Core Points - Brookdale Senior Living Inc. is urging shareholders to vote "FOR" its eight nominees listed on the BLUE proxy card in the upcoming 2025 Annual Meeting scheduled for July 11, 2025 [1][2] - The company has filed its definitive proxy statement with the SEC and launched a dedicated website for shareholder information [1][2] - The Board emphasizes its strategic initiatives aimed at enhancing shareholder value and highlights the poor engagement record of Pangaea Ventures, L.P., which seeks to replace six of the eight nominees [2][5] Company Strategy and Performance - The Board has implemented a clear strategy focused on streamlining operations, simplifying the business, and reducing leverage, resulting in a first quarter 2025 same community weighted average occupancy rate of 80% [4][10] - Brookdale's 2025 financial guidance has been raised, with RevPAR growth expectations adjusted from 4.75%-5.75% to 5.00%-5.75% and Adjusted EBITDA guidance increased from $430 million - $445 million to $440 million - $450 million [10][11] - The company is positioned to capitalize on demographic trends, with over one million seniors turning 80 each year through 2036, while new construction of senior housing remains low [14][15] Board Composition and Governance - The Board has undergone significant refreshment, with an average tenure of less than four years expected post-Annual Meeting, and has appointed two new independent directors with extensive industry experience [18][19][20] - The Board is committed to good governance, including a review of director tenure and performance-based long-term incentive awards in response to shareholder feedback [21][22] - The Board's proactive engagement with shareholders and efforts to maintain a constructive dialogue with Ortelius are highlighted, despite Ortelius's poor engagement record [22][26] Market Position and Future Outlook - Brookdale's portfolio is strategically focused on assisted living and memory care services, which are expected to yield higher margins due to the aging baby boomer demographic [15][16] - The company anticipates that returning to a pre-pandemic weighted average occupancy rate of 84.5% could generate approximately $170 million in incremental revenue and $125 million in incremental operating income [12] - Brookdale is well-positioned to address the growing demand for senior living services, with a needs-based product mix that caters to an older population facing chronic conditions [13][15]

