Q1 2021 Brookdale Senior Living Inc Earnings Call
Good morning, Ladies and gentlemen, my name is Dexter and I'll be your conference operator today at this time I would like to welcome everyone to the Brookdale senior living third quarter earnings call.
At this time, all participants are in listen only mode and a speedier suppressing patient and there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone.
A reminder, this conference will be recorded for replay purposes.
I would now like to turn the call over to Scott and Mcdonalds Investor Relations. Please go ahead.
Thank you and good morning, I'd like to welcome you to the first quarter 2021 earnings call for Brookdale senior living and joining us today are Cindy Baier, our president and Chief Executive Officer, and Steve Swain, Our executive Vice President and Chief Financial Officer, All statements today, which are.
Not historical facts may be deemed to be forward looking statements within the meaning of the federal Securities laws. These statements are made as of today's date and we expressly disclaim any obligation to update these statements and the future.
Actual results and performance may differ materially from forward looking statements certain of the factors that could cause actual results to differ are detailed in the earnings release, we issued yesterday as well as in the reports we file with the SEC from time to time, including the risk factors contained in our annual report on form 10.
K and quarterly reports on form 10-Q.
I direct you to the release for the full Safe Harbor statement.
Also please note that during this call we will present non-GAAP financial measures for reconciliations of each non-GAAP measure from the most comparable GAAP measure I direct you to the release and supplemental information, which may be found at Brookdale dotcom forward Slash investor and was furnished on an 8-K yesterday.
Now I will turn the call over to Cindy.
Thank you Kathy good morning to all of our shareholders analysts and other participants welcome to our first quarter 2021 earnings call.
And I am pleased that occupancy began to grow by the end of the first quarter and continued in April for the last year, we have been and the toughest battle in the company's history, we have been fighting for the health and wellbeing of our residents patients and associates, while the battle is not over we have created and implemented highly.
And effective tools to help us reduce COVID-19 cases, including hosting thousands of vaccination clinics and our communities. So our residents patients and associates could receive the lifesaving COVID-19 vaccines.
I want to say, thank you to our 42000 associates for their extraordinary leadership throughout the pandemic together, our frontline regional and corporate associates stepped up and rapidly executed a series of carefully considered actions to do everything we could to support those who live.
And our served by and work within our communities and agencies.
I'm, especially grateful to our associates, who recently led through the historic ice storms in Texas I'm. So proud of everything you have accomplished I.
I would also like to thank our residents patients and their families for their partnership trust and support during this unprecedented here the genuine affection for our associates and the gratitude that you express it means a great deal to US. We're also beyond grateful for the scientists who created the vaccines.
And the people that produce them the government agencies, who prioritize shots for our community residents and associates as well as Cvs health and public health departments and other pharmacy partners, who helped administered these life saving vaccines with more Americans vaccinated every day, we're hopeful.
And the end of the pandemic is within sight and I am proud of Brookdale and unique and vital role during this crisis.
Let's review our journey.
Just over a year ago, we closed all of our communities to nonessential gas to help protect against the novel Corona virus that was ravaging the country and the world too.
Today I'm thrilled that all of our communities have reopened to loved ones. We have resumed and many of our residents favorite group activities and social events, you can feel the renewed sense of hope and vitality and our communities.
We believe that the COVID-19 vaccines are critically important and changing our business trends.
Early on and we realized the importance of vaccines and we took a leadership role and successfully advocating for priority vaccine access for assisted living residents and associates and work closely with public and private officials to improve the vaccine rollout I am incredibly proud of Brookdale herculean effort.
To schedule, the clinics and educate individuals' within our communities and lightning fast speeds.
Through unwavering perseverance and less than four months, we hosted at least three clinics and every one of our communities and over 125000, COVID-19 vaccine doses were administered to our residents and associates with 93% of our residents benefiting from the protection.
Of these life saving vaccines, we have made a significant positive impact and helping our nation seniors reduce their chances of contracting COVID-19.
I believe our relentless focus on making vaccines available as quickly as possible saved many lives.
The benefit of the vaccine clinics is already reflected in the 97% decline of resident COVID-19 cases in our communities since the peak in mid December.
