The Ensign Group Q4 Earnings Call Highlights

Core Insights - The Ensign Group reported record financial results for fiscal 2025, with a GAAP diluted EPS of $5.84, an increase of 14.1%, and consolidated revenue of $5.1 billion, up 18.7% [6][15][17] - The company highlighted strong operational metrics, including same-store occupancy rates reaching all-time highs of 83.8% and transitioning occupancy at 84.9% [1][4] - Ensign's management emphasized the importance of clinical performance linked to staff retention, with a notable 33% reduction in director of nursing turnover over recent years [2][3] Financial Performance - For Q4, Ensign reported a GAAP diluted EPS of $1.61, up 18.4%, and consolidated revenue of $1.4 billion, an increase of 20.2% [17] - The company ended fiscal 2025 with $504 million in cash and a lease-adjusted net debt/EBITDA ratio of 1.77x, indicating strong financial health [6][17] - Fiscal 2026 guidance includes diluted EPS of $7.41 to $7.61 and revenue projections of $5.77 billion to $5.84 billion [19] Operational Highlights - The company added 17 new operations during the quarter, increasing its skilled nursing bed capacity by 1,371 across seven states [5][8] - Skilled days increased by 8.5% for same-store operations and 10% for transitioning operations compared to the prior year [9] - Ensign's same-store operations outperformed peers in quality measures, achieving a 24% advantage at the state level and a 33% advantage at the county level [3] Growth Strategy - Ensign's active acquisition pipeline is described as healthy but increasingly competitive, with over $1 billion available for future investments [5][6] - The company is focusing on organic growth potential, with occupancy levels still below those of mature operations, indicating room for expansion [7] - Management is pursuing strategic capital projects, including new construction and facility upgrades, to enhance service capacity [10][16] Clinical and Staffing Improvements - The company reported improvements in clinical outcomes, with same-store operations achieving five-star quality measure results that were 22% better nationally [3] - Staffing agency usage has decreased, and stable wage growth has contributed to improved staff retention, supporting care quality [2][20] - Specific facilities, such as South Bay Post Acute and Shoreline Health, demonstrated significant operational improvements and revenue growth through specialized care programs [13][14]