SNDA - Earnings call transcript Q2 2024 | Sonida Senior Living, Inc.

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Operator

Greetings, and welcome to the Sonida Senior Living Second Quarter 2024 Earnings Results Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the call over to Jason Finkelstein, Investor Relations. Thank you, Jason.

You may begin.

Jason Finkelstein

operator. you, Thank today, facts made within XXXX, are which meaning All be August deemed historical laws. may federal statements to not of statements securities XX, be the forward-looking update company these The any disclaims obligation statements the future. expressly in to materially Actual forward-looking statements. from results may performance and differ earnings time, as company Certain the to well Form from the the that cause the as with contained annual detailed can company the in time the that XX-Q. XX-K report results to in that factors are risk factors on issued files SEC on differ and including actual in release earlier today the reports quarterly reports Form

see in measures please Investor found present at Please of harbor found the safe X-K that full www.sonidaseniorliving.com. Also, filing these Reconciliations press Relations non-GAAP page please morning most also for GAAP this see will press the company's company today's note call, from the the the non-GAAP be statement, measure, which release. during measures. comparable may this to today's financial release at

to I'd Brandon Sonida CEO, to Living At Senior this over call and turn the President Ribar. time, like

Brandon Ribar

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

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

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

externally growth organic considerable delivered initiatives. and company the inorganic across progress quarter, second both the our accretive or In

portfolio's results a same-store the history basis, generating operating quarter. for strong and on this and highest our and foremost, year-over-year portfolio occupancy margins operating XX% continued in First exceeding both the culminating with sequential operating

XX.X%. basis sequentially Average averaged by basis points averaging spot quarter second for occupancy June XXXX. occupancy at improved portfolio and June nearly finishing for for the XXX same-store occupancy points The XX June with XX.X% June and XXX XX% than XX the owned occupancy basis of quarter, higher with points year-over-year

As average strength operating The each occupancy were a XXXX to gains XX%. growing occupancy across the around occupancy communities. a of our ability regions in reflect of reference, frame and trend drive and of QX spot underperforming our recovery

meaningfully high-quality over second half occupancy normalized and positive dynamics, of that continuous the significant year XX% is industry-wide believe be supply-demand next the shown several our our than has portfolio-wide years. next The portfolio of we XX% greater goal. Based momentum and can occupancy on

growth re-leasing annual We sequential growth of on on driven improvement QX. by also with experienced continued X.X% our quarter the spread a coupled increases, and positive to leading year-over-year X move-ins from rate the new front X% rate for rate March

provide on as rates. will Kevin leverage look to to further higher we strategy our occupancy grow levels market rate detail further

Finally, occupancy and and QX margin the continues rate expand. portfolio, our from Same-store increased XX% with XX% of operating net to across income XXXX increased the sequentially. profile operating

XX% and of to portfolio. previous our by existing comments. even into improve. call, Kevin dive growth basis his see Again, year-over-year outlined earnings metrics the operating will X we around We to our point On detail margin are opportunity encouraged also further XXX key expansion in drive areas in the to further focus

and reinforcing leadership regional importance the and First, local teams. strength of our

finally, to and performance; of support set our the capital further concentrated and of driving stabilization community underperforming investments and Second, programming in communities. recovery a

we completed in success. the regional a proudly trained experienced executive by culture leadership as front, people retention leadership of promoted continued acquisitions. and we Throughout crucial community the on-the-ground to at and local empowered and recent strong regional decision-making improvement directors for is central overall our building number and and On reinforcing leadership to level roles QX,

both On first investment community-based front, generating and across the expenditures, than both technology the including more we and NOI $XX capital million maintenance. of capital year, the targeted half invested in capital recurring

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

front, resident meet experience technology the ensure in response to and rolling model systems to technology both support notification prevention This care On needs. times the includes simplify business. programming employee fall improve and monitoring investment continues our prompt across to to resident

care lower-performing with metrics Care level board. Trails matches locations communities a the investments of of Additionally, across and Magnolia residents of Memory strengthen across services The these and QX provided efforts collective care. in drove more operating key improvement across impact the each new our effectively our cost initiative of to significant

cost I'll business, remains briefly the XXXX with structure provide commentary. Kevin of will detail comment on components of stable significant Each of the line operating in our the and and expense our projections. further and side

across and reduction total a QX costs improved. combined the Labor and other dependence of a categories cost of premium declined The well on expense agencies, declining labor on cost by for X% increased is stability as our a in sequentially percent profile third-party year-over-year basis, from and costs major labor as X.X% trending referral cost with quarter overall revenue.

