The Ensign Group, Inc. (Nasdaq:ENSG), reported an adjusted net income of $14.3 million, or $0.62 per diluted share, for the third quarter ended Sept. 30, 2011, up 35% from the previous year’s $9.9 million, or $0.47 per diluted share, despite the recently-implemented 11.1% Medicare cuts.
Ensign’s president and CEO Christopher Christensen highlighted the company’s ability to maintain clinical and financial performance in the wake of the cuts, through creating “meaningful long-term solutions.”
“These dedicated teams, immediately upon the announcement and rather than waiting for instructions from anyone, began putting all of their expenses which are not directly related to patient care under the microscope and making appropriate adjustments,” said Christensen in a statement. “…We expect this combination of expense reduction, operational efficiency and continued movement in occupancy and skilled mix to significantly offset the reimbursement reductions and other changes.”
Total revenue increased 19.2% to $196.3 million in the quarter compared to the previous year, with 22.2% more facilities, although occupancy went down 1.4% to 78.7%. However, assisted living occupancy saw a 133 basis point increase to 84.3%.
While skilled nursing occupancy declined 20 basis points, it was primarily due to temporary vacancies created by significant renovation and repositioning activities in four skilled nursing facilities, said Ensign.
During and after the the third quarter, Ensign announced the acquisition of 13 long-term care facilities and a home health business in five separate transactions since June 30, 2011; its transaction activity in the quarter brought the company’s portfolio to 100 facilities, 73 of which are Ensign-owned, with affiliates holding purchase options on six of Ensign’s 27 leased facilities.
Ensign’s management increased 2011 annual earnings guidance to an adjusted $2.25 to $2.30 per diluted share for the year, and reaffirmed revenue guidance, which was already increased mid-year to $755 million to $770 million based on the recent growth in Ensign’s portfolio.
View the earnings report here.
Written by Alyssa Gerace