Genesis Healthcare, Inc. Receives Continued Listing Standard Notice From the NYSE
30 November 2017 - 8:01AM
Genesis HealthCare (“Genesis”) (NYSE:GEN), one of the largest
post-acute care providers in the United States, today announced
that it received written notification from the New York Stock
Exchange (the “NYSE”) on November 22, 2017 that it is not in
compliance with the NYSE continued listing standard that requires a
minimum average closing price of Genesis’ common stock of $1.00 per
share over a consecutive 30 trading-day period (the
“Notice”). The Company is, however, in compliance with the
NYSE minimum market capitalization threshold of $50 million over a
30 trading-day period. Currently, Genesis’ market capitalization is
more than double this threshold.
Receipt of the Notice by Genesis is not a violation of the terms
of, and does not constitute a default or event of default under,
any of Genesis’ debt obligations, and will not impact the Company’s
ability to finalize its recently announced restructuring plans. The
Notice also has no immediate impact on the listing of Genesis’
common stock, which will continue to be listed and traded on the
NYSE during the applicable cure period under the symbol “GEN,”
subject to Genesis’ compliance with other continued listing
requirements set forth in the NYSE Listed Company Manual.
Pursuant to NYSE rules, Genesis can regain compliance with the
minimum share price requirement if, during the six-month cure
period following receipt of the Notice, on the last trading-day of
any calendar month, Genesis’ common stock has a closing share price
and a 30 trading-day average closing share price of at least
$1.00.
Genesis will notify the NYSE on or before December
7, 2017 that it intends to cure the continued listing standard
deficiency. “Reimbursement and occupancy challenges facing
our entire industry have negatively impacted the Genesis HealthCare
stock price and those of other providers in the industry,” noted
George V. Hager Jr., Chief Executive Officer of Genesis. “We
recently announced plans to restructure master leases and loans
which, if fully consummated, we believe will result in a
significantly strengthened capital structure for the Company and
play a key role in long-term shareholder value. We are
confident in our ability to address the listing standard
deficiency.” In addition to previously announced
restructuring plans relating to certain master leases and loans,
Genesis is considering further options to cure this continued
listing standard deficiency.
About Genesis HealthCareGenesis 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
approximately 1,700 healthcare providers in 45 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 Medicare 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;
- our issuance of debt securities that are convertible into our
common stock could result in dilution of common stockholders’
percentage ownership of our company, if such debt securities are
converted to common stock;
- we have entered into preliminary non-binding agreements with
certain of our credit parties concerning a proposed long-term
restructuring of certain master leases and loans (the Restructuring
Plans) in an effort to develop a sustainable capital structure for
us. However, there can be no assurance that the conditions
necessary to achieve the fixed charge reductions contemplated in
the Restructuring Plans will be met. If such fixed
charge reductions are not realized it would have a material adverse
effect on our liquidity and financial condition;
- we are presently operating under waivers of certain of our
financial agreements and are engaged in discussions with the
counterparties to the Revolving Credit Facilities to secure a
90-day forbearance agreement through late January
2018. There can be no assurance such waivers will be
received in future periods, or whether a forbearance agreement will
be executed by us and the counterparties to the Revolving Credit
Facilities. In the event future waivers or forbearance
agreements are not extended and our creditors accelerate our loan
and lease obligations, it would have a material adverse effect on
our liquidity and financial condition;
- 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;
- 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;
- no assurance can be given that we will be able to regain
compliance with the NYSE continued listing standard regarding the
minimum share price requirement or maintain compliance with other
continued listing requirements set forth in the NYSE Listed Company
Manual; and
- we could experience adverse consequences if our common stock
ultimately were to be suspended from trading on, and delisted from,
the NYSE for any reason, which could have an adverse effect on our
restructuring plans, liquidity or financial condition, any of which
could lead to difficulty maintaining business, financing and
operational relationships.
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, including the Company’s Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 2017,
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 Relations610-925-2000
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