Ladies and gentlemen, thank you for joining us and welcome to the Enzyme Group, Inc. Fourth Quarter Fiscal Year 2025 Earnings Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press star 9 to raise your hand and star 6 to unmute. I will now hand the conference over to Mr. Keech. Please go ahead.

Thank you, operator, and welcome, everyone. We followed our earnings press release yesterday, and it is available on the investor relations section of our website at enzymegroup.net. A replay of this call will also be available on our website until 5 p.m. Pacific on February 27, 2026. We want to remind anyone that might be listening to a replay of this call that all the statements made are as of today, February 5, 2026, and these statements have not been or will be updated subsequent to today's call. Also, any forward-looking statements made today are based on management's current expectations, assumptions, and beliefs about our business and the environment in which we operate. These statements are subject to the risks and uncertainties that could cause our actual results to materially differ from those expressed or implied on today's call. Listeners should not place undue reliance on forward-looking statements and are encouraged to review the SEC filings for a more complete discussion of factors that could impact our results. Except as required by federal securities laws, Enzyme and its independent subsidiaries do not undertake to publicly update or revise any forward-looking statements where changes arise as a result of new information, future events, changing circumstances, or for any other reason. In addition, the Enzyme Group Inc. is a holding company with no direct operating assets, employees, or revenues. Certain of our independent subsidiaries collectively referred to as a service center provide accounting, payroll, human resources, information technology, legal, risk management, and other services to the other independent subsidiaries through contractual relationships. In addition, our captive insurance subsidiary, which we refer to as the insurance captive, provides certain claims made coverage to our operating companies for general and professional liability as well as for work and compensation insurance liabilities. Enzyme also owns Standard Bear Healthcare REIT, which is a captive real estate investment trust that invests in healthcare properties and enters into lease agreements with certain independent subsidiaries of Enzyme as well as third-party tenants that are unaffiliated with the Enzyme Group. The words Enzyme, Company, We, Our, and Us refer to the Enzyme Group and its Consolidated Subsidiaries. All of our independent subsidiaries, the Service Center, Standard Bearer Healthcare, REIT, and the Insurance Captive are operated by separate independent companies that have their own management employees and assets. References here into the Consolidated Company and its assets and activities as well as the use of words We, Us, Our in similar terms are not meant to imply nor should it be construed meaning that the enzyme group has direct operating assets employees or revenue or that any of the subsidiaries are operated by the enzyme group also we supplement our gap reporting with non-gap metrics when viewed together with our gap results we believe that these measures can provide a more complete understanding of our business but they should not be relied upon in the exclusion of gap reports a gap to non-gap reconciliation is available in yesterday's press release and available in our Form 10-K. And with that, I'll turn the call over to Barry Ford, our CEO.

