Sonida Senior Living, Inc. (the “Company,” “Sonida,” “we,”
“our,” or “us”) (NYSE: SNDA) a leading owner, operator and investor
of senior housing communities, today announced its results for the
second quarter ended June 30, 2024.
“Continued momentum through focused execution on our
operational, financial and strategic growth initiatives resulted in
another quarter of exceptional performance. In the second quarter,
revenue, community net operating income, resident rates and
occupancy all exhibited meaningful and accelerating gains both
year-over-year and quarter-over-quarter. In addition to its strong
operating performance, Sonida continued leaning into its strategic
expansion goals by acquiring nine communities either outright or
through joint ventures, creating further density in existing
markets and entering new and attractive markets. Overall, I am
encouraged by our progress in the first half of 2024, and we remain
focused on providing value and care to our residents, all while
advancing and strengthening the Company for our communities and
stakeholders,” said Brandon Ribar, President and CEO.
Second Quarter Highlights
- Weighted average occupancy for the Company’s owned same-store
portfolio (“same-store”) increased 230 basis points to 86.2% from
83.9% in Q2 2023.
- Same-store resident revenue increased $5.7 million, or 10.0%,
comparing Q2 2024 to Q2 2023, and increased $6.1 million, or 10.8%
when excluding $0.4 million of state grant revenue received in Q2
2023.
- Net loss for Q2 2024 was $9.8 million compared to $12.2 million
for Q2 2023, representing a $2.4 million decrease in net loss.
- Q2 2024 Adjusted EBITDA, a non-GAAP measure, was $11.4 million,
representing an increase of $3.8 million, or 50.6% year-over-year
and $1.9 million, or 19.8% in sequential quarters, driven primarily
by continued improvement in operations.
- Results for the Company’s same-store, owned portfolio of 61
communities:
- Q2 2024 vs. Q2 2023:
- Revenue Per Available Unit (“RevPAR”) increased 11.3% to
$3,673.
- Revenue Per Occupied Unit (“RevPOR”) increased 8.4% to
$4,263.
- Community Net Operating Income, a non-GAAP measure, increased
$4.2 million to $17.7 million. Adjusted Community Net Operating
Income, a non-GAAP measure, which excludes $0.4 million of state
grant revenue received in Q2 2023 (none received in Q2 2024), was
$13.1 million for Q2 2023.
- Community Net Operating Income Margin a non-GAAP measure, was
28.2% for Q2 2024. Adjusted Community Net Operating Income Margin,
a non-GAAP measure and adjusted for non-recurring state grant
revenue, was 23.2% for Q2 2023.
- Q2 2024 vs. Q1 2024:
- RevPAR increased 3.3% to $3,673.
- RevPOR increased 3.0% to $4,263.
- Community Net Operating Income increased $2.8 million to $17.7
million. There were no state grants received during these
periods.
- Community Net Operating Income Margin was 28.2% and 24.6% for
Q2 2024 and Q1 2024, respectively.
- During May 2024, the Company acquired one senior housing
community located in Ohio (“Macedonia”) and invested in a joint
venture (“Stone”) with partner KZ Stone Investor LLC (“KZ
Investor”) that acquired four senior housing communities located in
the Midwest for which Sonida operates.
- In addition, during the quarter, the Company entered into an
At-The-Market issuance sales agreement (“ATM Sales Agreement”),
whereby the Company may sell, at its option, shares of its common
stock up to an aggregate offering price of $75.0 million. A total
of $17.4 million of net proceeds were raised in Q2 2024 through our
ATM Sales Agreement.
Subsequent Event Highlights
Investment in Joint Venture
On July 1, 2024, the Company entered into a joint venture
(“Palatine JV”) with affiliates of Palatine Capital Partners
(“Palatine Investor”), which acquired four senior living
communities located in Texas (3) and Georgia (1). The Palatine JV
acquired these communities with $12.5 million of cash and financing
of $21.8 million of senior mortgage debt. The Company is a 51%
owner in the joint venture and contributed $6.4 million in cash for
the investment. The Company will manage the four communities in
exchange for a management fee calculated as a percentage of gross
revenue and an additional incentive management fee.
Loan Modification
On August 5, 2024, the Company entered into loan modification
agreements (“Texas Loan Modification”) with one of its lenders on
two owned communities in Texas. The original loan terms included
maturities of April 2025 and October 2031, as well as cross-default
provisions with each other. The Texas Loan Modification includes
revised loan maturities of December 2025 on both communities, with
the Company’s option to make a discounted payoff (“Texas DPO”) of
the outstanding loan principal on or prior to November 1, 2024. The
Texas DPO amount of $18.5 million represents a discount of 36% on
the total principal outstanding of $28.7 million on these two loans
(as of July 31, 2024).
BMO Loan
On July 24, 2024, the Company entered into a loan agreement with
BMO Bank N.A. in the amount of $8.7 million that is secured by two
of the Company’s communities.
