What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-07-24 compared with 2025-04-29 · 352 added, 219 removed, 665 unchanged (46% of the section changed)

3 unchanged sentences

(In thousands, except par values)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Current assets:

Cash and cash equivalents $ 363,969 $ 464,598

Accounts receivable—less allowance for doubtful accounts of $ 8,400 and $ 8,435 at March 31, 2025 and December 31, 2024, respectively

Accounts receivable—less allowance for doubtful accounts of $ 8,320 and $ 8,435 at June 30, 2025 and December 31, 2024, respectively

578,050 569,897

30 unchanged sentences

150,000 shares authorized;

61,031 and 57,547 shares issued and shares outstanding at March 31, 2025, respectively, and 60,838 and 57,438 shares issued and shares outstanding at December 31, 2024, respectively

61,240 and 57,676 shares issued and shares outstanding at June 30, 2025, respectively, and 60,838 and 57,438 shares issued and shares outstanding at December 31, 2024, respectively

Additional paid-in capital 572,200 528,052

Retained earnings 1,584,233 1,426,762

Common stock in treasury, at cost, 3,484 and 3,400 shares at March 31, 2025 and December 31, 2024, respectively

Common stock in treasury, at cost, 3,564 and 3,400 shares at June 30, 2025 and December 31, 2024, respectively

( 138,835 ) ( 117,764 )

7 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In thousands, except per share data)

11 unchanged sentences

Interest income 5,240 7,084 12,123 13,544

5,241 1,049 5,602 3,933

OTHER INCOME, NET

32 unchanged sentences

BALANCE - MARCH 31, 2025 57,547 $ 61 $ 551,867 $ 1,503,442 3,484 $ ( 128,553 ) $ 3,340 $ 1,930,157

Issuance of common stock to employees and directors resulting from the exercise of stock options 168 — 8,652 — — — — 8,652

Issuance of restricted stock, net of forfeitures 41 — — — — — — —

Shares of common stock used to satisfy tax withholding obligations ( 7 ) — — — 7 ( 1,057 ) — ( 1,057 )

Dividends declared ($ 0.0625 per share)

— — — ( 3,605 ) — — — ( 3,605 )

Employee stock award compensation — — 11,628 — — — — 11,628

Repurchase of common stock (Note 20)

( 73 ) — — — 73 ( 9,225 ) — ( 9,225 )

Acquisition of noncontrolling interest shares — — ( 64 ) — — — — ( 64 )

Net income attributable to noncontrolling interest — — — — — — 70 70

Noncontrolling interests attributable to subsidiary equity plan — — 117 — — — ( 86 ) 31

Net income attributable to the Ensign Group, Inc.

— — — 84,396 — — — 84,396

BALANCE - JUNE 30, 2025 57,676 $ 61 $ 572,200 $ 1,584,233 3,564 $ ( 138,835 ) $ 3,324 $ 2,020,983

Common Stock Additional Paid-In Capital Retained Earnings Treasury Stock Non-Controlling Interest

13 unchanged sentences

BALANCE - MARCH 31, 2024 56,904 $ 60 $ 486,336 $ 1,208,074 3,390 $ ( 116,569 ) $ 5,566 $ 1,583,467

Issuance of common stock to employees and directors resulting from the exercise of stock options 117 1 4,089 — — — — 4,090

Issuance of restricted stock, net of forfeitures 38 — — — — — — —

Shares of common stock used to satisfy tax withholding obligations ( 10 ) — — — 10 ( 1,195 ) — ( 1,195 )

Dividends declared ($ 0.0600 per share)

— — — ( 3,424 ) — — — ( 3,424 )

Employee stock award compensation — — 8,978 — — — — 8,978

Repurchase of common stock (Note 20)

— — — — — — — —

Acquisition of noncontrolling interest shares — — ( 29 ) — — — — ( 29 )

Net income attributable to noncontrolling interest — — — — — — 174 174

Noncontrolling interests attributable to subsidiary equity plan — — 37 — — — ( 34 ) 3

Net income attributable to the Ensign Group, Inc.

— — — 71,007 — — — 71,007

BALANCE - JUNE 30, 2024 57,049 $ 61 $ 499,411 $ 1,275,657 3,400 $ ( 117,764 ) $ 5,706 $ 1,663,071

See accompanying notes to condensed consolidated financial statements.

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands) 2025 2024

10 unchanged sentences

Cash received from insurance proceeds 1,000 199

Loss (gain) on insurance claims and asset disposals

(Gain) loss on insurance claims and asset disposals ( 598 ) 254

Change in operating assets and liabilities

7 unchanged sentences

Accrued wages and related liabilities ( 17,523 ) ( 8,343 )

Income taxes payable 13,219 16,173

Other accrued liabilities 1,817 1,258

23 unchanged sentences

$ ( 16,655 ) $ 25

Net (decrease) increase in cash and cash equivalents

( 181,932 ) 2,213

Net decrease in cash and cash equivalents ( 100,629 ) ( 32,290 )

Cash and cash equivalents beginning of period 464,598 509,626

Cash and cash equivalents end of period $ 363,969 $ 477,336

Three Months Ended March 31,

Six Months Ended June 30,

(In thousands) 2025 2024

2 unchanged sentences

Interest $ 3,567 $ 3,488

Income taxes 64,621 56,062

Lease liabilities 117,256 104,749

11 unchanged sentences

The Company's independent subsidiaries provide health care services across the post-acute care continuum and engage in the ownership, acquisition, development and leasing of skilled nursing, senior living and other healthcare-related properties and ancillary businesses.

As of March 31, 2025, the Company's independent subsidiaries operated 340 facilities and other ancillary operations located in Alabama, Alaska, Arizona, California, Colorado, Idaho, Iowa, Kansas, Nebraska, Nevada, Oregon, South Carolina, Tennessee, Texas, Utah, Washington and Wisconsin.

As of June 30, 2025, the Company's independent subsidiaries operated 347 facilities and other ancillary operations located in 17 states.

The Company's independent subsidiaries have a collective capacity of approximately 35,500 operational skilled nursing beds and 3,300 senior living units.

As of March 31, 2025, the Company's independent subsidiaries operated 233 facilities under long-term lease arrangements and had options to purchase eight of those 233 facilities.

As of June 30, 2025, the Company's independent subsidiaries operated 238 facilities under long-term lease arrangements and had options to purchase eight of those 238 facilities.

The Company's real estate portfolio consists of 144 owned real estate properties, which includes 109 facilities operated and managed by the Company's independent subsidiaries, 35 operations leased to and operated by third-party operators and the Service Center (defined below) location.

11 unchanged sentences

has direct operating assets, employees or revenue, or that any of the subsidiaries are operated by The Ensign Group, Inc.

Other Information — The accompanying condensed consolidated financial statements as of March 31, 2025 and for the three months ended March 31, 2025 and 2024 (collectively, the Interim Financial Statements) are unaudited.

Other Information — The accompanying condensed consolidated financial statements as of June 30, 2025, and for the three and six months ended June 30, 2025 and 2024 (collectively, the Interim Financial Statements) are unaudited.

Certain information and note disclosures normally included in the annual consolidated financial statements have been condensed or omitted, as permitted under applicable rules and regulations.

15 unchanged sentences

Actual results could differ from those estimates.

Certain amounts in the prior period condensed statement of income have been reclassified to conform to the presentation of the current period financial statements.

These reclassifications had no effect on the previously reported net income.

Recently Issued Accounting Pronouncements — In December 2023, the FASB issued ASU 2023-09 " Income Taxes (Topic 740):

Recently Issued Accounting Pronouncements — In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09 " Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, " which requires the Company to disclose disaggregated jurisdictional and categorical information for the tax rate reconciliation, income taxes paid and other income tax related amounts.

14 unchanged sentences

For patients under reimbursement arrangements with third-party payors, including Medicaid, Medicare and private insurers, revenue is recorded based on contractually agreed-upon amounts or rates, adjusted for estimates for variable consideration, on a per patient, daily basis or as services are performed.

Revenue from the Medicare and Medicaid programs accounted for 69.5 % and 71.6 % of all service revenue for the three months ended March 31, 2025 and 2024, respectively.

Revenue from the Medicare and Medicaid programs accounted for 69.8 % and 69.6 % of all service revenue for the three and six months ended June 30, 2025, respectively, and 71.2 % and 71.4 % of all service revenue for the three and six months ended June 30, 2024, respectively.

Settlements with Medicare and Medicaid payors for retroactive adjustments due to audits and reviews are considered variable consideration and are included in the determination of the estimated transaction price.

1 unchanged sentence

Consistent with healthcare industry practices, any changes to these revenue estimates are recorded in the period the change or adjustment becomes known based on the final settlement.

The Company recorded adjustments to revenue which were not material to the Company's revenue for the three months ended March 31, 2025 and 2024.

The Company recorded adjustments to revenue which were not material to the Company's revenue for the three and six months ended June 30, 2025 and 2024.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Service revenue for the three months ended March 31, 2025 and 2024 is summarized in the following tables:

Three Months Ended March 31,

Service revenue for the three and six months ended June 30, 2025 and 2024 is summarized in the following tables:

Three Months Ended June 30,

Revenue % of Revenue Revenue % of Revenue

8 unchanged sentences

(1) Medicaid payor includes revenue for senior living operations.

