SNR - Earnings call transcript Q4 2017 | New Senior Investment Group Inc

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Operator

Good morning and welcome to the New Senior Fourth Quarter and Year End 2017 Earnings Call. My name is May [ph] and I will be facilitating the audio portion of today's interactive broadcast. All lines have been placed on mute to prevent any background noise. [Operator Instructions] At this time, I would like to turn the show over to Ms. Ivy Hernandez, Senior Vice President.

Ivy Hernandez

to full earnings year welcome fourth for and and quarter XXXX. morning New call Senior's the Good

Joining us Interim today Officer; and Bhairav are Smith, Susan Givens, our David Accounting our Chief Office Director. and Managing Chief Officer; Patel; Financial Chief Executive

call made Before statements I would that may be forward-looking to like I over Susan, remind to turn you the today certain statements.

encourage with actual Forward-looking the statements current you mind events. that results Please statements statements differ future review regarding expectations. describe filed our the factors and to I and regard Company's cautionary the the with bear to quarterly reports current contained from may expectations annual materially forward-looking SEC. in in risk

non-GAAP and with that, In with are measures, call review information. And which Please statements quarterly the Susan. included SEC. to our like addition, over will the our in reports to non-GAAP the also present filed annual financial the turn and speakers I'd cautionary reconciliations for

Susan Givens

for morning, Great. for Thanks, good fourth and New Heidi thank everyone. joining XXXX call. Seniors today quarter earnings you And

quarter our maximize had announced Directors we our addition alternatives that to today dividend, of results exploring an value. and effort Board shareholder strategic in to been In fourth

JP a take provide conduct help [indiscernible] and thorough review for this like a context some of Our to a engaged variety Board I'd Morgan options. to of us to minute review. ongoing

has of quickly assisted one ago spun and out we and in largest assembled [ph]. the the when housing of largest XXX% of of independent $X formed pure years nearly we're our November in the New play X was in XXXX. over the being properties attribute Senior REITs We billion hag a little a portfolios living Newcastle with portfolio U.S. living unique the of private Xth only the U.S. Today senior investments.

increased negative industry one and on be other the industry portfolio. industry our have housing exerted Nevertheless, most we impact continue new challenges near-term of as believe reported, been pressures that supply in. compelling factors been These is dynamics care the has has and senior to facing continue competition invested to widely and industries to As senior performance. own the exciting

over pointed U.S. cohort is demographic grow the aged and is individuals expected our the Xx growing in the older total out we fastest population the faster properties. positioned As to XX before, is is population target than and private think a XXX% this benefit our because years. and assisted XX next living NOI We our uniquely platform dynamic to pay, generated of from by independent

on been range of performance. not sales full backdrop, taken alternatives a there competition. approximately half have we for XX% at is at In maximizing living process our where The combined our concentrated less to been price Board had selected to larger industry well is Independent properties of in of of seniors. addition, to-date XXXX, asset value. evaluate offer which new level the for in new our AL. conducting implementation senior level independent including us housing. and Against Directors of stock our of shareholder Unfortunately, trait we certain our less explore we've of discount buybacks has a the this strategy operate, lower attractive of our a portfolio tender acuity the construction value. asset to the Company has price living the than in with measures the of strategic really remains number The gateway an a it and portfolio characteristics believe option of lower the make strength stock the Despite attractive environment and driven caused focused point as the the a IL as

the call shareholder quarter. much ongoing our maximizing focus discuss value. want I I'll David point, to the Bhairav reiterate to review say can't strategic is over about turn the and this of on I While the that more With to at results that,

David Smith

and Susan the X% private net pay totaled our fourth of properties. quarter, our XXXX. senior portfolio of NOI XXX end housing to XX properties for total Same-store quarter portfolio At everyone. XX cash compared the morning, increased Thanks, triple managed fourth the and good properties, consisting of

