Attached files
| file | filename |
|---|---|
| 8-K - 8-K - ENSIGN GROUP, INC | fy2013form8-k.htm |
The Ensign Group Reports Record Revenues and Adjusted Earnings of $0.70 per Share; Issues 2014 Guidance
Conference Call and Webcast Scheduled for February 14, 2014 at 10:00 am PT
MISSION VIEJO, California - February 13, 2014 - The Ensign Group, Inc. (Nasdaq: ENSG), the parent company of the Ensign™ group of skilled nursing, rehabilitative care services, assisted and independent living, home health, hospice care and urgent care companies, today reported operating results for the fourth quarter and full year of 2013.
Quarter Highlights Include:
▪ | Adjusted earnings per share climbed 25% sequentially to $0.70 per share for the quarter, and grew 4.5% over the prior year quarter; |
▪ | Same-store skilled mix days grew by 40 basis points to 28.0% of revenues in the quarter; |
▪ | Same-store occupancy grew by 41 basis points over the prior year quarter, to 81.3%; |
▪ | Adjusted consolidated EBITDAR was $40.5 million, an increase of 9.4% over the prior year quarter; |
▪ | Consolidated revenues were up 12.6% over the prior year quarter to a record $237.0 million, and up 9.9% to a record $904.6 million in the year; and |
▪ | Same-store revenues increased by $5.7 million or 3.4% over the prior year quarter. |
Operating Results
Commenting on the operating results, Ensign’s President and Chief Executive Officer Christopher Christensen said, “We are pleased to report another record quarter with revenues of $237.0 million on a GAAP basis, representing a 12.6% increase over the prior year quarter. This reversal was in spite of the many challenges we faced throughout the year.”
Mr. Christensen added that Management is “likewise pleased to be issuing 2014 annual guidance, with projected revenues of $1.01 billion to $1.025 billion in revenues, with $2.74 to $2.81 in diluted adjusted earnings per share.” He also indicated that Ensign anticipates updating its earnings per share guidance following the previously-announced spin-off transaction, but revenue guidance will not be materially affected. He also stated that, “As we have noted in the past, our business can be a bit lumpy from quarter to quarter, but we are pleased to have been able to project performance fairly accurately on an annual basis year after year.”
Mr. Christensen also acknowledged that, for the first time in Ensign’s history, annual results came in just under management’s guidance for 2013, and added “Even though the improvements in the fourth quarter were significant, they were not quite large enough to make up for our second and third quarter results.” He also affirmed that some of the challenges faced by Ensign in the second and third quarter continued into the fourth quarter, including distractions associated with structuring the spin-off transaction, significant costs surrounding the implementation of our corporate integrity agreement and the short-term earnings drag created by Ensign’s significant growth earlier in the year. Noting a record quarter, he added, “Although many of these challenges remain, our improvement demonstrates that we can do much, much better, and we expect to take the momentum we generated in the fourth quarter into 2014 and beyond.”
Suzanne Snapper, Ensign’s Chief Financial Officer, observed that substantial organic upside remains within the company’s existing portfolio. “We have started to see growth in occupancy in our 42 Transitioning and Newly-Acquired Facilities, with an increase of 58 basis points at our Transitioning and Newly-Acquired facilities to 71.1%, and an increase of 120 basis points at our Newly-Acquired Facilities to 65.7%, as compared to the third quarter,” she said. She noted that these improvements, together with the 41 basis point climb in same-store occupancy to 81.3%, grew sequential consolidated occupancy to 78.0%.
Diluted GAAP earnings per share were $0.59 for the quarter, compared to $0.14 per share in the prior year quarter, and $1.16 for the year, compared to $1.91 in 2012. Adjusted non-GAAP earnings for the quarter were $0.70 per diluted share, compared to $0.56 in the third quarter of 2013. Ms. Snapper also noted that the company’s adjusted earnings per share have grown at a rate of almost 15% a year since 2009.
During the quarter, the company’s Board of Directors declared a quarterly cash dividend of $0.07 per share of Ensign common stock, an increase from the prior quarterly cash dividend of $0.065 per share. Ensign has been a dividend-paying company since 2002 and has consistently increased its dividend annually.
Ensign’s growing portfolio consists of 119 facilities, nine home health and seven hospice companies, nine urgent care clinics, and an ancillary service provider, all in 11 states. Of the 119 post-acute and seniors housing facilities, 96 are Ensign-owned, and 75 of those are owned free of mortgage debt, with Ensign affiliates holding purchase options on two of Ensign’s 23 leased facilities. Management reaffirmed that Ensign is actively seeking additional opportunities to acquire both well-performing and struggling long-term care, assisted living, seniors housing, home health and hospice operations across the United States. Management also reports that they are seeing an increased number of attractive acquisition opportunities at present, and that they expect to complete additional acquisitions before the end of the first quarter of 2014.
A discussion of the company's use of non-GAAP financial measures is set forth below. A reconciliation of net income to adjusted EBITDAR and adjusted EBITDA, as well as a reconciliation of GAAP earnings per share and net income to adjusted net earnings per share and adjusted net income, appear in the financial data portion of this release.
More complete information is contained in the company’s 10-K, which was filed with the SEC today and can be viewed on the Company’s website at http://www.ensigngroup.net.
2013 Guidance Adjusted
Management issued 2014 annual guidance, projecting revenues of $1.01 billion to $1.025 billion in revenues, with $2.74 to $2.81 per diluted share for the year. The guidance is based on diluted weighted average common shares outstanding of 22.7 million and assumes, among other things, acquisitions anticipated to be closed by the end of the second quarter, anticipated Medicaid reimbursement rate increases net of provider taxes, and that tax rates do not materially increase. It also excludes acquisition-related costs and amortization costs related to intangible assets acquired, start-up losses at newly-created operations and the impact of the spin-off healthcare and real estate businesses.
CareTrust Update
Management also reported that the planned separation of Ensign’s real estate business from its healthcare operations, which was announced on November 7, 2013, continues to move forward. The spin-off of CareTrust REIT, Inc. will create a separate and independent publicly-traded real estate investment trust which will own, acquire and lease real estate serving the healthcare and seniors housing industries.