Registration Statement
On July 19, 2024, the Company filed a prospectus which is part
of a registration statement that we filed with the Securities and
Exchange Commission, or the (“SEC”), using a “shelf” registration
process. Under the shelf registration process, we may sell any
combination of the securities described in the prospectus in one or
more offerings up to a total dollar amount of $500.0 million. The
Company cannot provide any assurances that it will issue any
securities pursuant to the registration statement.
At-the-Market Equity Offerings
On July 1, 2024, the Company sold 51,127 shares pursuant to the
ATM Sales Agreement at an average sales price of $27.50 per share
for net proceeds of $1.4 million, inclusive of $35 thousand in
commissions paid to its Agent.
SONIDA SENIOR LIVING,
INC.
SUMMARY OF CONSOLIDATED
FINANCIAL RESULTS
THREE MONTHS ENDED JUNE 30,
2024
(in thousands)
Three Months Ended June
30,
Three Months Ended March
31,
2024
2023
2024
Consolidated results
Resident revenue (1)
$
63,108
$
56,960
$
60,737
Management fees
720
531
594
Managed community reimbursement
revenue
6,379
5,363
6,107
Operating expenses
45,981
44,662
46,317
General and administrative expenses
9,178
6,574
7,211
Gain on extinguishment of debt, net
—
—
38,148
Other income (expense), net
253
(117
)
(479
)
Income (loss) before provision for income
taxes (1)
(9,757
)
(12,159
)
27,085
Net income (loss) (1)
(9,816
)
(12,212
)
27,019
Adjusted EBITDA (1) (2)
11,350
7,538
9,473
Community net operating income (NOI) (1)
(2)
17,616
13,549
14,915
Community net operating income margin (1)
(2)
27.9
%
23.8
%
24.6
%
Weighted average occupancy (3)
85.7
%
83.9
%
85.9
%
(1) Includes $0.4 million of state grant
revenue received in Q2 2023. There were no such grant revenues in
Q2 2024 or Q1 2024.
(2) Adjusted EBITDA, Community Net
Operating Income, and Community Net Operating Income Margin are
financial measures that are not calculated in accordance with U.S.
Generally Accepted Accounting Principles (“GAAP”). See
“Reconciliation of Non-GAAP Financial Measures” for the Company's
definition of such measures, reconciliations to the most comparable
GAAP financial measures, and other information regarding the use of
the Company's non-GAAP financial measures.
(3) Includes the acquired community in
Macedonia, Ohio which had a weighted average occupancy of 40.6% for
Q2 2024.
Results of Operations
Three months ended June 30, 2024 as compared to three months
ended June 30, 2023
Revenues
Resident revenue for the three months ended June 30, 2024 was
$63.1 million as compared to $57.0 million for the three months
ended June 30, 2023, representing an increase of $6.1 million, or
10.7%. The increase in revenue was primarily due to increased
occupancy and, to a lesser extent, increased average rent rates,
and one additional owned community that was acquired in May 2024.
For the three months ended June 30, 2023, the Company received
approximately $0.4 million in various relief funds received from
state departments due to financial distress impacts of COVID-19
(“State Relief Funds”). For the three months ended June 30, 2024,
the Company received no State Relief Funds.
Managed community reimbursement revenue for the three months
ended June 30, 2024 was $6.4 million as compared to $5.4 million
for the three months ended June 30, 2023, representing an increase
of $1.0 million or 18.5%. The increase was primarily a result of
managing more communities in the three months ended June 30, 2024
compared to the prior period.
Expenses
Operating expenses for the three months ended June 30, 2024 were
$46.0 million as compared to $44.7 million for the three months
ended June 30, 2023, representing an increase of $1.3 million, or
2.9%. In our consolidated community portfolio, the labor component
of our operating expense increased approximately $1.2 million
period-over-period. The additional increase of $0.1 million was for
other expenses.
General and administrative expenses for the three months ended
June 30, 2024 were $9.2 million as compared to $6.6 million for the
three months ended June 30, 2023, representing an increase of $2.6
million. The increase was primarily a result of an increase in
labor and employee related expenses of $1.0 million, a $0.6 million
increase in stock-based compensation expense, a $0.3 million
increase in transaction costs, and a net increase in other expenses
of $0.7 million.
Interest expense for the three months ended June 30, 2024 was
$9.0 million as compared to $8.6 million for the three months ended
June 30, 2023, representing an increase of $0.4 million primarily
due to the change in fair value of our interest rate cap (“IRC”)
and the ending of the Fannie Interest Abatement Period ending on
May 31, 2024.
As a result of the foregoing factors, the Company reported net
loss of $9.8 million and $12.2 million for the three months ended
June 30, 2024 and June 30, 2023, respectively.
Adjusted EBITDA for the three months ended June 30, 2024 was
$11.4 million compared to $7.5 million for the three months ended
June 30, 2023, driven primarily by continued improvement in
operations. See “Reconciliation of Non-GAAP Financial Measures”
below.
