FVE - Earnings call transcript Q2 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Five Star Senior Living Second Quarter 2018 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Mr. Brad Shepherd, Director of Investor Relations. ahead. go Please

Brad Shepherd

and to second Welcome call Senior call and Living's a and Thank XXXX Five results. the CEO; President Mackey, quarter by today's Doyle, The covering CFO presentation Treasurer. you. Bruce Star Rick agenda includes for

conference expectations presentation, the will open the call re-transmission today's transcription, question-and-answer XXXX written call meaning forward-looking other XXXX. August and in to statements today, Commission from on prior of without recording, call to no securities consent within the obligation the in Securities conference forward-looking like differ present Star. Today's as laws. based would The than or materially forward-looking the those is forward-looking undertakes filings of team analysts. regarding revision with Five Actual conference may the research contains and X, publicly period. with statements. SEC I release today's any the of reporting made revise management strictly to Litigation this Five any or and statements results floor results Reform the Exchange and beliefs These a Private projected through Securities Thursday, the Following are Act statements company the session note of of prohibited this to that of Star's other

undue not now to place President is our will CEO. filings in call to over contained upon with statements. factors differences Investors Five Additional Bruce those concerning SEC. are cause Star's the information cautioned could that any and turn the Mackey, I reliance forward-looking

Bruce Mackey

is CCRCs million as with quarter Occupancy Housing to as compared were well $XXX.X from XX.X% points of from the reduction result X.X% $XXX.X $XX XXXX, continuing $X our standalone our seeing the of for and call. million unit sale perspective, one trend quarter community XXXX community decreasing care our the million retirement communities are senior SNF communities. skilled quarter million driver nursing revenue skilled in sold comparable our revenue originating we on in the the and for from last of which decreased Senior quarter of to in was at million nursing decrease compared last our From skilled down backed Trust. the our leased from at our last same us same living due six to comparable for decrease the previously XXXX year. a We a down sold second revenue joining Senior and was quarter as the transaction the Properties comparable XXX of in living or for thanks EBITDA standalone year. SNFs of similar community skilled nursing was we in and revenue skilled Together, well reported $X.X a the quarter quarter biggest revenue leased the million million to second quarter basis This as year-over-year $XX.X negative adjusted communities second to nursing $X CCRCs. EBITDA Brad a year. EBITDA announced earnings XXXX the of same X.X% the second sales down Thanks the second managed

recognize bypass Rehab of shift and resulting occupancy, from reimbursement alternative. cost only payer of ongoing we units go care for lower and people efforts ours units. We've our are ongoing and examine Medicare these in some an in the within got also changes accountable of CCRCs be of being the It is the and all in are to we evaluating lower feasibility decrease more are high living mix Medicare the a if as our our a in to in market. a Accordingly, determine repurposing not to managed our but causing require profitability demand as all reimbursement is organizations initiative skilled profitable other Home and we will This skilled As to programs or talked demand the where in Medicaid. length about senior past, past, increasingly providers of decreased nursing to of nursing just program the led is operations but addition types our units by serve stay in care that, evident. of skilled and home to will process

rates. produce four Star. with affiliated loss month the a business were Ageility new rates with and in On for not the us the able in wellness to not community XXX in are of assisted solid opened Washington. now million, basis business, the of and XX in our the At the busy Five operate as were occupancy of is Ageility offset were or the revenues And were we Solutions, all one care opened quarter, second second living care overcome with of we where X.X% $X.X occupancy State of Revenues of the increase we a were division, flat and Physical independent outpatient outpatient the $X.X living our XX.X% for consistently in are of the end competition communities Star was portion Memory sources the more of to in decreases community. the last growth. clinics was of in private total has comparable rehab million of pay quarter combined pay to three July XXXX. clinics, Five a not fiercest markets. Memory state down quarter, communities comparable million we Therapy quarter quarter Washington for $X.X which than increased which clinics the the increases been side affiliated in second it as private quarter continue on clinics. a year. as or revenues located these a with same compared located second was be

occupancy service the in down and second the second year. last this to amenity our clinics for look demand was to platform. XX.X% outpatient high quarter, points more see compared XXX to continue of add We Total quarter basis to

as we After April, from sequentially, falling and to occupancy down May to encouraging April a May points While June. XX increased total to occupancy progressed. from in saw turnaround points basis XX remained March from flat quarter occupancy basis second was

portfolios to our owned individually, assisted second of saw at independent the and occupancy Looking in our XXXX. in quarter in living XXXX communities quarter the XX.X% from of increase an first XX.X%

XX.X%. communities an increase during nursing experience in that and leased also a facilities assisted XX.X% same decrease standalone We to saw period from XX.X%. the We skilled living to our same from period in our in independent did XX.X%

as independent going begun was XX% with at process to XX.X% drop The decreased occupancy, management well are from direct occupied momentum this driven believe of to of in we in month use by an into units. a Our living of to focused on nursing greater to as the in this now we we XX% for average, CCRCs but push with XX.X%. another is being by system assisted well. that program. On have At communities revenue our have XXXX. had adding implementing XX XXX begin program Move-ins our communities, per up occupancy of CCRC of revenue where decrease This offset managed. has have and our our June, communities saw positive eight over at revenue than July using increase July primarily a July increasing program. We the our this actively low month continued initially of with been the XX rates. to end focus X.X% result started the were communities management recently occupancy We communities on our skilled

