The Ensign Group announced record operating results for the fourth quarter, reporting diluted earnings per share of 82 cents and $3.06 for the quarter and year, respectively.
“We’re happy to report another record quarter, as we achieved our highest adjusted earnings per share in our history, in spite of the continued challenges brought on as a result of the ongoing pandemic,” Ensign CEO Barry Port said on the firm’s fourth-quarter earnings call Thursday. Unlike the second and third quarters of 2020, when the San Juan Capistrano, CA-based firm saw occupancies drop, fourth-quarter occupancies remained flat, a sign of potential positive changes to come, Port added.
“We have seen over 30% of our same-store operations improve their occupancies to over 80%, which is at or near consolidated pre-COVID levels,” he said. In Utah, entire clusters have returned to pro-COVID levels.
The firm also announced that, beginning with the fourth quarter, it would begin reporting the results of its real estate portfolio as a new segment.
“This new real estate segment is comprised of properties owned by us and leased to affiliated skilled nursing and senior living operations and 31 senior living operations that are leased to The Pennant Group, Inc,” said Chad Keetch, Ensign’s chief investment officer. He noted that each of these properties are subject to triple-net, long-term leases and generated rental revenue of $61.3 million, of which $46.1 million was derived from Ensign affiliated operations.
Ensign also reported $49.5 million in funds from operations for 2020, which represents an increase of 51.6% over the prior year of $32.7 million.
“Our goal in separating this real estate business from our operations is to demonstrate the enormous inherent value that these real estate assets have and will have over time,” Keetch said. “We hope that this extra disclosure will be helpful to our current and prospective investors as they evaluate this growing part of our business.”
The firm also reported the acquisition of six skilled nursing facilities during the third quarter and in January, which bring Ensign’s growing portfolio to 232 healthcare operations, 24 of which also include senior living operations, across 13 states. Ensign now owns 94 real estate assets, 64 of which it operates.
Both Port and Keetch said the firm continues to evaluate a variety of opportunities to grow its portfolio.
“We are still being very selective and are keeping plenty of dry powder on hand for what we believe will be an attractive buyer’s market on the horizon. We look forward to growing within our existing geographical footprint and will do so as we see significant advantages to adding strength in markets we know well, including some of our newer emerging markets as they continue to mature and prepare for growth,” he added.
To read more about Ensign’s fourth quarter and full-year earnings, visit McKnights Long-Term Care News.