BKD - Earnings call transcript Q2 2020 | Brookdale Senior Living Inc.

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Operator

Good morning, ladies and gentlemen. My name is Jerome and I will be your conference operator today. At this time, I would like to welcome everyone to the Brookdale Senior Living Second Quarter Earnings Release Call. All participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. reminder, will a replay recorded As purposes. Instructions] this be conference for [Operator like call turn MacDonald would to I now the Relations. of over Investor Kathy to Please go ahead.

Kathy MacDonald

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

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

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

Cindy Baier

working to analysts call. on is fight want to to lives, all fighting who Kathy. and protect everyone you front earnings to start part making on Welcome our and who Good residents shareholders, work patients. each tirelessly the vaccines you, of to health century. our to COVID-XX. emergency of well-being a to doing make inspiring to the your I you Those public against past by and researchers Thank health our thank second help who the by and save quarter and other ensure includes saying our continue lines, the the greatest of participants. morning This associates, a difference to difference in

our approximately through us this an for transaction an improves that XXXX, long-term lowering create Brookdale's turnaround. positions about make flow. financial operations, over the the Prior our built Before to multi-part to and a most flow cash We to our since want us, period we enabled transaction, our during completed new cash time completed approximately We believe we largest talk future discuss transaction Ventas. with positive we transaction payment I is our a better our outcome significant one-year value liquidity and $XXX landlord us to debt In I an the Ventas shareholders. unprecedented lease this beginning by with for payment upfront million transaction payback. the improving July, of our lease foundation remaining believe reducing

so. Throughout we top Brookdale's high-quality up protect and do care well-being will to essential and has we will continue and patients provided priority operations. services to Turning to this our not of remains the residents, health on and associates diligence. and Brookdale global and helping let pandemic, this

given resident will successes inspiration innovation. incorporating and baseline and XX required are The are: We across states. unimaginable, asymptomatic nationwide sacrifices of few Our our the who testing COVID-XX well-being testing. engagement commenced and virus XX% program. asymptomatic personal and continue to individuals and proactively robust of baseline start three that I'd resident residents transmit to to infected And COVID-XX a up in ability family to of just health our research testing find months at showing individuals of has communities and ago. all to yet completed all I incremental testing like associate operations. our and that we highlight unknowingly, are a short With the commitment with with we were increased associates

quarantine residents asked to virus. help and asymptomatic addition virus. individuals that of regulatory of our all the a and work to extensive percentage the tireless could contain helping In following help community-based contracted to low identify XXX,XXX to and Year-to-date, our so helped tests. have requirements, we over performed be prevent we've efforts associates from Brookdale the identify this contribute COVID-XX individuals residents spread tested This asymptomatic who heroes and we any is to everyday

as less X% testing impact than of in duration to positive the the of our have us as community allows July, Baseline I recognize want our that exposure. well end to all communities and occurred of work the results. at residents COVID-XX COVID-XX at resulting great many outcomes. learn experiences minimize currently of As the with great our communities to

COVID-XX experienced symptomatic. our patients. restrict One who serving and the positive. comprehensive of many our tested individuals in residents we possible they those associates not protocols evolving are would they testing to full are Without for through even surprises our learning and the our working pleasant made COVID-XX, Identifying for period ever quarantine positive known of COVID-XX implement exposure have who residents all is those positive were passed positive every was it without day. we and becoming from still COVID-XX communities to infected

to testing to local public continue circumstances. built certain additional state and will meet testing incrementally and officials health in directives plans have We we conduct

now the they and our residents, focused remaining working are of appropriate. seniors accepting currently leading communities way success. communities Turning are on with to is move-ins. welcome when XX% operational with with connections able prospects The will Brookdale potential our be new forward creating to second so

the have pandemic, visits, window to residents with to Throughout our ones friends. we of anniversary and use corporates to communications virtual effort expanded connect celebrations. residents with loved family a technology amount the of their create with tremendous made birthday and increased through We and technology them and connect our

through have virtual at important different allowed residents where easing amplified baseline how very begun communities know responsibly of connections of We welcoming which move each loneliness the and state safety connection during critical our program. residents helped some completed many our our visitors to we our we've across other into numerous is much visitors, In see address and More communities COVID-XX forward of comprehensive and one requirements. welcome to restrictions by combating to communities recently, plan and to developed In-person we seniors local a that is faced connected ones guidelines America government new even at Having guidance. Brookdale to pandemic advance this isolation us response. our loved applicable their local want face-to-face. element testing of incorporates stage a by

restriction associates. Given residents second, steps with level, and support COVID-XX of the trends, remains continuing community-wide the agency testing associates the of positive a requires: COVID-XX licensing our and easing At helping, regulatory to as and applicable; current protect community results. no high first, complete the focus reopening our residents plan on for is

