The interim CEO of assisted living community owner/operator Assisted Living Concepts (NYSE:ALC) spoke out about his company’s recent troubles during a conference call with Wall Street analysts and an interview with company stakeholders, stating his intention to fix the company’s problems.
Charles Roadman II, a physician and retired lieutenant general for the U.S. Airforce, was hired as ALC’s interim CEO after the board fired former CEO Laurie Bebo, following multiple issues at a few of the company’s 211 assisted living communities.
Some ALC-operated communities in Idaho, Georgia, and Indiana have come under fire by regulators who said they were providing substandard care, and the company was slapped with a lawsuit in April for lease violation by [now-former] landlord Ventas, Inc. (NYSE:VTR). That lawsuit has since been settled after the REIT agreed to sell 12 of its ALC-managed communities to the tenant; Ventas no longer owns any assets operated by ALC.
“The job I’ve got, and I put it in aeronautical terms, is to get into level flight,” Roadman said during the call. “I strongly believe that providing good quality of care is good business.”
One issue raised by state regulators was that some ALC-operated communities were understaffed, leading to a poorer quality of care for residents. Roadman acknowledged concern over these allegations, and said the company has hired a consultant to overlook the operations at some of communities in question. Additionally, more staff is being added, and these moves may end up hurting ALC’s bottom line, he said.
“Clearly, there will be expenses associated with this strategy,” said the interim CEO.
He also noted that occupancy—which has remained flat in past years and rested at 62.4% by the end of 2011—is “clearly” an issue. He said that the company’s board will review some communities to see whether they need to be expanded, sold off, or repositioned.
Ultimately, turning the company around and revamping its troubled image is doable.
“Everything at ALC is eminently fixable,” Roadman said in an interview with company stakeholders. “Where we have problems, we will fix them.”
Written by Alyssa Gerace