Conference Call Scheduled for Friday, February 9, 2024 at
1:00 pm ET
CareTrust REIT, Inc. (NYSE:CTRE) today reported operating
results for the quarter and year ended December 31, 2023, as well
as other recent events.
For the quarter, CareTrust REIT reported:
- 100.0% of contractual rents collected, resulting in collections
for the year of 97.7%;
- Net income of $26.3 million and net income per share of
$0.22;
- Normalized FFO of $43.4 million and normalized FFO per share of
$0.36;
- Normalized FAD of $45.4 million and normalized FAD per share of
$0.37;
- A quarterly dividend of $0.28 per share, representing a payout
ratio of approximately 76% on normalized FAD;
- Investments of $43.2 million during the quarter and $288.1
million during the year at an estimated stabilized yield of 11.4%
and 9.8%, respectively, after rent ramps or rent resets under the
lease are completed;
- Settlement of 14.6 million shares under its ATM Program,
including both forward contract sales and direct issuances, for
gross proceeds of $319.9 million;
- Net Debt to Annualized Normalized Run Rate EBITDA of 1.4x.
Since quarter end, CareTrust REIT reported:
- Investments of $63.2 million at a yield of 12.9%;
- A new assisted living operator relationship;
- Investment pipeline of $250 million.
CareTrust’s President and Chief Executive Officer, Dave
Sedgwick, commented on the Company’s 2023 and fourth quarter
results: “2023 was a great year for the Company on all fronts. We
invested $288 million at a stabilized yield of 9.8%. We expanded
our operator and industry relationships. We paid off our $600
million line of credit and ended the year with approximately $294
million of cash on the balance sheet.” Mr. Sedgwick continued,
“Assuming the business environment for us and operators remains
steady, we expect 2024 to be a strong year for new investments. The
investment pipeline today is roughly $250 million, not including
larger portfolio deals we regularly review.”
Financial Results for Quarter and Year Ended December 31,
2023
Chief Financial Officer, Bill Wagner, reported that, for the
fourth quarter, CareTrust reported net income of $26.3 million, or
$0.22 per diluted weighted-average common share, normalized FFO of
$43.4 million, or $0.36 per diluted weighted-average common share,
and normalized FAD of $45.4 million, or $0.37 per diluted
weighted-average common share. For the year ended December 31,
2023, CareTrust reported net income of $53.7 million, or $0.50 per
diluted weighted-average common share, normalized FFO of $149.6
million, or $1.41 per diluted weighted-average common share, and
normalized FAD of $156.8 million, or $1.48 per diluted
weighted-average common share.
Liquidity
As of quarter end, CareTrust reported net debt-to-annualized
normalized run rate EBITDA of 1.4x, which is below the Company's
target leverage range of 4.0x to 5.0x, and a net debt-to-enterprise
value of approximately 9.5%. Mr. Wagner stated that, as of today,
the Company has no borrowings outstanding on its $600 million
revolving credit line, with no scheduled debt maturities prior to
2026. He also disclosed that CareTrust currently has approximately
$220 million in cash on hand. He further noted that the Company had
$274.1 million in available authorization remaining on its
at-the-market equity program as of December 31, 2023. During the
fourth quarter, the Company settled 14.6 million shares under the
ATM Program at a weighted average sales price of $21.94 for gross
proceeds of $319.9 million. During the year ended December 31,
2023, the Company settled 30.9 million shares under the ATM Program
at a weighted average sales price of $20.86 for gross proceeds of
$643.8 million. "With substantial availability on our revolver, and
equity markets readily accessible to us at present, we continue to
have a wide range of capital options for funding our opportunistic
growth strategy," said Mr. Wagner.
Guidance
The Company issued guidance for 2024, with Mr. Wagner projecting
on a per-diluted weighted-average common share basis net income of
approximately $1.02 to $1.04, normalized FFO of approximately $1.43
to $1.45, and normalized FAD of approximately $1.47 to $1.49. He
noted that the 2024 guidance is based on a diluted weighted-average
common share count of 130.5 million shares, and assumes the
following:
- All investments year-to-date;
- No new acquisitions;
- Dispositions and loan repayments made to date;
- No new dispositions, new loans or loan repayments beyond those
completed or announced to date;
- 2% - 3% uncollected rents;
- No new debt incurrences or new equity issuances;
- Estimated 2.5% CPI-based rent escalators under CareTrust's
long-term net leases.
