We last wrote about Sonida Senior Living , Inc. (NYSE: SNDA ) in July of last year, when we pointed to the company's significant leverage and how this could potentially stifle its growth path in theIndividual investor with a keen interest in deriving income from investment setups. We do this by buying undervalued profitable stocks with strong balance sheets & minimal debt. Furthermore, when the opportunity arises, we like to write calls against our positions to bring in additional income. Risk management is ...

Financial Data and Key Metrics Changes - The company achieved 19% year-over-year growth in same-store adjusted community NOI and 27% growth in adjusted EBITDA for 2024 [8] - Pro forma NOI grew 9.6% in Q4 2024 compared to Q4 2023, with a pro forma NOI margin increase of 90 basis points [23][25] - Annual revenues increased by 7.5% due to a 180 basis points occupancy gain and nearly 6% RevPOR increase [25] Business Line Data and Key Metrics Changes - The company integrated 20 owned and 3 managed communities, resulting in a nearly 30% increase in total units [9] - The weighted average occupancy for newly acquired communities was 76% with an NOI margin of 21.7% [12] Market Data and Key Metrics Changes - Lead volume in Q4 2024 increased by 15% year-over-year, with tour volume up 11% in the same-store owned portfolio [18] - The company experienced a decline in weighted average occupancy to 86.6%, down 40 basis points from Q3 2024 [27] Company Strategy and Development Direction - The company aims for same-store NOI growth in the high end of its peer group for 2025, leveraging stabilized operations from recent acquisitions [11] - The focus is on capitalizing on demographic trends and supply-demand imbalances in senior living, with a strategy to pursue underperforming or mispriced assets [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, anticipating strong pricing and occupancy recovery, particularly in newly acquired communities [50][52] - The company is focused on controlling labor expenses and has not seen significant shifts in the labor market due to immigration changes [54] Other Important Information - The company executed six transactions totaling over $250 million in 2024, enhancing its acquisition capabilities and operational integrations [10] - Employee turnover decreased nearly 10% in 2024, indicating improved employee experience and retention [15] Q&A Session Summary Question: What is the current pricing trend compared to last year? - Management indicated that pricing is expected to remain strong in 2025, similar to gains seen in 2024, with continued occupancy levels supporting this [50] Question: What are the expectations regarding labor costs? - Management noted that labor expenses are being diligently managed, with no major shifts anticipated due to immigration changes, allowing for margin growth [54]

Acquisitions and Investments - As of December 31, 2024, the Company owned, managed, or invested in 94 senior housing communities with an aggregate capacity of approximately 10,000 residents[206]. - The Company acquired a senior living community in Cincinnati for $16.3 million, funded by $18.3 million of senior mortgage debt[207]. - The Company closed the acquisition of two senior living communities in Atlanta for $29.0 million, recording $24.7 million in property and equipment[209][210]. - The Palm Acquisition involved eight senior living communities for a total cash purchase price of $102.9 million, with $89.2 million recorded in property and equipment[211][212]. - The Company entered into a non-recourse mortgage loan of $18.3 million for the Cincinnati Acquisition, with a fixed-interest-only rate of 3% after a 24-month interest waiver[228]. Financial Performance - The Company generated resident revenue of approximately $267.8 million in 2024, an increase of $35.8 million or 15.4% compared to $232.0 million in 2023[243][253]. - Weighted average occupancy for the Company's communities was 86.4% in 2024, up from 84.6% in 2023, indicating continued occupancy growth[244][253]. - The average monthly rental rate for owned communities increased by 5.9% in 2024 compared to 2023[244][253]. - Management fee revenue rose by $1.2 million in 2024 due to managing more communities[254]. - Managed community reimbursement revenue increased by $12.0 million or 56.9% in 2024, totaling $33.1 million compared to $21.1 million in 2023[255]. Operating Expenses - Operating expenses for 2024 were $202.0 million, an increase of $24.7 million from $177.3 million in 2023, primarily due to labor cost increases[256]. - General and administrative expenses for the year ended December 31, 2024, increased by $7.8 