Investors

As baby boomers age, Medicare enrollment rises, and so does the need for more high quality senior care facilities. CareTrust remains bullish on the senior healthcare space.

Press Release

CareTrust REIT Announces First Quarter 2022 Operating Results

05/05/22
Conference Call Scheduled for Friday, May 6, 2022 at 1:00 pm ET

SAN CLEMENTE, Calif., May 05, 2022 (GLOBE NEWSWIRE) -- CareTrust REIT, Inc. (Nasdaq:CTRE) today reported operating results for the quarter ended March 31, 2022, as well as other recent events.

For the quarter, CareTrust REIT reported:

  • 95% of contractual rents collected;
  • Net loss of $43.3 million and net loss per share of $0.45;
  • Normalized FFO of $35.9 million, a 5.2% increase over the prior year, and normalized FFO per share of $0.37;
  • Normalized FAD of $37.9 million, a 4.8% increase over the prior year, and normalized FAD per share of $0.39; and
  • A quarterly dividend of $0.275 per share, representing a payout ratio of approximately 71% on normalized FAD.

Key Operating Metrics

CareTrust’s President and Chief Executive Officer, Dave Sedgwick, commented on the Company’s collections amid continuing post-COVID disruptions across the industry in the quarter. “We’re pleased to report collection of 95% of contractual rents in the quarter, and that April rent came in at 93% without any security deposit application, as most of our operators are making the necessary moves to manage through the current headwinds,” he said. Mr. Sedgwick noted that the effects of a historically tight labor market, tapering of stimulus funds, and a lingering pandemic continue to present an operating environment where both the strengths and weaknesses of operators are magnified. “We are as committed as ever to support and to grow with the best-in-class operators in skilled nursing, seniors housing, and now behavioral health – many of whom are our operating partners already,” he added.

Looking at the occupancy in the quarter, Mr. Sedgwick reported that CareTrust’s skilled nursing portfolio occupancy held stable in the quarter over Q4 2021. As for seniors housing occupancy, he added, “After being flat for most of 2021 we are pleased to report a 100 bps increase in seniors housing in the quarter over Q4 2021.”

Portfolio Optimization

Mr. Sedgwick also reported on the Company’s previously announced plan to optimize its portfolio in 2022. “The current environment continues to provide an excellent opportunity to strengthen our portfolio through a combination of disciplined growth, key dispositions and re-tenanting and repositioning of assets,” he said. In February, the Company announced a comprehensive review and repositioning plan for 2022, affecting 32 of CareTrust’s 228 assets, and representing approximately 10% of contractual cash rents as of December 31, 2021. “27 of the 32 assets are now actively on the market,” he said.

Mr. Sedgwick also reported significant progress on CareTrust's previously announced intention to enter the behavioral health asset class. “We are pleased to announce that, since our last call, we have reached agreement with Landmark Recovery to convert three of our underperforming seniors housing facilities into residential addiction recovery centers,” he said, noting that the three properties are coming from the 32 assets included in CareTrust’s repositioning plan. “The behavioral space presents the company with a new and high-demand asset class where we can reposition certain existing assets in a way that fits our mission of matching great operators with great opportunities,” he said.

Investing in Growth

In addition to optimizing the portfolio in 2022, Mr. Sedgwick stated that the Company is also making key personnel changes aimed at capturing additional growth opportunities and further optimizing outcomes. “We are pleased to announce that industry veteran Scott Grossman has joined CareTrust as the Company’s Vice President of Asset Management,” said Mr. Sedgwick. He commented that Mr. Grossman’s experience in skilled nursing and seniors housing asset management brings a new level of large REIT expertise and leadership to that function at CareTrust. In addition, Mr. Sedgwick explained, “Scott heading up Asset Management allows us to strategically redeploy some key internal talent from portfolio management work to focusing on building the Company’s operator and investment pipelines, with an emphasis on sourcing off-market deals.”

Investments in the Quarter

During the quarter, CareTrust acquired a 155-bed skilled nursing facility in Ennis, Texas for a purchase price of $8.9 million, inclusive of transaction costs. The facility was added to the existing master lease with affiliates of Eduro Healthcare, who took over operations on February 1, 2022. Annual cash rent under the Eduro master lease increased by approximately $815,000 with CPI-based annual rent escalators. The initial term of Eduro's master lease with CareTrust was also extended by four years in connection with the transaction. The acquisition was funded using cash on hand.

