Sonida Senior Living, Inc. · NYSE:SNDA
Sonida Senior Living — Capital Senior Living — Investor Presentation (August 2008)
27 slides from Sonida Senior Living's investor presentation, Aug 19, 2008
Slide 1: Capital Senior Living Corporation
Capital Senior Living Corporation Capital Senior Living Corporation
Slide 2: Forward-Looking Statements
Forward-Looking Statements The forward-looking statements in this presentation are subject to certain risks and uncertainties that could cause results to differ materially, including, but not without limitation to, the Company's ability to complete the refinancing of certain of our wholly owned comm
Slide 3: Company Overview
Company Overview Capital Senior Living owns and/or operates 64 communities in 23 states with the ability to serve 9,401 residents 50 of these communities are owned or leased with resident capacity of 7,701 Achieved 94% approval rating in 2007 residents' satisfaction survey Owned Leased Joint Venture
Slide 4: The Capital Advantage: Senior Living Options - Independent Living
The Capital Advantage: Senior Living Options Average 131 units per IL community with large common areas and amenities Wide array of social, recreational, and educational events Average monthly rate of $2,200 100% private pay Average length of resident stay is 34 months Independent Living - 69% of Po
Slide 5: The Capital Advantage: Senior Living Options - Assisted Living
The Capital Advantage: Senior Living Options Average 64 units per AL community Assistance with activities of daily living such as medication reminders, bathing, dressing and grooming Average monthly rate of $3,200 96% private pay Average length of resident stay is 26 months Assisted Living - 24% of
Slide 6: Resident Demographics at CSU Communities
Resident Demographics at CSU Communities Average age of resident: 85 years Average age of resident moving in: 82 years Average stay period: 2-3 years Percent of female residents: 80% Resident turnover is primarily attributed to death or need for higher care
Slide 7: The Capital Advantage: Established National Platform
? Wholly Owned (25) ? JV Ownership/Managed (12) ? Leased (25) ? Management Only (2) ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? The Capital Advantage: Established National Platform (Parenthetical indicates years of experience in industry) ? ? ? ? ? ? ?
Slide 8: Favorable Demographics
Favorable Demographics US population 75+ years old is estimated to grow by 3.8 million through 2015 Only 1.8 million units serving a population of 18.6 million seniors Current 9.6% penetration rate implies demand growth of 45,000 units per year 2007 2015 East 18.6 22.4 Population (MM) Source: Center
Slide 9: Favorable Supply Trends
Favorable Supply Trends Source: National Investment Center / American Seniors Housing Association Seniors Housing Construction Trends Report, 2007 & NIC Key Financial Indicators * Including independent living, assisted living and continuing care retirement communities 1997 1998 1999 2000 2001 2002 2
Slide 10: The Capital Advantage: Proven Track Record
The Capital Advantage: Proven Track Record Stabilized Operating Results Capital Senior Living Industry Averages Industry Averages Capital Senior Living Independent Living Assisted Living Occupancy 1 89.0% 89.5% 88.0% Operating Margins 2,3 48.7% 52.6% 44.4% Second Quarter 2008 CSU (excluding 4 commun
Slide 11: Same Store Analysis for Communities Under Management
The Capital Advantage: Proven Track Record Same Store Analysis for Communities Under Management Same Store Average Revenue growth of 6.1%, with 13.7% Average Net Operating Income growth since 2003 2004 2005 2006 2007 Revenue 0.069 0.063 0.073 0.04 Net Operating Income 0.148 0.162 0.152 0.086
Slide 12: Industry Median Increases in Resident Revenue
Industry Median Increases in Resident Revenue 2000 2001 2002 2003 2004 2005 2006 Existing IL Residents 0.045 0.04 0.04 0.04 0.04 0.04 0.045 New IL Residents 0.05 0.05 0.05 0.04 0.04 0.046 0.047 Source: ASHA The State of seniors Housing 2007 2000 2001 2002 2003 2004 2005 2006 Existing AL Residents 0.
