Attached files
| file | filename |
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| 8-K - 8-K - CAPITAL SENIOR LIVING CORP | d68827d8k.htm |
| EX-99.1 - EX-99.1 - CAPITAL SENIOR LIVING CORP | d68827dex991.htm |
 Capital
Senior Living Company Presentation
Exhibit 99.2 |
 2 Forward-Looking Statements • The forward-looking statements in this presentation are subject to certain risks and uncertainties that
could cause results to differ materially, including, but not without limitation to, the
Company’s ability to complete the refinancing of certain of our
wholly owned communities, realize the anticipated savings related to such
financing, find suitable acquisition properties at favorable terms, financing, licensing, business conditions, risks of downturns in economic conditions generally, satisfaction of closing
conditions such as those pertaining to licensures, availability of insurance at
commercially reasonable rates and changes in accounting principles and
interpretations among others, and other risks and factors identified from
time to time in our reports filed with the Securities and Exchange Commission • The Company assumes no obligation to update or supplement forward-looking statements in this
presentation that become untrue because of new information, subsequent events or
otherwise. |
 3 Non-GAAP Financial Measures • Adjusted EBITDAR, Adjusted EBITDAR Margin, Adjusted Net Income and Adjusted CFFO are financial
measures of operating performance that are not calculated in accordance with U.S.
generally accepted accounting principles (“GAAP”).
Non-GAAP financial measures may have material limitations in that they
do not reflect all of the amounts associated with our results of operations as
determined in accordance with GAAP. As a result, these non-GAAP
financial measures should not be considered a substitute for, nor superior
to, financial results and measures determined or calculated in accordance with GAAP. The Company believes that these non-GAAP measures are useful in identifying trends in day-to-day
performance because they exclude items that are of little or no significance to
operations and provide indicators to management of progress in achieving
optimal operating performance. In addition, these measures are used by
many research analysts and investors to evaluate the performance and the value of companies in the senior living industry. The Company strongly urges you to review the reconciliation of
net income from operations to Adjusted EBITDAR and Adjusted EBITDAR Margin and the
reconciliation of net loss to Adjusted Net Income and Adjusted CFFO, each
of which is included at the end of the Company’s earnings releases,
along with the Company’s consolidated balance sheets, statements of
operations, and statements of cash flows. |
 4 Company Highlights Value leader in geographically concentrated regions providing quality seniors housing and care at reasonable prices Well positioned to make meaningful gains in shareholder value Substantially all private pay with strong cash flow generation Industry benefits from need-driven demand, limited new supply and an improving housing market and economy Larger company economies of scale and proprietary systems that yield operating efficiencies in highly fragmented industry Executing on disciplined accretive growth initiatives through acquisitions, conversions to higher levels of care, renovations and refurbishments Solid balance sheet |
 5 Company Overview • Capital Senior Living operates 119 communities in geographically concentrated regions with the capacity to serve 15,200 residents Number of residents by State Greater than 2,000 500 - 2,000 Less than 500 As of July 31, 2015 Resident Capacity By State |
 6 Resident Demographics at CSU Communities • Average age of resident: 85 years
• Average age of resident moving in: 82 years
