Sonida Senior Living (SNDA) 8-K Results of Operations and Financial Condition

Capital Senior Living

Company Presentation

Exhibit 99.2

2

Forward-Looking Statements

•

The forward-looking statements in this presentation are subject to certain risks and uncertainties that

could cause results to differ materially, including, but not without limitation to, the Company’s ability to

complete the refinancing of certain of our wholly owned communities, realize the anticipated savings

related to such financing, find suitable acquisition properties at favorable terms, financing, licensing,

business conditions, risks of downturns in economic conditions generally, satisfaction of closing

conditions such as those pertaining to licensures, availability of insurance at commercially reasonable

rates and changes in accounting principles and interpretations among others, and other risks and factors

identified from time to time in our reports filed with the Securities and Exchange Commission

•

The Company assumes no obligation to update or supplement forward-looking statements in this

presentation that become untrue because of new information, subsequent events or otherwise.                           

3

Non-GAAP Financial Measures

•

Adjusted EBITDAR, Adjusted EBITDAR Margin, Adjusted Net Income and Adjusted CFFO are financial

measures of operating performance that are not calculated in accordance with U.S. generally accepted

accounting principles (“GAAP”).  Non-GAAP financial measures may have material limitations in that they

do

not

reflect

all

of

the

amounts

associated

with

our

results

of

operations

as

determined

in

accordance

with GAAP.  As a result, these non-GAAP financial measures should not be considered a substitute for,

nor superior to, financial results and measures determined or calculated in accordance with GAAP.  The

Company believes that these non-GAAP measures are useful in identifying trends in day-to-day

performance because they exclude items that are of little or no significance to operations and provide

indicators to management of progress in achieving optimal operating performance. In addition, these

measures are used by many research analysts and investors to evaluate the performance and the value of

companies in the senior living industry.  The Company strongly urges you to review the reconciliation of

net income from operations to Adjusted EBITDAR and Adjusted EBITDAR Margin and the reconciliation of

net

loss

to

Adjusted

Net

Income

and

Adjusted

CFFO,

each

of

which

is

included

at

the

end

of

the

Company’s earnings releases, along with the Company’s consolidated balance sheets, statements of

operations, and statements of cash flows.

4

Investment Highlights

•

Value leader in providing quality seniors housing and care at

reasonable prices

•

Well positioned to make meaningful gains in shareholder value

•

Substantially all private pay with strong cash flow generation

•

Industry benefits from need-driven demand, limited new supply and

improving housing market and economy

•

Achieving solid growth in revenue, occupancy, EBITDAR and CFFO

•

Executing on disciplined accretive growth initiatives through

acquisitions and conversions to higher levels of care

•

Solid balance sheet

5

Company Overview

•

Capital Senior Living operates 116 communities in geographically

concentrated regions with the capacity to serve 15,100 residents

Number of residents by State

Greater than 2,000

500 -

2,000

Less than 500

AR. 

173

AZ. 

189

IA. 

122

IL. 

650

IN. 

2,247

KS. 

165

LA. 

133

MI.

429

MN.

173

MO. 

662

MS.

143

NE. 

668

OK. 

143

TX. 

3,720

CT. 

178

FL.

226

NC.

593

SC.

669

NJ. 

98

NY. 

387

OH. 

2,060

VA.

317

WI.

341

GA.

70

MA.

87

Owned

58%

Leased

42%

CA. 

408

Resident Capacity By State

Property Ownership Structure

6

Resident Demographics at CSU Communities

•

Average age of resident: 85 years

•

Average age of resident moving in: 82 years

•

Average

stay

period:

2-3

years

•

Percent of female residents: 80%

•

Resident turnover is primarily attributed to death or need for

higher care

7

The Capital Advantage: Senior Living Options

Independent Living –

51% of Resident Capacity

•

Average 115 units per IL community with large common areas and

amenities

•

Supportive services, wellness programs, social, recreational and

educational events

•

Average monthly rate of $2,422

•

100% private pay

•

Average length of resident stay is 31 months

8

The Capital Advantage: Senior Living Options

Assisted Living-

49% of Resident Capacity

•

Average 68 units per community

•

75% of communities offer AL

•

Assistance with activities of daily living including medication

reminders, bathing, dressing and grooming

•

Average monthly rate of $4,020

•

Substantially all private pay

•

Average length of resident stay is 24 months

9

The Capital Advantage: Need Driven Demand

U.S. population 75+ years old is estimated to be 12% of the population by

2030 compared to 6% in 2012

Source: 2010 Census Summary File 1 and U.S. Census Bureau, Population Division

U.S.