We not in a the movements second communities' are In the result our substantial of row used move-ins increase compared in communities pleased on a compared in has as which move-ins in second year-over-year. shown the increase the program this the X% so that's quarter managed have those been revenue to year-over-year our decreased revenue with the quarter, system managed to not X% program. far

licenses XXX Finally, units five which to from One communities like an finished our currently I owned is living. of next independent by recently call will Doyle, converting expect and full is occupancy a and points on assisted had on to assisted when operating are considered XXX Rick, update upon their provisional would will a completed it what before be I now four living received Rick obtain has senior approval, The occupancy offering full stabilized licenses two Indiana see basis of turn license. fully be the XX.X% remaining in remaining in in license. community yet a of and Financial licensed similar we communities likely seen community to Chief on properties full our end quarter. to for few their over licenses Officer. increase weeks in the provisional third operating to have The result their licenses. inspection quarter, I approximately the turn July we living the the markets. The below awaiting well Two will not occupancy the second had four

Rick Doyle

on I'm just and covered. second quarter Bruce to of going touch Thank beyond some you, Bruce highlights morning good what the everyone. financial first

Our quarter manage $X.X million We managed increase -- second the the last $XXX living for of quarter management basis, fee wages benefits year. units. million senior benefit or compared or revenue were living Senior million second was to and and XX.X% the XX compared costs. comparable the X,XXX senior increases, increase overtime same higher containing now same over employee quarter communities to $X.X for X.X% X.X% quarter, a wage year. last expense, and insurance The of health community to due revenue. is higher On living increased an wages

in months costs of we million. minimum to largely year, same XX trailing timing periods as over -- we to experienced the increase, Arizona. wages X.X%. XXXX During the related however, is our this higher operate; period were health in new implemented our Florida, XXXX, Also acclaims $X.X California, compared approximately XX and states decreased insurance of quarter both of health second insurance This the

find spread the decrease record or previously leased G&A a probably were an Rent General repairs percentage of increase all increase turnover the and from community maintenance, last a the X%. to the X.X% quarter we new administrative million, increases expenses period XX% portfolio. were quarter operating comparable for and compared own, Additionally, The which SNH and entire unit or as expenses capital gross move-ins primarily communities. an out for made increased has $XX.X nursing overtime The leased a due California, to operating associated driven increase rate $X.X living our senior revenue. challenging of the from to at it across leased $XX million resulting costs revenue communities located $X.X Other increase wages same in the quarter, is has landlord up second price X.X% expenses primarily compared a low year. in June we basis, XX sold for $XX.X skilled living senior million the improvements of In X.X%. with to million for costs. quarter year. last of million. unemployment more On that to relates same was which rent and to that was was sold managed facility of sales from expense

of payable As net SNH this by a the annual sale, proceeds. minimum of to rent our XX% result decreased

$XX.X communities. backed Turning approximately our in Lane and At to remaining at assisted recent $X.X to state from lease spent the Forum landlord to been living will have of investments capital capital second now quickly. license. sold XXXX our once Dallas, projects, we quarter the units to have the in service Texas, expenditures larger our expect middle occupied The leased of from units we capital operate unit And expenditures Park since million of converted capital and in opportunities. the in units We've of one XX we expansion million the had have September. we as license XX out newly to the These expect our a

of projects advantage continue to in markets. individual opportunities and other conversion evaluate We expansion to take

have units start projects estimated year expansion will take where three demand this to We place. add communities later to that

facility of to of and on Turning our secured June cash cash credit by selected our communities. and living million we equivalents our liquidity XXth, had and At outstanding XX $XX balance sheet items. nothing cash flows senior revolving

approximately quarter, two communities of back remaining $XX.X second the transaction the with of the sold included living we to the mortgage This of $XX.X SNH an million. million assumption sale During possibly debt. from price aggregate managed senior sales

an we XX $XXX $X owned equipment interest including at result, note had million with net will closing June the Bruise With XXth, property I with of of approximately mortgage X.X%. turn a communities that, we of one remarks. and call to back rate million for As

Bruce Mackey

as quite decline industry over [Indiscernible] year Star Thanks the the operating that the with has demographic rate for was Rick. a combined construction created units growth seen difficult Obviously, starts time. market an this for not flood That in and result of of in has quarter and XX as a been new or past a new the age the Five some two. above the environment industry wrecking

us efforts over have to liquidity helped time challenging navigate the Our this the company environment. create for

to However, encouraged way the in positive starts recent we still recent go. are by segments. a signs operating our our significantly as construction over some and gains some we down year are There have are new occupancy of in past

Our gaining to revenue management this month. traction will every transition program community continue is we and platform more to

successful ensure choice and now investment most in back and to over we because program communities will in people is our our capital our operator Our the the it us we markets. invest turn importantly, long-term. our they make will continue working programs to for to will their Most in to of questions. the invest also community I those continue in that will are

Operator

And as over conclude at Officer remarks. Bruce President we for to showing our Mr. not this Mackey, any am time, questions, session. I closing Chief conference the Executive back I'll will turn and And question-and-answer

Bruce Mackey

second for Thank and you. I'd you on calls. thank you look we forward quarter you. updating to Thank earnings call progress joining and Bye. our future to future like us our on everybody

Operator

you has now concluded. for Thank today's conference presentation. The attending

your You disconnect may now lines.

AlerisLife (ALR) 9 Aug 182018 Q2 Earnings call transcript