million, or 24.2%, to $40.0 million compared to $32.2 million in 2023, primarily due to increased labor costs and stock-based compensation[257]. - Non-labor operating expenses increased by 2.4% for same-store communities in 2024, reflecting inflationary pressures[275]. - Labor costs, which historically comprise about two-thirds of total operating expenses, continued to rise due to competitive labor conditions and increased occupancy levels[276]. Debt and Financing - The Texas Loan Modification resulted in a discounted payoff of $18.3 million, recognizing a gain on debt extinguishment of $10.4 million for the year ended December 31, 2024[230]. - The Company has a senior secured revolving credit facility with a borrowing capacity of $150.0 million, borrowing $68.7 million at a weighted average interest rate of 7.3%[233]. - The Company completed a $40.2 million loan purchase and reduced notes payable by $49.6 million, resulting in a gain on debt extinguishment of $38.1 million[234]. - Interest expense increased by $0.9 million, or 2.4%, to $37.0 million for the year ended December 31, 2024, due to incremental borrowings for community acquisitions[261]. Cash Flow and Liquidity - Net cash used in operating activities was $1.8 million for the year ended December 31, 2024, compared to net cash provided of $10.7 million in 2023, a change of $12.5 million[268]. - Net cash used in investing activities was $208.9 million for the year ended December 31, 2024, primarily due to $172.5 million for acquisitions of new communities[269]. - Net cash provided by financing activities was $232.0 million for the year ended December 31, 2024, mainly from net proceeds of $190.5 million from the issuance of common stock[271]. - The company had an unrestricted cash balance of approximately $17.0 million as of December 31, 2024, with future liquidity dependent on operating performance and economic conditions[264]. Stock and Equity - In August 2024, the Company raised $124.1 million from a public offering of 4,300,000 shares at $27.00 per share[239]. - The Company entered into an At-the-Market Issuance Sales Agreement allowing for the sale of shares up to an aggregate offering price of $75.0 million[240]. Impairments and Losses - The Company recognized a non-cash impairment charge of $6.0 million in 2023, with no impairments on long-lived assets in 2024[249]. - The company reported a net loss of $3.3 million for the year ended December 31, 2024, a significant improvement from a net loss of $21.1 million in 2023[263].

Financial Performance - Same-store resident revenue increased by $3.6 million, or 6.0%, comparing Q4 2024 to Q4 2023[3] - Net loss attributable to Sonida stockholders for 2024 was $2.1 million, a significant improvement of $19.0 million compared to a net loss of $21.1 million in 2023[3] - Adjusted EBITDA for 2024 was $43.2 million, representing an increase of $9.3 million or 27.4% from $33.9 million in 2023[3] - Resident revenue for the year ended December 31, 2024, was $267.8 million, an increase of $35.8 million, or 15.4%, compared to $232.0 million in 2023[13] - The company reported a net loss of $6.218 million for Q4 2024, compared to a net loss of $14.629 million in Q4 2023, indicating a 57.5% improvement[31] - The company reported a net loss of $3,280,000 for 2024, a significant improvement from a net loss of $21,107,000 in 2023, representing a reduction of approximately 84.5%[35] Revenue and Occupancy - Weighted average occupancy for the same-store portfolio increased by 70 basis points to 86.6% in Q4 2024 from 85.9% in Q4 2023[3] - Total revenues for Q4 2024 reached $91.931 million, a 39.8% increase from $65.720 million in Q4 2023[31] - Same-store community resident revenue increased to $62,928,000 in Q4 2024 from $59,349,000 in Q4 2023, marking an increase of approximately 4.4%[45] Expenses and Costs - Operating expenses for 2024 were $202.0 million, an increase of $24.7 million from $177.3 million in 2023, primarily due to increased community labor costs[15] - Depreciation and amortization expenses increased to $44,051,000 in 2024 from $39,888,000 in 2023, reflecting a rise of about 10.8%[35] - Management fees for 2024 were $3.381 million, a 54.3% increase from $2.191 million in 2023[31] - Stock-based compensation expense rose to $1,175,000 for the three months ended September 30, 2024, up from $605,000 in the same period of 2023, indicating an increase of 94.0%[48] Debt and Financing - The Company reported a gain on extinguishment of debt of $48.5 million for the year ended December 31, 2024, compared to $36.3 million in 2023[19] - Long-term debt increased to $635.904 million in 2024 from $587.099 million