Mr. Christensen reiterated that Ensign continues working to ensure that the strategic separation results in two very healthy platforms for growth. Greg Stapley, Ensign’s Executive Vice President and Secretary, who will become the Chief Executive Officer of CareTrust, noted that CareTrust filed its updated registration statement on Form 10 with the Securities and Exchange Commission today, which contains further details on the current format and status of the proposed transaction. Ensign anticipates that the spin-off will be completed early in the second quarter of 2014, but there can be no assurances regarding the final terms and structure of the spin-off or that it will be completed.
Conference Call
A live webcast will be held on Friday, February 14, 2014 at 10:00 a.m. Pacific Time (1:00 p.m. Eastern) to discuss Ensign’s fourth quarter and fiscal 2013 financial results, and Management’s 2014 guidance. To listen to the webcast, or to view any financial or statistical information required by SEC Regulation G, please visit the Investors section of the Ensign 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, March 7, 2014.
About EnsignTM
The Ensign Group, Inc.'s independent operating subsidiaries provide a broad spectrum of skilled nursing and assisted living services, physical, occupational and speech therapies, home health and hospice services, and other rehabilitative, healthcare and diagnostic services for both long-term residents and short-stay rehabilitation patients at 119 post-acute, assisted living and seniors housing facilities, nine home health companies, seven hospice companies, nine urgent care locations and a mobile diagnostic business, all spread across California, Arizona, Texas, Washington, Utah, Idaho, Colorado, Nevada, Iowa, Nebraska and Oregon. 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 home health and hospice businesses, the Service Center or the captive insurance subsidiary are operated by the same entity. More information about Ensign is available at http://www.ensigngroup.net.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:
This press release contains, and the related conference call and webcast will include, forward-looking statements that are based on management’s current expectations, assumptions and beliefs about its business, financial performance, operating results, the industry in which it operates and other future events. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding growth prospects, future operating and financial performance, and the entry into final settlement documents. 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 facilities, its ability to manage its increasing borrowing costs as it incurs additional indebtedness to fund the acquisition and development of facilities; 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 facilities; competition from other companies in the acquisition, development and operation of facilities; 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 facilities 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-K, which was filed today, 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.
GAAP and ADJUSTED CONDENSED CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share data)
Three Months Ended December 31, 2013 | Twelve Months Ended December 31, 2013 | ||||||||||||||||||||||
As Reported | Non-GAAP Adj. | As Adjusted | As Reported | Non-GAAP Adj. | As Adjusted | ||||||||||||||||||
Revenue | $ | 237,008 | (1,524 | ) | (9)(10) | $ | 235,484 | $ | 904,556 | $ | (5,688 | ) | (9) (10) | $ | 898,868 | ||||||||
Expense: | |||||||||||||||||||||||
Cost of services (exclusive of facility rent, general and administrative and depreciation and amortization expenses shown separately below) | 187,843 | (2,478 | ) | (1)(2)(9)(10) | 185,365 | 725,989 | (11,235 | ) | (1)(2)(9)(10) | 714,754 | |||||||||||||
U.S. Government inquiry settlement | — | — | — | 33,000 | (33,000 | ) | (4) | — | |||||||||||||||
Facility rent—cost of services | 3,557 | (321 | ) | (5)(6) | 3,236 | 13,613 | (1,009 | ) | (5) (6) | 12,604 | |||||||||||||
General and administrative expense | 11,782 | (2,180 | ) | (3)(7)(8) | 9,602 | 40,103 | (5,148 | ) | (3)(7)(8) | 34,955 | |||||||||||||
Depreciation and amortization | 8,711 | (210 | ) | (11)(12) | 8,501 | 33,909 | (1,386 | ) | (11) (12) | 32,523 | |||||||||||||
Total expenses | 211,893 | (5,189 | ) | 206,704 | 846,614 | (51,778 | ) | 794,836 | |||||||||||||||
Income from operations | 25,115 | 3,665 | 28,780 | 57,942 | 46,090 | 104,032 | |||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest expense | (3,346 | ) | (3,346 | ) | (12,787 | ) | (12,787 | ) | |||||||||||||||
Interest income | 143 | 143 | 506 | 506 | |||||||||||||||||||
Other expense, net | (3,203 | ) | (3,203 | ) | (12,281 | ) | (12,281 | ) | |||||||||||||||
Income before provision for income taxes | 21,912 | 3,665 | 25,577 | 45,661 | 46,090 | 91,751 | |||||||||||||||||
Tax Effect on Non-GAAP Adjustments | 1,411 | (13) | 17,745 | (13) | |||||||||||||||||||
Tax True-up for Effective Tax Rate | (127 | ) | (14) | (2,422 | ) | (14) | |||||||||||||||||
Provision for income taxes | 8,563 | 1,284 | 9,847 | 20,003 | 15,323 | 35,326 | |||||||||||||||||
Income from continuing operations | 13,349 | 2,381 | 15,730 | 25,658 | 30,767 | 56,425 | |||||||||||||||||
Loss from discontinued operations, net of income tax benefit | — | — | (1,804 | ) | (1,804 | ) | |||||||||||||||||
Net income | 13,349 | 2,381 | 15,730 | 23,854 | 30,767 | 54,621 | |||||||||||||||||
