Sienna Senior Living Inc.

Ladies and gentlemen, welcome to Ciena Seniors Living Inc's third quarter 2024 conference call. Today's call is hosted by Nitin Jain, President and Chief Executive Officer, and David Hung, Chief Financial Officer of Ciena Senior Living Inc. Please be aware that certain statements or information discussed today are forward-looking, and actual results could differ materially. The company does not undertake to update any forward-looking statement or information. Please refer to the forward-looking information and risk factors sections in the company's public filings, including its most recent MDNA and AIF, for more information. You will also find a more fulsome discussion of the company's results in its MDNA and financial statements for the period, which are posted on CDAR Plus and can be found on the company's website, cnliving.ca. Today's call is being recorded and a replay will be available. Instructions for accessing the call are posted on the company's website, and the details are provided in the company's news release. The company has posted slides which accompany the host's remarks on the company website under Events and Presentations. With that, I will now turn the call to Mr. Jain. Please go ahead, Mr. Jain.

Thank you, John. Good morning, everyone, and thank you for joining us on our call today. Our third quarter has been a great progress and success. Our operating results continue to strengthen for the seventh consecutive quarter. Our recent initiatives to raise capital were met with overwhelming demand by investors, and our efforts to expand into a new province were successful. These achievements did not happen by chance. They are the direct results of our ongoing initiatives to improve our operating platforms, strengthen team engagement, and deliver on our growth strategies. Our team members are the key drivers of our organizational strength, and as shareholders of the company, they are deeply aligned with CNS's success. For the past seven quarters, we have consistently achieved year-over-year growth in our operating results across both lines of our businesses. Ciena's total adjusted same-property NOI increased by 14.7% year-over-year, including an 18.3% increase in a long-term care segment and an 11% increase in a retirement segment. Supporting our long-term care results this quarter were fully occupied homes with higher revenues from preferred accommodation and increased government funding. On the retirement side, rising demand, limited new supply, and focused marketing and sales campaigns were the key drivers of improved occupancy. Further supporting our results were the ongoing improvements to our operating and our residence experience. Moving to slide six, same property occupancy in a retirement segment increased by 250 basis point year over year to 89.6% in the third quarter. Monthly occupancy levels improved throughout the quarter and exceeded 90% for the first time in over five years. at the end of Q3. Occupancy reached 90.3% in September and further grew to 96% in October. Our continued focus on homes with lower occupancy levels was a key driver for this improvement. More than half of these homes have achieved notable occupancy improvements with occupancy increasing an average of nearly 7% over the past two years in these homes. A combination of targeted onsite sales and marketing initiatives Strengthening operations and leadership teams, as well as investments in the home's infrastructure, are key reasons for this significant improvement. As occupancy moves closer to stabilization, each percentage increase has a significant impact on our bottom line. Our consistently strong financial results for nearly two years contributed to a sector-leading stock performance and invested interest this year. As a result, we have been able to leverage the capital markets and have completed two key financings in recent months. In August, we raised $144 million of equity at $15 per share. And in October, we issued $150 million of unsecured debentures. Both equity and debt financings were significantly oversubscribed, highlighting the increased interest of investors in the senior living sector and in Siena. These financing initiatives further strengthen our position for growth. Last month, we announced our expansion into Alberta with a $182 million portfolio acquisition of four continuing care homes. We expect to complete the acquisition, which is subject to regulatory approvals in early 2025. The portfolio is less than three years old and consists of 540 suites located in Calgary metropolitan area, Edmonton, Port Saskatchewan, and Medicine Hat. Each of the four properties are located in vibrant and growing communities and offer contemporary senior living accommodations. The portfolio has an occupancy rate of approximately 96%, with three of the four properties essentially at full occupancy and one property in lease-up. We have been considering expanding into Alberta for some time, and this acquisition provides immediate scale in one of the fastest-growing provinces in Canada. We believe that there is an opportunity for additional growth as a result of synergies as we further expand and invest in Canada. We're also in the process of finalizing the acquisition of remaining 30% interest in Nicola Lodge, our 256-bed long-term care community in the greater Vancouver area. Nicola Lodge was built in 2016 and is the best-in-class long-term care community. The acquisition is expected to be closed in early 2025 and will increase our ownership interest 100%. Moving to slide nine on development, On the development side of our business, we started construction at our newest long-term care redevelopment project in Keswick in October. We are developing a 160-bed long-term care home, which will replace the current 60 beds and add 100 new beds. We are also on track to complete our Ontario Long-Term Care campus of care development projects in North Bay and Brantford next year. With respect to our campus of care in Brantford, we have recently opened our sales center, with 147 suite retirement residents and have received strong interest from prospective residents and their families. The combined development cost for these three projects are exceeding 300 million. Once completed and operational, these projects will make a significant contribution to Ciena's operating results and lower our AFFO payout ratio. As we grow our operating platform, we'll continue to make team member engagement and retention a core focus of our initiatives. as staffing will likely remain one of the biggest challenges in senior living. We are so very proud of our recent team member engagement results. 2024 was the fourth consecutive time of improvements across all drivers of engagement. One of Ciena's top drivers is a team member's ability to do meaningful work. Ciena's core for this driver was in the top 5% of the global healthcare industry benchmark among approximately 350 other organizations. The strong results also tell us that the investment we have made in our team members, from training and development, improving onboarding and shift scheduling, to our ownership program, are all having an impact. Equally important, these improvements directly correlate with resident satisfaction, which impacts our operating results. And with that, I will turn it over to David for an update on our results.

