Sonida Senior Living (SNDA) 31 Mar 212020 Q4 Earnings call transcript

Good day and welcome to the Capital Senior Living Fourth Quarter 2020 Earnings Release Conference Call. Today's conference call is being recorded. All statements today, which are not historical facts, may be deemed to be forward-looking statements within the meaning of the federal securities laws. These statements are made as of today's date and the Company expressly disclaims any obligation to update these statements in the future. Actual results and performance may differ materially from forward-looking statements. reports that the actual issued to earnings as and as on factors are to earlier reports time, these with quarterly report well in files on factors detailed release the the including of the could from XX-Q. contained results cause differ today the risk Certain SEC Company in time annual the Form the XX-K Company Form capitalsenior.com/investor-relations, which press today's full for was may X-K be an release at statement, see Please safe filing found the and morning. in furnished harbor this will please non-GAAP during Also, that this note measures. call, the Company present financial

For to see the today's from Senior CEO, and Capital reconciliation turn Lody. I most also At release. measure, to this Living's time, President please non-GAAP of Kimberly press each Ms. would over comparable call measure like GAAP the

Thanks, everyone. Devin, joining quarter and you call. year our fourth for and XXXX earnings afternoon, full Thank good

our skill a of single each carrying for presence, for strategy talented your you to as into the Before quarter well residents, in the operational truly last can't get so I am day. the XX one across the themselves steadfast I enough. well-being colleagues another. our the make as relentless lives thank safety for in months company the remarkable dedication I and the their during want grateful I team accomplishments managing every update, difference of of of as and many you thank

sheet, the the the to enabled strategy; cash taken and triple-net data, operating of operations to transition front, difficult scalable assets am and and G&A. XX the every operating These a our operating in throughout to owned reduce XXXX beginning The on over-levered of with I declines actions in we all securing and during in our peers flow. throughout occupancy financial on establishing pro Living third and average many We've exiting plan performance in points. to focused detailed mitigating that liabilities our terms with to of us pandemic. improved our have while our more strategic XX strong significant our all improve communities to a needed leases months resulted by during to Turning our in Senior made senior the brought Capital progress operating occupancy three-year COVID-XX our as now adjust tremendous owned performance, we've decline outperforming strategy, the and the of say year-over-year XXX under-performing top stabilized and and stabilize history has talent work publicly efficient discipline streamline along reduced available XX last pleased conditions actions operating model the of organization, Company's on new our of Company's liabilities the year centered pandemic. Comparing agile a are the living our allowed our and portfolio foundation. basis assets was balance forma

better industry by While average points, performance XX% comparison. declined our basis others XXX that on making of approximately the by in

we our incidence performed than all more have to on completed decline In rounds. also that the in respect just clinics December We XX%. was communities, net nearly with late have communities completed XX% declined our average XXX% our of -- portfolio across XX% at year-over-year better of income peers and of of zero. as residents second fully rounds operating our of cases vaccination while maintaining under active XXXX, today, is three COVID-XX XX% are of clinics and our vaccinated and their NOI vaccination our began

our clinics weeks. two all to across expect all in next complete communities of We the

XX% December more. current quarter of continue to first can operating $X,XXX. at under more began rebound in upon markets. living senior our be XX% five-year February we communities the is that can rent in the years, owned to well household occupancy have of indicating in in assets has in preliminary our are attractive, work for to XX.X% Today's expected XXXX, and educate to occupancy beginning to XX within are employee with average activities improve competing about vaccination owned XX-plus move-out are in XX spot employees services of positioned believe our trends where of XX-plus March XX.X% XX inform late monthly the average information stabilize demographic vaccine in consistent of in to X-mile have began of in that tracking monthly and the to benefits XX.X%. continue XX% be we is the and where vaccination monthly the rebound. December than and assets housing owned Since afford the our XX%. of is average in and environment a the performed high-growth age construction rate age and February. for demographic of communities growth two improve approximately be tours markets These significantly, move-in change, beginning on assets March expect of readily move-ins portfolio level and XXXX. strategically current XX% income to average the improved and historically highest as the occupancy was current hard leads Based January, projects in may are subject indicators in or owned our the We we demand markets radius. to leading no

mid this XXXX, of before NOI the For was assets years, and was the recent in XXs In COVIDXX high same occupancy in mid-XX% assets these occupancy to had pandemic, margins in the year range. XX%. margin full group XX.X% and average of the

to environment performance We of operating expect these the to at least same returning the begin as communities stabilizes. level

previously Fannie Welltower assets one to owned manage we Canton, seven we Mae two owned. asset XX assets, and four Ventas assets, the addition Healthpeak in In assets, also currently Ohio that communities, four

