Q1 2020 Earnings Call

Good day advice talk about senior living Twentytwenty coupons earnings Conference call. Today's conference is being recorded Oh statements today, which I'm not just to wake effect, maybe deemed to be full what looking statements within the meaning of the federal security laws.

These statements made today stage at the company expressly disclaims any obligation to update these statements in the future.

Actual results performance may differ materially from for what looking statements.

These factors that could cause actual results to differ a detailed in the earnings release the company issued yesterday.

Well if somebody puts the company you parse the C. S. You see from time to time, including the vis vis complaint. We don't report on form 10-K, and quarterly reports on form.

In Q.

Please see todays press release for the fourth Safe Harbor statement, which may be found it competent senior dot com flesh in west or minus relations enforce furnished in an 8-K filling this morning.

Please also note.

During this call it the company, but its present non-GAAP financial metrics for reconciliation on each non-GAAP measure from the most comparable GAAP measure piece also see today's press release.

At this time I would like to turn the call lots of capital senior living space. If you didn't see all this came about anybody.

Thank you and good morning to our shareholders analysts employees in other participants welcome to capital Senior living first quarter 2020 earnings call. Joining me for today's call is Carey Hendrickson, our Chief Financial Officer, and Brandon Rebar, Our Chief operating Officer I. Appreciate you joining us today parts.

Secularly during this uncertain time and I hope that you in your family's remain safe and healthy.

Before getting into the quarter.

Let me begin by saying that I am so very proud of our 6000 plus employees, who have diligently cared for our residents physical cognitive and emotional wellbeing during the covert 19 pandemic well much of the world shutdown in recent months and we have faced escalating challenges and changes to our operating model on a 24 seven base.

So our staff have been heroic in their response, providing personalized care and comfort to the population most vulnerable to this highly contagious infection.

I want to thank the entire capital senior living team for their relentless passion and commitment to our business our residents into one another during this unprecedented time.

At the onset of the pandemic, we swiftly expanded our existing comprehensive disease prevention protocols to include real time best practices in guidance for federal state and local authorities.

We establish a multi disciplinary task force that continues to serve as an around the clock emergency response team to support our communities and to help them understand and operationalize the various federal state and local guidance on addressing cobot 19.

The task force developed delivered and reinforced training uncovered 19 prevention and mitigation protocols, they established innovative compensation and scheduling programs to address the unique staffing challenges presented by the pandemic.

They developed and implemented checklist protocols and 24, seven communications platform to provide our communities easy access to operational and clinical support day and night. They spent a long hours procuring storing distributing and managing our stock of math gallons phase Shields Glut C N.

The ties are test kits and other critical supplies.

Our capital senior living team responded to a quickly evolving crisis in real time in the face of changing government guidance and then evolving understanding of coordinate team.

We believe we have operated carefully and responsibly across our portfolio a senior living communities and we will continue to do so for the health and wellness of our residents and employees.

Randy will provide additional detail on October 19 response.

Turning to our first quarter 2020 operating results I am encouraged by the progress made during the past 15 month to improve our operational performance. While also addressing the Companys Financial Foundation My comments will focus on sequential comparisons of our 118 same store communities.

Which includes four communities excluded from our reported results in 2019 and brought back online in 2020. It also excludes one community that was sold during the first quarter.

And excludes six healthpocket communities that were transition from triple net leases to management agreements during the quarter.

For the 118 communities sequential occupancy declined 67 basis points from 80.6% in Q4, 2019% to 79.9% in Q1 of 2020.

The result of a decrease of 50 occupied units in independent living and a decrease of 26 occupied units in assisted living memory care.

You want 2020 revenue for the 118 communities was $101.6 million compared to 102.2 million in Q4, 2019, a decline of 0.6%.

Operating expenses were 3.3 million or 4.5% lower in Q1 compared to Q4 2019 with improvements in nearly every cost category.

Operating income for these 118 communities increased $2.7 million or 9.4% sequentially any I know why margin improved 290 basis points from 27.9% in the fourth quarter, 2018% to 30.8% in the first quarter of 2020.

