Delaware | 001-33757 | 33-0861263 | ||||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||
27101 Puerta Real, Suite 450, Mission Viejo, CA | 92691 | |||||
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit No. | Description | |
Press Release of the Company dated May 2, 2018 |
Dated: May 7, 2018 | THE ENSIGN GROUP, INC. | |||
By: | /s/ Suzanne D. Snapper | |||
Suzanne D. Snapper | ||||
Chief Financial Officer | ||||
Exhibit No. | Description | |
Press Release of the Company dated May 2, 2018 |
▪ | GAAP earnings for the quarter was $0.43 per diluted share, and adjusted earnings per share was up 32.4% over the prior year quarter to a record $0.45 per diluted share(1)(2); |
▪ | Consolidated GAAP Net Income for the quarter was $23.1 million, and consolidated adjusted Net Income was $24.1 million, an increase of 34.7% over the prior year quarter(1)(2); |
▪ | Total Transitional and Skilled Services segment income was $46.2 million for the quarter, an increase of 45.3% over the prior year quarter and an increase of 15.7% sequentially over the fourth quarter; |
▪ | Same-store occupancy was 79.2%, an increase of 82 basis points over the prior year quarter; |
▪ | Transitioning skilled occupancy was 76.0%, an increase of 415 basis points over the prior year quarter; |
▪ | Transitioning skilled managed care revenue was up 16.0% and same-store skilled managed care revenue was up 5.9%, both over the prior year quarter; and |
▪ | Total Home Health and Hospice Services segment revenue was up 23.7% to $39.8 million and segment income was up 41.1% to $6.1 million, both over the prior year quarter. |
Three Months Ended March 31, | |||||||||||
2018 | 2018 Pro forma (1) | 2017 | |||||||||
Revenue | |||||||||||
Service revenue | $ | 456,021 | $ | 464,825 | $ | 409,393 | |||||
Assisted and independent living revenue | 36,113 | 36,113 | 32,346 | ||||||||
Total revenue | 492,134 | 500,938 | 441,739 | ||||||||
Expense | |||||||||||
Cost of services | 390,243 | 399,047 | 355,486 | ||||||||
(Return of unclaimed class action settlement)/charges related to class action lawsuit | (1,664 | ) | (1,664 | ) | 11,000 | ||||||
Losses related to divestitures | — | — | 4,017 | ||||||||
Rent—cost of services | 33,850 | 33,850 | 31,900 | ||||||||
General and administrative expense | 25,104 | 25,104 | 21,270 | ||||||||
Depreciation and amortization | 11,622 | 11,622 | 10,514 | ||||||||
Total expenses | 459,155 | 467,959 | 434,187 | ||||||||
Income from operations | 32,979 | 32,979 | 7,552 | ||||||||
Other income (expense): | |||||||||||
Interest expense | (3,613 | ) | (3,613 | ) | (3,445 | ) | |||||
Interest income | 448 | 448 | 290 | ||||||||
Other expense, net | (3,165 | ) | (3,165 | ) | (3,155 | ) | |||||
Income before provision for income taxes | 29,814 | 29,814 | 4,397 | ||||||||
Provision for income taxes | 6,521 | 6,521 | 1,441 | ||||||||
Net income | 23,293 | 23,293 | 2,956 | ||||||||
Less: net income attributable to noncontrolling interests | 161 | 161 | 116 | ||||||||
Net income attributable to The Ensign Group, Inc. | $ | 23,132 | $ | 23,132 | $ | 2,840 | |||||
Net income per share attributable to The Ensign Group, Inc.: | |||||||||||
Basic | $ | 0.45 | $ | 0.45 | $ | 0.06 | |||||
Diluted | $ | 0.43 | $ | 0.43 | $ | 0.05 | |||||
Weighted average common shares outstanding: | |||||||||||
Basic | 51,585 | 51,585 | 50,767 | ||||||||
Diluted | 53,518 | 53,518 | 52,633 | ||||||||
Dividends per share | $ | 0.0450 | $ | 0.0450 | $ | 0.0425 | |||||