Welltower communities In difficult portfolio. Fannie transition that end in made stabilize, summary, assets the COVID called SING have and operating operators despite Mae environment second the for the to our Healthpeak, we eight resulting strategy by three-year XX created invest, of progress great in months last will quarter, pandemic, by nurture on grow. the XX We the our expect other managed and

We have stabilized business. the portfolio in the

invested our programs. processes and We our have in communities, our resident

our colleagues, now the and We call improving portfolio, to We team have improving sales and balance restructured over about generation our will environment. discuss ready operating sheet priorities. Brandon to our our post-COVID and feel lead turn nurtured our we now are grow. of I processes,, the good XXXX operating to

Kim, Thank good afternoon. and you,

of out leadership approximately quarter presented of and year providers through compassionate frontline marking realized consistent, and this steadfast first period service a XXXX, close Earlier want prolonged our to our local by operating resident month, I a healthy. of we employee highlight their for COVID-XX care thank and keep efforts As our and COVID-XX, to and one challenges the celebrating. cases, milestone we and and safe residents staff zero fellow worth

fully CSL COVID-free XX% month communities with remained and nearly cases only throughout residents have our COVID-XX Our for nearly two are vaccinated. reported all of March resident the of

larger model to groups family safe manner. accommodate increased continue from to operating in-person and a adjust We members, in and for enjoyable activities our communal dining visits

long-term progress strategy. we show at continue a of overall ending stability differentiation early further the in points our near year the retention trends and recovery. staff be are and Leadership total culture XXXX The the for percentage encouraged point to leadership XXXX and by with forward, tailwinds significantly internally community level both CSL. turnover year turnover and externally in improved Moving SING people-centered competency core at and of that improved with our previous the X annualized of over a drive

to XXXX in $X.X declined COVID-XX the Revenue expectations. excluding and foundation of XX% marketing or Currently, or The for our in any portfolio. rates million capabilities our of prior is and On XX QX, and portfolio year sales QX the above our the remain of revenue XXXX occupancy. front, achievement at stability XX% communities and owned flat. X.X% revenue XX% developed funds remained of relief operating from the implemented growth demonstrates

efforts the resident programs priorities to with efforts outreach of across Strategic to conjunction sales focus segment occupancy the as rebuild We near-term environment and forward our recovery ease. include in occupancy differentiated with each to continue begins of comprehensive upside moving in the operating services COVID-XX our providing levels. portfolio growth service

volume for tour key followed has training move-in suit. the improvement XXXX a home with indicator to therapy XXXX, in in highest results We reputations are operating strong a positive. QX of continue that care perspective, quality a in and diligent community the in also lead role excellent focus After our wellness platforms the that efforts QX and will also move-outs. capabilities our well-being programs sales levels website early residents' reduction in health results XXXX and on local and media components QX of XXXX, at also conversion quarters move-outs. and improved our additional social first health producing move-in our of plays service indicator volume drive level. and QX health therapy robust XXXX and are strong have also expansion lead Move-in lead of The monitoring volume are related inside the our investing are sales wellness to of clinical services partnership of community's From and exceed delivered and and access development volume rollout for and in a in tour to key The of XXXX, and providers reached third-party will have ongoing key confident tour traffic. both preventing of The and programs to ratios team throughout Lead since teams XXXX. continue and to our expanding positive their quality. move-outs our in sales

of states believe across XXXX. with expect care on and disease further individuals than to provide from QX more memory in January number levels, down and average remain portfolio our December care Expanding to with related first based efforts our is and Magnolia largest implementation We programming, newly memory -- XXXX. care beginning of in our quarter the XXXX in programming completed Alzheimer's of XXXX six XXXX consistent this well-positioned introduced services projected communities our year. on volume the with our Trails XXXX throughout expectation four units in and XXXX memory We the program increase to an has between our to our XX% of we expansion XX% of of on further remainder March trended move-out for

