Document


 
 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 10, 2017
The Ensign Group, Inc.
(Exact name of registrant as specified in its charter)
 
 
 
 
 
Delaware
 
001-33757
 
33-0861263
 
 
 
 
 
(State or other jurisdiction
of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
 
27101 Puerta Real, Suite 450,
Mission Viejo, CA
 
 
92691
 
 
 
(Address of principal executive offices)
 
(Zip Code)
Registrant's telephone number, including area code: (949) 487-9500
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
o
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
o
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 



 
 
 
 
 





Item 7.01 Regulation FD Disclosure.

As previously disclosed during the fourth quarter of the fiscal year 2016, The Ensign Group, Inc., a Delaware corporation, beginning with the filing of its Annual Report on Form 10-K for the year ended December 31, 2016, realigned its reportable segments to include (1) transitional and skilled services, which includes the operation of skilled nursing facilities; (2) assisted and independent living services, which includes the operation of assisted and independent living facilities; and (3) home health and hospice services, which includes the home health, home care and hospice businesses. The Company is furnishing supplemental disclosure of certain operating measures by segment to provide better visibility into these new segments. These expanded disclosures do not change the Company’s previously disclosed consolidated financial statements.

The information in this Current Report on Form 8-K under this Item 7.01 shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act except as shall be expressly set forth by specific reference in such a filing. The furnishing of this report is not intended to constitute a determination by the Company that the information is material or that the dissemination of the information is required by Regulation FD.

Use and Definition of Non-GAAP Financial Measures

EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR are supplemental non-GAAP financial measures. Regulation G, Conditions for Use of Non-GAAP Financial Measures, and other provisions of the Securities Exchange Act of 1934, as amended, define and prescribe the conditions for use of certain non-GAAP financial information. We calculate EBITDA as net income, adjusted for net losses attributable to noncontrolling interest, before (a) interest expense, net, (b) provision for income taxes, and (c) depreciation and amortization. We calculate EBITDAR by adjusting EBITDA to exclude facility rent. These non-GAAP financial measures are used in addition to and in conjunction with results presented in accordance with GAAP. These non-GAAP financial measures should not be relied upon to the exclusion of GAAP financial measures. These non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting our business.

We believe EBITDA, Adjusted EBITDA, EBITDAR and Adjusted EBITDAR are useful to investors and other external users of our financial statements in evaluating our operating performance because:

•
they are widely used by investors and analysts in our industry as a supplemental measure to evaluate the overall operating performance of companies in our industry without regard to items such as interest expense, net and depreciation and amortization, which can vary substantially from company to company depending on the book value of assets, capital structure and the method by which assets were acquired; and
•
they help investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure and asset base from our operating results.

We use EBITDA, Adjusted EBITDA, EBITDAR and Adjusted EBITDAR:

•
as measurements of our operating performance to assist us in comparing our operating performance on a consistent basis;
•
to allocate resources to enhance the financial performance of our business;
•
to evaluate the effectiveness of our operational strategies; and
•
to compare our operating performance to that of our competitors.

We typically use EBITDA, Adjusted EBITDA, EBITDAR and Adjusted EBITDAR to compare the operating performance of each operation. EBITDA and EBITDAR are useful in this regard because they do not include such costs as net interest expense, income taxes, depreciation and amortization expense, and, with respect to EBITDAR, facility rent, which may vary from period-to-period depending upon various factors, including the method used to finance facilities, the amount of debt that we have incurred, whether a facility is owned or leased, the date of acquisition of a facility or business, and the tax law of the state in which a business unit operates. As a result, we believe that the use of EBITDA and EBITDAR provide a meaningful and consistent comparison of our business between periods by eliminating certain items required by GAAP.

We also establish compensation programs and bonuses for our leaders that are partially based upon the achievement of Adjusted EBITDAR targets.





Despite the importance of these measures in analyzing our underlying business, designing incentive compensation and for our goal setting, EBITDA, Adjusted EBITDA, EBITDAR and Adjusted EBITDAR are non-GAAP financial measures that have no standardized meaning defined by GAAP. Therefore, our EBITDA, Adjusted EBITDA, EBITDAR and Adjusted EBITDAR measures have limitations as analytical tools, and they should not be considered in isolation, or as a substitute for analysis of our results as reported in accordance with GAAP. Some of these limitations are:

•
they do not reflect our current or future cash requirements for capital expenditures or contractual commitments;
•
they do not reflect changes in, or cash requirements for, our working capital needs;
•
they do not reflect the net interest expense, or the cash requirements necessary to service interest or principal payments, on our debt;
•
they do not reflect any income tax payments we may be required to make;
•
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA and EBITDAR do not reflect any cash requirements for such replacements; and
•
other companies in our industry may calculate these measures differently than we do, which may limit their usefulness as comparative measures.

