$596 Million of Acquisitions Completed Year
to Date
Pro Forma Quarterly Normalized FFO Per Share
of $0.35
New Senior Investment Group Inc. (“New Senior” or the “Company”)
(NYSE:SNR) announced today its results for the quarter ended March
31, 2015.
1Q 2015 AND RECENT BUSINESS
HIGHLIGHTS
- Completed $596 million of acquisitions
year-to-date comprising 24 primarily private pay senior housing
properties
- 6.3% same-store NOI growth for the
managed senior housing portfolio
- Raised $670 million of secured debt
with a term of 7 years and an attractive rate of L+234bps
1Q 2015 FINANCIAL
HIGHLIGHTS
- Total net operating income (“NOI”) of
$39.6 million compared to $32.3 million for 1Q 2014, a 23%
increase
- Normalized Funds from Operations
(“NFFO”) of $17.9 million, or $0.27 per diluted share
- AFFO of $14.9 million, or $0.22 per
diluted share
- Normalized FAD of $13.4 million, or
$0.20 per diluted share
- Paid dividend of $0.23 per share, or
$15.3 million
- Net loss of ($21.3) million, or ($0.32)
per diluted share
1Q 2015 PRO FORMA
HIGHLIGHTS
- Pro forma total NOI of $47.8
million
- Pro forma NFFO of $23.3 million, or
$0.35 per diluted share
- Pro forma AFFO of $20.3 million, or
$0.31 per diluted share
- Pro forma Normalized FAD of $18.5
million, or $0.28 per diluted share
See note below for an explanation regarding pro forma
amounts.
“2015 is off to a very strong start, and I am pleased to report
that the first quarter was an incredibly productive quarter, as
evidenced by our strong financial results, the successful execution
of our acquisition strategy and the improvements we made to our
capital structure,” New Senior Chief Executive Officer Susan Givens
said. “When we were spun-off approximately six months ago, we
outlined a set of objectives that we hoped to accomplish before the
end of the first quarter. I am happy to report that we have
successfully completed all of those initiatives and are well
positioned to deliver solid results for the remainder of 2015.”
Ms. Givens continued, “Our portfolio delivered strong results
once again this quarter, including 6.3% same-store NOI growth for
our managed portfolio. We continue to be extremely active with our
acquisition efforts and have completed $596 million of acquisitions
year-to-date at an attractive yield of approximately 6.5%, nearly
double our 2014 full year acquisition volume. We currently have a
number of significant opportunities in the pipeline, and we look
forward to continuing our track record of growth.”
FIRST QUARTER 2015
RESULTS
Dollars in thousands, except per share data
For
the Quarter Ended March 31, 2015 Amount Per
Share(b)
Non-GAAP(a)
NOI $39,589 -- FFO 8,904 $0.13 Normalized FFO 17,913 $0.27 AFFO
14,875 $0.22 Normalized FAD 13,350 $0.20
GAAP
Net loss (21,253) ($0.32)
(a) See end of press release for reconciliation of non-GAAP
measures to net loss.(b) Per share amounts are based on 67.4
million diluted shares outstanding for non-GAAP amounts and 66.4
million diluted shares outstanding for net loss.
ACQUISITION ACTIVITYAs of
today’s date, the Company has completed $596 million of primarily
private pay senior housing properties at an expected blended
initial NOI yield of approximately 6.5%. The 24 acquired properties
include 21 independent living properties (“IL-only”), 2 assisted
living / memory care (“AL/MC”) properties and 1 rental continuing
care retirement community (“CCRC”). The IL-only and AL/MC
properties were added to the Company’s managed portfolio and the
rental CCRC was added to the Company’s triple net lease
portfolio.
PORTFOLIO PERFORMANCETotal
portfolio NOI increased 22.7% to $39.6 million compared to $32.3
million for 1Q 2014. Same-store NOI increased 6.3% for the 33
same-store properties in the Company’s managed portfolio over 1Q
2014 results. (1Q 2015 same-store NOI excludes $122,000 relating to
the write-off of a receivable assumed at the time of an acquisition
in the third quarter of 2013.)
FINANCING ACTIVITYIn March,
the Company completed a $670 million first mortgage loan (the
“Loan”) secured by 52 senior housing properties with Freddie Mac.
