Caretrust Reit, Inc. · NYSE:CTRE
Caretrust Reit — Investor Presentation (August 2014)
27 slides from Caretrust Reit's investor presentation, Aug 19, 2014
Slide 1: Investor Presentation
Exhibit 99.2 Investor Presentation August 18, 2014
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief or expecta
Slide 3: Investment Highlights Summary
Investment Highlights Summary Financially Geographically Secure “Platform” Diverse Tenant Portfolio Growth & Favorable Long-Term Diversification Lease Structure Opportunities Strong Tenant Attractive Industry Rent Fundamentals Coverage Experienced Management Team 3
Slide 4: Management
Management Greg Stapley Bill Wagner Dave Sedgwick Mark Lamb CEO CFO VP Operations Director of Investments • 27 years of experience in the • 22 years of accounting and • 12 years of experience in • Three years as Director of acquisition, development and finance experience, primarily skilled nursing o
Slide 5: Transaction Overview
Transaction Overview On June 1, 2014 The Ensign Group split into two publicly traded companies through a tax-free spin-off transaction. Spin-Off Operations Real Estate • A leading provider of skilled nursing • Portfolio of 97 quality assets with Ensign care and assisted living services as initial te
Slide 6: Strong Liquidity for Growth
Strong Liquidity for Growth $80 million Cash on hand as of June 30, 2014¹ $150 million Undrawn Senior Secured Credit Facility with approximately $84 million of availability as of June 30, 2014 Plus access to public equity and debt markets, and other forms of long-term capital. (1) Does not reflect d
Slide 7: Investment Highlights
INVESTMENT HIGHLIGHTS a, WY
Slide 8: Portfolio Snapshot
Portfolio Snapshot Triple Net Leased Properties CareTrust Operated ILF 8
Slide 9: Wider Investment Parameters
Wider Investment Parameters CareTrust Strategy No Geographic Varying Deal Size Constraints (One-Offs to Portfolios) Multiple Operator Partnerships Future Diversification into MOB, Ensign Strategy Acute Care and Geographic Cluster Life Sciences Limits Ready Promising & Stabilized Local SNF/ALF Assets
Slide 10: Healthcare Real Estate Market Estimated at Over $1 Trillion
Healthcare Real Estate Market Estimated at Over $1 Trillion Healthcare Real Estate Ownership Large REITs focused on larger acquisitions Deal Size Real Estate Asset Breakdown Tenant Size 10 Note: Healthcare Real Estate Ownership Breakdown and Real Estate Asset Breakdown from Stifel Nicolaus industry
Slide 11: Fragmented Markets With Value Arbitrage Opportunities
Fragmented Markets With Value Arbitrage Opportunities Market Backdrop CareTrust Role Results Fragmented market, Quality one-off, small- & Creative capital solutions underserved by capital mid-sized portfolios providers Attractive investment Conservative spreads over cost of Limited access to capital
Slide 12: Disciplined Investment Strategy Focused on Driving Value
Disciplined Investment Strategy Focused on Driving Value Senior Housing Skilled Nursing Medical Office Facilities Acute Care Facilities Buildings (ALF, ILF, MC) Triple Net Leases Core Core Opportunistic Opportunistic Opportunistic Mortgage Debt Relationship Relationship Opportunistic Development Rel
Slide 13: Leading Tenant Rent Coverage
Leading Tenant Rent Coverage Total LTM EBITDAR Tenant Rent Coverage * Represents facility EBITDAR coverage for LTC’s skilled nursing portfolio ** Rent coverage is calculated as operating cash flow from SNH tenants’ operations of SNH properties, before subordinated charges, divided by rents payable t
Slide 14: Real Estate Acquisition & Development Experience
Real Estate Acquisition & Development Experience The CareTrust Team brings its Experience, Relationships & Track Record from Ensign Ensign Annual Facilities Growth Ensign Historical Asset Acquisitions 14
