Sonida Senior Living, Inc. · NYSE:SNDA
Sonida Senior Living — Capital Senior Living — Investor Presentation (November 2015)
40 slides from Sonida Senior Living's investor presentation, Nov 3, 2015
Slide 1: Capital Senior Living Company Presentation
Capital Senior Living Company Presentation Exhibit 99.2
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: Non-GAAP Financial Measures
Non-GAAP Financial Measures Adjusted EBITDAR, Adjusted EBITDAR Margin, Adjusted Net Income and Adjusted CFFO are financial measures of operating performance that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial measures may have materia
Slide 4: Capital Senior Living is Well Positioned For Sustainable Growth
Capital Senior Living is Well Positioned For Sustainable Growth Value leader in geographically concentrated regions providing quality seniors housing and care at reasonable prices Highest percentage of wholly-owned communities among top seniors housing operators generating strong cash flow Straight
Slide 5: The Seniors Housing Market is Highly Fragmented
The Seniors Housing Market is Highly Fragmented Top 10 Top 25 Source: IBISWorld, Provider Magazine, and Barclays Research Top 10 Top 25 Top 25 Remaining Market Independent Living Companies 75% 20% 25% Assisted Living Companies 63% 29% 37% Top 10
Slide 6: Highest Percentage of Wholly-owned Communities of Top U.S. Operators
Capital Senior Living Has Highest Percentage of Wholly-owned Communities of Top U.S. Operators Rank Company Units Operated % Owned 1 Brookdale Senior Living 110,443 33.8% 2 Holiday Retirement 37,657 36.6% 3 LCS 32,172 14.9% 4 Five Star Senior Living 31,267 9.8% 5 Sunrise Senior Living LLC 22,561 0.0
Slide 7: Competitive Advantages in Highly Fragmented Industry
Capital Senior Living’s Competitive Advantages in Highly Fragmented Industry Exceptional talent and reputation Economies of scale and operating efficiencies Strong cash flow funds investments in technology, training, systems, conversions, renovations, refurbishments and accretive acquisitions Enhanc
Slide 8: Demand Pull/Cost Push Pressures Favor Senior Living
Demand Pull/Cost Push Pressures Favor Senior Living Aging, Demographics, Acuity Levels and Disabilities Rising Penetration Rates Fewer Family Caregivers Social Engagement, Support and Emotional Well-Being Accountable Care Organizations Post Acute Care Collaboration Fee-For-Service Framework vs. Qual
Slide 9: Assisted Living Is a Lower Cost Alternative for Post-Acute Care
Assisted Living Is a Lower Cost Alternative for Post-Acute Care Higher Average Cost Lower Average Cost Acute Care Post-Acute Care Continuum Hospital $1,819/day Long-Term Care Hospital $1,450/day Inpatient Rehab Facility $1,314/day Skilled Nursing Property $432/day $190/day Home w/ Home Health Care A
Slide 10: Seniors Housing Yields Consistent High Investment Returns
Seniors Housing Yields Consistent High Investment Returns Source: NCREIF, NIC MAP Data Service NCREIF Annualized Total Investment Returns (1, 3, 5, 10-Year Periods, as of Q2 2015)
Slide 11: Capital Senior Living Geographic Concentration
Capital Senior Living Geographic Concentration Capital Senior Living operates 121 communities in geographically concentrated regions with the capacity to serve 15,400 residents AR. 173 AZ. 189 CT. 178 FL. 226 IA. 122 IL. 770 IN. 2,381 MI. 244 MN. 173 MO. 662 MS. 143 NC. 432 SC. 669 NE. 668 NJ. 98 NY
Slide 12: 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 13: Independent Living – 45% of Resident Capacity
Independent Living – 45% of Resident Capacity Average 108 units per IL community with large common areas and amenities Supportive services, wellness programs, social, recreational and educational events Average monthly rate of $2,599 100% private pay Average length of resident stay is 34 months The
Slide 14: Assisted Living – 55% of Resident Capacity
