NASHVILLE, Tenn., March 3, 2025 /PRNewswire/ -- Brookdale Senior Living Inc. (NYSE: BKD) ("Brookdale" or the "Company") today announced the February 27, 2025 closing of two portfolio acquisitions, completing its three-portfolio acquisition plan initially announced in September 2024. Through ownership of these communities, including the portfolio acquisition completed in December 2024, Brookdale is realizing predictable high-yielding returns on 41 assets from improved cost of capital and is increasing its ow ...

Brookdale Senior Living Inc.’s (BKD) shares gained 6.4% since it reported fourth-quarter 2024 results on Feb. 18, 2025. Despite benefiting from improved resident fees, increased revenue per occupied unit (RevPOR) and occupancy gains, the quarterly results were hurt by headwinds stemming from rising facility operating expenses, elevated general and administrative costs and declining interest income. See the Zacks Earnings Calendar to stay ahead of market-making news.BKD incurred a fourth-quarter loss of 37 c ...

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Core Insights - Brookdale Senior Living Inc. will participate in two upcoming conferences: Citi's Global Property CEO Conference on March 4, 2025, and Barclays Global Healthcare Conference on March 11, 2025 [1][2] Company Overview - Brookdale Senior Living Inc. operates 647 senior living communities across 41 states, serving approximately 58,000 residents as of December 31, 2024 [3] - 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 [3] - Brookdale aims to create opportunities for wellness, personal growth, and meaningful relationships, guided by its core values of passion, courage, partnership, and trust [3]

Shares of Brookdale Senior Living (BKD) have gained 10.8% over the past four weeks to close the last trading session at $5.45, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $7.38 indicates a potential upside of 35.4%.The mean estimate comprises four short-term price targets with a standard deviation of $1.25. While the lowest estimate of $5.50 indicates a 0.9% increase from th ...

Core Viewpoint - The article emphasizes the importance of value investing and highlights Brookdale Senior Living (BKD) as a strong value stock based on its financial metrics and Zacks Rank [2][3][6] Company Analysis - Brookdale Senior Living (BKD) holds a Zacks Rank of 2 (Buy) and has a Value grade of A, indicating it is among the strongest value stocks currently available [3] - BKD's price-to-book (P/B) ratio is 3.68, which is significantly lower than the industry average of 8.55, suggesting that BKD is undervalued [4] - The P/B ratio for BKD has fluctuated between a high of 4.60 and a low of 2.45 over the past year, with a median of 3.55 [4] - The price-to-cash flow (P/CF) ratio for BKD is 8.20, which is attractive compared to the industry average of 32.16, further indicating undervaluation [5] - Over the last 12 months, BKD's P/CF has ranged from a high of 12.19 to a low of 6.80, with a median of 8.59 [5] - Overall, the financial metrics suggest that Brookdale Senior Living is likely undervalued, making it a strong candidate for value investors [6]

Financial Data and Key Metrics Changes - The company reported a 3.9% increase in residency revenue year-over-year despite a 2.2% reduction in capacity [38] - Consolidated RevPAR grew 5.5%, driven by a 100 basis point increase in weighted average occupancy and a 4.2% increase in RevPOR [39] - Adjusted EBITDA grew 15% year-over-year, reaching approximately $99 million, which was above the top end of the guidance range [46][47] - Adjusted free cash flow was approximately $12 million negative for the fourth quarter, but positive adjusted free cash flow was achieved in the second half of 2024 [47][48] Business Line Data and Key Metrics Changes - Weighted average occupancy grew by 140 basis points, and RevPAR increased by 6.1% [8][9] - Move-ins in the fourth quarter were 8% above pre-pandemic averages, marking the strongest fourth quarter move-in volume since 2016 [12] - Same community operating income increased by 4.4% year-over-year [44] Market Data and Key Metrics Changes - The senior living industry is experiencing a favorable environment with record low inventory growth and high demand due to an aging population [28][29] - Less than 2% of the company's communities faced new construction within a 20-minute radius [27] Company Strategy and Development Direction - The company aims to grow profitable occupancy and RevPAR while improving adjusted free cash flow [8][9] - Strategic transactions included lease amendments and acquisitions to optimize the portfolio and manage capital structure effectively [22][24] - The company plans to expand the Brookdale Health Plus program to enhance care delivery and improve resident outcomes [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing favorable supply-demand dynamics and a growing senior population [26][28] - The company is focused on maintaining high-quality care and personalized service while managing costs effectively [32][35] - Management highlighted the importance of attracting and retaining top associates to ensure operational excellence [34] Other Important Information - The company received several awards for its commitment to quality care and social stewardship, including recognition from Newsweek and U.S. News and World Report [20][21] - The company has successfully addressed over $1 billion in future maturities, eliminating all 2025 debt maturities [25][55] Q&A Session Summary Question: Clarification on RevPAR guidance and impact of Ventas lease amendment - Management indicated that the 4.75% to 5.75% RevPAR guidance includes the impact of the Ventas lease amendment and reflects expected move-ins and move-outs [69][70] Question: Future growth and shareholder value creation - Management emphasized the focus on profitable occupancy growth and the unique aspects of Brookdale's service offerings to differentiate from competitors [72][75] Question: Impact of political landscape on business - Management noted that Brookdale has a low reliance on Medicaid, which differentiates its occupancy metrics from industry averages [93][94] Question: Long-term EBITDA growth expectations - Management expressed confidence in continued disciplined profitable growth, with a focus on capturing the growing demand for senior living services [106][110]