Less: net loss attributable to noncontrolling interests | (7 | ) | (7 | ) | (186 | ) | (186 | ) | |||||||||||||||
Net income attributable to The Ensign Group, Inc. | $ | 13,356 | $ | 2,381 | $ | 15,737 | $ | 24,040 | $ | 30,767 | $ | 54,807 | |||||||||||
Attributable to The Ensign Group, Inc. | |||||||||||||||||||||||
Net income attributable to The Ensign Group, Inc. | 13,356 | 2,381 | 15,737 | 24,040 | 30,767 | 54,807 | |||||||||||||||||
Loss from discontinued operations, net of income tax benefit | — | — | (1,804 | ) | (1,804 | ) | |||||||||||||||||
Income from continuing operations attributable to The Ensign Group, Inc. | $ | 13,356 | $ | 2,381 | $ | 15,737 | $ | 25,844 | $ | 30,767 | $ | 56,611 | |||||||||||
Net income (loss) per share: | |||||||||||||||||||||||
Basic: | |||||||||||||||||||||||
Net income attributable to The Ensign Group, Inc. | $ | 0.61 | $ | 0.71 | $ | 1.10 | $ | 2.50 | |||||||||||||||
Loss from discontinued operations, net of income tax benefit | — | — | (0.08 | ) | $ | (0.08 | ) | ||||||||||||||||
Income from continuing operations attributable to The Ensign Group, Inc. | $ | 0.61 | $ | 0.71 | $ | 1.18 | $ | 2.58 | |||||||||||||||
Diluted: | |||||||||||||||||||||||
Net income attributable to The Ensign Group, Inc. | $ | 0.59 | $ | 0.70 | $ | 1.07 | $ | 2.45 | |||||||||||||||
Loss from discontinued operations, net of income tax benefit | — | — | (0.09 | ) | $ | (0.08 | ) | ||||||||||||||||
Income from continuing operations attributable to The Ensign Group, Inc. | $ | 0.59 | $ | 0.70 | $ | 1.16 | $ | 2.53 | |||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | 22,028 | 22,028 | 21,900 | 21,900 | |||||||||||||||||||
Diluted | 22,507 | 22,507 | 22,364 | 22,364 | |||||||||||||||||||
(1) | Represents acquisition-related costs of $10 and $288 for the three and year ended December 31, 2013. |
(2) | Represents costs of $42 and $145 for the three and year ended December 31, 2013, incurred to recognize income tax credits. |
(3) | Represents additional costs incurred related to a class action lawsuit settlement of $0 and $1,524 for the three and year ended December 31, 2013. |
(4) | Charges related to our efforts to achieve a global, company-wide, resolution of any claims connected to the U.S. Department of Justice (DOJ) investigation. |
(5) | Represents straight-line rent amortization for the first six months of 2013 for one newly constructed facility which began operations during the first quarter of 2013. This facility began operating at full capacity during the third quarter and therefore, third and fourth quarter results were not included in the three or year ended periods above. |
(6) | Represents straight-line rent amortization for newly opened urgent care centers. |
(7) | Represents legal costs incurred in connection with the ongoing investigation into the billing and reimbursement processes of some of our subsidiaries being conducted by the DOJ. |
(8) | Represents expenses incurred in connection with the Company's proposed spin-off of its real estate assets to a newly formed publicly traded real estate investment trust (REIT). |
(9) | Represents revenues and expenses incurred at newly opened urgent care centers, less rent expense recognized in note (6) above and depreciation expense recognized in note (11) below. |
(10) | Represents revenues and expenses incurred for the first six months of 2013 at one newly constructed facility which began operations during the first quarter of 2013, less rent expense recognized in note (5) above and depreciation expense recognized in Note (12) below. This facility began operating at full capacity during the third quarter and therefore, third and fourth quarter results were not included in the three or year ended periods above. |
(11) | Represents depreciation expense at newly opened urgent care centers and amortization costs related to patient base intangible assets at skilled nursing and assisted living facilities acquired. Patient base intangible assets are amortized over a period of four to eight months, depending on the classification of the patients and the level of occupancy in a new acquisition on the acquisition date. |
(12) | Represents depreciation expense for the first six months of 2013 at one newly constructed facility which began operations in the first quarter of 2013. This facility began operating at full capacity during the third quarter and therefore, third and fourth quarter results were not included in the three or year end periods above. |
(13) | Represents the tax impact of non-GAAP adjustments noted in (1) – (12) at the Company’s year to date effective tax rate of 38.5% for the three and year ended December 31, 2013. |
(14) | Represents an adjustment to the provision for income taxes to our current year to date effective rate to 40.9% and 37.9% for the three and year ended December 31, 2013. |
THE ENSIGN GROUP, INC.
GAAP and ADJUSTED CONDENSED CONSOLIDATED STATEMENT OF INCOME
Adjusted to Reflect Discontinued Operations
(In thousands, except per share data)
Three Months Ended December 31, 2012 | Year Ended December 31, 2012 | ||||||||||||||||||||||
As Reported Including Discontinued Operations | Non-GAAP Adj. | As Adjusted | As Reported Including Discontinued Operations | Non-GAAP Adj. | As Adjusted | ||||||||||||||||||
Revenue | $ | 210,505 | (79 | ) | (9) | $ | 210,426 | $ | 823,155 | (79 | ) | (9) | $ | 823,076 | |||||||||
Expense: | |||||||||||||||||||||||