Dividend Maintained
During the quarter, CareTrust declared a quarterly dividend of
$0.28 per common share. On an annualized basis, the payout ratio
was approximately 78% based on fourth quarter 2023 normalized FFO,
and 76% based on normalized FAD.
Conference Call
A conference call will be held on Friday, February 9, 2024, at
1:00 p.m. Eastern Time (10:00 a.m. Pacific Time), during which
CareTrust’s management will discuss fourth quarter and full year
2023 results, recent developments and other matters. The toll-free
dial-in number is 1 (800) 715-9871 or toll dial-in number is 1
(646) 307-1963 and the conference ID number is 7862003. 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. This call will be recorded, and
will be available for replay via the website for 30 days following
the call.
About CareTrust™
CareTrust REIT, Inc. is a self-administered, publicly-traded
real estate investment trust engaged in the ownership, acquisition,
development and leasing of skilled nursing, seniors housing and
other healthcare-related properties. With a nationwide portfolio of
long-term net-leased properties, and a growing portfolio of quality
operators leasing them, CareTrust REIT is pursuing both external
and organic growth opportunities across the United States. 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 the Company’s intent,
belief or expectations, including, but not limited to, statements
regarding the following: future financial and financing plans;
strategies related to the Company's business and its portfolio,
including acquisition opportunities and disposition plans; growth
prospects; operating and financial performance; expectations
regarding the settlement of ATM forward contracts and the making of
distributions and payment of dividends; 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 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; (ii) the risk that we may have to incur additional
impairment charges related to our assets held for sale if we are
unable to sell such assets at the prices we expect; (iii) the
impact of healthcare reform legislation, including minimum staffing
level requirements, on the operating results and financial
conditions of our tenants; (iv) the ability of our tenants to
comply with applicable laws, rules and regulations in the operation
of the properties we lease to them; (v) 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; (vi) 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; (vii) the ability to generate
sufficient cash flows to service our outstanding indebtedness;
(viii) access to debt and equity capital markets; (ix) fluctuating
interest rates; (x) the impact of public health crises, including
significant COVID-19 outbreaks as well as other pandemics or
epidemics; (xi) the ability to retain our key management personnel;
(xii) the ability to maintain our status as a real estate
investment trust (“REIT”); (xiii) changes in the U.S. tax law and
other state, federal or local laws, whether or not specific to
REITs; (xiv) other risks inherent in the real estate business,
including potential liability relating to environmental matters and
illiquidity of real estate investments; and (xv) any additional
factors included in our Annual Report on Form 10-K for the year
ended December 31, 2023, including in the section entitled “Risk
Factors” in Item 1A of such report, as such risk factors may be
amended, supplemented or superseded from time to time by other
reports we file with the SEC.
This press release and the related conference call provides
information about the Company's financial results as of and for the
quarter and year ended December 31, 2023 and is provided as of the
date hereof, unless specifically stated otherwise. The Company
expressly disclaims 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 the Company’s 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," “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 STATEMENTS OF
OPERATIONS
(in thousands, except per
share data)
For the Three Months
Ended
December 31,
For the Twelve Months
Ended
December 31,
2023
2022
2023
2022
(Unaudited)
Revenues:
Rental income
$
53,473
$
47,675
$
198,599
$
187,506
Interest and other income
6,261
4,135
19,171
8,626
Total revenues
59,734
51,810
217,770
196,132
Expenses:
Depreciation and amortization
13,211
11,926
51,199
50,316
Interest expense
8,266
9,608
40,883
30,008
Property taxes
1,733
968
6,170
4,333
Impairment of real estate investments
4,791
5,356
36,301
79,062
Provision for loan losses, net
—
—
—
3,844
Property operating expenses
563
695
3,423
5,039
General and administrative
6,507
4,813
21,805
20,165
Total expenses
35,071
33,366
159,781
192,767
Other income (loss):
Gain (loss) on sale of real estate,
net
260
(1,668
)
2,218
(3,769
)
Unrealized gain (loss) on other real
estate related investments, net
1,371
(2,396
)
(6,485
)
(7,102
)
Total other income (loss)
1,631
(4,064
)
(4,267
)
(10,871
)
Net income (loss)
26,294
14,380
53,722
(7,506
)
Net loss attributable to noncontrolling
interests
(2
)
—
(13
)
—
Net income (loss) attributable to
CareTrust REIT, Inc.