(2) Private and other also includes revenue from senior living operations and all revenue generated in other an cillary services.

In addition to the service revenue above, the Company's rental revenue derived from triple-net lease arrangements with third parties was $ 6,001 and $ 5,687 , respectively, for the three months ended March 31, 2025 and 2024.

(2) Private and other in skilled services includes private, Veteran Affairs and hospice payors.

In addition, private and other in the "all other" category includes revenue from senior living and ancillary operations.

Six Months Ended June 30,

Revenue % of Revenue Revenue % of Revenue

$ 939,688 39.3 % $ 801,923 39.4 %

Medicare 578,868 24.2 524,452 25.8

Medicaid — skilled 144,758 6.1 126,278 6.2

Total Medicaid and Medicare $ 1,663,314 69.6 % $ 1,452,653 71.4 %

Managed care 456,712 19.1 379,126 18.6

Private and other (2)

268,428 11.3 203,280 10.0

SERVICE REVENUE $ 2,388,454 100.0 % $ 2,035,059 100.0 %

(1) Medicaid payor includes revenue for senior living operations.

(2) Private and other in skilled services includes private, Veteran Affairs and hospice payors.

In addition, private and other in the "all other" category includes revenue from senior living and ancillary operations.

In addition to the service revenue above, the Company's rental revenue derived from triple-net lease arrangements with third parties was $ 6,355 and $ 12,356 , respectively, for the three and six months ended June 30, 2025 and $ 5,711 and $ 11,398 , respectively, for the three and six months ended June 30, 2024.

Balance Sheet Impact

Included in the Company’s condensed consolidated balance sheets are contract balances, comprised of billed accounts receivable and unbilled receivables, which are the result of the timing of revenue recognition, billings and cash collections, as well as contract liabilities, which primarily represent payments the Company receives in advance of services provided.

The Company had no material contract liabilities and contract assets as of March 31, 2025 and December 31, 2024, or activity during the three months ended March 31, 2025 and 2024.

The Company had no material contract liabilities or contract assets as of June 30, 2025 and December 31, 2024, or activity during the three and six months ended June 30, 2025 and 2024.

Accounts receivable consist primarily of amounts due from Medicare and Medicaid programs, other government programs, managed care health plans and private payor sources, net of estimates for variable consideration and doubtful accounts.

Accounts receivable as of March 31, 2025 and December 31, 2024, is summarized in the following table:

March 31, 2025 December 31, 2024

Accounts receivable as of June 30, 2025 and December 31, 2024, is summarized in the following table:

June 30, 2025 December 31, 2024

Medicaid $ 237,393 $ 228,872

5 unchanged sentences

ACCOUNTS RECEIVABLE, NET $ 578,050 $ 569,897

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

COMPUTATION OF NET INCOME PER COMMON SHARE

2 unchanged sentences

The computation of diluted net income per share is similar to the computation of basic net income per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

A reconciliation of the numerator and denominator used in the calculation of basic net income per common share follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net income $ 84,466 $ 71,181 $ 164,819 $ 140,141

6 unchanged sentences

A reconciliation of the numerator and denominator used in the calculation of diluted net income per common share follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net income $ 84,466 $ 71,181 $ 164,819 $ 140,141

4 unchanged sentences

incremental shares from assumed conversion (1)

1,445 1,469 1,432 1,528

Adjusted weighted average common shares outstanding 58,602 58,013 58,560 57,969

1 unchanged sentence

$ 1.44 $ 1.22 $ 2.81 $ 2.41

(1) Options outstanding which are anti-dilutive and therefore not factored into the weighted average common shares amount above were 1,171 and 1,143 for the three months ended March 31, 2025 and 2024, respectivel y.

(1) Options outstanding which are anti-dilutive and therefore not factored into the weighted average common shares amount above were 920 and 855 for the three and six months ended June 30, 2025, respectively, and 1,368 and 1,252 for the three and six months ended June 30, 2024, respectivel y.

FAIR VALUE MEASUREMENTS

The Company's financial assets include held-to-maturity investments carried at amortized cost basis of $ 146,635 and $ 138,600 , of which $ 75,707 and $ 65,831 are designated to support long-term insurance subsidiary liabilities, as of March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025 and December 31, 2024, the amortized cost basis of these financial assets are considered to approximate fair value and are derived using Level 2 inputs.

The Company believes its amortized cost basis investments that were in an unrealized loss position as of March 31, 2025 and December 31, 2024 do not require an allowance for expected credit losses, nor has any event occurred through the filing date of this report that would indicate differently.

The Company's financial assets include held-to-maturity investments carried at amortized cost basis of $ 146,725 and $ 138,600 , of which $ 73,839 and $ 65,831 are designated to support long-term insurance subsidiary liabilities, as of June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025 and December 31, 2024, the amortized cost basis of these financial assets are considered to approximate fair value and are derived using Level 2 inputs.

The Company believes its amortized cost basis investments that were in an unrealized loss position as of June 30, 2025 and December 31, 2024 do not require an allowance for expected credit losses, nor has any event occurred through the filing date of this report that would indicate differently.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company's financial assets also include the contracts insuring the lives of certain employees who are eligible to participate in non-qualified deferred compensation plans that are held in a rabbi trust.

The cash surrender value of these contracts is based on funds that shadow the investment allocations specified by participants in the deferred compensation plan and are held at fair value.

As of March 31, 2025 and December 31, 2024, the fair value of the investment funds was $ 63,538 and $ 56,049 , respectively, which are derived using Level 2 inputs.

As of June 30, 2025 and December 31, 2024, the fair value of the investment funds was $ 68,344 and $ 56,049 , respectively, which are derived using Level 2 inputs.

Additionally, the Company has other investments held at historical cost basis, which are not material, for which the fair value is derived using Level 3 inputs.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

STANDARD BEARER

1 unchanged sentence

Of those 34 operations, one senior living operation is located on the same real estate property as a skilled nursing operation that an independent subsidiary operates.

During the three months ended March 31, 2025, Standard Bearer added $ 147,796 of real estate assets associated with eight stand-alone skilled nursing operations, one stand-alone senior living operation and two campus operations .

During the six months ended June 30, 2025, Standard Bearer added $ 195,045 of real estate assets associated with 11 stand-alone skilled nursing operations, one stand-alone senior living operation and two campus operations .

Four of the acquisitions were related to exercising purchase options under an existing lease arrangement from CareTrust REIT, Inc.

All these additions are operated by the Company's independent subsidiaries .

Of these additions, one stand-alone skilled nursing operation is leased to a third-party operator and the remaining additions are operated by the Company's independent subsidiaries.

Refer to Note 7, Operation Expansions , for additional information.

Subsequent to March 31, 2025, Standard Bearer added $ 24,781 of real estate assets associated with two stand-alone skilled nursing operations, of which one was leased back to the Company's independent subsidiaries and one leased to a third-party operator.

Subsequent to June 30, 2025, Standard Bearer added approximately $ 20,820 of real estate assets associated with two stand-alone skilled nursing operations, of which one was leased back to the Company's independent subsidiaries and one leased to a third-party operator.

Refer to Note 7, Operation Expansions, for additional information.

As of the date of this filing, the preliminary allocation of the purchase price for the acquisitions in the first quarter and subsequently has not been finalized, as necessary valuation information was not yet available.

During the three months ended March 31, 2024, Standard Bearer added $ 1,604 of real estate assets associated with one skilled nursing facility, which is operated by the Company's independent subsidiary.

During the six months ended June 30, 2024, Standard Bearer added $ 63,412 of real estate assets associated with five stand-alone skilled nursing operations and two campus operations, all of which are operated by the Company's independent subsidiaries.

Refer to Note 7, Operation Expansions , for additional information.

12 unchanged sentences

and (5) all fees in connection with any licenses or authorizations necessary or appropriate for the leased properties and the business conducted on the leased properties.

Intercompany rental revenue generated from Ensign affiliated operations for the three months ended March 31, 2025 and 2024 was $ 23,904 and $ 18,006 , respectively.

Intercompany rental revenue generated from Ensign affiliated operations was $ 26,756 and $ 50,660 , respectively, for the three and six months ended June 30, 2025 and $ 19,156 and $ 37,162 , respectively, for the three and six months ended June 30, 2024.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Intercompany management agreement

2 unchanged sentences

The management agreement provides for a base management fee that is equal to 5.0 % of total rental revenue and an incentive management fee that is equal to 5.0 % of funds from operations (FFO) and is capped at 1.0 % of total rental revenue, for a total of 6.0 %.

Management fee generated between Standard Bearer and the Service Center for the three months ended March 31, 2025 and 2024 was $ 1,692 and $ 1,332 , respectively, both representing 6 % of total Standard Bearer rental revenue.

Management fee generated between Standard Bearer and the Service Center for the three and six months ended June 30, 2025 was $ 1,883 and $ 3,575 , respectively.

Management fees generated between Standard Bearer and the Service Center for the three and six months ended June 30, 2024 was $ 1,401 and $ 2,733 , respectively.

