BKD - Earnings call transcript Q2 2019 | Brookdale Senior Living Inc.

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Operator

Good day, my name is Jay and I will be your conference operator for today. At this time, I would like to welcome everyone to the Brookdale Earnings Conference Call. All lines have been placed on mute to prevent any background noise. And at the end of today's presentation we will have a question-and-answer session. [Operator Instructions]. you. Thank my today's now Ms. over to pleasure is program turn to It MacDonald. Kathy The floor is yours.

Kathy MacDonald

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

Joining as us President Executive statements Officer. President forward-looking and deemed Officer; update These facts the meaning All today's Vice Baier, statements Swain, Federal Executive are Chief expressly and may the not our we historical laws. Chief made the these Steve future. to and are today within Cindy our of Financial today, which statements Securities disclaim are to of in obligation and date be any statements be

XX-K actual the note materially forward-looking risk non-GAAP the Reports Safe detailed may this contained Annual measures. XX-Q. results are SEC of in Statement. on we the results in our performance including the we Actual earnings cause will on call, factors during financial file yesterday, we direct please statements. from in to to from Also as and time-to-time for the and Harbor as Form well release differ these differ full release Quarterly the Certain that I with issued reports could factors you present Form Report that

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

Lucinda M. Baier

industry morning, on strategy. This of start Good second analysts, Kathy. other shareholders, our outlook, I'll participants. quarter. our an you, our to I'll provide all update with and our Thank morning strategy, the and

working. continue our to second demonstrate is that Our quarter strategy turnaround results

also on operational all are of and senior laser leading significant same strides We by our segments three for growth. our grew our store focused on basis our accomplished line this for healthcare making a We housing top Revenue services. improving on indicators.

showed quarter move-in first for since community year-over-year positive growth the time third Same XXXX. of

Brookdale, grew occupancy continued May, the two trend past earlier In up months in great than substitute no the and people do third who setting care, upward sequential simply our years patients in in quality quarter. thing, the July to and At occupancy with one there seasonally expected care. to for genuinely addition, is growth community our for residents and high in June serve and us same several right

every care of and having strategy quality focus win services working single to the Our our is associates We're high-quality metrics day, team group our residents on our is to of showing retaining we to pleased associates that positive associate continue first our foundation to a is talented strategy and providing dedicated of things on relies associates. which patients. we see as do extraordinary high why that locally,

community at an sales organization are It within rate for win rates a Trailing Directors quarter. aspects for and of place CEOs we over have personalized have communities empowers quarters who the XX% local sales Wellness Directors, lead efforts momentum leaders Year-to-date, also Brookdale positive XX-month remained and locally care. associates. around X,XXX and professionals continuing of are second is implement retention reputation what experiencing. to great returned the for industry as oversee former sales improved to culture. Also, to the eight central of is now the residents our to the work Health associates retention consecutive for highlighting speaks cycle clinical that a our sequential Executive all our for Brookdale, its our for our who professionals our our Retention

leaders The are given X% and validated our our have rates, needs associate-focused changes and and residents made. focus taking associate compared rehire We recognized to organization's and labor initiatives the overnight this XXXX a deeper all not Brookdale level. result year a change very improvements leaders ahead, happened turnover been total rather in positively The market. at the end, they are retention, that these by view development, on associates a of but focused made our the on engagement, clearly ago. associate current our but within positive retention on quarter feel Not and To resident's has we've the also hiring do momentum hold. have have clear operations our we've improved second of levels understanding tight the only

the been enhance resident As has to and take of such, actions priorities experience. our family that one top

enhancing so scoring in or objective system. over impact in last year measure pleased had transparent we past on the With positive this through experience years drive fashion, completed To to incremental our the our has net family the direct focused less and improvement. since survey. do and everything, occupancy. we're is business our in surveys These residents XX,XXX NPS, resident while and community outs move our over and increased NPS families, continuing date, progress We an to remain on resulted two at have will a most that customer same score, our business experience across over and significantly with recognize long-term this their controller success we the by XX% promoter efforts

results. summarize I'll provide backdrop Next, financial Brookdale's industry and the

on openings While occupancy NIC, living late occupancy XXXX. a industry rest in with of the with show supply coming dropped market, demand basis the industry into to and XX According basis new continue points. the NIC and senior shrink. and headwinds continues elevated appear and assisted demand supply a declined XXXX. Even supply remain XX housing the for equilibrium to occupancy construction balanced sequential points industry into basis stay starts to for second quarter the in recent the to XXXX pressure, pipeline

quarter for XXX Independent on Brookdale, remained quarter. basis Living and second basis, basis, points XX for XX% fourth the consecutive year-over-year year-to-date. For On around occupancy grew the same-community a basis a occupancy points

housing outperformed basis living assisted positive. With our more points basis proportionately occupancy XX to segment the XX a basis Senior just declined industry. larger close the occupancy excited declined to industry. being are NIC living we than Assisted slightly turning points than yet sequential on sequentially occupancy be