The Loan bears interest at LIBOR + 234bps and has a seven year
maturity. Proceeds from the Loan were used to refinance existing
floating rate debt and to fund acquisitions. The Loan lowered the
Company’s weighted average effective interest rate on its total
debt by 85bps and extended the weighted average maturity of its
debt by one year.
DIVIDENDOn April 6, 2015,
the Company announced that its Board of Directors declared a
quarterly dividend of $0.23 per share payable to shareholders of
record on April 17, 2015. This dividend was paid on April 30,
2015.
EXPLANATION OF 1Q 2015 PRO FORMA
HIGHLIGHTSPro forma NFFO, pro forma AFFO and pro forma
Normalized FAD represent 1Q 2015 actuals with adjustments to 1)
include 3 months of results attributable to acquisitions completed
during and subsequent to quarter end, based on underwriting
assumptions for the months in which the Company did not own an
asset for the entire month and 2) reflect 3 months of interest
expense from the new financing completed at the end of the first
quarter. Pro forma NOI represents 1Q 2015 NOI with the first
adjustment described above.
Pro forma NFFO, pro forma total NOI, pro forma AFFO and pro
forma Normalized FAD are illustrative/hypothetical values and do
not represent New Senior’s historical performance or management’s
projections for any future reporting period.
ADDITIONAL INFORMATIONFor
additional information that management believes to be useful for
investors, please refer to the presentation posted on the Investor
Relations section of the Company’s website,
www.newseniorinv.com.
EARNINGS CONFERENCE
CALLManagement will host a conference call on May 7,
2015 at 12:00 P.M. Eastern Time. The conference call may be
accessed by dialing (855) 734-8393 (from within the U.S.) or (970)
315-0985 (from outside of the U.S.) ten minutes prior to the
scheduled start of the call; please reference “New Senior First
Quarter Earnings Call.” A simultaneous webcast of the conference
call will be available to the public on a listen-only basis at
www.newseniorinv.com. Please allow extra time prior to the call to
visit the website and download any necessary software required to
listen to the internet broadcast.
A telephonic replay of the conference call will also be
available approximately two hours following the call’s completion
through 11:59 P.M. Eastern Time on June 7, 2015 by dialing (855)
859-2056 (from within the U.S.) or (404) 537-3406 (from outside the
U.S.); please reference access code “36746367.”
ABOUT NEW SENIORNew Senior
is a real estate investment trust focused on investing in senior
housing properties across the United States. The Company is one of
the largest owners of senior housing properties and currently owns
124 properties in 32 states. New Senior is managed by an affiliate
of Fortress Investment Group LLC, a global investment management
firm. More information about New Senior can be found at
www.newseniorinv.com.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTSCertain items in this press
release constitute “forward-looking statements” within the meaning
of the Private Securities Litigation Reform Act of 1995, such as
statements regarding acquisition opportunities, our ability to
continue the Company’s track record for growth, and the expected
NOI yield of completed acquisitions. These statements are not
historical facts. They represent management’s current expectations
regarding future events and are subject to a number of trends and
uncertainties, many of which are beyond our control, that could
cause actual results to differ materially from those described in
the forward-looking statements. Accordingly, you should not place
undue reliance on any forward-looking statements contained herein.
For a discussion of some of the risks and important factors that
could affect such forward-looking statements, see the sections
entitled “Risk Factors” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” in the Company’s
annual and quarterly reports filed with the Securities and Exchange
Commission, which are available on the Company’s website
(www.newseniorinv.com). New risks and uncertainties emerge from
time to time, and it is not possible for New Senior to predict or
assess the impact of every factor that may cause its actual results
to differ from those contained in any forward-looking statements.
Forward-looking statements contained herein speak only as of the
date of this press release, and New Senior expressly disclaims any
obligation to release publicly any updates or revisions to any
forward-looking statements contained herein to reflect any change
in New Senior's expectations with regard thereto or change in
events, conditions or circumstances on which any statement is
based.
