CareTrust REIT Announces Third Quarter 2020 Operating Results
11/05/20For the quarter,
- Net income of
$21.6 million and net income per diluted weighted-average common share of$0.23 ; - Normalized FFO of
$32.5 million and normalized FFO per diluted weighted-average common share of$0.34 ; - Normalized FAD of
$33.9 million and normalized FAD per diluted weighted-average common share of$0.36 ; and - A net debt-to-normalized EBITDA ratio of 3.1x, and a net debt-to-enterprise value of 22.0%, each as of quarter-end.
Lengthening the Runway
“Our tenants and their outstanding care teams continue to make impressive gains against the global pandemic," said
Financial Results for Quarter Ended
Chief Financial Officer
Liquidity
As of quarter end, CareTrust reported net debt-to-normalized EBITDA of approximately 3.1x, which is well under the Company's target leverage range of 4.0x to 5.0x, and represents a net debt-to-enterprise value of approximately 22.0%.
Pipeline Recovering
Turning to growth,
2020 Guidance Increased
CareTrust increased its 2020 annual guidance projecting, on a per-diluted weighted-average common share basis, net income of approximately
The guidance is based on a diluted weighted-average common share count of 95.4 million shares, and per CareTrust’s standard practice includes all investments, dispositions and loan repayments made to date, and assumes no new acquisitions, dispositions, new loans or loan repayments beyond those completed or announced to date and no new debt incurrences or new equity issuances. “Naturally, we note that material changes in economic and other factors related to the COVID-19 pandemic and the government’s responses thereto could alter our outlook at any time,” he concluded.
Dividend Maintained
During the quarter, CareTrust declared a quarterly dividend of
Conference Call
A conference call will be held on
About CareTrust™
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 future financial and financing positions, business and acquisition strategies, growth prospects, operating and financial performance, expectations regarding the making of distributions, payment of dividends, compliance with and changes in governmental regulations, 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 and the measures taken to prevent its spread 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 ability of our tenants to comply with applicable laws, rules and regulations in the operation of the properties we lease to them; (iv) 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; (v) 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; (vi) the ability to generate sufficient cash flows to service our outstanding indebtedness; (vii) access to debt and equity capital markets; (viii) fluctuating interest rates; (ix) the ability to retain our key management personnel; (x) the ability to maintain our status as a real estate investment trust (“REIT”); (xi) changes in the
This press release and the related conference call provides information about the Company's financial results as of and for the quarter ended
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
Contact:
(949) 542-3130
ir@caretrustreit.com
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||||
(in thousands, except per share data) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
For the Three Months Ended |
For the Nine Months Ended |
|||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||
Revenues: | ||||||||||||||||||
Rental income | $ | 45,036 | $ | 31,577 | $ | 130,007 | $ | 114,047 | ||||||||||
Independent living facilities | 634 | 929 | 1,874 | 2,676 | ||||||||||||||
Interest and other income | 17 | 808 | 2,314 | 2,450 | ||||||||||||||
Total revenues | 45,687 | 33,314 | 134,195 | 119,173 | ||||||||||||||
Expenses: | ||||||||||||||||||
