Genesis Healthcare, Inc. · OTC:GENNQ
Genesis Healthcare — Investor Presentation (January 2018)
21 slides from Genesis Healthcare's investor presentation, Jan 10, 2018
Slide 1: A leading provider of post-acute services
A leading provider of post ‐ acute services January 2018 © 2018 by Genesis Healthcare, Inc. All Rights Reserved.
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
Agenda Genesis Overview Long-Term Value Creation Opportunities Financial Summary
Slide 4: Genesis Overview: Competitive Strengths
Genesis Overview Competitive Strengths Genesis HealthCare is now one of the largest providers of post-acute care services in the nation. More than states More than units. More than and nurse 450 facilities across 30 200 clinical specialty Publicly Traded Ticker: GEN 425 Genesis physicians ~80,
Slide 5: Operating With Geographic Scale and Scope
Operating With Geographic Scale and Scope coordinated sales/marketing strategies Geographic density = operating efficiencies, strong hospital relations & Geographic diversity reduces regulatory risk More than 450 SNF and ALF facilities across 30 states Top 5 states by licensed beds: PA: 10.7
Slide 6: Differentiation Through Specialization
Differentiation Through Specialization Strategic investments in sub-acute specialty units help differentiate Genesis PowerBack 100% ShortStay. Aggressive, highly personalized - designed to get patients home sooner Transitional Care Units (TCU) A rapid recover option for patients requiring post-acute
Slide 7: Genesis Physician Services Overview
Genesis Physician Services Overview Full and Part-Time Provider Growth 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 adm
Slide 8: Agenda
Agenda Genesis Overview Long-Term Value Creation Opportunities Financial Summary Beds and patients certified facilities 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 17,000 16,500 16,000 15,500 15,000 certified beds patients in certified Beds certified Facilities Ma
Slide 9: U.S. SNF Capacity
U.S. SNF Capacity 9 Beds and patients certified facilities 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 17,000 16,500 16,000 15,500 15,000 certified beds patients in certified Beds certified Facilities Mar-05 Mar-06 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15
Slide 10: Projected Growth in U.S. SNF Census, by Age Cohort
Projected Growth in U.S. SNF Census, by Age Occupancy Cohort Maximum current SNF capacity 10 Source: CMS Nursing Home Data Compendium (2015 Edition) for percentage of SNF residents by age cohort and US Census Bureau data for population growth by age cohort. Number of SNF Residents (000’s) 100 200 30
Slide 11: Changing Models of Care Shaping the Industry
Changing Models of Care Shaping the Industry Genesis is well-positioned to capitalize on value-based movement Bundled Payment for Care Improvement (“BPCI”) Medicare Shared Savings Program (“MSSP”) Existing Program Growth Opportunities Low Risk/Low Accountability to High Risk/High Accountabilit
Slide 12: Success in BPCI program
Success in $20.0 BPCI program $15.0 $10.0 $5.0 $-2016 Actual 2017 Run Rate BPCI Gain Share (in $ mils) • • • >100% increase in estimated year-over-year gain share Program returns have exceeded expectations Invaluable experience gained operationalizing and managing the program 12 $20.5 $10.0
Slide 13: Genesis Rehab Services Value-Based Initiatives
Genesis Rehab Services Value-Based Initiatives • New business line – Vitality to You • Extends GRS’ therapy services into the community; patient receives rehabilitation in the home Designed to allow SNF’s to reduce average lengths of stay Vitality to You grew 35% year-over-year for the nine months e
Slide 14: Agenda
Agenda Genesis Overview Long-Term Value Creation Opportunities Financial Summary
Slide 15: Occupancy Trends vs Competitors
Occupancy Trends vs Competitors 88.0% 86.0% 85.6% 85.1% 84.6% 84.0% 82.0% 80.0% 78.0% 77.0% 77.1% 76.0% 76.3% 75.7% 74.9% 74.7% 74.6% 74.0% 72.0% 3Q15 4Q15 1Q16 2Q16 Genesis 3Q16 Kindred 4Q16 Ensign 1Q17 2Q17 3Q17 ** Source: 10Q and 10K SEC Filings - Genesis and Ensign = Operating Occupancy - Kindre
Slide 16: Genesis – Skilled Mix Trends
Genesis – Skilled Mix Trends 25.0% 20.0% 18.7% 15.0% 12.5% 12.3% 12.0% 11.9% 11.2% 10.0% 7.3% 7.3% 7.2% 7.2% 7.3% 7.5% 5.0% 0.0% 3Q15 4Q15 1Q16 2Q16 3Q16 Medicare Mix 4Q16 Insurance Mix 1Q17 2Q17 3Q17 Total Skilled Mix 16 20.6% 20.3% 21.2% 20.2% 20.6% 19.6% 19.3% 19.7% 13.7% 13.4% 13.1% 12.9% 8.1%7.
Slide 17: Restructuring Plan Summary
Restructuring Plan Summary Expect $80.0-$100.0 million reduction in aggregate annual fixed charges Significant improvement in free cash flow generation 17 Item Targeted Amount Description Rent Expense ~$54.0 million $35.0 million reduction from Welltower portfolio $19.0 million reduction fro
Slide 18: Restructuring Plan Pro Forma Analysis
Restructuring Plan Pro Forma Analysis Assumption: Genesis realizes fixed charge range. reductions approximating the $90 million mid-point of the projected 18 LTM Sept 30, 2017 Pro Forma LTM Sept 30, 2017 Fixed Charge Coverage Ratio 1.1x 1.3x Lease Coverage Ratio 1.3X 1.5X Net Funded Leverage Ratio 7
Slide 19: Appendix
Appendix
Slide 20: Appendix: Non-GAAP Financial Measures
Appendix 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 results
Slide 21: Appendix: Adjustments to EBITDA
Appendix 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 follow our
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