Genesis HealthCare (Genesis, or the Company) (NYSE:GEN), one of the
largest post-acute care providers in the United States, today
announced that it has signed a definitive agreement to sell 51% of
its subsidiary in China, referred to as GRS-HS, to Riswein Health
Industry Investment Co., Ltd (Riswein) for $30 million. The
transaction is expected to close in the first quarter of 2019 and
is subject to regulatory and licensing approvals, and other
customary conditions.
In the coming weeks, GRS-HS will seek approval for a new, wholly
owned foreign entity (WOFE) in China. GRS-HS expects the process to
take about 9 months to complete. Upon formation of the WOFE,
Riswein will invest $30 million for a 51% stake in the WOFE and
GRS-HS will own the remaining 49%. In the interim, Riswein
will lend GRS-HS $5 million, which will fund operating expenses
during the WOFE approval process. Riswein and GRS-HS will use the
$30 million to further fund expansion in China.
Genesis first announced its expansion into China in May
2015. Now called GRS-HS, the Company currently provides
rehabilitation therapy services in 12 facilities in Hong Kong,
Guangzhou, various cities in Zhejiang, Shanghai, Beijing and
Qinhuangdao. “We have made significant headway introducing
rehabilitation to China,” noted George V. Hager, Jr., Chief
Executive Officer of Genesis. “We are excited to partner with
Riswein, who with their local resources and expertise will help us
take GRS-HS to the next level.”
“The opportunities for rehabilitation in China are endless,”
noted Lucy Han, Chief Executive Officer of Riswein. “As the Chinese
population is aging, there is tremendous demand for rehabilitation
services. We could not think of a better partner to help us
expand rehabilitation services and design healthcare solutions
throughout China.”
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 StatementsThis 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;• 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 New York Stock Exchange (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, 2017, 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 and Public
Relations
610-925-2000
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