Genesis Healthcare, Inc. · OTC:GENNQ
Genesis Healthcare — Q3 2018 Earnings Presentation
20 slides from Genesis Healthcare's earnings presentation, Nov 7, 2018
Slide 1: A leading provider of post-acute services
© 2018 by Genesis Healthcare, Inc. All Rights Reserved. A leading provider of post-acute services November 2018
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 84.3% as of September 30, 2018 Competitive Strengths .. More than 400 facilities across 29 stat
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: 11.9% PA: 9.8% MD: 8.0% CA: 7.4% MA: 7.1% 5 Operating With Geographic Scale and Scope .. Geographic density = operating efficiencies, strong hospital relations & coordinated sales/marketing strate
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 .. 75% of facility admissions are seen by GPS providers
Slide 9: Financial Review
. Genesis Overview .. Financial Review Agenda
Slide 10: Improving Trends
10 Improving Trends • Adjusted EBITDAR less cash rents produced growth in each of the last two quarters. • Genesis reports organic Adjusted EBITDAR growth for the first time since 2015. • Occupancy continues to show improvement in 2018.
Slide 11: Adjusted EBITDAR less cash rents
11 Adjusted EBITDAR less cash rents (in mils) • Declined y-o-y from 2015- 2017 due to industry-wide pressures. • Financial restructuring in 1Q18, produced growth in each of the last two quarters: - 2Q18 – 12.2% - 3Q18 – 68.2% • The sharp increase in 3Q18 fueled by organic earnings growth, marking th
Slide 12: Adjusted EBITDAR - Organic Trends 2016 to 2018
12 Adjusted EBITDAR - Organic Trends – 2016 to 2018 • 3Q18 Organic Adjusted EBITDAR growth led by: • Aggressive cost management • Improved productivity • A series of permanent cost reductions implemented in July 2018 • Total annual cost reductions of $50 million to be fully realized by end 2Q19 • ~$
Slide 13: Same Store Avg. Daily Census Trends
13 Same Store Avg. Daily Census Trends – Jan ‘15 to Oct ‘18 • 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 14: Same Store Average Daily Census Trends 4Q18 to date
14 Same Store Average Daily Census Trends – 4Q18 to date In the back half of October 2018, Genesis same store average daily census exceeded prior year levels for the first time since 2014.
Slide 15: Priorities in 2019
Priorities in 2019 15 Continue to improve capital structure Capitalize on opportunities to reduce leverage and cost of capital Continue to execute on opportunities to optimize the portfolio Exit non-core markets with insufficient density to compete Exit unprofitable markets Selectively i
Slide 16: Appendix
Appendix
Slide 17: Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
17 Appendix RECONCILIATION OF NET LOSS ATTRIBUTABLE TO GENESIS HEALTHCARE, INC. TO EBITDA AND ADJUSTED EBITDA (UNAUDITED) (IN THOUSANDS) Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Net loss attributable to Genesis Healthcare, Inc. $ (58,128) $ (373,824) $ (16
Slide 18: Reconciliation of Net Loss to Adjusted EBITDAR
Appendix 18 RECONCILIATION OF NET LOSS ATTRIBUTABLE TO GENESIS HEALTHCARE, INC. TO ADJUSTED EBITDAR (UNAUDITED) (IN THOUSANDS) Three months ended September 30, Nine months ended September 30, 2018 2017 2018 2017 Net loss attributable to Genesis Healthcare, Inc. $ (58,128) $ (373,824) $ (166,278) $ (
Slide 19: Non-GAAP Financial Measures
Appendix 19 We use the following Non-GAAP Financial Measures that we believe are useful to investors as key valuation and operating performance measures: EBITDA We believe EBITDA is useful to an investor in evaluating our operating performance because it helps investors evaluate and compare the resu
Slide 20: Non-GAAP Adjustment Definitions
Appendix 20 • Severance and restructuring. We exclude severance costs from planned reduction in force initiatives associated with restructuring activities intended to adjust our cost structure in response to changes in the business environment. We believe these costs do not reflect the underlying pe