We compensate for these limitations by using them only to supplement net income on a basis prepared in accordance with GAAP in order to provide a more complete understanding of the factors and trends affecting our business.

(2) Adjusted EBITDA is EBITDA adjusted for non-core business items for each reportable segment, which for the reported periods includes, to the extent applicable:

•
General and administrative expenses are not allocated to any segment for purposes of determining segment profit or loss,
•
Costs incurred for facilities currently being constructed and other start-up operations,
•
Results related to a closed facility and a facility not at full operation,
•
Share-based compensation expense,
•
Insurance reserves in connection with the settlement of claims.

Adjusted EBITDAR is EBITDAR adjusted for the above noted non-core business items.

Management strongly encourages investors to review our consolidated financial statements in their entirety and to not rely on any single financial measure. Because these non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. To properly and prudently evaluate the Company’s business, you should review the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on February 10, 2016, and future periodic and current reports the Company files with the SEC, and you should not rely on any single financial measure to evaluate the Company’s business.




 
THE ENSIGN GROUP, INC.
 
 
SELECT PERFORMANCE INDICATORS
 
The following tables summarize our selected performance indicators for our transitional and skilled services segment along with other statistics, for each of the dates or periods indicated:
 
Three Months Ended
March 31,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Total Facility Results:
 
 
 
 
 
 
 
Transitional and skilled revenue
$
315,212

 
$
264,471

 
$
50,741

 
19.2
 %
Number of facilities at period end
130

 
113

 
17

 
15.0
 %
Number of campuses at period end*
16

 
13

 
3

 
23.1
 %
Actual patient days
1,052,736

 
906,098

 
146,638

 
16.2
 %
Occupancy percentage — Operational beds
76.9
%
 
78.6
%
 
 
 
(1.7
)%
Skilled mix by nursing days
32.5
%
 
30.3
%
 
 
 
2.2
 %
Skilled mix by nursing revenue
54.6
%
 
52.9
%
 
 
 
1.7
 %
 
Three Months Ended
March 31,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Same Facility Results(1):
 
 
 
 
 
 
 
Transitional and skilled revenue
$
223,757

 
$
215,556

 
$
8,201

 
3.8
 %
Number of facilities at period end
85

 
85

 
—

 
—
 %
Number of campuses at period end*
12

 
12

 
—

 
—
 %
Actual patient days
742,953

 
730,052

 
12,901

 
1.8
 %
Occupancy percentage — Operational beds
79.9
%
 
80.1
%
 
 
 
(0.2
)%
Skilled mix by nursing days
31.3
%
 
30.6
%
 
 
 
0.7
 %
Skilled mix by nursing revenue
53.6
%
 
53.3
%
 
 
 
0.3
 %
 
Three Months Ended
March 31,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Transitioning Facility Results(2):
 
 
 
 
 
 
 
Transitional and skilled revenue
$
43,938

 
$
40,571

 
$
3,367

 
8.3
%
Number of facilities at period end
23

 
23

 
—

 
—
%
Actual patient days
145,738

 
140,987

 
4,751

 
3.4
%
Occupancy percentage — Operational beds
73.9
%
 
71.5
%
 
 
 
2.4
%
Skilled mix by nursing days
34.9
%
 
31.1
%
 
 
 
3.8
%
Skilled mix by nursing revenue
56.8
%
 
53.8
%
 
 
 
3.0
%




 
Three Months Ended
March 31,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Recently Acquired Facility Results(3):
 
 
 
 
 
 
 
Transitional and skilled revenue
$
46,897

 
$
6,447

 
$
40,450

 
NM
Number of facilities at period end
22

 
4

 
18

 
NM
Number of campuses at period end*
4

 
1

 
3

 
NM
Actual patient days
160,800

 
25,866

 
134,934

 
NM
Occupancy percentage — Operational beds
67.5
%
 
81.9
%
 
 
 
NM
Skilled mix by nursing days
36.7
%
 
20.8
%
 
 
 
NM
Skilled mix by nursing revenue
57.8
%
 
39.8
%
 
 
 
NM
 
Three Months Ended
March 31,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Facility Closed(4):
 
 
 
 
 
 
 
