ENSG - Earnings call transcript Q2 2019

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Operator

Good day ladies and gentlemen and welcome to the Ensign Group Inc.

Second Quarter Fiscal Year 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] Also, as a reminder, this conference call is being recorded.

like Mr. the I'd your over time, to host this to call turn to At Keetch. Chad

may You sir. proceed

Chad Keetch

you, Thank operator. us Welcome you thank for everyone joining today. and

Port, Suzanne Here newly The in Pennant we'll Danny have this today which with of Barry Inc. discussing me Walker CEO appointed our Snapper, be CEO; Group CFO; call. and I our later

Investor and As Relations available filed our We few housekeeping always, matters. is website our before we of announcement press section begin, XX-Q release at I on This have the just a yesterday. earnings www.ensigngroup.net.

until the August be to call. A listening P.M. replay subsequent statements made XXXX will XXth, remind call Friday Xnd, of to of updated to these statements today's XXXX. and all be may a been on are this as replay have available anyone also on We not that want of our website this today, be nor Pacific August that X:XX will call

current today we Also and or operate. made which our expressed risks any are our forward-looking These in today's materially beliefs on and statements on call. statements are to could from subject differ expectations and environment actual cause that about implied those to assumptions business the uncertainties management's results based

should results. to Listeners and could discussion complete undue filings forward-looking for more our are on review statements place not reliance encouraged a SEC that our of impact factors

Ensign its new any reason. do changing affiliates of and laws, or events, not publicly securities a federal where statements any forward-looking revise circumstances, by changes update future other to required or as arise Except information, for result undertake as

services Certain referred provide information the relationships as payroll, other subsidiaries. operating subsidiaries no contractual with a is independent the Service other such risk subsidiaries, In operating resources, to assets collectively Group holding to addition Inc. wholly-owned Ensign employees human legal, and revenues. or our with management, through direct of technology, accounting, Center, company The

and our coverage certain captive, wholly-owned refer In operating as and professional to we insurance the compensation made addition, captive our general claims as subsidiaries liability well to liabilities. insurance provides for workers' as which company for

The Group consolidated we, and words refer us its and the Ensign Ensign, subsidiaries. our, company, to Inc.

subsidiaries Service are operated wholly-owned have management captive our their employees by Center the and assets. and own of that companies All operating independent separate the

to the and activities well not any that employees, are to the of as the operating assets, its company subsidiaries similar nor by the construed today herein References used Ensign consolidated The imply, and has operated Inc. terms use as of or our, be direct Group us, meaning should assets that the are revenue we, as it terms and or meant Group. Ensign

supplement our we that be understanding is in of available GAAP in with our the and relied GAAP the to When Also, provide believe A these XX-Q. our they to press non-GAAP metrics. non-GAAP can we should yesterday's our a together more measures reporting of upon GAAP GAAP exclusion but results, release reports. not complete viewed business with reconciliation

call with over Barry I'll our the turn Barry? CEO. And that Port, to

Barry Port

continue local happy results. drive impressive We're morning Good report everyone. our operators to that to

caregivers and outstanding of quarter. XX% leaders share increase up of an strong prior and year efforts GAAP $X.XX, led another over the share to per We have earnings year healthcare quarter per to many $X.XX, quarter the are with of XX% the their affiliated be earnings honored for and so over with collective adjusted quarter prior

acquired Our operations. an mature most the steady as improvement organic come well from operations our transitioning organization's from and in this the newly quarter positive as contribution again growth increasingly has

disciplined tremendous not from to with mention opportunities pleased only our begun we our we acquisition in potential or to While states progress, in which we've approach about the the strategy. are half operate

that and financial as in proven they that to to are confident practices implement leaders have positive collective will enormous these stronger and to consistently contributors results. diligently led so, newer soon our states local do newer clinical markets Our we are become working results

times as said as and unlock And existing within that very remains including before did opportunities operations the it remains a the transitioning many pathway disciplined true extraordinary what within to we acquisitions. several today potential clear our to we've mention vast still our for portfolio, future years see same-store not ago,

