BKD - Earnings call transcript Q1 2019 | Brookdale Senior Living Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning ladies and gentlemen. My name is Lance and I will be your conference operator today. At this point, I would like to welcome everyone to the Brookdale Senior Living first quarter earnings call. All participants are in a listen only mode.

We will open the lines for questions at the end of the call and instructions will follow at that time.

conference recorded this replay reminder, a will for be purposes. As the now to like would call to Relations. I Investor turn over with Kathy MacDonald begin. may you Kathy,

Kathy MacDonald

Thank Brookdale Senior to would first you everyone. Living. XXXX you quarter for to the and like call earnings morning good welcome I

the Steve within Financial historical today and statements Officer. be today, are Cindy Federal date not All maybe are Executive cause are we file the Vice factors deemed well forward-looking to from yesterday, the Executive issued the actual report statements. to us our President and meaning statements our as Joining Chief President facts to and these Harbor Baier, release I expressly made Officer the forward-looking Safe Swain, statements we from differ as direct will results financial in our the time-to-time in the these call, XX-Q. of obligation factors that on statements reports are of note with performance earnings and Chief These laws. which Securities the materially during full may any of in to and the today's Actual results this update contained detailed Certain risk we measures. on differ future. reports including SEC quarterly annual as in non-GAAP that for we release Also you Form please statement. present and XX-K Form could disclaim

call an Cindy. measure With from brookdale.com/investor may the to I at non-GAAP X-K most be each to which on release turn like I to that, was of reconciliations information, you furnished yesterday. and the would GAAP supplemental over For the comparable measure, and direct found

Cindy Baier

results, analysts participants. all strategy will you our of morning, to quarter and on update our morning I Thank our additions. leadership and first Good other shareholders, provide an This Kathy.

on competitive continue in industry landscape. headwinds Let making for outlook. openings senior to difficult deliveries new with the a XXXX, NIC, occupancy industry sequential first will me the quarter industry largely basis. and housing The for a elevated unchanged According to have start with was

For assisted Within starts and sequentially where XX% construction the better. since communities, drop and communities, high improvement period lease-up continues a minutes in while because The was construction quarter. to the we minutes the early first experts of declined. is pipeline properties then. in has dropped XX equilibrium from supply/demand is over in the reduction months. pressure a but remained by largest next XXXX have larger within Brookdale's was Brookdale's The industry's expecting news saw living, sectors, of stabilized around are the in XX memory This The XX care many assisted living occupancy properties concentration. XX% industry is quarter-by-quarter. the opens we pipeline the in shrink construction stubbornly Within industry that good even

In will the growth XXXX. inventory fact, of projects NIC that in overtake second assisted living, absorption half

now Let on operations. me specifically Brookdale's focus

higher intentionally labor levels in-place RevPOR the occupancy increases quarter, prior industry. years rates combining and lower of mitigate higher impact we community For our to than increased investment. the outperformed rate increased a same on year-over-year We basis. at occupancy changes, X.X% When the first with

better analysis. our nearly move-in, right with and X%. improved consistent upon our move-ins rates pricing than look sequentially the based are plan. competitors care This When and strategy our on is our by rate for our portfolio results at proprietary our Our are we

quarter improvement versus remained We XXX first basis independent are XXXX occupancy basis, pleased on same living that XX% community sequential basis. a on point a our a at

have return that can growth. We and demonstrated we to be successful

understand our that so XX top our updated have it's We chart to markets. new supply easier

our performing are markets overall these group, portfolio. a better As than

retention we are rates. our industry investments in We our in of making of the program are year and three-year in the labor above benefits last seeing

health executive XX-months seventh was quarter. wellness XX% the above trailing directors For and the and consecutive retention for directors,

in In of the a XXXX. XXX resulted facing resident voluntary especially basis in quarter investments point to roles, making our turnover associates, we first compared are the addition, improvement in

started retention The as on also our retention to rate for the to take first improving of are improvement. initiatives beginning sign professionals sales cycle initial improve urgent and We is rates the hold. important our sales step our sales

cycle Compared year sequential our Turning aggregators Improving leads leading our our and improvement were ago, with visits are softer sales the fourth in retention our move-ins. indicators. top move-ins. rate priorities impacted of leads, to sales professional pleased to our a is we and first from our quarter one and

highest improving and March organization pipeline signs to growth. our we that within are made taking the continues The Our sales to changes April showed early of pivot hold. to priority be month the

goal For in our move-outs, results XXXX to delivered is controllable excellent we maintain for the XXXX.

turning pleased sequential first to the In team's XX goal a revenue our a improved basis segment. point with the am services I on X% with year-over-year So to Briefly basis XXXX. exceed healthcare quarter, our of on compared X% our basis. quarter strength first to the quarter for a our first and improvement

returned addition, quarter near operating margin first our to the In segment XXXX level.

