Sonida Senior Living, Inc.

Good day, and welcome to Sonita Senior Living First Quarter 2022 Conference Call. Today's conference is being recorded. All statements today, which are not historical facts, may be deemed to be forward-looking statements within the meaning of the federal securities laws. These statements are made as of today's date, and the company expressly disclaims any obligation to update these statements in the future. Actual results and performance may differ materially from forward-looking statements. Certain of these factors that could cause actual results to differ are detailed in the earnings release the company issued earlier today, as well as in the reports the company files with the SEC from time to time, including the risk factors contained in the annual report on Form 10-K and quarterly reports on Form 10-Q. Please see today's press release for the full Safe Harbor Statement, which may be found at www.sonitaseniorliving.com. forward slash invest dash relations, and was furnished in the 8K filings this morning. Also, please note that during this call, the company will present non-GAAP financial measures. For reconciliations of each non-GAAP measure from the most comparable GAAP measure, please also see today's press release. At this time, I'd like to turn the call over to Sonita Senior Living President and CEO, Ms. Kimberly Lodi.

Thank you, Doug. Good afternoon, or good afternoon, everyone, and welcome to our conference call to discuss Anita Senior Living's first quarter 2022 results. Joining me today are Brandon Rebar, our Chief Operating Officer, and our new Chief Financial Officer, Kevin Dietz. There is a lot of good news this quarter. Most importantly, we've now delivered four consecutive quarters of occupancy and revenue growth, clearly demonstrating that our COVID-19 recovery and growth strategy is succeeding. Same store occupancy for the quarter is 82.3%, a 680 basis point improvement compared to 75.5% during the same quarter last year. Same store resident revenue increased 12% compared to the same quarter last year due to the strong occupancy increase as well as solid performance on rate growth. Revenue per occupied unit increased 3.2% compared to the first quarter of 2021. Keep in mind that Sonita's in-place rent increases occur throughout the year on a rolling basis as resident leases renew. This provides us with ongoing flexibility to consider community and market situations in the level of rent increases at renewal time. Breaking down the Rev4 increase a bit more, our in-place rent increases are pacing at about 5% through the first quarter. In addition, market rates for new move-ins during the same period are also about 5% higher than the corresponding rate for the exact same apartment recently vacated. So we feel good about our execution on rate increases through the first three months of the year, both in terms of in-place renewals, as well as market rents for new move-ins. Importantly, our same store portfolio has begun to deliver margin expansion. Same store net operating income increased 13% sequentially from the fourth quarter of 2021 An NOI margin increased 200 basis points from the low point of 18.2% in the fourth quarter of 21 to 20.2% in the first quarter of 2022. Our COVID recovery strategy was to focus heavily on occupancy and revenue growth, knowing that NOI would follow. As I mentioned earlier, we've now delivered four consecutive quarters of occupancy and revenue growth. We believe that our performance in the first quarter of 2022 marks the beginning of incremental NOI expansion as we continue to grow occupancy and revenue while also managing costs, especially contract labor costs that have been very elevated in recent months. Our community leadership teams have been working hard to reduce the need for contract agency staffing by focusing intense effort on recruiting, hiring, training, and retaining new team members. As a result, net hires have been strongly positive in both of the most recent two quarters. This indicates not only further reductions in utilization of costly premium labor, but also, most importantly, stability and consistency in our workforce. Speaking of the amazing team members we have at Sunita, I'd like to highlight a couple of results from a recent company-wide resident satisfaction survey conducted by an independent third-party organization. For all levels of care across our organization, 92% of respondents agree or strongly agree that their community feels like home. For communities with our unique Magnolia Trails memory care program, our satisfaction scores surpass the 2022 industry memory care benchmarks in activities, caregiving, and safety. We are very proud of these results and even more proud of the people working in our communities because the satisfaction scores directly reflect our unrelenting commitment to excellence. We believe that by continuing to focus on three major priorities, we will provide short- and long-term incremental value for our investors, employees, and residents. Our top priority is the health, wellness, and engagement of our residents and team members with continued development of our people-centered culture and differentiated resident programming. Second is delivering occupancy recovery to pre-pandemic levels by the end of 2022. And third is NOI expansion. We expect to improve our net operating income sequentially throughout the year by growing occupancy, increasing rates responsibly, deploying innovative staffing solutions, and diligently managing expenses. Lastly, I'm delighted to welcome Kevin Dietz as Sonita's Chief Financial Officer. Kevin joined the company on May 1st, and he, along with existing and new team members, are already providing significant value to the business. I'll now turn the call over to Kevin for a couple of introductory comments, and then we'll go to Brandon for more insight on our operations.

Thank you for those kind words, Kim. To pick up where Kim left off, the first quarter results are proving out that the company is continuing to progress from the inflection point caused by the pandemic. This, along with the recapitalization late last year and great work to provide debt maturity runway, has me equally excited to join the company in this pivotal and exciting time. Having spent the last eight years in hospitality management, I've been extremely impressed with the breadth and depth of talent in our community teams. I'm looking forward to working with Kim, Brandon, and the entire leadership team to execute on the company's growth strategy. Part of this growth strategy includes a keen focus on our cost to serve Corporate G&A maximizing our incremental margins on growth while rate and occupancy push up. At this time, I will turn it over to our Chief Operating Officer, Brandon Rebar.