The Ensign Group, Inc.

I would like to welcome everyone to the Enzyme Group Quarter 2 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Chad Keech, Chief Investment Officer, please go ahead.

Thank you, operator, and welcome, everyone. We filed our earnings press release yesterday, and it is available on the Investors 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, August 29, 2025. We want to remind anyone that may be listening to a replay of this call that all statements made as of today, July 25, 2025, 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 under-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, Ensign 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 Ensign 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. In addition, our captive insurance subsidiary, which we refer to as the insurance captive, provides certain claims to make 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, Inc., and its consolidated subsidiaries. All of our independent subsidiaries, the Service Center, Standing Bear Health Co. 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 the use of the words we, us, our, and similar terms are not meant to imply, nor should it 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. We also 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, but they should not be relied upon to the exclusion of GAAP reports. A GAAP to non-GAAP reconciliation is available in yesterday's press release and is available in our Form 10-2. And with that, I'll turn the call over to Barry Port, our CEO. Barry?

Thanks, Chad, and thank you all for joining us today. Our local teams have achieved another outstanding quarter, raising the bar again for what is possible even in a quarter where we historically have experienced more seasonality. The clinical results they achieved continue to be an important driver of our success, As our teams work tirelessly to gain the trust of the communities they serve and deliver consistent outcomes, our operations continue to earn the reputation as the facility of choice for thousands of patients. This trust is apparent from the strong upward trends in occupancy and skilled mix during the quarter, which we believe is only achievable through dependable clinical results delivered by dedicated local leaders, caregivers, and outstanding team members. As we dissect the numbers, we set second quarter records for same store and transitioning occupancy, which increased by 2% and 4.6% to 82.1% and 84% respectively over the prior year quarter. We also saw skilled census increase for both our same store and transitioning operations by 7.4% and 13.5% respectively over the prior year quarter. All these improvements are the result of many factors, but it could never have happened without the relentless efforts by these local teams that we mentioned earlier who implement standard setting practices that lead to better outcomes. We also continue to attract and develop caring and passionate partners into post-acute care who are determined to join us as we pursue our mission to dignify post-acute care. In addition, we continue to see improvements in turnover as well as lower staffing agency labor even in the face of increased occupancy. As we've said before, our people are at the heart of our efforts, and seeing these metrics consistently improve is critical to maintaining our path of success and to achieve industry-leading results. On the regulatory front, we were pleased that the skilled nursing population was carved out of provider tax reduction in the recently passed reconciliation bill, which was a big win for our industry. We feel optimistic that state and federal governments will continue to recognize the importance of properly funding the healthcare needs of the senior population. Now more than ever, it is essential that we elevate the voices of our patients and frontline team members. Their stories reflect the heart of what we do, and we remain unwavering in our commitment to advocate for the resources and support needed to ensure they receive what they deserve. After such a strong first half of the year, We are raising our annual 2025 earnings guidance to between $6.34 and $6.46 per diluted share, up from the previously raised guidance of $6.22 to $6.38 per diluted share. The new midpoint of this increased 2025 earnings guidance represents an increase of 16.4% over our 2024 results, and it's 34% higher than our 2023 results. We're also increasing our annual revenue guidance to 4.99 billion to 5.02 billion, up from 4.89 billion to 4.94 billion to account for our current quarter performance and acquisitions we anticipate closing through the third quarter. This increased guidance is due to the continued execution of our growth model with organic growth stemming from stronger occupancy and skilled mix, which is more than expected for the second quarter. Other than during the pandemic, we typically experienced a slowdown in both occupancy and skilled mix during the second quarter. However, due to the continued momentum and quality outcomes and the benefit from positive demographic trends, we were able to maintain stronger than expected performance in both occupancy and skilled mix, without the use of increased agency or overtime, which is also helping control our cost of services. In addition, many of our new acquisitions are performing well ahead of schedule, which highlights the continued improvement in our locally driven transition strategy, but also points towards solid underwriting and investment decisions. We're also excited about our performance so far this year and are confident that our partners will continue to manage and innovate while balancing the addition of newly acquired operations. We are eager to continue to drive organic improvements and take advantage of the acquisition opportunities that we see on the horizon. The combination of improvements in occupancy and skilled mix in our more mature operations and the long-term upside in our newly acquired operations shows the enormous organic growth potential in our existing portfolio. Next, I'll ask Chad to add some additional insights into our recent growth. Chad? Thank you, Barry.