Lastly, more in new we communities the higher our than welcomed move into residents grew our and industry. rate

For strategic quarter, To community and a on increased X.X% rate basis. part a same RevPAR every on basis year-over-year strategy. our line revenue and delivered is up pleased on community same growth. the X.X% that improving wrap our Driving plan. housing against our demonstrating year-over-year we're second a revenue, key I'm success RevPAR execution product improved of senior

on the our on a services sequential and healthcare our quarter in basis second basis. to X.X% Turning segment, a year-over-year improved revenue X.X%

by the for The on second excellence, is plan addition, improved leadership segment margin our high consecutive operating developing improving a In recruiting accountability, quarter. quality care financial new and results the team continue expanding leaders, services. patient focusing to our under

hospice year this July, that As opened the second and new fully we year. announcing agency this we to are pleased we operational, opening is forward agency later look announced in another

off. market we move-in and This paying of and margin quarter, retention, are healthcare efforts XX,XXX positive satisfaction, in services wins growth, resident improvement over associates had associate and growth. revenue The

Rick Business with and off are our reports Johnson take several As track performance. you recently to level records Resources; an to O'Neal, to Wigginton, Sales; team. welcomed to our speaking May, proven Head and soon to a of me. and to as directly are higher Brookdale of And Diane Human lead us joined operational now know, passionate, leadership industry Leader, after dedicated of start ready of even of leaders expertise services Hospice Anna-Gene basis Head our our our we've she and great our interim entire on a Hospice healthcare Anna-Gene agreed she Head group

will of of is are implementation the Gender of our XX% it's important the the Today over approximately such great women. in our industry. of to even the in strive Steve my leadership in years in joined improve and XX of female, of leadership critical associates, healthcare. recipients our has leadership organization Chris services lead are XX% Information decisions IT diversity our direct you IT women new Officer He residents, Chief I'm entire will Suite, another our half Brookdale and Bayham of better in their caregivers we and healthcare which female, to as drive any are continue system, XX% experience families proprietary team. made specializing are excited as industry innovation know are healthcare Swain. and electronic Chris overall provided our of to Board reporting residents. sales marketing our more by C Today to diversity Today XX% in mix reports and has to care of member reflects patients, of announce Members and improvements Approximately women. continued to as agreements, Brookdale but residency

strongly industry. that will culture ahead. our scored monitors healthcare party third of top the and in our of our to foundation months wellness the we to in that pleased talent believe the optimistic are and years XX% are top Brookdale We in programs attract the We continue and

up are but leading business generating operator As value only we and our an that the my living is a quarter wrap results and have over autonomy to comments the to emphasize of goal. us quarter net to over not proceeds our I'd about like our XXX our I we estate component healthcare second community senior integral bringing XXXX sales our strategy estate million assets. regard In is real first since and from the ownership total closer real of

portfolio that diversified tremendous and has operating have built opportunity We a intentionally leverage.

from of are dramatically well especially live benefit need number to positioned life day the the services with positive to best seniors We trends possible. who increasing the every ahead demographic our

oldest XX XX% foreseeable age housing. for Equally into when important is the approaching typical because age quickly with improving of is fact our baby the or aging occur move-ins of boomers of through a accelerate senior which within years the will lives In boomers over seniors younger. baby housing at This important are couple future. consider the wave senior silver their

We are Steve. we over turnaround can deliver I'll to and an Brookdale turn call to commitment we return reiterate attractive delivering so XXXX to the that our our guidance. annual shareholders our on

