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Senior Living CommunitiesForm 8-K CAPITAL SENIOR LIVING For: Mar 31 | #seniorliving | #elderly | #seniors

Form 8-K CAPITAL SENIOR LIVING For: Mar 31 | #seniorliving | #elderly | #seniors

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Exhibit 99.1

 

LOGO

Capital Senior Living Corporation Announces

Fourth Quarter and Full Year 2020 Results

DALLAS – March 31, 2021 – Capital Senior Living Corporation (the “Company”) (NYSE: CSU), one of the
nation’s leading owner-operators of senior housing communities, announced results for the fourth quarter and full year ended December 31, 2020.

Highlights

 

  •  

Execution of transformational strategy focused on improving the Company’s balance sheet position has
poised the Company for stabilization and growth in 2021.

 

  •  

The Company successfully exited all triple-net leases, resulting in
reduced lease liabilities of $265.4
 million and improved annual cash flow of more than $22 million.

 

  •  

The Company closed on the sale of Canton, Ohio property, for a total purchase price of
$18.0
 million.

 

  •  

Leading indicators in March 2021 show late Q4 2020 rebound and highest levels of leads, tours and move-ins since March 2020.

 

  •  

Aggressive response to COVID-19 resulted in nearly 90% of residents
being fully vaccinated. All communities have completed second-round vaccinations, and final round vaccination clinics are scheduled to be completed by mid-April 2021.

“Associates throughout our Company executed in the delivery of a strong clinical and operational response to the challenges of operating our senior
living communities during the COVID-19 pandemic. Concurrently we took significant transformative actions to improve the financial foundation of the Company and transition to a focused portfolio,” said
Kimberly S. Lody, President and CEO. “We are encouraged to see recent trends of leading indicators of leads, tours, move-ins and move-outs returning to pre-pandemic
levels, and we are optimistic about the outlook of the post-pandemic recovery. I am extremely grateful for our team of associates and their relentless dedication to the safety and wellbeing of our residents and employees. They are true front-line
heroes.”


Financial Results – Fourth Quarter and Full Year 2020

 

     Quarter Ended December 31,      Year Ended December 31,  
     2020      2019      2020      2019  

Total Revenues

   $ 80,205      $ 108,688      $ 383,864      $ 447,100  

Expenses:

           

Operating expenses (exclusive of facility lease expense and depreciation and amortization expense
shown below)

     42,756        80,322        254,630        310,551  

General and administrative expenses

     6,868        5,752        27,904        27,518  

Facility lease expense

     4,875        14,315        28,109        57,021  

Stock-based compensation expense

     230        951        1,724        2,509  

Depreciation and amortization expense

     12,718        16,105        60,302        64,190  

Long-lived asset impairment

     2,649        664        41,843        3,004  

Community reimbursement expense

     13,054        —          24,942        —    
  

 

 

    

 

 

    

 

 

    

 

 

 

Total expenses

     83,150        118,109        439,454        464,793  
  

 

 

    

 

 

    

 

 

    

 

 

 

Other income (expense):

           

Interest income

     110        48        193        221  

Interest expense

     (10,520      (12,074      (44,564      (49,802

Write-off of deferred loan costs and prepayment
premiums

     —          (4,843      —          (4,843

Gain on facility lease modification and termination, net

     172        97        10,659        —    

Gain (Loss) on disposition of assets, net

     (7,088      36,490        (205,476      36,528  

Other income

     (203      (1      (201      7  
  

 

 

    

 

 

    

 

 

    

 

 

 

Loss before benefit (provision) for income taxes

     (20,474      10,296        (294,979      (35,582

Benefit (provision) for income taxes

     4        (77      (389      (448
  

 

 

    

 

 

    

 

 

    

 

 

 

Net loss and comprehensive loss

   $ (20,470    $ 10,219      $ (295,368    $ (36,030
  

 

 

    

 

 

    

 

 

    

 

 

 

Fourth Quarter Results

Fourth quarter 2020 revenue was $80.2 million compared to revenue of $108.7 million in the prior comparable period, representing a decrease of
approximately $28.5 million. The majority of the decrease is related to significant property dispositions in fiscal year 2020, including (1) the sale of two owned properties, one of which transitioned to a management agreement with the
successor owner, (2) the transition of 22 of its leased communities to different operators in conjunction with exiting its master lease agreements, (3) the conversion of 12 previously-leased communities to management agreements, and
(4) the process of transferring legal ownership of 18 communities to Fannie Mae, the holder of nonrecourse debt. The remaining decrease was primarily due to a decrease in total occupancies at the Company’s remaining senior housing
communities. Financial occupancy in the fourth quarter of 2020 was 74.2%, a decrease of 720 basis points compared to the fourth quarter of 2019. The decrease in financial occupancy was primarily due to reduced
move-in activity, which began in the second half of March 2020 and continued through the end of 2020, related primarily to the COVID-19 pandemic. The decreases in total
revenue were partially offset by increases in management fees and community reimbursement revenue of $1.0 million and $13.1 million, respectively, which were due to the Company’s management of certain communities in the fourth quarter
of 2020. Monthly average rent in the fourth quarter of 2020 was $3,464 as compared to $3,666 in the fourth quarter of 2019.