Six months ended June 30, 2024 as compared to six months
ended June 30, 2023
Revenues
Resident revenue for the six months ended June 30, 2024 was
$123.8 million as compared to $113.6 million for the six months
ended June 30, 2023, representing an increase of $10.2 million, or
9.0%. The increase in revenue was primarily due to increased
occupancy, one additional owned community that was acquired in May
2024, and to a lesser extent, increased average rent rates. For the
six months ended June 30, 2023, the Company received $2.4 million
in State Relief Funds. For the six months ended June 30, 2024, the
Company received no State Relief Funds.
Managed community reimbursement revenue for the six months ended
June 30, 2024 was $12.5 million as compared to $10.3 million for
the six months ended June 30, 2023, an increase of $2.2 million, or
21.4%. The increase was primarily a result of managing more
communities in the six months ended June 30, 2024 as compared to
the prior period.
Expenses
Operating expenses for the six months ended June 30, 2024 were
$92.3 million as compared to $88.5 million for the six months ended
June 30, 2023, representing an increase of $3.8 million, or 4.3%.
The increase is primarily attributable to the increase in labor
over this period.
General and administrative expenses for the six months ended
June 30, 2024 were $16.4 million as compared to $13.6 million for
the six months ended June 30, 2023, representing an increase of
$2.8 million. The increase was primarily a result of an increase in
labor and employee related expenses of $1.6 million, an increase in
stock-based compensation of $0.3 million, an increase in
transaction costs of $0.3 million, and a net increase in other
expenses of $0.6 million.
Interest expense for the six months ended June 30, 2024 was
$17.6 million as compared to $17.4 million for the six months ended
June 30, 2023, representing an increase of $0.2 million primarily
due to the change in fair value of our IRC.
Gain on extinguishment of debt for the six months ended June 30,
2024 was $38.1 million. The gain relates to the derecognition of
notes payable and liabilities as a result of the loan purchase from
one of our lenders. Gain on extinguishment of debt for the six
months ended June 30, 2023 was $36.3 million and related to the
derecognition of notes payable and liabilities as a result of the
transition of legal ownership of two communities to Fannie Mae, the
holder of the related non-recourse debt.
As a result of the foregoing factors, the Company reported net
income of $17.2 million and $11.9 million for the six months ended
June 30, 2024 and June 30, 2023, respectively.
Liquidity, Capital Resources, and
Subsequent Events
Liquidity
Increase in Authorized Shares of Common Stock
On March 21, 2024, following receipt of stockholder approval at
the Special Meeting of the Company’s stockholders held on March 21,
2024, the Company filed an amendment to the Company’s Amended and
Restated Certificate of Incorporation, as amended, with the
Delaware Secretary of State to increase the number of authorized
shares of the Company’s common stock from 15,000,000 shares to
30,000,000 shares. The charter amendment became effective upon
filing.
Securities Purchase Agreement
On February 1, 2024, the Company entered into a securities
purchase agreement (the “Securities Purchase Agreement”) with
Conversant Dallas Parkway (A) LP, Conversant Dallas Parkway (B) LP
(together, “Conversant”) and several other shareholders (together,
the “Investors”), pursuant to which the Investors agreed to
purchase from the Company, and the Company agreed to sell to the
Investors, in a private placement transaction pursuant to Section
4(a)(2) of the Securities Act of 1933, as amended, an aggregate of
5,026,318 shares of the Company’s common stock at a price of $9.50
per share (the “Private Placement”).
As of June 30, 2024, the Private Placement has been completed
with gross cash proceeds of $47.7 million received. The Company
used these proceeds in connection with the 2024 Loan Purchase
described below, continued investments in community improvements,
broader community programming, other general corporate purposes,
and working capital.
At-the-Market Sales
On April 1, 2024, the Company entered into the ATM Sales
Agreement, whereby the Company may sell, at its option, shares of
its common stock up to an aggregate offering price of $75.0
million. On April 5, 2024, the Company sold 382,000 shares pursuant
to the ATM Sales Agreement at $27.50 per share for net proceeds of
$10.2 million, inclusive of $0.3 million in offering costs. On May
14, 2024, the Company sold 234,375 shares pursuant to the ATM Sales
Agreement at an average sales price of $32.00 per share for net
proceeds of $7.2 million, inclusive of $0.3 million in offering
costs. These transactions are expected to provide additional
financial flexibility to the Company and increase our liquidity
position. On July 1, 2024, the Company sold 51,127 shares pursuant
to the ATM Sales Agreement at an average sales price of $27.50 per
share for net proceeds of $1.4 million, inclusive of $35,000 in
commissions paid to its Agent.
2024 Loan Repurchase Agreement
On February 2, 2024, the Company completed the purchase of the
total outstanding principal balance of $74.4 million from the
lender that was secured by seven of the Company’s senior living
communities for a purchase price of $40.2 million (such
transaction, the “2024 Loan Purchase”). In addition to aggregate
deposits of $1.5 million made in December 2023 and January 2024,
the Company funded the remaining cash portion of the purchase price
(including one-time closing costs) with $15.4 million of net
proceeds from the sale of the shares at the first closing of the
Private Placement. The Company obtained additional debt proceeds
through its existing loan facility with Ally Bank for the remaining
portion of the purchase price, as described below.
