GENESIS HEALTHCARE FINALIZES AGREEMENT FOR LONG TERM LEASE OF MAINE FACILITIES1/5/2007
Kennett Square, PA -- 01/05/2007 --
Genesis HealthCare Corporation (GHC) (NASDAQ: GHCI) today announced the completion of a lease and purchase option agreement for 11 facilities in Maine with 748 skilled nursing and 220 residential care beds. The transaction was effective January 1, 2007.
Under the agreement with the Sandy River Health System, GHC will lease 11 nursing and residential care facilities for 25 years with an annual lease payment of approximately $5 million. Additionally, GHC paid approximately $15 million in cash in exchange for tangible operating assets and a $53 million fixed price purchase option exercisable in 2026. The transaction will be recorded as a capital lease.
“We are pleased to add the Sandy River facilities to the Genesis portfolio and to expand into the State of Maine,” said George V. Hager, Jr., Genesis Chairman and CEO. “Sandy River and Genesis share a similar vision and operating philosophy which should ensure a smooth transition for employees, patients, residents and referral sources.”
About Genesis HealthCare Corporation
Genesis HealthCare Corporation (NASDAQ: GHCI) is one of the nation’s largest long-term care providers with over 200 skilled nursing centers and assisted living residences in 12 eastern states. Genesis also supplies contract rehabilitation therapy to over 600 healthcare providers in 20 states and the District of Columbia.
Statements made in this release, our website and in our other public filings and releases, which are not historical facts contain "forward-looking" statements (as defined in the Private Securities Litigation Reform Act of 1995) 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," "believe," "plan," "estimate," "expect," "intend," "may," “target,” “appears” and similar expressions. Such forward- looking statements include, without limitation, closure of transactions, expected reimbursement rates, including RUGs changes, our net operating loss carryforwards, our effective tax rate, agency labor utilization, wage rates, debt repayments, share repurchases, provider tax assessments, changes in state Medicaid rates, our plans to improve the operating performance of our Rehabilitation services segment and progress to date, the extent and effectiveness of our facilities renovation program our expected income from continuing operations, earnings per diluted share, EBITDA and capital expenditures for fiscal 2007. Factors that could cause actual results to differ materially include, but are not limited to, the following: costs, changes in the reimbursement rates methods and timing of payment from Medicare or Medicaid, or the implementation of other measures to reduce reimbursement for our services; community-based care trends, capitation or other risk sharing reimbursement trends, efforts of third party payors to control costs; the impact of federal and state regulations; changes in payor mix and payment methodologies; competition in our business; an increase in insurance costs and potential liability for losses not covered by, or in excess of, our insurance; competition for and availability of qualified staff in the healthcare industry; our ability to control operating costs, and generate sufficient cash flow to meet operational and financial requirements; and an economic downturn or changes in the laws affecting our business in those markets in which we operate.
The forward-looking statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control. We caution investors that any forward-looking statements made by us are not guarantees of future performance. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.
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