Depreciation and amortization | 13,086 | 13,420 | 39,485 | 38,759 | ||||||||||||||
Interest expense | 5,519 | 7,064 | 18,082 | 21,209 | ||||||||||||||
Property taxes | 857 | 1,025 | 2,179 | 2,307 | ||||||||||||||
Independent living facilities | 568 | 806 | 1,660 | 2,232 | ||||||||||||||
Impairment of real estate investments | — | 16,692 | — | 16,692 | ||||||||||||||
Provision for loan losses | — | 1,076 | — | 1,076 | ||||||||||||||
General and administrative | 4,105 | 3,502 | 12,921 | 11,418 | ||||||||||||||
Total expenses | 24,135 | 43,585 | 74,327 | 93,693 | ||||||||||||||
Other income (loss): | ||||||||||||||||||
Gain (loss) on sale of real estate | — | 217 | (56 | ) | 217 | |||||||||||||
Net income (loss) | $ | 21,552 | $ | (10,054 | ) | $ | 59,812 | $ | 25,697 | |||||||||
Earnings (loss) per common share: | ||||||||||||||||||
Basic | $ | 0.23 | $ | (0.11 | ) | $ | 0.63 | $ | 0.28 | |||||||||
Diluted | $ | 0.23 | $ | (0.11 | ) | $ | 0.63 | $ | 0.28 | |||||||||
Weighted-average number of common shares: | ||||||||||||||||||
Basic | 95,214 | 95,103 | 95,195 | 92,409 | ||||||||||||||
Diluted | 95,214 | 95,103 | 95,195 | 92,409 | ||||||||||||||
Dividends declared per common share | $ | 0.25 | $ | 0.225 | $ | 0.75 | $ | 0.675 |
RECONCILIATIONS OF NET INCOME (LOSS) TO NON-GAAP FINANCIAL MEASURES | |||||||||||||||||||||
(in thousands) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||
Net income (loss) | $ | 21,552 | $ | (10,054 | ) | $ | 59,812 | $ | 25,697 | ||||||||||||
Depreciation and amortization | 13,086 | 13,420 | 39,485 | 38,759 | |||||||||||||||||
Interest expense | 5,519 | 7,064 | 18,082 | 21,209 | |||||||||||||||||
Amortization of stock-based compensation | 972 | 981 | 2,819 | 3,122 | |||||||||||||||||
EBITDA | 41,129 | 11,411 | 120,198 | 88,787 | |||||||||||||||||
Impairment of real estate investments | — | 16,692 | — | 16,692 | |||||||||||||||||
Provision for loan losses | — | 1,076 | — | 1,076 | |||||||||||||||||
Provision for doubtful accounts and lease restructuring | — | 12,471 | — | 12,471 | |||||||||||||||||
Recovery of previously reversed rent | (1,047 | ) | — | (1,047 | ) | — | |||||||||||||||
Lease termination revenue | (1,106 | ) | — | (1,106 | ) | — | |||||||||||||||
Property operating expenses | — | 218 | (248 | ) | 218 | ||||||||||||||||
(Gain) loss on sale of real estate | — | (217 | ) | 56 | (217 | ) | |||||||||||||||
Normalized EBITDA | $ | 38,976 | $ | 41,651 | $ | 117,853 | $ | 119,027 | |||||||||||||
Net income (loss) | $ | 21,552 | $ | (10,054 | ) | $ | 59,812 | $ | 25,697 | ||||||||||||
Real estate related depreciation and amortization | 13,078 | 13,404 | 39,445 | 38,709 | |||||||||||||||||
Impairment of real estate investments | — | 16,692 | — | 16,692 | |||||||||||||||||
(Gain) loss on sale of real estate | — | (217 | ) | 56 | (217 | ) | |||||||||||||||
Funds from Operations (FFO) | 34,630 | 19,825 | 99,313 | 80,881 | |||||||||||||||||
Provision for loan losses | — | 1,076 | — | 1,076 | |||||||||||||||||
Provision for doubtful accounts and lease restructuring | — | 12,471 | — | 12,471 | |||||||||||||||||
Recovery of previously reversed rent | (1,047 | ) | — | (1,047 | ) | — | |||||||||||||||
Lease termination revenue | (1,106 | ) | — | (1,106 | ) | — | |||||||||||||||
Property operating expenses | — | 218 | (248 | ) | 218 | ||||||||||||||||
Normalized FFO | $ | 32,477 | $ | 33,590 | $ | 96,912 | $ | 94,646 |
RECONCILIATIONS OF NET INCOME (LOSS) TO NON-GAAP FINANCIAL MEASURES (continued) | |||||||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||
Net income (loss) | $ | 21,552 | $ | (10,054 | ) | $ | 59,812 | $ | 25,697 | ||||||||||||
Real estate related depreciation and amortization | 13,078 | 13,404 | 39,445 | 38,709 | |||||||||||||||||
Amortization of deferred financing fees | 487 | 488 | 1,462 | 1,516 | |||||||||||||||||
