CSU - Earnings call transcript Q4 2017 | Sonida Senior Living, Inc.

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Operator

Good day, and welcome to the Capital Senior Living Fourth Quarter 2017 Earnings Release Conference Call. Today's conference is being recorded. The forward-looking statements in this release 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 find suitable acquisition properties at favorable terms; financing; licensing; business conditions; risk of downturns in economic conditions, generally; satisfaction of closing conditions, such as those pertaining to licensure; 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. At this time I'd like to turn the call over to Mr. Larry Cohen. ahead. go Please

Lawrence Cohen

the areas much. and platform, of improvements broad-based operations Last and Living's quarter, eliminating very Call. our including started and to and sequential benefit restructuring across same-community basis. our improving finish our about rent welcome am incentive and all with year-over-year management Senior Thank our health serve I in better and programs, CFFO we growth operating our Quarter Good on team, and Senior our community making to to positive the a concessions Fourth to enhancing adjusted Earnings other for operational among Full Capital Capital pricing bonus spoke residents, pleased simplified leveraging scale, Living EBITDAR you NOI, report afternoon, year adjusted Year I a XXXX both actions.

executing We reliability, day on are everything do. areas that focus have initiatives a that and been of our to maintaining diligently to excellence sharpen we every the and namely operational culture important on most in those us, accountability high

drive our strive fruits and excellence change, the Lee, Officer, labor. of Chief new improve and to are to event an in increasing shareholders. this Brett for beginning our value ongoing initiatives to our and in drive to improvement. sustainable financial is Operating X-quarter helping day been commit and ultimately profitable our for culture goal ourselves Our The have improve every a we deliver we continuous to of not performance, a see growth has place and operational are effort but instrumental

more our from the basis points of basis quarter quarter from compared quarter the to XX% the XX XX third the third We second quarter, highlights since third occupancy quarter. averaging Same-community and better across XXXX. the in operational median to XX points sequentially over a and XX some communities saw with improved XXXX. XX% trough quarter fourth or occupancy portfolio, increased occupancy our progress points to basis increased Turning from

increase the monthly in an of We since same-community also XXXX. of X.X% rent quarter average saw fourth

efficiencies and we of As always, residents we that the occupancy, the compared year. in with higher we cost improvement are improved a achieved income last base durable of maintained we expense is resulted on monthly of operating same-community increasing last To approximately of quarter communities. end, lower same-community in our prior the focused to of the average expense combination the same third #X and X.X% a couple structure. to the that rent our priority, expenses months in and work our care savings operating from safety net of the The The health and period in year. X% quarter, fourth maintaining level increase consistently driving

the impact severe the initiative As flu health first experienced significant we know, residents you in most of devastating that this we company's attrition year's protect all seen years. Having from been national diseases our have flu forward. better season the a has of in to the public last wake undertook going season, communicable event many

and other winter lose months. the diseases during We even able a our increases our months, of across and during occur to hospitalizations deaths infections, couple these health employees response and the systems outbreak. reductions the XXX XXXX-'XX experienced with significant year the been communities that as combat deaths comprehensive a the in protect the expect Through occupancy always advisory protocols, as to issued launched in our As flu prevention resulting the resident and soon we and epidemic, plan first have we winter protocols, of in we CDC to an nationwide. flu months on proactive residents attrition increase in from

residents our and kept leasing healthier to during However, season. our our touring communities allowed the protocols and flu continue flu

amount occupancy the worst lowest units a had February we the our the XXXX, result, flu over despite XX of since past loss season net X net loss year-to-date, net also of the approximately units As better that years, than the of and hit X We early. XXXX. year the months loss from of in considerably benefit XXX this flu is in should fact first

senior term and returned right I'd number subsequently infections Senior to able Capital American community. XXXX. that thank place residents, As the projecting do tremendous a mitigate loved families flu environment. best with ranked their in hospitalized. our receive rich for I an ones rooms, above the well recent resident industry third that Study nation's to the mission that we why our living seniors. Overall the educate residents our providers in and an so we our core for the for letters all the in hospitalizations, and X thank issued and limit Living given Capital All details make a effects This to with to our helping taking flu residents' and order Living. The Through and been unfortunately inaugural with the and Senior in share was in provides have Living X.X% of key than our services two of the services; to how residents experience, preventative factors response respective all healthy that a That's satisfaction and every for like high-quality position measures to industry to largest activities; in their resident of take the to want I including special Senior occupancy factors a X.X% in time Association, report to residents industry short future orientation. full a in been much to the the employees sure brief food caregiver to Housing at from efforts less communities dedication as growth of have J.D. years of standpoint our with of had death lifestyle residential with setup years. to to the in on building and been in residents frequent also Satisfaction employees resident appreciation result, of Senior average. family plan senior we thrilled nature, that moment Power satisfaction. for study Delivering Capital we are write sincerely efforts, high-risk three interesting better measured are resident's across in previous the Living than service occupancy measured care than new all their job information residents care satisfaction of the am The XXXX staff; to have cost highly-effective continue Senior we prevention were for other year day. is grounds; and flu and and afternoon, you beverage; we the

