Occupancy and margin gains accelerated in the third quarter for Sonida Senior Living (NYSE: SNDA) as the company continued to make progress on several new and existing initiatives.
With a new year in sight, the Dallas-based company is “approaching the end of an exceptional year for the Sonida recovery story,” said CEO Brandon Ribar during an earnings call with investors and analysts Thursday. And it is reading
Sonida Senior Living operates 71 communities in 18 states. Sonida’s stock price was relatively flat Tuesday, ending the day at $9 per share.
Central to that recovery story has been the company’s efforts to regain occupancy and margins lost during the pandemic.
Occupancy also rose in the third quarter, landing at 84.9%. That represents a gain of about 150 basis points compared to the same quarter in 2022, according to Sonida management. At the same time, revenue per occupied unit (RevPOR) increased 11.7% in the quarter, landing at $4,061.
“To complement revenue expansion, we continue to identify expense management opportunities and efficiencies, investments and utilization of technology supporting more informed labor management practices at the local level, combined with continued rollout of our market specific talent sharing program remain paramount to controlling total cost of labor,” Ribar said.
As a result, the company’s margins at the end of September registered above 25%, a gain compared to the company’s 3Q22 margins of about 600 basis points.
The senior living operator made headway on multiple initiatives that Ribar said helped move the ball forward in the third quarter. Among them were improvements to the company’s relatively new Magnolia Trails memory care program, which resulted in occupancy of about 88% for the product type in the third quarter.
Also central to the company’s growth in the third quarter was improvements in independent living. Exemplifying those trends are two communities Sonida acquired last year that grew from 52% occupancy at the time the deal closed to nearly 90% occupancy today.
Those results highlight Sonida’s “ability to quickly integrate and improve performance of communities we take over and introduce our systems and operating model,” Ribar said.
Sonida in the third quarter completed a series of debt modifications with Fannie Mae, reflecting a new “inflection point” for the operator.
“As previously discussed, this modification significantly improves the company’s long-term debt structure and run rate liquidity,” said Sonida CFO Kevin Detz.
Looking ahead, Sonida is readying the deployment of a new independent living offering called Joyful Living in 14 communities. The offering focuses on delivering “well-rounded programming that supports physical and emotional health, intellectual stimulation, individual purpose, social engagement and spirituality,”
“The goal is to provide residents with a variety of opportunities to achieve their desired potential and enjoy full meaningful lives,” Ribar said.
The company plans to expand the program to all of its independent living communities by mid-2024.
Companies featured in this article:
