Ensign Group Q4 2025 Ensign Group Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Ensign Group Inc Earnings Call
Speaker #1: Ladies and gentlemen, thank you for joining us, and welcome to the Ensign Group, Inc. fourth quarter fiscal year 2025 earnings conference call. After today's prepared remarks, we will host a question-and-answer session.
Operator: Ladies and gentlemen, thank you for joining us and welcome to the Ensign Group Inc. Q4 Fiscal Year 2025 Earnings Conference Call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press star 9 to raise your hand and star 6 to unmute. I will now hand the conference over to Mr. Keetch. Please go ahead.
Operator: Ladies and gentlemen, thank you for joining us and welcome to the Ensign Group Inc. Q4 Fiscal Year 2025 Earnings Conference Call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press star 9 to raise your hand and star 6 to unmute. I will now hand the conference over to Mr. Keetch. Please go ahead.
Speaker #1: If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press *9 to raise your hand and *6 to unmute.
Speaker #1: I will now hand the conference over to Mr. Keetch. Please go ahead.
Speaker #2: 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 ensigngroup.net.
Chad Keetch: 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 ensigngroup.net. A replay of this call will also be available on our website until 5:00PM Pacific on 27 February 2026. We want to remind anyone that might be listening to a replay of this call that all the statements made are as of today, 5 February 2026, and these statements have not been nor 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 the risks and uncertainties that could cause our actual results to materially differ from those expressed or implied on today's call.
Chad Keetch: 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 ensigngroup.net. A replay of this call will also be available on our website until 5:00PM Pacific on 27 February 2026. We want to remind anyone that might be listening to a replay of this call that all the statements made are as of today, 5 February 2026, and these statements have not been nor 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 the risks and uncertainties that could cause our actual results to materially differ from those expressed or implied on today's call.
Speaker #2: A replay of this call will also be available on our website until 5:00 p.m. Pacific on February 27, 2026. We want to remind anyone that might be listening to a replay of this call that all the statements made are as of today, February 5, 2026, and these statements have not been, and will not be, updated subsequent to today's call.
Speaker #2: Also, any forward-looking statements made today are based on management's current expectations of Simpsons and beliefs about our business and the environment in which we operate.
Speaker #2: These statements are subject to the risks and uncertainties that could cause our actual results to materially differ from those expressed or implied on today's call.
Speaker #2: Listeners should not place undue reliance on forward-looking statements and are encouraged to review the SEC filings for a more complete discussion of factors that could impact our results.
Chad Keetch: Listeners should not place under-reliance on forward-looking statements and are encouraged to review the 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 a service center, provide accounting, payroll, human resources, information technology, legal, risk management, and other services to the other independent subsidiaries through contractual relationships.
Chad Keetch: Listeners should not place under-reliance on forward-looking statements and are encouraged to review the 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 a service center, provide accounting, payroll, human resources, information technology, legal, risk management, and other services to the other independent subsidiaries through contractual relationships.
Speaker #2: Except as required by federal securities laws, Ensign and its independent subsidiaries do not undertake the publicly updated or revised any forward-looking statements or changes arise as a result of new information, future events, changing circumstances, or for any other reason.
Speaker #2: 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 a Service Center, provide accounting, payroll, human resources, information technology, legal, risk management, and other services to the other independent subsidiaries through contractual relationships.
Speaker #2: 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.
Chad Keetch: 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 Bearer Healthcare REIT, which is a captive real estate investment trust that invests in healthcare properties and enters into lease agreements with certain independent subsidiaries of Ensign, as well as third-party tenants that are unaffiliated with the Ensign Group. The words Ensign Group, we, our, and us refer to The Ensign Group, Inc. 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.
Chad Keetch: 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 Bearer Healthcare REIT, which is a captive real estate investment trust that invests in healthcare properties and enters into lease agreements with certain independent subsidiaries of Ensign, as well as third-party tenants that are unaffiliated with the Ensign Group. The words Ensign Group, we, our, and us refer to The Ensign Group, Inc. 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.
Speaker #2: Ensign also owns Standard Barry Healthcare REIT, which is a captive real estate investment trust that invests in healthcare properties and enters into lease agreements with certain independent subsidiaries of Ensign, as well as third-party tenants that are unaffiliated with The Ensign Group.
Speaker #2: The words Ensign Company, we, our, and us refer to The Ensign Group, Inc. and its consolidated subsidiaries. All of our independent subsidiaries, service centers, Standard, Barry Healthcare REIT, and the insurance captive are operated by separate independent companies that have their own management, employees, and assets.
Speaker #2: References herein to the consolidated company and its assets and activities, as well as the use of words like 'we,' 'us,' 'our,' and similar terms, are not meant to imply, nor should it be construed as meaning, that The Ensign Group has direct operating assets, employees, or revenue, or that any of the subsidiaries are operated by The Ensign Group.
Chad Keetch: References herein to the consolidated company and its assets and activities, as well as the use of words we, us, our, and similar terms, are not meant to imply, nor should it be construed as meaning, that The Ensign Group has direct operating assets, employees, or revenue, or that any of the subsidiaries are operated by The Ensign 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, 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 available in our Form 10-K. And with that, I'll turn the call over to Barry Port, our CEO. Barry?
Chad Keetch: References herein to the consolidated company and its assets and activities, as well as the use of words we, us, our, and similar terms, are not meant to imply, nor should it be construed as meaning, that The Ensign Group has direct operating assets, employees, or revenue, or that any of the subsidiaries are operated by The Ensign 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, 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 available in our Form 10-K. And with that, I'll turn the call over to Barry Port, our CEO. Barry?
Speaker #2: 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.
Speaker #2: 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 also available in our Form 10-K.
Speaker #2: And with that, I'll turn the call over to Barry Port, our CEO. Barry?
Speaker #3: Thanks, Chad, and thank you all for joining us today. We're excited to report another record year and record quarter in several key areas. To start, I want to highlight the extraordinary clinical outcomes achieved by our dedicated and talented caregivers.
Barry Port: Thanks, Chad, and thank you all for joining us today. We're excited to report another record year and record quarter in several key areas. To start, I want to highlight the extraordinary clinical outcomes achieved by our dedicated and talented caregivers. None of the results, which we will discuss today, are possible without the outstanding work being done by these amazing nurses, therapists, dietitians, food service professionals, activities coordinators, and the many others whose unwavering commitment shapes the daily care experience for thousands of patients across our portfolio. It's difficult to convey in words how so many individuals work so hard to achieve such amazing outcomes through so many small moments of selfless service. Having a front-row seat to these amazing people is humbling, to say the least.
Barry Port: Thanks, Chad, and thank you all for joining us today. We're excited to report another record year and record quarter in several key areas. To start, I want to highlight the extraordinary clinical outcomes achieved by our dedicated and talented caregivers. None of the results, which we will discuss today, are possible without the outstanding work being done by these amazing nurses, therapists, dietitians, food service professionals, activities coordinators, and the many others whose unwavering commitment shapes the daily care experience for thousands of patients across our portfolio. It's difficult to convey in words how so many individuals work so hard to achieve such amazing outcomes through so many small moments of selfless service. Having a front-row seat to these amazing people is humbling, to say the least.
Speaker #3: None of the results, which we will discuss today, are possible without the outstanding work being done by these amazing nurses, therapists, dietitians, food service professionals, activities coordinators, and the many others whose unwavering commitment shapes the daily care experience for thousands of patients across our portfolio.
Speaker #3: It's difficult to convey in words how so many individuals work so hard to achieve such amazing outcomes through so many small moments of selfless service.
Speaker #3: Having a front-row seat to these amazing people is humbling, to say the least. And while the point of these quarterly calls is to provide investors a financial update, let there be no mistake that our consistent financial results would not be possible without a relentless, patient-focused culture that drives our front-line partners to deliver the highest quality clinical outcomes, supported by a family-like atmosphere where everyone genuinely cares about one another.
Barry Port: While the point of these quarterly calls is to provide investors a financial update, let there be no mistake that our consistent financial results would not be possible without a relentless, patient-focused culture that drives our frontline partners to deliver the highest-quality clinical outcomes supported by a family-like atmosphere where everyone genuinely cares about one another. There are several measurements that showcase our clinical excellence. For example, according to the most recently published CMS data, same-store Ensign-affiliated operations outperformed their peers in their annual survey results by an impressive 24% at the state level and 33% at the county level. This exceptional performance is only possible by achieving sustained clinical performance over time. In that same dataset, Ensign-affiliated operations also maintained a 19% advantage in overall four- and five-star rated buildings when compared to their peers.
Barry Port: While the point of these quarterly calls is to provide investors a financial update, let there be no mistake that our consistent financial results would not be possible without a relentless, patient-focused culture that drives our frontline partners to deliver the highest-quality clinical outcomes supported by a family-like atmosphere where everyone genuinely cares about one another. There are several measurements that showcase our clinical excellence. For example, according to the most recently published CMS data, same-store Ensign-affiliated operations outperformed their peers in their annual survey results by an impressive 24% at the state level and 33% at the county level. This exceptional performance is only possible by achieving sustained clinical performance over time. In that same dataset, Ensign-affiliated operations also maintained a 19% advantage in overall four- and five-star rated buildings when compared to their peers.
Speaker #3: There are several measurements that showcase our clinical excellence. For example, according to the most recently published CMS data, same-store Ensign-affiliated operations outperform their peers in their annual survey results by an impressive 24% at the state level and 33% at the county level.
Speaker #3: This exceptional performance is only possible by achieving sustained clinical performance over time. In that same dataset, Ensign-affiliated operations also maintained a 19% advantage in overall four- and five-star-rated buildings when compared to their peers.
Speaker #3: This is particularly noteworthy given that the majority of these communities were one- and two-star facilities at the time of acquisition. In addition, our same-store operations continue to outperform their industry peers in five-star quality measure results by delivering 22% better results on a national level and 17% above the state level.
Barry Port: This is particularly noteworthy given that the majority of these communities were one- and two-star facilities at the time of acquisition. In addition, our same-store operations continue to outperform their industry peers in five-star quality measure results by delivering 22% better results on a national level and 17% above the state level. Together, these results underscore our ability to become the provider of choice in our communities by delivering consistently better quality of care, creating long-term value across our portfolio, and we'll expand on that more throughout this call. This clinical strength depends upon attracting and retaining top-notch talent in every operation. We are encouraged by the deep bench of incredible talent that continues to flow into our organization, and we look forward to working with them to continue to achieve our mission to dignify post-acute care.
Barry Port: This is particularly noteworthy given that the majority of these communities were one- and two-star facilities at the time of acquisition. In addition, our same-store operations continue to outperform their industry peers in five-star quality measure results by delivering 22% better results on a national level and 17% above the state level. Together, these results underscore our ability to become the provider of choice in our communities by delivering consistently better quality of care, creating long-term value across our portfolio, and we'll expand on that more throughout this call. This clinical strength depends upon attracting and retaining top-notch talent in every operation. We are encouraged by the deep bench of incredible talent that continues to flow into our organization, and we look forward to working with them to continue to achieve our mission to dignify post-acute care.
Speaker #3: Together, these results underscore our ability to become the provider of choice in our better quality of care, creating long-term value across our portfolio, and we will expand on that more throughout this call.
Speaker #3: This clinical strength depends upon attracting and retaining top-notch talent in every operation. We are encouraged by the deep bench of incredible talent that continues to flow into our organization, and we look forward to working with them to continue to achieve our mission to dignify post-acute care.
Speaker #3: On the retention side, we continue to experience improvements in turnover, stable wage growth, and lower staffing agency usage, even in the face of increased occupancy.
Barry Port: On the retention side, we continue to experience improvements in turnover, stable wage growth, and lower staffing agency usage, even in the face of increased occupancy. We are especially proud of the exceptionally low turnover among our directors of nursing. Over the past 2 years, DON turnover has declined by 33%, placing us among performers in the industry and reinforcing the stability and leadership consistency that drives high-quality care. 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. Our clinical achievements are bearing fruit in many ways. On the census front, our same-store and transitioning occupancy increased to 83.8% and 84.9% during the quarter, which are both all-time highs. On the skill mix front, we saw an increase across all payers.
Barry Port: On the retention side, we continue to experience improvements in turnover, stable wage growth, and lower staffing agency usage, even in the face of increased occupancy. We are especially proud of the exceptionally low turnover among our directors of nursing. Over the past 2 years, DON turnover has declined by 33%, placing us among performers in the industry and reinforcing the stability and leadership consistency that drives high-quality care. 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. Our clinical achievements are bearing fruit in many ways. On the census front, our same-store and transitioning occupancy increased to 83.8% and 84.9% during the quarter, which are both all-time highs. On the skill mix front, we saw an increase across all payers.
