Brookdale Senior Living released its earnings lat week that showed increases in revenues and funds from operations yet posted a $13.6 million dollar loss in the quarter. The increase in expenses that attributed to the loss were $318.1 million, an increase of $13.1 million, or 4.3%, from the first quarter of 2008. The increase was primarily driven by the growth of ancillary services and expenses associated with expansions. The company’s cash flow from operations grew 20% compared to the first quarter of 2009 and improved the average monthly revenue per unit by 5.4% from $3,759 to $3,961 but showed a decrease in average occupancy to 88.7% from 90% in the first quarter of 2008. During the quarter, Brookdale opened three expansions with 128 units and has four expansion projects under construction that will add a total of 611 additional units in 2009.
Bill Sheriff, Brookdale’s CEO, said, "We had a very good start to the year. Our organization’s response to the call to action has been incredible. After January’s typical occupancy decline, our sales and marketing team held occupancy steady through the end of March despite the challenging environment. At the same time, our revenue per unit increased by over 5%, helped partially by our ancillary services programs. However, the most significant improvement came through the actions of our organization to comprehensively examine our costs and execute on numerous cost control measures. As the first quarter results show, we made significant progress toward adjusting our cost structure to better face these difficult times.
Barrons Online put out a positive piece entitled, A Misdiagnosed Nursing-Home Stock, that discussed the prospects for the stock. The article states that the company’s price to earnings multiple is well below the broad industry and its stock price presents a compelling value. The article requires free registration but provides some background on why SUNH might be a good stock pick for 2009.
For the earnings release, click here.
For the Barron’s article, click here. (registration required)