The Ensign Group, Inc. · NASDAQ:ENSG
The Ensign — Investor Presentation (July 2024)
55 slides from The Ensign's investor presentation, July 2024
Slide 1: Investor Presentation
ENSIGN GROUP July 2024 INVESTOR PRESENTATION www.ensigngroup.net
Slide 2: 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 3: 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 4: Leading Healthcare Services Operator With Proven Track Record
Leading Healthcare Services Operator With Proven Track Record 1999 14 Founded States 312 120 Operated Facilities Owned Properties (90 Ensign / 30 Third-Party Operated) 35,000+ 80.9% Beds / Units Across the Care Continuum Occupancy Rate (1) 45,000+ 31.5% Employees Skilled Mix Days (1) 15% 1,083% $4.2
Slide 5: Entrepreneurial Evolution Of Ensign
Entrepreneurial Evolution Of Ensign Established New Ensign completes Ensign entered Senior living Completed spin- Continues to Ensign formed Ensign The Ensign Group portfolio Completed the Market CEO an IPO in into the home off of home execute on a Captive REIT, completed 40 was founded company was
Slide 6: 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 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. Inpatient LTACH 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 14 States 312 Facilities 35,000+ Beds 45,000+ Employees Skilled Nursing Operations - 271 Senior Living Operations - 11 Campus Operations - 29 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 Ops geographically close together. Ops • Sharing of
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 400 1-Star 2-Star 3-Star 4-Star 5-Star 300 200 100 0 (3) 14 21 38 45 60 77 72 86 100 91 102 116 114 113 130 135 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 27.3% 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) 16.5% EBITDAR Margin Skil
Slide 17: Operational Improvements of Acquired Assets QTD Q2 2024
Demonstrated Track Record of Significant Operational Improvements of Acquired Assets QTD Q2 2024 Skilled Mix Revenue (6) Medicare Rates Consolidated Consolidated 48.2% $761 Medicaid $296 $751 $700 $848 49.4% 38.3% 50.4% (10) (8) (9) Same Store Transitioning Recently Acquired Same Store (7) Transitio
Slide 18: Operational Improvements of Acquired Assets YTD Q2 2024
Demonstrated Track Record of Significant Operational Improvements of Acquired Assets YTD Q2 2024 Skilled Mix Revenue (6) Medicare Rates Consolidated Consolidated 49.0% $759 Medicaid $293 50.2% 38.1% 53.0% $748 $696 $853 (10) Same Store (7) Transitioning (8) Recently Acquired (9) Same Store Transitio
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 As of July 1, 2024
Significant Real Estate Portfolio As of July 1, 2024 (11) % of 312 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 35.1% Lease agreements with i
Slide 21: 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 22: Standard Bearer at a Glance
Standard Bearer at a Glance Geographic Footprint Key Stats (12) 115 $1.2B Real Estate Properties Fair Value 12 11,275 Operating States Beds / Units 14.6 Years 82.4% (13) Weighted Avg. Ensign Operated Lease Tenor Note: Figures represent the number of owned properties per state Ensign Group | Investor
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) $997 12,000 $1,000 $921 $927 Total No. of SNF Beds / ALF Units $832 10,000 $800 $722 $624 8,000 $583 $600 6,000 $422 $400 $358 $302 4,0
Slide 24: Standard Bearer Strong Long Term Leases
Standard Bearer Strong Long Term Leases 14.6 years 98% (15) Weighted Average of leases expire Lease Tenor after 2031 Annualized Rent Revenue Expirations by Year Tenant Rent Coverage Summary 20 18.0 18 16 14.4 14.3 Q2 Q3 Q4 Q1 Q2 14 12.9 13.0 2023 2023 2023 2024 2024 12 10.8 10 Ensign 8 Affiliated 2.
