Conference Call and Webcast scheduled for tomorrow, February 6, 2025 at 10:00 am PT
SAN JUAN CAPISTRANO, Calif., Feb. 05, 2025 (GLOBE NEWSWIRE) — The Ensign Group, Inc. (Nasdaq: ENSG), the parent company of the Ensign(TM) group of companies, which provide post-acute healthcare services and invest in the long-term healthcare industry, primarily in skilled nursing and senior living facilities, announced operating results for the fiscal year and fourth quarter of 2024, reporting GAAP diluted earnings per share of $5.12 and adjusted earnings per share(1) of $5.50, both for the year ended December 31, 2024. Ensign also reported GAAP diluted earnings per share of $1.36 and adjusted earnings per share(1) of $1.49, both for the quarter ended December 31, 2024.
Highlights Include:
- GAAP net income was $298.0 million for the year and $79.7 million for the quarter, an increase of 42.3% and 267.4% over the prior year and prior year quarter, respectively.
- Adjusted net income(1) was $320.5 million for the year and $87.6 million for the quarter, an increase of 17.2% and 18.9%, over the prior year and prior year quarter, respectively.
- GAAP diluted earnings per share for the year was $5.12 and for the quarter was $1.36, an increase of 40.3% and 257.9% over the prior year and prior year quarter, respectively.
- Adjusted diluted earnings per share(1) was $5.50 for the year and $1.49 for the quarter, an increase of 15.3% and 16.4%, over the prior year and prior year quarter, respectively.
- Same Facilities and Transitioning Facilities occupancy for the year increased by 2.7% and 4.1%, respectively, over the prior year and increased by 2.3% and 4.7%, respectively, over the prior year quarter.
- Same Facilities and Transitioning Facilities skilled revenue for the year increased by 8.6% and 9.8%, respectively, over the prior year. Same Store and Transitioning Facilities skilled revenue for the quarter increased by 7.5% and 10.4%, respectively, over the prior year quarter.
- Same Facilities and Transitioning Facilities managed care days for the year improved by 6.5% and 27.8%, respectively, from prior year. Same Facilities and Transitioning Facilities managed care days for the quarter improved by 6.6% and 27.7%, respectively, from prior year quarter.
- Total skilled services(2) revenue was $4.1 billion for the year, an increase of 13.9% over the prior year, and was $1.1 billion for the quarter, an increase of 15.1% over the prior year quarter.
- Consolidated GAAP and adjusted revenues for the year were $4.26 billion, an increase of 14.2% over the prior year. Consolidated GAAP and adjusted revenues for the quarter were $1.13 billion, an increase of 15.5% over the prior year quarter.
- Standard Bearer(2) revenue was $95.1 million for the year, an increase of 15.3%, and $25.1 million for the quarter, an increase of 14.8%. FFO was $58.6 million for the year, an increase of 8.0%, and $15.3 million for the quarter, an increase of 7.3%
(1) See “Reconciliation of GAAP to Non-GAAP Financial Information”.
(2) Our Skilled Services and Standard Bearer Segments are defined and outlined in Note 8 of Item 8. Financial Statements and Supplementary Data on Form 10-K.
Operating Results
“Our leaders and their teams across the organization once again posted record clinical and financial results and continue to build remarkable momentum in each market across our portfolio,” said Barry Port, Ensign’s Chief Executive Officer. “Highlighting that progress, we were pleased to see same store and transitioning occupancy increase to 81.7% and 77.5% for the fourth quarter, respectively. We also saw skilled days increase for both our same store and transitioning operations by 3.8% and 10.9%, respectively, over the prior year quarter. In addition, our managed care census grew by 6.6% and 27.7% for our same store and transitioning operations, respectively, over the prior year quarter. These results demonstrate the enormous upside inherent in our more mature operations while simultaneously adding 64 new operations across several markets since 2023. All of this success is entirely due to the efforts and commitment of our local leadership teams, caregivers, field resources and service center partners. After another record quarter and year, we are excited about the many opportunities to continue to capture the enormous potential inherent in our portfolio as we relentlessly focus on our operational fundamentals, both in existing operations and the growing number of new acquisitions,” Mr. Port added.
“We are very humbled by what we were able to accomplish in 2024, and we are eager to continue to drive improvements in our existing portfolio and to take advantage of the acquisition opportunities that we see on the horizon, given the remarkable bench of talent that we have been developing. We are issuing our annual 2025 earnings guidance of $6.16 to $6.34 per diluted share and annual revenue guidance of $4.83 billion to $4.91 billion. The midpoint of this 2025 earnings guidance represents an increase of 13.8% over our 2024 results and is 31.0% higher than our 2023 results. We look forward to 2025 with confidence that our partners will continue to manage and innovate while balancing the addition of newly acquired operations. When we consider the current health of our organization, combined with our culture and proven local leadership strategy, we are well-positioned to have another outstanding year in 2025,” Port said.
Speaking to the Company’s growth, Chad Keetch, Ensign’s Chief Investment Officer and Executive Vice President said, “As we expected, we continued to add to our growing portfolio and are very excited about the twelve new operations, including six real estate assets, we added during the quarter and since, bringing the number of operations acquired during 2024 and since to 38. We are seeing significant opportunities to continue to add meaningful density in the markets we know best and are making progress on several additions that we expect to close in the next few months. While we anticipate the current rate of acquisitions to continue this year, we remain committed to staying true to the proven deal criteria that has allowed us to grow in a healthy and sustainable way. We continue to see more and more opportunities to acquire new operations, and our focus is to carefully choose the acquisitions that will be accretive to shareholders in both the near- and long-term.”
Suzanne Snapper, Ensign’s Executive Vice President and Chief Financial Officer reported that the Company’s liquidity remains strong with approximately $464.6 million of cash on hand and $572.1 million of available capacity under its line-of-credit. Ms. Snapper also indicated that, “Management’s annual guidance is based on diluted weighted average common shares outstanding of approximately 59.5 million and a 25.0% tax rate. In addition, the guidance assumes, among other things, normalized health insurance costs and management’s current expectations regarding reimbursement rates. It also excludes certain charges that arise outside the normal course of business, acquisition related costs and share-based compensation.”
A discussion of the Company’s use of non-GAAP financial measures is set forth below. A reconciliation of net income to adjusted EBT, EBITDA, adjusted EBITDAR, adjusted EBITDA and FFO for Standard Bearer, as well as a reconciliation of GAAP earnings per share, net income to adjusted net income and adjusted net earnings per share appear in the financial data portion of this release. More complete information is contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, which is expected to be filed with the SEC today and can be viewed on the Company’s website at http://www.ensigngroup.net.