Company Operations - Brookdale operates and manages 647 senior living communities across 41 states, serving approximately 58,000 residents as of December 31, 2024[18]. - The company has 647 communities with a total of 55,095 units as of December 31, 2024, with 60.8% in Assisted Living and Memory Care[53]. - The company managed 28 communities (4,256 units) on behalf of others, representing 8% of its senior housing capacity[66]. - The company provides memory care services at 336 communities, totaling 8,962 memory care units, including 107 freestanding memory care communities[62]. - The company owned 353 communities, leased 266 communities, and managed 28 communities on behalf of others as of December 31, 2024[200]. - The total number of communities operated by the company is 55,095, with 353 owned, 266 leased, and 28 managed[201]. Financial Performance - Total resident fee and management fee revenue reached $2,982,571, with Assisted Living and Memory Care contributing 68.3% at $2,038,660[55]. - For the year ended December 31, 2024, 93.8% of resident fee revenue was generated from private pay residents[54]. - The company anticipates benefiting from operating leverage as occupancy increases, which will improve margins and drive Adjusted EBITDA growth[22]. - As of December 31, 2024, the company had $4.1 billion of debt outstanding, including $3.0 billion of long-term fixed rate debt at a weighted average interest rate of 4.50%[29]. - For the year ended December 31, 2024, debt interest expense increased by $5.8 million, or 2.7%, compared to the prior year[31]. - The company has significant indebtedness and lease obligations, which could adversely affect future operations and stockholder interests[145]. - The company’s debt and lease documents contain financial covenants that, if breached, could lead to acceleration of indebtedness and adverse effects on capital structure[147]. Strategic Initiatives - The company aims to improve occupancy levels and profitability by increasing move-ins and managing controllable expenses, targeting a return to pre-pandemic occupancy and margins[21]. - Brookdale plans to exit non-strategic or underperforming assets and explore growth opportunities through acquisitions and expansions in core markets[25]. - The company is focused on strategic innovation and technology to enhance resident engagement and improve operational efficiency[25]. - The company has implemented centralized support functions, achieving cost efficiencies in procurement, human resources, and other operational areas[70]. - The company plans to implement a new ERP system throughout 2025, which requires significant financial and personnel resources[124]. Labor and Workforce - Labor costs account for approximately two-thirds of total facility operating expenses, with a 3.0% increase in labor expenses in 2024 compared to the prior year due to wage adjustments[26][27]. - The company aims to enhance associate engagement and reduce turnover through improved training and career development opportunities[21]. - The company employed approximately 36,000 associates, with 68% being full-time[77]. - In 2024, the company focused on reducing turnover, resulting in contract labor costs returning to pre-pandemic inflation-adjusted levels[78]. - The company implemented various recruitment strategies, including partnerships with nursing schools and support for military recruitment[80]. Regulatory and Compliance - The company is subject to increasing regulatory scrutiny, which could materially affect its operations and expansion plans[86]. - The company is subject to government reviews and audits related to compliance with Medicare and Medicaid programs, which could result in penalties or loss of participation[101]. - Compliance with evolving regulations may require unanticipated expenditures, adversely affecting results of operations and financial condition[181]. - The company is subject to various federal, state, and local employment-related laws and regulations, which could increase operational costs significantly[186]. - Violations of federal and state laws governing healthcare provider relationships could lead to criminal penalties, civil sanctions, and loss of government reimbursement eligibility[179]. Market and Competition - The senior living industry is projected to see over one million new potential residents per year for the next decade due to demographic trends[45]. - The company faces increased competition from various organizations, including not-for-profit entities, in the senior living industry[48]. - The senior living industry is highly competitive, with numerous organizations offering similar services, which may impact occupancy and revenue[114]. - The geographic concentration of communities in states like California, Florida, and Texas increases vulnerability to local economic downturns and regulatory changes[115]. Risks and Challenges - The company faces risks from environmental regulations that could lead to significant liabilities for hazardous substances on properties[102]. - The management of infectious medical waste is subject to strict regulations, and non-compliance could adversely affect financial condition and operations[105]. - The company acknowledges that future pandemics or health crises could adversely impact business operations and financial performance[136]. - The company may incur significant remediation costs and face negative publicity due to cybersecurity vulnerabilities, which could materially impact revenues and cash flow[123]. - Increased competition for qualified associates and wage pressures could negatively impact the company's operating results and cash flow[160]. Technology and Innovation - The company is undergoing a transformative process to modernize technology platforms, which may disrupt operations if not completed successfully[124]. - Cybersecurity risks are managed by a dedicated Chief Information Security Officer, with ongoing assessments and compliance efforts in place[196]. - The company has engaged external experts to enhance cybersecurity strategies and ensure compliance with legal standards[199]. Stock and Dividends - The company suspended its quarterly cash dividend indefinitely as of December 30, 2008, focusing on capital expenditures and strategic investments[208]. - The stock price performance shows a decline from $100 in December 2019 to $69.19 in December 2024[212]. - The company’s common stock is traded on the NYSE under the symbol "BKD"[207]. - Future offerings of debt or equity securities may adversely affect the market price of the company's common stock and dilute existing shareholders[191].

