SAN CLEMENTE, Calif., Feb. 07, 2017 (GLOBE NEWSWIRE) -- CareTrust REIT, Inc. (NASDAQ:CTRE) reported today
operating results for the fourth quarter of 2016 and for the full year 2016, as well as other recent events.
For the quarter, CareTrust REIT:
- Posted net income of $0.14, normalized FFO of $0.28 and normalized FAD of $0.29, all per diluted weighted-average common
share;
- Raised $80.9 million net proceeds in an underwritten public equity offering;
- Acquired four properties (consisting of three skilled nursing facilities and one skilled nursing campus) and initiated a new
net-lease tenant relationship with Priority Management Group; and
- Invested approximately $95.9 million (inclusive of transaction costs) at a blended initial cash yield of 8.9%.
For the full year 2016, CareTrust REIT:
- Posted net income of $0.52, normalized FFO of $1.10 and normalized FAD of $1.17, all per diluted weighted-average common
share;
- Raised $186.7 million net proceeds in two underwritten public equity offerings;
- Acquired 33 properties (consisting of 17 skilled nursing facilities, 13 assisted living facilities, and three skilled nursing
campuses), initiated seven new net-lease tenant relationships, and expanded four existing net-lease tenant relationships;
- Made two preferred equity investments to develop two skilled nursing facilities, both of which are currently under
construction;
- Invested approximately $288.0 million (inclusive of transaction costs) at a blended initial cash yield of 9.0%; and
- Garnered multiple credit rating increases, with Moody's raising both its corporate credit rating on CareTrust REIT and its
rating on CareTrust REIT's 5.875% Senior Unsecured Notes to B1 (from B2), each with a stable outlook, and Standard & Poor's
raising both its corporate credit rating on CareTrust to B+ (from B), with a stable outlook, and its issue rating on CareTrust
REIT's 5.875% Senior Unsecured Notes to BB- (from B+).
Subsequent to year-end, CareTrust REIT acquired two assisted living facilities for approximately $26.1 million
(inclusive of transaction costs), generating an initial cash yield of 8.3%.
Approximately $288.0 Million in Full Year 2016 New Investments
Discussing CareTrust REIT’s progress during the quarter and full year 2016, Chairman and Chief Executive Officer
Greg Stapley remarked, “Our fourth quarter Texas acquisition and related new operator relationship, together with our equity raise
to match-fund the acquisition, brought a great finish to the year.” He noted that 2016 saw the company further its disciplined
growth and diversification strategy, nearly doubling its operator bullpen, reducing run-rate debt-to-EBITDA to 4.6x, and crossing
the $100 million run-rate rental revenue mark. “We look forward to leveraging our operating experience and platform to again
generate solid returns for our shareholders in 2017.”
Financial Results for the Fourth Quarter and Full Year 2016
Chief Financial Officer Bill Wagner reported that for the quarter, CareTrust REIT generated net income of $8.4
million, or $0.14 per diluted weighted-average common share, normalized FFO of $17.2 million or $0.28 per diluted weighted-average
common share, and normalized FAD of $18.0 million or $0.29 per diluted weighted-average common share.
For the full year 2016, Mr. Wagner reported that CareTrust REIT generated net income of $29.4 million, or $0.52
per diluted weighted-average common share, normalized FFO of $62.0 million or $1.10 per diluted weighted-average common share, and
normalized FAD of $65.6 million or $1.17 per diluted weighted-average common share.
Capital Events and Liquidity
Mr. Wagner also discussed CareTrust REIT’s liquidity, reviewing its 2016 underwritten public equity offerings
and at-the-market program activity. With its March and November 2016 public equity offerings, CareTrust REIT issued and sold
approximately 16.1 million shares of common stock at average prices of $11.35 and $13.35 per share respectively, for an aggregate
$186.7 million in net proceeds. With its 2016 at-the-market offerings, CareTrust REIT issued approximately 0.9 million shares
of common stock at an average price of $15.31 per share for $14.1 million in gross proceeds. Subsequent to year-end, CareTrust REIT
issued approximately 1.1 million shares at an average price of $15.46 per share for $16.6 million in gross proceeds under the
at-the-market program.
