Regional Health Properties, Inc. · OTC:RHEP
Regional Health Properties — Adcare Health Systems — Investor Presentation (May 2016)
18 slides from Regional Health Properties's investor presentation, May 23, 2016
Slide 1: Investor Presentation
May 20, 2016 Investor Presentation NYSE MKT: ADK AdCare Health Systems, Inc. ®
Slide 2: Forward-Looking Statements
NYSE MKT: ADK Forward-Looking Statements 2 Statements contained in this presentation that are not historical facts may be forward-looking statements within the meaning of federal law. Such statements can be identified by the use of forward-looking terminology, such as "believes," "expects," "plans,"
Slide 3: Investor Highlights
NYSE MKT: ADK Investor Highlights AdCare Health Systems is a healthcare property holding and leasing company Portfolio of 38 operator and geographically diverse senior care properties, primarily skilled nursing facilities, with a total of 4,081 beds/units Similar to a REIT, portfolio primarily consi
Slide 4: Increasing Demand for Long-Term Care
NYSE MKT: ADK 3.1 4.2 5.8 6.6 8.7 14.2 19.0 1990 2000 2010 2020E 2030E 2040E 2050E Increasing Demand for Long-Term Care Population of 85+ is one of the fastest growing segments U.S. population is also living longer, often with chronic illness and disabling conditions Use of long-term care insurance
Slide 5: SNF Reimbursement Rates
NYSE MKT: ADK SNF Reimbursement Rates 5 Skilled nursing reimbursement rates have steadily increased $110 $118 $124 $129 $142 $145 $150 $156 $164 $172 $174 $177 $179 $184 $186 $190 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E Avg. SNF Medicaid Daily Rate Source: El
Slide 6: Strategic Transition Complete
NYSE MKT: ADK Strategic Transition Complete 6 In July 2014, the Company announced its plan to transition from an owner and operator of skilled nursing facilities to a healthcare property holding and leasing company Since that time, Leadership roles filled with seasoned executives possessing extensiv
Slide 7: Geographic Diversification
NYSE MKT: ADK OK AR MO OH NC SC AL GA TX Geographic Diversification 7 State # of Facilities % of Total Georgia 14 37% Arkansas 9 24% Ohio 8 21% Alabama 2 5% Oklahoma 2 5% South Carolina 2 5% North Carolina 1 3% Total 38 100%
Slide 8: Operator Diversification
NYSE MKT: ADK Operator Diversification 8 Operator # of Facilities Leased Skyline 9 Beacon 7 C-Ross Management 7 Wellington 4 New Beginnings Care 3 Symmetry 3 Southwest LTC 2 Total Leased 35 AdCare Managed 3 Total 38 % of Facilities by Operator Skyline 24% Beacon 18% C-Ross Mgmt 18% Wellington 11% Ne
Slide 9: Recent Operator Developments
NYSE MKT: ADK Recent Operator Developments 9 Skyline Healthcare, LLC Commenced a new master lease agreement for nine facilities located in Arkansas on April 1 with an option for Skyline to purchase the facilities for $55M Skyline exercised its option to purchase $52M to be paid in cash at closing an
Slide 10: Typical Lease Structure
NYSE MKT: ADK Typical Lease Structure 10 “Triple-net basis” terms; lessee is typically obligated for all expenses of the property including: Insurance Taxes Facility maintenance Typically 10+ years in duration with renewal options Annual rent escalation clauses between 2 and 3% Cross collateral and
Slide 11: Leased Portfolio Metrics
NYSE MKT: ADK Leased Portfolio Metrics 11 For the Three Months Ended March 31, 2016 (1) Occupancy (%) 82.8% Skilled Mix (%) (2) 13.0% Rent Coverage Before Management Fees 1.4x Rent Coverage After Management Fees 1.0x (1) Excludes nine Arkansas facilities operated by Skyline and three Georgia facilit
Slide 12: Improving Financial Performance
NYSE MKT: ADK Improving Financial Performance Paid down or have received commitments to refinance or extend ~$44M of short-term debt Expect to complete by the Q2 2016 Expect interest expense savings of ~$400,000 by applying $4 million of restricted cash against outstanding debt and lower interest ra
Slide 13: Capital Structure
NYSE MKT: ADK Capital Structure 13 ($ in thousands) 3/31/2016 Non-convertible debt $109,188 Convertible subordinated debt 9,200 Total Debt(1) $118,388 Preferred stock 58,391 Total Equity / (Deficit) (27,394) Total Book Capitalization $149,385 (1) Includes $949,000 in liabilities of a disposal group
Slide 14: Total Capitalization (at Market Value)
NYSE MKT: ADK Total Capitalization (at Market Value) 14 53% 29% 18% Total debt Preferred stock (at liquidation value) Market value of equity Total Capitalization (at Market Value) ($ in thousands) 3/31/2016 Total Debt(1) $118,388 Preferred stock (at liquidation value) $65,346 Market value of equity(
Slide 15: Series A Cumulative Redeemable Preferred Stock
NYSE MKT: ADK Series A Cumulative Redeemable Preferred Stock 15 Amount outstanding (3/31/2016) 2,614,000 shares Liquidation Preference $25.00 per share Dividends $2.72 per share (10.875%) Optional redemption After December 1, 2017 at par Special redemption On “Change of Control” and delisting at par
Slide 16: Built-in Company Growth
NYSE MKT: ADK Built-in Company Growth Rent escalators In connection with the Company’s transition to a property holding and leasing company, higher than industry standard rent escalators were negotiated 2% - 3% per annum (especially in later years) Minimum Lease Receivables(1) 2017 $26,845,000 2018
Slide 17: Positioned for Growth
NYSE MKT: ADK Positioned for Growth Diverse pipeline of portfolio expansion opportunities Targeting small to mid-sized transactions Considering individual facilities, primarily with existing operators, as well as small groups of facilities and larger portfolios Broad, national search for potential a
Slide 18: Key Stats
NYSE MKT: ADK Stock Price (5/20/16) $1.98 Avg. Daily Vol. (3 mo.) 31,292 52 Week Low/High $1.85 – $4.01 Shares Outstanding (4/30/16) 19.9M Public Float, est. 15.8M Valuation Measures Market Value of Equity $39.5M Enterprise Value (1) $214.6M Ownership Institutional, est. 22.8% Insider, est. 29.7% Ke
Adcare Health Systems — Investor Presentation (May 2016) on 6ix