Sonida Senior Living (formerly Capital Senior Living) came out with its first quarter earnings, just a month after it provided its delayed fourth quarter results. At that time, Sonida had reported some progress after it raised $154.8 million through a major recapitalization in late 2021, including reporting sequential occupancy growth from 82.0% in January to 82.2% in February and 82.6% in March. That equated to a 60-basis point increase for a quarter that always declines.
Now, looking at the weighted average occupancy for its same-store portfolio, the first quarter of 2022 came in at 82.3%, which represents a 100-basis point increase from the previous quarter and is 680 basis points higher than the weighted average in Q1:21. Sonida is not the only company to achieve an occupancy gain in the first quarter, but we have not seen a 100-basis point increase yet. That is very good news as we head into the busiest move-in period of the year.
Sonida did report a net loss in the first quarter of 2022 of $17.8 million, compared to net income of $38.8 million in Q1:21. However, the change was primarily due to a $47.0 million gain on extinguishment of debt and $8.7 million of CARES Act income in 2021. In fact, resident revenue in Q1:22 increased 12.5% from the year-ago quarter to $50.8 million, and adjusted EBITDAR rose 38.6% to $3.7% during the same period due to the improved operations and higher census. REVPOR increased 2.3% quarter over quarter to $3,644, and the NOI margin grew by 20 basis points to 20.2%.
With the positive operating momentum, Sonida also commenced its new growth phase with the acquisition of two seniors housing communities in Indiana for $12.3 million. The company also strengthened its balance sheet by refinancing 10 communities with an initial term loan of $80 million. In addition, $10.0 million is available as delayed loans that can be borrowed upon achieving and maintaining certain financial covenant requirements and up to an additional uncommitted $40 million may be available to fund future growth initiatives.
As part of the transaction, Sonida provided a limited payment guaranty of 33%, that reduces to 25% and then to 10%, of the then outstanding balance of the refinance facility based upon achieving certain financial covenants maintained over a certain time period. That’s where the positive operating momentum will be critical going forward; otherwise, Sonida could find itself in another financial crunch. Sonida also accepted $9.1 million of cash for grants from the Provider Relief Fund’s Phase 4 General Distribution in April 2022. Lastly, Sonida further strengthened its accounting and finance function by welcoming Kevin Detz as Chief Financial Officer and Howard Garfield as Chief Accounting Officer. Both began their employment with the company on May 1, 2022.
