Sonida Senior Living (SNDA) 11 May 232023 Q1 Earnings call transcript

Good day, and welcome to the Sonida Senior Living Q1 2023 Earnings 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 expressively 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 XX-Q. time earnings as XX-K as reports factors are to earlier quarterly to these filed and annual well in company report risk detailed release in in time, of including could SEC Form factors results cause differ today, with the Certain the the contained from the reports on the Form company on be found see morning. harbor may Please press statement, in furnished the release this sonidaseniorliving.com/investor-relations safe full at an today's for filing was and which X-K

please the non-GAAP Also, note will that call, during company measures. this financial present

each For release. of measure, please the see non-GAAP reconciliation most comparable GAAP measure from press today's also

CEO, time, like At I Brandon call to would over the Senior this turn Ribar. Living to Sonida

to investor morning, XXXX Earlier be I'm which welcome quarter. operating our you, call. earnings results Kevin QX Good for Officer. the referenced Chief this our today as Financial quarter our presentation, and Thank joined posted Alicia. we priorities first by discuss today, call strategic will throughout we Detz, our and

in our along. sonidaseniorliving.com would presentation at like Relations Investor can find if You to section latest follow the you

believe in be across expansion a through management more XXXX acquisitions. fundamental and portfolio for continue profile; defined finally, operations; margin success arrangements cash expansion estate to strategic efforts: balance will accelerated flow positive sheet real with I X generate and from to strengthened Sonida a attractive accretive debt

months, excited X focused last X I'm to the Over progress. and the we our have on first share efforts,

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in earnings set early expectation in XXXX. call stable improvement and year forth During occupancy an expanded we margin previous our in the for March,

delivered history. of increase RevPOR team XXXX, growth, company's an in our recent with over of occupancy X.X% quarter strongest Xth increase coupled operating consecutive QX Our a the

with will a X impactful of revenue as QX, our baseline to from in in with X.X% expectation Page further comments, XXXX. monthly up an QX and the team referenced contributed view XXX Kevin points provide the more results results rate at XX% sequential QX expense with were these March, more occupancy basis and excludes throughout in adjusted deck. thank XXXX. his comparable coupled and detail run I portfolio a to Even owned margin and in in On revenue our increase QX growth basis X%, community and investor for leadership the Our on a control XX% averaged strong further of effort NOI basis, the and March year-over-year quickly. grant cannot points encouraging increase XXX so revenue QX from NOI, for quarters. March results the increase XX% for which We in required than operating up achieve enough XX.X% new quarterly

Sonida strengthening believe who by delivering each family experience and residents operating excited the the will part be are firmly results. to valued care of to families engaged and the service I their for and resident our highly team our the of remain foundation of continued members and

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residents spaces It members survey. caring World is joy day. News safe, create cultivate to and & every Report annual team our testament our who a for

that and senior to strong We remain and of dedication hard communities see throughout retention leadership pleased in work their are grateful for QX. our our

X over combined strongest in to quarter. of traditionally NOI in they I states. growth of by on highly a operational and remain improvement is as experience the in revenue deliver margin operating our leadership points XXX in staffing Texas portfolio Midwest with continue fourth strong what led QX, concentrated operating through expansion the to those the recovery senior stability resulting rate expansion deliver X spread The margin in excellence. and front, and confident XX% continued states, our margin Wisconsin, exceeding basis

always priorities. with stable at metrics only deliver be Leadership first to to percentage cost transparent an on local QX XXXX. time the at the already achieved of and teams and total costs the maintaining QX, Developing open, nearly key Sonida than in positions culture the down an commitment highlight sequentially reflect core quarter. of will and for leadership remains our roles, led communities. labor top retention recent high-performing X years, additional our more in community across organizational first regional that the points with the and reduction retaining These turnover will in our XXX open labor XX% XX% by in supportive across the labor top operational in of continue continuity In declined contract reduction XX

extensive is strengthened with remain sheet debt Our to an near a more second area balance the profile. update restructurings in X that cash potential delivering bridge with capital our term. positive needed flow forward structure planned on focus strategic supports of lender of growth. partners, providing with We material discussion look lending to goal We in short-term a attractive and, providing generation of each liquidity to stability the our importantly, a more

margin quarter overall flows loans, and beyond. strong QX and in continued in rate comprehensive year-over-year leadership restructuring the growth to in of a for expansion the lending operations, XXXX success than operating for discussions recent improvement The cash substantial first Sonida a company more our of return our stable $X combination from cash company's and for across would Our generation million. history. with flow The XXXX, time coupled improvement operations platform, the million of cash $X positions partners, in of run first in our in generated progress and the mortgage significant with

come alternatives a growth accretive believe transaction of of Sonida we in estate from partner previously, real in strategic are will Many strategic identifying term. a for the near and investment the referenced As and arrangements operators with combination additional their assets, XXXX is present our management opportunities lenders goal acquisition an owners, our actively existing primary as living and across to senior profile.