It's distancing criteria dining as official requirements be of may prepares and fitness salon, different and follow third, communicates appropriate plan areas by to compliance to must not that apartment engagement, we social guidance. center, residents visits order health local executive loved-one for cetera. note those such in-house modify include, regulatory necessary requirements community to when with and offerings applicable resident important and et ensure prospective and we ever-changing as the met community various of are communal, library but guidance; staggered limited state our addition, and an that these In or visits, consideration

All continuing research taken well residents based pulse highlighted social environmental our can wash for cautious, of since memory cause incorporate with innovation. infection Recently team, care beginning. to experts our hands. clinical company well-being readings highlight Last Brookdale identified strategy has that assisted our an to and frequently clinical our maintain our distancing, memory a wear remember quarter, as challenges clinical adopter are and associates. precautions our about of an care prevention product residents' and the to their health memory final taking and residents. care to masks I our support My over-the-counter of is operational as by was early approach on of unique COVID-XX into emotional the control ability to residents. Dementia oximeter our living our

to care face Our memory a associates residents' hypoallergenic product lotion-like this the of supports hands several the times this day. the antimicrobial product apply can and We believe barrier skin.

continuing the while offer new our protocols to results. assess impact and and pleased to existing are We monitor add measure to this and

for let's performance my to community financial of the on second I Now the our results. same focus turn will comments operations quarter.

residents. our was communities was compared on basis as continues X.X% to basis. RevPAR performance, have community including quarter our same RevPOR to a COVID-XX a visitors a second significant on better expected, impact year-over-year X.X% and XXXX to community protect a same move-ins necessary our As and on lower to higher basis on closing

key investments our our Our Brookdale around to Whether connection through are decline still was progressed rate our a XX% resulted be team's June including more Brookdale's approximately on schedule June support marketing of communities quality able efforts the hyperlocal sales the living quarter. joining for a clear progress focus has lower and were even communities. of of year-over-year but web this difference high in-person seniors or we U.S. year-over-year allow. well while center efforts visits our guidelines meet resurgence. to basis, face great welcome for calls continues of lower we've with continuing second our made fair convenience year-over-year is one-half demonstrates able demand team's their communities. when within strong move-ins our from pandemic. hotspot to care. to on as a homes, in efforts. lower from a to to move-ins enhancements team of neighborhood prospects their nearly prospects Move-ins senior saw ago. was operations who April that from thanks price we service as They XX% during This were exploring cut field the of What's forms handling been the improvement charging by basis than are the as points our provide and quality by in We visits behalf year options virtual the of thousands new on

compared residents to united the controllable We of protect quarter prior for operational Our in the less and the heat year. results teams in to move-in believe others. the our residents for likely crises were has care themselves to favorable second resulted and move-out

to we was occupancy live a decline world and learn normal XXX our with same the move-ins return more a sequential our move-ins and move-outs move-in community of significant level. will showing risk to to each impact of sequential the quarter COVID-XX, month The point As net with begins the that basis move-outs believe of improvement.

half of skilled business. $XX million provider first the related funds nursing we of grants in portion federal XXXX, we to housing, the and through additional the July, accepted applied senior for For Medicaid CHIP approximately allocation. of our relief grants In

senior others operator, time with leadership to housing senior amount explaining along largest administration living and the Brookdale economics important the invested critically nation's of our HHS, lines industry relief financial As is of played significant COVID-XX. in help I the our industry battle as the senior importance well front have against a housing the emphasizing role COVID-XX a seniors as of playing that the to providing on protect involved. role against the congressional to members the in

combined our health health on order about turn with our all services. and limited access care procedures impact continue first care strong with home In communities our patients Let the that starting census. our and services home to in negative our are vital but referral provide rebuild me severely to health our acute protocols screening to the and we starting in quarter, business. health shutdown associates care sources to revenue, or a started educating had our limited to elective systems Lower occupancy now

Given agencies in are excited decline quality, we census. that on of ratings or June. we sequential our greater reducing see had this focus quality the by focus, our X-star to are XX% With

we back the by fact, January census end of built to June, In had levels.