in 2023, representing an 8.3% rise[33] - The Company entered into a new secured corporate credit facility with a total commitment of up to $150.0 million to support acquisition activities[7] Investments and Acquisitions - The Company closed on the acquisition of 20 high-quality communities in 2024, contributing to its growth strategy[2] - The company invested $172,546,000 in acquiring new communities in 2024, with total net cash used in investing activities amounting to $(208,923,000)[35] - Proceeds from the issuance of common stock, net of issuance costs, reached $190,537,000 in 2024, a substantial increase from $10,000,000 in 2023[35] Cash Flow and Assets - Cash and cash equivalents rose to $16.992 million in 2024, significantly up from $4.082 million in 2023[33] - Cash and cash equivalents at the end of 2024 were $39,087,000, a significant increase from $17,750,000 at the beginning of the year[35] - Total assets increased to $841.921 million as of December 31, 2024, compared to $621.460 million at the end of 2023, reflecting a growth of 35.4%[33] Future Outlook - The company plans to continue expanding its senior living communities and enhancing its service offerings in the coming years[28]

A Leading Owner, Operator & Investor Investor Presentation Third Quarter 2024 November 13, 2024 SNDA NYSE Listed 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 indicated in the forward-looking statements, including, among others, the risks, uncertainties and factors ...

Financial Data and Key Metrics Changes - The company achieved a 14th consecutive quarter of occupancy growth for its same-store portfolio, with occupancy reaching a new weighted average quarterly high at 87%, growing 210 basis points year-over-year and 80 basis points from Q2 2024 [14][31] - Same-store adjusted community net operating income (NOI) increased by 18.3% year-over-year, excluding nonrecurring state grants received in Q3 2023 [32] - Resident rates increased by 5.5% from the same quarter in 2023, although there was a sequential decline of 0.5% from Q2 2024 due to occupancy mix [39][40] Business Line Data and Key Metrics Changes - The same-store portfolio continues to show strong operating results, with significant growth in occupancy and margins, particularly in independent living care levels [16][18] - The company added 22 communities this year, increasing its operating portfolio by nearly 2,000 units, representing a 30% increase [12] Market Data and Key Metrics Changes - Lead volume in the third quarter increased by 7.5% year-over-year and 10% sequentially from Q2 2024, with organic leads now representing 56% of total lead volume [22] - Discounts and concessions have been on a two-year downward trend, supporting the stability of the company's rate profile [41] Company Strategy and Development Direction - The company is focused on operational excellence and capital allocation, with a robust pipeline of acquisition opportunities and a commitment to delivering strong operating results [30][28] - The company aims to achieve portfolio-wide occupancy of 90% and believes that normalized occupancy can exceed this level over the next several years [17][16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued NOI growth and margin expansion, driven by ongoing improvements in the same-store portfolio and stabilization in recently acquired communities [18][30] - The company is positioned to fulfill its commitment to residents, employees, and shareholders, with expectations for positive recurring cash flow by year-end [54] Other Important Information - The company completed acquisitions of 14 new communities valued at over $160 million and secured a $150 million line of credit [8][9] - A loan modification agreement with Fannie Mae extended the maturity of $220 million in outstanding mortgages, allowing the company to retain attractive fixed-rate debt [10][49] Q&A Session Summary Question: What are the expectations for future occupancy growth? - Management believes that achieving portfolio-wide occupancy of 90% is the next significant milestone and expects normalized occupancy to exceed this level in the coming years [16][17] Question: How does the company plan to manage its capital structure? - The company intends to manage its balance sheet to deleverage through operational improvement and funding acquisitions with lower leverage, targeting a debt-to-EBITDA ratio below 7 times [36][49]