Thanks, Chad, and thank you all for joining us today. We're excited to report another record year and record quarter in several key areas. To start, I want to highlight the extraordinary clinical outcomes achieved by our dedicated and talented caregivers. None of the results which we will discuss today are possible without the outstanding work being done by these amazing nurses, therapists, dieticians, food service professionals, activities coordinators, and the many others whose unwavering commitment shapes the daily care experience for thousands of patients across our portfolio. It's difficult to convey in words how so many individuals work so hard to achieve such amazing outcomes through so many small moments of selfless service. Having a front row seat to these amazing people is humbling to say the least. And while the point of these quarterly calls is to provide investors a financial update, let there be no mistake that our consistent financial results would not be possible without a relentless patient-focused culture that drives our frontline partners to deliver the highest quality clinical outcomes supported by a family-like atmosphere where everyone genuinely cares about one another. There are several measurements that showcase our clinical excellence. For example, according to the most recently published CMS data, SameStore Ensign-Affiliated operations outperform their peers in their annual survey results by an impressive 24% at the state level and 33% at the county level. This exceptional performance is only possible by achieving sustained clinical performance over time. In that same data set, Ensign affiliated operations also maintained a 19% advantage in overall four- and five-star rated buildings when compared to their peers. This is particularly noteworthy given that the majority of these communities were one- and two-star facilities at the time of acquisition. In addition, our same-store operations continue to outperform their industry peers and five-star quality measure results by delivering 22% better results on a national level and 17% above the state level. Together, these results underscore our ability to become the provider of choice in our communities by delivering consistently better quality of care, getting long-term value across our portfolio, and we'll expand on that more throughout this call. This clinical strength depends upon attracting and retaining top-notch talent in every operation we are encouraged by the deep bench of incredible talent that continues to flow into our organization and we look forward to working with them to continue to achieve our mission to dignify post-acute care on the retention side we continue to experience improvements in turnover stable wage growth and lower staffing agency usage even in the face of increased occupancy we are especially proud of the exceptionally low turnover amongst our directors of nursing. Over the past few years, D.O.N. turnover has declined by 33 percent, placing us among performers in the industry and reinforcing the stability and leadership consistency that drives high-quality care. As we've said before, our people are at the heart of our efforts, and seeing these metrics consistently improved is critical to maintaining our path of success and to achieve industry-leading results. Our clinical achievements are bearing fruit in many ways. On the census front, our same-store and transitioning occupancy increased to 83.8% and 84.9% during the quarter, which are both all-time highs. On the skill mix front, we saw an increase across all payers. More specifically, skill days increased for both our same store and transitioning operations by 8.5% and 10% respectively over the prior year quarter. We also saw Medicare revenue increase for both our same store and transitioning operations by 15.7% and 11.3% respectively and an increase in our same store Medicare days of 11% over the prior year quarter. In addition, we saw managed care revenue increase for both our same store and transitioning operations by 8.9% and 15% respectively. The primary reason for all these improvements is expanding the trust of the communities our team serve through the clinical outcomes that they have achieved that I described earlier. As each operation solidifies the reputation in their respective markets, they are not only seeing more patients, but they are also being entrusted to care for more and more medically complex patients, which includes a larger share of Medicare, care, managed care, and other skilled patients. In addition, we believe we are just now starting to see increased demand for our services related to the strong demographic trends. These powerful tailwinds will only bolster our census momentum we're seeing across our portfolio, giving us confidence in the long-term growth opportunity ahead. While we are thrilled with our current record same-store occupancy, we are actually excited that it's as low as it is. At 83%, we have enough organic growth potential left in our organization to sustain our consistent earnings and revenue growth, even if we stopped acquiring. As we point out during each of our earnings calls with specific facility examples, it's not uncommon to see some of our most mature operations consistently achieve and maintain occupancies in the high to mid-90s. Although many of our acquisitions in 2025 are in states that have higher occupancy levels, including California, Alaska, Utah, and Washington, their occupancy levels are far below the average levels that we see from our mature campuses in these states. The organic potential in our portfolio continues to remain one of our most compelling opportunities to continue to drive results. In addition, we continue to acquire new operations with massive long-term upside, with many more in the works. Since 2024, we have successfully sourced, underwritten, closed, and transitioned 82 new operations across several markets, many of which are already performing at or above our expectations. We are very humbled by what we were able to accomplish in 2025, and we are eager to continue to drive organic improvements and take advantage of the acquisition opportunities that we see on the horizon. We are issuing our annual 2026 earnings guidance of $7.41 to $7.61 per diluted share, and annual revenue guidance of $5.77 billion to $5.84 The midpoint of this 2026 earnings guidance represents an increase of 14.3% over our 2025 results and is 36.5% higher than our 2024 results. We look forward to 2026 with confidence that our partners will continue to manage and innovate while balancing the addition of newly acquired operations. This annual guidance comes on top of the extraordinary growth we experienced in the last few years. To put this performance in perspective, over the last five years, our total adjusted revenue increased by $2.7 billion, or 111%, representing a 16% compounded annual growth rate, while our diluted adjusted earnings per share grew by $3.44 from 2020 to 2025, representing a 16% compounded annual growth rate. In addition, we have seen adjusted net income grow by 121% with a compounded annual growth rate of 17%. This performance is not due to some large event or a single transformative transaction, but instead is the result of steady, consistent growth and performance quarter after quarter, which comes from a collective belief and commitment that is held by all of our partners to expand our mission in a methodical and thoughtful Next, I'll ask Chad to add some additional insights regarding our recent growth. Thank you, Barry.

