Capital Senior Living(SNDA)2023-11-14 21:47Revenue Performance - For the three months ended September 30, 2023, the Company generated resident revenue of approximately $59.1 million, an increase of 12.6% compared to $52.5 million for the same period in 2022[128]. - For the nine months ended September 30, 2023, the Company generated resident revenue of approximately $172.7 million, representing an increase of 11.2% from approximately $155.3 million in the same period of 2022[128]. - Resident revenue for Q3 2023 was $59.1 million, an increase of $6.6 million or 12.6% compared to Q3 2022, primarily due to increased occupancy and average rent rates[150]. - Resident revenue for the nine months ended September 30, 2023 was $172.7 million, an increase of $17.4 million or 11.2% from $155.3 million in the same period in 2022, driven by increased occupancy and average rent rates[157]. Occupancy and Rental Rates - Weighted average occupancy for the three months ended September 30, 2023, was 84.9%, up from 83.4% in the same period of 2022, indicating continued recovery post-COVID-19[129]. - The average monthly rental rate for the quarter ended September 30, 2023, was 11.7% higher compared to the same quarter in 2022[129]. Operating Expenses - Operating expenses for Q3 2023 were $44.5 million, an increase of $1.4 million or 3.2% compared to Q3 2022, driven by a $2.2 million rise in labor and employee-related expenses[152]. - Operating expenses for the nine months ended September 30, 2023 were $133.0 million, an increase of $6.4 million or 5.1% compared to $126.6 million for the same period in 2022, mainly due to a $5.8 million increase in labor and employee-related expenses[159]. Grants and Financial Support - The Company received approximately $0.5 million in various state grants during the quarter ended September 30, 2023, and $2.9 million for the nine months ended September 30, 2023[127]. Debt and Financing - The Company entered into a forbearance agreement with Fannie Mae in June 2023, which significantly reduced debt service payments and improved working capital[126]. - The Company may request additional investments of up to $25.0 million from Conversant Investors for future capital expenditures and acquisitions[127]. - The Company entered into a $13.5 million equity commitment agreement with Conversant Investors, with a commitment fee of $675,000 payable through the issuance of 67,500 shares of common stock[137]. - The Company made an equity draw of $6.0 million in July 2023 and issued 600,000 shares of common stock to Conversant[137]. - The Company is required to escrow 50% of Net Cash Flow less Debt Service on an aggregate basis over all 37 Fannie Mae communities for the first twelve months following the loan modification[134]. Impairment and Restructuring - The Company recorded a non-cash impairment charge of $6.0 million in Q3 2023 related to one owned community due to recurring net operating losses[154]. - The Company recorded a non-cash impairment charge of $6.0 million during the nine months ended September 30, 2023, related to one owned community due to recurring net operating losses[161]. - The Company incurred restructuring costs of $0.7 million in the nine months ended September 30, 2023, included in deferred loan costs[134]. Cash Flow and Liquidity - Net cash provided by operating activities for the nine months ended September 30, 2023 was $10.6 million, an increase of $7.7 million from $2.9 million in the same period in 2022, attributed to increased income from operations[171]. - Net cash used in investing activities was $12.8 million for the nine months ended September 30, 2023, primarily due to $14.2 million in capital expenditures[172]. - Net cash used in financing activities for the nine months ended September 30, 2023 was $7.4 million, primarily due to repayments of notes payable of $12.5 million[173]. - As of September 30, 2023, the company had approximately $3.6 million of unrestricted cash balances on hand, with future liquidity dependent on operating performance and economic conditions[166]. Community Management - Managed community reimbursement revenue decreased to $5.0 million in Q3 2023 from $7.7 million in Q3 2022, a decline of $2.7 million due to managing fewer communities[151]. - Managed community reimbursement expense for the nine months ended September 30, 2023 was $15.3 million, a decrease of $6.5 million or 29.9% compared to $21.8 million for the same period in 2022, primarily due to managing fewer communities[158]. Workforce Challenges - The Company faced workforce challenges requiring the use of overtime, shift bonuses, and contract labor to support its senior living communities[131]. Liquidity Improvement Actions - The Company has taken actions to improve liquidity, including cost-cutting and efficiency initiatives, to address going concern uncertainties[122].