MARKHAM, Ontario, May 08, 2019 (GLOBE NEWSWIRE) -- Sienna Senior Living Inc. (“Sienna” or the “Company”) (TSX: SIA) today announced its financial results for the three months ended March 31, 2019. The Unaudited Condensed Interim Consolidated Financial Statements and accompanying Management’s Discussion and Analysis are available on the Company’s website at www.siennaliving.ca and on SEDAR at www.sedar.com.
“Our team delivered a solid first quarter operating performance with strong same property growth and further improvements to the balance sheet,” said Lois Cormack, President and CEO of Sienna Senior Living. “Our Q1 results highlight the benefits from running a balanced, larger scale platform and reflect the invaluable contributions from our 12,000 team members.”
Financial and Operating Highlights
Strong financial performance in 2019 first quarter
- Revenue increased by 12.6% year-over-year to $163.7 million;
- Net Operating Income (“NOI”) increased by 20.1% year-over-year to $38.9 million;
- Same Property NOI increased by 5.4% year-over-year to $32.8 million, including a 7.3% increase to $11.8 million in the Retirement portfolio and a 4.3% increase to $21.0 million in the Long-term Care (“LTC”) portfolio;
- Diluted Operating Funds from Operations (“OFFO”) increased by 4.2% year-over-year to $0.322 per share;
- Diluted Adjusted Funds from Operations (“AFFO”) increased by 2.6% year-over-year to $0.353 per share.
Improved balance sheet
- Debt to gross book value lowered by 250 bps to 47.8% year-over-year;
- Debt to Adjusted EBITDA decreased from 8.2 years to 7.1 years year-over-year;
- Lengthened average debt term to 4.4 years from 4.1 years year-over-year;
- Confirmed A (low) rating with a stable outlook for the Series B Debentures in March 2019.
Enhanced operating platform
- Retirement NOI increased by 62.5% year-over-year to 46% of total NOI in Q1 2019, nearing the Company’s goal of generating at least half of its NOI from the Retirement segment;
- Integration of ten high-quality retirement residences and over 1,000 new team members into Sienna’s operating platform essentially completed.
Financial and Operating Results:
| $000s except occupancy, per share and ratio data | Three months ended March 31, 2019 | Three months ended March 31, 2018 |
| Retirement Same Property – Average occupancy | 91.6% | 92.6% |
| Retirement Acquisitions – Average occupancy | 88.4% | 93.3% |
| Retirement – Average total occupancy | 90.4% | 92.6% |
| LTC – Average total occupancy | 98.2% | 97.9% |
| LTC – Average private occupancy | 98.3% | 97.9% |
| Revenue | $163,669 | $145,357 |
| Operating expenses | $124,757 | $112,953 |
| NOI(1) | $38,912 | $32,404 |
| Net income | $442 | $1,033 |
| Operating Funds from Operations (OFFO)(1)(3) | $21,322 | $18,609 |
| Adjusted Funds from Operations (AFFO)(1)(3) | $23,383 | $20,774 |
| Net income per share, diluted | $0.007 | $0.018 |
| OFFO per share, diluted(3) | $0.322 | $0.309 |
| AFFO per share, diluted(3) | $0.353 | $0.344 |
| Dividends declared per share | $0.230 | $0.225 |
| Payout Ratio(2) | 65.2% | 63.7% |
Notes:
- NOI, OFFO and AFFO are not measures recognized under International Financial Reporting Standards (“IFRS”) and do not have standardized meanings prescribed by IFRS. NOI, OFFO and AFFO are supplemental measures of a company's performance, and management of the Company believes that NOI and OFFO are relevant measures of the Company’s earnings performance, and AFFO is a relevant measure of the Company’s ability to earn cash and pay dividends. The IFRS measurement most directly comparable to OFFO and AFFO is net income and cash flow from operating activities, respectively.
- Payout Ratio is calculated using dividends declared per share divided by the basic AFFO per share for the respective periods.
- The Company adopted IFRS 16, Leases ("IFRS 16") on January 1, 2019. The comparative period's non-IFRS measures have been restated to reflect IFRS 16 as if it was adopted on January 1, 2017. For the three months ended March 31, 2018, the IFRS 16 adjustment increased OFFO and AFFO by $138, which represents a reduction in operating expenses and administrative expenses, offset by lease interest expense. Due to the IFRS 16 adjustment, basic and diluted OFFO and AFFO per share increased by $0.002 for the three months ended March 31, 2018.
2019 First Quarter Summary
NOI increased by 20.1% (or $6.5 million) to $38.9 million in Q1 2019, compared to Q1 2018. The increase is driven by strong same property NOI growth and contributions from acquisitions.
