NASHVILLE, Tenn., Oct. 16, 2017 /PRNewswire/ -- Brookdale
Senior Living Inc. (NYSE: BKD) today provided an update on the
impact of Hurricanes Harvey and Irma and the Northern California wildfires.
Andy Smith, Brookdale's President and CEO, said, "With a
primary focus on the safety and comfort of all our residents and
associates, we were prepared for the hurricanes. Overall, our
residents and patients were well-cared for before, during and after
these natural disasters. We have many messages of thanks from
residents and family members about the quality of care
provided. This is a testament to the extraordinary acts of
courage, sacrifice and compassion from our associates who in many
cases were, themselves, impacted by these natural disasters.
I can't begin to express my appreciation to those associates
who put the care and safety of their residents and patients first
and foremost during these stressful and exhausting
experiences. The wildfires in California continue to be an active situation
and we are again focusing the Company's resources on the safety and
comfort of our residents and associates."
The Company also announced today that Labeed S. Diab, the Company's Chief Operating
Officer, provided notice to the Company that he will resign from
his position effective October 28,
2017 to pursue another opportunity.
"Labeed has made many important contributions to Brookdale during his tenure as COO. I
want to personally thank him for his leadership and wish him all
the best," said Mr. Smith.
Hurricanes
The Company has completed its preliminary assessment of the
financial impact of Hurricanes Harvey and Irma. Brookdale operates 171 communities, serving
approximately 19,000 residents, in areas impacted by these
hurricanes. All but one of the impacted communities have returned
to operation, though seven communities will experience some
continuing disruption as storm damage is remediated.
As a result of the hurricanes, the Company expects a negative
impact to Adjusted EBITDA of approximately $12 million to $13 million for 2017.
Adjusted EBITDA for the third quarter of 2017 is expected to
reflect a negative impact of approximately $9 million, approximately one-third of which is
expected to result from lost revenue in the Company's home health
business in Florida and the
remainder of which is expected to result from rent credits and
increased operating costs relating to the hurricane response.
Adjusted EBITDA for the fourth quarter of 2017 is expected to
reflect a negative impact of approximately $3 million to $4 million, split between lower
ancillary services revenue and increased operating costs. The
Company also estimates that it will incur an additional
approximately $13 million to $14
million of capitalized costs for physical plant remediation,
approximately $5 million to $6
million of which the Company expects to incur during the
fourth quarter of 2017 and the remainder of which it expects to
incur in 2018.
The foregoing amounts are presented net of expected
reimbursement from the Company's property and casualty and business
interruption insurance policies, are preliminary estimates derived
by management from the information available at this time, and are
subject to the completion and finalization of the Company's
quarterly accounting and financial reporting procedures. The
actual amounts and timing of amounts may differ.
In addition, as a result of Hurricane Irma, Florida issued an emergency order
requiring nursing homes and assisted living facilities to
obtain generators and the fuel necessary to sustain operations and
maintain comfortable temperatures in the event of a power
outage. The financial impact of complying with that order is
not yet known.
Wildfires
The Company continues to monitor the wildfires in
California. Approximately 20 of the Company's California communities are being affected by
the wildfires. The Company evacuated the residents of six
communities, two of which have returned to full operation, and
others are hosting residents who were evacuated. So far, none of
the communities have suffered major damage from the wildfires.
Ongoing Review Process
As previously announced, Brookdale's Board and management team are
working with legal and financial advisors in a process of exploring
options and alternatives to create and enhance stockholder
value. That process remains ongoing.
Non-GAAP Financial Measure
The Company's estimates of the financial impact of Hurricanes
Harvey and Irma refer to the non-GAAP financial measure Adjusted
EBITDA. The Company defines Adjusted EBITDA as net income (loss)
before: provision (benefit) for income taxes; non-operating
(income) expense items; depreciation and amortization (including
non-cash impairment charges); (gain) loss on sale or acquisition of
communities (including gain (loss) on facility lease termination);
straight-line lease expense (income), net of amortization of
(above) below market rents; amortization of deferred gain; non-cash
stock-based compensation expense; and change in future service
obligation. Reconciliations of Adjusted EBITDA to the most
comparable GAAP financial measure for the third and fourth quarters
of 2017 are not available without unreasonable effort due to the
inherent difficulty in forecasting the timing or amounts of items
required to reconcile Adjusted EBITDA from the Company's net income
(loss). Variability in the timing or amounts of items
required to reconcile such measures may have a significant impact
on the Company's future GAAP results.