May our up Diane amazing that help strong XX Resources of on Kraft over As brings President with proud Chief quarter we years Resources. Diane are three results, Vice as first focus with and the me to let drive I of to has say including engaging, enhancing announce Vice of experience Foods, be have operator made serving She as consumer Human Executive week, developing will Brookdale distributed experience turnaround. the living workforce. progress attracting, am This intentionally the Brookdale's Diane the a key and our Human large Officer. significant real our estate additions. motivating leadership senior attracting are President owns best and joined significant Johnson to Executive team our our a us know retaining we priority strategic I in associates. I and pleased that associates healthcare and leading wrap

to May. Senior of the in has to and which President deep leader sales unique strategy. our record. our Vice the us from has turnaround and compassionate and as seven of Alive where will for brings our Brookdale she critical Senior the I phenomenal Sales. industry are us in excited a end that living care improve Anna-Gene she with join our Vice a industry expertise is join over am She very industry to cycle, valuable important success will will thrilled of has O'Neal that been CEO decade energetic that our President proven has partner operations it's we as sales June, In years. well an Whittington Rick He our and Anna-Gene experience Next, our her us we of extremely and critically who expertise and track leader business. past President Hospice will hospice joins be Brookdale. at Rick recruited team. will join sales end-of-life

so hospice the talented because We Anna-Gene able attract devoted of of three key leaders improve there be with industry and In our successful. because our build with strong are proven company summary, to growth proud able will to dedicated to passionate, we and a of substitute key we success opportunity to accelerate where and are team we in for I business of and extremely track our Brookdale mission serving was our be joining these they excited operational believe term that driven in expertise the our on in the roles. to is about success position seniors. am high-quality no execution we these part leaders fill bringing can see as are growth. hospice Brookdale, serving already leaders a new long areas leaders want record

the reiterate we at company and progress priorities on curve Brookdale are I I are we XXXX We around industry guidance. over call on will to be that the housing senior making our working all our turning and excited approaching our positive growth. demand demographic Steve. of the am ready positive is for that our to annual strategic for turn

Steve Swain

Cindy. Thanks

Let few moving to We annual we the first community transitioned other highlights. day. seasonality. On guidance, new previously operators. we me When quarter start every set we a identified one communities executed understood average, with on

average pressure, decision. rate trend growth of We was on quarter factors, on increases, be basis we mentioned to from revenue than same the a would cyclical rate, and fourth occupancy occupancy supply/demand with year-over-year lower needed rate basis drove expected price to we due increases, same average. we program, X% quarter, winter This rebuild at lower services living shares. known occupancy our we $X.XX. December's sequential to and by from community sequentially $X segment, higher which Under and million the related growth community XXXX. the X.X% X.X% saw right our the of occupancy Cindy an the delivered With shares Even We strategic the health home which was a basis. we census. continued sequential knew points at In improve driven growth to independent first repurchase of opportunistically remained continued XXX quarter is of healthcare repurchase strong we purchased we controllable revenue XX%. our of move-outs In

evaluate We standard transactions will accounting will continue reported year-over-year as new and conditions liquidity affected and The additional conditions arise. market upfront a My on final based comparability opportunistic consider repurchases and repurchases lease to basis. comment. on asset

helpful normalizes in which provided be and these We community will your same have analysis. impacts results,

communities starting arrangements. in which first me being the real to communities. of We managed transitioning we talk under progress were Let interim most with operators, about managed made initiatives, the XX significant over estate our In managed quarter, portfolio. new transitioned

