Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 30, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-13445 | |
Entity Registrant Name | Sonida Senior Living, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 75-2678809 | |
Entity Address, Address Line One | 16301 Quorum Drive | |
Entity Address, Address Line Two | Suite 160A | |
Entity Address, City or Town | Addison | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75001 | |
City Area Code | 972 | |
Local Phone Number | 770-5600 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | SNDA | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 6,755,938 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001043000 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 48,634 | $ 78,691 |
Restricted cash | 3,982 | 4,882 |
Accounts receivable, net | 4,502 | 3,983 |
Property tax and insurance deposits | 3,946 | 6,666 |
Prepaid expenses and other | 7,665 | 9,328 |
Total current assets | 68,729 | 103,550 |
Property and equipment, net | 627,844 | 621,199 |
Other assets, net | 6,808 | 3,803 |
Total assets | 703,381 | 728,552 |
Current liabilities: | ||
Accounts payable and accrued expense | 48,528 | 46,194 |
Current portion of notes payable, net of deferred financing costs | 43,851 | 69,769 |
Deferred income | 3,527 | 3,162 |
Federal and state income taxes payable | 850 | 599 |
Other current liabilities | 778 | 758 |
Total current liabilities | 97,534 | 120,482 |
Notes payable, net of deferred financing costs and current portion | 627,170 | 613,342 |
Other liabilities | 220 | 288 |
Total liabilities | 724,924 | 734,112 |
Commitments and contingencies | ||
Redeemable preferred stock: | ||
Series A convertible preferred stock, $0.01 par value; 41 shares authorized, 41 shares issued and outstanding | 41,250 | 41,250 |
Shareholders’ deficit: | ||
Preferred stock, authorized (in shares) | 0 | 0 |
Common stock, authorized (in shares) | 67 | 66 |
Additional paid-in capital | 296,475 | 295,781 |
Retained deficit | (359,335) | (342,657) |
Total shareholders’ deficit | (62,793) | (46,810) |
Total liabilities, redeemable preferred stock and shareholders’ deficit | $ 703,381 | $ 728,552 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Series A convertible preferred stock , par value (in USD per share) | $ 0.01 | $ 0.01 |
Temporary equity, shares authorized (in shares) | 41,000 | 41,000 |
Temporary equity, shares issued (in shares) | 41,000 | 41,000 |
Temporary equity, shares outstanding (in shares) | 41,000 | 41,000 |
Preferred stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Common stock, shares issued (in shares) | 6,665,000 | 6,634,000 |
Common stock, shares outstanding (in shares) | 6,665,000 | 6,634,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Total revenues | $ 58,484 | $ 61,648 |
Expenses: | ||
Operating expenses | 41,929 | 36,758 |
General and administrative expenses | 6,445 | 7,187 |
Stock-based compensation expense | 1,828 | 166 |
Depreciation and amortization expense | 9,578 | 9,283 |
Community reimbursement expense | 7,022 | 15,260 |
Total expenses | 66,802 | 68,654 |
Other income (expense): | ||
Interest income | 1 | 4 |
Interest expense | (7,603) | (9,374) |
Gain (loss) on extinguishment of debt | (641) | 46,999 |
Loss on disposition of assets, net | 0 | (421) |
Other income | 137 | 8,705 |
Income (loss) before provision for income taxes | (16,424) | 38,907 |
Provision for income taxes | (254) | (63) |
Net income (loss) | (16,678) | 38,844 |
Dividends on Series A convertible preferred stock | (1,133) | 0 |
Net income (loss) attributable to common stockholders | $ (17,811) | $ 38,844 |
Weighted average shares outstanding — basic (in shares) | 6,341 | 2,058 |
Weighted average shares outstanding — diluted (in shares) | 6,341 | 2,066 |
Basic net income (loss) per share (in USD per share) | $ (2.81) | $ 18.87 |
Diluted net income (loss) per share (in USD per share) | $ (2.81) | $ 18.80 |
Resident revenue | ||
Revenue from Contract with Customer [Abstract] | ||
Total revenues | $ 50,834 | $ 45,202 |
Management fees | ||
Revenue from Contract with Customer [Abstract] | ||
Total revenues | 628 | 1,186 |
Community reimbursement revenue | ||
Revenue from Contract with Customer [Abstract] | ||
Total revenues | $ 7,022 | $ 15,260 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Deficit |
Beginning Balance (in shares) at Dec. 31, 2020 | 2,084 | |||
Beginning Balance at Dec. 31, 2020 | $ (279,265) | $ 21 | $ 188,978 | $ (468,264) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Restricted stock awards (cancellations), net (in shares) | 98 | |||
Restricted stock awards (cancellations), net | $ 1 | (1) | ||
Series A convertible preferred stock dividends | 0 | |||
Stock-based compensation | 166 | 166 | ||
Net income (loss) | 38,844 | 38,844 | ||
Ending Balance (in shares) at Mar. 31, 2021 | 2,182 | |||
Ending Balance at Mar. 31, 2021 | (240,255) | $ 22 | 189,143 | (429,420) |
Beginning Balance (in shares) at Dec. 31, 2021 | 6,634 | |||
Beginning Balance at Dec. 31, 2021 | (46,810) | $ 66 | 295,781 | (342,657) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Series A convertible preferred stock dividends | (1,133) | (1,133) | ||
Stock-based compensation (in shares) | 31 | |||
Stock-based compensation | 1,828 | $ 1 | 1,827 | |
Net income (loss) | (16,678) | (16,678) | ||
Ending Balance (in shares) at Mar. 31, 2022 | 6,665 | |||
Ending Balance at Mar. 31, 2022 | $ (62,793) | $ 67 | $ 296,475 | $ (359,335) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (16,678) | $ 38,844 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 9,578 | 9,283 |
Amortization of deferred financing charges | 244 | 358 |
Deferred income | 365 | (244) |
Operating lease expense adjustment | (55) | (264) |
Loss on disposition of assets, net | 0 | 421 |
(Gain) loss on extinguishment of debt | 641 | (46,999) |
Provision for bad debts | 106 | 365 |
Stock-based compensation expense | 1,828 | 166 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (625) | 1,528 |
Property tax and insurance deposits | 2,720 | 3,187 |
Prepaid expenses and other | 1,633 | 1,876 |
Other assets | (1,333) | (332) |
Accounts payable and accrued expenses | 1,700 | (5,235) |
Federal and state income taxes receivable/payable | 251 | 210 |
Deferred resident revenue | 0 | 143 |
Other current liabilities | 26 | (43) |
Net cash provided by operating activities | 401 | 3,264 |
Cash flows from investing activities: | ||
Acquisition of new communities | (12,342) | 0 |
Capital expenditures | (5,582) | (2,108) |
Net cash used in investing activities | (17,924) | (2,108) |
Cash flows from financing activities: | ||
Proceeds from notes payable | 80,000 | 1,148 |
Repayments of notes payable | (90,579) | (3,406) |
Cash payments for financing lease and financing obligations | 0 | (17) |
Dividends paid to Series A preferred stockholders | (718) | 0 |
Deferred financing costs paid | (2,137) | 0 |
Net cash used in financing activities | (13,434) | (2,275) |
Decrease in cash and cash equivalents and restricted cash | (30,957) | (1,119) |
Cash, cash equivalents and restricted cash at beginning of period | 83,573 | 22,867 |
Cash, cash equivalents and restricted cash at end of period | 52,616 | 21,748 |
Cash paid during the period for: | ||
Interest | 7,076 | 7,740 |
Income taxes | 3 | $ 3 |
Non-cash investing and financing activities | ||
Dividends payable to Series A preferred stockholders | $ 1,133 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Organization and Business Sonida Senior Living, Inc., a Delaware corporation, is one of the leading owner-operators of senior housing communities in the United States in terms of resident capacity. As used herein, the “Company,” “we,” “us,” or “our” refers to Sonida Senior Living, Inc. and its subsidiaries). The Company owns, operates, develops and manages senior housing communities throughout the United States. As of March 31, 2022, the Company operated 76 senior housing communities in 18 states with an aggregate capacity of approxima tely 9,500 residents, including 62 senior housing communities that the Company owned and 14 communities that the Company managed on behalf of third parties. The accompanying condensed consolidated financial statements include the financial statements of Sonida Senior Living, Inc. and its wholly owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation. Interim Unaudited Financial Information The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted from this Quarterly Report on Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The results for the interim periods shown in this report are not necessarily indicative of future financial results. The accompanying condensed consolidated financial statements have not been audited by our independent registered public accounting firm. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all adjustments, including normal recurring items, necessary to present fairly our condensed consolidated financial position as of March 31, 2022 and December 31, 2021, and our condensed consolidated results of operations and cash flows for the periods ended March 31, 2022 and 2021. Reclassification Certain amounts previously reflected in the prior year condensed consolidated balance sheet have been reclassified to conform to our March 31, 2022 presentation. The condensed consolidated balance sheet as of December 31, 2021 reflects reclassifying “operating lease right-of-use assets, net” to “other assets, net.” “Accounts payable” and “accrued liabilities” have been combined into one line. “Current portion of lease liabilities” and “customer deposits” were combined into “other current liabilities.” “Lease liabilities, net of current portion” has been reclassified as “other liabilities.” These reclassifications had no effect on the previously reported total current assets, total assets, current liabilities or total liabilities. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. These estimates include such items related to the accounting for: income taxes, including assessments of probabilities of realization of income tax benefits; impairment of long-lived assets, including applicable cash flow projections, holding periods and fair value evaluations; and depreciation and amortization including determination of estimated useful lives. Actual results could differ from those estimates. |
