The Ensign Group, Inc. · NASDAQ:ENSG
The Ensign — Investor Presentation (March 2024)
56 slides from The Ensign's investor presentation, March 2024
Slide 1: Investor Presentation
ENSIGN GROUP March 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 LTAC Out Patient Rehab High quality healthcare outcomes across the Patient Service Intensity Rehab continuum driving local reputation and Skille
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 of 90 years at Ensign alone. Presence in Attractive Markets Multiple Business Lines Presence in strategic markets across 14 states with Diversified operations including skilled
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 – 264 Senior Living Operations – 11 Campus Operations – 27 Ensign Group | Investor Presentation 8 Source: Data as of 3/1/2024.
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 Ops geographically close together. • 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 300 1-Star 2-Star 3-Star 4-Star 5-Star 250 200 150 100 50 0 (2) 14 21 38 45 60 77 72 86 100 91 102 116 114 113 130 2009 2010 2011 2012 2013 2014 201
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 25.5% 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: Operational Improvements of Acquired Assets QTD Q4 2023
Demonstrated Track Record of Significant Operational Improvements of Acquired Assets QTD Q4 2023 Skilled Mix Revenue (1)(6) Medicare Rates Consolidated Consolidated 49.0% $761 Medicaid $281 50.3% 37.4% 48.3% $747 $723 $819 (10) Same Store (7) Transitioning (8) Recently Acquired (9) Same Store Transi
Slide 16: Operational Improvements of Acquired Assets YTD Q4 2023
Demonstrated Track Record of Significant Operational Improvements of Acquired Assets YTD Q4 2023 Skilled Mix Revenue (1)(6) Medicare Rates Consolidated Consolidated 50.2% $733 Medicaid $272 51.4% 38.5% 49.3% $723 $696 $788 (10) Same Store (7) Transitioning (8) Recently Acquired (9) Same Store Transi
Slide 17: Ensign Represents The Growth Story
Ensign Represents The Growth Story In the Facility-Based Healthcare Services & Post-Acute Sector Revenue (11)(14) Adjusted EBITDAR (11)(14) ($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 $1,027 1,183 $221 $159 (14) (14) 2014 2015 2016 2017 201
Slide 18: Quarter Over Quarter Highlights
Quarter Over Quarter Highlights (in millions) Q4 2023 Q4 2022 REVENUE 21.1% $980.4 $809.5 SAME FACILITY SKILLED NURSING FACILITY 8.0% REVENUE $713.3 $660.4 CONSOLIDATED 17.5% ADJUSTED NET $73.7 $62.7 INCOME Ensign Group | Investor Presentation 18
Slide 19: Year Over Year Highlights
Year Over Year Highlights (in millions) 2023 2022 REVENUE 23.3% $3,729.4 $3,025.5 SAME FACILITY SKILLED NURSING FACILITY 7.9% REVENUE $2,771.6 $2,569.8 CONSOLIDATED 16.0% ADJUSTED NET $273.5 $235.7 INCOME Ensign Group | Investor Presentation 19
Slide 20: Significant Real Estate Portfolio As of March 1, 2024
Significant Real Estate Portfolio As of March 1, 2024 (15) % of 302 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 3.4% Structure 34.3% Lease agreements with
Slide 21: Track Record of Successfully Incubating New Ventures
Track Record of Successfully Incubating New Ventures Completed 2019 Completed in 2014 Completed in 2016 21 21 Spin Offs Divestitures Current 21
Slide 22: 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 23: Standard Bearer at a Glance
Standard Bearer at a Glance Geographic Footprint Key Stats 109 $1.1B (16) Real Estate Properties Fair Value 11 10,747 Operating States Beds / Units 15 Years 80.8% (17) Weighted Avg. Ensign Operated Lease Tenor Note: Figures represent the number of owned properties per state Ensign Group | Investor P
Slide 24: Standard Bearer Metrics Quarter Over Quarter
Standard Bearer Metrics Quarter Over Quarter Rental Revenue – Trend Other Real Estate Metrics In $ Millions $21.9 In $ Millions $21.0 $19.7 $19.9 $19.4 $4.2 $4.0 $3.8 $3.8 $3.8 $7.5 $7.2 $7.1 $7.2 $7.2 $17.0 $17.7 $15.6 $15.9 $16.1 $13.2 $13.3 $13.6 $14.2 $13.0 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 202
Slide 25: Liquidity Financials Measure