additional total completed first assets. million. has progress expect of selling Since be proceeds of the to to XXXX, Also, the on year. net the meaningful managed from balance quarter, transitioned the In our sale communities over community continued the We sales communities. six throughout been of make $XXX quarter we we

senior within flow XXX provide through EBITDA accounting grew assets expect we sequential terminations financial standard. with transitioned identified Starting basis, rate standard. same will housing. to RevPAR quarter's and and XXXX $XXX cash seven more million the the To year impact results, remaining $X X.X% offset We free than context lease results, which lease adopted sales the negatively same community on adjusted a $XX the quarter year. new accounting analysis impacted one-time million. lease impacted to excludes the RevPOR focus year-over-year but revenue the community comments I my help new with and XXXX, from by comparability, of the occupancy. and company prior community sold asset this the year-over-year be communities our both and by the revenue adjusted impact To on compared X.X% and by Same excluded positively increases where million to transactions In our metrics. the

quarter. the We points the are at prior when to in quarter first increased compared independent occupancy pleased year that and living XX% same remained community XXX strong basis

X.X% memory Same occupancy cyclical on by increased and However, impacted care resident in-place our increased be an year-over-year to our basis in-depth pressures. by continues driven proprietary new the points X.X% move-in using declined oversupply primarily resident and analysis RevPOR assisted rent grew increases. and living data. XXX basis community was Year-over-year, data. than We NIC This a industry sequentially. performed price rates more

industry the Higher outperformed first associates. community we are increases when increased combining quarter. Same making addition, resident increases merit investments the compensation expenses of the changes. our In occurred the rates X% support community level occupancy related in for March. in-place impact in we with Community rate

in to and So benefits, X% higher same XXXX. facility resulted expenses including a compared we to were income expense a premiums. increased in growth on advertising, year-over-year continue In primarily to in full Other marketing year the offset operating The by X.X% revenue investments quarter basis. in increase due total, expect first operating operating community remediation total decline the of X% to above and XXXX. annual X% costs, partially increases labor and is insurance grow to property

XX%. expect operating X% Beginning which Again, However, sequential is grew increases to expansion the industry. equilibrium, we occupancy cost supply/demand in in expected we will our income, grow. to operating be with XXXX, with positive saw with labor margin line

shareholder potential significant good As leverage. through operational value grows, has housing occupancy senior to drive

by to The a by home in business increase driven census dispositions. services segment. an offset but case quarter healthcare in X% on and sequential in was partially daily our hospice X% health first year-over-year and community The average was in Moving mix share. the sequential daily the revenue first a changes a increase on basis the average Brookdale centralized Revenue improved few services another intake basis. operator, generally cost a lose grow to to level transition market and and of we operating to is complete. we function more now markets. to XXXX nearly the as we recently community After margin the census consolidate into quarter expanded Healthcare returned some one-time continues

year for $XXX the daily XXXX million the to to quarter. decline a The new million over compared the We services to million communities, of transactions of primarily a Excluding the impact $XXX prior from senior two $X transition million accounting lease lower housing standard. healthcare items, non-core year-over-year reported census average related EBITDA grew adjusted be adjusted result impact first and of was $XX X%. EBITDA operational quarter

accounting As next a in has and year. facility reminder, standard XXXX, revenue expense but no the accelerates impact

We track Over first the XXXX. our for CapEx investments completed on non-development are in with $XXX XX% million quarter. was

use $XX During of range of unit for CapEx CapEx non-development flow to we due after asked to negative $XX our we inflation. various was long-term with $X,XXX a level capital's were felt prior the metric of was was earnings discussions first per providing CapEx to the Adjusted million million most insights. of accounting expect unit be free In working estimate. for stakeholders, call, committed we we $X,XXX relevant and view per in cash. our the to XXXX, quarter, high community the After which for seasonally cash

due lower receivable higher, Non-development balance conversion. we was A the with prepaid an prior XXXX were and to due items. intake flow was source million and cash. the Lower cash the consistent adjusted to rent non-core to $XX million reduction first increased partially drivers lease of $XX driven EBITDA expansion quarter, million $XX accounts by the working hospice in capital activity. a $XX quarter-end by disposition primarily financing in timing the of investment driven working variances. in to change When increase was expect adjusted our These capital offset a XXXX, Sifting by free comparing million. be plan. decreased centralized year CapEx For through to payments by due quarter