Speaker #3: We are especially proud of the exceptionally low turnover amongst our directors of nursing. Over the past few years, DON turnover has declined by 33%, placing us amongst the top performers in the industry and reinforcing the stability and leadership consistency that drives high-quality care.
Speaker #3: 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 achieving industry-leading results.
Speaker #3: Our clinical achievements are bearing fruit in many ways. On the census front, our same-store transitioning occupancy increased to 83.8% and 84.9% during the quarter, which are both all-time highs.
Speaker #3: On the skill mix front, we saw an increase across all payers. More specifically, skilled days increased for both our same-store and transitioning operations by 8.5% and 10%, respectively, over the prior-year quarter.
Barry Port: More specifically, skilled days increased for both our same-store and transitioning operations by 8.5% and 10%, respectively, over the prior year quarter. We also saw Medicare revenue increase for both our same-store and transitioning operations by 15.7% and 11.3%, respectively, and an increase in our same-store Medicare days of 11% over the prior year quarter. In addition, we saw managed care revenue increase for both our same-store and transitioning operations by 8.9% and 15%, respectively. The primary reason for all these improvements is expanding the trust of the communities our teams serve through the clinical outcomes that they have achieved that I described earlier. As each operation solidifies their reputation in their respective markets, they are not only seeing more patients, but they are also being entrusted to care for more and more medically complex patients, which includes a larger share of Medicare, managed care, and other skilled patients.
Barry Port: More specifically, skilled days increased for both our same-store and transitioning operations by 8.5% and 10%, respectively, over the prior year quarter. We also saw Medicare revenue increase for both our same-store and transitioning operations by 15.7% and 11.3%, respectively, and an increase in our same-store Medicare days of 11% over the prior year quarter. In addition, we saw managed care revenue increase for both our same-store and transitioning operations by 8.9% and 15%, respectively. The primary reason for all these improvements is expanding the trust of the communities our teams serve through the clinical outcomes that they have achieved that I described earlier. As each operation solidifies their reputation in their respective markets, they are not only seeing more patients, but they are also being entrusted to care for more and more medically complex patients, which includes a larger share of Medicare, managed care, and other skilled patients.
Speaker #3: We also saw Medicare revenue increase for both our same-store and transitioning operations by 15.7% and 11.3%, respectively, and an increase in our same-store Medicare days of 11% over the prior-year quarter.
Speaker #3: In addition, we saw managed care revenue increase for both our same-store and transitioning operations by 8.9% and 15%, respectively. The primary reason for all these improvements is expanding the trust of the communities our team serves, through the clinical outcomes that they have achieved, which I described earlier.
Speaker #3: As each operation solidifies its reputation in their respective markets, they are not only seeing more patients, but they are also being entrusted to care for more and more medically complex patients, which includes a larger share of Medicare, managed care, and other skilled patients.
Speaker #3: In addition, we believe we are just now starting to see increased demand for our services related to the strong demographic trends. These powerful tailwinds will only bolster our census momentum we're seeing across our portfolio, giving us confidence in a long-term growth opportunity ahead.
Barry Port: In addition, we believe we are just now starting to see increased demand for our services related to the strong demographic trends. These powerful tailwinds will only bolster our census momentum we're seeing across our portfolio, giving us confidence in a long-term growth opportunity ahead. While we are thrilled with our current record same-store occupancy, we are actually excited that it's as low as it is. At 83%, we have enough organic growth potential left in our organization to sustain our consistent earnings and revenue growth even if we stopped acquiring. As we point out during each of our earnings calls with specific facility examples, it's not uncommon to see some of our most mature operations consistently achieve and maintain occupancies in the high to mid-90s.
Barry Port: In addition, we believe we are just now starting to see increased demand for our services related to the strong demographic trends. These powerful tailwinds will only bolster our census momentum we're seeing across our portfolio, giving us confidence in a long-term growth opportunity ahead. While we are thrilled with our current record same-store occupancy, we are actually excited that it's as low as it is. At 83%, we have enough organic growth potential left in our organization to sustain our consistent earnings and revenue growth even if we stopped acquiring. As we point out during each of our earnings calls with specific facility examples, it's not uncommon to see some of our most mature operations consistently achieve and maintain occupancies in the high to mid-90s.
Speaker #3: While we are thrilled with our current record same-store occupancy, we are actually excited that it's as low as it is. At 83%, we have enough organic growth potential left in our organization to sustain our consistent earnings and revenue growth, even if we stopped acquiring.
Speaker #3: As we point out during each of our earnings calls, with specific facility examples, it's not uncommon to see some of our most mature operations consistently achieve and maintain occupancies in the high to mid-90s.
Speaker #3: Although many of our acquisitions in 2025 are in states that have higher occupancy levels, including California, Alaska, Utah, and Washington, their occupancy levels are far below the average levels that we see from our mature campuses in these states.
Barry Port: Although many of our acquisitions in 2025 are in states that have higher occupancy levels, including California, Alaska, Utah, and Washington, their occupancy levels are far below the average levels that we see from our mature campuses in these states. The organic potential in our portfolio continues to remain one of our most compelling opportunities to continue to drive results. In addition, we continue to acquire new operations with massive long-term upside, with many more in the works. Since 2024, we have successfully sourced, underwritten, closed, and transitioned 82 new operations across several markets, many of which are already performing at or above our expectations. We are very humbled by what we were able to accomplish in 2025, and we are eager to continue to drive organic improvements and take advantage of the acquisition opportunities that we see on the horizon.
Barry Port: Although many of our acquisitions in 2025 are in states that have higher occupancy levels, including California, Alaska, Utah, and Washington, their occupancy levels are far below the average levels that we see from our mature campuses in these states. The organic potential in our portfolio continues to remain one of our most compelling opportunities to continue to drive results. In addition, we continue to acquire new operations with massive long-term upside, with many more in the works. Since 2024, we have successfully sourced, underwritten, closed, and transitioned 82 new operations across several markets, many of which are already performing at or above our expectations. We are very humbled by what we were able to accomplish in 2025, and we are eager to continue to drive organic improvements and take advantage of the acquisition opportunities that we see on the horizon.
Speaker #3: The organic potential in our portfolio continues to remain one of our most compelling opportunities to continue to drive results. In addition, we continue to acquire new operations with massive long-term upside, with many more in the works.
Speaker #3: Since 2024, we have successfully sourced, underwritten, closed, and transitioned 82 new operations across several markets, many of which are already performing at or above our expectations.
Speaker #3: We're very humbled by what we've been able to accomplish in 2025, and we are eager to continue to drive organic improvements and take advantage of the acquisition opportunities that we see on the horizon.
Speaker #3: We are issuing our annual 2026 earnings guidance of $7.41 to $7.61 per diluted share, and annual revenue guidance of $5.77 billion to $5.84 billion.
Barry Port: We are issuing our annual 2026 earnings guidance of $7.41 to $7.61 per diluted share, an annual revenue guidance of $5.77 billion to $5.84 billion. The midpoint of this 2026 earnings guidance represents an increase of 14.3% over our 2025 results and is 36.5% higher than our 2024 results. We look forward to 2026 with confidence that our partners will continue to manage and innovate while balancing the addition of newly acquired operations. This annual guidance comes on top of the extraordinary growth we experienced in the last few years. To put this performance in perspective, over the last five years, our total adjusted revenue increased by $2.7 billion or 111%, representing a 16% compounded annual growth rate, while our diluted adjusted earnings per share grew by $3.44 from 2020 to 2025, representing a 16% compounded annual growth rate.
Barry Port: We are issuing our annual 2026 earnings guidance of $7.41 to $7.61 per diluted share, an annual revenue guidance of $5.77 billion to $5.84 billion. The midpoint of this 2026 earnings guidance represents an increase of 14.3% over our 2025 results and is 36.5% higher than our 2024 results. We look forward to 2026 with confidence that our partners will continue to manage and innovate while balancing the addition of newly acquired operations. This annual guidance comes on top of the extraordinary growth we experienced in the last few years. To put this performance in perspective, over the last five years, our total adjusted revenue increased by $2.7 billion or 111%, representing a 16% compounded annual growth rate, while our diluted adjusted earnings per share grew by $3.44 from 2020 to 2025, representing a 16% compounded annual growth rate.
Speaker #3: The midpoint of this 2026 earnings guidance represents an increase of 14.3% over our 2025 results and is 36.5% higher than our 2024 results. We look forward to 2026 with confidence that our partners will continue to manage and innovate while balancing the addition of newly acquired operations.
Speaker #3: This annual guidance comes on top of the extraordinary growth we experienced in the last few years. To put this performance in perspective, over the last five years, our total adjusted revenue increased by $2.7 billion, or 111%, representing a 16% compounded annual growth rate, while our diluted adjusted earnings per share grew by $3.44 from 2020 to 2025, representing a 16% compounded annual growth rate.
Speaker #3: In addition, we have seen adjusted net income grow by 121%, with a compounded annual growth rate of 17%. This performance is not due to some large event or a single transformative transaction, but instead is the result of steady, consistent growth and performance quarter after quarter.
Barry Port: In addition, we have seen adjusted net income grow by 121% with a compounded annual growth rate of 17%. This performance is not due to some large event or a single transformative transaction, but instead is the result of steady, consistent growth and performance quarter after quarter, which comes from a collective belief and commitment that is held by all of our partners to expand our mission in a methodical and thoughtful way. Next, I'll ask Chad to add some additional insights regarding our recent growth. Chad?
Barry Port: In addition, we have seen adjusted net income grow by 121% with a compounded annual growth rate of 17%. This performance is not due to some large event or a single transformative transaction, but instead is the result of steady, consistent growth and performance quarter after quarter, which comes from a collective belief and commitment that is held by all of our partners to expand our mission in a methodical and thoughtful way. Next, I'll ask Chad to add some additional insights regarding our recent growth. Chad?
Speaker #3: This comes from a collective belief and commitment that is held by all of our partners to expand our mission in a methodical and thoughtful way.
Speaker #3: Next, I'll ask Chad to add some additional insights regarding our recent growth. Chad?
Speaker #2: Thank you, Barry. We had another significant few months on the acquisition front, adding 17 new operations—which includes 12 real estate assets—during the quarter and since.
Chad Keetch: Thank you, Barry. We had another significant few months on the acquisition front, adding 17 new operations, which includes 12 real estate assets during the quarter and since. These include a 7-building portfolio in Utah, 3 in Texas, 2 in Arizona, 2 in Colorado, and 1 in each of Alabama, Kansas, and Wisconsin. In total, we added 1,371 new skilled nursing beds across 7 states. This growth brings the number of operations in our recently acquired group of operations to 21.7% of our entire portfolio. We were thrilled to complete these acquisitions that span across so many distinct healthcare markets. In each case, our local clusters are prepared to execute on their specialized building-by-building transition plans several months in advance. Overall, our growth this quarter continues to demonstrate our ability to take on multi-facility portfolios as well as our traditional singles and doubles.
Chad Keetch: Thank you, Barry. We had another significant few months on the acquisition front, adding 17 new operations, which includes 12 real estate assets during the quarter and since. These include a 7-building portfolio in Utah, 3 in Texas, 2 in Arizona, 2 in Colorado, and 1 in each of Alabama, Kansas, and Wisconsin. In total, we added 1,371 new skilled nursing beds across 7 states. This growth brings the number of operations in our recently acquired group of operations to 21.7% of our entire portfolio. We were thrilled to complete these acquisitions that span across so many distinct healthcare markets. In each case, our local clusters are prepared to execute on their specialized building-by-building transition plans several months in advance. Overall, our growth this quarter continues to demonstrate our ability to take on multi-facility portfolios as well as our traditional singles and doubles.
Speaker #2: These include a seven-building portfolio in Utah, three in Texas, two in Arizona, two in Colorado, and one in each of Alabama, Kansas, and Wisconsin.
Speaker #2: In total, we added 1,371 new skilled nursing beds across seven states. This growth brings a number of operations, and our recently acquired group of operations, to 21.7% of our entire portfolio.
Speaker #2: We were thrilled to complete these acquisitions at span across so many distinct healthcare markets. In each case, our local clusters are prepared to execute on their specialized, building-by-building transition plans, several months in advance.