Skilled nursing revenue
$
620

 
$
1,897

 
$
(1,277
)
 
NM
Actual patient days
3,245

 
9,193

 
(5,948
)
 
NM
Occupancy percentage — Operational beds
70.7
%
 
74.6
%
 
 
 
NM
Skilled mix by nursing days
9.6
%
 
15.4
%
 
 
 
NM
Skilled mix by nursing revenue
14.0
%
 
36.0
%
 
 
 
NM
                                
* Campus represents a facility that offers both skilled nursing assisted and/or independently living services. Revenue and expenses related to skilled nursing and assisted and independent living services have been allocated and recorded in the respective reportable segment.
(1)
Same Facility results represent all facilities purchased prior to January 1, 2013.
(2)
Transitioning Facility results represents all facilities purchased from January 1, 2013 to December 31, 2014.
(3)
Recently Acquired Facility (Acquisitions) results represent all facilities purchased on or subsequent to January 1, 2015.
(4)
Facility Closed represent the result of one facility closed during the first quarter of 2016. These results were excluded from Same Facility results for the three months ended March 31, 2016 and 2015 for comparison purposes.
 
Three Months Ended
June 30,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Total Facility Results:
 
 
 
 
 
 
 
Transitional and skilled revenue
$
340,417

 
$
265,709

 
$
74,708

 
28.1
 %
Number of facilities at period end
148

 
117

 
31

 
26.5
 %
Number of campuses at period end*
18

 
13

 
5

 
38.5
 %
Actual patient days
1,136,724

 
927,369

 
209,355

 
22.6
 %
Occupancy percentage — Operational beds
75.6
%
 
78.0
%
 
 
 
(2.4
)%
Skilled mix by nursing days
31.3
%
 
30.1
%
 
 
 
1.2
 %
Skilled mix by nursing revenue
52.7
%
 
53.4
%
 
 
 
(0.7
)%




 
Three Months Ended
June 30,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Same Facility Results(1):
 
 
 
 
 
 
 
Transitional and skilled revenue
$
225,787

 
$
211,994

 
$
13,793

 
6.5
 %
Number of facilities at period end
85

 
85

 
—

 
—
 %
Number of campuses at period end*
12

 
12

 
—

 
—
 %
Actual patient days
726,585

 
734,371

 
(7,786
)
 
(1.1
)%
Occupancy percentage — Operational beds
78.2
%
 
79.7
%
 
 
 
(1.5
)%
Skilled mix by nursing days
30.4
%
 
30.1
%
 
 
 
0.3
 %
Skilled mix by nursing revenue
51.1
%
 
53.6
%
 
 
 
(2.5
)%
 
Three Months Ended
June 30,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Transitioning Facility Results(2):
 
 
 
 
 
 
 
Transitional and skilled revenue
$
42,284

 
$
40,069

 
$
2,215

 
5.5
%
Number of facilities at period end
23

 
23

 
—

 
—
%
Actual patient days
141,747

 
140,938

 
809

 
0.6
%
Occupancy percentage — Operational beds
71.9
%
 
71.5
%
 
 
 
0.4
%
Skilled mix by nursing days
34.1
%
 
31.8
%
 
 
 
2.3
%
Skilled mix by nursing revenue
55.9
%
 
54.6
%
 
 
 
1.3
%
 
Three Months Ended
June 30,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Recently Acquired Facility Results(3):
 
 
 
 
 
 
 
Transitional and skilled revenue
$
72,346

 
$
11,883

 
$
60,463

 
NM
Number of facilities at period end
40

 
8

 
32

 
NM
Number of campuses at period end*
6

 
1

 
5

 
NM
Actual patient days
268,392

 
43,312

 
225,080

 
NM
Occupancy percentage — Operational beds
71.4
%
 
74.1
%
 
 
 
NM
Skilled mix by nursing days
32.1
%
 
29.6
%
 
 
 
NM
Skilled mix by nursing revenue
55.6
%
 
50.7
%
 
 
 
NM
 
Three Months Ended
June 30,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Facility Closed(4):
 
 
 
 
 
 
 
Skilled nursing revenue
$
—

 
$
1,763

 
$
(1,763
)
 
NM
Actual patient days
—

 
8,748

 
(8,748
)
 
NM
Occupancy percentage — Operational beds
—
%
 
70.2
%
 
 
 
NM
Skilled mix by nursing days
—
%
 
10.5
%
 
 
 
NM
Skilled mix by nursing revenue
—
%
 
26.9
%
 
 
 
NM
                                
* Campus represents a facility that offers both skilled nursing assisted and/or independently living services. Revenue and expenses related to skilled nursing and assisted and independent living services have been allocated and recorded in the respective reportable segment.
(1)
Same Facility results represent all facilities purchased prior to January 1, 2013.
(2)
Transitioning Facility results represents all facilities purchased from January 1, 2013 to December 31, 2014.




