Q2 2022 Brookdale Senior Living Inc Earnings Call
Sequential basis.
Even so we have not seen labor cost reduction and therefore expect that improvement to begin later in the year because of the continued challenging labor environment, we revised our operational adjusted EBITDA guidance for the balance of this year at the same time, we are pleased that last week, we received additional.
<unk> provider relief funds, which is included in our updated guidance.
We are very thankful for federal and state grants that support our important efforts to help protect our residents and associates.
Let me turn to our second quarter highlights. We are pleased that revpar increased more than 10% compared to the prior year quarter. We continued on a strong path of occupancy recovery. The second quarter's year over year weighted average occupancy increased 420 basis points on a same community basis, we didn't.
The best second quarter sequential weighted average occupancy growth in more than 10 years, we achieved 2000 move ins in March which at that time with the highest months for move ins since the beginning of the pandemic.
For the second quarter, we sustained this rate averaging more than 2000 move ins per month as reported by and I see the industry second quarter senior housing occupancy increased 80 basis points on a sequential basis.
We are pleased that brookdale exceeded industry growth by increasing occupancy 120 basis points on a same community basis.
We also exceeded our three year pre pandemic average move in performance by 9%.
This is evidence of both strong demand.
And the strength of Brookdale execution and brand.
Our lead funnel remains strong with second quarter inquiries and visits that exceeded pre pandemic levels as we enter the third quarter, which is normally the best selling season, we are well positioned for occupancy acceleration barring a significant disruptive COVID-19 variance Serge.
Turning to labor, our turnover is higher than our historical norms and we are focused on taking actions to improve associate retention.
Throughout the pandemic our team managed through numerous challenging situations and remained focused on providing high quality care to our residents for this I want to thank our associates across the country for their dedication and hard work.
Despite ongoing challenges in the U S labor market, we achieved eight consecutive months of net hires.
We significantly accelerated our hiring in the second quarter, where net hires where more than two five times those of the first quarter and five times better than the fourth quarter of 2021, we increased our workforce by 10% since year end with more than 3000 net hires.
On a year to date basis, allowing us to fill more shifts with Brookdale associates.
These efforts contributed to our ability to markedly reduce contract labor in the second quarter, while continuing to ensure that we meet the needs of our residents and provide high quality care.
Not only are we rebuilding our workforce, we are creating a stronger team.
We are proud of this progress, we're not where we want to be contract labor usage is declining but at a slower pace than desired and we are experiencing some increase in overtime usage at the same time given the currently highly competitive nature of the labor market, we are seeing wage pressure and higher sign on.
Coverage and retention bonuses through continued focus and discipline I am confident we will overcome the current U S labor pressures overtime.
Our labor pressure is a structural issue inflationary adjustments, we're seeing will be factored into the determination of our 2023 revenue rates.
For new residents, we historically increase rates on October one with the majority of our in place residents receiving new rates effective at the beginning of each year.
In addition to winning the recoveries are driving revenue growth and appropriately controlling costs, we are pursuing incremental value creation through innovation.
Health care and senior living is critically important given the acuity of the population we serve.
Our goal at Brookdale is to help our residents improve their health span.
With the growing trend of more health care services being provided at home. We are building on the knowledge. We gained throughout the pandemic to continue to evolve our service offering to residents in their brookdale homes, especially with the support of our nurses, who make up 10% of our workforce are.
Health plus program, which we have been piloting in certain communities involved registered nurse care managers working to help improve residents' quality of life and helping prevent avoidable emergency room visits or hospitalizations.
We do this in partnership with our residents family and their health care providers.
In communities that rolled out this pilot program. The data revealed that residents had fewer urgent care or emergency room visits and fewer hospitalizations and brookdale like residents and private housing.
Importantly, we are seeing longer lengths of stay and health plus communities as our residents are improving their health span.
These longer lengths of stay also helped drive our occupancy rates.
Health plus isn't the only integrated project in our pipeline, we are expanding a technology based falls prevention and detection program two additional communities after successfully completing our pilot to improve health outcomes.
In addition, we are currently piloting AI driven analytics to accelerate residents socialization and engagement by connecting new and existing residents based on common interests.
Moving to technology innovations that support our associates, we now offer flexibility via digital scheduling for our hourly associates turning to our 2022 guidance. We are pleased with the progress we are making with our net move ins and move outs and our occupancy, although we have been able to pass through.
