Caretrust Reit, Inc. · NYSE:CTRE
Caretrust Reit — Investor Presentation (February 2015)
33 slides from Caretrust Reit's investor presentation, Feb 25, 2015
Slide 1: Investor Presentation
Exhibit 99.1 Investor Presentation February 24, 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: 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 • 28 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 t
Slide 6: Strong Liquidity for Growth
Strong Liquidity for Growth $25 million Cash on hand as of December 31, 2014 $150 million Undrawn Senior Secured Credit Facility with approximately $112 million of availability ($84 million currently available plus $28 million for assets recently acquired). Plus access to public equity and debt mark
Slide 7: Investment Highlights
INVESTMENT HIGHLIGHTS 7
Slide 8: Portfolio Snapshot
Portfolio Snapshot SNF, AL, IL, Campus Locations TX 27 Other 26% 36 35% CA 18 AZ 17% UT 10 10% 12 12% Portfolio Asset Category IL 4 Campus 4% 10 10% AL 16 15% SNF 73 71% 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 $1 Trillion Healthcare Real Estate Ownership Public REIT- Large REITs focused on larger acquisitions Owned , 21% Privately Owned, 79% Deal Size Real Estate Asset Breakdown Life Science/ Skilled Biotech, 5% Nursing, 10% Senior Housing (ALF, ILF, Outpati
Slide 11: Fragmented Markets With Value Arbitrage Opportunities
Fragmented Markets With Value Arbitrage Opportunities Market Backdrop CareTrust Role Results Fragmented market, Target quality one-off, Creative capital solutions underserved by capital small- & mid-sized providers portfolios Attractive investment spreads over cost of Limited access to capital Maint
Slide 12: Disciplined Investment Strategy Focused on Driving Value
Disciplined Investment Strategy Focused on Driving Value Senior Housing Skilled Nursing Medical Office Facilities Acute Care Facilities Buildings (ALF, ILF, MC) Triple Net Leases Core Core Opportunistic Opportunistic Opportunistic Mortgage Debt Relationship Relationship Opportunistic Development Rel
Slide 13: Leading Tenant Rent Coverage
Leading Tenant Rent Coverage Total LTM EBITDAR Tenant Rent Coverage 1.91x 1.68x 1.60x 1.50x 1.44x 1.33x CTRE* LTC** AVIV OHI SNH*** SBRA * Represents facility EBITDAR coverage for the twelve months ending September 30, 2014 ** Represents facility EBITDAR coverage for LTC’s skilled nursing portfolio
Slide 14: Real Estate Acquisition & Development Experience
Real Estate Acquisition & Development Experience The CareTrust Team brings its Experience, Relationships & Track Record from Ensign Ensign Annual Facilities Growth Ensign Historical Asset Acquisitions 130 ($ in millions) $130 6 $120 11 110 6 $100 20 90 $80 5 $61 119 $60 70 14 108 $48 102 $45 $43 2 $
Slide 15: Attractive Industry Dynamics for SNF Operators
Attractive Industry Dynamics for SNF Operators 16,715 16,554 Number US of Skilled Nursing Facilities SNF Properties 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 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) Avg. SNF Medicaid Rate Per Day $618 Avg. SNF Medicare Rate Per Day $574 $560 $555 $564 $524 CAGR ENSG Same Facility Medicare Rate per Day $446 $451 3.4% $505 $454 $469 $478 $432 4.0%
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 integrat
Slide 18: 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 29 Margin 7 17 7 25 14 30 14 14 33 Occupancy 70.9% 74.0% 316 bps 15 16 21
Slide 19: Deals Summary
DEALS SUMMARY 19
Slide 20: #1 Cross Healthcare
#1 CROSS HEALTHCARE TRANSACTION SUMMARY Type ALF Sale/Leaseback Price $12,000,000 # of Units/Beds 90/102 Price/Unit $133,333 # of Buildings 3 Price/Bed $117,647 Location Idaho Occupancy 92% LEASE SUMMARY Initial Yield 8.50% EBITDARM Coverage 1.45x Initial Rent $1,020,000 EBITDAR Coverage 1.31x Secur
