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Conference Call and Webcast scheduled for tomorrow, February 2, 2024 at 10:00 am PT

SAN JUAN CAPISTRANO, Calif., Feb. 01, 2024 (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 and fourth quarter of 2023, reporting GAAP diluted earnings per share of $3.65 and adjusted earnings per share⁽¹⁾ of $4.77 for the year. Ensign also reported GAAP diluted earnings per share of $0.38 and adjusted earnings per share⁽¹⁾ of $1.28 for the quarter ended December 31, 2023.

Highlights Include:

• Consolidated GAAP and adjusted revenues for the year were $3.73 billion, an increase of 23.3% over the prior year. Consolidated GAAP and adjusted revenues for the quarter were $980.4 million, an increase of 21.1% over the prior year quarter.
   
• GAAP diluted earnings per share was $3.65 or the year and $0.38 for the quarter, both of which include the impact of certain litigation matters arising outside the ordinary course of business.
   
• Adjusted diluted earnings per share⁽¹⁾ was $4.77 for the year and $1.28 for the quarter, an increase of 15.2% and 16.4% over the prior year and prior year quarter, respectively.
   
• GAAP net income was $209.4 million for the year and $21.7 for the quarter, both of which includes the impact of certain litigation matters arising outside the ordinary course of business.
   
• Adjusted net income⁽¹⁾ was $273.5 million for the year and $73.7 million for the quarter, an increase of 16.0% and 17.5% over the prior year and prior year quarter, respectively.
   
• Same store and transitioning occupancy both increased by 3.2% over the prior year and increased by 2.4% and 1.5%, respectively, over the prior year quarter.
   
• Total skilled services⁽²⁾ revenue was $3.58 billion for the year, an increase of 23.1% over the prior year, and was $940.8 million for the quarter, an increase of 21.0% over the prior year quarter.
   
• Same store and transitioning combined managed care revenue increased by 12.3% and managed care census increased by 3.5%, both over the prior year quarter.
   
• Standard Bearer⁽²⁾ revenue was $82.5 million for the year, an increase of 13.1% from the prior year, and $21.9 million for the quarter, an increase of 12.7% from the prior year quarter. FFO was $54.3 million for the year, an increase of 9.7% from the prior year, and $14.2 million for the quarter, an increase of 9.4% from the prior year quarter.
  

(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 local teams have once again posted impressive clinical and financial results and continue to build remarkable momentum in each market across our portfolio,” said Barry Port, Ensign’s Chief Executive Officer. “We were pleased to see same store occupancy of 79.9%, which grew by 240 basis points over the prior year quarter. In addition, we saw an improvement in occupancy on a sequential basis of 40 basis points over the third quarter. As expected, we also saw an increase in our skilled mix during the quarter as our same store days for the quarter increased by 110 basis points sequentially over the third quarter. Our success is entirely due to the efforts and commitment of those leadership teams, caregivers, field resources and service center partners. After another record quarter, 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,” Port added.

“We are very humbled by what we were able to accomplish in 2023, but 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. We are issuing our annual 2024 earnings guidance of $5.29 to $5.47 per diluted share and annual revenue guidance of $4.13 billion to $4.17 billion. The midpoint of this 2024 earnings guidance represents an increase of 13% over our 2023 results and is 30% higher than our 2022 results. 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 2024," Port said.

Chad Keetch, Ensign’s Chief Investment Officer and Executive Vice President noted the progress the Company is making with its newly acquired operations. He said, “As we expected, we continued to add to our growing portfolio and are very excited about the three new operations and one real estate asset we added during the quarter and since, bringing the number of operations acquired since 2022 to 54. Looking closer at these new operations, occupancy and skilled mix days for the skilled nursing operations in the recently acquired bucket were 77.6% and 27.5%, respectively, for the quarter. When compared to our same store occupancy and skilled mix days of 79.9% and 30.9%, respectively, there is enormous upside in each of these new operations as they continue to transform into ‘same store’ caliber operations.”

Speaking to the Company’s financial health, Suzanne Snapper, Ensign’s Executive Vice President and Chief Financial Officer reported that the Company’s liquidity remains strong with approximately $509.6 million of cash on hand and $593.7 million of available capacity under its line-of-credit. Ms. Snapper also indicated that, “Management’s guidance is based on diluted weighted average common shares outstanding of approximately 58.5 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 one-time charges, including certain expenses related to litigation matters arising outside of the ordinary course of business, acquisition-related costs and amortization costs related to intangible assets acquired 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, 2023, 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. “The pipeline for new deals remains strong. We are lining up several exciting opportunities and expect to announce several deals over the coming months. We remain poised to grow with over a billion dollars in dry powder for future investments and our local leaders continue to recruit future CEOs of Ensign affiliated operations. We currently have a deep bench of CEO’s-in-training that are eagerly preparing for their opportunity to lead. We continue to see evidence that many operators in this industry are struggling, and we expect that the operating environment will translate into many near and long-term opportunities to both lease and acquire post-acute care assets. However, as we’ve said before, we do not set arbitrary growth goals and will remain true to our disciplined acquisition strategy, only growing when we have the right leaders in place and the pricing is right.”

The recent acquisitions include the following operations:

• Providence Place, a 45-bed skilled nursing facility located in Kansas City, Kansas;
  
  
• Hearthstone Health and Rehabilitation, a 125-bed skilled nursing facility located in Sparks, Nevada;
  
  
• TriState Health and Rehabilitation Center, a 116-bed skilled nursing facility located in Harrogate, Tennessee; and
  
  
• Champions Healthcare at Willowbrook, a healthcare campus consisting of a 98-bed skilled nursing facility and a 144-bed assisted living facility located in Houston, Texas, which included the real estate assets that were acquired by Standard Bearer.

Ensign's growing portfolio consists of 299 healthcare operations, 27 of which also include senior living operations, across 14 states. Ensign now owns 113 real estate assets, 83 of which it operates. 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 disclosures on Standard Bearer, which is comprised of 108 properties owned by the Company and leased to 79 affiliated skilled nursing and senior living operations and 30 operations that are leased to third party operators (numbers reflect one shared campus that is jointly used by the Company and a third party operator). Keetch noted that each of these properties are subject to triple-net, long-term leases and generated rental revenue of $21.9 million for the quarter, of which $17.7 million was derived from Ensign affiliated operations. For the quarter, Ensign reported $14.2 million in FFO.

The Company paid a quarterly cash dividend of $0.06 per share of Ensign common stock. Ms. Snapper noted that the Company’s liquidity remains strong and that the Company plans to continue its long history of paying dividends into the future, noting that in December of 2023 the Company increased the annual dividend for the 21st consecutive year.

Conference Call

A live webcast will be held Friday, February 2, 2024 at 10:00 a.m. Pacific time (1:00 p.m. Eastern time) to discuss Ensign’s fourth quarter and fiscal year of 2023 financial results. To listen to the webcast, or to view any financial or statistical information required by SEC Regulation G, please visit the Investors Relations section of Ensign’s website at http://investor.ensigngroup.net. The webcast will be recorded and will be available for replay via the website until 5:00 p.m. Pacific time on Friday, March 1, 2024.

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 299 healthcare facilities in 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, 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, ir@ensigngroup.net.

SOURCE: The Ensign Group, Inc.