With the high vaccination rate, we believe that we have broken the link with COVID-19 case trends in the metropolitan areas surrounding our communities.
Our 695 communities across the country combined have an incredibly small number of current cases.
We are pleased with these results yet we remain diligent with our science based approach to help protect our communities through P. P E use cleaning protocols and other best practices as always the health and wellbeing of our residents and associates is our top priority, let me turn to our financial Hi.
<unk> for the first quarter, we continued to deliver sequential move and improvement every month since November move ins increased 29% from the fourth quarter to the first quarter. This is significant progress, particularly in light of the fact that the first quarter started with a pandemic third.
Wave ravaging the nation are.
Our sales force transformation is delivering results. The team is driving positive momentum with leads and visits increasing sequentially.
And I'm proud of our sales associates are attracting many seniors to brookdale. So that we can help more people navigate the challenges of aging.
In March net move ins and move outs also known as Nemo turned positive what is especially exciting about March is that the net Nemo was positive and each of our three senior living segments. This is the first positive net Nemo since before the pandemic began.
I am delighted that we concluded March with sequential occupancy growth and we accomplished this while maintaining rate discipline, we continue to focus on driving occupancy improvement and our profitable growth strategy.
Now turning to an update on government grants to date providers have been able to request funding for COVID-19 expenses and lost revenue for the first and second quarters of 2020.
The provider relief fund portal has not yet opened to submit third and fourth quarter 2020 requests.
When the portal opens we are prepared to file a request as soon as possible. We are grateful that the bipartisan Senate letter to HHS signed by a full quarter of the Senate requested a portion of the remaining provider relief fund to be dedicated to senior living.
In addition, 59 Representatives signed the companion House letter.
And as the largest senior living operator, we will continue to be and advocate for the senior living industry.
Reinforcing the vital role our industry plays and the health care continuum and its critical role to help protect a vulnerable population before I turn the call over to Steve I'd like to address our health care services transaction expectations, and our senior living outlook for recovery, starting with our health care services.
The transaction to sell a majority stake of Brookdale health care services to HCA healthcare continues to be on track for a midyear closing our teams are working well together on the transition plan and we remain excited about the benefits of this transaction for our residents and patients when the transaction closes we expect to.
Received approximately $300 million and net cash proceeds, which will strengthen brookdale as liquidity position for our senior living business. We are seeing the first green shoots of growth demand for our communities is returning and gaining momentum independent market research showed unaided awareness.
And as for Brookdale is two and a half times higher than that of and next identified competitor. Our sales force transformation is taking hold as seen in our sequential move and growth every month since November with our recent occupancy growth and net Nemo results, we believe that we.
We are at a positive inflection point on a sequential basis, we expect growth in the second quarter and stronger growth in the third quarter.
While we can't tell you the exact timing of the recovery based on our recent experience and with the dramatically lower construction starts and the accelerating demographic tailwind I am confident that demand will continue to improve I am very optimistic about our future our business and its core is.
Providing high quality needs based services for our rapidly growing senior population, we enable seniors to spend more time doing the things that get their life, meaning and provide joy by helping them manage the challenges of aging.
We will continue to make the best of our leadership position, especially with our clinical and operational expertise.
I'll now turn the call over to Steve.
Cindy there are three takeaways related to first quarter results occupancy inflected positive in March and the positive growth continued in April we maintained rate discipline with our pricing strategy and.
And we continued to face a challenging labor environment. However, as occupancy grows margins will improve based on operating leverage.
Let me provide context for the three highlights starting with occupancy looking back to January of this year, the country, including our industry, who felt the pressure of the third wave resurgence. Even so we are pleased with the strengthening move ins during the first quarter and into April.
With the benefit of our communities completing 100% of first vaccine clinics in February.
Our occupancy decline rapidly moderated.
And March net move ins and move outs or net Nemo turned positive for the first time since the beginning of the pandemic and by March month, and occupancy had turned positive on a sequential basis.
While COVID-19 related occupancy losses that occurred over the past year will have a negative impact on year over year comparisons the positive net Nemo and March was an important milestone turning to rate or Rev. Poor. The first quarter was 2.9% higher year over year and 3.3% higher.
