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The Ensign Group Reports Record Net Income, Adjusted Earnings of $0.62 Per Share



The Ensign Group Reports Record Net Income, Adjusted Earnings of $0.62 Per
Share

Conference Call and Webcast Scheduled for November 8, 2012 at 10:00 am PT

MISSION VIEJO, Calif., Nov. 7, 2012 (GLOBE NEWSWIRE) -- The Ensign Group, Inc.
(Nasdaq:ENSG), the parent company of the Ensign™ group of skilled nursing,
rehabilitative care services, assisted and independent living, home health,
hospice care and urgent care companies, today reported operating results for
the third quarter of 2012.

Financial highlights for the Third Quarter include:

  * Net income climbed 14.6% to a record $13.3 million;
  * Same-store skilled nursing occupancy grew by 40 basis points over the
    prior year quarter to 82.1%;
  * Same-store skilled mix days held steady at 28.7% despite reported soft
    hospital occupancy in many markets, while consolidated skilled days grew
    by 34 basis points to 25.2% of patient days;
  * Consolidated EBITDAR was a record $34.4 million, an increase of 3.0% over
    the prior year quarter, and the fourth consecutive sequential increase
    since the October 1, 2011 implementation of an 11.1% Medicare cut and
    changes to therapy regulations which increased therapy costs; and
  * Consolidated revenues were a record $207.2 million, up 5.5%.

Operating Results

Ensign matched its adjusted earnings per share for the same quarter of 2011,
despite the effects of last October's unprecedented 11.1% reduction in
Medicare rates to skilled nursing facilities and a simultaneous change in
therapy regulations that increased the cost of delivering physical and other
types of therapy to skilled nursing patients.

"We have now successfully navigated a full four quarters under the difficult
circumstances posed by last years' cuts, and have posted improved operating
results each quarter," said Christopher Christensen, Ensign's President and
Chief Executive Officer. He observed that, even though same-store revenues are
tracking behind the prior year as a result of the cuts, the 14.6% earnings
increase illustrates that Ensign's unique operating model has been able to
adjust effectively on the expense side to the new reimbursement realities in
skilled nursing care.

Mr. Christensen also highlighted the company's diversification into home
health and hospice care, and into subacute care, as further evidence of the
organization's agility and ability to quickly adjust in the face of operating
headwinds. "As always, it is our empowered and motivated local leaders and
their teams that have rallied to make up lost revenues, craft their own unique
and innovative ways to get the job done, and again set Ensign apart from the
crowd," he said.

Mr. Christensen noted that the last four quarters "have been the perfect
storm" for the skilled nursing industry, adding, "And we are grateful that –
while we have increased revenue, earnings and occupancy more slowly than last
year – we have nevertheless increased, and done so through a very difficult
time."

In other results, Chief Financial Officer Suzanne Snapper reported that EBITDA
rose nearly $1.0 million to $31.1 million, notwithstanding the October 2011
Medicare cuts and therapy changes. She noted that Ensign, as a growing,
dynamic company, had benefitted from the contributions of recently-acquired
and transitioning facilities, which posted revenue gains of 80% and 5.7%
respectively, more than offsetting the 3.3% decline in same-store revenue
resulting from the 2011 cuts.

She also reported that, while much of the industry appears to have suffered a
decline in occupancy during the quarter, Ensign's same-store skilled nursing
occupancy was actually up by 40 basis points to 82.1%, and same-store
occupancy was up 35 basis points to 82.2%. "We believe that as the quality of
our service offerings, our superior clinical outcomes and our connections to
our individual markets continue to strengthen, we will increasingly draw
market share across the portfolio," she added, noting that the largest
increases are expected "at the higher end of the acuity spectrum."

Fully diluted GAAP earnings per share were $0.60 for the quarter, an 11.1%
increase compared to $0.54 in the third quarter of 2011. Adjusted non-GAAP
earnings for the quarter were $0.62 per fully diluted share, compared to $0.62
in the third quarter of 2011. A reconciliation of key GAAP and non-GAAP
financial metrics appears in the financial data included with this release.
More complete information is contained in the Company's 10-Q, which was filed
with the SEC today and can be viewed on the Company's website at
http://www.ensigngroup.net.