of operating of as core participating and our active the improvement with balance shareholders We focus investors. an market continue strengthening partnership and the to balance acquirer the in in sheet on portfolio, intense the

to team joy caring friendships. local only with find Success strengthening sheet; safe margin these of primary the a in efforts: with in regional best-in-class portfolio, of each these growing expansion; hobbies and and the our possible dedication environment a and shared deliver XXXX in where leadership balance of to their shareholders the and the residents beyond. experiences, levels, X value Each creating will efforts are substantial new and at

the for discussion a financial the Kevin results. over I'll call of to now turn

efforts Thanks, I'm quarter, the amazing to starting to the which share reflect excited equally Brandon. to results the the and this tireless all contributions past X X over team from months. from are

a occupancy peer seasonality as slides. is rollout that both rate the for softening Starting repeating Xth was in X our company programmatic trend returning of seen with QX top the line achieve realized straight the recent that it X, of Slides first as quarter increases, that company is and to industry, able the in of resident growth. more in despite on an few particularly its increase a goals The filings; to discussed bears X reasons: slight in detail revenue is The second historical occupancy the our and noteworthy is occupancy

XX% improving place, stabilizing regional and subset firmly towards of of meaningful to and With focus continue communities, run successful, driver We their occupancy leaders communities underperformance overall portfolio our a the a in of of will be when across efforts on customized performance north to the half extra the small plans. to of push the our underperforming occupancy second in these portfolio resource address occupancy growth focus foundation year. with rate believe

portfolio, both across reflect margins accretive industry to previous begins and Sonida improvement that industry metrics and should with margin recovery of and company remaining incremental this macro when initiatives the exceed based discussed on continue encouraged combination are trends occupancy a on calls. specific level. Rate approach stabilized We

last recovery of on the initiative significant Slide the increases resident March referenced leases company's on growth address we through acceleration earnings XXth, In XX our to months. in-place than Moving rate and rate most call greater active to X.

with significant manifested community that belief responsible the residents currently support from Our a quarter. increases teams commensurate this our value our way in would provided

pleased extremely beginning we over March that while executed occupancy successfully this slightly report initiative still on are growing X, to the We same period.

we've More tranche a note Please RevPOR to measures The we run and on similar successful presentation believe on basis and QX our company up of an of coming X.X% presented and on remove be adjusted a respectively. population important, X,XXX rent realized state new XXXX RevPOR. X.X% With and should approximately impact in to XXXX that provide overall an pushing acceleration XXXX, available summer, of nonrecurring in another the rate leases, of elevated these we also XXXX in non-GAAP foundation portfolio this XXXX. RevPAR RevPOR, QX increases Slide increase of margin. adjusted as leases seen of and grants to the for over received both -- of rate historical overall permanently directly further of QX contributing will addition due resident on rates X.X% X,

fully spread of positive to believe cadence, each X% lease and review resident us was re-leasing of family more to community has Similar we by created day the to other achievable renewal a which our for quarter-over-quarter push that the spread every Amongst recently our on last X% continue by Page X, only X re-leasing because teams. quarters. rate initiatives our implemented increase described resident we revenue the experience increases, allowed on

program, level grown is last revenues this We the recently implemented matures believe our care and program by Finally, quarters. result opportunity of further to still around of level as of each have our there revenue we care X the push across as of revamped evolves. a stream technologies portfolio the X%

consecutive X, business. We've reducing our Slide side to some on address continue expense where high QX has be on improvement QX XXXX of QX XXXX. to operating laser-focused the quarters $XXX,XXX labor labor QX monthly where and respectively. trends point to now the $XXX,XXX levels. its we of to rate seen pre-pandemic ahead represents in peers, $XXX,XXX the a contract Moving run $XXX,XXX encouraging and at This decreased of we'll XXXX, at just X Like XXXX contract from