Mr. Wagner further reported a year-end outstanding balance of approximately $95.0 million under CareTrust REIT’s
$300 million unsecured revolving credit facility. Currently, there is approximately $110.0 million outstanding under the revolver.
He added that CareTrust REIT’s run-rate debt-to-EBITDA ratio was approximately 4.6x, and its debt-to-enterprise value was
approximately 32%, each at year-end. He also noted that CareTrust continues to have no property-level debt and, taking into account
existing extension rights, no debt maturing before 2020.
2017 Net Income, FFO and FAD Guidance Issued
Mr. Wagner provided CareTrust REIT’s 2017 earnings guidance projecting, on a per-diluted weighted-average common
share basis, net income of approximately $0.60 to $0.62, normalized FFO of approximately $1.11 to $1.13, and normalized FAD of
approximately $1.18 to $1.20. This 2017 guidance assumes no new acquisitions beyond those made to date, no new debt incurrences or
new equity issuances, and no future CPI-based rent escalators under CareTrust REIT’s long-term net-leases.
Dividend Declared
During the quarter, CareTrust declared a quarterly dividend of $0.17 per common share, bringing the full year
2016 dividend to $0.68 per common share. “Our 2016 dividends represent a FFO payout ratio of approximately 62% based on our actual
2016 FFO,” said Mr. Wagner. “At this level, our dividend remains among the best-protected of all our industry peers, while giving
us ample additional growth capital to reinvest and providing a solid overall return to our shareholders,” he added.
Conference Call
A conference call will be held on Wednesday, February 8, at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time),
during which CareTrust REIT’s management will discuss fourth quarter and full year 2016 results, recent developments and other
matters affecting CareTrust REIT’s business and prospects. The dial-in number for this call is (844) 220-4972 (U.S.) or (317)
973-4053 (International). The conference ID number is 65149740. 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 CareTrust REITTM
CareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the
ownership, acquisition and leasing of seniors housing and healthcare-related properties. With 153 net-leased healthcare properties
and three operated seniors housing properties in 20 states, CareTrust is pursuing opportunities across the nation to acquire
properties that will be leased to a diverse group of local, regional and national seniors housing operators, healthcare services
providers, and other healthcare-related businesses. 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 our 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 our 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. Our forward-looking statements are based on
our 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 we believe that the assumptions underlying these
forward-looking statements are reasonable, they are not guarantees and we can give no assurance that our expectations will be
attained. Factors which could have a material adverse effect on our operations and future prospects or which could cause actual
results to differ materially from expectations include, but are not limited to: (i) the ability to achieve some or all
of the expected benefits from the completed spin-off from The Ensign Group, Inc. (“Ensign”); (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 and
the ability and willingness of Ensign to meet and/or perform its obligations under the contractual arrangements that it entered
into with us in connection with such spin-off, including its triple-net long-term leases with us, and any of its obligations to
indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (iii) the ability and
willingness of our tenants to (a) comply with laws, rules and regulations in the operation of the properties we lease to them, and
(b) renew their leases with us upon expiration, or in the alternative, (c) our ability to reposition and re-let our properties
on the same or better terms in the event of nonrenewal or replacement of an existing tenant and any obligations, including
indemnification obligations, that we may incur in replacing an existing tenant; (iv) the availability of, and the ability to
identify and acquire, suitable acquisition opportunities and lease the same to reliable tenants on accretive terms; (v) the
ability to generate sufficient cash flows to service our outstanding indebtedness; (vi) access to debt and equity capital
markets; (vii) fluctuating interest rates; (viii) the ability to retain and properly incentivize key management
personnel; (ix) the ability to maintain our status as a real estate investment trust (“REIT”); (x) changes in the U.S.
tax laws and other state, federal or local laws, whether or not specific to REITs; (xi) other risks inherent in the real
estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and
(xii) any additional factors identified in our filings with the Securities and Exchange Commission (“SEC”), including those in
our Annual Report on Form 10-K for the year ended December 31, 2016 under the heading entitled “Risk Factors.”
Information in this press release or the related conference call is provided as of December 31, 2016, unless
specifically stated otherwise. We expressly disclaim 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 our
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 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.
