The Ensign Group, Inc. · NASDAQ:ENSG
The Ensign — Investor Presentation (November 2024)
57 slides from The Ensign's investor presentation, November 2024
Slide 1: Investor Presentation
ENSIGN GROUP November 2024 INVESTOR PRESENTATION www.ensigngroup.net
Slide 2: 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 delivered b
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: 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 5: Leading Healthcare Services Operator With Proven Track Record
Leading Healthcare Services Operator With Proven Track Record 1999 14 Founded States 324 126 Operated Facilities Owned Properties 36,000+ 81.7% (1) Beds / Units Across the Care Continuum Occupancy Rate 48,000+ 31.6% (1) Employees Skilled Mix Days 15% 1,524% $4.26B (1) Annual Revenue Growth Total Sha
Slide 6: Entrepreneurial Evolution Of Ensign
Entrepreneurial Evolution Of Ensign The Ensign Group Established New Ensign Ensign entered Senior living Completed the Completed spin- Continues to Ensign formed Ensign was founded Market CEO completes an into the home portfolio spin-off of its off of home execute on local a Captive REIT, completed
Slide 7: Ensign's Commitment to The Care Continuum
Ensign’s Commitment to The Care Continuum Denotes Ensign Business Acute Care Local leadership strategy focused on acquisitions in fragmented markets. LTACH Inpatient Outpatient Rehab High quality healthcare outcomes across the Patient Service Intensity Rehab continuum driving local reputation and Sk
Slide 8: 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 9: 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 Growth Opportunities Organic, Strategic, Real Estate and New Ventures Clinical Excellence Strategic Continuum of Care Culture 9
Slide 10: Leading Operational Presence in Attractive Markets
Leading Operational Presence in Attractive Markets 16 1414 12 3 States 8 3 8 324 Facilities 22 37 70 11 3 36,000+ 9 38 Beds 84 48,000+ Employees Skilled Nursing Operations - 282 Senior Living Operations - 11 Campus Operations - 30 LTAC – 1 10
Slide 11: 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 Facilities are pur
Slide 12: 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 Empowering local leaders and their teams We partner with many other healthcare Our independent subsidi
Slide 13: 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 geographically close together. • Sharing of resourc
Slide 14: 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 1-Star 2-Star 3-Star 4-Star 5-Star 400 300 200 100 0 (3) 14 21 38 45 60 77 72 86 100 91 102 116 114 113 130 134 2009 2010 2011 2012 2013 2014 2015 2
Slide 15: 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 15
Slide 16: A Disciplined Approach to Acquisitions & Track Record of Improving Operations
A Disciplined Approach to Acquisitions & Track Record of Improving Operations to Drive Continued Growth 30.4% of Ensign’s skilled nursing operations have been Proven track record of achieving significant (4) improvement in operated less than three full years just 5 quarters 16.5% EBITDAR Margin Skil
Slide 17: Operational Improvements of Acquired Assets QTD Q3 2024
Demonstrated Track Record of Significant Operational Improvements of Acquired Assets QTD Q3 2024 (6) Skilled Mix Revenue Medicare Rates Consolidated Consolidated 48.5% $761 Medicaid $291 50.2% 38.9% 47.8% $752 $703 $836 (7) (8) (9) (10) Same Store Transitioning Recently Acquired Same Store Transitio
Slide 18: Operational Improvements of Acquired Assets YTD 2024
Demonstrated Track Record of Significant Operational Improvements of Acquired Assets YTD 2024 (6) Skilled Mix Revenue Medicare Rates Consolidated $760 Consolidated 48.8% Medicaid $292 50.2% 38.4% 51.0% $749 $699 $847 (7) (8) (9) (10) Same Store Transitioning Recently Acquired Same Store Transitionin