On a sequential same community basis for most of our communities. Our annual price increase took effect at the beginning of the year the rate increases will help mitigate higher labor costs and lower occupancy.
While market conditions remain dynamic we have balanced rate discipline with targeted discounting to respond to the competitive environment and specific markets.
The third key highlight as Opex on a same community basis, the first quarter senior housing operating expense improved 1% year over year. The primary driver of the favorability was from variable costs, such as supplies and food and it was linked to lower occupancy levels that occurred as we progressed through 2020.
On the variable cost favorability more than offset higher wage rates, resulting from the difficult labor environment and incremental work and staffing related to the pandemic.
Let me briefly discuss our health care services segment results. The revenue decrease was mainly impacted by the pandemic with fewer services within our communities due to lower occupancy along with the impact of the severe winter storm in Texas.
To mitigate a significant portion of the revenue loss and the team continued their strong cost controls matching their operating expenses to the current business and payment model.
For senior housing and health care services combined and the first quarter of this year, we recognized $11 million of cares Act related income $9 million was for the employee retention credit associated with wages paid through the end of September 'twenty, and 'twenty, along with approximately $2 million related to government grants.
And Cindy mentioned, we look for HHS to provide an update on the use of the remaining provider relief fund and the opportunity to submit requests to mitigate second half 2020 COVID-19 related expenses and lost revenue.
Turning to G&A over the past few years, we took actions to reduce our G&A costs and match or smaller community footprint. The last significant transaction was related to the health peak unconsolidated CCR see venture completed and the first quarter 2020. This.
And this transaction delivered the majority of our year over year G&A reduction as well as tighter controls on G&A costs adjusted EBITDA for the first quarter 2021 was $35 million compared to 185 million for the prior year quarter of which $100 million was from the one time Matt.
And termination fee related to the health peak transaction I just mentioned.
The other major driver of lower adjusted EBITDA is lower revenue due to the pandemic adjusted free cash flow was $56 million lower and the first quarter compared to the prior year period to.
Two items helped to mitigate the impact of lower EBITDA and.
The working capital change was a benefit of $49 million. This favorability was mainly due to lower accounts payable payments and timing of payroll.
Non development Capex was $33 million lower than the prior year due to timing of elective projects.
Turning to liquidity as of March 31st total liquidity was $439 million compared to $575 million at year and the $137 million change was primarily from $67 million of infrequent items, including pay down of debt and letters of credit and our and.
Newel insurance funding $51 million of negative adjusted free cash flow and $19 million of ongoing debt principal payments as I described last quarter. The expected sale of our health care services segment will provide approximately $300 million on liquidity and will be reported as net cash provided.
Investing activities to wrap up let me share high level comments about the second quarter 2021 with a recent occupancy growth. We believe we are at a positive inflection point on a sequential basis, we expect growth and the second quarter and stronger growth and the third quarter.
And the second quarter, we expect a sizable step down and COVID-19 related expenses due to the low number of active cases in our communities we.
We anticipate capex projects will accelerate and the second quarter now that our communities are open and we expect to see continued move and growth annual non development Capex investment remains at approximately $140 million for 2020 one.
For working capital and 2020, we benefited from two cares act programs that require repayment, we received accelerated Medicare payments and we elected to defer payment of the employer portion of the social security payroll tax.
The program balances related to the health care services segment will be deducted from the sale proceeds as of quarter and these amounts were $84 million. The remaining senior housing program balances of $76 million will be paid half in 2020, one and half in 2020 two for.
For health care services, we will continue reporting the results as a segment until the transaction closes, which we expect to occur mid year subject to final regulatory approvals.
Upon the closing of the transaction and the net proceeds of approximately $300 million will strengthen our liquidity position.
We are encouraged by several leading business indicators occupancy has inflected to positive growth, we maintained rate discipline through the toughest part of the pandemic and expect our pricing strategy will continue to provide benefits and the future.
Construction has decidedly slowed for instance, according to Nic assisted living units under construction is at a six year low when looking within 20 minutes of Brookdale is owned and leased portfolio construction starts have dropped 80% from the peak. The current low construction starts will provide a tailwind for several years.