in quarter $XX million XXXX, due unconsolidated sale The the the $X first interest ventures our million of of of free cash For year. our decrease share and proportionate last was delivered flow. equity adjusted of adjusted to year-over-year EBITDA ventures primarily

primarily of March first credit, XX, of free million, liquidity line cash decrease $XXX adjusted quarter's liquidity, of decrease was the total The $XX in As from of was XXXX. including million the a year-end flow. result

we Our strong as to position around balance sheet continue in remains to flexibility business. turn a sufficient provide the

at of full expected first XX positive demand sequential in are shareholder I construction has we turn growth the July. and the industry's should last As the of metrics move-ins. to turned in the will saw moving positions right to XXXX months. operational guidance. the trends. we occupancy The drive year years, value our top community Cindy within was quarter, the the potential next direction. predicting range industry June supply/demand have mentioned, as few positive our and leader occupancy call And to looking And balance, equilibrium In occur supply expectations. rates continue are experts or Many reiterating in is the three that industry's Retention are show leverage. improvement turn to Working we within the again, through back significant Cindy. capital now over positive. Occupancy

Cindy Baier

Accordingly, it a serve. at markets our understand important is by largest we time. advisory the we national includes to team. a what from leadership that will the is council representatives Recently, that relationship we fully in provide our Brookdale to critically created communities our insights residents building one to succeed resident business important

had was During to great sounding better. ideas our every live where feedback What we their received we amount even a focus we creative our I Residents day. make best was forward dialogue. significant of they look meeting, help to are me lives the continued to first for should residents our important a and Brookdale about positive board how

our investments making are success. long-term that to We are critical

equilibrium. progress We supply/demand the and operational industry's approaching are making is

line confident our are visits that are shareholders allow provide to and and building momentum. to move-ins questions I turnaround please leads, our questions? I value. Brookdale is sequential Operator, and will in first the with now. with team Steve the We pleased long-term am improvement answer happy for open

Operator

Instructions]. [Operator

question Nephron first from Josh from Raskin of Your comes line the Research.

is line Your open.

Josh Raskin

Hi. Thanks. Good morning.

color just us give your just projections? question, to million, internal as the $XXX that could your where XQ you came to in some First adjusted relative EBITDA,

Cindy Baier

pleased drive really were were the we I the and better had that actually with focused of We projection. had on and was our to thanks. really appreciate occupancy driving quarter. first rate in industry able than were results rate We in very Josh, that the our question. combination a line that we

results pleased consistent are that our we with plan. our So in came

Josh Raskin

Okay. All right.

for will with better like So the first want Obviously, but range It because like didn't trending the to March. the more X%-ish in sure expecting just merit increases then start still story I I than it line right. sounds be yours. consensus. the until quarter sounded And labor in to cost, make the the X.X% it got X% labor

implies for of Am that I obviously X.X% all over rest little year. right? so thinking a And the about bit that the

Cindy Baier

correct. you thinking are Josh, about it exactly

as late labor we to have the year would labor the first cost ramp XXXX with in our guidance increases throughout year, That's But So last generally pleased increases we but the we growth. up are during not what to time, in so our and rate the labor in our we our first are year. expect the quarter consistent for results happened our same built at quarter. changing increases very

Josh Raskin

Okay. effect on like the the and I better of little occupancy situation got obviously cost, to pressure they RevPOR, last facilities feel got increase? rate having It portfolio, you up? bit you of occupancy can you generally the like is I the any you And rate of intended fixed do Or cover level rate have to feel increases, in certain the keep the but now. have certainly you overall in handle are But occupancy, just it's in understand working then facilities a terms guys where assume a cetera, this et speaking, where do at seems versus are a some strategy. question dynamic

Cindy Baier

business to community, us sure a about our earn, our the our are to one a our occupancy do so the thoughtful know a and and we that want to we of decisions our money were very are from But that the council resident building actually balance to team sure conscious rate year, we much rate lot dollar pay seniors make rate, best we opportunity one we And so. we spent last our we have very local that in push between we make We every want stable lot investments. of absolutely market trying time. we industry. Where that increases more. are make It's paying and fact labor the the our advisory workers residents resident that at

So balance, that's so, there we and want. about are with driven charging and you being that have longer-term seniors on increases markets increase appropriate Even in making sure to consistent But with some is really for what an oversupply they you a we those are heavy cased, that to amount by use feel success rate have rate the serve. occupancy. like thoughtful very disciplined amount the of

Josh Raskin

Thanks. Okay. Perfect.

