Pro Forma Quarterly AFFO Per Share of
$0.30
Third 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
September 30, 2015.
3Q 2015 BUSINESS
HIGHLIGHTS
- Total managed portfolio occupancy
increased 290 basis points for 3Q’15 vs. 3Q’14
- Same store occupancy for the managed
portfolio increased 210 basis points for 3Q’15 vs. 3Q’14
- Same store occupancy for the triple net
portfolio increased 180 basis points for 3Q’15 vs. 3Q’14
- Same store net operating income (“NOI”)
growth of 6.0% for the managed portfolio for 3Q’15 vs. 3Q’14
- Completed $640 million acquisition of
28 independent living (“IL”) properties
- Raised $465 million of secured debt
with a term of 10 years at an attractive fixed rate of 4.25%
- Declared a third quarter dividend of
$0.26 per share
3Q 2015 FINANCIAL
HIGHLIGHTS
- Total NOI of $53.2 million compared to
$38.4 million for 3Q 2014, a 39% increase
- Normalized Funds from Operations
(“NFFO”) of $26.3 million, or $0.30 per basic and diluted
share
- AFFO of $22.9 million, or $0.27 per
basic share and $0.26 per diluted share
- Normalized Funds Available for
Distribution (“Normalized FAD”) of $20.9 million, or $0.24 per
basic and diluted share
- Net loss of ($18.0) million, or ($0.21)
per basic and diluted share
3Q 2015 PRO FORMA
HIGHLIGHTS
- Pro forma total NOI of $58.4
million
- Pro forma NFFO of $28.9 million, or
$0.33 per diluted share
- Pro forma AFFO of $25.8 million, or
$0.30 per diluted share
- Pro forma Normalized FAD of $23.2
million, or $0.27 per diluted share
See note below for an explanation of pro forma amounts.
“New Senior’s portfolio once again delivered strong results
during the third quarter, with superior same store managed NOI
growth of 6.0% and a same store occupancy increase of 210 basis
points, exceeding our peers and the industry averages,” New Senior
Chief Executive Officer Susan Givens said. “These results speak to
the significant embedded growth potential we have in our portfolio
as a result of our unique acquisition strategy. We closed on our
largest acquisition year to date in August, which included 28
private pay independent living properties for $640 million, and the
portfolio has realized strong increases in occupancy of over 300bps
since May 2015 to finish September at 91.2% occupancy. We look
forward to continuing to deliver strong organic growth from our
existing portfolio, and we are committed to a disciplined approach
to capital allocation decisions.”
THIRD QUARTER 2015
RESULTS
Dollars in thousands, except per share data
For the Quarter Ended September 30, 2015 Amount
Per Diluted Share(B)
Non-GAAP(A)
NOI $53,225 -- FFO 22,853 $0.26 Normalized FFO 26,315 $0.30 AFFO
22,942 $0.26 Normalized FAD 20,891 $0.24
GAAP
Net loss ($17,959) $0.21 (A) See end of press release for
reconciliation of non-GAAP measures to net loss. (B) Per share
amounts are based on 87.1 million diluted shares outstanding for
non-GAAP amounts and 86.5 million diluted shares outstanding for
net loss. See the appendix in the third quarter presentation posted
in the Investor Relations section of the Company's website for an
explanation of the difference between basic and diluted shares.
ACQUISITION ACTIVITY
Year to date, the Company has closed $1.3 billion of
acquisitions, which includes 49 IL properties, 4 assisted living /
memory care (“AL/MC”) properties and 1 rental continuing care
retirement community (“CCRC”).
During the third quarter, the Company closed a $640 million
acquisition of 28 private pay, IL properties from affiliates of
Holiday Retirement (“Holiday”). The portfolio is 100% private pay,
contains 3,296 IL units located across 21 states and is expected to
generate an initial cash NOI yield of approximately 6.4%. Occupancy
for the portfolio has increased 330bps from 87.9% in May 2015 to
91.2% in September 2015. The acquisition was integrated into the
Company’s managed portfolio.
In October, the Company closed a $40 million acquisition of two
AL/MC properties that were added to the Company’s managed
portfolio.
PORTFOLIO PERFORMANCE
Total NOI increased 39% to $53.2 million compared to $38.4
million for 3Q 2014.
For the managed portfolio, total occupancy increased 290 basis
points to 86.9% compared to 84.0% for 3Q 2014, and same store
occupancy increased 210 basis points to 85.6% compared to 83.5% for
3Q 2014. Same store NOI increased 6.0% to $11.4 million compared to
$10.8 million for 3Q 2014. Same store information excludes one
property that, although owned during both comparison periods, was
not fully operational and had units that were not available for
rent during the third quarter of 2015. Including this property,
same store occupancy growth was 150 basis points and same store NOI
growth was 3.5%.
