Assisted Living Concepts — Investor Presentation (March 2007)
28 slides from Assisted Living Concepts's investor presentation, Mar 21, 2007
Slide 1: 20-Mar-07
20-Mar-07 f Lssds bol La ty m, Y ro‘ ~*~ Con ws ay Vie.
Slide 2: Forward-Looking Statements & Non-GAAP Measures
20-Mar-07 Forward-Looking Statements & Non-GAAP Measures Forward-looking statements used in this presentation are based on our current expectations, involve risks and uncertainties, and are subject to change at any time. We undertake no obligation to update such statements to reflect new information
Slide 3: ALC Corporate Information
20-Mar-07 ALC Corporate Information Acquired by Extendicare Inc. in February 2005 Spin-off on November 10, 2006 NYSE: ALC $832 M Market Capitalization* $922 M Enterprise Value* * Based upon closing price on March 16, 2007 of $11.90 • As you may be aware, ALC was listed on the New York Stock Exchange
Slide 4: Overview of ALC
20-Mar-07 Overview of ALC Leading provider of assisted living care services One of the largest in the U.S. 5th in unit size ALC comprised of 207 residences 8,302 units Recently announce 400 unit expansion plan Located in small mid- market suburban bedroom communities. Population 10,000 - 40,000 Net
Slide 5: U.S. Assisted Living Industry
20-Mar-07 U.S. Assisted Living Industry Assisted living grew out of a need to bridge the gap between private homes and higher acuity nursing homes Acuity levels in nursing homes have increased significantly due to increased life expectancy and changes in government policy, increasing the need for a
Slide 6: U.S. Assisted Living Industry
20-Mar-07 U.S. Assisted Living Industry 36,000 licensed facilities 900,000 people Two essential models: Social Wellness ALC Focused on Wellness Source: ALFA • Looking at the US industry as a whole, there are currently 36,000 licensed facilities with 900,000 people living in those facilities. • Withi
Slide 7: U.S. Assisted Living Industry: Services Provided
20-Mar-07 U.S. Assisted Living Industry 24 hour supervision and assistance Tailored personal services Activities, life enrichment and transportation Health related services An environment that maximizes resident's dignity, autonomy, privacy, independence and safety Services Provided • Assisted livin
Slide 8: Flow of Assisted Living Residents
20-Mar-07 Home SNF Expire Hospital Other ALFs Other East 0.12 0.33 0.28 0.11 0.14 0.02 Home SNF Hospital Independent Living Other ALFs East 0.45 0.15 0.15 0.1 0.15 Flow of Assisted Living Residents Residents Leave For Residents Come From Source: ALFA • These two pie charts indicate, by percentage, w
Slide 9: Assisted Living Residents: Typical Resident
20-Mar-07 Aged between 75 & 85 Female Mobile Needs assistance with 2.25 ADL's Assisted Living Residents 31% 69% Typical Resident Source: ALFA Male Female East 0.24 0.76 • If we examine who makes up the population of a typical assisted living residence, you would find that 69% of the residents are fe
Slide 10: U.S. Assisted Living Industry: Activities of Daily Living
20-Mar-07 U.S. Assisted Living Industry General Meals, activities, laundry and housekeeping Support Assistance with medication, monitoring health status, and coordination with transportation and physician visits Personal Care Dressing, grooming, bathing and toileting Safety Safe and secure environme
Slide 11: Changing Family Dynamics
20-Mar-07 Changing Family Dynamics Due to growth in two-income families, the immediate family has become less of a primary source of care Two-income families better able to provide financial support Family caregiver time is limited Increasing number of seniors able to afford the cost of assisted liv
Slide 12: Competitive Advantages/Opportunities
20-Mar-07 Competitive Advantages/Opportunities Relatively new portfolio constructed in mid to late 1990s Designed to appeal to the senior living community and their decision makers Small markets provide for less competition Tend to compete with local or regional provider lacking same level of expert
Slide 13: Competitive Advantages/Opportunities
20-Mar-07 Competitive Advantages/Opportunities 75% ownership of our residences providing us with increased flexibility to: Refurbish residences as required Expand residences with successful growth opportunities Exit markets if warranted Portfolio offers geographic diversity and clustering Leverage s
Slide 14: Assisted Living Concepts' Operations
20-Mar-07 21 19 11 23 41 Assisted Living Concepts' Operations 207 ALC residences 9 9 6 4 9 8 4 9 8,302 Units 12 1 1 Focused Business with Geographic Diversity 20 • ALC operates 207 residences across 17 states with over 8,300 apartments. This map of the US shows how many residences we have in each st
Slide 15: Competitive Advantages/Opportunities