$
26,296
$
14,380
$
53,735
$
(7,506
)
Earnings (loss) per common share
attributable to CareTrust REIT, Inc.:
Basic
$
0.22
$
0.15
$
0.50
$
(0.08
)
Diluted
$
0.22
$
0.15
$
0.50
$
(0.08
)
Weighted-average number of common
shares:
Basic
121,411
97,227
105,956
96,703
Diluted
121,684
97,272
106,152
96,703
Dividends declared per common
share
$
0.28
$
0.275
$
1.12
$
1.10
CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME
(LOSS) TO NON-GAAP FINANCIAL MEASURES
(in thousands)
(Unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Net income (loss) attributable to
CareTrust REIT, Inc.
$
26,296
$
14,380
$
53,735
$
(7,506
)
Depreciation and amortization
13,211
11,926
51,199
50,316
Interest expense
8,266
9,608
40,883
30,008
Amortization of stock-based
compensation
1,774
1,463
5,153
5,758
EBITDA attributable to CareTrust REIT,
Inc.
49,547
37,377
150,970
78,576
Impairment of real estate investments
4,791
5,356
36,301
79,062
Provision for loan losses, net
—
—
—
3,844
Provision for doubtful accounts and lease
restructuring
—
390
—
1,367
Property operating expenses
714
914
4,095
6,597
(Gain) loss on sale of real estate,
net
(260
)
1,668
(2,218
)
3,769
Unrealized (gain) loss on other real
estate related investments, net
(1,371
)
2,396
6,485
7,102
Normalized EBITDA attributable to
CareTrust REIT, Inc.
53,421
48,101
$
195,633
$
180,317
Full impact of quarterly
investments[1]
48
—
Normalized Run Rate EBITDA attributable
to CareTrust REIT, Inc.
$
53,469
$
48,101
Net income (loss) attributable to
CareTrust REIT, Inc.
$
26,296
$
14,380
$
53,735
$
(7,506
)
Real estate related depreciation and
amortization
13,206
11,921
51,179
50,296
Impairment of real estate investments
4,791
5,356
36,301
79,062
(Gain) loss on sale of real estate,
net
(260
)
1,668
(2,218
)
3,769
Funds from Operations (FFO)
attributable to CareTrust REIT, Inc.
44,033
33,325
138,997
125,621
Provision for loan losses, net
—
—
—
3,844
Provision for doubtful accounts and lease
restructuring
—
390
—
1,367
Property operating expenses
714
914
4,095
6,597
Unrealized (gain) loss on other real
estate related investments, net
(1,371
)
2,396
6,485
7,102
Normalized FFO attributable to
CareTrust REIT, Inc.
$
43,376
$
37,025
$
149,577
$
144,531
NET DEBT TO ANNUALIZED
NORMALIZED RUN RATE EBITDA RECONCILIATION
(in thousands)
(Unaudited)
Three Months Ended
December 31,
2023
2022
Total debt
$
600,000
$
725,000
Cash, cash equivalents
(294,448
)
(13,178
)
Net Debt
$
305,552
$
711,822
Annualized Normalized Run Rate EBITDA
attributable to CareTrust REIT, Inc.[2]
$
213,876
$
192,404
Net Debt to Annualized Normalized Run
Rate EBITDA attributable to CareTrust REIT, Inc.
1.4
x
3.7
x
[1] Quarterly adjustments give effect to
the investments completed and loans receivable pay downs during the
three months ended for the respective period as though such
investments and pay downs were completed as of the beginning of the
period.
[2] Annualized Normalized Run Rate EBITDA
is calculated as Normalized Run Rate EBITDA attributable to
CareTrust REIT, Inc. for the quarter multiplied by four (4).
CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME
(LOSS) TO NON-GAAP FINANCIAL MEASURES (continued)
(in thousands, except per
share data)
(Unaudited)
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2023
2022
2023
2022
Net income (loss) attributable to
CareTrust REIT, Inc.
$
26,296
$
14,380
$
53,735
$
(7,506
)
Real estate related depreciation and
amortization
13,206
11,921
51,179
50,296
Amortization of deferred financing
fees
610
535
2,436
2,095
Amortization of stock-based
compensation
1,774
1,463
5,153
5,758
Straight-line rental income
8
(3
)
29
(17
)
Amortization of below market lease
intangible
(384
)
—
(384
)
—
Impairment of real estate investments
4,791
5,356
36,301
79,062
(Gain) loss on sale of real estate,
net
(260
)
1,668
(2,218
)
3,769
Funds Available for Distribution (FAD)
attributable to CareTrust REIT, Inc.