Slide 13: 2008 Business Plan
2008 Business Plan Increase levels of care and capacity through expansions, conversions and new developments Organic growth from rate increases, cost savings and occupancy growth Accretive acquisitions in highly fragmented industry to enhance geographic clustering Explore and consider a range of str
Slide 14: Growth Initiatives: Expansions, Conversions and Developments
Growth Initiatives: Expansions, Conversions and Developments Intend to add additional levels of care at eleven communities Three new joint venture developments are currently underway that will add 434 units (299 IL, 135 AL) Units Estimated Cost Expected Revenues (1) Expected Incremental EBITDAR Marg
Slide 15: Growth Initiatives: Expansions
Growth Initiatives: Expansions IL IL AL AL Total Total Units Occ% Units Occ% Units Occ% Annual Revenue Pre-expansion 65 100% - - 65 100% $1.3M 2007 114 98% 48 96% 162 98% $4.6M Added 49 IL units and 48 AL units $6.8 million total cost Annual revenues increased 3.5 times since expansion Cottonwood ca
Slide 16: Growth Initiatives: Conversions
Growth Initiatives: Conversions IL IL AL AL Total Total Units Occ% Units Occ% Units Occ% Annual Revenue 2003 105 48% 45 100% 150 60% $2.0M 2007 118 94% 29 97% 147 95% $3.5M Relocated AL units to a new wing $800,000 total cost Annual revenues increased 75%, with an increase of over 50% in occupancy S
Slide 17: Growth Initiatives: Operating Leverage in Consolidated Communities
Growth Initiatives : Operating Leverage in Consolidated Communities $2.0 million incremental revenue for every 1.0% of financial occupancy gain $8.5 million incremental revenue from a 5% increase in average monthly rent 80% incremental EBITDAR margin on same store revenue increases
Slide 18: Operating Leverage: Expense Categories
Growth Initiatives : Operating Leverage in Consolidated Communities Labor Food Utilities Property Taxes Insurance Other East 0.54 0.1 0.09 0.08 0.02 0.16 Labor Food Utilities Property Taxes Insurance Other CSL 714 138 121 103 29 212 Industry 800 156 152 100 49 341 Industry data from 2007 The State o
Slide 19: Growth Initiatives: Acquisition/Lease Transactions
Growth Initiatives: Acquisition/Lease Transactions Year 1 Year 2 $ Increase % Increase Revenue $25,000,000 $26,500,000 $1,500,000 6.0% Operating Expense $15,000,000 $15,600,000 $600,000 4.0% EBITDAR $10,000,000 $10,900,000 $900,000 9.0% Lease Expense $7,800,000 $8,000,000 $200,000 2.5% EBITDA $2,200
Slide 20: Growth Initiatives: Joint Venture Acquisitions and Developments
Growth Initiatives: Joint Venture Acquisitions and Developments Joint venture partners Blackstone Real Estate Advisors GE Healthcare Financial Services Prudential Real Estate Investors Twelve communities are owned with joint venture partners Three developments are underway with joint venture partner
Slide 21: Example of Joint Venture Economics
Example of Joint Venture Economics Venture CSU Partner NOI $ 8,000,000 Cap Rate 8% Purchase Price $100,000,000 Debt $ 75,000,000 Equity $ 25,000,000 $2,500,000 $22,500,000 Revenues $ 25,000,000 Mgt. Fees (5%) $1,250,000 ROE (14.0%) $ 350,000 $ 3,150,000 Total First Year Return $1,600,000 $ 3,150,000
Slide 22: Capital Advantage: Financial Growth
Capital Advantage: Financial Growth Revenue and Adjusted EBITDAR ($ in millions) Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Revenue 31.5 32.1 33.9 37.1 43 46.2 Adjusted EBITDAR 8.4 8.8 9.6 10.3 11.9 13.2 Adjusted EBITDAR Margin % 0.3 0.3 0.3 0.3 0.3 0.3 Q4 05 Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Q4 07
Slide 23: Income Statement: Q2 Comparison
Income Statement: Q2 Comparison (in millions, except per share) 2008* 2007* %Change Resident & Health Care Revenue $42.7 $41.6 2.6% Other Revenue 6.3 5.3 18.9% Total Revenues $49.0 $46.9 4.5% Operating Expenses 30.8 30.1 2.3% General & Administrative Expenses 3.9 3.4 14.7% EBITDAR $14.3 $13.4 6.7% L
Slide 24: Balance Sheet Strength
Since Q1 2006, CSU has significantly strengthened its balance sheet Reduced total mortgage debt by $51.6 million Refinanced or retired $162 million of variable rate debt Reduced average interest rate from 7.5% to 6.1% fixed Resulting in $8.3 million of annual interest expense savings Balance Sheet S
Slide 25: Balance Sheet
Balance Sheet ASSETS ASSETS Cash and Securities $ 26.1 Other Current Assets 20.3 Total Current Assets 46.4 Fixed Assets 307.7 Other Assets 36.1 TOTAL ASSETS $390.2 As of June 30, 2008 (in millions) LIABILITIES & EQUITY LIABILITIES & EQUITY Current Liabilities $ 35.8 Long-Term Debt 179.3 Other Liabil
Slide 26: Investment Highlights
Investment Highlights Favorable demographics and attractive industry fundamentals Expansion and conversion initiatives with significant revenue and margin growth Strong same-store community net income growth Acquisition opportunities in highly fragmented industry Existing infrastructure results in l
Slide 27: Capital Senior Living Corporation
Capital Senior Living Corporation Capital Senior Living Corporation
Capital Senior Living — Investor Presentation (August 2008) on 6ix