Significant Accounting Policies
Significant Accounting Policies and Recently Issued Accounting Standards | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies and Recently Issued Accounting Standards | Significant Accounting Policies and Recently Issued Accounting Standards Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents. The Company has deposits in banks that exceed Federal Deposit Insurance Corporation insurance limits. Management believes that credit risk related to these deposits is minimal. Restricted cash consists of deposits required by certain counterparties as collateral pursuant to letters of credit. The deposit must remain so long as the letters of credit, which are subject to renewal annually, are outstanding. The following table sets forth the Company’s cash, cash equivalents and restricted cash total as presented in our statements of cash flows (in thousands): March 31, March 31, Cash and cash equivalents $ 48,634 $ 16,766 Restricted cash 3,982 4,982 Total cash, cash equivalents, and restricted cash $ 52,616 $ 21,748 Property and Equipment Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets. At each balance sheet date, the Company reviews the carrying value of its property and equipment to determine if facts and circumstances suggest that they may be impaired or that the depreciation period may need to be changed. The Company considers internal factors such as net operating losses along with external factors relating to each asset, including contract changes, local market developments, and other publicly available information to determine whether impairment indicators exist. If an indicator of impairment is identified, recoverability of an asset group is assessed by comparing its carrying amount to the estimated future undiscounted net cash flows expected to be generated by the asset group through operation or disposition, calculated utilizing the lowest level of identifiable cash flows. If this comparison indicates that the carrying amount of an asset group is not recoverable, we estimate fair value of the asset group and record an impairment loss when the carrying amount exceeds fair value. There were no impairments of long-lived assets during the three months ended March 31, 2022 or 2021. In evaluating our investments for impairment, we undergo continuous evaluations of property level performance and real estate trends, and management makes several estimates and assumptions, including, but not limited to, the projected date of disposition, estimated sales price and future cash flows of each property during our estimated holding period. If our analysis or assumptions regarding the projected cash flows expected to result from the use and eventual disposition of our properties change, we incur additional costs and expenses during the holding period, or our expected hold periods change, we may incur future impairment losses. Upon the acquisition of new communities accounted for as an acquisition of an asset, we recognize the assets acquired and the liabilities assumed as of the acquisition date, measured at their relative fair values once we have determined the fair value of each of these assets and liabilities. The acquisition date is the date on which we obtain control of the real estate property and associated transaction costs are capitalized. The assets acquired and liabilities assumed consist of land, inclusive of associated rights, buildings, assumed debt, and identified intangible assets and liabilities. Revenue Recognition Resident revenue primarily consists of fees for basic housing and certain support services provided to residents which are accounted for under GAAP in accordance with lease accounting standards. The Company's residency lease agreements are generally short term in nature, with durations of one year or less, and are typically terminable by either party, under certain circumstances, upon providing 30 days’ notice, unless state law provides otherwise. Resident leases do not contain purchase options or require significant assumptions or judgments. Resident fees are billed monthly in advance. Basic housing and certain support services revenue is recorded when services are rendered and amounts are billable to residents in the period in which the rental and other services are provided. At March 31, 2022 and December 31, 2021, the Company had contract liabilitie s for deferred fees paid by its residents prior to the month that housing and support services were to be provided totaling approximately $2.7 million and $2.3 million, respectively, which are included as a component of deferred income within current liabilities. Revenue for certain ancillary services is recognized as services are provided to customers and includes fees for certain services, such as medication management, daily living activities, beautician/barber, laundry, television, guest meals, pets, and parking, which are generally billed monthly in arrears and are included as a component of resident revenue. Other operating revenue generally includes nonrecurring state grants and is included as a component of resident revenue as earned. The Company's senior housing communities have residency agreements that generally require the resident to pay a community fee prior to moving into the community and are recorded initially by the Company as deferred revenue. At March 31, 2022 and December 31, 2021, the Company had contract liabilities for deferred community fees totaling approximately $0.9 million and $0.8 million, respectively, which are included as a component of deferred income within current liabilities. The Company has management agreements whereby it manages certain communities on behalf of third party owners under a contract that provides for periodic management fee payments to the Company. The Company has determined that all community management activities are a single performance obligation, which is satisfied over time as the services are rendered. The Company’s estimate of the transaction price for management services also includes the amount of reimbursement due from the owners of the communities for services provided and related costs incurred. Such revenue is included in “community reimbursement revenue.” The related costs are included in “community reimbursement expense.” Although these costs are funded by the community owners, accounting guidance requires the Company to report these fees on a gross basis as both revenues and expenses. Credit Risk and Allowance for Doubtful Accounts The Company’s resident receivables are generally due within 30 days from the date billed. Accounts receivable are reported net of an allowance for doubtful accounts of $5.1 million and $4.7 million at March 31, 2022, and December 31, 2021, respectively, and represent the Company’s estimate of the amount that ultimately will be collected. The adequacy of the Company’s allowance for doubtful accounts is reviewed on an ongoing basis, using historical payment trends, write-off experience, analyses of receivable portfolios by payor source and aging of receivables, as well as a review of specific accounts, and adjustments are made to the allowance, as necessary. Credit losses on resident receivables have historically been within management’s estimates, and management believes that the allowance for doubtful accounts adequately provides for expected losses. Self-Insurance Liability Accruals The Company offers full-time employees an option to participate in its health and dental plans. The Company is self-insured up to certain limits and is insured if claims in excess of these limits are incurred. The cost of employee health and dental