Sonida Senior Living, Inc. · NYSE:SNDA
Sonida Senior Living — Capital Senior Living — Investor Presentation (January 2006)
29 slides from Sonida Senior Living's investor presentation, Jan 10, 2006
Slide 1: 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 find suitable acquisition properties at favorable terms, fin
Slide 3: Investment Highlights
Investment Highlights Strong demographic trends and improving metrics Highly fragmented industry with acquisition opportunities Established national platform High quality communities at affordable rates Predominately private pay with minimal federal regulation Financial leverage through joint ventur
Slide 4: Company Overview
Company Overview Resident Capacity Resident Capacity Resident Capacity Resident Capacity Number of Communities IL AL SN Total Wholly Owned 29 4,245 416 170 4,831 JV Ownership/Mgmt. 4 454 244 -- 698 Leased 7 1,299 117 -- 1,416 Management Only 15 1,562 408 -- 1,970 _______ ___________ _______ _______
Slide 5: Senior Living Industry Demographics
Source: U.S. Census Bureau Senior Living Industry Demographics Estimated Growth in Elderly Population 2000 - 2030 17.9 18.5 19.6 22.3 27.0 32.6 16.6 8.9 7.4 6.7 6.4 5.8 4.9 4.2 0 10 20 30 40 2000 2005 2010 2015 2020 2025 2030 Population Age 75+ Population Age 85+ Population (M)
Slide 6: Senior Housing Construction
Senior Housing Construction Total Units and Industry Occupancy Percentages Source: American Seniors Housing Association Seniors Housing Construction Report, 2005 NIC Key Financial Indicators 1997 1998 1999 2000 2001 2002 2003 2004 2005 IL 9671 10206 13042 12415 9274 5077 6028 7216 6843 AL 22380 3266
Slide 7: Senior Living Industry
Senior Living Industry Seniors Housing Property Supply(21,203 properties) (1) Source: American Seniors Housing Association Seniors Housing Construction Report, 2005 Source: American Seniors Housing Association Seniors Housing Statistical Handbook Assisted Living - 35% Independent Living - 30% Senior
Slide 8: Effective Demand for Senior Living
Source: PriceWaterhouseCoopers/National Investment Conference Effective Demand for Senior Living Senior Living Industry Beds (000s) Elderly Population With Income Over $15,000 2000 2005 2010 2015 2020 2025 2030 Independent Living 640 695 750 870 990 1190 1390 Skilled Nursing 670 720 770 865 960 1135
Slide 9: The Capital Advantage: Independent Lifestyles
The Capital Advantage: Independent Lifestyles
Slide 10: 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 Resident turnover is primarily attributed to death or need for higher care 80% of residents are women
Slide 11: The Capital Advantage: High-Quality Communities
The Capital Advantage: High-Quality Communities
Slide 12: The Capital Advantage: Established National Platform
The Capital Advantage: Established National Platform Wholly Owned (29) JV Ownership/Managed (4) Leased (7) Management Only (15) ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Dallas Region David Beathard (31) Sally Vann (23) Midwest Region Mark West (19) Gary Fernandez (8) Western Region Lesl
Slide 13: The Capital Advantage: Years of Management Experience
The Capital Advantage: 155 Years of Management Experience James A. Stroud Chairman 20 Keith N. Johannessen President/COO 26 Glen H. Campbell VP Development 30 Industry Experience (Years) David W. Beathard VP Operations 31 Rob L. Goodpaster VP Marketing 28 Lawrence A. Cohen Vice-Chairman/CEO 20
Slide 14: Status of Communities
Status of Communities As of November 8, 2005 Stabilized Lease-up Renovations/ re-leasing Wholly Owned 23 5 1 JV Ownership/Management 2 2 -- Leased 7 -- -- Management Only 13 2 -- Total 45 9 1
Slide 15: The Capital Advantage: Proven Track Record
The Capital Advantage: Proven Track Record Industry Averages CSU IL AL Occupancy1 91.0% 92.0% 89.0% Operating margins2, 3 45.0% 43.9% 38.3% 1. Third Quarter 2005 CSU and Second Quarter 2005 NIC Key Financial Indicators 2. Before property taxes, insurance and management fees 3. CSU Third Quarter 2005
Slide 16: The Capital Advantage: Proven Track Record, Same Store Analysis