Speaker #2: Overall, our growth this quarter continues to demonstrate our ability to take on multi-facility portfolios, as well as our traditional singles and doubles. We continue to learn from and perfect our transition process and believe that those lessons are showing through in the performance of our recently acquired operations.
Chad Keetch: We continue to learn from and perfect our transition process and believe that those lessons are showing through in the performance of our recently acquired operations. As we've shown during the quarter and the last few years, our building-by-building approach to transition works for single operations, small portfolios, and larger portfolios, particularly when a large deal spans several markets and geographies. We've also shown that in certain strategic situations, paying higher prices can be justified for performing assets that have newer physical plants. And while some of those deals may take a bit longer to generate the returns we expect, we've seen these deals pay off over time as our operators implement the proper clinical systems and cultural changes. In the Stonehenge acquisition, for example, the purchase price represented a premium over our historical acquisitions in Utah.
Chad Keetch: We continue to learn from and perfect our transition process and believe that those lessons are showing through in the performance of our recently acquired operations. As we've shown during the quarter and the last few years, our building-by-building approach to transition works for single operations, small portfolios, and larger portfolios, particularly when a large deal spans several markets and geographies. We've also shown that in certain strategic situations, paying higher prices can be justified for performing assets that have newer physical plants. And while some of those deals may take a bit longer to generate the returns we expect, we've seen these deals pay off over time as our operators implement the proper clinical systems and cultural changes. In the Stonehenge acquisition, for example, the purchase price represented a premium over our historical acquisitions in Utah.
Speaker #2: As we've shown during the quarter and the last few years, our building-by-building approach to transition works for single operations, small portfolios, and larger portfolios.
Speaker #2: Particularly when a large deal spans several markets and geographies. We've also shown that, in certain strategic situations, paying higher prices can be justified for performing assets that have newer physical plants.
Speaker #2: And while some of those deals may take a bit longer to generate the returns we expect, we've seen these deals pay off over time as our operators implement the proper clinical systems and cultural changes.
Speaker #2: In the Stonehenge acquisition, for example, the purchase price represented a premium over our historical acquisitions in Utah. However, the high quality of the assets, the strong clinical and financial performance, as well as the synergies with our existing footprint in several markets, justified a higher price while still leaving room for midterm and long-term upside.
Chad Keetch: However, the high quality of the assets, the strong clinical and financial performance, as well as the synergies with our existing footprint in several markets justified a higher price while still leaving room for midterm and long-term upside. And yet, just a few months after closing, these operations are performing well ahead of schedule and contributing to both the strength of our clusters in Utah and the company's overall performance. While we certainly will continue to evaluate and consider any deal that's out there, we are also very comfortable growing the way we've grown this year, with lots of transactions across many states, including small deals to larger portfolios and, where it makes sense, higher-priced strategic assets.
Chad Keetch: However, the high quality of the assets, the strong clinical and financial performance, as well as the synergies with our existing footprint in several markets justified a higher price while still leaving room for midterm and long-term upside. And yet, just a few months after closing, these operations are performing well ahead of schedule and contributing to both the strength of our clusters in Utah and the company's overall performance. While we certainly will continue to evaluate and consider any deal that's out there, we are also very comfortable growing the way we've grown this year, with lots of transactions across many states, including small deals to larger portfolios and, where it makes sense, higher-priced strategic assets.
Speaker #2: And yet, just a few months after closing, these operations are performing well ahead of schedule and contributing to both the strength of our clusters in Utah and the company's overall performance.
Speaker #2: While we certainly will continue to evaluate and consider any deal that's out there, we are also very comfortable growing the way we've grown this year.
Speaker #2: With lots of transactions across many states, including small deals to larger portfolios, and, where it makes sense, higher-price strategic assets. As we look at the current pipeline, we continue to see opportunities that include everything from larger portfolios to landlords looking to replace current tenants, nonprofits looking to divest of their post-acute assets, and a steady flow of our traditional onesie-twosies.
Chad Keetch: As we look at the current pipeline, we continue to see opportunities that include everything from larger portfolios, landlords looking to replace current tenants, nonprofits looking to divest of their post-acute assets, and a steady flow of our traditional onesies-twosies. We have several new additions lining up for Q1 of 2026, and our local leadership teams and their deal partners here at the service center are working together to source, underwrite, and carefully select the right opportunities. We continue to have lots of success in closing deals with sellers who are not just interested in receiving top dollar but care deeply about the quality and reputation of the company they select to inherit their legacy and choose us because they believe in our mission to dignify post-acute care. We are also pleased to announce a few unique new construction projects we recently completed both in California.
Chad Keetch: As we look at the current pipeline, we continue to see opportunities that include everything from larger portfolios, landlords looking to replace current tenants, nonprofits looking to divest of their post-acute assets, and a steady flow of our traditional onesies-twosies. We have several new additions lining up for Q1 of 2026, and our local leadership teams and their deal partners here at the service center are working together to source, underwrite, and carefully select the right opportunities. We continue to have lots of success in closing deals with sellers who are not just interested in receiving top dollar but care deeply about the quality and reputation of the company they select to inherit their legacy and choose us because they believe in our mission to dignify post-acute care. We are also pleased to announce a few unique new construction projects we recently completed both in California.
Speaker #2: We have several new additions lining up for Q1 of 2026, and our local leadership teams and their deal partners here at the service center are working together to source, underwrite, and carefully select the right opportunities.
Speaker #2: We continue to have a lot of success in closing deals with sellers who are not just interested in receiving top dollar, but who care deeply about the quality and reputation of the company they select to inherit their legacy. They choose us because they believe in our mission to dignify post-acute care.
Speaker #2: We are also pleased to announce a few unique new construction projects we recently completed, both in California. The first project involved working together with Omega Healthcare REIT to take advantage of several acres of vacant land on one of our leased properties.
Chad Keetch: The first project involved working together with Omega Healthcare REIT to take advantage of several acres of vacant land on one of our leased properties. With their support and the expertise of our team of healthcare construction experts, we completed a 40-bed addition at Vista Knoll Specialized Healthcare in Vista, California. The expansion added much-needed capacity to our specialty care unit and significantly strengthened our ability to meet the community's growing needs. Only a few months after opening, the new wing has already achieved 98.3% occupancy. We are also thrilled to have recently completed the construction and obtained the license to operate a replacement facility to one of our high-performing skilled nursing operations in San Diego County. Grossmont Post-Acute in La Mesa, California, which is located next to Sharp Grossmont Hospital, is a pillar of the local La Mesa healthcare community.
Chad Keetch: The first project involved working together with Omega Healthcare REIT to take advantage of several acres of vacant land on one of our leased properties. With their support and the expertise of our team of healthcare construction experts, we completed a 40-bed addition at Vista Knoll Specialized Healthcare in Vista, California. The expansion added much-needed capacity to our specialty care unit and significantly strengthened our ability to meet the community's growing needs. Only a few months after opening, the new wing has already achieved 98.3% occupancy. We are also thrilled to have recently completed the construction and obtained the license to operate a replacement facility to one of our high-performing skilled nursing operations in San Diego County. Grossmont Post-Acute in La Mesa, California, which is located next to Sharp Grossmont Hospital, is a pillar of the local La Mesa healthcare community.
Speaker #2: With their support, and the expertise of our team of healthcare construction experts, we completed a 40-bed addition at Vista Knoll Specialized Healthcare in Vista, California.
Speaker #2: The expansion added much-needed capacity to our specialty care unit and significantly strengthened our ability to meet the community's growing needs. Only a few months after opening, the new wing has already achieved 98.3% occupancy.
Speaker #2: We are also thrilled to have recently completed the construction and obtained the license to operate a replacement facility for one of our high-performing skilled nursing operations in San Diego County.
Speaker #2: Grossmont Post-Acute in La Mesa, California, which is located next to Sharp Grossmont Hospital, is a pillar of the local La Mesa healthcare community. But the operation was housed in an aging building, and the landlord had determined to replace that aging building with new medical office space.
Chad Keetch: But the operation was housed in an aging building, and the landlord had determined to replace that aging building with new medical office space. Several years ago, we acquired land next door and endeavored to build a brand new replacement building across the street from the original location. After several years and lots of hard work, we successfully completed the construction and will be moving all the patients and staff to a brand new state-of-the-art building that will replace the old building while also adding 15 beds to the original license. We are thrilled for the city of La Mesa that we were able to find a way to continue at considerable investment to provide these critical post-acute services to the community for decades to come.
Chad Keetch: But the operation was housed in an aging building, and the landlord had determined to replace that aging building with new medical office space. Several years ago, we acquired land next door and endeavored to build a brand new replacement building across the street from the original location. After several years and lots of hard work, we successfully completed the construction and will be moving all the patients and staff to a brand new state-of-the-art building that will replace the old building while also adding 15 beds to the original license. We are thrilled for the city of La Mesa that we were able to find a way to continue at considerable investment to provide these critical post-acute services to the community for decades to come.
Speaker #2: Several years ago, we acquired land next door and endeavored to build a brand-new replacement building across the street from the original location. After several years and lots of hard work, we successfully completed the construction and will be moving all the patients and staff to a brand-new, state-of-the-art building that will replace the old building while also adding 15 beds to the original license.
Speaker #2: We are thrilled for the city of La Mesa that we were able to find a way to continue, at considerable investment, to provide these critical post-acute services to the community for decades to come.
Speaker #2: We are also grateful for the support of our partners at Sharp Grossmont Hospital, and look forward to finding ways to continue to provide service to their patients.
Chad Keetch: We are also grateful for the support of our partners at Sharp Grossmont Hospital and look forward to finding ways to continue to provide service to their patients. Both cases illustrate that there are several ways that we can carefully and selectively invest our capital to enhance our service offerings to the communities we serve. We will continue to look for opportunities to add beds to successful operations and, where appropriate, to invest in newer construction in markets we know well. Our local leaders continue to recruit future CEOs for Ensign-affiliated operations, and we have a deep bench of CEOs in training that are eagerly preparing for their opportunity to lead. During the quarter, we again reached an all-time high for AITs in our pipeline. This high-quality influx of leadership talent, combined with our decentralized transition model, allows us to grow without being limited by typical corporate bottlenecks.
Chad Keetch: We are also grateful for the support of our partners at Sharp Grossmont Hospital and look forward to finding ways to continue to provide service to their patients. Both cases illustrate that there are several ways that we can carefully and selectively invest our capital to enhance our service offerings to the communities we serve. We will continue to look for opportunities to add beds to successful operations and, where appropriate, to invest in newer construction in markets we know well. Our local leaders continue to recruit future CEOs for Ensign-affiliated operations, and we have a deep bench of CEOs in training that are eagerly preparing for their opportunity to lead. During the quarter, we again reached an all-time high for AITs in our pipeline. This high-quality influx of leadership talent, combined with our decentralized transition model, allows us to grow without being limited by typical corporate bottlenecks.
Speaker #2: Both cases illustrate that there are several ways we can carefully and selectively invest our capital to enhance our service offerings to the communities we serve.
Speaker #2: We will continue to look for opportunities to add beds to successful operations and, where appropriate, to invest in newer construction in markets we know well.
Speaker #2: Our local leaders continue to recruit future CEOs for Ensign-affiliated operations, and we have a deep bench of CEOs in training who are eagerly preparing for their opportunity to lead.
Speaker #2: During the quarter, we again reached an all-time high for AITs in our pipeline. This high-quality influx of leadership talent, combined with our decentralized transition model, allows us to grow without being limited by typical corporate bottlenecks.
Speaker #2: We also continue to store enough dry powder on our balance sheet to fund a significant amount of growth, including adding even more real estate assets to our portfolio.
Chad Keetch: We also continue to store enough dry powder on our balance sheet to fund a significant amount of growth, including adding even more real estate assets to our portfolio. Therefore, our unique acquisition and transition strategy puts us in an excellent position to continue growing in a healthy and sustainable way. Lastly, we are also pleased with the continued growth of Standard Bearer, which added 12 new assets during the quarter and since. Standard Bearer is now comprised of 154 owned properties, of which 120 are leased to an Ensign-affiliated operator and 35 which are leased to third-party operators. We were excited to add to our growing list of relationships with unaffiliated operators, which further diversifies our tenant base and helps our organization as a whole continue to advance our mission by working closely with like-minded operators that want to make a difference in this industry.
