SNR - Earnings call transcript Q3 2018 | New Senior Investment Group Inc

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Operator

Good morning. My name is Heidi, and I will be your conference operator today. At this time, I would like to welcome everyone to the New Senior Third 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. Ms. Instructions] [Operator may you conference. Ivy begin Hernandez, your

Ivy Hernandez

you. Call for morning, welcome XXXX. and Earnings Senior's New to the Thank Good Third of Quarter

Here Managing Givens; Patel; Susan today and are Bhairav CAO, Interim and Director. CFO Smith, David CEO,

not Before forward-looking expected be like all. risk review and most at as certain including the remind would we be forward-looking Susan, the reports to other our the and which to occur statements, encourage you SEC, events the will quarterly filing statements are or I in I in with and today statements many factors you recent expected after the may contingencies risks, XX-Q call uncertainties turn filed this disclaimer, made to annual I disclosures over statements call. may forward-looking that these subject described to and

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

Susan Givens

intended a and of function. Thank Senior's the XXXX. you Good announced Ivy. quarter, morning, thank you, management maximize to of a Call including plan everyone, quarter to we for for Earnings joining initiatives the Great. strategic value, Company's third Last New series internalize

to-date strategic challenges. initiatives including turn results we capital in structure by hindered the key Company's recap review believe announced strategic That I'll quarter, and the we address intended then The following performance prospects before issues a initiatives, structure, those review detail. to discussing Bhairav strategic is process in are I'll has strategic call coverage, of completion part review quarter. to-date. comprehensive growth to more The our David initiatives. And coverage. and the multi-step During for lease portfolio dividend and our been resulting management have strategic made the board. significant the external low the The over progress a financial of certain initiatives those discuss performance the to towards the

leases assets of Independent our in Living the of operating and their transparency the results. May, net to triple First, managed termination conversion on structure increased which our reduced credit a XX risk and

Company’s Second, re-set which with more August, the peers. of payout dividend brought in a in-line our our ratio

Third, plan of in to $XX bridge a plan And resulted million fourth than over internalize a function or refinancing. refinance annually loan new a of the by the management interest Company's to October, expense, $XXX In loan million in lastly, year-end. successfully savings points even basis the better completed The XXX we quarter. expected.

cost to In to identify accretive addition, prepayment our designed the us recycle opportunities. refinancing savings in enable flexibility. event to that capital we And to we this preserve

are the completed we With the refinancing three in on four have fourth of strategic initiatives internalization the the year-end. track by and to initiative, finalize been October,

As we per cost benefits, including savings have of previously, million discussed we expect XX several the year. internalization approximately to

organizational financial We the the the also simplify our increase internalization of transparency Company’s structure results. expect and will

REIT space, and In our will company, could investor we in to in healthcare base. which comparable peers we addition, more as company our managed the think our an interest bolster become internally expand

for I'm While, shareholder process we progress goals part us, company will that additional of measures significant of towards of facilitate to we a very made as the and achieving maximize work growth the date have position still efforts have for to review the lot our value. the company. ahead taken optimistic strategic

previously adjusted the Company assets in results. assets our same-store assets on and forward. XX first results impact were we've triple on of quarter about were discuss reported same-store independent capture living owned briefly that this portfolio composition how a total of current a portfolio in the think was managed our on these comparison I'll living XX% full quarter we owned nearly net This going the represent our which our part to Now, and we independent NOI Since by of lease periods, the segment. these both basis

more pay. across a gives largest straight the the has senior unique but that basis. and trends representation believe we a accurate attribute pure eighth with of only U.S. have in seeing portfolio one owned Today, we're on a business. of forward the XXX% assets, REIT the XXX our asset We're of housing a also the private managed being We all portfolio play

is our In more derived NOI living any than addition, peers. from independent over XX% of of

quarter have living third our assets independent no properties exception. the and was Our generally outperformed Care Assisted Living/Memory

on year-over-year up were basis. assets living independent an adjusted same-store Our

memory down AL assets our While significantly. were care

worth are there think I noting. a takeaways few key

First, space, independent we while forward in remain And, housing independent quarter the this experienced senior about same living some of that had others of living our challenges assets. the we going our impacted significance we've given growth NOI. optimistic our across prospects the total positive have to