year revenue compared X% to delivered business Hospice quarter the and Our sequentially. prior growth

as funding We are of income to the other segment. Care support Home the operating second the recent Health Hospice pleased we government Through Services grants the recognized our quarter, and industries. of in $XX with end Health million

will outlook. to the I Steve, Before our call I address over turn

return and needs-based. With when South in coronavirus too to new rate business normal. the definitively our it's is Southwest, will primarily the core, its about early elevation speak business the recent U.S. exactly in a growth essential, our to and At

sources patients. messages. care residents Our to with This along our news and our associates COVID advantage low facts back cases our our resonates percentage with strong of up highlights lead competitive of sales providing positive quality for our

the great and that on and mentioned financial roles the opportunity national will focused just opportunities With As progress that, experiences. can to through reinventing by We our the our to the associates the business nimble being quarter, with forward to that. resident leading actions over provide call we challenges crisis this ahead. overcome made outlook. I'll second our are on help rising doing for is more a and us a scale quarter, Brookdale lead challenge and update on last coronavirus this and united turn way quality-focused create offerings I short-term capitalize we're in to Steve our and detailed performance that their memorable

Steve Swain

income comment impact provide added the within and impacts start Cindy. by a summary a and with by made segment in include we clear, the To I'll supplemental make the on deck page decision financial the COVID-XX's We COVID-XX-related pandemic line. to results. all financial of expenses reporting. Thanks, to

I'll a occupancy Now, the In declines highlights. through senior financial go housing, as few second the quarter. progressed month-over-month through we slowed

COVID-XX in saw segment, sequential revenue stalled, slowed, to due hotspots move-outs the U.S. returning Hospice's the in the growth revenue Since Services quarter. new occupancy we our July as to normal second decline a progress month-over-month increased, level. Health in April, and trend returned in to Care Home Health's However,

Ventas from of increasing the position. valuation. XX, improved by coverage with Our arrangement assets significantly lease transaction covenants eliminating monetizing and to financial June comfortable our flow, structure Ventas all million. and improved we expected liquidity capital our our the liquidity Even are cash recently an $XXX announced with with uses And our long-term at cash, also attractive

the provide income of satisfy To line page are a In Brookdale second conditions our were continue impact. skilled to future Care lost nursing of on financial we line transparency, recognizing reported related me our and estimated industry The grants advocate on senior We the the relief. provide the Let to income. coronavirus more in section a Services grants related as the basis as segment, be Medicare prioritized government quarter, largely and of a perspective of summarized and supplemental. we included revenue operating grants senior associations we the recognized on X color grants. to is million COVID-XX for housing to $XX government the a housing. of majority business, further provide other the which for Health the small to for trade

supplies COVID-XX over associates this the to quarter, to is COVID-XX of $XX housing second In in services we spent expense costs. Turning communities. for the health care Year-to-date, million safe $XX and and was and X% XX% fight pandemic. help revenue. keep Of million, medical was senior which costs, residents PPE quarter's to our these

as occurred, we hotspots increased labor. costs new such As bore

We in increase our have costs medical with also seen an associated population. self-insured employee

last the are ensure costs several quarter importance of expectations, and we will second expect our supplies and The our baseline PPE to appropriately While we these stock We that been costs by months. higher associates want to PPE initial than in about have were residents of protected. testing the $X incurred able a million. Brookdale that build were understand

related to million available. on million need For with CARES Act. private least the resources Medicare advance testing. to our Based capital and generally bear unless one We $XXX $XXX essential to associate departments received for assisted likely associates of residents, government of will $XX which we improved of the payments. that state believe million, the incremental are or we of National insurance Working expense understanding the testing made at was Medicare with because workers, reimbursement, test Guard along many initial they testing local covers health are current

in benefit second We half expect of will reverse the this XXXX.

until we from also aren't program, to of $XX XXXX deferred As deferral the payments the June, million benefited remitted end XXXX. required and of under of which tax payroll be

operations Turning to the side.

with will comments me senior results. on start Let my I community housing. same focus

on Page March compared of trend was May. less COVID-XX new to presentation, of U.S. became investor the severe and worse then the significantly national at cases Looking April X in

June decline second reopened, occupancy half XXX in July. trend declining grew started country change similar the new Brookdale's month-over-month increase substantially showed to of cases returning points was a the month-over-month as the In a to and a occupancy point However, XX in normal more basis basis basis due in of July number in April to XXX in to our points lower moderating trend and however, June. move-outs level.

