Sunrise Senior Living, Inc. (SRZ)
Q1 2010 Earnings Call Transcript
May 4, 2010 8:00 am ET
Mark Ordan – CEO
Julie Pangelinan – CFO and Treasurer
Greg Neeb – Chief Investment Officer
Jerry Doctrow – Stifel Nicolaus
Previous Statements by SRZ
» Sunrise Senior Living, Inc. Q4 2009 Earnings Call Transcript
» Sunrise Senior Living Inc Q3 2009 Earnings Call Transcript
» Sunrise Senior Living, Inc. Q2 2009 Earnings Call Transcript
Good day and welcome to the Sunrise Senior Living first quarter earnings conference call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Mark Ordan, Chief Executive Officer. Please go ahead, sir.
Thank you. Welcome to Sunrise Senior Living’s investor conference call. This is Mark Ordan, Sunrise’s Chief Executive Officer. Joining me on today’s call is Julie Pangelinan, our CFO, and Greg Neeb, our Chief Investment Officer.
Before we begin, let me remind you that this call is being recorded and the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995 apply to this conference call. During the course of this call, the company will make various remarks concerning management’s expectations, predictions, plans and prospects that constitute forward-looking statements.
Actual results may differ materially from those anticipated by these forward-looking statements as a result of a variety of factors, including those identified in our 2009 Form 10-K. Any forward-looking statements reflect management’s current view only, and the company undertakes no obligation to revise or update such statements in the future. For further discussions on the company’s forward-looking statements, please refer to our quarter Form 10-Q, which will be filed in a coming date.
I will start by turning the call over to Julie Pangelinan, who will provide our operating and financial results for the quarter, and then to Greg Neeb, who will briefly discuss our recent progress in restructuring our debt with respect to our German subsidiaries and other matters. Then I will provide a bit more color on the matters both Julie and Greg did review with you how these relate to our restructuring process. Julie?
Thank you, Mark. Before I review our comparable community operating performance for the first quarter, I’d like to remind you that our comparable community set consists of communities that were open and operating for 24 months as of January 1, 2010. This quarter we added 16 communities to our comparable set that had previously been in the leased up phase. And we are seeing that our newer communities that historically had taken 24 months to stabilize are taking longer to fill.
To start, I will discuss our occupancy. Our occupancy for the first quarter of 2010 in our comparable communities was 86.2%, which is a decline of 150 basis points from the first quarter of 2009 and down 50 basis points compared to the fourth quarter of 2009. In addition to the slower filling pace of the 16 communities I just mentioned, we historically experienced a seasonal decline in occupancy from the fourth quarter to the first quarter.
Our average daily revenue per occupied unit in our comparable communities increased by 4.2% in the first quarter to $203.23 as compared to the prior year period. The majority of our residents received an annual rate increase in January, which favorably contributed to our overall increase in revenue per occupied unit. As a reminder, we share our results with and without the impact of foreign exchange rates to present our data in a manner consistent with others in the industry that operate predominantly in the US. If we exclude the impact of foreign exchange rates on our average daily revenue per occupied unit, it was an increase of 3.1% year-over-year.
Our comparable communities revenues were $495.3 million this quarter, an increase of 2.4% as compared to the prior year period, and excluding the impact of the foreign exchange rates, our first quarter revenues increased by 1.3% to $489.9 million year-over-year. With respect to comparable communities expenses, we experienced an increase of 2.1% to $366.5 million as compared to the first quarter of 2009, and excluding the impact of foreign exchange rates, an increase of 1.0% year-over-year.
Labor continues to be our largest expense. In this quarter, it was driven up in part by an increase in our acuity mix as well as due to an increase in wage rates. This quarter, we were also impacted with higher than average snow removal costs. Compared to the same period last year, however, expenses declined in the areas of utilities, insurance, bad debt, and food costs.
Now I’ll turn to our financial results for the quarter. We reported revenues of $355.2 million for the first quarter as compared to $374.7 million in the first quarter of 2009. Net loss attributable to common shareholders was $16 million or $0.29 per fully diluted share as compared to a net loss of $18.2 million or $0.36 per diluted share for 2009.
Loss from operations for the first quarter was $10.6 million compared to $41 million in 2009. Excluding SEC investigation costs, restructuring costs, and non-cash charges, including depreciation and amortization, the provision for doubtful accounts, write-off of capitalized project costs, and impairment of long lived assets, adjusted income from ongoing operations is $5.6 million in 2010 compared to $3.7 million in 2009, an increase of 49%.
Adjusted income from ongoing operations is a measure of operating performance that is not calculated in accordance with US GAAP and should not be considered as a substitute for income or loss from operations or net income or loss. Adjusted income from ongoing operations is used by the management to focus on cash generated from the ongoing operations of the company and to help management assess if adjustments for current spending decisions are needed.