Some of our inflationary costs to our residents via rate increases we continue to be challenged by the U S. Labor environment, we remain highly focused on addressing labor costs within the realities of the current labor market and overall conditions in the U S economy, we look forward to providing updates on our progress.
Yes in the coming quarters.
Our revpar growth expectation of 10% to 12% remains unchanged as we continue to make occupancy gains combined with a strong annual rate increase while the COVID-19 variance continue to evolve and are becoming an ever present part of our operating environment I am incredibly proud of our leaders at Brookdale.
Who have risen to the challenges and continue to learn and innovate for the benefit of our residents associates and shareholders.
We are making positive steps forward on our path to recovery continuing to innovate and capitalize on new opportunities and our evolving world.
Our residents show US every day, the importance of lifelong learning growth and the power afforded to.
A team of dedicated individuals working together can accomplish incredible things.
We have that team at Brookdale.
I will now turn the call over to Steve.
Thanks, Andy Let me start with key takeaways first revpar increased more than 10% in the second quarter compared to the prior year quarter occupancy inflicted positive earlier than usual and we are entering the third quarter, which normally is the strongest quarter of sequential occupancy growth Rev.
Revpar was slightly lower on a sequential basis.
Second expenses on a sequential basis facility operating expenses were flat, including labor.
<unk> and <unk>.
August we accepted the long awaited phase for grants under the provider relief fund of approximately $60 million, we updated guidance to reflect this income and higher labor expense.
Now let me provide context for these highlights on a same community basis, starting with revenue.
Occupancy increased 420 basis points compared to the prior year quarter and sequentially increased 120 basis points.
Our sequential second quarter increase was significantly better than historical growth.
Poor or rate improved more than 4% compared to the prior year quarter and was 80 basis points lower on a sequential basis. The sequential change was due to strategic discounting in certain low occupancy communities to drive more move ins along with lower resident acuity.
During the pandemic, we had higher acuity residents move in we are now seeing move ins returned to more normal acuity levels.
This along with the sheer volume of new move ins as reflected in our care revenue.
With the leased senior housing units under construction since 2015, according to Nic and positive demographic tailwind, we see a long runway for topline growth.
Turning to operating expense starting with labor.
Second quarter Labor expense remained flat sequentially.
We reduced contract labor by more than 25% and Covid related labor moderated these expense reductions mitigated increases in staff wages due to our sizable net hires in the quarter and additional day and holiday in the quarter and a full quarter's impact of merit increases which were.
We implemented in mid March.
As expected the change in occupancy you only had a minor impact on labor expense due to our current levels of fixed costs.
As our permanent workforce stabilizes, we expect further reductions in contract labor for the balance of the year. Other facility operating expenses increased approximately $1 million or 60 basis points sequentially higher marketing investments to support the strong move in season and food expenses were partially offset by lower.
COVID-19 related expenses.
The second quarter, G&A expense, excluding transaction and organizational restructuring costs and noncash stock based comp.
It was lower on a sequential basis to reflect quarterly incentive compensation true ups, the 20% year over year reduction was primarily due to reducing expenses. Following the sale of our healthcare services business in 2021.
Adjusted EBITDA for the second quarter increased meaningfully on a sequential basis and compared to second quarter 2021.
The second quarter's adjusted free cash flow improved to $5 million sequentially.
The adjusted EBITDA improvement was partially offset by two drivers.
Net interest expense, which increased approximately $2 million of this quarter due to rising interest rates and capex, which increased more than $6 million, primarily with more unit remodeling as we had higher move ins.
Turning to liquidity as of June 30, total liquidity was $412 million compared to $476 million at the end of the first quarter. The phase four funding received in August will strengthen our liquidity with rising fed rate, we expect annual interest expense to be approximately 15.
Higher in 2021.
In addition, we expect to start refinancing our 2023 debt maturities later this year.
Now, let me summarize the key considerations of our revised guidance.
Our annual Revpar growth remains in the range of 10% to 12%.
We expect the third quarter sequential occupancy growth to exceed the second quarter's growth, which was 120 basis points.
Seasonally high occupancy growth in the third quarter will drive NOI and margin expansion annual labor costs will be higher than previously planned. However, we expect to see improvements in the second half of the year.
Occupancy driven cost increases are projected to be more than offset by further contract labor reductions as we fill openings in our permanent workforce. We have factored these updates into our community operating expenses and expect the annual expense increases to be slightly higher than they previously stated mid single digit range.
