The Ensign Group added six new operations and four real estate properties during and since the third quarter, “bringing the number of operations in our newly acquired bucket to 51,” according to Ensign’s Chief Investment Officer and Executive Vice President Chad Keetch, who spoke during Thursday’s third-quarter earnings call.
The San Juan Capistrano, CA-based skilled nursing, senior living and rehab operating company in August added to its portfolio three skilled nursing facilities in Washington state and another in Colorado. In September, the Ensign Group acquired two SNFs in South Carolina. In October, the company added a SNF in Kansas.
For the quarter, net income totaled $63.9 million, an increase of 13.7% from the second quarter. Consolidated GAAP revenues and adjusted revenues both were at $940.8 million, an increase of 22.2% over the same quarter last year. Cash and cash equivalents totaled $467.9 million.
CEO Berry Port noted that the company is increasing its annual 2023 earnings guidance to between $4.73 to $4.79 per diluted share, up from $4.70 to $4.78 per diluted share.
“This new midpoint of our 2023 earnings guidance represents an increase of 15% over our 2022 results and is 30.8% higher than our 2021 results,” he said. “We are also raising our annual revenue guidance to between $3.72 billion and $3.73 billion, up from our previous guidance of $3.69 billion to $3.73 billion.”
Ensign’s growing portfolio consists of 296 healthcare operations across 13 states. A total of 26 of them include senior living operations. Occupancy and skilled mix days for the skilled nursing operations in the newly acquired properties was 77.4% and 26.1%, respectively, for the quarter.
“When compared to our same-store occupancy and skilled mix days of 79.5% and 30.7%, respectively, there is enormous upside in each of these new operations as they continue to transform into same-store caliber operations,” Keetch said. “We have been patient and look forward to seeing our discipline paying off as these new operations continue to improve.”
Port added that the continued improvement in occupancies and managed care revenues is “particularly impressive given persistent labor market pressures and the return of more typical seasonality.”
Ensign’s captive real estate investment trust, Standard Bearer Healthcare REIT, also announced the following real estate acquisitions:
- Rehabilitation and Nursing Center of the Rockies, a 96-bed SNF in Fort Collins, CO, which will be operated by an independent operating subsidiary of Ensign;
- Belmont Terrace, a 95-bed SNF in Bremerton, WA, which will be operated by an independent operating subsidiary of Ensign;
- Puget Sound Transitional Care, a 125-bed SNF in Des Moines, WA, which will be operated by an independent operating subsidiary of Ensign; and
- Avamere Rehabilitation at Ridgemont and The Villas at Ridgemont, consisting of 96 licensed skilled nursing beds and 46 independent living units in Port Orchard, WA, which will be operated by a third-party operator.
According to Keetch, The Ensign Group has a steady pipeline of opportunities in the fourth quarter. With higher interest rates and a tight financial marker, he said, he expects “lots of opportunities” to present themselves.
“Looking forward, we are poised to grow with over $1 billion in dry powder for future investments,” Keetch added. “We look forward to actively seeking opportunities to acquire real estate and to lease both well-performing and struggling skilled nursing, senior living and other healthcare-related businesses in our current footprint and in a few new states.”
Ensign Executive Vice President and Chief Financial Officer Suzanne Snapper added that the company currently has $593 million of available capacity under a revolving line of credit, which, combined with the cash in its balance sheet, provides the more than $1 billion dollars in dry power for future investments that Keetch described.
The company paid a quarterly cash dividend of $0.0575 per share of Ensign common stock.
For additional coverage of The Ensign Group earnings call, see McKnight’s Long-Term Care News.