benefits, net of employee contributions, is shared between the corporate office and the senior housing communities based on the respective number of plan participants. Funds collected are used to pay the actual program costs, including estimated annual claims, third-party administrative fees, network provider fees, communication costs, and other related administrative costs incurred by the plans. Claims are paid as they are submitted to the Company’s third-party administrator. The Company records a liability for outstanding claims and claims that have been incurred but not yet reported. This liability is based on the historical claim reporting lag and payment trends of health insurance claims. The Company uses a combination of insurance and self-insurance for workers’ compensation. Determining the reserve for workers’ compensation losses and costs that the Company has incurred as of the end of a reporting period involves significant judgments based on projected future events, including among other factors, potential settlements for pending claims, known incidents which may result in claims, estimates of incurred but not yet reported claims, changes in insurance premiums and/or estimated litigation costs. The Company regularly adjusts these estimates to reflect changes in the foregoing factors. However, since this reserve is based on estimates, it is possible the actual expenses incurred may differ from the amounts reserved. Any subsequent changes in estimates are recorded in the period in which they are determined. Income Taxes Income taxes are computed using the asset and liability method and current income taxes are recorded based on amounts refundable or payable in the current year. The effective tax rates for the three months ended March 31, 2022 and 2021 differ from the statutory tax rates due to state income taxes, permanent tax differences, and changes in the deferred tax asset valuation allowance. Deferred income taxes are recorded based on the estimated future tax effects of loss carryforwards and temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the years in which the Company expects those carryforwards and temporary differences to be recovered or settled. Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income. As of December 31, 2021, the Company had a three-year cumulative net operating loss for its U.S. operations and is subject to annual operating loss utilization limits and accordingly, has provided a full valuation allowance on its U.S. and state net deferred tax assets. The valuation allowance reduces the Company’s net deferred tax assets to the amount that is “more likely than not” (i.e., a greater than 50% likelihood) to be realized. However, in the event that the Company were to ultimately determine that it would be more likely than not that the Company would realize the benefit of deferred tax assets in the future in excess of their net recorded amounts, adjustments to deferred tax assets would increase net income in the period such determination was made. The benefits of the net deferred tax assets might not be realized if actual results differ from expectations. The Company evaluates uncertain tax positions through consideration of accounting and reporting guidance on criteria, measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition that is intended to provide enhanced financial statement comparability among different companies. The Company is required to recognize a tax benefit in its financial statements for an uncertain tax position only if management’s assessment is that such position is “more likely than not” to be upheld on audit based solely on the technical merits of the tax position. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as income tax expense. Redeemable Preferred Stock The Company evaluates the classification of redeemable preferred stock based on the instrument’s specific terms and rights. Perpetual convertible preferred stock which can be converted to common stock outside of the Company’s control is classified as mezzanine equity, outside of the stockholders’ deficit section, and recorded at the maximum liquidation or conversion amount. Dividends on redeemable preferred stock are recorded to retained earnings or additional paid-in capital if retained earnings is an accumulated deficit. During the year ended December 31, 2021, the Company issued 41,250 shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”). Derivative Instruments We use derivative instruments as part of our overall strategy to manage our exposure to market risks associated with the fluctuations in interest rates. We may also be required to enter into interest rate derivative instruments in compliance with debt agreements. We regularly monitor the financial stability and credit standing of the counterparties to our derivative instruments. We do not enter into derivative financial instruments for trading or speculative purposes. We record all derivatives at fair value. As of March 31, 2022 and December 31, 2021, all of our derivative instruments were interest rate caps, and none are designated as hedge instruments. Changes in fair value of undesignated hedge instruments are recorded in current period earnings in interest expense. Net Income (Loss) Per Common Share Basic income (loss) per share is computed by dividing net income (loss) less distributions to participating securities using the two-class method and preferred stock dividends, including redeemable preferred stock classified as mezzanine equity, divided by the weighted average number of shares of common stock outstanding. Under the two-class method, net income is reduced by the amount of any dividends earned during the period. The remaining earnings (undistributed earnings) are allocated based on the weighted-average shares outstanding of common stock and Series A Preferred Stock (on an if-converted basis) to the extent that each preferred security may share in earnings as if all of the earnings for the period had been distributed. The total earnings allocated to common stock is then divided by the number of outstanding shares to which the earnings are allocated to determine the earnings per share. The two-class method is not applicable during periods with a net loss, as the holders of the Series A Preferred Stock have no obligation to fund losses. Diluted net income (loss) per common share is computed under the two-class method by using the weighted-average number of shares of common stock outstanding, plus, for periods with net income attributable to common stockholders, the potential dilutive effects of instruments convertible into common stock, stock options, stock-based compensation awards and warrants. The Company analyzes the potential dilutive effect of convertible instruments under the “if-converted” method, in which it is assumed that the instruments convert into common stock at the beginning of the period or when issued, if later. The Company reports the more dilutive of the approaches (two class or “if-converted”) as its diluted net income per share during the period. Dilutive securities are excluded from the calculation of diluted income per share if the effect would be anti-dilutive. Concentration of Credit Risk and Business Risk Substantially all of our revenues are derived from senior living communities we own and senior living communities that we manage. Senior living operations are particularly sensitive to adverse economic, social and competitive conditions and trends, including the effects of the COVID-19 pandemic, which has and may continue to adversely affect our business, financial condition and results of operations. Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments. Current GAAP requires an “incurred loss” methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. ASU 2016-13 replaces the current incurred loss methodology non-lease revenue credit losses and removes the thresholds that companies apply to measure credit losses on financial statements measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates. For smaller reporting companies, ASU 2016-13 is effective for fiscal years and for interim periods within those fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact the adoption of this guidance will have on its consolidated financial statements and disclosures. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on contracts, hedging relationships, and other transactions that reference the London Inter-Bank Offered Rate (“LIBOR”). The provisions of this standard are available for election through December 31, 2022. The Company is currently evaluating its contracts and the optional expedients provided by this update. |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net The following is a summary of our property and equipment, net as of March 31, 2022 and December 31, 2021 (in thousands): Asset Lives March 31, December 31, Land $ 47,598 $ 46,069 Land improvements 5 to 20 years 19,305 19,146 Buildings and building improvements 10 to 40 years 825,195 814,035 Furniture and equipment 5 to 10 years 54,247 52,602 Automobiles 5 to 7 years 2,679 2,662 Assets under financing leases and leasehold improvements (1) 2,287 2,276 Construction in progress 1,905 392 Total property and equipment, net 953,216 937,182 Less accumulated depreciation and amortization (325,372) (315,983) Total property and equipment, net $ 627,844 $ 621,199 __________ (1) Leasehold improvements are amortized over the shorter of the useful life of the asset or the remaining lease term. Assets under financing leases and leasehold improvements includ e $0.3 million of financing lease right-of-use assets, net of accumulated amortization, as of both March 31, 2022 and December 31, 2021. |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes Payable Notes payable consists of the following (in thousands): Maturity Dates March 31, December 31, Fixed mortgage notes payable 2022 to 2045 $ 543,593 $ 592,997 Variable mortgage notes payable 2026 to 2029 130,127 88,711 Notes payable - insurance 2022 1,532 3,483 Notes payable - other 2023 2,121 2,121 Total notes payable $ 677,373 $ 687,312 Less: deferred financing costs, net 6,352 4,201 Total notes payable, net $ 671,021 $ 683,111 Less: current portion 43,851 69,769 Total long-term notes payable, less current portion $ 627,170 $ 613,342 The following schedule summarizing our notes payable as of March 31, 2022 (in thousands): Principal payments due in: 2022 $ 42,391 2023 14,452 2024 152,155 2025 194,285 2026 75,919 Thereafter 198,171 Total notes payable, excluding deferred financing costs $ 677,373 As of March 31, 2022, our fixed mortgage notes interest rates range from 3.6% to 6.3%. Our variable mortgage notes are based on one-month LIBOR or the Secured Overnight Financing Rate (“SOFR”) plus an applicable margin. As of March 31, 2022, one-month LIBOR and one-month SOFR was 0.44% and 0.29%, respectively, and the applicable margins were 2.14% and 3.50%, respectively. As of March 31, 2022, we had property and equipment with a net carrying value of $603.8 million that is secured by outstanding notes payable. 2022 Mortgage Refinance In March 2022, the Company completed the refinancing of certain existing mortgage debt (“Refinance Facility”) for ten of its communities. The Refinance Facility includes an initial term loan of $80.0 million. In addition, $10.0 million is available as delayed loans that can be borrowed upon achieving and maintaining certain financial covenant requirements and up to an additional uncommitted $40 million may be available to fund future growth initiatives. In addition, the Company provided a limited payment guaranty (“Limited Payment Guaranty”) of 33%, that reduces to 25% and then to 10%, of the then outstanding balance of the Refinance Facility based upon achieving certain financial covenants maintained over a certain time period As defined and required in the Limited Payment Guaranty, the Company is required to maintain certain covenants including maintaining a Tangible Net Worth of $150 million and Liquid Assets of at least $13 million (inclusive of a $1.5 million debt service reserve fund provided by the Company at the closing of the Refinance Facility). The Refinance Facility also requires the financial performance of the ten communities to achieve certain financial covenants, including a minimum debt service coverage ratio and a minimum debt yield (as defined in the Loan Agreement) with a first measurement date as of June 30, 2022 and quarterly measurement dates thereafter. We can provide no assurance that any future financial covenants will be met. The Loan Agreement requires the establishment of a debt service reserve fund with a defined balance of $1.5 million (included in Liquid Assets) that may be released based upon terms described in the Loan Agreement. The reserve fund is included in our “other assets.” The Refinancing Facility requires that the Company purchase and maintain an interest rate cap facility during the term of the Refinancing Facility. The Company is in process of obtaining the interest rate cap facility in compliance with the lender’s requirements. The Company incurred costs related to the Refinance Facility of $2.1 million that are included in deferred financing costs at March 31, 2022. The financing transaction generated a loss on refinancing of notes payable of $0.6 million which is included in loss on extinguishment of debt for the three months ended March 31, 2022. Transactions Involving Certain Fannie Mae Loans The Coronavirus Aid, Relief and Economic Security (“CARES”) Act, among other things, permitted borrowers with mortgages from Government Sponsored Enterprises who experienced a financial hardship related to the COVID-19 pandemic t o obtain forbearance of their loans for up to 90 days . During 2020, the Company entered into several loan forbearance agreements with the Federal National Mortgage Association (“Fannie Mae”). In July 2020, t he Company elected not to pay $3.8 million on the loans for the remaining 18 properties as of that date as it initiated a process intended to transfer the operations and ownership of such properties to Fannie Mae. Therefore, the Company was in default on such loans. As a result of the events of default and receivership order, the Company discontinued recognizing revenues and expenses related to the 18 properties effective August 1, 2020, which was the date of default. In addition, the Company concluded it was no longer entitled to receive any existing accounts receivable or revenue related to the properties, all amounts held in escrow by Fannie Mae were forfeited, and that the Company no longer has control of the properties in accordance with GAAP. Accordingly, the Company derecognized the net carrying value of the properties and related assets from the financial statements and recorded a loss from the forbearance. The Company continued to recognize the related debt and liabilities until the debts are formally released. When these debts are formally released, the net carrying value of the debts is derecognized and a gain on extinguishment of debt is recognized. During the three months ended March 31, 2021, Fannie Mae completed the transition of legal ownership of three of the Company's properties and the Company recorded a $47.0 million gain on extinguishment of this debt. As of March 31, 2022, two properties remain for which the legal ownership has not been transferred back to Fannie Mae. At both March 31, 2022 and December 31, 2021, the Company included $32.0 million in outstanding debt in current portion of notes payable, net of deferred financing costs. As March 31, 2022 and December 31, 2021, accrued interest related to the remaining two properties was $3.4 million and $2.7 million, respectively. As of March 31, 2022 and December 31, 2021, the Company did not manage these properties (or any properties) on behalf of Fannie Mae. Except for the non-compliance with Fannie Mae mortgages for the two remaining properties expected to transition back to Fannie Mae, as noted above, the Company was in compliance with all other aspects of its outstanding indebtedness at March 31, 2022. |
Redeemable Preferred Stock
Redeemable Preferred Stock | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Redeemable Preferred Stock | Redeemable Preferred StockIn 2021, the Company issued 41,250 shares of Series A Preferred Stock. The Series A Preferred Stock is convertible outside of the Company's control and in accordance with GAAP is classified as mezzanine equity, outside the stockholders’ deficit section, on our condensed consolidated balance sheets. The Series A Preferred Stock was initially recorded at fair value upon issuance in 2021, net of issuance costs. The holders of Series A Preferred Stock are entitled to vote with the holders of common stock on all matters submitted to a vote of stockholders of the Company. It is deemed probable that the Series A Preferred Stock could be redeemed for cash, and as such the Series A Preferred Stock is required to be remeasured and adjusted to its maximum redemption value at the end of each reporting period. However, to the extent that the maximum redemption value of the Series A Preferred Stock does not exceed fair value of the shares at the date of issuance, the shares are not adjusted below the fair value at the date of issuance. As of March 31, 2022 and December 31, 2021, the Series A Preferred Stock is carried at the maximum redemption value. The Series A Preferred Stock does not have a maturity date and therefore is considered as perpetual.The Series A Preferred Stock has an 11% annual dividend calculated on the original investment of $41.3 million accrued quarterly in arrears and compounded. Dividends are guaranteed and may be paid in cash or in additional liquidation preference to the shares of Series A Preferred Stock at the discretion of the Company’s Board of Directors. On March 31, 2022, the Company declared a $1.1 million cash dividend on the Series A Preferred Stock which is included in accounts payable and accrued expense. The cash dividend was paid in April 2022. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Revenue for the three months ended March 31, 2022 and 2021 are comprised of the following components (in thousands): Three Months Ended March 31, 2022 2021 Housing and support services $ 49,438 $ 44,441 Community fees 453 411 Ancillary services 254 350 Other operating revenue 689 — Resident revenue 50,834 45,202 Management fees 628 1,186 Community reimbursement revenue 7,022 15,260 Total revenue $ 58,484 $ 61,648 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation During the three months ended March 31, 2022, the Company granted market-based restricted stock awards. The shares were issued in three tranches that vest if the Company’s stock price closes at or above an established threshold for each tranche for 90 consecutive trading days within five years of the date of the grant. Compensation expense related to market-based restricted stock awards is recognized over the requisite service period on a straight-line basis. The requisite service period is a measure of the expected time to reach the respective vesting threshold and was estimated by utilizing a Monte Carlo simulation, considering only those stock price-paths in which the threshold was exceeded. Grants of market-based restricted stock awards were as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Total Grant Date Fair Value (in thousands) Three months ended March 31, 2022 30,039 $ 25.17 $ 756 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesAs of March 31, 2022, we had contractual commitments of $5.8 million related to future renovations and technology enhancements to our communities. We expect these amounts to be substantially expended during 2022.The Company has claims incurred in the normal course of its business. Most of these claims are believed by management to be covered by insurance, subject to deductibles, normal reservations of rights by the insurance companies and possibly subject to certain exclusions in the applicable insurance policies. Whether or not covered by insurance, these claims, in the opinion of management, based on advice of legal counsel, should not have a material impact on the consolidated financial statements of the Company. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As of March 31, 2022, affiliates of Conversant Capital LLC owned approximately 57% of our outstanding shares of common sto ck (inclusive of common stock issuable upon conversion of outstanding Series A Preferred Stock and outstanding warrants). Series A Preferred Stock dividend declared, all recognized to additional paid in capital was $1.1 million for the three months ended March 31, 2022. Dividends of $0.7 million were paid on the Series A Preferred Stock during the three months ended March 31, 2022. There was no corresponding amounts for the three months ended March 31, 2021. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and Liabilities Measured at Fair Value on a Recurring Basis The Company uses interest rate cap arrangements with financial institutions to manage exposure to interest rate changes for loans that utilize floating interest rates. As of March 31, 2022, we had an interest rate cap with an aggregate notional value of $50.3 million, a strike rate of 4.0%. The interest rate cap terminates in 2024. The fair value and net book value related to this cap were insignificant. Financial Instruments Not Reported at Fair Value For those financial instruments not carried at fair value, the carrying amount and estimated fair values of our financial assets and liabilities were as follows at March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Carrying Fair Value Carrying Fair Value Notes payable, excluding deferred financing costs $ 677,373 $ 660,524 $ 687,312 $ 636,836 We believe the carrying amount of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable and accrued liabilities approximate fair value due to their short-term nature. The fair value of notes payable, excluding deferred financing costs, is estimated using discounted cash flow analysis, based on current incremental borrowing rates for similar types of borrowing arrangements, which represent Level 2 inputs as defined in the accounting standards codification. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventIn April 2022, the Company accepted $9.1 million of cash for grants from the Provider Relief Fund’s Phase 4 General Distribution, which was expanded by the CARES Act to provide grants or other funding mechanisms to eligible healthcare providers for healthcare-related expenses or lost revenues attributable to COVID-19. The CARES Act Phase 4 funds are grants that do not have to be repaid provided the Company satisfies the terms and conditions of the CARES Act. |
Significant Accounting Polici_2
Significant Accounting Policies and Recently Issued Accounting Standards (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with original maturities of three months or less at the date of acquisition to be cash equivalents. The Company has deposits in banks that exceed Federal Deposit Insurance Corporation insurance limits. Management believes that credit risk related to these deposits is minimal. Restricted cash consists of deposits required by certain counterparties as collateral pursuant to letters of credit. The deposit must remain so long as the letters of credit, which are subject to renewal annually, are outstanding. The following table sets forth the Company’s cash, cash equivalents and restricted cash total as presented in our statements of cash flows (in thousands): March 31, March 31, Cash and cash equivalents $ 48,634 $ 16,766 Restricted cash 3,982 4,982 Total cash, cash equivalents, and restricted cash $ 52,616 $ 21,748 |
Property and Equipment | Property and Equipment Property and equipment are stated at cost and depreciated on a straight-line basis over the estimated useful lives of the assets. At each balance sheet date, the Company reviews the carrying value of its property and equipment to determine if facts and circumstances suggest that they may be impaired or that the depreciation period may need to be changed. The Company considers internal factors such as net operating losses along with external factors relating to each asset, including contract changes, local market developments, and other publicly available information to determine whether impairment indicators exist. If an indicator of impairment is identified, recoverability of an asset group is assessed by comparing its carrying amount to the estimated future undiscounted net cash flows expected to be generated by the asset group through operation or disposition, calculated utilizing the lowest level of identifiable cash flows. If this comparison indicates that the carrying amount of an asset group is not recoverable, we estimate fair value of the asset group and record an impairment loss when the carrying amount exceeds fair value. There were no impairments of long-lived assets during the three months ended March 31, 2022 or 2021. In evaluating our investments for impairment, we undergo continuous evaluations of property level performance and real estate trends, and management makes several estimates and assumptions, including, but not limited to, the projected date of disposition, estimated sales price and future cash flows of each property during our estimated holding period. If our analysis or assumptions regarding the projected cash flows expected to result from the use and eventual disposition of our properties change, we incur additional costs and expenses during the holding period, or our expected hold periods change, we may incur future impairment losses. Upon the acquisition of new communities accounted for as an acquisition of an asset, we recognize the assets acquired and the liabilities assumed as of the acquisition date, measured at their relative fair values once we have determined the fair value of each of these assets and liabilities. The acquisition date is the date on which we obtain control of the real estate property and associated transaction costs are capitalized. The assets acquired and liabilities assumed consist of land, inclusive of associated rights, buildings, assumed debt, and identified intangible assets and liabilities. |