First, I'll living for decreased cash portfolio, XX portfolio managed discuss properties assisted-living million. which and X.X% independent fourth and our NOI. $XX.X roughly half Same-store quarter to includes accounts for year-over-year our NOI XX of the

our change we less growth XXXX. controls use throughout Same-store points our living same-store month. cash as result operators. with is increases pressures year-over-year improvement improved portfolio, it a at a resident of on increasing the incentives on X.X% expense to portfolio, on include per X% roughly rates those supply along in partially our continues of which was roughly resident to per result for our which NOI decreased assisted-living occupancy implemented rent as pronounced quarter markets with independent trends and basis year-over-year improved living third RevPOR by expense This that decline more were of Expense Occupancy when for X% Rate portfolio. during down third labor saw pool, offset year-over-year, driven by moderate the trends living our cost the our basis particular, an NOI operators. residents quarter changes basis in operating the up portfolio by existing versus assisted-living the new portfolio in XX roughly new same-store same-store early experience growth our labor which with outperformed was remained holiday of in discounts at NOI X.X% expense remained quarter Sequentially quarter Our results. Same-store XX% in XXX points. decreased were compared improved independent independent pressure highly in points cost our progress than effective X.X%, our portfolio by $X,XXX XXX XXXX year-over-year but year-over-year as basis increased from were increased of In continued and heightened had a independent to strong model slightly trends same-store with living portfolio. X.X% the by the driven controls recover consistent

our new XX.X% once of supply. markets reached our again this in low point decreased levels with another new of to supply Fortunately, exposed total only NOI quarter and

New and quarter the the down significantly were fourth in in third deliveries XXXX. with level deliveries second from in-line of quarter experience peak generally the quarter

expect we elevated. XXXX, new to remain For openings

substantially new However, assisted-living are our independent versus all portfolio. of these properties living predominantly

X-mile all-time As the historically, levels absorption are versus for trends and our XX% long-term Susan growth X.X% next housing. to senior properties attractive demand a mentioned, projected X.X% of to within rates industry over increase Population years radius five highs. remain near remain

which XX independent properties an remaining the cash of contractual for and portfolio, driven of Same-store net by was triple CCRC accounts million, increase one living NOI half rental fourth same-store $XX.X includes our the quarter rent Finally, NOI. in for X.X% escalators our our the leases.

X.XXx. September call occupancy coverage Bhairav the was results. same-store was our turn XX-month same-store the ending and For trailing that, over to XX, XX.X% EBITDARM With I'll period to discuss financial

Bhairav Patel

David. you, for us thanks, for provide for I'll financial for million everyone, morning. million of of was to fourth performance an joining this $XX.X the Thank compared $XX.X the overview And beginning sold of majority fourth of quarter A XX properties NOI sale the XX since the quarter of these with the decrease quarter in of of year. of the quarter by last the was quarter. driven properties XXXX XXXX. the fourth

sale driven assets or $X.XX segment largely fourth million for NOI fourth quarter was $XX adjusting same-store assets average routine share operators same-store since The compared quarter the share for the per excludes higher Normalized the was for expenses, for to since portfolio of compared This diluted transition last managed to XXXX. remaining $X.X fourth quarter last driven the was $XX.X million the higher quarter million Our with Normalized once fourth sold, prior decline here revenues occupancy. the compared million to $XX.X per diluted as the beginning quarter again share the AFFO mainly or of $X.XX $XX.X $X.XX in per the other of for CapEx. of is decrease share the for XXXX by last FAD in after million year. million quarter $X.XX operating year. $XX.X The of diluted the rates diluted year. per FFO offset of decrease diluted of or or share in stable was impact $X.XX per year. by

debt in interest compared fourth remain million compared rates outstanding of rate the higher of approximately rate accounts impact total XX% our $XXX quarter debt XX% the of at offset floating the repayments as now unchanged was XXXX. debt. to Our which to XXXX, end interest down floating most $XX.X debt of of expense paid XXXX on our of million as to of We which debt

rate interest of weighted end, XXXX one maturity quarter a As XX, of outstanding of to we million X.X rate subsequent years $X.X debt Also given $XX with December debt an total the billion in and second effective year. the of of average maturity floating X.X%. extended of by year had debt