(1) The proforma amounts in the table demonstrate the impact of adopting Accounting Standards Codification Topic 606, Revenue from Customers with Customers (ASC 606), for the three months ended March 31, 2018 by presenting the dollars as if the previous accounting guidance was still in effect. |
March 31, 2018 | December 31, 2017 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 35,057 | $ | 42,337 | |||
Accounts receivable—less allowance for doubtful accounts of $1,762 and $43,961 at March 31, 2018 and December 31, 2017, respectively | 258,509 | 265,068 | |||||
Investments—current | 13,631 | 13,092 | |||||
Prepaid income taxes | 12,794 | 19,447 | |||||
Prepaid expenses and other current assets | 24,735 | 28,132 | |||||
Total current assets | 344,726 | 368,076 | |||||
Property and equipment, net | 541,019 | 537,084 | |||||
Insurance subsidiary deposits and investments | 28,065 | 28,685 | |||||
Escrow deposits | 10,025 | 228 | |||||
Deferred tax assets | 12,731 | 12,745 | |||||
Restricted and other assets | 17,695 | 16,501 | |||||
Intangible assets, net | 32,236 | 32,803 | |||||
Goodwill | 80,963 | 81,062 | |||||
Other indefinite-lived intangibles | 25,249 | 25,249 | |||||
Total assets | $ | 1,092,709 | $ | 1,102,433 | |||
Liabilities and equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 31,977 | $ | 39,043 | |||
Accrued wages and related liabilities | 84,018 | 90,508 | |||||
Accrued self-insurance liabilities—current | 22,163 | 22,516 | |||||
Other accrued liabilities | 63,088 | 63,815 | |||||
Current maturities of long-term debt | 10,035 | 9,939 | |||||
Total current liabilities | 211,281 | 225,821 | |||||
Long-term debt—less current maturities | 280,449 | 302,990 | |||||
Accrued self-insurance liabilities—less current portion | 51,518 | 50,220 | |||||
Deferred rent and other long-term liabilities | 11,608 | 11,268 | |||||
Deferred gain related to sale-leaseback | 11,910 | 12,075 | |||||
Total equity | 525,943 | 500,059 | |||||
Total liabilities and equity | $ | 1,092,709 | $ | 1,102,433 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Net cash provided by operating activities | 40,395 | 19,586 | |||||
Net cash used in investing activities | (25,463 | ) | (21,397 | ) | |||
Net cash used in financing activities | (22,212 | ) | (24,388 | ) | |||
Net decrease in cash and cash equivalents | (7,280 | ) | (26,199 | ) | |||
Cash and cash equivalents beginning of period | 42,337 | 57,706 | |||||
Cash and cash equivalents end of period | $ | 35,057 | $ | 31,507 |
THE ENSIGN GROUP, INC. | ||||||||||||||||||||||
REVENUE BY SEGMENT | ||||||||||||||||||||||
The following table sets forth our total revenue by segment and as a percentage of total revenue for the periods indicated: | ||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||||||||||
2018 (As Reported) | 2018 (Pro Forma (2)) | 2017 | ||||||||||||||||||||
$ | % | $ | % | $ | % | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
Transitional and skilled services | $ | 407,016 | 82.7 | % | $ | 415,221 | 82.9 | % | $ | 372,339 | 84.3 | % | ||||||||||
Assisted and independent living services | 36,113 | 7.3 | 36,113 | 7.2 | 32,346 | 7.3 | ||||||||||||||||
Home health and hospice services: | ||||||||||||||||||||||
Home health | 20,184 | 4.1 | 20,596 | 4.1 | 17,050 | 3.9 | ||||||||||||||||
Hospice | 19,574 | 4.0 | 19,761 | 3.9 | 15,083 | 3.4 | ||||||||||||||||
Total home health and hospice services | 39,758 | 8.1 | 40,357 | 8.0 | 32,133 | 7.3 | ||||||||||||||||
All other (1) | 9,247 | 1.9 | 9,247 | 1.9 | 4,921 | 1.1 | ||||||||||||||||
Total revenue | $ | 492,134 | 100.0 | % | $ | 500,938 | 100.0 | % | $ | 441,739 | 100.0 | % | ||||||||||