relationships results results These built care foundation strong with by improvements collective enhanced providers. the and due of are efforts outcomes the high-quality to impact in operations care regulatory dozens of a made health collections of on strengthened managed

give me Meadow group you Idaho example. View Idaho. an acquired and XXXX, In Let Nampa, our Nursing in Rehabilitation

and and and significant Jeremy case, operation enhancing specialized Chase year prior to earnings Jeremy market. employee losing over other impressive the the four-star their journey mix XX% by them by rate state services themselves over of in have immediately occupancy XX%. an provide behavioral CMS This on CEO, skilled Enter obtained a ability Gunderson; the challenges. was and they They the engaged to had their while COO, to approval a staff while quarter higher rehabilitation embraced As for and meet the clinical skilled and is Chase improved reposition money often revenues rating Withers. program, excellent and turnover all community's XX% a year over on maintaining needs. and

businesses Arizona, Executive Services during segment and earnings results results Clinical health of quarter. to prior their was over Cornerstone quarter. Healthcare Schaeffer; of its agency in revenue in operations, our history Brad that by principles the income XX% XX% consistent XX% of One prior Director post-acute Our grew the year over our of of and applying an this and achieved increase hospice other in of incubating each revenue entrepreneurial respectively and same quarter with Hospice during outstanding and [indiscernible] example year nursing XX% skilled and the seen By care the by growth venture quarter. growth unique Director, continued culture these Inc. led the Prescott, at located Pines have led and health home

local who and clinical to in commitment the of excellence ratings satisfaction community some result the is clinicians, success Pines the have strong talented of communities market. of engaged resulted survey. Sedona the hospital team With shows a and a way. systems in their relationships areas Prescott in employee growth have the with organization, these a love in full leading of in it provider in meaningful and living that developed their highest senior do, deficiency-free They Hospice the as and they what caregivers

Let me Joseph Wellness Senior Rank. in care and example Executive local our driving by living Las growth leaders View operations. community highlight Vegas, assisted Desert our Nevada senior one memory Ortega; Director, is last living an of and in Living led Paul Director, impressive

in fund specific feedback become community. the needs by these all their They dedicated of a their local care the community serving their these increase team Following example force XX% plan prior quarter. XX led leaders, quarter and has They to tailed service points a on from implemented Desert improving expand of year partners. offering. This memory to their second EBIT percentage View increase a an overall to revenue addition relentless focus over in occupancy of community's XXX% the carefully

seeing growth growth. segments, are these just dozens of underperforming organic of and each business We like examples in operations drive acquire as of we our

our access in growth inherent of also direct discuss announced in accelerate believe a will we proposed of As will the more we to allowing we May in business. both the value shareholders few transaction minutes, businesses, these in detail these the while lines

quarter. increased billion. $X.XX earnings of XXXX our schedule and therefore, expected when reaffirming billion are annual and results our and between last we quarter we what our diluted between annual of $X.X $X.XX second we with And revenue guidance $X.XX on per guidance earnings Our are annual share guidance

represents guidance our this of a $X.XX share midpoint the per increase over Overall, XX% earnings. annual or XXXX

forward. our first that remind the each are about to the favors carry continues year, to leader leader second you that this are year. coming and but excited market second in performance -- our as confident We will we local adjust very the quarter conditions, of again guidance we half each We momentum

the we the take and few back quarters, a results care strong look health minute As regulatory collection outcomes, strong on occupancy, of consistent results our efforts. drivers are to stronger high-quality primary last

markets local be In companies managed partnerships our their addition, and the and to between an continues clusters advantage. care

serve. occupancy, developing peer appropriate it's skilled across needs fit all on we an that the just isn't markets mix focus unique of the Our types

even across we able including results occupancies managed are results real estate We private show types hope peer disciplined and care pay. that period, all over and that a these investments the drive and across local will industry down, leadership Medicare, Thanks where our are in confident we consistently to Medicaid, model to that long-term. are our is the acquisitions, distinctive sustainable to performance this continue

give with investment I'll to on activity. Chad? Chad recent our ask us an And that, update

