Q2 2022 Sienna Senior Living Inc Earnings Call

August 12, 2022

Okay.

Ladies and gentlemen, welcome to Sienna Senior living Inc. Second quarter 2022 conference calls.

Today's call is hosted by knit and Shane President and Chief Executive Officer, and David Hong Chief Financial Officer of Sienna Senior.

Senior living Inc.

Please be aware that certain statements or information discussed today are forward looking and actual results could differ materially.

The company does not undertake to update any forward looking statement.

Please refer to the forward looking information and risk factors section in the Companys public filings.

Including its most recent MD&A and I E R F for more condition.

You'll also find a more fulsome discussion of the company's results in its MD&A financial statements for the period.

Which are posted on SEDAR and can be found on the company's website C N a living that CA.

Today's call is being recorded and a replay will be available.

Such as for accessing call are posted on the company's website and the details are provided in the company's news release.

The company has posted slides, which accompany the host's remarks on the company website on the events and presentations.

With that I will now turn the call to Mr. Jeong. Please go ahead Mr. James.

Thank you Shannon and good afternoon, everyone and thank you for joining us on our call today.

Our second quarter results reflect the continued improvements across our operations and highlight the benefits of running a large diversified operating platform.

Our solid results come at a time of economic uncertainty and highlight the stability of our long term care operations and the growth potential inherent in our retirement platform.

This was highlighted in a you don't want to get the same property net operating income growth of 19, 7% in our retirement portfolio and two 7% growth in our long term care portfolio.

Average same property at a time at occupancy increased by 820 basis points to 87, 1% year over year.

In the second quarter of this year bleeding.

Leading to significant NOI growth, despite higher labor cost and inflationary pressures.

Occupancy increased to 88, 6% in July a level not seen since well before the pandemic.

In line with the positive occupancy trends, we updated our occupancy forecast with the retirement portfolio.

Increasing until approximately 89% to 90% by the end of 2022 from the previous guidance of 87% to 89%.

Our sales and marketing teams have been generating strong interest in our residents is by building and maintaining excellent relationships in the local communities.

FX, coupled with strong demand resulted in an increase in rent deposits and our same property portfolio of 14% and then and then increase in move ins up approximately 19% year over year compared to Q2 2021.

We also expect new Aspira retirement bran to support continued occupancy growth by offering personalization and expanded choices to residents.

In late April we launched a new website for SBR and started rolling out new signature programs.

The immediate response from prospective residents and families have been compelling initial.

Initial results indicate that quantified leads have increased by approximately 26% during the first month after the launch compared to the same period in 2021.

Our teams have also worked tirelessly to integrate the <unk> retirement residences, we acquired during the quarter into the spirit platform <unk>.

Average Q2 occupancy was approximately 82% at that five residences or 84, 1%. Excluding one retirement residents that is currently in lease up.

Why does this reflect some softening in recent months, we are confident that occupancy trends will become more consistent with the overall portfolio. Once these residents and team members are fully integrated investigator platform.

Now moving to slide seven and our long term care communities resident admissions progress steadily throughout this quarter.

Same property occupancy reached 95, 5% in the second quarter and in February of 2022, the government of Ontario reinstated occupancy targets of 97% required for full funding.

Given the long waiting list for long term care beds, we anticipate to meet the required occupancy targets at the majority of our communities for full funding this year with limited impact on NOI.

Moving to our development plan or the past PRP product hired our plans to redevelop our agent classy long term care portfolio in Ontario.

Our plans include over $600 million in capital investments and to date, we have received bad license allocations for the Ministry of long term care for 12 hour long term care communities for a total of 2600 beds.

Including approximately 800 for renewals and what 800 new beds.

Current supply chain issues and high inflation has slowed the development momentum in recent months, including at our project in North Bay, where construction started last year.

We are closely monitoring cost escalations with respect to material and labor and their impact on our construction starts estimated development deals and economic feasibility of our current and future projects.

Staffing will remain one of the biggest challenges for some time and we've been very active on many fronts to break the existing labor gap.

Externally, we continue to advocate for faster immigration and expedited placements of internationally educated nurses.

Internally, we are making important investments with respect to our staff scheduling and followed software to support our scheduling initiatives.

Currently implementing a new system that will provide greater visibility to staffing on a real time basis.

This new technology will help us fill staffing gaps more seamlessly and faster. It also helps us better monitor agency staffing and improve scheduling for our own team members.

The new system is expected to be completed later in 2022 across all of our long term care communities.

And will be rolled into our retirement platform after that.

We expect competition for talent to further intensify in the years ahead, and we will continue with enhanced recruitment campaigns with key colleges and universities.

During the first six months of 2022 over 1100 students were placed at our care communities in retirement residences.

Of whom we hope to hire once they graduate.

Our recruitment strategy is also focused on strengthening our employer brand that we do this by more clearly communicating what it means to be part of CNS with a goal to become the product choice and Canadian senior living sector.

To achieve this objective by offering a compelling team member experience and by nurturing our purpose driven culture.

Making sure our team members feel supported and appreciated has never been more important and is reflected in many of our initiatives such as our share ownership program <unk> <unk>.

Subsequent to the call absorbed by our shareholders at the annual General meeting in April shares in the amount of $1 6 million what issue to team members as part of our initial three 3 million.

Commitment.

With that I'll turn it over to David for an update on our operating and financial results.

Thank you, Matt and good afternoon, everyone I will start on slide 11 for financial results.

Sector fundamentals continued to strengthen during the second quarter, increasing demand for quality seniors living in many of our key markets coupled with our successful marketing sales and rebranding initiatives are reflected in CNS second quarter results.

At the same time intense competition for talent cost pressures and decades high inflation continued to impact our operations.

In Q2 of 2022 total adjusted revenues increased by 10, 7% year over year to $182 million.

This increase was largely due to occupancy and rental rate growth and additional revenue from the 12 properties. We acquired this quarter in our retirement segment and flow through funding for increased direct care provided to residents as well as higher preferred accommodation revenues from increased occupancy in our long term care segment, partly offset by lower.

Our revenues as a result of two properties that we sold earlier in 2022.

Total net operating income increased by 10, 3% to $34 $2 million this quarter compared to last year. Our retirement segment contributed $3 6 million of this increase mainly through same property NOI growth of $2 5 million and $9 million of additional NOI from our 12 new retire.

<unk> properties.

Our LTC segment was stable with total LTC NOI lower by $4 million.

Compared to the last year.

Retirement same property NOI increased by 19, 7% to $15 1 million compared to last year, primarily due to occupancy improvements and annual rental rate increases in line with market conditions as well as lower net pandemic expenses.