sequential so quarter a in are X.X% smaller decline care. We RevPOR X% pandemic the trends was its national living monitoring sequential the lower on length of assisted a stay, second year-over-year a higher on and living longer Independent was basis. than basis, occupancy closely. yet has memory

a While rates, our independent of housing mix longer our stay same we shift second in resulted community on continued living, $XX XXXX a we compressed. the care-related for for revenue length lower basis nearly quarter. the With on sequential was basis. rates to million impact portfolio. rent COVID-XX lower compared our X.X% in independent to in of lower within portfolio was due Senior estimate saw disciplined quarter X.X% RevPOR the living, of IL community average with to We and a and the be same given towards lost revenue

to non-labor mainly senior by related compensation-related nursing COVID-XX expect sequential a $XX increased In by to of results Medicare $X applied meals community through quarter and July, reduction million related for of pay. marketing as and allocation. to portion provider quarter, expense mitigated on we grants additional relief in-apartment driven CHIP prior grants the to incremental increased We $XX fund, skilled mainly and COVID-XX-related community premium Medicaid the COVID-XX lower variable costs business. second Other including Our expenses occupancy basis, a lower costs related of approximately for expense operating our cost housing compared million from actions, these to $XX to business, receive include the facility X% million up driven and million. dining such activities, delivering restrictions. year work and the of Same

continue our summary, costs has the strategy senior housing will in third market loosen to lost adapt impact COVID-XX increase communities and restrictions. quarter In on to a marketing significant business. had pandemic, expect conditions due to our We to related the revenue incremental costs and as to our

As operating to these year impacts, prior community grants. XX% a XX% our the compared same recognized of income quarter or result excluding decreased

to revenue Cindy's segment. $XX estimate of Moving add quarter. resulted the second in to the lost we revenue, Healthcare Services commentary on that million in To COVID-XX

It Operating received impact. to Care starting our decisions improve the We Care team of Services quarter the the compared leadership grant aligned million of we expense $XX offset year grants are while Care that relief. important with see revenue Medicare the We the portion recognized to PDGM. segment. lower portion of Health made quarter. a in the second related benefit to the year-to-date X% of operating Services favorable OpEx sequentially. to In Notably, to our implementing quarter, Services also is better was business Health the the grants expense we note to Health second government meaningful prior COVID-XX

Turning to G&A.

by was compared quarter. The second favorable to X% quarter the prior year

workforce we over We business have are and matching the our disciplined made adjustments year. of the last been from benefits the needs about our to seeing

business on nearly our including significant impact our addition, of benefit spending government reducing we grants, including the In business. COVID-XX have travel. had events a and has Even all tightened normal eliminating

reported incremental cash COVID-XX year can CapEx the adjusted improvement recognized $XXX costs year Act; working for negative free The exceeded XX non-development operating Adjusted to EBITDA due for of income. million the $XXX $XXX and grants million second compared lower the revenue three $XX primarily for than in Our other June was $XX quarter. million, year. compared CARES second, estimated $XXX We million was first to second flow $XX be quarter quarter direct prior which capital million summarized million through lost was the improved prior year-over-year to prior million highlights: as period.

than wellness $XX Those has projects. elective residents, our EBITDA million. we CapEx interest with restricted access quarter, more of adjusted benefits lower for the $XX last million community canceled expense the along delayed mentioned offset been or two of of As decline because many

let share the for seeing Now third what are me we quarter.

move-in increased outside For had COVID-XX of U.S. better we senior lower markets in I've hotspots are housing, the which seeing progress are we already in highlighted. as as hotspots. new sequential markets occupancy But

we Texas. the in expectations recent Services, to are Health Florida improvement given revenue cautiously and our while hotspots For Care third optimistic see quarter, in tempering

For able supply. were in PPE multiple will build significantly expect COVID-XX to quarter. costs, of Therefore, be we expenses months less we third the

we Medicaid government. funding grants, the look future government and the receipt grant of For any introduced or programs to by forward the

Let up liquidity our wrap outlook. with me

$XXX March under $XX from agreement liquidity June an the million, liquidity July temporary benefit our of primarily The of was we total announced $XX CARES with XX. approximately of Act. relief increase of As increase XX, million in Ventas. million was On XX, the

the As significantly our I structure. capital referenced earlier, transaction improves

remain begin While When Overall, an meaningful million payment lower debt the expenses, $XX is rent the and offset grant and among with use upfront development X-year partially we occupancy from items, quarter, third there liquidity, of note, and over third payments. $XXX EBITDA approximately about the and judicious Ventas, payroll a higher quarterly lower move-ins assumptions. ongoing other principal this long-term We lower move-out quarter expected seasonally are cash and payback million return. transaction taxes Medicaid expectations was an offset and Please advanced of the will deferred seeing of also and has million in reversal based payment the COVID-XX in by thinking additional pressure CapEx approximately on the will upfront benefit benefits expenses. rent. from liquidity of a What Medicare, remains $XX investments. to new

back call continue We to our look at to I'll And strengthen turn to now, options over Cindy. sheet. balance the further

Cindy Baier

Brookdale's of take enemy things and we the us most that families actions each every the heroes, patients, matter. focus residents have residents, that and our I them. our protect and help and to as to of who formidable others patients to one proud take a matter actions is rallied am very everyday on COVID-XX

play safety to measures. roles Our high by residents, key all patients our families adhering and

that and stronger together our ones. encouragement for we've been residents the eternally and grateful loved have received from families are associates other and residents We

better approaches Brookdale their country will believe high-quality loved and ones that Families housing. awareness demonstrated that care the do leader protocols in protection there a that. to Brookdale has community a a we in that is As a would be in want new health can provide they I just trust normal, senior

We other operating long-term are right leadership believe a of taking are from stakeholders. the to and actions we Brookdale for create position and our position to shareholders value we all

Kathy MacDonald

Please the Jerome, line this is Kathy. open to questions. Thank you.

