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Edited Transcript of SNR earnings conference call or presentation 27-Feb-20 2:00pm GMT

·27 min read

Q4 2019 New Senior Investment Group Inc Earnings Call New York Mar 12, 2020 (Thomson StreetEvents) -- Edited Transcript of New Senior Investment Group Inc earnings conference call or presentation Thursday, February 27, 2020 at 2:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Bhairav Patel New Senior Investment Group Inc. - Executive VP of Finance & Accounting and CAO * Jane Ryu New Senior Investment Group Inc. - President * Susan L. Givens New Senior Investment Group Inc. - CEO & Director ================================================================================ Conference Call Participants ================================================================================ * Andrew T. Babin Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst * Daniel Marc Bernstein Capital One Securities, Inc., Research Division - Research Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good day, and welcome to the New Senior Investment Group Fourth Quarter 2019 Earnings Conference Call and Webcast. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Ms. Jane Ryu, Vice President. Please go ahead. -------------------------------------------------------------------------------- Jane Ryu, New Senior Investment Group Inc. - President [2] -------------------------------------------------------------------------------- Good morning, and welcome to New Senior's earnings call for the fourth quarter and full year 2019. With me today are Susan Givens, our CEO; Bhairav Patel, EVP of Finance and Accounting; and Lori Marino, General Counsel. Before I turn the call over to Susan, I'd like to highlight that this morning's press release, our quarterly supplement and the reconciliations of GAAP and non-GAAP financial measures can be found on our website at newseniorinv.com. Before we begin, please note that our discussion will exclusively focus on non-GAAP measures, unless otherwise indicated. During this call, we will make forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. No forward-looking statements can be guaranteed, and actual results may differ materially from those projected. Forward-looking statements made on this call should be evaluated together with the risks and uncertainties that affect our business, particularly those disclosed in the risk factors and in other disclosures in our most recent annual and quarterly reports filed without -- with the SEC, including the Form 10-K that we will be filing later today. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. And now I'd like to turn the call over to our CEO, Susan Givens. -------------------------------------------------------------------------------- Susan L. Givens, New Senior Investment Group Inc. - CEO & Director [3] -------------------------------------------------------------------------------- Great. Thanks, Jane. Good morning, and thank you for joining New Senior's earnings call for the fourth quarter and full year 2019. I'll spend a minute discussing what we accomplished in 2019 and how we're thinking about the business going forward. And then I'll turn the call over to Bhairav to discuss portfolio performance, financial results and 2020 guidance. 2019 was a transformational year for New Senior. At the beginning of the year, we set out on a new path as an internally managed company. We knew we had a lot of work ahead of us, and we outlined a clear set of initiatives aimed at repositioning the company for success. Throughout the year, we made significant progress across each of those initiatives. And today, the company is in a much better place than it was a year ago. We made decisions that weren't easy, including the decision to sell our assisted living portfolio, but we remain focused on proactively addressing issues within our portfolio with the goal of putting the company firmly on a path to benefit as medium- and longer-term fundamentals improve across the senior housing industry. Overall, I'm extremely happy with what we accomplished in our first year as an internally managed company, and I want to thank our entire team for their commitment and hard work as we went through this period of significant change. Our team is focused and motivated, and I am optimistic that we can continue to build on the progress we made in 2019 as we shift our attention to 2020 and beyond. Now I'll quickly touch on Q4 and full year 2019 performance. I'm pleased to report that AFFO for the full year 2019 was $0.67 per share at the high end of our guidance range, with AFFO for the fourth quarter coming in at $0.18 per share, which is in line with our expectations. Bhairav will discuss in more detail, but on the portfolio side, total adjusted same-store NOI for the full year 2019 was up modestly at 0.3% versus full year 2018. Like others in the senior housing market, we continue to face a number of challenges impacting occupancy and expenses across our portfolio. But we're encouraged that our portfolio, which is now 96% independent living, continues to post relatively stable results. Now turning to our 2019 strategic priorities and accomplishments. At the beginning of 2019, we identified 4 key priorities for the year, including optimizing the portfolio, managing operator concentration, strengthening the balance sheet and increasing the transparency of our financial results. Throughout the year, we made significant progress, and I'll briefly give you an update on each. On optimizing our portfolio, our goal was to get our portfolio to a place where we could generate strong and consistent NOI growth. As we discussed previously, despite