Seniors Housing Weekly Update-- Earnings Season Brings Some Interesting News
August 14, 2012
Earnings Season Brings Some Interesting News
You always hope it is a quiet week when you leave for a summer vacation, but it is not always the case. It was in the middle of earnings season, and although not a surprise, the EBITDAR margin for Assisted Living Concepts is finally getting closer to reality, dropping from 37% a year ago to 30% in the most recent quarter. And it should be dropping further as the new management focuses on quality and spending money for it. Investors finally got the message, and the stock has dropped 50% since the end of July. Part of the investor concern is regarding the SEC investigation under way, including an allegation that ALC was filling some units with employees to meet occupancy requirements with a certain landlord. We had heard rumors about that a few months ago, but it was so outlandish we assumed they were simply that, rumors, and didn’t report on it. But sometimes when there is smoke….And Brookdale Senior Living disclosed that Bell Sheriff will be retiring as CEO and they are looking for a successor. Although not surprising news, it’s too bad. He’s one of the good guys.