location we for of twice our our annual reason Similarly, among convenience price, I'd CSU. reform of on as conducted communities. satisfaction residents received touch a its XX.X% the work outlook. which the Living of The to is of to staff what is third staff service community quality important a on independent believe resident hard testament economic like by is satisfaction selected. survey, showed as study and own results briefly of our result and the focus and The and was all as instance, For top Capital Senior recently party. highlight are quality XXX recent across across the these of true surveys differentiator tax customer country the results the an the

tax of with Tax benefit operating of believe, to estate ownership of are and from XX% of afforded including care the fully treatment expected under and improved senior real Cuts the the positioned and to confidence. estate at to communities Jobs favorable allows our continue expense the us in real intersection to stronger economic Act, interest And deductible. strategy consumer our operated well Our election we we have growth participate

is be fixed residents, higher benefit to our from by of would Our growth and penetration growth This interest and expected Higher rates. in supported rents supply, occupancies robust higher whom organic more new on rates. to so also expect would higher interest demographic increases growth. see further communities, rates live would we constrain at most expected near-term driving income,

in further committed values. This We having leverage long-term, of economic our position attractive rates. positive performance, expect owner real from at communities, an rate, low improving from nonrecourse estate resulting As entered stronger mortgages our magnify to a and most we would of remain platform. organizational fixed place operational CFFO and in benefit XXXX strength and to EBITDAR, higher of further

implementation growth areas the our accretive to and for prudently healthcare a including platform; continued leadership also always, potential acquisitions. considering a information organic number year, additional driving service key seeking common have strengthen as affiliations; continuing out while through value-enhancing electronic of opportunities and focus team; of We

advantage on efforts believe Living's the EBITDAR senior Brett we call Operating provide to Senior full us giving areas, strategy these in pure-play, increases to a and as progress our private-pay actions leading over consistent revenues, in capitalize more that result strong see results reduced to focused competitive long-term We owner/operator. time, and sustainable execute expect these will We be a increases platform and growth our Officer, have Capital operational of our foundation expenses to and for more would I including beyond. over our end believe about place XXXX right in improve in in to CFFO. operating and we like the now why and details excellence hand will Lee. Chief the Brett housing

discuss will fourth comments, Following financial our results. Hendrickson, Financial quarter Officer, Chief Carey Brett? Brett's our

Brett Lee

much, you Thank afternoon, everyone. good and Larry, so

approach on around new which quality, excited a During that to great centralized shared five implement our progress I'm report I Living made more growth. journey our uniform cost in to to Capital core have has and Senior performance last we our model, standardized embarked pillars people, focuses creating of earnings that efforts. a service, on operating call, a

to months, implemented financial improvement. our system, several on-site daily quality of facilitates last operational, and which lean the continuous a community Over have drive key daily leaders discussions metrics we management among

community which We engagement on resident staff improvement new industry-leading customer uniform across will resident our service create platform, experience our have every a portfolio retrained in already and drive in scores. and all our leadership

grids the that our levels the our current expenses and budget hardwired occupancy rebase rolled third to to in quarter margins. standard grow accountability have templates our and sustainably were We NOI staffing out

health to year's Senior We Senior behalf on in take their initiative residents national season. that proud particularly of our to home, it it attempt a a trust Capital we is responsibility seriously. effects placed sacred public of also Living virulent am Living that believe call very that by an the us of choose negative Capital undertaken is has is that residents and mitigate the in flu I this the

keep As and of and our in competency residents protocols preventative preventing flu infection that and the the rolled come. out season types all of training, years XXX our diseases advance to for communicable communities measures control level serve all to healthier the Larry in staff raised discussed, were to have should protect of

able slowed as Northeast impacted we of effects for dipping minimize the bad a pattern While our the we of and winter in costs. flu, our in This traffic in in X also potential were weather expenses residents in and Midwest to January. were historically utility the by and areas, below snow these weeks December with temperatures rise several caused the communities removal

sales transient our the and this expect expenses. We is have corresponding as normalization improve weather issue weeks in activity begun in seen of that a already in a to has an recent increase

growth We XXXX. have also engine company-wide our reignite initiatives to into move as implemented we several designed

helpful accountability structure field-based in very metric-based structure in to regional sales communities. team into organizational change recent Our vertical reporting has a sales the driving activity our a for leaders dedicated process the sales moved been that

training We employed continue in every to sales on of the based organization-wide evidence-based residents. sales our interaction are initiatives tactics secret with results that shopping optimize being monthly to ensure prospective

the to new those X,XXX our and digital alone. with to platform efforts optimize prospect in media particularly led social These outreach markets our were has work to expectations. marketing, dipped January leads have concerted in We occupancy sales enhance effort electronic below over

months in details have hope improved in these and while for also enhanced as We reconnect call status center, enhanced health cold in more share We centralized to proactive later and outreach call these the recent growth have to as to response with potential but occupancy residents leads, that this three systematically large the staff result that serve. We course coming in care consistent We've overall for earnings to believe continue community-based of with these care newer our systems initiated recently in efforts drive will of potential anticipate serve our relationships rapid XXXX. their of partnerships and older to we future program acute throughout occupancy that more well focus resulting leads creating accountable the also care coordination a affiliations referrals. on to improvements year. sales will grow only not discussions will