occupancy of to individual communities of We a comprise contract targeted with the our on focus consistent handful the much that labor deployment on front. continue

hold and community and to rapid we the to X-month has premium us direct contributed able stability out-of-market in avoidance the same been labor the our ranges. leadership Over period, have retain the pay despite labor over our We believe decrease of which same flat contract period. teams, relatively labor allowed have depth to

and double-digit occupancy results overall continued lower a rate period during into labor and recent run Most quarter. we create Specifically, moving both voluntary these a growth in overall most percentage the have rate the turnover forward support ratios realized expansion. should composition decreases where margin importantly, of

on of organization our each the the costs slide, to realizing same food down, continue global increased compliance trend and overall against associated economic our backdrop purchasing Staying as are we month easing. inflationary within optimization

Finally, operating revenue the overall flattening all expenses of company other is seeing profile. relative its to an

over push out an our months to We rolled various the economics. the initiatives on past unit continue X improve to operating further in attempt

Slide to On XX.

transitioned As of GAAP transfer Fannie This a XX Brandon Slide communities that extinguishment we in historical loan discussions referenced, debt January, debt date by company's note last to communities. $XX.X connection surrounding latest the early the potential XXXX X encouraged asset in excludes In gain impact related we of numbers Mae are the contains any noncash on with resulted company's legally million. to transition XX favorable of only and structure. the modifications. Please

greatly our with on company's is report to exposure rates. the or happy that elevated to limiting a and/or full debt our fixed call, variable are stated prolonged hedge As now either place, in we interest last further all

fully financial under Life Finally, the later of the compliance Protective XX-Q all with in with in today. the covenants to more X communities company described our mortgages mortgage was with be exception filed required as

XXth a I'd investor on of final Finally, and to like spend slides time presentation. bit today's our on

rate run shorten the and initiatives discussed March, company assist rate various burn filed reducing the immediately XXXX in XX-K previous our generation. cash in cash As calls preservation cash in developed run to bridge to and the on

the XXXX XX% we initiatives pleased XXXX. are operational the that to averaged XX% addition a trend total XXXX's this In of towards strategic already revenues, touched rate, significant which our and for G&A improvement on profile and first of call, to run half from continues

key of how able we been our implemented informed, into role significant recently We've our improvement, also a into along capital on ROI-based more has ERP system operations with amount make to our capital improved the a successfully of process This our decisions to communities leverage XXXX, portfolio. played in deploy in reinvested communities.

remove across We initiatives function of effectiveness with a believe direct consistent We these quality initiatives leadership team of pivot of of our results, concern, through flow on execution our and generation swift to the the and should year, these new one accelerate company. enable the of overall reflection successful cash the are ongoing any as strongly ability the a that quarter of allow the the growth. trajectory continue company the doubts believe its every growing to strategic to on for

you, Back Brandon. to

presentation ongoing conclude by future the I'll again as Sonida. residents and to the care It's a the my industry-leading resident are leaders thanking privilege running to company. honor our servicing an forward team differentiated a I today's growth success our to and while share once our utmost experience. and high-quality further rebuild business. we group trajectory commitment to confidence have as to in recognizing throughout Sonida this look I to creating they continue related in leadership delivering of updates achieving sound

open line for Alicia, please the questions.

first Our Barclays. Steve Instructions] from Valiquette is [Operator question with

Valiquette Barclays. Steve It's from

couple questions a of Just from the separate bigger quarterly picture today, maybe results. financial

taking XX% range the you road, So get and occupancy back you achieved, in a years high couple a maybe peak to that of let's levels pre-pandemic. step the down say, back just

of The as XX% had now. that was company $XX when annualized when decade, as you cash facilities high was occupancy. company twice also that of million the have generating last But in were you flow the achieving many middle roughly operating

of back there to So a flow occupancy, be, the just generation, full might once operating cash I'm get of just range existing to or trying what is EBITDA true picture, state recovery think, flow generation to just just operating big facility we cash footprint? steady from not

outstanding, in that million -- facilities kind versus of might on million if see then how to had based of then, of And recovery operating one, $XX of cash we $XXX the say of once address the kind the flow flow ratio frame that $XX kind half back full follow-up, cash the guess. of context you trying just a facilities? many million just have to debt you on outstanding I you get debt I first back let's because And the the of that then