Steven E. Swain

Cindy. Thanks

XXXX was same continued on locally. revenue X.X revenue continued purchased show X.X% $X.XX million portfolio. XXXX. we from the same retain the year-over-year occupancy shares quarter growth protect value growth We year strategy to the and change turned community year than our with program in occupancy an are second of quarter. was a opportunistically in will than pleased repurchase price senior to Also Healthcare we win two X.X%. last and our month long-term marks earlier RevPAR months second XXXX the at increased and housing residents second better continued the this earlier operating The for consecutive of attract first quarter improved of Highlights second shares. Under growth second strong this services the the to to quarter than progress in ramped average a X% our of were and plan was in May, community and better positive This with quarter. income CAPEX investment will segment. Consistent revenue up of This growth year-over-year. quarter investment

For real on of and enhancing arrangements. for a estate real were operators in review in where invest We the year-to-date we of more Brookdale. the communities let a owners managed February made second to detailed XX, assets priority operators to year which of end strategy remained potential. our to new portfolio interim quarter. quarter To again me most Since monetize last of see managed a communities successfully announced identified XX first start transitioned in future key of highest transitioning order in progress with under total initiatives. XX focus our has We estate or significant the growth communities we for that new to the

the expect of half transitioned to managed the be in We year. back communities additional

leased The marketed. Ventas communities quarter that XX master from are removed as the of the communities being sold are sold. lease In the five they are approximately

adjusted months XX adjusted the a expected guidance was there on previously next divestiture included cash slightly have these timing is of removals and flow. positive asset Estimated so annual free the Over no to change. in impact is benefit EBITDA

over $XXX From owned We approach XXXX, first also end of transitioned two communities. has quarter sales proceeds sale the million from two target. net as community of total we completed the net proceeds been our leased the communities and

campus around estate openings; campus assisted recently and we discussions living dementia and center divestitures new two While care a a Virginia memory building second, care newly provides with for at services Alzheimer's in homelike early real first, Williamsburg, in constructed celebrated setting. Crossings model Brookdale's designed Bridge comfortable is Brookdale and stage specifically dementias in other and individuals Colorado. Skyline and a disease programs Clare our

impacted $XXX provide revenue since the by lease second asset XXXX beginning to community free change. impact the positively XXXX the EBITDA year-over-year the which communities were but excludes To impacted cash negatively and I XXXX of quarter the adjusted adjusted context by both financial of lease focus my terminations. flow These results million. same million and transitioned XX XXX sales will on results transactions the through million by $X and quarter comments accounting

as housing, quarter. mentioned year-over-year X.X% occupancy. the increased RevPAR community Rate basis. revenue senior than X.X% more with compared increases same grew to to prior Starting lower a on the offset year

As outperforming living points decline and are at you occupancy segments consecutive XX memory points same fourth to we and increased look to to when care compared the the of in around that basis XX XX% independent the prior regard. reduction quarter. year pleased quarter this at strong stemmed living remains only basis a occupancy community the sequential We in NIC assisted for

part of increased revenue a strategy. year-over-year segments driving which basis key is rate by on housing a our senior three all For

first time QX XXXX. community Importantly the since positive move-ins for same growth showed

to been controllable since significantly move discipline operational while maintain We are that our move-ins we've pleased less we rate outs turnaround. also we've driving seen able began and

While are improved ran second local conversion quarter and examples down the focused visits improvements sales quarter, improvement believe rates potential all a team leads we In in impeded to high will cycle. rates future. about conversion where were identified that trends a in lower the A pilots by with associate follow. accelerate barriers seeing this first couple also retention XX mission positive we break the sales in several We were success. of executive assisted to communities in the leaders

and good XX to the we'll very seen pilot approximately soon. already have communities progress more We occupancy expand

utilized we target Based select quarter. and our a success uptake this digital move-ins investments cities. the we in by marketing to data will project digital positive analytics in another investments extend the marketing For third on continuing

X.X% expense within expenses, to and driven facility primarily quarter quarter property second compared community to guidance same Other XXXX. XXXX. higher to with increased operating The insurance the move-ins and was remediation to of increase increase a increased X% of marketing compared more annual to over operating related Turning expense of including second compensation X.X% X.X% the investments internally increased drive strategic was due to XXXX premiums. along

our improved basis nearly healthcare in a sequentially. quarter X.X% a revenue basis partially in revenue segment, daily X.X% driven average health a to Moving hit year-over-year posted July XXXX daily census increase On X% daily census second impact home and services XXXX. year-over-year on the both double-digit offset was but dispositions. for the the was in for changes by community quarter and an hospice grow revenue of continued average case of and census second exceeding The mix increases business average and year-over-year. to milestone We we by with rapidly