(3)
Recently Acquired Facility (Acquisitions) results represent all facilities purchased on or subsequent to January 1, 2015.
(4)
Facility Closed represent the result of one facility closed during the first quarter of 2016. These results were excluded from Same Facility results for the three months ended June 30, 2015 for comparison purposes.
 
Three Months Ended
September 30,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Total Facility Results:
 
 
 
 
 
 
 
Transitional and skilled revenue
$
357,315

 
$
289,475

 
$
67,840

 
23.4
 %
Number of facilities at period end
148

 
124

 
24

 
19.4
 %
Number of campuses at period end*
21

 
14

 
7

 
50.0
 %
Actual patient days
1,214,059

 
1,010,729

 
203,330

 
20.1
 %
Occupancy percentage — Operational beds
74.8
%
 
77.3
%
 
 
 
(2.5
)%
Skilled mix by nursing days
30.0
%
 
30.2
%
 
 
 
(0.2
)%
Skilled mix by nursing revenue
51.3
%
 
52.5
%
 
 
 
(1.2
)%
 
Three Months Ended
September 30,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Same Facility Results(1):
 
 
 
 
 
 
 
Transitional and skilled revenue
$
224,205

 
$
217,044

 
$
7,161

 
3.3
 %
Number of facilities at period end
85

 
85

 
—

 
—
 %
Number of campuses at period end*
12

 
12

 
—

 
—
 %
Actual patient days
731,189

 
751,322

 
(20,133
)
 
(2.7
)%
Occupancy percentage — Operational beds
77.8
%
 
80.1
%
 
 
 
(2.3
)%
Skilled mix by nursing days
29.5
%
 
29.9
%
 
 
 
(0.4
)%
Skilled mix by nursing revenue
50.2
%
 
52.4
%
 
 
 
(2.2
)%
 
Three Months Ended
September 30,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Transitioning Facility Results(2):
 
 
 
 
 
 
 
Transitional and skilled revenue
$
43,131

 
$
41,163

 
$
1,968

 
4.8
 %
Number of facilities at period end
23

 
23

 
—

 
—
 %
Actual patient days
144,709

 
143,545

 
1,164

 
0.8
 %
Occupancy percentage — Operational beds
72.6
%
 
72.0
%
 
 
 
0.6
 %
Skilled mix by nursing days
31.8
%
 
32.3
%
 
 
 
(0.5
)%
Skilled mix by nursing revenue
53.3
%
 
54.9
%
 
 
 
(1.6
)%




 
Three Months Ended
September 30,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Recently Acquired Facility Results(3):
 
 
 
 
 
 
 
Transitional and skilled revenue
$
89,979

 
$
29,432

 
$
60,547

 
NM
Number of facilities at period end
40

 
16

 
24

 
NM
Number of campuses at period end*
9

 
1

 
8

 
NM
Actual patient days
338,161

 
106,941

 
231,220

 
NM
Occupancy percentage — Operational beds
70.0
%
 
67.3
%
 
 
 
NM
Skilled mix by nursing days
30.2
%
 
30.8
%
 
 
 
NM
Skilled mix by nursing revenue
53.0
%
 
51.0
%
 
 
 
NM
 
Three Months Ended
September 30,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Facility Closed(4):
 
 
 
 
 
 
 
Skilled nursing revenue
$
—

 
$
1,836

 
$
(1,836
)
 
NM
Actual patient days
—

 
8,921

 
(8,921
)
 
NM
Occupancy percentage — Operational beds
—
%
 
70.8
%
 
 
 
NM
Skilled mix by nursing days
—
%
 
13.2
%
 
 
 
NM
Skilled mix by nursing revenue
—
%
 
27.0
%
 
 
 
NM
                                
* Campus represents a facility that offers both skilled nursing assisted and/or independently living services. Revenue and expenses related to skilled nursing and assisted and independent living services have been allocated and recorded in the respective reportable segment.
(1)
Same Facility results represent all facilities purchased prior to January 1, 2013.
(2)
Transitioning Facility results represents all facilities purchased from January 1, 2013 to December 31, 2014.
(3)
Recently Acquired Facility (Acquisitions) results represent all facilities purchased on or subsequent to January 1, 2015.
(4)
Facility Closed represent the result of one facility closed during the first quarter of 2016. These results were excluded from Same Facility results for the three months ended September 30, 2015 for comparison purposes.
 
