Sonida Senior Living, Inc. · NYSE:SNDA
Sonida Senior Living — Capital Senior Living — Investor Presentation (November 2007)
32 slides from Sonida Senior Living's investor presentation, Nov 20, 2007
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 9,544 residents 49 of these communities are owned or leased with resident capacity of 7,636 Achieved 95% approval rating in 2006 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 - 70% 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 $3,100 96% private pay Average length of resident stay is 26 months Assisted Living - 23% 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 (24) ? Management Only (3) ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? SW Region Duane Ness (14) Linda McAlister (11) Midwest Region Charlie Schott (22) Donna Monroe (10) ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Dallas Region Carole Burnell (10
Slide 8: The Capital Advantage: Years of Management Experience
The Capital Advantage: 168 Years of Management Experience James A. Stroud Chairman (22) Lawrence A. Cohen Vice-Chairman/CEO (22) Keith N. Johannessen President/COO (28) Rob L. Goodpaster VP Marketing (31) David W. Beathard VP Operations (33) Glen H. Campbell VP Development (32) (Parenthetical indica
Slide 9: Senior Living Industry Favorable Demographics
Senior Living Industry Favorable Demographics 2000 2005 2010 2015 2020 2025 2030 Population Age 75+ 16.6 17.9 18.5 19.6 22.3 27 32.6 Population Age 85+ 4.2 4.9 5.8 6.4 6.7 7.4 8.9 Source: U.S. Census Bureau
Slide 10: Favorable Supply Trends
Favorable Supply Trends Source: National Investment Center / American Seniors Housing Association Seniors Housing Construction Trends Report, 2006 & NIC Key Financial Indicators * Including senior apartments, independent living, assisted living, dementia care, and nursing care 1997 1998 1999 2000 20
Slide 11: Senior Living Industry: Units under Construction
Senior Living Industry Q1 2006 Q1 2007 Q2 2007 IL 8239 11082 10520 AL 4086 3620 3183 DC 932 1011 1119 NC 3938 3084 2598 Source: National Investment Center / American Seniors Housing Association MAP Data Units under Construction Independent Living Assisted Living Dementia Care Nursing Care Q1 2006 Q1
Slide 12: Senior Housing Capitalization Rates
Source: National Investment Center for the Seniors Housing & Care Industry Note: Q1 2005 data not available Senior Living Industry Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Independent Living 0.1 0.099 0.104 0.103 0.1 0.091 0.094 0.091 0.082 0.082 0.085 0.082 0.083 0.077 0.077 0.077 0.079 A
Slide 13: The Capital Advantage: Proven Track Record - Stabilized Operating Results
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 90.5% 91.5% 87.5% Operating Margins 2,3 48.0% 52.6% 44.4% Third Quarter 2007 CSU and Second Quarter N
Slide 14: The Capital Advantage: Proven Track Record - Same Store Analysis
The Capital Advantage: Proven Track Record Communities Under Management Same Store Analysis Source: 2005 - 2006 CSU; The State of Seniors Housing 2007 by the American Seniors Housing Association (ASHA) Capital Senior Living Industry Averages Industry Averages Capital Senior Living Independent Living
Slide 15: Industry Median Increases in Resident Revenue
Industry Median Increases in Resident Revenue Year Independent Living Independent Living Assisted Living Assisted Living Year Existing Residents New Residents Existing Residents New Residents 2006 4.5% 4.7% 6.0% 4.0% 2005 4 % 4.6% 5% 5% 2004 4% 4% 5% 5% 2003 4% 4% 5% 5% 2002 4% 5% 4% 5% 2001 4% 5% 5
Slide 16: Organic Growth: Enhance Revenues
Organic Growth: Enhance Revenues Improve occupancy Rate Increases Community Fees Ancillary Services Additional levels of Care Expansions / Conversions of Existing Communities
Slide 17: Organic Growth: Expansions
Organic Growth: 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 Annual revenues increased 3.5 times since expansion Cottonwood case study
Slide 18: Organic Growth: Conversions