Cost of services (exclusive of facility rent, general and administrative and depreciation and amortization expense shown separately below) | 169,133 | (3,077 | ) | (1)(2)(5)(9) | 166,056 | 656,424 | (6,641 | ) | (1)(2)(3)(5)(9) | 649,783 | |||||||||||||
Charges related to U.S. Government inquiries | 15,000 | (15,000 | ) | (4) | — | 15,000 | (15,000 | ) | (4) | — | |||||||||||||
Facility rent—cost of services | 3,247 | (272 | ) | (6)(9) | 2,975 | 13,281 | (860 | ) | (6)(9) | 12,421 | |||||||||||||
General and administrative expense | 7,886 | (503 | ) | (7) | 7,383 | 31,819 | (1,945 | ) | (7) | 29,874 | |||||||||||||
Depreciation and amortization | 7,287 | (50 | ) | (8)(9) | 7,237 | 28,358 | (501 | ) | (8)(9) | 27,857 | |||||||||||||
Total expenses | 202,553 | (18,902 | ) | 183,651 | 744,882 | (24,947 | ) | 719,935 | |||||||||||||||
Income from operations | 7,952 | 18,823 | 26,775 | 78,273 | 24,868 | 103,141 | |||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest expense | (3,098 | ) | (3,098 | ) | (12,229 | ) | (12,229 | ) | |||||||||||||||
Interest income | 83 | 83 | 255 | 255 | |||||||||||||||||||
Other expense, net | (3,015 | ) | — | (3,015 | ) | (11,974 | ) | — | (11,974 | ) | |||||||||||||
Income before provision for income taxes | 4,937 | 18,823 | 23,760 | 66,299 | 24,868 | 91,167 | |||||||||||||||||
Tax impact of non-GAAP adjustments | 7,134 | (10) | 9,425 | (10) | |||||||||||||||||||
Tax true-up for effective tax rate | (149 | ) | (11) | ||||||||||||||||||||
Provision for income taxes | 2,020 | 6,985 | 9,005 | 25,134 | 9,425 | 34,559 | |||||||||||||||||
Income from continuing operations | 2,917 | 11,838 | 14,755 | 41,165 | 15,443 | 56,608 | |||||||||||||||||
Loss from discontinued operations, net of income tax | (1,252 | ) | (1,252 | ) | (1,357 | ) | (1,357 | ) | |||||||||||||||
Net income | 1,665 | 11,838 | 13,503 | 39,808 | 15,443 | 55,251 | |||||||||||||||||
Less: net loss attributable to noncontrolling interests | (272 | ) | 226 | (46 | ) | (783 | ) | 354 | (429 | ) | |||||||||||||
Net income attributable to The Ensign Group, Inc. | $ | 1,937 | $ | 11,612 | $ | 13,549 | $ | 40,591 | $ | 15,089 | $ | 55,680 | |||||||||||
Attributable to The Ensign Group, Inc. | |||||||||||||||||||||||
Net income attributable to The Ensign Group, Inc. | 1,937 | 11,612 | 13,549 | 40,591 | 15,089 | 55,680 | |||||||||||||||||
Loss from discontinued operations, net of income tax | (1,252 | ) | (1,252 | ) | (1,357 | ) | (1,357 | ) | |||||||||||||||
Income from continuing operations attributable to The Ensign Group, Inc. | $ | 3,189 | $ | 11,612 | $ | 14,801 | $ | 41,948 | $ | 15,089 | $ | 57,037 | |||||||||||
Net income per share | |||||||||||||||||||||||
Basic: | |||||||||||||||||||||||
Net income attributable to The Ensign Group, Inc. | 0.09 | 0.63 | 1.89 | 2.60 | |||||||||||||||||||
Loss from discontinued operations, net of income tax | (0.06 | ) | (0.06 | ) | (0.07 | ) | (0.06 | ) | |||||||||||||||
Income from continuing operations attributable to The Ensign Group, Inc. | $ | 0.15 | $ | 0.69 | $ | 1.96 | $ | 2.66 | |||||||||||||||
Diluted: | |||||||||||||||||||||||
Net income attributable to The Ensign Group, Inc. | 0.09 | 0.61 | 1.85 | 2.54 | |||||||||||||||||||
Loss from discontinued operations, net of income tax benefit | (0.05 | ) | (0.06 | ) | (0.06 | ) | (0.06 | ) | |||||||||||||||
Income from continuing operations attributable to The Ensign Group, Inc. | $ | 0.14 | $ | 0.67 | $ | 1.91 | $ | 2.60 | |||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||
Basic | 21,605 | 21,605 | 21,429 | 21,429 | |||||||||||||||||||
Diluted | 22,075 | 22,075 | 21,942 | 21,942 | |||||||||||||||||||
(1) | Represents acquisition-related costs of $20 and $250 for the three and twelve months ended December 31, 2012, respectively. |
(2) | Represents costs of $152 and $591 for the three and twelve months ended December 31, 2012, respectively, incurred to recognized income tax credits which contributed to the decrease in the Company's effective tax rate. |
(3) | Represents the settlement of a class action lawsuit regarding minimum staffing requirements in the state of California of $2,596 during the period ended June 30, 2012. |
(4) | Represents the Company's estimated liability related to its efforts to achieve a global, company-wide resolution of any claims connected to the U.S. Department of Justice (DOJ) investigation. |
(5) | Represents impairment charges of $2,225 recorded at our urgent care franchising operations, which we attribute to a decline in the estimated fair value of redeemable noncontrolling interests. |
(6) | Represents straight-line rent amortization for a facility which the Company has begun construction activities, but had not commenced operations of a skilled nursing facility as of December 31, 2012. |
(7) | Represents legal costs incurred in connection with the ongoing investigation into the billing and reimbursement processes of some of our subsidiaries being conducted by the Department of Justice (DOJ). |
(8) | Represents amortization costs related to patient base intangible assets acquired. Patient base intangible assets are amortized over a period of four to eight months, depending on the classification of the patients and the level of occupancy in a new acquisition on the acquisition date. |
(9) | Represents revenues and expenses incurred at newly opened urgent care centers. |
(10) | Represents the tax impact of non-GAAP adjustments noted in (1) - (7) at a normalized rate of 37.9%. |
(11) | Represents an adjustment to the provision for income taxes to our effective tax rate of 37.9%. |
THE ENSIGN GROUP, INC.