About Brookdale Senior Living
Brookdale Senior Living Inc. is the leading operator of senior
living communities throughout the United States. The Company
is committed to providing senior living solutions primarily within
properties that are designed, purpose-built and operated to provide
the highest-quality service, care and living accommodations for
residents. Brookdale
operates independent living, assisted living, and dementia-care
communities and continuing care retirement centers, with
approximately 1,039 communities in 46 states and the ability to
serve approximately 102,000 residents as of June 30, 2017. Through its ancillary
services program, the Company also offers a range of outpatient
therapy, home health and hospice services. Brookdale's stock is traded on the New York
Stock Exchange under the ticker symbol BKD.
Safe Harbor
Certain statements in this press release may constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to various risks and uncertainties and
include all statements that are not historical statements of fact
and those regarding our intent, belief or expectations, including,
but not limited to, statements relating to the financial impact of
the natural disasters, expected insurance reimbursements and
capital expenditures, and the process of exploring options and
alternatives to create and enhance stockholder value.
Forward-looking statements are generally identifiable by use of
forward-looking terminology such as "expect," "estimate,"
"preliminary" or other similar words or expressions. These
forward-looking statements are based on certain assumptions and
expectations, and our ability to predict results or the actual
effect of future plans or strategies is inherently uncertain.
Although we believe that expectations reflected in any
forward-looking statements are based on reasonable assumptions, we
can give no assurance that our expectations will be attained and
actual results and performance could differ materially from those
projected. Factors which could cause events or circumstances to
differ from the forward-looking statements include, but are not
limited to, the risk that the Company could incur additional costs
related to the response to the natural disasters; the risk
associated with the current global economic situation and its
impact upon capital markets and liquidity; changes in governmental
reimbursement programs; the risk of overbuilding and new supply;
our inability to extend (or refinance) debt (including our credit
and letter of credit facilities and our outstanding convertible
notes) as it matures; the risk that we may not be able to satisfy
the conditions precedent to exercising the extension options
associated with certain of our debt agreements; events which
adversely affect the ability of seniors to afford our monthly
resident fees or entrance fees; the conditions of housing markets
in certain geographic areas; our ability to generate sufficient
cash flow to cover required interest and long-term lease payments;
the effect of our indebtedness and long-term leases on our
liquidity; the risk of loss of property pursuant to our mortgage
debt and long-term lease obligations; the possibilities that
changes in the capital markets, including changes in interest rates
and/or credit spreads, or other factors could make financing more
expensive or unavailable to us; our determination from time to time
to purchase any shares under our share repurchase program; our
ability to fund any repurchases; our ability to effectively manage
our growth; our ability to maintain consistent quality control;
delays in obtaining regulatory approvals; the risk that we may not
be able to expand, redevelop and reposition our communities in
accordance with our plans; our ability to complete acquisition,
disposition, lease restructuring, financing, re-financing and
venture transactions (including assets currently held for sale and
pending transactions) on agreed upon terms or at all, including in
respect of the satisfaction of closing conditions, the risk that
regulatory approvals are not obtained or are subject to
unanticipated conditions, and uncertainties as to the timing of
closing; our ability to successfully integrate acquisitions;
competition for the acquisition of assets; our ability to obtain
additional capital on terms acceptable to us; a decrease in the
overall demand for senior housing; our vulnerability to economic
downturns; acts of nature in certain geographic areas; terminations
of our resident agreements and vacancies in the living spaces we
lease; early terminations or non-renewal of management agreements;
increased competition for skilled personnel; increased wage
pressure and union activity; departure of our key officers;
increases in market interest rates; environmental contamination at
any of our communities; failure to comply with existing
environmental laws; an adverse determination or resolution of
complaints filed against us; the cost and difficulty of complying
with increasing and evolving regulation; and the risks detailed
from time to time in our filings with the Securities and Exchange
Commission, including our Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q. When considering forward-looking statements,
you should keep in mind the risk factors and other cautionary
statements in such SEC filings. Readers are cautioned not to place
undue reliance on any of these forward-looking statements, which
reflect our management's views as of the date of this press
release. We cannot guarantee future results, levels of activity,
performance or achievements, and we expressly disclaim any
obligation to release publicly any updates or revisions to any of
these forward-looking statements to reflect any change in our
expectations with regard thereto or change in events, conditions or
circumstances on which any statement is based.
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SOURCE Brookdale Senior Living Inc.