Sonida Senior Living
Annual Report 2007

Plain-text annual report

CAPITAL SENIOR LIV ING cor p o r at i o n T R O P E R L A U N N A 7 0 0 2 T O O uR FE L L O w S hA R EhO LdE R S 2007 EBITDAR $55.3 M, change 2006 to $40.5 from $40.6 to tie to press release 40.5 Total Revenue (in $ millions) 200 150 100 50 0 189.1 159.1 126.4 05 06 07 Total Revenue (in $ millions) EBITDAR Comparison (in $ millions) 189.1 2007 revenues $189.1 M 60 55.3 159.1 50 10 8 6 4 2 0 200 150 100 50 0 126.4 05 06 07 10 8 6 4 2 0 10 8 6 4 2 0 159.1 126.4 200 150 100 50 0 40.5 50 40 20 2007 revenues $189.1 M 2006-2007 same store comparison Revenue growth 4.0% Expense growth 1.2% Net income growth 8.6% 2006-2007 same store comparison 26.1 20 10 Revenue growth 4.0% Expense growth 1.2% 05 Net income growth 8.6% 06 07 0 Total Revenue (in $ millions) EBITDAR Comparison (in $ millions) Same Store Comparison 2006 -2007 (percentage change) 189.1 2007 revenues $189.1 M 60 55.3 10 8.6 40 30 8 30 26.1 2006-2007 same store comparison 4.0 4 6 05 06 07 10 Revenue growth 4.0% Expense growth 1.2% Net income growth 8.6% 05 06 07 0 2 0 1.2 e x p e n s e r e v e n u e n e t i n c o m e 2007 EBITDAR $55.3 M, change 2006 to $40.5 from $40.6 to tie to press release 60 Same Store Comparison 2006 -2007 (percentage change) Our 2007 business plan was focused on increasing shareholder value by EBITDAR Comparison (in $ millions) providing income and asset growth, strengthening our balance sheet and increasing the Company’s profitability. Our 2007 results demonstrate the significant progress we made toward those important goals. 40.5 55.3 8.6 10 50 40 8 6 30 26.1 4.0 0 0 2 4 07 06 05 1.2 Our revenues, EBITDAR and net income all 20 increased significantly as a result of our management focus on improving our operating results. Total revenue 10 for 2007 increased $30 million, or 19 percent, to $189.1 million and adjusted EBITDAR was $55.3 million, an increase of 37 percent compared to 2006 n c o results. Our net income for the year was $4.4 million, m e versus a loss of $2.6 million in 2006. In addition, at communities under management, same-community revenues increased 4.0 percent over 2006 results, while expenses only increased 1.2 percent. This resulted in same-community net income growth of 8.6 percent 8 compared to 2006. Same Store Comparison 2006 -2007 (percentage change) e x p e n s e r e v e n u e 8.6 n e t 10 i 6 2 4 1.2 4.0 Our 2007 business plan included external growth through aquisitions and new development. During 2007 and the first quarter of 2008, we consummated three joint ventures that are currently developing three senior housing communities totaling 299 independent living and 135 assisted living units. We anticipate further external growth in 2008 including acquisi- tions and additional development with strong capital partners that provide the operational benefits of regional clustering. e x p e n s e r e v e n u e n c o m e n e t 0 i We strengthened our balance sheet in 2007 by further reducing our debt and average borrowing costs, a continuation of an important initiative undertaken in 2006. Further, we were able to leverage our national platform and reduce expenses through the rollout of a national group purchasing program that is designed to provide ongoing expense efficiencies. At the end of 2007, we operated 64 senior living communities in 23 states with an aggregate capacity of approximately 9,400 residents, including 37 senior living communities which we own or have an ownership interest, 25 leased communities, and two communities we manage for third parties. In the communities we operated in 2007, 70 percent of residents lived independ- ently, 23 percent of residents required assistance with activities of daily living and 7 percent of residents lived in continuing care retirement communities. We believe that we are well positioned to take advantage of emerging opportunities in 2008. We have a successful record of operations as well as a strong balance sheet, a national operating platform and a talented, experienced management team. We have therefore structured our 2008 annual business plan to build shareholder value by delivering internal growth and expanding our external growth by pursuing aquisition and development opportunities. The focus of our 2008 plan is on increasing capacity and levels of care to meet the needs of our residents with an average age of 85. The key elements of this plan are to increase levels of care and capacity through expan- sions, conversions and new developments and to acquire home care agencies in clustered markets to provide home health and ancillary services. These investments typically produce excellent returns on invested capital. In addition, our 2008 plan includes the goals to create organic growth from rental rate increases, cost