Seniors

Population

Trends

(75+

years

old)

15,000

17,500

20,000

22,500

25,000

27,500

30,000

32,500

35,000

2010

2015

2020

2025

2030

•

Only 1.3 million units serving a population of 18.9 million seniors

•

Current 6.9% penetration rate implies demand growth of 40,000 units per year

10

The Capital Advantage: Limited New Supply

Source: NIC MAP Trends All Markets Q3 14

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Absorption

Inventory Growth

11

The

Capital

Advantage:

Senior

Housing

Occupancy

Trends

Source: NIC MAP Trends All Markets Q3 14

86.0%

87.0%

88.0%

89.0%

90.0%

91.0%

92.0%

IL Communities

AL Communities

12

The Capital Advantage: Competitive Strengths

•

Value leader in geographically concentrated regions

•

Experienced on-site, regional and corporate management

•

Larger company economies of scale and proprietary systems

that yield operating efficiencies in highly fragmented industry

•

Solid reputation in industry and 95% resident satisfaction

•

Employer of choice

•

Solid balance sheet

•

Strong Board of Directors

13

The Capital Advantage: Strategy

•

Focus on our core strengths

•

Capitalize on competitive strengths within each of our regions

to maximize the cash flow generated by our communities and

our operations

•

Capitalize on the fragmented nature of the senior living

industry to strategically aggregate local and regional operators

in geographically concentrated regions

•

Increase levels of care through conversions to Assisted Living

or Memory Care units

•

Attract and retain the best talent in the senior living industry

14

2014 Business Plan

•

Focused on Operations, marketing and growth to enhance

shareholder value through:

•

Organic growth

•

Proactive expense Management

•

Accretive acquisitions, unit conversions and community

refurbishment projects

•

Utilization of technology

15

2014 Business Plan: Organic Growth

•

Increase average rents

•

Each 3% increase generates $11.8M of revenue

•

Improve occupancies

•

Each 1% generates $4.0M of revenue, $2.8M of EBITDAR and $0.06 per

share of CFFO

•

Convert units to higher levels of care

•

Cash flow enhancing renovations and refurbishments

•

New branding strategy, eMarketing and website enhancements

•

Implement software programs to optimize care plans and level of

care charges

16

Solving to Achieve 90% Occupancy

Q3 2014

(1)

IL

AL

Total

Total Units

5,775

5,341

11,116

Occupied Units

4,944

4,816

9,760

Occupancy %

90.2%

87.8%

Planned IL to AL Conversions

IL

AL

Units

(360)

360

At 90% Stabilized

Occupancy

324

Occupancy After Conversions

Stabilize

IL

AL

Total

Total Units

5,415

5,701

11,116

Occupied Units

4,944

5,140

10,084

Occupancy %

91.3%

90.2%

90.7%

(1)

Excludes CCRC’s , Autumn Glen, and Veranda Club

85.6%

Note: Conversions are subject to customary approvals

17

Canton Regency Remodel Concepts

Existing Atrium

Concept Atrium

Concept Bistro

Concept Internet Cafe

18

2014 Business Plan: External Growth

•

Strategic acquisitions of high quality senior living communities

to

enhance

geographic

concentrations

–

16.4%

cash

on

cash

returns

*Based on share count at time of transaction      (in millions except number of communities)

2011

2012

2013

Q3 14 YTD

Combined

Purchase Price

$83.4

$181.3

$150.4

$145.6

$560.7

Communities

7

17

11

7

42

Units

551

1,367

881

762

3,561

Debt

$59.3

$129.5

$112.3

$109.3

$410.4

Equity

$24.1

$51.8

$38.1

$36.3

$150.3

First Year Revenue

$21.3

$49.1

$35.1

$34.2

$139.7

First Year EBITDAR

$7.3

$19.1

$14.1

$13.3

(1)

$53.8

First Year Cash Flow

from Operations

(CFFO)

$3.4

$9.1

$5.8

$6.4

(1)

$24.7

First Year CFFO per

share*

$0.13

$0.34

$0.20

$0.21

(1)

$0.88

(1)

Net of $0.9 million of management fees related to communities previously managed under a JV

agreement

19

Operating Performance

•

Revenue and EBITDAR growth

•

EBITDAR has increased at an 18.0% CAGR on a 15.2% CAGR in

revenue since the beginning of 2010.

•

EBITDAR margin increased from 29.9% in Q1 2010 to 35.6% in Q3

2014.

*

As adjusted in press releases

24.0%

26.0%

28.0%

30.0%

32.0%

34.0%

36.0%

38.0%

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

Revenue

EBITDAR *

EBITDAR Margin % *

20

Comparative Operating Metrics

Note: EBITDAR and CFFO are as adjusted in press releases.

Q3 14

Q3 13

% Increase

Total Revenues

$ 98.5

$ 88.0

11.9%

Adjusted EBITDAR

$ 33.5

$ 29.3

14.4%

% Margin

35.6%

35.2%

Adjusted CFFO

$ 11.1

$ 8.9

24.0%

Adjusted CFFO Per Share

$ 0.39

$ 0.32

21

Balance Sheet

•

As of September 30, 2014 (in millions)

ASSETS

Cash and Securities

$ 39.3

Other Current Assets

25.5

Total Current Assets

64.8

Fixed Assets

774.2

Other Assets

40.8

TOTAL ASSETS

$ 879.8

LIABILITIES & EQUITY

Current Liabilities

$ 90.2

Long-Term Debt

587.3

Other Liabilities

58.8

Total Liabilities

736.3

Stockholders’

Equity

143.5

TOTAL LIABILITIES &

EQUITY

$ 879.8

22

Investment Highlights

•

Value

leader

in

geographically

concentrated

regions

•

Substantially all private pay

•

Need-driven

demand,

limited

new

supply

and

improving

housing

market

and

economy

•

Experienced

management

team

with

demonstrated

ability

to

operate, acquire and create shareholder value

•

Accretive

acquisitions

in

highly

fragmented

industry

•

Conversions

to

higher

levels

of

care

with

significant

revenue

and

cash flow growth

•

Strong cash flow generation

•

Solid balance sheet

Capital Senior Living

Company Presentation