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
third quarter ended September 30, 2024.
“Sonida’s emphasis on its results-driven operational, financial
and capital allocation strategies yielded another quarter of
meaningful performance and portfolio expansion. Same-store revenue,
community net operating income, resident rates and occupancy
demonstrated continuing gains year-over-year. On the external
growth front, we have expanded our portfolio by 30% in just the
last six months by acquiring 19 senior living communities
(including 10 in the fourth quarter), either outright or through
joint ventures and adding three additional communities under third
party management agreements. We are poised to deliver further
growth and margin expansion as we balance the ongoing improvement
in our same store portfolio and drive accelerated revenue and
margin recovery in our newly acquired communities. The combination
of our operating platform, capital availability and robust pipeline
of growth opportunities positions Sonida to continue our multi-year
growth trajectory,” said Brandon Ribar, President and CEO.
Third Quarter Highlights
- Weighted average occupancy for the Company’s owned same-store
portfolio increased 210 basis points to 87.0% from 84.9% in Q3
2023.
- Same-store resident revenue increased $3.9 million, or 6.6%,
comparing Q3 2024 to Q3 2023, and increased $4.4 million, or 7.5%,
when excluding $0.5 million of state grant revenue received in Q3
2023.
- Net loss attributable to Sonida stockholders for Q3 2024 was
$13.8 million compared to $18.4 million for Q3 2023, representing a
$4.6 million improvement.
- Q3 2024 Adjusted EBITDA, a non-GAAP measure, was $10.1 million,
representing an increase of $0.8 million, or 8.7%, year-over-year,
driven primarily by continued improvements in operations.
- Results for the Company’s same-store, owned portfolio of 61
communities:
- Q3 2024 vs. Q3 2023:
- Revenue Per Available Unit (“RevPAR”) increased 7.1% to
$3,692.
- Revenue Per Occupied Unit (“RevPOR”) increased 4.5% to
$4,244.
- Q3 2024 Community Net Operating Income, a non-GAAP measure, was
$16.8 million. Q3 2023 Adjusted Community Net Operating Income, a
non-GAAP measure, which excludes $0.5 million of state grant
revenue received in Q3 2023 (none received in Q3 2024), was $14.2
million, representing an increase of $2.6 million or 18.3%.
- Community Net Operating Income Margin a non-GAAP measure, was
26.7% for Q3 2024. Adjusted Community Net Operating Income Margin,
a non-GAAP measure and adjusted for non-recurring state grant
revenue, was 24.2% for Q3 2023.
- Q3 2024 vs. Q2 2024:
- RevPAR increased 0.5% to $3,692.
- RevPOR decreased 0.4% to $4,244, due to a strong increase in
occupancy (170 bps) with our lower rate Independent Living
units.
- Community Net Operating Income decreased $0.9 million to $16.8
million primarily attributable to one additional work day and
holiday in Q3 2024, as well as the seasonal impact on the
communities’ utilities expense.
- Community Net Operating Income Margin was 26.7% and 28.2% for
Q3 2024 and Q2 2024, respectively.
- In July 2024, the Company entered into joint ventures which
acquired four senior living communities located in Texas (3) and
Georgia (1). The Company is a 51% owner in the joint ventures,
manages the communities and consolidates its results.
- In August 2024, the Company raised $130.4 million in gross
proceeds from its offering of common equity issuing 4.8 million
shares for net proceeds of $124.1 million.
- In July 2024, the Company entered into a senior secured
revolving credit facility (the “Credit Facility”) with BMO Bank
N.A. (“BMO Bank”) for $75.0 million. Additionally, the Company
received a commitment letter from the Royal Bank of Canada (“RBC”)
pursuant to which RBC committed to provide a revolving credit
commitment under the Credit Facility for an additional amount of up
to $75.0 million. The Credit Facility has a term of three years, a
leverage-based pricing matrix between S+210 and S+260 and is fully
recourse to Sonida.