quality competitive enjoy advantage believe people. also is that to company can hope our sustainable only the that a the We of

to wage serve an are feedback of independent and Senior by which turnover for us and company's and company. in receive third will survey development, We each minimize engagement survey, our company translated those and that for satisfaction. share brings excited party. of allow strategy the We recruited into as will across resident Jeremy months, reduce Human work in the the have on be employee The our retention improve new plans compensation we employee Mr. of the personal Resources talent interest major a to employee from fields will experience. that experience embark us continue enhance taking feedback will Falke In pressures with to targeted we Jeremy coming believe this retention. wealth who President a be we market Vice for of conducted the engagement, first to to

we identifying and for to to reduce diligently Finally, expenses have conversation, work executed our labor. value to to contract achieving last we rates operators national Since continue in contract of our field. our add a the in reduce economies and scale

must labor greatly X.X% of our July will fourth overall this revenue the we predictable quarter our of While more in unusual of of XXXX, contract in of the contract have high revenue decreased an the used. when of utilization circumstance costs in to agreement from X.X% make be labor average

operators invoicing supply that enhance finalized revolutionize our compliance supply to platform our allow an announce drive our to purchasing, platform earnings reduce can accounts built anticipate will relying than this a field implementation spend April. platform the and eliminate the down so costs The in payable We more track their across agreement their in also early use and centralization also with call. spend-down in the are of company discussed manual in chain limited for procurement in through approved that GPO purchasing We that paper we our variation formulary will rather have will live on that have go guardrails also last food accountability we sheets. budget will that against our in current uniform contracts. program to excited a realtime the budget systems This

and our spend goal reduce categories fixed third with from to utilities, a evaluate local telecommunications and We migrating national to have enhance waste as also all regional party engaged in of such management the cost towards services. agreements into agreements IT, costs and

already and completed are process, still produce have we savings reduction initiative this when of significant While early coming material our costs the months. agreements our in review fixed opportunities their expect we current is of in will identified a the

have the every that the the to for implement residents these my importantly, impressed embrace to care to humbled frontline operations, work they off we to hand be our call passion we It to our for by changes leadership that incredibly with serve. of the that have quarter. that Carey fundamental discuss discussed to continued pleasure the outstanding changes Most results CFO, am and the demonstrate staff, energy provide While and our company. that excitement fourth just have they financial is the I the have shown to they day Hendrickson, future to now I we our to the

Carey Hendrickson

better housing company's sequential of result Houston include Harvey loss. and both initiatives. results execution in Larry in we press X%, year-over-year In communities that very I'm translating licensed we peers, I'll continue focused their In achieved X good pleased Brett industry remainder on than renovation as interruption non-GAAP the significant results. the and improvements EBITDAR restores fourth as my our discuss are is platform to economic described that the repositioning, NOI Hurricane growth Brett, senior across the are afternoon, since growth a and X insurance into everyone. and our measures same-store higher that you, the our communities result in of units and conversion. quarter, of undergoing broad-based measures The our operating non-GAAP business exclude impacted CFFO excellent Thank a note and by already that lease-up the financial comments, release, the have significantly of approximately or and

was the shown communities lost the communities increase quarter, been the for quarter the of them the fourth reported increase $X.X would X X.X% over XX as Page $XXX Houston the company's Houston of monthly hurricane, approximately to approximately quarter over revenue fourth less measures This release, million approximately make of million, revenue include measures, Hurricane the fourth would the of by since consolidated of or they results quarter $X.X of XXXX. XXXX. XXXX. the fourth Including statistical Harvey communities of was on statistical have from or the X approximately exclude Prior million these company for meaningful. The average million However, $XXX.X of total an the fourth X% and X revenue quarter residents no earnings of currently an the been would which impacted our to have $XXX,XXX. for the revenue have revenue

the and expenses operating quarter the maintained throughout of in due this $XXX,XXX housing that $XX.X a created $XXX,XXX year November in expense XXXX senior of even August quarter. the lower of to the of the Our expense fourth to quarter million, XXXX. base decreased We acquisition September community with fourth we of in additional in fourth

the historical were year, first in of returning September. in flat last high Our to normalized were with levels three the costs, generally contract which quarters after labor year

BI Harvey. Houston X continue at complete months communities X or lost expenses continuing this that level cover the a until in net after credit from the whichever we with had the is to expenses business these coverage BI communities prior we have we year XX restoration to for is million comes Hurricane quarter of these the both related communities, The second these operating begin restore we intent to residents quarter of of and the XXXX. $X.X average the communities communities goal hurricane. insurance Our these income of our impacted at to included reach of our and the communities expect any early admitting on our fourth operating The Remediation revenue revenue adjustment will in by first. of to schedule, interruption that we previous

Our fourth million million XXXX fourth in of $X.X of general to and quarter the expenses quarter were administrative $X.X compared the for XXXX.

