Skilled Healthcare Group to transfer operations of five indirect subsidiaries to Brius Healthcare

Mar 5 2011

Skilled Healthcare Group, Inc. (NYSE: SKH) today announced that five of its indirect subsidiaries that operate skilled nursing facilities in northern California have entered into an agreement to transfer their operations to Brius Healthcare, LLC and expects the transfer to be completed in April 2011 following the receipt of necessary regulatory approvals. Another subsidiary of Skilled Healthcare Group will retain ownership of the real estate where the operations are located and has signed a 10-year lease with two 10-year extension options with the new operator.  

"We are pleased to have leased these properties to Brius Healthcare, a quality care provider who will continue striving for clinical excellence," noted Boyd Hendrickson, Chairman & Chief Executive Officer.  "This is a positive development for us as it continues our effort to balance our portfolio.  As a result of this transaction, we expect consolidated revenue for fiscal year 2011 to be approximately $23 million less than the 2011 guidance we issued in our earnings release on February 14, 2011.  Based on the terms of the lease, we anticipate consolidated cash flow after this transaction will be close to neutral for 2011.  Accordingly, our consolidated EBITDAR, EBITDA, and EPS guidance for 2011 as set forth in the February 14, 2011 press release remains unchanged."

Brius currently operates skilled nursing facilities in northern California.  "Our company is looking forward to working together with the Medical community in Humboldt County to deliver the excellent patient care Brius is known for," said Shlomo Rechnitz, Chief Executive Officer of Brius.  "We're honored to have the opportunity to make a difference."