Company Operations - As of March 31, 2025, the company operates 647 senior living communities across 41 states, serving approximately 58,000 residents[94]. Financial Performance - The company reported a net loss of $65.0 million for the three months ended March 31, 2025, an increase of $35.4 million, or 119.7%, compared to the net loss of $29.6 million in the same period in 2024[103]. - Adjusted EBITDA for the three months ended March 31, 2025, was $124.1 million, reflecting an increase of $26.5 million, or 27.2%, compared to $97.6 million in the same period in 2024[103]. - Resident fees for the three months ended March 31, 2025, increased by $33.2 million, or 4.5%, compared to the same period in 2024, driven by a 2.8% increase in same community RevPOR and a 130 basis point increase in same community weighted average occupancy[103]. - Resident fees increased by 4.5% to $777,454,000 in Q1 2025 from $744,241,000 in Q1 2024[109]. - Facility operating expenses rose by 2.7% to $556,987,000 in Q1 2025 compared to $542,550,000 in Q1 2024[109]. - The increase in net loss was attributed to the loss on extinguishment of financing obligations, increased facility operating expenses, and higher interest expenses, despite the rise in resident fees[106]. Segment Performance - In the Independent Living segment, resident fees grew by 5.5% to $157,117,000 in Q1 2025 from $148,948,000 in Q1 2024[111]. - Assisted Living and Memory Care segment resident fees increased by 4.4% to $533,379,000 in Q1 2025 compared to $510,872,000 in Q1 2024[114]. - CCRC segment resident fees rose by 3.0% to $86,958,000 in Q1 2025 from $84,421,000 in Q1 2024[118]. Expenses and Costs - Facility operating expenses rose by $14.4 million, or 2.7%, primarily due to a 3.2% increase in same community facility operating expenses, influenced by wage rate increases and higher utilities costs[104]. - General and administrative expenses increased by 4.7% to $47,874,000 in Q1 2025 from $45,732,000 in Q1 2024[121]. - Interest expense increased by 12.7% to $65,031,000 in Q1 2025 compared to $57,687,000 in Q1 2024[121]. Cash Flow and Liquidity - The company reported a net cash provided by operating activities of $23.4 million for the three months ended March 31, 2025, compared to a net cash used of $1.1 million in the same period of 2024, representing an increase of $24.5 million[130]. - The company experienced a significant increase in net cash used in investing activities, totaling $(326.8) million, primarily due to $311.0 million paid for the acquisition of formerly leased communities[131]. - The company had total liquidity of $306.0 million as of March 31, 2025, which included $239.7 million of unrestricted cash and cash equivalents, a decrease of $83.3 million from $389.3 million as of December 31, 2024[137]. - As of March 31, 2025, the company’s current liabilities exceeded current assets by $101.7 million, indicating potential liquidity challenges[138]. Debt and Financing - As of March 31, 2025, the company had $4.3 billion of debt outstanding at a weighted average interest rate of 5.21%, with 87.7% of total debt representing non-recourse property-level mortgage financings[135]. - The company had $3.1 billion of long-term debt with a weighted average fixed interest rate of 4.59% as of March 31, 2025[168]. - The company also had $1.2 billion of long-term variable rate debt with a weighted average interest rate of 6.78% as of March 31, 2025[168]. - The company completed the refinancing of all mortgage debt maturities due in 2025, but faces potential challenges in obtaining refinancing for 2026 and later maturities[140]. - The company is in compliance with the financial covenants of its debt agreements and long-term leases as of March 31, 2025[156]. Future Expectations - The company expects organizational restructuring costs related to recent senior leadership changes to be approximately $5,000,000 in Q2 2025[122]. - The company expects its full-year 2025 non-development capital expenditures to be between $175.0 million and $180.0 million, funded from cash on hand, cash equivalents, and cash flows from operations[145]. - The company anticipates an annual interest expense increase of $3.6 million for a 100 basis point increase in SOFR as of March 31, 2025[171]. Tax and Deferred Benefits - The company recorded an aggregate deferred tax benefit of $15.9 million for the three months ended March 31, 2025, partially offset by a $14.7 million increase in the valuation allowance[126].

Financial Data and Key Metrics Changes - Brookdale Senior Living reported a consolidated RevPAR growth of 4.9% in Q1 2025, driven by an increase in weighted average occupancy [24] - Adjusted EBITDA for Q1 2025 was $124 million, representing a 27% increase year-over-year, exceeding internal expectations and analyst consensus [30] - Adjusted free cash flow turned positive at $4 million, a significant improvement from the previous year [30] Business Line Data and Key Metrics Changes - Same community RevPAR increased by 4.5% year-over-year, with a 130 basis point occupancy growth [26] - Same community operating income margin expanded by 90 basis points to 29%, the highest margin achievement in five years [28] - Labor expenses as a percentage of revenue improved by 90 basis points compared to the prior year [27] Market Data and Key Metrics Changes - First quarter move-ins were 3% above the prior year and 12% above the historic average, contributing to a weighted average occupancy increase of 140 basis points to 79.3% [24] - The company expects to exit another 55 leased communities and divest 14 non-core owned communities by year-end 2025 [17] Company Strategy and Development Direction - The company is focused on improving operating performance, optimizing its real estate portfolio, and reducing leverage to enhance shareholder value [12] - A leadership transition is underway, with a search for a new CEO aimed at driving operational improvements and strategic vision for the future [8][9] - The company plans to expand its health plus offering to 58 additional communities in 2025 to improve resident quality of life [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong start to 2025, raising annual guidance for both RevPAR and adjusted EBITDA [7][36] - The company acknowledges macroeconomic uncertainties but remains confident in its strategic plans and operational improvements [90][94] - Management is focused on addressing communities with occupancy below 70% and has implemented a SWAT team approach to drive improvements [35] Other Important Information - The board has appointed two new independent directors to enhance expertise and perspectives [10] - The company is actively evaluating additional disposition opportunities to unlock value from owned assets [82] Q&A Session Summary Question: Can you provide more details on your pricing strategy? - Management indicated that pricing promotions are being piloted in targeted areas to increase occupancy while maintaining rate discipline [44][46] Question: How should we think about the seasonality of margins throughout the year? - Management noted that Q1 typically has the highest margin due to fewer workdays, and they expect a headwind of approximately $10 million in adjusted EBITDA between Q1 and Q2 due to seasonal factors [55][39] Question: What initiatives are contributing to better occupancy results? - Management highlighted the ongoing SWAT team initiatives and targeted pricing strategies as key contributors to improved occupancy [64][66] Question: What is the board looking for in the new CEO? - The board is prioritizing candidates with operational expertise and strategic vision to propel Brookdale into the future [86] Question: Is the guidance raised due to Q1 outperformance? - Yes, the guidance was raised based on Q1 outperformance, particularly in occupancy and expense management [90]