2012 Guidance Confirmed

Management confirmed its annual guidance, which was increased following the
second quarter, projecting adjusted net income of $2.48 to $2.56 per diluted
share on revenues of $830 million to $846 million. The guidance is based on
diluted weighted average common shares outstanding of 22.1 million and
assumes, among other things, no additional acquisitions or dispositions beyond
those made to date, the effects of the announced Medicare market basket
update, anticipated increases in overall net Medicaid reimbursement rates, a
normalized tax rate of approximately 39%, and that tax rates do not materially
increase. It also excludes expenses related to normalized rent from one
operating lease for a not-yet opened facility and the costs associated with
the settlement of the California class action, as well as expenses related to
the DOJ investigation which can vary widely from quarter to quarter depending
on the DOJ's activities and the required response by the Company.

Quarter Highlights

Dividend Declared

During the quarter, the company's Board of Directors declared a quarterly cash
dividend of $0.06 per share of Ensign common stock. Ensign has been a
dividend-paying company since 2002, and has increased its dividend every year.

Acquisition Growth

During the quarter, the company announced the acquisition of one skilled
nursing and assisted living campus and one skilled nursing facility, both in
the same transaction. In addition, the company exercised fixed-formula
purchase options on three skilled nursing facilities it has operated for many
years. The facilities were purchased with cash, and include:

  * In Idaho, Discovery Care Center, a 45-bed skilled nursing and 24-unit
    assisted living campus in Salmon.
  * Also in Idaho, Owyhee Health & Rehabilitation Center, a 49-bed skilled
    nursing facility located in Homedale, a suburb of the growing Boise
    market.
  * In Southern California, Ensign exercised a purchase option to acquire the
    underlying real estate of Palomar Vista Healthcare Center, a 74-bed
    skilled nursing facility located in Escondido. An Ensign subsidiary has
    operated Palomar Vista since 2003 under a lease from the family that
    founded the facility.
  * Also in Southern California, Ensign exercised purchase options to acquire
    the underlying real estate of Atlantic Memorial Healthcare Center, a
    104-bed skilled nursing facility, and Shoreline Healthcare Center, a
    75-bed skilled nursing facility, both located in the City of Long Beach.
    Separate Ensign subsidiaries have operated the two facilities since 2002
    under leases from the family that built and originally operated the two
    facilities.

The acquisitions brought Ensign's growing portfolio to 107 facilities, 85 of
which are Ensign-owned, with Ensign affiliates holding purchase options on two
of Ensign's 22 leased facilities, as well as four hospice companies and six
home health businesses, spread over 11 states. Management reaffirmed that
Ensign is actively seeking additional opportunities to acquire both
well-performing and struggling long-term care, home health and hospice
operations across the United States.

Conference Call

A live webcast will be held on Thursday, November 8, 2012 at 10:00 a.m.
Pacific Time (1:00 p.m. Eastern Time) to discuss Ensign's third quarter 2012
financial results. To listen to the webcast, or to view any financial or
statistical information required by SEC Regulation G, please visit the
Investors section of the Ensign website at http://investor.ensigngroup.net.
The webcast will be recorded, and will be available for replay via the website
until 5:00 p.m. Pacific Time on Friday, November 23, 2012.

About Ensign™

The Ensign Group, Inc.'s independent operating subsidiaries provide a broad
spectrum of skilled nursing and assisted living services, physical,
occupational and speech therapies, home health and hospice services, and other
rehabilitative and healthcare services for both long-term residents and
short-stay rehabilitation patients at 107 facilities, four hospice companies
and six home health businesses in California, Arizona, Texas, Washington,
Utah, Idaho, Colorado, Nevada, Iowa, Nebraska and Oregon. Each of these
facilities and businesses is operated by a separate, independent operating
subsidiary that has its own management, employees and assets. References
herein to the consolidated "company" and "its" assets and activities, as well
as the use of the terms "we," "us," "its" and similar verbiage, are not meant
to imply that The Ensign Group, Inc. has direct operating assets, employees or
revenue, or that any of the facilities, the home health and hospice
businesses, the urgent care joint venture, the Service Center or the captive
insurance subsidiary are operated by the same entity. More information about
Ensign is available at http://www.ensigngroup.net.

The Ensign Group, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=13849

Safe Harbor Statement under the Private Securities Litigation Reform Act of
1995:

This press release contains, and the related conference call and webcast will
include, forward-looking statements that are based on management's current
expectations, assumptions and beliefs about its business, financial
performance, operating results, the industry in which it operates and other
future events. Forward-looking statements can often be identified by words
such as "anticipates," "expects," "intends," "plans," "predicts," "believes,"
"seeks," "estimates," "may," "will," "should," "would," "could," "potential,"
"continue," "ongoing," similar expressions, and variations or negatives of
these words. These forward-looking statements include, but are not limited to,
statements regarding growth prospects, future operating and financial
performance. They are not guarantees of future results and are subject to
risks, uncertainties and assumptions that could cause actual results to
materially and adversely differ from those expressed in any forward-looking
statement.

