FVE - Earnings call transcript Q3 2020

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Operator

Hello, and welcome to the Five Star Senior Living Third Quarter 2020 Financial Results Conference Call. [Operator Instructions] Please note today's event is being recorded. I would now like to turn the conference over to Olivia Snyder, Manager of Investor Relations. Please go ahead.

Olivia Snyder

Thank you. Senior quarter Star results. Five to Living's XXXX third Welcome Leer; presentation call and President, The President Jeff today's Wigglesworth. a COO, CFO Senior by Margaret and Treasurer, Vice agenda for Executive includes President Vice Potter; CEO, and and Katie

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

any that upon differences forward-looking SEC. our filings statements. Investors Additional could with cause information reliance is concerning the place to are factors those contained undue in cautioned not

now EBITDA. call pro news the our are Katie. these call the them In of to available components quarterly forma and this may income I addition, at Reconciliations our www.fivestarseniorliving.com. result calculate EBITDA to attributable including contain in to numbers, and will website common on adjusted turn net non-GAAP figures over non-GAAP shareholders release to EBITDA,

Katie Potter

for everyone, on Thanks for the joining call us Olivia, quarter of and XXXX. third earnings our thanks,

significantly threat evolving pandemic, nation Senior remain that Living, adults, the the COVID-XX our continues to businesses impacted. serve face older of including As

and to gratitude regular COVID-XX. efforts challenges extraordinary Five members occupancy normal rates XXXX pride a returned experiences. rewarding operational equipment Senior challenges. or population to across partners providing increased members, including cases and top to Compounding While of health customers, during protocols have are most remain to worked community feel spikes evidence leaders success. Throughout some restrictions well-being of displayed have revenue. health of adapted testing many of for the states Living steadfast spread degree to the residents, I businesses Living to and our across driven and Star in potential We in Star the for adhering COVID-XX unforeseen and our securing has as remain PPE potential and vulnerable priority of work activity, be of and safety overcome life experience country are being into to the and platform of the we Senior reserves protocols, our the on how industry residents, team rest our our XXXX. personal occupancy, our daily The they loosened putting immense is the have while deterioration for widespread pressure in which continuing line and turn safeguard protective prepared of challenges pandemic and team by mitigate Five clients, the operating costs, of well low for been

expenses. a environment. share favorably adverse we revenues proved our and advanced I'd the as to like few effects During business that highlights this believe position strength durability occupancy, Five to in third Star on quarter, and Five pandemic response we its Star the

positive financial the Star third Five sheet balance our quarter, reported results for and remains First, strong.

in both segments rehabilitation to sequential positive and as were flow wellness growth on well cash services able net from with generate While and restructuring the our financial year-over-year We expense transactions income. and benefits focus in our as continued management. quarter DHC, and growth

third quarter per adjusted diluted XXXX, reported of share. of income and the $X.XX of $X.X million For EBITDA net we

unrestricted revolving million financial well million with financial believe improve $XX.X the with facility. only resources cash, we lasting outstanding to our $X.X effects our needs credit on necessary continues of positioned position We and of to the outstanding also business are during Our of support no debt amounts pandemic. the obligations,

continue ourselves exceptional focused we Next, to new to providing rebound have the in we on an experience. position remained normal, resident

impact we the adjust to COVID-XX. As of

Our our mitigate virus stability long day. and achieve the operational the improves how spread in And I'm to and term ability knowledge manage growth. every of to confident

our communities, restrictions provides services Despite this stream division were the addition, challenging new our to increases Senior total and flexibility to daily wellness open quarter. XXX in three and operating rehabilitation bringing pleased in agility to In throughout net Living visits we across both environment. outpatient stability see revenue average diversification, successfully and clinics,

COVID in a a Living Our in over de-conditioning and have and Senior continue remained results X.X% increase our forma quarantine to assisted have prior Assisted restrictions rehabilitation wellness States, Center strong revenues remained to nearly services a a increase. XX.X% substantial mobility Living, residents. opportunity living to with loss as the United XX,XXX which According the pro communities year increase Demand resulted for are believe and we National there for services among the rehabilitation of agility provide footprint. high sequential for

partnerships. on was well focusing actively the COVID-XX restrictions, delayed expansion as current as within strategic new exploring which are due networks, our We to

Lastly, committed to motivated and workforce. a focused we are preserving customer

to care compensation, through unprecedented the efforts members team times. recognition providing to support to for challenging acknowledge environment. ability to manage team this We and the are and on talented be commitment resources successful we and and our exceptional Our in it rewards fundamental members. takes resolve, compelling to that our continue focus And

will the pandemic adapt related hurdle economic COVID-XX our to we and continued As develop, to and the presented. meet refine strategy challenges

fulfilling priority team and remains experience Our a and for residents, always our safe as members. providing clients

the operations to review to for Margaret I'd the Senior to call like Now over our quarter. turn Living

Margaret Wigglesworth

Thanks, afternoon, everyone. good Katie, and

thank And they're difficult on communities. focused on team in and Katie residents to our families COVID-XX safe and Before providing for a I'll begin with sentiments update with their and environment. dedication these and our an affirm work our I particularly start, times. their supportive hard I'd during like