Financial Data and Key Metrics Changes - Brookdale Senior Living reported a consolidated RevPAR growth of 4.9% in Q1 2025, driven by an increase in weighted average occupancy [25][32] - Adjusted EBITDA for Q1 2025 was $124 million, representing a 27% increase year-over-year, exceeding internal expectations and analyst consensus [32] - Adjusted free cash flow turned positive at $4 million, a significant improvement from the previous year [32][33] Business Line Data and Key Metrics Changes - Same community RevPAR increased by 4.5% year-over-year, with a weighted average occupancy of 80% [28] - Same community expense per occupied unit rose by only 1.6%, indicating effective cost management relative to revenue growth [29] - Operating income margin for same communities expanded by 90 basis points to 29%, the highest in five years [30] Market Data and Key Metrics Changes - The company experienced a 3% increase in move-ins compared to the prior year, significantly above historical averages [25] - The weighted average occupancy increased by 140 basis points to 79.3% in Q1 2025, reflecting positive market dynamics [25] Company Strategy and Development Direction - The company is focused on improving operational performance, optimizing its real estate portfolio, and reducing leverage to enhance shareholder value [13][19] - A leadership transition is underway, with the board seeking a new CEO to drive operational improvements and strategic vision [9][10] - The company plans to exit 55 leased communities and divest 14 non-core owned communities by year-end 2025, aiming for 75% of its portfolio to be owned [16][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong start to 2025, raising annual guidance for RevPAR and adjusted EBITDA [24][39] - The company acknowledged macroeconomic uncertainties but remains confident in its strategic plans and operational improvements [95][99] - Management highlighted the importance of maintaining pricing power while balancing occupancy growth [62] Other Important Information - The company has appointed two new independent directors to enhance board expertise and oversight [12] - A focus on enhancing the quality of living environments for residents has led to multiple recognitions, including being named a "most loved workplace" by Newsweek [22] Q&A Session Summary Question: Can you elaborate on your pricing strategy? - Management indicated that pricing promotions are being piloted to boost occupancy while maintaining rate discipline [47][49] Question: What is the timeline for the impact of the First Impressions investment initiatives? - Management stated that targeted investments are expected to positively influence occupancy and rates, with budgeting for 2026 to begin later in the year [52][53] Question: How should we think about the seasonality of margins throughout the year? - Management explained that Q1 typically has the highest margins due to fewer workdays, with expected headwinds in Q2 from merit increases and additional workdays [58][60] Question: What initiatives are already contributing to better occupancy results? - Management noted that the SWAT teams and dynamic pricing strategies have been effective in improving occupancy [68][70] Question: What is the board prioritizing in the CEO search? - The board is looking for candidates with operational expertise and strategic vision to propel the company forward [90][91]