representing a relatively small percentage of our overall NOI, our assisted living portfolio had a prolonged negative impact on our financial results, a trend that we expected to continue into 2020 and beyond. As a result, one of our top priorities was to address the underperformance of the AL portfolio. We pursued a variety of strategies aimed at improving performance and ultimately concluded that a sale the entire AL portfolio will enable us to simplify our business and focus our attention on driving performance across our core IL assets. So in October 2019, we announced the sale of the entire AL portfolio of 28 properties for $385 million, and I'm happy to report that the transaction was recently completed as planned and on schedule. By selling the AL assets, we are left with an IL portfolio that has a strong track record of delivering solid results. Importantly, the sale of the AL portfolio enables us to dedicate ourselves to growing our core business, which is low acuity, private pay senior housing. Moving to our operator concentration. Holiday Retirement is our largest operating partner. And following the sale of the AL portfolio, Holiday manages assets that account for approximately 95% of our NOI. Holiday is an important partner of ours, and we believe they have done a great job operating our assets. That said, we also recognize the benefits of having a diversified portfolio of operators, and throughout 2019, we spent considerable time developing and growing relationships with existing and new operators. We're excited about these relationships, and we believe that partnering with some of the best operators in the industry will provide fresh perspective and more ideas as we explore a variety of new growth opportunities, both within and outside our current portfolio. Now turning to the balance sheet. In 2019, we implemented several initiatives that significantly improved our capital structure. Most notably, with the sale of the AL portfolio, we reduced our debt balance by approximately $360 million and improved the cash flow profile of the company. Additionally, in conjunction with the sale, we refinanced approximately $400 million of debt, which resulted in lower interest costs and an extension of our average weighted debt maturities by 2 years. And finally, we took advantage of the interest rate environment by executing an interest rate swap in 2019, which, together with the refinancing activities related to the sale of the assisted living portfolio, improved our fixed rate debt exposure from approximately 24% at the beginning of 2019 to approximately 55% today. Addressing our balance sheet will be a multistep process that will take time, but I'm very pleased with the progress made to date. And finally, we provided financial guidance for the first time in 2019, with the goal of improving the transparency of our financial results. Throughout the year, we refined our guidance range. And importantly, today, we reported that our full year 2019 results were at the high end of that guidance range. Overall, 2019 was a pivotal year, and as a result of a lot of focus and hard work, the company is in a significantly better position today than it was a year ago. With the sale of the assisted living portfolio, the company has a simple and straightforward portfolio of 102 independent living assets and 1 CCRC. As we move forward, we are focused on our next set of priorities, which includes managing our operator concentration and improving owner-operator alignment, continuing to strengthen our balance sheet and shifting our attention to organic and external growth. Our IL portfolio serves the attractive private pay middle market demographic, and we are well positioned to benefit from the growing demand in this segment. We believe we have a unique portfolio of senior housing assets. And while the industry continues to face near-term headwinds, the medium- and long-term fundamentals of the senior housing industry remain compelling. Now I'd like to turn the call over to Bhairav to review the portfolio and financial results in more detail. Bhairav? -------------------------------------------------------------------------------- Bhairav Patel, New Senior Investment Group Inc. - Executive VP of Finance & Accounting and CAO [4] -------------------------------------------------------------------------------- Thanks, Susan, and thanks, everyone, for joining us on the call this morning. I'll begin with a review of our portfolio performance and financial results, followed by an overview of our guidance for 2020. As of year-end, our portfolio was comprised of 131 private pay senior housing properties across 37 states. Subsequent to year-end, we completed the sale of 28 AL/MC properties, which were classified as discontinued operations on our year-end financial statements. Accordingly, the results of these properties have been carved out and excluded from the results of continuing operations on our income statements for all periods presented. These assets are also separately identified as discontinued operations on the face of our balance sheet for the periods presented. Lastly, these assets are no longer included in our same-store pool, which is now comprised of 103 properties, including 102 managed IL properties. Full year same-store cash NOI for our total portfolio of 103 assets was up 0.3% compared to 2018. Consistent with others in the industry, occupancy pressures on our portfolio persisted throughout 2019. Full year occupancy declined 50 basis points year-over-year, with the fourth quarter seeing the worst decline at 90 basis points compared to the fourth quarter of 2018. Those declines were offset by improving RevPOR trends, which, for the