the external front. growth Switching to

the outright into the basis existing to less communities attractive average in ventures high-quality unit. and basis. Each of or across approximately recently further provided through constructed on or markets than $XX and of targeted continue attractive an identification with Texas we X per markets Collectively, both opportunity created density at an the equity million purchased of assets communities Southeast. deployed strategic We significant focus at of $XXX,XXX value-add either an joint entry

regional and at and knowledge combination rate effective Through operating training the Each believe occupancy and growth, ongoing we local each can with collectively expense the market acquisition cap of improvement at application centralized teams support what attractive a upside rate leadership support of on model. with of the level improvement. blended performance based offers is material double-digit drive for basis. Sonida's the Development stabilize an management, investment successful a

in in the deliver from through deck, accretive investments. ventures and distressed network of investments joint investor to specific the our and this each recent growth market a reflects purchases to summary of strategic banking relationships to We've included our continues deal a relationships recapitalizations opportunities approach

clear Looking investments growth acquisition line targeted of strategy. profile sourcing ahead, have to along additional community sight external within a our multifaceted we

focus We and with growth then a leverage benefit provides estate both concentrated, and a best-in-class regionally our operating shareholders. these operating to And growth team to a flow owner low to a focused assets. as simple corporate significant external bring shareholders. operator, real structure we believe the investor deliver senior Our cash Sonida remains and construct our portfolio high-quality, housing model result, pure-play to accretive as

ownership corp into accretive the flow is as housing C fully to attractive opportunity real recovery and both the a cash Additionally, as control operations reinvest and accelerates. Sonida highly acquisitions senior distinctive market the estate through for

that the of success of and dependent to that the with assets. hiring is, believe on As retention alluded are to to together foremost, challenged a our having a and tools strong success earlier, key first stabilize and financial community great team is able local we Sonida leadership programs talent and

of we with practices of The recovery Excellence Clinical in integration operational, driving of Team introduced our clinical sales Officer, best Chief resources and the support Operational team including on technology an In led new Sonida's record is systems. successfully focused development underperforming training and comprised by and QX, track acquisitions, and communities. experience on the

underwriting each have our of support assumptions. line with teams pre-transaction Our improvement new significant communities operational identified in areas in for

leverage On our overall debt and banking new in acquisitions cost We lenders with the the key capital as front, optimized pursue acquisitions. relationships as the view to financing deep our including expanding structure, for forward further relationships referenced look presentation. X we evaluating these providing for we

portfolio overall Each loan portfolio was of to and transaction recent financed the reducing and ratios. leverage coverage goal value with improving

We are and long medium deleveraging further the committed over the to term. portfolio

to to assets relationships. target continue The and outright or rate the positioned generate release opportunities to year, we loans For to absence a the interest date across XXXX of default level opportunities the half of the pipeline increasing purchase continues robust of that venture through similar second in in of access. are market, to nonperforming rate growth we to joint addition

a communities, platform meaningfully the in summary, with by In capitalize layering shareholder positions backdrop trends differentiated properties. the return, new activity external slowdown construction in owning to reinforced of of on against dislocation near-term to population investing by company on extended senior and the operating, Sonida further senior investments market an enhance to growing approach designed value-creating of the living its powerful

coupled and and deal Sonida's flexible strategically balance creative favorably capital sheet can returns with stabilization. expansion our allows us of upon to disciplined acquire portfolio through impact deployment highly attractive of structuring assets that an operations

delivering to to acquired and key the both our our commitment communities. teams experience by improvement will residents, Sonida's building high-performing a newly valuable existing our to in and culture living ongoing remain characterized

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

Kevin Detz

acquisitions under today's May Macedonia XX. which broader as well management Slide comparative select Brandon. the will of financial through walking call Thanks, X presented appendix venture the the under communities note presentation, investor discussed a with and include slides for a excludes by wanted structure. consolidated on of that third-party references the portfolio communities presentation the will the pages investor in The basis, as slides same-store joint company's I to XX today's on community operated agreements. be starting to be purposes, most I

from prior during quarter. basis mentioned, than average basis up is XX push XXX driven a significant outset This call, Chief increase previous of teams QX in concert steadily a the weighted the with been continues from XX.X% year has to higher our focus with Brandon move-outs, occupancy the the As of another the Officer, company gains year. in point reduction occupancy our were the points late who joined continued team occupancy XX.X%. last which of community leadership occupancy These Clinical

second decreased preceding in and Specifically, quarter quarter XX% for quarter, and the the from comparable XXXX. XX% move-outs