Growth and Real Estate Highlights
Mr. Keetch added additional commentary on the Company’s continued acquisition activity. “We were very happy to complete new acquisitions during the quarter and since across five of our 15 states. We are very excited to add density to one of our newest markets in Tennessee and look forward to deepening our relationships in the healthcare community there. We are also eager to see our first operation in Alabama begin the transition process and look forward to bolstering our presence in that state over time. In the meantime, we continue to prioritize growth in our established geographies as it allows our clusters to provide a comprehensive solution to the healthcare needs in those markets.”
The recent acquisitions include the following leased operations:
- The Health Center at Research Park, a 91-bed skilled nursing facility located in Huntsville, Alabama.
- Meadowbrook Healthcare and Rehabilitation Center, a 75-bed skilled nursing facility located in Pulaski, Tennessee;
- Wellpark Health and Rehabilitation, a 30-bed skilled nursing facility located in Knoxville, Tennessee;
- Legacy Park Health and Rehabilitation, a 176-bed skilled nursing facility located in Knoxville, Tennessee;
- VanAyer Senior Living and Rehabilitation, a 75-bed skilled nursing facility located in Martin, Tennessee;
- Union City Health and Rehabilitation, a 115-bed skilled nursing facility located in Union City, Tennessee;
Standard Bearer also announced the following real estate acquisitions, which are operated by an Ensign-affiliate:
- St. Joseph Rehabilitation and Care Center and Skyview Villa Assisted Living, a healthcare campus with 83 skilled nursing beds and 16 senior living units in Norfolk, Nebraska;
- Benedictine Living Community Wausau, an 82-bed skilled nursing facility located in Wausau, Wisconsin;
- Decatur County Healthcare, a 115-bed skilled nursing facility located in Parsons, Tennessee;
- Savannah Nursing and Rehabilitation, a 117-bed skilled nursing facility located in Savannah, Tennessee;
- Westwood Nursing and Rehabilitation, a 68-bed skilled nursing facility located in Decaturville, Tennessee; and
- Mesquite Post Acute Care, a 120-bed skilled nursing facility located in Lubbock, Texas.
The Company, through Standard Bearer, also exercised a purchase option to acquire the real estate for three skilled nursing facilities and one campus operation in Texas, which had previously been leased and operated by an Ensign affiliate for several years. They include:
- Beacon Harbor Healthcare & Rehabilitation, a 190-bed skilled nursing facility located in Rockwall, Texas;
- Pleasant Manor Healthcare & Rehabilitation, a 126-bed skilled nursing facility located in Waxahachie, Texas
- Rowlett Health & Rehabilitation Center, a 150-bed skilled nursing facility located in Rowlett, Texas; and
- Crestwood Health & Rehabilitation Center, a healthcare campus with 112 skilled nursing beds and 36 senior living units located in Wills Point, Texas.
Lastly, Standard Bearer also acquired the following assets that are operated by a third-party under a triple net lease:
- Blue Jay Senior Living and Marla Vista Manor, a healthcare campus with 40 senior living units and 20 memory care units located in Green Bay, Wisconsin;
- Autumn Embers Senior Living, with 16 senior living units located in Green Bay, Wisconsin; and
- Lotus Gardens Senior Living, with 44 senior living units located in Appleton, Wisconsin.
Ensign’s growing portfolio consists of 334 healthcare operations, 30 of which also include senior living operations, across 15 states. The Company now owns 134 real estate assets, 101 of which are operated by an Ensign affiliate. Keetch noted that Ensign’s overall strategy will continue to include both leasing and acquiring real estate, and that the Company is actively looking for performing and underperforming operations in several states.
The Company continues to provide additional disclosure on Standard Bearer, which added 18 new assets during the year and since and is comprised of 129 owned properties. Of these assets, 97 are leased to an Ensign-affiliated operator and 33 are leased to third-party operators. Keetch noted that each of these properties are subject to triple-net, long-term leases and generated rental revenue of $25.1 million for the quarter, of which $20.7 million was derived from Ensign affiliated operations. For the quarter, Ensign reported $15.3 million in FFO.
The Company also paid a quarterly cash dividend of $0.0625 per share of Ensign common stock. Ms. Snapper noted that as the Company’s liquidity remains strong, it plans to continue its long history of paying dividends into the future, noting that in December of 2024 it increased the dividend for the 22nd consecutive year.
Conference Call
A live webcast will be held Thursday, February 6, 2025, at 10:00 a.m. Pacific time (1:00 p.m. Eastern time) to discuss Ensign’s fiscal year and fourth quarter 2024 financial results. To listen to the webcast, or to view any financial or statistical information required by SEC Regulation G, please visit the Investor 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, February 28, 2025.
About Ensign™
The Ensign Group, Inc.’s independent subsidiaries provide a broad spectrum of skilled nursing and senior living services, physical, occupational and speech therapies and other rehabilitative and healthcare services at 334 healthcare facilities in Alabama, Arizona, California, Colorado, Idaho, Iowa, Kansas, Nebraska, Nevada, South Carolina, Tennessee, Texas, Utah, Washington and Wisconsin. As part of its investment strategy, the Company will also acquire, lease and own healthcare real estate to service the post-acute care continuum through acquisition and investment opportunities in healthcare properties. Ensign’s new business venture operating subsidiaries also offer several other post-acute-related services, including mobile x-ray, emergency and non-emergency transportation services, long-term care pharmacy and other consulting services also across several states. Each of these operations is operated by a separate, independent 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, Standard Bearer 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. Additionally, our business and operations continue to be impacted by the unprecedented nature of the changes in the regulations and environment, as such, we are unable to predict the full extent and duration of the financial impact of these changes on our business, financial condition and results of operations. Therefore, our actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. 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 and 10-K, 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, [email protected].