• Average stay period: 2-3 years • Percent of female residents: 80%
• Resident turnover is primarily attributed to death or need for higher care |
 7 Independent Living – 47% of Resident Capacity • Average 109 units per IL community with large common areas and amenities • Supportive services, wellness programs, social, recreational and educational events • Average monthly rate of $2,576 • 100% private pay • Average length of resident stay is 31 months The Capital Advantage: Senior Living Options |
 8 The Capital Advantage: Senior Living Options Assisted Living- 53% of Resident Capacity • Average 68 units per community • 79% of communities offer AL • Assistance with activities of daily living including medication reminders, bathing, dressing and grooming • Average monthly rate of $4,044 • Substantially all private pay • Average length of resident stay is 24 months |
 9 The Capital Advantage: Need Driven Demand U.S. population 75+ years old is estimated to be 12% of the population by 2030 compared to 6% in 2012 • Only 1.3 million units serving a population of 18.9 million seniors • Current 6.9% penetration rate implies demand growth of 40,000 units per year U.S. Seniors Population Trends (75+ years old) 15,000 17,500 20,000 22,500 25,000 27,500 30,000 32,500 35,000 2010 2015 2020 2025 2030 Source: 2010 Census Summary File 1 and U.S. Census Bureau, Population Division |
 10 The Capital Advantage: Limited New Supply Source: NIC MAP Trends Senior Housing All Markets |
 11 The Capital Advantage: Senior Housing Occupancy Trends Source: NIC MAP Trends All Markets Q2 15 |
 12 The Capital Advantage: Competitive Strengths • Value leader in geographically concentrated regions • Experienced on-site, regional and corporate management • Larger company economies of scale and proprietary systems that yield operating efficiencies in highly fragmented industry • Solid reputation in industry and 95% resident satisfaction • Straightforward private-pay business model • Solid balance sheet • Strong Board of Directors |
 13 The Capital Advantage: Strategy • Focus on our core strengths • Capitalize on competitive strengths within each of our regions to maximize the cash flow and value of our communities and our operations • Capitalize on the fragmented nature of the senior living industry to strategically aggregate local and regional operators in geographically concentrated regions • Increase levels of care through conversions to Assisted Living or Memory Care units • Attract and retain the best talent in the senior living industry |
 14 2015 Business Plan Focused on operations, marketing and growth to enhance shareholder value through: Organic growth, including the conversion of units to higher levels of care and community renovations and refurbishment projects Proactive expense management Accretive acquisitions Utilization of technology |
 15 2015 Business Plan: Organic Growth • Increase average rents • Each 3% increase generates $11.8M of revenue • Improve occupancies • Each 1% generates $4.0M of revenue, $2.8M of EBITDAR and $0.06 per share of CFFO • Convert units to higher levels of care • Cash flow value enhancing renovations and refurbishments • Continue to enhance sales and marketing initiatives |
 16 Conversions: Significant Increases in Occupancy, Revenue and CFFO Occupancy Prior to Conversions (1) IL AL Total Total Units 6,192 5,434 11,626 Occupied Units 5,287 4,869 10,156 Occupancy % 85.4% 89.6% 87.4% Planned IL to AL Conversions IL AL Vacant Units (225) 225 At 90% Stabilized Occupancy 203 Incremental Conversions (175) 175 (1) As of June 30, 2014 - excludes CCRC’s , Autumn Glen, and Veranda Club Occupancy After Conversions IL AL Total Total Units 5,792 5,834 11,626 Occupied Units 5,112 5,247 10,359 Occupancy % 88.3% 89.9% 89.1% Annual Financial Impact Incremental CFFO: Approx. $0.20 per share |
