On July 25, 2024, Ensign Group Inc (ENSG, Financial) released its 8-K filing for the second quarter of 2024. The company, which provides post-acute healthcare services in the United States, reported GAAP diluted earnings per share (EPS) of $1.22 and adjusted EPS of $1.32 for the quarter ended June 30, 2024. This slightly missed the analyst estimate of $1.33. The company also reported consolidated GAAP and adjusted revenue of $1.04 billion, surpassing the estimated revenue of $1.02 billion.
Company Overview
Ensign Group Inc provides post-acute healthcare services in the United States. Its regional subsidiaries oversee skilled nursing, assisted living, home health and hospice, mobile ancillary, and urgent care operations. Medicare and Medicaid programs contribute a majority of revenue received for Ensign's services. The firm operates through two segments, Skilled Services and Standard Bearer. The skilled services segment includes the operation of skilled nursing facilities and rehabilitation therapy services. The Standard Bearer segment comprises properties owned by the company through its captive REIT and leased to skilled nursing and assisted living operations. The majority of the revenue is generated from the skilled services segment.
Performance and Challenges
Ensign Group Inc (ENSG, Financial) reported GAAP net income of $71.0 million, an increase of 11.0% over the prior year quarter. Adjusted net income was $76.4 million, an increase of 15.3% over the prior year quarter. GAAP diluted EPS for the quarter was $1.22, an increase of 8.9% over the prior year quarter, while adjusted diluted EPS was $1.32, an increase of 13.8% over the prior year quarter. Despite these positive results, the company faced challenges in meeting the analyst EPS estimate of $1.33.
Financial Achievements
Ensign Group Inc (ENSG, Financial) achieved significant financial milestones in Q2 2024. Consolidated GAAP and adjusted revenue for the quarter were $1.04 billion, an increase of 12.5% over the prior year quarter. Total skilled services revenue was $991.3 million for the quarter, an increase of 12.1% over the prior year quarter. The Standard Bearer segment reported revenue of $23.4 million for the quarter, an increase of 17.3% over the prior year quarter. These achievements are crucial for the company as they reflect its ability to grow revenue and maintain profitability in the competitive healthcare industry.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Service Revenue | $1,030.57 million | $916.10 million |
| Rental Revenue | $5.71 million | $5.24 million |
| Total Revenue | $1,036.29 million | $921.35 million |
| Net Income | $71.18 million | $64.09 million |
| Diluted EPS | $1.22 | $1.12 |
Balance Sheet and Cash Flow
As of June 30, 2024, Ensign Group Inc (ENSG, Financial) reported total assets of $4.44 billion, up from $4.18 billion as of December 31, 2023. The company’s cash and cash equivalents stood at $477.34 million, a decrease from $509.63 million at the end of 2023. The company’s liquidity remains strong with approximately $477.3 million of cash on hand and $573.1 million of available capacity under its line-of-credit.
Operational Insights
Ensign Group Inc (ENSG, Financial) reported that same store occupancy for the quarter reached 80.8%, growing by 2.8% over the prior year quarter. The company also saw an increase in same store and transitioning skilled services revenue during the quarter of 6.8% and 6.0%, respectively. The company’s focus on “customer second” continues to ensure that caregivers and their teams are recognized for their achievements, resulting in lower turnover for the 11th quarter in a row and a decrease in the use of staffing agencies for the 6th quarter in a row.
“We are thrilled to report another record quarter and are excited about the continued momentum our teams have created across our entire portfolio,” said Barry Port, Ensign’s Chief Executive Officer.
Future Outlook
Due to solid skilled mix and occupancy growth, as well as continued strength from recent acquisitions, Ensign Group Inc (ENSG, Financial) has raised its annual 2024 earnings guidance to between $5.38 to $5.50 per diluted share, up from $5.29 to $5.47 per diluted share. The company also increased its annual revenue guidance to between $4.20 billion to $4.22 billion, up from the previous guidance of $4.13 billion to $4.17 billion.
For more detailed information, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from Ensign Group Inc for further details.