The Capital Advantage: Senior Living Options Assisted Living- 55% of Resident Capacity Average 69 units per community 80% of communities offer AL Assistance with activities of daily living including medication reminders, bathing, dressing and grooming Average monthly rate of $4,064 Substantially all
Slide 15: The Capital Advantage: Need Driven Demand
The Capital Advantage: Need Driven Demand U.S. population 75+ years old is estimated to be 12% of the population by 2030 compared to 6% in 2012 Only 1.3 million units serving a population of 18.9 million seniors Current 6.9% penetration rate implies demand growth of 40,000 units per year U.S. Senior
Slide 16: Increasing Occupancy and Average Monthly Rate Trends
The Capital Advantage: Increasing Occupancy and Average Monthly Rate Trends
Slide 17: Economic Barriers Limit New Supply in Local Markets
Economic Barriers Limit New Supply in Local Markets Capital Senior Living Average Monthly Rents $3,382 Average Construction Cost per Unit $200,000 Annual Per Unit Cash Flow at 90% Occupancy and 30% Margin $10,958 Return on Investment 5.5% Low investment returns on construction at Capital Senior Livi
Slide 18: Transformation of Lead Generation
Transformation of Lead Generation CSU Executive Report/Standing Dog/Matrix Care Total Visits
Slide 19: Sales: Closing Ratios
Capital Senior Living Sales: Closing Ratios Closing Ratio % Based on Net Deposits/Tours Capital Senior Living Month End Compliance and Occupancy Reports / REPS Industry Trend Source: Bild & Co. IL Industry Average AL Industry Average
Slide 20: The Capital Advantage: Strategy
The Capital Advantage: Strategy Focus on our core strengths Capitalize on competitive advantages within each of our regions to maximize the cash flow and value of our communities and our operations Capitalize on the fragmented nature of the senior living industry to strategically aggregate local and
Slide 21: Our Greatest Resource – Our Employees
Capital Senior Living’s Greatest Resource – Our Employees Starts with hiring the right people with a heart for seniors Most important hire is the Executive Director with senior housing experience Community empowerment is essential due to the local nature of the markets that we serve Empowerment requ
Slide 22: Experienced Corporate Operations Team
Operations senior management average 32 years of senior housing experience Regional/District Operations Managers average 17 years of senior housing experience 10 of 12 Regional/District Operations Managers were promoted from Capital Senior Living Executive Directors Regional Marketing Directors aver
Slide 23: Multiple Avenues of Growth
Multiple Avenues of Growth Core Growth Conversion of units to higher levels of care Accretive acquisitions of wholly-owned communities Will add back communities currently excluded from non-GAAP financial measures when repositioning is complete
Slide 24: Core Growth
Core Growth Goal is to increase revenue at a rate 50 to 100 bps higher than expenses Occupancy growth is resulting in pricing power Continue to enhance sales and marketing initiatives Renovations and refurbishments enhance growth prospects Proactive expense management Wage pressure is not a concern
Slide 25: Conversions: Significant Increases in Occupancy, Revenue and CFFO
Conversions: Significant Increases in Occupancy, Revenue and CFFO Occupancy Prior to Conversions (1) IL AL Total Total Units 6,192 5,434 11,626 Occupied Units 5,287 4,869 10,156 Occupancy % 85.4% 89.6% 87.4% Planned IL to AL Conversions IL AL Vacant Units (225) 225 At 90% Stabilized Occupancy 203 In
Slide 26: Significant Occupancy Improvement After Conversion
Significant Occupancy Improvement After Conversion Occupancy has increased 11.6 percentage points at communities where conversions were completed in 3Q and 4Q 2014
Slide 27: Conversions: Increases in Occupancy, Revenue, and CFFO