Chad Keetch: We also continue to store enough dry powder on our balance sheet to fund a significant amount of growth, including adding even more real estate assets to our portfolio. Therefore, our unique acquisition and transition strategy puts us in an excellent position to continue growing in a healthy and sustainable way. Lastly, we are also pleased with the continued growth of Standard Bearer, which added 12 new assets during the quarter and since. Standard Bearer is now comprised of 154 owned properties, of which 120 are leased to an Ensign-affiliated operator and 35 which are leased to third-party operators. We were excited to add to our growing list of relationships with unaffiliated operators, which further diversifies our tenant base and helps our organization as a whole continue to advance our mission by working closely with like-minded operators that want to make a difference in this industry.
Speaker #2: Therefore, our unique acquisition and transition strategy puts us in an excellent position to continue growing in a healthy and sustainable way. Lastly, we are also pleased with the continued growth of Standard Bear, which added 12 new assets during the quarter and since.
Speaker #2: Standard Bear is now comprised of 154 owned properties, of which 120 are leased to an Ensign-affiliated operator and 35 are leased to third-party operators.
Speaker #2: We were excited to add to our growing list of relationships with unaffiliated operators, which further diversifies our tenant base and helps our organization as a whole continue to advance our mission by working closely with like-minded operators that want to make a difference in this industry.
Speaker #2: Going forward, StandardBear will work together with our existing operating partners and new relationships we're developing, in order to acquire portfolios comprised of operations that Ensign would operate and facilities that high-quality third parties are interested in operating under a lease.
Chad Keetch: Going forward, Standard Bearer will work together with our existing operating partners and new relationships we are developing in order to acquire portfolios comprised of operations that Ensign would operate and facilities that high-quality third parties are interested in operating under a lease. Collectively, Standard Bearer generated rental revenue of $34.5 million for the quarter, of which $29.3 million was derived from Ensign-affiliated operations. For the quarter, Standard Bearer reported $20.4 million in FFO and, as of the end of the quarter, had an EBITDA-to-rent coverage ratio of 2.6 times. With that, I'll turn the call over to Spencer, our COO, to add more color around operations. Spencer?
Chad Keetch: Going forward, Standard Bearer will work together with our existing operating partners and new relationships we are developing in order to acquire portfolios comprised of operations that Ensign would operate and facilities that high-quality third parties are interested in operating under a lease. Collectively, Standard Bearer generated rental revenue of $34.5 million for the quarter, of which $29.3 million was derived from Ensign-affiliated operations. For the quarter, Standard Bearer reported $20.4 million in FFO and, as of the end of the quarter, had an EBITDA-to-rent coverage ratio of 2.6 times. With that, I'll turn the call over to Spencer, our COO, to add more color around operations. Spencer?
Speaker #2: Collectively, StandardBear generated rental revenue of $34.5 million for the quarter, of which $29.3 million was derived from Enzyme-affiliated operations. For the quarter, StandardBear reported $20.4 million in FFO, and as of the end of the quarter, had an EBITDA to rent coverage ratio of 2.6 times.
Speaker #2: And with that, I'll turn the call over to Spencer, our COO, to add more color around operations. Spencer? Thanks, Chad, and hello everyone. I wanted to share two outstanding operations that have achieved sustained financial growth due to their consistent emphasis on clinical outcomes and staff development.
Spencer Burton: Thanks, Chad, and hello, everyone. I wanted to share two outstanding operations that have achieved sustained financial growth due to their consistent emphasis on clinical outcomes and staff development. South Bay Post-Acute, located near San Diego, California, is a 98-bed skilled nursing operation that has been an Ensign affiliate since 2014. Like many of our same-store operations, the South Bay team, led by CEO Lisa Simmons and COO Connie Narvaez, maintains a consistent focus on improving both clinical and financial performance year after year. The facility has long been recognized for strong quality outcomes, as reflected in its five-star CMS ratings for quality measures, health inspections, and overall performance. Over the past year, the team identified an opportunity to expand its community impact by developing specialized capabilities to care for bariatric patients, a growing but historically underserved population in post-acute care.
Spencer Burton: Thanks, Chad, and hello, everyone. I wanted to share two outstanding operations that have achieved sustained financial growth due to their consistent emphasis on clinical outcomes and staff development. South Bay Post-Acute, located near San Diego, California, is a 98-bed skilled nursing operation that has been an Ensign affiliate since 2014. Like many of our same-store operations, the South Bay team, led by CEO Lisa Simmons and COO Connie Narvaez, maintains a consistent focus on improving both clinical and financial performance year after year. The facility has long been recognized for strong quality outcomes, as reflected in its five-star CMS ratings for quality measures, health inspections, and overall performance. Over the past year, the team identified an opportunity to expand its community impact by developing specialized capabilities to care for bariatric patients, a growing but historically underserved population in post-acute care.
Speaker #2: South Bay Post-Acute, located near San Diego, California, is a 98-bed skilled nursing operation that has been an Enzyme-affiliate since 2014. Like many of our same-store operations, the South Bay team, led by CEO Lisa Simmons and COO Connie Narvaez, maintains a consistent focus on improving both clinical and financial performance year after year.
Speaker #2: The facility has long been recognized for strong quality outcomes, as reflected in its five-star CMS ratings for quality measures, health inspections, and overall performance.
Speaker #2: Over the past year, the team identified an opportunity to expand its community impact by developing specialized capabilities to care for bariatric patients—a growing but historically underserved population in post-acute care.
Speaker #2: Successfully serving this population required a disciplined clinical and operational strategy. The facility leadership team started by visiting a highly successful Ensign-affiliate that has become the top-performing bariatric operation in Arizona.
Spencer Burton: Successfully serving this population required a disciplined clinical and operational strategy. The facility leadership team started by visiting a highly successful Ensign affiliate that has become the top-performing bariatric operation in Arizona. Building on what they learned, South Bay remodeled rooms, invested in specialized equipment, and engaged both external experts and its in-house therapy team to develop protocols and provide staff training to safely and effectively treat bariatric patients. The team also expanded behavioral health support and implemented both group and individual therapies tailored to this population. By addressing the clinical and operational challenges that hospitals face when placing bariatric patients, South Bay positioned itself as a reliable solution for complex discharges. These efforts contributed to both improved patient outcomes and measurable reputational improvement. Health plans and referring acute partners have taken note, and South Bay has recently been awarded additional high-reimbursement contracts.
Spencer Burton: Successfully serving this population required a disciplined clinical and operational strategy. The facility leadership team started by visiting a highly successful Ensign affiliate that has become the top-performing bariatric operation in Arizona. Building on what they learned, South Bay remodeled rooms, invested in specialized equipment, and engaged both external experts and its in-house therapy team to develop protocols and provide staff training to safely and effectively treat bariatric patients. The team also expanded behavioral health support and implemented both group and individual therapies tailored to this population. By addressing the clinical and operational challenges that hospitals face when placing bariatric patients, South Bay positioned itself as a reliable solution for complex discharges. These efforts contributed to both improved patient outcomes and measurable reputational improvement. Health plans and referring acute partners have taken note, and South Bay has recently been awarded additional high-reimbursement contracts.
Speaker #2: Building on what they learned, South Bay remodeled rooms, invested in specialized equipment, and engaged both external experts and its in-house therapy team to develop protocols and provide staff training to safely and effectively treat bariatric patients.
Speaker #2: The team also expanded behavioral health support and implemented both group and individual therapies tailored to this population. By addressing the clinical and operational challenges that hospitals face when placing bariatric patients, South Bay positioned itself as a reliable solution for complex discharges.
Speaker #2: These efforts contributed to both improved patient outcomes and measurable reputational improvement. Health plans and referring acute partners have taken note, and South Bay has recently been awarded additional high-reimbursement contracts.
Speaker #2: These clinical accomplishments have inevitably resulted in financial growth. In the fourth quarter, earnings before income tax increased 127% compared to the prior year quarter.
Spencer Burton: These clinical accomplishments have inevitably resulted in financial growth. In Q4, earnings before income tax increased 127% compared to the prior-year quarter. Notably, this growth occurred in an operation that transitioned more than a decade ago and entered the year with very high occupancy. While overall occupancy increased modestly from 96% to 97%, the more meaningful impact occurred in payer and acuity mix. Skilled revenue mix increased 25%, driven in part by an 86% increase in Medicare days, while managed care volume grew 22%. With a continued focus on staff well-being and comprehensive, high-quality care, the South Bay team is demonstrating how clinical specialization can drive sustainable occupancy, skilled mix improvement, and financial performance and allow a longtime affiliate to elevate year-over-year results a decade after acquisition. The second highlight is Shoreline Health and Rehabilitation, located in North Seattle, Washington.
Spencer Burton: These clinical accomplishments have inevitably resulted in financial growth. In Q4, earnings before income tax increased 127% compared to the prior-year quarter. Notably, this growth occurred in an operation that transitioned more than a decade ago and entered the year with very high occupancy. While overall occupancy increased modestly from 96% to 97%, the more meaningful impact occurred in payer and acuity mix. Skilled revenue mix increased 25%, driven in part by an 86% increase in Medicare days, while managed care volume grew 22%. With a continued focus on staff well-being and comprehensive, high-quality care, the South Bay team is demonstrating how clinical specialization can drive sustainable occupancy, skilled mix improvement, and financial performance and allow a longtime affiliate to elevate year-over-year results a decade after acquisition. The second highlight is Shoreline Health and Rehabilitation, located in North Seattle, Washington.
Speaker #2: Notably, this growth occurred in an operation that transitioned more than a decade ago and entered the year with very high occupancy. While overall occupancy increased modestly from 96% to 97%, the more meaningful impact occurred in payer and acuity mix.
Speaker #2: Skilled revenue mix increased 25%, driven in part by an 86% increase in Medicare days, while managed care volume grew 22%. With the continued focus on staff well-being and comprehensive, high-quality care, the South Bay team has demonstrated how clinical specialization can drive sustainable occupancy, skilled mix improvement, and financial performance.
Speaker #2: And allow a long-time affiliate to elevate year-over-year results a decade after acquisition. The second highlight is Shoreline Health and Rehabilitation, located in North Seattle, Washington.
Speaker #2: This is an example of an operation that recently moved from the transitioning category. Since acquisition, the 114-bed skilled nursing operation has been led by CEO Clayton South and COO Ruby, maintaining a disciplined focus on finding, developing, and retaining exceptional care staff.
Spencer Burton: This is an example of an operation that recently moved from transitioning into our same-store category. Since acquisition, the 114-bed skilled nursing operation has been led by CEO Clayton South and COO Ruby Corp. Shoreline is an excellent example of maintaining a disciplined focus on finding, developing, and retaining exceptional care staff. For example, in 2025, the facility's CMS nursing turnover rate was 60% lower than the state average, and the tenure of frontline staff was over seven years on average, remarkable in an industry that is challenged by high turnover. This resulted in significant decreases in overtime costs and allowed Shoreline to operate with zero registry staffing for the second consecutive year. Having stable, satisfied staff results in better care, fewer patients returning to acute hospitals, and cost savings for health plans and hospital systems alike.
Spencer Burton: This is an example of an operation that recently moved from transitioning into our same-store category. Since acquisition, the 114-bed skilled nursing operation has been led by CEO Clayton South and COO Ruby Corp. Shoreline is an excellent example of maintaining a disciplined focus on finding, developing, and retaining exceptional care staff. For example, in 2025, the facility's CMS nursing turnover rate was 60% lower than the state average, and the tenure of frontline staff was over seven years on average, remarkable in an industry that is challenged by high turnover. This resulted in significant decreases in overtime costs and allowed Shoreline to operate with zero registry staffing for the second consecutive year. Having stable, satisfied staff results in better care, fewer patients returning to acute hospitals, and cost savings for health plans and hospital systems alike.
Speaker #2: For example, in 2025, the facility's CMS nursing turnover rate was 60% lower than the state average, and the tenure of frontline staff was over seven years, on average.
Speaker #2: Remarkable in an industry that is challenged by high turnover. This resulted in significant decreases in overtime costs and allowed Shoreline to operate with zero registry staffing for the second consecutive year.
Speaker #2: Having stable, satisfied staff results in better care, fewer patients, and cost savings for health plans and hospital systems alike. Throughout the year, Shoreline served as a preferred provider within the Providence, Swedish, and University of Washington health systems, which allowed facility leaders to meet monthly with acute providers and learn ways to become the solution to their challenges.