20-Mar-07 Competitive Advantages/Opportunities Total Occupancy Percentage Ability to fill open units Private/Medicaid Mix Ability to increase private versus Medicaid occupancy Fourth quarter 2006 at 79.5% of revenues from private pay Fourth quarter 72% of occupancy is private pay Notice provided at
Slide 16: Growth Strategy: Build Our Company Brand
20-Mar-07 Growth Strategy Establish ourselves as the provider of choice for residents who value wellness, quality of care, and customer service Initiating programs on a corporate, regional and residence level to allow us to monitor and improve our delivery of services Sales campaigns targeted at res
Slide 17: Growth Strategy: Internal Growth
20-Mar-07 Growth Strategy Improve occupancy, payer rates and private pay mix Further develop life enrichment, dining and customer service programs to enhance value, support rate improvements, and attract private pay residents Continue training, mentoring and goal setting with sales team Manage marke
Slide 18: Growth Strategy: Unit Expansion
20-Mar-07 Growth Strategy 400 unit expansion of existing owned buildings 2007 expansion plan of 20 unit increments to 20 of our most successful buildings Beginning March 31, 2007 Two additions nearing completion Total of 46 units Completion expected by July 2007 Currently own land to add units to ex
Slide 19: Growth Strategy: External Growth
20-Mar-07 Growth Strategy Will look to expand portfolio in markets where we already operate Will consider new markets with low risk of litigation Strong balance sheet enabling growth through acquisition and construction Industry remains highly fragmented Top five providers combined market share is a
Slide 20: Financial Results
20-Mar-07 Financial Results • Thank you Laurie. The financial information provided in these slides was done on a pro forma basis, to reflect the 206 buildings transferred from Extendicare to ALC. A reconciliation of pro forma data to GAAP numbers based on 208 buildings can be seen at the end of this
Slide 21: Occupancy Census & Average Daily Revenue Rates
20-Mar-07 Assisted Living Concepts, Inc. Occupancy Census & Average Daily Revenue Rates Q1 05 Q2 05 Q3 05 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Private Pay Rate 86.58 90 91.02 91.35 97.8 96.8 95.91 96.54 Medicaid Rate 63.03 61.79 62.07 62.97 64.22 63.23 65.55 64.13 Occupancey 0.89 0.88 0.872 0.859 0.842 0.8
Slide 22: ALC Pro Forma Revenue
20-Mar-07 ALC Pro Forma Revenue* Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 occ 54.4 55.4 55.7 57.5 58.1 ($'s in millions) *Based upon 206 residences transferred to ALC. See Reconciliation to GAAP measures attached. On a pro forma basis, revenues have increased from $54.4 million in the fourth quarter of 20
Slide 23: ALC Pro Forma EBITDA
20-Mar-07 ALC Pro Forma EBITDA* Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 occ 12.4 12.3 13.2 12.5 13.8 ($'s In millions) * Based on 206 residences transferred to ALC. See reconciliation to GAAP measures attached On a pro forma basis, EBITDA increased from $12.4 million in the fourth quarter of 2005 to $13.
Slide 24: ALC Pro Forma EBITDAR
20-Mar-07 ALC Pro Forma EBITDAR* Q4 '05 Q1 '06 Q2 '06 Q3 '06 Q4 '06 occ 15.9 15.8 16.7 16.1 17.5 ($'s In millions) * Based on 206 residences transferred to ALC. See reconciliation to GAAP measures attached On a pro forma basis, for the same reasons as EBITDA, EBITDAR increased from $15.9 million in
Slide 25: ALC Long-term Debt Summary
20-Mar-07 ALC Long-term Debt Summary Lender Red Mortgage Capital DMG ALF Capital Lease Oregon Trust Notes HUD Insured Mortgages Total Amount Dec 31, 2006 $35.9 $26.1 $11.8* $9.2 $7.6 $90.6 Maturity Current Rate 6.51% 6.01% 7.32% 6.72% 6.89% 2014 2008 2009 2020-2026 2036 * $10.3 million represents pu
Slide 26: Reconciliation of Net Income to Pro Forma EBITDA and EBITDAR
20-Mar-07 Reconciliation of Net Income to Pro Forma EBITDA and EBITDAR Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended Dec 31 March 31 June 30 Sept 30 Dec 31 2005 2006 2006 2006 2006 Net Income 3,682 2,310 1,832 296 4,571 Loss from discontinued operations, net of tax benefit 92
Slide 27: Reconciliation of Revenue to Pro Forma Revenue
20-Mar-07 Reconciliation of Revenue to Pro Forma Revenue Quarter Ended Quarter Ended Quarter Ended Quarter Ended Quarter Ended Dec 31, Mar 31, June 30, Sept 30, Dec 31, 2005 2006 2006 2006 2006 Revenue 55,784 56,776 56,998 58,820 58,554 Adjustment to remove revenues of residences not transferred to
Slide 28: Investment Highlights
20-Mar-07 High Percentage of Direct Ownership Focused On Suburban and Rural Centers New Portfolio of Assets Prudent Internal/ External Growth Strategy Investment Highlights Strong Financial Position 1. To summarize, ALC has a relatively new portfolio of assets; 2. We offer investors a high proportio
Assisted Living Concepts — Investor Presentation (March 2007) on 6ix