Capital Senior Living(SNDA) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a sequential occupancy of 83.2%, an increase of 510 basis points year-over-year and 90 basis points from the previous quarter [7] - Same-store REVPAR increased by 11.3% and REVPOR by 4.4%, with sequential improvements of 200 basis points and 80 basis points respectively [8] - EBITDAR grew by 13.7% sequentially from the first quarter, indicating strong operational improvements [11][32] - The company achieved a 41% reduction in contract labor expenses compared to the first quarter [12] Business Line Data and Key Metrics Changes - The company has experienced five consecutive quarters of occupancy and revenue growth, with a focus on managing community operating expenses [5][6] - The community workforce has expanded by approximately 6% since the beginning of the year, contributing to improved service delivery [13] Market Data and Key Metrics Changes - Leading indicators for demand are trending positively, with leads up 18%, store visits up 32%, and move-ins up 33% compared to the same period in 2019 [15] - Nearly two-thirds of the owned portfolio is operating above 85% occupancy, providing opportunities for further rate increases [24] Company Strategy and Development Direction - The company aims to achieve pre-pandemic occupancy levels by the end of 2022 while continuing to expand NOI margins [14] - A focus on reducing reliance on contract labor and enhancing the quality of care through a stable workforce is a key strategic priority [25][44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about pricing power in senior living for 2023, citing strong demand and limited new supply [49] - The company is committed to continuing its success in occupancy growth while responsibly elevating rates in a challenging inflationary environment [43] Other Important Information - The company raised nearly $155 million in new capital to invest in its business and has made significant improvements to its balance sheet [18] - The company appointed a new Chief Accounting Officer and strengthened its finance leadership team to enhance operational efficiency [36] Q&A Session Summary Question: What are the expected savings from eliminating contract labor? - Management indicated that the current run rate for contract labor is around $1.5 million for Q2, translating to approximately $6 million on an annualized basis, with expectations for significant savings as the workforce stabilizes [47] Question: What is the pricing strategy for 2023? - Management is optimistic about maintaining similar rate growth in 2023 as seen in 2022, driven by strong demand and occupancy levels [49][50] Question: Has labor shortages affected occupancy gains? - Management confirmed that they have not experienced any lost occupancy due to labor shortages, attributing this to effective management of premium labor and strong hiring trends [56]