The $37.5 million
decrease in operating expenses is primarily a result of the transition of properties to other operators or conversion to management agreements as described above, the Company’s acceptance of $8.1 million of relief funds under the CARES Act
to reimburse the Company for COVID-19 related costs, slightly lower bad debt expense as well as lower operating expenses as a result of lower occupancy as described above.


LOGO

 

The $1.1 million increase in general and administrative expenses is primarily due to consulting expenses
in our Dallas Support Center, an increase in corporate insurance premiums resulting from a challenging market, and increases in transaction and conversion costs.

The Company reported a net loss and comprehensive loss of $20.5 million for the fourth quarter of 2020, compared to net income and comprehensive income
of $10.2 million for the fourth quarter of 2019.

Adjusted EBITDAR for the fourth quarter of 2020 was $20.2 million. Adjusted EBITDAR excluding COVID-19 expenses was $16.9 million for the fourth quarter of 2020. Adjusted CFFO was ($0.4) million and Adjusted CFFO excluding COVID-19 relief and expenses was ($3.7)
million for the fourth quarter or 2020. (See “Non-GAAP Financial Measures of Operating Performance” below).

Full Year Results

The Company reported a net loss
and comprehensive loss of $295.4 million for the fiscal year ended December 31, 2020, and net loss and comprehensive loss of $36.0 million for the fiscal year ended December 31, 2019.

Adjusted EBITDAR for the year ended December 31, 2020, was $85.9 million and Adjusted EBITDAR excluding
COVID-19 expenses was $86.8 million for the fiscal year ended December 31, 2020. Adjusted CFFO for the year ended December 31, 2020 was ($9.4) million and Adjusted CFFO excluding COVID-19 relief and expenses was ($8.6) million for the year ended December 31, 2020. (See “Non-GAAP Financial Measures of Operating Performance” below).

Reverse Stock Split

On December 9, 2020, the
Company’s Board of Directors approved and effected a reverse stock split (the “Reverse Stock Split”) of the Company’s common stock at a ratio of
1-for-15. The Reverse Stock Split reduced the number of issued and outstanding shares of common stock from approximately 31,268,943 shares to approximately 2,084,596
shares. The authorized number of shares of common stock was also proportionately reduced from 65,000,000 shares to 4,333,334 shares. All share amounts presented for the year ended December 31, 2019 have been recast to give effect to the 1-for-15 Reverse Stock Split.

Continuing Portfolio Results

As previously announced, management has implemented an operational improvement plan, which included exiting underperforming leases to strengthen the balance
sheet and strategically invest in certain existing communities, as well as transferring ownership of certain properties of underperforming assets to the non-recourse debt holder (see “Community
Transitions Update” below). The resulting Continuing Portfolio consists of the 60 owned communities that will constitute the Company’s owned community portfolio subsequent to the completion of the Community Transition plan.

Continuing community revenue in the fourth quarter of 2020 decreased 7.7% versus the fourth quarter of 2019. Occupancy for the continuing community portfolio
was 77.4%, a decrease of 700 basis points as compared to the fourth quarter of 2019. Average rent for the 60 communities was $3,586 for the fourth quarter of 2020, which was relatively flat compared to the fourth quarter of 2019.


Continuing community operating expenses decreased 5.1% in the fourth quarter of 2020 compared to the fourth
quarter of 2019. Continuing community advertising and promotion costs decreased 42.2%, food costs decreased 7.7%, and repairs and maintenance decreased 16.1% in the fourth quarter of 2020 compared to the fourth quarter of 2019. Labor costs,
including benefits, remained relatively flat quarter over quarter while small increases in supplies and other expenses partially offset these decreases. Same-community net operating income decreased 14.8% in the fourth quarter of 2020 when compared
with the fourth quarter of 2019.

COVID-19 Update

In December 2020, the Company initiated the first round of COVID-19 vaccinations at its communities, and, as of March
2021, the Company has completed first- and second-round clinics at 100% of its communities. In communities that have completed two vaccine clinics, 87% of its residents and 41% of its staff have received both doses of the COVID-19 vaccine and are fully vaccinated. As of March 2021, COVID-19 incidence rates have declined across the portfolio, and leading indicators, such as leads, tours and move-ins, are at their highest levels since March 2020, indicating that demand for senior housing and services is beginning to rebound.

