Sabra Reports Third Quarter 2011 Results; Announces Acquisition; Declares Quarterly Dividend; and Increases Guidance for 2011
Copyright: | 2011 GlobeNewswire, Inc. |
Source: | GlobeNewswire |
Wordcount: | 5027 |
RECENT HIGHLIGHTS
- For the third quarter, posted FFO and AFFO of
$0.28 and$0.38 , respectively, per diluted share, and net income per diluted share of$0.07 .
- On
November 1, 2011 , we closed the acquisition of two skilled nursing facilities located inTexas for$14.2 million (the "Encore Portfolio Acquisition"), bringing our total 2011 acquisitions to approximately$210 million .
- On
November 2, 2011 , our board of directors declared a quarterly cash dividend of$0.32 per share of common stock. The dividend will be paid onDecember 2, 2011 to stockholders of record as of the close of business onNovember 15, 2011 .
Commenting on the third quarter results and recent acquisition activity,
Performance for the Third Quarter of 2011
During the third quarter of 2011, we recognized FFO of
Encore Portfolio
On
Creekside Senior Living Update
As previously announced on
LIQUIDITY
As of September 30, 2011, we had approximately
OUTLOOK
For the full year 2011, we expect FFO to range between
Estimates of FFO, AFFO, Normalized AFFO and net income per common share include the impact of acquisitions closed subsequent to
CONFERENCE CALL AND COMPANY INFORMATION
A conference call to discuss the third quarter 2011 results will be held on
ABOUT SABRA
The
FORWARD-LOOKING STATEMENTS SAFE HARBOR
Statements made in this release that are not historical facts are "forward-looking" statements (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These statements may be identified, without limitation, by the use of "expects," "believes," "intends," "should" or comparable terms or the negative thereof. Forward-looking statements in this release include all statements regarding our expectations concerning our acquisition pipeline and our outlook for the full year 2011.
These statements are made as of the date hereof and are subject to known and unknown risks, uncertainties, assumptions and other factors—many of which are out of the Company's control and difficult to forecast—that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks and uncertainties include but are not limited to: our dependence on Sun Healthcare Group, Inc. ("
TENANT INFORMATION
This release includes information regarding
NOTE REGARDING NON-GAAP FINANCIAL MEASURES
This release includes the following financial measures defined as non-GAAP financial measures by the
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FINANCIAL HIGHLIGHTS | ||
(dollars in thousands, except per share data) | ||
Three Months Ended |
Nine Months Ended |
|
Revenues | ||
EBITDA | ||
Net income | ||
FFO | ||
AFFO | ||
Normalized AFFO | ||
Per share data: | ||
Diluted EPS | ||
Diluted FFO | ||
Diluted AFFO | ||
Diluted Normalized AFFO | ||
Weighted-average number of common shares outstanding, diluted: | ||
EPS & FFO | 33,049,621 | 27,891,690 |
AFFO & Normalized AFFO | 33,320,262 | 28,142,867 |
Net cash flow from operations | ||
September 30, 2011 | December 31, 2010 | |
Real Estate Portfolio | ||
Total Equity Investments (#) | 94 | 86 |
Total Equity Investments ($) | ||
Total Licensed Beds/Units | 10,578 | 9,603 |
Weighted Average Remaining Lease Term (in months) | 146 | 136 |
Total Debt Investments (#) | 1 | — |
— | ||
Three Months Ended |
Twelve Months Ended |
|
Facility EBITDARM Coverage (1) | 2.07x | 2.08x |
Facility EBITDAR Coverage (1) | 1.59x | 1.61x |
Tenant EBITDAR Coverage (1) | 1.82x | 1.83x |
September 30, 2011 | December 31, 2010 | |
Debt | ||
Principal | ||
Fixed Rate Debt | ||
Variable Rate Debt | 59,456 | 60,315 |
Total Debt | 384,180 | 386,440 |
Rate | ||
Fixed Rate Debt | 7.57% | 7.56% |
Variable Rate Debt | 5.50% | 5.50% |
Total Debt | 7.25% | 7.24% |
% of Total | ||
Fixed Rate Debt | 84.5% | 84.4% |
Variable Rate Debt | 15.5% | 15.6% |
Total Debt | 100.0% | 100.0% |
Availability Under Credit Facility: | ||
Available Liquidity (Unrestricted Cash and Availability Under Credit Facility) |
(1) All references in this release to Facility EBITDAR, Facility EBITDARM and Tenant EBITDAR and related coverages are presented one month in arrears. Information for the Aurora Portfolio is not included in the information presented because the Aurora Portfolio was not acquired until the end of the period presented.