CARETRUST REIT, INC. |
CONSOLIDATED INCOME STATEMENTS |
(in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
Year Ended December 31, |
|
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
Rental income |
$ |
25,269 |
|
|
$ |
20,110 |
|
$ |
93,126 |
|
|
$ |
65,979 |
|
|
Tenant reimbursements |
|
2,031 |
|
|
|
1,631 |
|
|
7,846 |
|
|
|
5,497 |
|
|
Independent living facilities |
|
793 |
|
|
|
642 |
|
|
2,970 |
|
|
|
2,510 |
|
|
Interest and other income |
|
150 |
|
|
|
249 |
|
|
737 |
|
|
|
965 |
|
|
Total revenues |
|
28,243 |
|
|
|
22,632 |
|
|
104,679 |
|
|
|
74,951 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
8,532 |
|
|
|
7,040 |
|
|
31,965 |
|
|
|
24,133 |
|
|
Interest expense |
|
5,829 |
|
|
|
6,145 |
|
|
23,199 |
|
|
|
25,256 |
|
|
Property taxes |
|
2,031 |
|
|
|
1,631 |
|
|
7,846 |
|
|
|
5,497 |
|
|
Independent living facilities |
|
623 |
|
|
|
598 |
|
|
2,549 |
|
|
|
2,376 |
|
|
Acquisition costs |
|
2 |
|
|
|
- |
|
|
205 |
|
|
|
- |
|
|
General and administrative |
|
2,573 |
|
|
|
2,215 |
|
|
9,297 |
|
|
|
7,655 |
|
|
Total expenses |
|
19,590 |
|
|
|
17,629 |
|
|
75,061 |
|
|
|
64,917 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
Loss on sale of real estate |
|
(265 |
) |
|
|
- |
|
|
(265 |
) |
|
|
- |
|
Net income |
$ |
8,388 |
|
|
$ |
5,003 |
|
$ |
29,353 |
|
|
$ |
10,034 |
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.14 |
|
|
$ |
0.10 |
|
$ |
0.52 |
|
|
$ |
0.26 |
|
|
Diluted |
$ |
0.14 |
|
|
$ |
0.10 |
|
$ |
0.52 |
|
|
$ |
0.26 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
60,875 |
|
|
|
47,660 |
|
|
56,030 |
|
|
|
37,380 |
|
|
Diluted |
|
60,875 |
|
|
|
47,660 |
|
|
56,030 |
|
|
|
37,380 |
|
|
|
|
|
|
|
|
|
|
|
Dividends declared per common
share |
$ |
0.17 |
|
|
$ |
0.16 |
|
$ |
0.68 |
|
|
$ |
0.64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CARETRUST REIT, INC. |
RECONCILIATIONS OF NET INCOME TO NON-GAAP
FINANCIAL MEASURES |
(in thousands, except per
share amounts) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter |
|
Quarter |
|
Year |
|
Year |
|
|
|
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|
|
|
|
December 31, 2016 |
|
December 31, 2015 |
|
December 31, 2016 |
|
December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
8,388 |
|
|
$ |
5,003 |
|
$ |
29,353 |
|
|
$ |
10,034 |
|
Depreciation and amortization |
|
|
8,532 |
|
|
|
7,040 |
|
|
31,965 |
|
|
|
24,133 |
|
Interest expense |
|
|
5,829 |
|
|
|
6,145 |
|
|
23,199 |
|
|
|
25,256 |
|
Amortization of stock-based compensation |
|
|
339 |
|
|
|
427 |
|
|
1,546 |
|
|
|
1,522 |
EBITDA |
|
|
23,088 |
|
|
|
18,615 |
|
|
86,063 |
|
|
|
60,945 |
|
Acquisition costs |
|
|
2 |
|
|
|
- |
|
|
205 |
|
|
|
- |
|
Loss on sale of real estate |
|
|
265 |
|
|
|
- |
|
|
265 |
|
|
|
- |
Normalized EBITDA |
|
$ |
23,355 |
|
|
$ |
18,615 |
|
$ |
86,533 |
|
|
$ |
60,945 |
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
8,388 |
|
|
$ |
5,003 |
|
$ |
29,353 |
|
|
$ |
10,034 |
|
Real estate related depreciation and amortization |
|
|
8,505 |
|
|
|
7,018 |
|
|
31,865 |
|
|
|
24,075 |
|
