Sonida Senior Living, Inc. · NYSE:SNDA
Sonida Senior Living — Q4 2023 Earnings Presentation
35 slides from Sonida Senior Living's earnings presentation, Mar 27, 2024
Slide 1: A Leading Operator, Owner and Investor in Senior Living
A Leading Operator, Owner and Investor in Senior Living Investor Presentation – March 27, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements which are subject to certain risks and uncertainties that could cause our actual results and financial condition of Sonida Senior Living, Inc. (the “Company,” “we,” “our” or “us”) to differ materially from those indicat
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation contains financial measures: (1) Adjusted Operating Expenses, (2) Community Net Operating Income, (3) Community Net Operating Income Margin, (4) Adjusted Community Net Operating Income, (5) Adjusted Community Net Operating Income Margin, (6) Adjusted G&A
Slide 4: 2023 Sonida Accomplishments
2023 Sonida Accomplishments 100% retention of regional leadership team in 2023 and expanded executive team with two newly created Team Development and roles: Chief Clinical Officer and VP of Acquisitions and Business Development Stability Reduced turnover across community leadership positions by 9%
Slide 5: Power of "Operator-Owner-Investor" Model
Power of “Operator-Owner-Investor” Model Sonida is uniquely positioned to aggressively invest in a dislocated Seniors’ landscape Fully integrated and internal Ability to implement fast-paced Full control of operating platform does not rely on third-party property management, Unified team structure i
Slide 6: Cost Structure and Liquidity Accomplishments
Cost Structure and Liquidity Accomplishments Loan 56 of 60 community loans successfully modified/restructured, resulting in $52M+ in cash savings over the Right-Sizing revised loan maturities and overall reduction in Company debt by $55M Lower G&A Adjusted G&A Expense(1) vs Total Revenue(2) decrease
Slide 7: Leading Operator of Senior Housing and Services
Leading Operator of Senior Housing and Services 71 ~8,000 85.9% Communities Q4 2023 Weighted Average 3,900+ Resident 61 Owned Occupancy for Owned Employees Capacity 10 Managed Communities(1) Resident Revenue by State (1) Attractive Private Pay Revenue Mix (1) 15+ Communities 5 - 14 Communities 7,011
Slide 8: 2023 Operating Highlights
2023 Operating Highlights Eleven Consecutive YoY Q4 Resident Quarters of Revenue Revenue Increased Growth 11.2% Adjusted Community NOI(1) Up 36.8% YoY and 14.4% QoQ Operating Margin(1) Up 520 bps YoY and 260 bps QoQ RevPOR excluding state grants Up 8.8% YoY and 0.3% QoQ (1) Adjusted Community NOI is
Slide 9: 2023 Financial Comparisons – Owned Communities
2023 Financial Comparisons – Owned Communities Adjusted Community NOI Margin increased 460bps from 19.4% in 2022 to 24.0% in 2023 Y-O-Y Q4 2023(5) 2023 2022 In millions, except RevPAR and RevPOR Change (%) Annualized 84.6% 83.0% 160 bps 85.9% $3,375 $3,019 11.8% $3,470 $3,988 $3,640 9.6% $4,042 $232
Slide 10: Debt and Equity Highlights
Debt and Equity Highlights Debt - 56 of 60 Loans Restructured 37 Fannie Mae loans resulting in over $39M in savings, with maturities extended to December 2026 or beyond Ally Bank granted Sonida a waiver of its contractual $13M minimum liquidity requirement for 18 months Purchased $77.4M of outstandi
