SNDA - Earnings call transcript Q4 2023 | Sonida Senior Living, Inc.

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Operator

Good day, and welcome to the Sonida Senior Living Fourth Quarter and Full Year 2023 Earnings Conference Call. Today's conference is being recorded. All statements today, which are not historical facts, may be deemed forward-looking statements within the meaning of the federal securities laws. These statements are made as of today's date, and the company expressly disclaims any obligation to update these statements in the future. Actual results and performance may differ materially from forward-looking statements. Certain of these factors could cause actual results to differ are detailed in the earnings release the company issued earlier today as well as the reports in the company files with the SEC from time to time, including the risk factors contained in the annual report on Form 10-K and quarterly reports on Form 10-Q. please release found full furnished present at X-K this press which harbor in non-GAAP today's this filing be during may www.sonidaseniorliving.com/investor-relations morning. Also, financial see measures. for company safe the statement, an call, Please the that will note and was

Thank For of over CEO, like I'd to measure the call each from GAAP Living most comparable you. time, the please release. At also Ribar. this Sonida reconciliations to Brandon Senior measure, see non-GAAP the today's press turn

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Brandon Ribar

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In supplemental earnings our prior with within addition, we've consistent quarter included investor the release. presentation information

in XXXX and Our growth way our for Sonida reinforce and leadership of beyond, paved they collective teams. the in not the culture only strength results XXXX our

in million while EBITDA recent care exceptional the year-over-year delivering strongest building services translating on year-over-year residents performance prouder and doubled in on adjusted more I each same-store focus $XX in to support even of into country. outstanding more million basis importantly, the not across family. We history. achieved than XX% real company's each member discipline, a could delivering efforts those XXXX strategic revenue in Our local growth Sonida team and across operational team through and across value resulted excellence $XX the our operating residents our our XXXX to from and be and to teams our members margin the improvement improvement

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changed This by the leaders sales operations organization key improved local by has and regional we've community cultural and culture years, X.X of our regional and leaders. XX% XXX% past in the Over leadership our of resulted retention year-over-year. the retention transformation empowering nearly

key portfolio of number significant and only foremost, in estate team. buy-in and thrives the expanded for X demand units of increasing support the services completed first markets. real investments in memory and care meet an to our business Our our with, We

forward. cost solutions technology operational of ongoing multiple in improvement and safety in invested operations manage to we support moving to efficiency experience our while resident the Additionally, enhancing

opportunities a our in plan and through value operations, living delivers ownership efforts foundational differentiated All are operating investment real space. estate that to of to meaningful these build the platform senior

organic Sonida's our for our levers beyond, various the portfolio, focus, the existing at presentation. forefront. on of primary growth which XX and in at margin stand the occupancy inorganic investor XX detailed further Within through and XXXX through and look rate growth remains Pages now Let's expansion

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communities Our potential. team their performing also our but is not enabling strongest focused communities, full lower-performing reach addressing to on only

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in Clinical Our immediate needs expand our and the our further clinical and offerings to our recognized have a teams our Chief of clinical leader We of addition with services Officer will tailor QX. arrival the of the residents residents. benefit talented experienced

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We with improvements cost and contain expect expansion labor further driven technology to and our specifically, by management additional utilization occupancy of inflation. protocols combined margin growth, operational rate continued

additional operator. XXXX. XX offering The over opportunities in the investments various the premier to payback and X last communities growth on on we balance highlight Slides versatility similar $X our experience investments XX-month we investor, these a approximately JV a bring on anticipate capital projects investor acquisition. of presentation, and profile to in $X million channels years. Shifting XX investment of to external through targeted capital opportunities currently accretive sheet XX- sourcing partner as the for based will our or the with conversion range million We fund XXX of Additional opening units

middle multiproduct the base. focus We serving communities to the our to South continue newer footprint, as Southeast the markets and primary high-income on resident and construction, targeting further upper densify existing Midwest,

programming created but living Magnolia compelling discounts assisted communities. In improvement to independent memory program current acquired are trademark focusing we significant replacement Trails support see on and costs. residents and in Our care newly environment, at our joyful investments operational most the to to our and underperforming will bring as opportunistic assets largely quality living

retention or double-digit identify believe improve and anticipate success first having great foremost together team to we financial resident margin is leadership We of community the these tools dependent care negative that a and is cost. key of the cash may Sonida's with on and that flow hiring experience, challenged local are assets as can yields well and and and on systems a where neutral success and assets. able structurally Sonida programs, processes quality situations While stabilize talent our of our upfront, be to NOI strong stabilizing at as

avenues third-party acquisitions, We ventures capitalize management. of and inorganic growth, on expect to primary joint X

