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Brookdale Q3 Earnings Miss on Marketing Cost Hike, Shares Decline 18%
BKDBrookdale Senior Living(BKD) ZACKS·2024-11-15 19:25

Core Viewpoint - Brookdale Senior Living Inc. (BKD) experienced a significant decline in share price, losing 17.5% since the release of its third-quarter 2024 results, primarily due to increased marketing expenses, reduced property insurance proceeds, and a drop in interest income, leading to a wider net loss [1] Financial Performance - BKD reported an adjusted loss of 22 cents per share for Q3, which was worse than the Zacks Consensus Estimate of a 16-cent loss, remaining flat year over year [2] - Total revenues and other operating income increased by 3.5% year over year to 784.2million,drivenbyhigherresidentandmanagementfeerevenues[2]−Residentfeesroseto784.2 million, driven by higher resident and management fee revenues [2] - Resident fees rose to 743.7 million, a 3.7% increase year over year, supported by improved revenue per occupied unit (RevPOR) and occupancy rates [3] - Management fees grew by 4.3% year over year to 2.7million[3]KeyMetrics−RevPORincreasedby4.32.7 million [3] Key Metrics - RevPOR increased by 4.3% year over year due to annual rate increases, while weighted average occupancy improved by 130 basis points to 78.9% [4] - Facility operating expenses rose by 2% year over year to 548.3 million, influenced by inflation and marketing costs, although partially offset by divestitures and reduced contract labor costs [5] - Interest income fell by 26.3% year over year to 4.7million,contributingtoanetlossof4.7 million, contributing to a net loss of 50.7 million, which was wider than the previous year's loss of 48.8million[6]−AdjustedEBITDAwasreportedat48.8 million [6] - Adjusted EBITDA was reported at 92.2 million, reflecting a 15% year-over-year increase [6] Financial Position - As of September 30, 2024, BKD had cash and cash equivalents of 254.7million,down8.4254.7 million, down 8.4% from the end of 2023 [7] - Total assets increased by 6.6% to 5.9 billion, while long-term debt slightly decreased to 3.7billion[7]−Totalequityfellby27.43.7 billion [7] - Total equity fell by 27.4% from the end of 2023 to 294.3 million [8] - Net cash generated from operations surged by 45.2% year over year to 66.5million,althoughadjustedfreecashoutflowincreasedmorethanfive−foldto66.5 million, although adjusted free cash outflow increased more than five-fold to 13.9 million [8] Outlook - Management anticipates a year-over-year growth in RevPAR for Q4 2024 in the range of 5-5.5% and expects adjusted EBITDA to be between 93millionand93 million and 98 million [9] - Cash facility operating lease payments are projected to be around 56millionforQ4,withnon−developmentcapitalexpendituresestimatedatapproximately56 million for Q4, with non-development capital expenditures estimated at approximately 180 million for 2024 [10]