Amortization of stock-based compensation | 972 | 981 | 2,819 | 3,122 | |||||||||||||||||
Straight-line rental income | (17 | ) | (546 | ) | (65 | ) | (1,483 | ) | |||||||||||||
Impairment of real estate investments | — | 16,692 | — | 16,692 | |||||||||||||||||
(Gain) loss on sale of real estate | — | (217 | ) | 56 | (217 | ) | |||||||||||||||
Funds Available for Distribution (FAD) | 36,072 | 20,748 | 103,529 | 84,036 | |||||||||||||||||
Provision for loan losses | — | 1,076 | — | 1,076 | |||||||||||||||||
Provision for doubtful accounts and lease restructuring | — | 12,471 | — | 12,471 | |||||||||||||||||
Recovery of previously reversed rent | (1,047 | ) | — | (1,047 | ) | — | |||||||||||||||
Lease termination revenue | (1,106 | ) | — | (1,106 | ) | — | |||||||||||||||
Property operating expenses | — | 218 | (248 | ) | 218 | ||||||||||||||||
Normalized FAD | $ | 33,919 | $ | 34,513 | $ | 101,128 | $ | 97,801 | |||||||||||||
FFO per share | $ | 0.36 | $ | 0.21 | $ | 1.04 | $ | 0.87 | |||||||||||||
Normalized FFO per share | $ | 0.34 | $ | 0.35 | $ | 1.02 | $ | 1.02 | |||||||||||||
FAD per share | $ | 0.38 | $ | 0.22 | $ | 1.09 | $ | 0.91 | |||||||||||||
Normalized FAD per share | $ | 0.36 | $ | 0.36 | $ | 1.06 | $ | 1.06 | |||||||||||||
Diluted weighted average shares outstanding [1] | 95,353 | 95,313 | 95,318 | 92,650 | |||||||||||||||||
[1] For the periods presented, the diluted weighted average shares have been calculated using the treasury stock method. |
CONSOLIDATED STATEMENTS OF OPERATIONS - 5 QUARTER TREND | |||||||||||||||||
(in thousands, except per share data) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | |||||||||||||
Ended | Ended | Ended | Ended | Ended | |||||||||||||
2019 |
2019 |
2020 |
2020 |
2020 |
|||||||||||||
Revenues: | |||||||||||||||||
Rental income | $ | 31,577 | $ | 41,620 | $ | 42,464 | $ | 42,507 | $ | 45,036 | |||||||
Independent living facilities | 929 | 713 | 625 | 615 | 634 | ||||||||||||
Interest and other income | 808 | 1,895 | 1,251 | 1,046 | 17 | ||||||||||||
Total revenues | 33,314 | 44,228 | 44,340 | 44,168 | 45,687 | ||||||||||||
Expenses: | |||||||||||||||||
Depreciation and amortization | 13,420 | 13,063 | 13,160 | 13,239 | 13,086 | ||||||||||||
Interest expense | 7,064 | 6,916 | 6,714 | 5,849 | 5,519 | ||||||||||||
Property taxes | 1,025 | 741 | 485 | 837 | 857 | ||||||||||||
Independent living facilities | 806 | 666 | 546 | 546 | 568 | ||||||||||||
Impairment of real estate investments | 16,692 | — | — | — | — | ||||||||||||
Provision for loan losses | 1,076 | — | — | — | — | ||||||||||||
General and administrative | 3,502 | 3,740 | 4,054 | 4,762 | 4,105 | ||||||||||||
Total expenses | 43,585 | 25,126 | 24,959 | 25,233 | 24,135 | ||||||||||||
Other income (loss): | |||||||||||||||||
Gain (loss) on sale of real estate | 217 | 1,560 | (56 | ) | — | — | |||||||||||
Net (loss) income | $ | (10,054 | ) | $ | 20,662 | $ | 19,325 | $ | 18,935 | $ | 21,552 | ||||||
Diluted (loss) earnings per share | $ | (0.11 | ) | $ | 0.22 | $ | 0.20 | $ | 0.20 | $ | 0.23 | ||||||
Diluted weighted average shares outstanding | 95,103 | 95,144 | 95,161 | 95,208 | 95,214 |
RECONCILIATIONS OF NET (LOSS) INCOME TO NON-GAAP FINANCIAL MEASURES - 5 QUARTER TREND |
||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Quarter | Quarter | Quarter | Quarter | Quarter | ||||||||||||||||
Ended | Ended | Ended | Ended | Ended | ||||||||||||||||
2019 |
2019 |
2020 |
2020 |
2020 |
||||||||||||||||
Net (loss) income | $ | (10,054 | ) | $ | 20,662 | $ | 19,325 | $ | 18,935 | $ | 21,552 | |||||||||
Depreciation and amortization | 13,420 | 13,063 | 13,160 | 13,239 | 13,086 | |||||||||||||||
Interest expense | 7,064 | 6,916 | 6,714 | 5,849 | 5,519 | |||||||||||||||
Amortization of stock-based compensation | 981 | 982 | 884 | 963 | 972 | |||||||||||||||