These risks and uncertainties relate to the company's business, its industry
and its common stock and include: reduced prices and reimbursement rates for
its services; its ability to acquire, develop, manage or improve facilities,
its ability to manage its increasing borrowing costs as it incurs additional
indebtedness to fund the acquisition and development of facilities; its
ability to access capital on a cost-effective basis to continue to
successfully implement its growth strategy; its operating margins and
profitability could suffer if it is unable to grow and manage effectively its
increasing number of facilities; competition from other companies in the
acquisition, development and operation of facilities; and the application of
existing or proposed government regulations, or the adoption of new laws and
regulations, that could limit its business operations, require it to incur
significant expenditures or limit its ability to relocate its facilities if
necessary. Readers should not place undue reliance on any forward-looking
statements and are encouraged to review the company's periodic filings with
the Securities and Exchange Commission, including its Form 10-Q, which was
filed today, for a more complete discussion of the risks and other factors
that could affect Ensign's business, prospects and any forward-looking
statements. Except as required by the federal securities laws, Ensign does not
undertake any obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events, changing
circumstances or any other reason after the date of this press release.

                                                                                     
THE ENSIGN GROUP, INC.
GAAP and ADJUSTED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
 
                                                                                     
               Three Months Ended                   Nine Months Ended
               September 30, 2012                   September 30, 2012
               As        Non-GAAP         As        As          Non-GAAP            As
               Reported  Adj.             Adjusted  Reported    Adj.                Adjusted
Revenue         $                          $         $                               $
               207,150                    207,150   613,618                         613,618
Expense:                                                                             
Cost of
services
(exclusive of
facility rent,
general and
administrative
and             164,877  (307)    ^(1)(2)  164,570   488,305     (3,265) ^(1)(2)(3)  485,040
depreciation
and
amortization
expense shown
separately
below)
Facility
rent—cost of    3,374    (153)    ^(4)     3,221     10,063      (445)   ^(4)        9,618
services
General and
administrative  8,099    (594)    ^(5)     7,505     23,933      (1,442) ^(5)        22,491
expense
Depreciation
and             7,179    (127)    ^(6)     7,052     21,145      (433)   ^(6)        20,712
amortization
Total expenses  183,529  (1,181)           182,348   543,446     (5,585)             537,861
Income from     23,621   1,181             24,802    70,172      5,585               75,757
operations
Other income                                                                         
(expense): 
Interest        (3,092)                    (3,092)   (9,131)                         (9,131)
expense
Interest        69                         69        172                             172
income
Other expense,  (3,023)                    (3,023)   (8,959)                         (8,959)
net
Income before
provision for   20,598   1,181             21,779    61,213      5,585               66,798
income taxes
Tax Effect on
Non-GAAP                 461      ^(7)                           2,178   ^(7)        
Adjustments
Tax True-up
for Effective            471      ^(8)                           803     ^(8)        
Tax Rate
Provision for   7,562    932               8,494     23,070      2,981               26,051
income taxes
Net income      $ 13,036 249               $ 13,285  $ 38,143    2,604               $ 40,747
Less: net loss
attributable
to              (258)                      (258)     (511)                           (511)
noncontrolling
interests
Net income
attributable    $ 13,294 249               $ 13,543  $ 38,654    2,604               $ 41,258
to The Ensign
Group, Inc.
Net income per                                                                       
share: 
Basic           $ 0.62                     $ 0.63    $ 1.81                          $ 1.93
Diluted         $ 0.60                     $ 0.62    $ 1.77                          $ 1.88
Weighted
average common                                                                       
shares
outstanding: 
Basic           21,488                     21,488    21,369                          21,369
Diluted         22,010                     22,010    21,899                          21,899
                                                                                     
 
(1) Represents acquisition-related costs of $110 and $230 for the three and nine months ended
September 30, 2012, respectively.
(2) Represents costs of $197 and $439 for the three and nine months ended September 30, 2012,
respectively, incurred to recognize income tax credits which contributed to decrease in
effective tax rate.
(3) Represents the settlement of a class action lawsuit regarding minimum staffing
requirements in the state of California of $2,596 during the three months ended June 30,
2012.
(4) Represents straight-line rent amortization for a facility which the Company has begun
construction activities, but has not commenced operations of a skilled nursing facility as of
September 30, 2012.
(5) Represents legal costs incurred in connection with the ongoing investigation into the
billing and reimbursement processes of some of our subsidiaries being conducted by the
Department of Justice (DOJ).
(6) Represents amortization costs related to patient base intangible assets acquired. Patient
base intangible assets are amortized over a period of four to eight months, depending on the
classification of the patients and the level of occupancy in a new acquisition on the
acquisition date.
(7) Represents the tax impact of non-GAAP adjustments noted in (1) – (6) at a normalized rate
of 39.0%.
(8) In FY 2011 and 2010, the Company's effective tax rate was 38.3% and 39.3%,
respectively. Therefore, this represents an adjustment to the provision for income taxes to
normalize our current quarter effective rate to 39.0%.