costs Excluding our $XXX,XXX higher G&A increased in the to fourth quarter last transaction from years, quarter of compared expense expense. employee net both as the due year, partially fourth healthcare to

as revenue was quarter X.X% XXXX percentage expense to of management G&A in Our a the quarter under the XXXX. of compared X.X% fourth in of fourth

noted tax liabilities $X.X we deferred our of million limitation earnings we as direct future assessment record of the related as in noncash of did reform, As charge our assets of matching a tax the NOLSs. in and relates the years to our future it a result particularly of impacts release, and

million or in up million conversion. million is Our are adjusted to lease-up the fourth from XXXX, communities not of $X does significant include fourth related renovation X $XX.X $XX.X and repositioning, XXXX. of the which EBITDAR EBITDAR undergoing the was in quarter that quarter This of

compares in quarter guidance of million into in This fourth Our the quarter. $XX.X that end provided we XXXX. fourth adjusted the CFFO quarter to coming $XX.X the of was XXXX, which was the the at high fourth of million

fourth over prior X.X% or million $X.X the quarter increased year. revenue of same-community the Our

XXX quarter increase quarter Our was the decrease same-community XX.X% an basis of third XX last occupancy fourth the from year. points a from fourth quarter, basis of the was and points in which of

the expenses or X.X% the increased of year. of Same-community versus Our last same-community $X.X quarter increased from fourth XXXX. fourth average quarter X.X% monthly only million operating rent

fourth versus increased costs of labor the XXXX. employee in only Our the X.X% fourth quarter quarter

decreased Excluding care communities that of over converted units actually levels last our have the to year, labor higher costs employee X.X%.

over XXXX. the fourth our quarter, Our quarter the of X.X% in increased decreased food X% costs utilities while fourth

fourth by revenue reversing fourth NOI of quarter X our approximately result in first our XXXX the expenses compared team, income quarter of year-over-year XXXX. the a in management ops of trend decreases our excellent of experienced we X% operating quarters net same-community XXXX, and the As as growth that to the our in of of increased the

including ended at We of the Looking cash equivalents, balance cash the with briefly sheet. million restricted cash. and $XX quarter

additional During reimbursements was recurring the on for at million, capital are our million projects improvements $XXX,XXX expect CapEx. communities, spent our expenditures, fourth REIT completed. of We which leased and partners receive as $X.X reimbursements quarter, capital we received from we $X.X for of to

with debt duration approximately XX, balance fixed and December for was Our average loans At of our X.X%. rate average bridge after. $XX.X interest debt except of was $XXX.X debt our at maturing approximately all at of interest that XX% debt The XXXX in approximately mortgage million our XX a million. December at weighted totaled rates is X.X two of years,

expect Looking of expense XXXX, momentum we established continue through into growing we year. quarter we the we as the expect to in the to to implementing XXXX of Brett have initiatives noted, a that second the months go last operating we we're XXXX, which that impact several have as And additional XXXX. in

Larry the noted, started demand this compared average XX% year, previous move-ins years. very strong January for up X to January with move-ins our As

and year, side our low which for deaths importantly, attrition we've keep equation, has noted, the so incidents Larry touring. level as us of to had this flu of communities the a far open also On allowed

that higher of However, there months, the are January. the effects result at the their which in month rates attrition of occur also highest in other seasonally in winter diseases did

demand, to the than of was the years. However, previous due significantly the year decrease three in or residents last strong the less average

any of So occupancy at seasonally better a this from time while years. last position is we're considerably the standpoint X our -- XXXX in in an occupancy going any at forward in than lower,

to range CFFO $X.XX expect X% we'll year calculate of we full All range it If When growth approximately to X% a NOI results to we to full on our to provide $X.X for to of year XXXX in XXXX year with our translate CFFO same-community year repositioned XXXX. compared our in considered, communities before the a X.X% things for numbers X, one for X January X% would the on acquisitions our expect XXXX, add of beginning range CFFO. share full acquisitions XXXX in range report our as XXXX. XXXX non-GAAP million range. also per share per grow addition currently full We the before updates were basis, into our XXXX, XXXX quarterly to $X.XX to CFFO to

were the Brett to in quarter In quarter. year harsh line colder-than-usual expect first will each not to to seasonal quarterly at specific trends, over We provide do quarter things for of even along. temperatures provide we we to winter utilities then quarter financial occupancy second this on decline consider of lowest in to to the as the in seasonally but the decrease we higher winter first utilities, go guidance, year previous grow higher-than-usual currently fourth as Midwest year quarter plan we of the look upper the quarter. related expected in the January from normal the weather. due information XXXX quarters, seasonal in our each The Currently, due to expect and and the are as a remaining cold we be the and occupancy noted, historically quarter with and to Texas. the to quarters to sequentially increase to decrease begin

the utilities in of always to our and will implementation significant as most with in a on days the the also a quarter our expect quarters due impact We growth the number quarters additional of expense fourth in seasonally continuing degree. weather will third third Fluctuations first highest the into but quarter, initiatives. are Utilities growth lesser extremes. to

than lowest second is quarter. mildest $X utilities approximately with quarter The lower the quarter quarter generally weather the the typically first and second with the million utilities,

the increased hourly in labor compared of second day third mostly approximately to additional quarter, the of the approximately to represents utilities third expense quarter by additional million day workers due $XXX,XXX by a food additional $XXX,XXX in in to as a for quarter additional fourth compared quarter. approximately an and the quarter decrease as Our Each costs. then $X of followed

third days has The quarter but quarter days, in first XX second and days, quarters. XX has the the fourth XX

our rates, revenues of not are Our impacted the number are rates daily days monthly by rates. as not

the $XXX,XXX more fully impacts expect in third to combined. the all currently as quarters impact we can't for XXXX. and $XXX,XXX we per impact items some year, show second complete to the the Other yet quantify them quarter quarter, perhaps of fourth and to While as expense a the additional of consider in both much initiatives,