Operator

[Operator comes Instructions] from line of Your the question first Brian Tanquilut.

Brian Tanquilut

Thank Hey for details good all morning you guys. provided the have you today.

first So guess my I question, Cindy.

deal the upfront at rent some are the Ventas of to remarks, cash payments. you up that gave the beginning With opening highlighted economics you about up mean into get concessions? thinking you warrants and the gave your Brookdale you I how

So making that the it move today that to just on to get in perspective make to decision restructure restructured? wanting that your -- was way the lease the

Cindy Baier

for Ventas' that very reductions. more the rent excited Brian, we the position. win-win received this. working morning are than they and with Ventas we're the question for that transaction rent of reductions improves grateful question. announced We're no million that significant The and permanent There's on about team thank transaction financial this we and our you $XXX Good total us with

million extending covenants an control. control security a Importantly, and change still do we burdensome change market eliminated provisions in $XX requiring funding additional longer-term of the have and CapEx including above deposits lease financial removed we

payment liquidity cash receiving we longer-term upfront exchange benefit. with our providing felt significantly a an cash for given comfortable in position, Now

X-year Now if the you has a know cash payback. transaction roughly

G&A and assumed now the In a attractive similar at think warrants can we Brookdale. very be we new addition, that of are at alignment allocation five And with repaid to with Ventas a debt that rate we and properties. it sold interest The we and nice a has to X.X% continue rate manage par. interest a assets yet cap expect the

Brian Tanquilut

That the update you. you Then makes to guess operational that Got I turning gave. sense. just

how are operationally So have But that to closures a community facility the in and as at market that how facility or the of by obviously we to - September going hotspots. is or then at year? the happening the the more actually sorry Texas terms able just Is that navigating gauge are you August the level? is level to of And Florida recovery and like to are trying get I'm and of become that that by market you ramp facility? I'm get quickly of up? back look half what

Cindy Baier

no has it's a created health and great our COVID-XX Brian and been We're of emergency. question. the residents that unprecedented very top has our we're a public always Yes. patients There's associates. health nimble. question an organization learning our priority and our And well-being

see execution at think that can is driven Brookdale I and only that you'll our a response that level. by a provide, the infrastructure with support national framework but community is

exposure protocols. because know important you our Page if is look COVID And from so, we for up same loved investor opening of communities At exposed where the the be it's critically of there and residents a X exposure within at the community residents less deck, we we've time done really nice their job to additional being COVID prevent our families see when to ones. a able there's through

comprehensive if the protect We you proactive all made over about long-term benefit effort and prevent best excited at patients state will think can residents people a I'm and in and And the a you our earlier the communities local to it's to communities. with and will practices make will always so residents But in the guidelines. the safe long-term safer up again, that as big much do spread. asymptomatic very our test one-by-one Now accordance communities we can we way. will communities provide identify because open your better

Brian Tanquilut

-- just rightly home facilities should or about I nursing integrity assets for I against bucket, against and how there about in certainly of can't field stigma long. -- pretty assisted in as in care think independent nursing I the really of nursing that mean, thinking right? and have delay bucket. housing, the it a or business avoid residents housing be potential the But Cindy, really there senior defensibility I can't you are or or skilled senior broader now. going people lot the structural know stable wrongly the terms a so market, memory yeah, right? some in There's And of living this concern, residents right

are you changes since how to So thinking COVID any about hit? industry just happened that structural the have

Cindy Baier

Yes.

some think true in homes. general that nursing there negative about And I living. and a press between market very the was the senior it's confusion nursing homes around First, is difference there

So I is education. think element first the

the third-parties, sales that are living. they communities lot even think about very that how rates with We senior to communities closed of across control infection market We've are they're at got a how sort the of understanding note living. outcomes with protocols help relationships within senior always vast great prospects communities. residents had move-ins. about amazed the our and we've interested keep And research done still really out senior our important future have within it's want COVID-XX effective been team limit residents of and And to good. in industry strong the infection spread what majority very Every and living of while talk the we've are to prospects we time a and cultivates

decision. lifestyle Now let's is a independent face it, living

lifestyle activities a were that well. They rooms prospective have you gone the lifestyle. of closed communities weren't groups the were for as now back that to small vast so a the of the less But independent group that down, lot thinking excited our moving And small into living independent you to we're of as are of dining communities resident open were elements majority quality as when very about that They looking the have generally. available.