For the triple net portfolio, same store occupancy increased 180
basis points to 90.7% compared to 88.9% for 3Q 2014. Triple net
occupancy is presented one quarter in arrears from the date
reported on a trailing twelve month basis.
FINANCING ACTIVITY
In August, the Company completed a $465 million first mortgage
loan secured by the 28 independent living properties acquired from
Holiday with Freddie Mac. The loan bears interest at a fixed rate
of 4.25% and has a maturity of ten years. Proceeds from the loan
were used to finance the acquisition from Holiday and to pay down
$15 million of existing floating rate debt.
DIVIDEND
On November 4, 2015, the Company’s Board of Directors declared a
cash dividend of $0.26 per share for the quarter ended September
30, 2015. The dividend is payable on December 2, 2015 to
shareholders of record on November 18, 2015.
EXPLANATION OF 3Q 2015 PRO FORMA
HIGHLIGHTS
The pro forma financial information herein is calculated based
on 3Q’15 actual results with adjustments to reflect a full quarter
of income/expense (as estimated in the Company’s underwriting
models) associated with the acquisitions described under
“Acquisition Activity” above, as well as the related
financings.
The pro forma information included herein are
illustrative/hypothetical values and do not represent New Senior’s
historical performance or management’s projections for any future
reporting period.
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 November 5, 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 Third 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 December 5, 2015 by dialing
(855) 859-2056 (from within the U.S.) or (404) 537-3406 (from
outside the U.S.); please reference access code “60708069.”
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 constitute “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995, such as statements regarding management’s
intention to continue to deliver strong organic growth and the
expected initial cash NOI yield of the acquisition from Holiday,
which represents the expected cash NOI for a full year period
divided by the purchase price for the acquisition. 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) September 30, 2015
Assets (Unaudited) December 31, 2014 Real
estate investments: Land $ 218,816 $ 138,799 Buildings,
improvements and other 2,547,131 1,500,130 Accumulated depreciation
(107,512) (56,988) Net real estate property
2,658,435 1,581,941 Acquired lease and other intangible
assets 290,274 178,615 Accumulated amortization (139,095)
(79,021) Net real estate intangibles 151,179
99,594 Net real estate investments 2,809,614 1,681,535 Cash
and cash equivalents 156,926 226,377 Receivables and other assets,
net 88,712 58,247
Total Assets $
3,055,252 $ 1,966,159 Liabilities
and Equity Liabilities Mortgage notes payable, net $
2,127,184 $ 1,223,224 Due to affiliates 11,429 6,882 Dividends
payable - 15,276 Accrued expenses and other liabilities
94,520 72,241
Total Liabilities $ 2,233,133 $
1,317,623 Commitments and contingencies Equity
Preferred Stock $0.01 par value,
100,000,000 sharesauthorized and none outstanding as of both
September 30,2015 and December 31, 2014
$ - $ -
Common stock $0.01 par value,
2,000,000,000 sharesauthorized, 86,534,140 and 66,415,415 shares
issued andoutstanding as of September 30, 2015 and December 31,
2014, respectively
865 664 Additional paid-in capital 938,916 672,587 Accumulated
deficit (117,662) (24,715)
Total Equity $
822,119 $ 648,536
Total Liabilities and Equity
$ 3,055,252 $ 1,966,159
Consolidated Statements of Operations (unaudited)
(dollars in thousands, except share data)
Three Months Ended September 30, Nine
Months Ended September 30, 2015 2014 2015
2014 Revenues Resident fees and services $ 76,726 $
40,473 $ 187,384 $ 113,287 Rental revenue 28,259
26,672 82,661 71,316 Total revenues 104,985
67,145 270,045 184,603
Expenses
Property operating expense 51,760 28,776 128,855 80,531
Depreciation and amortization 40,812 28,670 110,543 74,682 Interest
expense 20,051 14,130 52,346 41,532 Acquisition, transaction and
integration expense 2,373 4,087 11,490 12,323 Management fee to
affiliate 4,085 2,385 10,207 5,764 General and administrative
expense 3,152 1,398 10,691 3,053 Loss on extinguishment of debt - -
5,091 - Other expense (income) 1,089 (1,500)
1,569 (1,500) Total expenses $ 123,322 $ 77,946 $ 330,792 $
216,385
Loss Before Income Taxes (18,337) (10,801)
(60,747) (31,782) Income tax (benefit) expense (378)
350 (344) 1,337
Net Loss $ (17,959) $ (11,151)
$ (60,403) $ (33,119)
Loss Per Share of Common Stock
Basic and diluted (A) $ (0.21) $ (0.17) $ (0.82) $ (0.50)
Weighted Average Number of Shares of Common Stock
Outstanding Basic and diluted (B) 86,533,384
66,399,857 73,342,453 66,399,857
Dividends