 17 Significant Occupancy Improvement after Conversion Number of Units Converted Occupancy prior to Conversion Occupancy at end of Q2 15 Third Quarter 2014 Conversions Waterford at Edison Lakes 45 69.0% 92.2% Waterford at Mansfield 45 84.5% 94.0% Autumn Glen 49 56.3% 81.6% Summit Point 35 95.4% 94.0% Fourth Quarter 2014 Conversions Tesson Heights 65 77.7% 91.3% Waterford at Oakwood 32 84.4% 100.0% |
 18 The Waterford at Thousand Oaks - Renovations New Entry Hall New Dining Room Old Entry Hall Old Dining Room |
 19 The Waterford on Huebner - Renovations New Entry Hall New Dining Room Old Entry Hall Old Dining Room |
 20 Community Portfolio Growth: 2010 to Present 25 32 48 59 67 65 69 45 49 50 50 50 50 50 7 3 3 3 0 25 50 75 100 125 2010 2011 2012 2013 2014 Q1 15 Current Owned Leased Joint Venture 77 84 101 112 117 115 Owned % 32.5% 38.1% 47.5% 52.7% 57.3% 56.5% 58.0% 119 |
 21 2015 Business Plan: External Growth • Strategic acquisitions of high quality senior living communities to enhance geographic concentrations – 16.2% cash on cash returns *Based on share count at time of transaction (in millions except number of communities) 2011 2012 2013 2014 Jan – July 2015 Combined Purchase Price $83.4 $181.3 $150.4 $160.2 $88.0 $663.3 Communities 7 17 11 8 6 49 Units 551 1,367 881 819 478 4,096 Debt $59.3 $129.5 $112.3 $119.7 $65.7 $486.5 Equity $24.1 $51.8 $38.1 $40.5 $22.3 $176.8 First Year Revenue $21.3 $49.1 $35.1 $36.4 $19.5 $161.4 First Year EBITDAR $7.3 $19.1 $14.1 $15.0 $7.7 $63.2 First Year Cash Flow from Operations (CFFO) $3.4 $9.1 $5.8 $6.7 $3.7 $28.7 First Year CFFO per
share* $0.13 $0.34 $0.20 $0.23 $0.13 $1.03 |
 22 Key Metrics: Consistent Significant Growth Revenue * Adjusted EBITDAR ($ In Millions) ($ In Millions) $197 $257 $305 $343 $380 2010 2011 2012 2013 2014 * Excludes community reimbursement revenue and management services revenue
$69 $92 $110 $120 $133 2010 2011 2012 2013 2014 Adjusted EBITDAR Margin Adjusted CFFO per share 32.4% 35.0% 35.4% 34.9% 35.9% 2010 2011 2012 2013 2014 $0.64 $0.91 $1.08 $1.33 $1.44 2010* 2011* 2012* 2013* 2014* * Excludes prepaid resident rents and tax
savings related to cost segregation studies
of $0.25 in 2012 and $0.14 in 2013 |
 23 Comparative Operating and Financial Metrics Q2 15 Q2 14 % Increase Total Revenues $ 101.6 $ 93.4 8.7% Adjusted EBITDAR $ 35.7 $ 32.2 11.0% % Margin 36.8% 35.6% Adjusted CFFO $ 11.7 $ 9.6 22.3% Adjusted CFFO Per Share $ 0.41 $ 0.34 Note: EBITDAR and CFFO are as adjusted in press releases. |
 24 Balance Sheet • As of June 30, 2015 (in millions) ASSETS Cash and Securities $ 51.7 Other Current Assets 23.8 Total Current Assets 75.5 Fixed Assets 811.1 Other Assets 35.4 TOTAL ASSETS $ 922.0 LIABILITIES & EQUITY Current Liabilities $ 71.4 Long-Term Debt 660.2 Other Liabilities 55.9 Total Liabilities 787.5 Stockholders’ Equity 134.5 TOTAL LIABILITIES & EQUITY $ 922.0 |
 25 Debt Overview : 100% Mortgage Debt Debt Maturities Weighted Average Interest Rate (In thousands) $627,624 $0 $0 $0 $43,660 $0 $8,472 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 2021 & After 2020 2019 2018 2017 2016 2015 6.00% 5.79% 5.25% 5.25% 4.70% 4.64% 4.00% 4.50% 5.00% 5.50% 6.00% 6.50% 2010 2011 2012 2013 2014 2015 YTD Average duration of debt is 8 years, with approximately 92% of all debt maturing in 2021 and after Weighted Average Interest Rate has decreased 136 bps since 2010 |
 26 Investment Highlights • Value leader in geographically concentrated regions • Substantially all private pay • Need-driven demand,
limited new supply and improving housing market and economy • Experienced management team with demonstrated ability to operate, acquire and create shareholder value • Accretive acquisitions in highly fragmented industry • Value-enhancing conversions to higher levels of care, renovations and refurbishments • Strong cash flow generation • Solid balance sheet |
 Capital
Senior Living Company Presentation |