Kevin Sure. I'll go ahead in. jump and then start, Steve, and can

think in like is but I don't getting I in provide, you there So the near question we'd a there. future. I be of range is what we're something about really to think your tell hopefully, to terms yet, quite that important able can

that we the deck front And there, really continued you from important on I is that improvement kind improvement is at because in X, got ongoing on we've seeing of baseline rate the that referenced. reported. And that the Page that looking think, March

expense ourselves And XXs it. And operating I high see continue the necessarily we the on we don't as want also think cap to to improve the level. to

So able closer margin I much been XX% really that that, important recovery and to have getting collectively mark these to around historically, is obviously communities achieve that. think,

ultimate will the we're our cash with it, the, our material having flow thoughts impact from lenders the that each kind of portfolio is. and is and other the factor of the where our call fully around just stabilized, how baked think outcome of that belief I discussions

had probably communities leased you recall, the As that past. in we XX were

don't And kind the flow, so ability also factored we escalating the costs of lease cash anymore. portfolio's that to were generate have and into

and we not expense to developed improvement we'd but overall And in detail the color be fully to profile. the generation see is that on then additional owned of as with happy occupancy think loan and try especially provide our cash how managed, beneficial. rate, our think goal only related share just operating So ultimate some and looks, along we're additional around kind being we we to where portfolio, able discussions ongoing

that really the that for some say around But I'd do to down term. going look want variables what range path. before able those being long So provide other the of get forward we to to more of the finalized can guidance portfolio we

helpful. definitely that's Yes, Okay.

probably of to then, discussions. mean, kind somewhat around restructuring obviously, able specifics some this And or sort guys of you to I on understand that. the the modification of potential you're alluded into of debt any handcuffed call, being into I on go loan tied that

the existing if to discussions, part of debt wondering, just just this curious, I'm relief amount I and/or just of outstanding at all principal principal able outstanding, the you're of change with level, sort But valve any numbers, a that could discuss pushing reduction So it is about of the any high the involve guess there either out just amount as maturities? total of in is specific giving at obviously. any just away the more the conceptually, or without interest associated burden just on

Unfortunately Yes. for the can I think might is we any of going give enough and going this prove look that ranges confined our to is historically. based out is like. the on is thesis Steve, we and scripts the can't by cash margins of some to what that or today -- or what ultimately the we're release by flow Kevin, be not investment is bound and that, what ultimately But something share to that be meaningful

set the shareholders acquisition for value and operational really our we real through and a of overall relative But estate to stage lot what management is acquisitions. to improvement value think

is hand, sharing So specifics. comfortable wouldn't tell something we what you meaningful. numbers that can without I going But those feel in for we're

moving different roughly be tied you financing different XX appreciate that on could timing, of I ago, with Okay. parts equity as another the just of maybe a months a months into source stuff variables, exact piece And all ago, then dilutive that. but within final all that. involved is, potentially the that this XX question forgot the had lot well,

ongoing just to debt and modifications? how in much investors involved? investment that loan Or activist the it you're having se, not party I'm any or around active Are the way stands curious want per involvement as that independent, of I an profile company the as kind investor their of passive is totally and they role really has now? in just discussions investment But the far don't call right

Board I'd on our say two have Directors Yes. shareholders. What that our largest of is representatives we from our -- of

our their we we're expertise. on. to so ongoing always keep they based speed the Board And insights And things the on in of that with discussions, areas up provide working

been had our productive And members. They've so and supportive very from us. various of really a discussions of board we've set contributions

so And on a the we where talk discussions as that's we're business. and kind about the going of stage which

it. Got

right. All it was of in Okay. consistent the trends as to the all that, progress done with Notwithstanding good of some see quarter, the industry kind well.

congrats So the of future again. to developments and thanks the so look on balance on kind that, sheet I -- picture, forward

Yes. Thank you, Steve.

we're we're the in think by first accelerated to on discussions saw just details towards very that the on fashion, encouraged an of everything then end the the push want I continue sheet. further and having what forward to balance we quarter provide and

So thank your time. you, I and appreciate

are further There at time. you. questions this no Thank

will all, for you, our Take conclude Thank for this care. joining. This call morning.

teleconference. today's concludes This

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