SOURCE: The Ensign Group, Inc.
| THE ENSIGN GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME |
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| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| (In thousands, except per share data) | |||||||||||||||
| REVENUE | |||||||||||||||
| Service revenue | $ | 1,126,374 | $ | 974,728 | $ | 4,237,525 | $ | 3,708,071 | |||||||
| Rental revenue | 5,878 | 5,650 | 22,960 | 21,284 | |||||||||||
| TOTAL REVENUE | $ | 1,132,252 | $ | 980,378 | $ | 4,260,485 | $ | 3,729,355 | |||||||
| Expense: | |||||||||||||||
| Cost of services | 897,269 | 781,158 | 3,376,884 | 2,941,238 | |||||||||||
| Rent—cost of services | 56,076 | 50,604 | 216,016 | 197,358 | |||||||||||
| General and administrative expense | 55,611 | 106,557 | 225,143 | 263,005 | |||||||||||
| Depreciation and amortization | 22,519 | 19,233 | 84,138 | 72,387 | |||||||||||
| TOTAL EXPENSES | $ | 1,031,475 | $ | 957,552 | $ | 3,902,181 | $ | 3,473,988 | |||||||
| Income from operations | 100,777 | 22,826 | 358,304 | 255,367 | |||||||||||
| Other income (expense): | |||||||||||||||
| Interest expense | (2,258 | ) | (2,004 | ) | (8,286 | ) | (8,087 | ) | |||||||
| Interest income | 7,598 | 6,431 | 28,749 | 19,216 | |||||||||||
| Other (expense) income | (359 | ) | 4,029 | 7,327 | 6,266 | ||||||||||
| OTHER INCOME, NET | $ | 4,981 | $ | 8,456 | $ | 27,790 | $ | 17,395 | |||||||
| Income before provision for income taxes | 105,758 | 31,282 | 386,094 | 272,762 | |||||||||||
| Provision for income taxes | 26,008 | 9,459 | 87,636 | 62,912 | |||||||||||
| NET INCOME | $ | 79,750 | $ | 21,823 | $ | 298,458 | $ | 209,850 | |||||||
| Less: net income attributable to noncontrolling interests | 63 | 132 | 485 | 451 | |||||||||||
| NET INCOME ATTRIBUTABLE TO THE ENSIGN GROUP, INC. | $ | 79,687 | $ | 21,691 | $ | 297,973 | $ | 209,399 | |||||||
| NET INCOME PER SHARE ATTRIBUTABLE TO THE ENSIGN GROUP INC. | |||||||||||||||
| Basic | $ | 1.40 | $ | 0.39 | $ | 5.26 | $ | 3.76 | |||||||
| Diluted | $ | 1.36 | $ | 0.38 | $ | 5.12 | $ | 3.65 | |||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING | |||||||||||||||
| Basic | 56,958 | 56,083 | 56,655 | 55,708 | |||||||||||
| Diluted | 58,580 | 57,555 | 58,240 | 57,323 | |||||||||||
| THE ENSIGN GROUP, INC. CONSOLIDATED BALANCE SHEETS (In thousands) |
|||||||
| December 31, | |||||||
| 2024 | 2023 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 464,598 | $ | 509,626 | |||
| Accounts receivable—less allowance for doubtful accounts of $8,435 and $9,348 at December 31, 2024 and 2023, respectively | 569,897 | 485,039 | |||||
| Investments—current | 62,255 | 17,229 | |||||
| Prepaid expenses and other current assets | 60,882 | 35,036 | |||||
| Total current assets | $ | 1,157,632 | $ | 1,046,930 | |||
| Property and equipment, net | 1,291,354 | 1,090,771 | |||||
| Right-of-use assets | 1,861,071 | 1,756,430 | |||||
| Insurance subsidiary deposits and investments | 141,246 | 92,687 | |||||
| Deferred tax assets | 66,281 | 67,124 | |||||
| Restricted and other assets | 46,499 | 40,205 | |||||
| Intangible assets, net | 7,292 | 6,525 | |||||
| Goodwill | 97,981 | 76,869 | |||||
| TOTAL ASSETS | $ | 4,669,356 | $ | 4,177,541 | |||
| LIABILITIES AND EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 98,947 | $ | 92,811 | |||
| Accrued wages and related liabilities | 347,532 | 332,568 | |||||
| Lease liabilities—current | 93,475 | 82,526 | |||||
| Accrued self-insurance liabilities—current | 67,331 | 54,664 | |||||
| Other accrued liabilities | 132,057 | 168,228 | |||||
| Current maturities of long-term debt | 4,086 | 3,950 | |||||
| Total current liabilities | $ | 743,428 | $ | 734,747 | |||
| Long-term debt—less current maturities | 141,585 | 145,497 | |||||
| Long-term lease liabilities—less current portion | 1,735,325 | 1,639,326 | |||||
| Accrued self-insurance liabilities—less current portion | 144,421 | 111,246 | |||||
| Other long-term liabilities | 64,169 | 49,408 | |||||
| Total equity | 1,840,428 | 1,497,317 | |||||
| TOTAL LIABILITIES AND EQUITY | $ | 4,669,356 | $ | 4,177,541 | |||
| THE ENSIGN GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) |
The following table presents selected data from our consolidated statements of cash flows for the periods presented:
| Year Ended December 31, | |||||||
| 2024 | 2023 | ||||||
| NET CASH PROVIDED BY/(USED IN): | |||||||
| Operating activities | $ | 347,186 | $ | 376,666 | |||
| Investing activities | (390,052 | ) | (182,698 | ) | |||
| Financing activities | (2,162 | ) | (612 | ) | |||
| Net (decrease) increase in cash and cash equivalents | $ | (45,028 | ) | $ | 193,356 | ||
| Cash and cash equivalents beginning of period | 509,626 | 316,270 | |||||
| Cash and cash equivalents at end of period | $ | 464,598 | $ | 509,626 | |||
| THE ENSIGN GROUP, INC. UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION (In thousands, except per share data) |
RECONCILIATION OF GAAP TO NON-GAAP NET INCOME
The following table reconciles GAAP net income to Non-GAAP net income for the periods presented:
| Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income attributable to The Ensign Group, Inc. | $ | 79,687 | $ | 21,691 | $ | 297,973 | $ | 209,399 | |||||||
| Non-GAAP adjustments | |||||||||||||||
| Stock-based compensation expense(1) | 9,820 | 8,076 | 36,226 | 30,767 | |||||||||||
| Litigation(2) | — | 58,816 | (1,425 | ) | 60,781 | ||||||||||