CONSOLIDATED STATEMENTS OF INCOME | ||
(in thousands, except share and per share data) | ||
Three Months Ended |
Nine Months Ended |
|
Revenues: | ||
Rental income | ||
Interest income | 176 | 393 |
Total revenues | 21,470 | 57,876 |
Expenses: | ||
Depreciation and amortization | 6,850 | 19,227 |
Interest | 7,624 | 22,726 |
General and administrative | 4,652 | 10,245 |
Total expenses | 19,126 | 52,198 |
Net income | ||
Net income per common share, basic | ||
Net income per common share, diluted | ||
Weighted-average number of common shares outstanding, basic | 32,986,657 | 27,797,411 |
Weighted-average number of common shares outstanding, diluted | 33,049,621 | 27,891,690 |
Dividends per common share |
CONSOLIDATED BALANCE SHEETS | ||
(in thousands, except share and per share data) | ||
September 30, 2011 |
December 31, 2010 |
|
Assets | ||
Real estate investments, net of accumulated depreciation of |
||
Cash and cash equivalents | 56,417 | 74,233 |
Restricted cash | 6,286 | 4,716 |
Deferred tax assets | 26,300 | 26,300 |
Prepaid expenses, deferred financing costs and other assets | 19,791 | 12,013 |
Total assets | ||
Liabilities and stockholders' equity | ||
Mortgage notes payable | ||
Senior unsecured notes payable | 225,000 | 225,000 |
Accounts payable and accrued liabilities | 17,641 | 9,286 |
Tax liability | 26,300 | 26,300 |
Total liabilities | 428,121 | 422,026 |
Stockholders' equity: | ||
Preferred stock, |
— | — |
Common stock, |
369 | 251 |
Additional paid-in capital | 343,748 | 177,275 |
Cumulative distributions in excess of net income | (14,193) | 7 |
Total stockholders' equity | 329,924 | 177,533 |
Total liabilities and stockholders' equity |
|
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CONSOLIDATED STATEMENT OF CASH FLOWS | |
(in thousands) | |
Nine Months Ended |
|
Cash flows from operating activities: | |
Net income | |
Adjustments to reconcile net income to net cash provided by operating activities: | |
Depreciation and amortization | 19,227 |
Amortization of deferred financing costs | 1,507 |
Stock-based compensation expense | 3,249 |
Amortization of premium on notes payable | (11) |
Straight-line rental income adjustments | (720) |
Changes in operating assets and liabilities: | |
Prepaid expenses and other assets | 556 |
Accounts payable and accrued liabilities | 7,860 |
Restricted cash | (2,837) |
Net cash provided by operating activities | 34,509 |
Cash flows from investing activities: | |
Acquisitions of real estate | (187,700) |
Acquisition of note receivable | (5,348) |
Additions to real estate | (86) |
Net cash used in investing activities | (193,134) |
Cash flows from financing activities: | |
Principal payments on mortgage notes payable | (2,249) |
Payments of deferred financing costs | (495) |
Issuance of common stock | 163,431 |
Dividends paid | (19,878) |
Net cash provided by financing activities | 140,809 |
Net decrease in cash and cash equivalents | (17,816) |
Cash and cash equivalents, beginning of period | 74,233 |
Cash and cash equivalents, end of period | |
Supplemental disclosure of cash flow information: | |
Interest paid |
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RECONCILIATIONS OF NET INCOME TO EBITDA, FUNDS FROM OPERATIONS (FFO), | ||
ADJUSTED FUNDS FROM OPERATIONS (AFFO) AND NORMALIZED AFFO | ||
(in thousands, except share and per share data) | ||
Three Months Ended |
Nine Months Ended |
|
Net income | ||
Interest expense | 7,624 | 22,726 |
Depreciation and amortization | 6,850 | 19,227 |
EBITDA | ||
Three Months Ended |
Nine Months Ended |
|
Net income | ||
Add: | ||
Depreciation of real estate assets | 6,850 | 19,227 |
Funds from Operations (FFO) | ||
Acquisition pursuit costs | 2,643 | 2,954 |
Stock-based compensation | 771 | 3,249 |
Straight-line rental income adjustments | (591) | (720) |
Amortization of deferred financing costs | 512 | 1,507 |
Adjusted Funds from Operations (AFFO) | ||
Start-up costs | — | 310 |
Normalized AFFO | ||
Net income per diluted common share | ||
FFO per diluted common share | ||
AFFO per diluted common share | ||
Normalized AFFO per diluted common share | ||
Weighted average number of common shares outstanding, diluted: | ||
Net income and FFO | 33,049,621 | 27,891,690 |
AFFO and Normalized AFFO | 33,320,262 | 28,142,867 |
2011 OUTLOOK | ||
Low | High | |
Net income | ||
Add: | ||
Depreciation and amortization of real estate assets | 0.88 | 0.88 |
Funds from Operations (FFO) | ||
Acquisition pursuit costs | 0.10 | 0.10 |
Stock-based compensation expense | 0.13 | 0.13 |
Straight-line rental income adjustments | (0.06) | (0.06) |
Amortization of deferred financing costs | 0.07 | 0.07 |
Adjusted Funds from Operations (AFFO) | ||
Start-up costs | 0.01 | 0.01 |
Normalized AFFO |