Subsequent Event Highlights
Fannie Mae Loan Extension
In October 2024, the Company agreed to terms in principle with
Fannie Mae subject to definitive documentation to extend the
maturities on 18 individual mortgages (representing $220.1 million
of debt outstanding as of September 30, 2024) from December 1, 2026
to January 1, 2029. As part of the proposed modification, the
Company tentatively agreed to $10.0 million in additional,
scheduled principal paydowns through the revised maturity.
Palm Acquisition
On October 1, 2024, the Company finalized the previously
announced acquisition of eight senior living communities
strategically located in attractive submarkets in the Southeast.
The portfolio is comprised of 555 units with Assisted Living (“AL”)
and Memory Care (“MC”) offerings (approximately 70% AL and 30% MC)
in northern Florida and South Carolina. The eight communities are
located in high growth primary and secondary metropolitan areas
with favorable growth prospects: Jacksonville, Orlando and Daytona
Beach (Florida); Hilton Head, Charleston and Florence (South
Carolina). Sonida’s purchase price of $102.9 million, or
approximately $185,000 per unit, reflects a significant discount to
the Company’s estimate of replacement cost. At close, the
portfolio’s in-place occupancy was approximately 85% with an
average RevPOR of more than $6,000.
Senior Secured Revolving Credit Facility
On October 3, 2024, the Company closed on the additional $75.0
million commitment under the Credit Facility. The incremental $75.0
million availability results in a total aggregate commitment under
the Credit Facility of up to $150.0 million. In addition to the two
existing senior living communities, the eight Palm Communities
secure the Company’s obligations under the Credit Facility.
On October 30, 2024, the Company drew down $60.0 million under
the Credit Facility in anticipation of the closing of the Atlanta
PSA (as defined below), the Texas DPO (as defined below) and
liquidity for general corporate purposes.
Texas DPO
On November 1, 2024, the Company exercised its option to make a
discounted payoff (“Texas DPO”) of the outstanding loan principal
for two communities located in Texas. The Texas DPO amount of $18.3
million represents a discount of 36% on the total principal
outstanding of $28.4 million (as of November 1, 2024). The Texas
DPO represents the last material restructuring of the Company’s
legacy debt portfolio, with 58 of 60 loans having been addressed
over the past 12 months.
Atlanta Acquisition
On October 2, 2024, the Company signed a purchase and sale
agreement (“Atlanta PSA”) to acquire two senior living communities
in the Atlanta, GA market for $29.0 million. The assets have an
average age of five years and will add 178 units (106 AL and 72 MC)
to Sonida’s portfolio. Sonida’s purchase price is approximately
$173,000 per unit, which reflects a significant discount to the
Company’s estimate of replacement cost. On November 1, 2024, the
Company finalized the acquisition of these two senior living
communities with in-place occupancy and average RevPOR of 86% and
more than $5,700, respectively.
SONIDA SENIOR LIVING,
INC.
SUMMARY OF CONSOLIDATED
FINANCIAL RESULTS
THREE MONTHS ENDED SEPTEMBER
30, 2024
(in thousands)
Three Months Ended September
30,
Three Months Ended June
30,
2024
2023
2024
Consolidated results
Resident revenue (1)
$
66,951
$
59,117
$
63,108
Management fees
1,151
569
720
Managed community reimbursement
revenue
6,648
4,989
6,379
Operating expenses
50,492
44,486
45,981
General and administrative expenses
(2)
11,793
8,615
9,178
Long-lived asset impairment
—
5,965
—
Other income (expense), net
(153
)
(124
)
253
Loss before provision for income taxes
(1)
(14,197
)
(18,328
)
(9,757
)
Net loss (1)
(14,265
)
(18,411
)
(9,816
)
Net loss attributable to Sonida
shareholders (1)
(13,758
)
(18,411
)
(9,816
)
Adjusted EBITDA (1) (3)
10,073
9,270
11,350
Community net operating income (NOI) (1)
(3)
17,089
14,690
17,616
Community net operating income margin (1)
(3)
25.5
%
24.8
%
27.9
%
Weighted average occupancy (4)
85.1
%
84.9
%
85.7
%
(1) Includes $0.5 million of state grant
revenue received in Q3 2023. There were no such grant revenues in
Q3 2024 or Q2 2024.