$XX to services improved annual primary to of revenue XXXX XXXX to items, driver decline a million are financial accounting reported million to Healthcare we through to compared build a new the a non-core continue quarter. of and second lower was to million. margin The $XXX Positive transactions from the balance EBITDA and operating expected adjusted sequentially of between $X $XXX trends lease result impact million X.X% $XXX X%. EBITDA expect million services standard. be of and million the year two prior We $XXX for the healthcare related adjusted from quarter

The other noted higher was investments main driver earlier. as I labor

EBITDA free primarily an cash CAPEX consistent to prior Adjusted a non-core an working turned in XXXX. from were driven increase first however, primarily with quarter. $XX insurance the cash key capital in by quarter increase plan. the capital variances quarter. the million our million. negative to in lower which in basis items, working sequential was is for second due When decreased $XX On non-development investment positive claims And adjusted changes flow flow adjusted year The compared free quarter by the

on XXX with positive offsetting into making over CAPEX activity. projects this communities a deploying prior the to started our payments drivers was are due lease Partially financing progress reduction year. the disposition We in

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

operational provide the continue of remains in implement we a to turnaround the sheet business. position balance Our effectively as sufficient strong to flexibility

XXXX for positions. fill a remaining we second be reiterating guidance of are occupancy May representation six continued good consolidated We our business the wage considerations. following pressure the growth positive the is adjusted will more There quarter turning in months with as open

merit Marketing in Data With full of we Driven quarter. investments. are the lastly our the impact third increase Utilities third the will Pilot occur in quarter higher success higher will and of the quarter digital seasonally also G&A

there up in months observations, of is metrics leverage past Based demand, and notable and couple win the to Brookdale cycle. wrap positive at moderating the The been now operating see beyond momentum is and occupancy call to strong more supply, locally I'll positive To our hold the execution a on our of shareholders move-ins wins. want company over a few taking the we Cindy. transformation tangible. has increasing in culture and over inside delivering key are retention share back attitude I from with turn early turn beginning powerful that the

Lucinda M. Baier

grateful sometimes California do very into amazing natural seamlessly team work disaster for safe and to earthquakes and Hurricane and even of our our prepare own very after all associates associates the are to action before families. community the they for our our response put scenarios Barry. various proud their moving I'm of emergency I'm first residents residents

Brookdale. work Our opportunity. believe saying on close residents making enhance days. are team to our momentum progress are we even we growth the Brookdale's positive that building turnaround our to and is in lives that does I and patients by strategy continuing evidence strongly ordinary quarter like of extraordinary to I'd The on

demographic I'm long-term we shareholders improving will Brookdale with value. operations the in and tailwind confident approaching that our provide are We of advance

engaging the and on Committee Land to one dialogue you shareholders from shareholders a the our I'd of of Land on Buildings carefully letters February to the up advisory prior of recommendation agreement take common & with our the Merrill at after appointed from of Land Buildings value all independent are to public in & as part determined additional with we of Lynch committee of creation. discussed call, with to made Board Buildings like your XXXX the earnings Buildings. Buildings goal unanimous one our shareholder would the whom with appreciate directors proceed value. Lynch Merrill we Based we suggested Land of assistance advocated & of BoA in they seen. that investment Investment towards Earlier Land as independent at & of touch questions to was open recent which consultation as Brookdale this generate and a evaluated be feedback year unlikely three the might by a was & have not Before I ideas that review firm BoA by constructive want actions always that reiterate

recently assist Land PropCo Merrill a of More asked financial Board's second independent to also proposal range with advisor further to potential Lynch the & Morgan OpCo asked BoA a evaluate structures. Board the of Buildings Stanley evaluation and

discussions considerations Green assessment of the and and and Board imprudent each would unrealistic in time with risk at structure. that practical and were of be OpCo and review Street of transaction fundamental PropCo Advisors PropCo assumptions. that a execution disregard theoretical flaws Following Those pursuing that the flaws critical, market include there OpCo a of numerous use advisors the concluded this

results of this we and to on realize estate our operating are the don't shareholders. discuss There and is sizable this portfolio. end We you that turnaround At the value. capital intend results to we making the time Brookdale execute say operational and we to taking income questions ongoing by investments the of actions be the demonstrating our move have Q&A please the today real turnaround this portfolio there are strides as to with that line for any our own call this would benefit on are have with increased we matter as our answer is into and we net strong might our open and is value purpose we I believe in comprehensive no maximizing tremendous progress to upside question quarter plan. To that Steve happy more Operator, to anything to questions. turnaround second

