SNR - Earnings call transcript Q1 2018 | New Senior Investment Group Inc

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Operator

Good day. My name is Alicia and I’ll be your conference operator today. At this time, I would like to welcome everyone to the New Senior First Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question and answer session. you. Thank Instructions] [Operator Ms. And you may Hernandez, your begin Ivy conference.

Ivy Hernandez

to you. of call earnings morning XXXX. welcome Good and New for Senior's Thank the first quarter

CFO, Joining Givens, Smith, our are Director. Bhairav Interim Managing us David Patel; CEO, and today our Susan

differ Please Susan, any actual subject expressed risk encourage and our statements from Before SEC you to would XX-Q will to uncertainties to quarterly made other in including may many I materially remind this call. the over These we and be results statements. forward-looking contingencies. statements on contained filed annual like review be factors certain most risks, filing with I forward-looking I the bear that forward-looking reports later the call that recent turn disclosures today the today. may in to mind you statements and are

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

Susan Givens

you Thanks, call joining morning Good and for Ivy. the thank XXXX. first New for Seniors' quarter Great. of earnings

results I’d provide update to like our the we an alternative decision for range explore previously company. to announced of full Before on a strategic discuss the quarter, for

Board’s company’s value. the As the reflects ongoing. comprehensive conduct to of The we process. have Directors important strategic in and February, decision financial advisors Board to engaged is strategic announced commitment the together legal maximizing review with management This continued review shareholder

we attractive assets transparency. evolutionary for including these as holiday transaction host to foundation terms, To leases focused a review, a improved company’s operator and to We this company represents changes managed of enhanced has reduced for that significant alignment this announced to and owner of company’s risk, with terminate agreement the solid and step benefits strategic met the part the As an the triple future. economic reposition on credit end, a XX portfolio. carry believe living independent today Board establish the

this like company the portfolio Before accounting more the a for strategic on In The significant benefits coverage a I’d asset in lease last EBITDAR are industry the years portfolio have holiday half the focus why review. of entering holiday decline describing of the portfolio’s lagged leases details of in total weakened became the almost with touch quarters. for NOI. expectations transaction to four leases, since the growth has trends resulting over the into

enter not truly opportunity to X% to to holiday of million $XXX caped order of an been revenue independent the of is has a Against is issue As own resolution. holiday. outstanding us deposits. to a fee to the This subsequent a special empowered with lease for declining a by gives special a negotiated year In of to many management and revenue directors new and which in Bridge the reported to the by fee, and management The also million advisors of and a the term security special agreement, foster The alignments, forfeited being results. should including for financial it’s advised committee incentive agreement widely $XX into legal grappled X.X% the of this one million appropriate committee lease committee Lease unique termination in agreement provide company terminate with special the peers. that predicament discriminate negotiated management which management years. new payment committee decides performance-based of its Board consideration X% $XX the equal backdrop, of our reduction for total earn

portfolio a condition can the leases decision portfolio after abilities the and which of as management termination the to entry agreement we reposition first be agreement are the expect without in committee’s the holiday new special the Importantly coming The managed into days. our The three penalty the to benefits. has management terminated year. complete refinancing upon key

First, risk. the managed reduced conversion structure our a credit to

mentioned, total continuance short-term concentration. The between leases of debt, NOI account previously to half financed meaningful during address our review. the securitized flexibility debt for new credit strategic in our As prepayable will and of almost The financing resulting originally with escalating and reserve limiting ability holiday portfolio I performance portfolio mortgage disconnect the is be rent. fully

And has operator is agreement value The The an yield. the management implies incentivize million our $XXX terms new Second, to agreement total so penalty said XX in or the to and enhances year, of flexibility the the to to after drive portfolio we if the have approximately basis the and conversion be I intended consideration asset of as alignments. quick favorable without improvement aligns on points holiday first operator we some before, new can management growth. setup transition NOI terminated [ph]. all

of operating our Third, portfolio the transparency the our results. simplifies conversion increases

owned held will tenant. nearly be conversion a managed any and improvement performance us structure, IL Since exposure results asset the to directly the from our on mere of portfolio in accrue with will will than to our portfolio assets basis our of be XXX% one increasing rather in Following XX%. a XX% operating will managed all results

the dividend. on Finally,

earnings, dividend strategic dividend factors. the and board While policy with to quarterly typically review our ongoing the relevant continues other we of in announced light our evaluate our

X, David, over board the June consistent more the make with portfolio on the results I’d will allow make of quarter to payment practices. review a June by expect us past first final to determination And detail. that, in on XX, to to the turn to XXXX, presentation amount dividend which with We like the