Declared Per Share of Common Stock $ - $ - $ 0.49 $ -
(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) 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. 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) Nine Months Ended
September 30, 2015 2014 Cash Flows From
Operating Activities Net loss $ (60,403) $ (33,119) Adjustments
to reconcile net loss to net cash provided by operating activities:
Depreciation of tangible assets and amortization of intangible
assets 110,651 74,682 Amortization of deferred financing costs
6,777 6,142 Amortization of deferred community fees (1,886) (984)
Amortization of premium on mortgage notes payable 228 635 Non-cash
straight line rent (18,885) (19,034) Change in fair value of
contingent consideration - (1,500) Loss on extinguishment of debt
5,091 - Equity-based compensation 17 - Provision for bad debt 1,449
649 Unrealized loss on interest rate caps 837 - Changes in:
Receivables and other assets (13,148) (8,645) Due to affiliates
4,547 6,334 Accrued expenses and other liabilities 18,641
20,850 Net cash provided by operating activities $ 53,916 $
46,010
Cash Flows From Investing Activities Cash paid
for acquisitions, net of deposits $ (1,212,169) $ (299,244) Capital
expenditures (7,788) (5,826) Funds reserved for future capital
expenditures (2,003) (1,018) Deposits paid for real estate
investments (11,355) (155) Net cash used in investing
activities $ (1,233,315) $ (306,243)
Cash Flows From
Financing Activities Proceeds from mortgage notes payable $
1,222,252 $ 80,144 Principal payments of mortgage notes payable
(11,683) (9,942) Repayments of mortgage notes payable (304,484) -
Payment of exit fee on extinguishment of debt (1,499) - Payment of
deferred financing costs (12,294) (967) Payment of common stock
dividend (47,820) - Purchase of interest rate caps (1,037) -
Proceeds from issuance of common stock 276,569 - Costs related to
issuance of common stock (10,056) - Contributions - 247,475
Distributions - (44,321) Net cash provided by
financing activities $ 1,109,948 $ 272,389
Net Increase in Cash
and Cash Equivalents (69,451) 12,156
Cash and Cash
Equivalents, Beginning of Period 226,377 30,393
Cash and Cash Equivalents, End of Period $ 156,926 $ 42,549
Supplemental Disclosure of Cash Flow Information Cash
paid during the period for interest expense $ 42,886 $ 32,120 Cash
paid during the period for income taxes 190 1,350
Supplemental Schedule of Non-Cash Investing and Financing
Activities Option exercise $ 62 $ - Other liabilities assumed
with acquisitions 651 - Issuance of contingent consideration at
fair value - 50
Reconciliation of NOI to Net
Loss (dollars in thousands) For
the Quarter Ended September 30, 2015 Total revenues $
104,985 Property operating expense (51,760)
NOI
53,225 Depreciation and amortization (40,812)
Interest expense (20,051) Acquisition, transaction and integration
expense (2,373) Management fee to affiliate (4,085) General and
administrative expense (3,152) Other expense (1,089) Income tax
benefit 378
Net Loss $ (17,959)
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
September 30, 2015 Net loss $ (17,959) Adjustments:
Depreciation and amortization 40,812
FFO
$ 22,853 FFO per diluted share $
0.26 Acquisition, transaction and integration expense 2,373
Other expense 1,089
Normalized FFO $
26,315 Normalized FFO per diluted share
$ 0.30 Straight-line rent (6,346) Amortization of
deferred financing costs 2,304 Amortization of deferred community
fees and other(1)
669
AFFO $ 22,942 AFFO per diluted share
$ 0.26 Maintenance capital expenditures
(2,051)
Normalized FAD $ 20,891
Normalized FAD per diluted share $ 0.24
Weighted average basic shares outstanding 86,533 Weighted
average diluted shares outstanding(2) 87,128 (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)(1)
(dollars in thousands)
3Q 2014 3Q 2015
NNNProperties
Same
StoreManagedProperties
Non-SameStoreManagedProperties
Total
NNNProperties
Same
StoreManagedProperties
Non-SameStoreManagedProperties
Total NOI $ 26,672
$ 11,222 $ 475 $
38,369 $ 28,259 $ 11,612
$ 13,354 $ 53,225
Depreciation and amortization (28,670) (40,812) Interest expense
(14,130) (20,051) Acquisition, transaction and integration expense
(4,087) (2,373) Management fee to affiliate (2,385) (4,085) General
and administrative expense (1,398) (3,152) Other income (expense)
1,500 (1,089) Income tax benefit (expense) (350) 378
Net Loss ($11,151) ($17,959)
(1) Includes all properties owned during both comparison periods
presented.
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 are useful as supplemental measures 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151105005579/en/
For New Senior Investment Group Inc.David Smith,
212-479-3140
New Senior Investment (NYSE:SNR)
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