EBITDA | 11,411 | 41,623 | 40,083 | 38,986 | 41,129 | |||||||||||||||
Impairment of real estate investments | 16,692 | — | — | — | — | |||||||||||||||
Provision for loan losses | 1,076 | — | — | — | — | |||||||||||||||
Provision for doubtful accounts and lease restructuring |
12,471 | 464 | — | — | — | |||||||||||||||
Recovery of previously reversed rent | — | — | — | — | (1,047 | ) | ||||||||||||||
Lease termination revenue | — | — | — | — | (1,106 | ) | ||||||||||||||
Property operating expenses | 218 | (84 | ) | (217 | ) | (31 | ) | — | ||||||||||||
(Gain) loss on sale of real estate | (217 | ) | (1,560 | ) | 56 | — | — | |||||||||||||
Normalized EBITDA | $ | 41,651 | $ | 40,443 | $ | 39,922 | $ | 38,955 | $ | 38,976 | ||||||||||
Net (loss) income | $ | (10,054 | ) | $ | 20,662 | $ | 19,325 | $ | 18,935 | $ | 21,552 | |||||||||
Real estate related depreciation and amortization | 13,404 | 13,046 | 13,144 | 13,223 | 13,078 | |||||||||||||||
Impairment of real estate investments | 16,692 | — | — | — | — | |||||||||||||||
(Gain) loss on sale of real estate | (217 | ) | (1,560 | ) | 56 | — | — | |||||||||||||
Funds from Operations (FFO) | 19,825 | 32,148 | 32,525 | 32,158 | 34,630 | |||||||||||||||
Provision for loan losses | 1,076 | — | — | — | — | |||||||||||||||
Provision for doubtful accounts and lease restructuring |
12,471 | 464 | — | — | — | |||||||||||||||
Recovery of previously reversed rent | — | — | — | — | (1,047 | ) | ||||||||||||||
Lease termination revenue | — | — | — | — | (1,106 | ) | ||||||||||||||
Property operating expenses | 218 | (84 | ) | (217 | ) | (31 | ) | — | ||||||||||||
Normalized FFO | $ | 33,590 | $ | 32,528 | $ | 32,308 | $ | 32,127 | $ | 32,477 |
RECONCILIATIONS OF NET (LOSS) INCOME 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 | ||||||||||||||||
2019 |
2019 |
2020 |
2020 |
2020 |
||||||||||||||||
Net (loss) income | $ | (10,054 | ) | $ | 20,662 | $ | 19,325 | $ | 18,935 | $ | 21,552 | |||||||||
Real estate related depreciation and amortization | 13,404 | 13,046 | 13,144 | 13,223 | 13,078 | |||||||||||||||
Amortization of deferred financing fees | 488 | 487 | 487 | 488 | 487 | |||||||||||||||
Amortization of stock-based compensation | 981 | 982 | 884 | 963 | 972 | |||||||||||||||
Straight-line rental income | (546 | ) | 98 | (26 | ) | (22 | ) | (17 | ) | |||||||||||
Impairment of real estate investments | 16,692 | — | — | — | — | |||||||||||||||
(Gain) loss on sale of real estate | (217 | ) | (1,560 | ) | 56 | — | — | |||||||||||||
Funds Available for Distribution (FAD) | 20,748 | 33,715 | 33,870 | 33,587 | 36,072 | |||||||||||||||
Provision for loan losses | 1,076 | — | — | — | — | |||||||||||||||
Provision for doubtful accounts and lease restructuring |
12,471 | 464 | — | — | — | |||||||||||||||
Recovery of previously reversed rent | — | — | — | — | (1,047 | ) | ||||||||||||||
Lease termination revenue | — | — | — | — | (1,106 | ) | ||||||||||||||
Property operating expenses | 218 | (84 | ) | (217 | ) | (31 | ) | — | ||||||||||||
Normalized FAD | $ | 34,513 | $ | 34,095 | $ | 33,653 | $ | 33,556 | $ | 33,919 | ||||||||||
FFO per share | $ | 0.21 | $ | 0.34 | $ | 0.34 | $ | 0.34 | $ | 0.36 | ||||||||||
Normalized FFO per share | $ | 0.35 | $ | 0.34 | $ | 0.34 | $ | 0.34 | $ | 0.34 | ||||||||||
FAD per share | $ | 0.22 | $ | 0.35 | $ | 0.36 | $ | 0.35 | $ | 0.38 | ||||||||||
Normalized FAD per share | $ | 0.36 | $ | 0.36 | $ | 0.35 | $ | 0.35 | $ | 0.36 | ||||||||||
Diluted weighted average shares outstanding [1] | 95,313 | 95,340 | 95,306 | 95,295 | 95,353 | |||||||||||||||
[1] For the periods presented, the diluted weighted average shares have been calculated using the treasury stock method. | ||||||||||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
(in thousands) | ||||||||||||