The upcoming baby Boomer opportunity is strong with nearly 1 million potential new resident starting within a year.
And we are seeing increasing needs based demand from higher acuity care, where 75% of residents are diagnosed with at least two chronic diseases.
And now I will turn the call back over to Cindy.
I am incredibly proud of our associates and cannot express the depth of my admiration for their tremendous dedication they have focus on what matters. Most enriching the lives of those we serve our residents patients and their families. We are coming.
Through the pandemic with grit and determination and it puts a smile on all of our faces to the gun and new gear that promises are returned to enrichment and growth in our communities.
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Dexter we are now ready for opening the line for questions.
Thank you Katie as a reminder, through assay question, you will need the brass star one on your telephone to withdraw your question press the pound key Gander started want to assay Christian please standby, while we compile the Q&A roster.
First question comes from the line of Steven Valiquette from Barclays. Your line is open.
Okay.
On it.
Hey, good morning, Congrats on these results.
Quick question for me just as we think about the the occupancy recovery over the remainder of 'twenty 'twenty. One can you talk about the relationship between the occupancy gains and the NOI margin should we assume the same relationship on the way up this year that we saw on the way down.
And between those two metrics last year, and 2020 or are there some other different dynamics they share either on pricing or labor expense trends that might alter the.
And the correlation between those two.
And that's an insightful question and let me start and Steve can jump and first of all we're very grateful to see the 100 basis points of occupancy growth from the end of February through April.
We know to be true is that we are currently at safety and staffing levels and so we will be able to build occupancy without having the same relationship to labor that we've had and historical year. So initially our revenue gain will drive more dollars of adjusted EBITDA and cash flow.
So.
And at least until we get to a higher occupancy level you can talk to you a little bit about and the trends that we expect with labor costs. Because it is as we said on the call a very dynamic and tight labor market.
Good morning, Steve.
And as Cindy mentioned due to maintaining the base level of staffing.
So we saw earlier in the pandemic and and really throughout.
And our labor became a less variable and lower occupancy however, as we increase occupancy levels throughout the rest of 2021, we do expect improved operating leverage so as we improve this operating leverage we expect NOI margins to stabilize on and the second quarter and then expand.
Through the second half of 2021.
Steve did you have any other follow up question or did that answer.
The market multiple items.
That was helpful. Thanks.
Thanks, Dan.
Your next question comes from the line of Joanna from Bank of America. Your line is open.
Good morning Joanna.
Hey, good morning. Thank you so you're actually on that topic on a labor topics.
You'll be hearing from other health care providers, but the cash.
Market. So can you just flesh it out for US you know how much was your contract labor costs. This.
This quarter and how does it compare give for you know kind of what you expect going forward you know Wendy.
This number would come down to South Korea points on like Oh, you know at least for some time, you might not where they need to hire more staff, but can you kind of talk about weather.
And you know, there's opening and second and and you try to replace that have access and contract labor would employees you know kind of what do you see in the market in terms of you know.
And I like to hire and.
And yet people. Thank you yeah.
The use of contract labor fluctuated during the quarter. If you think about what was happening and our community at the beginning of January we were at the top of the third wave of the pandemic and so we had extra labor or special resident care areas and then if you think about just the mindset amount.
Of work that goes into hosting thousands of vaccination and clinics, we need a lot and we needed a lot of labor that we normally wouldn't have had on our community. So the good news is that with the 97% reduction and positive resident cases, we will need less labor to take care of COVID-19 positive breath. It at all.
The vaccination clinics are behind US now and so it's really just a matter of keeping our incoming residents vaccinated. So we'll see less demand and especially that special labor that we saw as a result of COVID-19.
It is fair to say that it is harder to hire workers today than it has been and the last year and we're seeing a number of postpaid.
Postings, where applicants won't show up for interviews or they won't return call and so you know we really have to put our best foot forward to keep our community staffed with appropriate mission driven and people, but when we have openings, we have to fill our chefs and so Steve can now talk a little bit about what he sees from a financial perspective.
And as the year progresses.
You bet.
Good morning Joanna.