X end, X communities. focus of communities from occupied success its increases of of less continued quarter-over-quarter particularly elevating occupancy continues optimization, to only on rate on X% market than with XX% Sonida XX%. driven remain in March under As a with X quarter rate those RevPOR higher The company and increase portfolio-wide just

the to year-over-year a and continues assisted the RevPOR the loads later referenced level historically and the reflective The and program year start XX% quarter of of care respectively, lowest is higher the care that to first respectively. in with benefit XX% On volume revised our XX.X%, last and the lead latter the as and due in earnings same increased growth, quarter our expense of support from increases and calendar company's with call. Note year, quarter accounts memory stabilization seasonality communities. incremental of associated basis, X.X% occupancy-based performing prior with NOI May to and RevPAR

care to Moving past quarter living ahead the and rate levels, assisted XXXX, Slide rates for both the quarter double-digit into same memory care year. the in driving increased increases X.X% from had XX. Resident deeper over

the including care well level structures rework extension has memory the as Magnolia in program, independent company to This developed reference, rate has to same higher its our carry the acuity levels assisted platform level. outpacing pricing through on as care the memory living industry. led levels living of the recent care Beyond care both Trails across increases new and

driving a result the as Also Medicaid these the in care responsible of of legislation the for rate profile increase summer rates XXXX. levels in has in Indiana been in up passed

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

experiencing the increases started quarter labor COVID, the slightly XXXX. first For of industry the first decreased time direct company's from since the after inflationary

the decreased average XXX hours period. cost XXX wage QX from offsetting same XXXX, than total quarter's in that basis increase basis point for more This points

leadership the decreased strength on on saw recently through also this our developed BI controlling positive of company teams which quarters labor premium its tools. layer, The in more community year trending our sequential overtime

improving whereas up strategy, both revenue, in absolute XXX XXXX. XX, quarter trends this Slide picking On quarter continued these year, the and an margin quarters critical basis, nonlabor basis portfolio's these decreased operating comparing as a will to been sequential be now XX are also costs food are seeing nearly base of third-party as taxes percentage and as commissions On over occupancy the same months, to to expenses estate sustainable of real referrals costs the reduced XX due drivers We are points grows. believe this in $XXX,XXX sales areas expansion as of well market improvement have which a enhanced primary part such capabilities the on we as our last this presence favorable base. strong of local overall digital marketing evolution occupancy marries in internal to higher our with

remains earnings as revenues morning, management. below under Hitting observations this G&A our from XX% on of percentage a few total a release

equity Excluding and compensation and in with stock transaction debt, our costs onetime the of activities. noncash recent amortization connection acquisition

of reference investments namely important, to should our operational been and business our as and to growth its branded onboarding leaders department the reduce created the further that strategic actively Just the community our expected growth. vital already in contemplate our communities. keep development the regional the infrastructure to this and acquisition function, excellence which grow and supporting These G&A company has ratio be convert continues recent onetime on portfolio newly to revenue costs able bolstering company's with same-store focused pipeline

Texas. in more on Concluding and communities the to XX% $XX with principle. QX the balance discounted $XX.X attention modification on Slide sheet highlights, or the a lenders our its the agreements cross on Last Appendix into one and The revised discount the XX maturities payoff X. represents loan X on million of a million financial entered to includes ability million make balance, as we of remarks modification $XX.X will importantly which seen turn the week, loan on company current

of restructuring the loans that The principal the X remaining require communities balance. XX These company X.X% the months. in X for XX of past communities approximately current addressed X represent loans XX the material having last with account

Our with portfolio. fixed total XX% average hedged, a rate remaining variable interest X% notes of the is below debt comprised fully weighted notes, for rate the yielding just rate

this, reduction Fannie outstanding company's Mae to roughly of DPO the X indebtedness decreased QX second payments delevering a focus principal XXXX. from made during excludes The sheet, company XXXX million XX% nearly a in scheduled due with the the the of on company's connection basis further continues restructuring Beyond under $XX balance the with $X its million principal the option. million on This or $XX year-over-year balance quarter. on

assets acquire As even EBITDA the we expect portfolio and debt reset we ratios, grow delever at to to continues further.

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

performance continue acquired recently this operating on realize We to trajectory portfolio ability by be encouraged the the of communities. improvement to including our

you, Brandon. to Back

Brandon Ribar

growth. Thanks, differentiated present external deliver our approach Kevin. and for to XXXX continues to both to internal on opportunities Sonida

cash half our deliverables, XXXX to positive Our focus year-end improvement achieve revolves continued and performance second the key commitment the of priority. portfolio all-in X for expectation by around remains top a an organic of with flow

delivering Second, for proven track communities recently build acquired stabilizing on within a expected the improvements performance further will distressed assets. record

broad term. the Finally, platform living identify dynamics surrounding senior provide network in attractive attractive differentiated a investors leveraging market highly near acquisitions our to with to the will access sector the

investor We to residents, our senior firmly continue positioned a living. in and building employees to owner shareholders, is believe Sonida to fulfill commitments operator, and best-in-class

participating, for and today's Thank concludes conference you all call. this

Operator

you. Thank

Thank now for may You you lines. disconnect your your participation.

Sonida Senior Living (SNDA) 12 Aug 242024 Q2 Earnings call transcript