David Smith

quarter. discuss everyone. performance I’ll our Thanks, good for morning and the portfolio Susan first

of significantly signed so quarter new impact end the reminder, termination of we residence. Throughout early today, for first second our as occupancy discounting portfolio. during almost managed net remained $XX result. on of April points RevPAR first decreased to the NOI senior for began assisted cash X% August. first total Encouragingly, our our we accounted cash per our we with our real are properties quarters. same-store X.X% assisted-living second housing roughly since after the which at first living increases strongest roughly first agreement properties the stable, for our performance the off portfolio. Rate with last by NOI. XXX compared occupancy of trends increasing pay no and portfolio, are of new rates Same-store with existing and of properties. the quarter our decreased portfolio third Same-store independent see portfolio and month, I’ll quarter, our year-over-year million totaled properties NOI roughly was lease start half XX also last and last entered net occupancy managed XXXX. reported basis included XX portfolio triple achieving X% year-over-year a [ph] consistent seeing months portfolio to announced same-store was we NOI XX% in quarter, for which the positive experienced At the and year-over-year quarters, XXX first residence our living decreased was As approximately Same-store consisting trends quarter, with pool on flat quarter. had offset in XX in outperforming residence [ph] private optimistic our heading to into independent our of with quarter, growth X.X% year-over-year our on quarter, remains quarter, signs to on line our living the we portfolio our less seasonally end compared the stronger to stronger the performance Similar it growth $XX.X million. which to quarter portfolio XX past

performance transitioned in We’re operators also NOI basis quarter-over-quarter. continuing implemented XXXX our to see to practices assets These to second at that the improve to occupancy quarter new of [ph] have business watermark a great progress With and increasing on XXX properties. up order the in related and same pricing, four marketing management. staffing and cash XX% we points managed operational

be to with encouraged exposed continue by the supplies. we’re of our total Once again our XX.X% portfolio these remains work results more thus far. new supply levels delivered in decrease in While of NOI to completed,

to are to [ph] primarily living deliveries of Also, quarters majority living While still we property compared balance are portfolio. assisted past seen downward. as our have projected the stay independent new of the new openings in properties elevated, XXXX for

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

EBITDA Bhairav to times. same-store trailing was discuss XX, over call and was I’ll X.XX turn to our With ended same-store and the financial XX.X% XX-month For results. private the period December occupancy that,

Bhairav Patel

million NOI decline of was for you, the performance joining in year. I'll for morning. for We $XX.X XX quarter compared And first to assets million driving a $XX.X briefly quarter. during total the of for appreciate, this of quarter most Thank sold XXXX everyone, NOI. us discuss last financial the our David. the

first for of $XX.X Our XXXX, million compared first the year. quarter same-store managed segment quarter NOI to last $XX.X the for million was

operators over year. share FAD FFO As The growth or quarter $X.XX was of to was share for routine revenues a million $X.X for here decline million the Normalized of the impact the The result $XX.X prior diluted $X.XX diluted year. of is largely year. the to expenses, decline by as per $X.XX $X.XX diluted or for decline last the Normalized AFFO stable diluted $XX.X per share as of results average per assets compared remain other driven per of compared or in the or was $X.XX a occupancy. since adjusting XXXX. share since the reminder, assets sold, quarter $XX.X sale transition teams' we CapEx. after million diluted share million also last offset beginning in our higher first quarter exclude was operating per

$XXX the Our offset to interest XXXX higher rate our debt. million. repayments decline $XX.X of expense due assets interest the debt million rates sales decreases in partially $X.X XXXX quarter floating million to was totaling impact and from This by of from first

$X.X approximately year-over-year the of declined million compensation gross an X% billion. had of X.X%. G&A, fees cash to weighted end management XX, million average of we million with effective for cost. and the and rate quarter just professional $XXX with years interest As of X.X due a incentive $X.X of of or and At $X.X total debt assets billion administrative of primarily maturity the by and roll $XXX the fees March quarter outstanding

quarter fee with discussed retention agreement $XX enter deposits The or to we've earlier satisfaction the is to please debt test amounting debt. $XXX for with them to of Agreements of security agreed freely open terminate operator That our an entering Pursuant total triple end that, million and net replace subsequent with $XXX whereby upon with the approximately $XX holiday termination into finishing And to the will of line to the includes are the with certain as I'll Management determination for which manage conditions upon we property subsequent of expect the ask we existing and million. Lastly, into they holiday the termination. consideration the million. year to questions. refinancing pre-payable the Termination to to million of property one leases Agreement, the

Operator

[Operator the Instructions] question first And Vanacore. from Chad line of your comes

Seth Canetto

morning. This good Chad. Seth is Hey, Canetto for

Susan Givens

Good morning. How are you?