year, grew 1.6%. This was mainly driven by consistent rent increases of over 3% on existing residents. In addition, we saw solid expense controls throughout most of the year, ultimately resulting in modest NOI growth despite lower occupancy. Fourth quarter same-store cash NOI for our total portfolio decreased by 3.3% year-over-year. The NOI decline was in part due to a tough comparable period that we have pointed to in the past. Expenses were significantly higher relative to the fourth quarter of last year due to several onetime adjustments in the fourth quarter of 2018. That, in addition to the impact of software occupancy trends, drove the year-over-year decline. We are pleased to see, however, continued solid RevPOR trends in the fourth quarter as well as a very strong leasing month in December, which sets us up very nicely for 2020. Now I'll briefly touch upon new supply as we continue to be encouraged by some of the trends we are seeing nationwide ended in our markets. Across all markets covered by NIC, total construction as a percentage of inventory declined for the fourth consecutive quarter in Q4. New construction starts continue to trend over, with both AL and IL rolling 4-quarter starts well below the elevated levels of 2017 and 2018. In our NIC markets, we saw further evidence of increasing demand as annual absorption outpaced annual inventory growth for the second consecutive quarter compared to the previous 3 years, where absorption consistently lacked behind inventory growth. Lastly, new openings around our assets were down 30% in 2019 and have now turned it lower for the past 3 years. Now I'll discuss our financial results, balance sheet and outlook for 2020. AFFO for the fourth quarter was $15.1 million or $0.18 per diluted share. This brings our full year AFFO to $0.67 per diluted share, which is at the top of our 2019 guidance range. NOI for the fourth quarter was $36.1 million. Interest expense for the fourth quarter was $18 million or 5% lower compared to the prior quarter. This was driven by a lower average debt balance and a decrease in LIBOR relative to the previous quarter. NOI and interest expense amount I just discussed exclude amounts attributable to the AL/MC assets as these assets are excluded from continuing operations, and their combined results are presented as a single line item on our income statement. However, the contribution of these assets has been included in our AFFO for the fourth quarter of 2019 to facilitate a historical comparison. Turning to the balance sheet. Our gross assets and cash and cash equivalents were $2.6 billion and $40 million, respectively. We had $1.9 billion in face amount outstanding as of year-end at a weighted average coupon of 4.2% and a weighted average maturity of $4.4 million -- sorry, 4.4 years. Subsequent to year-end, we completed the sale of the AL/MC assets and utilized the proceeds to reduce our total debt outstanding by approximately $360 million. This was done through a combination of debt repayments and refinancings, including the pay down of a $560 million secured loan with Freddie Mac, which was partially refinanced by a new secured loan of $270 million. New loan has a term of 10 years and bears interest at LIBOR plus 212 basis points, an improvement of approximately 20 basis points over the previous financing. We also amended our revolving credit facility to improve pricing by 50 basis points to LIBOR plus 200 basis points in addition to extending the maturity by approximately 2.5 years to 2024. After incorporating the activity above, our total debt balance pro forma for the sales reduced to $1.5 billion and had a weighted average maturity of 6.4 years, an increase of 2 years compared to that at year-end. We now have no significant maturities until the second half of 2025. And now guidance. For 2020, we expect AFFO per share to range between $0.67 and $0.71. Our guidance is based on 4 major assumptions, which are as follows: one, cash NOI for our managed same-store IL assets is expected to range between down 1% and up 1.5%. We expect to see modest occupancy growth with continued RevPOR growth with labor pressures driving a higher year-over-year expense increase in 2020 versus 2019. Two, we expect our cash G&A to remain flat at $18 million. Three, we assume LIBOR to average at 1.7% for 2020, which approximates the spot rate at the end of January. Pro forma for the sale of the 28 AL/MC assets, 46% of our $1.5 billion in total debt is exposed to LIBOR fluctuations. Last week, we assumed 85.5 million of weighted average diluted shares outstanding for 2020. That concludes my remarks, and I will now turn it over to the operator to open the line for questions. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Our first question comes from Drew Babin with Baird. -------------------------------------------------------------------------------- Andrew T. Babin, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [2] -------------------------------------------------------------------------------- Congrats on hitting the high end of the same-store guidance on the transaction execution. I guess, shifting to the IL same-store performance, which is now more of a key driver for growth going forward, Bhairav, you talked a little bit about expense growth, maybe growing a little bit at a more robust rate than it did in '19. Can you talk a little more about the moving parts there? And any specific initiatives going on internally to combat that to the extent possible? -------------------------------------------------------------------------------- Susan L. Givens, New Senior Investment Group Inc. - CEO & Director [3] -------------------------------------------------------------------------------- Yes, sure. It's