The Ensign Group, Inc. (NASDAQ: ENSG) reported a net income of $13.5 million, or $0.09 per diluted share, for the fourth quarter ended December 31, 2013.
The company also reported fourth quarter revenues were up 9.6% to $211.1 million. For the year, revenues were up 10.1% to %55.7 million.
Adjusted earnings per share climbed 27.1% to $0.61 per share for the quarter, and grew 8.5% to $2.54 per share for the year, despite October 2011 Medicare cuts.
Operating results for 2012 came in the midst of an unprecedented 11.1% reduction in Medicare rates to skilled nursing facilities, as well as changes in therapy regulations that increased cost of delivering physical and other types of therapy to skilled nursing patients.
The company said that its fourth quarter results were significantly impacted by a $15 million reserve held in anticipated disposition of an ongoing civil investigation by the Department of Justice (DOJ).
Initiated in 2006, the DOJ investigation has been reviewing Medicare billing claims in six of the company’s Souther California skilled nursing facilities.
While the $15 million does not guarantee a settlement, General Counsel Beverly Wittekind said, it represents an estimated liability related to the company’s efforts to achieve a resolution to any claims the DOJ might have.
“Over the past months and years, as we have previously indicated, management and the special committee have been interacting with government representatives to advance the matter toward resolution,” said Wittekind.
Issued guidance for 2013 projects revenues of $915 million to $931 million.
Additionally, Ensign expects adjusted net income of $2.79 to $2.88 per diluted share for the year.
Ensign’s 2013 guidance excludes expenses related to the DOJ investigation, which the company said can vary widely from quarter to quarter depending on the DOJ’s activities, and any costs associated with an eventual settlement or litigation if the mater is otherwise unresolved.
Written by Jason Oliva