Chad Keetch

Thank you, Barry.

paid quarter, dividend we quarterly a share. During per of $X.XXXX cash the

of Also and health senior four year during and campus XXXX in skilled two one have living been nursing skilled nursing nursing and Utah. nursing and one have operation skilled healthcare since, and increased hospital-based in announced one operations; in the nursing we both a skilled acquisition skilled XX California; one company of paying in our care include a management for for operations in which operation since arrangement operation quarter campuses the years. California; dividend skilled dividend every We Texas; Arizona;

acquired one one agency In two and Home segment, in In agency California. living living in we and health acquired in our assisted home Hospice North Utah; Health home one and two hospice in Southern operations; Arizona. and hospice Texas; Wisconsin; Texas agencies in senior two hospice one care we agencies in

progress about of our carefully front solid of many and operators on acquisitions are we these attractive excited We acquisition the Even the to local far, not are are the date year have already we've selected completed representative the deals them. have opportunities number in available with that to us. of are though pleased had a made very so

kept an pipeline attractive for as what more we hand is believe intentionally powder as we but market. will ever, of plenty be on full dry buyers Our increasingly have

to to to as strength advantages in are our well. significant excited grow we adding we'll existing and very geographical we footprint do We know continue see markets within so

portfolio the operations, dozens in businesses the process of hospice nine living home which agencies, to are additions deals opportunities skilled care operations, XX operations, nursing more evaluating of in standalone XX XX senior also XXX announce expect third growing bring and of XX include XX home fourth agencies and health our and quarters. living These to states. senior We across

XX estate XX of operating results in we by spun have we our We to value our operations XXXX, estate improving assets real added Since real acquired the in real to by assets. out estate assets. XXX operations our owned CareTrust to real additional estate acquiring REIT and continue portfolio add and methodically

have look As we our to in been past are have we we owned real about very unlock to our value opportunities able the what we the accomplish with our to and estate. estate excited real

looking and operational to cultural will both evaluating forward our We are creating options alignment. ensure constantly and that structure a

guidance. our Suzanne? the that With more detail to turn I'll time to the Suzanne and provide financial company's over on performance

Suzanne Snapper

and Thank morning Chad for contained and press our in quarter Detailed financials filed you are XX-Q good release everyone. yesterday. the

highlights prior additional consolidated XX% over was Some income include, of quarter. the $XX the and adjusted of was increase net year quarter; for GAAP an net the XX% year million, income increase $XX prior an quarter million, over

adjustments out few and numbers share-based with those associated We the to and that very potential we also compensation. of relate between renewal made want point our adjustments GAAP transaction costs that of to have XX% non-GAAP the and spin-off

key million line Other June million, our of of of for as revolving ended $XXX equivalents cash and of cash and generated the million, credit. on include from $XX XX operations cash metrics availability of period $XX

growth heavier we acquisitions the that increase over expect quarter X.XX times. ratio in slightly EBITDAR typically to debt-to-EBITDA lease-adjusted net our acquired the from cash increased And As to from time. precedes newly operations we very outlay in anticipated

reminder since have REIT. $XXX off invested a we spun million acquisitions XXX after the we this As is in

home Model called preparation to and implement health, Patient-Driven Model payment for and PDGM. reforms Payment Groupings or our CMS's continued or Patient-Driven skilled We PDPM nursing

slated always focused programs We into XXXX will believe teams both effect have and go which interdisciplinary January and efficient been on respectively. are serve us that to XXXX on quality well X, our under October outcomes X, relentlessly which

are As reaffirming which annual guidance last increased Barry mentioned our we quarter. we for XXXX

and $X.XX earnings and and share $X.XX diluted projecting per annual between billion billion. between are $X.X revenues $X.XX We