                                                                          
THE ENSIGN GROUP, INC.
GAAP and ADJUSTED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
 
               Three Months Ended                Nine Months Ended
               September 30, 2011                September 30, 2011
               As        Non-GAAP      As        As        Non-GAAP      As
               Reported  Adj.          Adjusted  Reported  Adj.          Adjusted
Revenue         $                       $         $                       $
               196,346                 196,346   565,615                 565,615
Expense:                                                                  
Cost of
services
(exclusive of
facility rent,
general and
administrative
and             155,725  (158)    ^(1)  155,567   444,517   (362)   ^(1)  444,155
depreciation
and
amortization
expense shown
separately
below)
Facility
rent—cost of    3,331                   3,331     10,380                  10,380
services
General and
administrative  7,195             ^     7,195     22,188            ^     22,188
expense
Depreciation
and             6,179    (249)    ^(2)  5,930     16,784    (808)   ^(2)  15,976
amortization
Total expenses  172,430  (407)          172,023   493,869   (1,170)       492,699
Income from     23,916   407            24,323    71,746    1,170         72,916
operations
Other income                                                              
(expense): 
Interest        (5,323)  2,542          (2,781)   (10,789)  2,542   ^(3)  (8,247)
expense
Interest        68                      68        198                     198
income
Other expense,  (5,255)  2,542          (2,713)   (10,591)  2,542         (8,049)
net
Income before
provision for   18,661   2,949          21,610    61,155    3,712         64,867
income taxes
Provision for   7,063    1,116    ^(4)  8,179     23,835    1,447         25,282
income taxes
Net income      $ 11,598 1,833          $ 13,431  $ 37,320  2,265         $ 39,585
Net income per                                                            
share: 
Basic           $ 0.55                  $ 0.64    $ 1.78                  $ 1.89
Diluted         $ 0.54                  $ 0.62    $ 1.73                  $ 1.84
Weighted
average common                                                            
shares
outstanding: 
Basic           20,995                  20,995    20,920                  20,920
Diluted         21,570                  21,570    21,571                  21,571
 
(1) Represents acquisition-related costs expenses.
(2) Represents amortization costs related to patient base intangible assets
acquired. Patient base intangible assets are amortized over a period of four to
eight months, depending on the classification of the patients and the level of
occupancy in a new acquisition on the acquisition date.
(3) Represents the loss on extinguishment and amortization of remaining deferred
financing costs in connection with the Senior Credit Facility entered into by the
Company on July 15, 2011.
(4) Represents the tax impact of acquisition costs, patient base and loss on
extinguishment of debt non-GAAP adjustments represented in entries (1) - (3).

                                                                      
THE ENSIGN GROUP, INC.
RECONCILIATION OF NET INCOME TO EBITDA AND EBITDAR
(in thousands)
The table below reconciles net income to EBITDA and EBITDAR for the periods
presented:
                                                                      
                                      Three Months Ended  Nine Months Ended
                                      September 30,       Septebmer 30,
                                      2012      2011      2012       2011
Consolidated Statements of Income                                     
Data:
Net income                             $ 13,036  $ 11,598  $ 38,143   $ 37,320
Net loss attributable to              258       —         511        —
noncontrolling interests
Interest expense, net                 3,023     5,255     8,959      10,591
Provision for income taxes            7,562     7,063     23,070     23,835
Depreciation and amortization         7,179     6,179     21,145     16,784
EBITDA                                 $ 31,058  $ 30,095  $ 91,828   $ 88,530
Facility rent—cost of services        3,374     3,331     10,063     10,380
EBITDAR                                $ 34,432  $ 33,426  $ 101,891  $ 98,910