Thank you, Nitin, and good morning, everyone. I will start on slide 12 for financial results. In Q3 2024, total adjusted revenues increased by 12.5% year-over-year to $224.8 million. This increase was largely due to occupancy and rental rate growth, as well as increased care revenue in our retirement segment, and a government funding increase and higher private accommodation revenue in our LTC segment. Total adjusted same property NOI increased by 14.7% to $43.4 million in Q3 2024 compared to $37.8 million in Q3 2023. NOI in our long-term care segment increased by $3.5 million, largely due to higher revenue offset by inflationary expense increases. In our retirement segment, adjusted same property NOI increased by $2.1 million in Q3 2024 compared to last year, primarily as a result of improved occupancy and rental rate growth. Moving to slide 13, during Q3 2024, operating funds from operations increased by 19% to $23.9 million compared to last year, primarily due to higher NOI, lower transaction costs, and lower interest, partly offset by higher income tax. OSFO per share increased by 13.5% to 31.2 cents in Q3 2024. Adjusted funds from operations increased by 3.8% to $20.4 million compared to last year. The increase was due to higher OFFO offset by a decrease in construction funding income and increased maintenance capital expenditures. ANFFO per share decreased by 1.1% to $0.266 in Q3 2024 due to the temporary dilution resulting from our recent equity issuance of shares in connection with our $144 million equity raise. Throughout the third quarter, we have strengthened our financial position and balance sheet. We substantially increased Ciena's liquidity to $517 million at the end of Q3 2024, largely as a result of the proceeds from our recent equity offering. We also extended the weighted average term to maturity of our debt to 6.2 years from 5.7 years in Q3 2023. And we improved the debt to adjusted EBITDA to seven times at the end of Q3 2024 compared to 8.3 times at the end of Q3 2023. We ended Q3 2024 with a debt to adjusted gross book value of 42.3% and approximately $1 billion of unencumbered assets. Subsequent to the end of Q3, we issued $150 million of unsecured debentures at an interest rate of 4.436%. These proceeds were used to refinance our $150 million Series A unsecured debentures, which matured on November 4, 2024. Our strong financial position with no major debt maturity until Q1 2026, coupled with significant liquidity, provides flexibility and supports our growth initiatives with respect to both our acquisitions and our development programs. Our three development projects in Ontario have an average development yield of more than 8%. Once they are completed, they will make a significant contribution to CNS operating results, and as Nitin mentioned, we will have a notable impact in lowering our AFFO payout ratio in the high single digits. Going forward, we will continue to prudently manage our capital as we further expand our asset base through developments, look for intensification opportunities at existing sites, and grow through acquisitions. With that, I will turn the call back to Nitin for his closing remarks.