In March 2022, CareTrust acquired a skilled nursing campus in Decatur, Illinois with 95 licensed skilled nursing beds, 46 assisted living units and five independent living units for a purchase price of $13.1 million, inclusive of transaction costs and capital expenditure commitments. The facility was added to the existing master lease with affiliates of WLC Management Firm, LLC, who took over operations on March 1, 2022. Annual cash rent under the WLC master lease increased by approximately $1.24 million with CPI-based annual rent escalators. The acquisition was funded using CareTrust's $600 million unsecured revolving credit facility.

Commenting on the investment pipeline, Mark Lamb, CareTrust’s Chief Investment Officer, said, “We’re encouraged by the pickup in deal flow crossing our desk.” Mr. Lamb added, “We are excited by the new operators and opportunities that we are currently seeing from our bread and butter skilled nursing and seniors housing acquisitions, potential debt investments from the planned debt partnership we announced last quarter and from the expansion of our investment box to include behavioral health.”

Guidance Discussion

Chief Financial Officer Bill Wagner commented on issuing guidance at this stage in CareTrust's asset management plan. “While progress has been made on the disposition strategy laid out last quarter, we need more visibility into the execution of dispositions and possible re-tenanting work over the coming months before issuing guidance for this year.”

Financial Results for Quarter Ended March 31, 2022 

Mr. Wagner reported that, for the first quarter, CareTrust reported a net loss of $43.3 million, or $(0.45) per diluted weighted-average common share, normalized FFO of $35.9 million, or $0.37 per diluted weighted-average common share, and normalized FAD of $37.9 million, or $0.39 per diluted weighted-average common share.

Mr. Wagner reported that the quarter’s GAAP financial results were impacted by the Company’s asset disposition plan and the applicable facilities meeting the criteria to be classified as held for sale. “These changes resulted in total impairments of $59.7 million,” he stated. Mr. Wagner further stated, “We view these adjustments as a necessary part of our overall asset management plan to sell or reposition certain facilities to strengthen our growth platform moving forward.”

Liquidity

As of quarter end, CareTrust reported net debt-to-annualized normalized run rate EBITDA of 3.9x, which is under the Company's target leverage range of 4.0x to 5.0x, and a net debt-to-enterprise value of approximately 26.6%. Mr. Wagner stated that as of today, the Company had approximately $105 million outstanding on its $600 million revolving credit line, with no scheduled debt maturities prior to 2024. He also disclosed that CareTrust currently has $22 million in cash on hand. He further noted that the Company currently has approximately $476.5 million in available authorization remaining on its at-the-market equity program. "With substantial availability on our revolver, and equity markets readily accessible to us at present, we continue to have a wide range of capital options for funding our opportunistic growth strategy," said Mr. Wagner.

Dividend Increased

During the quarter, CareTrust increased its quarterly dividend from $0.265 to $0.275 per common share. On an annualized basis, the payout ratio was approximately 74% based on first quarter 2022 normalized FFO, and 71% based on normalized FAD.

Conference Call

A conference call will be held on Friday, May 6, 2022, at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time), during which CareTrust’s management will discuss first quarter 2022 results, recent developments and other matters. The dial-in number for this call is (844) 220-4972 (U.S.) or (317) 973-4053 (International). The conference ID number is 3068616. To listen to the call online, or to view any financial or other statistical information required by SEC Regulation G, please visit the Investors section of the CareTrust REIT website at http://investor.caretrustreit.com. The call will be recorded, and will be available for replay via the website for 30 days following the call.

About CareTrustTM

CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. With a nationwide portfolio of long-term net-leased properties, and a growing portfolio of quality operators leasing them, CareTrust REIT is pursuing both external and organic growth opportunities across the United States. More information about CareTrust REIT is available at www.caretrustreit.com

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

This press release contains, and the related conference call will include, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical statements of fact and statements regarding the Company’s intent, belief or expectations, including, but not limited to, statements regarding the following: future financial and financing plans; strategies related to the Company's business and its portfolio, including plans to sell, re-tenant or repurpose selected Company assets, the Company's possible expansion into behavioral health properties and acquisition plans; growth prospects; operating and financial performance; expectations regarding the making of distributions and payment of dividends; and the performance of the Company’s tenants and operators and their respective facilities.

