Capital Senior Living Makes More C-Suite Changes Amid Falling Revenue, Stock

DALLAS — In a move to get its financial house in order, Capital Senior Living Corp. (NYSE: CSU) has announced that Brett Lee, the company’s chief operating officer, is no longer with the company. Meanwhile, the company hired Michael Fryar to the newly created role of chief revenue officer. 

The announcement came on the company’s fourth-quarter earnings call on Thursday, Feb. 28. It was the first earnings call for new CEO Kim Lody, who did not mince words about the company’s performance.

“We are very disappointed with the company’s fourth-quarter and full-year results, and I am fully committed to taking the necessary steps to improve the company’s execution, operations and financial performance,” said Lody. “Since joining Capital Senior Living as CEO in early January, I have been working diligently with the team to set a new path forward that we expect to lead to stabilization of our operations in 2019 and provide a platform for cash flow generation and profitable growth in the years ahead.”

The first initiatives already implemented by Lody include sales management reorganization, reducing field labor by about 250 positions, focusing more on community-centered operations and creating the chief revenue officer position.

“Capital Senior Living has not executed with the precision we need to grow revenue over the long term and drive shareholder value,” continued Lody. “Our chief revenue officer will strengthen our use of market and community analytics, lead marketing strategy and execution, develop and execute sales training programs, enhance and differentiate our resident experience, and further develop relationships with strategic business partners.”

Although it was not specifically stated that Lee was fired, Lody cited the need for “a change in operational leadership” as the reason behind his departure. Lody will serve as interim COO while the company seeks a replacement for Lee.

Fryar most recently served as vice president of North America marketing for GN Hearing, which was also Lody’s former employer. The hearing device manufacturer is part of the medical device division of the GN Group, which works on audio solutions for medical, professional and consumer markets. At GN Hearing, Fryar led marketing strategy, product management, communications, technical support, consumer support and specialty sales teams for multiple business units across North America. He was an integral part of the leadership team responsible for several consecutive years of above-market growth and market share gains, according to CSU.

The moves come amid falling cash flow and stock price for the company. Full-year 2018 revenue was $460 million, a 1.5 percent decrease from 2017. The company’s stock price closed at $5.54 per share the evening prior to the call, then immediately dropped to $4.68 in the hours following the call. The five-year high of the company’s stock price was $27.50, which occurred on April 10, 2015.

Based in Dallas, CSU is one of the largest owners and operators of seniors housing in the United States. The company ranked ninth on the 2018 ASHA 50, with 129 communities totaling 16,523 units.