EX-99.2 3 d722933dex992.htm EX-99.2 EX-99.2
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.                   
2

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, EBITDAR and CFFO
•
Executing on disciplined accretive growth initiatives through
acquisitions and conversions to higher levels of care
•
Solid balance sheet
3

4
Company Overview
•
Capital Senior Living operates 113 communities in geographically
concentrated regions with the capacity to serve 14,700 residents
AR. 
173
CT. 
178
FL.
226
IA. 
122
IL. 
650
IN. 
2,247
KS. 
165
LA. 
133
MI.
429
MN.
173
MO. 
662
MS.
143
NC.
593
SC.
669
NE. 
668
NJ. 
98
NY. 
387
OH. 
2,060
OK. 
143
TX. 
3,720
VA.
153
Resident Capacity
CA. 
408
AZ. 
189
GA. 
70
WI. 
150
As of March 31, 2014
MA.
87

5
Resident Demographics at CSU Communities
•
Average age of resident: 85 years
•
Average age of resident moving in: 82 years
•
Average stay period:
-3 years
•
Percent of female residents: 80%
•
Resident turnover is primarily attributed to death or need for
higher care
2 

The Capital Advantage: Senior Living Options
Independent Living –
52% of Resident Capacity
•
Average 113 units per IL community with large common areas and
amenities
•
Supportive services, wellness programs, social, recreational and
educational events
•
Average monthly rate of $2,437
•
100% private pay
•
Average length of resident stay is 31 months
6

7
The Capital Advantage: Senior Living Options
Assisted Living-
48% of Resident Capacity
•
Average 64 units per community
•
74% of communities offer AL
•
Assistance with activities of daily living including medication
reminders, bathing, dressing and grooming
•
Average monthly rate of $3,955
•
Substantially all private pay
•
Average length of resident stay is 24 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
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
0.0
5.0
10.0
15.0
20.0
25.0
2009
2015
18.9
22.4
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
•
•

The Capital Advantage: Limited New Supply
Source: NIC MAP Trends All Markets Q1 14
9
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Absorption
Inventory Growth

10
The Capital Advantage: Senior Housing Occupancy Trends
Source: NIC MAP Trends All Markets Q1 14
92.0%
91.0%
90.0%
89.0%
88.0%
87.0%
86.0%
IL Communities
AL Communities

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
11

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

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
13

2014 Business Plan: Organic Growth
•
Increase average rents
•
Each 3% increase generates $10.8M 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
14

Solving to Achieve 90% Occupancy
Q1 2014
IL
AL
Total
Total Units
5,927
5,206
11,133
Occupied Units
5,050
4,654
9,704
Occupancy %
85.2%
89.4%
87.1%
Planned IL to AL Conversions
IL
AL
Units
(360)
360 
At 90% Stabilized
Occupancy
324
Note: Conversions are subject to customary approvals
Occupancy After Conversions
Stabilize
IL
AL
Total
Total Units
5,567
5,566
11,133
Occupied Units
5,050
4,978
10,028
Occupancy %
90.7%
89.4%
90.1%
15

(in millions except number of communities and units)
2011
2012  
2013    
Combined  
Purchase Price
$83.4
$181.3
$150.4
$415.1
Communities
7
17
11
35
Units
551
1,367
881
2,799
Debt
$59.3
$129.5
$112.3
$301.1
Equity
$24.1
$51.8
$38.1
$114.0
First Year Revenue
$21.3
$49.1
$35.1
$105.5
First Year EBITDAR
$7.3
$19.1
$14.1
$40.5
First Year Cash Flow
from Operations
(CFFO)
$3.4
$9.1
$5.8
$18.3
First Year CFFO per
share
$0.13
$0.34
$0.20
$0.67
16
2014 Business Plan: External Growth
•
Strategic acquisitions of high quality senior living communities
to
enhance
geographic
concentrations
–
16.1%
cash
on
cash
returns

17
Operating Performance
•
Revenue and EBITDAR growth
•
EBITDAR increased 107.7% on an 85.6% increase in revenue
•
EBITDAR margin increased from 29.9% in Q1 2010 to 34.6% in Q4
2013
*
As adjusted in Q4 2013 earnings release
$100.0
$90.0
$80.0
$70.0
$60.0
$50.0
$40.0
$30.0
$20.0
$10.0
$0.0
38.0%
36.0%
34.0%
32.0%
30.0%
28.0%
26.0%
24.0%
Revenue
EBITDAR
EBITDAR Margin %

Comparative Operating Metrics
As adjusted in press releases
2013
2012
% Increase
Total Revenues
$ 350.4
$ 310.5
12.8%
EBITDAR
$ 119.6
$ 110.0
8.7%
% Margin
34.9%
35.4%
CFFO
$ 42.6
$ 37.3
14.2%
CFFO Per Share
$1.53
$1.36
18

Balance Sheet
•
As of December 31, 2013 (in millions)
ASSETS
Cash and Securities
$ 25.0
Other Current Assets
27.8
Total Current Assets
52.8
Fixed Assets
650.0
Other Assets
42.7
TOTAL ASSETS
$ 745.5
LIABILITIES & EQUITY
Current Liabilities
$ 58.7
Long-Term Debt
467.4
Other Liabilities
61.4
Total Liabilities
587.5
Stockholders’
Equity
158.0
TOTAL LIABILITIES &
EQUITY
$ 745.5
19

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
20

Capital Senior Living
Company Presentation