Intercompany debt arrangements

2 unchanged sentences

The interest rate under the credit facility is a base rate plus a margin ranging from 0.25 % to 1.25 % per annum or SOFR plus a margin ranging from 1.25 % to 2.25 % per annum.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

In addition, as the Department of Housing and Urban Development (HUD) mortgage loans and promissory note are entered into by real estate subsidiaries of Standard Bearer, the interest expense incurred from these debts are included in Standard Bearer's segment income.

7 unchanged sentences

The Company can also call the awards, generally upon employee termination.

During the three months ended March 31, 2025 and 2024, the Company did not grant any stock options or restricted shares under the Standard Bearer Equity Plan.

During the three months ended March 31, 2025 and 2024, there were no restricted stock awards vested for the periods.

During the six months ended June 30, 2025 and 2024, the Company did not grant any stock options or restricted shares under the Standard Bearer Equity Plan.

During the six months ended June 30, 2025 and 2024, there were no restricted stock awards vested for the periods.

The grant-date fair value of the awards is recognized as compensation expense over the relevant vesting periods, with a corresponding adjustment to noncontrolling interests.

The grant value was determined based on an independent valuation of the subsidiary shares.

For the three months ended March 31, 2025, the Standard Bearer Equity Plan's share-based compensation expense was not material.

There was no expense during the three months ended March 31, 2024.

For the three and six months ended June 30, 2025, the Standard Bearer Equity Plan's share-based compensation expense was not material.

There was no expense during the three and six months ended June 30, 2024.

OPERATION EXPANSIONS

The expansion focus of the Company's independent subsidiaries is to purchase or lease operations that are complementary to the current operations, accretive to the business, or otherwise advance the Company's strategy.

The focus of the Company's independent subsidiaries is to expand its operations through leases or acquisitions of real estate that are complementary to the current operations, accretive to the business, or otherwise advance the Company's strategy.

The results of all independent subsidiaries are included in the Interim Financial Statements subsequent to the date of acquisition.

5 unchanged sentences

2025 Expansions

During the three months ended March 31, 2025, the Company expanded its operations and real estate portfolio through a combination of long-term leases and real estate purchases , with the addition of 11 stand-alone skilled nursing operations, one stand-alone senior living operation and one campus operation.

Of these additions, Standard Bearer acquired the real estate of seven of these operations, all of which were leased back to the Company's independent subsidiaries.

Refer to Note 6, Standard Bearer, for additional information on the purchase of real estate properties.

These new operations added a total of 1,365 operational skilled nursing beds and 132 operational senior living units to be operated by the Company's independent subsidiaries.

Subsequent to March 31, 2025, the Company expanded its operations through a combination of long-term leases and real estate purchases , with the addition of two stand-alone skilled nursing operations and one stand-alone senior living operation.

Of these additions, Standard Bearer acquired the real estate of one stand-alone skilled nursing operation, which was leased back to the Company's independent subsidiary.

Refer to Note 6, Standard Bearer, for additional information on the purchase of the real estate property.

The new operations added 241 operational skilled nursing beds and 68 operational senior living units to be operated by the Company's independent subsidiaries.

Additionally, the Company added one stand-alone senior living facility to its real estate portfolio, which is leased to a third-party operator.

2024 Expansions

During the three months ended March 31, 2024, the Company expanded its operations and real estate portfolio through a combination of long-term leases and a real estate purchase , with the addition of five stand-alone skilled nursing operations.

Of these additions, Standard Bearer acquired the real estate of one of the stand-alone skilled nursing operation, which was leased back to the Company's independent subsidiary.

Refer to Note 6, Standard Bearer, for additional information on the purchase of real estate property.

These new operations added a total of 591 operational skilled nursing beds to be operated by the Company's independent subsidiaries.

The Company also invested in new ancillary services that are complementary to its existing businesses.

During the six months ended June 30, 2025, the Company expanded its operations with the addition of 17 stand-alone skilled nursing operations, two stand-alone senior living operations and one campus operation.

These new operations added a total of 1,955 operational skilled nursing beds and 204 operational senior living units be operated by the Company's independent subsidiaries.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

As of the date of this filing, the preliminary allocation of the purchase price for the acquisitions in the first quarter of 2025 was not finalized as necessary valuation information was not yet available.

The table below presents the allocation of the purchase price for the operations acquired during the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

Land $ 20,136 $ 241

Building and improvements 127,660 1,503

Equipment, furniture, and fixtures 2,723 189

Assembled occupancy 324 —

Goodwill 8,329 372

Other indefinite-lived intangible assets — 132

TOTAL ACQUISITIONS $ 159,172 $ 2,437

The Company’s acquisition strategy has been focused on identifying both opportunistic and strategic acquisitions within its target markets that offer strong opportunities for return.

The operations added by the Company are frequently underperforming financially and can have regulatory and clinical challenges to overcome.

Financial information, especially with underperforming operations, is often inadequate, inaccurate or unavailable.

Consequently, the Company believes that prior operating results are not a meaningful representation of the Company’s current operating results or indicative of the integration potential of its newly acquired independent subsidiaries .

The operations added during the three months ended March 31, 2025 were not material to the Company individually or in the aggregate.

Accordingly, pro forma financial information is not presented.

These additions have been included in the condensed consolidated balance sheets of the Company, and the operating results have been included in the condensed consolidated statements of income of the Company since the date the Company gained effective control.

Subsequent to June 30, 2025, the Company expanded its operations with the addition of one stand-alone skilled nursing operation.

This new operation added 120 operational skilled nursing beds to be operated by one of the Company's independent subsidiary.

2024 Expansions

During the six months ended June 30, 2024, the Company expanded its operations with the addition of 13 stand-alone skilled nursing operations and two campus operations.

One of the stand-alone skilled nursing operations includes a long-term acute care hospital.

These new operations added a total of 1,369 operational skilled nursing beds and 202 operational senior living units operated by the Company's independent subsidiaries.

Included within the operational skilled nursing bed are 43 long-term acute care beds.

The Company also invested in new ancillary services that are complementary to its existing businesses.

BUSINESS SEGMENTS

1 unchanged sentence

(1) skilled services, which includes the operation of skilled nursing facilities and rehabilitation therapy services and (2) Standard Bearer, which is comprised of selected real estate properties owned by Standard Bearer and leased to skilled nursing and senior living operators.

As of March 31, 2025, the skilled services segment includes 297 skilled nursing and 31 campus operations that provide both skilled nursing and rehabilitative care services and senior living services.

As of June 30, 2025, the skilled services segment includes 303 skilled nursing and 31 campus operations that provide both skilled nursing and rehabilitative care services and senior living services.

The Company's Standard Bearer segment consists of 138 owned real estate properties.

4 unchanged sentences

The segment structure reflects the Company's current operational and financial management and provides the best structure to maximize the quality of care and investment strategy provided, while maintaining financial discipline.

Segment income (loss) is defined as income or loss before provision for income taxes, excluding gain or loss from sale of real estate, real estate insurance recoveries and impairment of long-lived assets.

The Company's chief operating decision maker or CODM, who is the Chief Executive Officer, reviews segment income or loss for each operating segment to evaluate performance and allocate capital resources.

The CODM uses segment income or loss to analyze actual results as part of operational planning and to decide whether to reinvest profits into the segments or into other parts of the Company, such as through acquisitions, to pay dividends or to recommend a stock repurchase program.

Segment income is defined as income before provision for income taxes, excluding gain or loss from sale of real estate, real estate insurance recoveries and impairment of long-lived assets.

The Company's chief operating decision maker or CODM, who is the Chief Executive Officer, reviews segment income for each operating segment to evaluate performance and allocate capital resources.

The CODM uses segment income to analyze actual results as part of operational planning and to decide whether to reinvest profits into the segments or into other parts of the Company, such as through acquisitions, to pay dividends or to recommend a stock repurchase program.

The Company's CODM does not review assets by segment in his resource allocation and therefore assets by segment are not disclosed below.

4 unchanged sentences

The following tables set forth financial information for the segments:

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Skilled Services Standard Bearer Total

18 unchanged sentences

Intercompany service revenue is eliminated in "Elimination of intercompany revenue".

(2) All other revenue includes $ 49,427 of service revenue and $ 2,999 of rental revenue for the three months ended March 31, 2025, both of which include intercompany revenue that is eliminated in "Elimination of intercompany revenue".

(3) Elimination of intercompany revenue includes the elimination of intercompany rental revenue of $ 25,399 and intercompany service revenue of $ 5,941 for the three months ended March 31, 2025.

(4) Other segment items includes cost of services and rent expense for the skilled services segment and cost of services, rent expense and general and administrative expenses for the Standard Bearer segment.

Additionally, there are intercompany expenses of $ 31,340 during the three months ended March 31, 2025, which are eliminated in consolidation.

(2) All other revenue includes $ 54,174 of service revenue and $ 3,158 of rental revenue for the three months ended June 30, 2025, both of which include intercompany revenue that is eliminated in "Elimination of intercompany revenue".

(3) Elimination of intercompany revenue includes the elimination of intercompany rental revenue of $ 28,271 and intercompany service revenue of $ 6,336 for the three months ended June 30, 2025.