we have another significant few months on the acquisition front, adding 17 new operations, which includes 12 real estate assets during the quarter and since. These include a seven building portfolio in Utah, three in Texas, two in Arizona, two in Colorado, and one in each of Alabama, Kansas, and Wisconsin. In total, we added 1,371 new skilled nursing beds across seven states. This growth brings a number of operations in our recently acquired group of operations to 21.7% of our entire portfolio. We were thrilled to complete these acquisitions that span across so many distinct healthcare markets. In each case, our local clusters are prepared to execute on their specialized building-by-building transition plans several months in advance. Overall, our growth this quarter continues to demonstrate our ability to take on multi-facility portfolios as well as our traditional singles and doubles. We continue to learn from and perfect our transition process and believe that those lessons are showing through in the performance of our recently acquired operations. As we've shown during the quarter and the last few years, our building-by-building approach transition works for single operations, small portfolios, and larger portfolios, particularly when a large deal spans several markets and geographies. We've also shown that in certain strategic situations, paying higher prices can be justified for performing assets that have newer physical plants and while some of those deals may take a bit longer to generate the returns we expect we've seen these deals pay off over time as our operators implement the proper clinical systems and cultural changes in the stonehenge acquisition for example the purchase price represented a premium over our historical acquisitions in utah however the high quality of the assets the strong clinical and financial performance as well as the synergies with our existing footprint in several markets justified a higher price while still leaving room for midterm and long-term upside. And yet, just a few months after closing, these operations are performing well ahead of schedule and contributing to both the strength of our clusters in Utah and the company's overall performance. While we certainly will continue to evaluate and consider any deal that's out there, we're also very comfortable growing the way we've grown this year with lots of transactions across many states including small deals to larger portfolios and where it makes sense higher price strategic assets as we look at the current pipeline we continue to see opportunities that include everything from larger portfolios landlords looking to replace current tenants nonprofits looking to divest of their post-acute assets and a steady flow of our traditional onesie twosies we have several new additions lining up for Q1 of 2026 and our local leadership teams and their deal partners here at the Service Center are working together to source, underwrite, and carefully select the right opportunities. We continue to have lots of success in closing deals with sellers who are not just interested in receiving top dollar, but care deeply about the quality and reputation of the company they select to inherit their legacy and choose us because they believe in our mission to dignify post-acute care. We are also pleased to announce a few unique new construction projects we recently completed both in California. The first project involved working together with Omega Healthcare REIT to take advantage of several acres of vacant land on one of our leased properties. With their support and the expertise of our team of healthcare construction experts, we completed a 40 bed addition at Vista Null Specialized Healthcare in Vista, California. The The expansion added much-needed capacity to our specialty care unit and significantly strengthened our ability to meet the community's growing needs. Only a few months after opening, the new wing has already achieved 98.3% occupancy. We are also thrilled to have recently completed the construction and obtain the license to operate a replacement facility to one of our high-performing skilled nursing operations in San Diego County. Grossmont Post-Acute in La Mesa, California, which is located next to Sharp Grossmont Hospital, is a pillar of the local La Mesa health care community. But the operation was housed in an aging building, and the landlord had determined to replace that aging building with new medical office space. Several years ago, we acquired land next door and endeavored to build a brand-new replacement building across the street from the original location. After several years and lots of hard work, we successfully completed the construction and will be moving all the patients and staff to a brand new state-of-the-art building that will replace the old building while also adding 15 beds to the original license. We are thrilled for the City of La Mesa that we were able to find a way to continue at considerable investment to provide these critical post-acute services to the community for decades to come. We are also grateful for the support of our partners at Sharp Grossmont hospital and look forward to finding ways to continue to provide service to their patients. Both cases illustrate that there are several ways that we can carefully and selectively invest our capital to enhance our service offerings to the communities we serve. We will continue to look for opportunities to add beds to successful operations and where appropriate to invest in newer construction in markets we know well. Our local leaders continue to recruit future CEOs for enzyme affiliated operations and we have a deep bench of CEOs in training that are eagerly preparing for their opportunity to lead. During the quarter, we again reached an all-time high for AITs in our pipeline. This high-quality influx of leadership talent combined with our decentralized transition model allows us to grow without being limited by typical corporate bottlenecks. We also continue to store enough drive-out on our balance sheet to fund a significant amount of growth, including adding even more real estate assets to our portfolio. Therefore, our unique acquisition and transition strategy puts us in an excellent position to continue growing in a healthy and sustainable way. Lastly, we are also pleased with the continued growth of Standard Bearer, which added 12 new assets during the quarter and since. Standard Bearer is now comprised of 154 owned properties, of which 120 are leased to an Enzyme affiliated operator and 35 which are leased to third-party operators. We were excited to add to our growing list of relationships with unaffiliated operators which further diversifies our tenant base and helps our organization as a whole continue to advance our mission by working closely with like-minded operators that want to make a difference in this industry going forward standard bear will work together with our existing operating partners and new relationships we're developing in order to acquire portfolios comprised of operations that enzyme would operate and facilities that high-quality third parties are interested in operating under a lease. Collectively Standard Bearer generated rental revenue of thirty four point five million for the quarter of which twenty nine point three million was derived from enzyme affiliated operations. For the quarter Standard Bearer reported twenty point four million in FFO and as of the end of the quarter had an EBITDA to rent coverage ratio of two point six times. And with that I'll turn the call over to Spencer our COO to add more