Throughout 2020, the Company incurred substantial costs for procurement of additional PPE, cleaning and disposable food service supplies, enhanced cleaning,
infection control, environmental sanitization costs, and increased labor expenses for hazard pay at certain communities with COVID-19 positive residents. The Company has also incurred costs for COVID-19 testing of residents and employees. In total, the Company incurred approximately $4.8 million and $7.9 million in incremental COVID-19 costs in the fourth
quarter and full year 2020, respectively. To mitigate these new costs, the Company reduced spending on non-essential supplies, travel and other discretionary items.

In November 2020, the Company accepted $8.1 million of CARES Act Phase 2 Provider Relief funds, which are intended to reimburse the Company for COVID-19-related costs and lost revenues. The $8.1 million Phase 2 Provider Relief Funds have been recorded as a reduction to operating expenses in the Consolidated
Statement of Operations and Comprehensive Loss for the year ended December 31, 2020. The Company received an additional $8.7 million in the first quarter of 2021 under the CARES Act Phase 3 and expects to fully recognize Phase 3 funds in
2021. The CARES Act Phase 2 and Phase 3 funds are grants that do not have to be repaid provided the Company satisfies the terms and conditions of the CARES Act.

In addition, the Company had received approximately $1.9 million in relief from state agencies during the year ended December 31, 2020, under the
CARES Act and has applied for additional federal and state funding. The Company is utilizing the payroll tax deferral program under the CARES Act and delayed the employer portion of payroll taxes totaling $7.4 million from April 2020 through
December 2020. One-half of the deferred payroll taxes, which amount to $3.7 million, will be due by December 2021, while the other half will be due by December 2022.

Community Transitions Update

Disposition of
Canton, Ohio, Community

On November 24, 2020, the Company closed on the sale of one senior housing community located in Canton, Ohio, for a total
purchase price of $18.0 million and received approximately $6.4 million in net proceeds after retiring outstanding mortgage debt of $10.8 million and paying customary transaction and closing costs. In the fourth quarter of 2020, the
Company recorded a $2.0 million gain on the sale of the property. In November 2020, the Company entered into a management agreement with the successor owner to manage the senior living community, subject to a management fee based on the gross
revenues of the property.


LOGO

 

Transactions Involving Leases

As of December 31, 2019, the Company leased 46 senior housing communities from certain real estate investment trusts. During 2020, the Company exited all
master lease agreements with its landlords and after giving effect to such transactions, as of December 31, 2020, the Company leased 12 senior living communities. All 12 remaining leases were subsequently converted to management agreements as
of January 1, 2021.

Liquidity

In
addition to approximately $17.9 million of unrestricted cash balances on hand as of December 31, 2020, the Company’s principal sources of liquidity are expected to be cash flows from operations, additional proceeds from debt
refinancing activities, COVID-19 relief funding (including $8.1 million and $8.7 million of cash the Company accepted pursuant to the Provider Relief Fund’s Phase 2 and Phase 3 General
Distribution in November 2020 and January 2021, respectively), equity issuances and/or proceeds from the sale of owned assets.

As of December 31,
2020, the Company was in active discussions with existing and potential lending sources to refinance its two bridge loans totaling $72.5 million, both of which are scheduled to mature in December 2021. The Company has implemented plans, which
include strategic and cash-preservation initiatives, which are designed to provide it with adequate liquidity to meet its obligations for at least the 12-month period following the date its fiscal year 2020
financial statements are issued. If the Company is unable to extend or refinance its indebtedness prior to scheduled maturity dates, its liquidity and financial condition could be adversely impacted. Even if the Company is able to extend or
refinance its maturing bridge loans, the terms of the new financing may not be as favorable to it as the terms of the existing financing. In addition, the amount of mortgage financing available for the Company’s communities is generally
dependent on their respective appraised values and performance. Decreases in the appraised values of the Company’s communities, including due to adverse changes in real estate market conditions or their performance, could result in available
mortgage refinancing amounts that are less than the communities’ maturing indebtedness. The Company’s inability to obtain refinancing proceeds sufficient to cover maturing indebtedness could adversely impact its liquidity and may cause it
to seek alternative sources of financing, which may be less attractive or unavailable.

Conference Call Information

The Company will host a conference call with senior management to discuss the Company’s fourth quarter and full year 2020 financial results on Wednesday,
March 31, 2021, at 2:30 p.m. Eastern Time. To participate, dial 877-407-0989 (no passcode is required). A simultaneous webcast of the teleconference will be
available at https://www.webcast-eqs.com/register/capitalseniorliving20201105/en

For the convenience of
the Company’s shareholders and the public, the conference call will be recorded and available for replay starting March 31, 2021, through April 14, 2021. To access the conference call replay, call 877-660-6853, passcode 13711946. The conference call will also be available for playback via the Company’s corporate website, https://www.capitalsenior.com/investor-relations/quarterly-conference-calls/.