This was partially offset by higher cost per agency staffing culinary costs utilities insurance and marketing cost.

Rent collection levels remained high at approximately 99%.

Cna's long term care same property NOI increased by two 7% to $18 million compared to last year, primarily due to increases in preferred accommodation revenues from increased occupancy offset partly by higher utilities and insurance costs.

Over the past two years, we have seen significant cost pressures, including higher agency cost due to staffing shortages increased insurance premiums and rising utility costs. In addition to generally high inflation in line with the overall market.

With respect to our retirement portfolio, we expect that continued occupancy gains rental rate increases and improving operating environment will help mitigate these cost pressures and we expect operating margins to moderately improve by 50 to 100 basis points. During the second half of 2022 compared to the second quarter.

We further anticipate that net pandemic related expenses will range from $2 million to $3 million in the third quarter of the year as a result of recent increase in COVID-19 cases.

Moving onto slide 12 during the second quarter of 2022 operating funds from operations increased by 14% to $17 $3 million compared to last year, primarily due to higher NOI, partly offset by higher current income tax expense as well as higher administration expenses.

Q2, OSI Boe per share increased by 5% to $23 seven.

Adjusted funds from operations increased by 22% to $17 2 million compared to last year due to higher <unk> as.

As well as lower maintenance costs.

<unk> per share increased by 12% to 23, 6% in Q2 2022, resulting in an <unk> payout ratio of 99%.

Looking at our debt metrics on slide 13, our debt to gross book value decreased by 210 basis points to 43, 4% at the end of Q2 2022 compared to 45, 5% at the end of Q2 2021, mainly due to mortgage repayments largely with proceeds from property dispositions URL.

During the year.

Debt to adjusted EBITDA increased to nine five years in Q2 2022 compared to seven four years in Q2 2021.

And interest coverage ratio increased to three two times in Q2 2022 compared to three one times in Q2 2021.

Our debt is well distributed between unsecured debentures credit facilities unsecured term loans conventional mortgages and mortgages insured, but that Canada mortgage and housing Corporation and our debt maturities are staggered with the next significant expiry being our $90 million unsecured term loan due in May 2023.

Refinancing of this loan which was used to support the acquisition of our 12 retirement residences is well underway I will now turn the call back to Nick for his closing remarks. Thank you David.

Canadian senior living sector continues to evolve at a fast pace.

With the changing landscape, we are reaffirming our strategy to grow our balanced portfolio and which are retirement and long term care operations each make a significant contribution to the company's overall net operating income.

With deep experience and scale in each segment, we run two distinct business lines, which are deeply aligned with respect to a newly defined purpose to cultivating happiness and daily life.

It conveys I believe that our role does not stop at providing the highest quality of service and care to our residents. It goes much further.

Each and every day, we will strive to bring happiness into our residents' lives by enabling our team to put their passion for their work interaction and by supporting families to bring joining into our homes.

In retirement and long term care, we are committed to helping residents discover happiness through personalization choice and community engagement and a comfortable home like setting.

And in doing so each and every day it supports our vision to be Canada's most trusted and most loved senior living provider.

Moving to our focus on ESG.

Our key focus to create positive changes for our stakeholders and the communities. We serve is also highlighted in CNS second ESG report, which was published yesterday.

The need for quality seniors care and services has never been greater and I feel confident about our long term growth potential and position to meet the needs of Canadian seniors during a time of unprecedented growth.

Yesterday, we announced that <unk>, who had less CNS chair of the board of directors has decided to step down after 12 year tenure on Sienna's Board.

On behalf of our board and our management team I would like to express my gratitude to Dino for his guidance and Thats supported chinas growth and transformation.

He has extensive experience wisdom and leadership over the past 12 years, and especially through the pandemic shaped organization and positioned us well in the fast growing Canadian senior living sector.

As a token of appreciation and recognition of dana's commitment to this company and leadership in this sector. We are introducing the Sienna senior living Dino kiosk ownership of $50000, which will fund the education and training for <unk> across Ontario, BC and Saskatchewan.

We are so very pleased to own a ddos through this program and to be able to support the people serving the senior living sector.

Shelley Jameson, who joined <unk> as an independent director in November of 2021 has been appointed as companies New chair and I would like to sincerely. Thank Shelly for taking on this role.

As we pursue our vision to become Canada's most trusted and most loved senior living provider I am looking forward to working with Shelley was impressive expertise in senior living health care and government will guide us as we continue to grow our company and to add value to our operating platform.

We are now pleased to answer any questions you may have.

Thank you.

As a reminder to ask a question at this time. Please press star one one on your telephone.

Please standby, while we compile the Q&A rosner.

Our first question comes from Jonathan <unk> with TD Securities. Your line is now open.

Thanks, Good afternoon.

Hi, Good afternoon first question.

First question just on the.

The margins for a retirement home just want to confirm so the 50 to 100 basis points.

So youre looking for the back half of this year, that's up to 38, 3% in Q2.

That's correct, Jonathan it would be up to 38 three.

3%.

Okay, and then the $2 million to $3 million in pandemic costs.

Is that do you expect that more on long term care or retirement.

It's going to be a combination of both.

And the long term care side with more b.

MPC and then we would expect some pandemic costs as well in retirement, so it would be both segments.

Okay.

50 to 100, obviously exclusive of the pin debit cards.

It would yes, it would be exclusive of the pandemic costs.

Okay, and then longer longer term given that we're in the I guess.

Seven wave of this thing now in the costs seem to be sort of a recurring thing.

At what point does it sort of become.

More of a permanent.

Cost and how should we think about margins longer longer term.

Hi, Jonathan Good afternoon. So what we are seeing is that cost decline year over year. So this wave of around 22 residences and outbreak.

But what are you finding the outcome to be very different than what we had especially in the first second and the Army Corps waiver.

Most cases, the cases are very mild to moderate and it's more around.

Just outbreak management to make sure it.

It doesn't spread people can dining and social settings and others. So we do continue to see a reduction in that cost.

Yes.

<unk> and time to time in BC and sometimes at a time when we do get funding to offset these pandemic costs. So we've got we continue to remain.

Hopeful and confident that eventually this cost of grind down closer to zero and if it does.

Become permanent for example for whatever reason then we would expect you're funding change in long term care and we would expect to be.

Passing on this cost to the to the end resident as well.

Okay.

That's helpful I'll turn it back thanks.

Thank you.

Next question comes from the line of Scott <unk> with CIBC. Your line is now open.

Hi, Thanks.

