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 Investment Highlights • Value leader in 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 improving housing market • Achieving solid growth in occupancy, revenue and net operating income • Executing on disciplined accretive growth initiatives through acquisitions and conversions to higher levels of care • Solid balance sheet |
4 Company Overview • Capital Senior Living operates 108 communities in geographically concentrated regions with the capacity to serve 14,300 residents |
5 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 |
6 The Capital Advantage: Senior Living Options Independent Living – 54% of Resident Capacity • Average 115 units per IL community with large common areas and amenities • Supportive services, wellness programs, social, recreational and educational events • Average monthly rate of $2,475 • 100% private pay • Average length of resident stay is 34 months |
7 The Capital Advantage: Senior Living Options Assisted Living- 46% of Resident Capacity • Average 66 units per community • 73% of communities offer AL • Assistance with activities of daily living including medication reminders, bathing, dressing and grooming • Average monthly rate of $3,677 • Substantially all private pay • Average length of resident stay is 26 months |
8 The Capital Advantage: Need Driven Demand U.S. population 75+ years old is estimated to grow by 3.5 million from 2009 through 2015 • 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) (Population in millions) Implied demand growth of 40,000 units per year Source: NIC Investment Guide 2010 and U.S. Census Bureau |
9 The Capital Advantage: Limited New Supply Source: Seniors NIC MAP100 Trends |
10 The Capital Advantage: Senior Housing Occupancy Trends Source: Seniors NIC MAP100 Trends |
11 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 • Employer of choice • Solid balance sheet • Strong Board of Directors |
12 The Capital Advantage: Strategy • Focus on our core strengths • Capitalize on competitive strengths within each of our regions to maximize the cash flow generated by 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 |
13 2013 Business Plan • Focused on Operations, marketing and growth to enhance shareholder value through: • Organic growth • Proactive expense Management • Accretive acquisitions and unit conversions • Utilization of technology |
14 2013 Business Plan: Organic Growth • Increase average rents • Each 3% increase generates $10.4M of revenue • Improve occupancies • Each 1% generates $3.5M of revenue, $2.5M of EBITDAR and $0.06 per share of CFFO • Convert units to higher levels of care • Cash flow enhancing renovations and refurbishments • New branding strategy, eMarketing and website enhancements • Implement software programs to optimize care plans and level of care changes |
15 Operating Performance • Same-store comparable trends |
16 2013 Business Plan: External Growth • Strategic acquisitions of high quality senior living communities to enhance geographic concentrations - 17% cash on cash returns (in millions except number of communities and units) 2012 2013 YTD Combined Purchase Price $181.3 $85.4 $266.7 Communities 17 7 24 Units 1,367 493 1,860 Debt $129.5 $63.7 $193.1 Equity $51.8 $21.7 $73.5 First Year Revenue $49.1 $20.5 $69.6 First Year EBITDAR $19.1 $8.4 $27.5 First Year Cash Flow from Operations (CFFO) $9.1 $3.7 $12.8 First Year CFFO per share $0.34 $0.13 $0.47 |
17 Operating Performance • Revenue and EBITDAR growth • EBITDAR increased 104.9% on an 83.7% increase in revenue • EBITDAR margin increased from 29.9% in Q1 2010 to 35.2% in Q3 2013 * As adjusted in Q3 2013 earnings release |
18 Income Statement: September YTD Comparison As adjusted in press releases 2013 2012 % Increase Total Revenues $ 261.4 $ 227.3 15.0% Operating Expenses (153.5) (133.1) General & Administrative Expenses (13.8) (9.7) Other Expense (4.3) (3.7) EBITDAR $ 89.8 $ 80.8 11.1% % Margin 35.0% 35.6% Lease Expense (42.8) (41.2) Interest, Taxes and Other (43.4) (33.8) Net Income $ 3.6 $ 5.8 Earning Per Share $0.13 $0.21 CFFO $ 28.1 $ 23.9 17.6% CFFO Per Share $1.01 $0.87 |
19 Balance Sheet • As of September 30, 2013 (in millions) ASSETS Cash and Securities $ 30.2 Other Current Assets 25.1 Total Current Assets 55.3 Fixed Assets 565.9 Other Assets 48.7 TOTAL ASSETS $ 669.9 LIABILITIES & EQUITY Current Liabilities $ 54.4 Long-Term Debt 387.7 Other Liabilities 61.3 Total Liabilities 503.4 Stockholders’ Equity 166.5 TOTAL LIABILITIES & EQUITY $ 669.9 |
20 Investment Highlights • Value leader in geographically concentrated regions • Substantially all private pay • Need-driven demand, limited new supply and improving housing market • Experienced management team with demonstrated ability to operate, acquire and create shareholder value • Accretive acquisitions in highly fragmented industry • Conversions to higher levels of care with significant revenue and cash flow growth • Strong cash flow generation • Solid balance sheet |
Capital Senior Living Company Presentation |