We still have more work to do but we're pleased with it improved performance.

To provide some context for the second quarter of course at this time no. One can predict the full extent and duration of the cobot pandemic, nor its ongoing impact on the overall economy or industry for our business.

What I can share with you is that the impact to our business. During the last eight weeks, it's been very similar to the impact reported for our industry by various research houses and trade associations.

April move ins were 45% of than normal pre co they'd move in volume and.

And move outs were about the same as in the pre cobot month.

Or may move in activity is improving compared to April and through May 18th move ins are approximately 62% of normalized volume in pre cobot month.

Turning for a moment to our balance sheet as we announced back in March during Q1, we were able to successfully reach mutually beneficial agreements with all of our landlords to reduce our short and long term lease liabilities.

These lease terminations immediately reduce our rent and capex obligations by approximately $1.8 million per month through the end up 2020.

Annual cash flow will improve by approximately $22 million when the transitions are complete.

The related lease liabilities on our balance sheet, which were approximately $253 million at December 31st 2019.

Were reduced to 38.8 million at March 31st 2020, and will be eliminated by December 31st of this year.

During the last earnings call I mentioned that CFS, though from the consolidated leased assets in the portfolio was approximately negative $4 million or negative 14 cents per share in the fourth quarter.

While our owned portfolio of 79 communities delivered CFO of approximately $3 million or positive nine cents per share during the same period.

During the first quarter of 2020 CFO for the consolidated leased assets with approximately negative $2 million or negative seven cents per share while our own portfolio of 79 communities delivered CFO of approximately positive $7 million are positive 23 cents per share in the.

Same period.

The termination of the leases is a significant accomplishment and one that will be meaningfully accretive to the long term performance of the company.

To summarize we delivered improving Q1 results that highlight progress the company is making to stabilize operation strengthen our financial foundation and execute our turnaround strategy.

While we are seeing positive developments take shape, and our operating and financial performance. The covert 19, pandemics negative effects on the U.S. economy, and our Companys financial results will likely continue for the next several months.

Despite these additional obstacles I am confident in our team's ability to navigate the current environment with excellence and quickly resume our work to continue improving our operations in our financial foundation when market conditions stabilize.

Now I'll turn the call over to branded and to provide a detailed review of our operations.

Thank you Kim and good morning.

Well much has changed and evolve across the nation into seven weeks since we last provided an update on our business. The fundamental building blocks of our company remain the same.

Strength compassion and competence of our local leadership teams and the frontline caregivers and employees across each of our communities continue is the foundation of CSL.

Well the impacts of cobot 19 on the country in senior living as a whole remain uncertain I'm confident in our ability to navigate this challenging time.

For Q1 operating results and ongoing leadership in employee retention metrics continued to support that confidence.

Briefly provide an overview of key operating metrics before providing updated information on kogut specific to our portfolio.

Total employee turnover continues to trend favorably in the first four months of 2020 with a more than 10 percentage point decline year over year, given the national employment landscape and a significant increase in candidate flow or communities of experience. We are optimistic. This trend will continue but also allows you to sell to recruit talent from adjacent industries.

Leadership stability continues to be strong with 91% of our executive directors retain through the first four months of the year and combined turnover of our key leadership roles in our communities decreasing nearly eight percentage points year over year through April we continue to monitor the number of communities showing sequential quarterly improvement.

As an indicator of progress on our thing strategy, which began one year ago.

Our results in Q1 as referenced by Kim show significant progress across much of our portfolio in both revenue growth and an even stronger improvement in net operating income nearly half of our communities grew revenue quarter over quarter and our occupancy numbers at the end of April remained stable.

90 of our 118 same store communities were 76% increased net operating income from Q4 2019 to Q1 up 2020. These improvements resulted in the 2.7 million or 9.4% increase in Q1.

While the impacts of Kogut on Q2 performance and beyond still remain uncertain. We continue to implement strong operating practices and protocols to responsibly manage business performance through these unprecedented times.