Revenue Growth - For the three months ended September 30, 2024, the Company generated resident revenue of $67.0 million, a 13.4% increase from $59.1 million in the same period of 2023[126] - For the nine months ended September 30, 2024, resident revenue was $190.8 million, up 10.5% from $172.7 million in the prior year[126] - Resident revenue for Q3 2024 was $67.0 million, an increase of $7.9 million or 13.4% compared to $59.1 million in Q3 2023[164] - Resident revenue for the nine months ended September 30, 2024 was $190.8 million, an increase of $18.1 million or 10.5% compared to $172.7 million in the same period of 2023[167] Occupancy and Rental Rates - Weighted average occupancy for the same-store communities was 87.0% for Q3 2024, compared to 84.9% in Q3 2023, indicating continued occupancy growth[126] - The average monthly rental rate for the same-store communities increased by 4.5% in Q3 2024 compared to Q3 2023[126] Managed Communities - The Company managed 13 communities on behalf of third-party owners during the nine months ended September 30, 2024, up from 10 communities in the same period of 2023[128] - Managed community reimbursement revenue for Q3 2024 was $6.6 million, up $1.6 million or 32.0% from $5.0 million in Q3 2023[164] - Managed community reimbursement revenue increased to $19.1 million for the nine months ended September 30, 2024, up $3.8 million or 24.8% from $15.3 million in 2023[167] Operating Expenses - Operating expenses for Q3 2024 were $50.5 million, an increase of $6.0 million or 13.5% compared to $44.5 million in Q3 2023[165] - Operating expenses rose to $142.8 million for the nine months ended September 30, 2024, an increase of $9.8 million or 7.4% compared to $133.0 million in 2023[168] General and Administrative Expenses - General and administrative expenses for Q3 2024 were $11.8 million, an increase of $3.2 million from $8.6 million in Q3 2023[165] - General and administrative expenses increased to $28.2 million for the nine months ended September 30, 2024, up $5.9 million from $22.3 million in 2023[168] Debt and Financing Activities - The Company completed a loan purchase agreement in February 2024, acquiring $74.4 million in outstanding indebtedness, resulting in a gain on debt extinguishment of $38.1 million[143] - The Company recognized a total of $36.3 million for the gain on debt extinguishments for the nine months ended September 30, 2023[149] - The Company entered into a $9.4 million mortgage for the Macedonia community acquisition with a variable interest rate[158] - The Company entered into Loan Modification Agreements with Fannie Mae on October 2, 2023, extending maturities on 18 community mortgages to December 2026[144] - The Company made a $5.0 million principal payment in July 2023 as part of the Fannie Forbearance[144] - The Company entered into a credit agreement for a senior secured revolving credit facility with an initial borrowing capacity of $75.0 million in July 2024[142] Cash Flow and Liquidity - Net cash provided by operating activities decreased to $1.4 million for the nine months ended September 30, 2024, down $9.2 million from $10.6 million in 2023[172] - Net cash used in investing activities was $154.1 million for the nine months ended September 30, 2024, primarily due to a $102.5 million acquisition deposit[173] - Net cash provided by financing activities was $178.8 million for the nine months ended September 30, 2024, primarily from net proceeds of $190.5 million from common stock issuance[174] - As of September 30, 2024, the company had $24.9 million in unrestricted cash, with future liquidity dependent on operating performance and economic conditions[169] Share Issuance - In August 2024, the Company raised $130.4 million in gross proceeds from the public offering of 4,300,000 shares at $27.00 per share[131] - The company completed a private placement in 2024, issuing 5.0 million shares for gross cash proceeds of $47.8 million[169] - The company entered into an At-the-Market Issuance Sales Agreement allowing for the sale of shares up to an aggregate offering price of $75 million[170] Acquisitions - The Company acquired four senior living communities in Texas and Georgia for $32.8 million in July 2024 through joint ventures[138] - The Company entered into an asset purchase agreement to acquire a community in Macedonia, Ohio for $10.7 million in April 2024[139]