46,041
35,320
146,231
133,457
Provision for loan losses, net
—
—
—
3,844
Provision for doubtful accounts and lease
restructuring
—
390
—
1,367
Property operating expenses
714
914
4,095
6,597
Unrealized (gain) loss on other real
estate related investments, net
(1,371
)
2,396
6,485
7,102
Normalized FAD attributable to
CareTrust REIT, Inc.
$
45,384
$
39,020
$
156,811
$
152,367
FFO per share attributable to CareTrust
REIT, Inc.
$
0.36
$
0.34
$
1.31
$
1.30
Normalized FFO per share attributable
to CareTrust REIT, Inc.
$
0.36
$
0.38
$
1.41
$
1.49
FAD per share attributable to CareTrust
REIT, Inc.
$
0.38
$
0.36
$
1.38
$
1.38
Normalized FAD per share attributable
to CareTrust REIT, Inc.
$
0.37
$
0.40
$
1.48
$
1.57
Diluted weighted average shares
outstanding[1]
121,854
97,408
106,264
96,885
[1] For the periods presented, the diluted
weighted average shares have been calculated using the treasury
stock method.
CARETRUST REIT, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS - 5 QUARTER TREND
(in thousands, except per
share data)
(Unaudited)
Quarter
Quarter
Quarter
Quarter
Quarter
Ended
Ended
Ended
Ended
Ended
December 31,
2022
March 31,
2023
June 30,
2023
September 30,
2023
December 31,
2023
Revenues:
Rental income
$
47,675
$
46,163
$
47,745
$
51,218
$
53,473
Interest and other income
4,135
4,443
3,808
4,659
6,261
Total revenues
51,810
50,606
51,553
55,877
59,734
Expenses:
Depreciation and amortization
11,926
12,238
12,716
13,034
13,211
Interest expense
9,608
9,827
11,040
11,750
8,266
Property taxes
968
880
1,390
2,167
1,733
Impairment of real estate investments
5,356
1,886
21,392
8,232
4,791
Property operating expenses
695
963
658
1,239
563
General and administrative
4,813
5,061
4,718
5,519
6,507
Total expenses
33,366
30,855
51,914
41,941
35,071
Other (loss) income:
(Loss) gain on sale of real estate,
net
(1,668
)
(70
)
2,028
—
260
Unrealized (loss) gain on other real
estate related investments, net
(2,396
)
(454
)
(2,151
)
(5,251
)
1,371
Total other (loss) income
(4,064
)
(524
)
(123
)
(5,251
)
1,631
Net income (loss)
14,380
19,227
(484
)
8,685
26,294
Net loss attributable to noncontrolling
interests
—
—
—
(11
)
(2
)
Net income (loss) attributable to
CareTrust REIT, Inc.
$
14,380
$
19,227
$
(484
)
$
8,696
$
26,296
Diluted earnings (loss) per share
attributable to CareTrust REIT, Inc.
$
0.15
$
0.19
$
(0.01
)
$
0.08
$
0.22
Diluted weighted average shares
outstanding
97,272
99,087
99,117
104,311
121,684
CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME
(LOSS) TO NON-GAAP FINANCIAL MEASURES - 5 QUARTER TREND
(in thousands)
(Unaudited)
Quarter
Quarter
Quarter
Quarter
Quarter
Ended
Ended
Ended
Ended
Ended
December 31,
2022
March 31,
2023
June 30,
2023
September 30,
2023
December 31,
2023
Net income (loss) attributable to
CareTrust REIT, Inc.
$
14,380
$
19,227
$
(484
)
$
8,696
$
26,296
Depreciation and amortization
11,926
12,238
12,716
13,034
13,211
Interest expense
9,608
9,827
11,040
11,750
8,266
Amortization of stock-based
compensation
1,463
936
924
1,519
1,774
EBITDA attributable to CareTrust REIT,
Inc.
37,377
42,228
24,196
34,999
49,547
Impairment of real estate investments
5,356
1,886
21,392
8,232
4,791
Provision for doubtful accounts and lease
restructuring
390
—
—
—
—
Property operating expenses
914
1,134
831
1,416
714
Loss (gain) on sale of real estate,
net
1,668
70
(2,028
)
—
(260
)
Unrealized loss (gain) on other real
estate related investments, net
2,396
454
2,151
5,251
(1,371
)
Normalized EBITDA attributable to
CareTrust REIT, Inc.