Susan. I'll start off and Bhairav can jump in. I think the thing that's worth noting, obviously, labor is our biggest expense, whether we're talking about IL or AL. Looking specifically at IL, which is what we are now, the average age of our residents is a little bit lower than what it is on the AL side. As everyone knows, but I'll continue to kind of hit home, we don't have health care in our IL properties. So as a result of that, in combination with kind of the lower age, generally speaking, our labor costs are lower than what you see on the AL side of things. That said, we certainly expect to see labor going up this year, and we've forecasted that in our numbers and taking that into consideration in terms of the guidance range. But just putting it in context a little bit, labor per resident last year for IL was up about 3%. If you compare that to our AL assets, that was up about 6%. And so as we move into 2020, we're expecting labor for residents to still grow and to be up a little bit over 3%. But I gave you all that background and color because I think it's worth pointing out that we don't expect quite as much labor pressure, given the fact that we are pure IL at this point. We'll certainly see growth, but when we're talking about an IL portfolio last year that saw kind of 3% growth versus AL we saw 6%, I think it's a pretty stark comparison or contrast there. -------------------------------------------------------------------------------- Andrew T. Babin, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [4] -------------------------------------------------------------------------------- Okay. And then a couple of questions here. Are you seeing any impact from the flu, which has obviously been in the news a lot, just year-to-date? And I guess, also just on the operating side, if you could give some color on what recent renewal rates the IL properties have been kind of relative to maybe where they were a year ago? -------------------------------------------------------------------------------- Susan L. Givens, New Senior Investment Group Inc. - CEO & Director [5] -------------------------------------------------------------------------------- Yes. So I'll touch on that -- the flu. Obviously, the flu and kind of everything going on right now is something everyone is spending a lot of time focused on and looking at. I think so far, kind of in the winter months, both kind of December and January, we didn't see significant impact from the flu. In fact, we had a pretty good kind of December and January in terms of leasing, new leasing and kind of lower move-outs. And so we saw particularly in December, higher leasing trends. And then in January, we actually saw, kind of, generally speaking, lower move-outs. So there's not a whole lot you can kind of clean throughout the rest of the year based on in the 2 months' worth of information. But I think that those are 2 months that we tend to see a lot of impact from the flu, and we haven't seen that. I think that -- I don't think anyone wants to sort of claim anyone out of the woods, particularly with respect to kind of a lot of the news that's going on right now. But so far, we have not seen a huge impact on the -- from the flu. On the renewal raising kind of what we're seeing, we're seeing sort of 1% to 2% in terms of renewal. -------------------------------------------------------------------------------- Andrew T. Babin, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [6] -------------------------------------------------------------------------------- Okay. Appreciate the color there. And just one more for me. Obviously, you don't guide for recurring CapEx kind of calculating that, but I would assume that it's probably lighter than it was incorporating the AL portfolio. Could you maybe give us a per bed or per -- some way of kind of framing CapEx for 2020? -------------------------------------------------------------------------------- Susan L. Givens, New Senior Investment Group Inc. - CEO & Director [7] -------------------------------------------------------------------------------- Yes, sure. I mean we -- you're exactly right that with IL only, our -- kind of we consider our ongoing recurring CapEx per unit is generally lower. We think about the ongoing CapEx per unit for IL being around 1,100 to 1,200 units. And that's pretty consistent with what we're projecting going forward. I think one thing we're spending a lot of time on across our portfolio is really reevaluating and considering where we think we should invest some additional CapEx dollars above and beyond just kind of maintenance CapEx and that's suppression of properties to get them to kind of a slightly better place. And we've got assets that are, on average, 20 years old. And so we do think that, in some cases, it's necessary to invest some additional CapEx. But in terms of thinking about maintenance CapEx, that number as a whole per unit is going down as a function of being kind of 100% IL effectively now. -------------------------------------------------------------------------------- Operator [8] -------------------------------------------------------------------------------- The next question comes from Vikram Malhotra with Morgan Stanley. -------------------------------------------------------------------------------- Unidentified Analyst, [9] -------------------------------------------------------------------------------- This is [Celine] on for Vikram. Just wanted to zero in on your third 2020 initiative on external and internal growth initiatives. So just if you could provide a little bit of color on how you expect to grow -- to affect organic growth to trend? And then