Brookdale Senior Living CFO Steve Swain and Executive Vice President of Operations Kevin Bowman are leaving the company. Brookdale leadership also announced changes to its full-year 2022 earnings expectations, with earnings likely to come in “modestly below guidance.”
The leadership changes are one step toward better aligning expenses with revenue, CEO Cindy Baier said in a statement issued Friday.
But with EBITDA margin in 2022 improving only 130 basis points despite strong revenue growth, and operational challenges continuing, the coming year “won’t be a cakewalk,” Stifel analysts said in a note issued Monday. They believe that Brookdale’s leadership may need to take further steps to shore up investor confidence, although the leadership shakeup is a “first step.”
Bowman — who ascended to his role last year after the departure of senior living president Cindy Kent — officially left the company Jan. 12, according to Brookdale. Swain is staying on until Feb. 24.
Brentwood, Tennessee-based Brookdale is backfilling the positions through the appointment of Senior Vice President and Chief Accounting Officer Dawn Kussow to the role of executive vice president and CFO. She also is continuing to serve as the company’s principal accounting officer.
Two Brookdale divisional vice presidents, Laura Fischer and Benjamin Ricci, are leading the company’s east and west divisions. With Bowman’s exit, they will now report directly to CEO Cindy Baier.
The company also promoted Senior Vice President of Sales Rick Wigginton to the role of chief sales officer.
Brookdale management said the moves were “aligned with additional corporate and field optimizations that were recently implemented,” and “designed to maximize efficiencies.”
“I thank Steve and Kevin for their leadership and dedication to Brookdale over the years,” Baier said in an announcement. “With Dawn’s remarkable track record, Rick’s demonstrated success, and Laura and Ben’s deep operational experience, I am confident they will continue to provide excellent leadership and drive improved performance.”
The terminations, announced Friday, were “without cause,” the company noted in an SEC filing.
A representative for the company declined to elaborate on the leadership changes when reached by Senior Housing News.
For Bowman and Swain, the exit caps off years-long stints with the company.
Bowman joined Brookdale in 2016 as regional vice president of operations by way of Vista Cove Senior Living in Southern California, where he worked as COO between 2014 and 2016. Overall, his career spans about 30 years, with past positions at Sunrise Senior Living and a handful of other senior care organizations.
Swain joined the operator in 2018 after working as CFO of telecommunications giant DISH Network Corporation for four years.
Although any executive leadership change brings the possibility of operational challenges to come, management said the company has made good headway on growth and recovery by achieving its revenue per available room (RevPAR) targets for 2022. The company also noted it expects total revenue and operating income to exceed expectations for the year.
In the fourth quarter of 2022, the company’s weighted average occupancy increased 70 basis points over the third quarter in the same year, marking the company’s 14th consecutive month of year-over-year occupancy growth.
That said, Brookdale management said it is expecting to report adjusted earnings before interest taxes depreciation and amortization (EBITDA) “modestly below the previously issued guidance range” for 2022. That is partly to do with the fact that facility operating expenses are expected to have grown above 1% in the fourth quarter of 2022 compared with the previous quarter.
Recent moves at Brookdale have fueled speculation and interest from analysts and investors. Last November, the company announced a public offering of 2.5 million tangible equity units, a move that caused the company’s stock to sink that day in trading.
About a month before that, rumors swirled that the operator was exploring a sale of the company.