RECONCILIATION OF NET INCOME TO EBITDA, EBITDAR, ADJUSTED EBITDA AND
ADJUSTED EBITDAR
(in thousands)
(Unaudited)
The table below reconciles net income to EBITDA, Adjusted EBITDA, EBITDAR and Adjusted EBITDAR for the periods presented:
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
(In thousands) | |||||||||||||||
Consolidated statements of income Data: | |||||||||||||||
Net income | $ | 13,349 | $ | 1,665 | $ | 23,854 | $ | 39,808 | |||||||
Net loss attributable to noncontrolling interests | 7 | 272 | 186 | 783 | |||||||||||
Loss from discontinued operations | — | 1,252 | 1,804 | 1,357 | |||||||||||
Interest expense, net | 3,203 | 3,015 | 12,281 | 11,974 | |||||||||||
Provision for income taxes | 8,563 | 2,020 | 20,003 | 25,134 | |||||||||||
Depreciation and amortization | 8,711 | 7,287 | 33,909 | 28,358 | |||||||||||
EBITDA | 33,833 | 15,511 | 92,037 | 107,414 | |||||||||||
Facility rent—cost of services | 3,557 | 3,247 | 13,613 | 13,281 | |||||||||||
EBITDAR | 37,390 | 18,758 | 105,650 | 120,695 | |||||||||||
— | |||||||||||||||
EBITDA | 33,833 | 15,511 | 92,037 | 107,414 | |||||||||||
Charge related to the U.S. Government inquiry(a) | — | 15,000 | 33,000 | 15,000 | |||||||||||
Expenses related to the Spin-Off(b) | 2,192 | — | 4,050 | — | |||||||||||
Legal costs(c) | (13 | ) | 504 | 1,098 | 1,945 | ||||||||||
Settlement of class action lawsuit(d) | — | — | 1,524 | 2,596 | |||||||||||
Impairment of goodwill and other indefinite-lived intangibles | 490 | 2,225 | 490 | 2,225 | |||||||||||
Urgent care center losses(e) | 406 | 374 | 1,844 | 546 | |||||||||||
Losses at skilled nursing facility not at full operation(f) | — | — | 1,256 | — | |||||||||||
Acquisition related costs(g) | 10 | 20 | 288 | 250 | |||||||||||
Costs incurred to recognize income tax credits(h) | 42 | 152 | 145 | 591 | |||||||||||
Rent related to non-core business items above(i) | 322 | 272 | 1,009 | 860 | |||||||||||
Adjusted EBITDA | 37,282 | 34,058 | 136,741 | 131,427 | |||||||||||
Facility rent—cost of services | 3,557 | 3,247 | 13,613 | 13,281 | |||||||||||
Less: rent related to non-core business items above(i) | (322 | ) | (272 | ) | (1,009 | ) | (860 | ) | |||||||
Adjusted EBITDAR | $ | 40,517 | $ | 37,033 | $ | 149,345 | $ | 143,848 | |||||||
_______________________
(a) | Charges related to our efforts to achieve a global, company-wide, resolution of any claims connected to the U.S. Department of Justice (DOJ) investigation. |
(b) | Expenses incurred in connection with the Company's proposed spin-off of its real estate assets to a newly formed publicly traded real estate investment trust (REIT). |
(c) | Legal costs incurred in connection with the DOJ settlement. |
(d) | Settlement of a class action lawsuit regarding minimum staffing requirements in the state of California. |
(e) | Losses incurred at newly opened urgent care centers, excluding rent, depreciation, interest and income taxes. |
(f) | Losses incurred through the second quarter at one newly constructed skilled nursing facility which began operations during the first quarter of 2013, excluding rent, depreciation, interest and income taxes. The facility began running at full capacity during the third quarter of 2013, and therefore, results for the third and fourth quarter were not included in the results above. |
(g) | Costs incurred to acquire an operation which are not capitalizable. |
(h) | Costs incurred to recognize income tax credits which contributed to a decrease in effective tax rate. |
(i) | Rent related to newly opened urgent care centers and one newly constructed skilled nursing facility which began operations during the first quarter of 2013, not included in items (e) and (f) above. |
THE ENSIGN GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
December 31, | December 31, | ||||||
2013 | 2012 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 65,755 | $ | 40,685 | |||
Accounts receivable — less allowance for doubtful accounts of $16,540 and $13,811 at December 31, 2013 and December 31, 2012, respectively | 111,370 | 94,187 | |||||
Investments — current | 5,511 | 5,195 | |||||
Prepaid income taxes | 9,915 | 3,787 | |||||
Prepaid expenses and other current assets | 9,213 | 8,606 | |||||
Deferred tax asset — current | 9,232 | 14,871 | |||||
Assets held for sale — current | — | 268 | |||||
Total current assets | 210,996 | 167,599 | |||||
Property and equipment, net | 479,770 | 447,855 | |||||
Insurance subsidiary deposits and investments | 16,888 | 17,315 | |||||
Escrow deposits | 1,000 | 4,635 | |||||
Deferred tax asset | 4,464 | 2,234 | |||||
Restricted and other assets | 9,804 | 8,640 | |||||
Intangible assets, net | 5,718 | 6,115 | |||||
Long-term assets held for sale | — | 11,324 | |||||
Goodwill | 23,935 | 21,557 | |||||
Other indefinite-lived intangibles | 7,740 | 3,588 | |||||
Total assets | $ | 760,315 | $ | 690,862 | |||
Liabilities and equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 23,793 | $ | 26,069 | |||
Accrued charge related to U.S. Government inquiry | — | 15,000 | |||||
Accrued wages and related liabilities | 40,093 | 35,847 | |||||
Accrued self-insurance liabilities — current | 15,461 | 16,034 | |||||
Liabilities held for sale — current | — | 339 | |||||
Other accrued liabilities | 25,698 | 20,871 | |||||
Current maturities of long-term debt | 7,411 | 7,187 | |||||
Total current liabilities | 112,456 | 121,347 | |||||
Long-term debt — less current maturities | 251,895 | 200,505 | |||||
Accrued self-insurance liabilities — less current portion | 33,642 | 34,849 | |||||
Fair value of interest rate swap | 1,828 | 2,866 | |||||
Long-term liabilities held for sale | — | 130 | |||||
Deferred rent and other long-term liabilities | 3,237 | 3,281 | |||||
Total equity | 357,257 | 327,884 | |||||
Total liabilities and equity | $ | 760,315 | $ | 690,862 | |||
THE ENSIGN GROUP, INC.
CONDENSED 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, | |||||||
2013 | 2012 | ||||||
Net cash provided by operating activities | $ | 37,424 | $ | 82,050 | |||
Net cash used in investing activities | (65,235 | ) | (84,496 | ) | |||
Net cash provided by financing activities | 52,881 | 13,547 | |||||
Net increase in cash and cash equivalents | 25,070 | 11,101 | |||||
Cash and cash equivalents beginning of period | 40,685 | 29,584 | |||||
Cash and cash equivalents end of period | $ | 65,755 | $ | 40,685 | |||
THE ENSIGN GROUP, INC.