total Second represent only NOI. our AL Care our Memory XX% of assets

it's our company. piece of small relatively So, total a

assets our Care portfolio underperformance really necessary. by lastly, a focused assets. as enable of intentionally with Memory very AL our the to agreements created And we are to within us Third, changes is management operator have announced flexibility compelling. we ways subset long-term And initiatives fundamentals optimistic those housing driven on we the about identifying make a senior feel Combined, Senior the I the company's portfolio. our to-date. remain with and industry strategic believe to uniquely the medium attractive optimize portfolio of future. We have Housing of and

in detail. to the the portfolio more to I'll Now, over call review David turn results

David Smith

XX properties Thanks third Senior’s end states. Susan diversified private everyone. was XXX morning portfolio New the At quarter senior comprised of and of good across the pay housing

one Our of portfolio housing us senior U.S. the in of the owners largest top XX makes

accounts a results and have continues portfolio over on NOI both quarter increases positive results in XX% lease we basis, achieve for positive net including which own weakness of some for portfolio, figure This XXX a our independent managed the lease one occupancy. portfolio, in our that were totally second cash May, for to XXXX. announced entire the our XX triple the The not of addressing. in AL is living by assets of converted we’re conversion except our IL strength which decreased to same-store year-over-year. with offset IL in The lease of Adjusted our focused portfolio on takeaway structure total NOI our The quarter is entire assets, in NOI we the our key Following property. apparent same-store cash that X% of portfolio IL managed represents portfolio been from third results.

to points Year-over-year of Industry XX living number. So, data IL break and points. solid of independent in cash trends length assisted a supply narrowest that inventory was than same-store Occupancy third from living points higher portion NIC, me outperforming absorption XX recent stay, from basis more growth up regulatory since with decline favorable X.X%. IL with let margins new down NOI realized industry basis remain posted lower adjusted benefits risk. spread the of just XX.X% The which general, quarter longer quarter. and by the along lower XX of increased a the of second In levels exceeding XXXX. basis

assets these occupancy basis more portfolio NOI positive declines assisted year-over-year NOI adjusted points represents continues Our same-store year-over-year, offset XX% XX% was The of down to XXX remaining portion But experienced NOI. that had growth. XX% in which down challenges. living just cash XX than face significant by and was AL this of was business some nearly of assets the AL our

in a of being forward coming focused quality management our a months with the highly issues to addressing on are portfolio these color property improve performance number asset of initiatives, providing metrics. through additional AL its resulting to look the these We initiatives. portfolio goal overall on and We'll

openings from new that, a XX% openings Lastly, on XX over openings new call our properties. in lower quarter the our With which of portfolio. XXXX we has there for significant new quarter I'll financial bodes new our results. XX third to we based third XXXX. XXXX discuss in significantly Bhairav realized the within the turn openings approximately data reduction to down second mile living assisted well openings, our is peak quarter, be NIC, radius new supply, expect from of And these XX% new been of properties. in the than our which In to levels were a had in current

Bhairav Patel

routine morning. financial and NOI the sale for million the our due for the for thanks per to for diluted you, third was per million us expenditure million year. assets year. $X.X FFO David $XX.X earlier per diluted this $X.XX $X.XX year, per diluted quarter termination $X.X compared of briefly $X.X or which or the adjust the per to Thank of further will this Normalized share. to and diluted $XX.X compared everyone, last in for quarter. recap prior share the I XXXX XX was year. share, primarily to FAD $X.XX was assets share, million compared or in quarter AFFO of results joining $X.XX million the XX AFFO quarter IL was the for $X.XX share for quarter last diluted fourth Normalized lease capital

for interest connection were termination in results with in the from the we of Our to assets. due expense IL impacted bridge put place the one-year XX higher $XXX million of financing lease