| Cost of services – loss (gain) on long-lived assets and gain on business interruption recoveries | — | (123 | ) | 2,335 | (1,132 | ) | |||||||||
| Cost of services – acquisition related costs(3) | 501 | 92 | 1,019 | 814 | |||||||||||
| General and administrative – costs incurred related to system implementations | 431 | 88 | 2,953 | 963 | |||||||||||
| Depreciation and amortization – patient base(4) | 125 | 173 | 574 | 355 | |||||||||||
| Interest expense – write off deferred financing fees (5) | 200 | — | 200 | — | |||||||||||
| Provision for income taxes on Non-GAAP adjustments(6) | (3,201 | ) | (15,142 | ) | (19,358 | ) | (28,416 | ) | |||||||
| Non-GAAP Net Income | $ | 87,563 | $ | 73,671 | $ | 320,497 | $ | 273,531 | |||||||
| Average number of diluted shares outstanding | 58,580 | 57,555 | 58,240 | 57,323 | |||||||||||
| Diluted Earnings Per Share | $ | 1.36 | $ | 0.38 | $ | 5.12 | $ | 3.65 | |||||||
| Adjusted Diluted Earnings Per Share | $ | 1.49 | $ | 1.28 | $ | 5.50 | $ | 4.77 | |||||||
| Footnotes: | |||||||||||||||
| (1) Represents stock-based compensation expense incurred. | |||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Cost of services | $ | 6,554 | $ | 5,351 | $ | 23,880 | $ | 20,622 | |||||||
| General and administrative | 3,266 | 2,725 | 12,346 | 10,145 | |||||||||||
| Total Non-GAAP adjustment | $ | 9,820 | $ | 8,076 | $ | 36,226 | $ | 30,767 | |||||||
| (2) Represents specific proceedings and adjustments arising outside of the ordinary course of business. | |||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Cost of services | $ | — | $ | 4,600 | $ | (1,634 | ) | $ | 3,782 | ||||||
| General and administrative | — | 54,216 | 209 | 56,999 | |||||||||||
| Total Non-GAAP adjustment | $ | — | $ | 58,816 | $ | (1,425 | ) | $ | 60,781 | ||||||
| (3) Represents costs incurred to acquire operations that are not capitalizable. | |||||||||||||||
| (4) Represents amortization expenses related to patient base intangible assets at newly acquired skilled nursing and senior living facilities. | |||||||||||||||
| (5) Represents the write off of deferred financing fees associated with mortgage loans. | |||||||||||||||
| (6) Represents an adjustment to the provision for income tax to our historical year to date effective tax rate of 25.0%. | |||||||||||||||
| THE ENSIGN GROUP, INC. UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION (In thousands) |
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The table below reconciles net income to EBITDA, Adjusted EBITDA and Adjusted EBITDAR for the periods presented:
| Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Consolidated Statements of Income Data: | |||||||||||||||
| Net income | $ | 79,750 | $ | 21,823 | $ | 298,458 | $ | 209,850 | |||||||
| Less: Net income attributable to noncontrolling interests | 63 | 132 | 485 | 451 | |||||||||||
| Interest income | 7,598 | 6,431 | 28,749 | 19,216 | |||||||||||
| Add: Provision for income taxes | 26,008 | 9,459 | 87,636 | 62,912 | |||||||||||
| Depreciation and amortization | 22,519 | 19,233 | 84,138 | 72,387 | |||||||||||
| Interest expense | 2,258 | 2,004 | 8,286 | 8,087 | |||||||||||
| EBITDA | $ | 122,874 | $ | 45,956 | $ | 449,284 | $ | 333,569 | |||||||
| Adjustments to EBITDA: | |||||||||||||||
| Stock-based compensation expense | 9,820 | 8,076 | 36,226 | 30,767 | |||||||||||
| Litigation(1) | — | 58,816 | (1,425 | ) | 60,781 | ||||||||||
| Loss (gain) on long-lived assets and gain on business interruption recoveries | — | (123 | ) | 2,335 | (1,132 | ) | |||||||||
| Acquisition related costs(2) | 501 | 92 | 1,019 | 814 | |||||||||||
| Costs incurred related to system implementations | 431 | 88 | 2,953 | 963 | |||||||||||
| ADJUSTED EBITDA | $ | 133,626 | $ | 112,905 | $ | 490,392 | $ | 425,762 | |||||||
| Rent—cost of services | 56,076 | 50,604 | 216,016 | 197,358 | |||||||||||
| ADJUSTED EBITDAR | $ | 189,702 | $ | 706,408 | |||||||||||
(1) Litigation relates to specific proceedings and adjustments arising outside of the ordinary course of business.
(2) Costs incurred to acquire operations that are not capitalizable.
The table below reconciles income before provision for income taxes to Adjusted EBT for the periods presented:
| Three Months Ended December 31, |
Year Ended December 31, |
||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Consolidated statements of income data: | (In thousands) | ||||||||||||||
| Income before provision for income taxes | $ | 105,758 | $ | 31,282 | $ | 386,094 | $ | 272,762 | |||||||
| Stock-based compensation expense | 9,820 | 8,076 | 36,226 | 30,767 | |||||||||||
| Litigation(1) | — | 58,816 | (1,425 | ) | 60,781 | ||||||||||
| Loss (gain) on long-lived assets and gain on business interruption recoveries | — | (123 | ) | 2,335 | (1,132 | ) | |||||||||
| Acquisition related costs(2) | 501 | 92 | 1,019 | 814 | |||||||||||
| Costs incurred related to system implementations | 431 | 88 | 2,953 | 963 | |||||||||||
| Depreciation and amortization – patient base(3) | 125 | 173 | 574 | 355 | |||||||||||
| Interest expense – write off of deferred financing fees(4) | 200 | — | 200 | — | |||||||||||
| ADJUSTED EBT | $ | 116,835 | $ | 98,404 | $ | 427,976 | $ | 365,310 | |||||||
(1) Represents specific proceedings and adjustments arising outside of the ordinary course of business.
(2) Represents costs incurred to acquire operations that are not capitalizable.
(3) Represents amortization expenses related to patient base intangible assets at newly acquired skilled nursing and senior living facilities.