(4) Other segment items include cost of services and rent expense for the skilled services segment and cost of services, rent expense and general and administrative expenses for the Standard Bearer segment.

Additionally, there are intercompany expenses of $ 34,607 during the three months ended June 30, 2025, which are eliminated in consolidation.

(5) Included in interest expense in Standard Bearer is interest from intercompany debt arrangements between Standard Bearer and The Ensign Group, Inc.

of $ 7,040 during the three months ended March 31, 2025, which is eliminated in consolidation.

of $ 9,023 during the three months ended June 30, 2025, which is eliminated in consolidation.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Skilled Services Standard Bearer Total

18 unchanged sentences

Intercompany service revenue is eliminated in "Elimination of intercompany revenue".

(2) All Other revenue includes $ 39,626 of service revenue and $ 2,946 of rental revenue for the three months ended March 31, 2024, both of which include intercompany revenue that is eliminated in "Elimination of intercompany revenue".

(3) Elimination of intercompany revenue includes the elimination intercompany rental revenue of $ 19,460 and intercompany service revenue of $ 4,743 for the three months ended March 31, 2024.

Additionally, there are intercompany expenses of $ 24,203 during the three months ended March 31, 2024, which is eliminated in consolidation.

(2) All Other revenue includes $ 44,340 of service revenue and $ 2,999 of rental revenue for the three months ended June 30, 2024, both of which include intercompany revenue that is eliminated in "Elimination of intercompany revenue".

(3) Elimination of intercompany revenue includes the elimination intercompany rental revenue of $ 20,642 and intercompany service revenue of $ 5,051 for the three months ended June 30, 2024.

Additionally, there are intercompany expenses of $ 25,693 during the three months ended June 30, 2024, which is eliminated in consolidation.

(5) Included in interest expense in Standard Bearer is interest from intercompany debt arrangements between Standard Bearer and The Ensign Group, Inc.

of $ 4,285 during the three months ended March 31, 2024, which is eliminated in consolidation.

of $ 4,998 during the three months ended June 30, 2024, which is eliminated in consolidation.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Six Months Ended June 30, 2025

Skilled Services Standard Bearer Total

Service revenue (1)

$ 2,297,130 $ — $ 2,297,130

Rental revenue

— 59,869 59,869

Segment revenue

$ 2,297,130 $ 59,869 $ 2,356,999

Reconciliation of revenue:

All other revenue (2)

Elimination of intercompany revenue (3)

TOTAL CONSOLIDATED REVENUE

Other segment items (4)

1,976,232 5,372

Depreciation and amortization 26,963 17,741

Interest expense (5)

Segment income

$ 293,935 $ 17,709 $ 311,644

Reconciliation of profit or loss:

All other not included in segment income

INCOME BEFORE PROVISION FOR INCOME TAXES

(1) Skilled services service revenue does not include intercompany service revenue generated by ancillary operations provided to the Company's independent subsidiaries and management service revenue generated by the Service Center with Standard Bearer.

Intercompany service revenue is eliminated in "Elimination of intercompany revenue".

(2) All other revenue includes $ 103,601 of service revenue and $ 6,157 of rental revenue for the six months ended June 30, 2025, both of which include intercompany revenue that is eliminated in "Elimination of intercompany revenue".

(3) Elimination of intercompany revenue includes the elimination of intercompany rental revenue of $ 53,670 and intercompany service revenue of $ 12,277 for the six months ended June 30, 2025.

Additionally, there are intercompany expenses of $ 65,947 during the six months ended June 30, 2025, which are eliminated in consolidation.

(5) Included in interest expense in Standard Bearer is interest from intercompany debt arrangements between Standard Bearer and The Ensign Group, Inc.

of $ 16,063 during the six months ended June 30, 2025, which is eliminated in consolidation.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Six Months Ended June 30, 2024

Skilled Services Standard Bearer Total

Service revenue (1)

$ 1,960,887 $ — $ 1,960,887

Rental revenue

— 45,555 45,555

Segment revenue

$ 1,960,887 $ 45,555 $ 2,006,442

Reconciliation of revenue:

All other revenue (2)

Elimination of intercompany revenue (3)

TOTAL CONSOLIDATED REVENUE

Other segment items (4)

1,690,446 4,266

Depreciation and amortization 21,447 13,995

Interest expense (5)

Segment income $ 248,994 $ 14,618 $ 263,612

Reconciliation of profit or loss:

All other not included in segment income

INCOME BEFORE PROVISION FOR INCOME TAXES

Intercompany service revenue is eliminated in "Elimination of intercompany revenue".

(2) All Other revenue includes $ 83,966 of service revenue and $ 5,945 of rental revenue for the six months ended June 30, 2024, both of which include intercompany revenue that is eliminated in "Elimination of intercompany revenue".

(3) Elimination of intercompany revenue includes the elimination intercompany rental revenue of $ 40,102 and intercompany service revenue of $ 9,794 for the six months ended June 30, 2024.

Additionally, there are intercompany expenses of $ 49,896 during the six months ended June 30, 2024, which is eliminated in consolidation.

(5) Included in interest expense in Standard Bearer is interest from intercompany debt arrangements between Standard Bearer and The Ensign Group, Inc.

of $ 9,283 during the six months ended June 30, 2024, which is eliminated in consolidation.

Service revenue by major payor source were as follows:

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Skilled Services All Other (3)

8 unchanged sentences

TOTAL SERVICE REVENUE $ 1,173,576 $ 47,838 $ 1,221,414 100.0 %

(1) Medicaid payor includes revenue generated from senior living operations.

(2) Private and other payors also includes revenue from senior living operations and all revenue generated in other ancillary services.

(3) All Other incorporates intercompany eliminations.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Skilled Services All Other (3)

8 unchanged sentences

TOTAL SERVICE REVENUE $ 991,285 $ 39,289 $ 1,030,574 100.0 %

Six Months Ended June 30, 2025

Skilled Services All Other (3)

Total Service Revenue Revenue %

$ 917,315 $ 22,373 $ 939,688 39.3 %

Medicare 578,868 — 578,868 24.2

Medicaid-skilled 144,758 — 144,758 6.1

Subtotal $ 1,640,941 $ 22,373 $ 1,663,314 69.6 %

Managed care 456,712 — 456,712 19.1

Private and other (2)

199,477 68,951 268,428 11.3

TOTAL SERVICE REVENUE $ 2,297,130 $ 91,324 $ 2,388,454 100.0 %

Six Months Ended June 30, 2024

Skilled Services All Other (3)

Total Service Revenue Revenue %

$ 785,245 $ 16,678 $ 801,923 39.4 %

Medicare 524,452 — 524,452 25.8

Medicaid-skilled 126,278 — 126,278 6.2

Subtotal $ 1,435,975 $ 16,678 $ 1,452,653 71.4 %

Managed care 379,126 — 379,126 18.6

Private and other (2)

145,786 57,494 203,280 10.0

TOTAL SERVICE REVENUE $ 1,960,887 $ 74,172 $ 2,035,059 100.0 %

(1) Medicaid payor includes revenue generated from senior living operations.

(2) Private and other payors also includes revenue from senior living operations and all revenue generated in other ancillary services.

(2) Private and other in skilled services includes private, Veteran Affairs and hospice payors.

In addition, private and other in the "all other" category includes revenue from senior living and ancillary operations.

(3) All Other incorporates intercompany eliminations.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

PROPERTY AND EQUIPMENT - NET

Property and equipment, net consists of the following:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Land $ 200,366 $ 162,873

7 unchanged sentences

PROPERTY AND EQUIPMENT, NET $ 1,535,185 $ 1,291,354

Management evaluated its long-lived assets and recorded an impairment charge of $ 1,849 within the Company's consolidated statement of income as cost of services during the three months ended March 31, 2024.

The Company determined there was no impairment during the three months ended March 31, 2025.

Management evaluated its long-lived assets and determined there was no impairment during the six months ended June 30, 2025.

During the six months ended June 30, 2024, the Company recorded an impairment charge of $ 1,849 within the Company's consolidated statement of income as cost of services .

Real Estate Acquisitions

A majority of the real estate properties were acquired by subsidiaries of Standard Bearer, as detailed in Note 6.

Standard Bearer.

The table below presents the allocation of the purchase price for real estate purchases during the six months ended June 30, 2025 and 2024:

Six Months Ended June 30,

Land $ 37,493 $ 14,491

Building and improvements 162,806 48,535

Equipment, furniture, and fixtures 3,956 1,483

Assembled occupancy 354 377

Goodwill — 372

Other indefinite-lived intangible assets — 132

TOTAL ACQUISITIONS $ 204,609 $ 65,390

INTANGIBLE ASSETS - NET

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Weighted Average Life (Years)

5 unchanged sentences

TOTAL $ 7,660 $ ( 5,817 ) $ 1,843 $ 7,306 $ ( 4,680 ) $ 2,626

During the three months ended March 31, 2025 and 2024, amortization expense was $ 811 and $ 401 , respectively, of which $ 142 and $ 303 was related to the amortization of right-of-use assets, respectively.