Seth Canetto

why I on the to question function just upside? the I that short-term have you guys with well, the lot refinance have Doing of to dampen portfolio, this transition just used a transition on with that

Susan Givens

debt very really we structure and the had has in place. need your do long-term actually as doesn't much that in place securitized Turning you depth enable, to flexibility that's know CMBS we The limited into with was very question. and

financing debt pre-payable of then but flexibility. and for it's plans flexibility appropriately Two, the the one the match, because is a any structure decided pointed and flexibility give and assets intent at giving fully to and to extent to have the not absolutely managed effectively out provides we structure, the comment, more ultimate to operator. new debt that We're us management bridge we the as do the assets no we and ourselves cost. ourselves want we new a with that's structure short-term assets So, move specific the

that in that do So tied us other do no debt. had so it prior was ability allows the as CMBS the this financing to way because really fact the financing that and absolutely a we not did the lease to things, to flexibility was strictly given

be now to analysis of very assets own the that review us and to very that even I that I pointed perhaps get kind light enable matches that all what is feature strategic on gives in this will and taking of different you us are a of So, actually out, how flexibilities the of or view place we financing think kind flexible sort flexibility. good ultimate the right a

Seth Canetto

That same-store right, XXX-basis All you know occupancy was decline, occupancy looking I at point sequentially. have guys great. mentioned decline, helpful. I managed just at very And a and about the favorable. when which And impacted quarter outlook that then you flu more this can supply how bit the last But the much was in a versus quarter supply were that little by quarter. just talk look

Susan Givens

look, isolate to mean another. occupancy kind I I exactly think Yeah. always how thing declines are with versus of one of tricky much it's very associated

I third then implemented. year led of operator some of some given in of upticks with QX the bigger, biggest our the leading think the in sort sort kind see is have January mainly some or kind saw the that changes of saw so we of been of softness. I fully into can tell part fact favorable last back holiday fourth which model We did you, into quarter particularly December, really of the quarter, pretty in occupancy we

rest with the has I consistent of So, seen. the industry think what

continued some we of previous that years. so, is others consistent versus think flu bigger from directly drag we've I correlate we been the will But holding I how while year improvements is still in to much And the a and a has happy of we're pressures. a was occupancy with our product, define that kind up feel occupancy we some seen heard it's with kind not of for flu of product But that reported as think say side. this flu on our through industry we that ultimately IL season And with of this think what kind IL hard that better. in sequential the related decline others I has decline have operators like

quarter we're of of hard and as in QX kind first okay, isolate like but to late softness just seeing the seeing do quarter, the through sort kind we feel we event, the with So, some continue into that fourth of it's say ever now year. we're was improvement a

Seth Canetto

great. Thanks. the back right, portfolio. getting lease And to then of just All the repositioning

you expense $XX the you're understand there? penalty. make you're but then I any million the have assuming So, to given the guys pay don't year going receiving then a you And sale payment portfolio to changes, million, significantly short-term interest $XXX loan in for or your pay first higher

Susan Givens

doesn't one it an one is in the place The be term is outstanding for on interest entire the necessarily expense the higher. meaning will needs be year. It's an a of debt that put loan year to year that

alternatives And some dovetails so, all evaluating. that of this kind of we're into of the larger strategic

not And sort so, is have I outstanding think impact extent reduced would for year, to demands. the interest a the it on the obviously that of

on. the out think so, alternatives. be gives that that view, the And of number But we'll really increased you new I interest this be that I in by pursue expense offset would a can anticipate focused flexibility something go to my think us debt and

Seth Canetto

Perfect. my right. All for Thanks questions. taking

Susan Givens

Sure. Thank you.