Ally Term Loan Expansion
On February 2, 2024, the Company expanded the existing loan
facility with Ally by $24.8 million to partially fund the 2024 Loan
Purchase. The expanded Ally debt facility is secured by six of the
Company’s senior living communities involved in the 2024 Loan
Purchase.
On May 22, 2024, the Company executed an amendment (“Ally Fourth
Amendment”) to the Ally term loan agreement. Ally Bank successfully
syndicated a portion of its total term loan commitment to Cross
River Bank. Following the syndication, Ally Bank and Cross River
Bank owned 67.5% and 32.5% of the outstanding principal balance,
respectively.
Cashflows
The table below presents a summary of the Company’s net cash
provided by (used in) operating, investing, and financing
activities (in thousands):
Six Months ended June
30,
2024
2023
$ Change
Net cash provided by (used in) operating
activities
$
(1,624
)
$
5,537
$
(7,161
)
Net cash used in investing activities
(42,715
)
(9,355
)
(33,360
)
Net cash provided by (used in) financing
activities
50,372
(6,304
)
56,676
Increase (decrease) in cash and cash
equivalents
$
6,033
$
(10,122
)
$
16,155
In addition to $9.5 million of unrestricted cash as of June 30,
2024, our future liquidity will depend in part upon our operating
performance, which will be affected by prevailing economic
conditions, and financial, business and other factors, some of
which are beyond our control. Principal sources of liquidity are
expected to be cash flows from operations; proceeds from equity
offerings; proceeds from debt, debt refinancings, loan
modifications, or credit facilities; and proceeds from the sale of
owned assets.
The Company, from time to time, considers and evaluates
financial and capital raising transactions related to its
portfolio, including debt refinancings, purchases and sales of
assets, equity offerings, and other transactions. There can be no
assurance that the Company will continue to generate cash flows at
or above current levels, or that the Company will be able to obtain
the capital necessary to meet the Company’s short and long-term
capital requirements.
Recent changes in the current economic environment, and other
future changes, could result in decreases in the fair value of
assets, slowing of transactions, and the tightening of liquidity
and credit markets. These impacts could make securing debt or
refinancings for the Company or buyers of the Company’s properties
more difficult or on terms not acceptable to the Company. The
Company’s actual liquidity and capital funding requirements depend
on numerous factors, including its operating results, its capital
expenditures for community investment, and general economic
conditions, as well as other factors described in “Item 1A. Risk
Factors” of our Annual Report on Form 10-K for the fiscal year
ended December 31, 2023, filed with the SEC on March 27, 2024.
Conference Call
Information
The Company will host a conference call with senior management
to discuss the Company’s financial results for the three months
ended June 30, 2024, on Monday, August 12, 2024, at 11:00 a.m.
Eastern Time. To participate, dial 877-407-0989 (no passcode
required). A link to the simultaneous webcast of the teleconference
will be available at:
https://www.webcast-eqs.com/register/sonidaseniorliving_q22024_en/en.
For the convenience of the Company’s shareholders and the
public, the conference call will be recorded and available for
replay starting August 13, 2024 through August 26, 2024. To access
the conference call replay, call 877-660-6853, passcode 13743708. A
transcript of the call will be posted in the Investor Relations
section of the Company’s website.
About the Company
Dallas, Texas-based Sonida Senior Living, Inc. is a leading
owner, operator and investor in independent living, assisted living
and memory care communities and services for senior adults. As of
June 30, 2024, the Company operated 78 senior housing communities
in 19 states with an aggregate capacity of approximately 8,700
residents, including 66 owned senior housing communities (4 through
a joint venture) and 12 communities that the Company third-party
manages, which provide compassionate, resident-centric services and
care as well as engaging programming. For more information, visit
www.sonidaseniorliving.com or connect with the Company on Facebook,
Twitter or LinkedIn.
Definitions of RevPAR and
RevPOR
RevPAR, or average monthly revenue per available unit, is
defined by the Company as resident revenue for the period, divided
by the weighted average number of available units in the
corresponding portfolio for the period, divided by the number of
months in the period.
RevPOR, or average monthly revenue per occupied unit, is defined
by the Company as resident revenue for the period, divided by the
weighted average number of occupied units in the corresponding
portfolio for the period, divided by the number of months in the
period.
Safe Harbor
This release 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 set forth under “Item.