Non-GAAP Financial Measures of Operating Performance

Adjusted EBITDAR and Adjusted EBITDAR excluding COVID-19 impact are financial valuation measures and
Adjusted CFFO and Adjusted CFFO excluding COVID-19 impact are financial performance measures that are not calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial measures may have material limitations in that they do not reflect all of the costs associated with the Company’s results of operations as determined in accordance with GAAP. As a result,
these non-GAAP financial measures should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP.

The Company believes that presenting Adjusted EBITDAR excluding COVID-19 impact and Adjusted CFFO excluding COVID-19 impact is useful to investors to assess certain recent impacts of the COVID- 19 pandemic on the Company’s financial position, results of operations and the non-
GAAP financial valuation and performance measures that the Company has historically presented to investors.

Adjusted EBITDAR is a valuation measure
commonly used by Company management, research analysts and investors to value companies in the senior living industry. Since Adjusted EBITDAR excludes interest expense and rent expense, it allows Company management, research analysts and investors
to compare the enterprise values of different companies without regard to differences in capital structures and leasing arrangements.

The Company
believes Adjusted EBITDAR excluding COVID-19 impact is a valuable measure as it normalizes the impact of COVID-19 for valuation purposes.

The Company believes that Adjusted CFFO and Adjusted CFFO excluding COVID-19 impact are useful as performance measures
in identifying trends in day-to-day operations because they exclude the costs associated with acquisitions and conversions and other items that do not ordinarily reflect
the ongoing operating results of the Company’s primary business. Adjusted CFFO and Adjusted CFFO excluding COVID-19 impact provide indicators to management of progress in achieving both consolidated and
individual business unit operating performance and are used by research analysts and investors to evaluate the performance of companies in the senior living industry.

The Company strongly urges you to review the reconciliation of net loss to Adjusted EBITDAR and Adjusted EBITDAR excluding
COVID-19 impact and the reconciliation of net income/(loss) to Adjusted CFFO and Adjusted CFFO excluding COVID-19 impact, along with the Company’s consolidated
balance sheets, statements of operations, and statements of cash flows. This is included on the last page of this press release.

About the Company

Dallas-based Capital Senior Living Corporation is a leading owner-operator of independent living, assisted living and memory care communities for
senior adults. As of March 31, 2020, the Company operated 80 communities that are home to more than 7,000 residents across 19 states and provide compassionate, resident-centric service and care as well as engaging programming. Capital Senior
Living offers seniors the freedom and opportunity to successfully, comfortably and happily age in place. For more information, visit www.capitalsenior.com or connect with the Company on Facebook.

Safe Harbor

The forward-looking statements in
this release are subject to certain risks and uncertainties that could cause the Company’s actual results and financial condition to differ materially, including, but not limited to, the continued spread of
COVID-19, including the speed, depth, geographic reach and duration of such spread, new information that may emerge concerning the severity of COVID-19, the actions
taken to prevent or contain the spread of COVID-19 or treat its impact, the legal, regulatory and administrative developments that occur at the federal, state and local levels in response to the


LOGO

 


COVID-19 pandemic, and the frequency and magnitude of legal actions and liability claims that may arise due to
COVID-19 or the Company’s response efforts; the impact of COVID-19 and the Company’s near-term debt maturities on the Company’s ability to continue as a
going concern, the Company’s ability to generate sufficient cash flows from operations, additional proceeds from debt refinancing, and proceeds from the sale of assets to satisfy its short and long-term debt obligations and to fund the
Company’s capital improvement projects to expand, redevelop, and/or reposition its senior living communities; the Company’s ability to obtain additional capital on terms acceptable to it; the Company’s ability to extend or refinance
its existing debt as such debt matures; the Company’s compliance with its debt agreements, including certain financial covenants, and the risk of cross-default in the event such non-compliance occurs; the
Company’s ability to complete acquisitions and dispositions upon favorable terms or at all including the transfer of certain communities managed by the Company on behalf of Fannie Mae, Healthpeak, Ventas, and Welltower; the risk of oversupply
and increased competition in the markets which the Company operates; the risk of increased competition for skilled workers due to wage pressure and changes in regulatory requirements; the departure of the Company’s key officers and personnel;
the cost and difficulty of complying with applicable licensure, legislative oversight, or regulatory changes; the risks associated with a decline in economic conditions generally; the adequacy and continued availability of the Company’s
insurance policies and the Company’s ability to recover any losses it sustains under such policies; changes in accounting principles and interpretations; and the other risks and factors identified from time to time in the Company’s reports
filed with the Securities and Exchange Commission. On December 9, 2020, the Company’s Board of Directors approved a reverse stock split of the Company’s common stock at a ratio of 1-for-15, which became effective on December 11, 2020. Accordingly, all of the Company’s common share, equity award and per-share amounts have been adjusted
to reflect such reverse stock split for all prior periods presented.

For information about Capital Senior Living, visit www.capitalsenior.com.

Investor Contact: Kimberly Lody, Chief Executive Officer, at 972-770-5600

Press Contact: media@capitalsenior.com.


