Brookdale Senior Living (BKD) 2025 Conference Transcript

Brookdale Senior Living (BKD) 2025 Conference Summary Company Overview - Company: Brookdale Senior Living (BKD) - Event: 2025 Conference held on May 20, 2025 Key Industry Insights - Occupancy Trends: - Significant momentum in occupancy growth observed in Q1 2025, surpassing typical seasonal trends [3][4] - Year-over-year move-ins increased by 3% compared to the prior year and 12% over historical averages [5] - Move-outs decreased by 3% year-over-year, contributing positively to occupancy [5] - Same-store occupancy remained flat at 80%, which is crucial for covering fixed costs [6] - Market Positioning: - The company is experiencing a favorable demographic tailwind, with constraints on new supply in the senior housing market [35] - Brookdale's strategy focuses on addressing clinical challenges and enhancing resident quality of life through programs like Health Plus [36] Financial Performance - Cash Flow and Occupancy: - Adjusted free cash flow was positive in Q1 2025, attributed to reaching the 80% occupancy milestone [6] - The company aims to reduce leverage, targeting a low nine times leverage ratio by the end of the year [41] - Portfolio Optimization: - Plans to exit 55 non-core Ventas communities and an additional 14 assets by the end of 2025 [15][21] - The strategy includes evaluating community performance and potentially disposing of underperforming assets [16][17] Strategic Initiatives - Health Plus Program: - Aimed at providing holistic care through technology-enabled coordination, showing better occupancy growth and lower associate turnover in participating communities [25][26][27] - Rollout to 58 additional communities planned for the latter half of 2025 [26] - Marketing Strategy: - Shifted focus to internal marketing due to disruptions in third-party lead sources, resulting in improved move-ins [10][38] - Enhanced digital and direct mail marketing efforts to attract potential residents [38] Management and Leadership - CEO Transition: - The company is undergoing a CEO search, with a focus on finding a candidate with operational improvement skills and strategic vision [32][34] - The board emphasizes continuity in the company's long-term strategy despite management changes [32] Macro Environment Considerations - Economic Factors: - Cautious outlook on macroeconomic conditions, particularly regarding labor costs, which constitute 65% of total costs [44] - The company benefits from being 94% private pay, insulating it from government funding fluctuations [46][47] Conclusion - Brookdale Senior Living is positioned for growth with a strong focus on occupancy improvement, strategic asset management, and innovative care programs. The company is navigating a transitional phase in leadership while maintaining a commitment to enhancing resident care and operational efficiency.