shares to million, primary the common closed guidance exclusions stock-based a The XX% on with approximately compensation the tax and spin-off transaction diluted and based average acquisitions from rate approximately XXXX proposed of outstanding of date. XX.X coming inclusion weighted is of

in Additionally our budget, in of to asymmetrical and variations accruals general contributing the include; our changes mix, census seasonality economy variations activities, short-term influence of skilled on other staffing, in factors. reimbursement the and impact other systems, and in quarters our factors state the delays occupancy in insurance acquisition

more call Accordingly, results back that year. over Chad weighted we expect spinoff. details the be half the heavily provide the second towards to to to about of more And turn the Chad? I'll with proposed the

Chad Keetch

into agencies Suzanne. our home health publicly announced senior hospice May to and company. all Thank we our separate separate living and On businesses you, X, substantially XXXX of plans a traded

include; include of Upon and the care operations, health Ensign other the rehabilitative The consummation transitional care related investments. laboratory Inc. the services, post-acute ventures, diagnostic companies skilled and mobile will campuses, Group spinoff, two services, estate which real and will new business clinical

And the living operations Group substantially Inc. home senior operations. which Ensign's and Pennant health include its of hospice and will all

President remain team Chief of Ensign's leadership become the and Ensign Danny Cornerstone Hospice Pennant. Executive Our will place. of Holding Healthcare Walker, President Officer will Home Company in and Health Chairman, Inc.

Chairman, will for Director also current Christensen Our the future. Christopher both as Executive foreseeable for serve companies

we Continuum. Care develop partnership will new preferred umbrella. Ensign Although always provider will a we one under network the ownership have a memorialize Pennant the continuing are operational have Pennant Pennant to which call enjoyed structure, This Ensign and

As to hop pathways data that and to Ensign the will our designed the care appropriately and transitions within by possible together each care Pennant elects network the between to providers settings. preferred highest outcomes create continuum, clinicians into work operation and share care achieve

their We and care customary registration continuing payers spinoff forward SEC, and tax Board of statement agreements effectiveness channel acute to the a of trust our of earn receipt opinion partners, amendments, The Directors. counsel, of subject to other from our look filed the partners approval are the further final of by execution and certain with conditions to intercompany offerings to lease including patients, our is service excited enhance and residents families.

to XXXX, at pleased the with X, have that or progress structure completed of the on are on made and are October the no terms the all. assurances can schedule it confident final we and will we complete spinoff there are spinoff We but be that be regarding

Barry. with hand the over that, back to I'll And call

Barry Port

Chad. Thanks,

operating to several significant these ability senior will the our Ensign's distinct, leadership the two of we've As believe patients, but accelerate have adapt the care. payers both innovative two other home leaders the they've providers last to living and over emphasized quarters, as and quickly hospice continuum enterprises and within healthy businesses repeatedly applied We of health that as separating organizations and of ever-changing value created embraced needs our model. very

present a very We our has will to believe opportunity partners add realized value shine light share and entity now and also to on the investments shareholders this that attractive fully single that time. value as provide over yet will and spinoff be two that and

grow Chad As real mentioned call, and the earlier our mature. in estate portfolio continues to

we underlying will organization real always but continuously our improving in We be operationally-driven the value first, an owned are estate.

We incubating our ultimately our their forward to develop. other to to look ways and shareholders for other also opportunity new ventures businesses value create finding several continue and business as and are partners those leaders

leadership our company always Developing We've a be leaders to above is aspired entrepreneurial else. important all outstanding priority. most

already for and pathway creating Ensign brightest. help so best so have strategy the us As is attract the what experienced each leaders, experience so at of can many we key they retain to and that a do these a

multiple so achieve core Our amazing program. pathways that many to and new leaders deserve the created within opportunity the organization that including venture success business business the our outstanding exists has

to our spinoff the We are upside local walks with opportunities starting truly to this all that attract gaining as life post-acute have what incredible our is amazing are continue traction. well that like is encouraged allow continuously many will to talent and It's understand Ensign care. of shared such so and as to story really from leaders us

