The Ensign Group, Inc.

during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, press star one again. Thank you. I would now like to turn the conference over to Mr. Keech. You may begin.

Thank you, operator, and welcome, everyone. We filed our earnings press release yesterday, and it is available on the investor relations section of our website at enzymegroup.net. A replay of this call will also be available on our website until 5 p.m. Pacific on Friday, May 31, 2024. We want to remind anyone that may be listening to a replay of this call that all statements made are as of today, May 2, 2024, and these statements have not been or will be updated subsequent to today's call. Also, any forward-looking statements made today are based on management's current expectations, assumptions, and beliefs about our business. and the environment in which we operate. These statements are subject to risks and uncertainties that could cause our actual results to materially differ from those expressed or implied on today's call. Listeners should not place undue reliance on forward-looking statements and are encouraged to review our SEC filings for a more complete discussion of factors that could impact our results. Except as required by federal securities laws, Enzyme and its independent subsidiaries do not undertake to publicly update or revise any forward-looking statements where changes arise as a result of new information, future events, changing circumstances, or for any other reason. In addition, the Enzyme Group, Inc. is a holding company with no direct operating assets, employees, or revenues. Certain of our independent subsidiaries, collectively referred to as the Service Center, provide accounting, payroll, human resources, information technology, legal, risk management, and other services to the other independent subsidiaries through contractual relationships with such subsidiaries. In addition, our captive insurance subsidiary, which we refer to as the insurance captive, provides certain claims-made coverage to our operating companies for general and professional liability, as well as for workers' compensation insurance liabilities. Ensign also owns Standard Bear Healthcare REIT, Inc., which is a captive real estate investment trust that invests in healthcare properties and enters into lease agreements with certain independent subsidiaries of Enzyme, as well as third-party tenants that are unaffiliated with the Enzyme Group. The words Enzyme, Company, We, Our, and Us refer to the Enzyme Group and its consolidated subsidiaries. All of our independent subsidiaries, the Service Center, Standard Bearer Healthcare REIT, and the Insurance Captive are operated by separate, independent companies that have their own management, employees, and assets. References herein to the consolidated company and its assets and activities as well as use of the words we, us, our, and similar terms are not meant to imply nor should be construed as meaning that the Enzyme Group has direct operating assets, employees, or revenue, or that any of the subsidiaries are operated by the Enzyme Group. Also, we supplement our GAAP reporting with non-GAAP metrics. When viewed together with our GAAP results, we believe that these measures can provide a more complete understanding of our business. They should not be relied upon upon the exclusion of GAAP reports. A gap to non-gap reconciliation is available in yesterday's press release and is available in our Form 10-Q. And with that, I'll turn the call over to Barry Port, our CEO. Barry?

