Paul Contris Interview with KJAG Radio’s James Lowe – April 2015

1. Paul Contris Interview with KJAG Radio’s James Lowe – April 2015
James: He's been serving the healthcare industry for over 30 years. Paul Contris is the
CEO of Welcov. Welcov Healthcare, which he founded in 1997, today Paul and
his partner Tom run a company that serves thousands of clients in 60 skilled
nursing, assisted living facilities, and home health agencies throughout
Minnesota, South Dakota, Montana, Iowa, Nebraska, and Wyoming. The
corporate office is located in Edna, Minnesota. Welcov provides progressive
healthcare and specialized services and strives to be the premiere healthcare
provider in the communities that it serves, and we want to welcome to our
broadcast our guest. Go ahead and give us a brief introduction on yourself, my
friend, and then we'll kind of talk a little about the topic here today.
Paul: Yes, thank you James. Well the introduction kind of sums it up, I've been in the
healthcare business now for over thirty years and I've specialized in senior care,
the long term care arena. That's skilled nursing, assisted living, home health
agencies and so forth and ...
James: Yeah.
Paul: Welcov Healthcare company started in 1997 and we've built it up into a fairly
significant sized regional company. We've got close to four thousand employees
and we're all pretty proud of the company we've built and the care that we give
and so we're just continuing to kind of develop our services and build the
company.
James: We've got a great guest with us today. Paul Contris joins us. He's the CEO of
Welcov Healthcare and he's with us today here on the telephone. Now what was
some of the ideas behind developing Welcov? What was some of the different
things that when you put this company together, what exactly did you want to
get accomplished here, my friend?
Paul: Well, I think any time you start a business you want to kind of take what you've
learned in other settings in other companies and take the best from what you've
learned and try to create something that you can be proud of. And that's what
we've tried to do is ... I had experienced a number of other healthcare
companies providing similar services and my partner and I kind of took the best
from what we had learned and incorporated it into Welcov.
James: Now Welcov is a fantastic, fantastic company. What were some of the trials and
tribulations that you guys went through when you put the company together?

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Paul: Oh, boy, just typical things any company I suppose runs into when you're starting
out the first. When we first started ... Actually, my partner now wasn't with me
when I first founded the company. I had another operating partner who actually
passed away about three or four years after I started the company. So that was a
trial and tribulation I guess. But, I was very fortunate to find Tom after that
happened. Tom's just ... He's been an amazing partner and friend and has really
made a lot of the growth possible that we've experienced. But it's the same
challenges any company that goes from nothing to over two hundred million in
revenue. As you build, there's the question of when do you bring on additional
resources for new growth. Do you anticipate the new growth and bring them on
first or grow some and then bring them on? You try to strike a balance, and I
think we've done a pretty good job to this point and we're now really at a point
where we're very stable and very fortunate to have a fantastic team of people at
our corporate office that provide the oversight and support to our facility
management, and we're just continuing to thrive and to look for some future
growth.
James: We've got a great guest with us today joining us on the telephone today, a
seasoned entrepreneur. He's been in the healthcare industry for over thirty
years. We've got Paul Contris with us today. He's the CEO of Welcov Healthcare.
He founded that in 1997. He joins us on the telephone today. Now, Paul, when
you guys first started this, what was the goal, let's say within a year, what was
some of your plans for it when you first got this ball rolling?
Paul: The goal at the very beginning was to acquire some facilities to have some
business. We were, like I said, or I was at the time, fortunate to have the
connections and contacts in the business and was able to put together our first
acquisition in Grand Rapids, Minnesota, northern Minnesota, for the Evergreen
Care Center and Pleasant Seasons Assisted Living. Then I think about six months
after that first acquisition, we were able to acquire the Bethel Care Center in St.
Paul, Minnesota. So really the first year was just to get some business, some
operations, and acquire some facilities and get the company up and going.
James: We've got a great guest with us today joining us on the telephone today. We've
got a guy who's been involved in the healthcare industry for over thirty years
today. Paul Contris is the CEO of Welcov Healthcare, and he's with us today here
on the telephone. Now, you guys run a booming company that serves about
thousands and thousands of clients in some incredible, incredible places and
incredible activities. Tell us a little bit about how you guys got expanded to
Minnesota, South Dakota, Montana, some of these other places. Take us
through that process. Was it a situation of you got one office up and running and
the need and the growth was there, or did you guys basically just kept the ball
rolling and just started expanding to all these different places?