Question on the retirement residents occupancy can you comment on what kind of incentives you offered us basically how you're so successful in driving occupancy gains.

So thank you Scott good afternoon I noticed.

We get this question asked often by investors. So let me just say for the record. So we are not driving occupancy by offering incentives and I would say quite the opposite.

We might do one time our programs in our community here and there are not very different end market could be.

<unk> III are.

I hope it moving.

Occupancy drive is driven by the.

Our aspira platform, which is personalization on choice and by the local community and the third part, that's where really where all the local networks working closely with the doctors' offices and hospitals.

Making sure that the people who are visiting we are speaking to them offer often it's a it really is.

A lot of that work on the field and in our sales team has done and marketing teams have done an incredible job of that.

And have you seen tangible benefits of the new brands.

Yes.

Been surprising to us in a good way was that even though we have officially launched the brand in April we started to see that benefit even before that because we have internally we have been talking about the brand.

More for close to a year.

A lot of.

Frontline managers and our leaders have been part of it. So we didn't realize it but our team started selling is that the brand already existed even though before we officially launched the website and others. So we did see that benefit our leads were up significantly when once we start speaking about the brand and putting some of the programs into place. So we.

We definitely see the benefit of in the past and continue to see that going forward as well.

Thanks.

How do you see the current macro environment.

Rates.

Labor availability, how do you see that changing your brands.

For development.

Sure and this is where we are.

We believe that having a diversified portfolio is a huge strength, it's one plus one does article's too because.

We are seeing just in a short period of my nine years of Ciena, we've seen different cycles were.

Good growth in long term care stable predictable and.

So it becomes well known as interest in long term care at the moment because of the time and is growing by double digits. Then you have multiple markets, which are oversupplied and retirement occupancy declines and negative NOI growth and then suddenly.

Everyone likes long term care because of stable predictable and then the cycle goes back and forth. So we've seen that enough and loss just even an eight or nine years.

Youre, having both of them is a natural offset against market conditions.

Rising inflationary cost.

Obviously at a time and with the good because you can pass on that eventually that cost to the end resident in long term care become challenging and an economic uncertainty where we would be ahead. It looks like in the long term care the stability and predictability, whether it's decorating whether it's our cash flow whether it's a dividend.

Definitely supports that and from a development perspective, our development is mostly tied to long term care homes in Ontario, other than few partnerships with others and we remain committed to the development and we do expect that funding cost to change over time, because the current funding program is not adequate given the construction cost.

Thanks, Matt that's helpful too.

Silver.

Thank you.

<unk>.

Thank you.

Our next question comes from Amit Gupta with Scotiabank. Your line is open.

Thank you and good afternoon.

So just a question on the long term.

On the long term care margins will come down.

Those two quarters.

How should we think about the margins on a full year basis.

Are there some expenses, which are yet to be done.

Okay.

Yes.

Sure. Thanks for that question.

Just on a full year basis, we would anticipate that our margins would be similar to what they were in the first half of the year around 13%. One thing that you should consider is that.

In Q4 of last year, we started receiving.

Flow through funding from the government for direct care hours. So that has the effect and of course, there is no margin on.

That funding so it has the impact of increasing our revenues, but there is no impact to our NOI and as a result of that decreases our NOI margin. So.

All that to say that going forward, we would anticipate that the margin for the second half of the year would be similar as the first half.

Okay and is that something structural.

Doug.

Go ahead Jim.

On the margin.

Yes.

Not structural again.

Some of the margin compression is because of the flow through funding that we're starting to get from four direct care hours.

Anticipate that as government funding.

Creases back or other accommodations, we would see that margin expansion happening again in 2023 and beyond.

When the when the government starts funding for.

Or are other accommodations.

The only thing I would add to that combined you I think going forward it will be important because theres, a significant especially in Ontario. This significant funding change as it relates to direct care hours.

You cannot it is low margin and care. So what happens is our funding is going to go up but it's like one of your flow through so either is going to be spent or you have to give it back to the government. So I think what you might have to start measuring is margin dollars or percentage because we do expect.

Let's say if suddenly everything went back to pre pandemic.

But direct care hours are not going to for our margin would decline just mathematically. So we can start providing a bit more we will look at how better how better we can provide some more information in our disclosure as well to help to help with that.

Okay. Thank you thank you for that.

And then just to clarify.

Most thoughtful annualized shortfall because of production.

Production meeting 90 to one person.

Got it.

Any margin at all.

Q2.

Yes, that's correct, we took a small provision in the second quarter or a.

A handful of homes that we don't that may not achieve the 97%, but nothing significant.

Okay. Thank you.

And then you must take into margins.

Sure.

Mid <unk>.

Just a clarification.

That 50 to 100, which is one guidance that you bought.

This is kind of levels.

But that includes Steve.

<unk> expenses of student achievement.

Because that's where the cost of that.

Right.

Is that correct to say that.

Yes, sorry, I should clarify that it would be 50 to 100 basis points on top of the 38, 3%.

Just to clarify.

Yes.

Includes the battle.

At this level.

Thats right it would because the $38. Three also is inclusive of the 30 is within the 38, 3%.

Okay.

Good.

Thanks for that.

Last question.

Okay. Thank you. This question and then I'll just jump in.

Just wondering.

You have to see properties.

Ottawa region maybe.

I think we're that good.

How is the occupancy.

Hello Vijay.

Yes.

Our occupancy in autoimmune.

Also going up obviously as well.

Let's say if stabilizing the rest of the province of <unk>, 90, 596, and Ottawa might would be a bit lower but we did see occupancy gains in auto as well.

Okay, that's great to hear.

One last question here.

We keep hearing about the staffing shortage.

Is that a bigger issue David Dodman home.

Okay.

I would say the bigger I mean, it is really the issue was in both.

It becomes a bigger issue in long term care because for same amount of beds like 160 bed long term care home is going to really have a 160 stock members and 160 <unk> comments. So you might have 50 or 60, so I think thats the quantum becomes higher just because there are more people, but as a percentage it would be similar.

And where it becomes challenging especially for nurses because in the long term care on 160 bed long term care home at any given time, you've got a multiple.

Our nurses in the home and in retirement, there might only be one so on submitting that one person.

We're in a significant challenge.

Lying on agency, so I would say it's in both in one case, it's more volume, but the impact is quite similar in both portfolios.

Okay fair enough.

Thank you. Thank you so much thank.

Thank you.

Our next question comes from the line of Pammy Burger with RBC. Your line is now open.

Thanks, Hi, everyone.

I think you mentioned some softening in the occupancy in the retirement portfolio that you acquired.