also your investment opportunities with those, are those still focused on IL? Are you considering other types of health care facilities? -------------------------------------------------------------------------------- Susan L. Givens, New Senior Investment Group Inc. - CEO & Director [10] -------------------------------------------------------------------------------- Sure. So first, on the organic piece, sort of continuing on what I was just saying related to the CapEx, one of the things we're spending a bunch of time on kind of now, we started it last year but are really ramping up our efforts now that we've completed the AL sale is to evaluate our entire portfolio and determine where we think there are opportunities to invest some additional CapEx and/or to tweak and try some different things with some of our existing IL properties to drive growth. We think that now that we sort of have our -- a clean slate, if you will, we can really examine the IL portfolio in a way that we were -- didn't have kind of the capacity over the last few years. And so in doing that, we think there are some opportunities, and we think our operators have some good insights, and we're working with our operators to develop some ideas. And so we think there are opportunities to kind of drive growth just in the existing assets. And now that we have some capacity, we can really focus on that. So that's on the organic side of things. External growth, there is certainly a big market, and there are lots of opportunities. Once again, now with all the initiatives that we put in place last year, we feel like we're finally in a place to really be able to put in our best foot forward and go out and look at external opportunities. We are focused on assets that are very consistent with our current platform and strategy. Like all things, I think, given kind of all the progress that we've made, we want to be very careful and be pretty calculated and kind of moderate in what we do. But we are examining and looking at opportunities that are consistent with our low acuity, private pay senior housing assets. And I think, importantly, by all the work that we've done, a lot of people are reaching out to us, are showing us opportunities, wanting to partner with us. We've spent a whole lot of time building and developing relationships, not just with operating partners but with others in the industry. And I think that -- really, all the things that we did last year have set us up well, and people are calling on us and showing us things in a way that we have not been able to participate in the last couple of years. So I think all that's very positive. -------------------------------------------------------------------------------- Operator [11] -------------------------------------------------------------------------------- The next question comes from Daniel Bernstein with Capital One. -------------------------------------------------------------------------------- Daniel Marc Bernstein, Capital One Securities, Inc., Research Division - Research Analyst [12] -------------------------------------------------------------------------------- I want to ask a couple of extra questions, might as well stay on the pipeline. I guess, one, are you specifically looking at senior apartments at all? And obviously sold the higher acuity assets. Would you dip down to even lower acuity than IL and the senior apartments? If so, do you find those assets attractive for the pricing? And maybe kind of -- maybe what's the general view of that product type? And how that might fit into your current portfolio? -------------------------------------------------------------------------------- Susan L. Givens, New Senior Investment Group Inc. - CEO & Director [13] -------------------------------------------------------------------------------- Sure. Yes. I think it's safe to say we're looking at a lot of different things, and I -- we are looking at even sort of lower acuity products compared to what we have today. I think it's a natural sort of progression to think that now with us being almost 100% IL that looking at something like senior apartments could make sense. I think that there are a lot of people poking around in that space right now. And obviously, the pricing is still pretty tight. So we have to kind of consider that and take that into consideration. But I think there's some interesting models that are starting to emerge out there, which are kind of a hybrid between IL and pure senior apartments. And those are some things we're kind of looking at. I think that what I will say is that our focus is on sticking to kind of what we have today and being pretty consistent in line with what we think is a pretty simple portfolio. So anything that would fall into that sort of broad bucket, we're kind of thinking about and taking a look at. -------------------------------------------------------------------------------- Daniel Marc Bernstein, Capital One Securities, Inc., Research Division - Research Analyst [14] -------------------------------------------------------------------------------- Okay. And then in terms of financing of new investments, external investments, perhaps large amounts of CapEx as well, how are you thinking about financing those external investments from a kind of a leverage perspective? Are you thinking about investing in more like a leverage-neutral or somewhere more issuing a little bit higher equity as you do deals? Just trying to understand kind of how you're thinking about the financing and leverage of the business going forward [and what you can do as you buy assets]? -------------------------------------------------------------------------------- Susan L. Givens, New Senior