Ensign Group(US:ENSG)2024-10-25 20:04Financial Data and Key Metrics Changes - The company reported diluted earnings per share of $1.34, an increase of 20.7% year-over-year [21] - Adjusted diluted earnings per share was $1.39, reflecting a 15.8% increase [22] - Consolidated GAAP revenue and adjusted revenues both reached $1.1 billion, marking a 15% increase [22] - GAAP net income was $78.4 million, up 22.8% from the previous year [22] - Adjusted net income was $81.1 million, an increase of 17.7% [22] - The company achieved a record low lease adjusted net debt-to-EBITDA ratio of 1.88x [22] Business Line Data and Key Metrics Changes - Same-store occupancy grew to 81.7%, a 2.8% increase over the prior year quarter [7] - Skilled days increased by 6.1% across all skilled payer sources in same-store operations [8] - Managed care census grew by 9.1% for same-store operations and 23.2% for transitioning operations [8] Market Data and Key Metrics Changes - Newly acquired facilities now account for over 14.4% of total service revenue, up from 8.6% a year ago [15] - The company added 53 new operations across several markets, including 1,279 new skilled nursing beds and 20 senior living units [11] Company Strategy and Development Direction - The company is focused on organic growth, with 46% of increased revenue for the quarter generated from organic growth [9] - The strategy includes acquiring lower occupancy operations at attractive prices, providing long-term growth potential [9] - The company aims to build clusters in new states and markets with significant room for growth [13] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the opportunities to unlock organic growth in the existing portfolio [8] - The company raised its annual 2024 earnings guidance to between $5.46 to $5.52 per diluted share, reflecting a 15.1% increase over 2023 results [10] - Management noted a healthy pipeline of new acquisition opportunities and a disciplined approach to growth [12] Other Important Information - The company has approximately $572 million of availability under its line of credit, providing over $1 billion in liquidity for future investments [23] - The company has a long history of paying dividends, having increased the annual dividend for 21 consecutive years [22] Q&A Session Summary Question: Same-store occupancy levels and potential upside - Management confirmed that same-store occupancy is above pre-pandemic levels and highlighted the potential for further growth due to demographic trends and managed care momentum [26][27] Question: Update on state supplemental payments and Medicaid rates - Management explained that supplemental payments are embedded within Medicaid rates and discussed the timing of updates across states [28][29][30] Question: M&A activity and market sentiment - Management noted an increase in M&A activity driven by seller sentiment and market conditions, particularly for smaller operators facing challenges [32][33] Question: Acquisition profile and geographical expansion - Management clarified that while the acquisition profile remains consistent, there are opportunities for growth in new markets and states [35][36] Question: Growth opportunities and potential headwinds for 2025 - Management expressed optimism about growth opportunities and the ability to balance acquisitions with organic growth [44]