1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal
year ended December 31, 2023, filed with the Securities and
Exchange Commission (the “SEC”) on March 27, 2024, and also include
the following: the Company’s ability to generate sufficient cash
flows from operations, proceeds from equity issuances and debt
financings, and proceeds from the sale of assets to satisfy its
short- and long-term debt obligations and to fund the Company’s
acquisitions and capital improvement projects to expand, redevelop,
and/or reposition its senior living communities; increases in
market interest rates that increase the cost of certain of our debt
obligations; increased competition for, or a shortage of, skilled
workers, including due to general labor market conditions, along
with wage pressures resulting from such increased competition, low
unemployment levels, use of contract labor, minimum wage increases
and/or changes in overtime laws; the Company’s ability to obtain
additional capital on terms acceptable to it; the Company’s ability
to extend or refinance its existing debt as such debt matures; the
Company’s compliance with its debt agreements, including certain
financial covenants, and the risk of cross-default in the event
such non-compliance occurs; the Company’s ability to complete
acquisitions and dispositions upon favorable terms or at all,
including the possibility that the expected benefits and our
projections related to such acquisitions may not materialize as
expected; the risk of oversupply and increased competition in the
markets which the Company operates; the Company’s ability to
improve and maintain controls over financial reporting and
remediate the identified material weakness discussed in its recent
Quarterly and Annual Reports filed with the SEC; the cost and
difficulty of complying with applicable licensure, legislative
oversight, or regulatory changes; risks associated with current
global economic conditions and general economic factors such as
inflation, the consumer price index, commodity costs, fuel and
other energy costs, competition in the labor market, costs of
salaries, wages, benefits, and insurance, interest rates, and tax
rates; the impact from or the potential emergence and effects of a
future epidemic, pandemic, outbreak of infectious disease or other
health crisis; and changes in accounting principles and
interpretations.
For information about Sonida Senior Living, visit
www.sonidaseniorliving.com or connect with the Company on Facebook,
Twitter or LinkedIn.
Sonida Senior Living,
Inc.
Condensed Consolidated
Statements of Operations (Unaudited)
(in thousands, except per
share data)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Revenues:
Resident revenue
$
63,108
$
56,960
$
123,845
$
113,566
Management fees
720
531
1,314
1,036
Managed community reimbursement
revenue
6,379
5,363
12,486
10,325
Total revenues
70,207
62,854
137,645
124,927
Expenses:
Operating expense
45,981
44,662
92,298
88,470
General and administrative expense
9,178
6,574
16,389
13,637
Depreciation and amortization expense
10,067
9,927
20,002
19,808
Managed community reimbursement
expense
6,379
5,363
12,486
10,325
Total expenses
71,605
66,526
141,175
132,240
Other income (expense):
Interest income
387
188
526
382
Interest expense
(8,964
)
(8,558
)
(17,555
)
(17,425
)
Gain on extinguishment of debt, net
—
—
38,148
36,339
Loss from equity method investment
(35
)
—
(35
)
—
Other income (expense), net
253
(117
)
(226
)
72
Income (loss) before provision for
income taxes
(9,757
)
(12,159
)
17,328
12,055
Provision for income taxes
(59
)
(53
)
(125
)
(122
)
Net income (loss)
(9,816
)
(12,212
)
17,203
11,933
Undeclared dividends on Series A
convertible preferred stock
(1,372
)
(1,230
)
(2,707
)
(2,428
)
Undistributed net income allocated to
participating securities
—
—
(1,425
)
(1,419
)
Net income (loss) attributable to
common stockholders
$
(11,188
)
$
(13,442
)
$
13,071
$
8,086
Weighted average common shares outstanding
— basic
13,014
6,381
11,438
6,374
Weighted average common shares outstanding
— diluted
13,014
6,381
12,143
6,856
Basic net income (loss) per common
share
$
(0.86
)
$
(2.11
)
$
1.14
$
1.27
Diluted net income (loss) per common
share
$
(0.86
)
$
(2.11
)
$
1.08
$
1.18
Sonida Senior Living,
Inc.
Condensed Consolidated Balance
Sheets (Unaudited)
(in thousands, except per
share amounts)
June 30, 2024
December 31,
2023
Assets
Current assets:
Cash and cash equivalents
$
9,491
$
4,082
Restricted cash
14,292
13,668
Accounts receivable, net
9,145
8,017
Prepaid expenses and other assets
5,231
4,475
Derivative assets
2,071
2,103
Total current assets
40,230
32,345
Property and equipment, net
587,516
588,179
Investment in unconsolidated entity
22,307
—
Other assets, net
2,194
936
Total assets
$
652,247
$
621,460
Liabilities and Equity
Current liabilities:
Accounts payable
$
8,951
$
11,375
Accrued expenses
37,324
42,388
Current portion of notes payable, net of
deferred loan costs
2,235
42,323
Deferred income
4,356
4,041
Federal and state income taxes payable
93
215
Other current liabilities
599
519
Total current liabilities
53,558
100,861
Notes payable, net of deferred loan costs
and current portion
581,520
587,099
Other long-term liabilities
31
49
Total liabilities
635,109
688,009
Commitments and contingencies
Redeemable preferred stock:
Series A convertible preferred stock,
$0.01 par value; 41 shares authorized, 41 shares issued and
outstanding as of June 30, 2024 and December 31, 2023
51,248
48,542
Shareholders’ deficit:
Authorized shares - 15,000 as of June 30,
2024 and December 31, 2023; none issued or outstanding, except
Series A convertible preferred stock as noted above
—
—
Authorized shares - 30,000 and 15,000 as
of June 30, 2024 and December 31, 2023, respectively; 14,190 and
8,178 shares issued and outstanding as of June 30, 2024 and
December 31, 2023, respectively
142
82
Additional paid-in capital
366,710
302,992
Retained deficit
(400,962
)
(418,165
)
Total shareholders’ deficit
(34,110
)
(115,091
)
Total liabilities, redeemable preferred
stock and shareholders’ deficit
$
652,247
$
621,460
Sonida Senior Living,
Inc.