(4) Represents the write off of deferred financing fees associated with mortgage loans.
| THE ENSIGN GROUP, INC. UNAUDITED SELECT PERFORMANCE INDICATORS |
The following tables summarize our selected performance indicators for our skilled services segment along with other statistics, for each of the dates or periods presented:
| Three Months Ended December 31, | |||||||||||||||
| 2024 | 2023 | Change | % Change | ||||||||||||
| TOTAL FACILITY RESULTS: | (Dollars in thousands) | ||||||||||||||
| Skilled services revenue | $ | 1,082,825 | $ | 940,765 | $ | 142,060 | 15.1 | % | |||||||
| Number of facilities at period end | 286 | 259 | 27 | 10.4 | % | ||||||||||
| Number of campuses at period end(1) | 30 | 27 | 3 | 11.1 | % | ||||||||||
| Actual patient days | 2,469,517 | 2,227,888 | 241,629 | 10.8 | % | ||||||||||
| Occupancy percentage — Operational beds | 80.9 | % | 79.2 | % | 1.7 | % | 2.1 | % | |||||||
| Skilled mix by nursing days | 29.1 | % | 29.5 | % | (0.4 | )% | (1.4 | )% | |||||||
| Skilled mix by nursing revenue | 47.8 | % | 49.0 | % | (1.2 | )% | (2.4 | )% | |||||||
| Three Months Ended December 31, | |||||||||||||||
| 2024 | 2023 | Change | % Change | ||||||||||||
| SAME FACILITY RESULTS:(2) | (Dollars in thousands) | ||||||||||||||
| Skilled services revenue | $ | 774,029 | $ | 726,562 | $ | 47,467 | 6.5 | % | |||||||
| Number of facilities at period end | 193 | 193 | — | — | % | ||||||||||
| Number of campuses at period end(1) | 25 | 25 | — | — | % | ||||||||||
| Actual patient days | 1,744,222 | 1,704,669 | 39,553 | 2.3 | % | ||||||||||
| Occupancy percentage — Operational beds | 81.7 | % | 79.9 | % | 1.8 | % | 2.3 | % | |||||||
| Skilled mix by nursing days | 31.2 | % | 30.7 | % | 0.5 | % | 1.6 | % | |||||||
| Skilled mix by nursing revenue | 50.1 | % | 50.0 | % | 0.1 | % | 0.2 | % | |||||||
| Three Months Ended December 31, | |||||||||||||||
| 2024 | 2023 | Change | % Change | ||||||||||||
| TRANSITIONING FACILITY RESULTS:(3) | (Dollars in thousands) | ||||||||||||||
| Skilled services revenue | $ | 132,154 | $ | 122,760 | $ | 9,394 | 7.7 | % | |||||||
| Number of facilities at period end | 40 | 40 | — | — | % | ||||||||||
| Number of campuses at period end(1) | 1 | 1 | — | — | % | ||||||||||
| Actual patient days | 340,636 | 333,095 | 7,541 | 2.3 | % | ||||||||||
| Occupancy percentage — Operational beds | 77.5 | % | 74.0 | % | 3.5 | % | 4.7 | % | |||||||
| Skilled mix by nursing days | 21.9 | % | 20.2 | % | 1.7 | % | 8.4 | % | |||||||
| Skilled mix by nursing revenue | 38.6 | % | 37.5 | % | 1.1 | % | 2.9 | % | |||||||
| Three Months Ended December 31, | |||||||||||||||
| 2024 | 2023 | Change | % Change | ||||||||||||
| RECENTLY ACQUIRED FACILITY RESULTS:(4) | (Dollars in thousands) | ||||||||||||||
| Skilled services revenue | $ | 176,642 | $ | 90,575 | $ | 86,067 | NM | ||||||||
| Number of facilities at period end | 53 | 25 | 28 | NM | |||||||||||
| Number of campuses at period end(1) | 4 | 1 | 3 | NM | |||||||||||
| Actual patient days | 384,659 | 186,690 | 197,969 | NM | |||||||||||
| Occupancy percentage — Operational beds | 80.6 | % | 82.8 | % | NM | NM | |||||||||
| Skilled mix by nursing days | 26.0 | % | 35.7 | % | NM | NM | |||||||||
| Skilled mix by nursing revenue | 44.5 | % | 56.6 | % | NM | NM | |||||||||
| Three Months Ended December 31, | |||||||||||||||
| 2024 | 2023 | Change | % Change | ||||||||||||
| FACILITY CLOSED RESULTS:(5) | (Dollars in thousands) | ||||||||||||||
| Skilled services revenue | $ | — | $ | 868 | $ | (868 | ) | NM | |||||||
| Actual patient days | — | 3,434 | (3,434 | ) | NM | ||||||||||
| Occupancy percentage — Operational beds | — | % | 91.1 | % | NM | NM | |||||||||
(1) 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 operating segment.
(2) Same Facility results represent all facilities purchased prior to January 1, 2021.
(3) Transitioning Facility results represent all facilities purchased from January 1, 2021 to December 31, 2022.
(4) Recently Acquired Facility (Acquisitions) results represent all facilities purchased on or subsequent to January 1, 2023.
(5) Facility Closed results represent one closed operation during 2024 due to the transitioning of an intermediate care facility program to a group home setting, which is included in All Other category. The skilled services revenue was excluded from Same Facilities results for the three months ended December 31, 2023 for comparison purposes.
