DALLAS — Sonida Senior Living (NYSE: SNDA), a Dallas-based owner-operator, saw stock prices plummet Thursday, March 30, as its fourth-quarter 2022 earnings press release warned that the company may be on its way to failure.
“Due to the current inflationary environment, elevated interest rates and continued impact of COVID-19 on our financial position, as well as our upcoming debt maturities, our management concluded as of Dec. 31, 2022 there is substantial doubt about our ability to continue as a going concern,” the press release reads.
“While the company’s plans are designed to provide it with adequate liquidity to meet its obligations for at least the 12-month period following the date its financial statements are issued, the remediation plan is dependent on conditions and matters that may be outside of the company’s control, and no assurance can be given that certain options will be available on terms acceptable to the company, or at all.”
The company reported a net loss of $16.6 million for the quarter and $54.4 million for the year, after posting a positive net income of $125.6 million in 2021.
The stock price opened at $10.94 per share on Thursday, but quickly fell more than 55 percent to $6.11 following the press release. The company’s stock has traded as high as $35.48 per share within the last 12 months.
Formerly known as Capital Senior Living Corp., the company rebranded as Sonida in late 2021. The former CEO, Kim Lody, left in September of 2022 at the end of a three-year turnaround plan. Then-COO Brandon Ribar was elevated to the CEO position at that time.
The Sonida press release notes that many of its properties are already under transition to new operators, and in some cases are being handed over to lenders, including two communities that were given over to Fannie Mae on Jan. 11. The company is also trying to renegotiate loans with life insurance lenders to hold on to four other communities.
“During the first quarter of 2023, the company elected not to make principal and interest payments due in February and March of 2023 related to certain non-recourse mortgage loan agreements covering four of the company’s properties, with outstanding debt amount under such agreements totaling $70 million as of Dec. 31, 2022,” the press release states. “The company is currently engaged in active negotiations with the lender for these loans as well as the additional [life insurance company] loans relating to six communities to resolve this matter and obtain more favorable terms. However, we cannot give any assurance that a mutually agreeable resolution will be reached.”
As of the American Seniors Housing Association (ASHA) June 1 calculations, Sonida was the 27th largest owner of seniors housing in the U.S. with 62 properties totaling 6,534 units, as well as the 21st largest operator with 76 properties totaling 7,957 units.