(2) Q3 G&A expenses included a total
of $3.5 million, $2.2 million and $1.7 million for the one-time
transaction and stock-based compensation costs for the three months
ended September 30, 2024, September 30, 2023 and June 30, 2024,
respectively.
(3) 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.
(4) Q3 2024 includes five acquired
communities. Q2 2024 includes the acquired community in Macedonia,
Ohio which had a weighted average occupancy of 40.6%.
Results of Operations
Three months ended September 30, 2024 as compared to three
months ended September 30, 2023
Revenues
Resident revenue for the three months ended September 30, 2024
was $67.0 million as compared to $59.1 million for the three months
ended September 30, 2023, representing an increase of $7.9 million,
or 13.4%. The increase in revenue was primarily due to increased
occupancy, increased average rent rates, and five additional
communities acquired during 2024. For the three months ended
September 30, 2023, the Company received approximately $0.5 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 September 30, 2024, the Company did not
receive any State Relief Funds.
Managed community reimbursement revenue for the three months
ended September 30, 2024 was $6.6 million as compared to $5.0
million for the three months ended September 30, 2023, representing
an increase of $1.6 million, or 32.0%. The increase was primarily a
result of managing more communities in the three months ended
September 30, 2024 compared to the prior period.
Expenses
Operating expenses for the three months ended September 30, 2024
were $50.5 million as compared to $44.5 million for the three
months ended September 30, 2023, representing an increase of $6.0
million, or 13.5%. The increase was attributable to an increase of
$3.6 million in operating expenses related to the additional
communities acquired and managed during 2024 versus the prior year
and an increase of $2.4 million in operating expenses related to
our same-store portfolio, driven by $0.8 million increases in labor
and $1.6 million increases in other operating expenses.
General and administrative expenses for the three months ended
September 30, 2024 were $11.8 million as compared to $8.6 million
for the three months ended September 30, 2023, representing an
increase of $3.2 million. The increase was primarily a result of an
increase in labor and employee related expenses of $1.6 million due
to the additional communities acquired and managed during 2024, a
$0.8 million increase in stock-based compensation expense, a $0.5
million increase in transaction costs, and a net increase in other
expenses of $0.3 million.
During the three months ended September 30, 2023, the Company
recorded a non-cash impairment charge of $6.0 million related to
one owned community as a result of recurring net operating
losses.
Interest expense for the three months ended September 30, 2024
was $9.8 million as compared to $9.0 million for the three months
ended September 30, 2023, representing an increase of $0.8 million,
primarily due to the change in fair value of our interest rate cap
(“IRC”) and the ending of the Fannie Interest Abatement Period on
May 31, 2024.
As a result of the foregoing factors, the Company reported net
loss attributable to Sonida stockholders of $13.8 million and $18.4
million for the three months ended September 30, 2024 and September
30, 2023, respectively.
Adjusted EBITDA for the three months ended September 30, 2024
was $10.1 million compared to $9.3 million for the three months
ended September 30, 2023. See “Reconciliation of Non-GAAP Financial
Measures” below.
Nine months ended September 30, 2024 as compared to nine
months ended September 30, 2023
Revenues
Resident revenue for the nine months ended September 30, 2024
was $190.8 million as compared to $172.7 million for the nine
months ended September 30, 2023, representing an increase of $18.1
million, or 10.5%. The increase in revenue was primarily due to
increased occupancy, increased average rent rates, and five
additional communities acquired during 2024. For the nine months
ended September 30, 2023, the Company received $2.9 million in
State Relief Funds. For the nine months ended September 30, 2024,
the Company did not receive any State Relief Funds.
Managed community reimbursement revenue for the nine months
ended September 30, 2024 was $19.1 million as compared to $15.3
million for the nine months ended September 30, 2023, an increase
of $3.8 million, or 24.8%. The increase was primarily a result of
managing more communities in the nine months ended September 30,
2024 as compared to the prior period.