From a clinical and operational perspective, our local teams have remained focused on the safety and needs of our residents throughout the pandemic as a company. We have invested just over $2 million in March April and May support and acknowledge the work of our incredible frontline employees provide the appropriate personal protective equipment and maintain a safe and clean.

Environment for our employees and residents we continue our diligent approach to maintaining a safe and enjoyable environment for our residents and to consistently communicating with the thousands of loved ones with residents in our care.

In terms of direct changes to our business there have been significant operating impacts across each of our capital seniors communities.

Due to the restrictions on visitors to senior living communities throughout March and April and to stay at home orders issued across the country a significant reduction in the number of leads and tours occurred across the board.

Consistent with the industry as a whole CSL experienced a more than 40% drop in Leeds and tours in a nearly 55% dropping overall move ins in April at the same time move outs remained at levels consistent with prior month.

On the supply front the company purchased more than twice our monthly average of medical nursing and food supplies. We expect these costs to continue through the second quarter as our communities continue with fully masked caregiving protocols in unit dining and additional safeguards to protect our residents.

Third all of our communities have shifted to in unit dining throughout April and May creating significant labor and supply demand to complete this change in our operating model.

Briefly where are we today from an operating perspective, all employees must wear masks at all times, while working in our communities.

We have restricted all visitors into communities to only include authorized medical personnel and emergency medical stuff.

Aurs are limited to only the prospect in one family member in some communities and another completely restricted to virtual tours only.

In early March we established seven regional supply hubs throughout the country to ensure communities have quick access to all P. P beyond their on site stock if needed.

We continue weekly live video broadcast with all communities to discuss operational protocol changes address all frequently asked questions and provide guidance on the change in government landscape.

We've created a micro sites that houses and materials created for managing all aspects of the business, including safety protocols training videos communication resources for family members clinical and operational check was an index of all previously generated content related to managing in the cobot environments.

And finally, we continue to conduct the daily survey with all communities to gather information on the real time needs of our employees and residents.

As of April Thirtyth 136, total residents were just over 1% of our 10217 residents at tested positive for cobot.

Impacting 12 of our communities or less than 10% of the portfolio.

In May we have seen continued stability with fewer communities impacted and declining incidence of positive test results across the company.

We remain confident in our leadership teams across our individual communities in our regional team to navigate the always changing environment and continue providing a safe and enjoyable environment for current and future residents.

We've developed significant materials and processes to support our welcome strategy as states and our communities shift to a less restrictive environment. At this point. However, we expect an additional 30 to 60 days before communities implement the reopening protocols.

As Kim mentioned, we are optimistic that lead and tour levels. In May we will continue to trend significantly ahead of April and June will show further improvement assuming no significant changes in the national health landscape.

We are so thankful for the daily commitment each of our employees makes to provide care in service to our residents and remain confident in our team to manage through this challenging environment.

Now I'll turn the call over to carry to provide a detailed review of our financials.

Thank you Brandon.

While cobot 19 will certainly impacted our results in the coming weeks and months, we do not want to lose side of the hard work, but end by operations team and the first quarter that resulted in improvements in our key metrics or the significant actions. We took in the first quarter 2020 to improve our financial position and provide us with the path to growth and long term value creation.

As Ken noted many of our key metrics improved in the first quarter on a sequential basis arc net operating income increased $2.7 million in the first quarter of 2020 over the fourth quarter of 2019.

Our adjusted EBITDAR, excluding approximately $300000 of cobot vaccine expenses increased $900000 sequentially over the fourth quarter of 2019.

And adjusted CFO, excluding those cope with that can't expenses increased $1.8 million or the first quarter 2020 over the fourth quarter 29.

Very importantly, we reached agreements with all three of our re partners for the early termination of all of our leases by December 31, 2020 at the latest do the release of our existing security deposits at our letters of credit with respectively.

And we'll see meaningful reductions in our rent payments until that time.

With all of the lease terminations are complete or cash flow, while improved by approximately $22 million on an annual basis.

Related lease liabilities on our balance sheet, which were approximately $253 million at December 31 2019.

Well reduced to $38.8 million at March 31.

It will be eliminated by December 31, 2020.

This is a major step forward in the transformation of capital senior living.

We recorded a noncash gain a $15.6 million on the lease transactions due in parts of the release of a lingering lease obligation related to the prior transaction.

Because the maturity.

Most of our leases were shortened by five to six years.

We reviewed the carrying value of a lot of use assets. All these communities due to the shorter timeframe for Recoverability and the impact of Coke 19 of these communities in the near term recorded a non cash impairment charge of $36.5 million on are writing these assets and our associated property plant and equipment related to those communities.

Another outcome of the lease agreements with its six communities, formerly leased from healthy were converted to management agreements effective March one.

The original maturity dates for these communities were in 2025 2026.

We recorded the 6.2 million dollar noncash loss related to this transaction do the write off of the right abuse assets lease liabilities and fixed assets associated with these six communities.

We also disposing of non core community in the first quarter, resulting in net cash proceeds of $6.9 million.

The community contribute don't like a minimal amount it's to get the FFO in 2019 and produce negative cash after capital expenditures.

Recorded the 7.4 million dollar noncash loss on that transaction.

Looking at our first quarter results. Our total consolidated revenues in the first quarter $106.1 million, which compares to $114.2 million on a reported basis in the first quarter of 2019.

$4.6 million that difference was related to dispositions and conversions of assets since the first quarter of 2019.

But the rest due to lower occupancy levels, partially offset by a 1.6% increase in rate.

Financial occupancy for all communities was 80.0% in the first quarter, which was a decline of 310 basis points for the first quarter of 2019.

Our operating expenses in the first quarter 2020 were $75.4 million, which is the same as they were in the first quarter of 2019.

The first quarter 2019, just like the revenues included operating expenses related to the four communities that we disposed of since that time and the six formerly leased communities that were converted to management agreements on March the first of this year and that totaled $2.6 million. We also had $1.2 million in business interruption cry.

It's though in the first quarter 2019 related to the communities that we had the were impacted by Hurricane Harvey and we did not have any business interruption credits in the first quarter 2020.

Our general and administrative expenses for the first quarter 2020 were $6.7 million, which compares to $7.6 million and the first quarter of 2019.

Excluding transaction costs from both years, our DNA expense decreased $600000 in the first quarter 2020, as compared to first quarter 2019, due to lower healthcare claims expense.

DNA expense as a percentage of revenues was 4.9% in the first quarter 2020, which is slightly lower than the 5.1% of revenues and the first quarter 2019.

Our adjusted EBITDAR was $26.3 million, the first quarter 2020, and was $26.6 million, excluding covered 19 expenses.

Adjusted CFO with zero point $2 million in the first quarter 2020, and was zero point $5 billion, excluding covered magazine expenses.

As I noted earlier, both adjusted EBITDAR and adjusted CFO improved in the first quarter 2020, as compared to the fourth quarter of 2019.

Looking at our same community results same community revenues decreased 2.6% as compared to the first quarter 2019.

Then community occupancy was 79.9% in the first quarter 2020.

Our average monthly rent increase 0.9% to three Sept, 3700, $72 and the first quarter 2020 as compared to the first quarter 2019.

This is the first year over year increase that we've shown in same community average rent since the second quarter 29 teams, we were happy to see that.

Then community expenses and the first quarter of 2020 increased only 2.4% as compared to the first quarter 2019, our employee labor cost increased 5.9%, mostly due to unusually low labor cost in the first quarter of last year.

And including contracts labor, our total labor cost increased 5% as compared to the first quarter 2019.

Our food cost decreased 1% and our utilities decreased 5.5%.

As I noted earlier and that's kind of also mentioned our same community net operating income increased $2.7 million in the first quarter 2020 on a sequential basis for the fourth quarter 2019, due to excellent cost management by our operations team.

The sequential basis, our same community expenses decreased $3.3 million or 4.5% in the first quarter 2020.

As compared to the first quarter fourth quarter excuse me of 2019 with decreases in most categories, including labor food advertising and promotion repairs and maintenance service contracts and bad debt expense.

Looking at the balance sheet, we ended the quarter was $17.7 million available cash, including restricted cash or cash balance was $27.9 million at March 31 2020.

We spent a $5.4 million on capital expenditures in the first quarter.

Our mortgage debt balance at March 31, 2020 was $923 million at a weighted average interest rate up 4.7%.

The majority of our debt as it fixed interest rates, except for the three bridge loans totaled approximately $82.9 million at March 31, and then $50 million of long term variable rate debt under our master credit facility with anybody.

Our financial performance in the first quarter 2020 was in line with web or slightly better than our expectations and we made continued progress on our transformation.

Of course, the onset of coking 19 as change our perspective in the short term.

Our new resident leads visits and move in activity the declined significantly April compared typical levels as branded noted our consolidated occupancy excluding the non core community that we sold in the first quarter decreased from 79.8% to them at the March to 78.7% for the month April swap one.

Hundred 10 basis point decrease.

Revenue on the same basis decreased approximately $500000 from March to April.

While it's still early branded noted that may move ins and move outs are both trending better than April but still we expect further deterioration of our occupancy and revenue, resulting from fewer move ins due to the impacts of Copel 19.

On the expense side as Brendan noted, we've also had increases in supplies costs, primarily related to personal protection equipment and paper goods required and dining as well as increases for labor and certain communities specialized cleaning and disinfecting costs and testing of residents and employees.

To mitigate the impact of the coping Maxine related expenditures, we've reduced spending on non essential supplies travel cost and certain other discretionary items and we've suspended all non critical capital expenditure projects.

In April we were able to offset most of the cobot 19 expense.

But that may be difficult to sustain.

The only governmental program available to us and the payroll tax flow program under the cares Act, which which we are utilizing is that it's apparel referral program. This will allow us to defer the employer fortunate payroll taxes from April through December 2020, which we estimate will accumulate to approximately $7 million one half of the deferred payroll.

Taxes will be do by December 2021, but the other half due by December 2022.

We've also entered into short term debt for Barents agreements with certain of our lenders effective April one 2020, some of which will require repayment of her parents over a 12 month period. Following the end at the forbearance period.

Lastly in our earnings release, we stated that conditions created by the Cobot 19 impact on our 2020 revenues and operating expenses.

As well as the unknown duration of the pandemic required us to recognize a going concern issue.

We've already taken actions to improve our liquidity position at address uncertainty about our ability to continue its a going concern and we're evaluating additional actions.

We will continue to execute on our three year operational turnaround plan that we initiated in the first quarter of 2019, which as we've discussed today results improved operating results in the first quarter 2020, and we expect our turnaround plan to continue to produce incremental profitability improvements.

We've implemented additional proactive spending reductions, including reduced discretionary spending at lower capital spending.

As we described we took measures in the first quarter 2020 to exit underperforming leases, which will benefit our operating results with reduced rent payments through December 2020, and will eliminate all rent payments beginning January 2021.

We are evaluating the opportunity to sell certain communities that could provide net cash proceeds as I mentioned, we've entered into short term debt forbearance agreements with certain of our lenders and we are utilizing the cares act payroll tax deferral program to delay payment of the employer portion the payroll taxes from April through December.

And we are evaluating other possible then capital options.

As a result to the actions we've already taken we expect to generate positive cash flow into second quarter.

While the current environment is challenging we remain confident the steps we've taken over the past 15 months and specifically in the first quarter of this year will improve our financial position and provide a path to growth and long term value creation.

We're working diligently to build the company that will have a consistent high quality product across its portfolio and we know the hard work we've done and are continuing to do will serve us well through the current challenge and as we emerge from the Koeppen 19 crisis.

Now I'll turn it back over to Kevin.

Thank you carry as day three open we too will welcome families friends and visitors back to our communities as soon as we are confident that it is safe and responsible to do so in the meantime, we remain steadfastly committed to providing high quality care in services to our beloved senior.

And we know that our services are needed now more than ever as many senior citizens have had to face the pandemic alone from their home.

Foundation, we put in place during 2019 has served us well during these difficult times and we continue to believe our strategy of stabilized invest nurture and grow will drive long term value for all of our stakeholders.

Ill now open the lines for questions.

Operator, if he would please open the line.

Thank you very much.

If you looked like the question. Please take note by pressing star one on your telephone keypad, if you're using to speak of Cowen. Please make sure. Your mute function. This turned off to an though you'll stick natural each hour equipment.

Again Presque stop on to ask a question we bought for just a moment's tournedos, everyone that opportunity to signal for questions.

Even though take off [laughter] question from Steven on that can you from Barclays. Please go ahead.

Great. Thanks.

Good morning, Kevin branded and carry over everyone stay and say hey, thanks for taking the question.

Just wanted to unpack a little bit some of the operating expense trends you mentioned that the same store expenses increased to 2.4% year over year, but that there were some some material improvements sequentially versus the fourth quarter.

Yeah, I guess I'm curious to hear more about the operating expense growth trends for the rest of 2020.

Yes, excluding cobot 19 expenses and then just in light of the that exclusion of zero point Threemillion have expenses in one Q 20 is there any range are able to provide for the full year on the amount of Copel 19 expenses that you may potentially excluding relation to the adjusted EBITDAR.

Kim I'll start with isn't that a few and brand and what add something you can get a Steve as you know we did not provide guidance. So I can't really speak about what we think our full year expenses are going to look like from an off from operating perspective, I will say that.

That we do expect to continue to have very solid cost management through the rest of the year.

Cope with 19, it's it's really.

Talking about how much that will be that we've been adjust out of EBITDAR. It's so difficult to predict that because we just don't know the extent or duration of cobot 19, you know how long, it's going to last and where that where it's going to be and so it's really a.

Really unable to protect at this point and that's part of that uncertainty is part of what were you.

People into our projection for the rest of the year overall brand and Ken anything you'd add.

Yeah, I'll add you know the operations team has done a fantastic job.

Really controlling and maintaining the operating costs during the period and and that's why we were able to really offset most of the.

Incremental covert 19 expenses incurred during the first quarter.

By some of the actions at the operations team made you know in and.

Becoming more efficient in in the communities you know as we look forward like Carey said the duration in the severity of the pandemic certainly creates uncertainty about what we may need to do on the on the cost side of things I think the things that are in our favor.

Are we are very solid in our supplies on P.P.E. and all of the other sterilization a in gloves and so on math and gallons et cetera, we are solidly stopped there.

So we don't expect to have a tremendous incremental expense and find those items.

And one of the headwinds of the overall industry coming into the pandemic was the labor market you know, it's very difficult to find people to work in.

The senior living because they had so many other options out there and we've seen a tremendous change and not as well we have many more people available to us and we have I think done a great job in the operations area of making sure people know about the opportunities to work with us until.

Do that at or better reasonable rate, we have implemented them a hero pay programs across the portfolio, where we've needed to do that.

To address some unique staffing challenges, but overall, we feel good about our ability to maintain reasonable labor costs as well is the overall supply costs.

Brandon anything you would add to that just a couple of things that I would add quickly would be the the continued sequential decrease in the use of contract under cost of contract labor in the portfolio. We did see contract go down again in Q1 versus Q4.

So we are managing that very closely and then I would just say as it related to.

The additional purchases and supply requirement in preparation for coated.

We were able with very good partners to.

Purchase those at a consistent level price wise as we had previously so we did not experience having to overpay for any additional supplies that we were we were purchasing and we did have in place good good par in stock levels in our communities to start with I'm, sorry, I think those both contributed as well.

Okay great.

Other quick one just on the.

A short term debt forbearance agreement that you entered into.

Not sure. If you gave the total dollar amount of payment that will be impacted by the agreements that you entered into if you have had number.

And also do you think what you've entered into will be sufficient that there won't be any additional HM agreements or a there's still opportunity or.

Optionality for additional agreements going forward.

Steve This is Karen I'll start and Kim I'll, let you add and if you'd like to but.