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Paul: Yeah, starting in Minnesota was ... Because I lived in Arizona, so the fact that we
started in Minnesota, that was somewhat happenstance. I mean, I was looking at
deals all over the country and it just so happened that the first deal that made
sense that I could get financed was in Minnesota. But once I was in Minnesota,
then yeah, the plan then was to kind of build an infrastructure in that region and
expand out from there, so we went from two facilities at the beginning in 1997
and eventually acquired another four facilities in Minnesota, so we had six
facilities in Minnesota when we then broke into the state of South Dakota. In
South Dakota we now have I think 12 facilities there in that ballpark, so we had
pretty much established ourselves now as the Midwest, upper Midwest
company with our corporate headquarters in Edina, Minnesota there. Then we
were looking for opportunities that were contiguous to Minnesota in that whole
upper Midwest level. And if you look at it now, Minnesota, South Dakota,
Wyoming, Montana, Nebraska, Iowa, makes kind of a nice big square in the
upper Midwest of the country. So, we've purposefully kind of tried to keep in
that geographic target area, so we didn't really entertain opportunities say in
Florida or California or Washington state, something that wouldn't make sense
for us geographically because all of our people ... All of our regional corporate
people are in the Midwest.
James: Yeah, yeah.
Paul: That's kind of how things transpired.
James: We'll we're going to do this, we're going to take a quick timeout here with Paul.
When we come back we're going to chat a little bit more with him about Welcov
Healthcare and get his thoughts on some of the different things going on in the
healthcare industry and some fundraising questions. We're chatting about the
healthcare industry today and we've got one of the big heavy hitters in that
healthcare industry joining us on the telephone. The fantastic, fantastic Paul
Contris. He's the CEO of Welcov Healthcare, and he joins us on the telephone.
Now, your corporate office is located in Minnesota. What have you guys noticed
as far as the healthcare industry at least in Minnesota. How has that changed
since you guys got Welcov healthcare going?
Paul: Minnesota is kind of going through the same evolutionary [inaudible 10:43] as
the rest of the healthcare industry.
James: Yeah
Paul: With the new healthcare reform, there's a lot of emphasis now on coordinating
services and focusing on providing high quality service but doing it in a smart
way and trying to kind of reign in the expenses, the cost of our healthcare,
because I think everybody knows now that our ... I think we're the probably the

