Sonida Senior Living (SNDA) 13 Nov 242024 Q3 Earnings call transcript

Thank you for standing by. My name is Novi, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sonida Senior Living Q3 2024 Earnings Call. [Operator Instructions]. I would now like to turn the call over to Jason Finkelstein, Investor Relations. ahead. go Please

The All results are operator. be today, XX, from in securities November statements to statements. any Thank these forward-looking performance update historical statements may facts which statements laws. federal of not the future. to expressly may XXXX, disclaims within obligation Actual you, the meaning made company or be forward-looking materially deemed differ

earlier the that SEC today files the differ that during harbor found well the are page results detailed full may present be the and Investor the filing the please on XX-K can company X-K the earnings the which with note to annual safe that factors the this issued see Certain reports in quarterly Form in Form including to for XX-Q. release statement, in as on company this as factors at reports from cause www.sonidaseniorliving.com. Also, Relations in the Please contained non-GAAP risk report company's time, call, morning actual from found that financial time the at measures. will release today's company press

like earnings For At GAAP measure, Brandon Ribar, today's these most this remarks. the comparable Sonida reconciliations also call see time, President non-GAAP of please over the and CEO, measures to to I'd to Living turn release. Senior for opening

our strategic Earlier the XXXX. operating Chief investor referenced Officer. we Third in call. and our year priorities I'm earnings will Financial be in our we joined QX Quarter on to Jason. Kevin results call you, throughout XXXX welcome ahead by Detz, and and as which addition Thank our to Hello, released discuss view presentation, today this earnings today, our

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

a in first, these earnings great resulting like margins. and occurred team remained grateful allocation our continue discuss occupancy services supplemental end touch Sonida. to residents, providing the quarter with moment, prior that busy within QX. of presentation but addition, care quite who growth extremely ongoing to release. in information capital included and I'll our in I'd QX investor events consistent key have the since on our for detail in we In points I'm for several

communities First, acquisitions asset $XXX more of than completed we XX value. new in with total million

We expect to seen platform drive have as these and initial part use to of positive Sonida's momentum value operating Sonida broad significant operating the assets system. to

$XXX credit Second, we put a advantageous of on new million in terms. line place secured

resulting new capital $XX the addition, accessed offering capital company million $XXX broad equity a successfully In price at of overnight in public of in a share. per

an important is a capital Sonida has milestone overnight sheet and acquisition take balance the This our than further decade. the place opportunities. as company with more to equity new registered credit Together for to maintain advantage offering flexibility in in of access facility, first tools the

I'm currently Finally, Mae maturity with of X, mortgages maturity XXXX. agreement of new reached pleased revised which a covering to recently a have XX/XX/XXXX communities, date Fannie outstanding date to million $XXX to XX we of share January that extend

capital completion rate the to as to delivering making beyond. and into allocation Fannie are us in capital families, and attractive Mae move of both retain to our employees our the residents to including results progress documentation endeavors, our successes, across our debt serve we These committed of of their subject which This investors. we and allocation same-store company XXXX fixed all indicators are improvement portfolio stakeholders, debt definitive material is extension, coupled critical and the for operational all with with maturities and allows continued

agreements. outright increasing or number which XX, November, this are the in year XX closed to early we portfolio management strategic months. of growth our of nearly front, or joint X just XX% units in ventures added communities sixth X,XXX operating past amounts On This and to of our a year the to the which owned capital-light X transaction added the total through are increase of growth

new environment ability has Sonida opportunities. the growth find incorporating new you I invest the a long-term communities into our meeting deliver We've these of robust perspective, of on set team challenge of growing line same-store The occupancy foundation quickly to acquisition strengthen proud in for for and and basis transaction both margin XX can growth and the XXXX our last points at pipeline compelling, points chosen achieving continues acquisitions both given year. this from integration against basis in of opportunity XXX opportunities. return resources portfolio the outsized the sight growing our our am an remains of team and occupancy creation. XX%, confidence of a year in family, attractive QX and performance to depth -- our high with value to weighted operating incredibly to quarterly average QX From operations

