The Ensign Group, Inc. · NASDAQ:ENSG
The Ensign — Investor Presentation (May 2024)
51 slides from The Ensign's investor presentation, May 2024
Slide 1: Investor Presentation
ENSIGN GROUP May 2024 INVESTOR PRESENTATION www.ensigngroup.net
Slide 2: Our Mission
Our Mission We rely on our culture to accomplish our mission CAPLICO Our mission is to support the operations we serve in dignifying post-acute care in the eyes of the world. We do that through “Moments of Truth” – everyday situations that are met with out-of-the-ordinary service that surpasses all
Slide 3: Disclaimers
Disclaimers This presentation contains, and other communications of The Ensign Group, Inc. (“Ensign” or the “Company”) may contain, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not r
Slide 4: Table Of Contents
Table Of Contents About US Portfolio Our Services Financials Since 1999, the independent subsidiaries Each of the 300+ businesses are run Our independent subsidiaries offer a A clinically strong foundation combined of The Ensign Group, Inc. (ENSG) have independently encompassing services broad spect
Slide 5: Ensign's Commitment to Care Continuum
Ensign’s Commitment to Care Continuum Denotes Ensign Business Acute Care Local leadership strategy focused on acquisitions in fragmented markets. Inpatient LTACH Out Patient Rehab High quality healthcare outcomes across the Patient Service Intensity Rehab continuum driving local reputation and Skill
Slide 6: Ensign Strategically Positioned to Deliver Long-Term Value
Ensign Strategically Positioned to Deliver Long-Term Value Experienced Management Management team with combined experience over 90 years at Ensign alone. Presence in Attractive Markets Multiple Business Lines Presence in strategic markets across 14 states with Diversified operations including skille
Slide 7: Ensign's Investment Thesis
Ensign’s Investment Thesis Ensign is Positioned to Deliver Superior Clinical Results that Will Superior Results Generate Strong Financial and Operating Results Clinical Excellence Strategic Continuum of Care Growth Opportunities Organic, Strategic, Real Estate and New Ventures Culture 7
Slide 8: Leading Operational Presence in Attractive Markets
Leading Operational Presence in Attractive Markets Industry Leader with Strong and Growing National Presence Skilled Nursing Operations – 270 Senior Living Operations – 11 Campus Operations – 29 Ensign Group | Investor Presentation 8 Source: Data as of 5/1/2024.
Slide 9: Business Leaders Drive Results
Business Leaders Drive Results Track record of attracting, empowering & retaining clinically-focused business leaders. Local Leadership Superior Clinical Local Operation Clusters Outcomes of Choice Our independent subsidiaries offer a broad Empowering local leaders and their We partner with many oth
Slide 10: Local Leaders are Empowered by our Cluster Model
Local Leaders are Empowered by our Cluster Model Best Practices Shared Across Clusters Along with Economic and Payor Benefits at Cluster Level What is a Cluster? • Collaboration and connectivity between operations (“ops”) that are Economic Benefits Ops geographically close together. Ops • Sharing of
Slide 11: Organizational Focus on Clinical Quality Leads to Superior Financial Results
Organizational Focus on Clinical Quality Leads to Superior Financial Results Clinical Quality Translates to Organic Growth SNF Count by CMS Star Rating 400 1-Star 2-Star 3-Star 4-Star 5-Star 300 200 100 0 (2) 14 21 38 45 60 77 72 86 100 91 102 116 114 113 130 133 2009 2010 2011 2012 2013 2014 2015 2
Slide 12: Multifaceted Growth Opportunities Creating Value
Multifaceted Growth Opportunities Driven by Organic as well as Strategic Opportunities Creating Value Skilled Mix Disciplined Acquisitions Organic Occupancy Distressed Assets Strategic Fundamentals New Ventures 12
Slide 13: EPCC Enables Value-Based Care Continuum at the Local Level