We expect our level increase year-over-year. labor approximately X.X% to a at cost to X% increasing in continued moderate to XXXX,

grow We The contributions X at costs will in will first we're expect renewal our since quarter XXXX. January results up. net from non-GAAP beginning be communities as to in of to communities employee X continue experienced levels the repositioned we've our June the lower that the and adding through minimal our year the healthcare those are leased

in vacation expected systems. to primarily to initiatives team some we investments people, in These note, the are higher in additional cost. operations in financial adjustments the historically, improved important the time begin results the acquisition for year-end increase have of result the and due taken pursuing end in in G&A exceed standpoint, in expect year. year. of our expect Also XXXX half the covering We we and that G&A expenses to to related accruals December of holidays to acquisitions an employee do shifts the at second to From of various and the

all-private a growing competitive call scale, supply fragmented competitive a economy. with company over I in pay toward markets, business from believe those our in open our and questions. included demographics, housing in CFFO strong differentiated that as But our now us create long-term in to remarks, a metrics new local formal need-driven time up provided. a positions We of have may in acquisitions $XX guidance well year. execution our outstanding and real clear key not are larger and successful highly the strategy value like that shareholder concludes the of long-term advantages more the approximately I for demand, million limited and the will weighted acquisitions substantially result That benefits and estate market we XXXX, the in end industry in model So growth to would

Operator

with will [Operator Instructions]. question come Vanacore our And from Chad first Stifel.

Chad Vanacore

for thinking on just I'm about your So occupancy higher outlook XXXX.

So far? occupancy And has what factors then are driving trended that? year-to-date how so

Lawrence Cohen

I two the for first months year, about said earlier, XX of as the Chad, units. we lost

Just we to year, of 'XX, XX units; lost months two XXX units. give first in XXX comparison, some the last units; 'XX,

don't still the move-ins year. So three that our seen in XX% increased last mentioned we the we three month. a Carey January numbers was -- years over of of last the in have better are at we've any XX% average much actually place. highest last increased over years, February -- the yet It

Brett the begun. So that lot have detailed of a we initiatives

continue will We initiatives. those

great have on We reports traffic.

results. metric-driven have We

very the little markets. showing and have very position and the only updated the strong starting supply by good we expecting in we're we've our communities where are X.X% And to season growth worst that in areas MAP the flu high our see throughout in encouraged feel that of already experienced in construction. are again, about occupancy perhaps NIC slides, year, are in very career. with our our are We we We

Chad Vanacore

but you is quarter. the So the Larry, the recovery the year qualify the of do it earlier a in in like how Because expect than quarter? first worse impact we season last tighter trend flu sounds second

Brett Lee

no. Yes,

by the that able the as that job residents. significantly we although portfolio, Larry industry population articulating to efforts great minimize season, efforts to through pretty the were the whole across of think had was impact our around we general affected a and flu a our the I did and the

other for did senior diseases January that that attrition. tends there the the population, statistically mention just and causes death Carey Now to

and the last our because have normal than the anticipate itself, course So in we we've But flu higher a tend and the minimize year attrition much normalized trends a prove of that's already. starting of we quicker impact February throughout rate in those bounce-back to than to did January rate. we run year had itself

Chad Vanacore

to Okay. And what season a bit till that into think breaking out Do improve to early a now then from actually could second the that? you flu the be seems call quarter? bit. other words, In experience little it's

Brett Lee

of public in a seen our in mid-January of of are since community at to in staff, protect hand education to areas common peaked got we internal so data, a in the when impacts outbreak communicable think that's fundamental shutting decline outside question. appropriate in have diseases. symptomatic of terms terms put continuous even areas we season look for great we mitigate infections, protocols rapid other from you each When of additional that the Yes, in and flu down a protocols we of number basis protocols a will And in isolation that our on have those an us residents, we've place week. place then infections actually and hygiene,

continue although may processes more flu fundamental feel like us we So forward. few protect for place we've season on the a in weeks, will got that going

Lawrence Cohen

issue that impact with We invite special detailed information, Association, learned in with is X-K flu. Senior conjunction lessons tracking the tonight. information, everybody great, provides the that filed Housing education weekly a actually I brief the of the and filing with American shows protocol

resident, and it strongly should and residents not we The we year. limited residents, part XX% was other the And while is our every of industry an to so and precaution years. health quality It part DNA, flu we best in happens our the put responsibility provide one feel our taking It's right it's of will that we the there our wellness effectiveness measures It's place. families brief that excuse. to thing it's to the flu having have we I'll the future and reason the possible in protect help protocol our business, is of in this of employees. have that entire and And of this do. be filed what something of the to combat the that comment, communities, almost was