Slide 25: Standard Bearer Metrics Quarter Over Quarter
Standard Bearer Metrics Quarter Over Quarter Rental Revenue – Trend Other Real Estate Metrics $23.4 In $ Millions $21.9 $22.2 In $ Millions $21.0 $19.9 $4.2 $4.2 $4.2 $4.0 $3.8 $7.5 $7.3 $7.4 $7.1 $7.2 $19.2 $17.0 $17.7 $18.0 $16.1 $13.6 $14.2 $14.1 $14.5 $13.3 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 202
Slide 26: Ensign Represents The Growth Story
Ensign Represents The Growth Story In the Facility-Based Healthcare Services & Post-Acute Sector Revenue (18) Adjusted EBITDAR (18) ($mm) $3,729 ($mm) $3,025 $623 $2,627 $533 $2,403 $478 2,037 $2,046 $424 1,755 $374 1,598 $319 $338 1,438 $262 $285 1,183 $221 (18) (18) 2015 2016 2017 2018 2019 2020 2
Slide 27: Liquidity Financials Measure
Liquidity Financials Measure Six Months Ended June 30, Summary of Cash Flows (In millions) 2024 2023 Net cash provided by (used in): Operating activities 112.3 168.1 Investing activities (144.6) (62.4) Financing activities - (1.9) Net increase in cash and cash equivalents (32.3) 103.7 Cash and cash
Slide 28: Quarter Over Quarter Highlights
Quarter Over Quarter Highlights (in millions) Q2 2024 Q2 2023 REVENUE 12.5% $1,036.3 $921.3 SAME FACILITY SKILLED NURSING FACILITY 6.8% REVENUE $745.5 $697.9 CONSOLIDATED 15.2% ADJUSTED NET $76.4 $66.3 INCOME Ensign Group | Investor Presentation 28
Slide 29: Year Over Year Highlights
Year Over Year Highlights (in millions) Q2 2024 Q2 2023 REVENUE 13.2% $2,046.5 $1,808.2 SAME FACILITY SKILLED NURSING FACILITY 6.8% REVENUE $1,488.7 $1,393.7 CONSOLIDATED 16.0% ADJUSTED NET $151.8 $130.9 INCOME Ensign Group | Investor Presentation 29
Slide 30: Guidance
Guidance Annual Revenue $4.20B to $4.22B 2024 Diluted Adjusted EPS $5.38 to $5.50 Midpoint is: 14% over 2023 31% over 2022 30
Slide 31: Strong Shareholder Returns Since IPO
Strong Shareholder Returns Since IPO Total Shareholder Return Com pany Since IPO 1 Yr 3 Yr 5 Yr 10 Yr 3,153% 26% 40% 152% 1,083% 3,500% +3,153% 3,000% 2,500% 2,000% 1,500% 1,000% 500% 0% (500%) Source: Data as of 7/1/2024. 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 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 35: Largest Beneficiary Of Medicare Post-Acute Dollars
Largest Beneficiary Of Medicare Post-Acute Dollars While Medicare Spending Continues to Increase Medicare Spending Projection Post-Acute Destinations - % of Medicare Dollars (23) (24) (25) 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 36: Skilled Services Segment
Skilled Services Segment Three Months Ended June 30, Six Months Ended June 30, $ in thousands 2024 2023 2024 2023 Statements of Income Data: (25) Segment income $122,185 $117,008 $248,994 $230,353 Depreciation and amortization 10,911 9,417 21,447 18,481 EBITDA $133,096 $126,425 $270,441 $248,834 Adj
Slide 37: Standard Bearer Segment
Standard Bearer Segment $ in thousands Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Rental revenue generated from third-party tenants $4,198 $3,786 $8,393 $7,572 Rental revenue generated from Ensign’s independent subsidiaries 19,156 16,128 37,162 32,059 Total rental reve
Slide 38: Reconciliation of GAAP to Non-GAAP Income
Reconciliation of GAAP to Non-GAAP Income Three Months Ended June 30, Six Months Ended June 30, $ in thousands 2024 2023 2024 2023 Net income attributable to The Ensign Group, Inc. $71,007 $63,993 $139,842 $123,845 Non-GAAP adjustments (27) Stock-based compensation expense 8,985 8,881 17,223 15,454
Slide 39: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended June 30, Six Months Ended June 30, $ in thousands 2024 2023 2024 2023 Income before provision for income taxes 92,064 81,053 181,662 159,435 Stock-based compensation 8,985 8,881 17,223 15,454 (26) Litigation (1,634) (885) (870)
