Sonida Senior Living, Inc.

Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Sonita Senior Living Q4 and full year 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, Simply press star, then the number one on your telephone keypad. I would now like to turn the call over to Jason Finkelstein, Investor Relations. Jason, please go ahead.

Thank you, Operator. All statements made today, March 11, 2026, which are not historical facts, may be deemed to be forward-looking statements within the meaning of federal security laws. The company expressly disclaims any obligation to update these statements in the future, except as required by law. Actual results or performance may differ materially from what we're looking statements. Certain factors that can cause actual results to differ are detailed in the earnings release that the company issued earlier today, as well as in the reports that the company files with the SEC, 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 statements, which may be found in the 8K filing from this morning or at the company's investor relations page found at investors.sonitaseniorliving.com. As further described in the company's current report on Form 8K filed with the SEC this morning, the company completed its previously announced acquisition of C&L Healthcare's property, Inc., or CHP, through a series of steps ending with a forward merger of CHP. with and into a subsidiary of the company with such subsidiary surviving the CHP merger as a result of which the company now indirectly owns all the assets of CHP. Unless otherwise specifically noted or the context otherwise requires, the information presented on today's call does not reflect the closing of the CHP acquisition. Please also note that during the call, the company will present non-GAAP financial measures the reconciliations of these non-GAAP measures to the most comparable GAAP measure, please see today's earnings release. If you'd like to follow along during today's call, you can find Sunita's fourth quarter and full year 2025 earnings presentation in the investor relations section of the company's website. In addition, we've included supplemental information within our presentation consistent with prior quarter's releases. I would now like to turn the call over to Sunita, resident and CEO of

