Genesis Healthcare, Inc. · OTC:GENNQ
Genesis Healthcare — Q2 2019 Earnings Presentation
21 slides from Genesis Healthcare's earnings presentation, Aug 8, 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 August 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 86.5% as of June 30, 2019 Competitive Strengths .. Approx. 400 facilities across 27 states .. A
Slide 5: Operating With Geographic Scale and Scope
. Approx. 400 SNF and ALF facilities across 27 states .. Top 5 states by licensed beds: NJ: 11.6% PA: 10.6% MD: 8.4% WV: 6.6% MA: 7.6% 5 Operating With Geographic Scale and Scope .. Geographic density = operating efficiencies, strong hospital relations & coordinated sales/marketing strateg
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: Financial Review
. Genesis Overview .. Financial Review Agenda
Slide 12: Improving Same-Store Growth Trends
12 Improving Same-Store Growth Trends 2Q19 1Q19 4Q18 3Q18 Occupancy 0.80% 0.50% 0.30% -0.40% Inpatient Revenue 1.60% 0.50% 0.85% -0.60% Adjusted EBITDAR 4.10% 6.50% 6.50% 2.60% Quarter over prior year quarter comparisons
Slide 13: Adjusted EBITDAR - Organic Trends 2018 to 2019
13 Adjusted EBITDAR - Organic Trends – 2018 to 2019 • Organic Adjusted EBITDAR growth led by: • Occupancy growth • Reimbursement rate increases better aligned with wage inflation • Aggressive cost management • Improved labor efficiency • Current portfolio under operation more stable following over 1
Slide 14: Same Store Avg. Daily Census Trends
14 Same Store Avg. Daily Census Trends – January ‘15 to July ‘19 • In recent 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 4Q18 Genesis has seen y-o- y growth i
Slide 15: Same Store Average Daily Census Trends July-August 2019
15 Same Store Average Daily Census Trends – July 3, 2019 – August 2, 2019 Same store average daily census continue to show y-o-y growth through August 2, 2019
Slide 16: Priorities in 2019
Priorities in 2019 16 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 17: Appendix
Appendix
Slide 18: Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
Genesis jf Appendix GENESIS HEALTHCARE, INC. RECONCILIATION OF NET LOSS ATTRIBUTABLE TO GENESIS HEALTHCARE, INC. TO EBITDA AND ADJUSTED EBITDA (UNAUDITED) (IN THOUSANDS) ‘Three mon ‘Sis months ended June 30, 7019 7019 2018, ne. s asim § noncotrlling interests 4168) expense 28.268 S275 Interest expen
Slide 19: Reconciliation of Net Loss to Adjusted EBITDAR
Appendix Genesis GENESIS HEALTHCARE, INC. RECONCILIATION OF NET LOSS ATTRIBUTABLE TO GENESIS HEALTHCARE, INC. TO ADJUSTED EBITDAR (UNAUDITED) (IN THOUSANDS) Thee month eden ‘Six months ended June 30, 2019 2019 2018 ‘Net lss attributable to Genesis Healthcare, Inc. s Gay s cei S 20082) $ (208,150) ‘A
Slide 20: Non-GAAP Financial Measures
Appendix 20 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 perating performance because it helps investors evaluate and compare the resul
Slide 21: Appendix: Adjustment Definitions
Appendix 21 •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 per