lower increased to an dropped XXX from interest interest the with outstanding weighted our driven months. effective XXXX interest largely our maturity loan refinanced After by with seven on This our million financing. our million, plus in October of to basis. a approximately refinancing to the to Our increase at in $X.X third is by loan to $XX.X due average interest expected million expense adjusting points. year also bridge which debt next rate effective X.X years by annualized expense LIBOR due limited XX to the coming priced was the XX bridge the for It $XX increased the of rate X.X%, in quarter basis debt

the totaled third to year-over-year reimbursements. million a fees management and lower of $X.X and million professional G&A due fees $X.X for reduction Our quarter,

company’s We following decline item management expect line the of function. the this to internalization significantly

the that, dividend of December open cash remained to the sheet as of balance a $X.X gross balance record to million the and assets Directors our Board shareholders on of I'll Our the of billion ask With declared lastly, for of for end on $XXX quarter, December operator quarter. payable a of with the And relatively XX third questions. $X.XX line of X. unchanged

Operator

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

Vikram Malhotra

question. for the Thanks taking

there, internalization, Just could updates reasons the any delay process? or the on that process any the derail

Susan Givens

Vikram, Hey, Susan. it’s

definitive the completed really on our Fortress from the So expectation done all documentation that work working end on will we've made to on the progress the year. and continued and towards operational internalization of And by side components ton of standpoint, be the Committee internalization. the a with the operational having Special are the

a good in we're place. So

Vikram Malhotra

Okay.

start give as to me in be, had quarter, the what would just as the G&A mentioned? FAD Bhairav If of interest $X.XX this last the you lower assume expense internalization of occurred and the

Susan Givens

the top mean, until there's this our going off quarter, that don’t wasn't on in loan I have of head. because know of things bridge we we that right, place a refinanced couple I the had October. that

from annual little internalization. in we've we've million internalization bit savings. quarter, So spent the the of there's a separating talked will noise But about amount $XX to aside the as of

share a So that’s our couple if count you pennies. look at

Vikram Malhotra

peers we an trajectory occupancy. of then you guys I should see And reported mean, a think occupancy seeing from Okay. about And into I in of don't mentioned – sequentially uptick this mentioned question improvement, sort from you give next just have – lower it. you on pension guidance How perspective, operations your know XXXX? as of but an last here supply, this the the lot David, year also

we is actually faster question year? my to a there guess NOI where next same-store scenario I start growth So see

Susan Givens

so. certainly We hope

about I independent quarter and managed comments. NOI saw clear portfolio been will part growth a understandable and his growth. saw year-over-year basis. this we think occupancy seen David portfolio and very a mentioned We really of positive. there significant living. positive forward, going such IL be very talked We our The we've trends a our portfolio in as on of have

model really so feel have trend the were last through optimistic operating to the continue. changes year that lot reason can holiday change. we is And system is implemented Obviously of the a that over

about numbers. some focused But from now And our to we challenges. we're a had on, we've initiatives where those taking hard changes talked on benefits starting think. our we're portfolio been the look we face if to our and we've as continues AL the those portion on we're a assets specifically some at operators focusing of really see And changes. addressing so focused of those assets working some in I juncture good can a strategic through with at make see of lot to now pretty We're

we So that to start some from can portfolio. generate growth

growth it we underperformers chunk portfolio So you our we is and growth. kind are are seeing weighing but total positive But like not positive good if take seeing news that out, our down David our trends of said, and those is NOI it's a growth. total the huge of occupancy

we year. see about. So good going every I we're of very feel have to kind reason think What going to into next

the But we the is mark of of On we're think I assets. assets. next with IL about kind question And kind those going where into bigger can positioned we what the feel side, AL year. do good

Vikram Malhotra

you. Thank great. Okay,

Susan Givens

Great, thanks.

Operator

And there are further no questions.

Susan Givens

for thank be joining you. in touch us. we with soon. everyone you everyone Great. will Well, And Thank

Operator

call. This concludes today's conference

You now may disconnect.

Ivy Hernandez	Investor Relations
Susan Givens	Chief Executive Officer
Bhairav Patel	Interim-Chief Financial Officer and Chief Accounting Officer
David Smith	Managing Director
Vikram Malhotra	Morgan Stanley

New Senior Investment (SNR) 1 Nov 182018 Q3 Earnings call transcript