savings and occupancy growth, and to complete accretive, geographically desirable acquisitions that are becoming available in our highly fragmented industry. We have already made progress on these initiatives. Specifically, we intend to convert 256 independent living units in eight communities to units of assisted living and dementia care by the second quarter of 2008. We had already completed 70 of these conversions by the end of 2007. In addition, we are planning to expand three communities, adding a total of 180 assisted living, 60 dementia care, and 30 independent living units. The expansions are planned to begin in the second half of 2008. We are proud of the positive results we achieved in 2007 and we believe that our plan for 2008, supported by positive industry dynamics, holds the potential for increasing shareholder value. Throughout 2008, we will assess the viability of acquisition and development prospects while we seek to maximize internal growth and operating metrics. We thank you for your support. 2007 EBITDAR $55.3 M, change 2006 to $40.5 from $40.6 to tie to press release James A. Stroud Chairman of the Board Lawrence A. Cohen Chief Executive Officer Company Management Board of Directors Regional Information Lawrence a. cohen Chief Executive Officer James a. stroud Chairman of the Company Keith n. Johannessen President and Chief Operating Officer raLph a. Beattie Executive Vice President and Chief Financial Officer roB L. Goodpaster Vice President, National Marketing david w. Beathard Vice President, Operations GLen h. campBeLL Vice President, Development david r. BricKman Vice President, General Counsel and Secretary GLoria m. hoLLand Vice President, Finance Jerry d. Lee Corporate Controller roBert F. hoLLister Property Controller Shareholder Information stocK exchanGe ListinG Capital Senior Living Corporation Common Stock is listed on the New York Stock Exchange and trades under the symbol CSU. transFer aGent and reGistrar BNY Mellon Shareowner Services P.O. Box 358015 Pittsburgh, Pennsylvania 15252-8015 or 480 Washington Boulevard Jersey City, New Jersey 07310-1900 (800) 635-9270 TDD for hearing impaired: (800) 231-5469 Foreign shareowners: (201) 680-6578 TDD foreign shareowners: (201) 680-6610 www.bnymellon.com/shareowner/isd auditors Ernst & Young LLP 2100 Ross Avenue, Suite 1500 Dallas, Texas 75201 (214) 969-8000 James a. stroud Chairman of the Board Capital Senior Living Corporation Dallas, Texas Lawrence a. cohen Vice Chairman of the Board Capital Senior Living Corporation New York, New York Keith n. Johannessen President and Chief Operating Officer Capital Senior Living Corporation Dallas, Texas craiG F. hartBerG 1,2,3 Retired First Vice President Bank One, Texas, N.A. Baton Rouge, Louisiana JiLL m. KrueGer 2 President and CEO Health Resources Alliance, Inc. Oakbrook, Illinois James a. moore 1,2,3 President Moore Diversified Services, Inc. Fort Worth, Texas victor w. nee, ph.d .1,3 Professor Emeritus Department of Aerospace & Mechanical Engineering University of Notre Dame Scottsdale, Arizona 1 Member of the Board’s Compensation Committee 2 Member of the Board’s Audit Committee 3 Member of the Board’s Nominating Committee Corporate Information corporate headquarters 14160 Dallas Parkway, Suite 300 Dallas, Texas 75254 (972) 770-5600 (972) 770-5666 fax main@capitalsenior.com new yorK oFFice 300 Park Avenue, Suite 1700 New York, New York 10022 (212) 551-1770 (212) 551-1774 fax corporate weB site www.capitalsenior.com eastern reGionaL oFFice 186 Old Stagecoach Road Ridgefield, Connecticut 06877 (203) 894-9406 (203) 894-9407 fax centraL pLains reGionaL oFFice 1913 E. Highway 34 Plattsmouth, Nebraska 68048 (402) 296-0618 (866) 731-0053 fax western reGionaL oFFice 5757 Cypress Avenue Carmichael, California 95608 (916) 480-0634 (916) 486-4375 fax midwestern reGionaL oFFice 2650 Hemford Falls Court, #200 St. Louis, Missouri 63129 (314) 846-8517 (314) 846-5495 fax southwestern and texas reGionaL oFFices 14160 Dallas Parkway, Suite 300 Dallas, Texas 75254 (972) 770-5600 (972) 770-5666 fax daLLas reGionaL oFFice 2222 Walter Smith Road Azle, Texas 76020 (817) 237-2496 (817) 237-3496 fax Form 10-K A copy of Capital Senior Living Corporation’s 2007 annual report to the SEC on Form 10-K is included herein and is available without charge upon written request to the Investor Relations Department at corporate headquarters. It can also be found on the Company’s web site, www.capitalsenior.com. Annual Shareholders Meeting May 15, 2008 at 10:00 am, Eastern Time Waldorf Astoria Hotel 301 Park Avenue New York, New York 10022-6897 (212) 355-3000 Capital Senior living Corpor ation 14160 Dallas Parkway, Suite 300 Dallas, Texas 75254 (972) 770-5600 fax (972) 770-5666 www.capitalsenior.com

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