Genesis Healthcare, Inc. · OTC:GENNQ
Genesis Healthcare — Q1 2019 Earnings Presentation
22 slides from Genesis Healthcare's earnings presentation, May 10, 2019
Slide 1: A leading provider of post-acute services
© 2019 by Genesis Healthcare, Inc. All Rights Reserved. A leading provider of post-acute services May 2019
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
. Genesis Overview .. Financial Review Agenda
Slide 4: Genesis Overview
Genesis Overview Genesis HealthCare is now one of the largest providers of post-acute care services in the nation. Publicly Traded Ticker: GEN ~60,000 dedicated teammates ~ 50,000 beds Operating Occupancy 86.8% as of March 31, 2019 Competitive Strengths .. More than 400 facilities across 29 states .
Slide 5: Operating With Geographic Scale and Scope
. More than 400 SNF and ALF facilities across 29 states .. Top 5 states by licensed beds: NJ: 11.1% PA: 10.1% MD: 8.0% CA: 7.6% MA: 7.4% 5 Operating With Geographic Scale and Scope .. Geographic density = operating efficiencies, strong hospital relations & coordinated sales/marketing strat
Slide 6: Advantages of National Scale
Advantages of National Scale – … with regional & local focus … 6 Advantages Examples Contracting with National Payors • United Healthcare and Aetna Ability to Invest in Technology & Innovation • BPCI and MSSP • Industry leading technology platforms Purchasing Power • Cost efficiencies • Major vendor
Slide 7: Differentiation Through Specialization
Differentiation Through Specialization 7 PowerBack 100% ShortStay. Aggressive, highly personalized - designed to get patients home sooner Transitional Care Units (TCU) A rapid recovery option for patients requiring post-acute rehab and medical services due to illness, surgery or injury Memory Suppor
Slide 8: Genesis Physician Services
Genesis Physician Services .. 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 .. 83% of facility admissions are seen by GPS providers
Slide 9: Investment Case for Joint Venture Structures
Investment Case for Joint Venture Structures 9 Transaction Summary – Next Healthcare Capital Partnership with Genesis – closed Jan 31, 2019 • Welltower sells 22 Genesis leased centers - 7 to a new owner operator and 15 to a new real estate partnership (Next GEN) owned 54% by Next Healthcare Capital
Slide 10: Investment Case for Joint Venture Structures, cont'd
Investment Case for Joint Venture Structures, cont’d 10 Transaction Highlights: • Sold 7 underperforming leaseholds with rent escalators - exchanged for 46% interest in real estate of 15 in-market facilities • Fixed price purchase option provides opportunity to participate in upside accretion in rea
Slide 11: Agenda
. Genesis Overview .. Financial Review Agenda
Slide 12: Improving Same-Store Growth Trends
12 Improving Same-Store Growth Trends 1Q19 4Q18 3Q18 Occupancy 0.50% 0.30% -0.40% Inpatient Revenue 0.50% 0.85% -0.60% Adjusted EBITDAR 6.50% 6.50% 2.60% Quarter over prior year quarter comparisons
Slide 13: Adjusted EBITDAR less cash rents
13 Adjusted EBITDAR less cash rents (in mils) • Declined y-o-y from 2015- 2017 due to industry-wide pressures. • Financial restructuring produced growth beginning in 1Q18. • The sharp increase beginning 3Q18 marked the first periods of organic Adjusted EBITDAR growth since 2015.
Slide 14: Adjusted EBITDAR - Organic Trends 2018 to 2019
14 Adjusted EBITDAR - Organic Trends – 2018 to 2019 • Q1 2019 Organic Adjusted EBITDAR growth led by: • Aggressive cost management • Improved labor efficiency • A series of permanent cost reductions implemented in July 2018 • Total annual cost reductions of $50 million to be fully realized by end 2Q
Slide 15: Same Store Avg. Daily Census Trends
15 Same Store Avg. Daily Census Trends – Jan ‘15 to Apr ‘19 • Over the past 3 years, Genesis and the industry have experienced y-o-y declines in occupancy / average daily patients. • For Genesis, this y-o-y negative trend peaked in the June / 2Q17 period. • Since 2Q17, Genesis’s rate of y-o- y avera
Slide 16: Same Store Average Daily Census Trends April-May 2019
16 Same Store Average Daily Census Trends – April 2, 2019 – May 2, 2019 Same store average daily census continue to show y-o-y growth through May 2, 2019
Slide 17: Priorities in 2019
Priorities in 2019 17 Continue to improve capital structure Capitalize on opportunities to reduce leverage and cost of capital Execute on transactions involving the ability to repurchase real estate Continue to execute on opportunities to optimize the portfolio Exit non-core markets with i
Slide 18: Appendix
Appendix
Slide 19: Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
Appendix 19 RECONCILIATION OF NET LOSS ATTRIBUTABLE TO GENESIS HEALTHCARE, INC. TO EBITDA AND ADJUSTED EBITDA (UNAUDITED) (IN THOUSANDS) Three months ended March 31, 2019 2018 Net loss attributable to Genesis Healthcare, Inc. $ (15,263) $ (68,538) Adjustments to compute EBITDA: Net loss attributable
Slide 20: Reconciliation of Net Loss to Adjusted EBITDAR
Appendix 20 RECONCILIATION OF NET LOSS ATTRIBUTABLE TO GENESIS HEALTHCARE, INC. TO ADJUSTED EBITDAR (UNAUDITED) (IN THOUSANDS) Three months ended March 31, 2019 2018 Net loss attributable to Genesis Healthcare, Inc. $ (15,263) $ (68,538) Adjustments to compute Adjusted EBITDAR: Net loss attributable
Slide 21: EBITDA and Adjustments to EBITDA
Appendix 21 EBITDA We believe EBITDA is useful to an investor in evaluating our operating performance because it helps investors evaluate and compare the results of our operations from period to period by removing the impact of our capital structure (interest expense) and our asset base (depreciatio
Slide 22: Losses of newly acquired, constructed or divested businesses
Appendix 22 Losses of newly acquired, constructed or divested businesses. The acquisition and construction of new businesses is an element of our growth strategy. Many of the businesses we acquire have a history of operating losses and continue to generate operating losses in the months that follo