SNR New Senior Investment Group Inc

New Senior Investment Group Inc. (“New Senior” or the “Company”) (NYSE:SNR) announced today its results for the quarter and full year ended December 31, 2014.

4Q & 2014 BUSINESS HIGHLIGHTS

• Completed spin-off from Newcastle Investment Corp. on November 6th
• Completed $315 million of acquisitions during 2014
• Acquired one assisted living/memory care (“AL/MC”) property for $16 million in December
• Announced agreement to acquire 17 private pay independent living (“IL-only”) properties for $435 million in December

4Q FINANCIAL HIGHLIGHTS

• Total net operating income (“NOI”) of $38.7 million for 4Q 2014 compared to $10.8 million for 4Q 2013
• Normalized Funds from Operations (“NFFO”) of $17.3 million, or $0.26 per diluted share
• AFFO of $12.9 million, or $0.19 per diluted share
• Announced first quarterly dividend of $0.23 per share, or $15.3 million
• Net loss of ($13.3) million, or ($0.20) per diluted share

FOURTH QUARTER RESULTS

Normalized FFO for the quarter ended December 31, 2014 was $17.3 million, or $0.26 per diluted share. AFFO for the quarter ended December 31, 2014 was $12.9 million, or $0.19 per diluted share. Net income (loss) for the quarter ended December 31, 2014 was ($13.3) million, or ($0.20) per diluted share.

  Dollars in thousands For the Quarter Ended December 31, 2014 Amount   Per Share

Non-GAAP(1)

NOI $38,671 -- FFO 15,313 $0.23 Normalized FFO 17,285 $0.26 AFFO 12,873 $0.19  

GAAP

Net loss (13,284) ($0.20)   Weighted average diluted shares outstanding 66,404

 

(1) See end of press release for reconciliation of non-GAAP measures to net loss.

ACQUISITION ACTIVITY

During 2014, New Senior completed $315 million of primarily private pay senior housing acquisitions at an expected blended initial NOI yield of approximately 7.5%. The 16 acquired properties include ten AL/MC properties, four continuing care retirement communities (“CCRC”) and two dedicated IL-only properties. Ten of these properties were added to the Company’s managed portfolio, and the remaining six were integrated into the Company’s triple net lease portfolio.

During the fourth quarter, the Company acquired one AL/MC property for $16 million. The property was added to the Company’s managed portfolio.

In December, New Senior also announced an agreement to acquire 17 IL-only properties for approximately $435 million. The transaction is expected to close by the end of March 2015 and the properties are expected to be added to the Company’s managed portfolio.

In January 2015, the Company acquired four IL-only properties for approximately $36 million. The properties were added to the Company’s managed portfolio.

DIVIDEND

On December 19, 2014, New Senior's Board of Directors declared a quarterly dividend of $0.23 per share, or $15.3 million, payable to shareholders of record on January 2, 2015. This dividend was paid on January 30, 2015.

ADDITIONAL INFORMATION

For 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 CALL

Management will host a conference call on February 26, 2015 at 9:00 A.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 Fourth 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 Thursday, March 26, 2015 by dialing (855) 859-2056 (from within the U.S.) or (404) 537-3406 (from outside the U.S.); please reference access code “87722933.”

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 one of the largest owners of senior housing properties and currently owns 104 properties in 28 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 constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements regarding our ability to complete acquisitions and the timing thereof, 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 Report on Form 10-K, which is, or will be, 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 (Successor) (dollars in thousands, except per share data)   December 31, Assets 2014 2013 Real estate investments: Land $ 138,799 $ 102,064 Buildings, improvements and other 1,500,130 1,271,364 Accumulated depreciation   (56,988 )   (10,526 ) Net real estate property   1,581,941     1,362,902   Acquired lease and other intangible assets 178,615 123,063 Accumulated amortization   (79,021 )   (22,174 ) Net real estate intangibles   99,594     100,889   Net real estate investments 1,681,535 1,463,791   Cash and cash equivalents 226,377 30,393 Receivables and other assets, net 58,247 13,432 Deferred financing costs, net   36,206     41,979   Total Assets $ 2,002,365   $ 1,549,595     Liabilities and Equity Liabilities Mortgage notes payable $ 1,259,430 $ 1,077,172 Due to affiliates 6,882 5,894 Accrued expenses and other liabilities 72,241 58,694 Dividends payable   15,276    

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  Total Liabilities   1,353,829     1,141,760     Equity Preferred Stock $0.01 par value, 100,000,000 shares authorized and none outstanding as of December 31, 2014

-

-

Common stock $0.01 par value, 2,000,000,000 shares authorized, 66,415,415 shares issued and outstanding as of December 31, 2014 664

-

Additional paid-in capital 672,587 407,835 Accumulated deficit   (24,715 )  

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  Total Equity 648,536 407,835     Total Liabilities and Equity $ 2,002,365   $ 1,549,595           Consolidated (Successor) Statements of Operations (dollars in thousands, except per share data)  