Loss on sale of real estate |
|
|
265 |
|
|
|
- |
|
|
265 |
|
|
|
- |
Funds from Operations (FFO) |
|
|
17,158 |
|
|
|
12,021 |
|
|
61,483 |
|
|
|
34,109 |
|
Write-off of deferred financing fees |
|
|
- |
|
|
|
- |
|
|
326 |
|
|
|
1,208 |
|
Acquisition costs |
|
|
2 |
|
|
|
- |
|
|
205 |
|
|
|
- |
Normalized FFO |
|
$ |
17,160 |
|
|
$ |
12,021 |
|
$ |
62,014 |
|
|
$ |
35,317 |
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
8,388 |
|
|
$ |
5,003 |
|
$ |
29,353 |
|
|
$ |
10,034 |
|
Real estate related depreciation and amortization |
|
|
8,505 |
|
|
|
7,018 |
|
|
31,865 |
|
|
|
24,075 |
|
Amortization of deferred financing fees |
|
|
561 |
|
|
|
551 |
|
|
2,239 |
|
|
|
2,200 |
|
Amortization of stock-based compensation |
|
|
339 |
|
|
|
427 |
|
|
1,546 |
|
|
|
1,522 |
|
Straight-line rental income |
|
|
(72 |
) |
|
|
- |
|
|
(150 |
) |
|
|
- |
|
Loss on sale of real estate |
|
|
265 |
|
|
|
- |
|
|
265 |
|
|
|
- |
Funds Available for Distribution (FAD) |
|
|
17,986 |
|
|
|
12,999 |
|
|
65,118 |
|
|
|
37,831 |
|
Write-off of deferred financing fees |
|
|
- |
|
|
|
- |
|
|
326 |
|
|
|
1,208 |
|
Acquisition costs |
|
|
2 |
|
|
|
- |
|
|
205 |
|
|
|
- |
Normalized FAD |
|
$ |
17,988 |
|
|
$ |
12,999 |
|
$ |
65,649 |
|
|
$ |
39,039 |
|
|
|
|
|
|
|
|
|
|
|
FFO per share |
|
$ |
0.28 |
|
|
$ |
0.25 |
|
$ |
1.09 |
|
|
$ |
0.91 |
Normalized FFO per share |
|
$ |
0.28 |
|
|
$ |
0.25 |
|
$ |
1.10 |
|
|
$ |
0.94 |
|
|
|
|
|
|
|
|
|
|
|
FAD per share |
|
$ |
0.29 |
|
|
$ |
0.27 |
|
$ |
1.16 |
|
|
$ |
1.01 |
Normalized FAD per share |
|
$ |
0.29 |
|
|
$ |
0.27 |
|
$ |
1.17 |
|
|
$ |
1.04 |
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding [1] |
|
|
61,028 |
|
|
|
47,802 |
|
|
56,186 |
|
|
|
37,545 |
|
|
|
|
|
|
|
|
|
|
|
|
[1] For the periods presented, the diluted weighted
average shares have been calculated using the treasury stock method. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CARETRUST REIT, INC. |
|
CONSOLIDATED INCOME STATEMENTS - 5 QUARTER
TREND |
|
(in thousands, except per share
amounts) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter |
Quarter |
Quarter |
Quarter |
Quarter |
|
|
|
Ended |
Ended |
Ended |
Ended |
Ended |
|
|
|
December 31,
2015
|
|
March 31,
2016
|
|
June 30,
2016
|
|
September 30,
2016
|
|
December 31,
2016
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental income |
$ |
20,110 |
|
$ |
20,897 |
|
$ |
22,781 |
|
$ |
24,179 |
|
$ |
25,269 |
|
|
|
Tenant reimbursements |
|
1,631 |
|
|
1,797 |
|
|
1,929 |
|
|
2,089 |
|
|
2,031 |
|
|
|
Independent living facilities |
|
642 |
|
|
681 |
|
|
730 |
|
|
766 |
|
|
793 |
|
|
|
Interest and other income |
|
249 |
|
|
254 |
|
|
261 |
|
|
72 |
|
|
150 |
|
|
|
Total revenues |
|
22,632 |
|
|
23,629 |
|
|
25,701 |
|
|
27,106 |
|
|
28,243 |
|
|
Expenses: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
7,040 |
|
|
7,293 |
|
|
7,892 |
|
|
8,248 |
|
|
8,532 |
|
|
|
Interest expense |
|
6,145 |
|
|
6,187 |
|
|
5,440 |
|
|
5,743 |
|
|
5,829 |
|
|
|
Property taxes |
|
1,631 |
|
|
1,797 |
|
|
1,929 |
|
|
2,089 |
|
|
2,031 |
|
|
|
Independent living facilities |