Financial Performance - Same-store resident revenue increased by $3.9 million, or 6.6%, year-over-year, totaling $66.9 million for Q3 2024[3] - Net loss attributable to Sonida stockholders improved to $13.8 million in Q3 2024 from $18.4 million in Q3 2023, a $4.6 million improvement[3] - Adjusted EBITDA for Q3 2024 was $10.1 million, an increase of $0.8 million, or 8.7%, year-over-year[3] - Resident revenue for the three months ended September 30, 2024, was $66.951 million, up from $59.117 million in the same period last year, representing a 3.1% increase[28] - Total revenues for the nine months ended September 30, 2024, reached $212.395 million, compared to $189.602 million for the same period in 2023, reflecting a 12.0% growth[28] - Net income attributable to Sonida shareholders for the nine months ended September 30, 2024, was $3.445 million, compared to a net loss of $6.478 million in the same period last year[28] - Net income for the nine months ended September 30, 2024, was $2,938,000, compared to a net loss of $(6,478,000) in 2023, indicating a significant improvement[31] - Net loss for Q3 2024 was $14,265, compared to a loss of $18,411 in Q3 2023, showing an improvement of 15.5%[40] Occupancy and Community Operations - Weighted average occupancy for the owned same-store portfolio rose 210 basis points to 87.0% from 84.9% in Q3 2023[3] - Managed community reimbursement revenue increased by $1.6 million, or 32.0%, to $6.6 million for Q3 2024 compared to Q3 2023[14] - Same-store community net operating income margin improved to 26.7% in Q3 2024, up from 24.8% in Q3 2023, an increase of 1.9%[45] - Consolidated community net operating income for Q3 2024 was $16,812, up $2,122 from $14,690 in Q3 2023, a growth of 14.4%[45] - The company operated 83 senior housing communities with an aggregate capacity of approximately 9,100 residents as of September 30, 2024[25] Expenses and Liabilities - Operating expenses for Q3 2024 were $50.5 million, an increase of $6.0 million, or 13.5%, year-over-year[15] - Operating expenses for the nine months ended September 30, 2024, increased by $9.8 million, or 7.4%, to $142.8 million compared to $133.0 million for the same period in 2023[17] - General and administrative expenses rose by $5.9 million to $28.2 million for the nine months ended September 30, 2024, primarily due to increased labor and employee-related expenses[17] - General and administrative expenses for Q3 2024 were $11,793, compared to $8,615 in Q3 2023, an increase of 37.8%[40] - Total expenses for the three months ended September 30, 2024, were $79.662 million, an increase from $73.998 million in the prior year, marking a 7.6% rise[28] - Total liabilities decreased to $660.287 million as of September 30, 2024, from $688.009 million at the end of 2023, showing a reduction of 4.0%[30] Cash Flow and Financing - The company raised $130.4 million in gross proceeds from a public offering of 4,300,000 shares at a price of $27.00 per share in August 2024[20] - As of September 30, 2024, the company had $24.9 million of unrestricted cash, with future liquidity dependent on operating performance and economic conditions[22] - The company entered into a senior secured revolving credit facility for $75.0 million, with an additional commitment of up to $75.0 million from RBC[6] - The company closed on an additional $75 million commitment under its Credit Facility, bringing the total commitment to $150 million[21] - Net cash provided by operating activities was $1.4 million for the nine months ended September 30, 2024, a decrease of $9.3 million compared to $10.6 million in 2023[22] - The cash, cash equivalents, and restricted cash at the end of the period totaled $43,788,000, compared to $21,152,000 at the end of the previous year, marking a 106.5% increase[31] - The company’s net cash provided by financing activities was $178,809,000, a substantial increase from $(7,441,000) in the prior year[31] Acquisitions and Portfolio Expansion - The company expanded its portfolio by 30% in the last six months, acquiring 19 senior living communities[2] - The acquisition of eight senior living communities in the Southeast was finalized for $102.9 million, approximately $185,000 per unit, with an in-place occupancy of 85%[8] Debt and Interest - Fannie Mae agreed to extend the maturities on $220.1 million of debt from December 1, 2026, to January 1, 2029[7] - Total variable rate mortgage debt increased to $171,531 in Q3 2024 from $137,320 in Q3 2023[45] - Interest expense for Q3 2024 was $9,839, slightly up from $9,020 in Q3 2023, an increase of 9.1%[40] - The company recorded a gain on extinguishment of debt of $38.1 million for the nine months ended September 30, 2024, compared to $36.3 million for the same period in 2023[18] Other Financial Metrics - The company recorded interest income of $853,000 for the three months ended September 30, 2024, compared to $139,000 in the same period last year[28] - The company incurred a provision for bad debt of $1,510,000, which is significantly higher than the $582,000 recorded in the previous year[31] - Provision for bad debt increased to $629 in Q3 2024 from $249 in Q3 2023, a rise of 152.2%[44] - The company reported a loss on derivative instruments of $3,285,000, which increased from $1,958,000 in the previous year[31] - Capital expenditures for the nine months ended September 30, 2024, were $17,936,000, up from $14,168,000 in 2023, indicating a 19.5% increase[31]