Liquidity Financials Measure Year Ended December 31, Summary of Cash Flows (In millions) 2023 2022 Net cash provided by (used in): Operating activities 376.7 272.5 Investing activities (182.7) (186.2) Financing activities (0.6) (32.3) Net increase in cash and cash equivalents 193.4 54.1 Cash and cas
Slide 26: 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 26
Slide 27: 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 57 was founded an IPO
Slide 28: 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 29: Largest Beneficiary Of Medicare Post-Acute Dollars
Largest Beneficiary Of Medicare Post-Acute Dollars While Medicare Spending Continues to Increase Medicare Spending Projection (22) Post-Acute Destinations - % of Medicare Dollars (23) (in Billions) 6% 7% 2,500 14% 2,000 1,500 30% 1,000 500 Other LTAC 0 IRF 43% 2015 2017 2019 2021 2023 2025 2027 2029
Slide 30: Medicare Advantage Growth Projection
Medicare Advantage Growth Projection (24) Medicare Advantage Enrollment as Percentage of Medicare Enrollment Projection (in Thousands) 55% 56% 90,000 50% 51% 52% 53% 53% 54% 55% 60% 80,000 43% 46% 49% 50% 70,000 40% 36% 37% 60,000 30% 31% 32% 34% 40% 28% 50,000 30% 40,000 30,000 20% 20,000 10% 10,00
Slide 31: Standard Bearer Portfolio Diversification
Standard Bearer Portfolio Diversification Diversification by Property Type (17) (25) Diversification by State (17) OTHER 8% AZ ID 17% 4% CAMPUS UT 18% 6% SC 5% WI 14% ALF KS 6% 19% SNF 63% CA 15% TX 25% Ensign Group | Investor Presentation 31 Refer to pages 53 – 54 for end notes. Source: Data as of
Slide 32: Standard Bearer Continuation & Expansion of Real Estate Success
Standard Bearer Continuation & Expansion of Real Estate Success (26) Cumulative Investments Over Time $1,000 14,000 $903 $921 $900 Cumulative Real Estate Investments (in millions) $832 $838 $845 12,000 $800 Total No. of SNF Beds / ALF Units $722 $700 10,000 $624 $600 $583 8,000 $500 $422 6,000 $400
Slide 33: Standard Bearer Strong Long Term Leases
Standard Bearer Strong Long Term Leases 15 years 98% (27) Weighted Average of leases expire Lease Tenor after 2031 Annualized Rent Revenue Expirations by Year Tenant Rent Coverage Summary 20 17.3 18 16 Q4 Q1 Q2 Q3 Q4 14.2 14 12.8 2022 2023 2023 2023 2023 12 10.7 10.8 11.1 10 Ensign 8 Affiliated 2.41
Slide 34: 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. Villa Maria Post Acute Fountain Hills Post Acute Lila Doyle Post Acute Arizona Arizona South Carolina Assets include a mix of s
Slide 35: 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 19 Years 17 Y
Slide 36: Appendix
Appendix www.ensigngroup.net
Slide 37: Skilled Services Segment
Skilled Services Segment Three Months Ended Year Ended $ in thousands December 31, December 31, 2023 2022 2023 2022 Statements of Income Data: Segment income $116,756 $106,460 $464,925 $408,732 (28) Depreciation and amortization 10,349 8,813 38,766 33,224 EBITDA $127,105 $115,273 $503,691 $441,956 A
Slide 38: Standard Bearer Segment
Standard Bearer Segment Three Months Ended Year Ended $ in thousands December 31, December 31, 2023 2022 2023 2022 Rental revenue generated from third-party tenants $4,198 $3,790 $15,774 $14,970 Rental revenue generated from Ensign independent subsidiaries 17,677 15,624 66,712 57,967 Total rental re
Slide 39: Reconciliation of GAAP to Non-GAAP Income
Reconciliation of GAAP to Non-GAAP Income Three Months Ended Year Ended $ in thousands December 31, December 31, 2023 2022 2023 2022 Net income attributable to The Ensign Group, Inc. $21,691 $60,471 $209,399 $224,681 Non-GAAP adjustments (29) Stock-based compensation expense 8,076 6,039 30,767 22,72
Slide 40: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended Year Ended $ in thousands December 31, December 31, 2023 2022 2023 2022 Income before provision for income taxes $31,282 $77,451 $272,762 $289,089 Stock-based compensation 8,076 6,039 30,767 22,720 (35) Litigation 58,816 68 60,
Slide 41: Reconciliation of GAAP to Non-GAAP Financial Measures
Reconciliation of GAAP to Non-GAAP Financial Measures Three Months Ended Year Ended December 31, December 31, $ in thousands 2023 2022 2023 2022 Net income $21,823 $60,519 $209,850 $224,652 Less: net income (loss) attributable to noncontrolling interests 132 48 451 (29) Add: Other (income) expense,