Operator

from comes of Your next line question the from Jason Jefferies. Plagman

line Your open. is

Jason Plagman

Good Hi. morning.

bit. continuing Just a discussion on little that

obviously on on wanted just I rate move-ins I positive But make turned to year. could Steve mark-to-market. in-place if the some mark-to-market increases. last But had he that know performance new sure believe late gave strong So comments on repeat those?

continue expect Just wondering XXXX? if that you in to

Cindy Baier

started that is quarter that to jumps go the X% I just in, was mark-to-market. a second the before mark-to-market. negative where XXXX, let if And the we all Jason, way third have you So say back positive of that with had Steve we this very consecutive quarter remember am me pleased

the improvement so what's matter because rates know really consistent driving mark-to-market is the and that that's we going And that we on positive our several quarters, we for last had most. showed to focus in

want to if you jump Steve, in? Now,

Steve Swain

pleased optimize look where markets left am Sure, with it's rate. that, RevPAR mark-to-market. forward. have or little I there opportunity from Like total the where said coming Cindy certainly at to the occupancy I whether trying are RevPAR, a And Jason. we we bit of going are

Jason Plagman

a And capital on switching it. bit Got gears the deployment. little

deployment balance or reduction your are in you cash the two I your further on CapEx balance on substantial on But over us year and know color debt you in a thoughts capital got towards any sheet of and investing have communities. this M&A, year give next buybacks? significantly You

Cindy Baier

Yes.

that have position is year prioritized with Let highlight the and to priority saying have the me so think been support to the share turnaround we we start will by business opportunistic our that we assets our have certainly is first necessary this regard also we strategy. the that to CapEx of that I repurchases. operational

about QX from we in repurchases, of doing heard have a QX. repurchases highly attractive repurchases have and are We We our lot share disciplined accretive. share are do that share shareholders that know and some been both

debt appropriate value sure the we our quarters terms to want paying operational a also has we in industry the see you are We positive Anything opportunity time, our also that to until for make the add, we maintaining few having to equilibrium a know shareholders. record turnaround down that At the improve same fully turned growth. Steve? supply/demand of consecutive of of and want track liquidity

Steve Swain

the future Really shareholder position what the on that turnaround the and being operational in are about that's Like our value have. am we Cindy execute liquidity to doing. best to way I is diligent plan we mentioned, create

Jason Plagman

one pay. thoughts know Brookdale? it. on But All providers. then for And lots predominantly impact There and healthcare are Medicare Cindy, for of discussion Got guys about impact me. a private any you has on Medicare potential could recently I been All the for last

Cindy Baier

asking Jason, so thanks question. for this much

been is have virtually This the on EBITDA. our will say it's healthcare all stock. that comes our Medicare business, think small revenue regard senior XX% from entire of does and segment private our overhang private driver over that I a accept healthcare to very of pay. pay industry an services residents housing our I with our segment of of

it. asking a question. it's insightful for So really Thanks

Jason Plagman

Thanks. are You welcome.

Cindy Baier

you. Thank

Operator

the question Stifel. Vanacore of Chad comes next from Your line from

open. is line Your

Chad Vanacore

good Thanks all. All right. morning and

Cindy Baier

morning Chad. Good

Chad Vanacore

potential How we what's in many expect are to contract the end further of we timing quarter? transitions then transitions should And And manage I Cindy, be mentioned thinking interim this remain year? you think at about? contracts the management any So the should manage throughout there impact the contract year. additional

Cindy Baier

that about last we when have managing. don't are contracts end we the if third-parties. years, can a from the as have necessarily we some Welltower dispositions few from portfolio exit over of timing. those the specifically managed We of changes talk about certainly restructurings. transitions or end of our of you we leases we think of year. the last made In Many either at But of So we management still the are result communities properties those the of total, have March, that XXX lease number lease

that And needs be us Many taken with into interim it the to so the were terminated that's expedient thought to consideration. leases, replace the something for of is operator. just manage practically these managed quarter way first we contract could we when until do to they because

that direct details supplement our I Now one you the forma pro page gives things of included That's that. supplement. XX the and that our of on that some in of is we you specific have the to will of

