Sun Healthcare — Jefferies 2012 Global Healthcare Conference
17 slides from Sun Healthcare's conference presentation, Jun 6, 2012
Slide 1: Jefferies 2012 Global Healthcare Conference
Jefferies 2012 Global Healthcare Conference June 6, 2012
Slide 2: Forward-Looking Statements
1 Statements made in this presentation that are not historical facts are "forward-looking" statements that involve risks and uncertainties and are subject to change at any time. These forward-looking statements may include, but are not limited to, statements containing words such as "anticipate," "b
Slide 3: Non-GAAP Financial Measures
2 References are made in this presentation to EBITDA, EBITDA margin, EBITDAR and EBITDAR margin, which are non- GAAP financial measures. EBITDA is defined as net income before loss (gain) on discontinued operations, interest expense (net of interest income), income tax expense (benefit) and deprecia
Slide 4: Investment Considerations
3 Investment Considerations
Slide 5: Net Revenue by Line of Business
Net Revenue by Line of Business Sun Healthcare Today
Slide 6: Complementary Lines of Business
5 Complementary Lines of Business Skilled Nursing Services Rehabilitation Therapy Services
Slide 7: Key Strategic Initiatives
6 Key Strategic Initiatives Focus on delivering quality care services to medically-complex, high-acuity patients. Specialize and differentiate our clinical product on a market-by-market basis to gain market share. Seek partnerships , not just relationships (hospitals, physicians, managed care provid
Slide 8: Focus on High-Acuity, Short Stay Patients
7 RRS Q1’11 Q1’12 Growth Beds 1,790 2,117 +18% Units 61 69 +13% Focus on High-Acuity, Short Stay Patients q Stabilizing Overall Occupancy q Medicare/ Managed Care Profile q Expansion of RRS Product § Over 47,000 patients admitted annually § 94% of SNF patients admitted from hospital § 27 day average
Slide 9: Investment Activity Driving Results
8 Sun Strategic Spend in 2012 $12.7 REIT-Financed in 2012/2013 30.4 New Development (developer/landlord) 19.5 Total $62.6 RRS Beds at 3/31/12 2117 RRS Beds Under Construction in 2012 76 Planned RRS Beds in 2012/2013 242 Projected Total 2435 Investment Activity Driving Results We have completed moder
Slide 10: Ancillary Businesses Contributing to Growth
9 • • • SolAmor: Q1 ’11 Q1’ 12 Average Daily Census 1,018 1,071 Revenue $13.8 $14.9 Adjusted EBITDAR $3.2 $3.3 Adjusted EBITDAR Margin 23.1% 22.5% SunDance: Q1 ‘11 Q1’ 12 Revenue $62.8 $64.1 Adjusted EBITDAR $3.1 $4.1 Adjusted EBITDAR Margin 5.0% 6.5% CareerStaff: Q1 ‘11 Q1’ 12 Revenue $22.9 $22.9 A
Slide 11: Near-Term Reimbursement Update
10 Near-Term Reimbursement Update Mitigation of CMS Medicare Reimbursement Changes are on Target § Infrastructure initiatives included reductions in overhead positions, other labor related costs, vendor costs, discretionary spend and broad-based process improvements § Therapy initiatives related to
Slide 12: 2012 Full-Year Guidance
($ in millions, except EPS) 2012 Full-Year Guidance Depreciation & amortization . Interest, net 175 Pre-tax earnings Income tax expense 17 102 Income from continuing operations SUNHEALTHCARE Caring ite Kein ie
Slide 13: Sun First Quarter Results
12 Sun 1 st Quarter Results Actual Results (in thousands, except per share data) Q1-2012 Q1-2011 Revenue 458,493 $ 466,307 $ Adjusted EBITDAR 52,265 $ 64,513 $ Margin - Adjusted EBITDAR 11.4% 13.8% Center rent expense 36,377 35,692 Adjusted EBITDA 15,888 $ 28,821 $ Margin - Adjusted EBITDA 3.5% 6.2%
Slide 14: Capital Structure & Bank Covenants
13 Capital Structure & Bank Covenants (1) (1) In December 2011, Sun amended its Credit Facility and made a voluntary debt pay-down of $50 million and increased its interest rate by 1.25% in return for greater flexibility to financial covenants (2) Based upon 2012 guidance (3) $60 million of capacity
Slide 15: 2012 Projected Cash Flows
14 2012 Projected Cash Flows Based upon 2012 Guidance
Slide 16: Attractive industry fundamentals
Attractive industry fundamentals ea J + Favorable demographics — increasing senior population + Improving supply / demand dynamics — number of SNF beds has steadily declined + Core skilled nursing business provides value — effective clinical outcomes at lower costs Diversified, growing platform } |
Slide 17: \ald
\ald ~ SUNHEALTHCARE Caring is the Key in Life
Sun Healthcare Group — Jefferies 2012 Global Healthcare Conference on 6ix