EPCC Enables Value- Based Care Continuum at the Local Level (3) What is it? Clinical Care Transitional Care Coordination Management Preferred provider network between Ensign and The High Transparent Pennant Group, Inc. Clinical Quality Empowers local clinical Care Data leaders to opt-in resulting i
Slide 14: A Disciplined Approach to Acquisitions & Track Record of Improving Operations
A Disciplined Approach to Acquisitions & Track Record of Improving Operations to Drive Continued Growth 26.8% of Ensign’s skilled nursing operations have been Proven track record of achieving significant improvement in operated less than three full years just 5 quarters (4) 15.9% EBITDAR Margin Skil
Slide 15: Demonstrated Track Record of Significant Operational Improvements of Acquired Assets
Demonstrated Track Record of Significant Operational Improvements of Acquired Assets QTD Q1 2024 Skilled Mix Revenue (6) Medicare Rates(6) Consolidated Consolidated 49.9% $758 Medicaid $281 50.9% 37.9% 56.1% $745 $693 $857 Same Store (7) Transitioning (8) Recently Acquired (9) Same Store Transitioni
Slide 16: Ensign Represents The Growth Story
Ensign Represents The Growth Story In the Facility-Based Healthcare Services & Post-Acute Sector Revenue (11)(14) Adjusted EBITDAR (11)(14) ($mm) $3,729 ($mm) $3,025 $617 $2,627 $537 $2,403 $476 2,037 $423 1,755 $374 1,598 $319 1,438 $262 $285 1,183 $221 $1,010 $165 (14) (14) 2015 2016 2017 2018 201
Slide 17: Quarter Over Quarter Highlights
Quarter Over Quarter Highlights (in millions) Q1 2024 Q1 2023 REVENUE 13.9% $1,010.2 $886.8 SAME FACILITY SKILLED NURSING FACILITY 6.8% REVENUE $743.3 $695.8 CONSOLIDATED 16.6% ADJUSTED NET $75.4 $64.6 INCOME Ensign Group | Investor Presentation 17
Slide 18: Significant Real Estate Portfolio As of May 1, 2024
Significant Real Estate Portfolio As of May 1, 2024 (15) % of 310 Facilities Ensign Operates and 30 Ensign Triple Net Master Owned Real Estate Leased to Third Party Leases with Third Party Operators Operators Lease Multiple “triple-net” master leases 3.5% Structure 35.0% Lease agreements with in
Slide 19: Track Record of Successfully Incubating New Ventures
Track Record of Successfully Incubating New Ventures Completed 2019 Completed in 2014 Completed in 2016 19 19 19 Spin Offs Divestitures Current
Slide 20: Standard Bearer REIT Structure Summary & Key Benefits
Standard Bearer REIT Structure Summary & Key Benefits Operations Skilled Services Real Estate Ownership Ensign Pennant Care Continuum Real Estate Management & Monitoring New Ventures Investment Evaluation and Execution Real Estate Portfolio Performance Reporting Increased Visibility Ke
Slide 21: Standard Bearer at a Glance
Standard Bearer at a Glance Geographic Footprint Key Stats (16) 114 $1.1B Real Estate Properties Fair Value 12 11,278 Operating States Beds / Units 14.8 Years 82.3% (17) Weighted Avg. Ensign Operated Lease Tenor Note: Figures represent the number of owned properties per state Ensign Group | Investor
Slide 22: Standard Bearer Metrics Quarter Over Quarter
Standard Bearer Metrics Quarter Over Quarter Rental Revenue – Trend Other Real Estate Metrics In $ Millions $21.9 $22.2 In $ Millions $21.0 $19.9 $19.7 $4.2 $4.2 $4.0 $3.8 $3.8 $7.5 $7.3 $7.2 $7.1 $7.2 $17.0 $17.7 $18.0 $15.9 $16.1 $13.2 $13.3 $13.6 $14.2 $14.1 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 202
Slide 23: Liquidity Financials Measure
Liquidity Financials Measure Three Months Ended March 31, Summary of Cash Flows (In millions) 2024 2023 Net cash provided by (used in): Operating activities(36) 35.3 48.3 Investing activities (34.7) (36.0) Financing activities 1.6 (1.7) Net increase in cash and cash equivalents 2.2 10.7 Cash and cas
Slide 24: Guidance
Guidance Annual Revenue $4.13B to $4.17B 2024 Diluted Adjusted EPS $5.29 to $5.47 Midpoint is: 13% over 2023 30% over 2022 24
Slide 25: Entrepreneurial Evolution Of Ensign
Entrepreneurial Evolution Of Ensign Established New Ensign entered Senior living Completed the Completed spin- Continues to Ensign formed Ensign The Ensign Group Ensign completes Market CEO into the home portfolio spin-off of its off of home execute on a Captive REIT, completed 39 was founded an IPO