Thanks, Chad, and thank you everyone for joining us today. We're pleased with the continued and consistent performance that our local teams achieved again. After another record quarter, we're excited about the remarkable momentum our teams have created across our entire portfolio and look forward to seeing that continue throughout the year. As strong as our performance has been, we continue to see enormous opportunities inherent in our portfolio, both in existing operations and the growing number of new acquisitions. We were encouraged to see an increase in skilled mix during the quarter with an increase in same-store skilled mix days of 5.6% and an increase in same-store skilled mix revenue of 1.9% sequentially over the fourth quarter. This continued strength in our skilled mix demonstrates the ongoing trend of increasing demand for skilled post-acute services. We were also excited to see same store occupancy for the quarter reach 81%, which grew by 2.7% over the prior year quarter and surpassed pre-pandemic same store occupancies for the first time since first quarter of 2020. While we celebrate this milestone, our same store portfolio still has an incredible amount a built-in upside as dozens of our most mature same store operations operate in the 90 plus percent occupancy range. As our operators continue to build on a solid foundation of strong clinical results, cultural excellence, and sustainable real estate costs, they will continue to realize the occupancy and skill mix growth potential inherent in our same store portfolio, which will allow us to continue achieving the consistent financial results that we have delivered over time without depending solely on acquiring new operations. That said, as you saw in our press release yesterday, we have been busy acquiring new operations and our transitioning and newly acquired buckets now represent over 25% of our total operational beds. We have enormous organic growth potential within those growing buckets. To give some perspective, our occupancy and skilled mix days for the skilled nursing operations in the transitioning bucket were 74% and 22%, respectively, while our same-store occupancy and skilled mix days were 81% and 32%, respectively. As we've shown over two decades, we expect our teams to unlock significant upside in each of these new operations as they mature. As most of you know, CMS issued a final minimum staffing rule last week. As expected, the final rule is very much in line with the proposed rule they issued last year with a few minor differences, despite the overwhelming amount of feedback CMS received from various stakeholders, including operators of all sizes and in all geographies. While we are deeply committed to increasing access to quality care for our seniors, we strongly disagree with this rule and believe especially in light of the nationwide shortage of nursing labor, that the rule only exacerbates an already precarious staffing problem, and if it survives as is, would severely limit the ability of the skilled nursing industry to serve the growing long-term care population. We believe it would be much more constructive to focus policy on rewarding quality outcomes and assisting providers to increase the supply of caregivers. Unfortunately, this rule will have its largest impact on smaller and more thinly capitalized operators, many of which are quality providers, and will ultimately result in limiting quality care options for the senior population. However, we are optimistic that this rule will be either eliminated entirely or its effects will be mitigated long before the rule takes effect in two to three years. We're encouraged to see bipartisan support in the legislature that can result in this rule being overturned or significantly altered. In addition, our industry representatives and their legal experts have been preparing to challenge this rule in the courts on several grounds and believe this rule is highly likely to be overturned in federal court. Lastly, because this rule is being driven by political ideologies, its survival also depends on the outcome of several elections that will take place before the rule would be implemented. In the meantime, our locally driven operational model is built to respond to changes like these. As we've shown over and over again, when change comes, our leaders respond. Whether you look back to seismic changes in reimbursement like RUGS 4 in 2011 and 2012, or PDPM in 2019, or the frequent regulatory changes imposed on our business during the COVID pandemic, our local CEOs and COOs have been able to adjust their individual operation strategy and rapidly respond to any shift in market dynamics in a very thoughtful and specific way. In addition, when the industry is out of favor or regulatory uncertainty leads to less capital being invested in our space, our local acquisition approach has allowed us to continue to add new operations at attractive prices. As our local teams have done so, They have demonstrated their capabilities to their healthcare partners and have grown market share. It's ultimately because of them that we have so much confidence that no matter what happens with minimum staffing or other unforeseeable regulatory changes in the future, we are built not only to survive, but to thrive and grow with change. Our focus over the coming months and years is to continue the strategy that has always been paramount to our success, regardless of staffing mandates or any other change. Good care depends entirely on attracting and training great talent. Becoming the employer of choice in each of our markets has been and will be our relentless focus. We've seen evidence of the fruits of these efforts during the quarter and are encouraged by the reduction in the use of third-party nursing agencies, which improved again for the fifth quarter in a row, representing a reduction in agency usage of 59% since its peak in December of 2022. We're also thrilled to continue to see lower turnover for the 10th quarter in a row, which is a result of our local leaders' focus on a customer second philosophy. Likewise, we continue to see the pace of wage inflation slowing while we simultaneously successfully recruit new talent. As of the end of the quarter, we saw net new hires increase yet again. We are confident that by being true to our cultural values, strong clinical results, and proven operating principles, our ability to attract talent to our organization will shine through. We're affirming our annual 2024 earnings guidance of 529 to 547 per deluded share and annual revenue guidance of $4.13 billion to $4.17 billion. The midpoint of this 2024 earnings guidance represents an increase of 13% over our 2023 results and is 30% higher than our 2022 results. This annual guidance comes on top of the extraordinary growth we've experienced in the last few years. To put this performance in perspective, since we spun out the pennant group in 2019, the midpoint of our 2024 guidance represents growth in adjusted EPS of 201.1% with a compound annual growth rate of 24.4%. This performance is not due to some large event or a single transformative transaction, but instead as a result of consistent growth and performance quarter after quarter, which comes from following proven and signed principles. All these achievements are entirely due to the efforts and commitment of our local leadership teams, caregivers, field resources, and service center partners. There are so many opportunities in front of us to improve in expense management, and drive occupancy and skilled mix as we continue to successfully unlock value in all of our operations. We remain poised to again showcase our ability to find, acquire, and transition performing and underperforming operations by applying proven Ensign principles developed over two decades. Next, I'll ask Chad to add some additional insights regarding our recent growth. Chad? Thank you, Barry.