94,561

 
15.7

 
81,444

 
15.8

Revenue
 
$
600,507

 
100.0
%
 
$
514,364

 
100.0
%
(1) Private and other payors also includes revenue from all payors generated in our other ancillary services for the three months ended September 30, 2019 and 2018.
 
 
Nine Months Ended September 30,
 
 
2019
 
2018
 
 
$
 
%
 
$
 
%
 
 
 
 
 
 
 
 
 
 
 
(Dollars in thousands)
Revenue:
 
 
 
 
 
 
 
 
Medicaid
 
$
620,539