for financial the our care and living to level. removing year comments. The same-store year-over-year quarter community continues his on the in strong in margin generate margin performance gains income. of than front, will prior Kevin our income concentrated when the across portfolio a XX% operating grant reflect in operating results with occupancy strength occupancy with regions more On on the quarter increasing nonrecurring basis net operating further provide our the each independent growth continued detail

vast portfolio, our exceed the the occupancy results. we skilled not normalized quarter or and not year contributors next value purchased the the positive occupancy next milestone. portfolio view this to high-quality NOI In both our believe most several continued the teams, dynamics as third of XX% have seeing momentum continued supporting in year, are the meaningful over is well that QX from are years. importantly, operating in on about the of majority our can second Achieving an growth. investor we same-store tailwinds significant potential supply-demand creation half illustrative We and which of optimistic XX% portfolio-wide presentation, Based our as communities the of are provided the industry-wide

further stabilization acquired further recently growth as to in revenue additional communities. margin same-store on and capital of NOI compound the We and our portfolio see availability. improvement we our poised pipeline and accelerated capabilities by operating opportunity growth our opportunities, acquisition in to an expansion and robust ongoing leveraging capitalizing our deliver are our We push margin

a few in the discussing spend across I'll support confidence our communities. of fundamentals that upside minutes the ongoing our business XX our

a strength of experience. continue prioritize of development local as resident to leadership well differentiated the the We and to and regional our activities deliver programming as

second the engagement new in The and to existing continue our communities, trends strengthen has in favorable the staff and within tools to at both communities. employee level we both shown our of retention and community leadership year half develop

average length resident the On overall independent of sales and our living Joyful our Switching and score enhanced both the to measured advancement stay resident and to programming assisted contributed front, as by reviews. marketing. of in Living have reputation stability in third-party settings programs

technology and Continued implementation organically of drive acquisition and on move-ins. and development, resident incubation higher emphasis costs percentage metrics generated to conversion of to improved down leads led a has

XX% sources versus of Sonida volume prior increased Leads to X.X% total XXXX and local the XX% in lead in third our XXXX represent XX% substantial in the generated XX% portfolio. our digital channels, Lead sequentially year-over-year including platforms. quarter investment only in in organic now and from same-store through XXXX referral website, and volume in QX owned our

greater architecture the updated changes, driven from over enhancements, including have that paid pleased and third-party especially website digital significantly in paid in third-party are marketing by scrutiny strategy move-ins move-ins aggregators change search We listings outpaced XXXX.

Through communities. targeted to stabilize earnings occupancy ongoing our double-digit XX combination acquired XXXX, are newly growth a and value effective has a quarters particularly that excited to rate, delivering further cap occupancy growth, delivered expense to and the consecutive accretion. rate of improvement sales We our performance near-term leverage in drive investments of in same-store management, improvement and marketing approach significant are at significant creation

deal in deep We've included relationships our in recapitalization distressed finding year-to-date reflects ventures opportunities investments XXXX wide deck a investor our to a current approach deliver and growth investment relationships of network opportunities. the From to the to accretive and purchases through continues strategic joint each specific summary banking market. of and

our clear of consistent fluid our remains sight and additional robust by pipeline to transaction sourcing Our targeted with propelled multifaceted investment with profile and line opportunities strategy.

