First Quarter AFFO of $0.29 Per Basic Share
and Normalized FFO of $0.32 Per Basic Share
First Quarter Dividend of $0.26 Per
Share
New Senior Investment Group Inc. (“New Senior” or the “Company”)
(NYSE:SNR) announced today its results for the quarter ended March
31, 2016.
1Q 2016 BUSINESS
HIGHLIGHTS
- Total managed portfolio average
occupancy increased 460 basis points to 88.3% vs. 1Q’15
- Same store net operating income (“NOI”)
growth for the managed portfolio of 2.3% vs. 1Q’15
- Same store average occupancy for the
managed portfolio increased 180 basis points vs. 1Q’15
- Occupancy for the triple net portfolio
increased 90 basis points vs. 1Q’15
- Completed tender offer for $30 million
of common stock at a price of $9.00 per share
1Q 2016 FINANCIAL
HIGHLIGHTS
- Total NOI of $57.3 million compared to
$39.6 million for 1Q’15, a 45% increase
- Normalized Funds from Operations
(“Normalized FFO”) of $26.5 million, or $0.32 per basic and diluted
share, an increase of 19% vs. 1Q’15
- AFFO of $23.9 million, or $0.29 per
basic and diluted share, an increase of 32% vs. 1Q’15
- Normalized Funds Available for
Distribution (“Normalized FAD”) of $21.8 million, or $0.26 per
basic and diluted share, an increase of 30% vs. 1Q’15
- Net loss of $21.8 million, or $0.26 per
basic and diluted share
“New Senior produced another strong quarter of results, with
AFFO per share up 32% over the first quarter of 2015,” New Senior
Chief Executive Officer Susan Givens said. “Our portfolio delivered
outsized occupancy growth of 180 basis points coupled with solid
same store NOI growth of 2.3%. The increase in occupancy represents
our fifth straight quarter exceeding the industry average and
reflects the embedded growth in our portfolio. Furthermore, we
capitalized on dislocation in the equity markets by completing an
accretive $30 million tender offer. We are focused on continuing to
deliver strong performance for the balance of 2016.”
FIRST QUARTER 2016
RESULTS
Dollars in thousands, except per share data
For
the Quarter Ended March 31, 2016 Amount
Per BasicShare(B)
Per
DilutedShare(B)
Non-GAAP(A)
NOI $ 57,320 N/A N/A FFO 25,519 $ 0.31 $ 0.31 Normalized FFO 26,460
$ 0.32 $ 0.32 AFFO 23,899 $ 0.29 $ 0.29 Normalized FAD 21,811 $
0.26 $ 0.26
GAAP
Net loss ($21,848 ) ($0.26 ) ($0.26 ) (A) See end of press
release for reconciliation of non-GAAP measures to net loss. (B)
Per share amounts for the quarter ended March 31, 2016 are based on
83.1 million basic shares outstanding and 83.5 million diluted
shares outstanding for non-GAAP amounts and 83.1 million basic and
diluted shares outstanding for net loss. See the appendix in the
first quarter presentation posted in the Investor Relations section
of the Company's website for an explanation of the difference
between basic and diluted shares.
PORTFOLIO PERFORMANCE
Total NOI increased 45% to $57.3 million compared to $39.6
million for 1Q 2015. Since 1Q 2015, the Company has grown its
portfolio from 121 to 154 properties.
For the managed portfolio, total average occupancy increased 460
basis points to 88.3% compared to 83.7% for 1Q 2015, and same store
average occupancy increased 180 basis points to 85.3% compared to
83.5% for 1Q 2015. Same store NOI for 1Q 2016 increased 2.3% to
$12.1 million compared to $11.8 million for 1Q 2015. As previously
disclosed, same store information excludes one property that was
not fully operational during 2015 and 2016, and 1Q 2015 NOI
excludes a $122,000 write-off of a receivable acquired in
connection with an acquisition in 2013. Including these items, same
store occupancy growth for 1Q 2016 was 120 basis points and same
store NOI growth was 0.5% compared to 1Q 2015.