SELECT PERFORMANCE INDICATORS
(Unaudited)
The following tables summarize our selected performance indicators, along with other statistics, for each of the dates or periods indicated:
Three Months Ended December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||
Total Facility Results: | ||||||||||||||
Revenue | $ | 237,008 | $ | 210,505 | $ | 26,503 | 12.6 | % | ||||||
Number of facilities at period end | 119 | 108 | 11 | 10.2 | % | |||||||||
Actual patient days | 947,138 | 872,634 | 74,504 | 8.5 | % | |||||||||
Occupancy percentage — Operational beds | 78.0 | % | 78.3 | % | (0.3 | )% | ||||||||
Skilled mix by nursing days | 26.0 | % | 25.9 | % | 0.1 | % | ||||||||
Skilled mix by nursing revenue | 49.1 | % | 49.7 | % | (0.6 | )% | ||||||||
Three Months Ended December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||
Same Facility Results:(1) | ||||||||||||||
Revenue | $ | 174,913 | $ | 169,214 | $ | 5,699 | 3.4 | % | ||||||
Number of facilities at period end | 77 | 77 | — | — | % | |||||||||
Actual patient days | 664,098 | 661,257 | 2,841 | 0.4 | % | |||||||||
Occupancy percentage — Operational beds | 81.3 | % | 80.9 | % | 0.4 | % | ||||||||
Skilled mix by nursing days | 28.0 | % | 27.6 | % | 0.4 | % | ||||||||
Skilled mix by nursing revenue | 50.9 | % | 52.1 | % | (1.2 | )% | ||||||||
Three Months Ended December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||
Transitioning Facility Results:(2) | ||||||||||||||
Revenue | $ | 36,377 | $ | 34,869 | $ | 1,508 | 4.3 | % | ||||||
Number of facilities at period end | 25 | 25 | — | — | % | |||||||||
Actual patient days | 183,922 | 182,738 | 1,184 | 0.6 | % | |||||||||
Occupancy percentage — Operational beds | 74.4 | % | 73.9 | % | 0.5 | % | ||||||||
Skilled mix by nursing days | 19.5 | % | 18.8 | % | 0.7 | % | ||||||||
Skilled mix by nursing revenue | 41.8 | % | 38.8 | % | 3.0 | % | ||||||||
Three Months Ended December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
(Dollars in thousands) | Change | % Change | |||||||||||
Recently Acquired Facility Results:(3) | |||||||||||||
Revenue | $ | 25,718 | $ | 6,422 | $ | 19,296 | NM | ||||||
Number of facilities at period end | 17 | 6 | 11 | NM | |||||||||
Actual patient days | 99,118 | 28,639 | 70,479 | NM | |||||||||
Occupancy percentage — Operational beds | 65.7 | % | 56.8 | % | NM | ||||||||
Skilled mix by nursing days | 19.1 | % | 14.0 | % | NM | ||||||||
Skilled mix by nursing revenue | 40.9 | % | 23.5 | % | NM | ||||||||
_______________________
(1) | Same Facility results represent all facilities purchased prior to January 1, 2010. |
(2) | Transitioning Facility results represents all facilities purchased from January 1, 2010 to December 31, 2011. |
(3) | Recently Acquired Facility (or “Acquisitions”) results represent all facilities purchased on or subsequent to January 1, 2012. |
Twelve Months Ended December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||
Total Facility Results: | ||||||||||||||
Revenue | $ | 904,556 | $ | 823,155 | $ | 81,401 | 9.9 | % | ||||||
Number of facilities at period end | 119 | 108 | 11 | 10.2 | % | |||||||||
Actual patient days | 3,648,651 | 3,452,598 | 196,053 | 5.7 | % | |||||||||
Occupancy percentage — Operational beds | 77.5 | % | 79.0 | % | (1.5 | )% | ||||||||
Skilled mix by nursing days | 26.4 | % | 25.9 | % | 0.5 | % | ||||||||
Skilled mix by nursing revenue | 50.0 | % | 50.0 | % | — | % | ||||||||
Twelve Months Ended December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||
Same Facility Results:(1) | ||||||||||||||
Revenue | $ | 679,610 | $ | 670,747 | $ | 8,863 | 1.3 | % | ||||||
Number of facilities at period end | 77 | 77 | — | — | % | |||||||||
Actual patient days | 2,618,541 | 2,638,029 | (19,488 | ) | (0.7 | )% | ||||||||
Occupancy percentage — Operational beds | 80.8 | % | 81.2 | % | (0.4 | )% | ||||||||
Skilled mix by nursing days | 28.3 | % | 27.5 | % | 0.8 | % | ||||||||
Skilled mix by nursing revenue | 52.1 | % | 52.0 | % | 0.1 | % | ||||||||
Twelve Months Ended December 31, | ||||||||||||||
2013 | 2012 | |||||||||||||
(Dollars in thousands) | Change | % Change | ||||||||||||
Transitioning Facility Results:(2) | ||||||||||||||
Revenue | $ | 141,180 | $ | 135,639 | $ | 5,541 | 4.1 | % | ||||||
Number of facilities at period end | 25 | 25 | — | — | % | |||||||||
Actual patient days | 724,243 | 736,995 | (12,752 | ) | (1.7 | )% | ||||||||
Occupancy percentage — Operational beds | 73.8 | % | 74.9 | % | (1.1 | )% | ||||||||
Skilled mix by nursing days | 20.2 | % | 18.2 | % | 2.0 | % | ||||||||
Skilled mix by nursing revenue | 42.0 | % | 39.2 | % | 2.8 | % | ||||||||
Twelve Months Ended December 31, | |||||||||||||
2013 | 2012 | ||||||||||||
(Dollars in thousands) | Change | % Change | |||||||||||
Recently Acquired Facility Results:(3) | |||||||||||||
Revenue | $ | 83,766 | $ | 16,769 | $ | 66,997 | NM | ||||||
Number of facilities at period end | 17 | 6 | 11 | NM | |||||||||
Actual patient days | 305,867 | 77,574 | 228,293 | NM | |||||||||
Occupancy percentage — Operational beds | 62.7 | % | 55.5 | % | NM | ||||||||
Skilled mix by nursing days | 18.0 | % | 11.2 | % | NM | ||||||||
Skilled mix by nursing revenue | 38.1 | % | 20.9 | % | NM | ||||||||
_______________________
(1) | Same Facility results represent all facilities purchased prior to January 1, 2010. |
(2) | Transitioning Facility results represents all facilities purchased from January 1, 2010 to December 31, 2011. |
(3) | Recently Acquired Facility (or “Acquisitions”) results represent all facilities purchased on or subsequent to January 1, 2012. |
THE ENSIGN GROUP, INC.