Except as otherwise noted above, the foregoing projections reflect management's view of current and future market conditions, including assumptions with respect to the earnings impact of the events referenced in this release, as of the date of this release. These estimates do not reflect the potential impact of future acquisitions or the impact on the Company's stock based compensation for changes in the price of the Company's common stock. There can be no assurance that the Company's actual results will not differ materially from the estimates set forth above. Except as otherwise required by law, the Company assumes no, and hereby disclaims any, obligation to update any of the foregoing projections as a result of new information or new or future developments.
DEFINITIONS OF NON-GAAP FINANCIAL MEASURES
This press release includes the non-GAAP financial measures of EBITDA, FFO, AFFO, normalized AFFO, FFO per diluted share, AFFO per diluted share and normalized AFFO per diluted share, which are reconciled to net income, which we believe is the most comparable GAAP measure. We believe that the use of FFO, AFFO and Normalized AFFO (and the related per share amounts), combined with the required GAAP presentations, improves the understanding of operating results of REITs among investors and makes comparisons of operating results among such companies more meaningful.
EBITDA. The real estate industry uses earnings before interest, taxes, depreciation and amortization ("EBITDA"), a non-GAAP financial measure, as a measure of both operating performance and liquidity. The Company uses EBITDA to measure both its operating performance and liquidity. By excluding interest expense, EBITDA allows investors to measure the Company's operating performance independent of its capital structure and indebtedness and, therefore, allows for a more meaningful comparison of its operating performance between quarters as well as annual periods and to compare its operating performance to that of other companies, both in the real estate industry and in other industries. As a liquidity measure, the Company believes that EBITDA helps investors analyze the Company's ability to meet its interest payments on outstanding debt. The Company believes investors should consider EBITDA in conjunction with net income (the primary measure of the Company's performance) and the other required GAAP measures of its performance and liquidity, to improve their understanding of the Company's operating results and liquidity, and to make more meaningful comparisons of its performance between periods and against other companies. EBITDA has limitations as an analytical tool and should be used in conjunction with the Company's required GAAP presentations. EBITDA does not reflect the Company's historical cash expenditures or future cash requirements for capital expenditures or contractual commitments. While EBITDA is a relevant and widely used measure of operating performance and liquidity, it does not represent net income or cash flow from operations as defined by GAAP and it should not be considered as an alternative to those indicators in evaluating operating performance or liquidity. Further, the Company's computation of EBITDA may not be comparable to similar measures reported by other companies.
Facility EBITDAR(M). Earnings before interest, taxes, depreciation, amortization, rent ("EBITDAR") and management fees ("EBITDARM") for a particular facility accruing to the operator/tenant of the property (not the Company), for the period presented. The Company uses Facility EBITDAR(M) in determining Facility EBITDAR(M) Coverages. Facility EBITDAR(M) has limitations as an analytical tool. Facility EBITDAR(M) does not reflect historical cash expenditures or future cash requirements for facility capital expenditures or contractual commitments. In addition, Facility EBITDAR(M) does not represent a property's net income or cash flow from operations and should not be considered an alternative to those indicators. However, the Company receives periodic financial information from operators/tenants regarding the performance of the Company's facilities under the operator's/tenant's management. The Company utilizes Facility EBITDAR(M) as a supplemental measure of the ability of those properties to generate sufficient liquidity to meet related obligations to the Company and EBITDARM in particular to evaluate the core operations of the properties by eliminating management fees, which vary based on operator/tenant and its operating structure. All facility financial performance data was derived solely from information provided by operators/tenants and borrowers without independent verification by the Company. All facility financial performance data are presented one month in arrears. The Company includes Facility EBITDAR(M) for a property if it was operated at any time during the period presented subject to a lease with the Company. Information related to the Aurora Portfolio is not included in the information presented because the Aurora Portfolio was not acquired until the end of the period presented.