(Unaudited) | ||||||||||||
Assets: | ||||||||||||
Real estate investments, net | $ | 1,423,238 | $ | 1,414,200 | ||||||||
Other real estate investments, net | — | 33,300 | ||||||||||
Assets held for sale, net | — | 34,590 | ||||||||||
Cash and cash equivalents | 19,101 | 20,327 | ||||||||||
Accounts and other receivables, net | 2,093 | 2,571 | ||||||||||
Prepaid expenses and other assets | 7,097 | 10,850 | ||||||||||
Deferred financing costs, net | 2,287 | 3,023 | ||||||||||
Total assets | $ | 1,453,816 | $ | 1,518,861 | ||||||||
Liabilities and Equity: | ||||||||||||
Senior unsecured notes payable, net | $ | 296,479 | $ | 295,911 | ||||||||
Senior unsecured term loan, net | 198,872 | 198,713 | ||||||||||
Unsecured revolving credit facility | — | 60,000 | ||||||||||
Accounts payable and accrued liabilities | 18,232 | 14,962 | ||||||||||
Dividends payable | 24,197 | 21,684 | ||||||||||
Total liabilities | 537,780 | 591,270 | ||||||||||
Equity: | ||||||||||||
Common stock | 952 | 951 | ||||||||||
Additional paid-in capital | 1,163,418 | 1,162,990 | ||||||||||
Cumulative distributions in excess of earnings | (248,334 | ) | (236,350 | ) | ||||||||
Total equity | 916,036 | 927,591 | ||||||||||
Total liabilities and equity | $ | 1,453,816 | $ | 1,518,861 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
(in thousands) | |||||||||
(Unaudited) | |||||||||
For the Nine Months Ended |
|||||||||
2020 | 2019 | ||||||||
Cash flows from operating activities: | |||||||||
Net income | $ | 59,812 | $ | 25,697 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||
Depreciation and amortization (including below-market ground leases) | 39,529 | 38,789 | |||||||
Amortization of deferred financing costs | 1,462 | 1,516 | |||||||
Amortization of stock-based compensation | 2,819 | 3,122 | |||||||
Straight-line rental income | (65 | ) | (1,483 | ) | |||||
Adjustment for collectibility of rental income | — | 12,078 | |||||||
Noncash interest income | — | (31 | ) | ||||||
Loss (gain) on sale of real estate | 56 | (217 | ) | ||||||
Interest income distribution from other real estate investment | 1,346 | 463 | |||||||
Impairment of real estate investments | — | 16,692 | |||||||
Provision for loan losses | — | 1,076 | |||||||
Change in operating assets and liabilities: | |||||||||
Accounts and other receivables, net | 543 | (6,043 | ) | ||||||
Prepaid expenses and other assets | 267 | (348 | ) | ||||||
Accounts payable and accrued liabilities | 2,616 | 3,847 | |||||||
Net cash provided by operating activities | 108,385 | 95,158 | |||||||
Cash flows from investing activities: | |||||||||
Acquisitions of real estate, net of deposits applied | (42,075 | ) | (298,557 | ) | |||||
Improvements to real estate | (5,713 | ) | (1,230 | ) | |||||
Purchases of equipment, furniture and fixtures | (581 | ) | (2,926 | ) | |||||
Investment in real estate mortgage and other loans receivable | (13,958 | ) | (14,699 | ) | |||||
Principal payments received on real estate mortgage and other loans receivable | 80,873 | 11,959 | |||||||
Repayment of other real estate investment | 2,327 | 2,204 | |||||||
Escrow deposits for potential acquisitions of real estate | (1,000 | ) | (22,920 | ) | |||||
Net proceeds from sales of real estate | 2,189 | 218 | |||||||
Net cash provided by (used in) investing activities | 22,062 | (325,951 | ) | ||||||
Cash flows from financing activities: | |||||||||
Proceeds from (costs paid for) the issuance of common stock, net | (404 | ) | 195,963 | ||||||
Proceeds from the issuance of senior unsecured term loan | — | 200,000 | |||||||
Borrowings under unsecured revolving credit facility | 15,000 | 235,000 | |||||||
Payments on unsecured revolving credit facility | (75,000 | ) | (265,000 | ) | |||||
Payments on senior unsecured term loan | — | (100,000 | ) | ||||||