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highest as far as per capita of healthcare costs in the world, and we don't
necessarily have the best outcomes, so-
James: Yeah.
Paul: That's the main thrust I think in healthcare in general. We feel in long term care,
in the skilled nursing, assisted living business we're able to do things for a
relatively efficient and reasonable cost as opposed to the acute care, the hospital
side, and that's where we see a lot of opportunity. We're doing a lot of things in
our skilled nursing facilities that were done in hospitals twenty or thirty years
ago. We have traumatic brain injury programs, we have ventilator programs,
cardiac rehab programs, many things that we can do in our facilities that is at a
much more reasonable price point than the acute care setting. So there's a lot of
big changes going on in healthcare but we're pretty excited and pretty positive
about the future of our segment in the industry.
James: We've got a great guest with us today here on the broadcast. Now being in the
healthcare industry, why did you want to work in this industry?
Paul: I do have some, I guess, personal experience with the senior care industry. My
mother wanted to keep her parents at home. Of course this was way back, I
guess in the 60s, but she, for seven years, actually went to their ... drove to their
house everyday in the morning and the evening, seven days a week, three
hundred and sixty-five days a year to make them their meals and kind of look
after them. And, I mean that was a very wonderful thing she did, but boy, I'll tell
you it really ... It was hard on her. It took a toll on her. And I guess it took a toll
on our family life. Although, as a child you don't know any better, and really I
think I had a wonderful childhood. But I definitely wouldn't want to put that kind
of burden on my kids and have to have them go through what she went through.
So I do have kind of a personal connection to the service that we provide in the
community and we genuinely want to provide a setting where a child can feel
good about his parents being there and have it be a very positive environment
and something that everybody feels good about. So, we're pretty proud of the
services we provide.
James: We've got a great guest with us today here on the broadcast. Paul Contris joins
us. He's the CEO of Welcov Healthcare and he joins us on the telephone. Now
tell us about your recent financing activity, because you guys have been doing
some amazing things over there.
Paul: Yes, we just now concluded a 50 million dollar credit facility with Capital Source
division of Western Bank, and it consolidated a number of different lenders that
we had for our working capital financing and some of our real estate debt, and it
was kind of a major move for us and it's going to give us the flexibility and

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liquidity to do the things that we need to as far as growth and investment in our
facilities and our infrastructure and we're pretty excited about getting that done.
It was kind of in process for a couple years and we finally got to the size and got
the financial results necessary to be able to pull off a deal like that. So we're-
James: Yeah
Paul: We're pretty excited about that.
James: Now, you guys have been doing some amazing, amazing things. You've got the
offices in Minnesota, South Dakota, Montana, Iowa, Nebraska, so on. Tell us
about some of the recent acquisitions. Do you guys have any? Because I know
that you guys have been doing a lot of growth over there.
Paul: Yes, the recent acquisitions we had acquired ... We acquired the Goshen Care
Center in Torrington, Wyoming in I believe it was October of last year.
James: Yeah
Paul: And then we acquired ... And along with the Goshen Care Center, we acquired
the Evergreen Courts independent living facility, and then we acquired Riverview
Manor, a nursing home in Flandreau, South Dakota, and that was also in the last
quarter of last year. And at the beginning of this month, we took on Hilda's
Heritage Home, it's an assisted living facility in Lennox, South Dakota, and this
Friday we're bringing on the Touchstone Care Center which is a skilled nursing
facility in Sioux City, Iowa.
James: Wow
Paul: So we've had a lot of stuff going on in the last few months and we've got a
number of other facilities that we're looking at for potential acquisition in later in
the year. We also have a hundred unit independent living facility that's brand
new. It's been under construction for the last ten, eleven months and it's going
to be opening up in June of this year, June or July, and that's in Shawnee
Mission, Kansas.
James: Wow, wow, you guys have got quite the activity over there. I did not know you
guys had accomplished this much. Congratulations, my friend. You guys have got
a lot of growth here. Do you guys have any plans for future growth?
Paul: Yes, that hundred unit independent facility we're building in Kansas. We have a
couple of development partners in that project and we plan to use that same
design and prototype in a number of other areas. We're going to start some new
construction and we're looking at a couple of different sites right now. And then,

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like I said, we've got a number of facilities that we're now analyzing and are in
the process of trying to get to the point of actually acquiring them. So we expect
some more growth in the latter part of the year.
James: Well good stuff my friend, I appreciate you being with us today. Before we let
you go, how do we find you guys online if people want to get some more
information on what you guys are doing on Welcov.
Paul: It's www.Welcov. W-E-L-C-O-V. Welcove.com
James: Well good stuff, my friend, I appreciate you being with us today. I apologize for
the technical issues earlier in the day, but we got you on, my friend, and it's been
an eye-opening and interesting conversation about the healthcare industry.
Come back any time, my friend. Thanks for coming on today.
Paul: Thank you so much.
James: Thank you man. Definitely. Have yourself a wonderful, wonderful evening, Paul.
Appreciate it, my friend.