Expenses
Operating expenses for the nine months ended September 30, 2024
were $142.8 million as compared to $133.0 million for the nine
months ended September 30, 2023, representing an increase of $9.8
million, or 7.4%. The increase was primarily attributable to the
increase in labor of $6.9 million and an increase in other expenses
of $2.9 million as a result of the five new consolidated
communities this period as compared to the prior period.
General and administrative expenses for the nine months ended
September 30, 2024 were $28.2 million as compared to $22.3 million
for the nine months ended September 30, 2023, representing an
increase of $5.9 million. The increase was primarily a result of an
increase in labor and employee related expenses of $3.2 million, an
increase in stock-based compensation of $1.1 million, an increase
in transaction costs of $0.8 million, and a net increase in other
expenses of $0.8 million. The main driver of the increases were the
additional expenses related to five new consolidated communities
this period as compared to the prior period.
During the nine months ended September 30, 2023, the Company
recorded a non-cash impairment charge of $6.0 million related to
one owned community as a result of recurring net operating
losses.
Interest expense for the nine months ended September 30, 2024
was $27.4 million as compared to $26.4 million for the nine months
ended September 30, 2023, representing an increase of $1.0 million,
primarily due to the change in fair value of our IRC.
Gain on extinguishment of debt for the nine months ended
September 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 nine months ended September 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 formerly
owned communities to Fannie Mae, the holder of the related
non-recourse debt.
As a result of the foregoing factors, the Company reported net
income attributable to Sonida stockholders of $3.4 million and net
loss attributable to Sonida stockholders of $6.5 million for the
nine months ended September 30, 2024 and September 30, 2023,
respectively.
Liquidity and Capital
Resources
At-the-Market Sales
On April 1, 2024, the Company entered into the At-the-Market
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. 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 $1.3 million,
inclusive of $0.2 million in commissions and offering costs.
Public Offering
In August 2024, the Company entered into an underwriting
agreement providing for the offer and sale (the “Offering”) by the
Company, and the purchase by the underwriters, of 4,300,000 shares
of the Company’s common stock, (par value $0.1 per share), at a
price to the public of $27.00 per share ($25.785 per share net of
underwriting discounts and commissions). The Company also granted a
30-day option to the underwriters to purchase up to an additional
645,000 shares of common stock on the same terms as above.
During August 2024, the Company raised $130.4 million in gross
proceeds from the Offering. The Company initially raised $110.4
million of proceeds on the sale of 4,300,000 shares, net of
underwriting discounts and offering costs. The Company raised an
additional $13.7 million of proceeds on the sale of 530,317 shares,
net of underwriting discounts and offering costs, due to the 30-day
option.
Credit Facility
On October 3, 2024, the Company closed on an additional $75
million commitment under the Credit Facility. The incremental $75
million availability results in a total aggregate commitment under
the Credit Facility of up to $150 million. The Credit Facility has
a term of three years, a leverage-based pricing matrix between
S+210 and S+260 and is fully recourse to Sonida and its applicable
subsidiaries. On October 30, 2024, the Company drew down $60.0
million under its Credit Facility in anticipation of the closing of
the Atlanta PSA, the Texas DPO and liquidity for general corporate
purposes.