Chad Vanacore

on then And from expense. plan quarter, a third I right, the you out the laid of I'm then. think in you pretty proactive million operating And like million made if or right. you $X savings something moves All garnered $X

the purchasing that much run then given savings end we other XXXX think by savings you're to? And rolling and April in out So XQ? the what new in of making rate platform get moves, incremental do how a were

Carey Hendrickson

Right.

able So the to third third decrease had we in we quarter, versus the quarter maintain fourth that the quarter. were the in

year, as the So favorably the first versus numbers. to year then XXXX. months I last compare And of get XXXX's the X They maintain of those have comparables. we to for continue think throughout then the part to we will the we'll expect lower

expenses there. be place expense we the to initiatives as get in quarter. additional in we're some there have put we so in going variation But there meantime, these And will second will the that in

So quantified help expense we us to that initiatives haven't are of in XXXX. yet going fully the additional impact these

per think third $XXX,XXX in that as be be those just As more to quarters. but be of range. and I or fourth said kind $XXX,XXX in could could That much could my the in as quarter less we remarks,

So in your answering helpful I hope that's question.

Chad Vanacore

more guess I for one me.

do had And these credit to $X.X thought that I them on I long be to actually the mentioned think million you do properties expect expect second are you might have you then that X On I but that. received quarter you closed. How stabilize? properties offline? missed when the

Carey Hendrickson

expect can residents Brett of the to And will Brett, that quarter to of bit think up. more let to admitting as timeline second actually the in speak we I so take you Right, in XXXX. how begin a fill And that long to detail.

Brett Lee

thank so mid-to-late frame. question. probably the anticipate and in that begin will We you new admitting Yes, time for residents, we March the

have communities. home campaign communities. effort a to We and to ground that already significant proactive residents on is expressed back a those are the were communities public component those with have that are come deposits in relations taking and that There already the the with families desire already of marketing gone a for

somewhat And accelerated, those be we will but communities phases. so anticipate that the we will in ramp-up open

-- to to levels next business our ramp-up be So insurance will of for that interruption have back the historical the off occupancy impact insurance. the benefit goal some time help XX that mitigate to the of we to the would transition months, we by and interruption be of business

Chad Vanacore

And Okay. more piece that. of one just on question

Carey Hendrickson

be months a BI, XX begins the that communities. about once the on we CO the Chad, have clear for to

begins occupancy. or of community than CO certificate that So for but the XX longer we it it's have when months in total, actually

Chad Vanacore

Okay, got it. opened And then up just the January X X? communities that are closed starting now, you did three you say

Carey Hendrickson

they've results the their on levels open buildings added January our We in portion because X, of various before. well complete them was them been just the certain all We open. back care. of beginning non-GAAP XXXX to had work Yes,

is for is very Those Now our CFFO, well and those. we're XX%, in leased. of in to so back will in begin as year I town one about described. as them along Canton. lease the numbers the three that's our and goes impact Veranda all mode up January Club lease-up our Actually, of X, as

Chad Vanacore

incremental what's should we then the And Okay. expect? changes

Carey Hendrickson

$X.X from CFFO three impact those approximately million In XXXX, of communities.

We to a is community and of XXXX. out numbers mentioned of in XXXX. community. to able fourth that back that There out be You to be numbers, one part the other our add that throughout be would hope will continues our first of

Operator

[Operator Instructions].

from question a take America. we'll of from Next Bank Gajuk Joanna

Joanna Gajuk

the So was better your the in It of CFFO. than first quarter. on guidance terms

what just So upside? about the can talk surprise the you was to

Carey Hendrickson

it end was guidance. Yes, so the of at high our

that was line but Our were an really the expected higher what for range. from end we at what and revenues much the of range with it a we pretty expense of we expected in fourth quarter, had impact,

expenses, end So the the that's what of with the really got better Joanna. to higher us range

Joanna Gajuk

particular expenses? Anything the on in

Carey Hendrickson

what we're from It's and to very labor standpoint. cost. on end impressive do able that really that Labor was

Lawrence Cohen

feel protocols Brett, achieve. our on give enterprise, let can And effective. and put of that? corporate has that expenses that accomplish Larry. successful at our you involved more really And the and staff. to really XXXX. it's confident Brett saved regional on what have And so systems really spoke And they and it's the for about an saving month the on that's our every been expenses color and forward going leaders incredibly Joanna, that they XXX expenses. It we speak has to and all in been rebased more. new outlook why August properties, templates We we in need effort and recovery we what our managers I'll entire want

Brett Lee

both and said. how comment on around could project development contract to forward. regional approval to went shift staffing we in community, introduction to reducing This we through contract of is we taken oversight not contract Yes, a all into XXXX. the labor, grids more to make want that And occupancy levels. and major component terms had general our emphasize communities to for is core a a implementing things markets, labor into external as communities I sure that that a that in of Those labor around are staffing about pools it we've we one concerted make effort flip standard going creating our systematize, would our staffing try labor that employees that sustainable to operate that Larry part-time have of utilization to but of we've to We so our of so also staff required rebased are internal where expenses Carey carried that, labor. could our said, between have and rely on much appropriate

Joanna Gajuk

grow to And on that and deals, year So NOI confirm X% outlook, to increase, the the just the full same-store X.X% the That's CFFO great. to before is correct? inside can X% X% you numbers?