express want you has to in to of been for us making We again Center appreciative the joining our And indicate our and towards is a their thank results local at operators. today for collective support. our planned focus distraction confidence shareholders for X, the and to as and that every day. our confident our better also leaders field quarter and October for appreciation the not move our Service are the us a colleagues We're to than stronger date we we As spinoff ever. operational spin

our particular leaders health trust almost more and and by about are measure. even excited partners improvement operations demonstration the local are that markets our our occupancy in These the results every In in nursing impressive care our are gaining very across patient of an dozens the the extraordinary we diverse population. skilled diverse ultimate gains of

across momentum As we even the look and that over about at few occupancy portfolio, we last the us gives our long-term levels have seen future. near more confidence quarters the

that help will the We see into glimpse hopeful we enormous gain in portfolio. you our that are upside this a

We'll now here Group address spinoff earlier, of questions CEO mentioned Pennant Pennant Walker, operations. the Danny to And Chad over call. also and turn the Q&A to about of portion we're as time with our help the

Danny Walker

everyone. Hello

Barry Port

on Dylan, can Q&A the audience you the please instruct procedure?

Operator

Sure first comes ahead. from Our Instructions] sir. go from Thank Chad you. Please question [Operator Stifel. Vanacore

Seth Canetto

Seth Hey for good is on Canetto morning. Chad. This

Suzanne Snapper

Seth. Hi,

Chad Keetch

Hey, Seth.

Seth Canetto

you Suzanne back the EPS year changes from upside in the of just of budget number be in reimbursement back the stronger half about your variables of seasonality and and remarks the off What's mentioned in opening driver occupancy. delays numbers in to state you to half the that in biggest the going a listed year? the of

Suzanne Snapper

seasonality the In in a kicked skilled level across Yeah. quarters on things look the if that fourth the is I been as all state look and see probably of mean, well. that's industry. reimbursement consistent. quarter, nursing That's that years have I biggest you everything driver federal complete Seth we are and basically over at at at you have of our very, where our seasonality very and both when think and point,

mostly the by always the significantly for would seasonality of and And first happened I but and definitely point of of end QX. quarter QX the reimbursement fourth beginning changes stronger followed us, kind so being that then foremost

Seth Canetto

strong And a and seemed you first on marketplace? had half And pipeline just market the very to a you the more what's to there? relative Great. robust for that Chad color opportunity acquisition that guys mentioned a pretty you strong really then you alluded and have Can growth. right. XQ it's buyers to XQ little give All in driving have

Chad Keetch

having impacting Great to rent think that, increases that are aggressive turned led have Yes. troubles were past we years too distressed multiple operators Clearly, There's the covering they're in be question, of that. done transactions out that and to to think escalators. we have Seth. factors several aggressive ago obviously lot I and pointed that as a too were had

led there regional operators. are notable pretty larger And out amongst so to bankruptcies that's some that several

that's biggest we So a continues that factor then other I think is probably coming to the is the one more case of the and there's more And And always factor. think the as environment lot thing, become more complex. well. regulatory as

us like systems to You and it at have for smaller that that reimbursement those things to continue throw make just of the PDPM to to opportunities continue operators that for and don't have provide resources reform grow. difficult very sorts changes

So those are factors. the probably two main

Seth Canetto

geographies mean, focused the Utah. in how we you Are then mentioned deals think right on should and Great. you you've existing right. be? earlier your Arizona, will you All just deals where And California, for think are in guys growing those expansion? grow you'll done expanding Texas do that Or I any about in particular footprint? and

Chad Keetch

Yes. Definitely.

are is already markets, growing right in focus Our we now in. the

and on there before we mentioned improving to focused in As gaining very there. as continue about us. that We're and we've talked the newer operations we to remarks his have grow strength some states Barry are before

I opportunity and full new of definitely, expanding a we've see got our into near plenty new course, states time we But be. just the XX within that and future past, hands but about keep in lot states newer our to So to of will to any in see that's speak. done right focus we the as don't we're we've we're the now of happening so future. markets markets look will very in where In careful the