As of October population seen to virus. as CDC course have And resident impacted as significant the Generally, which highlighted we over by seen for of geographic those COVID-XX. of defined our a by pandemic, we've approximately XX, of recovery the similar guidelines. of is the rate has areas significantly the CDC X.X% cases the concentrations positive

and XX, of October include the new decline of represent did our North of third Georgia, over The week As quarter. and Florida, during rate states Texas. week cases, Carolina Carolina, South five XX% cases

three month, evidence in United help located regimented continued But seeing we're have primarily the widespread the exposure. will residents, implemented environment approach to and we southeastern requires a communities residents. and Midwest of our However, fluctuation mitigate in community. that delicate presented welcoming we States. call, the fulfilling believe finding quarter's experience reopening of a providing balance for last a we On Reopening creating to phase our for over while our protocols essential last safety, prospective

are and a three robust testing screening with Our protocol. pronged programs

First, wherever state local the of mandated. we guidelines and follow and governments testing when is

consecutive the any cases. the symptoms tested test until positive then and in community COVID event entire resident new a clears we of weekly weeks or is two members it case, team showing no with Second,

over community consecutive per case, a all we the by member of and until a entire two a positive it's protocol routine of week month. adopted of employee rotating In cover the positive event a without the team base residents COVID testing members follows clear weeks case. course XX% surveillance a the the community's of group test to of which testing, Third, also population we've team

of XX, the of navigate to X.X%. We As conservative more in approach XXX,XXX October have member we as a which than evolving the pandemic, resulted a have the we team residents believe taken is case low of confirmed over have and course response. this rate we our administered tests testament only

are to strategy Our once business in slow in a lifted, term. communities the open all able be our being will and which benefit steady believe long to resulted reopening remain stakeholders and we restrictions has

decreased While community in during portfolio over basis Comparable quarter occupancy to address segment, we Average declines last last Senior occupancy managed To prior from we've XXX decline points from lease focused on the from occupancy, community marketing the quarter. basis year. from occupancy see communities' third the points on basis in basis decreased prior in year. and XXX been points average our efforts. did Living our and put XXX COVID-XX XXX continued and comparable our quarter began our to decelerate the points in pressure sales

levels, per month average Although were quarter third are to quarter XX% average over for weekly from sales fleets second encouraged sales the increased pre down see by rates. fleets pandemic we

during move-ins trend, to fourth so is this remained to positive pandemic between see typically leads addition pre The time weeks, In with levels. fairly hopeful consistent quarter. we're rates acceleration in an new of move-ins lag XX conversion the

a resident revPAR one in XX, RevPAR to and communities community X.X% the with of As are owned of line revPAR our the challenged down comparable of setting least from October managed comparable portfolio, last down XX% new as community same occupancy year, for at result business. our declines leased of X.X%. and portfolio continues move-ins period be

been maintain commitment new normalize. residents. for term near pressure occupied positions our have our levels once long on living successfully of our better to and preserving term units occupancy attract offered concessions we've competitors able growing senior to We occupancy the deep put has However, for this new rates rate to despite move-in believe operations stability

we declines, of cautious While country. see aware to spread remain continued in of slowdown occupancy and areas in COVID-XX we are many the of the optimistic some

best structured move we the reopening in the will discussion We to for believe are and residents opportunities over to term conservative address work the the the members and occupancy business I'll approach and our communities that and team financial As investments of not to safely on pandemic results. only growth. our to but now mitigating we declines. long generate a also through and our Jeff turn our process making our clients, capitalize benefit call prepare

Jeff Leer

X quarter a our period. the $X.X was evaluate on Margaret. This quarter to $X.X financial of from quarter for or a million third this diluted of diluted $X.XX quarter's a presentation the also the Adjusted compared the net year. close with third share following The report EBITDA DHC quarter you, same last will with of year net or $X.X third per XXXX income results. results XXXX compare decrease X.X% of $X.XX XXXX period had represents third from better million increase This a to X.X% increase forma for $XXX,XXX XX.X% transaction or million, share the for $X.X quarter. of last the prior January XXXX, we income per as from million pro morning Thank

the and in prior a Third communities XX first services driven the Senior of three and and in quarter committee result million segments, from for decrease the Living with offset increase segment. $XX million, in XXXX declines a $X.X of occupancy revenues the $X.X XXXX, a XX.X%. third revenues. our by year DHC wellness of and comparable largely the X.X% or management in of or sale coupled quarters basis, to approximately services our five in revenues of On management as operating and were operating an Also sales due rehabilitation of communities COVID-XX wellness growth our rehabilitation increased by million pandemic, quarter

basis, wellness July of to third million, Our opening million, agility, and an and $XX.X attributable or quarter rehabilitation XX.X%, of stabilization $X.X the opened XX wellness period, and X.X% the $XX.X is into fourth million net comprise the and in XXXX. $XX.X of sequential prior the new increased quarter. of primarily And services to $X.X increase segment or compared million over clinics rehabilitation second fitness revenues On in XXXX. quarter revenues million, services of reported year rehab X a which clinics