Carey Hendrickson

yes. right, is That

Joanna Gajuk

Okay.

think CFFO the about guess, of outlook the the year. year, were the in we about XX% about I Because for So then should included talking half growth, how the the delta? deals which last when I talked I guess time you second

terms bridge year? outlook X the commentary in So versus your the months of can today you help us ago between for

Carey Hendrickson

Yes, guidance that of looking Joanna, include include were trying did the acquisitions, That you're budget of the the say of comment kind Also, -- does previously today middle million the to not. we compose acquisitions, did XXXX in time. right. our did -- $XX at which we

be in to part feel into being we number little are about But -- as -- the year still as this into add later of we I points expect is XX as first that that. a first -- that, particularly in anticipated but of and of attrition today, very higher a bit little than little more We more the expect those -- talked it think about second XXXX. idea quarter in where January So the we percentage we we and X as good bit get first wanted probably probably may we some come basis may coming It bit to with that out at what happen to far our occupancy. a growth quarter. quarter, little give points XX the bit of We than of where to differently. to get so about could just a would we'd occupancy acquisitions, And now an it that. we and the

of of that changes XX but the it points feel timing So really bit, good of growth. about that XX basis we a occupancy kind little to

Joanna Gajuk

last was and because Good second was you attrition the my far XX basis part of because you so to to about now increase, question. time that experienced QX Because occupancy you [indiscernible]. XX say thought points I maybe XX that talked of XX it's

you QX of as expected. it sound of it So expected mix or sort revenue in like as Was that the just occupancy the of was as made then expected? QX, terms

Carey Hendrickson

the Yes, revenue basis for that was of XX expected. We've of of as range kind occupancy. growth, points got as Occupancy wasn't middle was of occupancy our expectations and fourth expected. really quarter

Joanna Gajuk

Okay.

good that So this to quarter. then occupancy, XX XX you're pretty and pricing saying points was basis

for increase 'XX? So X% expect still you kind of range

Carey Hendrickson

Yes, we do.

Joanna Gajuk

on ACOs. may, topic more acute Okay, if hospitals great. I terms then you that care And doing of maybe around this just work with in introduced

be a along -- first will will be in lines. it of these something terms flesh that sounds just for like you something doing out? It can company the So there

ACOs? care how Are hospitals? you us So by can these can? much I CSU? it far of And guess, discussions? all, along detail, just as Medicare Was you by in commercial are give the it first Or was these driven acute as driven you ACOs? are But those

Brett Lee

I I'll that senior broader is what we the company absolutely. Yes, care opportunity role the really truly of I define continuum. in And think to share can. with the as living you have a great

there from where providers care acute these care continuum. coordinate hospitals, And great fragile hospital a effectively manage supportive to work care around. an care to increasingly trying environment and organizations and is the so disease, us are seniors serving interest are that medically acute fit environment help accountable with population effectively we supportive to that is put define provide more systems we to population same chronic that a that to readmissions, in We to reduce

for is sharing to this even doing and referral So a of end potentially them not are point, when are our respite to many system. quality with us the respite to will of staying we for sponsored some data large are with planners, in agreements. risk-sharing a at around these acute What go that to out talking come home enhance long then is a own for And that, them we're people a care who what a discharge And experience been preferred And rate. we're about their essentially exchange talking are not willing kind our source typically by that ACOs need outcomes. we care with become any talking work has safe hospital up for period of come folks stay, of diem time per in pay for term. about

help systems for value nice we they've for. acute can we tremendous down we coordinate generator assumed risk that better also can populations can that of we manage well. us a this readmissions, reduce to to be the And a for can as there post-acute can overall So because add it hospital care, them spend volume care amount anticipate

potential. the about excited we're So

Lawrence Cohen

will to clarify, be private And Joanna, just pay. only it

Brett Lee

That's Larry. right. know to Good that,

Lawrence Cohen

private pay. only It's

Joanna Gajuk

Only private pay.

it Or data? some or and the will you're that's saying it more be the has future, in started there sense data of And already goal in be a Okay. point more so the now exchanging risk-taking? at would then for around

Brett Lee

Yes.

the a them would a that representation us as better provide quality collaboratively for to with us and haven't residents it but challenge good well will we care risk-taking would think feel we for even get dashboard of working that's the we So can comfortable add great yet, contemplated provide. an are that value with that to we we to both because at our be acute We be to develop going care system.

help sharing coordination more this to reducing be can point, contemplating think their and risk. achieve relationship. outcome It care. that of them taking again, data readmissions goals not of and will And we, at terms in So we're some of of referral a a we

Joanna Gajuk

part those active on initiated was it with relationships it hospitals? So was kinds pursuing at of or CSU their

Brett Lee

think us the senior experience but of to we around relationships that being outcomes. population, can in actually of us was on at it to we Yes, ahead help because by systems that value the also believe overall will terms better care mining. truly our terms that our the we part of care pursuing in look both add these we are it get we of acute disciplines provide quality proactive And data our measuring well and as

will we accelerate so efforts. this think And really our

Lawrence Cohen

background is really that comment Brett's I'll And helpful.

of four the CEO hospitals Tenet's operations. know, ran the country. was may Brett As Dallas largest the of in children's North you He

a experience relationships brings and of he with these lot organizations. So

And that senior formulating something we're his on to in done do well we that private-pay he's the So it's very living now what career. side.

