ENSIGN GROUP, INC Q4 FY2024 earnings call

• Leaders and teams across the organization posted record clinical and financial results. - Same-store and transitioning occupancy increased by 2.7% and 4.1% for the year, and 2.3% and 4.7% over prior year quarter respectively. - Skilled days increased by 3.8% for same-store and 10.9% for transitioning operations over prior year quarter. - Managed care census grew by 6.6% and 27.7% for same-store and transitioning operations over prior year quarter. - Added 12 new operations during the quarter, including in Alabama, Tennessee, Wisconsin, Texas, Nebraska, adding 1,147 skilled nursing beds and 16 senior living units. - Standard Bearer added 13 new assets, now has 129 owned properties, with 97 leased to Ensign affiliated operators and 33 to third-party operators. - Examples like Victoria Healthcare in California showing growth in occupancy and skilled revenue mix, and Boulder Canyon Health and Rehabilitation in Colorado turning around from a struggling facility to a high-performing one.

The Ensign Group is a holding company with independent subsidiaries. The service center provides accounting, payroll, human resources, etc., services. The insurance captive offers claims-made coverage for general and professional liability, and workers' compensation. Standard Bearer Healthcare REIT invests in healthcare properties. In Q4, Standard Bearer generated $25.1 million in rental revenue, with $20.7 million from Ensign affiliated operators. Absolute terms: Service Centers provide various support services; Insurance Captive handles insurance coverage; Standard Bearer has 129 owned properties. Revenue contribution %: Not explicitly stated percentages, but Standard Bearer's rental revenue is part of the overall financial picture.

• 2025 earnings guidance: $6.16 to $6.34 per diluted share, representing a 13.8% increase over 2024 results and 31% higher than 2023 results. - Annual revenue guidance: $4.83 billion to $4.91 billion. - Guidance is based on strong performance, occupancy and skilled mix momentum, and progress on operational initiatives. - Based on diluted weighted average common shares outstanding of 59.5 million, 25% tax rate, and inclusion of acquisitions closed and expected to close by Q2 2025.

• Factors impacting quarterly performance: Variations in reimbursement system, delays and changes in state budgets, seasonality in occupancy and skill mix, influence of general economy on census and staffing, short-term impact of acquisition activities, variations in insurance accruals. - Regulatory and legislative risks related to Medicaid reimbursement rates and potential changes in legislation affecting the business.

Q: Please provide latest thoughts on the Medicaid reimbursement backdrop and Tennessee M&A.

A: It's hard to know exact legislative impacts, but the company is part of industry education efforts. In Tennessee, the market has noise around hospitals, but the operator in the state has established relationships.

Q: Ask about quarterly EPS seasonality and cash flow from operations.

A: Q4 historically has strong occupancy and skilled mix, Q1 is typically the strongest. Cash flow from operations may be impacted by delays in Medicaid office approvals for licensing during acquisitions.

Q: Inquire about labor cost trends and deal pipeline.

A: Labor costs are seeing gradual improvements, with efforts to attract and retain workers through leadership development. There's a lot of deal flow, with the company being selective, focusing on having ready leaders and favorable deal terms, and expecting to continue acquiring deals over the next few months.