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 Spin Offs Divestitures Current 19
Slide 20: Significant Real Estate Portfolio
Significant Real Estate Portfolio As of November 1, 2024 Real Estate Distribution on Ensign operated Ensign Triple Net Master facilities of 324 and 33 Owned Real Estate Leased Leases with Third Party Operators to Third Party Operators (11) 3.4% Lease • Multiple “triple-net” master leases 33 faciliti
Slide 21: Standard Bearer REIT Structure Summary & Key Benefits
Standard Bearer REIT Structure Summary & Key Benefits Ensign Affiliated Operations • Skilled Services • Real Estate Ownership • New Ventures • Real Estate Management & Monitoring • Investment Evaluation and Execution • Real Estate Portfolio Performance Reporting Increased Visibility Low-Cost Key Ben
Slide 22: Standard Bearer at a Glance
Standard Bearer at a Glance Geographic Footprint Key Statistics 5 $1.2B (12) 121 Real Estate Properties Fair Value 5 25 1 2 1 8 13 11,811 13 7 6 States Operating Beds / Units 5 16 27 14.4 Years 82.2% (13) Weighted Avg. Ensign Operated Lease Tenor Note: Figures represent the number of owned propertie
Slide 23: Standard Bearer Continuation & Expansion of Real Estate Success
Standard Bearer Continuation & Expansion of Real Estate Success (14) Cumulative Investments Over Time $1,200 14,000 Cumulative Real Estate Investments (in millions) $1,025 12,000 $1,000 $921 Total No. of SNF Beds / ALF Units $832 10,000 $800 $722 $624 8,000 $583 $600 6,000 $422 $400 $358 $302 4,000
Slide 24: Standard Bearer Strong Long Term Leases
Standard Bearer Strong Long Term Leases 14.4 years 98% (15) Weighted Average of leases expire Lease Tenor after 2031 Annualized Rent Revenue Expirations by Year Tenant Rent Coverage Summary 20 19.0 17.3 18 Q3 Q4 Q1 Q2 Q3 16 14.5 2023 2024 14 12.9 12.6 2023 2024 2024 12 10.8 10 Ensign Affiliated(35)
Slide 25: Standard Bearer Metrics Quarter Over Quarter
Standard Bearer Metrics Quarter Over Quarter In $ Millions Rental Revenue - Trend In $ Millions Other Real Estate Metrics $24.4 $23.4 $21.9 $22.2 $21.0 $4.2 $4.2 $4.2 $4.2 $4.0 $7.3 $7.5 $7.3 $7.4 $7.2 $20.2 $19.2 $17.0 $17.7 $18.0 $14.2 $14.1 $14.5 $14.8 $13.6 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 202
Slide 26: Ensign Represents The Growth Story
Ensign Represents The Growth Story In the Facility-Based Healthcare Services & Post-Acute Sector (18) Revenue (18) Adjusted EBITDAR ($mm) ($mm) R: 15% 023 CAG $3,729 3 CAGR : 16% 2015 – 2 – 2 0 2 $3,025 $3,128 2015 $623 $2,627 $533 $517 $2,403 $478 $2,037 $424 $374 $1,755 $319 $1,438 $1,598 $285 $26
Slide 27: Liquidity Financials Measure
Liquidity Financials Measure Nine Months Ended September 30, Summary of Cash Flows (In millions) 2024 2023 Net cash provided by (used in): Operating activities $246.7 $291.4 Investing activities (223.5) (137.8) Financing activities (0.8) (2.0) Net increase in cash and cash equivalents 22.4 151.6 Cas
Slide 28: Quarter Over Quarter Highlights
Quarter Over Quarter Highlights (in millions) Q3 2024 Q3 2023 REVENUE 15.0% $1,081.8 $940.8 SAME FACILITY SKILLED NURSING FACILITY 7.3% $756.4 $705.1 REVENUE CONSOLIDATED ADJUSTED NET INCOME 17.7% $81.1 $69.0 Ensign Group | Investor Presentation 28
Slide 29: Year Over Year Highlights
Year Over Year Highlights (in millions) Q3 2024 Q3 2023 REVENUE 13.8% $3,128.2 $2,749.0 SAME FACILITY SKILLED NURSING FACILITY 7.0% $2,244.6 $2,096.8 REVENUE CONSOLIDATED ADJUSTED NET INCOME 16.5% $232.9 $199.9 Ensign Group | Investor Presentation 29
Slide 30: Raised Guidance
Raised Annual Revenue Guidance $4.25B to $4.26B Diluted Adjusted EPS 2024 $5.46 to $5.52 Diluted Adjusted EPS Midpoint is: 15% over 2023 33% over 2022 30
Slide 31: Strong Shareholder Returns Since IPO
Strong Shareholder Returns Since IPO Source: Data as of 11/1/2024. 31
Slide 32: 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 33: Appendix
Appendix www.ensigngroup.net