(1) Includes revenue from services generated in our other ancillary services. | ||||||||||||||||||||||
(2) The proforma amounts in the table demonstrate the impact of adopting ASC 606 for the three months ended March 31, 2018 by presenting the dollars and percentages as if the previous accounting guidance was still in effect. | ||||||||||||||||||||||
THE ENSIGN GROUP, INC. | ||||||||||
SELECT PERFORMANCE INDICATORS | ||||||||||
(Unaudited) |
Three Months Ended March 31, | ||||||||||||||
2018 | 2017 | |||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||
Total Facility Results: | ||||||||||||||
Transitional and skilled revenue (As Reported) | $ | 407,016 | $ | 372,339 | $ | 34,677 | 9.3 | % | ||||||
Transitional and skilled revenue (Pro forma (5)) | 415,221 | 372,339 | 42,882 | 11.5 | % | |||||||||
Number of facilities at period end | 160 | 150 | 10 | 6.7 | % | |||||||||
Number of campuses at period end* | 21 | 21 | — | — | % | |||||||||
Actual patient days | 1,314,970 | 1,209,264 | 105,706 | 8.7 | % | |||||||||
Occupancy percentage — Operational beds | 77.8 | % | 74.9 | % | 2.9 | % | ||||||||
Skilled mix by nursing days | 31.6 | % | 32.0 | % | (0.4 | )% | ||||||||
Skilled mix by nursing revenue | 52.2 | % | 53.3 | % | (1.1 | )% |
Three Months Ended March 31, | ||||||||||||||
2018 | 2017 | |||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||
Same Facility Results(1): | ||||||||||||||
Transitional and skilled revenue (As Reported) | $ | 280,247 | $ | 273,730 | $ | 6,517 | 2.4 | % | ||||||
Transitional and skilled revenue (Pro forma (5)) | 285,840 | 273,730 | 12,110 | 4.4 | % | |||||||||
Number of facilities at period end | 108 | 108 | — | — | % | |||||||||
Number of campuses at period end* | 11 | 11 | — | — | % | |||||||||
Actual patient days | 870,523 | 862,126 | 8,397 | 1.0 | % | |||||||||
Occupancy percentage — Operational beds | 79.2 | % | 78.4 | % | 0.8 | % | ||||||||
Skilled mix by nursing days | 32.2 | % | 31.9 | % | 0.3 | % | ||||||||
Skilled mix by nursing revenue | 53.1 | % | 52.9 | % | 0.2 | % |
Three Months Ended March 31, | ||||||||||||||
2018 | 2017 | |||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||
Transitioning Facility Results(2): | ||||||||||||||
Transitional and skilled revenue (As Reported) | $ | 101,847 | $ | 95,730 | $ | 6,117 | 6.4 | % | ||||||
Transitional and skilled revenue (Pro forma (5)) | 103,963 | 95,730 | 8,233 | 8.6 | % | |||||||||
Number of facilities at period end | 40 | 40 | — | — | % | |||||||||
Number of campuses at period end* | 9 | 9 | — | — | % | |||||||||
Actual patient days | 356,807 | 337,307 | 19,500 | 5.8 | % | |||||||||
Occupancy percentage — Operational beds | 76.0 | % | 71.9 | % | 4.1 | % | ||||||||
Skilled mix by nursing days | 32.2 | % | 32.2 | % | — | % | ||||||||
Skilled mix by nursing revenue | 52.6 | % | 54.3 | % | (1.7 | )% |
Three Months Ended March 31, | |||||||||||||
2018 | 2017 | ||||||||||||
(Dollars in thousands) | Change | % Change | |||||||||||
Recently Acquired Facility Results(3): | |||||||||||||
Transitional and skilled revenue (As Reported) | $ | 24,922 | $ | 1,184 | $ | 23,738 | NM | ||||||
Transitional and skilled revenue (Pro forma (5)) | 25,418 | 1,184 | 24,234 | NM | |||||||||
Number of facilities at period end | 12 | 2 | 10 | NM | |||||||||
Number of campuses at period end* | 1 | 1 | — | NM | |||||||||
Actual patient days | 87,640 | 4,805 | 82,835 | NM | |||||||||
Occupancy percentage — Operational beds | 71.6 | % | 16.0 | % | NM | ||||||||
Skilled mix by nursing days | 23.5 | % | 24.6 | % | NM | ||||||||
