Ensign Group(US:ENSG)2025-07-24 20:04Operations and Expansion - As of June 30, 2025, the company operates 347 skilled nursing and senior living facilities, with a total of 35,545 operational skilled nursing beds and 3,292 senior living units[159][160]. - During the six months ended June 30, 2025, the company expanded operations by adding 17 stand-alone skilled nursing operations, two stand-alone senior living operations, and one campus operation, resulting in 1,955 new skilled nursing beds and 204 senior living units[164]. - The company expanded into Alabama, Alaska, and Oregon in Q1 2025, enhancing its national presence in attractive markets[166]. - The company’s facilities are located across 17 states, with Texas having the highest number of operational beds at 10,844[172]. - The company reported a total of 35,545 operational beds at the end of the period for skilled services, an increase from 31,813 in the previous year[181]. - The number of facilities increased to 303 at the end of June 2025, up from 272 in June 2024, representing an 11.4% growth[331]. Financial Performance - Total service revenue for the three months ended June 30, 2025, was $1,221.4 million, up from $1,030.6 million in 2024, representing a year-over-year increase of approximately 18.5%[184]. - For the six months ended June 30, 2025, total service revenue reached $2,388.5 million, compared to $2,035.1 million in 2024, marking an increase of approximately 17.4%[186]. - Total revenue for the three months ended June 30, 2025, increased by $191.5 million, or 18.5%, compared to the same period in 2024[302]. - Total revenue for the six months ended June 30, 2025, increased by $354.4 million, or 17.3%, to $2.4 billion, attributed to a 2.5% increase in occupancy in skilled services[355]. - Net income for the three months ended June 30, 2025, was $84.466 million, an increase of 18.6% from $71.181 million in the same period of 2024[326]. Revenue Sources - Medicaid revenue for skilled services increased to $473.9 million in the three months ended June 30, 2025, from $403.1 million in 2024, reflecting a growth of 17.5%[184]. - The skilled revenue from Medicare for the three months ended June 30, 2025, was $291.1 million, up from $258.9 million in 2024, indicating a growth of 12.4%[184]. - Recently Acquired Facilities generated $139.292 million in revenue, a significant increase of $110.903 million compared to $28.389 million in the same period of 2024[332]. - Revenue from Same Facilities increased by $51.8 million, or 6.5%, due to improved occupancy and revenue per patient day[337]. - Total skilled nursing revenue increased to $420.43 million, up from $396.63 million, representing a growth of 6.0% year-over-year[345]. Occupancy and Utilization - The occupancy percentage based on operational beds for skilled services was 81.3% for the three months ended June 30, 2025, compared to 80.1% in the same period of 2024[181]. - Same Facilities occupancy increased to 82.1%, a rise of 2.0% compared to the same period in 2024[302]. - Transitioning Facilities occupancy increased by 4.6% to 84.0% compared to the same period in 2024[302]. - Consolidated occupancy increased by 1.5% to 81.3% during the three months ended June 30, 2025, compared to 80.1% in 2024[336]. Cost and Expenses - Cost of services increased by $141.2 million, or 17.8%, to $932.8 million, while the cost of services as a percentage of revenue decreased to 79.5% from 79.9%[345]. - General and administrative expenses rose by $12.9 million, or 23.0%, to $69.1 million, driven by additional headcount and wage increases[350]. - Total expenses as a percentage of total revenue decreased to 91.5% for the three months ended June 30, 2025, from 91.7% in 2024[306]. Strategic Initiatives - The company’s acquisition strategy focuses on identifying underperforming operations that present strong return opportunities, despite potential regulatory and clinical challenges[162]. - The company has made progress on initiatives to increase occupancy and the acuity level of patients served[304]. - The operating model empowers each operator to form market-specific strategies to attract and retain healthcare professionals[305]. - The company continues to see positive trends in turnover and agency usage across its operations[305]. Regulatory and Policy Changes - For fiscal year 2026, CMS proposes to increase the SNF PPS rate by 2.8%, based on a 3.0% market basket adjustment, a 0.6% forecast error adjustment, and a negative 0.8% productivity adjustment[198]. - The OBBB establishes a limit of $1.0 million for home equity that can be exempted from calculating an individual's eligibility for Medicaid in seeking long-term care, effective January 1, 2028[194]. - The OBBB reduces the hold harmless threshold in expansion states beginning in fiscal year 2028, decreasing by 0.5% per year until reaching 3.5% in fiscal year 2032[191]. - The SNF PPS FY 2026 Proposed Rule includes updates to the PDPM, proposing revisions to ICD-10 code mappings to improve coding accuracy and better reflect patients' primary diagnoses[198]. - The OIG's increased scrutiny on nursing homes includes audits of reported nurse staffing hours, with a report expected in FY 2025[258].