Spencer Burton: Throughout the year, Shoreline served as a preferred provider within the Providence, Swedish, and University of Washington Health Systems, which allowed facility leaders to meet monthly with acute providers and learn ways to become the solution to their challenges. A clear example of this partnership occurred when the hospitals expressed difficulty placing patients requiring TPN, a complex and resource-intensive service that is normally provided only in the acute care setting. Ruby and her team evaluated the clinical requirements, implemented additional staff training, and coordinated closely with their physician group and pharmacy partners. As a result, Shoreline is now the only facility in the North Seattle area accepting TPN patients. This capability has also driven admissions across a broader range of skilled diagnoses.
Spencer Burton: Throughout the year, Shoreline served as a preferred provider within the Providence, Swedish, and University of Washington Health Systems, which allowed facility leaders to meet monthly with acute providers and learn ways to become the solution to their challenges. A clear example of this partnership occurred when the hospitals expressed difficulty placing patients requiring TPN, a complex and resource-intensive service that is normally provided only in the acute care setting. Ruby and her team evaluated the clinical requirements, implemented additional staff training, and coordinated closely with their physician group and pharmacy partners. As a result, Shoreline is now the only facility in the North Seattle area accepting TPN patients. This capability has also driven admissions across a broader range of skilled diagnoses.
Speaker #2: A clear example of this partnership occurred when the hospital expressed difficulty placing patients requiring TPN, a complex and resource-intensive service that is normally provided only in the acute care setting.
Speaker #2: Ruby and her team evaluated the clinical requirements, implemented additional staff training, and coordinated closely with their physician group and pharmacy partners. As a result, Shoreline is now the only facility in the North Seattle area accepting TPN patients.
Speaker #2: This capability has also driven admissions across a broader range of skilled diagnoses. By investing in its workforce and positioning itself as a solution to hospital discharge constraints, Shoreline continues to strengthen its standing as a high-performing, clinically sophisticated provider of choice in its market.
Spencer Burton: By investing in its workforce and positioning itself as a solution to hospital discharge constraints, Shoreline continues to strengthen its standing as a high-performing, clinically sophisticated provider of choice in its market. As a result of all those efforts, the Shoreline team achieved record financial performance for four consecutive quarters. In Q4, Shoreline's revenues increased by 11% compared to the prior-year quarter, while EBIT rose by nearly 33% over the same period. While overall occupancy growth was modest and occupancy remains below 74%, the team executed on their strategy to increase clinical capabilities and care for higher acuity skilled patients, which allowed skilled revenue mix to grow to 70%. Medicare days increased 24%, and managed care improved 103% over prior-year quarter. Because of this acuity strategy, Shoreline accomplished record results in 2025 and has significant opportunity to continue to increase occupancy and grow results long into the future.
Spencer Burton: By investing in its workforce and positioning itself as a solution to hospital discharge constraints, Shoreline continues to strengthen its standing as a high-performing, clinically sophisticated provider of choice in its market. As a result of all those efforts, the Shoreline team achieved record financial performance for four consecutive quarters. In Q4, Shoreline's revenues increased by 11% compared to the prior-year quarter, while EBIT rose by nearly 33% over the same period. While overall occupancy growth was modest and occupancy remains below 74%, the team executed on their strategy to increase clinical capabilities and care for higher acuity skilled patients, which allowed skilled revenue mix to grow to 70%. Medicare days increased 24%, and managed care improved 103% over prior-year quarter.
Speaker #2: As a result of all those efforts, the Shoreline team achieved record financial performance for four consecutive quarters. In Q4, Shoreline's revenues increased by 11% compared to the prior-year quarter.
Speaker #2: EBIT rose by nearly 33% over the same period. While overall occupancy growth was modest and occupancy remains below 74%, the team executed on their strategy to increase clinical capabilities and care for higher-acuity skilled patients, which allowed skilled revenue mix to grow to 70%.
Speaker #2: Medicare days increased 24%, and managed care improved 103% over the prior year quarter. Because of this acuity strategy, Shoreline accomplished record results in 2025 and has significant opportunity to continue to increase occupancy and grow results long into the future.
Spencer Burton: Because of this acuity strategy, Shoreline accomplished record results in 2025 and has significant opportunity to continue to increase occupancy and grow results long into the future. With that, I'll turn the time over to Suzanne to provide more detail on the company's financial performance and our guidance, and then we'll open up for some questions. Suzanne?
Speaker #2: With that, I'll turn the time over to Suzanne to provide more detail on the company's financial performance and our guidance, and then we'll open it up for some questions.
Spencer Burton: With that, I'll turn the time over to Suzanne to provide more detail on the company's financial performance and our guidance, and then we'll open up for some questions. Suzanne?
Speaker #2: Suzanne? Thank you, Spencer, and good morning, everyone. Detailed financials for the year and the quarter are contained in our 10-K and press release filed yesterday.
Suzanne Snapper: Thank you, Spencer, and good morning, everyone. Detailed financials for the year and the quarter are contained in our 10-K and press release filed yesterday. Some additional highlights for the year and the quarter compared to the prior year include the following: For the year, GAAP diluted earnings per share was $5.84, an increase of 14.1%. Adjusted diluted earnings per share was $6.57, an increase of 19.5%. Consolidated revenue was $5.1 billion, an increase of 18.7%. GAAP net income was $344 million, an increase of 15.4%. Adjusted net income was $386.6 million, an increase of 20.6%. For the quarter, GAAP diluted earnings per share was $1.61, an increase of 18.4%. Adjusted diluted earnings per share was $1.82, an increase of 22.1%. Consolidated revenue was $1.4 billion, an increase of 20.2%. GAAP net income was $95.5 million, an increase of 19.8%. Adjusted net income was $107.8 million, an increase of 23.2%.
Suzanne Snapper: Thank you, Spencer, and good morning, everyone. Detailed financials for the year and the quarter are contained in our 10-K and press release filed yesterday. Some additional highlights for the year and the quarter compared to the prior year include the following: For the year, GAAP diluted earnings per share was $5.84, an increase of 14.1%. Adjusted diluted earnings per share was $6.57, an increase of 19.5%. Consolidated revenue was $5.1 billion, an increase of 18.7%. GAAP net income was $344 million, an increase of 15.4%. Adjusted net income was $386.6 million, an increase of 20.6%. For the quarter, GAAP diluted earnings per share was $1.61, an increase of 18.4%. Adjusted diluted earnings per share was $1.82, an increase of 22.1%. Consolidated revenue was $1.4 billion, an increase of 20.2%. GAAP net income was $95.5 million, an increase of 19.8%. Adjusted net income was $107.8 million, an increase of 23.2%.
Speaker #2: Some additional highlights for the year and the quarter compared to the prior year include the following: For the year, GAAP diluted earnings per share was 14.1%.
Speaker #2: $5.84, an increase. Adjusted diluted earnings per share was $6.57, an increase of 19.5%. Consolidated revenue was $5.1 billion, an increase of 18.7%. GAAP net income was $344 million, an increase of 15.4%.
Speaker #2: And adjusted net income was $386.6 million, an increase of 20.6%. For the quarter, GAAP diluted earnings per share was $1.61, an increase of 18.4%.
Speaker #2: Adjusted diluted earnings per share was $1.82, an increase of 22.1%. Consolidated revenue was $1.4 billion, an increase of 20.2%. GAAP net income was $95.5 million, an increase of 19.8%.
Speaker #2: Adjusted net income was $107.8 million, an increase of 23.2%. Other key metrics as of December 31, 2025, include cash and cash equivalents of $504 million, and cash flow from operations of $564 million.
Suzanne Snapper: Other key metrics as of 31 December 2025 include cash and cash equivalents of $504 million and cash flow from operations of $564 million. During 2025, we spent more than $500 million to execute on our strategic growth plans. We made these investments from a position of strength as shown by our record low lease-adjusted net debt-to-EBITDA ratio of 1.77x after taking these investments into consideration. Our continued ability to maintain low leverage even during periods of significant acquisition is particularly noteworthy and demonstrates our commitment to disciplined growth, as well as our belief that we can continue to achieve sustainable growth in the long run. In addition, we have more than $590 million available on our line of credit, which, when combined with our cash on our balance sheet, gives us over a billion dollars in dry powder for future investments.
Suzanne Snapper: Other key metrics as of 31 December 2025 include cash and cash equivalents of $504 million and cash flow from operations of $564 million. During 2025, we spent more than $500 million to execute on our strategic growth plans. We made these investments from a position of strength as shown by our record low lease-adjusted net debt-to-EBITDA ratio of 1.77x after taking these investments into consideration. Our continued ability to maintain low leverage even during periods of significant acquisition is particularly noteworthy and demonstrates our commitment to disciplined growth, as well as our belief that we can continue to achieve sustainable growth in the long run. In addition, we have more than $590 million available on our line of credit, which, when combined with our cash on our balance sheet, gives us over a billion dollars in dry powder for future investments.
Speaker #2: During 2025, we spent more than $500 million to execute on our strategic growth plans. We made these investments from a position of strength, as shown by our record low lease-adjusted net debt to EBITDA ratio of 1.77 times, after taking these investments into consideration.
Speaker #2: Our continued ability to maintain low leverage, even during periods of significant acquisition, is particularly noteworthy and demonstrates our commitment to disciplined growth, as well as our belief that we can continue to achieve sustainable growth in the long run.
Speaker #2: In addition, we have more than $590 million available on our line of credit, which, when combined with the cash on our balance sheet, gives us over $1 billion in dry powder for future investments.
Suzanne Snapper: We also own 160 assets, 136 of which are completely debt-free. They are gaining significant value over time and adding even more liquidity to help with future growth. During the quarter, the company increased its dividend for the 23rd consecutive year and paid a quarterly cash dividend of $0.065 per common share. We have a long history of paying dividends, and as the company's liquidity remains strong, we plan to continue our long history of paying dividends into the future. As Barry mentioned, we provided our annual 2026 earnings guidance between $7.41 to $7.61 per diluted share and our annual revenue guidance between $5.77 billion and $5.84 billion.
Suzanne Snapper: We also own 160 assets, 136 of which are completely debt-free. They are gaining significant value over time and adding even more liquidity to help with future growth. During the quarter, the company increased its dividend for the 23rd consecutive year and paid a quarterly cash dividend of $0.065 per common share. We have a long history of paying dividends, and as the company's liquidity remains strong, we plan to continue our long history of paying dividends into the future. As Barry mentioned, we provided our annual 2026 earnings guidance between $7.41 to $7.61 per diluted share and our annual revenue guidance between $5.77 billion and $5.84 billion.
Speaker #2: We also own 160 assets, 136 of which are completely debt-free. They are gaining significant value over time and adding even more liquidity to help with future growth.
Speaker #2: During the quarter, the company increased its dividend for the 23rd consecutive year and paid a quarterly cash dividend of $0.065 per common share.
Speaker #2: We have a long history of paying dividends, and we plan to continue our long history of paying dividends into the future. As Barry mentioned, we provided our annual 2026 earnings guidance between $7.41 to $7.61 per diluted share, and our annual revenue guidance between $5.77 billion and $5.84 billion.
Speaker #2: We have evaluated multiple scenarios, and based upon our strength, our performance, and positive momentum, we have seen an improvement in occupancy and skilled mix, as well as continued progress on labor, agency management, and other operational initiatives. The company's liquidity remains strong.
Suzanne Snapper: We have evaluated multiple scenarios, and based upon our strength in our performance and positive momentum we have seen in occupancy and skilled mix, as well as continued progress on labor, agency management, and other operational initiatives, we have confidence that we can achieve these results. Our 2026 guidance is based on diluted weighted average common shares outstanding of approximately $60 million, a tax rate of 25%, the inclusion of acquisition closed and expected to be closed during Q1 2026, the inclusion of management's expectation for reimbursement rates, with the primary exclusions coming from stock-based compensation and amortization of system implementation costs.
Suzanne Snapper: We have evaluated multiple scenarios, and based upon our strength in our performance and positive momentum we have seen in occupancy and skilled mix, as well as continued progress on labor, agency management, and other operational initiatives, we have confidence that we can achieve these results. Our 2026 guidance is based on diluted weighted average common shares outstanding of approximately $60 million, a tax rate of 25%, the inclusion of acquisition closed and expected to be closed during Q1 2026, the inclusion of management's expectation for reimbursement rates, with the primary exclusions coming from stock-based compensation and amortization of system implementation costs.