Words such as “anticipate,” “believe,” “could,” “expect,” “estimate,” “intend,” “may,” “plan,” “seek,” “should,” “will,” “would,” and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements, though not all forward-looking statements contain these identifying words. The Company’s forward-looking statements are based on management’s current expectations and beliefs, and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although the Company believes that the assumptions underlying these forward-looking statements are reasonable, they are not guarantees and the Company can give no assurance that its expectations will be attained. Factors which could have a material adverse effect on the Company’s operations and future prospects or which could cause actual results to differ materially from expectations include, but are not limited to: (i) the COVID-19 pandemic, including the risk of additional surges of COVID-19 infections due to the rate of public acceptance and efficacy of COVID-19 vaccines or to new and more contagious and/or vaccine resistant variants, and the measures taken to prevent the spread of COVID-19 and the related impact on our business or the businesses of our tenants; (ii) the ability and willingness of our tenants to meet and/or perform their obligations under the triple-net leases we have entered into with them, including, without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (iii) the risk that we may have to incur additional impairment charges related to our assets held for sale if we are unable to sell such assets at the prices we expect; (iv) the ability of our tenants to comply with applicable laws, rules and regulations in the operation of the properties we lease to them; (v) the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant; (vi) the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities, and the ability to acquire and lease the respective properties to such tenants on favorable terms; (vii) the ability to generate sufficient cash flows to service our outstanding indebtedness; (viii) access to debt and equity capital markets; (ix) fluctuating interest rates; (x) the ability to retain our key management personnel; (xi) the ability to maintain our status as a real estate investment trust (“REIT”); (xii) changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs; (xiii) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and (xiv) additional factors included in our Annual Report on Form 10-K for the year ended December 31, 2021, including in the section entitled “Risk Factors” in Item 1A of Part I of such report, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the SEC.

This press release and the related conference call provides information about the Company's financial results as of and for the quarter ended March 31, 2022 and is provided as of the date hereof, unless specifically stated otherwise. The Company expressly disclaims any obligation to update or revise any information in this press release or the related conference call (and replays thereof), including forward-looking statements, whether to reflect any change in the Company’s expectations, any change in events, conditions or circumstances, or otherwise.

As used in this press release or the related conference call, unless the context requires otherwise, references to “CTRE,” "CareTrust," “CareTrust REIT” or the “Company” refer to CareTrust REIT, Inc. and its consolidated subsidiaries. GAAP refers to generally accepted accounting principles in the United States of America.

Contact:
CareTrust REIT, Inc.
(949) 542-3130
ir@caretrustreit.com 


 
CARETRUST REIT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
    For the Three Months Ended March 31,
      2022       2021  
Revenues:      
  Rental income $ 46,007     $ 45,246  
  Interest and other income   469       505  
  Total revenues   46,476       45,751  
Expenses:      
  Depreciation and amortization   13,575       13,473  
  Interest expense   5,742       5,762  
  Property taxes   1,420       696  
  Impairment of real estate investments   59,683        
  Provision for loan losses, net   3,844        
  Property operating expenses   447        
  General and administrative   5,215       5,142  
  Total expenses   89,926       25,073  
Other income (loss):      
  Gain (loss) on sale of real estate   186       (192 )
Net (loss) income $ (43,264 )   $ 20,486  
         
(Loss) earnings per common share:      
  Basic $ (0.45 )   $ 0.21  
  Diluted $ (0.45 )   $ 0.21  
         
Weighted-average number of common shares:      
  Basic   96,410       95,378  
  Diluted   96,410       95,385  
         
Dividends declared per common share $ 0.275     $ 0.265  


 
CARETRUST REIT, INC.
RECONCILIATIONS OF NET (LOSS) INCOME TO NON-GAAP FINANCIAL MEASURES
(in thousands)
(Unaudited)
      Three Months Ended March 31,
        2022       2021  
           