Capital Senior Living Corporation

Consolidated Statements of Operations and Comprehensive Loss

(in thousands, except per share data)

 

     Three Months Ended
December 31,
    Twelve Months Ended
December 31,
 
     2020     2019     2020     2019  

Revenues:

        

Resident revenue

   $ 66,170     $ 108,688     $ 357,122     $ 447,100  

Management fees

     981       —         1,800       —    

Community reimbursement revenue

     13,054       —         24,942       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     80,205       108,688       383,864       447,100  
  

 

 

   

 

 

   

 

 

   

 

 

 

Expenses:

        

Operating expenses (exclusive of facility lease expense and depreciation and amortization expense
shown below)

     42,756       80,322       254,630       310,551  

General and administrative expenses

     6,868       5,752       27,904       27,518  

Facility lease expense

     4,875       14,315       28,109       57,021  

Stock-based compensation expense

     230       951       1,724       2,509  

Depreciation and amortization expense

     12,718       16,105       60,302       64,190  

Long-lived asset impairment

     2,649       664       41,843       3,004  

Community reimbursement expense

     13,054       —         24,942       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     83,150       118,109       439,454       464,793  
  

 

 

   

 

 

   

 

 

   

 

 

 

Other income (expense):

        

Interest income

     110       48       193       221  

Interest expense

     (10,520     (12,074     (44,564     (49,802

Write-off of deferred loan costs and prepayment
premiums

     —         (4,843     —         (4,843

Gain on facility lease modification and termination, net

     172       97       10,659       —    

Loss on disposition of assets, net

     (7,088     36,490       (205,476     36,528  

Other income

     (203     (1     (201     7  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from continuing operations before provision for income taxes

     (20,474     10,296       (294,979     (35,582

Provision for income taxes

     4       (77     (389     (448
  

 

 

   

 

 

   

 

 

   

 

 

 

Net loss from operations

   $ (20,470   $ 10,219     $ (295,368   $ (36,030
  

 

 

   

 

 

   

 

 

   

 

 

 

Per share data:

        

Basic net loss per share

   $ (9.99   $ 5.05     $ (144.08   $ (17.87
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted net loss per share

   $ (9.99   $ 5.05     $ (144.08   $ (17.87
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding — basic

     2,050       2,022       2,050       2,016  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding — diluted

     2,050       2,022       2,050       2,016  
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive loss

   $ (20,470   $ 10,219     $ (295,368   $ (36,030
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Prior period results have been adjusted to reflect the fifteen-for-one Reverse Stock Split as discussed above.


LOGO

 

Capital Senior Living Corporation

Consolidated Balance Sheet

(in thousands)

 

     December 31,
2020
    December 31,
2019
 
ASSETS

 

Current assets:

    

Cash and cash equivalents

   $ 17,885     $ 23,975  

Restricted cash

     4,982       13,088  

Accounts receivable, net

     5,820       8,143  

Federal and state income taxes receivable

     76       72  

Property tax and insurance deposits

     7,637       12,627  

Prepaid expenses and other

     7,028       5,308  
  

 

 

   

 

 

 

Total current assets

     43,428       63,213  

Property and equipment, net

     655,731       969,211  

Operating lease
right-of-use assets, net

     536       224,523  

Deferred taxes, net

     —         76  

Other assets, net

     3,138       10,673  
  

 

 

   

 

 

 

Total assets

   $ 702,833     $ 1,267,696  
  

 

 

   

 

 

 
LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)     

Current liabilities:

    

Accounts payable

   $ 14,967     $ 10,382  

Accrued expenses

     48,515       46,227  

Current portion of notes payable, net of deferred loan costs

     304,164       15,819  

Current portion of deferred income

     3,984       7,201  

Current portion of financing obligations

     —         1,741  

Current portion of lease liabilities

     421       45,988  

Federal and state income taxes payable

     249       420  

Customer deposits

     822       1,247  
  

 

 

   

 

 

 

Total current liabilities

     373,122       129,025  

Financing obligations, net of current portion

     —         9,688  

Lease liabilities, net of current portion

     533       208,967  

Other long-term liabilities

     3,714       —    

Notes payable, net of deferred loan costs and current portion

     604,729       905,637  

Commitments and contingencies

    

Shareholders’ equity (deficit):

    

Preferred stock, $.01 par value:

     —         —    

Authorized shares — 1,000; no shares issued or outstanding

    

Common stock, $.01 par value:

    

Authorized shares — 4,333; issued and outstanding shares 2,084 and 2,096 in 2020 and 2019,
respectively (1)

     21       319  

Additional paid-in capital

     188,978       190,386  

Retained deficit

     (468,264     (172,896

Treasury stock, at cost — 0 and 33 shares in 2020 and 2019, respectively (1)

     —         (3,430
  

 

 

   

 

 

 

Total shareholders’ equity (deficit)

     (279,265     14,379  
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity (deficit)

   $ 702,833     $ 1,267,696  
  

 

 

   

 

 

 

 

(1)

Prior period results have been adjusted to reflect the fifteen-for-one Reverse Stock Split as discussed above.


