Caretrust Reit, Inc. · NYSE:CTRE
Caretrust Reit — Investor Presentation (June 2015)
30 slides from Caretrust Reit's investor presentation, Jun 9, 2015
Slide 1: Investor Presentation
Exhibit 99.1 Investor Presentation June 2015
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: 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 • Initial portfolio of 97 quality assets with care and assisted living services Ensign as i
Slide 4: New Platform for Growth
New Platform for Growth Experienced Growth & Management Diversification Team Opportunities Triple-Net Lease Conservative Payout Structure Ratio Financially Strong Rent Secure “Platform” Coverage Tenant 4
Slide 5: Strong Healthcare Operating Background
Strong Healthcare Operating Background Greg Stapley Bill Wagner Dave Sedgwick Mark Lamb CEO CFO VP Operations Director of Investments • 28 years of experience in • 22 years of accounting and • 12 years of experience in • Three years as Director of the acquisition, development finance experience, ski
Slide 6: Acquisition & Operational Experience
Acquisition & Operational Experience The CareTrust Team brings its Experience, Relationships & Track Record from Ensign Ensign Pre-Spin Historical Asset Acquisitions & Ensign Pre-Spin Annual Facilities Growth CareTrust’s First-Year Growth 130 ($ in millions) $130 6 $120 11 110 6 $100 20 90 $80 $67 5
Slide 7: Growing Portfolio
Growing Portfolio Geographic Diversification CareTrust Portfolio As Of June 1, 2015 © Original Triple Net Lease Ensign Portfolio © CareTrust Managed IL Facilities © Properties Under Development © 2014 Acqu ll a @ 2015 Acquisiti
Slide 8: Strong Liquidity for Growth
Strong Liquidity for Growth $150 million Undrawn Senior Secured Credit Facility with $13.6 million $500 million approximately $112 million of availability ($84 million currently available plus $28 million for assets recently acquired). Cash on hand as of March 31, 2015 Shelf registration filed June
Slide 9: Roll – Up Opportunity
Roll – Up Opportunity Healthcare Real Estate Market Estimated at Over $1 Trillion Healthcare Real Estate Ownership Public REIT - Large REITs focused on larger acquisitions Owned , 21% Privately Owned, 79% Deal Size Real Estate Asset Breakdown Life Science/ Skilled Biotech, 5% Nursing, 10% Senior Hou
Slide 10: Mining an Underserved Market
Mining an Underserved Market Market Backdrop CareTrust Role Results Fragmented market, Apply healthcare Accretive investments underserved by capital operating experience to with strong operating providers underwriting process partners/tenants Limited access to capital Target quality one-off, 100% le
Slide 11: Disciplined Investment Strategy Focused on Accretive Deals
Disciplined Investment Strategy Focused on Accretive Deals Senior Housing Skilled Nursing Medical Office Facilities Acute Care Facilities Buildings (ALF, ILF, MC) Net Lease Core Core Opportunistic Opportunistic Opportunistic Mortgage Debt Relationship Relationship Opportunistic Development Relations
Slide 12: Leading Tenant Rent Coverage
Leading Tenant Rent Coverage Total LTM EBITDAR Tenant Rent Coverage 1.91x 1.68x 1.60x 1.50x 1.44x 1.33x CTRE* LTC** AVIV OHI SNH*** SBRA * Represents facility EBITDAR coverage for the twelve months ending September 30, 2014 ** Represents facility EBITDAR coverage for LTC’s skilled nursing portfolio
Slide 13: Attractive Industry Dynamics for SNF Operators
Attractive Industry Dynamics for SNF Operators 16,715 Number US of Skilled Nursing Facilities SNF Properties 16,554 16,441 16,256 16,066 15,965 15,861 15,772 15,771 15,679 15,669 15,655 15,667 15,666 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Age 65+ Population 78 81 Numbe
Slide 14: Skilled Nursing Reimbursement Rates: Stable and Increasing Over Time
Skilled Nursing Reimbursement Rates: Stable and Increasing Over Time Skilled Nursing Reimbursement Rates (2000-2013) Avg. SNF Medicaid Rate Per Day $618 Avg. SNF Medicare Rate Per Day $574 $564 CAGR $560 $555 $524 ENSG Same Facility Medicare Rate per Day $446 $451 3.4% $505 4.0% $454 $469 $478 $408
Slide 15: “THE” Platform Tenant