Steve Swain

are to revenue we So the million $X of And in $X.X out quarters, revenue. the look expecting line. services quarter, in if it, of at management transition we first you of transitioned Chad, future million

Chad Vanacore

All Thanks just then Steve. thinking right. XXXX expectations. about And

the how year? the us guidance, you also idea one more competitive. made how a It's positive half had in thinking on were of today, headwind a bit I little then comments a But that difficult Can are give trend And to supply about through you it? second should supply. put that expect occupancy you think to the out you landscape originally some and should when going be you persist. maybe XXXX

Cindy Baier

question. a that lot Okay. in There is

I see me start the conditions. if let can with macro So

NIC, our are fewer sequential reduction of to at If of absorption than QX and XX%. we quarter you the fourth there in the the in opens first of new had look last in XX% this exceed basically year. own portfolio, QX quarter a expecting look in opens of have between I half year. our back were specifically they When at supply year

you the in there I a you did but opens larger and specifically, look in And that also back at ago, well at starts. if our it significantly sequential we year been I know a new this That's XX% construction the first new is I year. sequential largest get the see least of as has after reduction portfolio quarter pipeline XXXX. that you competitor if Now will QX, opens, pipeline, reduction construction do competition there are look but total impacted if long between is conditions was a do XX% the economic that first our reduction way XX QX look we a at for want of saying, XX a the in by since to impact expect remind months. better we month a

So hit us be competitive in see Brookdale see and us we strong continues. deliveries during new that that the XX that XXXX around will the deliveries our with XXXX the But for evidence month. environment then we communities,

decline in of year, second history, then I normally our Now it. XX I see the back QX. do history piece to if let normal our was points basis and That's Last quarter. between the occupancy our will look forward-looking occupancy and I I down will Steve think We seasonality. the QX do

June seen first several our occupancy turn last we that the years, or have Over July in timeframe. positive

season I year. this is had and later not am sure we flu what Now longer a about

were And QX. the the we I to now about year-over-year, death our expectations will rate was year. he I might to for Steve impact on do could flu that some While rest think that add the turn have down it of any happy comments have

Steve Swain

Yes.

historically of we are where year's we the quarter. are slightly again we factor have longer down a second generally of guidance turned occupancy. mentioned, be Cindy within our positive that in flu But we XXX will reiterating like points season, last the So looking basis at in

Chad Vanacore

All right. Thanks. And then just one one more me. for quick

said annual total about a think $XX half sell How your expect for leased contemplated. to you they on lower rent that that their of do affects expectations million was for originally year? confirm in now XX Ventas, what rent. you that they So Can call, properties the expectation? That's BKD base

Cindy Baier

to want termination, that to from say I a sold. credit we Ventas' could rent lease is thing get first when be set the we assets So had we that million potential $XX

for maximum that make the of we expect, Now we will we all wanted I that least And that the had as to sold. at look you XX knowledge being would said assets sure in to want we process the that in would it at. assets are

will happen Ventas get sales sell rent that assets will in X.XX% the will they the sale price. is when what price to credit and a us, equal will of the For the lock we sell asset

it make portfolio performance did we it's something we be the when to rent materially do to with Now comfortable can structure, that is change sure that's in operational never are Brookdale we But forward. lease to to going we the that renegotiations. intended was the what a going win spread have really intended we because

we to impact assets have significant our expect impacts on wouldn't so XXXX we built the in. do guidance but have And a the

Chad Vanacore

That's it right. Thanks. All for me.

Cindy Baier

Chad. Thanks

Operator

comes of question next Gajuk America. of line from Bank Joanna Your the from

Your is line open.

Joanna Gajuk

for the question. morning. Good Thanks taking

So the and seasonality the that happened coming discussion back for the just I the the on your year few a view minutes now ago just to year. and rest of guess

in was with QX internal said line your you So expectations.