color around operations Spencer thanks Chad and hello everyone I wanted to share two outstanding operations that have achieved sustained financial growth due to their consistent emphasis on clinical outcomes and staff development South Bay post acute located near San Diego California is a 98 bed skilled nursing operation that has been an Ensign affiliate since 2014 like many of our same-store operations, the South Bay team, led by CEO Lisa Simmons and COO Connie Narvaez, maintains a consistent focus on improving both clinical and financial performance year after year. The facility has long been recognized for strong quality outcomes as reflected in its five star CMS ratings for quality measures, health inspections, and overall performance. Over the past year, the team identified an opportunity to expand its community impact by developing specialized capabilities to care for bariatric patients, a growing but historically underserved population in post-acute care. Successfully serving this population required a disciplined clinical and operational strategy. The facility leadership team started by visiting a highly successful Ensign affiliate that has become the top-performing bariatric operation in Arizona. Building on what they learned, South Bay remodeled rooms, invested in specialized equipment, and engaged both external experts and its in-house therapy team to develop protocols and provide staff training to safely and effectively treat bariatric patients. The team also expanded behavioral health support and implemented both group and individual therapies tailored to this population. By addressing the clinical and operational challenges that hospitals face when placing bariatric patients, South Bay positioned itself as a reliable solution for complex discharges. These efforts contributed to both improved patient outcomes and measurable reputational improvement. Health plans and referring acute partners have taken note, and South Bay has recently been awarded additional high reimbursement contracts. These clinical accomplishments have inevitably resulted in financial growth. In the fourth quarter, earnings before income tax increased 127% compared to the prior year quarter. Notably, this growth occurred in an operation that transitioned more than a decade ago and entered the year with very high occupancy. While overall occupancy increased modestly from 96% to 97%, the more meaningful impact occurred in payer and acuity mix. Skilled revenue mix increased 25%, driven in part by an 86% increase in Medicare days, while managed care volume grew 22%. With a continued focus on staff well-being and comprehensive, high-quality care, the South Bay team is demonstrating how clinical specialization can drive sustainable occupancy, skilled mix improvement, and financial performance, and allow a long-time affiliate to elevate year-over-year results a decade after acquisition. The second highlight is Shoreline Health and Rehabilitation, located in North Seattle, Washington. This is an example of an operation that recently moved from transitioning into our same-store category. Since acquisition, the 114-bed skilled nursing operation has been led by CEO Clayton South and COO Ruby Corp. Shoreline is an excellent example of maintaining a disciplined focus on finding, developing, and retaining exceptional care staff. For example, in 2025, the facility's CMS nursing turnover rate was 60% lower than the state average, and the tenure of frontline staff was over seven years on average, remarkable in an industry that is challenged by high turnover. This resulted in significant decreases in overtime costs and allowed Shoreline to operate with zero registry staffing for the second consecutive year. Having stable, satisfied staff results in better care, fewer patients returning to acute hospitals, and cost savings for health plans and hospital systems alike. Throughout the year, Shoreline served as a preferred provider within the Providence, Swedish, and University of Washington health systems, which allowed facility leaders to meet monthly with acute providers and learn ways to become the solution to their challenges. A clear example of this partnership occurred when the hospitals expressed difficulty placing patients requiring TPN, a complex and resource-intensive service that is normally provided only in the acute care setting. Ruby and her team evaluated the clinical requirements, implemented additional staff training, and coordinated closely with their physician group and pharmacy partners. As a result, Shoreline is now the only facility in the North Seattle area accepting TPN patients. This capability has also driven admissions across a broader range of skilled diagnoses. By investing in its workforce and positioning itself as a solution to hospital discharge constraints, Shoreline continues to strengthen its standing as a high-performing, clinically sophisticated provider of choice in its market. As a result of all those efforts, the Shoreline team achieved record financial performance for four consecutive quarters. In Q4, Shoreline's revenues increased by 11% compared to the prior year quarter, while EBIT rose by nearly 33% over the same period. While overall occupancy growth was modest, and occupancy remains below 74%. The team executed on their strategy to increase clinical capabilities and care for higher acuity skilled patients, which allowed skilled revenue mix to grow to 70%. Medicare days increased 24% and managed care improved 103% over prior year quarter. Because of this acuity strategy, Shoreline accomplished record results in 2025 and has significant opportunity to continue to increase occupancy and grow results long into the future. With that, I'll turn the time over to Suzanne to provide more detail on the company's financial performance and our guidance and then we'll open up for some questions. Suzanne?