Payments of deferred financing costs | — | (4,534 | ) | ||||||
Net-settle adjustment on restricted stock | (1,986 | ) | (2,524 | ) | |||||
Dividends paid on common stock | (69,283 | ) | (59,155 | ) | |||||
Net cash (used in) provided by financing activities | (131,673 | ) | 199,750 | ||||||
Net decrease in cash and cash equivalents | (1,226 | ) | (31,043 | ) | |||||
Cash and cash equivalents, beginning of period | 20,327 | 36,792 | |||||||
Cash and cash equivalents, end of period | $ | 19,101 | $ | 5,749 |
DEBT SUMMARY | ||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Interest | Maturity | % of | Deferred | Net Carrying |
||||||||||||||||
Debt | Rate | Date | Principal | Principal | Loan Costs |
Value | ||||||||||||||
Fixed Rate Debt | ||||||||||||||||||||
Senior unsecured notes payable | 5.250 | % | 2025 | $ | 300,000 | 60.0 | % | $ | (3,521 | ) | $ | 296,479 | ||||||||
Floating Rate Debt | ||||||||||||||||||||
Senior unsecured term loan | 1.649 | % | [1] | 2026 | 200,000 | 40.0 | % | (1,128 | ) | 198,872 | ||||||||||
Unsecured revolving credit facility |
— | % | [2] | 2024 | [3] | — | — | — | [4] | — | ||||||||||
1.649 | % | 200,000 | 40.0 | % | (1,128 | ) | 198,872 | |||||||||||||
Total Debt | 3.810 | % | $ | 500,000 | 100.0 | % | $ | (4,649 | ) | $ | 495,351 | |||||||||
[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 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. | ||||||||||||||||||||
RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES | |||||||||
(shares in thousands) | |||||||||
(Unaudited) | |||||||||
Updated Guidance | |||||||||
Full Year 2020 Guidance[1] | |||||||||
Low | High | ||||||||
Net income | $ | 0.83 | $ | 0.84 | |||||
Real estate related depreciation and amortization | 0.55 | 0.55 | |||||||
(Gain) loss on sale of real estate | (0.00 | ) | (0.00 | ) | |||||
Funds from Operations (FFO) | 1.38 | 1.39 | |||||||
Recovery of previously reversed rent | (0.01 | ) | (0.01 | ) | |||||
Lease termination revenue | (0.01 | ) | (0.01 | ) | |||||
Property operating expenses | (0.00 | ) | (0.00 | ) | |||||
Normalized FFO | $ | 1.36 | $ | 1.37 | |||||
Net income | $ | 0.83 | $ | 0.84 | |||||
Real estate related depreciation and amortization | 0.55 | 0.55 | |||||||
Amortization of deferred financing fees | 0.02 | 0.02 | |||||||
Amortization of stock-based compensation | 0.04 | 0.04 | |||||||
Straight-line rental income | (0.00 | ) | (0.00 | ) | |||||
(Gain) loss on sale of real estate | (0.00 | ) | (0.00 | ) | |||||
Funds Available for Distribution (FAD) | 1.44 | 1.45 | |||||||
Recovery of previously reversed rent | (0.01 | ) | (0.01 | ) | |||||
Lease termination revenue | (0.01 | ) | (0.01 | ) | |||||
Property operating expenses | (0.00 | ) | (0.00 | ) | |||||
Normalized FAD | $ | 1.42 | $ | 1.43 | |||||
Weighted average shares outstanding: | |||||||||
Diluted | 95,378 | 95,378 | |||||||
[1]This guidance assumes and includes (i) all investments, dispositions and loan repayments made to date, (ii) no new acquisitions, dispositions, new loans or loan repayments beyond those completed or announced to date and (iii) no new debt incurrences or new equity issuances. It does not contemplate future negative impacts, if any, that are related to the COVID-19 pandemic, which are highly uncertain and cannot be predicted at this time. |
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 real estate impairment charges, provision for loan losses, provision for doubtful accounts and lease restructuring, recovery of previously reversed rent, lease termination revenue, property operating expenses and gains or losses from dispositions of real estate. 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
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, 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.
Source: CareTrust REIT, Inc.