Condensed Consolidated
Statements of Cash Flows (Unaudited)
(in thousands)
Six Months Ended June
30,
2024
2023
Cash flows from operating
activities:
Net income
$
17,203
$
11,933
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization
20,002
19,808
Amortization of deferred loan costs
722
788
Gain on sale of assets, net
(192
)
(251
)
Loss on derivative instruments, net
1,606
1,103
Gain on extinguishment of debt
(38,148
)
(36,339
)
Loss from equity method investment
35
—
Provision for bad debt
881
334
Non-cash stock-based compensation
expense
1,786
1,503
Other non-cash items
(3
)
(1
)
Changes in operating assets and
liabilities:
Accounts receivable, net
(2,008
)
(1,807
)
Prepaid expenses and other assets
(756
)
1,316
Other assets, net
(199
)
294
Accounts payable and accrued expense
(2,791
)
6,100
Federal and state income taxes payable
(122
)
61
Deferred income
315
723
Other current liabilities
45
(28
)
Net cash provided by (used in)
operating activities
(1,624
)
5,537
Cash flows from investing
activities:
Acquisition of unconsolidated entities
(22,342
)
—
Community acquisition
(11,105
)
—
Capital expenditures
(9,899
)
(9,698
)
Proceeds from sale of assets
631
343
Net cash used in investing
activities
(42,715
)
(9,355
)
Cash flows from financing
activities:
Proceeds from issuance of common stock,
net
65,079
—
Proceeds from notes payable
36,648
—
Repayments of notes payable
(48,475
)
(5,893
)
Purchase of interest rate cap
(1,851
)
—
Deferred loan costs paid
(633
)
(327
)
Other financing costs
(396
)
(84
)
Net cash provided by (used in)
financing activities
50,372
(6,304
)
Increase (decrease) in cash and cash
equivalents and restricted cash
6,033
(10,122
)
Cash, cash equivalents, and restricted
cash at beginning of period
17,750
30,742
Cash, cash equivalents, and restricted
cash at end of period
$
23,783
$
20,620
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (UNAUDITED)
This earnings release contains the financial measures (1)
Community Net Operating Income and Adjusted Community Net Operating
Income, (2) Community Net Operating Income Margin and Adjusted
Community Net Operating Income Margin, (3) Adjusted EBITDA, (4)
Revenue per Occupied Unit (RevPOR) and (5) Revenue per Available
Unit (RevPAR), all of which are not calculated in accordance with
U.S. GAAP. Presentations of these non-GAAP financial measures are
intended to aid investors in better understanding the factors and
trends affecting the Company’s performance and liquidity. However,
investors should not consider these non-GAAP financial measures as
a substitute for financial measures determined in accordance with
GAAP, including net income (loss), income (loss) from operations,
net cash provided by (used in) operating activities, or revenue.
Investors are cautioned that amounts presented in accordance with
the Company’s definitions of these non-GAAP financial measures may
not be comparable to similar measures disclosed by other companies
because not all companies calculate non-GAAP measures in the same
manner. Investors are urged to review the following reconciliations
of these non-GAAP financial measures from the most comparable
financial measures determined in accordance with GAAP.
Community Net Operating Income and Community Net Operating
Income Margin are non-GAAP performance measures for the Company’s
consolidated owned portfolio of communities that the Company
defines as net income (loss) excluding: general and administrative
expenses (inclusive of stock-based compensation expense), interest
income, interest expense, other income/expense, provision for
income taxes, settlement fees and expenses, revenue and operating
expenses from the Company’s disposed properties; and further
adjusted to exclude income/expense associated with non-cash,
non-operational, transactional, or organizational restructuring
items that management does not consider as part of the Company’s
underlying core operating performance and impacts the comparability
of performance between periods. For the periods presented herein,
such other items include depreciation and amortization expense,
gain(loss) on extinguishment of debt, gain(loss) on disposition of
assets, long-lived asset impairment, and loss on non-recurring
settlements with third parties. The Community Net Operating Income
Margin is calculated by dividing Community Net Operating Income by
resident revenue. Adjusted Community Net Operating Income and
Adjusted Community Net Operating Income Margin are further adjusted
to exclude the impact from non-recurring state grant funds
received.
The Company believes that presentation of Community Net
Operating Income, Community Net Operating Income Margin, Adjusted
Community Net Operating Income, and Adjusted Community Net
Operating Income Margin as performance measures are useful to
investors because (i) they are one of the metrics used by the
Company’s management to evaluate the performance of our core
consolidated owed portfolio of communities, to review the Company’s
comparable historic and prospective core operating performance of
the consolidated owned communities, and to make day-to-day
operating decisions; (ii) they provide an assessment of operational
factors that management can impact in the short-term, namely
revenues and the controllable cost structure of the organization,
by eliminating items related to the Company’s financing and capital
structure and other items that management does not consider as part
of the Company’s underlying core operating performance, and impacts
the comparability of performance between periods.
