Brookdale Senior Living (BKD) 9 Aug 24 2024 Q2 Earnings call transcript

Brookdale Senior Living (NYSE: BKD), the nation's largest senior housing operator, reported impressive financial results for the second quarter of 2024, highlighting significant improvements in key performance indicators. In a recent earnings call, the company's leadership team, led by CEO Cindy Baier and CFO Dawn Kussow, discussed the company's financial health, strategic initiatives, and future growth prospects.

Financial Highlights

The company reported a 20% year-over-year increase in adjusted EBITDA and a 26% improvement in adjusted free cash flow, reflecting the successful execution of its operational and financial strategies. These gains were attributed to consistent occupancy growth, continued revenue per occupied room (RevPOR) increases, and quarter after quarter of operating margin expansion.

Recovery from the Pandemic

Brookdale's financial performance underscores its strong recovery from the impact of the pandemic. The company has recorded 11 consecutive quarters of year-over-year same-community adjusted operating income growth, while maintaining high levels of resident satisfaction, meeting residents' needs, and adhering to regulatory requirements. This remarkable resilience is a testament to the company's commitment to delivering high-quality care and personalized services.

Strategic Initiatives and Operational Excellence

Brookdale's strategic initiatives, such as the Brookdale HealthPlus program and its focus on associate retention and turnover, are contributing to the company's operational excellence. The HealthPlus program, an innovative care delivery model designed to enhance residents' quality of life, is set to expand from 49 to 130 communities by the end of 2024. This expansion underscores the company's commitment to leveraging technology and evidence-based care coordination to improve resident care and satisfaction.

Additionally, Brookdale's efforts to improve associate retention and turnover have yielded positive results, with four consecutive quarters of leadership retention improvement and five consecutive quarters of hourly associate turnover improvement. These improvements translate into stronger relationships with residents and other associates, increased resident satisfaction, and ultimately, better financial results.

Looking Ahead

Despite the challenges posed by the pandemic, Brookdale remains optimistic about its future growth potential. The company's ability to deliver move-ins above pre-pandemic levels, coupled with the aging demographics, presents a significant opportunity for occupancy growth. Brookdale is poised to capitalize on this trend, with plans to expand its offerings to meet the needs of an aging population and maintain its market leadership.

Financial Outlook

Brookdale's financial outlook remains strong, with a focus on sustainable growth and disciplined cost management. The company's commitment to increasing occupancy while managing expenses prudently is expected to yield significant financial returns, including increased operating income and adjusted EBITDA growth. These gains will support the company's efforts to reduce leverage and create value for shareholders, residents, and associates.

Conclusion

Brookdale's strong financial performance and strategic initiatives position the company well for future growth. The company's focus on operational excellence, resident care, and associate satisfaction, combined with its strategic expansion plans, are expected to drive sustainable financial growth and enhance shareholder value. As Brookdale continues to navigate the challenges and opportunities of the senior living industry, it remains committed to its mission of providing exceptional care and services to its residents.