Can you just comment on maybe what were some of the drivers behind that and then I'm.

I'm not sure if you mentioned it but how much it slipped.

Sure so it will be.

Hard for me to do.

Comment because it came in at a lower occupancy than where we expected it to be so I wouldn't I wouldn't know the reasons why it started lower.

Having said so what we are saying is that we feel confident in bringing back bringing that back up I mean, it does take two or three months to integrate things I get the sales and marketing program going usually will take even longer I was recently in many of those properties.

Properties.

And I expect it to hear a lot of integration pains and in most cases I heard things went extremely well.

It felt we welcomed to the spearhead and Siena family. So we think.

Instead of having a six month integration plan, we expect that it will be shorter which is good news and it's a bit early for us to do.

To confirm but as to where that where we can grow that occupancy in the next 12 months, but we remain confident and.

And optimistic that we can start bringing it closer to overall aspira platform occupancy.

Okay.

And then just in terms of maybe building on those comments around driving the occupancy.

What can you share in terms of.

Maybe what you plan to do differently.

That will help drive the occupancy in those assets.

Yes.

The 6% targeted yield.

Sure I would say again I don't know what to what was being done before so that's not for me to comment on I think what.

What we will be focusing on is putting the sales same sales and marketing platform that we have for aspira homes in those homes.

When we underwrote that that was our expectation and thats. So thats what makes us gives us the confidence that we can get those homes at similar levels that we have the rest of the Aspira platform App.

Yes.

Okay, I will turn it back. Thank you. Thank you.

Thank you as a reminder to ask a question at this time. Please press star one one.

Our next question comes from the line of Tal Woolley with National Bank. Your line is open.

Alright, good afternoon, everyone.

Hi, good afternoon good afternoon.

I was just curious if you think on the horizon.

Any sort of.

That's taken to maybe Ramon.

Agency usage or.

Maybe regulated a little bit more just because it's.

It's not just an issue obviously prelaunch repair and retirement its biggest through in hospitals sort of any sort of health care studying right now.

What's the thinking.

What's sort of the maybe the tcas.

<unk> in your view around that.

And the works on that front.

Sure. So that has been discussion for a long period of time.

They are I don't think they are very good examples in Canada at the moment, but U S. For example, I think there for a couple of years now because.

<unk> seen that that's happening even before Covid for example to put at a maximum rate of agency costs, regardless of what sector, you're in and that has had a huge impact. So if people are going to work at an agency because they want a lot more flexibility than behalf that would make sense.

As it happens and you can never make it to zero because if you if people call out of the last minute at that time, you are calling agency stuff, but what we're seeing happening in health care broadly, whether it's hospitals homecare long term care retirement is that people are leaving because.

Suddenly you don't have to follow all the union agreements and everything else you can just go towards agency and because the regulations you cannot do certain things unless you have a nurse on your floor. So it doesn't really matter what the cost is you have you pay for it then I.

I think last year, we just sienna we paid it on close to $50 million in agency costs and lot of it is funded by government. So I think it's in everyone's best interest.

To break that down because it is not in most cases not benefiting the end.

Teamwork it anyways, because a lot of it gets lost in the middle So we continue to advocate for it internally, we continue to advocate with associations and with government spending where we have the forum.

Okay.

And then I guess one of the other surprises I think maybe.

I'm curious to hear your perspective on it.

The fact that there was no <unk>.

Accommodation premium increase this.

Year I'm, just wondering if you can sort of maybe put that into context historically.

Whether it was surprising to the industry at large.

Yes.

Currently it was surprising because we are especially when you're in an inflationary environment and I think this is where I am.

Less than a long term care is important for all of us.

We always say that long term care is stable predictable over a period of time. So you would have years, where you're below CPI in the U S. Mature about for example, there was a period of time in 2014, where the private accommodation number increased by 5% to 6% a year without having any increases for nearly 15 years. So there was a bit of a catch up.

We understand government is also facing similar economic condition says the rest of the industries are so for example, food has gone up significantly and there was a <unk>.

Big focus on ensuring the food cost per funded there was a big focus on care costs. So that's really our hours increasing we continue to advocate for better funding for Oi as well, because that's where you pay for utilities that sort of pay for insurance and all of that which has gone up significantly so.

Again.

If history tells us anything it will be that over time, they will be caught up but youre correct, 100% that there is a shortfall for the current time period.

Okay.

And with the class C beds.

I'm just wondering.

Is there any concern around.

Lending on those assets.

We get closer to 2025.

The redevelopment process kind of needs to go through another rethink here in terms of the formula.

Is there anything we're going to have to add that the.

The industry is going to have to manage in terms of trying to figure out how lending stork.

Sure Charles So just to clarify I guess the second part of the question. The first part on the currency answer that question.

Yes.

Yeah.

It's probably already pretty clear that we're not.

Like the provinces the provinces.

The industry is not going to get through the entirety of the.

Currency beds by.

By 2025.

My understanding is that there is a bit of a challenge around refinancing loans on some of these homes.

Because the licenses expire in 2025.

Sure So I mean.

We are in a fortunate situation on the FERC side, where we do not have any financing need on any of our C. Home. So they are all unencumbered and we did it for the purpose because we.

We wanted to make sure we can develop as need be.

The construction cost has gone up significantly so the current funding does not work and thats across the sector I don't think thats going to be news for anyone.

Do continue to feel confident that eventually there is going to be at the right program continues on the pre work that is needed for many of our sites. So we are committed to this program.

But it has to make financial sense to ensure that you can borrow it at the right return for people involved in it so.

I think everyone recognizes this is not a surprise for anyone that the cost has gone up and the funding formula as we change and we do expect that to change.

Okay.

And just lastly.

The store grids.

Do you expect that to be an annual thing.

Yeah. So the way it is structured is that.

It is a one time grant for any first completed a year. So it's a one time from a few if you start if you want to get at one time, but you. That's been team members have a chance to actually do a matching program, where we would match up to a certain dollar amount. So I think this initial number is obviously much bigger because you are catching up.

The second brands might be bigger than relative not bigger than $1 6 million, but bigger to the ones follow after that because there were some key members, who actually do a matching program, where we would match up to a certain dollar amount. So I think this initial number is obviously much bigger because we were catching up.

I think the second brands might be bigger than relative not bigger than $1 6 million, but they go to the ones follow after that because there were some key members who.

We wanted to wait to see how things work because there is obviously administrative process and getting those shares granted so we do expect the second tranche to be.

A little bit bigger than others and after that it should be a much smaller number because you really granting into people, who who have less than a year in the company.