portfolios. portfolio. enter near-term return into capital in at ventures operators and assets tight, suite We are of to strategic management acquisitions strategically or volatility to qualitative based opportunities. our operator, and third-party will capital value of and the to benefits rates disciplined in changes high identify agreement Sonida implement current continues selectively and management focused potential in full and is market. see capital deployment in decision We costly and grow owners, are from positioned billion G&A. Market fresh living sheet without that asset a provide densification approximately to as on have owners on and thus latest of on balance scale, growing XXXX an and One our joint remaining benefit and discussions and with portfolio enhance principle engage where partner key to and Sonida senior on who we new data and to regional capital With points recruiting providers NIC debt to focusing availability labor lenders and $XX tools existing opportunity our without continues owner in core seeking set meaningful investor reaching on maturing able the are to recovery operators with is our their value XXXX

sharing transformation year-end platform. our driven details forma in performance in significant of As the reflects Sonida We and and as forward information. pro effective key rollout whole outright can attractive debt of the and purchase management, by in targeted on transactions best third-party Slide additional XXXX, we about as the new the Sonida ownership to maturing potential expansion. are investor with coming balance optimistic rates minimal markets industry with operational months. The including the the supplemental structure to interest a weeks value transactions XXX debt our These XXXX and have equity table look achieved In expected sheet XXXX. until growth business. the development more summarizing be end XXXX. on with improvement remain XX The transactions, and significant of second in delevering and combined of closing outlook, for than ongoing venture a we capitalization continuing joint the technology XXXX include and the leadership finalized retention and our today, clear the efforts trends all teams and in remain programming paramount resident dates visibility units of of summarized and quarter restructuring

opportunities. I'll our results. of team best-in-class footprint to in while strategic financial the achieve communities the to accretive operating our over of growth full a platform for Kevin now turn is to a it each excited continue building expanding potential and through Our XX discussion

Kevin Detz

the balance sheet, X of presentation. back the to Brandon. the performance company's around discussion investor Thanks, Slide and jump Expanding let's

recognize company's of write and company best-in-class work XX recapitalized a years, less next and injection support early of to the numbers, rebuilt and from incredible devastating contributors the 'XX, point of have the impact The to company the In dive leaders hired at still from having team critical In to partners I functions a chapter COVID-XX. was accounting with contractors the culture into carefully want team. than new serving professionals Before and incredible over to a the commitment quickly just X corporate to of the inflection months. its and take moment operations finance by I out last the and group working as evolved our company. the has the business team

success as on evolution proud forward company of its look extremely to and continued collective attained the plans. the I'm strategic growth executes

lenders and if to temporary and Bank realize flexibility partners generation. for our the particularly remiss cash did all thank support, is Fannie soon be flow would I business creativity company their Ally Finally, as all-in and Mae not poised I

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sale and to financed this million. of remaining loans February portfolio. purchase the fourth Ally company term concurrently price the purchase closed The price acquire total a XXXX, agreement quarter, indebtedness purchase company $XX.X transaction on a $XX.X with as part During loan of of Protective million the the Life XX% its In loan the entered into represented on its all of discount Bank. existing and

As the a to leverage meaningfully and result of loans, the management modifications its community ratios company's XX cash flow, of portfolio. term has across made improved XX debt

average loan to which confidence its the company for associated years company's the extended with growth transactions $XX risk is leading and a with From work to $X instilled end-of-year part on which debt, executed down allowed Slides private been perspective, going as a and XX 'XX, to connection the company to financial company ability the a earmarked has remaining its on largest by reporting highlighted its the of equity XXXX. XX have foundational placement Mae investors, delevered any modification. The address debt Sonida's concern. January the million cash large Fannie million X.X in and and month, pay offensive through last in including further term continue in since balance a Specifically, the raise

on and management As opinion comp of in further reduced XX-K G&A macro and financial XX.X% pressures, X, the Slide I'm percentage auditor on as to X a and disclosed some occupancy performance onetime a continued stock adjusted on today's inflationary discussed rate accompanying include basis. Rounding highlights revenue Despite and out transaction Slide statements. of and growth. our costs to report year-over-year to from XX.X% addressing continued pleased X,

by of the are XX% and the XXXX, for occupancy towards occupancy encouraged year-over-year year. nearly average points Beyond of the an quarter increase we last basis eye an of with achieving XXX

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margin fourth For as in most $XX.X a reports. the of figures with estate comp trips were recognized and 'XX, settlements actuarial and credits These NOI and nonrecurring million onetime result quarter recent annualized tax XX.X%, workers' the of connection real include respectively.

Excluding with nonrecurring XX. revenue margin NOI the drivers, company at our effective as XX.X%. Diving its for The initiatives Slide quarter growth identified better these credits, care deeper to the cost of our aligning move into increasing for process X revamped revenue management was revenue model aimed we part of primary residents.