Slide 26: Fundamentals Remain Favorable for Strong Organic Growth
Fundamentals Remain Favorable for Strong Organic Growth Key Drivers of Organic Growth Shift to value-based care, will Over the last 10 years the CMS Aging Population over 65 projected Shift to Value- continue to benefit low cost, Reimbursement reimbursement rates in the SNF Population to nearly doub
Slide 27: Largest Beneficiary Of Medicare Post-Acute Dollars
Largest Beneficiary Of Medicare Post-Acute Dollars While Medicare Spending Continues to Increase Post-Acute Destinations - % of Medicare Dollars (23) (37) Medicare Spending Projection (22) 1.9% 1.9 (in Billions) 11% 11% 2,500 2,000 45% 45% 1,500 1,000 500 LTACH 0 42% IRF 42% 2015 2017 2019 2021 2023
Slide 28: Medicare Advantage Growth Projection
Medicare Advantage Growth Projection (24) Medicare Advantage Enrollment as Percentage of Medicare Enrollment Projection (in Thousands) 90,000 52% 53% 53% 54% 55% 55% 56% 60% 80,000 49% 50% 51% 43% 46% 50% 70,000 37%40% 60,000 30% 31% 32% 34% 36% 40% 28% 50,000 30% 40,000 30,000 20% 20,000 10% 10,000
Slide 29: Diversification of Annualized Rent
Diversification of Annualized Rent (17) (25) By Property Type By State (17) OTHER AZ 9% 17% ID 4% CAMPUS 20% UT 9% WI 12% ALF SC 5% 16% SNF 64% KS 7% TX CA 23% 14% Ensign Group | Investor Presentation 29 Refer to pages 49 – 50 for end notes. Source: Data as of 5/1/2024.
Slide 30: Standard Bearer Continuation & Expansion of Real Estate Success
Standard Bearer Continuation & Expansion of Real Estate Success Cumulative Investments Over Time (26) $1,000 14,000 $921 $927 $900 $832 12,000 Cumulative Real Estate Investments (in millions) $800 $722 Total No. of SNF Beds / ALF Units $700 10,000 $624 $600 $583 8,000 $500 $422 6,000 $400 $358 $302
Slide 31: Standard Bearer Strong Long Term Leases
Standard Bearer Strong Long Term Leases 14.8 years 98% (27) Weighted Average of leases expire Lease Tenor after 2031 Annualized Rent Revenue Expirations by Year Tenant Rent Coverage Summary 20 18.0 18 16 Q1 Q2 Q3 Q4 Q1 14.0 14.2 14 12.8 12.7 2023 2023 2023 2023 2024 12 10.7 10 Ensign 8 Affiliated 2.
Slide 32: High-Quality Portfolio Of Assets
High-Quality Portfolio Of Assets Ensign’s real estate portfolio includes attractive assets in appealing markets that provide the foundation for patient care and well-being. Hillside Village of De Soto South Davis Community Hospital Longhouse Northshire Care Center Kansas Utah Iowa Assets include a m
Slide 33: Ensign Management Team
Ensign Management Team Christopher Barry Suzanne Chad Spencer Christensen Port Snapper Keetch Burton Executive Chairman Chief Executive Officer Chief Financial Officer, EVP Chief Investment Officer, EVP President, Chief Operating 24 Years and Director and Director and Secretary Officer 20 Years 17 Y
Slide 34: Appendix
Appendix www.ensigngroup.net
Slide 35: Skilled Services Segment
Skilled Services Segment Three Months Ended $ in thousands March 31, 2024 2023 Statements of Income Data: (28) Segment income $126,809 $113,345 Depreciation and amortization 10,536 9,064 EBITDA $137,345 $122,409 Adjustments to EBITDA: Stock-based compensation expense 5,214 4,156 Adjusted EBITDA $142
Slide 36: Standard Bearer Segment
Standard Bearer Segment Three Months Ended $ in thousands March 31, 2024 2023 Rental revenue generated from third-party tenants $4,195 $3,786 Rental revenue generated from Ensign independent subsidiaries 18,006 15,931 Total rental revenue $22,201 $19,717 Segment income (19) 7,258 7,219 Depreciation
Slide 37: Reconciliation of GAAP to Non-GAAP Income
Reconciliation of GAAP to Non-GAAP Income Three Months Ended $ in thousands March 31, 2024 2023 Net income attributable to The Ensign Group, Inc. $68,835 $59,852 Non-GAAP adjustments (29) Stock-based compensation expense 8,238 6,573 (30) Litigation 764 67 Cost of services – impairment of long-lived