Cash Flows
The table below presents a summary of the Company’s net cash
provided by (used in) operating, investing, and financing
activities (in thousands):
Nine Months Ended September
30,
2024
2023
Change
Net cash provided by operating
activities
$
1,355
$
10,643
$
(9,288
)
Net cash used in investing activities
(154,126
)
(12,792
)
(141,334
)
Net cash provided by (used in) financing
activities
178,809
(7,441
)
186,250
Increase (decrease) in cash and cash
equivalents
$
26,038
$
(9,590
)
$
35,628
In addition to $24.9 million of unrestricted cash as of
September 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 financing and 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 September 30, 2024, on Wednesday November 13, 2024, at 11:00
a.m. Eastern Time. To participate, dial (800) 715-9871 (or +1 (646)
307-1963 for international callers), and the participant passcode
is 4619110. A link to the simultaneous webcast of the
teleconference will be available at:
https://events.q4inc.com/attendee/787263548
For the convenience of the Company’s shareholders and the
public, the conference call will be recorded and available for
replay for 12 months. To access the conference call replay, call
(800) 770-2030, passcode 4619110. 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
September 30, 2024, the Company operated 83 senior housing
communities in 20 states with an aggregate capacity of
approximately 9,100 residents, including 70 owned senior housing
communities (4 through a joint venture in a consolidated entity and
4 through a joint venture investment in an unconsolidated entity)
and 13 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
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenues:
Resident revenue
$
66,951
$
59,117
$
190,796
$
172,683
Management fees
1,151
569
2,465
1,605
Managed community reimbursement
revenue
6,648
4,989
19,134
15,314
Total revenues
74,750
64,675
212,395
189,602
Expenses:
Operating expense
50,492
44,486
142,790
132,956
General and administrative expense
11,793
8,615
28,182
22,252
Depreciation and amortization expense
10,729
9,943
30,731
29,751
Long-lived asset impairment
—
5,965
—
5,965
Managed community reimbursement
expense
6,648
4,989
19,134
15,314
Total expenses
79,662
73,998
220,837
206,238
Other income (expense):
Interest income
853
139
1,379
521
Interest expense
(9,839
)
(9,020
)
(27,394
)
(26,445
)
Gain on extinguishment of debt, net
—
—
38,148
36,339
Loss from equity method investment
(146
)
—
(181
)
—
Other expense, net
(153
)
(124
)
(379
)
(52
)
Income (loss) before provision for
income taxes
(14,197
)
(18,328
)
3,131
(6,273
)
Provision for income taxes
(68
)
(83
)
(193
)
(205
)
Net income (loss)
(14,265
)
(18,411
)
2,938
(6,478
)
Less: Net loss attributable to
noncontrolling interests
507
—
507
—
Net income (loss) attributable to
Sonida shareholders
(13,758
)
(18,411
)
3,445
(6,478
)
Dividends on Series A convertible
preferred stock
(1,409
)
—
(1,409
)
—
Undeclared dividends on Series A
convertible preferred stock
—
(1,265
)
(2,707
)
(3,693
)
Net loss attributable to common
stockholders
$
(15,167
)
$
(19,676
)
$
(671
)
$
(10,171
)
Weighted average common shares outstanding
— basic
15,456
7,050
12,787
6,602
Weighted average common shares outstanding
— diluted
15,456
7,050
12,787
6,602
Basic net loss per common share
$
(0.98
)
$
(2.79
)
$
(0.05
)
$
(1.54
)
Diluted net loss per common share
$
(0.98
)
$
(2.79
)
$
(0.05
)
$
(1.54
)
Sonida Senior Living,
Inc.
Condensed Consolidated Balance
Sheets (Unaudited)
(in thousands, except per
share amounts)
September 30,
2024
December 31,
2023
Assets:
Current assets
Cash and cash equivalents
$
24,938
$
4,082
Restricted cash
18,850
13,668
Accounts receivable, net
12,677
8,017
Prepaid expenses and other assets
4,743
4,475
Derivative assets
701
2,103
Acquisition deposit
102,461
—
Total current assets
164,370
32,345
Property and equipment, net
611,911
588,179
Investment in unconsolidated entity
11,868
—
Other assets, net
8,086
936
Total assets
$
796,235
$
621,460
Liabilities:
Current liabilities
Accounts payable
$
6,098
$
11,375
Accrued expenses
44,791
42,388
Current portion of notes payable, net of
deferred loan costs
14,119
42,323
Deferred income
4,294
4,041
Federal and state income taxes payable
161
215
Other current liabilities
826
519
Total current liabilities
70,289
100,861
Notes payable, net of deferred loan costs
and current portion
589,975
587,099
Other long-term liabilities
23
49
Total liabilities
660,287
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 September 30, 2024 and December 31, 2023
51,248
48,542
Equity:
Sonida’s shareholders’ equity
(deficit):
Preferred stock, $0.01 par value:
Authorized shares - 15,000 as of September
30, 2024 and December 31, 2023; none issued or outstanding, except
Series A convertible preferred stock as noted above
—
—
Common stock, $0.01 par value:
Authorized shares - 30,000 and 15,000 as
of September 30, 2024 and December 31, 2023, respectively; 19,070
and 8,178 shares issued and outstanding as of September 30, 2024
and December 31, 2023, respectively
191
82
Additional paid-in capital
492,072
302,992
Retained deficit
(414,720
)
(418,165
)
Total Sonida shareholders’ equity
(deficit)
77,543
(115,091
)
Noncontrolling interest:
$
7,157
$
—
Total equity (deficit)
$
84,700
$
(115,091
)
Total liabilities, redeemable preferred
stock and equity (deficit)
$
796,235
$
621,460
Sonida Senior Living,
Inc.