|
598 |
|
|
620 |
|
|
598 |
|
|
708 |
|
|
623 |
|
|
|
Acquisition costs |
|
- |
|
|
- |
|
|
- |
|
|
203 |
|
|
2 |
|
|
|
General and administrative |
|
2,215 |
|
|
2,230 |
|
|
2,211 |
|
|
2,283 |
|
|
2,573 |
|
|
|
Total expenses |
|
17,629 |
|
|
18,127 |
|
|
18,070 |
|
|
19,274 |
|
|
19,590 |
|
|
Other income (expense): |
|
|
|
|
|
|
|
Loss on sale of real estate |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(265 |
) |
|
Net income |
$ |
5,003 |
|
$ |
5,502 |
|
$ |
7,631 |
|
$ |
7,832 |
|
$ |
8,388 |
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share |
$ |
0.10 |
|
$ |
0.11 |
|
$ |
0.13 |
|
$ |
0.13 |
|
$ |
0.14 |
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares
outstanding |
|
47,660 |
|
|
48,101 |
|
|
57,478 |
|
|
57,595 |
|
|
60,875 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CARETRUST REIT, INC. |
RECONCILIATIONS OF NET INCOME TO NON-GAAP
FINANCIAL MEASURES - 5 QUARTER TREND |
(in thousands, except per
share amounts) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter |
Quarter |
Quarter |
Quarter |
Quarter |
|
|
|
|
Ended |
Ended |
Ended |
Ended |
Ended |
|
|
|
|
December 31,
2015
|
|
March 31,
2016
|
|
June 30,
2016
|
|
September 30,
2016
|
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
5,003 |
|
$ |
5,502 |
|
$ |
7,631 |
|
$ |
7,832 |
|
$ |
8,388 |
|
|
Depreciation and amortization |
|
|
7,040 |
|
|
7,293 |
|
|
7,892 |
|
|
8,248 |
|
|
8,532 |
|
|
Interest expense |
|
|
6,145 |
|
|
6,187 |
|
|
5,440 |
|
|
5,743 |
|
|
5,829 |
|
|
Amortization of stock-based compensation |
|
|
427 |
|
|
431 |
|
|
437 |
|
|
339 |
|
|
339 |
|
EBITDA |
|
|
18,615 |
|
|
19,413 |
|
|
21,400 |
|
|
22,162 |
|
|
23,088 |
|
|
Acquisition costs |
|
|
- |
|
|
- |
|
|
- |
|
|
203 |
|
|
2 |
|
|
Loss on sale of real estate |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
265 |
|
Normalized EBITDA |
|
$ |
18,615 |
|
$ |
19,413 |
|
$ |
21,400 |
|
$ |
22,365 |
|
$ |
23,355 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
5,003 |
|
$ |
5,502 |
|
$ |
7,631 |
|
$ |
7,832 |
|
$ |
8,388 |
|
|
Real estate related depreciation and amortization |
|
|
7,018 |
|
|
7,270 |
|
|
7,867 |
|
|
8,223 |
|
|
8,505 |
|
|
Loss on sale of real estate |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
265 |
|
Funds from Operations (FFO) |
|
|
12,021 |
|
|
12,772 |
|
|
15,498 |
|
|
16,055 |
|
|
17,158 |
|
|
Write-off of deferred financing fees |
|
|
- |
|
|
326 |
|
|
- |
|
|
- |
|
|
- |
|
|
Acquisition costs |
|
|
- |
|
|
- |
|
|
- |
|
|
203 |
|
|
2 |
|
Normalized FFO |
|
$ |
12,021 |
|
$ |
13,098 |
|
$ |
15,498 |
|
$ |
16,258 |
|
$ |
17,160 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
5,003 |
|
$ |
5,502 |
|
$ |
7,631 |
|
$ |
7,832 |
|
$ |
8,388 |
|
|
Real estate related depreciation and amortization |
|
|
7,018 |
|
|
7,270 |
|
|
7,867 |
|
|
8,223 |
|
|
8,505 |
|
|
Amortization of deferred financing fees |
|
|
551 |
|
|
556 |
|
|
561 |
|
|
561 |
|
|
561 |
|
|
Amortization of stock-based compensation |
|
|
427 |
|
|
431 |
|
|
437 |
|
|
339 |
|
|
339 |
|
|
Straight-line rental income |
|
|
- |
|