$
48,101
$
45,772
$
46,542
$
49,898
$
53,421
Net income (loss) attributable to
CareTrust REIT, Inc.
$
14,380
$
19,227
$
(484
)
$
8,696
$
26,296
Real estate related depreciation and
amortization
11,921
12,233
12,712
13,028
13,206
Impairment of real estate investments
5,356
1,886
21,392
8,232
4,791
Loss (gain) on sale of real estate,
net
1,668
70
(2,028
)
—
(260
)
Funds from Operations (FFO)
attributable to CareTrust REIT, Inc.
33,325
33,416
31,592
29,956
44,033
Provision for doubtful accounts and lease
restructuring
390
—
—
—
—
Property operating expenses
914
1,134
831
1,416
714
Unrealized loss (gain) on other real
estate related investments, net
2,396
454
2,151
5,251
(1,371
)
Normalized FFO attributable to
CareTrust REIT, Inc.
$
37,025
$
35,004
$
34,574
$
36,623
$
43,376
CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME
(LOSS) 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
December 31,
2022
March 31,
2023
June 30,
2023
September 30,
2023
December 31,
2023
Net income (loss) attributable to
CareTrust REIT, Inc.
$
14,380
$
19,227
$
(484
)
$
8,696
$
26,296
Real estate related depreciation and
amortization
11,921
12,233
12,712
13,028
13,206
Amortization of deferred financing
fees
535
609
608
609
610
Amortization of stock-based
compensation
1,463
936
924
1,519
1,774
Straight-line rental income
(3
)
7
7
7
8
Amortization of below market lease
intangible
—
—
—
—
(384
)
Impairment of real estate investments
5,356
1,886
21,392
8,232
4,791
Loss (gain) on sale of real estate,
net
1,668
70
(2,028
)
—
(260
)
Funds Available for Distribution (FAD)
attributable to CareTrust REIT, Inc.
35,320
34,968
33,131
32,091
46,041
Provision for doubtful accounts and lease
restructuring
390
—
—
—
—
Property operating expenses
914
1,134
831
1,416
714
Unrealized loss (gain) on other real
estate related investments, net
2,396
454
2,151
5,251
(1,371
)
Normalized FAD attributable to
CareTrust REIT, Inc.
$
39,020
$
36,556
$
36,113
$
38,758
$
45,384
FFO per share attributable to CareTrust
REIT, Inc.
$
0.34
$
0.34
$
0.32
$
0.29
$
0.36
Normalized FFO per share attributable
to CareTrust REIT, Inc.
$
0.38
$
0.35
$
0.35
$
0.35
$
0.36
FAD per share attributable to CareTrust
REIT, Inc.
$
0.36
$
0.35
$
0.33
$
0.31
$
0.38
Normalized FAD per share attributable
to CareTrust REIT, Inc.
$
0.40
$
0.37
$
0.36
$
0.37
$
0.37
Diluted weighted average shares
outstanding[1]
97,408
99,195
99,360
104,422
121,854
[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, 2023
December 31, 2022
Assets:
Real estate investments, net
$
1,567,119
$
1,421,410
Other real estate related investments
(including accrued interest of $1,727 and $1,320 as of December 31,
2023 and 2022, respectively)
180,368
156,368
Assets held for sale, net
15,011
12,291
Cash and cash equivalents
294,448
13,178
Accounts and other receivables
395
416
Prepaid expenses and other assets, net
23,337
11,690
Deferred financing costs, net
4,160
5,428
Total assets
$
2,084,838
$
1,620,781
Liabilities and Equity:
Senior unsecured notes payable, net
$
396,039
$
395,150
Senior unsecured term loan, net
199,559
199,348
Unsecured revolving credit facility
—
125,000
Accounts payable, accrued liabilities and
deferred rent liabilities
33,992
24,360
Dividends payable
36,531
27,550
Total liabilities
666,121
771,408
Equity:
Common stock
1,300
990
Additional paid-in capital
1,883,147
1,245,337
Cumulative distributions in excess of
earnings
(467,628
)
(396,954
)
Total stockholders' equity
1,416,819
849,373
Non-controlling interests
1,898
—
Total equity
1,418,717
849,373
Total liabilities and equity
$
2,084,838
$
1,620,781
CARETRUST REIT, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
For the Twelve Months Ended
December 31,
2023
2022