Net (loss) income   $ (43,264 )   $ 20,486  
  Depreciation and amortization     13,575       13,473  
  Interest expense     5,742       5,762  
  Amortization of stock-based compensation     1,521       1,585  
EBITDA     (22,426 )     41,306  
  Impairment of real estate investments     59,683        
  Provision for loan losses, net     3,844        
  Provision for doubtful accounts and lease restructuring     977        
  Lease termination revenue           (63 )
  Property operating expenses     1,231        
  (Gain) loss on sale of real estate     (186 )     192  
Normalized EBITDA   $ 43,123     $ 41,435  
           
Net (loss) income   $ (43,264 )   $ 20,486  
  Real estate related depreciation and amortization     13,571       13,466  
  Impairment of real estate investments     59,683        
  (Gain) loss on sale of real estate     (186 )     192  
Funds from Operations (FFO)     29,804       34,144  
  Provision for loan losses, net     3,844        
  Provision for doubtful accounts and lease restructuring     977        
  Lease termination revenue           (63 )
  Property operating expenses     1,231        
Normalized FFO   $ 35,856     $ 34,081  


 
CARETRUST REIT, INC.
RECONCILIATIONS OF NET (LOSS) INCOME TO NON-GAAP FINANCIAL MEASURES (continued)
(in thousands, except per share data)
(Unaudited)
      Three Months Ended March 31,
        2022       2021  
           
Net (loss) income   $ (43,264 )   $ 20,486  
  Real estate related depreciation and amortization     13,571       13,466  
  Amortization of deferred financing fees     520       487  
  Amortization of stock-based compensation     1,521       1,585  
  Straight-line rental income     (6 )     (12 )
  Impairment of real estate investments     59,683        
  (Gain) loss on sale of real estate     (186 )     192  
Funds Available for Distribution (FAD)     31,839       36,204  
  Provision for loan losses, net     3,844        
  Provision for doubtful accounts and lease restructuring     977        
  Lease termination revenue           (63 )
  Property operating expenses     1,231        
Normalized FAD   $ 37,891     $ 36,141  
           
FFO per share   $ 0.31     $ 0.36  
Normalized FFO per share   $ 0.37     $ 0.36  
           
FAD per share   $ 0.33     $ 0.38  
Normalized FAD per share   $ 0.39     $ 0.38  
           
  Diluted weighted average shares outstanding [1]     96,701       95,621  
           
  [1] For the periods presented, the diluted weighted average shares have been calculated using the treasury stock method.


 
CARETRUST REIT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS - 5 QUARTER TREND
(in thousands, except per share data)
(Unaudited)
  Quarter Quarter Quarter Quarter Quarter
  Ended Ended Ended Ended Ended
  March 31,
2021
June 30,
2021
September 30,
2021
December 31,
2021
March 31,
2022
Revenues:          
Rental income $ 45,246   $ 47,744   $ 48,087   $ 49,118   $ 46,007  
Interest and other income   505     514     518     619     469  
Total revenues   45,751     48,258     48,605     49,737     46,476  
Expenses:          
Depreciation and amortization   13,473     13,843     13,968     14,056     13,575  
Interest expense   5,762     6,534     5,692     5,689     5,742  
Property taxes   696     766     1,004     1,108     1,420  
Impairment of real estate investments                   59,683  
Provision for loan losses, net                   3,844  
Property operating expenses                   447  
General and administrative   5,142     5,798     5,196     10,738     5,215  
Total expenses   25,073     26,941     25,860     31,591     89,926  
Other (loss) income:        
Loss on extinguishment of debt           (10,827 )        
(Loss) gain on sale of real estate   (192 )           115     186  
Total other (loss) income   (192 )       (10,827 )   115     186  
Net income (loss) $ 20,486   $ 21,317   $ 11,918   $ 18,261   $ (43,264 )
           
Diluted earnings (loss) per share $ 0.21   $ 0.22   $ 0.12   $ 0.19   $ (0.45 )
           
Diluted weighted average shares outstanding   95,385     96,120     96,297     96,552     96,410  