During the three and six months ended June 30, 2025, amortization expense was $ 740 and $ 1,551 , respectively, of which $ 272 and $ 414 was related to the amortization of right-of-use assets, respectively.

Amortization expense was $ 536 and $ 937 , respectively, of which $ 303 and $ 606 was related to the amortization of right-of-use assets for the three and six months ended June 30, 2024, respectively.

THE ENSIGN GROUP, INC.

4 unchanged sentences

Other indefinite-lived intangible assets consist of the following:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Trade name $ 889 $ 889

3 unchanged sentences

In addition, goodwill is tested for impairment if events occur or circumstances indicate that its carrying value may not be recoverable.

There were no indicators of goodwill impairment noted during the three months ended March 31, 2025.

The Company anticipates that the majority of goodwill recognized will be fully deductible for tax purposes as of March 31, 2025.

There were no indicators of goodwill impairment noted during the three and six months ended June 30, 2025.

The Company anticipates that the majority of goodwill recognized will be fully deductible for tax purposes as of June 30, 2025.

Provided that goodwill corresponds to the acquisition of a business and not merely the acquisition of real estate property, the Company's Standard Bearer segment appropriately does not carry a goodwill balance.

The following table represents activity in goodwill by the skilled services segment and "all other" category as of and for the three months ended March 31, 2025:

There were no activities in goodwill during the six months ended June 30, 2025.

The following table represents goodwill value by the skilled services segment and "all other" category as of June 30, 2025 and December 31, 2024:

Skilled Services All Other Total

January 1, 2025 $ 88,626 $ 9,355 $ 97,981

Additions 8,329 — 8,329

March 31, 2025 $ 96,955 $ 9,355 $ 106,310

Goodwill $ 88,626 $ 9,355 $ 97,981

OTHER ACCRUED LIABILITIES

Other accrued liabilities consist of the following:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Quality assurance fee $ 15,963 $ 12,667

Refunds payable 74,340 56,755

Resident advances 14,572 18,818

Refunds, deferred revenue and advances

78,817 75,573

Cash held in trust for patients 7,557 6,370

1 unchanged sentence

Property taxes 10,943 15,400

Income tax payable 13,219 —

Other 17,935 18,458

OTHER ACCRUED LIABILITIES $ 134,820 $ 132,057

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Quality assurance fee represents the aggregate of amounts payable to various states that have a mandated fee based on patient days or licensed beds.

Refunds payable includes payables related to overpayments, duplicate payments and credit balances from various payor sources.

Resident advances occur when the Company receives payments in advance of services provided.

Refunds, deferred revenue and advances consists of liabilities related to duplicate payments and credit balances from various payor sources, as well as payments received from residents in advance of services provided.

Cash held in trust for patients reflects monies received from or on behalf of patients.

1 unchanged sentence

The cash balance related to this liability is included in other current assets in the condensed consolidated balance sheets.

The Company recorded income tax expense of $ 26,227 and $ 20,638 during the three months ended March 31, 2025 and 2024, respectively, or 24.6 % of earnings before income taxes for the three months ended March 31, 2025, compared to 23.0 % for the three months ended March 31, 2024.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company recorded income tax expense of $ 54,119 and $ 41,521 during the six months ended June 30, 2025 and 2024, respectively, or 24.7 % of earnings before income taxes for the six months ended June 30, 2025, compared to 22.9 % for the six months ended June 30, 2024.

The effective tax rate for both periods is driven by the impact of excess tax benefits from stock-based compensation, offset by non-deductible expenses including non-deductible compensation.

2 unchanged sentences

The Company does not believe the federal or state statute lapses or any other event will significantly impact the balance of unrecognized tax benefits in the next twelve months.

The net balance of unrecognized tax benefits was not material to the Interim Financial Statements for the three months ended March 31, 2025 and 2024.

The net balance of unrecognized tax benefits was not material to the Interim Financial Statements for the six months ended June 30, 2025 and 2024.

On July 4, 2025, the One Big Beautiful Bill (OBBB) was enacted in the U.S.

The OBBB includes provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and changes to certain U.S.

corporate tax provisions.

These changes include 100% bonus depreciation for capital expenditures incurred after January 19, 2025, and full expensing of domestic research and experimental expenditures.

FASB ASC Topic 740, Income Taxes , requires the effects of tax law changes to be recognized in the period of enactment.

As the legislation was signed into law after the close of the Company's second quarter, the impacts are not included in the Company's operating results for the six months ended June 30, 2025.

The Company is currently assessing the impact but does not expect that the provisions will have a material impact on its consolidated financial statements.

Debt consists of the following:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Mortgage loans and promissory note $ 146,413 $ 148,438

11 unchanged sentences

provided that if the aggregate consideration for approved acquisitions in a six month period is greater than $ 50,000 , then the ratio can be increased at the election of the Company with notice to the administrative agent to 4.25 :1.00 for the first fiscal quarter and the immediately following three fiscal quarters), and (ii) a minimum interest/rent coverage ratio (which cannot be less than 1.50 :1.00).

As of March 31, 2025, there was no outstanding debt under the Credit Facility.

The Company was in compliance with all loan covenants as of March 31, 2025.

As of June 30, 2025, there was no outstanding debt under the Credit Facility.

The Company was in compliance with all loan covenants as of June 30, 2025.

THE ENSIGN GROUP, INC.

1 unchanged sentence

Mortgage Loans and Promissory Note

As of March 31, 2025, the Company has 23 subsidiaries that have mortgage loans insured with HUD in the aggregate amount of $ 146,045 , which subjects these subsidiaries to HUD oversight and periodic inspections.

As of June 30, 2025, the Company has 23 subsidiaries that have mortgage loans insured with HUD in the aggregate amount of $ 145,187 , which subjects these subsidiaries to HUD oversight and periodic inspections.

The mortgage loans bear effective interest rates in a range of 3.1 % to 4.2 %, including fixed interest rates in a range of 2.4 % to 3.3 % per annum.

7 unchanged sentences

Off-Balance Sheet Arrangements

As of March 31, 2025, the Company had approximately $ 27,893 of borrowing capacity under the Credit Facility pledged as collateral to secure outstanding letters of credit.

The Company believes that its outstanding letters of credit as of March 31, 2025 do not require an allowance for expected credit losses, nor has any event occurred through the filing date of this report that would indicate differently.

As of June 30, 2025, the Company had approximately $ 7,402 of borrowing capacity under the Credit Facility pledged as collateral to secure outstanding letters of credit, a decrease of $ 20,491 from December 31, 2024.

The Company believes that its outstanding letters of credit as of June 30, 2025 do not require an allowance for expected credit losses, nor has any event occurred through the filing date of this report that would indicate differently.

OPTIONS AND AWARDS

Stock-based compensation expense consists of stock-based payment awards made to employees and directors, including employee stock options and restricted stock awards, based on estimated fair values.

As stock-based compensation expense recognized in the Company’s condensed consolidated statements of income for the three months ended March 31, 2025 and 2024 was based on awards expected to vest, it has been reduced for estimated forfeitures.

As stock-based compensation expense recognized in the Company’s condensed consolidated statements of income for the three and six months ended June 30, 2025 and 2024 was based on awards expected to vest, it has been reduced for estimated forfeitures.

The Company estimates forfeitures at the time of grant and, if necessary, revises the estimate in subsequent periods if actual forfeitures differ.

2022 Omnibus Incentive Plan (2022 Plan) — The Company has one stock incentive plan, the 2022 Omnibus Incentive Plan (the 2022 Plan), pursuant to which grants of the Company's securities may currently be made.

Including the shares rolled over from the 2017 Omnibus Incentive Plan, the 2022 Plan provides for the issuance of 3,452 shares of common stock.

The number of shares available to be issued under the 2022 Plan will be reduced by (i) one share for each share that relates to an option or stock appreciation right award and (ii) two shares for each share which relates to an award other than a stock option or stock appreciation right award (a full-value award).

The Company has one stock incentive plan, the Amended and Restated 2022 Omnibus Incentive Plan (the Amended and Restated Plan), pursuant to which grants of the Company's securities may currently be made.

During the second quarter of 2025, the Company’s stockholders approved the Amended and Restated Plan, which increased the total number of shares authorized for issuance under the 2022 Omnibus Incentive Plan (the Predecessor Plan).

Including the shares rolled over from the Predecessor Plan, the Amended and Restated Plan provides for the issuance of 4,231 shares of common stock.

The number of shares available to be issued under the Amended and Restated Plan will be reduced by (i) one share for each share that relates to an option or stock appreciation right award and (ii) two shares for each share which relates to an award other than a stock option or stock appreciation right award (a full-value award).

Non-employee director options, to the extent granted, will vest and become exercisable in three equal annual installments, or the length of the term if less than three years , on the completion of each year of service measured from the grant date.

1 unchanged sentence

Options expire ten years from the date of grant.

At March 31, 2025, the total number of shares available for issuance under the 2022 Plan was 28 .

At June 30, 2025, the total number of shares available for issuance under the Amended and Restated Plan was 3,982 .

The Company uses the Black-Scholes option-pricing model to recognize the value of stock-based compensation expense for stock option awards.