Good afternoon and thank you for joining us on our fourth quarter and year end earnings call. This morning we announced the completion of our previously announced merger in which Sunita has acquired CNL Healthcare Properties, or CHP, for a total consideration of $1.8 billion. The transaction closed on an accelerated timeframe with the overwhelming support of shareholders from both Sunita and CHP. More than 95% of votes received supported the transaction, a reflection of the significant value proposition delivered to shareholders at both companies. I'm thankful for the substantial effort put forth by both parties and our respective advisors. The transaction significantly enhances the company's competitive positioning, including benefits of scale with additional accretive investment opportunities, increased trading liquidity, and balance sheet strength. accelerates our growth profile, and is expected to deliver earnings accretion to Sonita shareholders. It's worth pointing out that based on the creative asymmetrical collar structure that was put in place, we have issued approximately 8 million fewer shares than originally anticipated based on the reference price at the time of the announcement, resulting in material additional value creation for both legacy Sonita and CHP shareholders. Further, Based on yesterday's closing price, which is above the high end of the collar range, CHP shareholders received $7.22 of total consideration, which compares favorably to the $6.90 of value they would have received had the stock remained in the collar range. We are excited to welcome all of the CHP shareholders to Sonita. We assure you that every day we strive to create significant value and returns to our investors. The company has been on quite the journey over the last three years. Including this transaction, we have added 93 communities to our portfolio of owned real estate since 2024, nearly all of which are high-quality assets in growth markets that are newer than most of the competition in the market. We will continue to strive for excellence in our operational capabilities and customer service across each community we manage. I'll provide additional color on the integration work completed since the transaction was announced last November later in my remarks. Switching to the performance of our business, I'm pleased with the progress and continued momentum in the fourth quarter, which continues into the beginning of 2026. The impact of investments in our labor model and the restructuring of operations were evident in our fourth quarter results and continue to trend well in the early months of 2026. Growth in both our same-store and acquisition portfolios accelerated in Q4, and we are optimistic that with Q1 results, we will continue the trend of year-over-year and sequential quarterly improvement in top-line and bottom-line metrics. For the full year 2025, Sunita net operating income increased more than 22%, and adjusted EBITDA at share improved 28%. a testament to both the earnings potential of assets purchased in 2024 and our operating team's ability to drive organic asset growth while limiting our incremental GNA. We continue to see improving trends in the first quarter based on occupancy improvement in the same store portfolio alongside an accelerated recovery in newly purchased communities. Additionally, for the full year 2026, We are targeting growth in our revenue per occupied room at or above our same store growth achieved in 2025. Our portfolio top line continued to deliver sequential growth and year-over-year improvement driven by both occupancy and rate, highlighted by accelerated recovery in our acquisition communities. I'd like to quickly highlight the accelerated recovery in our acquisition communities. The 19 communities acquired in 2024 performed exceptionally well with a sequential occupancy improvement of 290 basis points from Q3 to Q4. Comparing Q4 2025 to Q4 2024 for these communities, total occupancy improved 820 basis points, revenue increased more than 22%, and NOI margin expanded from 21% to 28%. This further demonstrates the growth potential in 2026 and beyond and a reflection on the caliber of real estate we acquired and our team's operating capabilities. Given both the scale of the CHP transaction and Sonita's track record of successfully integrating communities into our operating platform with minimal periods of disruption, we are extremely optimistic that this merger will continue to drive improved performance trends and significant upside in the combined platform. Heading into 2026, our operating team will place added emphasis in two specific areas. The consistent delivery of excellent clinical care and services to support the health and well-being of our residents and the continued development of a labor model that rewards our strongest employees and furthers our retention efforts. We are proud of the work done in recent years to reduce our turnover by more than 30 percentage points. However, we still have room for improvement. Kevin will provide additional detail on our efforts across the labor side of the business, as well as progress across key operating metrics in Q4. I'll quickly touch on the work completed over the previous four months on post-transaction integration and our updated view on synergies, both corporate and operational. We've spent considerable time working with the 16 operators across the existing CHP portfolio to understand areas of opportunity and assess potential strategic relationships. Our first priority is minimizing operational disruption for residents and community team members. Two key components to the effort are creating additional incentives for strong ongoing performance at the operator level and maintaining continuity within the CHP asset management function in the Proforma Sonita platform. Performance at the CHP operator and asset level has continued to trend favorably post-announcement, with strong results in Q4, and positive trends as well early in 2026. We previously identified value-creating synergy in three components, the reduction in the cost associated with managing the 54 shop assets and the operational benefits communities will experience as part of the Sonita platform. Kevin will provide further detail in his comments in addition to our plans for reporting changes in Q1 consistent with real estate heavy peers, including the REITs The addition of high-quality real estate located in strong growth markets further enhances the near and long-term earnings power of our portfolio. On the combined portfolio, we will also accelerate deleveraging through strategic asset dispositions, enabling Sunita to recycle capital into higher growth, higher quality assets. This approach will apply to approximately 10% of the portfolio based on community counts and subject to operational trajectory and market dynamics. We also expect the company's free cash flow generation post-transaction to provide significant capital for reinvestment in both internal ROI projects and new acquisitions. The commitment of a new upsized $405 million revolver at close of the transaction will further increase our available capital to capitalize our robust investment pipeline during the remainder of 2026. Finally, I'll touch briefly on the company's capital structure. We are pleased to have reached an agreement with Conversant Capital for the early conversion of its Series A convertible preferred stock into common equity. As disclosed earlier today in our 8K, the convertible preferred originated in 2021 with the Conversant recapitalization and as of 12-31 had an outstanding balance of $51,250,000, carrying an 11% coupon, which we have been paying in cash. Under the terms of the new agreement, the Series A will be converted into common equity at $32 per share, thereby eliminating a high cost and onerous remnant of the company's legacy capital structure. This more than $5 million of additional annual free cash flow savings will be used to reinvest in opportunities in excess of the current 11% cost of capital. Pro forma for the conversion, conversant will be fully aligned with all shareholders with all exposure via common equity. The transaction simplifies our capital structure, reduces our cost of capital, accelerates our deleveraging, and improves the pro forma free cash flow profile of the business. Note that the impact from this subsequent event is not reflected in the financial information being shared in today's earnings presentation. These operating results and the continued value creating growth of our platform, including the CHP transaction, depend on the strength and capabilities of our local and regional leadership. We are proud of the compassion and commitment to results delivered every day in our Sunita communities. Our focus will intensify further on retaining, developing, and recruiting new talent as we grow. Employee turnover and leadership turnover within our communities continues to trend favorably. Kevin will share additional details on company-wide trends, and I am confident these retention levels are a result of the investments we have made in wages, benefits, and the positive and supportive culture at Sunita. We continue to attract high-level talent in the operating and support functions due to elevated interest in career opportunities with Sunita and I'm confident we will continue to attract top-notch talent with a commitment to providing high-quality care and services to our residents. Our near-term strategy and focus remains consistent as we accelerate our growth trajectory. Our mission is to continue building a best-in-class real estate portfolio with geographic purpose that enables our owner-operator model to deliver differentiated FFO and NOI growth. Operational performance based on retention and development of strong local and regional leadership combined with advanced technology platforms to improve resident outcomes and operating efficiency remain the linchpin to our success. Continued acquisitions in our primary geographies along with strategic expansion into additional markets will create further benefit operationally, including the additional product offerings and pricing options, efficiencies in sales and marketing costs, and labor efficiencies. I'll now turn the call over to Kevin for detailed discussion of our Q4 financial performance.