[UPDATED] Capital Senior Living Names Kimberly Lody as New President, CEO

Capital Senior Living (NYSE: CSU) has appointed a successor to retired CEO Larry Cohen.

Lody’s first priorities with the company will include improving its operating performance, growing occupancy, stabilizing rates and strengthening its financial position.

Kim Lody

The Dallas-based senior living operator’s board of directors named Kimberly S. Lody as president and CEO, effective immediately. Lody has been a director with the company since 2014, and will continue to serve on its board of directors.

She succeeds longtime company leader Larry Cohen, who officially retired at the beginning of the year and is currently working with Capital Senior Living as a consultant. The company currently operates 129 senior housing communities in the U.S., making it one of the top 10 largest providers in the industry.

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“Those two things, operating performance and the balance sheet, are the two things I’ll be focused on,” Lody told Senior Housing News.

Overall, her 25 years of industry experience spans mergers and acquisitions, investor relations, multi-site health care marketing, sales, and operational management. That wide range of expertise gives her a large skillset with which to steer Capital Senior Living through potentially choppy waters.

“What I bring in terms of skillset is that broad and strategic understanding of many parallel health care segments and channels that have seen similar types of circumstances that we’re seeing here in senior housing,” Lody said. “I’ve had quite a lot of success leading organizations through some of those difficult types of dynamics.”

Lody, 53, previously worked as president of GN Hearing North America, which is part of the medical device division of the GN Group. Prior to that, she served as vice president of marketing and later president of Chronic Care, the U.S. subsidiary of Coloplast, a $5 billion medical device manufacturer based in Denmark. She also previously spent time as COO of Senior Home Care, chief marketing officer of Gentiva Health Services and vice president of managed care programs for Apria Healthcare.

Winning in a tough environment

Lody is joining Capital Senior Living at a pivotal time, as headwinds have battered both the company and the industry as a whole.

In the third quarter of 2018, the operator logged a total revenue of $115.7 million, a 1.4%, decrease from its revenue during the same period last year. Average occupancy was 85.6% for that period, representing an increase of 10 basis points from the second quarter of this year and a decrease of 130 basis points from the third quarter of 2017. All the while, rumors have swirled that the company has been exploring strategic alternatives and might be entertaining interest from potential private equity buyers. Capital Senior Living declined to comment on those rumors.

The decision to hire Lody may come as a surprise to some in the investment world, who anticipated that Capital Senior Living would choose an external candidate, Stephens analyst Dana Hambly told SHN. Her appointment could quiet the chatter about an imminent sale, he added.

“I do feel like this should put to rest expectations of a near-term sale of the company as had been speculated in the press last November,” Hambly said. “There is clearly value in the real estate, but more value if CSU can improve the underlying fundamentals and facility cash flow. Not dissimilar from the BKD [Brookdale Senior Living] story.”

Brookdale, the nation’s largest senior living operator, named a new CEO about one year ago, and has been focused on an operational turnaround — and unlocking value in its owned real estate through targeted sales — since that time. Under Lody, Capital appears to be taking a similar operations-focused approach.

“The industry headwinds are what they are. I don’t think those are going to change in the really near term, in the next couple of months,” Lody said. “The thing we need to focus on is, how do we win in the current environment? It’s what we have to work with.”

While Lody remained mum regarding specific plans she would set in motion in her new role, she hinted at more to come in Capital’s next quarterly earnings call. Similarly, she hasn’t set a timeline by which to measure any of her planned initiatives.

Lody’s appointment as CEO and president likely won’t prompt a radical change in direction for Capital Senior Living, in Hambly’s view. And the company itself highlighted that she has already played a role in developing the go-forward strategy.

Specifically, Lody’s experience as a Capital Senior Living board member makes her well-suited for her new role, according to Michael Reid, the company’s chairman of the board.

“Kim is deeply familiar with Capital Senior Living’s business and has been pivotal in our efforts to refine our strategy and strengthen our financial position,” Reid stated in a press release. “The board and I are confident that Kim is the right leader to move Capital Senior Living forward as we seek to enhance operational execution and position the company to deliver profitable growth and shareholder value creation.”

Capital Senior Living’s stock price grew almost 1.5% to rest at $7.57 by the time the markets closed Tuesday.

Written by Tim Regan

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