2 unchanged sentences

The Company develops estimates based on historical data and market information, which can change significantly over time.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Stock Options

The Company used the following assumptions for stock options granted during the three months ended March 31, 2025 and 2024:

The Company used the following assumptions for stock options granted during the three months ended June 30, 2025 and 2024:

Grant Year Options Granted Weighted Average Risk-Free Rate Expected Life Weighted Average Volatility Weighted Average Dividend Yield

1 unchanged sentence

2024 173 4.4 % 6.1 years 40.6 % 0.2 %

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

For the three months ended March 31, 2025 and 2024, the following represents the exercise price and fair value displayed at grant date for stock option grants:

The Company used the following assumptions for stock options granted during the six months ended June 30, 2025 and 2024:

Grant Year Options Granted Weighted Average Risk-Free Rate Expected Life Weighted Average Volatility Weighted Average Dividend Yield

2025 327 4.2 % 6.2 years 39.4 % 0.2 %

2024 354 4.4 % 6.1 years 40.8 % 0.2 %

For the six months ended June 30, 2025 and 2024, the following represents the exercise price and fair value displayed at grant date for stock option grants:

Grant Year Granted Weighted Average Exercise Price Weighted Average Fair Value of Options

1 unchanged sentence

2024 354 $ 120.98 $ 55.39

The weighted average exercise price equaled the weighted average fair value of common stock on the grant date for all options granted during the three months ended March 31, 2025 and 2024 and therefore, the intrinsic value was $ 0 at the date of grant.

The following table represents the employee stock option activity during the three months ended March 31, 2025:

The weighted average exercise price equaled the weighted average fair value of common stock on the grant date for all options granted during the six months ended June 30, 2025 and 2024 and therefore, the intrinsic value was $ 0 at the date of grant.

The following table represents the employee stock option activity during the six months ended June 30, 2025:

Number of Options Outstanding Weighted Average

5 unchanged sentences

Exercised ( 274 ) 49.89

March 31, 2025 4,019 $ 81.35 1,941 $ 55.85

The aggregate intrinsic value of options outstanding, vested, expected to vest and exercised as of March 31, 2025 and December 31, 2024 is as follows:

Options March 31, 2025 December 31, 2024

June 30, 2025 4,009 $ 85.40 1,943 $ 58.64

The aggregate intrinsic value of options outstanding, vested, expected to vest and exercised as of June 30, 2025 and December 31, 2024 is as follows:

Options June 30, 2025 December 31, 2024

Outstanding $ 276,046 $ 219,309

2 unchanged sentences

The intrinsic value is calculated as the difference between the market value of the underlying common stock and the exercise price of the options .

The aggregate intrinsic value of options that vested during the three months ended March 31, 2025 and 2024 was $ 6,045 and $ 7,382 , respectively.

The total intrinsic value of options exercised during the three months ended March 31, 2025 and 2024 was $ 9,470 and $ 19,959 , respectively.

The aggregate intrinsic value of options that vested during the six months ended June 30, 2025 and 2024 was $ 22,121 and $ 18,073 , respectively.

The total intrinsic value of options exercised during the six months ended June 30, 2025 and 2024 was $ 24,957 and $ 29,894 , respectively.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Restricted Stock Awards

The Company granted 92 and 95 restricted stock awards during the three months ended March 31, 2025 and 2024 , respectively.

The Company granted 42 and 134 restricted stock awards during the three and six months ended June 30, 2025, respectively.

The Company granted 42 and 137 restricted stock awards during the three and six months ended June 30, 2024, respectively.

All awards were granted at an issue price of $ 0 and generally vest over five years .

The fair value per share of restricted awards granted during the three months ended March 31, 2025 and 2024 ranged from $ 126.34 to $ 134.58 and $ 116.65 to $ 122.69 , respectively.

The fair value per share of restricted awards granted during the six months ended June 30, 2025 and 2024 ranged from $ 126.34 to $ 147.04 and $ 116.65 to $ 122.69 , respectively.

The fair value per share includes quarterly stock awards to non-employee directors.

Included in the restricted stock award grants are $ 8,003 and $ 6,165 of annual bonuses that were settled in vested restricted stock awards during the three months ended March 31, 2025 and 2024, respectively.

A summary of the status of the Company's non-vested restricted stock awards as of March 31, 2025 and changes during the three months ended March 31, 2025, is presented below:

Included in the restricted stock award grants are $ 8,003 and $ 6,165 of annual bonuses that were settled in vested restricted stock awards in the first quarter of 2025 and 2024, respectively .

A summary of the status of the Company's non-vested restricted stock awards as of June 30, 2025 and changes during the six months ended June 30, 2025 is presented below:

Non-Vested Restricted Awards Weighted Average Grant Date Fair Value

3 unchanged sentences

Forfeited ( 6 ) 109.88

Nonvested at March 31, 2025

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

During the three months ended March 31, 2025, the Company granted 3.6 automatic quarterly stock awards to non-employee directors for their service on the Company's board of directors.

The fair value per share of these stock awards was $ 134.58 based on the market price on the grant date.

Nonvested at June 30, 2025

During the three and six months ended June 30, 2025, the Company granted 3 and 7 automatic quarterly stock awards, respectively, to non-employee directors for their service on the Company's board of directors.

The fair value per share of these stock awards ranged from $ 129.09 to $ 134.58 based on the market price on the grant date.

Stock-based compensation expense

Stock-based compensation expense recognized for the Company's equity incentive plans and long-term incentive plan for the three months ended March 31, 2025 and 2024 was as follows:

Three Months Ended March 31,

Stock-based compensation expense recognized for the Company's equity incentive plans and long-term incentive plan for the three and six months ended June 30, 2025 and 2024 was as follows:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Stock-based compensation expense related to stock options $ 7,402 $ 5,518 $ 14,207 $ 10,506

1 unchanged sentence

Stock-based compensation expense related to restricted stock awards to non-employee directors

465 524 949 1,040

TOTAL $ 11,628 $ 8,978 $ 22,319 $ 17,209

In future periods, the Company expects to recognize approximately $ 86,128 and $ 37,841 in stock-based compensation expense for unvested options and unvested restricted stock awards, respectively, that were outstanding as of March 31, 2025.

In future periods, the Company expects to recognize approximately $ 89,480 and $ 39,906 in stock-based compensation expense for unvested options and unvested restricted stock awards, respectively, that were outstanding as of June 30, 2025.

Future stock-based compensation expense will be recognized over 3.7 weighted average years for both unvested options and restricted stock awards.

There were 2,078 unvested and outstanding options as of March 31, 2025, of which 1,913 options are expected to vest.

The weighted average contractual life for options outstanding, vested and expected to vest as of March 31, 2025 was 6.7 years.

There were 2,066 unvested and outstanding options as of June 30, 2025, of which 1,900 options are expected to vest.

The weighted average contractual life for options outstanding, vested and expected to vest as of June 30, 2025 was 6.7 years.

The Company leases from CareTrust real property associated with 96 independent skilled nursing and senior living facilities used in the Company’s operations under eight “triple-net” master lease agreements (collectively, the Master Leases), which range in terms from 13 to 20 years.

5 unchanged sentences

If the Company elects to renew the term of a Master Lease, the renewal will be effective to all, but not less than all, of the leased property then subject to the Master Lease.

During the three months ended March 31, 2025, the Company exercised purchase options under an existing lease arrangement to acquire the real estate of four facilities from CareTrust for $ 44,627 .

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company does not have the ability to terminate the obligations under a Master Lease prior to its expiration without CareTrust’s consent.

7 unchanged sentences

and (5) all fees in connection with any licenses or authorizations necessary or appropriate for the leased properties and the business conducted on the leased properties.

The terms and conditions of the one stand-alone lease are substantially the same as those for the master leases described above.

Total rent expense under the Master Leases was approximately $ 17,126 and $ 16,800 for the three months ended March 31, 2025 and 2024, respectively.

Total rent expense under the Master Leases was approximately $ 16,904 and $ 34,030 for the three and six months ended June 30, 2025, respectively, and $ 17,272 and $ 34,072 for the three and six months ended June 30, 2024, respectively.

Among other things, under the Master Leases, the Company must maintain compliance with specified financial covenants measured on a quarterly basis, including a portfolio coverage ratio and a minimum rent coverage ratio.

The Master Leases also include certain reporting, legal and authorization requirements.

The Company is in compliance with requirements of the Master Leases as of March 31, 2025.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company is in compliance with requirements of the Master Leases as of June 30, 2025.

The Company leases facilities where its independent subsidiaries operate and certain administrative offices under non-cancelable operating leases, most of which have initial lease terms ranging from 15 to 20 years.

2 unchanged sentences

The Company's 100 independent subsidiaries, excluding the subsidiaries that are operated under the Master Leases with CareTrust, are operated under 17 separate master lease arrangements.

During the three months ended March 31, 2025, the Company entered into one new master lease arrangement to add six stand-alone skilled nursing facilities operated by the Company's independent subsidiaries with an initial term of 15 years.

In the first quarter of 2025, the Company entered into one new master lease arrangement to add six stand-alone skilled nursing facilities operated by the Company's independent subsidiaries with an initial term of 15 years.