Condensed Consolidated
Statements of Cash Flows (Unaudited)
(in thousands)
Nine Months Ended September
30,
2024
2023
Cash flows from operating
activities:
Net income (loss)
$
2,938
$
(6,478
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
30,731
29,751
Amortization of deferred loan costs
1,129
1,130
Gain on sale of assets, net
(192
)
(217
)
Long-lived asset impairment
—
5,965
Loss on derivative instruments, net
3,285
1,958
Gain on extinguishment of debt
(38,148
)
(36,339
)
Loss from equity method investment
181
—
Provision for bad debt
1,510
582
Non-cash stock-based compensation
expense
3,194
2,144
Other non-cash items
(5
)
(7
)
Changes in operating assets and
liabilities:
Accounts receivable, net
(6,170
)
(2,592
)
Prepaid expenses and other assets
(290
)
2,952
Accounts payable and accrued expense
2,945
11,276
Federal and state income taxes payable
(54
)
158
Deferred income
253
371
Other current liabilities
48
(11
)
Net cash provided by operating
activities
1,355
10,643
Cash flows from investing
activities:
Investments in unconsolidated entities
(22,409
)
—
Return of investment in unconsolidated
entities
10,360
—
Acquisition of new communities
(22,311
)
—
Acquisition deposit
(102,461
)
—
Capital expenditures
(17,936
)
(14,168
)
Proceeds from sale of assets
631
1,376
Net cash used in investing
activities
(154,126
)
(12,792
)
Cash flows from financing
activities:
Proceeds from issuance of common stock,
net of issuance costs
190,517
6,000
Proceeds from notes payable
36,906
—
Repayments of notes payable
(50,004
)
(12,508
)
Proceeds from credit facility
8,705
—
Repayment of credit facility
(8,705
)
—
Proceeds from noncontrolling investors in
joint ventures
7,664
—
Dividends paid on Series A convertible
preferred stock
(1,409
)
—
Purchase of interest rate caps
(1,943
)
—
Deferred loan costs paid
(2,508
)
(825
)
Other financing costs
(414
)
(108
)
Net cash provided by (used in)
financing activities
178,809
(7,441
)
Increase (decrease) in cash and cash
equivalents and restricted cash
26,038
(9,590
)
Cash, cash equivalents, and restricted
cash at beginning of period
17,750
30,742
Cash, cash equivalents, and restricted
cash at end of period
$
43,788
$
21,152
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
September 30,
Three Months Ended June
30,
Nine Months Ended
September 30,
2024
2023
2024
2024
2023
Same-store community net operating
income (1)
Net income (loss)
$
(14,265
)
$
(18,411
)
$
(9,816
)
$
2,938
$
(6,478
)
General and administrative expense
11,793
8,615
9,178
28,182
22,252
Depreciation and amortization expense
10,729
9,943
10,067
30,731
29,751
Long-lived asset impairment
—
5,965
—
—
5,965
Interest income
(853
)
(139
)
(387
)
(1,379
)
(521
)
Interest expense
9,839
9,020
8,964
27,394
26,445
Gain on extinguishment of debt
—
—
—
(38,148
)
(36,339
)
Loss from equity method investment
146
—
35
181
—
Other (income) expense, net
153
124
(253
)
379
52
Provision for income taxes
68
83
59
193
205
Settlement (income) fees and expense, net
(2)
(521
)
(510
)
(231
)
(851
)
309
Consolidated community net operating
income
17,089
14,690
17,616
49,620
41,641
Net operating (income) loss for non
same-store communities (1)
(277
)
—
65
(212
)
—
Same-store community net operating
income
16,812
14,690