You same the the still in year. range expect level of for terms the EBITDA of

accelerate down like it QX you occupancy, seems with line in expect seasonal in be it QX and cost like versus So labor seems will to trends.

one changes I progress? also about which handout. items seasonality will mean there the the should you as other on So of the slides the we think and outlined quarters is portfolio obviously any

us for quality of to for the year for EBITDA So from point anything the the QX, the high of rest of for seasonality in year flag EBITDA? be you which the can seems else terms the of progression the

Cindy Baier

Joanna, question. you thank the for

business. very making and They me with our that I first, am quarter consistent improvements say are first in with we our happy So with the expectations result. operational internal are are we pleased very let that

of transactions quarter supplement, XXXX completed already in quarter. the forma If the first that you are you during page Anything our the of gives that you to pro the turn we see Column XX B result. that first

So that for longer million or the means what that earned quarter that is X.XXX we own operate. EBITDA first in we assets no

quarter. away. generated first have in adjusted in So then that And EBITDA of goes $X.XXX million process also that transactions the we

that for Now you the make to have the what about your year. of assumption means rest

basis XX one. might turn QX. points think our about of in and Last you between or the We think seasonality that about were year, we your in some you July. June If down QX normal things occupancy of modeling, is normally have terms

have to this expect would we similar trends so And year.

labor labor our event. year, primarily throughout build a like the And field. is are in the thing second saw Those The last increases you year-over-year year. QX

think that I of that impact beyond. also basis, is one And prior think always the in that's QX when about about there impact some $X would calendar first think bonus a always normally there year there reasonable is you of fewer the our day in in things about From quarter. a expectation. quarter, and of QX I first And say accruals. happen then a so. And is million than then reversal a tiny or normally that's

small, bonuses mind. As objectives. that's paid million who you And strategic cycle, things before you $X my some anything? compensation are do or there making small people finish leave either out are to are of want the always Those Steve, $X to the million, impact not that maybe. add come

Steve Swain

you covered No. it all. Cindy,

Cindy Baier

we will start the year Remember, CapEx. to particularly say, that probably in I ramp should is CapEx the quarter XX% QX CapEx the other One in had Joanna, a QX. and throughout slower in We that little normally of about first year. get thing

Steve Swain

looking be And of are the remember that of a if for you cash source the cash year. will balance capital working at flow, free

Joanna Gajuk

Right. That was helpful.

that, inside for or that? my pretty the follow-up seasonality anything But the guess was any unusual nice G&A. other Because like CapEx G&A, the just you question. a I EBITDA So to on had improvement on there line,

about? the the anything of we think there year So for rest should

Cindy Baier

that saying, managed million start made so G&A out XXXX, of $XX our we be really by we took I G&A that In able our our fact have we rate am to happy have additional keep could the we revenues that took and me of for X% out massive XXXX. G&A in shifts despite So run let this at portfolio. at been we

might Steve wants have G&A. think thoughts I make on to he some

Steve Swain

traditionally Yes. at the have second our increases. merit Joanna, in implemented Brookdale quarter, we

that's bump So in the expense out of rate, you rest then then once run quarter. the will it year. the a first in through you quarter spread see from up the the can And in second

Joanna Gajuk

And on picture hospice. a if I I guess right. bigger squeeze All may question

reimbursement recently home Medicare on But payments. that So of outlook health routine new so of on congratulations care hospice are reduction terms the there, proposed the for for clearly, you there. in CMS a things growing And services the that hire segment. side part and rebasing the very the of focused implies

I vast payments. that's So the your of assume majority

So respect? XXXX terms is in outlook basket the a market some there cutting But proposed. that's that in rebasing. you how payments of obviously do think about mean they I CMS good that pretty seems there like are

in of how view impact Brookdale payments? do you would a So that terms have

Cindy Baier

Yes.

track CEO from we that saying by she President where as Vice hospice start Anna-Gene the brings very business. joining me of are let Hospice a and President about the seven strong very years. excited record last So Alive was She new us for our

doing hospice. We novo also on we de excited are that development are

do has of companies hospice not the a have needs is that other resident who we regularly have base One that Brookdale services. benefits

a able that to start so And hospices in can't an patients. because engine new are we way have to new up we generate others

GIP is But our care. Now have less will length hospice patients about GAAP continuous as And focus changes. more that's current certainly, short-term think we for to impact rebase care as certainly on impact to X% rate transition or is do I do lot we negative these routine CMS, model there opportunity thinking a because can us to team a sales to our us. help of our care agency provide stay home to an which offset of we than

Joanna Gajuk

the much. queue. back to so super helpful. That's Great. you will go I Thank

Cindy Baier

Thanks Joanna.