And when you look at the Labor expense line you are I break it into two pieces a rate and volume are suddenly described a little bit about the rage, so wage rates use of overtime and contract labor premium pay all of those go into what I consider the rate and generally speaking when you add it all up we.
Are seeing similar.
Crusher.
That the industry sees and as Cindy mentioned kind of across the country.
Same ROI pressure in that same percentage.
And the headwind if you look at the volume variables such as work activity as a function of occupancy.
Like I mentioned we.
We had to maintain a base level of staffing and.
During the <unk>.
Pandemic, even as the occupancy.
And so.
Decreased.
So again as.
As we increase occupancy and the second half of 2020, one and we should see improved operating leverage.
The last piece is and Ah.
And second quarter, we expect a sizable on my 50% stepped down and COVID-19 related expenses and that's due to fewer cases, driving less work activity, which is another and volume related metric.
That's a great color and if I may follow up on the commentary and just the <unk>.
Clarify.
A comment about I think and with about occupancy and I wasn't sure debt do you expect a vote I guess in Q2 and had stronger growth in Q3, So I assume that's a sequential inc.
Increases in occupancy you are talking about correct.
Yes, absolutely.
Because the way I was thinking about it right. So obviously, there's pent up demand people sitting on the sidelines waiting to be able to move and so I guess, that's how you're thinking about it. It kind of you know things started to open up you know and and that's why April yourself 50 Bips improvement.
And then would you expect this kind of.
And maybe improving on a monthly basis. So then when you have I guess Q3.
Full kind of three quarters of this improvement that that's why you're saying like a stronger growth rate Q3 from tier two debt.
And how you're kind of getting to that.
And I think about it Joanna is first there is tremendous need for our services, we are and needs driven business, because we have a higher concentration of assisted living and memory care than other operators and.
On the business.
Can't thing that's important is only 11% of seniors choose senior living and so theres, a pretty small penetration and the overall demand for the services.
Third there were really two reasons why people didn't choose to move during the pandemic. The first was the fear of contracting COVID-19, and some people were sheltering in place and their home keeping their social interactions as small as possible. The vaccination is a game changer for that particularly along the age that we serve.
Most senior.
Pet them back.
And different than sort of the younger workforce.
Second reason and the people may have chosen not to move if they were concerned about not being able to feed their family and friends and stuff.
About moving into and new setting and not knowing when you'll be able to see your daughter or hug your grandchildren and that was something that many people just chose not to make that decision today, 100% of our communities are open. So revenue can be confident that they'll get to see family and friends and that is is very good I think also.
And what do you think about what's happening and the broader market and the U S and people are starting to go back to work and so returning to the offices.
And it looks like about 80% of workers are now back in their offices or workplace and so as that continues to work there will be fewer people at home to take care of mom or dad. So for all of those reasons, we see demand continuing to strengthen and you know I can't tell you exactly what the recovery will look like.
I'm optimistic, though that there are a lot of people who need our help.
And it is safer now than it has been in the past to venture out of your home and.
Fewer caregivers so all of that should bode for a nice recovery. It's also important to know that because our occupancy is lower we have a smaller headwind from move out and we think that reduction and headwind is about 70 basis points. There are many reasons why and just so excited about our future.
That's very quick color I appreciate it thank you.
Thanks Joanna.
We have a question from Brian and tank COVID-19 with Jefferies. Your line is open.
Hey, Brian Hey, good morning, guys. Good morning congratulation.
Good Court obviously.
I guess my question for you you know I remember, we used to talk about your strategy with Brookdale health services and how yes.
And having that offering was.
Part of the pitch for Brookdale right. So as you sell it to HCA.
Two questions number one.
How does that strategy change or how do you check that box.
It's it's two potential resident and then the second part of my question is from an expense perspective, you know should we expect.
A corresponding drop off and G&A at some point, you know kind of corporate level allocation related to VHS.
Yes, let me start with a strategic question. So the most important thing is that our resident have access to high quality services and we originally started offering home health and hospice at the request of our rise to that as you know we will retain a 20% interest and the DHS business won and we sell.
80% of the business to HCA healthcare, what has really changed over the last several years and <unk>.