For the triple net portfolio, total portfolio average occupancy
increased 90 basis points to 88.9% compared to 88.0% for 1Q 2015.
Triple net average occupancy is presented one quarter in arrears on
a trailing twelve month basis.
TENDER OFFER
On December 17, 2015, the Company commenced a modified “Dutch
auction” self-tender offer to repurchase up to $30.0 million of
shares of our common stock. At the expiration of the tender offer
on January 19, 2016, the Company accepted for purchase 3,333,333
shares of its common stock (3.9% of shares outstanding) at $9.00
per share, resulting in an investment of $30.8 million, including
transaction costs. The remaining capacity under the Company’s share
repurchase program is $89.7 million. As of May 4, 2016, there were
82.1 million shares outstanding.
FIRST QUARTER DIVIDEND
On May 3, 2016, the Company’s Board of Directors declared a cash
dividend of $0.26 per share for the quarter ended March 31, 2016.
The dividend is payable on June 22, 2016 to shareholders of record
on June 8, 2016.
ADDITIONAL INFORMATION
For additional information that management believes to be useful
for investors, please refer to the presentation posted in the
Investor Relations section of the Company’s website,
www.newseniorinv.com.
EARNINGS CONFERENCE CALL
Management will host a conference call on May 5, 2016 at 10:00
A.M. Eastern Time. The conference call may be accessed by dialing
(877) 694-6694 (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 2016 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 5, 2016 by dialing (855)
859-2056 (from within the U.S.) or (404) 537-3406 (from outside the
U.S.); please reference access code “87653551.”
ABOUT NEW SENIOR
New Senior is a real estate investment trust focused on
investing in senior housing properties across the United States.
The Company is the only pure play senior housing REIT and is one of
the largest owners of senior housing properties. Currently, New
Senior owns 154 properties located across 37 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 STATEMENTS
Certain items in this press release may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, such as statements
regarding future growth and financial performance. 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.
Consolidated Balance Sheets (dollars in thousands,
except share data) March 31,
2016 Assets (Unaudited) December 31, 2015
Real estate investments: Land $ 222,795 $ 222,795 Buildings,
improvements and other 2,572,099 2,568,133 Accumulated depreciation
(152,185 ) (129,788 ) Net real estate property
2,642,709 2,661,140 Acquired lease and other
intangible assets 308,917 308,917 Accumulated amortization
(191,699 ) (166,714 ) Net real estate intangibles
117,218 142,203 Net real estate investments
2,759,927 2,803,343 Cash and cash equivalents 79,865 116,881
Straight-line rent receivables 57,469 51,916 Receivables and other
assets, net 44,822 45,319
Total
Assets $ 2,942,083 $
3,017,459 Liabilities and Equity
Liabilities Mortgage notes payable, net $ 2,149,645 $
2,151,317 Due to affiliates 10,593 9,644 Accrued expenses and other
liabilities 88,559 89,173
Total
Liabilities $ 2,248,797 $ 2,250,134
Commitments and contingencies
Equity
Preferred Stock $0.01 par value,
100,000,000 sharesauthorized and none outstanding as of both March
31, 2016and December 31, 2015
$ - $ -
Common stock $0.01 par value,
2,000,000,000 sharesauthorized, 82,114,218 and 85,447,551 shares
issued andoutstanding as of March 31, 2016 and December 31,
2015,respectively
821 854 Additional paid-in capital 897,852 928,654 Accumulated
deficit (205,387 ) (162,183 )
Total Equity $
693,286 $ 767,325
Total Liabilities
and Equity $ 2,942,083 $
3,017,459
Consolidated Statements of Operations (unaudited)
(dollars in thousands, except share data) Three
Months Ended March 31, 2016
2015 Revenues Resident fees and services $
89,706 $ 47,188 Rental revenue 28,239 26,672
Total revenues 117,945 73,860
Expenses Property operating expense 60,625 34,271
Depreciation and amortization 47,367 30,157 Interest expense 22,788
15,312 Acquisition, transaction, and integration expense 754 3,918
Management fees and incentive compensation to affiliate 3,928 3,050
General and administrative expense 4,370 3,409 Loss on
extinguishment of debt - 5,091 Other expense 187
- Total expenses $ 140,019 $ 95,208
Loss Before Income Taxes (22,074 ) (21,348 ) Income
tax benefit (226 ) (95 )
Net Loss $ (21,848 )
$ (21,253 )
Loss Per Share of Common Stock Basic and
diluted(A) $ (0.26 ) $ (0.32 )
Weighted Average Number of Shares of
Common StockOutstanding
Basic and diluted(B) 83,066,599 66,415,415
Dividends Declared Per Share of Common Stock $
0.26 $ - (A) Basic earnings per share (“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) All
outstanding options were excluded from the diluted share
calculation as their effect would have been anti-dilutive.