Slide 11: Discounted Debt Purchase
Discounted Debt Purchase Completed deal to purchase 7 loans in February 2024 Purchased $77.4M worth of loans (including accrued interest) on 7 communities for $40.2M, representing a 48% discount Raised $47.75M of equity through private placement offering to fund purchase price and provide workin
Slide 12: 2023 Debt – Overview
2023 Debt – Overview Focused Debt Restructuring – Key Points Weighted average maturities extended 1+ year to September 2027 Total cost of debt post restructuring is 4.6% and 5.0% in 2024 and 2025, respectively Total FNMA debt service decreases $15.5M and $8.9M in the first and second year foll
Slide 13: 11 Consecutive Quarters of Occupancy Growth (Same-Store)
11 Consecutive Quarters of Occupancy Growth (Same-Store) 86.9% 86.4% 85.9% 85.4% 85.0% 85.0% 85.0% 84.9% 84.4% 84.2% 84.2% 84.2% 84.2% 84.0% 83.7% 83.5% 83.2% 82.3% 82.2% 82.2% 81.3% 81.0% 79.7% 78.1% 76.7% 75.5% Q4 '19 Q1 '21 Q2 '21 Q3 '21 Q4 '21 Q1 '22 Q2 '22 Q3 '22 Q4 '22 Q1' 23 Q2' 23 Q3' 23 Q4'
Slide 14: 2023 Revenue Highlights
2023 Revenue Highlights Resident Rent Rate Changes (1) Assisted Living Level of Care “LoC” Program Impact • Simplified 4 level system with clear requirements 2023 Resident rent • New monitoring tools implemented to reinforce timely rates(1) increased $282 LoC reviews based on company and state-speci
Slide 15: Revenue Growth Continues to Outpace Labor Costs
Revenue Growth Continues to Outpace Labor Costs Labor(1) Costs Trend as a Percent of Revenue(2) • Q4 2023 labor(1) costs as a percent of revenue(2) were 45.2%, marking 4 consecutive quarters of stabilized labor costs at approximately 46.0% of revenue • 2023 labor(1) costs as a percentage of revenue(
Slide 16: Non-Labor Operating Cost Holding Steady
Non-Labor Operating Cost Holding Steady • As a percentage of revenue, Q4 2023 expense was 525 Total Operating Expense Excluding Labor(1) Costs Trend basis points lower than the previous 8-quarter average • Non-recurring credits to system allocations ($0.5M) and real estate taxes ($0.7M) are driving
Slide 17: Debt Structure as of December 31, 2023 and Pro-forma
Debt Structure as of December 31, 2023 and Pro-forma(1) As of December 31, 2023 ($ in millions) Protective Life Fixed Rate $ 437.2 Non-Compliant Fixed Rate 8.8% Fixed Rate Protective Life Non-Compliant Fixed Rate(2) 55.8 69.1% Effective weighted Variable Rate (fully hedged) 137.3 average interest ra
Slide 18: Industry Observations
Industry Observations Rent Increase Average asking rent up 5.0% from prior year Sonida budgeted asking rent above industry average Demand & Occupancy Strengthens New inventory being absorbed at high levels Occupancy gains for 10th consecutive quarter Slowdown in New Supply Inventory growth at lowest
Slide 19: Growth in 2024 and Beyond
Growth in 2024 and Beyond Sonida is poised to capitalize on significant value creation in its existing portfolio and through new acquisitions Company specific operational improvements led by new Continued industry recovery driven by lack of new supply, high management initiatives (labor, sales effic
Slide 20: Investment Profile – Where do we focus?
