Sonida Senior Living, Inc. · NYSE:SNDA
Sonida Senior Living — Capital Senior Living — Investor Presentation (March 2005)
30 slides from Sonida Senior Living's investor presentation, Mar 11, 2005
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 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 venture partners Experienced
Slide 4: 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 5: Senior Housing Construction
Senior Housing Construction Total Units and Industry Occupancy Percentages Source: American Seniors Housing Association Seniors Housing Construction Report, 2004 NIC Key Financial Indicators 1997 1998 1999 2000 2001 2002 2003 2004 IL 9671 10206 13042 12415 9274 5077 6028 7216 AL 22380 32666 31273 14
Slide 6: Senior Living Industry Barriers to Entry
Senior Living Industry Barriers to Entry Significant equity required Substantial industry operating expertise needed Constraint of capital Long lead-times -- average of four to five years from initial planning to final lease-up
Slide 7: Senior Living Industry: Property Supply and Market Value
Senior Living Industry Seniors Housing Property Supply(20,920 properties) (1) Source: American Seniors Housing Association Seniors Housing Construction Report, 2004 Source: American Seniors Housing Association Seniors Housing Statistical Handbook Assisted Living - 35% Independent Living - 30% Senior
Slide 8: Effective Demand for Senior Living
Source: Price Waterhouse LLP/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 1
Slide 9: Company History
Company History 1990 - Began senior living operations October 1997 - Completed IPO April 1998 - Formed Triad venture to develop communities January 2000 - Announced no new development of communities January 2002 - Announced joint venture with Blackstone July 2003 - Acquired Triads II - V January 200
Slide 10: Overview of Communities
Overview of Communities Owns and/or operates 54 communities in 20 states Total resident capacity of approximately 8,700 residents Average resident capacity of 155 per community 85% of residents live independently and 15% require assistance with activities of daily living 95% of revenue from private
Slide 11: Interests in Communities
Interests in Communities 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. 10 1,506 361 -- 1,867 Management Only 15 1,562 408 -- 1,970 _______ ___________ _______ _______ ___________ Tot
Slide 12: Status of Communities
Status of Communities As of December 31, 2004 Stabilized Lease-up Renovations/ re-leasing Wholly Owned 23 5 1 JV Ownership/Management 8 2 -- Management Only 13 2 -- Total 44 9 1
Slide 13: Community Occupancy
Community Occupancy 100% 80% 60% 40% 20% 0% Occupancy Rates ‘ll CME A a Stabilized Lease Up Property Type 13
Slide 14: The Capital Advantage: Independent Lifestyles
The Capital Advantage: Independent Lifestyles
Slide 15: 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 16: The Capital Advantage: High-Quality Communities
The Capital Advantage: High-Quality Communities
Slide 17: The Capital Advantage: Established National Platform
The Capital Advantage: Established National Platform Wholly Owned (29) JV Ownership/Managed (10) Management Only (15) ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Dallas Region David Beathard (31) Sally Vann (23) Midwest Region Gary Fernandez (8) Western Region Lesley Tejada (27) Tina Tedfo
Slide 18: 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 19: The Capital Advantage: Proven Track Record
The Capital Advantage: Proven Track Record Industry Averages CSU IL AL Occupancy1 90.0% 89.5% 87.5% Operating margins2, 3 47.0% 43.2% 39.1% Annual change in rents3 5.0 % 4.0% 5.0% 1. Third Quarter 2004 CSU and NIC Key Financial Indicators 2. Before property taxes, insurance and management fees 3. CS
Slide 20: Yearly Median Increases in Resident Revenue
Yearly Median Increases in Resident Revenue Source: ASHA The State of Seniors Housing 2003 Independent Living Independent Living Assisted Living Assisted Living Existing New Existing New Residents Residents Residents Residents 2002 4% 5% 5% 5% 2001 4.5% 5% 5% 5.5% 2000 4% 5% 4% 4.5% 1999 4% 4% 3.5%
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 has the exclusive right and option to purchase the seven owned communities for $41 million through February 2007 and thereafter for $42 million through August
Slide 22: 2005 Strategic Initiatives
2005 Strategic Initiatives Focus on improving occupancy and operating margins Increase ancillary services offered to residents Participate in acquisitions or co-investments Manage acquired and other communities Selectively develop for third parties
Slide 23: Operating Leverage from Achieving 93% Occupancy
Operating Leverage from Achieving 93% Occupancy in Wholly-Owned Communities $3.2M3 $2.1M2 $42.4M 1 $4.4M3 $2.5M2 $49.2M 1 1. Annualized revenue as of December 2004 2. Effect of a 5% increase in average rents 3. Effect of achieving 93% average occupancy Mature Communities Triads I - V
Slide 24: Growth Strategies: Joint Ventures
Growth Strategies: Joint Ventures Ventures with Blackstone and Prudential have acquired ten senior housing communities with resident capacity of 1,900 Seeking additional acquisitions of senior housing communities Co-invest with joint venture partners to participate in economics: 5% - 10% CSU 95% - 9
Slide 25: 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 9% 10% 9% 10% Interest Rate 6.0% 6.0% 6.0% 6.0% ROE 18.0% 22.0% 16.0% 19.3% ROE w/25 year amortization 12.6% 16.5% 11.8% 15.1%
Slide 26: Example of Joint Venture Economics
Example of Joint Venture Economics Venture CSU Partner NOI $ 1,000,000 Cap Rate 9% Purchase Price $11,100,000 Debt $ 8,325,000 Equity $ 2,775,000 $277,500 $2,497,500 Revenues $ 3,000,000 Mgt. Fees (5%) $150,000 ROE (18%) $ 50,000 $ 450,000 Total First Year Return $200,000 $ 450,000 Total Return % 72
Slide 27: Income Statement Q4 Comparison
Income Statement Q4 Comparison (in millions, except per share) 2004 2003 Resident & Health Care Revenue $23.0 $18.1 Other Revenue 0.9 0.8 Total Revenues $23.9 $18.9 Operating Expenses 14.1 12.3 General & Administrative Expenses 4.7 3.8 Depreciation & Amortization 3.1 2.6 Total Expenses $21.9 $18.7 I
Slide 28: Balance Sheet
Balance Sheet As of December 31, 2004 (in millions) Cash and Securities $ 19.5 Current Liabilities $ 54.1 Other Current Assets 13.0 Long-Term Debt 219.5 Total Current Assets $ 32.5 Other Liabilities 8.1 Fixed Assets 381.1 Total Liabilities $281.7 Assets Held for Sale 1.0 Stockholders' Equity 149.5 O
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Slide 30: Capital Senior Living Corporation
CAPITAL SENIOR LIVING CORPORATION
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