Thank you Spencer and good morning everyone. Detailed financials for the year and the quarter are contained in our 10k and press release file yesterday. Some additional highlights for the year and the quarter compared to the prior year include the following. For the year gaps diluted earnings per share was $5.84 an increase of 14.1 percent. Adjusted diluted earnings per share was $6.57, an increase of 19.5%. Consolidated Revenue was $5.1 billion, an increase of 18.7%. GAAP Net Income was $344 million, an increase of 15.4%. And Adjusted Net Income was $386.6 million, an increase of 20.6%. For the quarter, GAAP diluted earnings per share was $1.61, an increase of 18.4%. Adjusted diluted earnings per share was $1.82, an increase of 22.1%. Consolidated revenue was $1.4 billion, an increase of 20.2%. GAAP net income was $95.5 million, an increase of 19.8%. Adjusted net income was $107.8 million, an increase of 23.2%. Other key metrics as of December 31, 2025 include cash and cash equivalents of $504 million, and cash flow from operations of $554 million. During 2025, we spent more than $500 million plan to execute on our strategic growth plan. We made these investments from a position of strength, as shown by our record-low least-adjusted net debt to EBITDA ratio of 1.77 times after taking these investments into consideration. Our continued ability to maintain low leverage even during periods of significant acquisition is particularly noteworthy and demonstrates our commitment to disciplined growth, as well our belief that we can continue to achieve sustainable growth in the long run. In addition, we have more than $590 million available on our line of credit, which when combined with our cash and our balance sheet gives us over a billion dollars in dry powder for future investments. We also own 160 assets, 136 of which are completely debt-free. They are gaining significant value over time and adding even more liquidity to help with future growth. During the quarter, the company increased its dividend for the 23rd consecutive year and paid a quarterly cash dividend of 6.5 cents per common share. We have a long history of paying dividends, and as the company's liquidity remains strong, we plan to continue our long history of paying dividends into the future. As Barry mentioned, we provided our annual 2026 earning guidance between $7.41 to $7.61 cents per deleted share, and our annual revenue guidance between $5.77 billion and $5.84 billion. We have evaluated multiple scenarios, and based upon our strengths and our performance and positive momentum, we have seen an occupancy and skill mix, as well as continued progress on labor, agency management, and other operational initiatives, we have confidence that we can achieve these results. Our 2026 guidance is based on saluted weighted average common shares outstanding of approximately $60 million, a tax rate of 25%, the inclusion of acquisitions closed and expected to be closed during the first quarter of 2026, the inclusion of management's expectations for reimbursement rates, with the primary exclusions coming from stock-based compensation, and amortization of system implementation costs. Other factors that could impact quarterly performance include variations in reimbursement systems, delays and changes in state budgets, seasonality and occupancy and skill mix, the influence of the general economy on census and staffing, short-term impact over acquisition activities, variations in insurance controls, and other factors. And now I'll turn it back over to Barry. Barry? Thanks, Suzanne. As we wrap up,