Slide 38: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended $ in thousands March 31, 2024 2023 Income before provision for income taxes $89,598 $78,382 Stock-based compensation 8,238 6,573 (30) Litigation 764 67 Impairment of long-lived assets 1,849 - (31) Acquisition related costs 114
Slide 39: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended March 31, $ in thousands 2024 2023 Net income $68,960 $59,969 Less: Net income attributable to noncontrolling interests 125 117 Other income, net 7,380 3,507 Add: Provision for income taxes 20,638 18,413 Depreciation and amorti
Slide 40: Reconciliation From Segment Income to Income Before Provisions For Income Taxes
Reconciliation From Segment Income to Income Before Provisions For Income Taxes QTD Q1 2024 $ in thousands Skilled Services Standard Bearer All Other Eliminations Consolidated Total Revenue $969,602 $22,201 $42,572 ($24,203) $1,010,172 (34) Cost of services 767,977 587 32,399 (3,549) 797,414 (35) In
Slide 41: Reconciliation From Segment Income to GAAP EBITDA and Non-GAAP EBITDA
Reconciliation From Segment Income to GAAP EBITDA and Non-GAAP EBITDA QTD Q1 2024 $ in thousands Skilled Services Standard Bearer All Other Eliminations Consolidated Segment Income $126,809 $7,258 ($42,620) - $91,447 Other expense (income), net - 5,942 (13,322) - (7,380) Depreciation and amortizatio
Slide 42: Reconciliation of Deferred Compensation Plan
Reconciliation of Deferred Compensation Plan Impact 5 Quarter Trend $ in thousands Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Non-GAAP other income (expense): Interest expense ($1,964) ($2,004) ($2,024) ($2,023) ($2,036) Interest income 6,950 6,891 5,701 3,952 4,304 Deferred compensation plan (DCP) inv
Slide 43: Property Locations
Property Locations Property Name State Property Type # of Operating Beds / Units Tenant Alta Mesa Health and Rehabilitation and The Groves Assisted and Independent Senior Living Community AZ Campus 176 Ensign Arrowhead Springs Healthcare CA SNF 99 Ensign Atchison Senior Village Rehabilitation and Nu
Slide 44: Property Locations
Property Locations Property Name State Property Type # of Operating Beds / Units Tenant Golden Palms Rehabilitation and Retirement TX Campus 197 Ensign Greentree Health and Rehabilitation Center WI SNF 50 Ensign Harbor View Assisted Living WI Senior Living 39 Pennant Harrison Pointe Healthcare and R
Slide 45: Property Locations
Property Locations Property Name State Property Type # of Operating Beds / Units Tenant Medallion Post Acute Rehabilitation CO SNF 60 Ensign Medallion Villas CO Senior Living 100 Ensign Mesa Springs Healthcare Center TX Campus 138 Joint (Ensign/Pennant) Millennium Post Acute Rehabilitation SC SNF 13
Slide 46: Property Locations
Property Locations Property Name State Property Type # of Operating Beds / Units Tenant Puget Sound Transitional Care WA SNF 125 Ensign Rehabilitation and Nursing Center of the Rockies CO SNF 96 Ensign Rio Vista Post Acute and Rehabilitiation AZ SNF 150 Ensign River Park Post Acute and Elmwood Senio
Slide 47: Property Locations
Property Locations Property Name State Property Type # of Operating Beds / Units Tenant The Eden of Las Colinas TX SNF 118 Ensign The Healthcare Center at Patriot Heights TX Campus 232 Ensign The Healthcare Resort of Leawood KS Campus 94 Ensign The Healthcare Resort of Topeka KS Campus 94 Ensign The
Slide 48: End Notes
End Notes www.ensigngroup.net
Slide 49: End Notes
End Notes (1) Adjusted EBITDAR is a non-GAAP measure and represents net income before (a) other income, net, (b) provisions for income taxes, (c) depreciation and amortization, (d) rent-cost of services, (e) stock-based compensation expense, (f) acquisition related costs, (g) costs incurred related
Slide 50: End Notes
End Notes 21) Source from CMS. Based on total number of facilities; PACS Group statistics represent year-end 2023 data, based on the Company’s S-1 filed on April 12, 2024. [Slide 26] 22) Source: 2023 Medicare Trustees Report. [Slide 27] 23) Source: Medpac and US HHS Department as of March 2024. [Sli
Slide 51: Thank You
THANK YOU