Capital Senior Living Corporation

Non-GAAP Reconciliations

(In thousands, except per share data)

 

     Three months ended December 31     Year ended December 31,  
     2020     2019     2020     2019  

Adjusted EBITDAR

        

Net loss

     (20,470     10,219       (295,368     (36,030

Depreciation and amortization expense

     12,718       16,105       60,302       64,190  

Stock-based compensation expense

     230       951       1,724       2,509  

Facility lease expense

     4,875       14,316       28,109       57,022  

Provision for bad debts

     692       1,583       2,882       3,765  

Interest income

     (110     (48     (193     (221

Interest expense

     10,520       12,074       44,564       49,802  

Write-off of deferred loan costs and prepayment
premiums

     —         4,649       —         4,746  

Long-lived asset impairment

     2,649       3,004       41,843       3,004  

(Gain) loss on lease related transactions, net

     (172     —         (10,659     —    

(Gain) loss on disposition of assets, net

     7,088       (38,830     205,476       (36,528

Other expense (income)

     203       —         201       (7

Provision for income taxes

     (4     77       389       448  

Casualty losses

     614       883       1,572       2,868  

Transaction and conversion costs

     1,401       311       4,483       2,657  

Employee placement and separation costs

     (16     487       588       3,073  

Employee benefit reserve adjustments

     —         (100     —         (100

Communities excluded due to
repositioning/lease-up

     —         48       —         163  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDAR

   $ 20,218     $ 25,729     $ 85,913     $ 121,361  
  

 

 

   

 

 

   

 

 

   

 

 

 

COVID-19 relief revenue

     (8,114     —         (8,616     —    

COVID-19 expenses

     4,836       —         9,462       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDAR excluding COVID-19 impact

   $ 16,940     $ 25,729     $ 86,759     $ 121,361  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted revenues

        

Total revenues

   $ 80,205     $ 108,688     $ 383,864     $ 447,100  

Communities excluded due to
repositioning/lease-up

     —       $ 48       —       $ 163  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted revenues

   $ 80,205     $ 108,736     $ 383,864     $ 447,263  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted CFFO

        

Net loss

     (20,470     10,219       (295,368     (36,030

Non-cash charges, net

     18,086       (12,452     279,389       39,516  

Operating lease payment adjustment to normalize lease commitments

     —         —         —         (910

Recurring capital expenditures

     —         (1,136     —         (4,581

Casualty losses

     614       883       1,572       2,868  

Transaction and conversion costs

     1,401       311       4,483       2,674  

Employee placement and separation costs

     (16     487       588       3,073  

Employee benefit reserve adjustments

     —         (100     —         (100

Communities excluded due to
repositioning/lease-up

     —         412       —         1,623  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted CFFO

   $ (385   $ (1,376   $ (9,336   $ 8,133  
  

 

 

   

 

 

   

 

 

   

 

 

 

COVID-19 relief revenue

     (8,114     —         (8,616     —    

COVID-19 expenses

     4,836       —         9,462       —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted CFFO excluding COVID-19 impact

     (3,663     (1,376     (8,490     8,133  
  

 

 

   

 

 

   

 

 

   

 

 

 


LOGO

 

Capital Senior Living Corporation

Supplemental Information

 

     Q4 20     Q4 19  

Selected Operating Results

    

I. Owned communities

    

Number of communities (1)

     77       76  

Resident capacity

     9,604       9,774  

Unit capacity

     7,539       7,405  

Financial occupancy (2)

     74.7     83.0

Revenue (in millions)

     48.0       65.9  

Operating expenses (in millions) (3)

     37.1       48.0  

Operating margin

     23     27

Average monthly rent

     2,839       3,572  

II. Leased communities

    

Number of communities

     12       46  

Resident capacity

     1,827       5,756  

Unit capacity

     1,389       4,413  

Financial occupancy (2)

     72.4     78.8

Revenue (in millions)

     20.9       40.0  

Operating expenses (in millions) (3)

     14.3       26.8  

Operating margin

     32     33

Average monthly rent

     4,074       3,831  

III. Consolidated communities

    

Number of communities

     89       122  

Resident capacity

     11,431       15,530  

Unit capacity

     8,928       11,818  

Financial occupancy (2)

     74.2     81.4

Revenue (in millions) (4)

     66.2       105.8  

Operating expenses (in millions) (3)

     42.8       74.6  

Operating margin

     35     29

Average monthly rent

     3,464       3,666  

IV. Continuing community portfolio

    

Number of communities

     60       60  

Resident capacity

     7,463       7,464  

Unit capacity

     5,634       5,635  

Financial occupancy (2)

     77.4     84.4

Revenue (in millions)

     46.9       50.8  

Operating expenses (in millions) (3)

     36.1       36.9  

Operating margin

     23     27

Average monthly rent

     3,586       3,563  

V. Consolidated Debt Information (in thousands, except for interest rates)

    

(Excludes insurance premium financing)

    

Total variable rate mortgage debt

     122,742       126,385  

Total fixed rate debt

     787,030       844,567  

Weighted average interest rate

     4.49     4.86

 

(1)

Includes 17 properties in the process of transitioning ownership back to Fannie Mae at December 31, 2020;
2019 excludes four communities that were being repositioned

(2)

Financial occupancy represents actual days occupied divided by total number of available days during the
quarter.