Slide 34: Fundamentals Remain Favorable for Strong Organic Growth
Fundamentals Remain Favorable for Strong Organic Growth Key Drivers of Organic Growth Over the last 10 years the CMS Shift to value-based care, will Shift to Value- Reimbursement reimbursement rates in the SNF continue to benefit low cost, high based Care Environment industry have increased at a ste
Slide 35: Fundamentals Remain Favorable for Strong Organic Growth
Fundamentals Remain Favorable for Strong Organic Growth Key Drivers of Organic Growth Aging Population over 65 projected to Population nearly double by 2060 (21) (22) (22) Estimated Population Over 65 Estimated Population Over 85 100,000 20,000 80,000 15,000 60,000 10,000 40,000 5,000 2022 2025 2030
Slide 36: Largest Beneficiary Of Medicare Post-Acute Dollars
Largest Beneficiary Of Medicare Post-Acute Dollars While Medicare Spending Continues to Increase (23) (24) Medicare Spending Projection Post-Acute Destinations - % of Medicare Dollars (in Billions) 2,500 2% 11% 2,000 42% 1,500 1,000 45% 500 0 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 Ensign
Slide 37: Skilled Services Segment
Skilled Services Segment Three Months Ended September 30, Nine Months Ended September 30, $ in millions 2024 2023 2024 2023 Statements of Income Data: Segment income (25) $128,489 $117,816 $377,483 $348,169 Depreciation and amortization 11,541 9,936 32,988 28,417 EBITDA $140,030 $127,752 $410,471 $3
Slide 38: Standard Bearer Segment
Standard Bearer Segment Three Months Ended September 30, Nine Months Ended September 30, $ in millions 2024 2023 2024 2023 Rental revenue generated from third-party tenants $4,195 $4,004 $12,588 $11,576 Rental revenue generated from Ensign’s independent subsidiaries 20,234 16,976 57,396 49,035 Total
Slide 39: Reconciliation of GAAP to Non-GAAP Income
Reconciliation of GAAP to Non-GAAP Income Three Months Ended September 30, Nine Months Ended September 30, $ in millions 2024 2023 2024 2023 Net income attributable to The Ensign Group, Inc. $78,444 $63,863 $218,286 $187,708 Non-GAAP adjustments Stock-based compensation expense (27) 9,183 7,237 26,4
Slide 40: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended September 30, Nine Months Ended September 30, $ in millions 2024 2023 2024 2023 Income before provision for income taxes $98,674 $82,045 $280,336 $241,480 Non-GAAP adjustments Stock-based compensation (27) 9,183 7,237 26,406 22
Slide 41: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended September 30, Nine Months Ended September 30, $ in millions 2024 2023 2024 2023 Net income $78,567 $63,968 $218,708 $188,027 Less: net income attributable to noncontrolling interests 123 105 422 319 Interest income 7,607 5,259
Slide 42: Reconciliation From Segment Income to Income Before Taxes QTD Q3 2024
Reconciliation From Segment Income to Income Before Provisions For Income Taxes QTD Q3 2024 $ in millions Skilled Services Standard Bearer All Other Eliminations Consolidated Total Revenue $1,033,113 $24,429 $51,144 $(26,910) $1,081,776 Cost of services 824,152 574 38,701 (3,921) 859,506 Internal re
Slide 43: Reconciliation From Segment Income to Income Before Taxes YTD 2024
Reconciliation From Segment Income to Income Before Provisions For Income Taxes YTD 2024 $ in millions Skilled Services Standard Bearer All Other Eliminations Consolidated Total Revenue $2,994,000 $69,984 $141,055 $(76,806) $3,128,233 Cost of services 2,383,742 1,648 103,147 (11,257) 2,477,280 Inter
Slide 44: Reconciliation From Segment Income to GAAP and Non-GAAP EBITDA QTD
Reconciliation From Segment Income to GAAP EBITDA and Non-GAAP EBITDA QTD Q3 2024 $ in millions Skilled Services Standard Bearer All Other Eliminations Consolidated Segment income (loss) $128,489 $7,274 $(36,603) — $99,160 Interest expense (income) — 7,251 (12,834) — (5,583) Depreciation and amortiz