Group 1 - Brookdale Senior Living reported a quarterly loss of $0.11 per share, which is an improvement from a loss of $0.13 per share a year ago, aligning with the Zacks Consensus Estimate [1] - The company's revenues for the quarter ended March 2025 were $813.86 million, missing the Zacks Consensus Estimate by 0.81%, but showing an increase from $782.83 million year-over-year [2] - Over the last four quarters, Brookdale has consistently failed to surpass consensus EPS and revenue estimates [2] Group 2 - Brookdale shares have increased approximately 31.8% since the beginning of the year, contrasting with a decline of 3.9% in the S&P 500 [3] - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at -$0.13 for the coming quarter and -$0.55 for the current fiscal year [4][7] - The Medical - Nursing Homes industry, to which Brookdale belongs, is currently ranked in the top 9% of over 250 Zacks industries, indicating a favorable industry outlook [8]

Company Overview - Brookdale operates 647 senior living communities across 41 states[8] - The company has the ability to serve approximately 58,000 residents[6] - 94% of senior living resident fees are private pay[8] - The company has approximately 36,000 caring and dedicated associates[8] Financial Performance and Guidance - First quarter Adjusted EBITDA increased by 27% year-over-year[35] - First quarter Adjusted Free Cash Flow improved by $30 million year-over-year and was positive[35] - The company positively revised its 2025 Adjusted EBITDA guidance to $440 to $450 million[38] - The company expects 2025 Adjusted Free Cash Flow to be $30 to $50 million[38] Occupancy and Revenue - First quarter consolidated weighted average occupancy grew by 140 bps over the prior year[35] - Move-ins increased by 12% and move-outs decreased by 3% compared to historical averages[35] - Returning to pre-pandemic occupancy of 84.5% would drive at least $200 million of incremental revenue[52] - Achieving the historic occupancy high of 89% would drive at least $380 million of incremental revenue[52]

Financial Performance - The financial results for the quarter ended March 31, 2025, will include key performance metrics that reflect the company's operational efficiency[8] - The company is committed to transparency in its financial disclosures, ensuring stakeholders are informed of its performance[9] Occupancy and Market Trends - Brookdale Senior Living Inc. announced its consolidated occupancy for March 2025, with specific figures to be detailed in the press release[8] - The press release dated April 8, 2025, will provide insights into user data and occupancy trends, which are critical for assessing market demand[8] Strategic Outlook - Future outlook and performance guidance will be discussed, indicating the company's strategic direction and expected growth[8] - Market expansion strategies are likely to be outlined, focusing on increasing the company's footprint in key regions[8] - Potential mergers and acquisitions may be explored as part of the company's growth strategy, aiming to enhance market position[8] - Other new strategies will be highlighted, reflecting the company's adaptability to changing market conditions[8] Product and Technology Development - New product and technology developments are anticipated, which may enhance service offerings and operational capabilities[8] Leadership Insights - The executive team, led by CFO Dawn L. Kussow, will provide further insights during the earnings call[14]

Core Insights - Brookdale Senior Living Inc. reported solid first quarter results for 2025, indicating significant momentum in meeting the needs of the aging population and positioning for accelerated growth [3][4][6] - The company raised its annual guidance for RevPAR and Adjusted EBITDA, reflecting an improved outlook for 2025 [14][18] Financial Performance - Resident fees increased to $777.5 million in Q1 2025 from $744.2 million in Q1 2024, a rise of 4.5% [4][9] - Adjusted EBITDA rose to $124.1 million, up 27.2% from $97.6 million in the prior year [4][36] - Net loss for Q1 2025 was $65.0 million, compared to a loss of $29.6 million in Q1 2024, marking a 119.7% increase in loss [4][9] Operational Metrics - Weighted average occupancy improved to 79.3% in Q1 2025 from 77.9% in Q1 2024, an increase of 140 basis points [4][5] - RevPAR increased to $5,090, up 4.9% from $4,854 in the previous year [4][5] - Same community operating income increased by 7.6% year-over-year [6] Liquidity and Cash Flow - Total liquidity as of March 31, 2025, was $306.0 million, down $83.3 million from December 31, 2024, primarily due to cash used for acquisitions [11] - Net cash provided by operating activities improved to $23.4 million from a negative $1.1 million in the prior year [8][10] - Adjusted Free Cash Flow for Q1 2025 was $3.8 million, a significant improvement from a negative $26.3 million in Q1 2024 [8][41] Strategic Transactions - In February 2025, the company acquired 30 previously leased communities for $310.0 million, funded through mortgage debt and cash [12] - The company settled its remaining outstanding prepaid stock purchase contracts in March 2025, delivering over 29 million shares of common stock [13] 2025 Guidance - The company revised its full-year 2025 guidance for RevPAR growth to a range of 5.00% to 5.75% and Adjusted EBITDA to $440 million to $450 million [18]