Skilled mix by nursing revenue | 41.2 | % | 48.3 | % | NM |
Three Months Ended March 31, | |||||||||||||
2018 | 2017 | ||||||||||||
(Dollars in thousands) | Change | % Change | |||||||||||
Facility Closed Results(4): | |||||||||||||
Skilled nursing revenue | $ | — | $ | 1,695 | $ | (1,695 | ) | NM | |||||
Actual patient days | — | 5,026 | (5,026 | ) | NM | ||||||||
Occupancy percentage — Operational beds | — | % | 33.2 | % | NM | ||||||||
Skilled mix by nursing days | — | % | 50.3 | % | NM | ||||||||
Skilled mix by nursing revenue | — | % | 74.6 | % | NM |
(1) | Same Facility results represent all facilities purchased prior to January 1, 2015. |
(2) | Transitioning Facility results represents all facilities purchased from January 1, 2015 to December 31, 2016. |
(3) | Recently Acquired Facility (Acquisitions) results represent all facilities purchased on or subsequent to January 1, 2017. |
(4) | Facility Closed results represents closed operations during the three months ended March 31, 2017, which were excluded from Same Store and Transitioning results for the three months ended March 31, 2017, for comparison purposes. |
(5) | The proforma amounts in the table demonstrate the impact of adopting ASC 606 for the three months ended March 31, 2018 by presenting the dollars and percentages as if the previous accounting guidance was still in effect. |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||
Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||||||
Skilled Nursing Average Daily Revenue Rates: | |||||||||||||||||||||||||||||||
Medicare | $ | 610.47 | $ | 597.31 | $ | 514.77 | $ | 503.32 | $ | 520.54 | $ | 479.03 | $ | 574.68 | $ | 564.55 | |||||||||||||||
Managed care | 459.66 | 442.56 | 408.92 | 420.38 | 419.10 | 347.98 | 443.24 | 436.41 | |||||||||||||||||||||||
Other skilled | 482.53 | 459.83 | 365.45 | 366.97 | 484.95 | — | 467.14 | 445.46 | |||||||||||||||||||||||
Total skilled revenue | 524.69 | 511.20 | 457.49 | 460.55 | 486.36 | 463.38 | 504.22 | 496.65 | |||||||||||||||||||||||
Medicaid | 221.18 | 214.83 | 193.47 | 179.37 | 212.76 | 144.36 | 213.36 | 204.87 | |||||||||||||||||||||||
Private and other payors | 225.18 | 206.66 | 208.69 | 202.04 | 227.94 | 185.77 | 220.06 | 204.88 | |||||||||||||||||||||||
Total skilled nursing revenue | $ | 319.84 | $ | 308.50 | $ | 280.68 | $ | 273.02 | $ | 279.37 | $ | 235.79 | $ | 306.49 | $ | 298.38 |
Three Months Ended March 31, | |||||||||||||||||||||||
Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Percentage of Skilled Nursing Revenue: | |||||||||||||||||||||||
Medicare | 24.9 | % | 26.3 | % | 28.9 | % | 31.7 | % | 26.9 | % | 44.0 | % | 26.0 | % | 27.9 | % | |||||||
Managed care | 19.1 | 18.8 | 20.7 | 19.4 | 10.9 | 4.3 | 19.0 | 18.8 | |||||||||||||||
Other skilled | 9.1 | 7.8 | 3.0 | 3.2 | 3.4 | — | 7.2 | 6.6 | |||||||||||||||
Skilled mix | 53.1 | 52.9 | 52.6 | 54.3 | 41.2 | 48.3 | 52.2 | 53.3 | |||||||||||||||
Private and other payors | 7.4 | 7.6 | 10.1 | 10.1 | 10.1 | 24.8 | 8.3 | 8.3 | |||||||||||||||
Quality mix | 60.5 | 60.5 | 62.7 | 64.4 | 51.3 | 73.1 | 60.5 | 61.6 | |||||||||||||||
Medicaid | 39.5 | 39.5 | 37.3 | 35.6 | 48.7 | 26.9 | 39.5 | 38.4 | |||||||||||||||
Total skilled nursing | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
Three Months Ended March 31, | |||||||||||||||||||||||
Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Percentage of Skilled Nursing Days: | |||||||||||||||||||||||
Medicare | 13.0 | % | 13.6 | % | 15.7 | % | 17.2 | % | 14.4 | % | 21.6 | % | 13.8 | % | 14.8 | % | |||||||