Cash flows from operating activities:
Net income (loss)
$
53,722
$
(7,506
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization (including
below-market ground leases)
51,257
50,378
Amortization of deferred financing
costs
2,436
2,095
Unrealized losses on other real estate
related investments, net
6,485
7,102
Amortization of stock-based
compensation
5,153
5,758
Straight-line rental income
29
(17
)
Amortization of below market rent
(384
)
—
Adjustment for collectibility of rental
income
—
1,417
Noncash interest income
(407
)
(1,165
)
(Gain) loss on sale of real estate,
net
(2,218
)
3,769
Impairment of real estate investments
36,301
79,062
Provision for loan losses, net
—
3,844
Change in operating assets and
liabilities:
Accounts and other receivables
(9
)
604
Prepaid expenses and other assets, net
(21
)
123
Accounts payable, accrued liabilities and
deferred rent liabilities
2,423
(1,049
)
Net cash provided by operating
activities
154,767
144,415
Cash flows from investing activities:
Acquisitions of real estate, net of
deposits applied
(233,776
)
(21,915
)
Purchases of equipment, furniture and
fixtures and improvements to real estate
(10,976
)
(7,292
)
Investment in real estate related
investments and other loans receivable
(60,319
)
(149,650
)
Preferred equity investments
(1,782
)
—
Principal payments received on real estate
related investments and other loans receivable
26,525
6,308
Escrow deposits for potential acquisitions
of real estate
(3,800
)
—
Net proceeds from sales of real estate
16,313
45,149
Net cash used in investing activities
(267,815
)
(127,400
)
Cash flows from financing activities:
Proceeds from the issuance of common
stock, net
634,446
47,236
Borrowings under unsecured revolving
credit facility
185,000
160,000
Payments on unsecured revolving credit
facility
(310,000
)
(115,000
)
Payments on debt extinguishment and
deferred financing costs
(68
)
(5,361
)
Net-settle adjustment on restricted
stock
(1,479
)
(4,469
)
Dividends paid on common stock
(115,492
)
(106,138
)
Contributions from noncontrolling
interests
1,952
—
Distributions to noncontrolling
interests
(41
)
—
Net cash provided by (used in) financing
activities
394,318
(23,732
)
Net increase (decrease) in cash and cash
equivalents
281,270
(6,717
)
Cash and cash equivalents as of the
beginning of period
13,178
19,895
Cash and cash equivalents as of the end
of period
$
294,448
$
13,178
CARETRUST REIT, INC.
DEBT SUMMARY
(dollars in thousands)
(Unaudited)
December 31, 2023
Interest
Maturity
% of
Deferred
Net Carrying
Debt
Rate
Date
Principal
Principal
Loan Costs
Value
Fixed Rate Debt
Senior unsecured notes payable
3.875
%
2028
$
400,000
66.7
%
$
(3,961
)
$
396,039
Floating Rate Debt
Senior unsecured term loan
6.958
%
[1]
2026
200,000
33.3
%
(441
)
199,559
Unsecured revolving credit facility
—
%
[2]
2027
[3]
—
—
%
—
[4]
—
6.958
%
200,000
33.3
%
(441
)
199,559
Total Debt
4.903
%
$
600,000
100.0
%
$
(4,402
)
$
595,598
[1] Funds can be borrowed at applicable
SOFR 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
SOFR plus 1.10% to 1.55% or at the Base Rate (as defined) plus
0.10% to 0.55%.
[3] Maturity date does not assume 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.
CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME
TO NON-GAAP FINANCIAL MEASURES
(shares in thousands)
(Unaudited)
2024 Guidance
Full Year 2024
Guidance[1]
Low
High
Net income attributable to CareTrust
REIT, Inc.
$
1.02
$
1.04
Real estate related depreciation and
amortization
0.40
0.40
Funds from Operations (FFO)
attributable to CareTrust REIT, Inc.
1.42
1.44
Property operating expenses
0.01
0.01
Normalized FFO attributable to
CareTrust REIT, Inc.
$
1.43
$
1.45
Net income attributable to CareTrust
REIT, Inc.