Three Months Ended
December 31,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Total Facility Results:
 
 
 
 
 
 
 
Transitional and skilled revenue
$
361,857

 
$
306,733

 
$
55,124

 
18.0
 %
Number of facilities at period end
149

 
131

 
18

 
13.7
 %
Number of campuses at period end*
21

 
15

 
6

 
40.0
 %
Actual patient days
1,217,216

 
1,029,307

 
187,909

 
18.3
 %
Occupancy percentage — Operational beds
74.6
%
 
76.7
%
 
 
 
(2.1
)%
Skilled mix by nursing days
30.1
%
 
30.9
%
 
 
 
(0.8
)%
Skilled mix by nursing revenue
51.8
%
 
51.8
%
 
 
 
—
 %




 
Three Months Ended
December 31,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Same Facility Results(1):
 
 
 
 
 
 
 
Transitional and skilled revenue
$
224,635

 
$
226,856

 
$
(2,221
)
 
(1.0
)%
Number of facilities at period end
85

 
85

 
—

 
—
 %
Number of campuses at period end*
12

 
12

 
—

 
—
 %
Actual patient days
729,505

 
748,534

 
(19,029
)
 
(2.5
)%
Occupancy percentage — Operational beds
77.8
%
 
79.7
%
 
 
 
(1.9
)%
Skilled mix by nursing days
29.3
%
 
30.2
%
 
 
 
(0.9
)%
Skilled mix by nursing revenue
50.5
%
 
50.9
%
 
 
 
(0.4
)%
 
Three Months Ended
December 31,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Transitioning Facility Results(2):
 
 
 
 
 
 
 
Transitional and skilled revenue
$
44,206

 
$
42,326

 
$
1,880

 
4.4
 %
Number of facilities at period end
23

 
23

 
—

 
—
 %
Actual patient days
145,984

 
144,331

 
1,653

 
1.1
 %
Occupancy percentage — Operational beds
73.3
%
 
72.4
%
 


 
0.9
 %
Skilled mix by nursing days
32.7
%
 
33.6
%
 
 
 
(0.9
)%
Skilled mix by nursing revenue
55.6
%
 
55.6
%
 
 
 
—
 %
 
Three Months Ended
December 31,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Recently Acquired Facility Results(3):
 
 
 
 
 
 
 
Transitional and skilled revenue
$
93,016

 
$
35,929

 
$
57,087

 
NM
Number of facilities at period end
41

 
22

 
19

 
NM
Number of campuses at period end*
9

 
3

 
6

 
NM
Actual patient days
341,727

 
127,567

 
214,160

 
NM
Occupancy percentage — Operational beds
69.1
%
 
67.1
%
 
 
 
NM
Skilled mix by nursing days
30.5
%
 
33.5
%
 
 
 
NM
Skilled mix by nursing revenue
53.1
%
 
53.8
%
 
 
 
NM
 
Three Months Ended
December 31,
 
 
 
 
 
2016
 
2015
 
 
 
 
 
(Dollars in thousands)
 
Change
 
% Change
Facility Closed(4):
 
 
 
 
 
 
 
Skilled nursing revenue
$
—

 
$
1,622

 
$
(1,622
)
 
NM
Actual patient days
—

 
8,875

 
(8,875
)
 
NM
Occupancy percentage — Operational beds
—
%
 
70.4
%
 

 
NM
Skilled mix by nursing days
—
%
 
11.6
%
 
 
 
NM
Skilled mix by nursing revenue
—
%
 
15.9
%
 
 
 
NM
                                
* Campus represents a facility that offers both skilled nursing assisted and/or independently living services. Revenue and expenses related to skilled nursing and assisted and independent living services have been allocated and recorded in the respective reportable segment.
(1)
Same Facility results represent all facilities purchased prior to January 1, 2013.
(2)
Transitioning Facility results represents all facilities purchased from January 1, 2013 to December 31, 2014.




(3)
Recently Acquired Facility (Acquisitions) results represent all facilities purchased on or subsequent to January 1, 2015.
(4)
Facility Closed represent the result of one facility closed during the first quarter of 2016. These results were excluded from Same Facility results for the three months ended December 31, 2015 for comparison purposes.