Core Viewpoint - Brookdale Senior Living Inc. is set to release its first quarter 2025 financial results on May 6, 2025, followed by a conference call on May 7, 2025, to discuss these results [1][2]. Company Overview - Brookdale Senior Living Inc. operates 647 senior living communities across 41 states, serving approximately 58,000 residents as of March 31, 2025 [4]. - The company focuses on enriching the lives of seniors through compassionate care, clinical expertise, and exceptional service, offering independent living, assisted living, memory care, and continuing care retirement communities [4]. - Brookdale aims to create opportunities for wellness, personal growth, and meaningful relationships in environments that feel like home, guided by its core values of passion, courage, partnership, and trust [4].

Market Overview - The three major U.S. indexes, Nasdaq Composite, S&P 500, and Dow Jones Industrial Average, experienced declines of 3.24%, 2.3%, and 3.41% respectively in the holiday-shortened trading week, driven by fears of economic slowdown and rising inflation due to trade tensions between the U.S. and China [1] - Consumer sentiment in April dropped to 50.8, the lowest since June 2022, primarily due to inflation concerns [2] - The core Producer Price Index (PPI) rose by 0.3%, indicating persistent price pressures, while the PPI for final demand decreased by 0.4% in March [2] Federal Reserve Insights - Federal Reserve Chair Jerome Powell indicated a need for more clarity before making policy adjustments, suggesting a delay in interest rate cuts, with market expectations leaning towards a rate decrease in December [3] - The ongoing trade war and potential inflation increases are expected to negatively impact job creation and business confidence [3] Zacks Performance and Recommendations - Brookdale Senior Living Inc. (BKD) shares increased by 14.7% since being upgraded to Zacks Rank 2 (Buy) on February 20, contrasting with a 14.2% decrease in the S&P 500 [4] - The Bank of East Asia, Limited (BKEAY) also saw a 3.9% return since its upgrade to Zacks Rank 2 on February 20 [5] - A hypothetical portfolio of Zacks Rank 1 (Strong Buy) stocks returned -3.48% in January 2025, compared to -0.60% for the S&P 500 [5] Zacks Model Portfolio Performance - The Zacks Model Portfolio, consisting of Zacks Rank 1 stocks, has outperformed the S&P 500 index by nearly 13 percentage points since 1988, with an annualized average return of +23.9% compared to +11.3% for the S&P 500 [7] - The Zacks Focus List portfolio returned -2.96% in Q1 2025, outperforming the S&P 500's -4.30% decline [12] - The Earnings Certain Admiral Portfolio (ECAP) returned +3.20% in Q1 2025, significantly better than the S&P 500's -4.30% decline [16] Stock Highlights - Pro-Dex, Inc. (PDEX) shares surged by 68.6% since its Zacks Recommendation upgrade to Outperform on March 4 [8] - Coca-Cola Company (KO) returned 17% over the past 12 weeks, while J. M. Smucker Company (SJM) increased by 12.6% during the same period [18] - Primo Brands Corporation (PRMB) rose by 9% year-to-date, outperforming the S&P 500 index's 10.2% decrease [22]