SKILLED NURSING AVERAGE DAILY REVENUE RATES AND
PERCENT OF SKILLED NURSING REVENUE AND DAYS BY PAYOR
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 December 31, | ||||||||||||||||||||||||||||||||||
Same Facility | Transitioning | Acquisitions | Total | % | ||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | Change | ||||||||||||||||||||||||||
Skilled Nursing Average Daily Revenue Rates: | ||||||||||||||||||||||||||||||||||
Medicare | $ | 572.28 | $ | 565.15 | $ | 487.50 | $ | 474.63 | $ | 468.45 | $ | 424.77 | $ | 552.37 | $ | 547.86 | 0.8 | % | ||||||||||||||||
Managed care | 404.54 | 399.71 | 397.83 | 389.83 | 461.24 | 264.91 | 408.26 | 399.25 | 2.3 | % | ||||||||||||||||||||||||
Other skilled | 432.46 | 451.81 | 723.71 | 439.00 | 253.00 | — | 439.21 | 451.60 | (2.7 | )% | ||||||||||||||||||||||||
Total skilled revenue | 494.98 | 494.30 | 478.68 | 461.54 | 465.23 | 425.53 | 491.43 | 489.90 | 0.3 | % | ||||||||||||||||||||||||
Medicaid | 184.47 | 170.42 | 159.06 | 169.56 | 159.31 | 235.97 | 179.18 | 172.38 | 3.9 | % | ||||||||||||||||||||||||
Private and other payors | 190.34 | 185.72 | 165.11 | 167.11 | 155.97 | 170.02 | 179.57 | 179.55 | — | % | ||||||||||||||||||||||||
Total skilled nursing revenue | $ | 271.91 | $ | 261.30 | $ | 222.99 | $ | 223.84 | $ | 217.12 | $ | 254.16 | $ | 260.54 | $ | 255.72 | 1.9 | % | ||||||||||||||||
Twelve Months Ended December 31, | ||||||||||||||||||||||||||||||||||
Same Facility | Transitioning | Acquisitions | Total | % | ||||||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | Change | ||||||||||||||||||||||||||
Skilled Nursing Average Daily Revenue Rates: | ||||||||||||||||||||||||||||||||||
Medicare | $ | 564.45 | $ | 555.44 | $ | 474.16 | $ | 471.25 | $ | 461.98 | $ | 418.73 | $ | 544.51 | $ | 541.63 | 0.5 | % | ||||||||||||||||
Managed care | 398.86 | 391.08 | 378.70 | 395.32 | 458.55 | 427.52 | 400.44 | 391.32 | 2.3 | % | ||||||||||||||||||||||||
Other skilled | 455.88 | 457.58 | 708.32 | 529.85 | 253.00 | — | 460.76 | 458.67 | 0.5 | % | ||||||||||||||||||||||||
Total skilled revenue | 492.13 | 490.63 | 462.86 | 460.25 | 460.78 | 418.88 | 487.53 | 486.98 | 0.1 | % | ||||||||||||||||||||||||
Medicaid | 176.97 | 168.85 | 158.45 | 155.16 | 167.26 | 204.57 | 174.04 | 167.78 | 3.7 | % | ||||||||||||||||||||||||
Private and other payors | 188.44 | 189.62 | 167.45 | 165.93 | 154.87 | 168.26 | 179.40 | 181.52 | (1.2 | )% | ||||||||||||||||||||||||
Total skilled nursing revenue | $ | 267.38 | $ | 259.48 | $ | 222.39 | $ | 213.93 | $ | 218.10 | $ | 223.11 | $ | 257.67 | $ | 252.18 | 2.2 | % | ||||||||||||||||
The following tables set forth our percentage of skilled nursing patient revenue and days by payor source for the three months ended December 31, 2013 and 2012:
Three Months Ended December 31, | |||||||||||||||||||||||
Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Percentage of Skilled Nursing Revenue: | |||||||||||||||||||||||
Medicare | 30.5 | % | 31.9 | % | 34.4 | % | 33.4 | % | 25.6 | % | 23.5 | % | 30.6 | % | 31.8 | % | |||||||
Managed care | 14.8 | 14.7 | 5.8 | 4.8 | 15.2 | (0.1 | ) | 13.8 | 13.1 | ||||||||||||||
Other skilled | 5.6 | 5.5 | 1.6 | 0.6 | 0.1 | — | 4.7 | 4.8 | |||||||||||||||
Skilled mix | 50.9 | 52.1 | 41.8 | 38.8 | 40.9 | 23.4 | 49.1 | 49.7 | |||||||||||||||
Private and other payors | 7.6 | 7.6 | 21.0 | 21.3 | 12.4 | 8.5 | 9.5 | 9.3 | |||||||||||||||
Quality mix | 58.5 | 59.7 | 62.8 | 60.1 | 53.3 | 31.9 | 58.6 | 59.0 | |||||||||||||||
Medicaid | 41.5 | 40.3 | 37.2 | 39.9 | 46.7 | 68.1 | 41.4 | 41.0 | |||||||||||||||
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 | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Percentage of Skilled Nursing Days: | |||||||||||||||||||||||
Medicare | 14.6 | % | 14.8 | % | 15.8 | % | 15.7 | % | 11.9 | % | 14.1 | % | 14.4 | % | 14.8 | % | |||||||
Managed care | 9.9 | 9.6 | 3.2 | 2.8 | 7.2 | (0.1 | ) | 8.8 | 8.4 | ||||||||||||||
Other skilled | 3.5 | 3.2 | 0.5 | 0.3 | — | — | 2.8 | 2.7 | |||||||||||||||
Skilled mix | 28.0 | 27.6 | 19.5 | 18.8 | 19.1 | 14.0 | 26.0 | 25.9 | |||||||||||||||
Private and other payors | 10.8 | 10.6 | 28.4 | 28.5 | 17.2 | 12.7 | 13.8 | 13.3 | |||||||||||||||
Quality mix | 38.8 | 38.2 | 47.9 | 47.3 | 36.3 | 26.7 | 39.8 | 39.2 | |||||||||||||||
Medicaid | 61.2 | 61.8 | 52.1 | 52.7 | 63.7 | 73.3 | 60.2 | 60.8 | |||||||||||||||
Total skilled nursing | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
The following tables set forth our percentage of skilled nursing patient revenue and days by payor source for the year ended December 31, 2013 and 2012:
Twelve Months Ended December 31, | |||||||||||||||||||||||
Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Percentage of Skilled Nursing Revenue: | |||||||||||||||||||||||
Medicare | 31.3 | % | 33.0 | % | 35.1 | % | 33.3 | % | 26.6 | % | 20.6 | % | 31.4 | % | 32.9 | % | |||||||
Managed care | 15.2 | 13.7 | 5.7 | 5.3 | 11.5 | 0.3 | 13.9 | 12.4 | |||||||||||||||
Other skilled | 5.6 | 5.3 | 1.2 | 0.6 | — | — | 4.7 | 4.7 | |||||||||||||||
Skilled mix | 52.1 | 52.0 | 42.0 | 39.2 | 38.1 | 20.9 | 50.0 | 50.0 | |||||||||||||||
Private and other payors | 7.5 | 7.6 | 21.4 | 22.6 | 12.1 | 11.2 | 9.5 | 9.5 | |||||||||||||||