Press Release Information - Consolidated occupancy for December 2024 announced, with specific details provided in the press release[13] - Press release dated January 9, 2025, includes information on the quarter ended December 31, 2024[13] - The press release is furnished as Exhibit 99.1[14]

Core Insights - Brookdale Senior Living Inc. reported significant progress in 2024, achieving positive Adjusted Free Cash Flow in the latter half of the year and positioning itself for continued growth in 2025 through profitable occupancy growth and effective expense management [3][4]. Financial Performance - In Q4 2024, resident fees increased to $744.4 million, a 3.9% rise from $716.6 million in Q4 2023, and a slight increase of 0.1% from $743.7 million in Q3 2024 [4]. - Facility operating expenses rose to $554.9 million, up 4.6% year-over-year from $530.5 million, and increased by 1.2% sequentially from $548.3 million [4]. - General and administrative expenses increased by 15.9% year-over-year to $48.5 million, compared to $41.9 million in Q4 2023 [4]. - The company reported a net loss of $83.9 million in Q4 2024, an improvement from a loss of $91.2 million in Q4 2023 [4]. - Adjusted EBITDA for Q4 2024 was $98.5 million, a 15.5% increase from $85.3 million in Q4 2023 [4]. Operational Metrics - The weighted average occupancy rate improved to 79.4% in Q4 2024, up from 78.4% in Q4 2023 [4]. - RevPAR (Revenue per Available Room) increased to $4,873, a 5.5% rise from $4,619 in Q4 2023 [4]. - RevPOR (Revenue per Occupied Room) reached $6,136, up 4.2% from $5,889 in Q4 2023 [4]. Yearly Overview - For the full year 2024, resident fee revenue totaled $2.972 billion, a 4.0% increase from $2.857 billion in 2023 [9]. - Total facility operating expenses for 2024 were $2.183 billion, up 2.5% from $2.130 billion in 2023 [9]. - The full-year net loss was $202 million, compared to a loss of $189 million in 2023 [9]. - Adjusted EBITDA for the full year was $386.2 million, a 15.1% increase from $335.5 million in 2023 [9]. Liquidity and Financing - As of December 31, 2024, total liquidity was $389.3 million, including $308.9 million in unrestricted cash [24]. - The company successfully refinanced over $300 million of 2027 debt maturities at a lower interest rate [7]. - In December 2024, Brookdale amended its lease with Ventas, which is expected to enhance cash flows significantly [20]. Future Outlook - For 2025, the company anticipates RevPAR growth of 4.75% to 5.75% and expects Adjusted EBITDA to be between $430 million and $445 million [24][25]. - The company plans to continue focusing on profitable occupancy growth and effective expense management to enhance shareholder value [3].