Speaker #2: We have confidence that we can achieve these results. Our 2026 guidance is based on diluted weighted average common shares outstanding of approximately 60 million, a tax rate of 25%, the inclusion of acquisition close, expected to be closed during the first quarter of 2026, and the inclusion of management's expectation for reimbursement rates, with primary exclusions coming from stock-based compensation and amortization of system implementation costs.
Speaker #2: Other factors that could impact quarterly performance include variations in reimbursement systems, delays in changes in state budgets, seasonality in occupancy and skilled mix, the influence of the general economy on census and staffing, short-term impact of our acquisition activities, variations in insurance withdrawals, and other factors.
Suzanne Snapper: Other factors that could impact quarterly performance include variations in reimbursement systems, delays and changes in state budgets, seasonality in occupancy and skilled mix, the influence of the general economy on census and staffing, short-term impact of our acquisition activities, variations in insurance with growth, and other factors. Now I'll turn it back over to Barry. Barry?
Suzanne Snapper: Other factors that could impact quarterly performance include variations in reimbursement systems, delays and changes in state budgets, seasonality in occupancy and skilled mix, the influence of the general economy on census and staffing, short-term impact of our acquisition activities, variations in insurance with growth, and other factors. Now I'll turn it back over to Barry. Barry?
Speaker #2: And now, I'll turn it back over to Barry. Barry?
Speaker #3: Thanks, Suzanne. As we wrap up, we can emphasize how incredibly honored and grateful we are to work alongside our operational leaders, and our Service Center team here that are behind these record-setting results.
Barry Port: Thanks, Suzanne. As we wrap up, we can't emphasize enough how incredibly honored and grateful we are to work alongside our operational leaders and our service center team here that are behind these record-setting results. We never cease to be amazed by their impressive resiliency as they focus on supporting one another in new and innovative ways. Their commitment has blessed the lives of so many, including our own, and we're excited about our future because of these amazing partners. We have complete faith in them and the culture that they've collectively built. With that, we'll turn it over to our Q&A portion of the call. Operator, will you please provide instructions on the Q&A?
Barry Port: Thanks, Suzanne. As we wrap up, we can't emphasize enough how incredibly honored and grateful we are to work alongside our operational leaders and our service center team here that are behind these record-setting results. We never cease to be amazed by their impressive resiliency as they focus on supporting one another in new and innovative ways. Their commitment has blessed the lives of so many, including our own, and we're excited about our future because of these amazing partners. We have complete faith in them and the culture that they've collectively built. With that, we'll turn it over to our Q&A portion of the call. Operator, will you please provide instructions on the Q&A?
Speaker #3: We never cease to be amazed by their supporting one another in new and innovative ways. Their commitment, impressive resiliency as they focus on, has blessed the lives of so many, including our own, and we're excited about our future because of these amazing partners.
Speaker #3: We have complete faith in them and the culture that they've collectively built. And with that, we'll turn it over to our Q&A portion of the call.
Speaker #3: Instructions from the operator, will you please provide?
Speaker #3: Q&A? We will now begin the Q&A session.
Operator: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand now. If you have dialed into today's call, please press star 9 to raise your hand and star 6 to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Clarke Murphy with Truist Securities. Your line is open. Please go ahead.
Operator: We will now begin the question-and-answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand now. If you have dialed into today's call, please press star 9 to raise your hand and star 6 to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Clarke Murphy with Truist Securities. Your line is open. Please go ahead.
Speaker #4: Question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand now.
Speaker #4: If you have dialed into today's call, please press star 9 to raise your hand and star 6 to unmute. Please stand by while we compile the Q&A roster.
Speaker #4: Your first question comes from the line of Clark Murphy with Truist Securities. Your line is open. Please go ahead.
Speaker #5: Hey, everyone. Thanks for taking my questions and congrats on the quarter and the guide. I just wanted to start out on M&A. It sounds like you're perhaps with a more diverse group of sellers than before, seeing some more opportunities come around like you've talked about in the past.
Clarke Murphy: Hey, everyone. Thanks for taking my questions and congrats on the quarter and the guide. Just wanted to start out on M&A. It sounds like you're perhaps seeing some more opportunities come around with a more diverse group of sellers than you've talked about in the past. So can you guys just talk about what you're seeing in terms of the pipeline valuations, etc.? And has anything changed about how you guys are approaching opportunities? And then finally, just are there any markets or geographies in particular where you're seeing opportunity?
Clarke Murphy: Hey, everyone. Thanks for taking my questions and congrats on the quarter and the guide. Just wanted to start out on M&A. It sounds like you're perhaps seeing some more opportunities come around with a more diverse group of sellers than you've talked about in the past. So can you guys just talk about what you're seeing in terms of the pipeline valuations, etc.? And has anything changed about how you guys are approaching opportunities? And then finally, just are there any markets or geographies in particular where you're seeing opportunity?
Speaker #5: So, can you guys just talk about what you're seeing in terms of the pipeline valuation that's better? And has anything changed about how you guys are approaching opportunities?
Speaker #5: And then finally, just, are there any markets or geographies in particular where you're seeing
Speaker #5: opportunity? Yeah.
Barry Port: Yeah. I appreciate the question. So we certainly are seeing a pretty healthy pipeline. I would probably describe the market as seller-friendly in terms of values have risen. And I think because of that, a lot of people are bringing their stuff for sale. So we're seeing new deals frequently that are opportunities for us. And yes, I would also say that pricing has definitely gone up. All that said, as I said in my prepared remarks, we are seeing tons of our traditional onesies and twosies and smaller portfolios. And in addition to that, some larger ones. I wouldn't say that the way we've looked at deals has changed. I would just kind of point out, though, again, as we talked about in the prepared remarks, when there are high-quality assets that are newer construction, have higher occupancies, and higher skilled mix, those sometimes deserve a premium.
Barry Port: Yeah. I appreciate the question. So we certainly are seeing a pretty healthy pipeline. I would probably describe the market as seller-friendly in terms of values have risen. And I think because of that, a lot of people are bringing their stuff for sale. So we're seeing new deals frequently that are opportunities for us. And yes, I would also say that pricing has definitely gone up. All that said, as I said in my prepared remarks, we are seeing tons of our traditional onesies and twosies and smaller portfolios. And in addition to that, some larger ones. I wouldn't say that the way we've looked at deals has changed. I would just kind of point out, though, again, as we talked about in the prepared remarks, when there are high-quality assets that are newer construction, have higher occupancies, and higher skilled mix, those sometimes deserve a premium.
Speaker #6: I appreciate the question. So we certainly are seeing a pretty healthy, I would say, market pipeline. I would probably say, in terms of values, values have risen. And I think because of that, a lot of people are bringing their stuff for sale.
Speaker #6: So, we're seeing new deals frequently that are opportunities for us. And yes, I would also say that pricing has definitely gone up. All that said, as I mentioned in my prepared remarks as seller-friendly, we are seeing tons of our traditional onesie-twosies and some smaller, larger ones.
Speaker #6: Portfolios—in addition to that, some of the way we've looked at deals has, I wouldn't say changed. I would just kind of point out, though, again, as we talked about in the prepared remarks, when there are high-quality assets that are newer construction, have higher occupancies, premium.
Speaker #6: And we recently showed that we would do that in the sometimes-deserved Utah acquisition that we closed during the quarter. And so those are performing really well.
Barry Port: We've recently shown that we would do that in the Utah acquisition that we closed during the quarter. Those are performing really well. So for us, when we talk about disciplined growth, we definitely are looking to make sure that there's a pathway both in the short run, medium range, and the long term to create shareholder value. But the total cost of the acquisition, it may, when you're buying an older asset, sometimes the amount you have to spend to bring it up to current standards and then maintain it over time, the CapEx spend can actually be quite heavy. Buying newer assets can be something that we're looking to do. That's not necessarily new, but just wanted to highlight that as something we're seeing. But certainly excited about the opportunities that we have for 2026.
Barry Port: We've recently shown that we would do that in the Utah acquisition that we closed during the quarter. Those are performing really well. So for us, when we talk about disciplined growth, we definitely are looking to make sure that there's a pathway both in the short run, medium range, and the long term to create shareholder value. But the total cost of the acquisition, it may, when you're buying an older asset, sometimes the amount you have to spend to bring it up to current standards and then maintain it over time, the CapEx spend can actually be quite heavy. Buying newer assets can be something that we're looking to do. That's not necessarily new, but just wanted to highlight that as something we're seeing. But certainly excited about the opportunities that we have for 2026.
Speaker #6: So, for we definitely are looking to make sure, when we talk about discipline growth, that there's a pathway both in the short run, medium range, and the long term to create shareholder value.
Speaker #6: But the total cost of the acquisition—it may, when you're buying an older asset, sometimes the amount you have to spend to bring it up to current standards and then maintain it over time—the CapEx spend can actually be quite heavy.
Speaker #6: And so, buying newer assets can be something that we're looking to do. And so that's not necessarily new, but just wanted to highlight that as something we're excited about—the opportunities that we have for 2026.
Speaker #5: Okay, great, thanks. And then, just kind of shifting gears a little bit, can you guys—
Clarke Murphy: Okay. Great. Thanks. And then just kind of shifting gears a little bit, can you guys give us some color on things you're doing on the labor environment? Specifically, your agency labor continues to come down. You guys talked about the director of nursing and the CEOs in training where you continue to have success. Can you just kind of talk about some of the drivers there and how we should think about continued improvement going forward on the labor front? Thanks.
Clarke Murphy: Okay. Great. Thanks. And then just kind of shifting gears a little bit, can you guys give us some color on things you're doing on the labor environment? Specifically, your agency labor continues to come down. You guys talked about the director of nursing and the CEOs in training where you continue to have success. Can you just kind of talk about some of the drivers there and how we should think about continued improvement going forward on the labor front? Thanks.
Speaker #5: Give us some color on seeing.
Speaker #5: Things you're doing on the labor environment, specifically, your agency labor continues to come down? But certainly excited about that. You guys talked about the director of nursing and the CEOs in training, where you continue to have success.
Speaker #5: About some of the drivers there—can you just kind of talk about how we should think about continued... thanks.
Speaker #3: Yeah, great question. A couple of things. I mean, you've got your macro-environmental factors, which can influence, but I'd say the way to think about it is, healthcare—especially for us—is a very locally driven business.
Barry Port: Yeah. Great question. A couple of things. I mean, you've got your macro-environmental factors, which can influence, but I'd say the way to think about it is healthcare, especially for us, is a very locally driven business. And as we do better at things like our initiative to decrease Director of Nursing turnover, what you've got is you've got this stability of leadership. You've got relationships that allow the frontline caregivers to feel like they've found a home and they can produce great care outcomes. So we believe that focusing on leadership stability then allows those COO and CEO-caliber leaders to create environments where people want to stay.
Spencer Burton: Yeah. Great question. A couple of things. I mean, you've got your macro-environmental factors, which can influence, but I'd say the way to think about it is healthcare, especially for us, is a very locally driven business. And as we do better at things like our initiative to decrease Director of Nursing turnover, what you've got is you've got this stability of leadership. You've got relationships that allow the frontline caregivers to feel like they've found a home and they can produce great care outcomes. So we believe that focusing on leadership stability then allows those COO and CEO-caliber leaders to create environments where people want to stay.
Speaker #3: And as an initiative to decrease Director of Nursing turnover, what you've got is you've got this stability of leadership. You've got relationships. But a lot of the frontline caregivers feel like they've found a home, and they can produce great care outcomes.
Speaker #3: So we believe that focusing on leadership stability then allows those COO and CEO-caliber leaders to create environments where people want to stay. We're very optimistic about both our ability to continue to make progress and have good stability in our labor, and also in our ability to, as we acquire facilities, have that same model have similar results where, with time and with the right people, you're going to see labor numbers get better and better.
Barry Port: We're very optimistic about both our ability to continue to make progress and have good stability in our labor and also in our ability to, as we acquire facilities, have that same model, have the similar results where with time and with the right people, you're going to see labor numbers get better and better. I would just say, I guess, the final thing is with this, you've got agency, but you've also got overtime, and we're excited to see that overtime is moving in the same direction.
Spencer Burton: We're very optimistic about both our ability to continue to make progress and have good stability in our labor and also in our ability to, as we acquire facilities, have that same model, have the similar results where with time and with the right people, you're going to see labor numbers get better and better. I would just say, I guess, the final thing is with this, you've got agency, but you've also got overtime, and we're excited to see that overtime is moving in the same direction.