Community Net Operating Income, Net Community Operating Income
Margin, Adjusted Community Net Operating Income, and Adjusted
Community Net Operating Income Margin have material limitations as
a performance measure, including: (i) excluded general and
administrative expenses are necessary to operate the Company and
oversee its communities; (ii) excluded interest is necessary to
operate the Company’s business under its current financing and
capital structure; (iii) excluded depreciation, amortization, and
impairment charges may represent the wear and tear and/or reduction
in value of the Company’s communities, and other assets and may be
indicative of future needs for capital expenditures; and (iv) the
Company may incur income/expense similar to those for which
adjustments are made, such as gain (loss) on debt extinguishment,
gain(loss) on disposition of assets, loss on settlements, non-cash
stock-based compensation expense, and transaction and other costs,
and such income/expense may significantly affect the Company’s
operating results.
SAME-STORE NET OPERATING INCOME AND
SAME-STORE NET OPERATING INCOME MARGIN (UNAUDITED)
Same-Store Net Operating Income and Same-Store Net Operating
Income Margin are non-GAAP performance measures for the Company’s
portfolio of 61 owned continuing communities that the Company
defines as net income (loss) excluding: general and administrative
expenses, interest income, interest expense, other income/expense,
provision for income taxes, settlement fees and expenses, and
further adjusted to exclude income/expense associated with
non-cash, non-operational, transactional, or organizational
restructuring items that management does not consider as part of
the Company’s underlying core operating performance and that
management believes impact the comparability of performance between
periods. For the periods presented herein, such other items include
stock-based compensation expense, depreciation and amortization
expense, long-lived asset impairment, gain on extinguishment of
debt, loss from equity method investment, and other income
(expense), net.
The Company believes that presentation of Same-Store Net
Operating Income and Same-Store Net Operating Income Margin as
performance measures are useful to investors because (i) they are
one of the metrics used by the Company’s management to evaluate the
performance of our core portfolio of 61 owned continuing
communities, to review the Company’s comparable historic and
prospective core operating performance of the 61 owned continuing
communities, and to make day-to-day operating decisions; (ii) they
provide an assessment of operational factors that management can
impact in the short-term, namely revenues and the controllable cost
structure of the organization, by eliminating items related to the
Company’s financing and capital structure and other items that
management does not consider as part of the Company’s underlying
core operating performance, and that management believes impact the
comparability of performance between periods.
Same-Store Net Operating Income and Same-Store Net Operating
Income Margin have material limitations as a performance measure,
including: (i) excluded interest is necessary to operate the
Company’s business under its current financing and capital
structure; (ii) excluded depreciation, amortization and impairment
charges may represent the wear and tear and/or reduction in value
of the Company’s communities, and other assets and may be
indicative of future needs for capital expenditures; and (iii) the
Company may incur income/expense similar to those for which
adjustments are made, such as gain(loss) on sale of assets,
gain(loss) debt extinguishment, loss on equity method investment,
non-cash stock-based compensation expense, and transaction and
other costs, and such income/expense may significantly affect the
Company’s operating results.
(Dollars in thousands)
Three Months Ended June
30,
Three Months Ended March
31,
Six Months Ended June
30,
2024
2023
2024
2024
2023
Same-store community net operating
income (1)
Net income (loss)
$
(9,816
)
$
(12,212
)
$
27,019
$
17,203
$
11,933
General and administrative expense
9,178
6,574
7,211
16,389
13,637
Depreciation and amortization expense
10,067
9,927
9,935
20,002
19,808
Interest income
(387
)
(188
)
(139
)
(526
)
(382
)
Interest expense
8,964
8,558
8,591
17,555
17,425
Gain on extinguishment of debt
—
—
(38,148
)
(38,148
)
(36,339
)
Loss from equity method investment
35
—
—
35
Other (income) expense, net
(253
)
117
479
226
(72
)
Provision for income taxes
59
53
66
125
122
Settlement (income) fees and expense, net
(2)
(231
)
720
(99
)
(330
)
819
Consolidated community net operating
income
17,616
13,549
14,915
32,531
26,951
Net operating loss for non same-store
communities (1)
65
—
—
65
—
Same-store community net operating
income
17,681
13,549
14,915
32,596
26,951
Resident revenue
$
63,108
$
56,960
$
60,737
$
123,845
$
113,566
Resident revenue for non same-store
communities (1)
369
—
—
369
—
Same-store community resident
revenue
62,739
56,960
60,737
123,476
113,566
Same-store community net operating
income margin
28.2
%
23.8
%
24.6
%
26.4
%
23.7
%
COVID-19 state relief grants (3)
—
411
—
—
2,448
Adjusted resident revenue
63,108
56,549
60,737
123,476
111,118
Adjusted community net operating
income
$
17,681
$
13,138
$
14,915
$
32,596
$
24,503
Adjusted community net operating income
margin
28.2
%
23.2
%
24.6
%
26.4
%
22.1
%
(1) Q2 2024 excludes one senior living
community acquired by the Company in May 2024.
