AlerisLife Inc.

Hello and welcome to the Alaris Life fourth quarter 2021 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Michael Kodesh, Director of Investor Relations. Please go ahead.

Thank you. Welcome to Alaris Life's fourth quarter 2021 conference call. The agenda for today's call includes a presentation by President and CEO Katie Potter and Executive Vice President, CFO and Treasurer Jeff Lear, followed by a question and answer session with research analysts. We'd like to note that the transcription, recording, or retransmission of today's conference call is strictly prohibited without the prior written consent of the company. Today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on Alaris Live's present beliefs and expectations as of today, Thursday, February 24, 2022. Company undertakes no obligation to revise or publicly release the results of any revisions to the forward-looking statements made in today's conference call, other than through filings with the Securities and Exchange Commission, or SEC, regarding this reporting period. Actual results may differ materially from those projected in any forward-looking statements. Additional information concerning factors that could cause those differences is contained in our filings with the SEC. Investors are cautioned not to place undue reliance on any forward-looking statements. In addition, this call may contain non-GAAP numbers including EBITDA, adjusted EBITDA, adjusted net income, and adjusted earnings per share. Reconciliations of net income to these non-GAAP figures and components to calculate them are available in our quarterly results news release or investor presentation available on our website at alarislife.com. I will now turn the call over to Katie.