Condensed Consolidated Balance Sheets (dollars in
thousands, except per share data) Assets
March 31, 2015 December 31, 2014 Real estate
investments: (unaudited) Land $ 170,690 $ 138,799 Buildings,
improvements and other 1,907,393 1,500,130 Accumulated depreciation
(70,391 ) (56,988 ) Net real estate property
2,007,692 1,581,941 Acquired lease and other
intangible assets 239,557 178,615 Accumulated amortization
(95,811 ) (79,021 ) Net real estate intangibles
143,746 99,594 Net real estate investments
2,151,438 1,681,535 Cash and cash equivalents 107,090
226,377 Receivables and other assets, net 69,208
58,247
Total Assets $ 2,327,736
$ 1,966,159 Liabilities and
Equity Liabilities Mortgage notes payable, net $
1,614,759 $ 1,223,224 Due to affiliates 9,924 6,882 Dividends
payable - 15,276 Accrued expenses and other liabilities
75,753 72,241
Total Liabilities $
1,700,436 $ 1,317,623 Commitments and
contingencies
Equity Preferred Stock $0.01 par value,
100,000,000 shares authorized and none outstanding as of both March
31, 2015 and December 31, 2014 $ - $ - Common stock $0.01 par
value, 2,000,000,000 shares authorized, 66,415,415 shares issued
and outstanding as of both March 31, 2015 and December 31, 2014 664
664 Additional paid-in capital 672,604 672,587 Accumulated deficit
(45,968 ) (24,715 )
Total Equity $ 627,300
$ 648,536
Total Liabilities and
Equity $ 2,327,736 $
1,966,159
Condensed Consolidated Statements of Operations (unaudited)
(dollars in thousands, except per share data)
Three Months Ended March 31, 2015 2014
Revenues Resident fees and services $ 47,188 $ 35,537 Rental
revenue 26,672 22,298 Total revenues
73,860 57,835
Expenses
Property operating expense 34,271 25,559 Depreciation and
amortization 30,157 22,835 Interest expense 15,312 13,305
Acquisition, transaction and integration expense 3,918 4,223
Management fee to affiliate 3,050 1,653 General and administrative
expense 3,409 838 Loss on extinguishment of debt 5,091
- Total expenses $ 95,208 $ 68,413
Loss Before Income Taxes (21,348 ) (10,578 )
Income tax (benefit) expense (95 ) 360
Net
Loss $ (21,253 ) $ (10,938 )
Loss Per Share of Common
Stock Basic and diluted(A) $ (0.32 ) $ (0.16 )
Weighted Average Number of Shares of Common Stock
Outstanding Basic and diluted(B) 66,415,415
66,399,857
Dividends Declared Per Share of
Common Stock $ - $ -
(A) Basic EPS is calculated by dividing net income by the
weighted average number of shares of common stock outstanding.
Diluted EPS is computed by dividing net income by the weighted
average number of shares of common stock outstanding plus the
additional dilutive effect, if any, of common stock equivalents
during each period.
(B) For the purposes of computing income per share of common
stock for periods prior to the spin-off on November 6, 2014, the
Company treated the common shares issued in connection with the
spin-off as if they had been outstanding for all periods presented,
similar to a stock split. The 5.5 million options that were issued
on the spin-off date were excluded from the diluted share
calculation as their effect would have been anti-dilutive.
Condensed Consolidated Statements of Cash
Flows (unaudited) (dollars in thousands) Three
Months Ended March 31, 2015 2014 Cash Flows
From Operating Activities Net loss $ (21,253 ) $ (10,938 )
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation and amortization 30,193 22,835
Amortization of deferred financing costs 2,198 2,054 Amortization
of deferred community fees (563 ) (266 ) Amortization of premium on
mortgage notes payable 230 215 Non-cash straight line rent (6,166 )
(6,064 ) Loss on extinguishment of debt 5,091 - Equity-based
compensation 17 - Provision for bad debt 467 233 Changes in:
Receivables and other assets (3,244 ) (2,042 ) Due to affiliates
3,042 1,511 Accrued expenses and other liabilities 2,985
8,253 Net cash provided by operating
activities $ 12,997 $ 15,791
Cash Flows
From Investing Activities Acquisition of real estate
investments and intangibles (492,943 ) (23,000 ) Capital
expenditures (2,460 ) (1,785 ) Funds reserved for future capital
expenditures (445 ) (253 ) Deposits paid for real estate
investments (4,955 ) (2,448 ) Net cash used in
investing activities $ (500,803 ) $ (27,486 )
Cash Flows
From Financing Activities Proceeds from mortgage notes payable
687,722 17,250 Principal payments of mortgage notes payable (4,176
) (2,739 ) Repayments of mortgage notes payable (289,484 ) -
Payment of exit fees on extinguishment of debt (1,499 ) - Payment
of deferred financing costs (7,779 ) (252 ) Payment of common stock
dividend (15,276 ) - Purchase of interest rate caps (989 ) -
