Capital Senior Living (CSU) Misses Q4 EPS by 8c

Capital Senior Living (NYSE: CSU) reported Q4 EPS of ($0.60), $0.08 worse than the analyst estimate of ($0.52). Revenue for the quarter came in at $108.7 million versus the consensus estimate of $109.31 million.

“During 2019, we put in place the operational discipline necessary to improve the business for the long term, and as a result, we are pleased to report that our operating performance stabilized in the fourth quarter,” said Kimberly S. Lody, President and Chief Executive Officer. “Specifically, we have improved the quality of our products and services, upgraded our management talent, improved our data and systems, and enhanced the efficiency and effectiveness of our operational processes. In addition, we have strengthened the Company’s financial foundation through the sale of non-core communities and the accretive early terminations of our master leases with Healthpeak, Ventas and Welltower. All of these actions will improve our operating performance going forward, reduce our debt and lease liabilities, and significantly enhance our financial flexibility and resilience.”

Ms. Lody continued, “As the COVID-19 pandemic continues to unfold, we are relentlessly focused on the safety and wellbeing of our residents, employees and caregivers. This is, and will remain, our highest priority. We are taking all precautionary safety measures, following guidance from the CDC and other government authorities, and focusing on prevention and education to keep our communities safe. We are closely monitoring updates from federal, state, and local sources and will continue to evolve our response as we receive new information.”

COVID-19 Business Update

At the onset of the COVID-19 pandemic, the Company’s operations teams swiftly implemented comprehensive protocols and best-practices across the portfolio based on guidance from the Centers for Disease Control as well as federal, state and local authorities. All communities have executed risk-mitigation actions, such as restricting access and assessing the health status of every person entering the communities, including the Company’s employees, all visitors, and all outside service providers.

Through mid-March 2020, the Company delivered results in line with its expectations. Although in-person community tours have now slowed, the Company is relying on its virtual tours, social media and other electronic means to continue engaging with prospective residents and their families. New residents continue to move in, but at a lower rate than in recent months, and the level of move-outs is also trending lower. The Company expects to recognize increases in labor costs due to the need for premium labor to supplement staffing, and increases in costs for medical supplies. To offset the COVID-related expenditures, the Company has reduced spending on non-essential supplies, travel costs and all other discretionary items, and has ceased all non-critical capital expenditure projects. The Company will continue to monitor these trends and conditions while working to mitigate the potential impact on its revenues, expenses and liquidity.

The company is evaluating the CARES stimulus bill, and plans to apply relevant provisions of the bill to the fullest extent possible.

For earnings history and earnings-related data on Capital Senior Living (CSU) click here.

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