|
- |
|
|
- |
|
|
(78 |
) |
|
(72 |
) |
|
Loss on sale of real estate |
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
265 |
|
Funds Available for Distribution (FAD) |
|
|
12,999 |
|
|
13,759 |
|
|
16,496 |
|
|
16,877 |
|
|
17,986 |
|
|
Write-off of deferred financing fees |
|
|
- |
|
|
326 |
|
|
- |
|
|
- |
|
|
- |
|
|
Acquisition costs |
|
|
- |
|
|
- |
|
|
- |
|
|
203 |
|
|
2 |
|
Normalized FAD |
|
$ |
12,999 |
|
$ |
14,085 |
|
$ |
16,496 |
|
$ |
17,080 |
|
$ |
17,988 |
|
|
|
|
|
|
|
|
|
|
FFO per share |
|
$ |
0.25 |
|
$ |
0.26 |
|
$ |
0.27 |
|
$ |
0.28 |
|
$ |
0.28 |
|
Normalized FFO per share |
|
$ |
0.25 |
|
$ |
0.27 |
|
$ |
0.27 |
|
$ |
0.28 |
|
$ |
0.28 |
|
|
|
|
|
|
|
|
|
|
FAD per share |
|
$ |
0.27 |
|
$ |
0.29 |
|
$ |
0.29 |
|
$ |
0.29 |
|
$ |
0.29 |
|
Normalized FAD per share |
|
$ |
0.27 |
|
$ |
0.29 |
|
$ |
0.29 |
|
$ |
0.30 |
|
$ |
0.29 |
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding [1] |
|
|
47,802 |
|
|
48,258 |
|
|
57,667 |
|
|
57,739 |
|
|
61,028 |
|
|
|
|
|
|
|
|
|
|
|
[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) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
|
|
|
2016 |
|
2015 |
|
Assets |
|
|
|
|
|
|
Real estate investments, net |
|
$ |
893,918 |
|
|
$ |
645,614 |
|
|
Other real estate investments |
|
|
13,872 |
|
|
|
8,477 |
|
|
Cash and cash equivalents |
|
|
7,500 |
|
|
|
11,467 |
|
|
Accounts receivable |
|
|
5,896 |
|
|
|
2,342 |
|
|
Prepaid expenses and other assets |
|
|
1,369 |
|
|
|
2,083 |
|
|
Deferred financing costs, net |
|
|
2,803 |
|
|
|
3,183 |
|
|
|
|
|
Total assets |
|
$ |
925,358 |
|
|
$ |
673,166 |
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Equity |
|
|
|
|
|
Senior unsecured notes payable, net |
|
$ |
255,294 |
|
|
$ |
254,229 |
|
|
Senior unsecured term loan, net |
|
|
99,422 |
|
|
|
- |
|
|
Unsecured revolving credit facility |
|
|
95,000 |
|
|
|
45,000 |
|
|
Mortgage notes payable, net |
|
|
- |
|
|
|
94,676 |
|
|
Accounts payable and accrued liabilities |
|
|
12,137 |
|
|
|
9,269 |
|
|
Dividends payable |
|
|
11,075 |
|
|
|
7,704 |
|
|
|
|
|
Total liabilities |
|
|
472,928 |
|
|
|
410,878 |
|
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
Common stock |
|
|
648 |
|
|
|
477 |
|
|
Additional paid-in capital |
|
|
611,475 |
|
|
|
410,217 |
|
|
Cumulative distributions in excess of earnings |
|
|
(159,693 |
) |
|
|
(148,406 |
) |
|
|
|
|
Total equity |
|
|
452,430 |
|
|
|
262,288 |
|
|
|
|
|
Total liabilities and equity |
|
$ |
925,358 |
|
|
$ |
673,166 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CARETRUST REIT, INC. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2016 |
|
2015 |
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
Net income |
$ |
29,353 |
|
|
$ |
10,034 |
|
|
Adjustments to reconcile net income to net cash provided by |
|
|
|
|
operating activities: |
|
|
|
|
Depreciation and amortization (including a below-market ground
lease) |
|
31,980 |
|
|
|
24,133 |
|
|
Amortization of deferred financing costs |
|
2,239 |
|
|
|
2,200 |
|
|
Write-off of deferred financing costs |
|
326 |
|
|
|
1,208 |