with with provide front, providers recovery management cost the initiatives the increased pleased and care basis to pandemic supplies inclusive associated of throughout operating prevention by of in and reductions on in ongoing are $X to is operating sequentially the declined were recognition QX of compensation our exclude efforts. trending cost through offset any investment significant million flat nearly COVID-XX frontline and for the Expenses in their in and of efforts in expenses. QXXX ongoing relief variable received increased costs. expenses months from management operating margin of or additional for On labor a with were revenue Total XXXX first efforts cost spite QX due expense expense conjunction efforts to costs We year-over-year stat two recovery. COVID-XX opportunity to funds COVID-XX favorably These XXXX throughout pay in X.X%. results service related

complete labor Additionally, March. COVID-XX in the our the is of throughout in cases a our nearly to of operating stat model environment pay due compensation material use of no current communities component longer elimination

the changes rollout near-term the operating and continue further QX in in by impacts in senior to is arrived of the between XXXX. communities the diligently presence and operating to residents has the remain COVID-XX nation. is and throughout COVID-XX of suggest environment address of reached the on and indicators of revenue staff local well-being the each the our uncertain, technology improving certain portfolio These What ability scheduling across in early challenges safety operating teams of point QX, ongoing and sales of since real-time the expectations energy vaccine supported highest While growth with communities the March the of staff. excitement living the Our ensuring adjustments adjust to occupancy, our share real-time being while their and are model

recovery. residents Our goal cautious us return a the leading to half and our outreach and is and on programming with is lead the interest pre-pandemic to has gradual the combination that to the efforts safe in consumers revenue enjoyable teams and road environment increased optimism continue of attract fuel XXXX. occupancy senior XXXX and in in XXXX. future ensure confidence grow The a to I excited second on the front, in experience operating indicators of am and all and within recovery that thankful resident-based field the living, positive reach delivers an leadership CSL expanding our to

I'll our to financials. to review provide a Tiffany detailed turn the over Now, call of

you, Thank afternoon, Brandon. everyone. Good

COVID-XX XXXX Our the our results on quarter revenues fourth impacts of occupancy reflect continued and expenses.

throughout did within XXXX, then excellent of managing on COVID-XX teams their limiting did I mitigate overall to as job control declines quarter. operations an our in during the the However, in impact occupancy and results our the the cost

underperforming actions with of balance course sheet We Act November X Funds the XXXX. associated Phase leases we relief of exited in as we XX and quarter also the our CARES to the transition Distribution successfully benefited triple-net Provider over XXXX [indiscernible] improve completed million pursuant Relief position in continued from $X.X positive Mae. The all also reflects continued impacts to General fourth to Fannie communities funding

million fees were XXXX. sales or related of properties of costs increase certain $XX.X fourth partially since of operating the reported behalf. with the conversions million XX offset related paid revenue we end community communities, by the that fourth the the in $XXX.X of managed reimbursement million Our an to was reimbursement Most the for in management $XX.X the their of decrease on $XX.X of associated to these $XX.X million. was and million revenue of compared quarter -- to revenues XXXX, quarter the

for is that income the expense our statement there $XX.X see a million. You'll on corresponding same

the Financial from revenue fourth occupancy XXXX, half XXXX million. occupancy fourth for of in the XXXX of basis The the through of in points of was was basis related decrease lower quarter move-in XXXX continued to to decline began second primarily portfolio of XXX third decline March XXX total Our in was to fee primarily fourth in reduced of of management consolidated and the the approximately due XXXX. quarter is the a due a pandemic. then the of decrease activity, the rates. and remainder COVID-XX levels $X points to XX.X%, quarter the compared end decrease which quarter The and in occupancy

have range our collections; the total high to collections revenue of as remained collections collected. consistent Turning through overall to are the as of and ACH XX% period have in pandemic of via a be revenue percentage ACH a continued collections with period. Most the our pre-pandemic percent

our of amounts We have with compared increase in overall expenses the quarter seen of that remains the to collections. card XXXX our were payments, a quarter still $XX.X been of Operating period. an usage small have for but credit million, rent consistent the in $XX.X very And fourth decrease percentage a return of fourth very XXXX. when pre-pandemic million

fourth expenses our I As fourth the when part in of combined or XX the in of revenue, in than the accounted of fewer we mentioned we communities XXXX These of the had XX for basis. decrease all discussing quarter quarter majority on XXXX. had a for decline communities

discussed million and were expenses sterilization that of hazard which I earlier supplies. Our in relief fourth $X.X Fund including equipment of were during the in protective disposable primarily recognized receipt COVID as expenses Provider employee a by quarter from foodservice operating $X.X services, XXXX that the pay, funds Phase X costs impacted quarter, Relief the positively year-to-date recognized include specialized which personal incurred fourth of million reduction and were