Operator

Instructions]. [Operator

from Research. Our comes first line Raskin the question open. of Sir, your Josh is Nephron line

Joshua Raskin

everyone. morning Good

seen there that the on didn't something how around look to you read sort don’t two out bit from tougher good. some don't there And is necessarily as question then what a metrics why the last of and a year, two to that occupancy good little First have looks generation you for of that been sort maybe -- in past, occupancy I that terms you? just lead the if pick it's color good, of not link obviously sort everything leading was? first half more that's on But us want into was correlation, business of I there and the I'm pick the of understand of indicator and future periods, first in that want a but curious that is give but to the on mean seasonality did directly around comp

Lucinda M. Baier

a This Thanks so Cindy. Josh is So great it's question. much.

So of let second your the with question first. me start half

very an the carefully a month. at that So because usually look reflects following occupancy and move-outs month, for move-ins during we

positive were compared our had the favorable quarter, in the net I quarter I when we to last third excited increase move that the for of by quarter a out very total move-ins the I'm same look look year. X% move When at X%. So, in out, quarter at

and goal controllable really Now look and controllable consistent, the X% a outs move RevPAR that of sort move despite because fact keep independently. had difficult rate or stronger increase we're to was improved occupancy as our year our looking outs comp because is know second knew over push primary X%. controllable our profitability if could to controllable you to driving that rate decided driver from We outs, within did by a is at on quarter, in that basis, year-to-date year either and move rate number we controllable last we on opposed of move that the out the we on our really the of really focus And we move our outs out. we financial last move

Now marketing I was shifted recognized we note investments our that we last of there's few into remember, answering leads, that important at a some call quickly really to delivering when because inquiries look more to year things you'll our center move-ins.

that's so, at that you're factor leads And one year-over-year. when you see looking

factor second talking from this a we've The and quarter the some been third volume XXXX there is about the lead is in since disruption that of large aggregator.

Now we've no in made that significant progress past. quarters in generate not first programs building momentum there's in the of that did we're leads we're that and look question that's when you into the reflected a last we we're number in aggregator actually three something getting marketing to same the addition there, And in move from but the that our visit has some successful visit at getting of also in first people shift to visit, that communities. but our less our

that of decisions we positive them expect we've investments as we're marketing us we and expect are continue getting down turnaround, to why data financial we're into working our whether that the the looking our that the or we're quarter. the operational really that third conversion really, And should is proud are go cycle. continue our sales expect have us they're on the you doubling we which I'm we looking driven, on to, as we things made, So, always at benefit at

the have is last what year You you great told we know, strategy, this added we sales year always that right execution. had I

more Patchett, And deliver on so, for give great to able us success I build team Wigginton huge that, to and we're Sue to Rick our want the to be operations joining with Mary I'm that that excited to very credit mission seniors. going

Joshua Raskin

helpful. Got very you, that's

that follow-up Just of think if sort down exclude first X%, feasible? you you does on though Cindy, if that them sound would both of flattish from aggregator, kind have periods opposed online you that as to been large one could quick excluded more visits

Lucinda M. Baier

reasonable is That to conclude. very

Joshua Raskin

the for are cycle is be a Okay, rate of from like down, healthcare around interest, to up REITs. second of classes? and like then more on kind -- the do just a stocks bit focused Are question that you still investment them them, little feel you seems the REIT asset interest heating just seeing or for housing terms housing seems up more are senior in REITs non-senior

Lucinda M. Baier

think REITs it's earnings easy focused. where look their at to well I are very and their and publicized, transcripts and see they're investments

speak for to themselves. them allow would I So,

Joshua Raskin

like But of change the to I seeing Brookdale, more interest you now. meant REITs direct are directly sort from

I think the year process, been any there or it's developments divestitures and etc. last around so, about products, interest them? is new obviously or from sales

Lucinda M. Baier

think had we've happy partners, and with very REIT constructive of all discussions our I several have we very that positive that I'm transactions. announced win-win

We continue to financial REIT look results our our financial results go both and at transactions that will we improve as forward.

to on us deliver really our communities. value for with operations. that what's by operations We shareholders excited is into our that is partnering are improved everyone, with going delivering are REITs the really capital our And like our because focus primary

Joshua Raskin

again. thanks Okay,

Lucinda M. Baier

you. Thank

Operator

you. Thank

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

Your line is open.