Okay, but it will be sort of an ongoing expense.

Thats correct, okay perfect. Thanks very much.

Thank you.

Thank you and I'm currently showing no further questions at this time I would like to turn the call back over to James for closing remarks. Thank.

Thank you Shannon. Thank you everyone for joining our call today on behalf of our Mad one for joining our call today on behalf of you for your continued support and I Hope you have a great rest of the summer.

This concludes today's conference call. Thank you for participating you may now disconnect.

The conference.

Vince will begin shortly to raise your hand during Q&A you can dial one one.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

[music].

Yes.

Okay.

Sure.

[music].

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

[music].

Yes.

[music].

Yes.

[music].

Okay.

[music].

Yes.

[music].

Yes.

Okay.

Yes.

Okay.

[music].

Yes.

Okay.

[music].

Yes.

[music].

Yes.

Sure.

Yes.

Okay.

[music].

Okay.

[music].

No.

[music].

Yes.

Sure.

[music].

Yes.

Okay.

[music].

Okay.

Yes.

Okay.

Yes.

Sure.

Okay.

[music].

Sure.

Okay.

Yes.

[music].

Yes.

Sure.

Yes.

[music].

Yes.

[music].

Yes.

[music].

Yes.

[music].

Okay.

Yes.

Okay.

Yes.

Okay.

Sure.

Yes.

Sure.

[music].

Yes.

Okay.

Yes.

Okay.

Yes.

[music].

Yes.

[music].

Okay.

Yes.

Sure.

Yes.

Please.

Yes.

Okay.

Yes.

Okay.

Sure.

Okay.

Thanks.

Okay.

Yes.

Thank you.

Okay.

Yes.

Thanks.

[music].

Sure.

Yes.

[music].

Yes.

Okay.

Thanks.

Yes.

Okay.

Yes.

[music].

Sure.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

Okay.

[music].

Yes.

Sure.

Yes.

[music].

Okay.

Yes.

Okay.

Thank you.

Yes.

Okay.

Yes.

[music].

Yes.

[music].

Okay.

Yes.

Okay.

Yes.

Okay.

Yes.

[music].

Yes.

[music].

Yes.

Okay.

Yes.

Ladies and gentlemen, welcome to Sienna Senior living Inc. Second quarter 2022 conference call.

Today's call is hosted by James President and Chief Executive Officer, and David Hong Chief Financial Officer.

Senior living.

Please be aware that statements or information discussed today are forward looking and actual results could differ materially.

The company does not undertake to update any forward looking statement.

Please refer to the forward looking information and risk factors section in the Companys public filings.

Its most recent MD&A.

For more information.

You will also find a more fulsome discussion of the company's results in its MD&A and financial statements for the period.

Which are posted on SEDAR and can be found on the company's website CN a living that CA.

Today's call is being recorded and a replay will be available.

Instructions for accessing call are posted on the company's website and the details are provided in the company's news release.

The company has posted slides, which accompany the host's remarks on the company website under events and presentations.

With that I will now turn the call to Mr. Jeong. Please go ahead Mr. Tang.

Thank you Shannon and good afternoon, everyone and thank you for joining us on our call today, our second quarter results reflect the continued improvements across our operations and highlight the benefits of running a large diversified operating platform.

Our solid results come at a time of economic uncertainty and highlight the stability of our long term care operations and the growth potential inherent in our retirement platform.

This was highlighted in our year over year same property net operating income growth of 19, 7% in our retirement portfolio and two 7% growth in our long term care portfolio.

Average same property at a time and occupancy increased by 820 basis points to 87, 1% year over year and second quarter of this year.

Leading to significant NOI growth, despite higher labor cost and inflationary pressures.

Occupancy increased to 88, 6% in July a level not seen since well before the pandemic.

In line with the positive occupancy trends, we updated our occupancy forecast, what the retirement portfolio, increasing until approximately 89% to 90% by the end of 2022 from the previous guidance of 87% to 89%.

Our sales and marketing teams have been generating strong interest in our residents is by building and maintaining excellent relationships in the local communities.

Our efforts coupled with strong demand resulted in an increase in rent deposits and our same property portfolio of 14% and then and then increase in move ins up approximately 19% year over year compared to Q2 2021.

We also expect spit out a common brand to support continued occupancy growth by often personalization and expanded choices to residents.

Okay.

And maybe April we launched a new website for SBR and started rolling out new signature programs.

The immediate response from prospective residents and families have been compelling initial.

Initial results indicate that qualified leads have increased by approximately 26% during the first month after the launch compared to the same period in 2021.

Yeah.

Our teams have also worked tirelessly to integrate the 12 retirement residences, we acquired during the quarter into the Aspira platform <unk>.

Average Q2 occupancy was approximately 82% at that five residences or 84, 1%. Excluding one retirement residents that is currently in lease up.

While this reflects some softening in recent months, we are confident that occupancy trends will become more consistent with overall portfolio. Once these residents and team members are fully integrated investment platform.

Now moving to slide seven and our long term care communities resident admissions progress steadily throughout this quarter.

The average same property occupancy reached 95, 5% in the second quarter and in February of 2022, the government of Ontario reinstated occupancy targets of 97% required for full funding.

Given the long waiting list for long term care beds, we anticipate to meet the required occupancy targets and majority of our communities for full funding this year with limited impact on NOI.

Moving to our development plan over the past the European product, how did our plans to redevelop our agent classically long term care portfolio in Ontario.

Our plans include over $600 million in capital investments and to date, we have received bad license allocations for the Ministry of long term care, but 12 hour long term care communities for a total of 2600 beds.

Including approximately 1800 for renewals and what 800 new beds.

Current supply chain issues in a high inflation have slowed the development momentum in recent months, including at our project in North Bay, where construction started last year.

Closely monitoring cost escalations with respect to material and labor and their impact on our construction starts estimated development deals and economic feasibility of our current and future projects.

Sure.

Staffing will remain one of the biggest challenges for some time and we've been very active on many fronts to break the existing labor gap externally, we continue to advocate for faster immigration and expedited placements of internationally educated nurses.

Internally, we are making important investments with respect to our staff scheduling and followed software to support our scheduling initiatives.

Were currently implementing a new system that will provide greater visibility to staffing on a real time basis.

This new technology will help us fill staffing gaps more seamlessly and faster. It also helps us better monitor agency staffing and improve scheduling for our own team members.

The new system is expected to be completed later in 2022 across all of our long term care communities.

And will be rolled into our retirement platform after that.

We expect competition for talent to further intensify in the years ahead, and we will continue with enhanced recruitment campaigns with key colleges and universities.