Managed care | 13.2 | 13.1 | 14.2 | 12.6 | 7.3 | 3.0 | 13.1 | 12.9 | |||||||||||||||
Other skilled | 6.0 | 5.2 | 2.3 | 2.4 | 1.8 | — | 4.7 | 4.3 | |||||||||||||||
Skilled mix | 32.2 | 31.9 | 32.2 | 32.2 | 23.5 | 24.6 | 31.6 | 32.0 | |||||||||||||||
Private and other payors | 10.9 | 11.4 | 13.8 | 13.6 | 12.9 | 31.4 | 11.8 | 12.1 | |||||||||||||||
Quality mix | 43.1 | 43.3 | 46.0 | 45.8 | 36.4 | 56.0 | 43.4 | 44.1 | |||||||||||||||
Medicaid | 56.9 | 56.7 | 54.0 | 54.2 | 63.6 | 44.0 | 56.6 | 55.9 | |||||||||||||||
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 assisted and independent living segment along with other statistics, for each of the periods indicated: | ||||||||||
Three Months Ended March 31, | ||||||||||||||
2018 | 2017 | Change | % Change | |||||||||||
(Dollars in thousands) | ||||||||||||||
Resident fee revenue | $ | 36,113 | $ | 32,346 | $ | 3,767 | 11.6 | % | ||||||
Number of facilities at period end | 51 | 41 | 10 | 24.4 | % | |||||||||
Number of campuses at period end | 21 | 21 | — | — | % | |||||||||
Occupancy percentage (units) | 75.5 | % | 76.8 | % | (1.3 | )% | ||||||||
Average monthly revenue per unit | $ | 2,858 | $ | 2,838 | $ | 20 | 0.7 | % |
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 periods indicated: | ||||||||||
Three Months Ended March 31, | ||||||||||||||
2018 | 2017 | Change | % Change | |||||||||||
(Dollars in thousands) | ||||||||||||||
Home health and hospice revenue | ||||||||||||||
Home health services | $ | 20,184 | $ | 17,050 | $ | 3,134 | 18.4 | % | ||||||
Hospice services | 19,574 | 15,083 | 4,491 | 29.8 | ||||||||||
Total home health and hospice revenue | $ | 39,758 | $ | 32,133 | $ | 7,625 | 23.7 | % | ||||||
Pro-forma(1) | ||||||||||||||
Home health and hospice revenue | ||||||||||||||
Home health services | $ | 20,596 | $ | 17,050 | $ | 3,546 | 20.8 | % | ||||||
Hospice services | 19,761 | 15,083 | 4,678 | 31.0 | ||||||||||
Total home health and hospice revenue | $ | 40,357 | $ | 32,133 | $ | 8,224 | 25.6 | % | ||||||
Home health services: | ||||||||||||||
Average Medicare Revenue per Completed Episode | $ | 2,848 | $ | 2,976 | $ | (128 | ) | (4.3 | )% | |||||
Hospice services: | ||||||||||||||
Average Daily Census | 1,260 | 1,001 | 259 | 25.9 | % | |||||||||
(1) The proforma amounts in the table demonstrate the impact of adopting ASC 606 for the three months ended March 31, 2018 by presenting the dollars and percentages as if the previous accounting guidance was still in effect. |
Three Months Ended March 31, | |||||||||||||||||||||
2018 As Reported | 2018 Pro forma (2) | 2017 | |||||||||||||||||||
$ | % | $ | % | $ | % | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||
Revenue: | |||||||||||||||||||||
Medicaid | $ | 167,625 | 34.1 | % | $ | 170,309 | 34.0 | % | $ | 148,271 | 33.6 | % | |||||||||
Medicare | 139,314 | 28.3 | 140,381 | 28.0 | 129,920 | 29.4 | |||||||||||||||
Medicaid-skilled | 27,042 | 5.5 | 27,538 | 5.5 | 23,017 | 5.2 | |||||||||||||||
Total | 333,981 | 67.9 | 338,228 | 67.5 | 301,208 | 68.2 | |||||||||||||||
Managed Care | 83,716 | 17.0 | 85,845 | 17.1 | 75,562 | 17.1 | |||||||||||||||
Private and Other(1) | 74,437 | 15.1 | 76,865 | 15.4 | 64,969 | 14.7 | |||||||||||||||
Total revenue | $ | 492,134 | 100.0 | % | $ | 500,938 | 100.0 | % | $ | 441,739 | 100.0 | % | |||||||||
(1) Private and other payors also includes revenue from all payors generated in our other ancillary services for the three months ended March 31, 2018 and 2017. | |||||||||||||||||||||