have that that the memory have that where flow of again. to will the about of to assisted at longer the growing and who enhanced essential And an period is essential if And It's for some supports demographic strong. pre-COVID living in over that choppiness. lead long-term. the care been home, we place that really to independent think that good lifestyle we're our will course, levels its expect the seniors so service product. residents a age recover very no always has service to serve needs-driven But, area we And an fact you an and offer can and time. been and has successfully a so continue our short-term we ability be The to

Brian Tanquilut

right. Brian. Thanks, All you. Got Thank you.

Operator

comes line from Raskin. of question next Josh the Your

ask now You may question. your

Cindy Baier

Josh. morning, Good

Josh Raskin

that's normalized they is sort safety where think you question? Or this? more Thanks. or the we going bringing Do more down going the care your market. I on Cindy. sort bit results comfort to Good around understand from matter? of the And sort with playing and need and messaging the and do outcomes Thank guess, sort post And that market believe you. when a a of little I widespread to resonate then Is superior part Brookdale's to think in market? a better if morning. and you're residents to environment would can seeing going the previous of industry differentiate you're Brookdale versus two to guess, start you to get be the protocols around the that B the year want road? I it of

Cindy Baier

that So I health care is is thing local. think the important

and the so local in the first their important aspect And of our is markets. reputation communities most

prepared answer well our care will And not prospective protocol, residents, team our sources, as including protocol referral about health are do they families and so marketing questions professionals. and to but just very as strong with other that our sales safety

And is will so short-term. I important that the that very think be something over

be will sort we services I we think COVID-XX, world an the a important or important two year years, provide. used gets if is But once Now out will I that less high-quality look of differentiator the be with I think dealing to Brookdale important. health and what think of it

Given we've more than nurses size scale, got and anyone. our

us And the been aggressive we a think our to prospects friends. strongest It business help their will long-term. that differentiator And be something and their making we'll care gets those that think something very us of and their helping with that build always that's refer satisfaction have conditions. families. I go base for at can thing willingness relationship that's health And down for has and I resident the the to residents a been sure to manage connections being that We our in.

Josh Raskin

have difference the Got discounting move-ins factor this visits an the as And side really versus rates you what in of gating And selling this the does of visits us been? traditional is well. you. on on in then like in-person just you. point? virtual price tell the sort an in then Got at has Can closing sort effect two-parter environment

Cindy Baier

start are think at as within saying move-in have prospects gives more been least they we're to we much to we visit, build to when way better excited up our more effective with prospective community. effective as do virtual I not open me really communities to contact being Let able but with that know a certain potential able relationships But back substantially. And all. or virtual visits about residents visits, that a their them to in-person increased not being because has than the visit a actually twice at

is to We memory model. IL a a selling a more we in a say our and was interesting question. AL that discounting that IL, of care. of strongly an in services fair It's is held certainly are really softness fair believe we Now, There for hospitality little quality bit firm but price.

about think you pandemic, or move into to the protected. would If mom into moving do operator low-cost solution? midst high-quality my a want want you of the the I

rate the to probably you to rate. community-by-community basis be for provide. a nimble right driver as the But know we think on think always thing which market protect do the that's services But and why that to well. would is local a we to respond continue that conditions. We profitability is stronger high-quality we'll I we

Josh Raskin

Okay.

with to understand -- residents low-cost on provider? I say I to just So, versus softness, IL I'm you want juxtapose the that side, just there's did higher-quality operator wanting a sure trying make but little

Cindy Baier

right? think that between you care, services need if memory sort There is IL the and No, personal about AL other difference care for and IL model. is of hospitality Yes. more nursing less and services.

So, same we lot a the it's the were that months it's different. of IL, last doesn't were care. it a memory with big is hospitality during is as of AL and matter, not quite the with as not thing factor three The of the providing that operator quality but like services

will excited the But the in-room every that and residents. you when who the were our in a of early resort. routine other think I break started a was dining say residents dining with at in-room like that in-room was it aspect miss in very about days socialization day dining being you having because Now,

choose it's of reasons So, people one prime living. senior the that

lifestyle that's able to to so give been something And and always because back excited we've going back small dining that's small that's going to more the to get of drew once dining allow to that activities, I'm room draw us group normalize. our to in group choice a prospects does And that communities.

Josh Raskin

Thanks. Perfect.

Cindy Baier

so Thank much. you

Operator

Your comes the next line of question from Steven Valiquette.