Operator

from And Stanley. Morgan comes of from question line the your Malhotra Vikram next

Vikram Malhotra

Vikram. is This Thanks.

sort talk the you’ve sort the know shop. be you to about envision. print you're much expecting expectations Can that returns you of you and this converted the scenarios you understand to how How over if maybe metrics assets. of these that the kind that the wanted next CapEx to trending needs just will Just of XX underwriting to to XX months? see What or

Susan Givens

Sure.

think you how look about you coverage. actually underlying been I of XX. [ph] it. think kind below we've When reporting you lease It kind when the think and was foremost, first the about and of at

the some course improvement some NOI fact come assets decline lease to coverage converting the only implied will NOI just structure now And given under and will or we to because different But be directly. converting. the at managed the a that the the so, not these of structure, us decline was in assets of by there now currently XX

way I of to some the will think We it that kind couple But step what plus is hard really kind the red current kind escalators The years. predict now. that's structure red about slides have actually yield escalators thinking a of is plus under the the decline in exactly kind the that X.X% it's and put the that give the deck in to of assets right that lease of is so of midyear class we on kind four. of fact NOI of on we're page the the have over

difference now kind I sort could NOI think of assets look from the cash If expected for so improved there of about you estimate bit. a the NOI, how X% it our and the we we’re the slight take about of a what payments own and kind basis one the for of That’s so to like of receiving is NOI and little look kind basis kind just lower while from adjust yield a also the the you assets that pay imply own holiday then effectively store yield of thinking actually team way between red at and we - what at and it.

Vikram Malhotra

And the NOI supply been just sort Okay. keep if the will I decelerating headwinds of the it’s assume operator to growth expect in you safe sort of or declining remains probably other of say keeps and maybe innings headwinds introducing and improve the have is this given they’ve cyclicality where sort probably your up? rent then the see thought or you and negative I'm what the that mean in triple coverage how taking you’d bump sort lot lot of more restructuring the just the peers wondering of versus some about de-structure net more maybe adjusted some obviously you lease concession rent just underlying

Susan Givens

declines formed the Board input Sure, special not first. our on lease, myself did of so of your of special actually talked all this so our structure Directors we a can’t I’ll evaluate the features of We It because notes. had second was into really on kind that comment on of think about to sure this not a that then focusing that directly I were part question committee different those address because results it’s that not some surely but we’ve lot NOI but committee softness and was of kind I directly so care. while the particularly seen what make of our or the side on comment things have conversation. rest kind IL IL I of I neared think the myself of kind very everyone conversions, with these NOI features holiday evaluated of IL the looked negotiated was that and out is memory and kind to and on has a can’t industry do But across I important it’s our secondly, seen IL trends expectations, of portfolio I

and that when percent kind sort of that year-over-year think X-ish - compares at look have that IL you and predict implemented. where you change declines that model to holiday numbers are what believe even to so I fully kind kind we’re higher don’t massive want it been and add and plus fact of that’s any through the of had same-store in than though of through you aware the of I certainly are industry hadn’t past the an going they that and to

the across get kind to favorable the owning of it’s of considering improve seen managed improvement. point of I accrued very process of now that start we basis the none see structure and plus think benefit. will good actually of these the under of rest improvement kind and we’ve starts we when pickup industry starting lease would these industry, we to where the and get NOI pretty-pretty all our relative really a think what assets the point - that a so, that I the actually of is performance to the on XXX% assets when

Vikram Malhotra

Okay.

of triple sense have portfolio us sense was last portfolio XX if managed with down growth what this all side one be tell a the a have what’s NOI us managed the clarification, managed can do now Just net NOI, since were can you give you managed is were going number? to this you just the a the total been

Susan Givens

Yeah, all say. it would I improved can that’s have

of be the really concentration I year-over-year the memory given running on less a managed fact been increase, having think so down IL we was more and makes much it IL would numbers through care and of basis sense. asset would that if our have than that same-store IL kind better, our IL

you numbers. So, looking improves metrics our start it when only same-store at managed our

Vikram Malhotra

EBITDAR than the negative roughly for for underlying was triple the underlying nets better So, growth growth - X.X? it another the EBITDAR

Susan Givens

That’s right.

Vikram Malhotra

Okay, thank you.

Operator

from Instructions] the [Operator of Omega comes question Our Lee from Advisors. line next Cooperman

Lee Cooperman

hired my series excessively you. have and the than is are housing in says senior the work Thank to properties company the is I market, materially part build being and contract of but had and in with lucrative. a worth a he external in capitalized problem I questions. the If of above the it investment me market manager he more consultant the of

and So, changes shareholders this my enhance the to announced designed first the that you these one. that transfer they company, to have from question value the will manager number morning of are is external value

you just you Let them want. way questions my out and get all of down them where can me any we take write

Secondly, call, business developments we created, when optimistic spoke I where two months business optimistic change wondering optimism still last the the have that on the and have we you about or am you in created. very sound over have you the three last the

have that timetable previously you're that which has Xst, the in review, have Any same give questions be can any be help completed board do made a appreciated. respond some a I and and optimistic total fiduciary at am court I we the duty line we the so strategic CEO the the the of certified you. question you would be now to you're sustainable, you you’ll and to been time. do by against announcements, great information about you picture Thank these with if the the and strategic all And implying think announcement comment it me the cut, you lastly, lawsuit have have of before conclude dividend the review to about is, June would kind is in will Third dividend speaking on have company.