For the Quarter Ended

For the Year Ended December 31, December 31, 2014 2014 2013 Revenues (unaudited) Resident fees and services $ 43,706 $ 156,993 $ 83,218 Rental revenue   26,676     97,992     1,918   Total revenues   70,382     254,985     85,136     Expenses Property operating expense 31,711 112,242 59,726 Depreciation and amortization 28,597 103,279 26,933 Interest expense 15,494 57,026 10,589 Acquisition, transaction and integration expense 1,972 14,295 13,294 Management fee to affiliate 2,706 8,470 1,796 General and administrative expense 4,363 7,416 2,188 Other income  

-

    (1,500 )  

-

  Total expenses $ 84,843   $ 301,228   $ 114,526     Loss before income taxes (14,461 ) (46,243 ) (29,390 ) Income tax benefit (expense)   1,177     (160 )   (656 ) Net Loss $ (13,284 ) $ (46,403 ) $ (30,046 )   Loss Per Share of Common Stock Basic and diluted $ (0.20 ) $ (0.70 ) $ (0.45 )   Weighted Average Number of Shares of Common Stock - Basic and diluted 66,404,051 66,400,914 66,399,857         Consolidated (Successor) Statements of Cash Flows

(dollars in thousands)

  For the Quarter Ended For the Year Ended December 31, December 31, 2014 2014 2013 Cash Flows From Operating Activities (unaudited) Net loss $ (13,284 ) $ (46,403 ) $ (30,046 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 28,716 103,398 26,933 Amortization of deferred financing fees 2,188 8,331 896 Amortization of deferred community fees (436 ) (1,420 ) (404 ) Amortization of premium on mortgage notes payable 215 850 344 Non cash straight line rent (6,898 ) (25,932 ) (522 ) Change in fair value of contingent consideration

-

(1,500 )

-

Changes in: Receivables and other assets, net 2,865 (5,131 ) (8,773 ) Due to affiliates (5,345 ) 989 4,011 Accrued expenses and other liabilities   (7,420 )   13,429     50,093   Net cash provided by operating activities $ 601   $ 46,611   $ 42,532     Cash Flows From Investing Activities Acquisition of real estate investments

$

(15,691 ) $ (314,935 ) $ (1,249,167 ) Capital expenditures (2,712 ) (8,538 ) (3,502 ) Funds reserved for future capital expenditures (2,512 ) (3,530 )

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Deposits paid for investments   (4,700 )   (4,855 )   (505 ) Net cash used in investing activities $ (25,615 ) $ (331,858 ) $ (1,253,174 )   Cash Flows From Financing Activities Proceeds from mortgage notes payable $ 115,000 $ 195,144 $ 904,509 Principal payments of mortgage notes payable (3,794 ) (13,736 ) (746 ) Payment of deferred financing costs (1,590 ) (2,557 ) (40,625 ) Contributions

213,743

461,218

397,015 Distributions

(114,659

)

(158,980

) (28,838 ) Issuance of common stock and exercise of options   142     142  

-    

Net cash provided by financing activities $ 208,842   $ 481,231   $ 1,231,315   Net Increase in Cash and Cash Equivalents 183,828 195,984 20,673 Cash and Cash Equivalents, Beginning of Period   42,549     30,393     9,720   Cash and Cash Equivalents, End of Period $ 226,377   $ 226,377   $ 30,393     Supplemental Disclosure of Cash Flow Information Cash paid during the period for interest expense $ 12,906 $ 45,026 $ 9,252 Cash paid during the period for income taxes 187 1,357 899   Supplemental Schedule of Non-Cash Investing and Financing Activities Assumption of mortgage notes payable at fair value

$

-

$

-

$ 43,128 Issuance of seller financing for acquisition at fair value

-

-

9,407

Recognized contingent consideration at fair value

-

50 1,500 Common stock dividend declared but not paid 15,276 15,276

-

Issuance of common stock and exercise of options 23 23

-

   

Reconciliation of NOI

(dollars in thousands) For the Quarter Ended December 31, 2014 Revenue $ 70,382 Property operating expense   (31,711 ) NOI 38,671   Depreciation and amortization (28,597 ) Interest expense (15,494 ) Acquisition, transaction and integration expense (1,972 ) Management fee to affiliate (2,706 ) General and administrative expense (4,363 ) Income tax benefit   1,177   Net Loss   ($13,284 )     Reconciliation of FFO, Normalized FFO and AFFO (dollars in thousands, except per share data)   For the Quarter Ended December 31, 2014 Net loss ($13,284 ) Adjustments: Depreciation and amortization   28,597   FFO 15,313 Acquisition, transaction and integration expense     1,972   Normalized FFO $ 17,285 Normalized FFO per diluted share   $ 0.26   Straight-line rent (6,898 ) Amortization of deferred financing costs 2,188 Amortization of premium on mortgage notes payable 216

Amortization of deferred community fees and other(1)

    82   AFFO $ 12,873 AFFO per diluted share   $ 0.19     Weighted average diluted shares outstanding 66,404

 

(1) Includes net change in deferred community fees, above/below market lease amortization and other non-cash GAAP adjustments.

The table above sets 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, 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, 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.Investor Relations:David Smith, 212-479-3140