(2) Settlement fees and expenses relate to
non-recurring settlements with third parties for contract
terminations, insurance claims, and related fees.
(3) COVID-19 relief revenue are grants and
other funding received from third parties to aid in the COVID-19
response and includes State Relief Funds received.
ADJUSTED EBITDA (UNAUDITED)
Adjusted EBITDA is a non-GAAP performance measures that the
Company defines as net income (loss) excluding: depreciation and
amortization expense, interest income, interest expense, other
expense/income, provision for income taxes; and further adjusted to
exclude income/expense associated with non-cash, non-operational,
transactional, or organizational restructuring items that
management does not consider as part of the Company’s underlying
core operating performance and impacts the comparability of
performance between periods. For the periods presented herein, such
other items include stock-based compensation expense, provision for
bad debts, gain on extinguishment of debt, gain on sale of assets,
long-lived asset impairment, casualty losses, and transaction and
conversion costs.
The Company believes that presentation of Adjusted EBITDA’s
impact as a performance measure is useful to investors because it
provides an assessment of operational factors that management can
impact in the short-term, namely revenues and the controllable cost
structure of the organization, by eliminating items related to the
Company’s financing and capital structure and other items that
management does not consider as part of the Company’s underlying
core operating performance and that management believes impact the
comparability of performance between periods.
Adjusted EBITDA has material limitations as a performance
measure, including: (i) excluded interest is necessary to operate
the Company’s business under its current financing and capital
structure; (ii) excluded depreciation, amortization and impairment
charges may represent the wear and tear and/or reduction in value
of the Company’s communities and other assets and may be indicative
of future needs for capital expenditures; and (iii) the Company may
incur income/expense similar to those for which adjustments are
made, such as bad debts, gain(loss) on sale of assets, or gain on
debt extinguishment, non-cash stock-based compensation expense and
transaction and other costs, and such income/expense may
significantly affect the Company’s operating results.
(In thousands)
Three Months Ended June
30,
Three Months Ended
March 31,
2024
2023
2024
Adjusted EBITDA
Net income (loss)
$
(9,816
)
$
(12,212
)
$
27,019
Depreciation and amortization expense
10,067
9,927
9,935
Stock-based compensation expense
1,211
601
575
Provision for bad debt
483
96
398
Interest income
(387
)
(188
)
(139
)
Interest expense
8,964
8,558
8,591
Gain on extinguishment of debt, net
—
—
(38,148
)
Other (income) expense, net
(253
)
117
479
Provision for income taxes
59
53
66
Casualty losses (1)
557
456
298
Transaction and conversion costs (2)
465
130
399
Adjusted EBITDA
$
11,350
$
7,538
$
9,473
(1) Casualty losses relate to
non-recurring insured claims for unexpected events.
(2) Transaction and conversion costs
relate to legal and professional fees incurred for transactions,
restructure activities, or related projects.
SUPPLEMENTAL
INFORMATION
Second Quarter
(Dollars in thousands)
2024
2023
Increase (decrease)
First Quarter 2024
Sequential increase
(decrease)
Selected Operating Results
I. Same-store community portfolio
(1)
Number of communities owned 100%
61
62
(1
)
61
—
Unit capacity
5,694
5,753
(59
)
5,692
2
Weighted average occupancy (2)
86.2
%
83.9
%
2.3
%
85.9
%
0.3
%
RevPAR
$
3,673
$
3,300
$
373
$
3,557
$
116
RevPOR
$
4,263
$
3,932
$
331
$
4,140
$
123
Consolidated community net operating
income
$
17,681
$
13,549
$
4,132
$
14,915
$
2,766
Consolidated community net operating
income margin (3)
28.2
%
23.8
%
4.4
%
24.6
%
3.6
%
Consolidated community net operating
income, net of general and administrative expenses (4)
$
8,503
$
7,576
$
927
$
7,704
$
799
Consolidated community net operating
income margin, net of general and administrative expenses (4)
13.5
%
13.4
%
0.1
%
12.7
%
0.8
%
II. Consolidated Debt
Information
(Excludes insurance premium
financing)
Total variable rate mortgage debt
$
171,531
$
137,453
N/A
$
162,114
N/A
Total fixed rate debt
$
412,943
$
499,078
N/A
$
418,275
N/A
(1) Q2 2024 excludes one senior living
community acquired by the Company in May 2024.
(2) Weighted average occupancy represents
actual days occupied divided by total number of available days
during the quarter.
(3) Includes $0.4 million of state grant
revenue received in Q2 2023. There were no such grant revenues in
Q2 2024 or Q1 2024. Excluding the grant revenue, Q2 2023
consolidated community NOI margin was 23.2%.
(4) General and administrative expenses
exclude stock-based compensation expense in order to remove the
fluctuation in fair value measurement due to market volatility.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240812645012/en/
Jason Finkelstein Ignition Investor Relations
ir@sonidaliving.com
Sonida Senior Living (NYSE:SNDA)
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