Conversions: Significant Increases in Occupancy, Revenue, and CFFO 400 units converted at June 30, 2015 Includes 94 units at two of the four communities currently excluded from our Non-GAAP results $0.20 per share of CFFO 100 units to be converted in second half of 2015 $0.03 per share of CFFO 200 u
Slide 28: The Waterford at Thousand Oaks - Renovations
The Waterford at Thousand Oaks - Renovations New Entry Hall New Dining Room Old Entry Hall Old Dining Room
Slide 29: The Waterford on Huebner - Renovations
The Waterford on Huebner - Renovations New Entry Hall New Dining Room Old Entry Hall Old Dining Room
Slide 30: Transformation: Wholly-Owned Portfolio Growth
Transformation: Wholly-Owned Portfolio Growth Owned % 32.5% 58.7% 77 Total Properties 121 Total Properties As of October 31, 2015
Slide 31: Strategic Accretive Acquisitions of Wholly-Owned Communities
Strategic Accretive Acquisitions of Wholly-Owned Communities *Based on share count at time of transaction (in millions except number of communities) 2011 2012 2013 2014 Jan – Sept 2015 Combined Purchase Price $83.4 $181.3 $150.4 $160.2 $124.5 $699.8 Communities 7 17 11 8 8 51 Units 551 1,367 881 819
Slide 32: Acquisition Activity January 2011 – September 2015
Acquisition Activity January 2011 – September 2015 Market Off-Market Tot./Avg. Signed Confidentiality Agreements (CA’s) 189 111 300 Pct. Of Total CA’s Signed 63% 37% 100% Offers Submitted 55 46 101 Pct. of Signed CA’s 29% 41% 34% # of Properties 99 127 226 Offers Accepted 19 28 47 Pct. of Offers Sub
Slide 33: Keys to Off-Market Success
Keys to Off-Market Success Extensive industry relationships Name recognition and track record of closing acquisitions Certainty in securing financing Reputation for being responsive, fair and “straight-shooters” Owner / operator Sellers deal with one party (i.e., no capital partner) Continuity of op
Slide 34: Key Metrics: Consistent Significant Growth
Key Metrics: Consistent Significant Growth Revenue * Adjusted EBITDAR ($ In Millions) ($ In Millions) 17.9% CAGR * Excludes community reimbursement revenue and management services revenue 17.9% CAGR Adjusted EBITDAR Margin Adjusted CFFO per share * Excludes prepaid resident rents and tax savings rel
Slide 35: Comparative Operating and Financial Metrics
Comparative Operating and Financial Metrics Q3 15 YTD Q3 14 YTD % Increase Total Revenues $ 304.6 $ 283.8 7.3% Adjusted EBITDAR $ 106.3 $ 96.5 10.2% % Margin 36.5% 35.3% Adjusted CFFO $ 34.2 $ 28.5 20.0% Adjusted CFFO Per Share $ 1.19 $ 1.01 Note: EBITDAR and CFFO are as adjusted in press releases.
Slide 36: Balance Sheet
Balance Sheet As of September 30, 2015 (in millions) ASSETS Cash and Securities $ 47.9 Other Current Assets 25.3 Total Current Assets 73.2 Fixed Assets 848.0 Other Assets 38.1 TOTAL ASSETS $ 959.3 LIABILITIES & EQUITY Current Liabilities $ 66.8 Long-Term Debt 697.7 Other Liabilities 55.1 Total Liabi
Slide 37: Debt Overview: 100% Mortgage Debt
Debt Overview : 100% Mortgage Debt Debt Maturities Weighted Average Interest Rate (In thousands) Average duration of debt is 8 years, with approximately 94% of all debt maturing in 2021 and after Weighted Average Interest Rate has decreased 137 bps since 2010 * $32 million of this debt is scheduled
Slide 38: Accelerated CFFO Growth through 2018
Accelerated CFFO Growth through 2018 CAGR: +22% Note: This chart illustrates the potential financial impact of successful execution of our strategic plan; it is not intended as financial guidance. Please see Capital Senior Living’s disclosure related to forward-looking statements. EBITDAR would incr
Slide 39: Investment Highlights
Investment Highlights Value leader in geographically concentrated regions Highest percentage of wholly-owned communities among top operators Straight-forward private pay business model Need-driven demand, limited new supply and improving housing market and economy Experienced management team with de
Slide 40: Capital Senior Living
Capital Senior Living Company Presentation
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