 
 
 
 
 
 
 
 
 
 
 
 
The following tables summarize our selected performance indicators for our assisted and independent living segment along with other statistics, for each of the date or periods indicated:
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
March 31,
 
 
 
 
 
 
2016
 
2015
 
Change
 
% Change
 
 
(Dollars in thousands)
 
 
 
 
 
Revenue
$
30,171

 
$
14,303

 
$
15,868

 
110.9
%
 
Number of facilities at period end
40

 
17

 
23

 
135.3
%
 
Number of campuses at period end
16

 
13

 
3

 
23.1
%
 
Occupancy percentage (units)
75.7
%
 
74.6
%
 
 
 
1.1
%
 
Average monthly revenue per unit
$
2,747

 
$
2,528

 
$
219

 
8.7
%
 
 
Three Months Ended
June 30,
 
 
 
 
 
 
2016
 
2015
 
Change
 
% Change
 
 
(Dollars in thousands)
 
 
 
 
 
Revenue
$
30,708

 
$
15,927

 
$
14,781

 
92.8
%
 
Number of facilities at period end
40

 
20

 
20

 
100.0
%
 
Number of campuses at period end
18

 
13

 
5

 
38.5
%
 
Occupancy percentage (units)
76.0
%
 
73.1
%
 
 
 
2.9
%
 
Average monthly revenue per unit
$
2,757

 
$
2,494

 
$
263

 
10.5
%
 
 
Three Months Ended
September 30,
 
 
 
 
 
 
2016
 
2015
 
Change
 
% Change
 
 
(Dollars in thousands)
 
 
 
 
 
Revenue
31,248

 
27,686

 
$
3,562

 
12.9
 %
 
Number of facilities at period end
40

 
40

 
—

 
—
 %
 
Number of campuses at period end
21

 
14

 
7

 
50.0
 %
 
Occupancy percentage (units)
75.8
%
 
76.3
%
 
 
 
(0.5
)%
 
Average monthly revenue per unit
$
2,733

 
$
2,711

 
$
22

 
0.8
 %
 
 
Three Months Ended
December 31,
 
 
 
 
 
 
2016
 
2015
 
Change
 
% Change
 
 
(Dollars in thousands)
 
 
 
 
 
Revenue
31,512

 
30,213

 
$
1,299

 
4.3
%
 
Number of facilities at period end
40

 
40

 
—

 
—
%
 
Number of campuses at period end
21

 
15

 
6

 
40.0
%
 
Occupancy percentage (units)
76.3
%
 
76.0
%
 
 
 
0.3
%
 
Average monthly revenue per unit
$
2,748

 
$
2,634

 
$
114

 
4.3
%
 




THE ENSIGN GROUP, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The table below reconciles net income from operations to EBITDA, EBITDAR, Adjusted EBITDA and Adjusted EBITDAR for each reportable segment for the periods presented:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March31,
 
 
 
Transitional and Skilled Services
 
Assisted and Independent Services
 
Home Health and
Hospice
 
 
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Income Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from operations, excluding general and administrative expense(a)
 
$
27,596

 
$
35,228

 
$
3,260

 
$
2,070

 
$
3,176

 
$
2,675

 
Depreciation and amortization
 
5,239

 
4,225

 
1,063

 
724

 
268

 
221

 
EBITDA
 
$
32,835

 
$
39,453

 
$
4,323

 
$
2,794

 
$
3,444

 
$
2,896

 
Rent—cost of services
 
18,983

 
16,464

 
7,004

 
1,699

 
378

 
258

 
EBITDAR
 
$
51,818

 
$
55,917

 
$
11,327

 
$
4,493

 
$
3,822

 
$
3,154

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EBITDA
 
$
32,835

 
$
39,453

 
$
4,323

 
$
2,794

 
$
3,444

 
$
2,896

 
Adjustments to EBITDA:
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs at facilities currently being constructed and other start-up operations(b)
 
1,224

 
146

 
108

 
—

 
31

 
—

 
Results related to a closed facility, including continued obligations and closing expenses(c)
 
8,125

 
—

 
—

 
—

 
—

 
—

 
Share-based compensation expense(d)
 
1,026

 
838

 
95

 
42

 
66

 
61

 
Rent related to item(b) and (c)above
 
1,001

 
—

 
368

 
—

 
9

 
—

 
Adjusted EBITDA
 
$
44,211

 
$
40,437

 
$
4,894

 
$
2,836

 
$
3,550

 
$
2,957

 
Rent—cost of services
 
18,983

 
16,464

 
7,004

 
1,699

 
378

 
258

 
Less: rent related to items(b) and(c) above
 
(1,001
)
 