| Year Ended December 31, | |||||||||||||||
| 2024 | 2023 | Change | % Change | ||||||||||||
| TOTAL FACILITY RESULTS: | (Dollars in thousands) | ||||||||||||||
| Skilled services revenue | $ | 4,076,825 | $ | 3,578,855 | $ | 497,970 | 13.9 | % | |||||||
| Number of facilities at period end | 286 | 259 | 27 | 10.4 | % | ||||||||||
| Number of campuses at period end(1) | 30 | 27 | 3 | 11.1 | % | ||||||||||
| Actual patient days | 9,431,825 | 8,590,995 | 840,830 | 9.8 | % | ||||||||||
| Occupancy percentage — Operational beds | 80.5 | % | 78.5 | % | 2.0 | % | 2.5 | % | |||||||
| Skilled mix by nursing days | 29.9 | % | 30.4 | % | (0.5 | )% | (1.6 | )% | |||||||
| Skilled mix by nursing revenue | 48.6 | % | 50.2 | % | (1.6 | )% | (3.2 | )% | |||||||
| Year Ended December 31, | |||||||||||||||
| 2024 | 2023 | Change | % Change | ||||||||||||
| SAME FACILITY RESULTS:(2) | (Dollars in thousands) | ||||||||||||||
| Skilled services revenue | $ | 3,018,601 | $ | 2,823,314 | $ | 195,287 | 6.9 | % | |||||||
| Number of facilities at period end | 193 | 193 | — | — | % | ||||||||||
| Number of campuses at period end(1) | 25 | 25 | — | — | % | ||||||||||
| Actual patient days | 6,902,006 | 6,704,689 | 197,317 | 2.9 | % | ||||||||||
| Occupancy percentage — Operational beds | 81.3 | % | 79.2 | % | 2.1 | % | 2.7 | % | |||||||
| Skilled mix by nursing days | 31.7 | % | 31.8 | % | (0.1 | )% | (0.3 | )% | |||||||
| Skilled mix by nursing revenue | 50.2 | % | 51.2 | % | (1.0 | )% | (2.0 | )% | |||||||
| Year Ended December 31, | |||||||||||||||
| 2024 | 2023 | Change | % Change | ||||||||||||
| TRANSITIONING FACILITY RESULTS:(3) | (Dollars in thousands) | ||||||||||||||
| Skilled services revenue | $ | 507,143 | $ | 472,808 | $ | 34,335 | 7.3 | % | |||||||
| Number of facilities at period end | 40 | 40 | — | — | % | ||||||||||
| Number of campuses at period end(1) | 1 | 1 | — | — | % | ||||||||||
| Actual patient days | 1,336,074 | 1,302,680 | 33,394 | 2.6 | % | ||||||||||
| Occupancy percentage — Operational beds | 76.0 | % | 73.0 | % | 3.0 | % | 4.1 | % | |||||||
| Skilled mix by nursing days | 21.8 | % | 20.7 | % | 1.1 | % | 5.3 | % | |||||||
| Skilled mix by nursing revenue | 38.4 | % | 38.4 | % | — | % | — | % | |||||||
| Year Ended December 31, | |||||||||||||||
| 2024 | 2023 | Change | % Change | ||||||||||||
| RECENTLY ACQUIRED FACILITY RESULTS:(4) | (Dollars in thousands) | ||||||||||||||
| Skilled services revenue | $ | 550,507 | $ | 278,791 | $ | 271,716 | NM | ||||||||
| Number of facilities at period end | 53 | 25 | 28 | NM | |||||||||||
| Number of campuses at period end(1) | 4 | 1 | 3 | NM | |||||||||||
| Actual patient days | 1,191,663 | 566,398 | 625,265 | NM | |||||||||||
| Occupancy percentage — Operational beds | 81.6 | % | 84.4 | % | NM | NM | |||||||||
| Skilled mix by nursing days | 28.9 | % | 37.4 | % | NM | NM | |||||||||
| Skilled mix by nursing revenue | 48.9 | % | 59.7 | % | NM | NM | |||||||||
| Year Ended December 31, | |||||||||||||||
| 2024 | 2023 | Change | % Change | ||||||||||||
| FACILITY CLOSED RESULTS:(5) | (Dollars in thousands) | ||||||||||||||
| Skilled services revenue | $ | 574 | $ | 3,942 | $ | (3,368 | ) | NM | |||||||
| Actual patient days | 2,082 | 17,228 | (15,146 | ) | NM | ||||||||||
| Occupancy percentage — Operational beds | 52.6 | % | 90.8 | % | NM | NM | |||||||||
(1) 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 operating segment.
(2) Same Facility results represent all facilities purchased prior to January 1, 2021.
(3) Transitioning Facility results represent all facilities purchased from January 1, 2021 to December 31, 2022.
(4) Recently Acquired Facility (Acquisitions) results represent all facilities purchased on or subsequent to January 1, 2023.
(5) Facility Closed results represent a closed operation during the year ended December 31, 2024 due to the transitioning of an intermediate care facility program to a group home setting, which is included in All Other category. The skilled services revenue was excluded from Same Facilities results for the years ended December 31, 2024 and 2023 for comparison purposes.
| THE ENSIGN GROUP, INC. UNAUDITED SKILLED NURSING AVERAGE DAILY REVENUE RATES AND PERCENT OF SKILLED NURSING REVENUE AND DAYS BY PAYOR |
The following tables reflect 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 December 31, | |||||||||||||||||||||||
| Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||
| SKILLED NURSING AVERAGE DAILY REVENUE RATES(1) | |||||||||||||||||||||||
| Medicare | $ | 786.39 | $ | 745.05 | $ | 726.57 | $ | 701.10 | $ | 846.19 | $ | 880.69 | $ | 791.34 | $ | 760.57 | |||||||
| Managed care | 569.32 | 555.59 | 530.58 | 554.69 | 603.48 | 612.95 | 568.89 | 559.23 | |||||||||||||||
| Other skilled | 641.50 | 605.52 | 596.16 | 495.05 | 663.32 | 327.68 | 639.97 | 571.93 | |||||||||||||||
| Total skilled revenue | 655.76 | 632.11 | 622.64 | 608.26 | 742.13 | 727.31 | 664.26 | 639.33 | |||||||||||||||
| Medicaid | 300.28 | 283.31 | 285.31 | 259.51 | 322.37 | 304.39 | 301.56 | 280.85 | |||||||||||||||
| Private and other payors | 270.97 | 264.69 | 235.59 | 236.84 | 342.25 | 347.57 | 277.12 | 265.52 | |||||||||||||||
| Total skilled nursing revenue | $ | 408.02 | $ | 388.42 | $ | 353.12 | $ | 326.99 | $ | 433.96 | $ | 459.38 | $ | 404.45 | $ | 384.97 | |||||||
(1) The rates are based on contractually agreed-upon amounts or rates, excluding the estimates of variable consideration under the revenue recognition standard, Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 606 and state relief funding during the three months ended December 31, 2023.
| Year Ended December 31, | |||||||||||||||||||||||
| Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||
| SKILLED NURSING AVERAGE DAILY REVENUE RATES(1) | |||||||||||||||||||||||
| Medicare | $ | 757.99 | $ | 721.04 | $ | 705.71 | $ | 677.71 | $ | 846.60 | $ | 865.81 | $ | 767.72 | $ | 733.47 | |||||||
| Managed care | 555.11 | 535.95 | 526.01 | 528.10 | 590.50 | 613.57 | 555.37 | 539.25 | |||||||||||||||
| Other skilled | 628.01 | 595.57 | 537.30 | 494.43 | 627.85 | 424.56 | 620.42 | 575.34 | |||||||||||||||
| Total skilled revenue | 638.61 | 615.59 | 605.32 | 593.46 | 738.31 | 743.60 | 647.28 | 623.70 | |||||||||||||||
| Medicaid | 296.64 | 275.47 | 274.24 | 251.18 | 309.90 | 292.73 | 294.78 | 272.14 | |||||||||||||||
| Private and other payors | 278.20 | 262.93 | 246.18 | 237.11 | 334.92 | 347.70 | 280.24 | 262.93 | |||||||||||||||
| Total skilled nursing revenue | $ | 403.02 | $ | 382.15 | $ | 342.94 | $ | 320.41 | $ | 436.43 | $ | 466.18 | $ | 398.66 | $ | 378.02 | |||||||
(1) The rates are based on contractually agreed-upon amounts or rates, excluding the estimates of variable consideration under the revenue recognition standard, Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 606 and state relief funding during the year ended December 31, 2023.