“THE” Platform Tenant Ensign Business Overview Ensign Operated Facilities As of March 31, 2015, Ensign operated 143 facilities, 13 home health and 12 hospice operations, two home care businesses, one transitional care management company,16 urgent care centers and a mobile x-ray diagnostic company, a
Slide 16: Ensign Track Record Operational Excellence
Ensign Track Record Operational Excellence Recognized Skilled Nursing Facility Quality Turnaround Track Record 1-Star 2-Star 3-Star 4-Star 5-Star 4-Quarter Q1 Q5 Improvement Performance 9 30 35 20 EBITDAR 4 11.3% 14.5% 322 bps Margin 7 17 29 7 25 30 Occupancy 70.9% 74.0% 316 bps 14 14 14 33 15 16 21
Slide 17: Deal Summary
DEAL SUMMARY Investments Acquisition Rent/Revenue Tenant Location Type Amount Yield Period (Annual) 2014 Acquisitions Cross Healthcare 4Q 2014 Idaho Senior Housing$ 12,000,0008.50% $ 1,020,000 Signature Senior Living 4Q 2014 Colorado Senior Housing$ 7,500,00012.00%$ 900,000 20 Management 4Q 2014 Vir
Slide 18: #1 Bethany Rehab
#1 BETHANY REHAB (CLOSED IN Q1 2015) TRANSACTION SUMMARY Type Purchase/ Net Lease Price $17,950,000 # of Units/Beds 170 beds Price/Bed $105,588 # of Buildings 1 Quality Mix 5% Location CO Occupancy 96% st Transaction Closing February 1 , 2015 LEASE SUMMARY Initial Yield 9.65% EBITDARM Coverage1.64x
Slide 19: #2 Mira Vista Care Center
#2 MIRA VISTA CARE CENTER (CLOSED POST Q1 2015) TRANSACTION SUMMARY Type Purchase/ Net Lease Price $9,100,000 # of Beds 94 Price/Bed $117,647 # of Buildings 1 QualityMix 37% Location Mt. Vernon, WA Occupancy 87% st Transaction Closing April 1 , 2015 LEASE SUMMARY Initial Yield 9.50% EBITDARM Coverag
Slide 20: #3 Shoreline Health and Rehabilitation Center
#3 SHORELINE HEALTH AND REHABILITATION CENTER (CLOSED POST Q1 2015) TRANSACTION SUMMARY Type Purchase/ Net Lease Price $6,740,636 # of Beds 105 Price/Bed $63,095 # of Buildings 1 QualityMix 24% Location Shoreline, WA Occupancy 81% Transaction Closing June1st,2015 LEASE SUMMARY Initial Yield 9.9% EBI
Slide 21: Financial Summary
FINANCIAL SUMMARY 21
Slide 22: 2015 Guidance
2015 Guidance CareTrust’s 2015 guidance as of May 12, 2015 is based on the following: • $56 million in rent from Ensign and $4.4 million from all investments closed post-Spin through May 12, 2015 • $0.9 million in interest income from the $7.5 million preferred equity investment at 12% • $0.3 millio
Slide 23: Guidance
Guidance RECONCILIATION OF NET INCOME TO NON-GAAP FINANCIAL MEASURES Guidance 2015 Low High Net income per share $ 0.28 $ 0.30 Real estate related depreciation and amortization 0.70 0.70 Funds from Operations (FFO) per share 0.98 1.00 Normalized FFO per share $ 0.98 $ 1.00 Net income per share $ 0.2
Slide 24: Appendix
APPENDIX 24
Slide 25: 2015 Financial Summary
2015 Financial Summary CARETRUST REIT, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) March 31, December 31, 2015 2014 Assets Real estate investments, net $ 448,841 $ 436,215 Other real estate investments 7,755 7,532 Cash and cash equivalents 13,594 25,320 Accounts receivable
Slide 26: 2015 Financial Summary
2015 Financial Summary CARETRUST REIT, INC. DEBT SUMMARY (in thousands) (unaudited) Interest Rate/ Maturity March 31, 2015 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 47,2
Slide 27: 2015 Financial Summary
2015 Financial Summary CARETRUST REIT, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) (unaudited) One Month Quarter Quarter Quarter Ended Ended Ended Ended June 30, 2014 September 30, 2014 December 31, 2014 March 31, 2015 Revenues: Rental income $ 4,667 $ 14,000 $ 14,13
Slide 28: 2015 Financial Summary
2015 Financial Summary CARETRUST REIT, INC. RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES (in thousands, except per share) (unaudited) One Month Quarter Quarter Quarter Ended Ended Ended Ended June 30, 2014 September 30, 2014 December 31, 2014 March 31, 2015 Net income $ 456 $ 1,967 $
Slide 29: 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 30: CareTrust Geographic Detail
CareTrust Geographic Detail Assisted Living and Independent Living 1 Skilled Nursing Total Multi-Specialty Campuses Independent LivingFacilities Operated Facilities 2 2 Facilities by CareTrust State Properties Beds/Units Facilities Beds Campuses SNF Beds ALF Units ILF Units Facilities Units Faciliti