We can't emphasize enough how incredibly honored and grateful we are to work alongside our operational leaders and our service center team here that are behind these record-setting results. We never cease to be amazed by their impressive resiliency as they focus on supporting one another in new and innovative ways. Their commitment has blessed the lives of so many, including our own, and we're excited about our future because of these amazing partners. We have complete faith in them and the culture that they've collectively built. With that, we'll turn it over to our Q&A portion of the call. Operator, will you please provide instructions on the Q&A?

We will now begin the question and answer session. Please limit yourself to one question and one follow-up. If you would like to ask a question, please raise your hand now. If you have dialed into today's call, please press star 9 to raise your hand and star 6 to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Clark Murphy with Truist Securities. Your line is open. Please go ahead.

Everyone, thanks for taking my questions and congrats on the quarter and the guide. Just wanted to start out on M&A. It sounds like you're perhaps seeing some more opportunities come around with the more diverse group of sellers than you've talked about in the past. So can you guys just talk about what you're seeing in terms of the pipeline, valuations, et cetera? And has anything changed about how you guys are approaching opportunities? And then finally, just are there any markets or geographies in particular where you're seeing opportunity?

Yeah, I appreciate the question. So we certainly are seeing a pretty healthy pipeline. I would probably describe the market as, you know, seller-friendly in terms of values have risen. And I think because of that, a lot of people are bringing their stuff for sale. So we're seeing new deals, you know, frequently, better opportunities for us. So, and yes, I would also say that, you know, pricing has definitely gone up. All that said, you know, as I said in my prepared remarks, we are seeing tons of our traditional onesie-twosies and smaller portfolios, and in addition to that, some larger ones. I wouldn't say that the way we've looked at deals has changed. You know, I would just kind of point out, though, again, as we talked about in the prepared remarks, you know, when there are high-quality assets that, you know, newer construction, have higher occupancies and higher skilled mix, those sometimes deserve a premium. And, you know, we've recently shown that, you know, we would do that in the Utah acquisition that we closed, you know, during the quarter. And those are performing really well. So for us, you know, when we talk about disciplined growth, we definitely are looking to make sure that there's a pathway both in the short run, medium range, and the long term to create shareholder value. But the total cost of, you know, the acquisition, you know, it may, you know, when you're buying an older asset, sometimes the amount you have to spend to bring it up to current standards and then maintain it over time, you know, the CapEx spend can actually be quite heavy. And so, you know, buying newer assets can be something that we're looking to do. And so that's not necessarily new, but just wanted to highlight that as something we're seeing, but certainly excited about the opportunities that we have for 2026.

Great, thanks. And then just kind of shifting gears a little bit, can you guys give us some color on things you're doing on the labor environment? You know, specifically, your agency labor continues to come down. You guys talked about the director of nurse and the CEOs and training where you continue to have success. Can you just kind of talk about some of the drivers there and how we should think about continued improvement going forward on the labor front? Thanks.

Yeah, great question. A couple of things. I mean, there's you've got your macro environmental factors, which, you know, can influence. But I'd say the way to think about it is, you know, health care, especially for us, is a very locally driven business. business. And as we do better at things like our initiative to decrease director of nursing turnover, what you've got is you've got this stability of leadership. You've got relationships that allow the frontline caregivers to feel like they've found a home and they can produce great care outcomes. So we believe that focusing on leadership stability then allows those COO and CEO caliber leaders to create environments where people want to stay. We're very optimistic about both our ability to continue to make, you know, progress and have good stability in our labor and also in our ability to, as we acquire facilities, have that same model, have the similar results where, you know, with time and with the right people, you're going to see labor numbers get better and better. And I would just say, I guess the final thing is, with this, you know, you've got agency, but you've also got overtime, and we're excited to see that overtime is moving in the same direction.