|
|
Amortization of stock-based compensation |
|
1,546 |
|
|
|
1,522 |
|
|
Straight-line rental income |
|
( 150 |
) |
|
|
- |
|
|
Non cash interest income |
|
( 737 |
) |
|
|
( 945 |
) |
|
Loss on sale of real estate |
|
265 |
|
|
|
- |
|
|
Change in operating assets and liabilities: |
|
|
|
|
Accounts receivable |
|
( 3,404 |
) |
|
|
( 2,326 |
) |
|
Accounts receivable due from related party |
|
- |
|
|
|
2,275 |
|
|
Prepaid expenses and other assets |
|
84 |
|
|
|
( 86 |
) |
|
Accounts payable and accrued liabilities |
|
2,929 |
|
|
|
2,239 |
|
Net cash provided by operating activities |
|
64,431 |
|
|
|
40,254 |
|
Cash flows from investing activities: |
|
|
|
|
Acquisitions of real estate |
|
( 281,228 |
) |
|
|
( 232,466 |
) |
|
Improvements to real estate |
|
( 762 |
) |
|
|
( 187 |
) |
|
Purchases of equipment, furniture and fixtures |
|
( 151 |
) |
|
|
( 276 |
) |
|
Preferred equity investments |
|
( 4,656 |
) |
|
|
- |
|
|
Escrow deposits for acquisition of real estate |
|
( 700 |
) |
|
|
( 1,750 |
) |
|
Net proceeds from the sale of real estate |
|
2,855 |
|
|
|
30 |
|
Net cash used in investing activities |
|
( 284,642 |
) |
|
|
( 234,649 |
) |
Cash flows from financing activities: |
|
|
|
|
Proceeds from the issuance of common stock, net |
|
200,402 |
|
|
|
162,963 |
|
|
Proceeds from the issuance of senior unsecured term loan |
|
100,000 |
|
|
|
- |
|
|
Borrowings under unsecured revolving credit facility |
|
255,000 |
|
|
|
45,000 |
|
|
Payments on unsecured revolving credit facility |
|
( 205,000 |
) |
|
|
- |
|
|
Borrowings under senior secured revolving credit facility |
|
- |
|
|
|
35,000 |
|
|
Repayments of borrowings under senior secured revolving credit
facility |
|
- |
|
|
|
( 35,000 |
) |
|
Payments on the mortgage notes payable |
|
( 95,022 |
) |
|
|
( 3,183 |
) |
|
Payments of deferred financing costs |
|
( 1,352 |
) |
|
|
( 2,303 |
) |
|
Net-settle adjustment on restricted stock |
|
( 515 |
) |
|
|
( 145 |
) |
|
Dividends paid on common stock |
|
( 37,269 |
) |
|
|
( 21,790 |
) |
Net cash provided by financing activities |
|
216,244 |
|
|
|
180,542 |
|
Net decrease in cash and cash equivalents |
|
( 3,967 |
) |
|
|
( 13,853 |
) |
Cash and cash equivalents beginning of period |
|
11,467 |
|
|
|
25,320 |
|
Cash and cash equivalents end of period |
$ |
7,500 |
|
|
$ |
11,467 |
|
|
|
|
|
|
|
|
|
|
|
CARETRUST REIT, INC. |
DEBT SUMMARY |
(dollars in thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 |
|
|
|
Interest |
|
Maturity |
|
|
|
% of |
|
Deferred |
|
Net Carrying |
Debt |
|
|
Rate |
|
Date |
|
Principal |
|
Principal |
|
Loan Costs |
|
Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Rate Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior unsecured notes payable |
|
|
5.875 |
% |
|
2021 |
|
$ |
260,000 |
|
57.1 |
% |
|
$ |
(4,706 |
) |
|
$ |
255,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Floating Rate Debt |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior unsecured term loan [1] |
|
|
2.820 |
% |
|
2023 |
|
|
100,000 |
|
22.0 |
% |
|
|
(578 |
) |
|
|