The following tables set forth our percentage of skilled nursing patient revenue and days by payor source for the periods presented:
| Three Months Ended December 31, | |||||||||||||||||||||||
| Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||
| PERCENTAGE OF SKILLED NURSING REVENUE | |||||||||||||||||||||||
| Medicare | 20.0 | % | 20.9 | % | 19.0 | % | 19.0 | % | 27.4 | % | 39.7 | % | 21.1 | % | 22.5 | % | |||||||
| Managed care | 20.5 | 20.2 | 14.3 | 13.0 | 12.0 | 13.2 | 18.4 | 18.6 | |||||||||||||||
| Other skilled | 9.6 | 8.9 | 5.3 | 5.5 | 5.1 | 3.7 | 8.3 | 7.9 | |||||||||||||||
| Skilled mix | 50.1 | % | 50.0 | % | 38.6 | % | 37.5 | % | 44.5 | % | 56.6 | % | 47.8 | % | 49.0 | % | |||||||
| Private and other payors | 7.1 | 7.8 | 8.1 | 9.4 | 9.1 | 6.8 | 7.5 | 7.9 | |||||||||||||||
| Medicaid | 42.8 | 42.2 | 53.3 | 53.1 | 46.4 | 36.6 | 44.7 | 43.1 | |||||||||||||||
| TOTAL SKILLED NURSING | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
| Three Months Ended December 31, | |||||||||||||||||||||||
| Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||
| PERCENTAGE OF SKILLED NURSING DAYS | |||||||||||||||||||||||
| Medicare | 10.4 | % | 10.9 | % | 9.2 | % | 8.9 | % | 14.0 | % | 20.7 | % | 10.8 | % | 11.4 | % | |||||||
| Managed care | 14.7 | 14.1 | 9.5 | 7.6 | 8.6 | 9.9 | 13.0 | 12.8 | |||||||||||||||
| Other skilled | 6.1 | 5.7 | 3.2 | 3.7 | 3.4 | 5.1 | 5.3 | 5.3 | |||||||||||||||
| Skilled mix | 31.2 | % | 30.7 | % | 21.9 | % | 20.2 | % | 26.0 | % | 35.7 | % | 29.1 | % | 29.5 | % | |||||||
| Private and other payors | 10.6 | 11.4 | 12.2 | 12.8 | 11.6 | 9.1 | 11.0 | 11.4 | |||||||||||||||
| Medicaid | 58.2 | 57.9 | 65.9 | 67.0 | 62.4 | 55.2 | 59.9 | 59.1 | |||||||||||||||
| TOTAL SKILLED NURSING | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
| Year Ended December 31, | |||||||||||||||||||||||
| Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||
| PERCENTAGE OF SKILLED NURSING REVENUE | |||||||||||||||||||||||
| Medicare | 20.5 | % | 22.4 | % | 19.4 | % | 20.8 | % | 31.4 | % | 42.2 | % | 21.9 | % | 23.8 | % | |||||||
| Managed care | 20.4 | 20.1 | 14.3 | 12.3 | 12.7 | 13.3 | 18.6 | 18.5 | |||||||||||||||
| Other skilled | 9.3 | 8.7 | 4.7 | 5.3 | 4.8 | 4.2 | 8.1 | 7.9 | |||||||||||||||
| Skilled mix | 50.2 | % | 51.2 | % | 38.4 | % | 38.4 | % | 48.9 | % | 59.7 | % | 48.6 | % | 50.2 | % | |||||||
| Private and other payors | 7.2 | 7.6 | 8.6 | 8.9 | 8.2 | 6.4 | 7.5 | 7.6 | |||||||||||||||
| Medicaid | 42.6 | 41.2 | 53.0 | 52.7 | 42.9 | 33.9 | 43.9 | 42.2 | |||||||||||||||
| TOTAL SKILLED NURSING | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
| Year Ended December 31, | |||||||||||||||||||||||
| Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||
| PERCENTAGE OF SKILLED NURSING DAYS | |||||||||||||||||||||||
| Medicare | 10.9 | % | 11.9 | % | 9.4 | % | 9.8 | % | 16.2 | % | 22.7 | % | 11.4 | % | 12.3 | % | |||||||
| Managed care | 14.8 | 14.3 | 9.3 | 7.5 | 9.4 | 10.1 | 13.4 | 13.0 | |||||||||||||||
| Other skilled | 6.0 | 5.6 | 3.1 | 3.4 | 3.3 | 4.6 | 5.1 | 5.1 | |||||||||||||||
| Skilled mix | 31.7 | % | 31.8 | % | 21.8 | % | 20.7 | % | 28.9 | % | 37.4 | % | 29.9 | % | 30.4 | % | |||||||
| Private and other payors | 10.4 | 11.0 | 12.0 | 12.1 | 10.7 | 8.6 | 10.7 | 11.0 | |||||||||||||||
| Medicaid | 57.9 | 57.2 | 66.2 | 67.2 | 60.4 | 54.0 | 59.4 | 58.6 | |||||||||||||||
| TOTAL SKILLED NURSING | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
| THE ENSIGN GROUP, INC. UNAUDITED REVENUE BY PAYOR SOURCE |
The following tables set forth our service revenue by payor source and as a percentage of total service revenue for the periods presented:
| Three Months Ended December 31, | |||||||||||||||
| 2024 | 2023 | ||||||||||||||
| Revenue | % of Revenue | Revenue | % of Revenue | ||||||||||||
| Medicaid(1)(2) | $ | 454,779 | 40.4 | % | $ | 384,566 | 39.5 | % | |||||||
| Medicare | 267,180 | 23.7 | 252,414 | 25.9 | |||||||||||
| Medicaid — skilled | 69,720 | 6.2 | 63,269 | 6.4 | |||||||||||
| Total Medicaid and Medicare | $ | 791,679 | 70.3 | % | $ | 700,249 | 71.8 | % | |||||||
| Managed care | 207,989 | 18.5 | 177,618 | 18.2 | |||||||||||
| Private and other(3) | 126,706 | 11.2 | 96,861 | 10.0 | |||||||||||
| SERVICE REVENUE | $ | 1,126,374 | 100.0 | % | $ | 974,728 | 100.0 | % | |||||||
(1) Medicaid payor includes revenue for senior living operations.