Slide 45: Reconciliation From Segment Income to GAAP and Non-GAAP EBITDA YTD
Reconciliation From Segment Income to GAAP EBITDA and Non-GAAP EBITDA YTD 2024 $ in millions Skilled Services Standard Bearer All Other Eliminations Consolidated Segment income (loss) $377,483 $21,892 $(116,704) — $282,671 Interest expense (income) — 19,787 (34,910) — (15,123) Depreciation and amort
Slide 46: Reconciliation of Deferred Compensation Plan (DCP)
Reconciliation of Deferred Compensation Plan (DCP) Impact 5 Quarter Trend $ in millions Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 Non-GAAP Revenue 1,081,776 1,036,285 1,010,172 980,378 940,791 Non-GAAP cost of services 853,260 815,911 791,899 771,238 736,125 Less: DCP gain (loss) related to cost of se
Slide 47: Reconciliation of Deferred Compensation Plan (DCP)
Reconciliation of Deferred Compensation Plan (DCP) Nine Months Ended September 30, $ in millions 2024 2023 Non-GAAP Revenue 3,128,233 2,748,977 Non-GAAP cost of services 2,461,070 2,146,225 Less: DCP gain (loss) related to cost of services 3,205 630 Non-GAAP cost of services without DCP 2,457,865 2,
Slide 48: Property Locations
Property Locations # of Operating Beds / Property Name State Property Type Tenant Units Alta Mesa Health and Rehabilitation and The Groves Assisted and Independent AZ Campus 176 Ensign Senior Living Community Arrowhead Springs Healthcare CA SNF 99 Ensign Atchison Senior Village Rehabilitation and Nu
Slide 49: Property Locations
Property Locations # of Operating Beds / Property Name State Property Type Tenant Units Desert Blossom Health and Rehabilitation Center AZ SNF 98 Ensign East View Healthcare TX SNF 125 Ensign Fountain Hills Post Acute AZ SNF 64 Ensign Golden Palms Rehabilitation and Retirement TX Campus 198 Ensign G
Slide 50: Property Locations
Property Locations # of Operating Beds / Property Name State Property Type Tenant Units Lo-Har Senior Living CA Senior Living 29 Pennant Lotus Gardens Senior Living WI Senior Living 45 Pennant Madison Pointe Senior Living WI Senior Living 39 Pennant Magnolia Post Acute Care CA SNF 99 Ensign Maple Me
Slide 51: Property Locations
Property Locations # of Operating Beds / Property Name State Property Type Tenant Units Olympia Transitional Care and Rehabilitation WA SNF 113 Ensign Opus Post Acute Rehabilitation SC SNF 98 Ensign Panorama Gardens Nursing and Rehabilitation Center CA SNF 145 Ensign Paris Chalet Senior Living TX Se
Slide 52: Property Locations
Property Locations # of Operating Beds / Property Name State Property Type Tenant Units Riverwalk Post Acute and Rehabilitation CO SNF 60 Ensign Rock Canyon Respiratory & Rehabilitation Center CO SNF 91 Ensign Rock Creek of Ottawa KS Campus 146 Ensign Rock Hill Post Acute Care Center SC SNF 99 Ensig
Slide 53: Property Locations
Property Locations # of Operating Beds / Property Name State Property Type Tenant Units The Medical Lodge of Amarillo TX SNF 82 Ensign The Mildred & Shirley L. Garrison Geriatric Education and Care Center TX SNF 116 Ensign The Orchard Post Acute Care CA SNF 162 Ensign The Pines Post Acute and Memory
Slide 54: End Notes
End Notes www.ensigngroup.net
Slide 55: End Notes
End Notes Occupancy and Skilled Mix metrics represent same store metrics for Q3'24. Reflects midpoints of 2024 guidance ranges of $4.249B to $4.262B for annual revenue and $5.46 to $5.52 for diluted 1 — adjusted EPS. [Slide 4] 2 — Adjusted EBITDAR consists of net income before (a) interest income, (
Slide 56: End Notes
End Notes 20 —Represents 2015 – 2023 average of AMED, ADUS, CHE, BKD, EHC and SEM. [Slide 26] 21 —Source: US Census, CDC (NCHS), CMS and Population Reference Bureau. From 58MM in 2022 to 93MM in 2065. [Slide 35] 22 —Source from CMS. [Slide 35] 23 —Source: 2024 Medicare Trustees Report. [Slide 36] 24
Slide 57: Thank You
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