Remember, we will also factor the impact of expense inflation into our 2023 revenue rates in the second half. We expect continued NOI growth due to increased occupancy as well as lower labor costs as we continue to reduce contract labor.
The financial benefit of recognizing approximately $60 million of phase four funding is also incorporated into our guidance range.
Our revised adjusted EBITDA is expected to be in the range of $270 million to $290 million.
I remain enthusiastic about brookdale as growth opportunities.
Slowdown in new construction and the increase in demand for our growing senior demographic are fueling the occupancy trajectory combine this positive occupancy opportunity with strong rate potential and we see a compelling long term growth thesis I will now turn the call back over to Cindy as we closeout our.
Our prepared remarks, I want to let you know that we expect Steve we'll be taking a medical leave of absence, starting next week and we expect to be back in six to eight weeks. Steve is so important to all of US here at Brookdale and we wish him all the best and look forward to a speedy and full recovery.
<unk>.
Dawn <unk>, our Chief Accounting Officer, and Steve close colleague will be stepping in as our interim Chief Financial officer. During Steves absence Dawn has been with Brookdale for over 15 years and I'm confident that she will provide excellent leadership of the finance function in the interim.
As a team we are focused on capitalizing on the opportunities in front of us to help you monitor our progress we added a new slide in the Investor presentation that shows you. The progress we've made in the pandemic recovery and the opportunities we are focused on.
Our first goal is to achieve our pre pandemic occupancy levels, which was nearly 85% and then accelerate growth to return to our historically high occupancy level of 89%. There is a vast opportunity for brookdale and our stakeholders with lower construction start.
<unk> a meaningful improvement in the new supply outlook with the acceleration of demand through demographic growth and with Brookdale powerful topline growth and operational leadership, we are entering an extraordinary new era in senior living.
Thank you.
Ladies and gentlemen, if you would like to ask a question. Please press Star then one on your telephone keypad now.
I would like to withdraw your question. Please press star followed by number two when preparing to ask your question. Please and show your phone is on mute locally.
Our first question comes from Paul Q from Stifel Financial Corporation.
Your line is open.
Hey, good morning, everyone Sandy you made great strides and good morning.
Good morning.
Thank you added 3000 full time employees in the second quarter, which helps drive our agency labor by 25%.
Looking at the employee count basis.
Power units and demand today, I think that in the first quarter of 2020.
50000 employees in 45 occupied units today, you have 36000 employees all 39000 multifamily units. So the employee unit car ratio is still depressed. So the first part of my question is how should we think about the number of employees that you need to add each quarter to keep up with the current occupancy.
The growth in the second part is what kind of productivity gains should we expect from the various pilot program and the good point that you alluded to in the prepared remarks. Thank you.
So a great question and thank you for noticing our progress on the hires we're very pleased with the progress that we're making if you go back a year ago, we sold our health care services business on July one last year that was about 4200 people associate.
And so we would not expect to increase.
Those associates, but as I sit there and just think about big picture labor costs, There's really four things that I think about in terms of labor costs, all of which will improve our continued focus on net hires.
If you think about contract labor, it's two to three times the cost of our Brookdale associates regular time.
If you think about overtime, it's generally at least one and a half times as expensive as an associate who is working a regular share.
If you think about the number of new associates that we hire before they can have their very first productive hour they have to be trained.
And then if you think about where we'd like to get if we'd like to get to our associates, who are staffing our chefs using regular full time and part time share and.
And so our goal really is to appropriately staff our communities to meet residents' needs with our Brookdale associates, who are working regular full or part time shifts.
And as we have reduced the most expensive source of labor, which is contract labor a portion of that labor from overtime.
Further we significantly increased our new hires as you noted this temporarily increased our training costs.
So as we continue to grow our workforce.
Expect that we're going to continue to reduce that most expensive labor Saar, which is contract labor again, two to three X the cost of a normal associate and overtime, which is at least one and a half acts.
Once we get to a stabilized workforce, we expect to see an improvement in labor costs as our training costs normalized there's one additional point to think about when you're thinking about what the right size of our workforce is.
As COVID-19 wave roll throughout the U S. It's important to note that our associates spend the majority of their time outside of our communities.
All Americans they have the risk of contracting COVID-19, and so when they must core team. We have to continue to serve our residents were working to build a larger workforce. So that we have associates, who is it can't work for whatever reason, we can staff our communities with associates, who are working.
Ship paying regular wages and this is a really significant opportunity for improvement.