                                                                   
THE ENSIGN GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 (In thousands)
                                                    September 30, December 31,
                                                    2012          2011
Assets                                                             
Current assets:                                                    
Cash and cash equivalents                            $ 32,028      $ 29,584
Accounts receivable — less allowance for doubtful
accounts of $13,628 and $12,782 at September 30,    98,072        86,311
2012 and December 31, 2011, respectively
Investments — current                               4,254         —
Prepaid income taxes                                3,232         5,882
Prepaid expenses and other current assets           7,985         7,667
Deferred tax asset — current                        10,178        11,195
Total current assets                                155,749       140,639
Property and equipment, net                         439,233       403,862
Insurance subsidiary deposits and investments       18,149        16,752
Escrow deposits                                     —             175
Deferred tax asset                                  4,787         3,514
Restricted and other assets                         12,385        10,418
Intangible assets, net                              4,867         2,321
Goodwill                                            22,180        17,177
Other indefinite-lived intangibles                  10,598        1,481
Total assets                                         $ 667,948     $ 596,339
                                                                   
Liabilities and equity                                             
Current liabilities:                                               
Accounts payable                                     $ 23,211      $ 21,169
Accrued wages and related liabilities               34,868        41,958
Accrued self-insurance liabilities — current        15,897        12,369
Other accrued liabilities                           22,615        18,577
Current maturities of long-term debt                7,133         6,314
Total current liabilities                           103,724       100,387
Long-term debt — less current maturities            192,299       181,556
Accrued self-insurance liabilities — less current   34,928        31,904
portion
Fair value of interest rate swap                    3,116         2,143
Deferred rent and other long-term liabilities       3,306         2,864
Total liabilities                                   337,373       318,854
Temporary equity — redeemable noncontrolling        11,511        —
interest
Total equity                                        319,064       277,485
Total liabilities and equity                         $ 667,948     $ 596,339
                                                                   
THE ENSIGN GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
The following table presents selected data from our condensed consolidated
statements of cash flows for the periods presented:
                                                                   
                                                    Nine Months Ended
                                                    September 30, 
                                                    2012          2011
Net cash provided by operating activities            $ 51,593      $ 53,245
Net cash used in investing activities               (61,841)       (126,870)
Net cash provided by (used in) financing activities 12,692         27,187
Net increase (decrease) in cash and cash            2,444          (46,438)
equivalents
Cash and cash equivalents beginning of period       29,584         72,088
Cash and cash equivalents end of period              $ 32,028      $ 25,650

                                                                             
THE ENSIGN GROUP, INC.
SELECT PERFORMANCE INDICATORS
                                                                             
The following tables summarize our selected performance indicators, along with
other statistics, for each of the dates or periods indicated:
                                                                             
                              Three Months Ended                             
                              September 30,
                              2012          2011                             
                              (Dollars in thousands)    Change      % Change
Total Facility Results:                                                      
Revenue                        $ 207,150     $ 196,346   $ 10,804    5.5    %
Number of facilities at        107           99          8           8.1    %
period end
Actual patient days            872,701       812,627     60,074      7.4    %
Occupancy percentage —        78.7%         78.7%                   —       %
Operational beds
Skilled mix by nursing days   25.2%         24.9%                    0.3    %
Skilled mix by nursing        49.3%         51.3%                    (2.0)  %
revenue
                              Three Months Ended                             
                              September 30,
                              2012          2011                             
                              (Dollars in thousands)    Change      % Change
Same Facility Results(1):                                                    
Revenue                        $ 139,664     $ 144,357   $ (4,693)   (3.3)  %
Number of facilities at        62            62         —            —      %
period end
Actual patient days            537,256       536,500     756         0.1    %
Occupancy percentage —        82.2%         81.8%                    0.4    %
Operational beds
Skilled mix by nursing days   28.7%         28.7%                    —      %
Skilled mix by nursing        53.3%         55.7%                    (2.4)  %
revenue
                              Three Months Ended                             
                              September 30,
                              2012          2011                             
                              (Dollars in thousands)    Change      % Change
Transitioning Facility                                                       
Results(2):
Revenue                        $ 37,163      $ 35,147    $ 2,016     5.7    %
Number of facilities at        20            20          —           —      %
period end
Actual patient days            168,062       159,750     8,312       5.2    %
Occupancy percentage —        75.7%         71.9%                    3.8    %
Operational beds
Skilled mix by nursing days   18.8%         16.8%                    2.0    %
Skilled mix by nursing        40.0%         38.6%                    1.4    %
revenue
                              Three Months Ended                             
                              September 30,
                              2012          2011                             
                              (Dollars in thousands)    Change      % Change
Recently Acquired Facility                                                   
Results(3):
Revenue                        $ 30,323      $ 16,842    $ 13,481   NM       
Number of facilities at        25            17          8          NM       
period end
Actual patient days            167,383       116,377     51,006     NM       
Occupancy percentage —        71.9%         75.2%                   NM       
Operational beds
Skilled mix by nursing days   16.8%         11.0%                   NM       
Skilled mix by nursing        37.0%         29.1%                   NM       
revenue
_______________________                                                      
                                                                             
(1)  Same Facility results represent all facilities purchased prior to
January 1, 2009.
(2)  Transitioning Facility results represents all facilities purchased from
January 1, 2009 to December 31, 2010.
(3)  Recently Acquired Facility (or "Acquisitions") results represent all
facilities purchased on or subsequent to January 1, 2011.