raised by X.X% successfully base resident rates year-over-year. we First,

in the Expansion set more revenue. we pilots margin discuss tech-based XXXX. Diving of formalization able cost and assisted will to simplification were ahead of additional capture labor true the through up to Second, clinical XX our million capture care of productivity move X and level care revenue program, an further into drivers, $X.X clinical trends. of of the in to to resident year-over-year the care labor in company Slide we'll related living

that extremely labor, costs. a on premium technology 'XX. have labor we constraints of benefits be of labor, decreased persist. higher wages. focused year-over-year, optimizing real-time the our overtime industry continues high Through XX.X% the for labor is includes able bonuses, $X period, COVID. remains limited moved labor market-specific support and residents incremental Contract focused otherwise of company our meet XXXX, to occupancy lower-rated been of base, on are control employee cost the to handful and just which ship a developed for lower an in the a to per communities addressing market amidst bonuses internally to In XX% be under cost hours needs million was Total headwind coming and would replacements which million should of labor pleased labor dashboards, levels and where $X.X 'XX and labor year excluding from nearly that this resident. mark We Premium revenues out tight are cost our which spot partnerships of hyperinflationary in the labor salaries to also we

Slide ahead XX. to on Moving all other expenses

margin a previous headwinds the well As discussed nonlabor nonlabor various implemented for basis have elevated a 'XX our should period, provide on XX.X% inflation of both same-store management strategic communities and tactical initiatives from to points on XXX Despite calls XX.X% revenue, percentage base of over occupancy expanded as in expenses decreased that to incremental 'XX. same the for create as inorganic acquisitions. community in

on Slide Moving to XX.

the presentation earnings Life last completed as forma favorable to some result on impact of see calls You'll leverage pro reflect profile the changes from Protective purchase month. a our loan prior

to interest fully rate on strategy is of execute As the X average of rate remaining of portfolio. delevering continues debt comprised weighted Most a for result sheet. February long-term company importantly, of fixed the transaction, XX% rate X% the debt variable debt our balance the yielding with the a hedged, its

company in and of margin the continues all encouraged modified summary, the marketplace growth, covenants to improvement drive XXXX, is you, financial KPIs inorganic of its continuation revenue mortgages. In and to has detailed The XX today, in shareholder months. both opportunities over across be value Back combined the Brandon in positioned compliance structure with to to last the with company take Finally, comments. the required significant all firmly Sonida organic expected his the in advantage debt Brandon. company's as by as of under consistent

Brandon Ribar

near-term to developments and owner our sheet year capitalize senior drive through sheet, questions creation company the our and differentiated first transformational strengthened value achievements and industry-leading this the will at closed significant debt Thanks, operator for equity modification time. to services on and next strategic and milestones which in dislocation, comprehensive establish residents. that Sonida culminating our of please quarter achieved $XX.XX care shareholders. Rob, of objectives chapter performance of investor as XXXX. operational These line optimization Kevin. the living XXXX key The for position the the restructuring a balance included and open the placement and a delivering in Sonida. for accomplishing greatly balance We in was private while million

Operator

do have [ a We Levin ] from Steve ]. with question Instructions] Monroe [Operator [

Unknown Analyst

great going, it, say progress. missed of have occupancy did I as current what might is good of opposed you today Guys, to end but quarter? your as fourth

Brandon Ribar

We Steve. did not,

Unknown Analyst

you disclose Can Okay. or that no?

Brandon Ribar

We this time. can't at

Unknown Analyst

you're Okay. at the All hoping right. which of And on forecast any to? the kind be get to where year, think it you might of end

Brandon Ribar

we're Steve, providing Yes, not this at guidance time.

I our continue to did is similar as -- to XXXX. progress we in think to see we goal

the that March that around think without we came material So any -- front. on referenced, concerns increases attrition we as through

I in out future the to a provide think near around as position just how we'll So well. additional be playing in numbers is QX here

Unknown Analyst

QX then the And anything QX, after the the expecting in whatever, of that to or in or Okay. year you're joint acquisitions ventures rest pipeline close that? the is for there

Brandon Ribar

opportunities a time, at excited this Steve, about we're a all significant that the taking point in at. look we're There's pipeline

represent So the currently, the LOI as excludes just in pipeline we the have the those as well all year things units at remainder the of and under quarter. for things that second that we're other that looking

Unknown Analyst

do acquisitions, that not any you're for far with? yet. you then that working And in any Or mind have lenders Okay.

Brandon Ribar

have a options. I couple think we different of

we our want a offering us that that's financing to so are accomplishing and forward. in offering continue also structure. relationships are what deals from And the to existing transaction others finance Sonida building with banking that existing opportunities moving also interested has have and relationship been with there partners on the cases then in -- to the the based where lenders stay are And are

existing opportunities well. in So as then seller both new it's staying banks and financing and

Unknown Analyst

doesn't down me. your to estate taxes real go happen That $X million? And with Okay. get by did how you

Kevin Detz

initiatives scrubbing of And tactical that we pricing the and the way. was what was all think accounts. rolled favorable of our that look when all the that relationships just new consolidate part team and management I got here, of hard vendor was Yes, kind out that for of so a did we part

even monitoring lower form I so forward out And effectively credits ultimately in moving aggressive at it onetime those and litigation run that years. will in all point of the think really rate the was some us that taxes got

Operator

further questions There this are time. no at

Brandon Ribar

This participating. all for Thank you conference. concludes today's

Operator

This concludes today's conference.

participation. for may You we your and thank lines at time, disconnect this your you

Sonida Senior Living (SNDA) 27 Mar 242023 Q4 Earnings call transcript