Operator

the from comes question Hambly next Dana from Stephens. of Your line

open. line is Your

Jacob Johnson

the maybe it good demand is for on Hi. see supply to markets. to equation, Jacob, your Thanks. Cindy, looking is This at Dana down morning. side study of the enough maybe this is senior growing? starting of on But so in senior And have could a also I to of housing housing? half suggested month had then seniors afford resources think touch last affordability? out you NIC tick that don't awareness

Cindy Baier

Jacob. Those good are really questions,

timing us, It's continues up now there they care It's housing. a NIC more strong if ever of demand. go has So It more senior And a not see you demand. and been seniors really back will to data, is sufficient need see we that not tick to as basically absorption the mismatch the you of for been a be back where absorbed still demand as dropped up and supply memory But to of memory housing about numbers the for percentage have senior was X%. that's unit care. particularly are that XX%. to between delivered in significant supply been in product, inventory the question

provided at retirement. the of If customer always affordability, has one income of qualified, reasons $XX,XXX we is in more you that our target income age and or look have

we that senior an with do targeting not is industry penetration seniors. recognize in we between XX%, So But think of housing. issue and the are affordability we XX% XXX%

targeting are who have We $XX,XXX seniors or income.

is to Now affordable will core continue But more well at in look can the do are for our for whether think we, industry explore for positioned in solutions business, others there the that Brookdale growing industry, like as demographic. to leader the we we housing. that the

Jacob Johnson

Cindy, Got headwind it. mentioned And from aggregator. an in then you a your also comments,

an more also there? what's you just your it Can on called some impact think update last And quarter. on you I color maybe just this of on leading out the give some going from on indicators?

Cindy Baier

quarter our And reduction quarter Well, that leads on largest call and there's have we talked we our fourth our no a something first question aggregator. it's in call. that seen from about

of all building basis, as move-ins. in all very to seniors the and the because, do the senior of at aggregator grow am with to from time a one partner industry, we partners with What to we and closely all disruption by leads, And mission know, as we flow a is seeing well. our we industry lead and we fact that you partners. really others that disruption relationships folks other visits Now though to will do first our continue that want serve in an on our we despite understand that had I like from some are they is able in sequential were pleased aggregator,

Jacob Johnson

Okay. quick rest spread last through aware Or Steve. we as think be And will $XX Steve, And for capital of Should the the to of for of modeling costs. a transaction quarters? you we a capital then of sort million year. then be that need source there? I seasonality talked the working couple just questions any think evenly of three about about

first quarter. or maybe in the I $XXX,XXX so was think it

timing Just of any the color additional on those?

Steve Swain

Sure.

On guidance incremental of transaction the on not really that. timing costs, the giving are we

We in timing and a million are quarter about still rest lowest the year. for even third capital, It will decent And for the then the so fourth the the then is the saying the in on of working slowly, up on $XX assumption the and quarter. probably second ramping year. ramp

$XXX a of capital We quarter revenue As million some to time. I and residents working the calendar our mentioned a due use in us about in we bill pay had my of remarks, of first timing. month ahead

the called much quarter a Sunday, When ends rent. as that's so And we get prepaid don't prepaid rent. on

quarter. working was it is ends that And the a $XXX also bill so over turns working month. we quarter, the actually change in sizable or And And it again out, second in capital that impact to because as a believe the Sunday. in capital on first a not, million a quarter

days early. in And fair comes so few a amount a

Jacob Johnson

for Thanks Great. the taking questions.

Kathy MacDonald

Great. Cindy?

Cindy Baier

So thank you.

you Brookdale And But I each to queue. dialog. our the interest to think we that's listen for in are in that we grateful all very that the we have took the questions call. your time welcome

Kathy MacDonald

Operator, you. call. can you the now Thank close

Operator

conference joining. call. today's This Thank concludes you for

may You now disconnect.

Brookdale Senior Living (BKD) 7 May 192019 Q1 Earnings call transcript