You may your ask now question.

Cindy Baier

Steven. Good morning

Steven Valiquette

the and morning Steve. taking for good Cindy questions Thanks Hey here.

a couple of things. So,

either some to First are XX paid the you segment or basically, that is out smaller out yourselves. guys that's been tied the presentation, And available. break currently to on view, mainly other from skilled your page investor you numbers of stimulus mentioned Brookdale in my as nursing it's

revenue, the other on allocated just unit might of And some housing a least that a the guess, based latest also since hear billion be this number at method senior relief may I So, no would color be for proposed basis one maybe I stimulus your potential per there that the $X I think how of it on Medicare any And updates Thanks. more to was curious about organizations. next on trade overall package. there's part broader federal or was industry around was be the the real for by done insights?

Cindy Baier

for Thank question. It's one Yes. issue. good complicated a a and you really the

health So, start the million hospice. for we that that by targeted incredibly grateful and home for skilled let are received $XX we me for have saying already nursing

because who HHS is giving an Medicare basically respond where revenue. this very quickly, respond to were they providers, quickly they was are think to I able able area and were known

industries make time decision the front way they when it the protecting so, do on support the that had to easy to an lines And to against were came so. pandemic

earlier second under little public that And that was the Provider tranche. the of funding Fund call. tranche the about Now bit we was talked a a released Medicaid on

HHS people, could sure providing are is make Now who because more this difficult for now is little living pay. funding sure really wide dollar they through variety to those fund is the a to Medicaid types, actually goes who focused and make private make they information memory every that they has deserves have is, assisted to pay, licensing on devote that because was to gets and numbers. -- have the our at that it And it's least able they of were difficult than they a care, to it's care. they provider And one and it. why that somebody it reason private provider easier Where defer, available wanted industry really which it

We on interpretation private to our that and is And the go HHS of fund a conversations are and there that the based had have Now, with all providers pay. we've intended that lot. been believe to in funding Medicaid private each a in of taxpayer that can and have initial of get got of service tranche if funding, revenue pay, numbers the a Medicaid X% Medicaid you for identification a that you've them. the

million And how investor $XX in deck. so that that's estimate see our you to up done we've the

for health prevents steps this the borne the hospitalization, We we've and are by that taken There's question and emergency others funding and our unprecedented gives grateful July, is to the the the important fact which seniors the next matter outcome that government. that expect application few we But than have see of our Brookdale would spread is very weeks. much seniors. funding. it of our very, made response we're cost the Now, protect to testing the to industry, government in the public reduces of the better that no from COVID-XX, and that nation's less of the cost received in our in for

to fight that will what X% to It's in of just costs. know that. unclear to it's doing the enough get so, cover be COVID-XX and to important exactly we're we spread isn't but bills us more living, point, for prevent this funding to And continue to our at senior the

skilled nursing also We tranches. their came to that it time get it when know came in for funds,

steps. so first and smaller it then were step And needed the was than there additional

to support. fight. grateful so continue we for And We're the will

a that's had, that why and because an private having and to really an the public from amazing a public no really as at industry. were industry a going important done getting it's across needs-based presence being in organized, pay job critical this from policy industry a perspective to to an communicating consistent we message We industry support industry Washington, effective have health

Steven Valiquette

Brookdale just overall That's this, around to seems just as of helpful. some Also X% of whatever that quicksandy market back a quick industry units. senior do amounts we might Okay. on if the check share come envelope the for housing math, future, have dollar maybe in over based the

in out, So $X receive about million relief, $XX mean billion be might I every whatever to of X%. position come will for a Brookdale number

if about X%, number maybe So, I'm to think you way And a that's your just Thanks. it that? do the right general around quicksandy for have just a I now. versus industry that check mentioned also share to good market curious different wanted a of

Cindy Baier

today understanding the the care relief share think of that would is Well, and nursing. is the the I on skilled towards market is really type about to that way driven product. it first and depend based assisted And foremost going my memory living, is

on our funding. we've X% about would got I if share. is consolidated X% see SNF. share, think say, care assisted got so And look so, X% or memory we market let's living you to X.X% where of X% about to about We've at expect And that and on

So and about about it's our share market it. And consolidated us X% on between is think for that's consolidated of kind IL smaller of how then I portfolio. X%

got that financial our are what would consolidated other you've but course, Of the communities we results manage primarily communities. affect

Steven Valiquette

helpful. Okay. That’s Thanks. extremely

Cindy Baier

Thanks welcome. question. You're for the

Operator

from of Frank line Morgan. Your question last comes the

You question. may now your ask

Frank Morgan

that lower if occupancy? with on of you do think this those light do we recovery half, see as lot in I'm signs get just leverage maintain your you'll controls. though early of basically curious I a we through think you'll focus we the much able is morning. Or back second to how up growth guess Good these structure cost you on cost costs? recovering obviously seen be have And