Contributions - 12,129 Distributions - (8,081
) Net cash provided by financing activities $ 368,519 $
18,307
Net Increase (Decrease) in Cash and Cash
Equivalents (119,287 ) 6,612 Cash and
Cash Equivalents, Beginning of Period 226,377
30,393 Cash and Cash Equivalents,
End of Period $ 107,090 $
37,005 Supplemental Disclosure of Cash Flow
Information Cash paid during the period for interest expense $
13,565 $ 8,667 Cash paid during the period for income taxes - 82
Reconciliation of NOI (dollars in
thousands) For the Quarter Ended March 31,
2015 Revenue $ 73,860 Property operating expense (34,271
)
NOI 39,589 Depreciation and amortization
(30,157 ) Interest expense (15,312 ) Acquisition, transaction and
integration expense (3,918 ) Management fee to affiliate (3,050 )
General and administrative expense (3,409 ) Loss on extinguishment
of debt (5,091 ) Income tax benefit 95
Net
Loss $ (21,253 )
Reconciliation of FFO, Normalized FFO, AFFO and Normalized
FAD (dollars and shares in thousands, except per share
data) For the Quarter Ended March 31, 2015
Net loss $ (21,253 ) Adjustments: Depreciation and amortization
30,157
FFO $ 8,904 FFO
per diluted share $ 0.13
Acquisition, transaction and integration expense 3,918 Loss on
extinguishment of debt 5,091
Normalized
FFO $ 17,913 Normalized FFO per diluted
share $ 0.27 Straight-line rent
(6,166 ) Amortization of deferred financing costs 2,198
Amortization of premium on mortgage notes payable 230 Amortization
of deferred community fees and other(1) 700
AFFO $ 14,875 AFFO per diluted share
$ 0.22 Maintenance capital expenditures
(1,525 )
Normalized FAD $ 13,350
Normalized FAD per diluted share $ 0.20
Weighted average diluted shares outstanding(2) 67,418
(1) Includes net change in deferred
community fees, above/below market lease amortization and other
non-cash GAAP adjustments.
(2) Includes dilutive effect of options
Reconciliation of Same-Store NOI (unaudited) (dollars in
thousands)
1Q 2014 1Q 2015 Non-Same
Non-Same
Same Store Store Same Store Store
NNN Managed Managed NNN Managed
Managed Properties Properties
Properties Total Properties
Properties Properties Total
NOI $22,298 $9,587 $391
$32,276 $26,672 $10,069
$2,848 $39,589 Depreciation and amortization
(22,835) (30,157) Interest expense (13,305) (15,312) Acquisition,
transaction and integration expense (4,223) (3,918) Management fee
to affiliate (1,653) (3,050) General and administrative expense
(838) (3,409) Loss on extinguishment of debt — (5,091) Income tax
(expense) benefit (360) 95
Net Loss ($10,938)
($21,253)
The tables above set forth reconciliations of non-GAAP measures
to net income (loss), which is the most directly comparable GAAP
financial measure. A non-GAAP financial measure is a measure of
historical or future financial performance, financial position or
cash flows that excludes or includes amounts that are not excluded
from or included in the most comparable GAAP measure.
We believe that net income (loss), as defined by GAAP, is the
most appropriate earnings measurement. However, we consider certain
non-GAAP financial measures to be useful supplemental measures of
our operating performance.
We believe that Normalized Funds from Operations, or Normalized
FFO, is useful because it allows investors, analysts and our
management to compare our operating performance to the operating
performance of other real estate companies and between periods on a
consistent basis without having to account for differences caused
by period specific items and events such as transaction costs. In
addition, we believe Adjusted Funds from Operations, or AFFO, and
normalized FAD is useful as a supplemental measure of our ability
to fund dividend payments.
The non-GAAP financial measures we present may not be identical
to those presented by other real estate companies due to the fact
that not all real estate companies use the same definitions. You
should not consider these measures as alternatives to net income
(determined in accordance with GAAP) as indicators of our financial
performance or as alternatives to cash flow from operating
activities (determined in accordance with GAAP) as measures of our
liquidity, nor are these measures necessarily indicative of
sufficient cash flow to fund all of our needs. In order to
facilitate a clear understanding of our consolidated historical
operating results, you should examine these measures in conjunction
with net income as presented in our Consolidated Financial
Statements.
New Senior Investment Group Inc.David Smith, 212-479-3140
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