Genesis Healthcare, Inc. · OTC:GENNQ
Genesis Healthcare — Investor Presentation (September 2017)
22 slides from Genesis Healthcare's investor presentation, Sep 22, 2017
Slide 1: A leading provider of post-acute services
A leading provider of post-acute services © 2017 by Genesis Healthcare, Inc. All Rights Reserved. September 2017
Slide 2: Safe Harbor Statement
Safe Harbor Statement Certain statements in this presentation regarding the expected benefits of future opportunities for the Company and any other statements regarding the Company’s future expectations, beliefs, goals, strategies or prospects contained in this presentation constitute “forward-looki
Slide 3: Agenda
Agenda GenesisOverview Long-TermValue Creation Opportunities Financial Summary
Slide 4: Genesis Overview: Competitive Strengths
Genesis Overview Competitive Strengths Genesis HealthCare is now one of the largest providers of post-acute care services in the nation. More than states More than units. More than and nurse 450 facilities across 30 200 clinical specialty Publicly Traded Ticker: GEN 425 Genesis physicians ~80,000 de
Slide 5: Operating With Geographic Scale and Scope
Operating WithGeographic Scaleand Scope coordinated sales/marketing strategies Geographic density = operating efficiencies, strong hospital relations & Geographic diversity reduces regulatory risk More than 450 SNF and ALF facilities across 30 states Top 5 states by beds: licensed PA: 10.6% NJ: 11.5
Slide 6: Differentiation Through Specialization
Differentiation Through Specialization Strategic investments in sub-acute specialty units PowerBack 100% ShortStay. Aggressive, highly personalized - designed to get patients home sooner Transitional Care Units (TCU) A rapid recover option for patients requiring post-acute rehab and medical services
Slide 7: Genesis Physician Services Overview
Genesis PhysicianServices Overview Full and Part-Time Provider Growth Group practice specializing in sub-acute, skilled nursing & long-term care Dedicated Medical Directors & full-/ part-time Attending Physicians and APPs Clinical care partners for the entire Genesis care team 75% of facility admiss
Slide 8: Agenda
Agenda Genesis Overview Long-Term Value Creation Opportunities Financial Summary
Slide 9: U.S. SNF Capacity
Genesis jl U.S. SNF Capacity 17,000 16,500 © 000,000 2 H 6000 ‘B 800,000 Pe = g 5,684 15,665 15,679 15,673 15,668 15 650 15,632 é 600,000 15,500 400,000 200,000 a ‘Mar-05 ‘Mar-06 ‘Mar-07 ‘Mar-08 ‘Mar-09 ‘Mar-10 ‘Mar-1 ‘Mar-12 ‘Mar-13° [| Mar-14 ‘Mar-15_ 15,000 ecenieaseae Target | 1eraeor | eriees |
Slide 10: Projected Growth in U.S. SNF Census, by Age Cohort
ProjectedGrowth in U.S. SNF Census, by Age Cohort 2400 2100 1800 1600 1400 1200 900 700 400 100 10 Source: CMS Nursing Home Data Compendium (2015 Edition) for percentage of SNF residents by age cohort and US Census Bureau data for population growth by age cohort. Number of SNF Residents (000's) 2500
Slide 11: Changing Models of Care Shaping the Industry
Changing Models of Genesis is well-positioned to Care Shaping theIndustry capitalize on value-based movement Bundled Payment for Care Improvement (“BPCI”) Medicare Shared Savings Program (“MSSP”) Existing Program Growth Opportunities Low Risk/Low Accountability to for High Risk/High Accountability Q
Slide 12: Genesis Rehab Services Value-Based Initiatives
Genesis Rehab Services Value-Based Initiatives • New business line – Vitality to You • Extends GRS’ therapy services into the community; patient receives rehabilitation in the home Designed to allow SNF’s to reduce average lengths of stay Vitality to You grew 44% year-over-year • • GRS - Growth Oppo
Slide 13: GRS China
GRSChina • • Genesis is the first provider to develop a post-acute continuum in China. China has limited post-acute care options for patients requiring rehabilitation after their hospital stay. Making significant headway in China with 13 current locations: • • 9 Hospital Collaborations (providing re
Slide 14: Agenda
Agenda GenesisOverview Long-Term Value Creation Opportunities Financial Summary
Slide 15: Occupancy Trends vs Competitors
Occupancy Trends vs Competitors 88.0% 86.0% % 84.0% 82.0% 80.0% 78.6% 77.3% 78.1% 78.1% 78.0% 78.0% 77.0% 77.1% 76.0% 76.3% % 74.0% 72.0% 2Q15 3Q15 4Q15 1Q16 2Q16 Kindred 3Q16 Ensign 4Q16 1Q17 2Q17 Genesis ** Source: 10Q and 10K SEC Filings - Genesis and Ensign = Operating Occupancy - Kindred = type
Slide 16: Year over Year Revenue and Adjusted EBITDAR
Year over ($ in millions) Revenue Adjused EBITDAR Year EBITDAR margins 2Q17 YTD 2Q16 $ 1,341.3 $ 2,910.6 $ 175.4 13.1% $ 367.7 12.6% Adjusted EBITDAR margin 16 Margin Preservation - Key Drivers: •Cost Reductions and Variable Cost Management Measures •Success in BPCI Model 3 Program •Divestiture of u
Slide 17: Managing Cost
Managing Cost • $50 million of cost reductions executed in fiscal 2017 • 76% represents streamlining divisional and corporate overhead • 24% focused on non-direct care operating cost. • Variable routine cost management strategies deployed to align operating expenses with lower volumes and skilled mi
Slide 18: Success in BPCI program
Success in BPCI program $20.0 $15.0 $10.0 $5.0 $-2016 Actual 2017 Run Rate BPCI Gain Share (in $ mils) 18 •95% increase in estimated year-over-year gain share •Program returns have exceeded expectations •Invaluable experience gained operationalizing and managing the program •2Q17 v 2Q16 skilled admi
Slide 19: Divestitures
Divestitures EBITDAR margin – 0% reductions - $2 million 19 Planned Divestitures •10 Facilities •To be divested facilities •Estimated cash rent 2017 Divestitures Completed •26 Facilities •Complete Exit of Four States Kansas, Missouri, Nebraska, Iowa •Divested facility EBITDAR margin – 3.2% •Debt rep
Slide 20: Appendix
Appendix
Slide 21: Appendix: Non-GAAP Financial Measures
Appendix We use the following Non-GAAP Financial Measures that we believe are useful to investors as key valuation and operating performance measures: EBITDA We believe EBITDA is useful to an investor in evaluating our operating performance because it helps investors evaluate and compare the results
Slide 22: Appendix: Adjustments to EBITDA
Appendix The activities of such businesses are adjusted when computing Adjusted EBITDA until such time as a new business generates positive Adjusted EBITDA. The operating performance of new businesses is no longer adjusted when computing Adjusted EBITDA beginning in the period in which a new busines
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