Seth Canetto

neutral you reimbursement how you tell into Okay. into change are? October Thanks. to us from the to like we and been this just the we preparation guys think training a financial And then maybe then change? standpoint Or from go slightly this should your And far the to X. last expected revenues question aspect? that? lower on with how about expenses effect PDPM Can be most expect challenging What's just the should

Suzanne Snapper

is training the vast. mean I pretty Seth, Yeah.

the not you encompasses AR as think teams, teams, noted clinical only, reimbursement I it our leadership at our teams, facilities. the our

day, hands-on to go and trainings, come continue are trainings We've questions into you have needs and have the the get additional that they'll the screens new So sure fill to live resource we're continuing of workshop in underlying change and point all and make deeply happened name the that we'll ensure delivering under system. coverage both that up we out every it. have through probably to we capture done and to right care up, that some it that systems, coverage there happen to live go just the coding will of We happen trainings, everything the that some also as we're we

the of still a So We've in to done but we're a lot still middle do. lot, it.

Barry Port

I'll just Seth. jump in here

new and the we about right On the our We've work PDPM similar. model make very, And electronic for providers, on front modeling mirrored preparations. of see lot very Lots still the the heavy good of the you're delivery into home our PDGM final health engaged to it's been It's we have as lens. going and the feel there's on patient preparation. of kind base now, record lot through of so work our SNF starting care a partners medical in it that that a a preparation side. front

to In in addition we're from delivery RAPs episode obviously shift preparation the making care sequences. the strides to – to XX-day from PDPM on side model, great away

-- we feel about though. So it but good

Suzanne Snapper

side. probably And question that one then out thing finish to on the PDPM more just

they're continued think clinical we we team that's team. why I therapists this the at really the you're confident part of patient that that decision. are our of they're people really of that I is making things looking part mean in-house. whole the have to about and of remind feel One the the because And

a market front, projected were there. financial had that think to regards out the think through some There's revenue. headwind be I with that's with potential of it we predicting mean implementation will after coming the savings increase, to we headwind previously in the phase We was most basket that it headwind originally cost slight. of it. the And probably still we be think that going and get I to Obviously offsets we then

Seth Canetto

All right, questions. Thanks taking great. a for lot my

Suzanne Snapper

Thanks, Seth.

Barry Port

Thanks, Seth.

Operator

you. Thank

Our next Morgan Please Capital question go comes from from ahead. RBC Frank Markets.

Frank Morgan

Hello. I'll were on Suzanne making. the I guess, stay you point, just

it be is So sounds to it's your it's revenue get saying the impact net-net initial in be will you're a it and kicking a what you going of costs if trying or like better less I'm not? it were -- thoughts just seems than like -- think net-net sense than better to

Barry Port

answer as on Frank maybe necessarily costs aggressively initially or be Obviously mean will indicated. We’re not question. cautious lower thought how even think I the others I have to probably as that we

it really on us will therapy things house has that shift. of many us care talent For be long-term as wanted programming not do the of more We've allowed in side we to. that a the to a of the past scarcity the of had

on been lot able we we big care And that some being programming shift lot existing base house provide that on because to long-term our and haven't of to provide that opportunities And part side B the more them talent. constraint talent going so therapy us patient front. to to pretty of services of for in necessarily to the see on be we're of redeploy to a the able our there front a

mix. now. be complex take focus you on PDPM probably because that is neutral able that it's inherent capitalize complex telling comfortable dive we'd as answer into just that patient to be we think the we net-net long-term But And complex mix for there So we'll right very our are services a going provide providers be for that opportunities patient of patient. you to

in net long-term the in see for we benefit it being So sure.

Frank Morgan

guess want Is I of you guidance has full that to through you. more right? or year. reiterated still just question. the in it Cornerstone/Pennant a clarify now Got that I one reiterate today the clerical

Suzanne Snapper

Correct.

