Capital Senior Living(SNDA) - 2024 Q1 - Earnings Call Transcript

Financial Data and Key Metrics - Occupancy remained stable at just shy of 86%, in line with the prior quarter [4] - Revenue increased 2.4% sequentially and 7.3% year-over-year, reflecting operational strength [4] - Adjusted NOI increased by $3.5 million year-over-year, with a 360 basis point improvement in adjusted NOI margin [8] - Resident rates increased 10.1% year-over-year and 2.7% sequentially, with an annual average rate increase of 6.3% on an all-in basis [9] - Adjusted EBITDA increased more than 21% year-over-year and 2% sequentially [29] Business Line Performance - Magnolia Trails memory care units saw a year-over-year occupancy increase of 750 basis points, reaching nearly 88% in Q1 2024 [29] - The company implemented a new level of care initiative in several Magnolia Trails memory care locations, focusing on expense management and labor cost control [5] - The company has successfully addressed all resident leases with level of care assessments, ensuring appropriate revenue capture [9] Market Performance - The company grew occupancy by 200 basis points year-over-year to 85.9% [8] - RevPAR increased by 8.4% year-over-year, and resident revenue increased by 7.2% [8] - The company experienced positive momentum in occupancy and margin in key recovery communities, with sequential quarterly occupancy improvement of 240 basis points and 130 basis points of margin expansion [17] Strategic Direction and Industry Competition - The company is focusing on acquiring underperforming but quality assets at significant discounts to replacement costs, with investments set to close in Q2 [5] - The company plans to continue targeting similar opportunities through joint venture relationships with leading real estate investors [6] - The company is leveraging its differentiated approach to operating, owning, and investing in senior living communities to capitalize on near-term market dislocation [19] - The company is focusing on regional densification to benefit from scale and implement labor management tools without significant changes to G&A [30] Management Commentary on Operating Environment and Future Outlook - The company remains optimistic about its 2024 operating targets and has clear line of sight into further growth opportunities [16] - The company expects to continue driving occupancy, rate, and margin improvement throughout the year [17] - The company is well-positioned to match revenues with the underlying cost of care, with new operating protocols and enhanced programming in place [9] - The company anticipates stabilizing utility costs later in 2024 when current rate contracts are up for renewal [10] Other Important Information - The company has raised nearly$ 60 million in equity capital, with approximately $35 million earmarked for transactions expected to close in the next 90 days [16] - The company has introduced an operational excellence team to focus on portfolio-wide initiatives and best practices for new communities [18] - The company is in compliance with all financial covenants required under its mortgages [11] - The company has added Lilly Donohue to its Board of Directors, bringing significant experience in senior living and real estate-based businesses [31] Q&A Session - No specific questions or answers were provided in the transcript [25]