Slide 42: Reconciliation From Segment Income to Income Before Provisions QTD Q4 2023
Reconciliation From Segment Income to Income Before Provisions For Income Taxes QTD Q4 2023 $ in thousands Skilled Services Standard Bearer All Other Eliminations Consolidated Total Revenue $940,765 $21,875 $41,230 ($23,492) $980,378 (36) Cost of services 750,905 517 33,067 (3,208) 781,281 (37) Inte
Slide 43: Reconciliation From Segment Income to Income Before Provisions YTD 2023
Reconciliation From Segment Income to Income Before Provisions For Income Taxes YTD 2023 $ in thousands Skilled Services Standard Bearer All Other Eliminations Consolidated Total Revenue $3,578,855 $82,486 $155,804 ($87,790) $3,729,355 Cost of services (39) 2,832,012 2,104 118,196 (11,051) 2,941,261
Slide 44: Reconciliation From Segment Income to GAAP EBITDA and Non-GAAP EBITDA QTD Q4 2023
Reconciliation From Segment Income to GAAP EBITDA and Non-GAAP EBITDA QTD Q4 2023 $ in thousands Skilled Services Standard Bearer All Other Eliminations Consolidated Segment Income $116,756 $7,548 ($93,145) - $31,159 Other expense (income), net - 5,478 (13,934) - (8,456) Depreciation and amortizatio
Slide 45: Reconciliation From Segment Income to GAAP EBITDA and Non-GAAP EBITDA YTD 2023
Reconciliation From Segment Income to GAAP EBITDA and Non-GAAP EBITDA YTD 2023 $ in thousands Skilled Services Standard Bearer All Other Eliminations Consolidated Segment Income $464,925 $29,065 ($221,251) - $272,739 Other expense (income), net - 19,761 (37,156) - (17,395) Depreciation and amortizat
Slide 46: Reconciliation of Deferred Compensation Plan
Reconciliation of Deferred Compensation Plan Impact 5 Quarter Trend $ in thousands Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Non-GAAP other income (expense): Interest expense ($2,004) ($2,024) ($2,023) ($2,036) ($2,067) Interest income 6,891 5,701 3,952 4,304 2,860 Deferred compensation plan (DCP) inv
Slide 47: Reconciliation of Deferred Compensation Plan
Reconciliation of Deferred Compensation Plan Year Ended December 31, $ in thousands 2023 2022 Non- GAAP other income (expense): Interest expense ($8,087) ($8,365) Interest income 20,848 5,383 Deferred compensation plan (DCP) investments gain (loss) 4,634 (4,188) Other income (expense) 25,482 1,195 T
Slide 48: 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 49: Property Locations
Property Locations Property Name State Property Type # of Operating Beds / Units Tenant Fountain Hills Post Acute AZ SNF 64 Ensign 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
Slide 50: Property Locations
Property Locations Property Name State Property Type # of Operating Beds / Units Tenant Meadowcreek Senior Living TX Senior Living 37 Pennant Medallion Post Acute Rehabilitation CO SNF 60 Ensign Medallion Villas CO Senior Living 100 Ensign Mesa Springs Healthcare Center TX Campus 138 Joint (Ensign/P
Slide 51: Property Locations
Property Locations Property Name State Property Type # of Operating Beds / Units Tenant Premier Care Center of Palm Springs CA SNF 99 Ensign Pueblo Springs Rehabilitation Center AZ SNF 115 Ensign Puget Sound Transitional Care WA SNF 125 Ensign Rehabilitation and Nursing Center of the Rockies CO SNF
Slide 52: 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 53: End Notes
End Notes www.ensigngroup.net
Slide 54: End Notes
End Notes (1) Adjusted EBITDAR is a non‐GAAP measure and represents net income before (a) interest expense, net, (b) provision for income taxes, (c) depreciation and amortization, (d) rent‐cost of services, (e) stock‐ based compensation expense, (f) acquisition related costs, (g) costs incurred rela
Slide 55: End Notes
End Notes 21) Source from CMS. Based on total number of facilities. [Slide 28] 22) Source: 2023 Medicare Trustees Report. [Slide 29] 23) Source: Medpac and US HHS Department as of March 2020. [Slide 29] 24) Source: Stephens New Medicare Trustees Report April 3, 2023. [Slide 30] 25) The number of SNF
Slide 56: Thank You
ENSIGN GROUP
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