Consolidated Statements of Cash
Flows (unaudited) (dollars in thousands) Three
Months Ended March 31, 2016
2015 Cash Flows From Operating Activities Net
loss $ (21,848 ) $ (21,253 ) Adjustments to reconcile net loss to
net cash provided by operating activities: Depreciation of tangible
assets and amortization of intangible assets 47,403 30,193
Amortization of deferred financing costs 2,428 2,198 Amortization
of deferred community fees (372 ) (563 ) Amortization of premium on
mortgage notes payable (146 ) 230 Non-cash straight line rent
(5,553 ) (6,166 ) Loss on extinguishment of debt - 5,091
Equity-based compensation 5 17 Provision for bad debt 523 467
Unrealized loss on interest rate caps 187 - Changes in: Receivables
and other assets, net 317 (3,244 ) Due to affiliates 949 3,042
Accrued expenses and other liabilities (193 ) 2,985
Net cash provided by operating activities $ 23,700 $
12,997
Cash Flows From Investing Activities
Cash paid for acquisitions, net of deposits $ - $ (492,943 )
Capital expenditures (3,967 ) (2,460 ) Funds reserved for future
capital expenditures (1,182 ) (445 ) Deposits refunded (paid) for
real estate investments 584 (4,955 ) Net cash
used in investing activities $ (4,565 ) $ (500,803 )
Cash
Flows From Financing Activities Proceeds from mortgage notes
payable $ - $ 687,722 Principal payments of mortgage notes payable
(3,955 ) (4,176 ) Repayments of mortgage notes payable - (289,484 )
Payment of exit fee on extinguishment of debt - (1,499 ) Payment of
deferred financing costs - (7,779 ) Payment of common stock
dividend (21,356 ) (15,276 ) Purchase of interest rate caps - (989
) Repurchase of common stock (30,840 ) - Net
cash (used in) provided by financing activities $ (56,151 ) $
368,519
Net Decrease in Cash and Cash Equivalents
(37,016 ) (119,287 )
Cash and Cash Equivalents, Beginning of
Period 116,881 226,377
Cash and
Cash Equivalents, End of Period $ 79,865 $ 107,090
Supplemental Disclosure of Cash Flow
Information Cash paid during the period for interest expense $
20,365 $ 13,565 Cash paid during the period for income taxes - -
Reconciliation of NOI to Net Loss (dollars
in thousands) For the Quarter Ended
March 31, 2016 Total revenues $ 117,945 Property operating
expense (60,625 )
NOI 57,320
Depreciation and amortization (47,367 ) Interest expense (22,788 )
Acquisition, transaction and integration expense (754 ) Management
fees and incentive compensation to affiliate (3,928 ) General and
administrative expense (4,370 ) Other expense (187 ) Income tax
benefit 226
Net Loss $ (21,848
) Reconciliation of Net Loss to FFO,
Normalized FFO, AFFO and Normalized FAD (dollars and shares
in thousands, except per share data) For the
Quarter Ended March 31, 2016 Net loss $ (21,848 )
Adjustments: Depreciation and amortization
47,367
FFO $ 25,519 FFO per diluted
share $ 0.31 Acquisition,
transaction and integration expense 754 Other expense
187
Normalized FFO $ 26,460
Normalized FFO per diluted share $
0.32 Straight-line rent (5,553 ) Amortization of
deferred financing costs 2,428 Amortization of deferred community
fees and other(1) 564
AFFO
$ 23,899 AFFO per diluted share
$ 0.29 Maintenance capital expenditures
(2,088 )
Normalized FAD $ 21,811
Normalized FAD per diluted share $
0.26 Weighted average basic shares outstanding
83,067 Weighted average diluted shares outstanding(2) 83,505
(1) Includes net change in deferred community fees, premium on
mortgage notes payable, 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 2015 1Q 2016
NNNProperties
Same
StoreManagedProperties(1)
Non-SameStoreManagedProperties
Total
NNNProperties
Same
StoreManagedProperties(1)
Non-SameStoreManagedProperties
Total NOI $ 26,672
$ 12,058 $ 859
$ 39,589 $ 28,239
$ 12,122 $ 16,959
$ 57,320 Depreciation and amortization (30,157
) (47,367 ) Interest expense (15,312 ) (22,788 )
Acquisition, transaction andintegration
expense
(3,918 ) (754 )
Management fees and incentivecompensation
to affiliate