It's difficult to really say exactly how much the debt for Barents is going to be there's some of them. Some of the debt for parents agreements have cash remittance provisions and then that are related to and it's a community. It produces cash after.

Yes, they didn't make the debt payment the incentive that cash is limited back to the to the lender.

So there so it's difficult to predict because it's going to depend on again how.

What the extent and duration as opposed to 19 on the particular communities on what you're receiving debt forbearance, but that said, it's it's a fish is significant and it's sufficient enough from that and the other actions. We've taken that we are able to produce positive cash flow and the second quarter.

As far as additional agreements we are Oh, we do expect to continue to have conversations with our lenders about additional release as needed.

Okay, all right I'll hop back in queue I am.

You have anything you would add to that.

Thank you covered it all carry thanks.

Thank you very much if you're fine. That's your question that's going to end such you may be moved yourself from the Q by pressing star too. We will now take on next question from Jack gone check from coal treat capital. Please go ahead your line.

<unk>.

Good morning, everybody.

And I would just like to say, which I never said another call I'd like to thank you guys. The management team to your serviced as.

Forget mess and.

This makes our job even harder so.

That said.

Quick question Kerry so.

He said cobot adjustment for the press release or is that actually gene norm for what's being incorporated into the new lending agreements and forbearance.

I'm not sure I understand the distinction there otherwise we have Colgate expenses had an important in the press release and adjust numbers, but.

The banks right is that part of a bank agreement that they too or.

Amending any sort of competence and things that have for that.

<unk> expense.

No no that's not really it's not related to that that's just we wanted to break it out so that so that investors could see how much those cobot expenses are and so we'll do that going forward through this pandemic. So the whole bank won't accept it but.

You're putting in the press release, so that everyone else accepts it.

Exactly.

Good.

Just Sag My next question really would be and this is for Kimberly and again quite <unk> first statement I didn't see anything in the press release for anything about the board of directors waving their cash piece.

And I'd like to understand why not given that this board.

And I'm sorry, you were part of this but you know this board.

Hi, mangled every strategic opportunity over years.

That enabled us to be in a lousy position for lousy things like this and I don't I would like you to comment as a member of the board of why did they don't have any or there's no sense that they should two should be waving their cash fees.

In.

On a crucial time for the company.

Yeah, Great question, Jeff. Thank you for that and the board is waving their fees our board has actually been deferring their compensation.

And late last year I believe that began in November and they continue that they are taking no cash compensation or were there any stock of worried grant this year to the board.

I missed that my apologies. Thank you very much good luck.

Thanks, Jeff Thank you.

Oh.

Thank you we take our next question from Ben Mackovak off carbon here.

<unk>. Please go ahead your line is open.

Hi, there.

Can only imagine how stressful the last few months have been so.

I do appreciate all that you've been through can you.

Just remind us on the debt maturities that are coming up.

It was a little unclear from the press release and then my second question is was there anything unique about the Merrell Phil.

Community I guess the sell price was.

Lower than I thought it would have been.

I'm sure. This is carry out from a debt maturities standpoint, the first debt we have coming due is in the fourth quarter 2021 that some of the bridge loans that we that we have that are smaller amounts and then we have the first fixed rate debt. We have coming is in 2022. So it's a it's a little ways out we have time.

For the recovery too.

Yes economy to recover and for our operations recover from there and remind me the second question Im sorry.

The mirror of Merrill Ville community, whereas Randy and I like to it yeah in Indiana, yet was there anything unique to it that.

Resulted in the purchase price.

Yeah, well you know that that's a that's a community maryville, Indiana that has been struggling for some time just the market itself. The overall economy. There is not good it's and so it's a market that.

Been able to to generate over the past a year or so.

Mm.

Thank you.

Thank you.

It's a P.S. they are no further crescent at this time is floaty I would like to turn the conference back to you for any additional little closing remarks.

Great. Thank you Sandra Thank you to our shareholders benders residents in employees here attracting capital senior living there's concludes today's conference. Thank you everyone stay safe and have a grey day.

[noise] Discomforts today's call. Thank you for your participation you may know.

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