17,681
49,408
41,641
Resident revenue
$
66,951
$
59,117
$
63,108
$
190,796
$
172,683
Resident revenue for non same-store
communities (1)
3,915
—
369
4,284
—
Same-store community resident
revenue
63,036
59,117
62,739
186,512
172,683
Same-store community net operating
income margin
26.7
%
24.8
%
28.2
%
26.5
%
24.1
%
COVID-19 state relief grants (3)
—
478
—
—
2,926
Adjusted resident revenue
63,036
58,639
62,739
186,512
169,757
Adjusted community net operating
income
$
16,812
$
14,212
$
17,681
$
49,408
$
38,715
Adjusted community net operating income
margin
26.7
%
24.2
%
28.2
%
26.5
%
22.8
%
(1) Q3 2024 excludes five senior living
communities acquired by the Company. Q2 2024 excludes one senior
living community acquired by the Company.
(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
September 30,
Three Months Ended June
30,
2024
2023
2024
Adjusted EBITDA
Net loss
$
(14,265
)
$
(18,411
)
$
(9,816
)
Depreciation and amortization expense
10,729
9,943
10,067
Stock-based compensation expense
1,408
641
1,211
Provision for bad debt
629
249
483
Interest income
(853
)
(139
)
(387
)
Interest expense
9,839
9,020
8,964
Long-lived asset impairment
—
5,965
—
Other (income) expense, net
153
124
(253
)
Provision for income taxes
68
83
59
Casualty losses (1)
267
204
557
Transaction and conversion costs (2)
2,098
1,591
465
Adjusted EBITDA
$
10,073
$
9,270
$
11,350
(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
Third Quarter
(Dollars in thousands)
2024
2023
Increase (decrease)
Second Quarter 2024
Sequential increase
(decrease)
Selected Operating Results
I. Same-store community portfolio
(1)
Number of communities owned 100%
61
61
—
61
—
Unit capacity
5,692
5,718
(26)
5,694
(2)
Weighted average occupancy (2)
87.0%
84.9%
2.1%
86.2%
0.8%
RevPAR
$3,692
$3,446
$246
$3,673
$19
RevPOR
$4,244
$4,061
$183
$4,263
$(19)
Consolidated community net operating
income
$16,812
$14,690
$2,122
17,681
$(869)
Consolidated community net operating
income margin (3)
26.7%
24.8%
1.9%
28.2%
(1.5)%
Consolidated community net operating
income, net of general and administrative expenses (4)
$5,292
$6,716
$(1,424)
$8,503
$(3,211)
Consolidated community net operating
income margin, net of general and administrative expenses (4)
8.4%
11.4%
(3.0)%
13.6%
(5.2)%
II. Consolidated Debt
Information
(Excludes insurance premium
financing)
Total variable rate mortgage debt
$171,531
$137,320
N/A
$171,531
N/A
Total fixed rate debt
$412,607
$493,436
N/A
$412,943
N/A
Notes payable - consolidated VIE
$21,690
—
N/A
—
N/A
(1) Q3 2024 excludes five senior living
communities acquired by the Company in 2024. Q2 2024 excludes one
senior living community acquired by the Company.
(2) Weighted average occupancy represents
actual days occupied divided by total number of available days
during the quarter.
(3) Includes $0.5 million of state grant
revenue received in Q3 2023. There were no such grant revenues in
Q3 2024 or Q2 2024. Excluding the grant revenue, Q3 2023
consolidated community NOI margin was 24.2%.
(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/20241113094389/en/
Investor Relations Jason Finkelstein Ignition Investor
Relations ir@sonidaliving.com
Sonida Senior Living (NYSE:SNDA)
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