During the first six months of 2022 over 1100 students were placed at our camp communities in retirement residences, many of whom we hope to hire once they graduate.

Okay.

Our recruitment strategy is also focused on strengthening our employer brand that we do this by more clearly communicating what it means to be part of CNS with a goal to become the employer of choice and Canadian senior living sector.

We plan to achieve this objective by offering a compelling team member experience and by nurturing our purpose driven culture.

Making sure our team members for your support and I. Appreciate it has never been more important and is reflected in many of our initiatives such as our share ownership program.

Subsequent to the call absorbed by our shareholders at the annual General meeting in April shares in the amount of $1 $6 million what it should have team members as part of my initial three 3 million committed.

Commitment.

With that I'll turn it over to David for an update on our operating and financial results.

Thank you, Matt and good afternoon, everyone I will start on slide 11 for financial results.

At the same time intense competition for talent cost pressures and decades high inflation continued to impact our operations.

In Q2 of 2022 total adjusted revenues increased by 10, 7% year over year to $182 million.

Revenues as a result of two properties that we sold earlier in 2022.

<unk> 9 million of additional NOI from our 12, new retirement properties.

Our LTC segment was stable with total LTC NOI lower by $4 million.

Compared to the last year.

This was partially offset by higher cost per agency staffing culinary cost utilities insurance and marketing costs.

Rent collection levels remained high at approximately 99%.

CNS long term care same property NOI increased by two 7% to $18 million compared to last year, primarily due to increases in preferred accommodation revenues from increased occupancy offset partly by higher utilities and insurance costs.

Over the past two years, we have seen significant cost pressures, including higher agency costs due to staffing shortages increased insurance premiums and rising utility costs. In addition to generally high inflation in line with the overall market.

We further anticipate that net pandemic related expenses will range from $2 million to $3 million in the third quarter of the year as a result of recent increase in COVID-19 cases.

Q2, OSF all per share increased by 5% to $23 seven.

Adjusted funds from operations increased by 22% to $17 2 million compared to last year due to higher <unk>.

As well as lower maintenance costs and.

<unk> per share increased by 12% to 23 six in Q2 2022, resulting in an <unk> payout ratio of 99%.

Earlier in the year.

Debt to adjusted EBITDA increased to $9 five years in Q2 2022 compared to seven four years in Q2 2021 and.

And interest coverage ratio increased to three two times in Q2 2022 compared to three one times in Q2 2021.

Our debt is well distributed between unsecured debentures credit facilities unsecured term loans conventional mortgages and mortgages insured by the Canada mortgage and housing Corporation and our debt maturities are staggered with the next significant expiry being our $90 million unsecured term loan due in May 2023.

Refinancing of this loan which was used to support the acquisition of our 12 retirement residences is well underway I will now turn the call back to Nick for his closing remarks. Thank you David.

The Canadian senior living sector continues to evolve at a fast pace.

At the changing landscape, we are reaffirming our strategy to grow our balanced portfolio and which at retirement and long term care operations each make a significant contribution to the company's overall net operating income.

With deep experience and scale in each segment, we run two distinct business lines, which are deeply aligned with respect to our newly defined purpose to cultivating happiness and daily life.

It conveys I believe that our role does not stop at providing the highest quality of service and care to our residents. It goes much further.

And then <unk> long term care, we are committed to helping residents discover happiness through personalization choice and community engagement and a comfortable home like setting.

And in doing so each and every day and supports our vision to be Canada's most trusted and most loved analytics provider.

Moving to our focus on ESG.

Our key focus to create positive changes for our stakeholders and the communities. We serve is also highlighted in CNS second ESG report, which was published yesterday.

The need for quality of seniors care and services has never been greater and I feel confident about our long term growth potential and position to meet the needs of Canadian seniors during a time of unprecedented growth.

Yesterday, we announced the Dino Piazza wetlands CNS chair of the board of Directors has decided to step down after 12 year tenure on Sienna's Board.

On behalf of our board and our management team I would like to express my gratitude to Dino for his guidance and Thats supported sienna's growth and transformation.

We are also very pleased to honor Dino So this program and to be able to support the people serving the senior living sector.

Shelley Jameson, who joined <unk> as an independent director in November of 2021 has been appointed as companies New chair and I would like to sincerely. Thanks, Shelly for taking on this role.

We are now pleased to answer any questions you may have.

Thank you.

As a reminder to ask a question at this time. Please press star one one on your telephone.

Please standby, while we compile the Q&A roster.

Okay.

Our first question comes from Jonathan <unk> with TD Securities. Your line is now open.

Thanks, Good afternoon.

Hi, Good afternoon first question.

First question just on the.

The margins for retirement home just want to confirm so the 50 to 100 basis points potentially youre looking for the back half of this year, that's off with 38, 3% in Q2.

That's correct, Jonathan it would be off of the 38.

3%.

Okay, and then the $2 million to $3 million in pandemic costs.

Is that do you expect that more on long term care or retirement.

It's going to be a combination of both.

In the long term care side with more b.

NBC and then we would expect some pandemic costs as well in retirement, so it would be both segments.

Okay.

50 to 100, obviously is exclusive of the pin debit cost.

It would yes, it would be exclusive of the pandemic costs.

Okay, and then longer longer term given that we're in the.

Seven wave of this thing now in the costs seem to be sort of a recurring thing.

At what point does it sort of become.

More of a permanent.

Cost and how should we think about margins longer longer term.

Hi, Jonathan Good afternoon. So what we are seeing is that cost to decline year over year. So this wave of around 22 residences and outbreak.

But what we are finding the outcome to be very different than what we had especially in the first second and the Army Corps wave there.

Most cases, the cases are very mild to moderate and it's more around.

Outbreak management to make sure it.

It doesn't spread people can dining and social settings and others. So we do continue to see a reduction in the cost and then.

Ontario, and time to time in BC and sometimes at a time when we do get funding to offset these pandemic costs. So we've got we continue to remain.

Hopeful and confident that eventually this cost of grind down closer to zero and if it does.

It will become permanent for example for whatever reason then we would expect you're funding change in long term care and we would expect to be.

Passing on this cost to the to the end resident as well.

Okay.

That's helpful I'll turn it back thanks.

Thank you.

Our next question comes from the line of Scott <unk> with CIBC. Your line is now open.

Hi, Thanks.

A question on the retirement residence occupancy can you comment on what kind of incentives you offered basically how you so successful in driving occupancy gains.

So thank you Scott and good afternoon I know this.