Organic Growth: Conversions IL IL AL AL Total Total Units Occ% Units Occ% Units Occ% Annual Revenue 2003 117 48% 35 100% 152 60% $2.0M 2007 118 94% 29 97% 147 95% $3.5M Annual revenues increased 75%, with an increase of over 50% in occupancy Sedgwick case study
Slide 19: Organic Growth: Expense Savings/Controls
Organic Growth: Expense Savings/Controls "The Capital System" - spend down sheets and staffing patterns tie to occupancy Group Purchasing Program as member of Premier GPO Premier - 43,500 members with volume over $27 billion 224 contracted diverse suppliers with over 1,300 contracts Electricity cont
Slide 20: Organic Growth: Property/Liability Insurance Savings
Organic Growth: Property/Liability Insurance Savings 1 Cost shown above includes primary GL/PL insurance and property insurance. Capital Senior Living Industry Averages Industry Averages Capital Senior Living Independent Living Assisted Living 2007 Cost of Property and Liability Insurance per Unit 1
Slide 21: Operating Leverage from Achieving 93% Occupancy
Operating Leverage from Achieving 93% Occupancy in Consolidated Communities $8.4 Million $8.5 Million $169.6 Million Annualized revenue as of September 2007 Effect of a 5% increase in average rents Effect of achieving 93% average occupancy Incremental Revenue $16.9 million Incremental EBITDAR $12.7
Slide 22: Growth Strategies: Acquisition/Lease Transactions
Growth Strategies: 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 23: Growth Strategies: Joint Ventures
Growth Strategies: Joint Ventures Joint venture partners Blackstone Real Estate Advisors GE Healthcare Financial Services Prudential Real Estate Investors Acquired eight communities for a total value of $85 million with joint venture partner in 2006 Seeking additional acquisitions/developments of se
Slide 24: Growth Strategies: Joint Ventures - Benefits of Financial Leverage
Growth Strategies: Joint Ventures 75% Debt / 25% Equity 75% Debt / 25% Equity 70% Debt / 30% Equity 70% Debt / 30% Equity Cap Rate 8.0% 9.0% 8.0% 9.0% Interest Rate 6.00% 6.00% 6.00% 6.00% ROE 14.0% 18.0% 12.7% 16.0% ROE with 25-year amortization 8.5% 12.5% 8.4% 11.8% Benefits of Financial Leverage
Slide 25: 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 26: Growth Strategies: Example of Enhancing Shareholder Value
Growth Strategies: Example of Enhancing Shareholder Value $100 Million of Lease Acquisitions $100 Million of Joint Venture Acquisitions 93% Occupancy in Consolidated Communities Revenue $25.0 $1.3 $16.9 1 EBITDAR $10.0 $1.3 $12.7 2 Lease Expense $7.8 - - Implied CSU Equity Value Per Share (at 26.6M
Slide 27: Capital Advantage: Financial Growth
Capital Advantage: Financial Growth Revenue and Adjusted EBITDAR ($ 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 Reven
Slide 28: Income Statement: Q3 Comparison
Income Statement: Q3 Comparison (in millions, except per share) 2007 2006 %Change Resident & Health Care Revenue $41.9 $36.5 14.8% Other Revenue 5.9 5.3 11.3% Total Revenues $47.8 $41.8 14.4% Operating Expenses 30.6 28.1 8.9% General & Administrative Expenses 3.2 3.4 (5.9%) EBITDAR $14.0 $10.3 35.9%
Slide 29: 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 30: Balance Sheet
Balance Sheet ASSETS ASSETS Cash and Securities $ 24.0 Other Current Assets 21.1 Total Current Assets 45.1 Fixed Assets 309.9 Other Assets 35.0 TOTAL ASSETS $390.0 As of September 30, 2007 (in millions) LIABILITIES & EQUITY LIABILITIES & EQUITY Current Liabilities $ 27.5 Long-Term Debt 190.4 Other L
Slide 31: Investment Highlights
Investment Highlights Favorable demographics and attractive industry fundamentals Strong growth in same-store community net income Acquisition opportunities in highly fragmented industry National platform and existing infrastructure result in low marginal integration cost Predominately private pay w
Slide 32: Capital Senior Living Corporation
Capital Senior Living Corporation Capital Senior Living Corporation
Capital Senior Living — Investor Presentation (November 2007) on 6ix