Speaker #3: And I would just say, I guess the final thing is with this, you've got agency, but you've also got overtime. And we're excited to see that overtime is moving in the same—
Speaker #3: direction. Your next
Operator: Your next question comes from the line of Ben Hendrix with RBC Capital Markets. Your line is open. Please go ahead.
Operator: Your next question comes from the line of Ben Hendrix with RBC Capital Markets. Your line is open. Please go ahead.
Speaker #4: The next question comes from the line of Ben Hendricks with RBC Capital Markets. Your line is open. Please go ahead.
Speaker #7: Great, thank you very much, and congrats on the quarter. I just wanted to ask a reimbursement question, specifically on the Medicare fee-for-service Part A piece. We've gotten some questions over the new value-based purchasing program metrics and how those factor in.
Ben Hendrix: Great. Thank you very much, and congrats on the quarter. Just wanted to ask a reimbursement question specifically on Medicare fee-for-service, the Part A piece. We've gotten some questions over the new value-based purchasing program metrics and how those factor in. I would assume that you're pretty well positioned over that given some of the nursing turnover and retention commentary you've provided. But then just looking at some of the other measures that have kind of rolled onto the program, like the healthcare-associated infections, just wondering kind of how you're faring there and what your outlook is given that you do have a higher acuity patient base versus the rest of the industry. Any comments or observations in the air? Thanks.
Ben Hendrix: Great. Thank you very much, and congrats on the quarter. Just wanted to ask a reimbursement question specifically on Medicare fee-for-service, the Part A piece. We've gotten some questions over the new value-based purchasing program metrics and how those factor in. I would assume that you're pretty well positioned over that given some of the nursing turnover and retention commentary you've provided. But then just looking at some of the other measures that have kind of rolled onto the program, like the healthcare-associated infections, just wondering kind of how you're faring there and what your outlook is given that you do have a higher acuity patient base versus the rest of the industry. Any comments or observations in the air? Thanks.
Speaker #7: I would assume that you're pretty well positioned under that, given some of the nursing turnover and retention commentary you've provided. But then, just looking at some of the other measures that have kind of rolled onto the program, like the healthcare-associated infections, just wondering kind of how you're faring there and what your outlook is, given that you do have a higher acuity patient base versus the rest of the industry.
Speaker #7: Any comments or observations into the air?
Speaker #7: Thanks. It's a great question, Ben.
Suzanne Snapper: It's a great question, Ben. I think when we kind of look across any time a new program is implemented, we get excited when the state or the federal government looks to quality and looks for us to be measured upon quality. This is another one where when we can look at the quality metrics and it's clearly outlined, we have an opportunity to showcase how we can do it and have our clinical leaders really lead out on that. So when we look at these quality metrics, like we always do, have dashboards and other things that allow us then to ensure that we are measuring those outcomes and measuring them and giving that information to our frontline staff and then show that we can do it really, really well.
Suzanne Snapper: It's a great question, Ben. I think when we kind of look across any time a new program is implemented, we get excited when the state or the federal government looks to quality and looks for us to be measured upon quality. This is another one where when we can look at the quality metrics and it's clearly outlined, we have an opportunity to showcase how we can do it and have our clinical leaders really lead out on that. So when we look at these quality metrics, like we always do, have dashboards and other things that allow us then to ensure that we are measuring those outcomes and measuring them and giving that information to our frontline staff and then show that we can do it really, really well.
Speaker #8: I think when we kind of look across any time a new program is implemented, we get excited when the state or the federal government looks to quality and looks for us to be measured upon quality.
Speaker #8: And this is another one where, when we can look at the quality metrics and it's clearly outlined, we have an opportunity to showcase how we can do it and have our clinical leaders really lead out on that.
Speaker #8: And so when we look at these quality metrics, we always do have dashboards and other things that allow us, then, to ensure that we are measuring those outcomes and measuring them and giving that information to our frontline staff, and then show that we can do it really, really well.
Speaker #3: Yeah, and I'd just say I echo what Suzanne said. And with these changes that they make, and things like value-based purchasing, the nice thing is we have signals from them years in advance.
Barry Port: Yeah. And I'd just say, I'd echo what Suzanne said. And with these changes that they make in things like value-based purchasing, the nice thing is we have signals from them years in advance. We know, for the most part, where they're going. And so this isn't something that caught us off guard. These are things we've been focused on, building foundations to deal with and to be exceptional at for years. And so again, that starts with great quality, local leadership, and then having the ability to kind of see around the corner of what's coming, which CMS signals. And so I'm very encouraged that we'll be able to continue to up our quality and do well in these programs.
Spencer Burton: Yeah. And I'd just say, I'd echo what Suzanne said. And with these changes that they make in things like value-based purchasing, the nice thing is we have signals from them years in advance. We know, for the most part, where they're going. And so this isn't something that caught us off guard. These are things we've been focused on, building foundations to deal with and to be exceptional at for years. And so again, that starts with great quality, local leadership, and then having the ability to kind of see around the corner of what's coming, which CMS signals. And so I'm very encouraged that we'll be able to continue to up our quality and do well in these programs.
Speaker #3: We know, for the most part, where they're going. And so this isn't something that caught us off guard. These are things we've been focused on—building foundations to deal with and to be exceptional at—for years.
Speaker #3: And so again, that starts with great quality local leadership, and then having the ability to kind of see around the corner of what's coming, which CMS signals.
Speaker #3: And so, I'm very encouraged that we'll be able to continue to up our quality and do well in these programs.
Speaker #1: And because we've got a world-class team of clinicians and data services folks that are able to analyze and package the data and create dashboards and tools that our clinicians on the front, ability to adapt to these lines can use, our changes is probably unlike any other provider.
Ben Hendrix: Because we've got a world-class team of clinicians and data services folks that are able to analyze and package the data and create dashboards and tools that our clinicians on the front lines can use, our ability to adapt to these changes is probably unlike any other post-acute provider. It's an amazing thing to see how our teams are able to kind of assimilate all these changes and get the information assembled in a really useful kind of ready-to-use way.
Barry Port: Because we've got a world-class team of clinicians and data services folks that are able to analyze and package the data and create dashboards and tools that our clinicians on the front lines can use, our ability to adapt to these changes is probably unlike any other post-acute provider. It's an amazing thing to see how our teams are able to kind of assimilate all these changes and get the information assembled in a really useful kind of ready-to-use way.
Speaker #1: It's an amazing thing to see how our teams are able to kind of assimilate all these changes and get the information assembled in a really useful, kind of ready-to-use format.
Speaker #1: way. Appreciate that commentary.
Clarke Murphy: Appreciate that commentary. Just a quick follow-up. Is there a risk that these types of programs could steepen the ramp on some of these turnaround acquisition opportunities?
Ben Hendrix: Appreciate that commentary. Just a quick follow-up. Is there a risk that these types of programs could steepen the ramp on some of these turnaround acquisition opportunities?
Speaker #7: Just a quick follow-up. Is there a risk that these types of programs could steepen the ramp on some of these turnaround acquisition opportunities?
Speaker #3: I mean, I think that's more a function of the changes we see in acuity that kind of steepen the ramp. When you take on acquisitions that are historically averse to acuity, that's the bigger kind of challenge that we see rather than these kind of unique nuances in how CMS measures things.
Barry Port: I mean, I think that's more a function of the changes we see in acuity that kind of steepen the ramp. When you take on acquisitions that are historically averse to acuity, that's the bigger kind of challenge that we see rather than these kind of unique nuances in how CMS measures things. So for us, our focus is on improving capabilities first and making sure clinical leadership and all the right tools are implemented so that there's an alignment of the direction we're headed. Our leaders are almost uniformly focused on bringing capabilities up to speed when we go into a building. And then as they do that, everything else kind of falls into place because all of the systems that they're able to lean on through our one clinical program align with kind of what they're already trying to do.
Barry Port: I mean, I think that's more a function of the changes we see in acuity that kind of steepen the ramp. When you take on acquisitions that are historically averse to acuity, that's the bigger kind of challenge that we see rather than these kind of unique nuances in how CMS measures things. So for us, our focus is on improving capabilities first and making sure clinical leadership and all the right tools are implemented so that there's an alignment of the direction we're headed. Our leaders are almost uniformly focused on bringing capabilities up to speed when we go into a building. And then as they do that, everything else kind of falls into place because all of the systems that they're able to lean on through our one clinical program align with kind of what they're already trying to do.
Speaker #3: So for us, our focus is on improving capabilities first and making sure clinical leadership and all the right tools are implemented, so that there's an alignment of the direction we're headed.
Speaker #3: Our leaders are almost uniformly focused on bringing capabilities up to speed when we go into a building. And then, as they do that, everything else kind of falls into place, because all of the systems that they're able to lean on through our one clinical program align with what they're already trying to do.
Speaker #3: do. Great.
Clarke Murphy: Great. Thank you very much.
Ben Hendrix: Great. Thank you very much.
Speaker #7: Thank you very
Speaker #7: much.
Speaker #4: Your next question comes from the...
Operator: Your next question comes from the line of Raj Kumar with Stephens. Your line is open. Please go ahead.
Operator: Your next question comes from the line of Raj Kumar with Stephens. Your line is open. Please go ahead.
Speaker #4: Line of Raj Kumar with Stevens. Your line is open. Please go ahead.
Speaker #4: ahead. Hi.
Raj Kumar: Hi. Maybe just one on kind of clicking into the commentary around just further expansion and opportunity with same-store occupancy and that being able to sustain kind of the organic growth momentum you've seen over the past couple of years. Seeing how 2025 showcased 200 basis points of improvement, I'm just kind of curious on what the magnitude in terms of guidance is kind of baked into 2026. And then maybe just any color on seasonality expectations would be helpful as well.
Raj Kumar: Hi. Maybe just one on kind of clicking into the commentary around just further expansion and opportunity with same-store occupancy and that being able to sustain kind of the organic growth momentum you've seen over the past couple of years. Seeing how 2025 showcased 200 basis points of improvement, I'm just kind of curious on what the magnitude in terms of guidance is kind of baked into 2026. And then maybe just any color on seasonality expectations would be helpful as well.
Speaker #9: Kind of clicking into the, maybe just one commentary around further expansion and opportunity with same-store occupancy, and that being able to sustain the organic growth momentum you've seen over the past couple of years.
Speaker #9: Seeing how 2025 showcased 200 basis points of improvement, I'm just kind of curious on what the magnitude in terms of guidance is, kind of baked into 2026.
Speaker #9: And then maybe just any color on seasonality expectations would be helpful as well.
Speaker #3: Yeah, it's great. Our expectation is that 2026 will, in many ways, mirror what we saw in question. I think that 2025—we always kind of caution about seasonality.
Ben Hendrix: Yeah. It's a great question. I think that our expectation is that 2026 will, in many ways, mirror what we saw in 2025. We always kind of caution about seasonality. And it's somewhat of an unpredictable factor when it comes to what the summer months will look like in the end. But we're coming off of a couple of really strong years in those months where seasonality has been much lighter. We'll always see skilled mix decline in the middle of the year. But I think the way we look at how we forecast our progress in the future, we kind of see overall occupancy headed in a similar direction to what we saw progress through last year.
Barry Port: Yeah. It's a great question. I think that our expectation is that 2026 will, in many ways, mirror what we saw in 2025. We always kind of caution about seasonality. And it's somewhat of an unpredictable factor when it comes to what the summer months will look like in the end. But we're coming off of a couple of really strong years in those months where seasonality has been much lighter. We'll always see skilled mix decline in the middle of the year. But I think the way we look at how we forecast our progress in the future, we kind of see overall occupancy headed in a similar direction to what we saw progress through last year.
Speaker #3: And it's somewhat of an unpredictable factor when it comes to what the summer months will look like. We're coming off of a, like, in the end.
Speaker #3: We forecast our progress in the future. We kind of see overall occupancy headed in a similar direction to what we saw progress through last year.
Speaker #3: year. Got it.
Raj Kumar: Got it. And then, maybe just kind of thinking about some of the incremental investments in 2026, just curious on maybe any kind of utilization or integration of AI across different functions of the operations or any buildout of clinical capabilities? And then also, maybe just on the one point around some of the construction projects, whether or not that's if there's kind of something in the future around that or these were just more opportunistic in nature that you highlighted today, and how we should kind of think about that from the longer-term perspective.
Raj Kumar: Got it. And then, maybe just kind of thinking about some of the incremental investments in 2026, just curious on maybe any kind of utilization or integration of AI across different functions of the operations or any buildout of clinical capabilities? And then also, maybe just on the one point around some of the construction projects, whether or not that's if there's kind of something in the future around that or these were just more opportunistic in nature that you highlighted today, and how we should kind of think about that from the longer-term perspective.