Thanks, Michael. Good afternoon, everyone, and thank you for joining our fourth quarter 2021 conference call. We are pleased to ring in the new year with a new name, Alaris Life, now trading under the ticker ALR on the NASDAQ. The name change reflects the significant organizational restructuring we've executed over the past two years and our strategic decision to continue delivering an exceptional and enhanced resident experience to senior living and active adult residents, while also offering lifestyle services to choice-based customers. While moving to a more Before moving to a more thorough review of our fourth quarter results, I wanted to spend some time detailing what this rebrand means for our company. Going forward, substantially all of our business will be conducted by our two segments. First, the residential segment, formerly known as Senior Living, which is operated primarily through our five-star Senior Living brand. And second, the lifestyle services segment, formerly known as Rehabilitation and Wellness Services, which is operated primarily through our agility brand. As we grow and expand these segments, we expect to add additional lines of business operated through new and existing brands representing a diverse offering of services to support older adults as they age. We remain committed to operating a sizable residential portfolio that delivers an exceptional resident experience to older adults. Following the successful transition of 107 smaller, higher-acuity communities to third-party operators, which was completed in the fourth quarter, our residential segment is now comprised of 20 owned communities and 120 managed communities, of which the majority of our units are weighted towards lower-acuity, choice-based customers. Looking at this new focused portfolio of properties, we are making the necessary investments to attract and retain our targeted customer. These investments are intended to make us more competitive with others offering similar services. In addition, we entered into two strategic collaborations with third-party service providers. In December, we announced a collaboration with Compass Community Living, a division of Compass Group, a global leader in food and support services. whereby Compass will assume management of dining services operations for all of our senior living communities. Based on feedback from our current residents and data regarding our changing customers, we sought to work with a partner that would transform the resident dining experience through chef inspired menus and farm to table ingredients. We also expect this collaboration to result in lower food costs for efficiencies of scale. At the end of the year, we announced a collaboration with Dispatch Health. a leading provider of in-home medical services that can provide on-demand acute care to our residents in certain markets. Adding these services to our existing clinical services offering is expected to reduce unnecessary and expensive trips to the emergency room, where our residents could also be exposed to more serious illnesses such as COVID-19. Continued focus on adding and enhancing our services offerings through partnerships such as with Compass and Dispatch Health drives differentiation in our residential product offering, which we expect will lead to longer and stronger relationships with our customers. As we have previously noted, customer demands have dynamically shifted over the last decade and require us to evolve with them. The average age of older adults moving into senior living communities continues to inch higher, and even before the pandemic, our residential portfolio experienced a subtle but consistent shift toward an older incoming resident. Meanwhile, the sales cycle has lengthened, putting pressure on lead conversion time and consequently requiring significant investment in nurturing prospective residents. As such, over the last several years, we have been focused on meeting evolving customer demands and capturing both residential and lifestyle needs earlier in the customer life cycle. Our name change to Alaris Life is in direct response to these changing needs and represents our continued expansion into the growing lifestyle services segment. Agility Rehabilitation Services represents a great example of our lifestyle services segment strategy. Our outpatient rehabilitation clinic openings have grown at a five-year CAGR of 22%. Over the past few years, we have seen that after adding an outpatient clinic to a senior living community, the rate of resident falls was reduced by 36%. And more critically, the average length of stay at these communities increased 31%. With minimal investment required in opening new clinics and a market share of under 1% of the estimated market opportunity for this service, we believe there is significant potential to continue growing this business. Similarly, in 2019, we launched an agility fitness offering that complements both our residential and lifestyle services segments and added a new revenue stream to our company. During the fourth quarter, fitness revenues increased over 30% year-over-year and were up over 4% sequentially. Furthermore, this service has been pandemic tested and continues to generate steady growth even through the recent emergence of COVID-19 variants. We are optimistic that we will continue to see robust growth in the fitness service line over the near and long term. On a consolidated basis, our lifestyle services segments revenues increased 1.6% from the third quarter, with sequential quarter increases recorded across each of our service offerings in this segment. On a consolidated basis, total outpatient rehabilitation visits in the fourth quarter increased to approximately 148,000, which represented a slight increase to third quarter figures and an increase of approximately 4% compared to pandemic lows. We will remain nimble and endeavor to anticipate the changing needs of our customer base in order to attract and retain residents within the communities we own and manage. As a result, we remain focused on sourcing opportunities that meet the needs of the choice-based customer and diversify our revenue stream, but also drive performance in our residential segment. While we have nothing new to announce at this time, we are actively pursuing expansion of our lifestyle services and hope to announce new partnerships and our strategic investments this year. Turning to our residential operating results for the quarter. Overall, we were pleased to demonstrate an average occupancy growth across our residential segment in a seasonally weak fourth quarter, despite the emergence of the Omicron variant of COVID-19, labor challenges, and a highly competitive market. Average occupancy in our own residential portfolio was 72%, an increase of 210 basis points in the third quarter. while average occupancy in our managed residential portfolio increased 150 basis points sequentially. On a comparable community basis, average occupancy in the managed residential portfolio was 74.1%, an increase of 70 basis points from the third quarter, which was roughly in line with the industry average for portfolios more weighted in independent living. In January, the comparable community portfolio's average occupancy increased 20 basis points to 74.1%. While we are encouraged by these results, we remain focused on improving our sales processes and maximizing REVPAR. In light of strong competition in our markets, REVPOR this quarter decreased approximately 2.3% sequentially across our comparable community residential segment as concessions remained elevated during the holiday months. Looking ahead, we believe the peak of concessions are now behind us, And given muted construction starts that we expect will continue to suppress the extensive new supply we experienced over the last decade, we are excited to begin increasing rates in 2022. Asking rents in January increased 5 to 10% depending on the community and market. And we have seen positive reception to these rate increases given wage inflation and the premium level service that we provide. Finally, subsequent to quarter end, I am excited to welcome Lauren Cody, our new chief customer officer, and Michael Lopez, our new chief people officer, to newly created positions within our leadership team. The most important asset of our business is our people, our team, and their service to our customers. As we expand our services and customer base, Lauren and Michael's decades of experience at large, successful, brand name organizations will be invaluable to us. We look forward to leveraging their knowledge and expertise as we enter this new chapter of our company. Before I turn the call over to Jeff, I wanted to show my gratitude and appreciation for our team's dedication, leadership, and resilience during this period of transition, as well as their continued exceptional service to our customers. The level of excitement as we transition into 2022 is tangible across our team, as we continue to lay the foundation to grow the quality and size of our business. With much of the reorganization behind us, we continue to invest in our corporate infrastructure and optimize our team and are eager to push Alaris Life forward. I will now turn the call over to Jeff for a discussion of the financial results.