Investment Group Inc. - CEO & Director [15] -------------------------------------------------------------------------------- Sure. Yes, it's a great question. Obviously, the balance sheet and the capital structure is a big -- was a big priority for us last year and continues to be a big priority, as you've heard from me many times. But I think we're in a much better place. And I think, as I mentioned, all the things we did have put us in a position where we can now start thinking about growth, where we weren't really able to do that before. We have over $100 million of kind of liquidity today. And I think what you should expect from us is, as we go forward, we're going to be very careful about ensuring that we balance any sort of growth with a careful eye on our balance sheet. So as we're looking at things, we're thinking about doing things where we could potentially overequitize investments or look at investments on kind of a leverage-neutral basis so that we're balancing the needs and the requirements of our balance sheet and having a real focus on improving our balance sheet over time, but ensuring that we're doing accretive deals and being very kind of focused on finding that right balance. So I -- we know that the balance sheet is a big thing that needs to be addressed. But we think there's a way, and we're looking at opportunities where we can basically improve the balance sheet and, at the same time, add accretive assets to our portfolio, and that's how we're thinking about it going forward. -------------------------------------------------------------------------------- Daniel Marc Bernstein, Capital One Securities, Inc., Research Division - Research Analyst [16] -------------------------------------------------------------------------------- Okay. One or two more questions here. CapEx and the redevelopment opportunities within the Holiday portfolio. When you talk about the internal opportunities there, are we talking about just some cosmetic fixes to the properties? Or are you talking some more significant redevelopment where maybe a part of a building will be taken off-line? Just trying to understand a little bit more specific what those opportunities might be on the property side. -------------------------------------------------------------------------------- Susan L. Givens, New Senior Investment Group Inc. - CEO & Director [17] -------------------------------------------------------------------------------- Sure. Sure. I think you -- we've got 102 pre-homogeneous IL properties. So we're thinking about a lot of things. And part of the reason we're working closely with Holiday and then other operating partners in the industry is to think about different formats and models and what might make sense for our assets. I think by and large, when we talk about kind of some of the organic growth opportunities, we do think that's more taking our existing products and kind of upgrading it and putting some cosmetic changes in place. I think that's the bulk of what you would expect to see from us. But I think there are certain assets that are in certain markets where we can test a little bit, and we can try a little bit of a new model without having any sort of significant impact on our portfolio. So those are things that we're looking at. I think that's the benefit of having a portfolio like ours. We can kind of test and try a few new things without sort of severely impacting our overall performance. So the bulk of what we're looking at is really sort of more of just upgrading and freshening up our properties. But then I think there are some interesting opportunities that we're doing on a more kind of one-off basis that could teach us something and could allow us to grow in -- with other partners and kind of with another sort of subsets of the IL space. So we're looking at all that kind of stuff, too. -------------------------------------------------------------------------------- Daniel Marc Bernstein, Capital One Securities, Inc., Research Division - Research Analyst [18] -------------------------------------------------------------------------------- Would that include managed care, bringing in any managed care? Or is -- it seems to be a fairly large trend whatever these managed care within seniors housing, but I didn't know if that was something that was being explored as well? -------------------------------------------------------------------------------- Susan L. Givens, New Senior Investment Group Inc. - CEO & Director [19] -------------------------------------------------------------------------------- No. We're more focused on kind of the -- just the existing product and figuring out there's ways we can kind of tweak the product to attract a larger sort of audience or have a slightly different product from what we have today. -------------------------------------------------------------------------------- Operator [20] -------------------------------------------------------------------------------- This concludes our question-and-answer session. I would like to turn the conference back over to Susan Givens for any closing remarks. -------------------------------------------------------------------------------- Susan L. Givens, New Senior Investment Group Inc. - CEO & Director [21] -------------------------------------------------------------------------------- Great. Appreciate everyone joining us today, and we will look forward to keeping you updated as we move through 2020. Thanks so much. -------------------------------------------------------------------------------- Operator [22] -------------------------------------------------------------------------------- The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.