 
CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME (LOSS) TO NON-GAAP FINANCIAL MEASURES - 5 QUARTER TREND
(in thousands)
(Unaudited)
  Quarter Quarter Quarter Quarter Quarter
  Ended Ended Ended Ended Ended
  March 31,
2021
June 30,
2021
September 30,
2021
December 31,
2021
March 31,
2022
           
Net income (loss) $ 20,486   $ 21,317   $ 11,918   $ 18,261   $ (43,264 )
Depreciation and amortization   13,473     13,843     13,968     14,056     13,575  
Interest expense   5,762     6,534     5,692     5,689     5,742  
Amortization of stock-based compensation   1,585     1,810     1,802     5,635     1,521  
EBITDA   41,306     43,504     33,380     43,641     (22,426 )
Impairment of real estate investments                   59,683  
Provision for loan losses, net                   3,844  
Provision for doubtful accounts and lease restructuring                   977  
Lease termination revenue   (63 )                
Property operating expenses               8     1,231  
Loss (gain) on sale of real estate   192             (115 )   (186 )
Non-routine transaction costs               1,418      
Loss on extinguishment of debt           10,827          
Normalized EBITDA $ 41,435   $ 43,504   $ 44,207   $ 44,952   $ 43,123  
           
Net income (loss) $ 20,486   $ 21,317   $ 11,918   $ 18,261   $ (43,264 )
Real estate related depreciation and amortization   13,466     13,837     13,964     14,051     13,571  
Impairment of real estate investments                   59,683  
Loss (gain) on sale of real estate   192             (115 )   (186 )
Funds from Operations (FFO)   34,144     35,154     25,882     32,197     29,804  
Effect of the senior unsecured notes payable redemption       642              
Provision for loan losses, net                   3,844  
Provision for doubtful accounts and lease restructuring                   977  
Lease termination revenue   (63 )                
Property operating expenses               8     1,231  
Accelerated amortization of stock-based compensation               3,696      
Non-routine transaction costs               1,418      
Loss on extinguishment of debt           10,827          
Normalized FFO $ 34,081   $ 35,796   $ 36,709   $ 37,319   $ 35,856  


 
CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME (LOSS) TO NON-GAAP FINANCIAL MEASURES - 5 QUARTER TREND (continued)
(in thousands, except per share data)
(Unaudited)
  Quarter Quarter Quarter Quarter Quarter
  Ended Ended Ended Ended Ended
  March 31,
2021
June 30,
2021
September 30,
2021
December 31,
2021
March 31,
2022
           
Net income (loss) $ 20,486   $ 21,317   $ 11,918   $ 18,261   $ (43,264 )
Real estate related depreciation and amortization   13,466     13,837     13,964     14,051     13,571  
Amortization of deferred financing fees   487     495     519     521     520  
Amortization of stock-based compensation   1,585     1,810     1,802     5,635     1,521  
Straight-line rental income   (12 )   (8 )   (6 )   (6 )   (6 )
Impairment of real estate investments                   59,683  
Loss (gain) on sale of real estate   192             (115 )   (186 )
Funds Available for Distribution (FAD)   36,204     37,451     28,197     38,347     31,839  
Effect of the senior unsecured notes payable redemption       642              
Provision for loan losses, net                   3,844  
Provision for doubtful accounts and lease restructuring                   977  
Lease termination revenue   (63 )                
Property operating expenses               8     1,231  
Non-routine transaction costs               1,418      
Loss on extinguishment of debt           10,827          
Normalized FAD $ 36,141   $ 38,093   $ 39,024   $ 39,773   $ 37,891  
           
FFO per share $ 0.36   $ 0.36   $ 0.27   $ 0.33   $ 0.31  
Normalized FFO per share $ 0.36   $ 0.37   $ 0.38   $ 0.39   $ 0.37  
           
FAD per share $ 0.38   $ 0.39   $ 0.29   $ 0.40   $ 0.33  
Normalized FAD per share $ 0.38   $ 0.40   $ 0.40   $ 0.41   $ 0.39  
           
Diluted weighted average shares outstanding [1]   95,621     96,366     96,592     96,646     96,701  
           
[1] For the periods presented, the diluted weighted average shares have been calculated using the treasury stock method.