housing of and and flow we the accessing our a Levy, industry a to believe acquisitions for CIO, Moreover, investor to controlling high-quality industry our we deliver leadership still operations into Max see continue uniquely see by and and fully by shareholders summer. cash access investments. benefit appointed operator our this owner, structure believe and differentiated earlier We capital competition positions the reinvesting from under to suffers to corporate are are situations off-market senior stabilized Sonida pure-play and our significant While high-return spread who as value-add for leveraging was increased starting assets, we to bid-ask availability. wider pricing transactions fully limited relationships

in facility allows focused more us our at attractive wide stabilized meaningful basis equity on access acquisitions we and supportive, believe credit a from rates. and acquisitions ability operational portfolio our are to unit. pursue price significant accretive and with markets availability going of on We complete see even new combination be upside and/or NOI on communities cap aggressively to upside that in upside will per stabilization The same-store our to an is when of significant due existing pricing NOI the

on demonstrated with and net and structure resident capital lower sheet operational our In performance strong to and of revenue, delever manage Sonida's operating meaningful income, Same-store the expansion. year-over-year. rates the and of focused through intend occupancy balance yielded allocation results-driven portfolio operational a gains capital another strategies improvement to perspective, From acquisitions both summary, leverage. we continuing funding quarter community

evident to entire and creating resident excellence is differentiated the across strong as fueled a and teams and excitement pursues Sonida The by commitment a the aggressively environment. growth, living team operational experience company building further

people unfolds, newly platform. is measured results over of a the operating results. communities, future in it ongoing the demonstrating to financial now acquired continue Kevin the to strength our As of improvement discussion and and the our turn for goal delivering I'll our further strong

X. I Brandon. investor Slide today's be select starting through will Thanks, presentation, with pages walking of

we consecutive achieved Some portfolio. occupancy a for quarter our of XXth growth of our financial same-store highlights,

communities As impact received the same-store the excludes community XX.X%. and QX adjusted year-over-year XXXX net past in a a basis, state grants months. the reminder, which X portfolio nonrecurring the $XXX,XXX excludes XX operating increased over same-store On income acquired of

the portfolio's NOI Brandon blended and rate strategic as in operating the was continued increase the in in variable rate profile. touch operating presentation. optimization I company's as detail resident the Earlier, of achieved its of both occupancy, more upon increases referenced expense the plan. X.X% expenses Beyond on later will execution well growth through growth

Beyond very events significant development. operating that our and results, are capital the our the of pleased next X foundational growth with company's phase to we strong are

company the for fourth August, I capital the the a facility discounted will provided July debt bolt-on million in public million a secured acquisitions. and with additional proceeds In offering. providing discuss powder future acquisition gross credit bit that $XXX payoff raised in a closed and senior $XXX These as in the equity company that closed of and quarter for dry well a as transactions

We buying of below opportunities we similar expect communities is the Xx, consistent transactions performance, to with with company's public these portfolio and improving peers. improving believe and will be achievable accretive stabilize a continue acquired, further debt-to-EBITDA same-store equity the value outlook we bit delevering goal as a that industry ratio

$XX the Rounding from loan importantly, discount communities represent $XX.X that stack months. past November require The X, on company mortgage ability principal on debt X this or balance. discounted discounted legacy included in the the XX lenders the and the maturities loans million a These the on material communities the with with August, company's modification to of entered past in quarter make the of a the XX which million payoff out Texas. On the X made million restructuring a loan communities last more of represented company balance. payoff highlights addressed having cross revised X into company modification $XX.X its the X for XX% in agreement XX

X.X% loans outstanding remaining account approximately balance. the The debt for X of

rate level ahead X.X% pricing in deeper on memory Moving structures due saw of and company company's same from part a increases level. revenue, care which developed quarter care into fees rates, the increased the ancillary sequential quarter recently had to Slide in other revenue rate similar the fees year-over-year to large In Diving streams exclude onetime community XXXX. XX. Resident its the decline. QX,

to industry, on percentage of seasonality is the rates the X.X reemergence attributed from the XXXX Beyond decline QX occupancy mix. within

increases increase lower-rated Specifically, living with occupancy net XX% had rest the by in composition modest and an lines. occupancy of of memory living in driven occupancy our higher quarter-over-quarter increases independent rated our assisted care the

weighting continue with overall basis the and concessions and trend. stability to over conversions direct rate Brandon's service comments and of on order absence supports and X-year discounts percentage offering the period. more the The Finally, downward absolute of and it's quality discounts source both consistent efforts along revenue profile concessions company's of a internally leads a basis and same

to Slide of cost labor Moving on trends revenue operating the continues incremental XX, stabilization. show to to expense incremental