(2) The 2018 pro forma results reflect balances assuming previous accounting guidance was still in effect. |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Net income attributable to The Ensign Group, Inc. | $ | 23,132 | $ | 2,840 | |||
Non-GAAP adjustments | |||||||
Costs incurred for facilities currently being constructed and other start-up operations(a) | 1,575 | 4,542 | |||||
(Return of unclaimed class action settlement)/charges related to the settlement of the class action lawsuit(b) | (1,664 | ) | 11,000 | ||||
Share-based compensation expense(c) | 2,309 | 2,224 | |||||
Results related to closed operations and operations not at full capacity, including continued obligations and closing expense(d) | 198 | 5,587 | |||||
Depreciation and amortization - Patient base(e) | 39 | 36 | |||||
General and administrative - Transaction-related costs(f) | 28 | 88 | |||||
Provision for income taxes on Non-GAAP adjustments(g) | (1,553 | ) | (8,454 | ) | |||
Non-GAAP Net Income | $ | 24,064 | $ | 17,863 | |||
Diluted Earnings Per Share As Reported | |||||||
Net Income | $ | 0.43 | $ | 0.05 | |||
Average number of shares outstanding | 53,518 | 52,633 | |||||
Adjusted Diluted Earnings Per Share | |||||||
Net Income | $ | 0.45 | $ | 0.34 | |||
Average number of shares outstanding | 53,518 | 52,633 | |||||
Footnotes: | |||||||
(a) Represents operating results for facilities currently being constructed and other start-up operations. | |||||||
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Revenue | $ | (16,224 | ) | $ | (12,967 | ) | |
Cost of services | 13,972 | 13,598 | |||||
Rent | 3,583 | 3,662 | |||||
Depreciation and amortization | 244 | 249 | |||||
Total Non-GAAP adjustment | $ | 1,575 | $ | 4,542 | |||
(b) (Return of unclaimed class action settlement funds)/charges incurred in connection with the settlement of the class action lawsuit. | |||||||
(c) Represents share-based compensation expense incurred. | |||||||
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Cost of services | $ | 1,257 | $ | 1,235 | |||
General and administrative | 1,052 | 989 | |||||
Total Non-GAAP adjustment | $ | 2,309 | $ | 2,224 | |||
(d) Represents results at closed operations and operations not at full capacity, including the fair value of continued obligation under the lease agreement and related closing expenses of $4.0 million for the three months ended March 31, 2017. | |||||||
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Revenue | $ | — | $ | (2,372 | ) | ||
(Gains)/Losses related to operational closures | — | 4,017 | |||||
Cost of services | 116 | 3,274 | |||||
Rent | 74 | 611 | |||||
Depreciation and amortization | 8 | 57 | |||||
Total Non-GAAP adjustment | $ | 198 | $ | 5,587 | |||
(e) Included in depreciation and amortization are amortization expenses related to patient base intangible assets at newly acquired skilled nursing and assisted living facilities. | |||||||
(f) Included in general and administrative expense are costs incurred to acquire an operation which are not capitalizable. | |||||||
(g) Represents an adjustment to the provision for income tax to our historical year to date effective tax rate of 25.0%, resulting from adoption of Tax Cuts and Jobs Act, for the three months ended March 31, 2018 and 35.5% for the three months ended March 31, 2017. |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Consolidated Statements of Income Data: | |||||||
Net income | $ | 23,293 | $ | 2,956 | |||
Less: net income attributable to noncontrolling interests | 161 | 116 | |||||
Interest expense, net | 3,165 | 3,155 | |||||
Provision for income taxes | 6,521 | 1,441 | |||||