Kim that continuing once completed. will owned As portfolio comprise transitions mentioned, portfolio all communities go-forward of our our the consists been have community XX

fourth the XX.X%, fourth XXXX. XXXX Compared than or quarter or occupancy lower revenue communities' XXX the quarter basis of points to in is to of million third revenues quarter the points $X.X of community the Continuing year, X.X% and continuing quarter decreased XXX basis which X.X%. of was than is quarter lower decreased this of fourth $X.X XXXX. compared million third Our XXXX the

certainly and are our admirable not operations occupancy sales have we challenging with job in pleased teams an any unprecedented an decline, marketplace. done While

funding COVID-related operations million on COVID-XX Our the to our quarter average million which over to compared quarter of as COVID $X.X last fourth managing $X.X quarter cost quarter exclude fourth of compared monthly expenses relief the well focus of rent XXXX increasing or fourth as due quarter in teams to increased offset community in of decreased success X.X% slightly of impact in fourth of the XXXX and XXXX. of X% the of XX% to as costs Continuing XXXX, year incremental and application $X,XXX the as the to third the costs.

costs utilities, Our X.X% and X.X% down major million combined decreased of million while our or categories: or employee $X.X other respectively. all labor categories X.X% expense and decrease with $X.X food other cost our X.X% to two

net as operating expenses, labor XX.X%. $XX.X costs exclusive was premium funding and included and million our define of NOI we community then Our operating with which continuing COVID-XX margin, -- revenue-less income was relief and

and the $X.X due an quarter corporate million were our a XXXX and of to quarter $X.X compared is general expenses primarily Dallas consulting million in to fourth of insurance in Support Our million XXXX. market increase and costs. The $X.X expenses transaction of conversion increases administrative in and resulting for premiums in challenging fourth approximately the from Center, increase

the sale $X resulted During We of of transaction. the which million. we net fourth $X.X located recorded non-cash Canton, completed proceeds million the community Ohio, quarter, in cash on a gain in this

the addition, a excluded, to negative quarter EBITDAR XXXX. to COVID-XX expenses a and of behalf, the community expenses CFFO in was million. by fourth the $XX.X in quarter the When Adjusted quarter annualized negative is was excluding XXXX. we of of and funding owner $X.X COVID fourth was been relief revenue. are on CFFO million contribute for Adjusted its XXXX in new funds $X.X million approximately $XX.X have fourth was relief adjusted EBITDAR expected In the $XXX,XXX million. Adjusted which retained XXXX manage

in noted cash the of December XX, we unrestricted liquidity; release had at million Turning that $XX.X now XXXX. to we

to funding Phase $X.X third our November Provider Relief received we Funds approximately XXXX. General Distribution X earnings, As million of quarter pursuant we in the announced relief

pleased X have We that are $X.X additional received Phase in announce the during quarter. first in of our the million to an we program same funding

relief $XXX,XXX quarter. offset In approximately to programs from received in addition, funds Wisconsin the state of we fourth COVID-XX and Ohio expenses in

second We business distributions Bureau the have Ohio in Compensation $X.X the in received million help Ohio quarters COVID. of fourth from doing approximately in during also and to Worker's companies

addition, taxes deferred in payroll $X.X quarter. that of CARES the total in a million in $X.X under million an under taxes the program. we payroll We fourth deferred In additional Act

the one of gain interest. amounts to additional and properties XX, of Once property XX and interest in lenders Fannie continue additional notes relief months of three of of December three ownership balance accrued and resulted with is progress we In Mae. in and our XX additional million extinguishment to and that $X.X transfer expected on included payable ownership accrued on of to interest We million our the communities Mae, full current principal the $XXX.X expect with forbearance At only, $X.X throughout relief. underperforming a recognize related months of in agreement million we extended debt XXXX, October, Fannie of to to occur legal we which is sheet. enhanced on to approximately our interest which transferred

discussions two that totaling We in of our in lenders, are to of with are our also scheduled refinancing million active $XX.X extension loans December regarding XXXX. currently two bridge mature the of

operating the of significant ahead, Mae will XX our two our we the remain platform transitioning the financial assets strategy. Although years first the made of challenging ownership the and Company's underperforming operating to the all of the months Fannie leases, improvements from during SING triple-net environment exiting improvements pleased foundation resulting executing to are in with

work and and move I will to we continue portfolio. diligently operator, consistent, we our our to to for SING, ask strengthening while final our questions. company across to of our services the remarks. residents now work programs That the -- concludes prepared line value we high-quality third create to providing open Devin As year into and

session. At Our proceed with we question-and-answer Steven will question this the time, Please question. with of be [Operator Barclays. line comes first a conducting Instructions] your from Valiquette

for afternoon and the thanks Good taking thanks. question. Great,

questions of here. couple a So

lot the draw any continuing first December Guess, call relative you're rates your of that few XX? if stands XXXX can just of March on where the right I that on a And around even financials XX, also you what the I transition balance million to mode these. total with the flow would a XX will run and on Cash and just XXXX sheet forward conclusions December on helpful question as data operation, continued given But to questions. balance now first. particular here. total able know just from or from is XX would First, wherein start communities I debt it guess progresses for shake I certainly the trends just we that to where guess sheet got on address that $XXX debt, out was in

a properties. of related to that, $XXX large million Fannie the million-plus, Well, $XXX.X of Mae chunk the is

fall ownership those as in So Mae, derecognizing we formally Fannie recognizing our to liability formerly will be gain. and transferred is off the the -- a

anticipate we throughout will XXXX. so happen that And

the have current also and or We those discussions in is approximately lenders refinance notes. are maturing at the $XX.X we our extend million year this of of with cognitive end to maturities that and

Okay, that's perfect.

flow be to as XX And the those guidance really ratio obviously, forward, there for what's color given annualized not around for for then, relative as not ratio is on giving the properties expect which on going XXXX those what [ph]? just we Still forward too will CapEx of operating well XX that any should pandemic, surprising XX EBITDA, on. cash going what annualized today, Okay. but the just any you're the going assets communities

and amount right you about markets. anticipate those Investor CapEx. per XX with And the on to that's third they quarter -- are that think can CapEx With secondary deck, you unit I'll When tertiary CapEx, are communities in that start jump the cash portfolio, in Tiffany think and we if community or that portfolio. spending of $X,XXX the we in in flow. recall Brandon the CapEx, about then, in respect our

market. in mentioned I focus As script, the the we on much middle very

comfortable, they're they're to -- warm, date. up they're are they clean, So they're

don't have require any or would -- projects construction reconstruction of repositioning lot a have or don't the portfolio. significant projects that we of would we refreshment significant that require So

good the So think that on Steve, is $X,XXX the I per assumption unit.

too, flow that right can Then of don't to now, you that's cash if have you right. fine have a we that track if EBITDA, All down later plan. ratio lucrative always that handy don't

that you to back get We'll one. on

the and might question are the to management I to expect I agreements, progress that light here fees under leased XXXX, in just XX -- is how mean, [ph]? communities through especially other had those there on so relation any management of what now range just meantime, was the of the formerly that in interim in for management fees

I in do Well, -- think you to Brandon? want go

is think $X.X million to our I revenue Yes, target million basis run-rate in the $X go fee management forward. our for on

outside And the of majority said, QX. you as managed I the the transition should that see portfolio the the by quarter -- managed end of eight majority of of

second sure, managed be at we'd communities. the the half, eight for in So

Got it.

of as Okay. on we here you of just components expecting stimulus those certainly have relation gave kind if I in of curious final just [ph]. versus you on helpful. And total was $X.X balance in COVID-related two payments or question The you're XXXX [indiscernible] -- coming million to color the in financials around quick in color what together, then XXXX? additional relief any the the expenses

was COVID component large a of pay. the XXXX, hero expenses, In that our

And that of total and was the so number. -- XX% approximately

and [indiscernible] be portfolio but pay that the overtime. nature, -- will the And we items expenses direct of so will cases declined as number zero, decreasing PPE well. that We the of our just nears it anticipate of has incur as in that number additional

expense we'll impact we're very impact we've COVID the pleased will zero add, of hopefully, been continue -- related that just a would on to confident an on continue, COVID Steve, that I profile trend see should with meaningful the standpoint cases from basis Yes, and expense the portfolio nearly are on very that a year-over-year and expenses. as the

Perfect.

Okay. All appreciate the right, update. Thanks.

Thanks, All Steve. right.

seem be at no [Operator this Instructions] time. further questions There to

back turn Ms. comments. closing to to Lody any for like the I'd So, call over

today's All Thank you This and day. everyone, great right. concludes have conference. a Thanks, Devin.

concludes teleconference. today's This

wonderful and You participation, have this Thank day. lines may your now you your a at for time. disconnect