Slide 21: #2 Prelude Healthcare
#2 PRELUDE HEALTHCARE TRANSACTION SUMMARY Type Memory Care Sale/Leaseback Price $7,205,088 # of Units/Beds 28/30 Price/Unit $257,325 # of Buildings 1 Occupancy 92% Location Minnesota LEASE SUMMARY Initial Yield 8.25% EBITDARM Coverage1.47x Initial Rent $594,420 EBITDAR Coverage 1.30x Security Deposi
Slide 22: #3 Signature Healthcare
#3 SIGNATURE HEALTHCARE TRANSACTION SUMMARY Type ALF Development Investment $7,500,000 # of Units/Beds 134/146 Investment Yield 12.00% # of Buildings 1 Purchase Option Price $40,000,000 Location Colorado LEASE SUMMARY (Upon Purchase) Initial Yield 8.00% EBITDAR Coverage 1.16x Initial Rent $3,200,000
Slide 23: #4 Twenty/20 Management
#4 TWENTY/20 MANAGEMENT TRANSACTION SUMMARY Type ALF Sale/Leaseback Price $6,600,000* # of Units 39 Price/Unit $169,230 # of Buildings 1* Occupancy 99% Location Virginia LEASE SUMMARY Initial Yield 8.50% EBITDARM Coverage1.47x Initial Rent $561,000 EBITDAR Coverage 1.30x Security Deposit 2 months re
Slide 24: #5 Bethany Rehab
#5 BETHANY REHAB TRANSACTION SUMMARY Type SNF Sale/Leaseback Price $17,950,000 # of Units/Beds 170 beds Price/Unit NA # of Buildings 1 Price/Bed $105,588 Location CO Occupancy 96% LEASE SUMMARY Initial Yield 9.65% EBITDARM Coverage1.64x Initial Rent $1,732,500 EBITDAR Coverage 1.29x Security Deposit
Slide 25: Financial Summary
FINANCIAL SUMMARY 25
Slide 26: 2015 Guidance
2015 Guidance CareTrust’s guidance for 2015 is based on the following: • $56 million in rent from Ensign and $3.8 million from all investments closed post-Spin • $0.9 million in interest income from the $7.5 million preferred equity investment at 12% • $0.3 million in NOI from the 3 ILFs that we own
Slide 27: Guidance
Guidance RECONCILIATION OF NET INCOME TO NON-GAAP FINANCIAL MEASURES Guidance Low High Net income $0.26 $0.28 Real estate related depreciation and amortization 0.70 0.70 Funds from Operations (FFO) 0.96 0.98 Acquisition costs - - Costs associated with the Spin-Off - - Normalized FFO $0.96 $0.98 Net
Slide 28: Appendix
APPENDIX 28
Slide 29: 2014 Financial Summary
2014 Financial Summary CARETRUST REIT, INC. CONSOLIDATED AND COMBINED BALANCE SHEETS (in thousands) (unaudited) December 31, September 30, June 30, December 31, 2014 2014 2014 2013 Assets Real estate investments, net $436,215 $415,021 $420,059 $425,003 Other real estate investments 7,532 - - Cash an
Slide 30: 2014 Financial Summary
2014 Financial Summary CARETRUST REIT, INC. DEBT SUMMARY (dollars in thousands) (unaudited) Interest Rate/ Maturity December 31, 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%
Slide 31: 2014 Financial Summary
2014 Financial Summary CARETRUST REIT, INC. CONSOLIDATED STATEMENTS OF INCOME (in thousands, except per share data) (unaudited) One Month Quarter Quarter Seven Months Ended Ended Ended Ended June 30, 2014 September 30, 2014 December 31, 2014 December 31, 2014 Revenues: Rental income $4,667 $14,000 $
Slide 32: 2014 Financial Summary
2014 Financial Summary CARETRUST REIT, INC. RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES (in thousands, except per share data) (unaudited) One Month Quarter Quarter Seven Months Ended Ended Ended Ended June 30, 2014 September 30, 2014 December 31, 2014 December 31, 2014 Net income $4
Slide 33: CareTrust Geographic Detail
CareTrust Geographic Detail Assisted Living and Independent Living Skilled Nursing Total1 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 Facilitie
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