Operator

Hollenden question will Sidoti. Our next Brian from come with

Brian Hollenden

were some many on communities full December? XXX% below XX%? Can color a How you in and occupancy many provide how additional were

Brett Lee

I'll a pulling We're it that for grab second. together. data

Lawrence Cohen

think I breakout. But some I the have to have December think as that get on. we'll quarterly that back you I Brian, don't I the one that to find materials not to have, have have well. the numbers. we but numbers

Brian Hollenden

my Okay. longer more And term. last just is question

expense mid the to organically a right given in at there controls? rate? is higher beyond the guidance, so, if grow opportunities digits? growth it And is just XXXX, By to Or way how? CFFO are about So high to single think

Carey Hendrickson

Yes, mean, see think, I greater I growth. we'll

that 'XX that a the initiatives growth we'll given in implement some expense speaking of we have XXXX. greater we'll in full Just I than year broadly, XXXX in think Brian, that could of even 'XX in see

some I that the really top the sales and goal. line, sales on addition, of of the we'll side going some is the think to talent begin we're side In impact things certainly to the doing on the and hiring be that's

that, have side the for greater I improvements we so could to continue on to potential think as And that certainly not I'm that see we I believe 'XX we in 'XX. make growth that as well. committing in but

Operator

[Operator Instructions].

question Hambly Dana a from from Stephens. take we'll Next

Dana Hambly

Carey, a do number year full have XXXX? you for CapEx all-in

Carey Hendrickson

was reimbursements, million, prior REIT our reimbursements million. to at it was XXXX, In partners. $XX.X right it million $XX from $XX With those

Dana Hambly

No, for XXXX?

Carey Hendrickson

XXXX. Oh, XXXX. I'm for sorry. That's

Dana Hambly

Yes, what projecting? you are

Carey Hendrickson

about projecting XXXX. net of I'm reimbursements XXXX, and $XX in million CapEx

Dana Hambly

That's all-in.

on kind basis? a quarterly similar on Okay. CapEx of And maintenance amount a

Carey Hendrickson

forecast. similar Yes, on amount Yes.

Dana Hambly

in projects any enhancing would away some of conversion giving trade press those Without the expenditures out you capital CapEx And of secrets units, EBITDAR-enhancing release. entail? what beyond called

Carey Hendrickson

Conversions are kinds things. that. still one do believe would the and But is can we certainly be at some on that looking there be Conversions capital. Dana, of front, EBITDAR-enhancing of we we'll

Dana Hambly

million cost is Carey, $X.XX it of that potential to to the contemplated is portion savings incorporated? then in And Ok. $X.XX the $XXX per $XXX,XXX or all any in quarter, that or

Carey Hendrickson

yes. is, that of portion A

Dana Hambly

But not everything?

Carey Hendrickson

That's before have I there, generally Dana, in what it.

those Some were -- that to we range. -- just of again, we on basis oversell we NOI it's implemented, part of in it's good still end very control front end. that, versus But And expenses a X% fully to the about of the promise we probably expense our less anticipate, in we reason well the first lower don't reason to of are a initiatives. certainly inquiries And XXXX managed once at we feel these than the want 'XX get growth and actually have same-store growth because the to revenue be in under expense giving us that to why be X%. XXXX part of we and minimal certainly the on expect

Dana Hambly

Okay, okay.

in So got the good the up visibility but year. reasonably that not baking number everything half back of you've in, ramping on

Carey Hendrickson

that. idea on returns and Yes, still But we some are again, be. have going it, got end in we've early to those of what some so of kind we're of front the savings

we get want to wait guidance fully that start -- providing to before around those so we out flesh numbers. And

Dana Hambly

Okay, all right.

out out, living. nervous. business. relates a recently assisted read for reports report get The put GAO last But innocuous to fairly a it bit come your So Larry. one It I on me, these as anytime little

have that? So comments any do you on

Lawrence Cohen

and Schless of looking their the David certain saw I on report, It information. sent with is reaction of Medicaid one ASHA. But e-mail that to lead it's deals It is in something and Dana, type innocuous. regarding them states oversight had an to believes any the same same more at assisted living. at to going getting

Operator

any this I'd additional that conclude remarks. or at And closing the back like conference for And for turn to over Cohen question-and-answer to our does session Larry time, today.

Lawrence Cohen

everybody thank to and for participation want I your support.

will we forward free feel to us evening, some further questions. conferences Carey of again. look good thank of at with to up, call any I always, and seeing investor coming you. and any and you As be Have a many

Operator

conference our participation. for today. for conclude you does That Thank your

Sonida Senior Living (SNDA) 27 Feb 182017 Q4 Earnings call transcript