The new master lease arrangement increased the lease liabilities and right-of-use assets by $ 57,961 to reflect the new lease obligations.

In the second quarter of 2025, the Company entered into two new master lease arrangements to add four stand-alone skilled nursing facilities operated by the Company's independent subsidiaries with an initial term of 15 years.

The new master lease arrangements increased the lease liabilities and right-of-use assets by $ 52,753 to reflect the new lease obligations.

Under the master leases, a default at a single facility could subject one or more of the other facilities covered by the same master lease to the same default risk.

3 unchanged sentences

The components of operating lease expense are as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Rent - cost of services (1)

1 unchanged sentence

Cost of services (2)

6,611 5,649 13,040 11,419

General and administrative expense 214 181 413 334

1 unchanged sentence

272 303 414 606

(1) Rent- cost of services includes deferred rent expense adju stments of $ 208 and $ 195 for the three months ended March 31, 2025 and 2024, respectively.

Additionally, rent- cost of services includes other variable lease costs such as CPI increases and short-term leases of $ 4,004 and $ 3,057 for the three months ended March 31, 2025 and 2024, respectively.

(2) Cost of services includes variable lease costs, which consists of property taxes and insurance.

$ 64,292 $ 59,405 $ 128,138 $ 117,507

(1) Rent - cost of services includes deferred rent expense adju stments of $ 199 and $ 407 for the three and six months ended June 30, 2025, respectively, and $ 190 and $ 385 for the three and six months ended June 30, 2024, respectively.

Additionally, rent - cost of services includes other variable lease costs such as CPI increases and short-term leases of $ 4,634 and $ 8,638 for the three and six months ended June 30, 2025, respectively, and $ 3,300 and $ 6,357 for the three and six months ended June 30, 2024, respectively.

(2) Cost of services includes variable lease costs consisting of property taxes and insurance.

(3) Depreciation and amortization is related to the amortization of favorable and direct lease costs.

Future minimum lease payments for all third-party leases as of March 31, 2025 are as follows:

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Future minimum lease payments for all third-party leases as of June 30, 2025 are as follows:

2025 (remainder) $ 108,371

7 unchanged sentences

In determining the present value of lease payments, the Company used its incremental borrowing rate based on the information available at the lease commencement date.

As of March 31, 2025, the weighted average remaining lease term is 14.4 years and the weighted average discount rate used to determine the operating lease liabilities is 6.3 %.

Subsequent to March 31, 2025, the Company expanded its operations through a new master lease with the addition of one stand-alone skilled nursing operation and one stand-alone senior living operation.

The aggregate impact to the carrying value of lease liabilities and right-of-use assets related to the long-term leases is estimated to be approximately $ 34,000 .

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

As of June 30, 2025, the weighted average remaining lease term is 14.2 years and the weighted average discount rate used to determine the operating lease liabilities is 6.3 %.

Lessor Activities

7 unchanged sentences

The initial terms range from 14 to 16 years.

Total rental income from all third-party sources for the three months ended March 31, 2025 and 2024 is as follows:

Three Months Ended March 31,

During the three and six months ended June 30, 2025, the Company entered into two lease agreements with a third-party operator for one skilled nursing and one senior living operation, both with initial lease terms of 15 years.

Total rental income from all third-party sources for the three and six months ended June 30, 2025 and 2024 is as follows:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

$ 4,082 $ 3,824 $ 8,204 $ 7,644

Other third-party (2)

2,273 1,887 4,152 3,754

TOTAL $ 6,355 $ 5,711 $ 12,356 $ 11,398

(1) Pennant rental income includes variable rent such as property taxes of $ 310 and $ 318 during the three months ended March 31, 2025 and 2024.

(2) Other third-party includes rental revenue associated with the Company's subleases to third parties of $ 1,107 and $ 1,080 for the three months ended March 31, 2025 and 2024.

Future annual rental income for all third-party leases as of March 31, 2025 were as follows:

(1) Pennant rental income includes variable rent such as property taxes of $ 270 and $ 580 during the three and six months ended June 30, 2025 and $ 314 and $ 632 for the three and six months ended June 30, 2024.

(2) Other third-party includes rental revenue associated with the Company's subleases to third parties of $ 1,116 and $ 2,223 for the three and six months ended June 30, 2025, respectively, and $ 1,089 and $ 2,169 for the three and six months ended June 30, 2024, respectively.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Future annual rental income for all third-party leases as of June 30, 2025 were as follows:

Year Amount (1)

2 unchanged sentences

TOTAL $ 250,101

(1) Annual rental income includes base rents and variable rental income pursuant to existing leases as of March 31, 2025.

Subsequent to March 31, 2025, the Company entered into two lease agreements with a third-party operator for one stand-alone skilled nursing operation and one stand-alone senior living operation with an initial lease term of 15 years, respectively.

(1) Annual rental income includes base rents and variable rental income pursuant to existing leases as of June 30, 2025.

Subsequent to June 30, 2025, the Company entered into one lease agreement with a third-party operator for one stand-alone skilled nursing operation .

DEFINED CONTRIBUTION PLANS

3 unchanged sentences

Additionally, the DCP allows for the employee deferrals to be deposited into a rabbi trust and the funds are generally invested in individual variable life insurance contracts owned by the Company that are specifically designed to fund savings plans of this nature.

The Company paid for related administrative costs, which were not significant during the three months ended March 31, 2025 and 2024.

As of March 31, 2025 and December 31, 2024, the Company accrued $ 65,232 and $ 63,051 , respectively, as long term deferred compensation in other long term liabilities on the condensed consolidated balance sheets.

The Company paid for related administrative costs, which were not significant during the three and six months ended June 30, 2025 and 2024.

As of June 30, 2025 and December 31, 2024, the Company accrued $ 62,816 and $ 63,051 , respectively, as long term deferred compensation in other long term liabilities on the condensed consolidated balance sheets.

Cash surrender value of the contracts is based on investment funds that shadow the investment allocations specified by participants in the deferred compensation plan.

Refer to Note 5, Fair Value Measurements for more information on the funds.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

For the three months ended March 31, 2025, the Company recorded a loss related to its DCP of $ 282 , which is included in other income (expense), and recorded an offsetting reduction in expense of $ 234 , which is allocated between cost of services and general and administrative expenses.

For the three months ended March 31, 2024, the Company recorded a gain related to its DCP of $ 2,394 , which is included in other income (expense), and recorded an offsetting expense of $ 2,488 , which is allocated between cost of services and general and administrative expenses.

For the three and six months ended June 30, 2025, the Company recorded gains related to its DCP of $ 4,482 and $ 4,200 , respectively, which is included in other income (expense), and recorded offsetting expenses of $ 4,578 and $ 4,344 , respectively, which is allocated between cost of services and general and administrative expenses.

For the three and six months ended June 30, 2024, the Company recorded gains related to its DCP of $ 527 and $ 2,921 , respectively, which is included in other income (expense), and recorded offsetting expenses of $ 628 and $ 3,116 , respectively, which is allocated between cost of services and general and administrative expenses.

SELF INSURANCE LIABILITIES

5 unchanged sentences

In Colorado, the third-party coverage above these limits is $ 1,000 per claim and $ 3,000 per operation, which is independent of the aforementioned blanket aggregate limits that apply outside of Colorado.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The majority of the self-insured retention and deductible limits for general and professional liabilities and workers' compensation liabilities are self-insured through the captive insurance subsidiary, the related assets and liabilities of which are included in the accompanying condensed consolidated balance sheets.

13 unchanged sentences

To protect itself against loss exposure with this policy, the Company has purchased individual stop-loss insurance coverage that insures individual claims that exceed $ 525 for each covered person for fiscal year 2025.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table represents the Company's self-insurance insurance liabilities, on an undiscounted basis, inclusive of anticipated insurance recoveries, as of March 31, 2025 and December 31, 2024:

March 31, 2025 December 31, 2024

The following table represents the Company's self-insurance insurance liabilities, on an undiscounted basis, inclusive of anticipated insurance recoveries, as of June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024

Accrued general liability and professional malpractice liabilities $ 179,515 $ 160,149

7 unchanged sentences

$ 158,991 $ 144,421

The anticipated insurance recoveries included in the self-insurance liabilities are presented gross rather than net with the corresponding asset of $ 17,899 and $ 17,741 , as of March 31, 2025 and December 31, 2024, respectively, included in Restricted and other assets on the consolidated balance sheets.

The anticipated insurance recoveries included in the self-insurance liabilities are presented gross rather than net with the corresponding asset of $ 17,958 and $ 17,741 , as of June 30, 2025 and December 31, 2024, respectively, included in Restricted and other assets on the consolidated balance sheets.

The Company believes that adequate provision has been made in the Interim Financial Statements for liabilities that may arise out of patient care, workers’ compensation, healthcare benefits and related services provided to date.

4 unchanged sentences

Consequently, because no claims have been asserted, no liabilities have been recorded for these obligations on the Company’s condensed consolidated balance sheets for any of the periods presented.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Litigation and Regulatory Matters — The Company and its independent subsidiaries are party to various legal actions and administrative proceedings and are subject to various claims arising in the ordinary course of business.