(3)

Excludes management fees and transaction and conversion costs.

(4)

Excludes revenues related to the 17 properties for which ownership is being transferred to Fannie Mae
subsequent to July 31, 2020, the date on which the Company ceased recognizing revenue on those properties

Exhibit 99.2Exhibit 99.2


Forward Looking Statements: The forward-looking statements in this
presentation are subject to certain risks and uncertainties that could cause the Company’s actual results and financial condition to differ materially, including, but not limited to, the continued spread of COVID-19, including the speed,
depth, geographic reach and duration of such spread, new information that may emerge concerning the severity of COVID-19, the actions taken to prevent or contain the spread of COVID-19 or treat its impact, the legal, regulatory and administrative
developments that occur at the federal, state and local levels in response to the COVID-19 pandemic, and the frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or the Company’s response efforts; the
impact of COVID-19 and the Company’s near-term debt maturities on the Company’s ability to continue as a going concern, the Company’s ability to generate sufficient cash flows from operations, additional proceeds from debt
refinancings, and proceeds from the sale of assets to satisfy its short and long-term debt obligations and to fund the Company’s capital improvement projects to expand, redevelop, and/or reposition its senior living communities; the
Company’s ability to obtain additional capital on terms acceptable to it; the Company’s ability to extend or refinance its existing debt as such debt matures; the Company’s compliance with its debt agreements, including certain
financial covenants, and the risk of cross-default in the event such non-compliance occurs; the Company’s ability to complete acquisitions and dispositions upon favorable terms or at all, including the transfer of certain communities managed
by the Company on behalf of Fannie Mae, Healthpeak, Ventas, and Welltower; the Company’s ability to improve and maintain adequate controls over financial reporting and remediate the identified material weakness; the risk of oversupply and
increased competition in the markets which the Company operates; the risk of increased competition for skilled workers due to wage pressure and changes in regulatory requirements; the departure of the Company’s key officers and personnel; the
cost and difficulty of complying with applicable licensure, legislative oversight, or regulatory changes; the risks associated with a decline in economic conditions generally; the adequacy and continued availability of the Company’s insurance
policies and the Company’s ability to recover any losses it sustains under such policies; changes in accounting principles and interpretations; and the other risks and factors identified from time to time in the Company’s reports filed
with the Securities and Exchange Commission. For information about Capital Senior Living, visit www.capitalsenior.com. The Company assumes no obligation to update or supplement forward-looking statements in this presentation that become untrue
because of new information, subsequent events or otherwise. Non-GAAP Financial Measures: In this presentation, the Company utilizes certain financial valuation and performance measures of operating performance, such as Net Operating Income
(‘’NOI ), that are not calculated in accordance with GAAP. Non-GAAP financial measures may have material limitations in that they do not reflect all of the costs associated with the Company’s results of operations as determined in
accordance with GAAP. As a result, these non-GAAP financial measures should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP. NOI is calculated as revenue less
operating expenses exclusive of COVID-19 relief and expenses of ($7.7M), net. The Company believes NOI is a useful performance measure in identifying trends in day-to-day operations because it excludes the costs associated with acquisitions and
conversions and other items that do not ordinarily reflect the ongoing operating results of the Company’s primary business. NOI is an important points of analysis when evaluating performance as it provides an indication of the effectiveness of
management producing growth in operations from existing assets. NOI provides indicators to management of progress in achieving both consolidated and individual business unit operating performance and is used by research analysts and investors to
evaluate the performance of companies in the senior living industry. Forward Looking Statements: The forward-looking statements in this presentation are subject to certain risks and uncertainties that could cause the Company’s actual results
and financial condition to differ materially, including, but not limited to, the continued spread of COVID-19, including the speed, depth, geographic reach and duration of such spread, new information that may emerge concerning the severity of
COVID-19, the actions taken to prevent or contain the spread of COVID-19 or treat its impact, the legal, regulatory and administrative developments that occur at the federal, state and local levels in response to the COVID-19 pandemic, and the
frequency and magnitude of legal actions and liability claims that may arise due to COVID-19 or the Company’s response efforts; the impact of COVID-19 and the Company’s near-term debt maturities on the Company’s ability to continue
as a going concern, the Company’s ability to generate sufficient cash flows from operations, additional proceeds from debt refinancings, and proceeds from the sale of assets to satisfy its short and long-term debt obligations and to fund the
Company’s capital improvement projects to expand, redevelop, and/or reposition its senior living communities; the Company’s ability to obtain additional capital on terms acceptable to it; the Company’s ability to extend or
refinance its existing debt as such debt matures; the Company’s compliance with its debt agreements, including certain financial covenants, and the risk of cross-default in the event such non-compliance occurs; the Company’s ability to
complete acquisitions and dispositions upon favorable terms or at all, including the transfer of certain communities managed by the Company on behalf of Fannie Mae, Healthpeak, Ventas, and Welltower; the Company’s ability to improve and
maintain adequate controls over financial reporting and remediate the identified material weakness; the risk of oversupply and increased competition in the markets which the Company operates; the risk of increased competition for skilled workers due
to wage pressure and changes in regulatory requirements; the departure of the Company’s key officers and personnel; the cost and difficulty of complying with applicable licensure, legislative oversight, or regulatory changes; the risks
associated with a decline in economic conditions generally; the adequacy and continued availability of the Company’s insurance policies and the Company’s ability to recover any losses it sustains under such policies; changes in
accounting principles and interpretations; and the other risks and factors identified from time to time in the Company’s reports filed with the Securities and Exchange Commission. For information about Capital Senior Living, visit
www.capitalsenior.com. The Company assumes no obligation to update or supplement forward-looking statements in this presentation that become untrue because of new information, subsequent events or otherwise. Non-GAAP Financial Measures: In this
presentation, the Company utilizes certain financial valuation and performance measures of operating performance, such as Net Operating Income (‘’NOI ), that are not calculated in accordance with GAAP. Non-GAAP financial measures may
have material limitations in that they do not reflect all of the costs associated with the Company’s results of operations as determined in accordance with GAAP. As a result, these non-GAAP financial measures should not be considered a substitute
for, nor superior to, financial results and measures determined or calculated in accordance with GAAP. NOI is calculated as revenue less operating expenses exclusive of COVID-19 relief and expenses of ($7.7M), net. The Company believes NOI is a
useful performance measure in identifying trends in day-to-day operations because it excludes the costs associated with acquisitions and conversions and other items that do not ordinarily reflect the ongoing operating results of the Company’s
primary business. NOI is an important points of analysis when evaluating performance as it provides an indication of the effectiveness of management producing growth in operations from existing assets. NOI provides indicators to management of
progress in achieving both consolidated and individual business unit operating performance and is used by research analysts and investors to evaluate the performance of companies in the senior living industry.