restrictions derived $XX.X Construction Senior projects the was a earned, behalf of fees a of period, DHC X% that decline managed and sequential was that earned our on represents from segment which Our or capital represent XX% of to and $XX.X of from construction communities. decline sequential reported $XXX,XXX basis. XX% million on managed management spend managed million placed was to million, attributable we and on increase a $XXX.X management on from the represent million parties on community Living and X% $XX.X compared of million behalf lease to attributable own capital total fees on anticipate year third do management revenues total We continued prior fees $XX.X basis. of communities DHC. DHC behalf in a in that Of projects

the and liquidity slowed close financial cause COVID-XX quarter In addition to programs of construction to first throughout management of respond will management of to into remainder the the needs XXXX. of impacts it XXXX

on behalf CapEx of we the communities we As of million DHC for $XX are budgeting remainder of roughly a XXXX. spend result, now manage in the

and a to the in the of million quarter. prior quarter, expenses, total decrease from X.X% Now $XXX.X expenses increase last operating year third operating period, turning we of incurred from of an X.X%

managing in we costs have including occupancy on labor communities. decreased expenses, While to our continued focus response across to

quarter expenses communities. million primarily insured increase communities related the pandemic. as has in and Of this remaining manage. potential Year-to-date, our PPE million this of protocols amounts increase and reimbursed approximately infectious QX been $XX.X the prefunded $X.X during amount to increase members testing, self of is we delivered XXXX. from Our reserves team to use is largely to fees majority protect our the DHC we prefunded the of aside $XXX,XXX previous throughout health The medical set communities and will PPE our by COVID-XX $X it costs residents of to to into due secured million at to and deployed be relate supplies and PPE to have insurance for combat QX disease

approximately quarter related on and million expenses Our medical million, third PPE spent COVID-XX $X.X were including supplies. $X.X

relates million We year, in believe in of increase claims claims continues coupled reimbursed increase for volumes our and As health and at will the self value the expense on an our continue quarter. third a that DHC. put basis. with and dollar by DHC. to of the a of members likely the over the cost to $X.X total insured community that certain claims in insured reimbursed quarter $XX.X is $XX.X by the self pressure costs medical Insurance administrative into on pandemic Health inclusive General testing represent million of team we the was than million and $XX.X third of sequential bear Program of same costs which XX.X% $X higher million experience program, normal an resulting higher fourth quarter, for approximately These our million, XX.X% previous period which included COVID-XX insurance,

G&A costs third Interest we quarter our the has revolving million, G&A. normalized which $XXX,XXX indicative Excluding Senior to DHC associated is these our of reimburse $XX.X on capacity cost credit with million spent unused at believe for a for managing facility. the expense Year-to-date, Living was of run communities. rate approximately was $XX.X expense due capital

in owned $XXX,XXX of our the third in in million comprised wellness leased plan. portfolio, quarter, a segment, of invested rehabilitation services Additionally, we invested and $X services in our shared capital of and $XXX,XXX $XXX,XXX investments

million September Moving DHC, were to by shortly we quarter XX, unrestricted funding of the our balance cash million amount equivalents approximately working sheet; of had end. after the and $XX.X as that capital cash represent for which current needs of $XX.X paid

at We $X.X the And living our for only support and growing note continue facility. the today, borrowings the with on revenues, segment on of our to in mortgage prepared have of we and senior outstanding effects from our along outstanding questions. our of do That debt financial form million have concludes credit we are ready our not We will maturing remarks. business open XXXX. believe obligations position, adverse we see COVID-XX this ongoing stable one line any Operator, services to wellness rehabilitation as pandemic. as

Operator

[Operator comes Riley Instructions] the with the McGinnis And [Kyle from Securities. first B question

Unidentified Analyst

And or it bit Hi, curious current Kyle going you've for little looks in new run three if quarter on about forward? all quarter Thanks rate would you detail. say a this agility pipeline been a talk helpful during the that's is current fair could for opening environment the the per Brian. clinics? was about I the you like pandemic, two for per

Katie Potter

to we per Kyle Yes. open three expect clinics four quarter. to

Unidentified Analyst

just leads up then picking in quarter? far seen you current move-ins And a curious leads. the with in and I you. so continuation Have was thank Great,

Katie Potter

hoping up we'll our convert leads have, we conclude leads you. we're QX. guess be I during And Thank move-ins able are to and that question-and-answer does those to session. this

like Potter would turn any over Katie I to back comments. So conference to the for closing

Katie Potter

face our clients the and Star we for team joining presents safe. here changing at new for our and hurdles leadership stability you plan planned believe and continued I and pandemic in other and to Thank and of our growth as that our are entire wellness with We team our growing keep the sustainability incredibly carefully crisis, this will dedication their residents, and today. health financial knowledge of business all. our COVID-XX and work support The We business. long to each of and coupled wish adaptability response proud Five term us strategic Operator concludes that collective call.

Operator

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

may lines. disconnect You now your

AlerisLife (ALR) 8 Nov 202020 Q3 Earnings call transcript