Slide 40: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended June 30, Six Months Ended June 30, $ in thousands 2024 2023 2024 2023 Net income $71,181 $64,090 $140,141 $124,059 Less: net income attributable to noncontrolling interests 174 97 299 214 Interest income 7,084 3,542 13,544 7,52
Slide 41: Reconciliation From Segment Income to Income Before Provisions QTD Q2 2024
Reconciliation From Segment Income to Income Before Provisions For Income Taxes QTD Q2 2024 $ in thousands Skilled Services Standard Bearer All Other Eliminations Consolidated Total Revenue $991,285 $23,354 $47,339 $(25,693) $1,036,285 Cost of services 791,613 487 32,047 (3,787) 820,361 (32) Interna
Slide 42: Reconciliation From Segment Income to Income Before Provisions YTD 2024
Reconciliation From Segment Income to Income Before Provisions For Income Taxes YTD 2024 $ in thousands Skilled Services Standard Bearer All Other Eliminations Consolidated Total Revenue $1,960,887 $45,555 $89,911 $(49,896) $2,046,457 Cost of services 1,559,590 1,074 64,446 (7,336) 1,617,774 (33) In
Slide 43: Reconciliation From Segment Income to GAAP and Non-GAAP EBITDA QTD Q2 2024
Reconciliation From Segment Income to GAAP EBITDA and Non-GAAP EBITDA QTD Q2 2024 $ in thousands Skilled Services Standard Bearer All Other Eliminations Consolidated Segment Income $122,185 $7,360 ($37,481) - $92,064 Interest Expense (income) - 6,594 (11,638) - (5,044) Depreciation and amortization
Slide 44: Reconciliation From Segment Income to GAAP and Non-GAAP EBITDA YTD 2024
Reconciliation From Segment Income to GAAP EBITDA and Non-GAAP EBITDA YTD 2024 $ in thousands Skilled Services Standard Bearer All Other Eliminations Consolidated Segment Income $ 248,994 $14,618 ($80,101) - $183,511 Interest Expense (income) - 12,536 (22,076) - (9,540) Depreciation and amortization
Slide 45: Reconciliation of Deferred Compensation Plan
Reconciliation of Deferred Compensation Plan Impact 5 Quarter Trend $ in thousands Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 Non-GAAP Revenue 1,036,285 1,010,172 980,378 940,791 921,345 Non-GAAP cost of services 815,911 791,899 771,238 736,125 718,388 Less: DCP gain (loss) related to cost of services
Slide 46: Reconciliation of Deferred Compensation Plan
Reconciliation of Deferred Compensation Plan Six Months Ended June 30, $ in thousands 2024 2023 Non-GAAP Revenue 2,046,457 1,808,186 Non-GAAP cost of services 1,607,810 1,410,100 Less: DCP gain (loss) related to cost of services 1,558 1,306 Non-GAAP cost of services without DCP 1,606,252 1,408,794 N
Slide 47: 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 48: Property Locations
Property Locations Property Name State Property Type # of Operating Beds / Units Tenant Golden Palms Rehabilitation and Retirement TX Campus 198 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 49: 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 50: 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 51: Property Locations
Property Locations Property Name State Property Type # of Operating Beds / Units Tenant 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 Medical Lodge of Amarillo TX SNF 82 Ensig
Slide 52: End Notes
End Notes www.ensigngroup.net
Slide 53: End Notes
End Notes 1. Occupancy and Skilled Mix metrics represent same store metrics for Q2 2024. Reflects midpoints of 2024 guidance ranges of $4.20B – $4.22B for annual revenue and $5.38 – $5.50 for diluted adjusted EPS. [Slide 4] 2. Adjusted EBITDAR consists of net income before (a) interest income, (b) p
Slide 54: 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 34] 22. Source from CMS. Based on total number of facilities; PACS Group statistics represen
Slide 55: Thank You
THANK YOU