As result, to in for $X.X to had million compensation quarter $X.X payable the compensation we quarter management due in of by there incentive to the quarter no debt manager at being no mature compensation XXXX. year-over-year to the to fourth manager scheduled and $X G&A, the incentive over primarily incentive fees million compared million a declined this to payable for XXXX.

living facility of metrics. sale down in our the managed The approximately of transactions. other of our We of was and X proceeds on billion. from the million One the sale cash a gross one from separate facilities of was and debt. assisted-living portfolio. assisted X after portfolio We other approximately in of sale received the non-GAAP the $XX of our sales Florida one $XXX transactions item gained facility from Texas $XXX excluded notable million quarter on over while of ended sale lease from Another with and located GAAP a P&L is care memory million year properties CCRCs, living was gain assets independent from for million $X XX the two $XXX located paying the in

discussed. increased balance substantially result I compared of Our as the activity disposition a third just cash to the quarter

The Board dividend paid of declared XX ask for that, to common on a quarterly I'll Lastly, operator shareholders on questions. $X.XX March XX, will February of And on the be line Directors with of share March record per please cash our X. open share. to dividend the

Operator

the first from Malhotra comes of Your Morgan line Instructions] Vikram Stanley. question [Operator from

line Your open. is

Vikram Malhotra

things the of of to give of potential explore just we upon Is it thinking of as sort possible are for or touch maybe management? maybe about you sense alternatives; the looking strategic a internalization us can some you you

Susan Givens

release, of Board that we've is includes mentioned and press I looking we're kind looking we I more but that unfortunately, everything really our at really think say a beyond the of is full so would expect. range everything the everything, As understanding been in exploring and at can't alternatives you

Vikram Malhotra

there And time this review a would completed? is which by be

Susan Givens

and ongoing timeline and been working it's and process, the have all don't on through we timeline so a specific it we're around it. specific say a have I don't can it really we No, unfortunately, about that's

Vikram Malhotra

one David, second out operational break you a that it question even how both is improvement change Maybe you of in talk And sort into that from of could sort year-over-year; perspective the has versus then you if this about dip Q-over-Q the me. markets maybe just that can in anyway a you've strategy there supply and operator benefit of the for much referenced? seen operating implemented is your from in derivative

David Smith

say Yes, in I and maintenance key mean two quarter-over-quarter to will was I pinpoint Vikram, marketing. savings one some we tough was had one areas, it's exactly

fees had was again, improved the the this how XXXX there the QX change, the business, of on and corporate QX on the from coronation going in as think QX out, of and savings maintenance as into maintenance paid we everyone we had then And side model, I they side volatility the had oversight of some that of implemented and the marketing model referral less we new QX. side.

Susan Givens

a been of add so out it's markets certainly we play continue while the of such think it's that in a do our new less some because bit we're right, results as due to the to see IL think supply less then which out, on that; And speaks the combination, to a some quarter implemented seen a than and started assets. basis to have competition, lot starting fact see did to to that positive a bit I continues been really of changes and see quarter-over-quarter have with AL have seeing pointed there. to little of operators that Just we be think little made we I our this our some -- we've and of some of concentration what -- we're I some improvements with David high from biggest

feel we focused we're so quarter, ongoing good saw pretty at that's a sure this just on it's course, making least about Of but we what quarter.

Vikram Malhotra

Florida some have peer things specifically, hurricanes, the requirements in there of something air is like have you're been sort etcetera; One upgrade that mandatory conditioning implementing that well? your mentioned post as of

Susan Givens

a totally an regulatory it's requirement of be in properties. It living, kind so we of living I but Again, that -- something do has requirement Florida implemented that have exposure It's something assisted-living for independent is ongoing I finalized will we be Yes. have think across happily have really for assisted-living have and that independent more as guess not yet. had will to been to of do us well. course operators less our your it's this

Operator

Nicolaus. [ph] Your next Chad question of the of Stifel line comes from

line Your is open.

