KENNETT SQUARE, Penn., April 11, 2018 (GLOBE NEWSWIRE) -- Genesis HealthCare (Genesis, or the Company)
(NYSE:GEN), one of the largest post-acute care providers in the United States, today announced it has signed a definitive agreement
to sell 23 Texas skilled nursing facilities (22 buildings owned by Genesis and one leased) to Regency REIT, LLC. The
transaction is expected to close on or about July 1, 2018 and is subject to additional due diligence, regulatory and licensing
approvals, and other customary conditions.
Genesis currently operates or manages a total of 24 facilities in the state of Texas. In addition to the 23 facilities
expected to be divested in the Regency transaction, Genesis also plans to exit the operations of an additional leased skilled
nursing facility. Aggregate revenue and EBITDA of all 24 facilities totaled approximately $173.7 million and $7.4 million,
respectively, in 2017. Genesis estimates these transactions will result in the reduction of approximately $97 million of
indebtedness and $1.8 million of annual cash lease expense. Closing of both transactions would mark the Company’s complete exit of
its inpatient business in the state of Texas.
“We are constantly reviewing our portfolio with an emphasis on divesting underperforming assets or assets in non-strategic
markets,” noted George V. Hager, Jr., Chief Executive Officer of Genesis. “This deleveraging transaction will allow for
additional focus on our core markets and will strengthen our overall portfolio,” noted Hager.
About Genesis HealthCare
Genesis HealthCare (NYSE:GEN) is a holding company with subsidiaries that, on a combined basis, comprise one of the nation's
largest post-acute care providers with more than 450 skilled nursing facilities and assisted/senior living communities in 30 states
nationwide. Genesis subsidiaries also supply rehabilitation and respiratory therapy to more than 1,600 healthcare providers in 46
states, the District of Columbia and China. References made in this release to "Genesis," "the Company," "we," "us" and "our"
refer to Genesis HealthCare and each of its wholly-owned companies. Visit our website at www.genesishcc.com.
Forward-Looking Statements
This release includes “forward-looking statements” within the meaning of the federal securities laws, including the Private
Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to
historical or current facts. These statements contain words such as “may,” “will,” “project,” “might,” “expect,” “believe,”
“anticipate,” “intend,” “could,” “would,” “estimate,” “continue,” “pursue,” “plans,” or “prospect,” or the negative or other
variations thereof or comparable terminology. They include, but are not limited to, statements about Genesis’ expectations and
beliefs regarding its future financial performance, anticipated cost management, anticipated business development, anticipated
financing activities and anticipated demographic and supply-demand trends facing the industry. These forward-looking statements are
based on current expectations and projections about future events, including the assumptions stated in this release, and there can
be no assurance that they will be achieved or occur, in whole or in part, in the timeframes anticipated by the Company or at all.
Investors are cautioned that forward-looking statements are not guarantees of future performance or results and involve risks and
uncertainties that cannot be predicted or quantified and, consequently, the actual performance of Genesis may differ materially
from that expressed or implied by such forward-looking statements.
These risks and uncertainties include, but are not limited to, the following:
- reductions and/or delays in Medicare or Medicaid reimbursement rates, or changes in the rules governing the Medicare or
Medicaid programs could have a material adverse effect on our revenues, financial condition and results of operations;
- reforms to the U.S. healthcare system that have imposed new requirements on us and uncertainties regarding potential material
changes to such reforms;
- revenue we receive from Medicare and Medicaid being subject to potential retroactive reduction;
- our success being dependent upon retaining key executives and personnel;
- it can be difficult to attract and retain qualified nurses, therapists, healthcare professionals and other key personnel,
which, along with a growing number of minimum wage and compensation related regulations, can increase our costs related to these
employees;
- recently enacted changes in Medicare reimbursements for physician and non-physician services could impact reimbursement for
medical professionals. Moreover, annual payment caps that limit the amounts that can be paid for outpatient therapy services
rendered to any Medicare beneficiary may negatively affect our results of operations;
- we are subject to extensive and complex laws and government regulations. If we are not operating in compliance with these
laws and regulations or if these laws and regulations change, we could be required to make significant expenditures or change our
operations in order to bring our facilities and operations into compliance;
- our physician services operations are subject to corporate practice of medicine laws and regulations. Our failure to comply
with these laws and regulations could have a material adverse effect on our business and operations;
- we face inspections, reviews, audits and investigations under federal and state government programs, such as the Department
of Justice. These investigations and audits could result in adverse findings that may negatively affect our business, including
our results of operations, liquidity, financial condition, and reputation;
- significant legal actions, which are commonplace in our industry, could subject us to increased operating costs, which could
materially and adversely affect our results of operations, liquidity, financial condition, and reputation;
- insurance coverages, including professional liability coverage, may become increasingly expensive and difficult to obtain for
health care companies, and our self-insurance may expose us to significant losses;
- failure to maintain effective internal control over financial reporting could have an adverse effect on our ability to report
on our financial results on a timely and accurate basis;
- we may be unable to reduce costs to offset decreases in our patient census levels or other expenses timely and
completely;
- completed and future acquisitions may consume significant resources, may be unsuccessful and could expose us to unforeseen
liabilities and integration risks;
- we lease a significant number of our facilities and may experience risks relating to lease termination, lease expense
escalators, lease extensions, special charges and leases that are not economically efficient in the current business
environment;
- our substantial indebtedness, scheduled maturities and disruptions in the financial markets could affect our ability to
obtain financing or to extend or refinance debt as it matures, which could negatively impact our results of operations,
liquidity, financial condition and the market price of our common stock;
- the holders of a majority of the voting power of Genesis’ common stock have entered into a voting agreement, and the voting
group’s interests may conflict with the interests of other stockholders;
- exposure to the credit and non-payment risk of our contracted customer relationships, including as a result from bankruptcy,
receivership, liquidation, reorganization or insolvency, especially during times of systemic industry pressures, economic
conditions, regulatory uncertainty and tight credit markets, which could result in material losses;
- some of our directors are significant stockholders or representatives of significant stockholders, which may present issues
regarding diversion of corporate opportunities and other potential conflicts; and
- we are a “controlled company” within the meaning of NYSE rules and, as a result, qualify for and rely on exemptions from
certain corporate governance requirements.
The Company’s Annual Report on Form 10-K for the year ended December 31, 2016, Quarterly Reports on Form 10-Q, Current Reports
on Form 8-K, and other filings with the U.S. Securities and Exchange Commission, discuss the foregoing risks as well as other
important risks and uncertainties of which investors should be aware. Any forward-looking statements contained herein are made only
as of the date of this release. Genesis disclaims any obligation to update its forward-looking statements or any of the information
contained in this release. Investors are cautioned not to place undue reliance on these forward-looking statements.
Genesis HealthCare Contact:
Investor
Relations
610-925-2000