—

 
(368
)
 
—

 
(9
)
 
—

 
Adjusted EBITDAR
 
$
62,193

 
$
56,901

 
$
11,530

 
$
4,535

 
$
3,919

 
$
3,215

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                
(a) General and administrative expenses are not allocated to any segment for purposes of determining segment profit or loss.
(b)
Costs incurred for facilities currently being constructed and other start-up operations
(c) Results related to a closed facility and a facility not at full operation, including the fair value of continued obligation under lease agreement and related closing expenses of $7.9 million for the three months ended March 31, 2016.
(d)
Share-based compensation expense incurred during the three months ended March 31, 2016 and 2015.




 
 
Three Months Ended June 30,
 
 
 
Transitional and Skilled Services
 
Assisted and Independent Services
 
Home Health and
Hospice
 
 
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Income Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from operations, excluding general and administrative expense(a)
 
$
32,835

 
$
32,539

 
$
3,263

 
$
2,528

 
$
4,349

 
$
2,996

 
Depreciation and amortization
 
6,792

 
4,230

 
983

 
647

 
229

 
224

 
EBITDA
 
$
39,627

 
$
36,769

 
$
4,246

 
$
3,175

 
$
4,578

 
$
3,220

 
Rent—cost of services
 
22,565

 
16,547

 
7,182

 
1,667

 
369

 
276

 
EBITDAR
 
$
62,192

 
$
53,316

 
$
11,428

 
$
4,842

 
$
4,947

 
$
3,496

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EBITDA
 
$
39,627

 
$
36,769

 
$
4,246

 
$
3,175

 
$
4,578

 
$
3,220

 
Adjustments to EBITDA:
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs at facilities currently being constructed and other start-up operations(b)
 
77

 
462

 
364

 
—

 
8

 
—

 
Results related to a closed facility, including continued obligations and closing expenses(c)
 
206

 
—

 
—

 
—

 
—

 
—

 
Share-based compensation expense(d)
 
1,119

 
978

 
97

 
55

 
72

 
61

 
Insurance reserve in connection with the settlement of claims(e)
 
1,586

 
—

 
—

 
—

 
—

 
—

 
Rent related to item(b) and (c)above
 
1,465

 
—

 
691

 
—

 
—

 
—

 
Adjusted EBITDA
 
$
44,080

 
$
38,209

 
$
5,398

 
$
3,230

 
$
4,658

 
$
3,281

 
Rent—cost of services
 
22,565

 
16,547

 
7,182

 
1,667

 
369

 
276

 
Less: rent related to items(b) and(c) above
 
(1,465
)
 
—

 
(691
)
 
—

 
—

 
—

 
Adjusted EBITDAR
 
$
65,180

 
$
54,756

 
$
11,889

 
$
4,897

 
$
5,027

 
$
3,557

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                
(a) General and administrative expenses are not allocated to any segment for purposes of determining segment profit or loss.
(b)
Costs incurred for facilities currently being constructed and other start-up operations
(c) Results related to a closed facility and a facility not at full operation for the three months ended June 30, 2016.
(d)
Share-based compensation expense incurred during the three months ended June 30, 2016 and 2015.
(e)
Insurance reserves in connection with the settlement of claims.






 
 
Three Months Ended September 30,
 
 
 
Transitional and Skilled Services
 
Assisted and Independent Services
 
Home Health and
Hospice
 
 
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Income Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from operations, excluding general and administrative expense(a)
 
$
29,214

 
$
32,717

 
$
2,593

 
$
3,509

 
$
4,499

 
$
4,067

 
Depreciation and amortization
 
7,606

 
4,630

 
1,074

 
912

 
215

 
258

 
EBITDA
 
$
36,820

 
$
37,347

 
$
3,667

 
$
4,421

 
$
4,714

 
$
4,325

 
Rent—cost of services
 
24,900

 
17,806

 
7,438

 
5,768

 
404

 
332

 
EBITDAR
 
$
61,720

 
$
55,153

 
$
11,105

 
$
10,189

 
$
5,118

 
$
4,657

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EBITDA
 
$
36,820

 
$
37,347

 
$
3,667

 
$
4,421

 
$
4,714

 
$
4,325

 
Adjustments to EBITDA:
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs at facilities currently being constructed and other start-up operations(b)
 