Group 1 - Sonida (NYSE: SNDA) shares have decreased by 31% from their recent high despite positive operating results and ongoing acquisition progress [1] - Current trading reflects an implied cap rate of 7.4%, indicating a significant discount [1]

Revenue Growth - For the three months ended June 30, 2024, the Company generated resident revenue of $63.1 million, a 10.7% increase from $57.0 million in the same period of 2023[105] - For the six months ended June 30, 2024, resident revenue was $123.8 million, up 9.0% from $113.6 million in the prior year[105] - Resident revenue for Q2 2024 was $63.1 million, an increase of 10.7% from $57.0 million in Q2 2023, primarily due to increased occupancy and one additional community acquisition[131] - Managed community reimbursement revenue for Q2 2024 was $6.4 million, up 18.5% from $5.4 million in Q2 2023, attributed to managing more communities[131] - Managed community reimbursement revenue for the first half of 2024 was $12.5 million, up 21.4% from $10.3 million in the first half of 2023[133] Occupancy and Rental Rates - Weighted average occupancy for the same-store communities was 86.2% for the three months ended June 30, 2024, compared to 83.9% in 2023, indicating continued occupancy growth[105] - The average monthly rental rate for the three months ended June 30, 2024, was 8.4% higher than the same period in 2023[105] Expenses - Operating expenses for Q2 2024 were $46.0 million, a 2.9% increase from $44.7 million in Q2 2023, with labor costs contributing approximately $1.2 million to the increase[132] - General and administrative expenses for Q2 2024 rose to $9.2 million, up 39.4% from $6.6 million in Q2 2023, driven by increased labor and employee-related expenses[132] - Operating expenses for the first half of 2024 were $92.3 million, a 4.3% increase from $88.5 million in the first half of 2023, mainly due to labor cost increases[135] Debt and Financing Activities - The Company entered into a loan repurchase agreement in February 2024, purchasing $74.4 million in outstanding debt, resulting in a gain on debt extinguishment of $38.1 million[114] - Gain on extinguishment of debt for the first half of 2024 was $38.1 million, compared to $36.3 million in the same period of 2023, resulting from derecognition of notes payable[135] - The company expanded its loan facility with Ally by $24.8 million to partially fund the 2024 Loan Purchase, incurring deferred loan costs of $0.5 million[119] Cash Flow and Liquidity - As of June 30, 2024, the company had $9.5 million in unrestricted cash, with future liquidity dependent on operating performance and economic conditions[136] - Net cash used in operating activities for the six months ended June 30, 2024 was $1.6 million, a decrease of $7.2 million compared to $5.5 million provided in the same period of 2023[138] - Net cash used in investing activities for the six months ended June 30, 2024 was $42.7 million, primarily due to the acquisition of a new community for $11.1 million and unconsolidated entities for $22.3 million[139] - Net cash provided by financing activities for the six months ended June 30, 2024 was $50.4 million, mainly from the issuance of common stock generating $65.1 million[140] - The company completed a private placement in Q1 2024, issuing 5.0 million shares for gross cash proceeds of $47.8 million, which helped purchase outstanding debt at a discount[136] - The company entered into an At-the-Market Issuance Sales Agreement allowing for the sale of shares up to $75 million, with $17.4 million net proceeds received as of June 30, 2024[136] - The company is evaluating financial and capital raising transactions, including debt refinancings and equity offerings, to enhance liquidity[136] Acquisitions and Investments - The Company acquired a community in Macedonia, Ohio for $10.7 million in April 2024, financed by a $9.4 million mortgage loan[111] - The Company formed a joint venture in April 2024 to acquire four senior housing communities for $64.0 million, holding a 33.33% noncontrolling interest[112] Interest Expense - Interest expense for Q2 2024 was $9.0 million, an increase of 4.7% from $8.6 million in Q2 2023, primarily due to changes in fair value of the interest rate cap[132] Grants - The company received $2.4 million in grants during the six months ended June 30, 2023, due to financial distress impacts from COVID-19[138]