The Ensign Group, Inc. (ENSG) has reported a 9.82 percent fall in profit for the quarter ended Dec. 31, 2016. The company has earned $49.99 million, or $0.96 a share in the quarter, compared with $55.43 million, or $1.06 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $15.57 million, or $0.30 a share compared with $18.54 million or $0.35 a share, a year ago.
Revenue during the quarter grew 23.33 percent to $1,654.86 million from $1,341.83 million in the previous year period. Gross margin for the quarter contracted 151 basis points over the previous year period to 18.92 percent. Total expenses were 94.45 percent of quarterly revenues, up from 93.06 percent for the same period last year. That has resulted in a contraction of 139 basis points in operating margin to 5.55 percent.
Operating income for the quarter was $91.85 million, compared with $93.08 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $36.56 million compared with $38.03 million in the prior year period. At the same time, adjusted EBITDA margin contracted 62 basis points in the quarter to 2.21 percent from 2.83 percent in the last year period.
Commenting on the operating results, Ensign's President and Chief Executive Officer Christopher Christensen said, "Although we are disappointed to announce that we did not meet our 2016 annual guidance, many of the lessons we learned during the year have helped us identify areas of weakness and our local operators have been working tirelessly to make any weaknesses become strengths. While several challenges we experienced during the year dragged into the fourth quarter, many of these improvements have started to take effect, and we expect them to continue into 2017."
For financial year 2017, The Ensign Group, Inc. projects revenue to be in the range of $1,760 million to $1,800 million. The company forecasts diluted earnings per share to be in the range of $1.46 to $1.53.
Operating cash flow improves significantly
The Ensign Group, Inc. has generated cash of $73.89 million from operating activities during the year, up 121.43 percent or $40.52 million, when compared with the last year.
The company has spent $210.64 million cash to meet investing activities during the year as against cash outgo of $168.54 million in the last year.
Cash flow from financing activities was $152.88 million for the year, up 21.02 percent or $26.55 million, when compared with the last year.
Cash and cash equivalents stood at $57.71 million as on Dec. 31, 2016, up 38.82 percent or $16.14 million from $41.57 million on Dec. 31, 2015.
Debt increases substantially
The Ensign Group, Inc. has witnessed an increase in total debt over the last one year. It stood at $283.62 million as on Dec. 31, 2016, up 184.55 percent or $183.94 million from $99.67 million on Dec. 31, 2015. Total debt was 28.33 percent of total assets as on Dec. 31, 2016, compared with 13.33 percent on Dec. 31, 2015. Debt to equity ratio was at 0.62 as on Dec. 31, 2016, up from 0.23 as on Dec. 31, 2015. Interest coverage ratio deteriorated to 12.87 for the quarter from 32.91 for the same period last year.
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