Ensign banks on assisted living, home care for the future
Independent and assisted living, along with home healthcare and hospice, are among the growing areas for the Ensign Group, President and CEO Christopher Christensen said Thursday on a third-quarter earnings call.
Although he made similar remarks during the company's second-quarter earnings call, Christensen told one analyst who questioned the reasoning for mentioning the importance of areas outside of skilled nursing that “[w]e just kind of feel like it wasn't obvious enough for people to see it.”
“While we understand that skilled nursing often overshadows everything else, we've been quietly building significantly value in our other ventures,” he told shareholders and analysts on the call in his prepared remarks. “Under the direction of key leaders and their independent service center resources, these operations have achieved consistent clinical and financial results while simultaneously bolstering our core skilled nursing operations. We expect to see each of these segments grow by acquiring underperforming assets and operations.”
Christensen said the company's assisted living and independent living portfolio has 49 standalone operations and 21 campuses in 12 states. It now represents 7.5% of Ensign's total consolidated revenue compared with 4.8% three years ago.
“Similarly, Cornerstone Healthcare, Ensign's home health and hospice portfolio company, now represents 7.6% of Ensign's total consolidated revenue, while only representing a little over 5% of those measures three years ago,” he said. “Collectively, these two business segments along with a few other new healthcare ventures within the portfolio are quickly approaching the size of Ensign when it completed its initial public offering in 2007. And each and everyone of these ventures are independently profitable and self-sustaining.”
Chad Keetch, executive vice president and secretary, said that among Ensign's acquisitions in the third quarter were a The Villas at Sunny Acres, a post-acute care and retirement community with 134 skilled nursing beds, 35 assisted living units and 198 independent living units set on 64 acres in Thornton, CO, acquired July 1; Medallion Villas, a 44-unit assisted living and 64 unit independent living operation, and Medallion Post Acute Rehabilitation, a 60-bed skilled nursing operation, both set on the same healthcare campus in Colorado Springs, CO, also acquired July 1. Another acquisition by the company was Parkside Senior Living, a 20-unit assisted living facility in Neenah, WI, acquired Aug. 1.
Ensign's earnings per share of $0.36 in the third quarter missed analysts' projections by $0.02. Revenue of $471.6 million, up 10.2% year over year, beat analysts' projections by $21.17 million.
Chief Financial Officer Suzanne Snapper, CFO, said that total assisted and independent living services segment revenue and income were up 13.5% to $35.5 million and 67.5% to $4.3 million, respectively, over the prior-year quarter.