We're making good progress as evidenced by our 25% more than 25% reduction in contract labor, but it's going to take some time to get our workforce fully stabilized and I can't tell you. The exact number of associates that we're gonna need, but we are making great progress looking forward, we expect to reduce contract labor and premium.
Resulting in lower labor costs, while appropriately staffing our communities and with regard to the productivity point of your question. What's that allows us to do is to shift more of our of our shift to a regular time because workers can go in and they can see when they want to work and they can pick up that shift.
Might have gone too overtime or contract labor. So that's really what we're looking to do is staff more shifts you think regular wages.
Okay.
Thanks for that color. That's very helpful. My second question is about the rate outlook for next year.
You mentioned that you factor in some of the structural higher labor costs and Youre right decision for 2023, do you think you'll be able to pass through the.
Higher operating expenses next year in terms of a rate re growth to offset that.
I'm really optimistic about the strong pricing power and senior living we have to make sure that our product is affordable, but we provide incredible value for the services that we provide if I look at the social security rates that we're expecting to see next year, we're expecting to see a 10, 5% increase and.
Social security check so I think that's important and then when I think about our labor costs I really break it down into two pieces. There is an increase in our normal hourly wage for our associates and that's something that we'll price and but I do think as we go through the back half of the year, we are going to make significant progress.
On that premium labor by reducing contract labor and by reducing overtime, so the cost per well.
Our should go down as we make that progress and we will price that piece into rates for next year.
Thank you thanks, everyone. Good luck Steve.
Thanks, Tom.
Yeah.
Thank you. Our next question comes from Josh Raskin from Nephron Research Josh Your line is open.
Hi, Good morning, this is Josh for Josh.
Hi, This is actually mark on for Sandy.
Thanks for taking the question.
I was just wondering if you could provide a little more detail on.
The specific components driving that incremental labor pressure.
It's contemplated in guidance for the year.
So how much of that pressure is related to the increase in hiring youre seeing versus the increase in base wages or the slower than expected moderation in contract labor.
Are you still seeing wage inflation in the July and August or are you or have you started to see that stabilize a little bit.
Yeah, I think the biggest factor really is the contract labor has come down a little more slowly than we expected and as is the case oftentimes. It's shifting a piece of it is shifting into overtime, which is still at a premium. So that's really the biggest factor that IC. Steve is there anything that you want to.
Add to that.
I agree that it's the rate at which our contract labor is leaving.
System.
Slower than what we had originally projected.
Got it thanks, Thanks, Mark that makes sense.
And then just one quick follow up here, so just taking a step back.
Was wondering if you could provide a little detail on how you're thinking about the overall portfolio.
So do you think there is still areas for potential community sales in the future.
Or how do you think about that going forward.
When I think about our portfolio I think we've got a huge opportunity for occupancy recovery and the revenue that that drives and one of the things that we added to our investor presentation was a slide slide eight of the investor presentation that really shows the revenue opportunity and if you think about sort of where.
We are now on a consolidated basis, our occupancy is 74, 6% and if you can get back to sort of that pre pandemic occupancy of 84, 5% without affecting any rate just based on today's rate that's at least $350 million of incremental revenue.
And of course, if we can get back to our historic occupancy high of 89% that would drive at least $500 million of incremental revenue. So theres tremendous powerful upside built into our existing portfolio, having said that we always look at our portfolio to see if there are assets where.
They may not be the right assets for us I think on the sale perspective.
<unk> impact on our lease portfolio. However, it's important to look at the Optionality, but it's built into our lease portfolio and if you look at the supplement you can see sort of the leases that we have and when they are scheduled to roll out.
Assuming our portfolio recovered lastly, then we will extend those leases and that will continue to drive profitability. If for whatever reason the portfolio doesn't improve then we have the ability to improve operating income by cutting those assets. So that's how I think about the portfolio, but I'm really happy.
With the portfolio, we have today and optimistic about the significant opportunity that we have in front of us.
Great. Thanks, again, and best wishes to Steve.
Thanks Mark.
Thank you. Our next question comes from Steven Valiquette from Barclays. Steven Your line is open.
Great. Thanks, good morning, everybody.
So I guess here as we think about the elevated labor expense I just wanted to revisit the breakdown of these dynamics between assisted living versus independent living here in mid 'twenty two.
It just seems intuitive you would still have more cost pressure on the assisted living and memory care sides of the business due to higher acuity.
In light of that should we think about the margin recovery.
Assisted living maybe happening a little bit slower pace.
Versus independent living.
The remainder of 2002 and also into 2023.