Your next question comes from the line of Ben Hendricks with RBC Capital Markets. Your line is open. Please go ahead.

Thank you very much, and congrats on the quarter. Just wanted to ask a reimbursement question specifically on Medicare fee-for-service, the Part A piece. We've gotten some questions over the new value-based purchasing program metrics and how those factor in. I would assume that you're pretty well positioned under that, given some of the nursing turnover and retention commentary you've provided. But then just looking at some of the other measures that have kind of rolled on to the program, like the healthcare-associated infections, Just wondering kind of how you're faring there and what your outlook is, given that you do have a higher acuity patient base versus the rest of the industry. Any comments or observations into the year? Thanks.

It's a great question, Ben. I think when we kind of look across any time a new program is implemented, we get excited when the state or the federal government looks to quality and looks for us to be measured upon quality. And this is another one where when we can look at their quality metrics and it's clearly outlined, we have an opportunity to showcase how we can do it and have our clinical leaders really lead out on that. And so when we look at these quality metrics, like we always do, have dashboards and other things that allow us then to ensure that we are measuring those outcomes and measuring them and giving that information to our frontline staff and then show that we can do it really, really well.

Yeah, and I just say, I echo what Suzanne said, and with these, you know, changes that they make in things like value-based purchasing, the nice thing is we have signals from them years in advance. We know, for the most part, where they're going, and so this isn't something that caught us off guard. These are things we've been focused on, you know, building foundations to deal with and to be exceptional at for years. And so, again, that starts with great quality, local leadership, and then having, you know, the ability to kind of see around the corner of what's coming, which CMS signals. And so I'm very encouraged that we'll be able to, you know, continue to up our quality and do well in these programs.

And because we've got a world-class team of clinicians and data services folks that are able to analyze and package the data and create dashboards and tools that our clinicians on the front lines can use, our ability to adapt to these changes is probably unlike any other post-acute provider. It's an amazing thing to see how our teams are able to kind of assimilate all these changes and get the information assembled in a really useful, you know, kind of ready-to-use way.

Appreciate that commentary. Just a quick follow-up. Is there a risk that these types of programs could steepen the ramp on some of these turnaround acquisition opportunities?

I mean, yeah, I think that's more a function of, you know, the changes we see in acuity that, you know, kind of steepen the ramp. When you take on acquisitions that are historically averse to acuity, that's the bigger kind of challenge that we see rather than these kind of unique nuances in how CMS measures things. So for us, you know, our focus is on improving capabilities first and making sure clinical leadership and all the right tools are implemented so that there's an alignment of the direction we're headed. Our leaders are almost uniformly focused on bringing capabilities up to speed when we go into a building. And then as they do that, everything else kind of falls into place because all of the systems that they're able to lean on through our one clinical program align with kind of what they're already trying to do.

Great. Thank you very much.

Your next question comes from the line of Raj Kumar with Stevens. Your line is open. Please go ahead.

Hi, maybe just one on, you know, kind of clicking into the commentary around just further expansion and opportunity with same store occupancy and that being able to sustain kind of the organic growth momentum you've seen over the past couple of years. You know, seeing how 2025 showcased, you know, 200 basis points of improvement, I'm just kind of curious on what the magnitude in terms of guidance is kind of baked into 2026. And then maybe just any color on seasonality expectations would be helpful as well.

Yeah, it's a great question. I think that our expectation is that 2026 will in many ways mirror what we saw in 2025. We always kind of caution about seasonality and it's somewhat of an unpredictable factor when it comes to what the summer months will look like in the end. But, you know, we're coming off of, you know, a couple of really strong years in those months where seasonality has been much lighter. You know, we'll always see skilled mix decline in the middle of the year. But I think, you know, the way we look at our, you know, we forecast our progress in the future, we kind of see overall occupancy headed in a similar direction than what we saw progress through last year.