(3,050 ) (3,928 ) General and administrative expense (3,409 )
(4,370 ) Loss on extinguishment of debt (5,091 ) - Other expense -
(187 ) Income tax benefit 95 226
Net
Loss ($21,253 ) ($21,848
) (1) Includes all properties owned during both
comparison periods presented.
NON-GAAP FINANCIAL
MEASURES
The tables above set forth reconciliations of non-GAAP measures
to net loss, which is the most directly comparable GAAP financial
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. 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.
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
(loss) (determined in accordance with GAAP), which is an indicator
of our financial performance, or as alternatives to cash flow from
operating activities (determined in accordance with GAAP), which is
a liquidity measure, 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 (loss) as presented in our Consolidated Financial
Statements.
NOI
The Company evaluates the performance of each of its two
business segments based on NOI. The Company defines NOI as total
revenues less property-level operating expenses, which include
property management fees, payroll expense and travel cost
reimbursements to affiliates. The sum of the NOI for each segment
is total NOI, which the Company uses to evaluate the aggregate
performance of its segments. Management believes that NOI serves as
a useful supplement to net income because it allows investors,
analysts and management to measure unlevered property-level
operating results and to compare the Company’s operating results
between periods and to the operating results of other real estate
companies on a consistent basis. Same store NOI includes only
properties owned for the entirety of comparable periods.
FFO and Other Non-GAAP Measures
Historical cost accounting for real estate assets implicitly
assumes that the value of real estate assets diminishes predictably
over time. However, since real estate values historically have
risen or fallen with market conditions, many industry investors
deem presentations of operating results for real estate companies
that use historical cost accounting to be insufficient by
themselves. Therefore, management considers Funds From Operations
("FFO") and Normalized FFO to be useful measures of operating
performance. The Company uses the National Association of Real
Estate Investment Trusts ("NAREIT") definition of FFO, which is
GAAP net income, excluding gains (losses) from sales of depreciable
real estate assets, impairment charges of depreciable real estate,
plus real estate depreciation and amortization, and after
adjustments for unconsolidated entities and joint ventures to
reflect FFO on the same basis. The Company defines Normalized FFO
as FFO excluding the following income and expense items (which may
be recurring in nature) as applicable: (a) acquisition, transaction
and integration related costs and expenses; (b) the write off of
unamortized deferred financing costs, or additional costs, make
whole payments, penalties or premiums incurred as the result of
early repayment of debt (collectively, "Loss on extinguishment of
debt") and (c) amounts reported in "Other expense" in the
Consolidated Statements of Operations. Management believes that
Normalized FFO in particular is useful because it allows investors,
analysts and our management to compare our operating performance
between periods and to the operating performance of other real
estate companies on a consistent basis without having to account
for differences caused by period specific items and events such as
transaction costs.
Management believes that AFFO and Normalized FAD are useful as
supplemental measures of our ability to fund dividend payments.
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version on businesswire.com: http://www.businesswire.com/news/home/20160505005508/en/
New Senior Investment Group Inc.David Smith, 212-479-3140
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