Thanks.
If you look at our supplement on page nine we basically breakdown our same community operations between IL.
And our <unk> and you can see our labor expense is up sort of five 7% year over year on independent living and its up 16, 2% on assisted living memory care you are exactly right the higher acuity.
Parts of our portfolio have had more labor pressure, but that also gives us more.
Opportunity. It's also important to note that our revpar is much stronger in assisted living and memory care.
Yes that was going to be the follow up question here on some ways is it easier to make the ask when you think about the and resident rate updates for next year is it easier to make the asking because it's just higher visibility on the higher labor costs and pressure and maybe there is there any is there resistance on the independent living side or do you find that.
We're able to pursue what you want and resident rates there too in terms of how that's flowing right now.
I think the difference between al and memory care is al and memory care R&D driven products and the higher the acuity the higher the need for the product where as independent living is more of a lifestyle choice and so that has been something that has come back a little bit slower sort of post pandemic.
As needs driven purchases have always been.
Sorry.
Got it okay, alright, great. Thanks.
Thanks, so much.
Thank you.
The next question comes from Joanna <unk> from Bank of America Joanna Your line is open.
Hi, good morning, Thanks, so much worth taking the question here.
So I guess on the a couple of follow ups here on the on the contract labor I understand.
Okay.
We're able to reduce sequentially about sounds like things there.
Flower to the client that you originally had expected so any.
Guesses or I guess observations in terms of what's driving that.
Contract flavor or the client being being.
Declining but slower than expected.
Sure Joanna just just remember that.
Generally between the first quarter and second quarter.
See labor cost increase.
This quarter the labor costs were flat because we did cut contract labor, 25% now.
Now about half the savings were offset by.
Direct labor costs as we built the brookdale.
Associate base and the other half was.
Savings.
It was offset by seasonal increases in calendar items like an extra day, an extra holiday.
Full impact of the field Merit increase.
Now that said Amit.
It is taking us a little bit more time than than what we had originally projected.
Reducing the amount of.
Contract labor and back filling the.
Ed.
Brookdale associates, we wanted to get the right associated in the right job at the right time.
Those factors.
Have led to a little bit longer Taiwan.
One other thing that I want to just.
Highlight Joanna if you think about the Covid way sort of in the United States. They are incredibly difficult to predict but our associates.
But most of the time outside of the communities. So if an associate has the quarantine because of COVID-19 than what's going to happen is they can't work their shift at regular wages and so we might be too.
You either contract labor overtime too.
Phil that shift and if you look at the COVID-19 summary that we have in our supplement on page 20, it's important to note that that COVID-19 labor cost. It doesn't include the incremental costs of associates, who may need to quarantine and therefore, the incremental contract labor overtime that comes from that.
It kind of takes me to my next point on sort of the COVID-19 costs. If you think about just the.
The extra labor expense that we've had during the first half of the year and the other COVID-19 costs are covered cost of about $12 $3 million in the first half of the year that we've been lucky that this year, we've been able to offset those costs by $8 $8 million of other operating income, which is roughly similar to what we report.
Last year, and so again I'm grateful that we've gotten some.
Some funding too.
From the states to offset those incremental labor costs and other COVID-19 costs, but it is important to sort of make sure that we're matching.
Operating income and the Covid costs that go along with it.
No definitely makes sense to get the clients so when you're still seeing.
The disruption that you mentioned from the.
From the virus.
To follow up I had.
Good to see the then that hiring.
And but I think I want to say you mentioned earlier in the call something about the turnover still be high so I don't know if theres anything.
Two flash that out in terms of the turnover being higher.
Because the net hiring numbers are pretty good. So I just wanted to clarify that those two things.
Yeah, absolutely the labor markets are very dynamic and there is a lot of elevated turnover not just at brookdale, but across all industries and so we're doing a great job recruiting we still want to make progress with our retention getting that back.
Back down to the levels that we had pre pandemic and we're making progress but.
Not as quickly as I would like.
It's something that we are very focused on other team we want to make sure that we've got the right value proposition for our associates, we have enhanced some of the training that we offer so our caregivers for instance, Ken.
Take advantage of Brookdale provided funding to get their CNA or med Tech certification. So they can grow with us and we can help them build a better life through.
Through higher wages, and we wanted to give people as many opportunities to grow with brookdale as possible and we're doing just that.
No that's definitely helping I guess within the pirate numbers being pretty good for that.
That was the follow up on the I have a question.