We get this question asked often by investors. So let me just say for the record. So we are not driving occupancy by offering incentives and I would say quite the opposite.

So we might do one time our programs in our community here and there are not very different end market could be a month free are helping moving.

Really.

Occupancy drive is driven by our Aspira platform, which is personalization on choice and by the local community and the third part, that's where really where all the local networks working closely with the doctors' offices with the hospitals.

Making sure that the people who are visiting we are speaking to them offer that often.

Really is.

Lot of that work on the field and in our sales team has done it and marketing teams have done an incredible job of that.

And have you seen tangible benefits of the new brand.

Yes.

Surprising to us in a good way was that even though we officially launched the brand in April we started to see the benefit even before that because we are internally we've been talking about the brand.

<unk> more than for close to a year.

A lot of.

Frontline managers and our leaders have been part of it. So we didn't realize it but our team started selling is if the brand already existed even though before we officially launched the website and other so.

We did see that benefit our leads were up significantly when once we start speaking about the brand and putting some of the programs into place.

So we definitely see the benefit of in the past and continue to see that going forward as well.

Thanks.

How do you see the current macro environment.

Rates.

Labor availability, how do you see that changing your brands.

Ill for development.

Sure and this is where we truly believe that having a diversified portfolio is a huge strength. It's one plus one does logical SKU because.

And we are seeing just in a short period of my nine years of Ciena, we've seen different cycles were.

You have a good growth in long term care stable predictable and so.

So it becomes while no one has interest in long term care at the moment because of the time and is growing by double digits. Then you have multiple markets, which are oversupplied and retirement occupancy declines and negative NOI growth and then suddenly.

Everyone likes onto care because of stable predictable and then the cycle goes back and forth. So we've seen that enough and loss just even an eight or nine years that we feel are having both of them is a natural offset against market conditions.

Rising inflationary cost.

Asleep.

Tom in for good because you can pass on that eventually that cost of that resident and long term care become challenging.

And in an economic uncertainty, where we would be ahead it looks like.

Long term care, the stability and predictable b, whether it's decorating whether it's our cash flow whether it's a dividend.

It definitely supports that and from a development perspective.

Development is mostly tied to our long term care homes in Ontario, other than few partnerships with others and.

We remain committed to that development and we do expect that funding cost to change over time, because the current funding program is not adequate given the construction cost.

Thanks, Matt that's helpful too.

Robert.

Thank you.

Our next question comes from Matthew Gupta with Scotiabank. Your line is open.

Thank you and good afternoon.

So just a question on the long term.

On the long term care margins will come down.

It's two quarters.

How should we think about the margins on a full year basis.

Yes.

Yet to be recovered.

From Goldman Sachs.

Sure. Thanks, Thanks for that question.

Just on a full year basis, we would anticipate that our margins would be similar to what they were in the first half of the year around 13% one thing.

Should consider is that.

In Q4 of last year, we started receiving.

Flow through funding from the government for direct care hours. So that has the effect and of course, there is no margin on.

That funding so it has the impact of increasing our revenues, but there is no impact to our NOI and as a result of that decreases our NOI margin. So.

All that to say that going forward, we would anticipate that the margin for the second half of the year would be similar as the first half.

Okay and is that something structural.

Hey, Doug.

Go ahead Jim.

On the margin.

Yes no.

Not structural again.

Some of the margin compression is because of the flow through funding that we're starting to get from our direct care hours.

Anticipate that as government funding.

Creases back or other accommodations, we would see that margin expansion happening again in 2023 and beyond.

Then when the government start funding for.

Or are other accommodations.

The only thing I would add to that combined you I think going forward. It will be important because there is significant especially in Ontario. This significant funding change as it relates to direct care hours and.

Okay. Thank you. Please go ahead.

And then just to clarify.

No.

Annualized shortfall because of production.

Ladies and gentlemen.

But the bottom line margin.

In Q2.

Yes.

Correct, we took a small provision in the second quarter for a handful of homes that we don't that may not achieve the 97%, but nothing significant.

Okay. Thank you.

And then you must take into margins.

Thank you.

Ned Hall.

Just a clarification.

<unk> hundred which is one guidance that your dog was pretty light this kind of levels.

But that includes Steve.

<unk> expenses, excluding super there, because that's where the cost with Abbott.

D C.

<unk>.

Is that correct to say that.

Yes, sorry, I should clarify that it would be 50 to 100 basis points on top of the 38, 3%.

Just to clarify.

Yes.

Includes the battle for lumber the Extensiveness slips.

Thats right it would because the $38. Three also is inclusive of the 30 is within the 38, 3%.

Okay.

Thanks for that.

Last question.

<unk> discussion and then obviously we've done a good job there.

Just wondering.

You have I think two or three properties in the Ottawa region.

Maybe before I think for that group.

How is the occupancy.

Ravi Jain.

Yes.

Our occupancy in auto.

Also going up obviously.

So, let's say if stabilized and the rest of the province of <unk>, 90, 596, and Ottawa might be a bit lower but we did see occupancy gains in auto as well.

Okay, that's great.

Let's take one last question here.

We keep hearing about the staffing shortage.

Is that a bigger issue David Dodman home.

The bigger issue in the market.

Yes.

I would say the bigger I mean, it is really the issue was in both.

It becomes a bigger issue in long term care because for same amount of beds like 160 bed long term care home is going to really have a 160 staff members and 168 comments. So we might have 50 or 60, so I think thats the quantum becomes higher just because there are more people, but as a percentage it would be similar.

And where it becomes challenging especially for nurses because in the long term care on 160 bed long term care home at any given time, you've got a multiple.

Nurses in the home and in retirement, there might only be one so on submitting that one person.

Now you are in a significant challenge and yet youre relying on agencies I would say it's in both in one case, it's more volume, but the impact is quite similar in both.

Portfolios.

Okay fair enough.

Thank you. Thank you so much thank.

Thank you.

Yes.

Thank you.

Our next question comes from the line of Pammy Burger with RBC. Your line is now open.

Thanks, Hi, everyone.

I think you mentioned some softening in the occupancy in the retirement portfolio that you acquired.

Can you just comment on maybe what were some of the drivers behind that and then and now.

Not sure if you mentioned it but how much it flipped.

Sure so.

It would be hard for me to comment because it came in at a lower occupancy than where we expected it to be so I wouldn't I wouldn't know the reasons why it started lower.

Having said so what we are saying is that we feel confident in bringing back bringing that back up I mean, it does take two or three months to integrate things I get the sales and marketing program going usually it will take even longer I was recently in many of those are <unk>.

<unk> and <unk>.