Such claims may be related to, but are not limited to, the Health Insurance Portability and Accountability Act of 1996, alleged Medicare or Medicaid false claims, qui tam or "whistleblower" provisions of the False Claims Act and/or the Anti-Kickback Statute, alleged violations of state and federal wage and hour laws, environmental matters, investigations, examinations, audits, site visits and surveys or other claims in connection with the delivery of healthcare and non-healthcare services.

Such claims may be related to, but are not limited to, the Health Insurance Portability and Accountability Act of 1996, alleged Medicare or Medicaid false claims, qui tam or "whistleblower" provisions of the False Claims Act and/or the Anti-Kickback Statute, alleged violations of state and federal wage and hour laws, environmental matters, investigations, examinations, audits and surveys or other claims in connection with the delivery of healthcare and non-healthcare services.

The Company and its independent subsidiaries are also subject to requests for information and investigations by other state and federal governmental entities (e.g., Offices of the Attorney General and Offices of the Inspector General).

The Company cannot predict or provide any assurance as to the possible outcome of any inquiry, investigation or litigation.

If any such inquiry, investigation or litigation were to proceed, and the Company and its independent subsidiaries are subjected to, alleged to be liable for, or agree to a settlement of, claims or obligations under federal Medicare statutes, the FCA, or similar state and federal statutes and related regulations, or if the Company or its independent subsidiaries are alleged or found to be liable on theories of general or professional negligence or wage and hour violations, the Company's business, financial condition and results of operations and cash flows could be materially and adversely affected and its stock price could be adversely impacted.

The Company cannot predict or provide any assurance as to the possible outcome of any inquiry, investigation or related litigation.

If any such inquiry, investigation or related litigation were to proceed, and the Company and its independent subsidiaries are subjected to, alleged to be liable for, or agree to a settlement of, claims or obligations under federal Medicare statutes, the FCA, or similar state and federal statutes and related regulations, or if the Company or its independent subsidiaries are alleged or found to be liable on theories of general or professional negligence or wage and hour violations, the Company's business, financial condition and results of operations and cash flows could be materially and adversely affected and its stock price could be adversely impacted.

Among other things, any settlement or litigation could involve the payment of substantial sums to settle any alleged violations and may also include the assumption of specific procedural and financial obligations by the Company or its independent subsidiaries under a Corporate Integrity Agreement and/or other such arrangement.

Other claims and suits, including class actions, continue to be filed against the Company and other companies in its industry.

The Company and its independent subsidiaries have been subjected to, and are currently involved in, class action litigation alleging violations (alone or in combination) of state and federal wage and hour laws as related to the alleged failure to pay wages, to timely provide and authorize meal and rest breaks, and related causes of action.

The Company and its independent subsidiaries have been subjected to, and are currently involved in, class action litigation alleging violations (alone or in combination) of state and federal wage and hour laws as related to the alleged failure to pay wages, to timely provide and compensate for meal and rest breaks, and related causes of action.

The Company does not believe that the ultimate resolution of these actions will have an ongoing material adverse effect on the Company’s business, cash flows, financial condition or results of operations.

Refer to Part I.

Legal Proceedings for additional information on litigation and regulatory matters.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

In 2024, the Company, on behalf of its independent subsidiaries, received a Civil Investigative Demand (CID) from the U.S.

7 unchanged sentences

The Company has in the past appealed similar decisions and has, in some circumstances, received decisions in its favor.

Although the Company intends to vigorously defend against these claims and in general these types of claims and cases, there can be no assurance that the outcomes of these matters will not have a material adverse effect on operational results and financial condition.

Although the Company intends to vigorously defend against these specific claims and in general these types of claims and cases, there can be no assurance that the outcomes of these matters will not have a material adverse effect on operational results and financial condition.

In 2018, the Company, on behalf of its independent subsidiaries, received a CID from the DOJ stating that it was investigating to determine whether there had been a violation of the False Claims Act (FCA) and/or the Anti-Kickback Statute (AKS) with respect to the relationships between certain of the Company’s independent subsidiaries and persons who serve or have served as medical directors.

3 unchanged sentences

Following the finalization of the settlement documents and payment of the settlement funds during the fourth quarter of 2024, the qui tam complaint was dismissed and the matter was resolved.

Medicare Revenue Recoupments — The Company's independent subsidiaries are subject to regulatory reviews relating to the provision of Medicare and Medicaid services, billings and potential overpayments as a result of Recovery Audit Contractors (RAC), various Program Safeguard Contractors, and Medicaid Integrity Contractor programs (collectively referred to as Reviews).

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Medicare Revenue Recoupments — The Company's independent subsidiaries are subject to regulatory reviews relating to the provision of Medicare and Medicaid services, billings and potential overpayments as a result of Recovery Audit Contractors (RAC), various Program Safeguard Contractors and Medicaid Integrity Contractors (collectively referred to as Reviews).

Reviews vary in claim selection size and processes, ranging from a single episode/claim month to larger, multi-claim batches;

2 unchanged sentences

The Company anticipates that these Reviews could increase in frequency in the future.

As of March 31, 2025 and through the filing date of this report, 18 of the Company's independent subsidiaries had multi-claim Reviews scheduled or in process.

As of June 30, 2025 and through the filing date of this report, 10 of the Company's independent subsidiaries had multi-claim Reviews scheduled or in process.

Concentrations

3 unchanged sentences

The Company believes that an appropriate allowance has been recorded for the possibility of these receivables proving uncollectible and continually monitors and adjusts these allowances as necessary.

The Company’s receivables from Medicare and Medicaid payor programs accounted for 51.2 % and 52.9 % of its total accounts receivable as of March 31, 2025 and December 31, 2024, respectively.

Revenue from reimbursement under the Medicare and Medicaid programs accounted for 69.5 % and 71.6 % of the Company's revenue for the three months ended March 31, 2025 and 2024, respectively.

The Company’s receivables from Medicare and Medicaid payor programs accounted for 56.3 % and 52.9 % of its total accounts receivable as of June 30, 2025 and December 31, 2024, respectively.

Revenue from reimbursement under the Medicare and Medicaid programs accounted for 69.8 % and 69.6 % of the Company's service revenue for the three and six months ended June 30, 2025, respectively, and 71.2 % and 71.4 % for the three and six months ended June 30, 2024, respectively.

COMMON STOCK REPURCHASE PROGRAM

On February 21, 2025, the Board of Directors approved a stock repurchase program pursuant to which the Company may repurchase up to $ 20,000 of its common stock under the program for a period of approximately 12 months from March 26, 2025.

During the three months ended March 31, 2025, the Company purchased 84 shares of its common stock for $ 10,775 .

Subsequent to March 31, 2025, the Company repurchased 73 shares of its common stock for $ 9,225 .

On May 15, 2025, the Board of Directors approved a stock repurchase program pursuant to which the Company is authorized to repurchase up to $ 20,000 of its common stock under the program for a period of approximately 12 months from June 16, 2025.

During the three months ended June 30, 2025, the Company did not repurchase any shares pursuant to this stock repurchase program.

On February 21, 2025, the Board of Directors approved a stock repurchase program pursuant to which the Company was authorized to repurchase up to $ 20,000 of its common stock under the program for a period of approximately 12 months from March 26, 2025.

During the three and six months ended June 30, 2025, the Company purchased 73 and 157 , respectively, of its common stock for $ 9,225 and $ 20,000 , respectively.

This repurchase program expired upon the repurchase of the fully authorized amount under the plan and is no longer in effect.

On May 16, 2024, the Board of Directors previously approved a stock repurchase program pursuant to which the Company could repurchase up to $ 20,000 of its common stock under the program for a period of approximately 12 months from September 1, 2024.

On May 16, 2024, the Board of Directors approved a stock repurchase program pursuant to which the Company was authorized to repurchase up to $ 20,000 of its common stock under the program for a period of approximately 12 months from September 1, 2024.

The Company did not purchase any shares pursuant to this stock repurchase program before the repurchase program was cancelled on February 21, 2025.

THE ENSIGN GROUP, INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

On August 29, 2023, the Board of Directors previously approved a stock repurchase program pursuant to which the Company could repurchase up to $ 20,000 of its common stock under the program for a period of approximately 12 months from September 1, 2023, which the program terminated by its terms on August 31, 2024.

On August 29, 2023, the Board of Directors approved a stock repurchase program pursuant to which the Company was authorized to repurchase up to $ 20,000 of its common stock under the program for a period of approximately 12 months from September 1, 2023, which terminated by its terms on August 31, 2024.

The Company did not purchase any shares pursuant to this stock repurchase program.

Under these repurchase programs, the Company is authorized to repurchase its issued and outstanding common shares from time to time in open-market and privately negotiated transactions, tender offers, pursuant to contractual provisions, and block trades, or otherwise in accordance with federal securities laws.

Under the repurchase program, the Company is authorized to repurchase its issued and outstanding common shares from time to time in open-market and privately negotiated transactions, tender offers, pursuant to contractual provisions, and block trades, or otherwise in accordance with federal securities laws.

The share repurchase program does not obligate the Company to acquire any specific number of shares.

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements