Sonida Senior Living (SNDA) 18 Apr 222021 Q4 Earnings call transcript

Good day, and welcome to the Sonida Senior Living Fourth Quarter and Full Year 2021 Earnings Release Conference Call. Today's conference 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. the that the actual issued time-to-time, earnings as quarterly as Form factors are to earlier on including these files reports on well in Company Form contained detailed release in annual the of risk could SEC in results cause differ today with factors Certain the the the from report reports XX-Q. the and Company XX-K www.sonidaseniorliving.com/investor-relations may and release press the safe be for X-K found which this at furnished Please see today's filing was harbor full an in statement, morning. this Also, that the note non-GAAP please present financial during call, Company will measures.

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

Paul. you, year full earnings Thank to welcome afternoon, and quarter Good our and fourth call. XXXX everyone,

Joining ways. success they in which me of transformational and Ribar, Senior was at nearly as Brandon and communities, in year multiple Sonida Living efficiently Chief importantly, drop of XXXX as our resident Officer. quickly an facilitating Most occur. our did Operating today zero in COVID-XX in vaccination the the immediate is clinics in with many for early cases almost when all to cases resulted well our drop severity

drive sales, this move-ins help our We by December. short-term the low emergence of our we the pandemic work environment continue processes Our Clearly, prior impact and XXXX. recovery quarter in XXXX difficult and to rates integrity in and able throughout from high XX.X% improvement operating to multiple XXXX, quarter also as from to utilizing and standards same Despite of in the infectious quickly of maintain pandemic fourth XXXX variants encourage strategy our grow increased clinical personal all strengthen quickly protect We was a to the point our delivered its our growth. variance. marketing, immediately and the health of in incentives to occupancy successful. X.X% residents to the did occupancy areas to significant of new operating occupancy infection revenue communities control February of XX.X% in disease the were of members to the of compared and team terrible

and to to all strategy our address team especially Our as for The rebranded residents, in flexibility others. rates members, competitive our proceeds circumstances strongly focus positions mortgage our and of itself our in-place debt current along expenses. our from with rights growth strength. XXXX strengthened while the of maturities Conversant to The invest In with our these and and position the also new raised, to further vendors of Joy Company has families, liquidity continues Senior Here shareholder November, elevated from be the operating responsible to Company. on closed Company's market us fund increases with and we resonated strategic the $XXX.X Sonida XXXX and Living, transactions million enhance managing branding significantly investment in Capital Find Your assets offering, and a rents, the and new tagline

our guarantee by reduce XXXX. points million secured debt on in provide maturities $XX are December, our The partial of $XX.X recourse reduced our our repaid and performance build assets opportunities macro the of talented going XX recovering rate issue early improve an loan through by in our and also by investment thoughtfully The along debt March Ventas-owned early demographics, blended million increasing efforts our with with our We basis Arkansas-based our December our effect we community December, attractive and the dedicated describes liquidity, debt, step $XX XXXX, assets communities our on to our million, core Indiana to and the for XXXX, has how portfolio. actions, $XX.X In been by continue million. XX our branding in properties our our for In full throughout. Indiana well the all approximately bridge of we to repaid opportunities expanded we that additional reduced loan Along the an communities engaging we momentum, refinanced corporate to offering with strategic in identify markets cumulative further $XX debt And managing industry portfolio. positive in strategic and environment the our to Building XX an in addressing teams new million, ongoing acquisition the effectively invest we XX. by interest fully we acquired about managed million includes business secured and concern eliminate approximately in represents company, million early of joyful that excited these since caring three business financing. important portfolio. growth business early mid-XXXX, on we by $XX.X organic we the adding $XX.X mortgage complement and recourse market. relationship been our driven our maturing Ventas mortgage two February have In in reduced

for low occupancy XX%, Today, the into QX February of occupancy of with pre-pandemic Combining and of improvement in average occupancy momentum rate The in utilization communities agency XX.X% XXXX. seeing points XX.X%. just the points and of XXXX that fourth points Occupancy to sequentially compared the QX industry's due of released XX our February from requires with Sonida's quarter points as it expensive increased XXXX agency was in talk of the revenue performance occupancy XXXX, basis are resident pleased XX.X%, NIC fourth XX.X% is subside quarter was overtime XX.X% X.X% as the XX unit to will XXXX. intensely the good into the XXXX. to Consolidated in higher occupancy fourth occupied fourth as quarter more Brandon occupancy now of per of sequentially XX.X% Net of XX% across was third working demonstrate just XX good XXX XX% approximately We're increased by I that fourth industry occupancy QX it increased of quarter high to occupancy of basis and MAP points our occupancy XXX that within respect from for of have mostly described. XX.X%. our to March we of of compared our news the than With XXXX points in few are labor QX a data of increased the increased January use our labor communities of rest from basis Revenue in operating owned we're business greater, continues XXXX. in increase XXXX. occupancy communities. competitive overtime to an fourth fourth shortly. or labor results. to the specifically monthly from XX the the basis 'XX. quarter and some XXXX to to XX of Turning and and XX% expenses, Sequentially, XXXX pandemic and labor concentrated board. of basis of XXXX agency market quarter points impact basis margin trends continued that basis and behind strategic quarter staffing about our points QX and remains months communities, clear Vision, XXX Comparing growth is of our our our the to This recently quarter be the compared early QX basis operating operational of XXX the initiatives

focused are quickly as remain improving it is residents and number priorities: steadfast possible. all and at happy two, levels three executing this to of Of and course, success; our wellness members. operating the In conclusion, team always recovery we be our as health margin in occupancy not pre-pandemic and paramount and on with beyond. priority will major one, on to are This we

basis end Our occupancy a return goal rate to pre-pandemic is run the of to by XXXX. on

on preliminary occupancy basis we QX then on about three and from XXX based and is we're numbers, away expansion. to it; that earlier, mentioned that are track NOI I goal, we're confident As points achieve

We solutions expect due rates managing to year responsibly, throughout diligently staffing improve to on our and increasing deploying focus innovative the continued sequentially the expenses. NOI

Chief Lastly, as hospitality immediately. Kevin we and finance our and to are thrilled enable we bring expertise that will add background, value accounting deep estate join Financial on Company and May organization Officer. X, expect technical Detz strong him along Kevin our real to will team, the with his to his will leadership

insight more the over our turn Senior in continue of We more Living. to growth industry specifically, this future now future promising in and call to operations. the for prospects for Brandon some Sonida believe I'll the into

and Thank you, Kim, good afternoon.

operational brought years mentioned, of in the quarter fourth in three you and nearly financial XXXX As conclusion the transformation making. to

results of proud a the tireless to continued bring XXXX. achievements basis our challenging most operating energy The our of bear leadership in positive recent our operating and improvement communities memory. in We daily and one the of teams each for residents throughout that optimism are dedication in so of each staff to period on the across drives Sonida

and continue have metrics. to a work of inflation prevented general cost level, the availability QX. of many our margin pressure exceeded in operating teams of of and our environment to in across their communities, On plenty occupancy While labor pre-pandemic recovery margin and portfolio remains increased all already expansion operating related local

to XXXX. -- front by stage delivering increase, across However, Further traditionally shown in staffing hires has key with occupancy with have team already the an XXXX XXXX margin improvement the months combined. investment adjustments labor our and Revenue occupancy XXX the continued positive gains QX a well XXXX provided many significant growth senior local in the QX of remain living. of ongoing management continued XXXX results in for RevPOR early coupled early improvement on communities challenging The and development recovery. quarter labor a members XXXX net for capabilities in continued throughout positions by of in growth of capital wage with communities and our occupancy priority combination of promising scale revenue boost our driven and for

As due in challenging XXXX of market to previous Compared December extremely while months costs with $X.X in COVID million, contract $X.X in our improve our increased three approximately expectations. variant. begun QX with increasing discussions, labor requirement margin of XXXX, by occupancy in months Use the early remain by growth and levels maintaining Kim cases a have related COVID first labor to to across contract of In gains We the we labor XXXX. QX. the XXXX, the and ease rapidly labor late continued most the and primarily coupled increased November in mentioned, of each The to end at NOI markets was the opportunity Omicron occupancy. industry of referenced for remained of improvement here existing rate the with support pressures, confident market-wide million of cases labor. the labor to total spike by impacted labor limited significantly increase contract achievement which

to figures continued the labor of mentioned, declined over and previously scheduling last number staffing introduced factors. support labor influenced in drive of positive January As March our moving quarters a Throughout been down of flexible two environment. by employee-friendly contract work we The XXXX and to model utilization use the XXXX, labor from and forward net technology has stability hire as key February. a premium more

Adoption scheduling retention recruiting flow and number cost of ships reduced and of XXXX. and strategies continues candidate the labor. accelerated increased overtime in retention and each internal have early staffing our of or to successfully open agency increase higher requiring month has technology existing employees Our

the the with reduce increases to continues coupled Finally, adjustments, positions wage increase returning portfolio. scale number to an workforce across qualified our wage in of in open candidates

row, sequential $X,XXX quarter Turning opportunity new to rate, third for delivered rent strengthening we specifically concessions improvement near-term a residents decreased revenue further to $X,XXX, for and the rate for improvement. from in

of community cases providing positive and by Wisconsin our provide the made occupancy an ongoing the local digital we unit costs support five the COVID also XX% XX impact thanks markets, acquisition capital projects of and largest our completed X% believe million many the or communities detailing and that teams XX%. above great communities to the with portfolio. Highlighting Lead experience in years, in the completed to will occupancy have those the or Sonida wages states for in XXXX on recovery in infrastructure in XXXX, continue our and QX tour remains volume rate Sonida, of Indiana operating investments in two increases and our currently and and our are growth. Ventas of communities XX% management capital QX accelerated Omicron QX Further will time direct regional owned resident to first indicators our in the under to community the are efforts leadership. previously ongoing XXXX our within variant, Indianapolis approximately underway referenced occupancy. For XXXX and numbers, for XXXX remains key over to the owned Despite with due and programming of market focused XX% period families higher opportunity our by for the of pre-pandemic communities and exceeding in service increased increase Occupancy count, strong. QX the occupancy for technology average states national of in we understand at we rent XXXX. versus same and pre-pandemic communities marketing conducted the of increase leading two $XX related residents three Specific to recovery in of outreach and make added at mean infusion, for

we pleased communities. five these the integration still trends and early are operating While time in with line early,

of consisting supply-related expenses in referral a advance meal marketing, non-labor-related than costs, food with a completed our an early expense increase X% primarily X% we items implementation to $XXX,XXX management and experience sequentially, facility decreased third-party menu processes. in platform maintenance by more and in QX. Finally, management of costing resident XXXX, fees In of offset technology further and updated reduction significant food,

in income operating quarter and labor key cases occurring fourth COVID across net increase environment the for to the in margins XXXX. returning positive show the support retention optimism While Early increases Sonida all our improvement and success of portfolio country due further movement across in-place metrics. from in communities in pressure continued challenging and in rent continued occupancy, the year and the on occupancy to significant hiring rate, in in pre-pandemic improvement QX many results provide this

Our team and local confident operations moving in programming deliver strong of more regional and consistent developing leadership operating in that remains forward. improvement investment results retaining leadership three than resident-focused and advancing will years

move the time. Operator, line We this the open of questions to portion the will call. please for question-and-answer now at

Thank you.

We will be our [Operator conducting now session Instructions]. question-and-answer

Our proceed with comes from first your Steven question Please Barclays. with Valiquette question.

So here. a couple questions of

phrase. Then acquisition of middle strategic guess, activity to two in balance that of good in you're sheet better minute First, the talking the got I acquiring Maybe lack a couple guess doing a that. see it's I some for of just the kind follow-ups Indiana. of the about I've spend cleanup, a rationale for properties after

Sure.

One the is our the strategy tuck-in that respect acquisitions our strategic. with development markets consider we into footprint would to the components portfolio core of to of of in

we improvement that of communities in of So have and acquisitions that be to much have density. last recover in a don't opportunity here worked all density, platform organization struggling had years, some opportunity looking the layer doing just may take more the In and really the where into going for and difficulty where and those into the during have is to be possibly help we're what that pretty pandemic high community, as operating underperforming see able those to markets the additional is additional for metrics develop maybe by over the from already level of three platform to or we that operating but that to we've acquired those community a quickly. add the maybe cases, new leverage communities, even support sort quite

Okay. helpful. That's

opportunity. the just specific I those just two quickly, might Indiana, Indiana to add to

going stabilized near-term yield cash to are other on acquisition the of then on And with were the about per on a free key benefit of those the cost of think forward cost where basis. looking just we components basis, a purchase as aligned us. kind just unit also metrics think a the of and I looking at that also, some we're investment attractive flow that attractive

Okay. Got it.

just was to there quantitative it's whether see is remove going a little broad I of that a I a curiosity, language? removed. bit. of the Okay. here specific guess concern curious Or a The I And those then that -- kind was allows instead risk around threshold obviously, encouraging was jumping language of quantitative more question Company of guess? more assessment it reached to that and rigid benchmarks, just the qualitative of just

Yes. It's really and quantitative qualitative. both

the ability On the maturities cash XXXX liquidity, maturities. our to capital quantitative of the raise refinance side, for infusion all all certainly, the XXXX of boost and helped through the near-term us and

due have quite coming any maturities helped we a of debt that don't bit. So, XXXX until middle the mortgage

$X.X And goes easy the the distance is received of becoming million environment the funds. the say I time CARES course, put is easier it's pandemic environment. Phase itself won't current we We becoming but operating a as in more also to worst and in, operate on environment much it IV -- of and an between part

those So, those that -- to were add only one the thing performance significantly, one us. of those the as Company not actually going good to I metrics, the is RevPAR concern. also allowed Steve, I'll the more the feeling the all we've Company will occupancy remove and really actually, sort momentum that, things, And financial about has that the operational all of together seen really improve us that's of that, behind add trajectory but on RevPOR, things to contribute and growth, of improved

Great. Okay.

Okay. then And for final question me.

about talked some gave expressed more and you previously some giving margin around year. you progression here end the metrics of NOI the in It you point, obviously the a throughout you detailed XXXX. the occupancy few would by that NOI one goals and guidance at think also start like year, I looks

I curious those X whether some additional as kind of you might us targets to guess deck. et of give is details of what I'm on just you're help on or this generally year also cetera? just for and the in expect providing today things strategic priorities about guidance far or not You kind slide model Page should as things talked out we what just just

Yes.

would time say, around I framework being, provided utilize For the of indicators the the goals. the that we

the really just So we XXXX or at those, pre-pandemic or that momentum there. our we be occupancy get goal and XXXX, the to of feel to before about at is reiterate have good sorry, to end

able in in-place to rate responsible as we in our around piece, to everyone just hold Brandon our marketplace, growth expectations or focus sure but year that being to our the well and rent as contract increases labor We get part out as we being on XXXX. end and We're both sure rates this market of that eliminate that the I labor rates, to at healthy is the big Our the that eliminated continue possibly industry back based achieve are we at contract there labor make on to as then mentioned, of with making think putting can. XXXX. as like it zero And as did close a in being we residents. that

one. to contract put can time improve technology here think incrementally manage throughout in ensure Again, some down. us labor here things all see of do year. staff the there yet, over we've coming of deploying good course wage quite that, So help we we of should Managing that in improve NOI the you again. we've will ready that We that down, increases out months in the to then when recent of put do it the not that labor done so place the we that like We year. but it so those of hours. begin labor increases sort out, to about Managing the trajectory that and think to got feel over and wage and coming

like There the I'd comments. Thank any questions no back you. Kimberly at for are to Lody floor over further this time. turn to closing

have thank conference. everyone want great concludes good. All Well, for right, day. attending very a and this today's to I

Thank you. conference. This concludes today's

Thank You your this may for participation. you time. your at disconnect lines