Revenue Recognition | Revenue Recognition Resident revenue primarily consists of fees for basic housing and certain support services provided to residents which are accounted for under GAAP in accordance with lease accounting standards. The Company's residency lease agreements are generally short term in nature, with durations of one year or less, and are typically terminable by either party, under certain circumstances, upon providing 30 days’ notice, unless state law provides otherwise. Resident leases do not contain purchase options or require significant assumptions or judgments. Resident fees are billed monthly in advance. Basic housing and certain support services revenue is recorded when services are rendered and amounts are billable to residents in the period in which the rental and other services are provided. At March 31, 2022 and December 31, 2021, the Company had contract liabilitie s for deferred fees paid by its residents prior to the month that housing and support services were to be provided totaling approximately $2.7 million and $2.3 million, respectively, which are included as a component of deferred income within current liabilities. Revenue for certain ancillary services is recognized as services are provided to customers and includes fees for certain services, such as medication management, daily living activities, beautician/barber, laundry, television, guest meals, pets, and parking, which are generally billed monthly in arrears and are included as a component of resident revenue. Other operating revenue generally includes nonrecurring state grants and is included as a component of resident revenue as earned. The Company's senior housing communities have residency agreements that generally require the resident to pay a community fee prior to moving into the community and are recorded initially by the Company as deferred revenue. At March 31, 2022 and December 31, 2021, the Company had contract liabilities for deferred community fees totaling approximately $0.9 million and $0.8 million, respectively, which are included as a component of deferred income within current liabilities. The Company has management agreements whereby it manages certain communities on behalf of third party owners under a contract that provides for periodic management fee payments to the Company. The Company has determined that all community management activities are a single performance obligation, which is satisfied over time as the services are rendered. The Company’s estimate of the transaction price for management services also includes the amount of reimbursement due from the owners of the communities for services provided and related costs incurred. Such revenue is included in “community reimbursement revenue.” The related costs are included in “community reimbursement expense.” |
Credit Risk and Allowance for Doubtful Accounts | Credit Risk and Allowance for Doubtful Accounts The Company’s resident receivables are generally due within 30 days from the date billed. Accounts receivable are reported net of an allowance for doubtful accounts of $5.1 million and $4.7 million at March 31, 2022, and December 31, 2021, respectively, and represent the Company’s estimate of the amount that ultimately will be collected. The adequacy of the Company’s allowance for doubtful accounts is reviewed on an ongoing basis, using historical payment trends, write-off experience, analyses of receivable portfolios by payor source and aging of receivables, as well as a review of specific accounts, and adjustments are made to the allowance, as necessary. Credit losses on resident receivables have historically been within management’s estimates, and management believes that the allowance for doubtful accounts adequately provides for expected losses. |
Self-Insurance Liability Accruals | Self-Insurance Liability Accruals The Company offers full-time employees an option to participate in its health and dental plans. The Company is self-insured up to certain limits and is insured if claims in excess of these limits are incurred. The cost of employee health and dental benefits, net of employee contributions, is shared between the corporate office and the senior housing communities based on the respective number of plan participants. Funds collected are used to pay the actual program costs, including estimated annual claims, third-party administrative fees, network provider fees, communication costs, and other related administrative costs incurred by the plans. Claims are paid as they are submitted to the Company’s third-party administrator. The Company records a liability for outstanding claims and claims that have been incurred but not yet reported. This liability is based on the historical claim reporting lag and payment trends of health insurance claims. The Company uses a combination of insurance and self-insurance for workers’ compensation. Determining the reserve for workers’ compensation losses and costs that the Company has incurred as of the end of a reporting period involves significant judgments based on projected future events, including among other factors, potential settlements for pending claims, known incidents which may result in claims, estimates of incurred but not yet reported claims, changes in insurance premiums and/or estimated litigation costs. The Company regularly adjusts these estimates to reflect changes in the foregoing factors. However, since this reserve is based on estimates, it is possible the actual expenses incurred may differ from the amounts reserved. Any subsequent changes in estimates are recorded in the period in which they are determined. |
Income Taxes | Income Taxes Income taxes are computed using the asset and liability method and current income taxes are recorded based on amounts refundable or payable in the current year. The effective tax rates for the three months ended March 31, 2022 and 2021 differ from the statutory tax rates due to state income taxes, permanent tax differences, and changes in the deferred tax asset valuation allowance. Deferred income taxes are recorded based on the estimated future tax effects of loss carryforwards and temporary differences between financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates that are expected to apply to taxable income in the years in which the Company expects those carryforwards and temporary differences to be recovered or settled. Management regularly evaluates the future realization of deferred tax assets and provides a valuation allowance, if considered necessary, based on such evaluation. As part of the evaluation, management has evaluated taxable income in carryback years, future reversals of taxable temporary differences, feasible tax planning strategies, and future expectations of income. As of December 31, 2021, the Company had a three-year cumulative net operating loss for its U.S. operations and is subject to annual operating loss utilization limits and accordingly, has provided a full valuation allowance on its U.S. and state net deferred tax assets. The valuation allowance reduces the Company’s net deferred tax assets to the amount that is “more likely than not” (i.e., a greater than 50% likelihood) to be realized. However, in the event that the Company were to ultimately determine that it would be more likely than not that the Company would realize the benefit of deferred tax assets in the future in excess of their net recorded |
Redeemable Preferred Stock | Redeemable Preferred Stock The Company evaluates the classification of redeemable preferred stock based on the instrument’s specific terms and rights. Perpetual convertible preferred stock which can be converted to common stock outside of the Company’s control is classified as mezzanine equity, outside of the stockholders’ deficit section, and recorded at the maximum liquidation or conversion amount. Dividends on redeemable preferred stock are recorded to retained earnings or additional paid-in capital if retained earnings is an accumulated deficit. During the year ended December 31, 2021, the Company issued 41,250 shares of Series A Convertible Preferred Stock (the “Series A Preferred Stock”). |
Derivative Instruments | Derivative Instruments We use derivative instruments as part of our overall strategy to manage our exposure to market risks associated with the fluctuations in interest rates. We may also be required to enter into interest rate derivative instruments in compliance with debt agreements. We regularly monitor the financial stability and credit standing of the counterparties to our derivative instruments. We do not enter into derivative financial instruments for trading or speculative purposes. We record all derivatives at fair value. As of March 31, 2022 and December 31, 2021, all of our derivative instruments were interest rate caps, and none are designated as hedge instruments. Changes in fair value of undesignated hedge instruments are recorded in current period earnings in interest expense. |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share Basic income (loss) per share is computed by dividing net income (loss) less distributions to participating securities using the two-class method and preferred stock dividends, including redeemable preferred stock classified as mezzanine equity, divided by the weighted average number of shares of common stock outstanding. Under the two-class method, net income is reduced by the amount of any dividends earned during the period. The remaining earnings (undistributed earnings) are allocated based on the weighted-average shares outstanding of common stock and Series A Preferred Stock (on an if-converted basis) to the extent that each preferred security may share in earnings as if all of the earnings for the period had been distributed. The total earnings allocated to common stock is then divided by the number of outstanding shares to which the earnings are allocated to determine the earnings per share. The two-class method is not applicable during periods with a net loss, as the holders of the Series A Preferred Stock have no obligation to fund losses. |