XXXX consistent burdened For increase holiday from more percentage purposes QX that QX's of XXX This QX a year-over-year points. full-time with the XXXX QX. point the basis slightly down compared XXX revenue is with same of the On as as seasonal by from X quarter. was improved to employees a more is and metric. comparability, X using basis note labor workday to total basis, number XXXX in QX The of QX previous same-store

which X.X%, the Slide the signs comprised trends increase absolute period. slightly in from On also $XXX,XXX annual increased is are sustainable are showing to the base from stabilization. occupancy entire XXXX. the grows. average from nearly of portfolio's in to On below nonlabor these of continued approximately believe XXXX these or margin QX amount over levels Increases basis, expansion indicators at was XXXX operating expenses increase We costs XX, utility prior costs sequential wage as rate same The continued inflationary QX quarter. an QX

XXXX. For increase same is the sequential from the consistent to relatively QX seasonal QX XXXX comparability, with increase

As attention sheet. above, programming. marketing cost continues lower sales stated Concluding and balance local company we turn to will QX the on our highlights, drive the through remarks of digital financial to its the sales

expenditures, third generating and invested than have maintenance. more the quarter, capital capital both technology across year-to-date investment we the On both million community-based $XX front, including through targeted and capital NOI recurring

feature positively projects, XXXX. expect these in units We converted performance impact to targeted NOI which additional or resident

is -- of sheet. the to debt Our company its focus continues delevering balance comprised on

principle million maturities date the the debt Mae in of that of on in with XXXX balance the date financing. is that communities individually X, of Fannie has released, for of years. all X XX mortgage result communities would This will $XXX agreed its total Mae, As terms company a Fannie extend with January a XX by under maturity

term principal In first company both exchange for the the the loan to make term, This series loan a quarter. revised of totaling million expected over payment transaction will paydowns $XX extended the parties. the definitive is of subject this by with documentation

last relationship Mae with appreciate over collaborative nature we the of always, As our years. Fannie the X

all under credit facility. company financial required revolving its the mortgages is today, of As and in compliance with covenants

with value Prior own NOI on some to million for NOI trajectory, an and as the data we turning for to back $XX general illustrative the points occupancy Brandon, same-store wanted yields million, percentage, by well I occupancy shareholders. XX% and portfolio which history XX% are of presentation to contribution. industry spend time annualized QX margin the Starting to incremental creation $XX path margins company's our selected both our recent of supported NOI as our to applying

methodology, joint incremental our assume respective NOI. this of share being produce owned illustratively future the ventures an combined would for similar approximately makes assets NOI on the no $XX acquired rate calculated this Under current rate layering based million XX on our and Note ownership assumption with year total in is be would that stabilization million. this in-place communities Additionally, $XXX growth line levels. achievement on at chart

communities. XX costs the already incurred To company has the majority to additional G&A support needed date, of the

recently In on approximately our closing, As operating to reminder, the Back encouraged you, a of improvement costs public acquired communities. we the the including the be portfolio, trajectory million to realize ability by company $X.X company incurs to performance of annually. Brandon. continue

by X to focus to months our in including year, growth continues an approach operator investor exciting and existing to differentiated building year-over-year of ongoing to acquisitions, identification within Thank fulfill our XXXX pipeline, our internal to in our residents, recurring growth. opportunities is shareholders primary when recent remaining it's portfolio time consistent for the call. to business. concludes positive for an investments a the living. our external best-in-class this with flow on today's benefit participating, conference in achieve our the Kevin. both Sonida and continue remains Sonida . We positioned you in deliver present in-place owner, firmly With coupled Thanks, expectation with year-end and employees and completion accretive all a of senior to believe commitment and cash

you thank for gentlemen, joining. and all Ladies

now may disconnect. You