979

 
836

 
320

 
—

 
39

 
—

 
Results related to a closed facility, including continued obligations and closing expenses(c)
 
131

 
—

 
—

 
—

 
—

 
—

 
Share-based compensation expense(d)
 
1,037

 
913

 
86

 
84

 
66

 
59

 
Insurance reserve in connection with the settlement of claims(e)
 
3,115

 
—

 
—

 
—

 
—

 
—

 
Rent related to item(b) and (c)above
 
2,120

 
—

 
1,055

 
—

 
9

 
—

 
Adjusted EBITDA
 
$
44,202

 
$
39,096

 
$
5,128

 
$
4,505

 
$
4,828

 
$
4,384

 
Rent—cost of services
 
24,900

 
17,806

 
7,438

 
5,768

 
404

 
332

 
Less: rent related to items(b) and(c) above
 
(2,120
)
 
—

 
(1,055
)
 
—

 
(9
)
 
—

 
Adjusted EBITDAR
 
$
66,982

 
$
56,902

 
$
11,511

 
$
10,273

 
$
5,223

 
$
4,716

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                
(a) General and administrative expenses are not allocated to any segment for purposes of determining segment profit or loss.
(b)
Costs incurred for facilities currently being constructed and other start-up operations
(c) Results related to a closed facility and a facility not at full operation for the three months ended September 30, 2016.
(d)
Share-based compensation expense incurred during the three months ended September 30, 2016 and 2015.
(e)
Insurance reserves in connection with the settlement of claims.




 
 
Three Months Ended December 31,
 
 
 
Transitional and Skilled Services
 
Assisted and Independent Services
 
Home Health and
Hospice
 
 
 
2016
 
2015
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Statements of Income Data:
 
 
 
 
 
 
 
 
 
 
 
 
 
Income from operations, excluding general and administrative expense(a)
 
$
28,473

 
$
36,259

 
$
2,585

 
$
3,356

 
$
4,547

 
$
3,846

 
Depreciation and amortization
 
6,661

 
4,923

 
1,036

 
1,055

 
215

 
277

 
EBITDA
 
$
35,134

 
$
41,182

 
$
3,621

 
$
4,411

 
$
4,762

 
$
4,123

 
Rent—cost of services
 
25,314

 
18,468

 
7,283

 
6,797

 
404

 
369

 
EBITDAR
 
$
60,448

 
$
59,650

 
$
10,904

 
$
11,208

 
$
5,166

 
$
4,492

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EBITDA
 
$
35,134

 
$
41,182

 
$
3,621

 
$
4,411

 
$
4,762

 
$
4,123

 
Adjustments to EBITDA:
 
 
 
 
 
 
 
 
 
 
 
 
 
Costs at facilities currently being constructed and other start-up operations(b)
 
688

 
1,060

 
(66
)
 
—

 
77

 
11

 
Results related to a closed facility and a facility not at full operation, including continued obligations and closing expenses(c)
 
244

 
—

 
—

 
—

 
—

 
—

 
Share-based compensation expense(d)
 
1,009

 
954

 
88

 
89

 
83

 
60

 
Insurance reserve in connection with the settlement of claims(e)
 
223

 
—

 
—

 
—

 
—

 
—

 
Rent related to item(b) and (c)above
 
2,500

 
644

 
1,283

 
—

 
9

 
5

 
Adjusted EBITDA
 
$
39,798

 
$
43,840

 
$
4,926

 
$
4,500

 
$
4,931

 
$
4,199

 
Rent—cost of services
 
25,314

 
18,468

 
7,283

 
6,797

 
404

 
369

 
Less: rent related to items(b) and(c) above
 
(2,500
)
 
(644
)
 
(1,283
)
 
—

 
(9
)
 
(5
)
 
Adjusted EBITDAR
 
$
62,612

 
$
61,664

 
$
10,926

 
$
11,297

 
$
5,326

 
$
4,563

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                
(a) General and administrative expenses are not allocated to any segment for purposes of determining segment profit or loss.
(b)
Costs incurred for facilities currently being constructed and other start-up operations
(c) Results related to a closed facility and a facility not at full operation for the three months ended December 31, 2016.
(d)
Share-based compensation expense incurred during the three months ended December 31, 2016 and 2015.
(e)
Insurance reserves in connection with the settlement of claims.





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
THE ENSIGN GROUP, INC.
 
 
By:  
/s/ Suzanne D. Snapper  
 
 
 
Suzanne D. Snapper 
 
 
 
Chief Financial Officer 
 
 
Dated: February 10, 2017