Slide 15: Attractive Industry Dynamics for SNF Operators
Attractive Industry Dynamics for SNF Operators Number US of Skilled Nursing Facilities SNF Properties Age 65+ Population Numbers in millions Relative Costs of Treatment Across Care Providers SNF IRF LTAC 15 Source: AHCA, CMS OSCAR data, U.S. Census Bureau, Medpac
Slide 16: Skilled Nursing Reimbursement Rates: Stable and Increasing Over Time
Skilled Nursing Reimbursement Rates: Stable and Increasing Over Time Skilled Nursing Reimbursement Rates (2000-2013) CAGR 3.4% 4.0% 4.2% In May 2014, CMS proposed a 2% aggregate increase for 2015 SNF payments Source: Eljay LLC and composite of CMS, AHCA, AQNHC and Avalere Group Data; ENSG company fi
Slide 17: "THE" Platform Tenant
“THE” Platform Tenant Ensign Business Overview Ensign Operated Facilities As of June 30, 2014, Ensign operated 125 facilities, 10 home health and 8 hospice operations, 12 urgent care centers and a mobile x-ray diagnostic company, all located in 12 states Ensign has a strong track record of integrati
Slide 18: Ensign Track Record Operational Excellence
Ensign Track Record Operational Excellence Recognized Skilled Nursing Facility Quality Turnaround Track Record 4-Quarter Q1 Q5 Improvement Performance EBITDAR 11.3% 14.5% 322 bps Margin Occupancy 70.9% 74.0% 316 bps Skilled Mix 31.3% 38.7% 732 bps (Rev) Quality Mix 48.4% 51.6% 321 bps (Rev) CMS Star
Slide 19: Financial Summary
FINANCIAL SUMMARY a, WY
Slide 20: Guidance
Guidance CareTrust’s guidance for the 12 months immediately post-spin1 is: • $56 million in rent from Ensign • $24 million in interest expense2 • $4.5 million to $5.0 million in G&A expense • $1.23 to $1.25 in normalized FFO per diluted common share • $1.33 to $1.35 in normalized FAD per diluted com
Slide 21: Guidance
Guidance RECONCILIATION OF NET INCOME TO NON-GAAP FINANCIAL MEASURES 1 Low Guide High Guide Net income $0.24 $0.26 Depreciation and amortization 0.98 0.98 FFO 1.22 1.24 Costs associated with the spin-off 0.01 0.01 Normalized FFO $1.23 $1.25 Net income $0.24 $0.26 Depreciation and amortization 0.98 0
Slide 22: Appendix
APPENDIX a, a
Slide 23: Q2 2014 Financial Summary
Q2 2014 Financial Summary BALANCE SHEET (in thousands) Assets Real estate investments $420,059 Cash and cash equivalents* 80,345 Accounts receivable 1,871 Prepaid expenses and other assets 77 Deferred financing costs, net 11,000 Total assets $513,352 Liabilities and Stockholders' Equity Senior unsec
Slide 24: Q2 2014 Financial Summary
Q2 2014 Financial Summary DEBT SUMMARY (in thousands) Interest Rate/ Maturity June 30, 2014 Debt Collateral Spread Date Balance Fixed Rate Debt Senior unsecured notes payable Unsecured 5.875% 2021 $260,000 GECC mortgage notes payable (1) 10 properties 7.252% 2017 48,220 Other mortgage note payable 1
Slide 25: Q2 2014 Financial Summary
Q2 2014 Financial Summary STATEMENT OF INCOME (in thousands, except per share amounts) One Month Ended June 30, 2014 Revenues: Rental income $4,667 Tenant reimbursement 396 Other revenue 211 Total revenues 5,274 Expenses: Depreciation and amortization 1,794 Interest expense 1,967 Property taxes 396
Slide 26: Q2 2014 Financial Summary
Q2 2014 Financial Summary NON-GAAP FINANCIAL MEASURES (in thousands, except per share amounts) One Month Ended June 30, 2014 Net income $456 Real estate related depreciation and amortization 1,794 Interest expense 1,967 EBITDA 4,217 Costs associated with the spin-off 254 Adjusted EBITDA $4,471 Net i
Slide 27: CareTrust Geographic Detail
CareTrust Geographic Detail Assisted Living and Independent Living Skilled Nursing Total Multi-Specialty Campuses Independent LivingFacilities Operated Facilities Facilities ¹ by CareTrust ¹ State Properties Beds/Units Facilities Beds Campuses SNF Beds ALF Units ILF Units Facilities Units Facilities