On the pricing, which I guess.
We obviously thought that gets done.
The slight decline quarter over quarter, and you mentioned I guess there was some.
Before and the lower acuity, but he also mentioned discounting so huh.
Widespread I guess was this discounting.
And I guess on the lower acuity, what should we expect going forward. Thank you.
Yeah.
Let me step back and start with the lower acuity and what that means right. So we have residents who live with us and live with us for quite a while and so during the pandemic. What we saw is that more higher acuity residents moved in during the pandemic and that makes sense right because it was a very nice driven purpose.
Our niche driven purchase and as we've come out of the pandemic. What we're really grateful for is that we're returning to a more normal level of acuity of our new residents and because there are more new residents relative to the existing.
Base of residents that brings our overall acuity down because usually acuity increases the longer that you stay with us. So in the short term what that means is theres a little bit of pressure on our revenue, but in the long term what that should mean, we should have a longer length of stay because the residents are moving and when they're healthier. So that's the care revenue.
So the compression there we view it as a very good long term trend for the business.
Look at discounting we have always had an objective of getting.
The highest revenue per available room, which is a combination of occupancy growth and rate and in certain markets in certain communities. We basically have recognized the opportunity to accelerate our revpar growth by strategic discounting and so we've done that and as you can see it's allowed us to deliver outsized occupancy.
And see growth compared to the industry. So we think it's working and driving higher revpar.
Thank you thanks for the color.
Of course, thank you Joanna.
Thank you.
Our next question comes from Brian <unk> from Jefferies. Brian Your line is open.
Hey, good morning, Steve.
Steve and best wishes.
Good luck with that.
Cindy I guess my question as I think about the guidance right and just going back to Joanna questions.
You did a really good job breakdown contract labor in Q2. So maybe if you guys can help us think through the level of improvement in contract labor and occupancy that needs to happen in the back half of the year to get the guidance.
Given with adjustments you made in Q2.
Yeah, Brian . Thanks, so much for recognizing me improvement in Q2. It was great that we were able to keep labor relatively flat that offset our merit that offset the additional day that we had in Q2 plus the additional holiday so that really was.
Something that offset a lot of sequential seasonal pressure, Steve do you want to talk about moving forward.
Sure so.
On the guidance you you hit on them on the two big levers on both.
Occupancy and labor.
Occupancy occupancy side as you noted.
The Revpar guidance Hasnt changed so it's still a 10% to 12% increase year over year, and so you can kind of estimate.
<unk> growth that we're going to see an occupancy later on in the second.
As we go into the third quarter, which has historically been our highest growth.
Quarter.
Due to seasonality and then secondly on the labor improvement overall, we expect the occupancy driven cost increases should be more than offset by further contract labor reduction so kind of the.
Same stepped down.
In the third quarter, and then higher stepped down kind of in the.
In the fourth quarter for contract labor.
Got it Okay, and then sorry go.
Right.
Yes, you mentioned seasonality in your prepared remarks, so maybe if you can just help us or me.
Can you remind us how seasonality works for you guys month to month I know we started hitting.
The Q4 holiday season. So just any reminder, you can share with us how youre thinking of a seasonality factor for the rest of the year.
Yeah, I think the most important thing to think about is the revenue we billed revenue, but expenses, we pay day late and so if you think about sort of.
Q1 to Q2, we basically pick up an extra day and we pick up an extra holiday and then if you go from Q2, well if you go from first half the second half we have.
Three additional days in the second half and we have five holidays in the second half compared to one holiday in the first half.
Got it okay awesome. Thank you guys.
Thanks, Brian .
Yes.
Thank you ladies and gentlemen, currently we have no further questions. Therefore, I would like to hand back to seem to be S. CEO of company for any closing remarks Cindy. Please go ahead.
I mean can I check if Ben Hendrix.
I thought I saw him earlier Colin.
Yes, Mr. Hendrix I think he withdrew his question as he's no longer in the question skewed, but he he's active on the call.
Yeah.
Okay, great. Thanks over to Cindy I wanted to thank everyone, who took the time to listen today, we have really good questions and as you can imagine we are very excited about the opportunity in front of us not just from the occupancy recovery and maintaining strong rate growth, but also from the improvement in contract labor and overtime.
With that this concludes our call.
Ladies and gentlemen. This concludes today's conference call. Thank you for being with US today have a lovely day ahead you may disconnect your lines now.
Thank you bye.
Oh.
Uh huh.
Yeah.
Yeah.