Great fun.
<unk> care and the ability to offer our residents are better integrated health care experience through this partnership with HCA and so it's really exciting to us that our resident will still have the high quality health care provided by Phs home health hospice, but by being part of the day HCA healthcare.
Network. They will have improved access to physicians and hospital lab services that should make their experience even better than it is today I think we learned a lot about telehealth during COVID-19, and I think we've learned a lot over the last several years about having doctors and nurse practitioners round and our communities.
And so being able to have a strategic relationship with such a high quality health care provider is so encouraging for our business now if you think about the G&A question on part of the back office EHS is shown within our our G&A statistic.
And so of course those people will go with the DHS business to HCA and you know we've always been very thoughtful about making sure that we manage our G&A to match.
And we'll continue to do that.
No that makes a lot of stuff and then I guess my second question for Steve as I think about the free cash flow number for the quarter, obviously, a little pressure there, but as I think about.
Laying out improve and expectation for the rest of the business how should we be thinking about the cash flow progression and then I guess the flip side of that just on Capex and he said a little bit of acceleration, but longer term how are you thinking about.
Potentially ramping up capex to drive growth and your businesses.
You bet good morning.
Brian So just think about cash flow and kind of the outlook for the rest of the year.
Occupancy and Revpar growth is key and we believe occupancy and collected as both senior and I mentioned and in March that was a huge positive first step of the leading indicator so on and so.
Sequential basis, I'm, certainly we expected.
As we discussed with Joanne on the second quarter, and even stronger growth and the third quarter.
For the reasons, Cindy mentioned and seasonality as.
As for as far as a rough poor goes we expect that to be stable. So oh.
And we will keep you updated throughout.
Throughout the second quarter on the on occupancy so that's one piece.
Cash was also I use by COVID-19 expense, and we expect to see a 50% step down and COVID-19 related expense and the second quarter.
Due to the lower number of cases, as I mentioned and I expect another sizable stop a shutdown and the third quarter.
And then from one of the first calls on first questions, we expect NOI margins to stabilize and the second quarter and expand and the second half.
A little more broadly we continue due to government funding and Cindy and.
And I both mentioned on the prepared remarks, the grant saw that we received today and only cover the first half of 2020, So we're hopeful for incremental funding.
And.
Two to cover some of the debt costs and the second half from the second half of 2020 and 2021.
The Capex piece.
We had.
No.
Well if you look at the Capex per unit on when you add in the.
The amount of landlord reimbursement and some where edge on some of the kind of historical levels, we lowered some of our capex because we had fewer move ins on them over the past year. Our Capex is certainly driven by move ins as we turn units.
And we will of course keep an eye on on Capex as we.
And as we go through the rest of the year, but we still have $140 million and guidance for 2021.
To sum it up on throughout the patent pending on that we.
We have taken proactive steps to strengthen our financial position.
Cash flow and liquidity are a priority and we will continue to take proactive steps and future.
Awesome Ah congrats on the again on finding positive and Nemo.
Thank you so much.
Your next question is from Josh Raskin.
Macro on research your line is open.
Good morning cash.
Hi, This is actually on Marco on for Josh Good morning, and thanks for taking the question.
And during the quarter and looks like and generated about a $25 million and adjusted EBITDA and if you were to exclude the benefit from cares Act grants.
But there was also a 27 million and COVID-19 expenses.
So if we were and to think about the quarterly run rate of roughly 52 million excluding those items.
How do you think about EBITDA growing off that base through the balance of the year.
Well the biggest driver and that is the timing of the occupancy recovery and we're very excited about the fact that we had 100 basis points of occupancy growth from the end of February to the end of April we see positive and encouraging sign about the level of demand that is on the market and our expectation is that we will.
When the recovery.
And so that's the biggest driver see what else do you want to add.
And that's really it.
Margo and the two to drive EBITDA on.
And just use the are the pieces that I stepped on.
And through.
During the pandemic there were a lot of variables on that so that we can necessarily predict so where he ran multiple scenarios and fast forward to now there are still unknowns and they still show a wide range of potential outcomes, although the range is getting tighter.
We're still not quite ready to issue guidance on but in the meantime.