Speaker #9: And then maybe just kind of thinking about some of the incremental investments in 2026, I'm just curious on maybe any kind of utilization or integration of AI across different functions of the operations, or any build-out of clinical capabilities.
Speaker #9: And then also, maybe just on the one point around some of the construction projects—whether or not that's, if there's something in the future around that, or if these were just more opportunistic in nature that you highlighted today.
Speaker #9: And how we should kind of think about that from a longer-term perspective.
Speaker #3: Yeah, look, AI is kind of the buzzword of the day for sure. We've been highly involved in looking at opportunities where we can leverage mostly our existing partnerships with a lot of our enterprise providers for our different software documentation systems and things like that, to kind of leverage the data and information that we have in a more effective way.
Ben Hendrix: Yeah. Look, AI is kind of the buzzword of the day, for sure. We've been highly involved in looking at opportunities where we can leverage mostly our existing partnerships with a lot of our enterprise providers for our different software systems, ERP, our clinical documentation systems, and things like that to kind of leverage the data and information that we have in a more effective way. And we've already achieved a lot of great advances in some of those areas, both on the financial side and also now looking more into the clinical side. I think our inclination will be to kind of leverage what our enterprise partners are doing first. But we have also undertaken several projects using more kind of off-the-shelf solutions that AI can provide us that are cost-effective and allow us to be a little more nimble. We've got a lot of those projects underway.
Barry Port: Yeah. Look, AI is kind of the buzzword of the day, for sure. We've been highly involved in looking at opportunities where we can leverage mostly our existing partnerships with a lot of our enterprise providers for our different software systems, ERP, our clinical documentation systems, and things like that to kind of leverage the data and information that we have in a more effective way. And we've already achieved a lot of great advances in some of those areas, both on the financial side and also now looking more into the clinical side. I think our inclination will be to kind of leverage what our enterprise partners are doing first. But we have also undertaken several projects using more kind of off-the-shelf solutions that AI can provide us that are cost-effective and allow us to be a little more nimble. We've got a lot of those projects underway.
Speaker #3: And we've already achieved a lot of great advances in some of those areas, both on the financial side and also now looking more into the clinical side.
Speaker #3: I think our inclination will be to kind of leverage what our enterprise partners are doing first, but we have also undertaken several projects using more kind of off-the-shelf solutions that AI can provide us.
Speaker #3: They are cost-effective and allow us to be a little more nimble. We've got a lot of those projects underway. And we've got a great committee and thought leadership assembled that provides us with steering and guidance to make sure that we're choosing the right projects in an effective and, again, thoughtful and deliberate way.
Ben Hendrix: And we've got a great committee and thought leadership assembled that provides us steering and guidance to make sure that we're choosing the right projects in an effective and, again, thoughtful and deliberate way that'll be primarily helpful to those that have a lot of kind of mundane administrative things that can be solved with some of that technology. But looking more into the future, we're really excited about how we can leverage the data that we have about our patients and residents and use that information and leverage that information by our caregivers to make better and more nimble clinical decisions. So there's some exciting things that are kind of on the horizon in that area for us that we look forward to.
Barry Port: And we've got a great committee and thought leadership assembled that provides us steering and guidance to make sure that we're choosing the right projects in an effective and, again, thoughtful and deliberate way that'll be primarily helpful to those that have a lot of kind of mundane administrative things that can be solved with some of that technology. But looking more into the future, we're really excited about how we can leverage the data that we have about our patients and residents and use that information and leverage that information by our caregivers to make better and more nimble clinical decisions. So there's some exciting things that are kind of on the horizon in that area for us that we look forward to.
Speaker #3: That'll be primarily helpful to those that have a lot of, kind of, mundane administrative things that can be solved with some of that technology.
Speaker #3: But looking more into the future, we're really excited about how we can leverage the data that we have about our patients and residents, and use that information to allow our caregivers to make better and more nimble clinical decisions.
Speaker #3: So, there's some exciting things that are coming up that we look forward to.
Speaker #3: to. Yeah.
Barry Port: Yeah. On the construction question, we are really excited about the projects that we talked about today. And there's really kind of two categories there. One is adding beds to existing operations where there's clearly demand for extra beds, but also land and capability to build. So that's something we're looking at doing. And the second was a replacement facility. Building a brand new building is really time-consuming and expensive, especially when you're starting with an empty operation, and going through the Medicare certification process is costly. So where you can do a replacement facility and essentially start with a new building, but you move the staff and the patients over on day one, it makes for a whole lot quicker return on that significant investment. So those are two things we're looking at.
Chad Keetch: Yeah. On the construction question, we are really excited about the projects that we talked about today. And there's really kind of two categories there. One is adding beds to existing operations where there's clearly demand for extra beds, but also land and capability to build. So that's something we're looking at doing. And the second was a replacement facility. Building a brand new building is really time-consuming and expensive, especially when you're starting with an empty operation, and going through the Medicare certification process is costly. So where you can do a replacement facility and essentially start with a new building, but you move the staff and the patients over on day one, it makes for a whole lot quicker return on that significant investment. So those are two things we're looking at.
Speaker #9: On the construction question, we are really excited about the projects that we talked about today. And there's really kind of two categories there. One is adding beds to existing operations, where there's clearly demand for extra beds, but also land build.
Speaker #9: So that's something we're looking at doing. And the second was a replacement facility. Building a brand new building is really time-consuming and expensive, especially when you're starting with an empty operation.
Speaker #9: And going through the Medicare certification process is costly. So, where you can do a replacement facility and essentially start with a new building, but you've moved the staff and the patients over on day one, it's a lot quicker return on that significant investment.
Speaker #9: So those are two things we're looking at. We've recently beefed up our kind of construction capabilities, bringing in some experts that do this stuff, and it's always kind of—anyone that's done any new construction understands that, especially with COVID and everything—having third parties that are not necessarily aligned with you on how to manage costs and all that can be challenging.
Barry Port: We've recently beefed up our kind of construction capabilities, bringing in some experts that do this stuff. It's always kind of, anyone that's done any new construction understands that, especially COVID and everything, having third parties that are not necessarily aligned with you on how to manage costs and all that can be challenging. So we've kind of learned some lessons through doing this that having that capability in-house would be really helpful. We're assessing our portfolio and trying to pick a handful of projects like this that would be sort of the lowest-hanging fruit. It obviously won't ever kind of compare to kind of our overall acquisition strategy, but it is an important tool that we have and one that we'll do more and more of, especially in our most mature markets.
Chad Keetch: We've recently beefed up our kind of construction capabilities, bringing in some experts that do this stuff. It's always kind of, anyone that's done any new construction understands that, especially COVID and everything, having third parties that are not necessarily aligned with you on how to manage costs and all that can be challenging. So we've kind of learned some lessons through doing this that having that capability in-house would be really helpful. We're assessing our portfolio and trying to pick a handful of projects like this that would be sort of the lowest-hanging fruit. It obviously won't ever kind of compare to kind of our overall acquisition strategy, but it is an important tool that we have and one that we'll do more and more of, especially in our most mature markets.
Speaker #9: And so, we've kind of learned some lessons through doing this, that having that capability in-house would be really helpful. So, we’re assessing our portfolio and trying to pick a handful of projects like this that would be sort of the lowest-hanging fruit and obviously won’t ever kind of compare to our overall acquisition strategy.
Speaker #9: But it is an important tool that we have, and one that we will do more and more of, especially in our most mature markets. Great.
Raj Kumar: Great. Thank you.
Raj Kumar: Great. Thank you.
Speaker #9: Thank you.
Speaker #10: Your next question comes from the line of AJ Rice with UBS. Your line is open. Please go ahead.
Operator: Your next question comes from the line of A.J. Rice with UBS. Your line is open. Please go ahead.
Operator: Your next question comes from the line of A.J. Rice with UBS. Your line is open. Please go ahead.
Speaker #10: ahead. Hi, this
James Haunt: Hi. This is James Haunt for AJ. Thanks for taking my question. I just wanted to see if you can provide an update on the traction you're seeing in taking on managed care patients on the behavioral health side, as some of these MCOs have had some trouble finding facilities to place these patients, and just any update up there.
Albert Rice: Hi. This is James Haunt for AJ. Thanks for taking my question. I just wanted to see if you can provide an update on the traction you're seeing in taking on managed care patients on the behavioral health side, as some of these MCOs have had some trouble finding facilities to place these patients, and just any update up there.
Speaker #11: This is James Hunter, AJ. Thanks for taking my question. I just wanted to see if you can provide an update on the traction you're seeing and taking on managed care patients on the behavioral health side, as some of these MCOs have had some trouble finding facilities to place these patients, and just any update.
Speaker #11: there. I mean, I think
Ben Hendrix: I mean, I think a good example of what you're asking about is, again, we referred to this in our highlighted remarks, although we didn't give a lot of detail on what the purpose for the new addition was at Vista Knoll. But that new unit we just constructed that's now essentially full after just a couple of months is entirely dedicated to behavioral patient use and highlights the growing need that you're mentioning, James. So there is a need out there, no question. I would say that it's a focus of ours to do it in a deliberate and thoughtful way in markets that make sense. We have, and we've mentioned this in prior calls, but we've got a strategy to do just that in some of our more mature markets like California, Arizona, and Texas with some others that are looking at it closely too.
Barry Port: I mean, I think a good example of what you're asking about is, again, we referred to this in our highlighted remarks, although we didn't give a lot of detail on what the purpose for the new addition was at Vista Knoll. But that new unit we just constructed that's now essentially full after just a couple of months is entirely dedicated to behavioral patient use and highlights the growing need that you're mentioning, James. So there is a need out there, no question. I would say that it's a focus of ours to do it in a deliberate and thoughtful way in markets that make sense. We have, and we've mentioned this in prior calls, but we've got a strategy to do just that in some of our more mature markets like California, Arizona, and Texas with some others that are looking at it closely too.
Speaker #3: A good example of what you're asking about is, again, we referred to this in our highlighted remarks, although we didn't give a lot of detail on what the purpose for the new addition was at Vista Knoll.
Speaker #3: But that new unit we just constructed, that's now essentially full after just a couple of months, is entirely dedicated to behavioral patient use. It highlights the growing need that you're mentioning.
Speaker #3: James, so there is a need out there, no question. I would say that it's a focus of ours to do it in a deliberate and thoughtful way, and in markets that make sense.
Speaker #3: We have mentioned this in prior calls, but we've got that in some of our strategy to do just more mature markets like California, Arizona, and Texas.
Speaker #3: With some others that are looking at it closely too. And we do it, certainly, in careful partnership with the managed care plans that are having those needs.
Ben Hendrix: We do it certainly in careful partnership with the managed care plans that are having those needs. So it's something that I think you'll probably hear more about as we go into the future. I wouldn't call it something that's a critical core strategy. Rather, it's a strategy that certain markets are focused on implementing based on the needs that they're seeing.
Barry Port: We do it certainly in careful partnership with the managed care plans that are having those needs. So it's something that I think you'll probably hear more about as we go into the future. I wouldn't call it something that's a critical core strategy. Rather, it's a strategy that certain markets are focused on implementing based on the needs that they're seeing.
Speaker #3: And so it's something that I think you'll probably hear more about as we go into the future. I wouldn't call it something that's a strategy that certain markets are focused on implementing based on the needs that they're seeing.
Speaker #2: Yeah, and I would just add it's not just behavioral health, but really looking at the specialty programs where there's a need. So it's really about partnership.
Suzanne Snapper: Yeah. And I would just add it's not just behavioral health, but really looking at those specialty programs where there's a need. So it's really partnership, like we always have, of working with the managed care organizations to see what their needs are and then developing with them solutions to meet those needs.
Suzanne Snapper: Yeah. And I would just add it's not just behavioral health, but really looking at those specialty programs where there's a need. So it's really partnership, like we always have, of working with the managed care organizations to see what their needs are and then developing with them solutions to meet those needs.
Speaker #2: We always have working with the managed care organizations to see what their needs are, and then developing with them solutions to meet those.
Speaker #2: needs. Great.
James Haunt: Great. Thank you. That's all the questions I had. Appreciate it.
Albert Rice: Great. Thank you. That's all the questions I had. Appreciate it.
Speaker #11: Thank you. That's all the questions I had. Appreciate it.
Operator: There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.
Operator: There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.