 
CARETRUST REIT, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
        March 31, 2022   December 31, 2021
Assets:        
Real estate investments, net $ 1,402,889     $ 1,589,971  
Other real estate investments   15,155       15,155  
Assets held for sale, net   141,716       4,835  
Cash and cash equivalents   26,586       19,895  
Accounts and other receivables   1,110       2,418  
Prepaid expenses and other assets, net   5,668       7,512  
Deferred financing costs, net   817       1,062  
      Total assets $ 1,593,941     $ 1,640,848  
             
Liabilities and Equity:      
Senior unsecured notes payable, net $ 394,484     $ 394,262  
Senior unsecured term loan, net   199,189       199,136  
Unsecured revolving credit facility   105,000       80,000  
Accounts payable, accrued liabilities and deferred rent liabilities   23,785       25,408  
Dividends payable   26,900       26,285  
      Total liabilities   749,358       725,091  
             
Equity:        
Common stock   965       963  
Additional paid-in capital   1,195,586       1,196,839  
Cumulative distributions in excess of earnings   (351,968 )     (282,045 )
      Total equity   844,583       915,757  
      Total liabilities and equity $ 1,593,941     $ 1,640,848  


 
CARETRUST REIT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
  For the Three Months Ended March 31,
    2022       2021  
Cash flows from operating activities:      
Net (loss) income $ (43,264 )   $ 20,486  
Adjustments to reconcile net (loss) income to net cash provided by operating activities:      
Depreciation and amortization (including below-market ground leases)   13,594       13,486  
Amortization of deferred financing costs   520       487  
Amortization of stock-based compensation   1,521       1,585  
Straight-line rental income   (6 )     (12 )
Adjustment for collectibility of rental income   977        
(Gain) loss on sale of real estate   (186 )     192  
Impairment of real estate investments   59,683        
Provision for loan losses, net   3,844        
Change in operating assets and liabilities:      
Accounts and other receivables   337       (100 )
Prepaid expenses and other assets, net   (404 )     278  
Accounts payable, accrued liabilities and deferred rent liabilities   (2,037 )     (2,453 )
   Net cash provided by operating activities   34,579       33,949  
Cash flows from investing activities:      
Acquisitions of real estate, net of deposits applied   (21,915 )     (138,151 )
Purchases of equipment, furniture and fixtures and improvements to real estate   (1,918 )     (1,319 )
Investment in other loans receivable   (2,086 )     (700 )
Principal payments received on real estate mortgage and other loans receivable   888       56  
Net proceeds from sales of real estate   959       6,814  
   Net cash used in investing activities   (24,072 )     (133,300 )
Cash flows from financing activities:      
Proceeds from the issuance of common stock, net         16,191  
Borrowings under unsecured revolving credit facility   25,000       120,000  
Net-settle adjustment on restricted stock   (2,772 )     (1,330 )
Dividends paid on common stock   (26,044 )     (23,960 )
   Net cash (used in) provided by financing activities   (3,816 )     110,901  
Net increase in cash and cash equivalents   6,691       11,550  
Cash and cash equivalents as of the beginning of period   19,895       18,919  
Cash and cash equivalents as of the end of period $ 26,586     $ 30,469  


 
CARETRUST REIT, INC.
DEBT SUMMARY
(dollars in thousands)
(Unaudited)
                       
          March 31, 2022
  Interest   Maturity       % of   Deferred   Net Carrying
Debt Rate   Date   Principal   Principal   Loan Costs   Value
                       
Fixed Rate Debt                      
                       
Senior unsecured notes payable 3.875 %   2028   $ 400,000     56.7 %   $ (5,516 )   $ 394,484  
Floating Rate Debt                      
                       
Senior unsecured term loan 1.957 % [1] 2026     200,000     28.4 %     (811 )     199,189  
Unsecured revolving credit facility 1.557 % [2] 2024 [3]   105,000     14.9 %       [4]   105,000  
  1.820 %         305,000     43.3 %     (811 )     304,189  
                       
Total Debt 2.986 %       $ 705,000     100.0 %   $ (6,327 )   $ 698,673  
                       
[1] Funds can be borrowed at applicable LIBOR plus 1.50% to 2.20% or at the Base Rate (as defined) plus 0.50% to 1.20%.
[2] Funds can be borrowed at applicable LIBOR plus 1.10% to 1.55% or at the Base Rate (as defined) plus 0.10% to 0.55%.
[3] Maturity date assumes exercise of two 6-month extension options.
[4] Deferred financing fees are not shown net for the unsecured revolving credit facility and are included in assets on the balance sheet.
 