Quality mix | 59.6 | 59.6 | 63.4 | 61.8 | 50.2 | 32.1 | 59.5 | 59.5 | |||||||||||||||
Medicaid | 40.4 | 40.4 | 36.6 | 38.2 | 49.8 | 67.9 | 40.5 | 40.5 | |||||||||||||||
Total skilled nursing | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
Twelve Months Ended December 31, | |||||||||||||||||||||||
Same Facility | Transitioning | Acquisitions | Total | ||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Percentage of Skilled Nursing Days: | |||||||||||||||||||||||
Medicare | 14.8 | % | 15.4 | % | 16.5 | % | 15.1 | % | 12.6 | % | 11.0 | % | 14.8 | % | 15.3 | % | |||||||
Managed care | 10.2 | 9.1 | 3.3 | 2.8 | 5.4 | 0.2 | 8.9 | 8.0 | |||||||||||||||
Other skilled | 3.3 | 3.0 | 0.4 | 0.3 | — | — | 2.7 | 2.6 | |||||||||||||||
Skilled mix | 28.3 | 27.5 | 20.2 | 18.2 | 18.0 | 11.2 | 26.4 | 25.9 | |||||||||||||||
Private and other payors | 10.7 | 10.4 | 28.4 | 29.2 | 17.0 | 14.7 | 13.7 | 13.2 | |||||||||||||||
Quality mix | 39.0 | 37.9 | 48.6 | 47.4 | 35.0 | 25.9 | 40.1 | 39.1 | |||||||||||||||
Medicaid | 61.0 | 62.1 | 51.4 | 52.6 | 65.0 | 74.1 | 59.9 | 60.9 | |||||||||||||||
Total skilled nursing | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||
THE ENSIGN GROUP, INC.
REVENUE BY PAYOR SOURCE
The following table sets forth our total revenue by payor source and as a percentage of total revenue for the periods indicated:
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||
$ | % | $ | % | $ | % | $ | % | |||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||||
Medicaid | $ | 86,502 | 36.5 | % | $ | 78,112 | 37.1 | % | $ | 323,803 | 35.8 | % | $ | 302,046 | 36.7 | % | ||||||||||||
Medicare | 74,703 | 31.5 | 68,863 | 32.7 | 292,917 | 32.4 | 278,578 | 33.8 | ||||||||||||||||||||
Medicaid-skilled | 9,469 | 4.0 | 8,690 | 4.1 | 36,085 | 4.0 | 33,031 | 4.0 | ||||||||||||||||||||
Total | 170,674 | 72.0 | 155,665 | 73.9 | 652,805 | 72.2 | 613,655 | 74.5 | ||||||||||||||||||||
Managed care | 30,722 | 13.0 | 26,668 | 12.7 | 118,168 | 13.1 | 98,655 | 12.0 | ||||||||||||||||||||
Private and other(1) | 35,612 | 15.0 | 28,172 | 13.4 | 133,583 | 14.7 | 110,845 | 13.5 | ||||||||||||||||||||
Total revenue | $ | 237,008 | 100.0 | % | $ | 210,505 | 100.0 | % | $ | 904,556 | 100.0 | % | $ | 823,155 | 100.0 | % | ||||||||||||
(1) Private and other payors includes revenue from urgent care centers and other ancillary businesses. | ||||||||||||||||||||||||||||
Discussion of Non-GAAP Financial Measures
EBITDA consists of net income before (a) interest expense, net, (b) provisions for income taxes, and (c) depreciation and amortization. EBITDAR consists of net income before (a) interest expense, net, (b) provisions for income taxes, (c) depreciation and amortization, and (d) facility rent-cost of services. Adjusted EBITDA consists of net income before (a) interest expense, net, (b) provisions for income taxes, (c) depreciation and amortization, and, (d) discontinued operations, (e) development and operational losses associated with newly-developed operations which have not achieved stabilization, (f) impairment charges, (g) charges related to the DOJ settlement, (h) expenses incurred in connection with the Company’s proposed spin-off of real estate assets, (i) settlement of a class action lawsuit and (j) normalized tax rate. Adjusted EBITDAR consists of net income before (a) interest expense, net, (b) provisions for income taxes, (c) depreciation and amortization, and (d) facility rent-cost of services, (e) , discontinued operations, (f) development and operational losses associated with newly-developed operations which have not achieved stabilization, (g) impairment charges, (h) charges related to the DOJ settlement, (i) expenses incurred in connection with the Company’s proposed spin-off of real estate assets, (j) settlement of a class action lawsuit and (k) normalized tax rate. The company believes that the presentation of EBITDA, EBITDAR, adjusted EBITDA, adjusted EBITDAR, adjusted net income and adjusted earnings per share provides important supplemental information to management and investors to evaluate the company’s operating performance. The company believes disclosure of adjusted net income per share, EBITDA, EBITDAR, adjusted EBITDA and adjusted EBITDAR has economic substance because the excluded revenues and expenses are infrequent in nature and are variable in nature, or do not represent current revenues or cash expenditures. A material limitation associated with the use of these measures as compared to the GAAP measures of net income and diluted earnings per share is that they may not be comparable with the calculation of net income and diluted earnings per share for other companies in the company's industry. These non-GAAP financial measures should not be relied upon to the exclusion of GAAP financial measures. For further information regarding why the company believes that this non-GAAP measure provides useful information to investors, the specific manner in which management uses this measure, and some of the limitations associated with the use of this measure, please refer to the company's Report on Form 10-K filed today with the SEC. The Form 10-K is 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.