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THE ENSIGN GROUP, INC. Reports Operating Results (10-K)

February 16, 2012 | About:
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THE ENSIGN GROUP, INC. (ENSG) filed Annual Report for the period ended 2011-12-31.

The Ensign Group Inc. has a market cap of $558.4 million; its shares were traded at around $25.91 with a P/E ratio of 11.1 and P/S ratio of 0.9. The dividend yield of The Ensign Group Inc. stocks is 0.9%.

Highlight of Business Operations:

Revenue. Revenue increased $108.8 million, or 16.7%, to $758.3 million for the year ended December 31, 2011 compared to $649.5 million for the year ended December 31, 2010. Of the $108.8 million increase, Medicare and managed care revenue increased ­$63.0 million, or 20.7%, Medicaid revenue increased $18.0 million, or 6.9%, private and other revenue increased $25.0 million, or 36.5% and other skilled revenue increased $2.7 million, or 15.5%. Approximately $64.8 million of the total revenue increase was due to revenue generated by Recently Acquired Facilities. Since January 1, 2010, the Company has acquired 25 facilities, four home health and two hospice operations in eight states.

Cost of Services (exclusive of facility rent and depreciation and amortization shown separately). Cost of services increased $84.1 million, or 16.3%, to $600.8 million for the year ended December 31, 2011 compared to $516.7 million for the year ended December 31, 2010. Of the $84.1 million increase, Same Facilities increased $26.3 million, or 6.4% and Recently Acquired Facilities increased $51.0 million. The $26.3 million increase in Same Facility cost of services was primarily due to a $8.1 million increase in salaries and benefits, a $7.9 million increase in ancillary expenses and a $2.9 million increase in insurance costs. The increase in salaries and benefits was primarily due to increases in nursing wages and benefits due to increased services provided at Same Facilities. The increase in ancillary expenses was primarily due to increased therapy wages. The increase in insurance was primarily due to increased general and professional liability costs. Cost of services decreased as a percent of total revenue to 79.2% for the year ended December 31, 2011 as compared to 79.5% for the year ended December 31, 2010.

Depreciation and Amortization. Depreciation and amortization expense increased $6.7 million, or 40.0%, to $23.3 million for the year ended December 31, 2011 compared to $16.6 million for the year ended December 31, 2010. Depreciation and amortization expense increased as a percent of total revenue to 3.1% for the year ended December 31, 2011 as compared to 2.6% for the year ended December 31, 2010. This increase was primarily related to the additional depreciation of $3.4 million at Recently Acquired Facilities, as well as increases of $2.2 million and $1.1 million at Same and Transitioning Facilities, respectively, due to recent renovations and the purchase of the underlying asset of five of our skilled nursing facilities which we previously operated under a long-term lease agreement. Of the $3.4 million increase at Recently Acquired Facilities, $1.0 million represented amortization expense of patient base intangible assets which are amortized over four to twelve months.

Revenue. Revenue increased $107.5 million, or 19.8%, to $649.5 million for the year ended December 31, 2010 compared to $542.0 million for the year ended December 31, 2009. Of the $107.5 million increase, Medicare and managed care revenue increased $55.8 million, or 22.5%, Medicaid revenue increased $40.5 million, or 18.5%, other skilled revenue increased $5.2 million, or 41.9%, and private and other revenue increased $6.2 million, or 9.9%. Approximately $75.8 million of the total revenue increase was due to revenue generated by Recently Acquired Facilities. Since January 1, 2009, the Company has acquired twenty facilities and one home health and hospice operation in six states.

Cost of Services (exclusive of facility rent and depreciation and amortization shown separately). Cost of services increased $82.4 million, or 19.0%, to $516.7 million for the year ended December 31, 2010 compared to $434.3 million for the year ended December 31, 2009. Cost of services decreased as a percent of total revenue to 79.5% for the year ended December 31, 2010 as compared to 80.1% for the year ended December 31, 2009. Of the $82.4 million increase, Same Facilities increased $18.9 million, or 5.1% and Recently Acquired Facilities increased $62.2 million. The $18.9 million increase in Same Facility cost of services was primarily due to a $9.4 million increase in salaries and benefits and a $5.5 million increase in ancillary expenses, partially offset by a decrease in insurance costs of $0.9 million. The increase in salaries and benefits was primarily due to increases in nursing wages and benefits and the increase in ancillary expenses was primarily due to increased therapy wages. The decrease in insurance was primarily due to decreased medical and dental healthcare benefits due to a decrease in current and projected claims.

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