Daily Local News (West Chester, PA)
Genesis HealthCare reports losses
KENNETT SQUARE » Genesis HealthCare, one of the largest operators of nursing homes and senior living communities in the United States, Wednesday announced second-quarter losses.
US GAAP revenue for the quarter ended June 30 was $1.34 billion compared to $1.44 billion in the prior year quarter. US GAAP net loss was $65.2 million compared to $23.0 million in the prior year quarter;
Adjusted EBITDAR in the second quarter of 2017 was $175.4 million compared to $189.4 million in the prior year quarter; and
Adjusted EBITDA in the second quarter of 2017 was $137.1 million compared to $152.4 million in the prior year quarter.
“We delivered a solid quarter despite persistent headwinds and we continued to execute on our plan to divest non-strategic assets, which will allow for increased focus on markets where we have geographic density,” said George V. Hager Jr., Chief Executive Officer of Genesis. “During the quarter, our dedicated team of professionals remained focused on the areas of the business we can control. We effectively managed labor and overhead costs, realized record gain share dollars under the Model 3 BPCI program, generated strong operating cash flows and maintained year-overyear Adjusted EBITDAR margins.”
Genesis said it continues to make progress with its strategy to exit challenging, low density markets and focus on investment and growth in core, strategic markets. During the second quarter, divestitures included:
• 18 facilities in the states of Kansas, Missouri, Nebraska and Iowa.
• Two leased facilities, which occurred at various points during the second quarter of 2017.
Genesis said it expects to divest an additional 10 underperforming assets or assets in non-strategic markets through early 2018.
Also during the quarter, as previously announced, Genesis entered into a strategic dining and nutrition partnership to further leverage its national platforms, process expertise and technology. The relationship, which is expected to be accretive to Genesis, provided additional liquidity, cost efficiency and enhanced operational performance, the company said.
In June, Genesis announced a $52.7 million settlement with the federal government.
Genesis said it finalized its previously reported agreement with the U.S. Department of Justice and related government agencies to resolve a legacy Sun Healthcare therapy matter in Georgia, a Skilled Healthcare therapy matter related to certain facilities in the Midwest and a Skilled Healthcare hospice matter related to the Las Vegas Creekside Hospice.
Genesis executed the settlement on June 9, and will pay $53.6 million, with interest.