NASHVILLE, Tenn., Feb. 22, 2018 /PRNewswire/ -- Brookdale Senior
Living Inc. (NYSE: BKD) ("Brookdale" or the "Company") today
announced that its Board of Directors has:
- Formally concluded the strategic review process;
- Appointed Chief Financial Officer Lucinda M. Baier as President and Chief
Executive Officer and as a Director to succeed T. Andrew Smith; and
- Elected Lee S. Wielansky as
Non-Executive Chairman to succeed Executive Chairman Daniel A. Decker, who has chosen to retire from
the Board now that the strategic review process has been
concluded.
Strategic Review Conclusion
In February 2017, the Company first announced that
it was exploring strategic alternatives. During the course of the
review, the Board and management team, assisted by legal and
financial advisors, explored multiple options and alternatives to
create and enhance shareholder value. The Company held in-depth
discussions with numerous potential counterparties regarding
various strategic alternatives, and conducted parallel negotiations
with certain third parties to seek to obtain consents for the
transactions under consideration.
At the conclusion of the most recent discussions, the Board
ultimately rejected a conditional indication of interest to acquire
the Company for $9.00 per share in
cash, which purported to range up to $11.00 per share in cash subject to conditions
that the Board did not believe were likely to be satisfied. The
Board did not believe this indication of interest was acceptable
given the Board's view of the value of the Company and its assets,
and the Board's belief that the Company can ultimately create more
value for shareholders by executing a turnaround strategy as a
public company under new leadership. As a result, the Board has
concluded the formal strategic review process but remains committed
to continuously evaluating all opportunities to enhance shareholder
value.
Additional details about the strategic review and turnaround
strategy will be provided on the Company's earnings call today.
Leadership & Board Changes
Effective February 28, 2018, Lucinda "Cindy" M. Baier,
Brookdale's Chief Financial Officer, has been appointed as
Brookdale's President and Chief Executive Officer and as a member
of the Board of Directors. Concurrently, T. Andrew Smith will step down from his role as
President and Chief Executive Officer and as a member of the Board
of Directors. Bryan Richardson,
Executive Vice President and Chief Administrative Officer, will
leave the Company effective March 9,
2018. Ms. Baier will continue to serve as Brookdale's
principal financial officer while the Company conducts a search for
her replacement. The Company does not currently intend to replace
Mr. Richardson's position.
Additionally, Daniel A. Decker
has informed the Board that he will retire from the Board,
effective March 1, 2018, now that the
strategic review process has been concluded. William G. Petty, Jr. has also informed the
Board that he has retired from the Board effective February 21, 2018. The Board has elected
Lee S. Wielansky, a Brookdale
director since 2015, to serve as Non-Executive Chairman. The
Board's Nominating and Corporate Governance Committee intends to
fill the vacant Board seats in due course.
Mr. Wielansky said, "It is time for meaningful change at
Brookdale and the Board is committed to making sure the Company's
new strategic plan creates long-term value for our shareholders. We
are fortunate to have someone with Cindy's leadership, financial
acumen and operational experience to take the helm as President and
CEO at this critical juncture, and the Board is confident that she
is the right person to guide a successful turnaround of our
business. I want to extend the Board's thanks to Andy and Bryan for
their dedicated service to the Company, its associates and its
residents, as well as to Dan, whose leadership and perspectives
were very valuable to Brookdale. I also want to extend our
thanks to Bill for his many valuable contributions to the
Company."
Ms. Baier said, "Brookdale has a strong foundation and rich
history upon which we can build a successful future. I am eager and
honored to accept this challenge and assume the responsibility of
leading our 75,000 dedicated and caring associates in delivering
our mission of enriching lives every day. As baby boomers continue
to age and the industry rebounds over time, Brookdale will be
well-positioned to return to growth and capture new opportunities.
In 2018, we plan to further cut G&A expenses, enhance our real
estate portfolio strategy and shift our efforts to winning locally
while leveraging our industry-leading scale. I look forward to
working closely with the Board and management team to execute on a
range of initiatives that I believe will create sustainable value
for shareholders."
Ms. Baier concluded, "I am grateful that Andy brought me into
Brookdale to be part of this inspiring, mission-driven
organization. Dan, Bill, Andy, and Bryan have my best wishes in
their future endeavors. We owe many thanks to them for their
steadfast commitment to Brookdale's stakeholders."
About Lucinda "Cindy" M. Baier
Ms. Baier joined
Brookdale as Chief Financial Officer in December 2015. Cindy is a proven, change-oriented
executive who has demonstrated her abilities across multiple
industries and leadership roles. In addition to experience as a
seasoned CFO in several companies, she has had multi-billion dollar
P&L responsibility; served as an executive officer of a Fortune
30 company; been the CEO for a publicly-traded retailer and has
served for more than a decade as a Board member of multi-billion
public and private companies, including serving as the Chairman of
the Board. Cindy's experience includes serving as the Senior Vice
President and General Manager of Sears, Roebuck and Co.'s Credit
and Financial Products business, serving as the Chairman of Sears
National Bank, and serving on the Board of Directors for The
Bon-Ton Stores and KKBS Group Holdings, LLC. She has served as the
Chief Financial Officer of the following companies: Navigant
Consulting, Inc., Central Parking System, Movie Gallery, Inc., and
World Kitchen, LLC. Cindy previously served on the Board of
Trustees of The Field Museum and on the Board of Directors for the
National Association of Corporate Directors, Chicago Chapter. Cindy
is a Certified Public Accountant and is a graduate of Illinois State University, with Bachelor and Master
of Science degrees in Accounting.