                                                                             
                               Nine Months Ended                             
                               September 30,
                               2012         2011                             
                               (Dollars in thousands)   Change      % Change
Total Facility Results:                                                      
Revenue                         $ 613,618    $ 565,615   $ 48,003    8.5    %
Number of facilities at period  107          99          8           8.1    %
end
Actual patient days             2,580,026    2,291,107   288,919     12.6   %
Occupancy percentage —         79.2%        79.5%                    (0.3)  %
Operational beds
Skilled mix by nursing days    25.8%        25.8%                    —      %
Skilled mix by nursing revenue 50.1%        52.2%                    (2.1)  %
                               Nine Months Ended                             
                               September 30,
                               2012         2011                             
                               (Dollars in thousands)   Change      % Change
Same Facility Results(1):                                                    
Revenue                         $ 421,993    $ 430,621   $ (8,628)   (2.0)  %
Number of facilities at period  62           62         —            —      %
end
Actual patient days             1,614,554    1,601,360   13,194      0.8    %
Occupancy percentage —         82.9%        82.3%                    0.6    %
Operational beds
Skilled mix by nursing days    29.6%        29.2%                    0.4    %
Skilled mix by nursing revenue 54.3%        56.2%                    (1.9)  %
                               Nine Months Ended                             
                               September 30,
                               2012         2011                             
                               (Dollars in thousands)   Change      % Change
Transitioning Facility                                                       
Results(2):
Revenue                         $ 108,611    $ 104,442   $ 4,169     4.0    %
Number of facilities at period  20           20          —           —      %
end
Actual patient days             493,258      481,277     11,981      2.5    %
Occupancy percentage —         74.6%        73.0%                    1.6    %
Operational beds
Skilled mix by nursing days    17.8%        16.2%                    1.6    %
Skilled mix by nursing revenue 38.3%        37.7%                    0.6    %
                               Nine Months Ended                             
                               September 30,
                               2012         2011                             
                               (Dollars in thousands)   Change      % Change
Recently Acquired Facility                                                   
Results(3):
Revenue                         $ 83,014     $ 30,552    $ 52,462   NM       
Number of facilities at period  25           17          8          NM       
end
Actual patient days             472,152      208,453     263,699    NM       
Occupancy percentage —         72.9%        75.1%                   NM       
Operational beds
Skilled mix by nursing days    17.4%        13.2%                   NM       
Skilled mix by nursing revenue 38.6%        32.9%                   NM       
_______________________                                                      
                                                                             
(1)  Same Facility results represent all facilities purchased prior to
January 1, 2009.
(2)  Transitioning Facility results represents all facilities purchased from
January 1, 2009 to December 31, 2010.
(3)  Recently Acquired Facility (or "Acquisitions") results represent all
facilities purchased on or subsequent to January 1, 2011.

                                                                                                   
THE ENSIGN GROUP, INC.
SKILLED NURSING AVERAGE DAILY REVENUE RATES AND
PERCENT OF SKILLED NURSING REVENUE AND DAYS BY PAYOR
                                                                                                   
The following table reflects the change in the skilled nursing average daily revenue rates by
payor source, excluding services that are not covered by the daily rate:
                                                                                                   
         Three Months Ended September 30,
         Same Facility       Transitioning       Acquisitions        Total               %
         2012      2011      2012      2011      2012      2011      2012      2011      Change
Skilled
Nursing
Average                                                                                            
Daily
Revenue
Rates:
Medicare  $ 564.05  $ 643.35  $ 483.99  $ 536.50  $ 464.93  $ 472.68  $ 539.13  $ 616.78  (12.6)%
Managed  380.35    369.63    399.24    415.53    398.82    490.71    383.29    375.05     2.2%
care
Other    565.92    538.68    582.27    550.61    —         —         568.60    539.85     5.3%
skilled
Total
skilled  494.56    535.11    467.43    509.47    454.10    474.63    487.11    529.46     (8.0)%
revenue
Medicaid 171.03    168.44    161.56    160.86    150.51    137.38    166.74    164.60     1.3%
Private
and      195.48    188.75    166.36    177.01    167.14    152.27    180.75    177.24     2.0%
other
payors
Total
skilled   $ 266.15  $ 275.75  $ 219.68  $ 221.55  $ 206.73  $ 180.37  $ 249.38  $ 257.06  (3.0)%
nursing
revenue
                                                                                                   