Cindy Baier

Well, let we as saying are QX and step to our COVID me into I down markedly, start think costs go going QX. by

through something we the of mentioned in certainly, the built specifics that's comments, continues. crisis and several months And rest supply of you a question. we've the PPE prepared take would Steve as your of we that our now As for use can expect

Steve Swain

Yes, good Frank. morning,

and You're the flexing revenue second our the around $XX did labor, we that right. maintenance. million, first expenses XX% by Between was non-COVID-related marketing drop quarter supplies, of did about which and quarter and

bit you in quarter some look are costs a third little in variable when at So the nature. that more of the the quarter third

think will we'll and those see benefits of labor continue You in food to expense etcetera that lines. to continue --

and restrictions, in loosen communities we As little bit we'll have will the the marketing maintenance lines. and be a repairs bit more a little more

So will that a be partial offset.

have extra lower As holiday well marketing about see way well I prepared is some utilities by does as as it by think associated repairs. just quarter total third cash. we'll and occupancy But of offset the reductions variable an cost bottom continue the partially that I I remarks mentioned The extra is quarter. in the higher to driven with workday, and seasonally my expenses think third higher in line

if will so first million -- And We you lower we the million CapEx, reduction also $XX apartment is by by in occupancy. second variable some a had and help, that's the between CapEx which and quarter driven you at $XX from reduced in look when quarter lower move-ins. fewer about refurbishes

continue. will help that So

offset really between of combination the the So the cash which good quarter first think new and quarter a to story. decline I lower on lower expenses is basis and a first CapEx the from quarter the second second revenue

Frank Morgan

not on fair that to occupancy sort this prudent quarter? as do you out obviously say improvement? think notable it would side, be Okay. mapping point. the that Would about fourth any thing how to that that? this be in maybe weighted Or more have we should you'd a improvement seen we're to Understanding you've the guidance of of an giving little you're at But bit

Cindy Baier

think it the I mostly COVID-XX resurgence. depend on

progress month look things to use draw you conclusion. that I through can our so what And is of be the can each quarter. of And the that going to think you we've told at your one about you

Frank Morgan

breakeven us terms occupancy building? economics lease we this just Got look own Would in either your more at you. occupancies remind then you or environment, And as cash on question. one what of building just were

Steve Swain

it's a It in short-term CARES the depends little expense. than different Sure, the lot COVID well of really a long-term, the and of in Frank. as bit relief And on assumptions. as amount

occupancy do, drive So to we increasing. profitability, in see order

short-term, turning, of kind -- and always the really But of And turning keeping drive -- some kind the positive, in mind, of the profitability. without minds our in in focused in liquidity. on our residents we of back are absolutely flattening wellness the will

the CapEx. the I'm keeping right line I'm that, the something spend proactive amount of expense. spend watching. is of bottom will amount very And of will under we right about company But the control. liquidity We And

-- community which I'm refinanced think for is we XXXX of going -- -- answer instance, maturities, or did to proactively. can't can't For long-winded I -- breakeven a recently occupancy. I of I explain company I that's And all instance our something the the not tell we you

Cindy Baier

There that are things are two important Frank. to remember,

the the more In payments, by than $XXX win-win Ventas improved million, terms over we the the is of because of has our transaction variable that did breakeven significant the own portfolio. a have lease. of positive our for interest of we portfolio, reduce portion environment, unprecedented our lease with significantly of because will costs term And because second, lower, rate that financing financing on our remaining low

Frank Morgan

you. Thank Okay.

Cindy Baier

Frank. you, Thank

Operator

closing to like you would Cindy, provide remarks?

Cindy Baier

Steve for Brian, you Frank, your and Josh, thank questions. I would.

that, of working a were support we critically demand around line battle we'll but The period, actions the was against by in services outcomes and healthy. your strong. taken long-term hard, and world to very place. our our when and to has And everyday talk saying of For majority important are work for seniors. safe COVID-XX, been want have quarter. the health heroes on you and Stay seniors. drivers much near-term Brookdale's the of And of rest the nation's navigate the data-driven to strong the the close critically the well-being Thank time. clock to through nation's is provides difficult important challenging, listeners, sheltering the deliver Brookdale our clinical front swift, I very next

now. can You disconnect

Operator

today. concludes us That joining. for you all Thank conference. ladies joining and for Thank today's gentlemen you,

now You disconnect. may

Brookdale Senior Living (BKD) 11 Aug 202020 Q2 Earnings call transcript