Chad Vanacore

Thanks and morning. good

of potential about? thinking until from we expect I the about it thinking what's year, management year-to-date. reading Am and a transitions, another you've the contract bit done the impact timing be and end reduction then the quarterly X just million you revenue So, now quite that should correctly

Lucinda M. Baier

the question. Steve you. for thanks Good for question Chad, answer morning. will that

Steven E. Swain

Yes Chad. in quarter XXXX. we and that from the million contemplate There primarily though in transactions is a in transactions already $X.X reduction for completed the in $X.X million we about future revenue second

Lucinda M. Baier

the we a arrangements, management and operators. that of wanted of ensure interim that communities on of you important were to there work our about as exiting management portfolio we The transition thing last was know leases, did year; remember lot these to good the lot restructuring agreements a is a transitions to of new our part

was so, the we're transition part as and the we're overall making this. planned And on this progress delighted something that restructuring, that is with of

Chad Vanacore

some in expected NOI turn get from to some made Alright, here? you think recent you can in positive then the mention on can store XXXX, how same about there Cindy us and you've color past you give more

Lucinda M. Baier

and move-ins rate, question drive it's occupancy really for with thing a most quarter important expectation our on third the need the first to thing. the trajectory Brookdale's will progress We continue the to that's that to drive RevPAR, revenue Sure, thing need occupancy have first drive so and is that we'll during positive turnaround. we

The approach labor year third second investments something marketing because will go that do we through normalize we that significant get or of investments and in ramped as benefit seen investments so that made next from market haven't we then some year's forward. year's is that that movements yet from And that year. next our we spend have so own up benefit pretty a this driven thing this more year next internal the is is year data and -- year driving and Because and third final this we'll above know our full we more in the of we've XXXX successful. it's

things those primary that drive in will So are the improvement XXXX.

Chad Vanacore

question your be? at and Okay, imply rate more would contribution, EBITDA point, guidance run why does now than on this half one that just second is JV level higher and just decline that in some

Lucinda M. Baier

our full maintained all guidance, our of guidance year. for the we've Well,

of into be some I for will certainly that the of near JV. the the end probably the CAPEX think the will it will top have go signals and back communities half in that our year guidance

Chad Vanacore

been Okay, is assume in pretty JV sales guidance, of and that drop properties but you've contemplated significant quarter quarter within quarter around second XX per a million that first that? would in any there guidance EBITDA running in

Steven E. Swain

as so to and -- communities. Cindy guidance the ways investigating increase changes didn't contemplated minutes in ago. value the have changes mentioned a few no in the in guidance always We're we Chad, any specific shareholder

Chad Vanacore

leave thanks. will it hop back there queue, I Alright, in and

Lucinda M. Baier

Chad. Thanks

Operator

Jason Plagman Jeffries. Next question comes from the of of line

Your line is open.

Jason Plagman

good Hey, morning.

competitive further three wondered bit are you're and just new on supply the just starts could ago new you that a feeling construction from comment are about how Cindy in slowing, environment seeing how little with things -- market standpoint? a your competitive you Just if months versus trending

Lucinda M. Baier

is insightful Brookdale's environment competitive last years. a because a really key three the been that performance over the Jason in factor question has

opens communities. if our a that see proprietary you're So around we deck analysis you page on starts X and and our can that looking use we have graph the shows investor in a at new Brookdale

that really is story. because a Starts So powerful let me start with

compared of down look was If the second XXXX news the you quarter second at starts in XX% within quarter of Brookdale peak. minutes new starts the are which a XX the to community

XX%. ago If same last XX% year you them are years the down they're you two and to they if down quarter compare to them compare

So be is our what me environment over years the that that should competitive two next tells improved. significantly

two there's that was at in that expected, compared that which years we've question down the quarter look quarters XXXX XX% Brookdale powerful from what's QX now. really no are QX, peak from ago Now about increase been for several opens this opens was around that peak. if is talking of second to the to But you sequentially the

If you it are compare to down the opens XX% year peak. from last

affected is a critically for the new new is Now that are this the after year about we because competition important opens. reason by opening competitors a

me strategy for operational what past deliver is the that with the have that So have tells me the that positive than strategy and when great future for our that turnaround gives value the that competitive shareholders. positive better combined from that is outlook which our right that is Brookdale will confidence much we we the momentum