Got it. And then maybe just kind of thinking about, you know, some of the incremental investments in 2026. I'm just curious on maybe any kind of utilization or integration of AI across different functions of the operations or any build-out of clinical capabilities. And then also maybe just on the one point around some of the construction projects, Whether or not that's, you know, if there's kind of something in the future around that or, you know, these were just more opportunistic in nature that you highlighted today and how we should kind of think about that from the longer term perspective.

Yeah. Look, AI is kind of the buzzword of the day for sure. We've been highly involved in looking at opportunities where we can leverage mostly our existing partnerships with a lot of our enterprise providers for our different software systems, ERP, our clinical documentation systems and things like that. to kind of, you know, leverage, you know, the data and information that we have in a more effective way. And we've already achieved a lot of great advances in some of those areas, both on the financial side and also now looking more into the clinical side. I think our inclination will be to kind of leverage what our enterprise partners are doing first, But we have also undertaken several projects using more kind of off-the-shelf solutions that AI can provide us that are, you know, cost-effective and allow us to be a little more nimble. We've got a lot of those projects underway. And we've got a great committee and thought leadership assembled that provides us steering and guidance to make sure that we're choosing the right projects in an effective and, again, thoughtful and deliberate way that will be primarily helpful to those that, you know, have a lot of kind of mundane administrative things that can be solved with some of that technology. But looking more into the future, we're really excited about how, you know, we can leverage the data that we have about our patients and residents and use that information to leverage that information by our caregivers to make better and more nimble clinical decisions. So there's some exciting things that are kind of on the horizon in that area for us that we look forward to.

yeah on the on the construction question um we are really excited about the projects that we talked about today and there's really kind of two categories there one is you know adding beds to existing operations where there's um you know clearly demand for for extra beds but also you know land and and uh you know capability to build um so that that's something you know we're looking to doing. And the second was a replacement facility. You know, building a brand new building is really time consuming and expensive, especially when you're starting with an empty operation and going through the Medicare certification process is costly. So, you know, where you can do a replacement facility and essentially, you know, start with a new building, but you move the staff and the patients over on day one, it makes for a whole lot quicker return on that significant investment. So, those are two things we're looking at. We've recently beefed up our kind of construction capabilities, bringing in some experts that do this stuff. And, you know, it's always kind of a, anyone that's done any new construction, you know, understands that, especially COVID and everything, you know, having third parties that are, you know, not necessarily aligned with you on how to manage costs and all that can be challenging. And so, So we've kind of learned some lessons through doing this that, you know, having that capability in-house would be really helpful. So we're assessing our portfolio and, you know, trying to pick, you know, a handful of projects like this that would be, you know, sort of the lowest hanging fruit. And it obviously won't ever kind of compare to kind of our overall acquisition strategy, but it is an important tool that we have and one that we'll do more and more of, especially in our most mature markets. Great. Thank you.

Your next question comes from the line of A.J. Rice with UBS. Your line is open. Please go ahead.

Hi, this is James on for A.J. Thanks for taking my question. I just wanted to see if you can provide an update on the traction you're seeing and taking on managed care patients on the behavioral health side as some of these MCOs have had some trouble finding facilities to place these patients and just any update up there.

I mean, I think a good example of what you're asking about is, you know, again, we referred to this in our highlighted remarks, although we didn't give a lot of detail on what the purpose for the new addition was at Vista Knoll. But that new unit we just constructed that's now essentially full after just a couple of months is entirely dedicated to behavioral patient use and highlights the growing need that you're mentioning. James. So there is a need out there, no question. I would say that it's a focus of ours to do it in a deliberate and thoughtful way in markets that make sense. We mentioned this in prior calls, but we've got a strategy to do just that in some of our more mature markets like California, Arizona, and Texas with some others that are looking at it closely too. And we do it certainly in careful partnership with the managed care plans that are having those needs. And so it's something that I think you'll probably hear more about as we go into the future. I wouldn't call it something that's a critical core strategy. Rather, it's a strategy that certain markets are focused on implementing based on the needs that they're seeing.

Yeah, and I would just add it's not just behavioral health, but really looking at those specialty programs where there's a need. So it's really partnership. like we always have of working with the managed care organizations to see what their needs are and then developing with them solutions to meet those needs.

Great. Thank you. That's all the questions I had. Appreciate it.

There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.