• Same-Store Occupancy Increase: 2.7% for the year, 2.3% over the prior-year quarter.
• Transitioning Occupancy Increase: 4.1% for the year, 4.7% over the prior-year quarter.
• Skilled Days Increase: 3.8% for same-store, 10.9% for transitioning operations over the prior-year quarter.
• Managed Care Census Growth: 6.6% for same-store, 27.7% for transitioning operations over the prior-year quarter.
• New Operations Added: 57 new operations in 2024.
• 2025 Earnings Guidance: $6.16 to $6.34 per diluted share.
• 2025 Revenue Guidance: $4.83 billion to $4.91 billion.
• 2024 GAAP Diluted EPS: $5.12, an increase of 40.3%.
• 2024 Adjusted Diluted EPS: $5.50, an increase of 15.3%.
• 2024 GAAP Revenue: $4.3 billion, an increase of 14.2%.
• 2024 GAAP Net Income: $298 million, an increase of 42.3%.
• 2024 Adjusted Net Income: $320.5 million, an increase of 17.2%.
• Q4 2024 GAAP Diluted EPS: $1.36, an increase of 257.9%.
• Q4 2024 Adjusted Diluted EPS: $1.49, an increase of 16.4%.
• Q4 2024 GAAP Revenue: $1.1 billion, an increase of 15.5%.
• Q4 2024 GAAP Net Income: $79.7 million, an increase of 267.4%.
• Q4 2024 Adjusted Net Income: $87.6 million, an increase of 18.9%.
• Cash and Cash Equivalents: $464.6 million as of December 31, 2024.
• Cash Flow from Operations: $347.2 million.
• Dividend Increase: 22nd consecutive year, $0.0625 per common share.
• Lease Adjusted Net Debt-to-EBITDA Ratio: 1.9 times.
• Available Credit Capacity: $572 million, over $1 billion in dry powder for future investments.

• Warning! GuruFocus has detected 4 Warning Sign with AB.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ensign Group Inc (NASDAQ:ENSG) reported record clinical and financial results, with significant growth in occupancy and skilled mix.
• The company added 57 new operations across various markets, demonstrating strong expansion capabilities.
• Ensign Group Inc (NASDAQ:ENSG) issued a 2025 earnings guidance with a midpoint increase of 13.8% over 2024 results.
• The company has a strong balance sheet with over $1 billion in available liquidity for future investments.
• Ensign Group Inc (NASDAQ:ENSG) increased its dividend for the 22nd consecutive year, showcasing a commitment to returning value to shareholders.

Negative Points

• There are potential risks related to Medicaid reimbursement changes under the new administration.
• The company faces delays in licensing and Medicaid certifications, impacting cash flow in the short term.
• Ensign Group Inc (NASDAQ:ENSG) operates in a highly competitive environment, particularly in regions like Costa Mesa, California.
• The acquisition process is experiencing slowdowns due to state-level bureaucratic delays.
• Labor costs remain a concern, although there is a gradual improvement in the labor market.

Q & A Highlights

Q: What are your thoughts on the Medicaid reimbursement backdrop and potential risks under the new administration? A: Barry Port, CEO, stated that while it's uncertain what will become a legislative priority, Ensign Group is prepared to educate Congress on Medicaid impacts. The company is not aware of any specific programs at risk and believes broad-based Medicaid cuts would be challenging for Congress. Suzanne Snapper, CFO, added that typically under Republican control, there are lighter regulations, which could offer some operational flexibility.

Q: Can you provide insights into the Tennessee market following your recent acquisitions there? A: Suzanne Snapper, CFO, explained that while Tennessee hospitals receive significant reimbursements, the supplemental amounts for Ensign's operations are less. The company is working with local legislation to continue support for skilled nursing. Ensign has established strong relationships in Tennessee, which will aid in networking and growth.

Q: What are the expectations for quarterly EPS seasonality and occupancy in 2025? A: Suzanne Snapper, CFO, noted that historically, Q4 and Q1 have been strong quarters for occupancy and skilled mix. The company expects this trend to continue in 2025, with Q1 typically being the strongest quarter.

Q: What are the current trends in labor costs, and how might the California Workforce Standards program impact you? A: Spencer Burton, COO, mentioned gradual improvements in the labor market, with stabilization since COVID. The company focuses on attracting and retaining top talent. Suzanne Snapper, CFO, confirmed that the California Workforce Standards program is factored into the 2025 guidance.

Q: How is the deal pipeline looking, and are there any changes in acquisition terms? A: Chad Keetch, CIO, reported a strong deal flow with many opportunities. The company remains selective, ensuring leaders are ready for transitions and maintaining disciplined growth. Ensign focuses on sustainable pricing and balance sheet health, allowing them to win desired deals.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.