Concentration of Credit Risk and Business Risk | Concentration of Credit Risk and Business RiskSubstantially all of our revenues are derived from senior living communities we own and senior living communities that we manage. Senior living operations are particularly sensitive to adverse economic, social and competitive conditions and trends, including the effects of the COVID-19 pandemic, which has and may continue to adversely affect our business, financial condition and results of operations. |
Recently Issued Accounting Pronouncements Not Yet Adopted | Recently Issued Accounting Pronouncements Not Yet Adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2016-13, Financial Instruments – Credit Losses: Measurement of Credit Losses on Financial Instruments. Current GAAP requires an “incurred loss” methodology for recognizing credit losses that delays recognition until it is probable a loss has been incurred. ASU 2016-13 replaces the current incurred loss methodology non-lease revenue credit losses and removes the thresholds that companies apply to measure credit losses on financial statements measured at amortized cost, such as loans, receivables, and held-to-maturity debt securities with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates. For smaller reporting companies, ASU 2016-13 is effective for fiscal years and for interim periods within those fiscal years beginning after December 15, 2022. The Company is currently evaluating the impact the adoption of this guidance will have on its consolidated financial statements and disclosures. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on contracts, hedging relationships, and other transactions that reference the London Inter-Bank Offered Rate (“LIBOR”). The provisions of this standard are available for election through December 31, 2022. The Company is currently evaluating its contracts and the optional expedients provided by this update. |
Significant Accounting Polici_3
Significant Accounting Policies and Recently Issued Accounting Standards (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents and Restricted Cash | The following table sets forth the Company’s cash, cash equivalents and restricted cash total as presented in our statements of cash flows (in thousands): March 31, March 31, Cash and cash equivalents $ 48,634 $ 16,766 Restricted cash 3,982 4,982 Total cash, cash equivalents, and restricted cash $ 52,616 $ 21,748 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Net Property and Equipment and Leasehold Improvements | The following is a summary of our property and equipment, net as of March 31, 2022 and December 31, 2021 (in thousands): Asset Lives March 31, December 31, Land $ 47,598 $ 46,069 Land improvements 5 to 20 years 19,305 19,146 Buildings and building improvements 10 to 40 years 825,195 814,035 Furniture and equipment 5 to 10 years 54,247 52,602 Automobiles 5 to 7 years 2,679 2,662 Assets under financing leases and leasehold improvements (1) 2,287 2,276 Construction in progress 1,905 392 Total property and equipment, net 953,216 937,182 Less accumulated depreciation and amortization (325,372) (315,983) Total property and equipment, net $ 627,844 $ 621,199 __________ (1) Leasehold improvements are amortized over the shorter of the useful life of the asset or the remaining lease term. Assets under financing leases and leasehold improvements includ e $0.3 million |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable consists of the following (in thousands): Maturity Dates March 31, December 31, Fixed mortgage notes payable 2022 to 2045 $ 543,593 $ 592,997 Variable mortgage notes payable 2026 to 2029 130,127 88,711 Notes payable - insurance 2022 1,532 3,483 Notes payable - other 2023 2,121 2,121 Total notes payable $ 677,373 $ 687,312 Less: deferred financing costs, net 6,352 4,201 Total notes payable, net $ 671,021 $ 683,111 Less: current portion 43,851 69,769 Total long-term notes payable, less current portion $ 627,170 $ 613,342 |
Summary of Aggregate Scheduled Maturities of Notes Payable | The following schedule summarizing our notes payable as of March 31, 2022 (in thousands): Principal payments due in: 2022 $ 42,391 2023 14,452 2024 152,155 2025 194,285 2026 75,919 Thereafter 198,171 Total notes payable, excluding deferred financing costs $ 677,373 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenue for the three months ended March 31, 2022 and 2021 are comprised of the following components (in thousands): Three Months Ended March 31, 2022 2021 Housing and support services $ 49,438 $ 44,441 Community fees 453 411 Ancillary services 254 350 Other operating revenue 689 — Resident revenue 50,834 45,202 Management fees 628 1,186 Community reimbursement revenue 7,022 15,260 Total revenue $ 58,484 $ 61,648 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Grants of Market-Based Restricted Stock Awards | Grants of market-based restricted stock awards were as follows: Number of Shares Weighted Average Grant Date Fair Value Per Share Total Grant Date Fair Value (in thousands) Three months ended March 31, 2022 30,039 $ 25.17 $ 756 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Carrying Amounts and Fair Values of Financial Instruments | For those financial instruments not carried at fair value, the carrying amount and estimated fair values of our financial assets and liabilities were as follows at March 31, 2022 and December 31, 2021 (in thousands): March 31, 2022 December 31, 2021 Carrying Fair Value Carrying Fair Value Notes payable, excluding deferred financing costs $ 677,373 $ 660,524 $ 687,312 $ 636,836 |
Basis of Presentation (Details)
Basis of Presentation (Details) | Mar. 31, 2022residentseniorHousingCommunitystate |
Real Estate Properties [Line Items] | |
Number of senior housing communities | 76 |
Number of states with senior housing communities | state | 18 |
Aggregate capacity of residents in senior housing communities | resident | 9,500 |
Managed On Behalf Of Third Parties | |
Real Estate Properties [Line Items] | |
Number of senior housing communities | 14 |
Wholly Owned Properties | |
Real Estate Properties [Line Items] | |
Number of senior housing communities | 62 |
Significant Accounting Polici_4
Significant Accounting Policies and Recently Issued Accounting Standards - Schedule of Cash and Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 48,634 | $ 78,691 | $ 16,766 | |
Restricted cash | 3,982 | 4,882 | 4,982 | |
Total cash and restricted cash | $ 52,616 | $ 83,573 | $ 21,748 | $ 22,867 |
Significant Accounting Polici_5
Significant Accounting Policies and Recently Issued Accounting Standards - Narrative (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Accounting Policies [Line Items] | |||
Impairment of long-lived assets | $ 0 | $ 0 | |
Resident receivables due period | 30 days | ||
Allowance for doubtful accounts | $ 5,100,000 | $ 4,700,000 | |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Derivative, cash received on hedge | $ 0 | $ 0 | |
Convertible Preferred Stock | |||
Accounting Policies [Line Items] | |||
Preferred stock, shares issued (in shares) | 41,250 | ||
Housing and support services | |||
Accounting Policies [Line Items] | |||
Contract liabilities for deferred fees paid | 2,700,000 | $ 2,300,000 | |
Community fees | |||
Accounting Policies [Line Items] | |||
Contract liabilities for deferred fees paid | $ 900,000 | $ 800,000 |
Property and Equipment, net - S
Property and Equipment, net - Schedule of Net Property and Equipment and Leasehold Improvements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 953,216 | $ 937,182 |
Less accumulated depreciation and amortization | (325,372) | (315,983) |
Total property and equipment, net | 627,844 | 621,199 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 47,598 | 46,069 |
Land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 19,305 | 19,146 |
Land improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Asset Lives | 5 years | |
Land improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Asset Lives | 20 years | |
Buildings and building improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 825,195 | 814,035 |
Buildings and building improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Asset Lives | 10 years | |
Buildings and building improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Asset Lives | 40 years | |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 54,247 | 52,602 |
Furniture and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Asset Lives | 5 years | |