About Lee S.
Wielansky
Mr. Wielansky has more than 40 years of
commercial real estate investment, management and development
experience. Mr. Wielansky currently serves as Chairman and CEO of
Opportunistic Equities, which specializes in low income housing. He
has also served as Chairman and CEO of Midland Development Group,
Inc., which he re-started in 2003 and focused on the development of
retail properties in the mid-west and southeast. Prior to Midland,
he served as President and CEO of JDN Development Company, Inc. and
as a director of JDN Realty Corporation. Before joining JDN, he
served as Managing Director – Investments of Regency Centers
Corporation. Mr. Wielansky joined Brookdale's Board of Directors in
April 2015 and is an independent
director. He also serves as Lead Trustee of Acadia Realty Trust and
served as a director of Isle of Capri Casinos, Inc. from 2007 to
2017 and Pulaski Financial Corp. from 2005 to 2016. Mr. Wielansky
received a bachelor's degree in Business Administration, with a
major in Real Estate and Finance, from the University of Missouri – Columbia, where he is currently a member of
the Strategic Development Board of the College of Business. He also
serves on the Board of Directors of The Foundation for
Barnes-Jewish Hospital.
Earnings Conference Call
Today Brookdale also
announced in a separate press release its financial results for the
fourth quarter and full year ended December
31, 2017. Brookdale's management will conduct a conference
call to discuss these results and the matters described in this
press release on February 22, 2018 at 9:00 AM ET. The conference call can be
accessed by dialing (866) 900-2996 (from within the U.S.) or (706)
643-2685 (from outside of the U.S.) ten minutes prior to the
scheduled start and referencing the "Brookdale Senior Living Fourth
Quarter Earnings Call."
A webcast of the conference call will be available to the public
on a listen-only basis at www.brookdale.com. Please allow extra
time prior to the call to visit the site and download the necessary
software required to listen to the internet broadcast. A
replay of the webcast will be available through the website for
three months following the call.
For those who cannot listen to the live call, a replay will be
available until 11:59 PM ET on
March 7, 2018 by dialing (855)
859-2056 (from within the U.S.) or (404) 537-3406 (from
outside of the U.S.) and referencing access code "9439517". A
copy of this earnings release is posted on the Investor Relations
page of the Brookdale website (www.brookdale.com).
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 1,023 communities in 46 states and the
ability to serve approximately 101,000 residents as of
December 31, 2017. Through its ancillary services program, the
Company also offers a range of home health, hospice and outpatient
therapy 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
and the associated earnings conference call 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 our redefined strategy,
including initiatives undertaken to execute on our strategic
priorities and their intended effect on our results; our
operational, sales, marketing and branding initiatives; our
expectations regarding the economy, the senior living industry,
senior housing construction, supply and competition, occupancy and
pricing and the demand for senior housing; our expectations
regarding our revenue, cash flow, operating income, expenses,
capital expenditures, including expected levels and reimbursements
and the timing thereof, expansion, redevelopment and repositioning
opportunities, including Program Max opportunities, and their
projected costs, cost savings and synergies, and our liquidity and
leverage; our plans and expectations with respect to acquisition,
disposition, development, lease restructuring and termination,
financing, re-financing and venture transactions and opportunities
(including assets held for sale, the pending transactions with HCP,
Inc. and our plans to market in 2018 and sell approximately 30
owned communities), including the timing thereof and their effects
on our results; our expectations regarding taxes, capital
deployment and returns on invested capital, Adjusted EBITDA and
Adjusted Free Cash Flow; our expectations regarding returns to
stockholders, our share repurchase program and the payment of
dividends; our ability to secure financing or repay, replace or
extend existing debt at or prior to maturity; our ability to remain
in compliance with all of our debt and lease agreements (including
the financial covenants contained therein); our expectations
regarding changes in government reimbursement programs and their
effect on our results; our plans to expand our offering of
ancillary services; and our ability to anticipate, manage and
address industry trends and their effect on our business.
Forward-looking statements are generally identifiable by use of
forward-looking terminology such as "may," "will," "should,"
"could," "would," "potential," "intend," "expect," "endeavor,"
"seek," "anticipate," "estimate," "overestimate," "underestimate,"
"believe," "project," "predict," "continue," "plan," "target" 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
have a material adverse effect on our operations and future
prospects or which could cause events or circumstances to differ
from the forward-looking statements include, but are not limited
to, 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, new
supply and new competition; 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
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
and to fund our planned capital projects; risks related to the
implementation of our redefined strategy, including initiatives
undertaken to execute on our strategic priorities and their effect
on our results; the effect of our indebtedness and long-term leases
on our liquidity; the effect of our non-compliance with any of our
debt or lease agreements (including the financial covenants
contained therein) and the risk of lenders or lessors declaring a
cross default in the event of our non-compliance with any such
agreements; 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 and termination, financing,
re-financing and venture transactions (including assets held for
sale, the pending transactions with HCP, Inc. and our plans to
market in 2018 and sell approximately 30 owned communities) 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, and our
ability to identify and pursue any such opportunities in the
future; 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 and
potential disruption caused by changes in management; 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; unanticipated costs to comply with legislative or
regulatory developments, including requirements to obtain emergency
power generators for our communities; as well as other risks
detailed from time to time in our filings with the Securities and
Exchange Commission, including those set forth under "Item 1A. Risk
Factors" contained in 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
and/or associated earnings call. 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.