Investment Profile – Where do we focus? Community profile for new acquisitions and joint ventures Business Model Market Cash Flow Profile Priority Asset Quality Geographic Political and Demographic and Run Rate / Consideration Competitor Profile Overlay Economic Climate IL/AL/MC Stabilized Growing m
Slide 21: Sourcing Channels and Strategy
Sourcing Channels and Strategy Existing Lending Relationships Boots on the Other Lenders Ground and BK Receivers Opportunistic Environment • Cash flowing with capital structure issues • Near-term maturities Sonida Investment • Inexperienced owner/operator Sources Third-Party • Special services for d
Slide 22: Opportunistic Investment Platform Built on Operational Excellence
Opportunistic Investment Platform Built on Operational Excellence Balance Sheet Joint Management Acquisitions Ventures Contracts Traditional owner/operator model Underperforming assets with distressed capitalization Capital stack refresh with future Newer assets Under-performing assets val
Slide 23: Supplemental Investor Information Q4 2023
Supplemental Investor Information Q4 2023
Slide 24: Table of Contents
Table of Contents 3 Forward Looking Statements Disclosure 4 Non-GAAP Financial Measures 5 Financial Overview 6 Community NOI 7 Net Income (Loss) Walk Forward 8 Adjusted EBITDA Walk Forward 9 Capitalization – YE 2024 10 Capitalization – Pro-forma 11 Geographical Breakdown 12 Financial and Key Metrics
Slide 25: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements which are subject to certain risks and uncertainties that could cause our actual results and financial condition of Sonida Senior Living, Inc. (the “Company,” “we,” “our” or “us”) to differ materially from those indicat
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures This presentation contains financial measures: (1) Adjusted Operating Expenses, (2) Community Net Operating Income, (3) Community Net Operating Income Margin, (4) Adjusted Community Net Operating Income, (5) Adjusted Community Net Operating Income Margin, (6) Adjusted G&A
Slide 27: Financial Overview – Owned Communities
Financial Overview – Owned Communities Note: Dollars in 000s. Numbers may vary due to rounding. Amounts derived from 2022 10-K as filed; nominal adjustments were made to conform 2022 actuals to 2023 presentation in the 2023 Form 10-K (1) Resident Revenue, Community NOI, Community NOI Margin %, Net I
Slide 28: Community NOI – Owned Communities
Community NOI – Owned Communities Note: Dollars in 000s. Numbers may vary due to rounding. Amounts derived from 2022 10-K as filed; nominal adjustments were made to conform 2022 actuals to 2023 presentation in the 2023 Form 10-K. (1) Includes Second Person and Level of Care fees. (2) Community NOI a
Slide 29: Net Income (Loss) Walk Forward
Net Income (Loss) Walk Forward Note: Dollars in 000s. Numbers may vary due to rounding. Amounts derived from 2022 10-K as filed; nominal adjustments were made to conform 2022 actuals to 2023 presentation in the 2023 Form 10-K (1) Amounts are not calculated in accordance with GAAP. See page 4 for the
Slide 30: Adjusted EBITDA Walk Forward
Adjusted EBITDA Walk Forward Note: Dollars in 000s. Numbers may vary due to rounding. Amounts derived from 2022 10-K as filed; nominal adjustments were made to conform 2022 actuals to 2023 presentation in the 2023 Form 10-K (1) Casualty losses relate to non-recurring insured claims for unexpected ev
Slide 31: Capitalization as of December 31, 2023
Capitalization as of December 31, 2023 Net Debt (82.9%) Components of Note: Dollars in 000s except for share price, share count, and strike price. Numbers may vary due Total Capital Common to rounding. (1) Weighted average interest rate Equity (2) Variable exposure is synthetically limited with inte
Slide 32: Capitalization – Pro-forma
Capitalization – Pro-forma(1) Net Debt (54.0%) Components of Note: Dollars in 000s except for share price, share count, and strike price. Numbers may vary due to rounding. Total Capital (1) Balances reflect private placement raise, the loan purchases on 7 communities and are as of Common Feb 2, 2024
Slide 33: Geographical Breakdown – Owned Communities
Geographical Breakdown – Owned Communities South/Southwest Midwest East 18 Communities 35 Communities 8 Communities (1) Data based on Q4 2023 average and excludes the Shaker Heights community, which was sold in August of 2023. 11
Slide 34: T3M: Financial and Key Metrics – Owned Communities
T3M: Financial and Key Metrics – Owned Communities Note: Dollars in 000s. Numbers may vary due to rounding. Financial data presented is December 2023 trailing 3-month results. (1) Includes Second Person Fees and Level of care fees. (2) Revenue includes non-recurring state grant revenue. (3) Adjusted
Slide 35: Market Fundamentals
Market Fundamentals Source: Sonida portfolio data presented on 61 owned assets as of Q4 2023. NIC MAP Vision as of February 29, 2024. Demographics data is as of February 29, 2024. NIC MAP Vision Seniors Housing Inventory data is current as of the 1Q2024 Market Fundamentals update. Primary Tertiary M