Fullerton acquisition for Ensign Group as fortunes improve

Buys Fullerton’s St. Catherine Healthcare

The Ensign Group Inc. (Nasdaq: ENSG) released first-quarter earnings on April 29 that exceeded expectations as skilled nursing occupancy, and as a result revenue, continued to improve.

The San Juan Capistrano-based skilled nursing facility (SNF) operator said it saw an 18% and 26% increase in same store and transitioning managed care daily census, respectively, from its fourth quarter to its first quarter.

Growth in revenue per patient day and skilled mix drove SNF revenue of $601 million, up 7.6% year over year.

Furthermore, “with full access to vaccines throughout the quarter, we saw new resident and staff infection rates plummet, and we quickly became one of the safest environments available for our critically ill population,” Chief Executive Barry Port said on the company’s earnings call.

“Although we will see some seasonality, we expect the positive trend in occupancy to continue throughout the year as volumes in higher acute settings and managed care utilization continue to increase,” he said.

The company announced adjusted EBITDA growth of 13%, above expectations of 12.3%. It also recorded revenue of $627.3 million, up 6.4% from a year ago.

Ensign “sharply outperformed the broader SNF industry throughout the pandemic, an accomplishment made even more notable by the fact that it returned all ~$153 million in CARES PRF grant funds it had received,” Stephens analyst Scott Fidel said in a report.

Among seven acquisitions for the company since the start of the first quarter was St. Catherine Healthcare, a 99-bed skilled nursing facility in Fullerton.; it now counts about 235 healthcare facilities in its portfolio.