         Nine Months Ended September 30,
         Same Facility       Transitioning       Acquisitions        Total               %
         2012      2011      2012      2011      2012      2011      2012      2011      Change
Skilled
Nursing
Average                                                                                            
Daily
Revenue
Rates:
Medicare  $ 561.39  $ 640.30  $ 484.52  $ 535.07  $ 471.11  $ 468.00  $ 539.61  $ 617.12  (12.6)%
Managed  371.90    368.52    405.64    424.72    405.85    489.89    376.64    373.99     0.7%
care
Other    571.69    530.87    579.57    520.02    —         —         572.78    530.02     8.1%
skilled
Total
skilled  491.37    530.69    469.82    508.88    460.53    470.05    485.99    526.38     (7.7)%
revenue
Medicaid 170.11    167.54    162.71    160.42    147.24    138.87    166.22    164.76     0.9%
Private
and      197.05    187.29    170.78    173.71    165.15    156.45    182.19    179.69     1.4%
other
payors
Total
skilled   $ 267.72  $ 275.62  $ 218.53  $ 218.57  $ 207.64  $ 189.26  $ 250.98  $ 259.85  (3.4)%
nursing
revenue

                                                                        
The following tables set forth our percentage of skilled nursing patient
revenue and days by payor source for the three and nine months ended September
30, 2012 and 2011:
                                                                        
               Three Months Ended September 30,
               Same Facility   Transitioning   Acquisitions    Total
               2012    2011    2012    2011    2012    2011    2012    2011
Percentage of
Skilled                                                                 
Nursing
Revenue:
Medicare       33.6%   37.9%   26.9%   29.6%   31.7%   25.8%   32.3%   35.9%
Managed care    15.5    14.3    9.5     7.2     5.3     3.3     13.4    12.5
Other skilled   4.2     3.5     3.6     1.8     —       —       3.6     2.9
 Skilled mix    53.3    55.7    40.0    38.6    37.0    29.1    49.3    51.3
Private and     7.0     7.0     10.7    10.7    24.8    32.6    9.5     9.2
other payors
 Quality mix    60.3    62.7    50.7    49.3    61.8    61.7    58.8    60.5
Medicaid        39.7    37.3    49.3    50.7    38.2    38.3    41.2    39.5
Total skilled  100.0%  100.0%  100.0%  100.0%  100.0%  100.0%  100.0%  100.0%
nursing
                                                                        
                                                                        
               Three Months Ended September 30,
               Same Facility   Transitioning   Acquisitions    Total
               2012    2011    2012    2011    2012    2011    2012    2011
Percentage of
Skilled                                                                 
Nursing Days:
Medicare       15.9%   16.3%   12.2%   12.2%   14.1%   9.8%    14.9%   14.9%
Managed care    10.9    10.7    5.2     3.9     2.7     1.2     8.7     8.6
Other skilled   1.9     1.7     1.4     0.7     —       —       1.6     1.4
 Skilled mix    28.7    28.7    18.8    16.8    16.8    11.0    25.2    24.9
Private and     9.5     10.2    14.2    13.3    30.8    38.7    13.2    13.3
other payors
 Quality mix    38.2    38.9    33.0    30.1    47.6    49.7    38.4    38.2
Medicaid        61.8    61.1    67.0    69.9    52.4    50.3    61.6    61.8
Total skilled  100.0%  100.0%  100.0%  100.0%  100.0%  100.0%  100.0%  100.0%
nursing

                                                                        
The following tables set forth our percentage of skilled nursing patient
revenue and days by payor source for the three and nine months ended September
30, 2012 and 2011:
                                                                        