The Capital Advantage: Proven Track Record Industry Averages CSU IL AL Revenues 6.4% 4.6% 6.1% Operating Expenses 2.1% 4.9% 8.0% NOI 15.7% 5.0% 10.0% Occupancy 2.1% 0.3% 2.1% Source: CSU Third Quarter 2005 and from The State of Seniors Housing 2005 by the American Seniors Housing Association (ASHA)
Slide 17: Yearly Median Increases in Resident Revenue
Yearly Median Increases in Resident Revenue Source: ASHA The State of Seniors Housing 2005 Independent Living Independent Living Assisted Living Assisted Living Existing New Existing New Residents Residents Residents Residents 2004 2003 2002 4% 4% 4% 4% 5% 5% 5% 4% 5% 5% 5% 5% 2001 4.5% 5% 5% 5.5% 2
Slide 18: 2006 Business Plan
2006 Business Plan Sale/leaseback transactions - generate gains - convert equity in properties to cash - reduce and fix interest rates on remaining debt - acquire CGI owned communities Maximize value of stabilized communities - improve operating income - increase assisted living capacity - expand an
Slide 19: 2006 Business Plan
2006 Business Plan Acquisitions - joint ventures - REIT acquisitions / leasebacks Increase third party fee income - management - development
Slide 20: Ventas Sale/Leaseback Transaction
Ventas Sale/Leaseback Transaction Joint venture between CSU and Blackstone sold six communities to Ventas for $85 million; CSU leased back the communities from Ventas CSU has leased the communities for ten years with two five year renewal options; initial rate is 8% CSU recorded a gain of approximat
Slide 21: CGIM Transaction
CGIM Transaction Capital assumed management of 14 communities, increasing resident capacity by approximately 1,800, 78% IL and 22% AL Capital paid $2.0 million in cash at closing in addition to two installment payments totaling $366k. Additional installments of $400k and $650k are potentially due on
Slide 22: Operating Leverage from Achieving 93% Occupancy
Operating Leverage from Achieving 93% Occupancy in Wholly-Owned Communities $1.8M3 $2.1M2 $41.7M 1 $4.5M3 $2.7M2 $54.3M 1 1. Annualized revenue as of September 2005 2. Effect of a 5% increase in average rents 3. Effect of achieving 93% average occupancy Mature Communities Waterford / Wellington Comm
Slide 23: Growth Strategies: Joint Ventures
Growth Strategies: Joint Ventures Joint venture partners - Blackstone - GE Healthcare Services - Prudential Seeking additional acquisitions of senior housing communities Co-invest with joint venture partners to participate in economics: 5% - 10% CSU 95% - 90% joint venture partners Earn management f
Slide 24: Joint Ventures: Benefits of Financial Leverage
Joint Ventures: Benefits of Financial Leverage 75% Debt / 25% Equity 75% Debt / 25% Equity 70% Debt / 30% Equity 70% Debt / 30% Equity Cap Rate 8% 9% 8% 9% Interest Rate 6.0% 6.0% 6.0% 6.0% ROE 14.0% 18.0% 12.7% 16.0% ROE w/25 year amortization 8.5% 12.5% 8.4% 11.7%
Slide 25: Example of Joint Venture Economics
Example of Joint Venture Economics Venture CSU Partner NOI $ 10,000,000 Cap Rate 8% Purchase Price $125,000,000 Debt $ 93,750,000 Equity $ 31,250,000 $3,125,000 $28,125,000 Revenues $ 30,000,000 Mgt. Fees (5%) $1,500,000 ROE (14%) $ 437,500 $ 3,937,500 Total First Year Return $1,937,500 $ 3,937,500
Slide 26: Income Statement Q3 Comparison
Income Statement Q3 Comparison (in millions, except per share) 2005 2004 Resident & Health Care Revenue $24.1 $23.0 Other Revenue 1.0 0.7 Total Revenues $25.1 $23.7 Operating Expenses 16.5 16.5 General & Administrative Expenses 2.4 2.1 Depreciation & Amortization 3.2 3.0 Total Expenses $22.1 $21.6 I
Slide 27: Balance Sheet
Balance Sheet As of September 30, 2005 (in millions) Cash and Securities $ 18.5 Current Liabilities $ 25.2 Other Current Assets 21.3 Long-Term Debt 254.1 Total Current Assets $ 39.8 Other Liabilities 10.8 Fixed Assets 373.8 Total Liabilities $ 290.1 Assets Held for Sale 2.0 Stockholders' Equity $ 14
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Slide 29: Capital Senior Living Corporation
CAPITAL SENIOR LIVING CORPORATION
Capital Senior Living — Investor Presentation (January 2006) on 6ix