Facility EBITDAR(M) Coverage. Facility EBITDAR(M) for the trailing 3 and 12 month periods prior to and including the period presented divided by the same period cash rent. Facility EBITDAR(M) coverage is a supplemental measure of a property's ability to generate cash flows for the operator/tenant (not the Company) to meet the operator's/tenant's related cash rent and other obligations to the Company. However, its usefulness is limited by, among other things, the same factors that limit the usefulness of Facility EBITDAR(M). All facility financial performance data were derived solely from information provided by operators/tenants and borrowers without independent verification by the Company. All facility financial performance data are presented one month in arrears. Information related to the Aurora Portfolio is not included in the information presented because the Aurora Portfolio was not acquired until the end of the period presented.
Funds From Operations ("FFO") and Adjusted Funds from Operations ("AFFO"). The Company believes that net income as defined by GAAP is the most appropriate earnings measure. The Company also believes that Funds From Operations, or FFO, as defined by the
Normalized AFFO. Normalized AFFO represents AFFO adjusted for one-time start-up costs. The Company considers normalized AFFO to be a useful measure to evaluate the Company's operating results excluding start-up costs. Normalized AFFO can help investors compare the operating performance of the Company between periods or as compared to other companies. Normalized AFFO does not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating the Company's liquidity or operating performance. Normalized AFFO also does not consider the costs associated with capital expenditures related to the Company's real estate assets nor does it purport to be indicative of cash available to fund the Company's future cash requirements. Further, the Company's computation of normalized AFFO may not be comparable to normalized AFFO reported by other REITs that do not define FFO in accordance with the current NAREIT definition or that interpret the current NAREIT definition or define AFFO or normalized AFFO differently from the Company.
Tenant EBITDAR. Facility EBITDAR, as defined herein, plus EBITDAR for the period presented for all other operations of any entities that guarantee the tenants' lease obligations to the Company. The Company uses Tenant EBITDAR in determining Tenant EBITDAR Coverage. As with Facility EBITDAR, the Company receives the underlying information from its tenants and, with respect to Tenant EBITDAR, the guarantors of its tenants' lease obligation to the Company. To the extent that a particular tenant's lease obligations are not guaranteed by another entity, Tenant EBITDAR and Facility EBITDAR with respect to a particular tenant are the same. The Company utilizes Tenant EBITDAR as a supplemental measure of the ability of the tenant to meet its cash rent and other obligations to the Company should the facilities be unable to generate sufficient liquidity to meet related obligations to the Company. The usefulness of Tenant EBITDAR is limited by the same factors that limit the usefulness of Facility EBITDAR. All facility and tenant financial performance data was derived solely from information provided by operators/tenants, guarantors and borrowers without independent verification by the Company. All facility and tenant financial performance data are presented one month in arrears. The Company includes Tenant EBITDAR with respect to property if the property was operated at any time during the period presented subject to a lease with the Company. Information related to the Aurora Portfolio is not included in the information presented because the Aurora Portfolio was not acquired until the end of the period presented.
Tenant EBITDAR Coverage. Tenant EBITDAR for the trailing 3 and 12 month periods prior to and including the period presented divided by the same period rent for all of our facilities plus rent expense for other operations of any entity that guarantees the tenants' lease obligation to the Company. Tenant EBITDAR coverage is a supplemental measure of a tenant's ability to meet its cash rent and other obligations to the Company. However, its usefulness is limited by, among other things, the same factors that limit the usefulness of Facility EBITDAR and Tenant EBITDAR. All facility and tenant financial performance data were derived solely from information provided by operators/tenants, guarantors and borrowers without independent verification by the Company. All facility and tenant financial performance data are presented one month in arrears. Information related to the Aurora Portfolio is not included in the information presented because the Aurora Portfolio was not acquired until the end of the period presented.
CONTACT: Investor & Media Inquiries: (949) 679-0410
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