Furniture and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Asset Lives | 10 years | |
Automobiles | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 2,679 | 2,662 |
Automobiles | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Asset Lives | 5 years | |
Automobiles | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Asset Lives | 7 years | |
Assets under financing leases and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 2,287 | 2,276 |
Finance lease, right-of-use asset, after accumulated amortization | 300 | 300 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,905 | $ 392 |
Property and Equipment, net - N
Property and Equipment, net - Narrative (Details) - Senior Living Communities Located in Indiana $ in Millions | Feb. 01, 2022USD ($)seniorHousingCommunity |
Property, Plant and Equipment [Line Items] | |
Number of assets acquired | 2 |
Asset acquisition, consideration transferred | $ | $ 12.3 |
Number of living units in a housing community sold | 157 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total notes payable | $ 677,373 | $ 687,312 |
Less: deferred financing costs, net | 6,352 | 4,201 |
Total notes payable, net | 671,021 | 683,111 |
Less: current portion | 43,851 | 69,769 |
Total long-term notes payable, less current portion | 627,170 | 613,342 |
Fixed mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Total notes payable | 543,593 | 592,997 |
Variable mortgage notes payable | ||
Debt Instrument [Line Items] | ||
Total notes payable | 130,127 | 88,711 |
Notes payable - insurance | ||
Debt Instrument [Line Items] | ||
Total notes payable | 1,532 | 3,483 |
Notes payable - other | ||
Debt Instrument [Line Items] | ||
Total notes payable | $ 2,121 | $ 2,121 |
Notes Payable - Schedule of Agg
Notes Payable - Schedule of Aggregate Scheduled Maturities of Notes Payable (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
2022 | $ 42,391 | |
2023 | 14,452 | |
2024 | 152,155 | |
2025 | 194,285 | |
2026 | 75,919 | |
Thereafter | 198,171 | |
Total notes payable, excluding deferred financing costs | $ 677,373 | $ 687,312 |
Notes Payable - Narrative (Deta
Notes Payable - Narrative (Detail) | Jul. 31, 2020USD ($)property | Mar. 31, 2020seniorHousingCommunity | Mar. 31, 2022USD ($)seniorHousingCommunityproperty | Mar. 31, 2021USD ($)property | Dec. 31, 2021USD ($) |
Debt Instrument [Line Items] | |||||
Property and equipment, net | $ 627,844,000 | $ 621,199,000 | |||
Other assets, net | 6,808,000 | 3,803,000 | |||
Gain (loss) on debt | $ (641,000) | $ 46,999,000 | |||
Number of properties | seniorHousingCommunity | 76 | ||||
Current portion of note payable, net of deferred loan costs | $ 32,000,000 | ||||
Fixed mortgage notes payable | Minimum | |||||
Debt Instrument [Line Items] | |||||
Debt effective interest rate | 3.60% | ||||
Fixed mortgage notes payable | Maximum | |||||
Debt Instrument [Line Items] | |||||
Debt effective interest rate | 6.30% | ||||
Fixed mortgage notes payable | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, variable rate at period end | 0.44% | ||||
Debt instrument, basis spread on variable rate | 2.14% | ||||
Fixed mortgage notes payable | SOFR | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, variable rate at period end | 0.29% | ||||
Debt instrument, basis spread on variable rate | 3.50% | ||||
Notes Payable | |||||
Debt Instrument [Line Items] | |||||
Property and equipment, net | $ 603,800,000 | ||||
Refinance Facility | Mortgage Debt | |||||
Debt Instrument [Line Items] | |||||
Number of communities refinanced | seniorHousingCommunity | 10 | ||||
Finance agreement amount | 80,000,000 | ||||
Amount available as delayed loans | 10,000,000 | ||||
Additional uncommitted amount | 40,000,000 | ||||
Debt instrument, covenant, tangible net worth, amount, minimum | 150,000,000 | ||||
Debt instrument, covenant, liquidity, amount, minimum | 13,000,000 | ||||
Other assets, net | 1,500,000 | ||||
Debt issuance costs, net | 2,100,000 | ||||
Gain (loss) on debt | $ (600,000) | ||||
Refinance Facility | Mortgage Debt | Covenant Achievement, Scenario One | |||||
Debt Instrument [Line Items] | |||||
Limited payment guaranty, percentage of outstanding balance of the refinance facility | 0.33 | ||||
Refinance Facility | Mortgage Debt | Covenant Achievement, Scenario Two | |||||
Debt Instrument [Line Items] | |||||
Limited payment guaranty, percentage of outstanding balance of the refinance facility | 0.25 | ||||
Refinance Facility | Mortgage Debt | Covenant Achievement, Scenario Three | |||||
Debt Instrument [Line Items] | |||||
Limited payment guaranty, percentage of outstanding balance of the refinance facility | 0.10 | ||||
Forbearance Agreements | |||||
Debt Instrument [Line Items] | |||||
Number of properties | property | 2 | ||||
Accrued interest | $ 3,400,000 | $ 2,700,000 | |||
Fannie Mae Loan | Forbearance Agreements | |||||
Debt Instrument [Line Items] | |||||
Gain (loss) on debt | $ 47,000,000 | ||||
Unpaid loans | $ 3,800,000 | ||||
Number of properties | property | 18 | 3 |
Redeemable Preferred Stock (Det
Redeemable Preferred Stock (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Class of Stock [Line Items] | ||
Temporary equity, shares issued (in shares) | 41,000 | 41,000 |
Preferred stock, dividend rate, percentage | 11.00% | |
Dividends payable to Series A preferred stockholders | $ 1,133 | $ 0 |
Convertible Preferred Stock | ||
Class of Stock [Line Items] | ||
Temporary equity, shares issued (in shares) | 41,250 | |
Dividends payable to Series A preferred stockholders | 1,100 | |
Convertible Preferred Stock | Private Placement | ||
Class of Stock [Line Items] | ||
Proceeds from sale of stock under agreement | $ 41,300 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 58,484 | $ 61,648 |
Resident revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 50,834 | 45,202 |
Housing and support services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 49,438 | 44,441 |
Community fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 453 | 411 |
Ancillary services | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 254 | 350 |
Other operating revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 689 | 0 |
Management fees | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 628 | 1,186 |
Community reimbursement revenue | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 7,022 | $ 15,260 |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Awards Activity and Related Information (Detail) - Restricted Stock $ / shares in Units, $ in Thousands | Mar. 31, 2022USD ($)$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Number of shares (in shares) | shares | 30,039 |
Weighted average grant date fair value (in USD per share) | $ / shares | $ 25.17 |
Total grant date fair value | $ | $ 756 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Detail) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022USD ($)tranche | Mar. 31, 2021USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ | $ 1,828 | $ 166 |
Market Based Restricted Stock Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of tranches for grants in period | tranche | 3 | |
Consecutive trading days | 90 days | |
Expiration period from grant date | 5 years |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Mar. 31, 2022USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Contractual obligation | $ 5.8 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Additional paid-in capital | $ 296,475,000 | $ 295,781,000 | |
Dividends paid on series A preferred stock | $ 718,000 | $ 0 | |
Affiliates Of Conversant Capital LLC | |||
Related Party Transaction [Line Items] | |||
Ownership percentage | 57.00% | ||
Additional paid-in capital | $ 1,100,000 | $ 0 | |
Dividends paid on series A preferred stock | $ 700,000 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Amounts and Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, excluding deferred financing costs | $ 671,021 | $ 683,111 |
Carrying Amount | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, excluding deferred financing costs | 677,373 | 687,312 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Notes payable, excluding deferred financing costs | $ 660,524 | $ 636,836 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Detail) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022USD ($) | Dec. 31, 2021USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Strike rate | 4.00% | |
Interest Rate Cap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative, notional amount | $ 50,300,000 | |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-cash impairment charge on property and equipment | $ 0 | $ 6,500,000 |
Fair value of impaired assets | $ 14,000,000 | |
Measurement Input, Cap Rate | Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Market capitalization rate | 0.0825 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | 1 Months Ended |
Apr. 30, 2022USD ($) | |
Subsequent Event | |
Subsequent Event [Line Items] | |
Proceeds CARES act | $ 9.1 |