(2) Medicaid payor includes revenue related to state relief funding during the three months ended December 31, 2023.
(3) Private and other also includes revenue from senior living operations and all revenue generated in other ancillary services.
| Year Ended December 31, | |||||||||||||||
| 2024 | 2023 | ||||||||||||||
| Revenue | % of Revenue | Revenue | % of Revenue | ||||||||||||
| Medicaid(1)(2) | $ | 1,682,344 | 39.7 | % | $ | 1,459,449 | 39.4 | % | |||||||
| Medicare | 1,055,226 | 24.9 | 985,749 | 26.6 | |||||||||||
| Medicaid — skilled | 266,738 | 6.3 | 245,663 | 6.6 | |||||||||||
| Total Medicaid and Medicare | $ | 3,004,308 | 70.9 | % | $ | 2,690,861 | 72.6 | % | |||||||
| Managed care | 789,643 | 18.6 | 666,129 | 18.0 | |||||||||||
| Private and other(3) | 443,574 | 10.5 | 351,081 | 9.4 | |||||||||||
| SERVICE REVENUE | $ | 4,237,525 | 100.0 | % | $ | 3,708,071 | 100.0 | % | |||||||
(1) Medicaid payor includes revenue for senior living operations.
(2) Medicaid payor includes revenue related to state relief funding during the year ended December 31, 2023.
(3) Private and other also includes revenue from senior living operations and all revenue generated in other ancillary services.
| THE ENSIGN GROUP, INC. UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION BY SEGMENT (In thousands) |
Skilled Services
The table below reconciles net income to EBITDA and Adjusted EBITDA for the skilled services reportable segment for the periods presented:
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Statements of Income Data: | |||||||||||||||
| Segment income(1) | $ | 140,980 | $ | 116,756 | $ | 518,463 | $ | 464,925 | |||||||
| Depreciation and amortization | 12,207 | 10,349 | 45,195 | 38,766 | |||||||||||
| EBITDA | $ | 153,187 | $ | 127,105 | $ | 563,658 | $ | 503,691 | |||||||
| Adjustments to EBITDA: | |||||||||||||||
| Stock-based compensation expense | 6,302 | 5,164 | 22,992 | 19,904 | |||||||||||
| Litigation(2) | — | 4,600 | 2,100 | 4,600 | |||||||||||
| Gain on business interruption recoveries | — | — | — | (1,009 | ) | ||||||||||
| ADJUSTED EBITDA | $ | 159,489 | $ | 136,869 | $ | 588,750 | $ | 527,186 | |||||||
(1) Segment income reflects profit or loss from operations before provision for income taxes and impairment charges from operations. General and administrative expenses are not allocated to the skilled services segment for purposes of determining segment profit or loss.
(2) Litigation relates to specific proceedings arising outside of the ordinary course of business.
Standard Bearer
The following table sets forth details of operating results for our revenue and earnings, and their respective components, by Standard Bearer for the periods presented:
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Rental revenue generated from third-party tenants | $ | 4,388 | $ | 4,198 | $ | 16,976 | $ | 15,774 | |||||||
| Rental revenue generated from Ensign’s independent subsidiaries | 20,714 | 17,677 | 78,110 | 66,712 | |||||||||||
| TOTAL RENTAL REVENUE | $ | 25,102 | $ | 21,875 | $ | 95,086 | $ | 82,486 | |||||||
| Segment income(1) | 7,443 | 7,548 | 29,335 | 29,065 | |||||||||||
| Depreciation and amortization | 7,818 | 6,677 | 29,297 | 25,205 | |||||||||||
| FFO(2) | $ | 15,261 | $ | 14,225 | $ | 58,632 | $ | 54,270 | |||||||
(1) Segment income reflects profit or loss from operations before provision for income taxes, excluding gain or loss from sale of real estate, insurance recoveries and impairment of long-lived assets. Included in Standard Bearer expenses for the three months and year ended December 31, 2024 is management fee of $1.5 million and $5.7 million, respectively, and interest of $5.5 million and $20.3 million, respectively, from intercompany agreements between Standard Bearer and the Company and its independent subsidiaries, including the Service Center. Included in Standard Bearer expenses for the three months and year ended December 31, 2023 is management fee of $1.3 million and $5.0 million, respectively, and interest of $3.8 million and $12.9 million, respectively, from intercompany agreements between Standard Bearer and the Company and its independent subsidiaries, including the Service Center.
(2) FFO, in accordance with the definition used by the National Association of Real Estate Investment Trusts, means net income attributable to common stockholders, computed in accordance with U.S. GAAP, excluding gains or losses from sale of real estate, insurance recoveries related to real estate and impairment of long-lived assets, while including depreciation and amortization related to real estate to earnings.
Discussion of Non-GAAP Financial Measures
EBITDA consists of net income before (a) interest income, (b) provision for income taxes, (c) depreciation and amortization and (d) interest expense. Adjusted EBITDA consists of net income before (a) interest income, (b) provision for income taxes, (c) depreciation and amortization, (d) interest expense, (e) stock-based compensation expense, (f) acquisition related costs, (g) costs incurred related to system implementations, (h) litigation arising outside of the ordinary course of business and (i) loss (gain) on long-lived assets and gain on business interruption recoveries. Adjusted EBITDAR consists of net income before (a) interest income, (b) provision for income taxes, (c) depreciation and amortization, (d) interest expense, (e) rent-cost of services, (f) stock-based compensation expense, (g) acquisition related costs, (h) costs incurred related to system implementations, (i) litigation arising outside of the ordinary course of business and (j) loss (gain) on long-lived assets and gain on business interruption recoveries. Adjusted EBT consists of net income before (a) provision for income taxes, (b) stock-based compensation expense, (c) acquisition related costs, (d) costs incurred related to system implementations, (e) litigation arising outside of the ordinary course of business, (f) loss (gain) on long-lived assets and gain on business interruption recoveries, (g) amortization of patient base intangible assets and (h) write off of deferred financing fees. Funds from Operations (FFO) for our Standard Bearer segment consists of segment income, excluding depreciation and amortization related to real estate, gains or losses from the sale of real estate, insurance recoveries related to real estate and impairment of long-lived assets. The Company believes that the presentation of adjusted net income, adjusted earnings per share, EBITDA, adjusted EBITDA, adjusted EBT and FFO 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, adjusted EBITDAR, adjusted EBT and FFO 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 measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, 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 “Financials” link of the Investor Relations section on Ensign’s website at http://www.ensigngroup.net.