And I expect it to hear a lot of integration pains.

And in most cases I heard things went extremely well.

It felt we welcomed to the spearhead and Siena families. So we think our instead of having a six month integration plan, we expect that it will be shorter which is good news and it's a bit early for us to do.

To confirm but as to where that where we can grow that occupancy in the next 12 months, but we remain confident and.

And optimistic that we can start bringing it closer to overall that's paid off platform occupancy.

Okay.

And then just in terms of maybe building on those comments around driving the occupancy.

What can you share in terms of.

Maybe what you plan to do differently.

That will help drive the occupancy in those assets.

Yes.

The 6% targeted yield.

Sure I would say again I don't know what to what was being done before so that's not for me to comment on I think what.

What you will be focusing on is putting the sales same sales and marketing platform that we have for aspira homes in those homes.

When we underwrote that that was our expectation and thats. So.

So thats what makes us gives us the confidence that we can get those homes at similar levels that we have the rest of the Aspira platform App.

Okay.

Okay, I will turn it back. Thank you. Thank you.

Thank you as a reminder to ask a question at this time. Please press star one on one.

Our next question comes from the line of Tal Woolley with National Bank. Your line is open.

Alright, good afternoon, everyone.

Hi, good afternoon good afternoon.

Sure.

I was just curious if.

You think on the horizon there'll be any sort of.

Steps taken to maybe rein in agency usage or.

Maybe regulated a little bit more just because.

It's not just an issue obviously furloughed prepare and retirement its biggest you in hospitals sort of any sort of health care setting right now.

What's what's the thinking.

What's sort of the maybe the Tcas view in your view around that.

Anything in the works on that front.

Sure. So that has been discussion for a long period of time and they are I don't think they are very good examples and in Canada at the moment, but the U S. For example, I think there for a couple of years now because.

They have seen that this happening even before Covid for example, they put at a maximum rate of agency caused regardless of what sector, you're in and that has had a huge impact. So if people are going to work at an agency because they want a lot more flexibility than behalf that would make sense that that doesn't happen and you can never.

Make it to zero because if you if people call out of the last minute.

At that time, you are calling agency stuff, but what we're seeing happening in health care broadly, whether it's hospitals homecare long term care retirement is that people are leaving because.

Suddenly you don't have to follow.

Union agreements and everything else you can just go towards agency and because the regulations you cannot do certain things unless you have a nurse on your floor. So it doesn't really matter what the cost is you have you pay for it then.

Last year, we just Sienna we paid it on close to $50 million in agency costs and lot of it is funded by government. So I think it's in everyone's best interest.

To break that down because it is not in most cases not benefiting the.

At the end.

Okay.

And then I guess one of the other surprises I think maybe let me know.

I'm curious to hear your perspective on it.

The fact that there was no.

Accommodation premium increase this.

This year I'm, just wondering if you can sort of maybe put that into context historically.

Whether it was surprising to the industry at large.

Yes, it definitely was surprising because we are especially when you're in an inflationary environment and I think this is where I am.

Less than a long term care is important for all of us that when we always say that long term care is stable predictable over a period of time. So you will have years, where you're below CPI in the U S which are above for example, there was a period of time.

<unk> thousand 14, where the private accommodation number increased by 5% to 6% a year without having any increases for nearly 15 years. So there was a bit of a catch up.

We understand government is also facing similar economic conditions as the rest of the industries are so for example, food has gone up significantly and there was a.

A big focus on ensuring the food cost per funded there was a big focus on care costs. So that's relocate our hours are increasing.

We continue to advocate for better funding.

Funding for OLED as well, because that's where you pay for utilities that sort of pay for insurance and all of that which has gone up significantly so.

Again, we are.

History tells us that I think it will be that over time, they won't be caught up but youre correct, 100% that there is a shortfall for the current time period.

And with the class C beds.

I'm just wondering.

Is there any concern around.

Lending on those assets.

We get closer to 2025.

The redevelopment process kind of needs to go through another rethink here in terms of the formula.

Is there anything we're going to have to.

The industry is going to have to manage in terms of trying to figure out how lending stork.

Sure Kyle So just to clarify I guess the second part of the question. The first part on the currency answer that question.

I'm, just I'm just thinking like <unk>.

It's probably already pretty clear that we're not.

The provinces the provinces.

The industry is not going to get through the entirety of the CBA the currency beds.

By 2025.

My understanding is that there is a bit of a challenge around refinancing loans on some of these homes with because the licenses expire in 2025.

Sure So I mean.

We are in a fortunate situation on the FERC side, where we do not have any financing need on any foresee home. So they are all unencumbered and we did it for the purpose because.

We want to make sure we can develop as need be.

Sure.

The construction cost has gone up significantly so the current funding does not work and thats across the sector I don't think thats going to be news for anyone.

We do continue to feel confident that eventually there is going to be at the right program continues on the pre work that is needed for many of our sites. So we are committed to this program.

But it has to make financial sense to ensure that you can borrow it at the right return for people involved in it so.

I think everyone recognizes this is not a surprise for anyone that the cost has gone up and the funding for philosophy change and we do expect that to change.

Okay.

And just lastly.

The store grids.

Do you expect that to be an annual thing.

Yeah. So the way it is structured is that.

It is a onetime Brian for any first completed a year. So it's a onetime from if you started you want you're going to get at one time, but yet you. That's been team members have a chance to actually do a matching program, where we would match up to a certain dollar amount. So I think this initial number is obviously much bigger because we were catching up.

The second brands might be bigger than relative not bigger than $1 6 million, but they go to the ones follow after that because there were some key members, who actually do a matching program, where we would match up to a certain dollar amount. So I think this initial number is obviously much bigger because we were catching up.

I think the second brand might be bigger than relative not bigger than $1 $6 million, but they go to the ones follow after that because there were some key members who.

Or we wanted to wait to see how things work because there is obviously administrative process and getting those shares granted so we do expect the second tranche to be.

Little bit bigger than others and after that it should be a much smaller number because you really granting into people who are who have less than a year in the company.

Okay, but it will be sort of an ongoing expense.

That's correct.

Perfect. Thanks very much.

Thank you.

Thank you and I'm currently showing no further questions at this time I would like to turn the call back over to James for closing remarks.

Shannon. Thank you everyone for joining our call today on behalf of our megawatts for joining our call today on behalf of you for your continued support and I Hope you have a great rest of the summer.

This concludes today's conference call. Thank you for participating you may now disconnect.

Q2 2022 Sienna Senior Living Inc Earnings Call

Request a DemoDemo

SIA

Sienna Senior Living

Earnings