What’s in the water in San Juan Capistrano? The Ensign Group, which is based in the California town, just reported another impressive quarter with GAAP diluted record earnings per share of $0.86. That is an increase of 17.8% over the prior-year quarter. That excludes any revenues from the CARES Act Provider Relief Funds as well, so that improvement is the real deal. Given the success of the company’s decentralized structure, maybe we should be asking what’s in the water at each of Ensign’s properties.
Starting with occupancy, Ensign reported a 0.4% increase in its same store occupancy and a 1.6% increase in its transitional occupancy, both sequentially over the fourth quarter of 2020. For its same store portfolio, occupancy was around 72.2% in the first quarter of 2021, compared with 80.4% in the first quarter of 2020, so there is still a long road ahead. In the last year, Ensign has made great strides in improving its skilled mix, with skilled mix by nursing days increasing from 31.0% in Q1:20 to 35.4% in Q1:21 and by nursing revenue from 52.1% in Q1:20 to 56.6% in Q1:21.
That certainly played a part in the company’s healthy financial performance despite the significant drop in census, as revenues across the same store portfolio increased from $476.9 million in Q1:20 to $491.8 million in Q1:21. It also means that Ensign has grown less reliant on Medicaid revenues, dropping from 40.2% of its revenues across its same-store portfolio in Q1:20 to 37.5% in Q1:21. In fact, its performance was bolstered by healthy increases in its average daily revenue rates for Medicare, managed care, Medicaid and private pay patients. In the end, Ensign’s GAAP net income rose to $49.2 million for the quarter, an increase of 20.5% from the prior-year quarter.
As far as government aid, Ensign returned an additional $9 million in provider grants in the first quarter and another $2 million, approximately, in April 2021. So, all of the CARES Act Provider Relief Funds totaling over $152.9 million have been returned to the government, and the company has also repaid all remaining Medicare advance payments totaling approximately $102 million. That further frees up the road to recovery, which Ensign is clearly speeding along.
