![]() 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 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 and economy • Achieving solid growth in revenue, occupancy, EBITDAR and CFFO • Executing on disciplined accretive growth initiatives through acquisitions and conversions to higher levels of care • Solid balance sheet |
![]() 5 Company Overview • Capital Senior Living operates 116 communities in geographically concentrated regions with the capacity to serve 15,100 residents Number of residents by State Greater than 2,000 500 - 2,000 Less than 500 AR. 173 AZ. 189 IA. 122 IL. 650 IN. 2,247 KS. 165 LA. 133 MI. 429 MN. 173 MO. 662 MS. 143 NE. 668 OK. 143 TX. 3,720 CT. 178 FL. 226 NC. 593 SC. 669 NJ. 98 NY. 387 OH. 2,060 VA. 317 WI. 341 GA. 70 MA. 87 Owned 58% Leased 42% CA. 408 Resident Capacity By State Property Ownership Structure |
![]() 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 The Capital Advantage: Senior Living Options Independent Living – 51% 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 $2,422 • 100% private pay • Average length of resident stay is 31 months |
![]() 8 The Capital Advantage: Senior Living Options Assisted Living- 49% of Resident Capacity • Average 68 units per community • 75% of communities offer AL • Assistance with activities of daily living including medication reminders, bathing, dressing and grooming • Average monthly rate of $4,020 • 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 Source: 2010 Census Summary File 1 and U.S. Census Bureau, Population Division 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 • 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 |
![]() 10 The Capital Advantage: Limited New Supply Source: NIC MAP Trends All Markets Q3 14 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Absorption Inventory Growth |
![]() 11 The Capital Advantage: Senior Housing Occupancy Trends Source: NIC MAP Trends All Markets Q3 14 86.0% 87.0% 88.0% 89.0% 90.0% 91.0% 92.0% IL Communities AL Communities |
![]() 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 • Employer of choice • 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 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 |
![]() 14 2014 Business Plan • Focused on Operations, marketing and growth to enhance shareholder value through: • Organic growth • Proactive expense Management • Accretive acquisitions, unit conversions and community refurbishment projects • Utilization of technology |
![]() 15 2014 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 enhancing renovations and refurbishments • New branding strategy, eMarketing and website enhancements • Implement software programs to optimize care plans and level of care charges |
![]() 16 Solving to Achieve 90% Occupancy Q3 2014 (1) IL AL Total Total Units 5,775 5,341 11,116 Occupied Units 4,944 4,816 9,760 Occupancy % 90.2% 87.8% Planned IL to AL Conversions IL AL Units (360) 360 At 90% Stabilized Occupancy 324 Occupancy After Conversions Stabilize IL AL Total Total Units 5,415 5,701 11,116 Occupied Units 4,944 5,140 10,084 Occupancy % 91.3% 90.2% 90.7% (1) Excludes CCRC’s , Autumn Glen, and Veranda Club 85.6% Note: Conversions are subject to customary approvals |
![]() 17 Canton Regency Remodel Concepts Existing Atrium Concept Atrium Concept Bistro Concept Internet Cafe |
![]() 18 2014 Business Plan: External Growth • Strategic acquisitions of high quality senior living communities to enhance geographic concentrations – 16.4% cash on cash returns *Based on share count at time of transaction (in millions except number of communities) 2011 2012 2013 Q3 14 YTD Combined Purchase Price $83.4 $181.3 $150.4 $145.6 $560.7 Communities 7 17 11 7 42 Units 551 1,367 881 762 3,561 Debt $59.3 $129.5 $112.3 $109.3 $410.4 Equity $24.1 $51.8 $38.1 $36.3 $150.3 First Year Revenue $21.3 $49.1 $35.1 $34.2 $139.7 First Year EBITDAR $7.3 $19.1 $14.1 $13.3 (1) $53.8 First Year Cash Flow from Operations (CFFO) $3.4 $9.1 $5.8 $6.4 (1) $24.7 First Year CFFO per share* $0.13 $0.34 $0.20 $0.21 (1) $0.88 (1) Net of $0.9 million of management fees related to communities previously managed under a JV agreement |
![]() 19 Operating Performance • Revenue and EBITDAR growth • EBITDAR has increased at an 18.0% CAGR on a 15.2% CAGR in revenue since the beginning of 2010. • EBITDAR margin increased from 29.9% in Q1 2010 to 35.6% in Q3 2014. * As adjusted in press releases 24.0% 26.0% 28.0% 30.0% 32.0% 34.0% 36.0% 38.0% $0.0 $20.0 $40.0 $60.0 $80.0 $100.0 $120.0 Revenue EBITDAR * EBITDAR Margin % * |
![]() 20 Comparative Operating Metrics Note: EBITDAR and CFFO are as adjusted in press releases. Q3 14 Q3 13 % Increase Total Revenues $ 98.5 $ 88.0 11.9% Adjusted EBITDAR $ 33.5 $ 29.3 14.4% % Margin 35.6% 35.2% Adjusted CFFO $ 11.1 $ 8.9 24.0% Adjusted CFFO Per Share $ 0.39 $ 0.32 |
![]() 21 Balance Sheet • As of September 30, 2014 (in millions) ASSETS Cash and Securities $ 39.3 Other Current Assets 25.5 Total Current Assets 64.8 Fixed Assets 774.2 Other Assets 40.8 TOTAL ASSETS $ 879.8 LIABILITIES & EQUITY Current Liabilities $ 90.2 Long-Term Debt 587.3 Other Liabilities 58.8 Total Liabilities 736.3 Stockholders’ Equity 143.5 TOTAL LIABILITIES & EQUITY $ 879.8 |
![]() 22 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 • 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 |