99,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured revolving credit facility [2] |
|
2.620 |
% |
|
2019 |
|
|
95,000 |
|
20.9 |
% |
|
|
- |
|
[3] |
|
95,000 |
|
|
|
2.723 |
% |
|
|
|
|
195,000 |
|
42.9 |
% |
|
|
(578 |
) |
|
|
194,422 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Debt |
|
|
4.524 |
% |
|
|
|
$ |
455,000 |
|
100.0 |
% |
|
$ |
(5,284 |
) |
|
$ |
449,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[1] Funds can be borrowed at applicable LIBOR plus 1.95% to 2.60% or
at the Base Rate (as defined) plus 0.95% to 1.6%. |
|
|
[2] Funds can be borrowed at applicable LIBOR plus 1.75% to 2.40% or
the Base Rate (as defined) plus 0.75% to 1.4%. |
|
|
[3] Deferred financing fees are not shown net for the unsecured
revolving credit facility and are included in assets on the balance sheet. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CARETRUST REIT, INC. |
RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL
MEASURES |
(shares in
thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
2017
Guidance |
|
|
|
|
|
|
|
|
|
|
Low |
High |
Net income |
$ |
0.60 |
|
$ |
0.62 |
|
|
Real estate related depreciation and amortization |
|
0.51 |
|
|
0.51 |
|
Funds from Operations (FFO) |
|
1.11 |
|
|
1.13 |
|
Normalized FFO |
$ |
1.11 |
|
$ |
1.13 |
|
|
|
|
|
Net income |
$ |
0.60 |
|
$ |
0.62 |
|
|
Real estate related depreciation and amortization |
|
0.51 |
|
|
0.51 |
|
|
Amortization of deferred financing fees |
|
0.03 |
|
|
0.03 |
|
|
Amortization of stock-based compensation |
|
0.04 |
|
|
0.04 |
|
|
Straight-line rental income |
|
(0.00 |
) |
|
(0.00 |
) |
Funds Available for Distribution (FAD) |
|
1.18 |
|
|
1.20 |
|
Normalized FAD |
$ |
1.18 |
|
$ |
1.20 |
|
Weighted average shares
outstanding: |
|
|
|
Diluted |
|
66,262 |
|
|
66,262 |
|
|
Non-GAAP Financial Measures
EBITDA represents net income before interest expense (including amortization of deferred financing costs) and
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 costs associated with the spin-off, impairments, expensed acquisition costs, and gains or losses on the sale 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 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. However, 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 real
estate dispositions, real estate depreciation and amortization and 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 non-cash income and expenses, such as amortization of stock-based compensation,
amortization of deferred financing costs 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 costs associated with
the spin-off, written-off deferred financing fees, expensed acquisition costs, and other unanticipated charges. 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 and indebtedness, 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 non-cash income and expenses such as amortization of stock-based compensation, amortization of deferred financing
costs, 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.
Contact Information CareTrust REIT, Inc. (949) 542-3130 ir@caretrustreit.com