               Nine Months Ended September 30,
               Same Facility   Transitioning   Acquisitions    Total
               2012    2011    2012    2011    2012    2011    2012    2011
Percentage of
Skilled                                                                 
Nursing
Revenue:
Medicare       34.8%   38.1%   26.6%   29.1%   33.1%   29.7%   33.3%   36.3%
Managed care    15.3    14.8    8.7     7.3     5.5     3.2     13.2    13.1
Other skilled   4.2     3.3     3.0     1.3     —       —       3.6     2.8
 Skilled mix    54.3    56.2    38.3    37.7    38.6    32.9    50.1    52.2
Private and     7.0     7.1     10.6    10.6    26.0    30.7    9.5     8.6
other payors
 Quality mix    61.3    63.3    48.9    48.3    64.6    63.6    59.6    60.8
Medicaid        38.7    36.7    51.1    51.7    35.4    36.4    40.4    39.2
Total skilled  100.0%  100.0%  100.0%  100.0%  100.0%  100.0%  100.0%  100.0%
nursing
                                                                        
                                                                        
               Nine Months Ended September 30,
               Same Facility   Transitioning   Acquisitions    Total
               2012    2011    2012    2011    2012    2011    2012    2011
Percentage of
Skilled                                                                 
Nursing Days:
Medicare       16.6%   16.4%   12.0%   11.9%   14.6%   12.0%   15.5%   15.3%
Managed care    11.0    11.1    4.7     3.8     2.8     1.2     8.8     9.1
Other skilled   2.0     1.7     1.1     0.5     —       —       1.5     1.4
 Skilled mix    29.6    29.2    17.8    16.2    17.4    13.2    25.8    25.8
Private and     9.6     10.4    13.6    13.4    32.7    37.2    13.2    12.4
other payors
 Quality mix    39.2    39.6    31.4    29.6    50.1    50.4    39.0    38.2
Medicaid        60.8    60.4    68.6    70.4    49.9    49.6    61.0    61.8
Total skilled  100.0%  100.0%  100.0%  100.0%  100.0%  100.0%  100.0%  100.0%
nursing

                                                                                   
THE ENSIGN GROUP, INC.
REVENUE BY PAYOR SOURCE
                                                                                   
The following table sets forth our total revenue by payor source and as a percentage of
total revenue for the periods indicated:
                                                                                   
                 Three Months Ended                  Nine Months Ended
                 September 30,                       September 30,
                 2012              2011              2012              2011
                 $          %      $          %      $          %      $          %
Revenue:         (Dollars in thousands)
Medicaid          $ 76,709  37.0%   $ 70,967  36.1%   $ 223,934 36.5%   $ 204,273 36.1%
Medicare         69,526     33.6%  71,293     36.3%   209,715   34.2%  207,897    36.8%
Medicaid—skilled 6,316      3.0%   5,024      2.6%    18,590    3.0%   13,730     2.4%
Total            152,551    73.6%  147,284    75.0%   452,239   73.7%  425,900    75.3%
Managed Care     26,316     12.7%  23,621     12.0%   77,738    12.7%  71,938     12.7%
Private and      28,283     13.7%  25,441     13.0%   83,641    13.6%  67,777     12.0%
Other
Total revenue     $ 207,150 100.0%  $ 196,346 100.0%  $ 613,618 100.0%  $ 565,615 100.0%
                                                                                   
Discussion of Non-GAAP Financial Measures
EBITDA consists of net income, adjusted for net losses attributable to noncontrolling
interest, before (a) interest expense, net, (b) provisions for income taxes, and
(c) depreciation and amortization. EBITDAR consists of net income before (a) interest
expense, net, (b) provisions for income taxes, (c) depreciation and amortization, and
(d) facility rent-cost of services. The Company believes that the presentation of EBITDA
and EBITDAR provides important supplemental information to management and investors to
evaluate the Company's operating performance. The Company believes disclosure of
adjusted non-GAAP net income and non-GAAP diluted earnings per share has economic
substance because the excluded expenses are infrequent in nature and are variable in
nature, or do not represent current cash expenditures. A material limitation associated
with the use of these measures as compared to the GAAP measures of net income and
diluted earnings per share is that they may not be comparable with the calculation of
net income and diluted earnings per share for other companies in the Company's industry.
These non-GAAP financial measures should not be relied upon to the exclusion of GAAP
financial measures. For further information regarding why the Company believes that this
non-GAAP measure provides useful information to investors, the specific manner in which
management uses this measure, and some of the limitations associated with the use of
this measure, please refer to the Company's Report on Form 10-Q filed today with the
SEC. The Form 10-Q is available on the SEC's website at www.sec.gov or under the
"Financial Information" link of the Investor Relations section on Ensign's website at
http://www.ensigngroup.net.

CONTACT: Robert East,
         Westwicke Partners LLC, (443) 213-0500,
         bob.east@westwickepartners.com,
         or
         Gregory Stapley, Investor/Media Relations,
         The Ensign Group, Inc., (949) 487-9500,
         ir@ensigngroup.net

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