Though Capital Senior Living’s (NYSE: CSU) move-ins for the first quarter of 2018 were the company’s best-ever, occupancy still took a hit.
That’s according to CEO Larry Cohen, who spoke about that and some of the company’s ongoing initiatives during the Dallas-based senior living operator’s first-quarter 2018 earnings call Tuesday. Capital Senior Living currently has 129 senior living communities throughout the U.S.
Specifically, the provider logged 14% higher move-ins in the first quarter of 2018 when compared with the same period in 2017.
“We had the best first quarter in number of move-ins in the history of the company, despite probably the worst flu season we’ve experienced in at least a decade and pretty bad weather in parts of the country,” Cohen noted. “We lost occupancy because our attrition was higher.”
In February, Cohen argued that senior housing providers “have the responsibility of taking precautions [against the flu],” and added that Capital Senior Living, unlike many of its competitors, had managed to largely avoid the negative repercussions of the most recent flu season.
Still, occupancy for consolidated and same communities was 86.1% in the first quarter of 2018, a decrease of 100 basis points from the fourth quarter of 2017 and a decrease of 130 basis points from the first quarter of 2017. But that drop was in line with the company’s expectations, Cohen said.
Looking forward, Cohen said he expects occupancy to stabilize in the second quarter of this year, then possibly even grow by the third quarter of 2018.
Cohen also touched upon Capital Senior Living’s ongoing plan to standardize its operating model during Tuesday’s earnings call.
Previously, the company pledged to roll out a “new, standardized operating model” that involved, among other things, evaluating all major expense categories, centralizing certain support functions such as accounts payable, rolling out a uniform customer service platform, establishing budget management templates and implementing comprehensive sales training for community-based sales directors.
Offering an example of that plan working as intended, Cohen touted the company’s operating expenses, which clocked in at $71.7 million for the first quarter of 2018 and represented a decrease of $1.1 million from the same quarter in 2017. Moving ahead, the plan should save the provider approximately $500,000 to $750,000 per quarter.
“By building on our 2017 cost control initiatives with further improvements in the first quarter, we had lower-than-anticipated expenses,” Cohen said.
The provider also made progress on its goal to pilot an Accountable Care Organization (ACO) relationship with a major hospital system in Texas. To aid those efforts, Capital Senior Living in March hired John Klitsch to the role of vice president of sales and business development.
On the whole, Capital Senior Living’s first-quarter 2018 revenue of $114.6 million lagged behind analysts’ expectations by approximately $3.8 million. Its first-quarter loss per share of 16 cents, however, beat analysts’ expectations by 7 cents.
Capital Senior Living’s share price hovered at $11.73 by the time the markets closed Tuesday.
Written by Tim Regan