68 30+ 6,000+ 80.5% 3,200+ Communities Year Residents 2020 Occupancy
Employees 60 Owned History Served 60 owned communities 8 Managed 15+ Communities 6,881 Units 5 – 14 Communities 18 States < 5 Communities Managed Owned68 30+ 6,000+ 80.5% 3,200+ Communities Year Residents 2020 Occupancy Employees 60 Owned History
Served 60 owned communities 8 Managed 15+ Communities 6,881 Units 5 – 14 Communities 18 States < 5 Communities Managed Owned



4Q20 3Q20 4Q19 FY 20 FY 19 • Average Occupancy 77.4% 79.3% 84.4%
80.5% 84.8% • (1) Average Rent $ 3,586 $ 3,582 $ 3,563 $ 3,586 $ 3,546 • Revenue $ 46.9 $ 48.0 $ 50.8 $ 195.1 $ 203.5 • (2) Operating Expenses $ 35.8 $ 35.7 $ 37.0 $ 141.2 $ 140.9 (3) NOI (60 Properties) $ 11.1 $ 12.3 $ 13.8 $ 53.9
$ 62.6 • (3) NOI Margin 23.6% 26% 27% 28% 31% • • •4Q20 3Q20 4Q19 FY 20 FY 19 • Average Occupancy 77.4% 79.3% 84.4% 80.5% 84.8% • (1) Average Rent $ 3,586 $ 3,582 $ 3,563 $ 3,586 $ 3,546 • Revenue $ 46.9 $
48.0 $ 50.8 $ 195.1 $ 203.5 • (2) Operating Expenses $ 35.8 $ 35.7 $ 37.0 $ 141.2 $ 140.9 (3) NOI (60 Properties) $ 11.1 $ 12.3 $ 13.8 $ 53.9 $ 62.6 • (3) NOI Margin 23.6% 26% 27% 28% 31% • • •


3.46 • 5.47 5.74 9.61 2.23 3.63 4.02 6.97 • 1.23 1.84 4+
Chronic Conditions 1.73 3+ Chronic Conditions 2.64 3.46 • 5.47 5.74 9.61 2.23 3.63 4.02 6.97 • 1.23 1.84 4+ Chronic Conditions 1.73 3+ Chronic Conditions 2.64


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