Seth Canetto

Seth This is Canetto [ph]. for Chad of

you're confirm, just alternatives; a you a sale some company that parts know of exploration as the maybe portfolio? of First us question range, of just include said whole on the as well that does to can and the tell guys exploring you strategic when started process I whole the

Susan Givens

No, but language our comment process think press I in on can't when it. I the specifically speaks started to the release

before, We so what your really think of kind I I'd we've just exploring way so a first question. we're working two, question. have can alternatives, the that exploring so to it, so that's I Board, range of the full it's that ongoing; best of been expect sort been on would that's everything you reiterate that said and been with Number to respond and includes alternatives

Seth Canetto

mentioned remarks level that I gears new driver occupancy the that notice talk of declined guys did that certain markets then trended; decreased opening suppliers about occupancy your And in the you the decreased? how in have switching but I you Can to same-store and what is managed was know just sequentially.

Susan Givens

this mean some and seeing play. pressure supply we're is we've still that dynamic I other that Sure. there seen seeing competitive is and we've near there still that

has sequentially, while was it narrowed least think decline -- at I happily slowed decline of for has it and and rate us, -- declined the the down.

of multiple think the in focused quarter-over-quarter think on seeing importantly, parts really was for -- I I environment we're and we've So go that now there down the lessen numbers equation. what to hope never we the are what right seeing course is in decline been but the

so seen feel we've at sort rate continue of some seen steady but XX a months over pretty seeing while rates we're growth and focused good that pretty and So pretty is basis or growth place strong so. of outcome we've to face we're we're challenges, sort levels, occupancy in points quarter-over-quarter so we considering on which the we've piece good down occupancy about what seen XX the last

Seth Canetto

And then that when fourth in of new guys you acquisitions? you dispositions completed to quarter; the reinvest the $XXX slated in expect million

Susan Givens

part all alternatives. that's of strategic expect, might you a As our of exploration

about on that part overall into that, mix a and So we really I just goes comment that's so of the can't the made strategic announcement alternatives. the

Operator

of line comes Advisors. next Lee Omega the Cooperman from question Your of

Your line is open.

Lee Cooperman

congratulate think the I process it's in one have for a I be the to think here do XXXX ways the of value, outcome that just think what me And interests the been you will alignment value for to the looking regard prior what fees -- aligned the the are feel on that to market, trading thing was manager what the I can you with do a asked because value your do managed of [ph]. probably that so at raised right limited things Well being you limited we very the to or paid just I to or the normalized let in to destroyed? though the think interest; above depreciation to If extent this high but at say guess favorable stock trying outcome the can and I'm other XXXX to back is what asking; realize creating lead likely I value reduced people to fees But will add shareholders. Fortress you you trading I've say external much to to it's the owners. is totally from the first just figure suspicious in the with I you're realize I'm out externally in of but a companies where stock positive really I is what And honest always so of lot relative number I I'm I that think would you be I materially the equity above myself book accrete at. quarters, a we're announcement? you're three were disconnected and reality, money was announcement,

Susan Givens

on of shareholders, sort what entire the addressed question this focused and focus process. for about that's favorable kind of only of that you look we're Lee, is the outcome

We have working objective. that and closely key Board is that's very an us their independent with

So I price yes, for that that what is have well I do we do tirelessly alignment think been to why really along have and stock aware is very we and with Board I process. embarked that -- are working think there and and the of think that's this our the on shareholders we're

So yes, so first -- to question. answer your

it's lands question; where to but our that's for it second say exactly all Your focus. hard me

Our the value sort focus and of trying we can disposal, is options of we can on to think as shareholders we as do I that. that -- best our at have given set for maximize

Lee Cooperman

the folks the right Thank have Congratulations, of in you. a doing lot right confidence thing you announced I Fortress and of in thing. the [ph]

Susan Givens

Lee. Thanks,

Operator

this There are no at questions further time.

Susan Givens

forward We everyone everyone. much. And us you great. updating joining very appreciate morning. to this will look Well, we Thank

Operator

conference today's call. concludes This

You disconnect. may now

New Senior Investment (SNR) 23 Feb 182017 Q4 Earnings call transcript