Non-GAAP Financial Measures

EBITDA represents net income before interest expense (including amortization of deferred financing costs), amortization of stock-based compensation, and depreciation and amortization. Normalized EBITDA represents EBITDA as further adjusted to eliminate the impact of certain items that the Company does not consider indicative of core operating performance, such as recovery of previously reversed rent, lease termination revenue, property operating expenses, gains or losses from dispositions of real estate, real estate impairment charges, provision for loan losses, non-routine transaction costs, loss on extinguishment of debt, and provision for doubtful accounts and lease restructuring, as applicable. EBITDA and Normalized EBITDA do 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. EBITDA and Normalized EBITDA do not purport to be indicative of cash available to fund future cash requirements, including the Company’s ability to fund capital expenditures or make payments on its indebtedness. Further, the Company’s computation of EBITDA and Normalized EBITDA may not be comparable to EBITDA and Normalized EBITDA reported by other REITs.

Funds from Operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts (“Nareit”), and Funds Available for Distribution (“FAD”) are important non-GAAP supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation except on land, such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that uses historical cost accounting for depreciation could be less informative. Thus, Nareit created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP.

FFO is defined by Nareit as net income computed in accordance with GAAP, excluding gains or losses from dispositions of real estate investments, real estate depreciation and amortization and real estate impairment charges, and adjustments for unconsolidated partnerships and joint ventures. The Company computes FFO in accordance with Nareit’s definition.

FAD is defined as FFO excluding noncash income and expenses, such as amortization of stock-based compensation, amortization of deferred financing fees and the effects of straight-line rent. The Company considers FAD to be a useful supplemental measure to evaluate the Company’s operating results excluding these income and expense items to help investors, analysts and other interested parties compare the operating performance of the Company between periods or as compared to other companies on a more consistent basis.

In addition, the Company reports Normalized FFO and Normalized FAD, which adjust FFO and FAD for certain revenue and expense items that the Company does not believe are indicative of its ongoing operating results, such as provision for loan losses, provision for doubtful accounts and lease restructuring, loss on extinguishment of debt, recovery of previously reversed rent, lease termination revenue and property operating expenses. By excluding these items, investors, analysts and our management can compare Normalized FFO and Normalized FAD between periods more consistently.

While FFO, Normalized FFO, FAD and Normalized FAD are relevant and widely-used measures of operating performance among REITs, they do 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. FFO, Normalized FFO, FAD and Normalized FAD do not purport to be indicative of cash available to fund future cash requirements.

Further, the Company’s computation of FFO, Normalized FFO, FAD and Normalized FAD may not be comparable to FFO, Normalized FFO, FAD and Normalized FAD 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 FAD differently than the Company does.

The Company believes that net income, as defined by GAAP, is the most appropriate earnings measure. The Company also believes that the use of EBITDA, Normalized EBITDA, FFO, Normalized FFO, FAD and Normalized FAD, 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. The Company considers EBITDA and Normalized EBITDA useful in understanding the Company’s operating results independent of its capital structure, indebtedness and other charges that are not indicative of its ongoing results, thereby allowing for a more meaningful comparison of operating performance between periods and against other REITs. The Company considers FFO, Normalized FFO, FAD and Normalized FAD to be useful measures for reviewing comparative operating and financial performance because, by excluding gains or losses from real estate dispositions, impairment charges and real estate depreciation and amortization, and, for FAD and Normalized FAD, by excluding noncash income and expenses such as amortization of stock-based compensation, amortization of deferred financing fees, and the effects of straight-line rent, FFO, Normalized FFO, FAD and Normalized FAD can help investors compare the Company’s operating performance between periods and to other REITs.


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Source: CareTrust REIT, Inc.

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