On every month, we will be posting occupancy so you'll be able to keep track of the biggest draw.
Driver of our financials.
Great. Thank you very helpful and if I could just sneak one more in and I was wondering if you could talk about some of the differences you're seeing in terms of uptake for.
And for health care services, among residents who have been vaccinated.
You mean home health and Hospice service is that the question or do you mean going out to doctors and and things like that.
For the home health and hospice side.
We have and 93% vaccination rates, among our rapid and and so we are seeing strong.
President vaccination and.
And Havent really taken the time to look for whether there's a difference and the home health or hospice penetration rates among those that are vaccinated and vaccinated.
Just because it's such a small percentage of our residents that are on vaccinated.
Yeah.
Okay, great. Thank you very much.
And your last questions from Frank Morgan with RBC capital markets. Your line is open.
Thanks, I hopped on late so apologize if this has already been asked but.
And I'm curious if the fact that you had such a grid.
Rest of and proactive vaccination program in place and got your.
Facilities completely vaccinated.
Do you think that gave you sort of and early jump on local competition.
It's moving and started occurring and do you think that it anyway and fluent.
Their decision to consider Brookdale first over other other facilities and I'm just curious.
Was that and advantage and then when I think about going forward and sustaining the occupancy growth from here.
And what is the pricing environment like what you see from these competitors and hopefully you got the jump on with with vaccination rates out and then I'll ask another one.
Yes, absolutely our.
Aggressive vaccine and campaign was a huge tailwind for US we know that we had residents who moved on to get vaccinated with US we know that health care providers or reluctant to refer to senior living until there was fascination and so we think that the effort that we do.
Good to get senior living prioritize to be the first choice for vaccine was important and the work that we did with CES to make sure that our clinics, where the first that were executed our work with the state and local health departments to remove barriers. When there was a prioritization of skilled nursing or assisted living or willingness to jump in on it.
Every slot that was available really really helped us and I think it helps us on two fronts first it helps us on getting people comfortable with moving into senior living but more importantly, it helped us with protecting our existing wrap it up and so if you think about the 97% reduction and COVID-19.
Live cases from December through now and that.
And that has just been a game changer and and we were ahead of that and in the industry, we executed two and a half times faster than our industry and the first month and so that was a.
Really important and your second question Frank was yes, just in terms of.
The rate environment, what you know you had the advantage there and what are your competitors doing locally on rates this year.
And the entire industry and lease up and we have 90% of our competitors operate five or fewer communities. So you can imagine that if yes. It is.
On a lease up environment everything you can imagine it's happening now what has been successful for us historically is to maintain discipline and that has been successful that doesn't mean that we won't discount and we will discount on a selective basis, where it's necessary to help us grow occupancy, but we'll do that on a very.
Targeted way and I think that's been something that's been pretty successful, but I think the next several months are going to be very competitive from a pricing perspective as the industry is under pressure.
Got you and then secondly, as you started to see this recovery are there any particular geographic areas, where youre seeing it more than others.
In terms of this improvement and the occupancy.
Sure Frank.
More broadly on the we look at rural onto to urban and we are seeing a little bit more recovery and the urban type environment.
And as opposed to World now rural didn't go down as much and argued occupancy, but it's being it's a little bit slower to recover and I.
But our occupancy recovery is largely due to the strength of the local teams right and we know that when we have executive directors that are in place to procure more years, they have a much better performance and their peers and that's why we focus so much on the retention rate of our our executive directors and our health and wellness Directors. We also found great success with.
Health and wellness directors being involved with the local medical professionals and talking about our success with the COVID-19 vaccination clinics as well as the health of their rapid answer and so that's been something that's been very strong and then the sales and transformation is also something that we think is going to help so where you've got a song.
Later on the community of that helps as well.
Okay. Thank you very much good quarter.
So I think that is the end of our question and I want to just close by saying if you or your family or your friends haven't yet gotten vaccinated. Please give her a shot thank you.
Yes.
Texture that ends our call.
This concludes today's conference call. Thank you for joining you may now disconnect.
Thank you and have a great day bye.
Yeah.
And then.
And then.
And I don't know.
And.
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