The Retirement segment had a strong operating performance and achieved a 7.3% year-over-year same property NOI growth, largely driven by an increase in rental growth that offset the occupancy decline in Retirement of 2.2% to 90.4% in Q1 2019, compared to Q1 2018.
The LTC segment delivered 4.3% year-over-year same property NOI growth, predominantly resulting from the timing of the Good Friday statutory holiday. Excluding the impact of this statutory holiday, same property NOI growth would be 1.9%. Average occupancy in our LTC portfolio remained high at 98.2% in Q1 2019, a 0.3% increase over Q1 2018.
Revenue increased by 12.6% (or $18.3 million) to $163.7 million in Q1 2019, compared to Q1 2018. The increase is mainly due to revenues generated from the 2018 acquisitions, as well as strong same property results from rate increases in Retirement, and additional funding revenues and inflationary funding increases in the flow-through envelopes in LTC.
Operating expenses increased by 10.5% (or $11.8 million) to $124.8 million in Q1 2019, compared to Q1 2018, which included a tax refund of $1.3 million in Q1 2018. The increase is mainly due to expenses incurred by the 2018 acquisitions, inflationary increases mainly in wages and food, and increases in property taxes and utilities.
The Company generated net income of $0.4 million in Q1 2019, representing a decrease of $0.6 million compared to Q1 2018. The decrease is primarily attributable to incremental interest expense and depreciation and amortization incurred from the 2018 acquisitions and an increase in mark-to-market adjustments on share-based compensation, partially offset by incremental NOI generated from these acquisitions and lower transaction costs.
OFFO increased by 14.6% (or $2.7 million) to $21.3 million in Q1 2019, compared to Q1 2018. The increase is mainly due to income generated from the 2018 acquisitions, as well as strong organic growth, partially offset by incremental interest expense on the acquired properties and an increase in mark-to-market adjustments on share-based compensation. Excluding the mark-to-market adjustments, OFFO would be $22.7 million or $0.343/share.
AFFO increased by 12.6% (or $2.6 million) to $23.4 million in Q1 2019, compared to Q1 2018. The increase is mainly related to the increase in OFFO noted above, partially offset by a decrease in income support that ended in 2018 related to a prior acquisition.
Conference Call
The conference call will be on Thursday May 9, 2019 at 9:30 a.m. (ET). The toll-free dial-in number for participants is 1-844-543-5234, conference ID: 8099783. A webcast of the call will be accessible via Sienna's website at: www.siennaliving.ca/Investors/Events-Presentations.aspx. The webcast of the call will be available for replay until May 9, 2020 and archived on Sienna's website.
About Sienna Senior Living
Sienna Senior Living Inc. (TSX:SIA) is a leading seniors' living provider with 87 seniors' living residences in key markets in Canada. Sienna offers a full range of seniors' living options, including independent living, assisted living, long-term care, and specialized programs and services. Sienna also provides expert management services. Sienna is committed to national growth, while driving long-term value for shareholders. The Company's approximately 12,000 employees are passionate about helping residents live fully every day, and were the driving force behind Sienna being named one of Canada's Most Admired Corporate Cultures in 2017. For more information, please visit www.siennaliving.ca.
Forward-Looking Statements
Certain of the statements contained in this news release are forward-looking statements and are provided for the purpose of presenting information about management's current expectations and plans relating to the future. Readers are cautioned that such statements may not be appropriate for other purposes. These statements generally use forward-looking words, such as "anticipate," "continue," "could," "expect," "may," "will," "estimate," "believe," “goals” or other similar words and include, among other things, statements related to the Company's financial results or strategic plans. These statements are subject to significant known and unknown risks and uncertainties that may cause actual results or events to differ materially from those expressed or implied by such statements and, accordingly, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. The forward-looking statements in this news release are based on information currently available and what management currently believes are reasonable assumptions, including the funding of long-term care/residential care facilities by government entities. Other material factors or assumptions that were applied in formulating the forward-looking statements contained herein include the assumption that the business and economic conditions affecting the Company's operations will continue substantially in their current state, including, with respect to industry conditions, general levels of economic activity and government regulations.
Although management believes that it has a reasonable basis for the expectations reflected in these forward-looking statements, actual results may differ from those suggested by the forward-looking statements for various reasons. The assumptions, risks and uncertainties described above are not exhaustive and other events and risk factors could cause actual results to differ materially from the results and events discussed in the forward-looking statements. These forward-looking statements reflect current expectations of the Company as at the date of this news release and speak only as at the date of this news release. The Company does not undertake any obligation to publicly update or revise any forward-looking statements except as may be required by applicable law.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Nitin Jain
Chief Financial Officer & Chief Investment Officer
(905) 489-0787
Nitin.Jain@siennaliving.ca