Susan Givens

Yeah, thanks Lee.

external I first it’s that got But, hopefully your of say, strategic manager. do board what the said before kind all it's and think of something been think structure say key I that exactly comment reviewing And folks we can’t carefully safe at that that been evaluated being management, be But on the as is is them has this as looked I we're that’s managed point to question on a think evaluating think Look, external board kind the that I and to us it's something focal I everything. I down. to and that know the safe reviewing. know the you for being so – is I and So, it's very initiatives you would expect it.

lot of think – question kind act announced and really -- ultimately a as that strategic the more announcement why efficiency that I step into in lot today, of I and we really this on it of with review will a of and think of a company of puts position this next where that really value we've to announced. initial for series that process, view entered kind the create series step I are your a what first process of the kind a strategic in expect alternative can I more that’s be is the kind shareholders

the behind a kind actions that is other on at. looking time involved and we So, I I the to space industry. we importantly Number long of us a trend always the those what are kind have sector. optimism This your most that good kind comment the think critical are, as have we first view in allows of felt about two, for macro step I on can’t question some that in this really been of this specifically move that respect with of to but

facing a here changes we an is industry the some really what’s the created challenges underwent had plus think space medium happening over think the of challenges everyone term. of think are we challenges as for some to today are that some of that operator and term with I the are the that something unique that fundamentally and kind about consistent industry, longer our to weakness us, kind But of us changes optimism unique are I respect facing kind of industry. sitting with I don’t across kind bundle that in

about now value. platform taking create industry structurally sure that feel we and really we that will our good but focused are structure So, steps shareholder still kind right we of can the on good enhance the a are more making

think elements so, the value or investors some and structural on And sure the really the assets that of kind really get are what they make sound I we’re of should. kind of shareholders focused

single time around is is this and Your no And spending has it’s special is strategic the a other members board there, and timeline been are if have review, not spending around have a to folks. of this lot if been something on this. of the the very question – other committee has has a the established the every timeline of of that timeline, myself put This people say engaged. actively there third board and passive and been is think that you time been review, out bunch something we actively specific that kind that safe have announced we I very engaged in

our give can process, is and long process dividend we kind the working be be question. to something On and that’s our kind that really think to good not So, drawn goal this conclude towards. is to out are desire you I of everyone commitment idea review of a have working your here and a never able we expeditiously

comment we can’t the your which anticipated not to have have and the assets previously we midst it, do sustainable fact dividends what it of see think and I view the kind been and I of given will strategic expectations our of I or totally think of specifically asked course that we’ve be actually to of the relates me selling that the was I been on think question of around Board amount I review process piece you if sort dividend the about ever if Just clear, don’t was in it. doing dividend imply kind other think the

of ongoing around to to an of of conversation looks kind strategic and to the strategic have that actively rather it’s and sooner like review update so Board of I that said will concluded be process think view than as review the what the of we’ll later. the to market we’re around like having kind review process, just think have of sort action that midst the the I it dividend continue I before relates that and in what Board the of take trying

Lee Cooperman

straightening least I negative reduction Is review raised be about? be and really loss happen to is going of we of what that should years a something believe an will that’s that it is conclusion buy that the materially resetting company in the somebody the am with XXXX value amount of excess is hard XX% scenario fiduciary the the a if process presently. with guess. this shareholders guess the -- hope helpful we’re to in we’ve that I substantial two money reduced June company in no as concerned dividend don’t to a the we strategic to that that the to my would I about What dividend, that at by almost think is conclusion last my hoping

Susan Givens

to here the mean I since the XX-K and no, folks that’s something working happened view my filed has is merit nothing through. no there kind In of was lawsuit that new are

Lee Cooperman

hope a conclusion for We luck. in this good Good process.

Susan Givens

time. your appreciate Lee, you. Thank

Operator

further questions we time. no have this at And

Susan Givens

updating be today appreciate the we that, Thanks, everyone you will everyone. with further in us near-term. Okay and joining

Operator

This today’s conference call. does conclude

disconnect. now may You

New Senior Investment (SNR) 10 May 182018 Q1 Earnings call transcript