Capital Senior Living(SNDA)2024-03-27 18:28Financial Data and Key Metrics Changes - The company achieved over 10% revenue growth on a same-store basis and doubled adjusted EBITDA year-over-year from $17 million in 2022 to $34 million in 2023 [51] - Cash flow from operations exceeded $10 million in 2023, a $13 million improvement from 2022 [29] - The annualized NOI and margin for Q4 2023 were $66.8 million and 27.4% respectively, with an effective NOI margin of 25.7% when excluding non-recurring credits [65] - The company expanded its NOI margin by 520 basis points year-over-year, or 460 basis points on an adjusted basis [77] Business Line Data and Key Metrics Changes - The company focused on driving occupancy improvement in underperforming assets that account for 40% of all vacant units [6] - The company successfully raised base resident rates by 8.3% year-over-year [78] - Contract labor decreased nearly $6 million year-over-year, with a focus on optimizing labor hours amidst higher occupancy levels [20] Market Data and Key Metrics Changes - The company continues to focus on the Midwest, Southeast, and South as primary markets for expansion [8] - More than half of the portfolio averaged occupancy of 90% or greater during Q4 2023 [54] - The company anticipates a 12 to 18 month payback on capital investments for approximately 100 additional units in 2024 [55] Company Strategy and Development Direction - The company aims to build exceptional teams and deliver value to residents, translating efforts into margin improvement through operational excellence [3] - The strategic focus includes further margin expansion through rate and occupancy growth, with nearly 80% of private pay residents experiencing rate increases [31] - The company is positioned to capitalize on near-term dislocation in the market, with approximately $18 billion in senior living debt maturing in 2024 and 2025 [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the industry and the Sonida platform, emphasizing the importance of leadership retention and effective rollout of new resident programming [11] - The company is encouraged by consistent improvement across all significant KPIs over the last 12 months, expecting continued revenue and margin growth [45] - Management highlighted the importance of a strong local leadership team for the financial success of communities [9] Other Important Information - The company completed significant investments in its real estate portfolio and expanded the number of units to meet increasing demand for memory care services [5] - The company has clear visibility on transactions including more than 700 units expected to close in Q2 2024 [58] - The company has de-levered by $55 million since January 2023, including a $5 million paydown in connection with the Fannie Mae modification [62] Q&A Session Summary Question: Current occupancy as of today compared to end of Q4 - Management did not disclose the current occupancy figure [47][83] Question: Any forecast for occupancy by the end of the year - Management did not provide specific guidance at this time but indicated a goal of continued progress similar to 2023 [21][84] Question: How did real estate taxes decrease by a million dollars - Management explained that aggressive monitoring and consolidation of vendor relationships led to favorable pricing and one-time credits that will result in lower taxes moving forward [74][87]