Depreciation and amortization | 11,622 | 10,514 | |||||
EBITDA | $ | 44,440 | $ | 17,950 | |||
Adjustments to EBITDA: | |||||||
(Earnings)/losses related to facilities currently being constructed and other start-up operations(a) | (2,252 | ) | 631 | ||||
(Return of unclaimed class action settlement)/charges related to the settlement of the class action lawsuit(b) | (1,664 | ) | 11,000 | ||||
Share-based compensation expense(c) | 2,309 | 2,224 | |||||
Results related to closed operations and operations not at full capacity, including continued obligations and closing expenses(d) | 116 | 4,919 | |||||
Transaction-related costs(e) | 28 | 88 | |||||
Rent related to items(a) and (d) above | 3,657 | 4,273 | |||||
Adjusted EBITDA | $ | 46,634 | $ | 41,085 | |||
Rent—cost of services | 33,850 | 31,900 | |||||
Less: rent related to items(a) and (d) above | (3,657 | ) | (4,273 | ) | |||
Adjusted EBITDAR | $ | 76,827 | $ | 68,712 | |||
(a) | Represents results related to facilities currently in the start up phase after construction was completed. This amount excludes rent, depreciation and interest expense. |
(c) | Share-based compensation expense incurred. |
(d) | Represents results at closed operations and operations not at full capacity during the three months ended March 31, 2018 and 2017, including the fair value of continued obligation under the lease agreement and related closing expenses of $4.0 million for the three months ended March 31, 2017. |
(e) | Costs incurred to acquire operations which are not capitalizable. |
THE ENSIGN GROUP, INC. | |||||||||||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||
The table below reconciles net income from operations to EBITDA, Adjusted EBITDA and Adjusted EBITDAR for each reportable segment for the periods presented: | |||||||||||||||||||||||||
Three Months Ended March 31, | |||||||||||||||||||||||||
Transitional and Skilled Services | Assisted and Independent Services | Home Health and Hospice | |||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||
Statements of Income Data: | |||||||||||||||||||||||||
Income from operations, excluding general and administrative expense(a) | $ | 46,195 | $ | 31,790 | $ | 4,662 | $ | 4,439 | $ | 6,058 | $ | 4,294 | |||||||||||||
Less: net income attributable to noncontrolling interests | — | — | — | — | 89 | 8 | |||||||||||||||||||
Depreciation and amortization | 7,802 | 6,953 | 1,597 | 1,623 | 245 | 235 | |||||||||||||||||||
EBITDA | $ | 53,997 | $ | 38,743 | $ | 6,259 | $ | 6,062 | $ | 6,214 | $ | 4,521 | |||||||||||||
Adjustments to EBITDA: | |||||||||||||||||||||||||
Costs at facilities currently being constructed and other start-up operations(b) | (2,383 | ) | 190 | 122 | 346 | 9 | 95 | ||||||||||||||||||
Results related to closed operations and operations not at full capacity, including continued obligations and closing expenses(c) | 116 | 4,404 | — | 2 | — | 513 | |||||||||||||||||||
Share-based compensation expense(d) | 987 | 1,028 | 158 | 90 | 91 | 85 | |||||||||||||||||||
Rent related to item(b),(c) and (d) above | $ | 2,767 | 3,180 | $ | 883 | $ | 934 | $ | 7 | $ | 159 | ||||||||||||||
Adjusted EBITDA | 55,484 | 47,545 | 7,422 | 7,434 | 6,321 | 5,373 | |||||||||||||||||||
Rent—cost of services | 26,777 | 25,946 | 6,380 | 5,308 | 537 | 551 | |||||||||||||||||||
Less: rent related to items(b),(c) and(d) above | (2,767 | ) | (3,180 | ) | (883 | ) | (934 | ) | (7 | ) | (159 | ) | |||||||||||||
Adjusted EBITDAR | $ | 79,494 | $ | 70,311 | $ | 12,919 | $ | 11,808 | $ | 6,851 | $ | 5,765 |