DALLAS, Aug. 06, 2020 (GLOBE NEWSWIRE) — Capital Senior Living Corporation (the “Company”) (NYSE: CSU), one of the nation’s largest operators of senior housing communities, announced today operating and financial results for the second quarter ended June 30, 2020.
Recent HighlightsConsolidated occupancy declined 240 bps in the second quarter of 2020 as compared to the first quarter of 2020 due to the impacts of COVID-19.The Company incurred $2.9 million of incremental COVID-19-related costs, which were mitigated by reductions in other expenses.The Company entered into short-term forbearance agreements with certain lenders, which provided $5.7 million of debt service payment deferrals in the second quarter of 2020.Agreements reached with REIT partners in the first quarter of 2020 reduced facility lease expense, resulting in a lesser Net Loss for the second quarter of 2020, which declined from $(47.2) million in the first quarter of 2020 to $(12.8) million in the second quarter of 2020, and a $0.8 million increase in Adjusted CFFO in the second quarter of 2020 as compared to the first quarter of 2020.As the next step in the Company’s plan to restructure its balance sheet, the Company initiated a process in July 2020 which is intended to transfer the operations and ownership of 18 communities that are either underperforming or are in underperforming loan pools to Fannie Mae, the holder of non-recourse debt on such communities.  The transfer will reduce the Company’s debt by $216.3 million and improve annual cash flow by approximately $10 million. The Company is in negotiations with Fannie Mae related to an agreement that is intended to assure the orderly transition of such communities.“During the second quarter we continued our intense operational focus on mitigating the effects of COVID-19 while remaining steadfast in our commitment to protect and care for our residents and employees,” said Kimberly S. Lody, President and Chief Executive Officer.  “While occupancy declined during the second quarter, our physical occupancy trend improved each month, and in June we experienced positive net move-ins.  In addition, our Adjusted CFFO increased sequentially in the second quarter due to reductions in facility lease expense, an outcome of the agreements reached with our REIT partners earlier this year. “We announced today that we have made the decision to turn back 18 communities to Fannie Mae.  These communities have been heavily impacted by the current COVID environment. With their unsustainably high debt load and generally difficult operating conditions, it did not make sense for us to continue incurring steep losses after debt service.  While a difficult decision, turning back these communities to improve our operating performance and liquidity is in the best interest of the Company and its shareholders.  We are working together with Fannie Mae to ensure a smooth transition of these communities to other operators.”Ms. Lody continued, “While we expect our financial results will continue to be impacted by the pandemic for the next several months, we believe that the strength of our operations teams, coupled with actions to improve our financial foundation, will further facilitate our operational turnaround as market conditions stabilize.”Financial Results – Second Quarter
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