Jason Plagman

the Thanks, maybe side. on for Steve -- that's on operational And then helpful. expense the

and expectations QX the weight in then margins items You mentioned you second that think, walk trending some and in to facility you I QX in higher QX? you continued came in other items, some can us just through comparison in, in half mentioned inflation for where utilities and would be operating your

Steven E. Swain

Yes, sure.

into quarter. third as we the So expense continuing go the expect do we quarter from pressure second

previous continue some already as as As and into from spend future our as marketing we movements labor some for that associated quarter going Occupancy and gotten signaling the move-in. marketing marketing of expense are quarter you dollars and this third as spend are to mentioned Cindy to an utilities. increase mentioned we in have occupancy that also positive second third is had we mentioned the a We're results we revenue quarter our ways with that will also pilots. had opposed increasing the you

and probably into that occupancy spin really turnaround first between decline. But to quarter we then rate move first and starting our would growth into the have margin line. into quarter So, we fourth phase the third in the And can around the second third margin as third the we had we out same flywheel quarter leverage. starting and XXXX between operational quarter the are the a in second decline you the from and assume quarter significant XXXX fall to -- our the is and fourth into bottom where where growth the

As same Cindy growth you the mentioned just steps a to ago. store to few NOI you, to she gave minutes get

Jason Plagman

that thanks it, color. for Got

Operator

[Operator Instructions].

Morgan from with question line Our the Capital. Frank RBC of next comes

Your line is open.

Frank Morgan

any color regard quarter, With normal or the do in in to [indiscernible] market faster the ramp as you see in than just to competitors that, that drove curious I'm have from you what specific unique morning. your around second well? up did that was Good you

Lucinda M. Baier

are job where better particularly we that in living Frank by the think assisted fabulous than our data a reported improvement sequential industry. was doing I the

very It on strategy. starts So our we've people. working hard turnaround all been with

we've we best a our success. business and is critical had been the the have in team X% know that you As associate the building turnover fact in improvement to

our have on delighting done been half in Frank. our really the like our getting satisfaction critical score to second a the momentum lifting as Thanks our strategy the of and and improvement really over we've had It measured we've get we residents third optimized that We've our fact looks very I'm sales work, of That's The thing that we a so turnaround and we part a operational promoter set, and and off our our year that sales we focused really, marketing is is in a by our spend heavy appropriately. part our results seen to improved a customer XX% strategy XX%, objectively it last lot optimized and great turnaround then have of got occupancy. really excited And start. the lot execution. why the we're marketing for have and that a of strategy. our is about

Frank Morgan

new out recovery? you're terms market of behavior of kind your promotion of opening a sort would what above pricing any markets be question, around pursuing there's seeing call to competitors, that just Thanks. strategies time on of the like might one of of impact second you they part Sure, any what color second particular likes? you from want in and of out the the but called them are any In the year the end

Lucinda M. Baier

many know different You have we competitors. so

In or the five vast fact competitors of operate majority in the communities. fewer XX% industry over our

in they're it's our So what not size and a at really competitors helpful to company doing. the individual look

focused about high very will and I that local but the XX got about in success markets returns. opportunity new focused less a execution, centric communities markets the exciting and outsized opportunity. the have those strategy communities And see we say communities that's we have barrier various got the We've we've outside and market throughout so on delivering those team senior every been leadership We marketing it's are with U.S. a communities as working for most to more great some to programs, where to we've win. they're remove

Frank Morgan

Thank you.

Lucinda M. Baier

Thanks Frank.

Operator

floor to are There Ma'am the at Cindy. time. like no you. turn Thank yours. to I over is would this questions call the further

Lucinda M. Baier

much. very you Thank

take operational evidence hold further that initiatives have important milestones. our achieved is and quarter continue This turnaround to we

The X% our we as providing improvement performance working to shareholder we committed and to are year-over-year by are sustainable care move-ins company's is demonstrated and operating to we've residents service and long-term performance drive improving value. patients. our our and continually evidenced business As quality in improving and

ends Thank turnaround much, our so you is results. Our this driving strategy call.

Operator

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

disconnect. great day. You Have may a now

Brookdale Senior Living (BKD) 6 Aug 192019 Q2 Earnings call transcript