We whether will planned helpful thinking guidance, with still up We to it guidance. was in October be obviously, just the going of guys. revisiting spinoff our you end about We're QX date might just XXXX for Xst.

but through it way year. the the all going that of end the definitely still we're through does So it have in

Frank Morgan

is like Okay. correct? of this healthy numbers is in And guidance? it -- Or in acquisitions pipeline the that sounds the not

Suzanne Snapper

through Correct. today. It's closed only acquisitions

But and strong So there. really it's numbers the good not put the about we've guidance on in definitely. what feel we

Frank Morgan

you. Got

Okay. clarifying. going back No, the pure-play guess of I cycle then health a just from company. PDGM, commentary the I there's earnings was been And to care through lot home

Just a pretty just as a Because larger. providers hurdle curious side and your your you is to as looks came presumably a going adjustments ability big revenue like was what offset behavioral I relates there looks the well? are adjustment either when on the make out, just most that to look to be the it thinking strategies behavioral like about was it curious from as rule up? coding your have then you at just -- the to this side cost or this

Barry Port

our we've We've get-go. that a the back just lot never We've through the Frank in product still that it's a that Yes. and focused highly next We've on for -- is built chipping haven't of operated from how would what gone expected at been and and category, be range into us. looked way. of been business rug the impact

to We everything and those up their is enormous particular with making of capturing sure severe questionable licensed operating observed other There's at settings. as about said, disciplined practice making it as there us, And encounters that a scope that in certain continuing so, pure-play being really we're have the professional I've what on we don't level each adjustments. the tightening big we patient. the That good that going focus going that well. of the as on coding sure training highest feel make we're as see for about making particular and that's

somewhere circumstance begun across that full And to instead biggest executive built we for operating some to P&L underway behavioral existing of and operations, have where who an office a really operators of we of market already the model. And structure. make making many, rollout answer of having PPS making an the trying the local each control have this In our changes many to make such is something behavioral of a lot of have in exactly and because those us transparency many, into happen. happens that we kind need already sense to some under of well changes. for -- team unique They're changes their have the ways, are changes ability what

we're decentralized So, we're built because model. type that structure, have we of -- for this exact

good And so, it. overall we about feel

still are even the after that X.X% fuel and acquisition think announced on have that hospice holding course, with the been of is home to projections rule the add side. We in to that And X.X% to strategy offset going rule. fire. the then, final easily health the Our just our that's it's changes headwind, at

So...

Frank Morgan

that the Got point in of you. the see look have about the is just M&A change will you you foresee talked pressure of the put another coming the or program, Do you that opportunities? operators. as some pure-plays that the your And smaller I around of impact on guess that rule RAP at

Barry Port

us. cash sure have in affect on That's we're making Yeah, do They're what first based increase that. really very, in model. for it expect local several that. days interested We see and preparing I will We're the our for collections we're our very do. to We predicting, mean grasp DSO. operators that a how

going waters navigate plan just thoughtfully to those And so, how for ourselves. we're one, to

more And that of the expect not But are to are that opportunities to to investments that, take we will more cash the in be specific different having adjusting flow our making just developing pipeline and smaller operators difficulty in prepared things fully deployed opportunities. we're drive of going side leaders to focused way. be markets leadership those our but also do advantage

Frank Morgan

Okay. That’s you great. much. Thank very

Suzanne Snapper

Thanks, Frank.

Barry Port

Thanks, Frank.

Chad Keetch

Frank. Thanks,

Operator

I Port, questions At you. call remarks. the this Mr. the Thank show no further turn I'd to over like CEO to closing in for time, queue. Barry

Barry Port

of And support us questions, talking Dylan. for thanks everyone your appreciate good look and to today. quarter. Thanks, and next We you joining the to all forward all

Operator

gentlemen and today's ladies conference. concludes the you, attending Thank This for program.

may all disconnect. Good You day.

The Ensign Group, Inc. (ENSG) 2 Aug 192019 Q2 Earnings call transcript