$
1.02
$
1.04
Real estate related depreciation and
amortization
0.40
0.40
Amortization of deferred financing
fees
0.02
0.02
Amortization of stock-based
compensation
0.04
0.04
Straight-line rental income
—
—
Amortization of below market lease
intangible
(0.02
)
(0.02
)
Funds Available for Distribution (FAD)
attributable to CareTrust REIT, Inc.
1.46
1.48
Property operating expenses
0.01
0.01
Normalized FAD attributable to
CareTrust REIT, Inc.
$
1.47
$
1.49
Weighted average shares
outstanding:
Diluted
130,518
130,518
[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, (iii) no
new debt incurrences or new equity issuances, (iv) estimated 2.5%
CPI-based rent escalators under CareTrust's long-term net leases,
and (v) assumes 2% - 3% uncollected rents for the year.
Non-GAAP Financial Measures
EBITDA attributable to CareTrust REIT, Inc. represents net
income (loss) attributable to CareTrust REIT, Inc. before interest
expense (including amortization of deferred financing costs),
amortization of stock-based compensation, and depreciation and
amortization. Normalized EBITDA attributable to CareTrust REIT,
Inc. represents EBITDA attributable to CareTrust REIT, Inc. as
further adjusted to eliminate the impact of certain items that the
Company does not consider indicative of core operating performance,
such as recovery of previously reversed rent, lease termination
revenue, property operating expenses, gains or losses from
dispositions of real estate, real estate impairment charges,
provision for loan losses, non-routine transaction costs, loss on
extinguishment of debt, unrealized loss on other real estate
related investments and provision for doubtful accounts and lease
restructuring, as applicable. EBITDA attributable to CareTrust
REIT, Inc. and Normalized EBITDA attributable to CareTrust REIT,
Inc. 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 attributable to CareTrust REIT, Inc. and
Normalized EBITDA attributable to CareTrust REIT, Inc. 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. 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 dispositions of real
estate investments, real estate related depreciation and
amortization and real estate impairment charges, and adjustments
for unconsolidated partnerships and joint ventures. The Company
computes FFO attributable to CareTrust REIT, Inc. in accordance
with Nareit’s definition.
FAD attributable to CareTrust REIT, Inc. is defined as FFO
attributable to CareTrust REIT, Inc. excluding noncash income and
expenses, such as amortization of stock-based compensation,
amortization of deferred financing fees, amortization of above and
below market intangibles, and the effects of straight-line rent.
The Company considers FAD attributable to CareTrust REIT, Inc. 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 attributable to
CareTrust REIT, Inc. and Normalized FAD attributable to CareTrust
REIT, Inc., 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,
non-routine transaction costs, provision for doubtful accounts and
lease restructuring, loss on extinguishment of debt, unrealized
loss on other real estate related investments, 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 also discloses Net Debt to Annualized Normalized Run
Rate EBITDA, which compares the Company’s Net Debt as of the last
day of the quarter to the Annualized Run Rate EBITDA attributable
to CareTrust REIT, Inc. for the quarter. Net Debt is defined as the
Company’s Total Debt as of the last day of the specified quarter
adjusted to exclude the Company’s cash, cash equivalents,
restricted cash and escrow deposits on acquisition of real estate
as of such date as well as the net proceeds from the expected
settlement of shares sold under equity forward contracts through
the Company’s ATM Program that are outstanding as of such date.
Normalized Run Rate EBITDA represents Normalized EBITDA, adjusted
to give effect to the investments completed during the three months
ended for the respective period as though such investments were
completed as of the beginning of the period. Annualized Normalized
Run Rate EBITDA is calculated as Normalized Run Rate EBITDA
attributable to CareTrust REIT, Inc. for the specified quarter
multiplied by four.
The Company believes that net income attributable to CareTrust
REIT, Inc., 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, in
each case attributable to CareTrust REIT, Inc., 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, in each case attributable to CareTrust REIT,
Inc., 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
related 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. The
Company believes that the disclosure of Net Debt to Annualized
Normalized Run Rate EBITDA provides a useful measure to investors
to evaluate the credit strength of the Company and its ability to
service its debt obligations and to compare the Company’s credit
strength to prior reporting periods and to other companies without
the effect of charges that are not indicative of the Company’s
ongoing performance or that could obscure the Company’s actual
credit quality and after considering the effect of investments
occurring during the period.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240207499046/en/
CareTrust REIT, Inc. (949) 542-3130 ir@caretrustreit.com
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