Successfully Extended Corporate Credit
Facility, Disposition of Non-Core Assets and Opening of Newly
Developed 102-unit Community in Colorado
TORONTO, Nov. 9, 2023
/CNW/ - Invesque Inc. (TSX: IVQ.U) (TSX: IVQ) (the "Company") today
announced its results for the three and nine months ended
September 30, 2023.
Third Quarter and Subsequent Highlights
The Company had a busy third quarter, continuing to streamline
and strengthen the portfolio through dispositions and operator
transitions. In addition, the Company opened up a newly developed
community.
- As previously announced, Adlai
Chester assumed the role of Chief Financial Officer in
addition to EVP – Investments, effective August 1.
- As previously announced, on September
26, the Company received debentureholder approval to pass an
extraordinary resolution amending certain terms of its 8.75%
Convertible Unsecured Subordinated Debentures due September 30, 2026 (the "Debentures"). On
October 5, the Company redeemed
US$4.8 million of the Debentures
pursuant to the amendment.
- On October 27, the Company
received confirmation that final licensure approval was granted for
a newly constructed seniors housing community in Parker, Colorado. The property consists of 102
units of assisted living and memory care and will be part of a
joint venture between the Company and Health Dimensions Group
("HDG"). HDG will manage day-to-day operations of the
community.
- On November 1, the Company sold
two seniors housing communities in Georgia and two seniors housing communities in
South Carolina to Logos Living
Capital, LLC ("Logos"), a New
York-based private equity firm focused on senior housing.
Viva Senior Living will manage the
properties on behalf of Logos. The communities, which were
previously part of the Company's joint venture with Phoenix Senior
Living, sold for US$25.1million.
- On November 8, the Company
executed an Amended and Restated Credit Agreement (the "A&R
Credit Agreement") with a syndicate of lenders led by KeyBank. The
A&R Credit Agreement extends the maturity from December 19, 2023 to March
31, 2025.
- Reported funds from operations
("FFO")1 of US$0.07 and US$0.30
per common share for the three and nine months ending September 30, 2023. The Company reported adjusted
funds from operations ("AFFO")2 of
US$0.05 and US$0.27 per common share for the three and nine
months ending September 30,
2023.
|
__________________________
|
|
1 FFO
is a measure used by management to evaluate operating performance.
Please refer to the section "Non-IFRS Measures" in this press
release for more information.
|
|
|
2 AFFO
is a measure used by management to evaluate operating performance.
Please refer to the section "Non-IFRS Measures" in this press
release for more information.
|
"The Company made great strides over the last ninety days on a
number of fronts, including the sale of a non-core and
underperforming seniors housing portfolio, the opening of a newly
constructed community in Colorado,
and an extension of the KeyBank credit facility that was previously
set to expire at year-end," commented Scott
White, Chairman & Chief Executive Officer.
Financial Highlights
|
Three months
ended
September
30,
|
|
Nine months
ended
September
30,
|
|
(in thousands of U.S
dollars, except per share values)
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
|
Revenue
|
$
46,471
|
$
49,665
|
|
$
146,539
|
$
147,991
|
|
Net income
(loss)
|
$
592
|
$
(13,503)
|
|
$
(60,932)
|
$
17,845
|
|
FFO
|
$
4,223
|
$
6,725
|
|
$
16,950
|
$
17,087
|
|
FFO per
share
|
$
0.07
|
$
0.12
|
|
$
0.30
|
$
0.30
|
|
AFFO
|
$
3,017
|
$
6,207
|
|
$
15,515
|
$
16,460
|
|
AFFO per
share
|
$
0.05
|
$
0.11
|
|
$
0.27
|
$
0.29
|
|
|
|
|
|
|
Balance Sheet and Portfolio Highlights
|
(in thousands of U.S.
dollars, except number of properties)
|
September 30,
2023
|
|
December 31,
2022
|
|
|
|
|
|
Total assets
|
$890,403
|
|
$1,097,340
|
|
Number of
properties3
|
65
|
|
77
|
|
Debt
|
$616,713
|
|
$765,457
|
|
|
|
|
About Invesque
The Company is a North American health
care real estate company with an investment thesis focused on the
premise that an aging demographic in North America will continue to utilize health
care services in growing proportion to the overall economy. The
Company currently capitalizes on this opportunity by investing in a
portfolio of income-generating predominantly private pay seniors
housing communities. The Company's portfolio includes investments
primarily in independent living, assisted living, and memory care,
which are operated under long-term leases and joint venture
arrangements with industry-leading operating partners. The
Company's portfolio also includes investments in owner-occupied
seniors housing properties in which the Company owns the real
estate, the licensed operations, and provides management services
through Commonwealth Senior Living, LLC, a Delaware limited liability company
("Commonwealth").
|
___________________________
|
|
3
Excludes two medical office buildings and one seniors housing
community held for sale as of September 30, 2023. Excludes three
medical office buildings held for sale as of December 31,
2022.
|
Forward-Looking Information
This press release
(this "Press Release") contains certain forward-looking information
and/or statements ("forward-looking statements"), that reflect and
are provided for the purpose of presenting information about
management's current expectations and plans relating to the future,
including, without limitation. Forward-looking information is
typically identified by terms such as "anticipate," "believe,"
"continue," "expect," "expectations," "look," "may," "plan,"
"project," "should," "will," and other similar expressions that do
not relate solely to historical matters and suggest future outcomes
or events. Readers should not place undue reliance on
forward-looking statements and are cautioned that forward-looking
statements may not be appropriate for other purposes.
Forward-looking statements in this Press Release are based on
current beliefs, expectations, and certain assumptions of the
Company's management and are subject to significant known and
unknown risks, uncertainties, and other factors that are beyond the
Company's ability to predict or control and may cause actual
results or events to differ materially from those expressed or
implied by such statements and, accordingly, should not be read as
guarantees of future performance or results and will not
necessarily be accurate indications of whether or not such results
will be achieved. The Company's actual results may differ as a
result of various factors, including without limitation, the risks
described in the Company's current annual information form and
management's discussion and analysis, available on SEDAR at
www.sedar.com, which risks may be
dependent on market factors and not entirely within the Company's
control. Although management believes that it has a reasonable
basis for the expectations reflected in these forward-looking
statements, actual results may differ from those suggested by the
forward-looking statements for various reasons. These
forward-looking statements reflect current expectations of the
Company as of the date of this Press Release and speak only as of
the date of this Press Release. The Company does not undertake any
obligation to publicly update or revise any forward-looking
statements except as may be required by applicable law.
There can be no assurance that forward-looking statements will
prove to be accurate as actual outcomes and results may differ
materially from those expressed in these forward-looking
statements. Readers are cautioned not to place undue reliance on
any such forward-looking statements, which are given as of the date
hereof, and not to use such forward-looking statements for anything
other than the intended purpose. Further, except as expressly
required by applicable law, the Company assumes no obligation to
publicly update or revise any forward-looking statement, whether as
a result of new information, future events, or otherwise.
Forward-looking statements contained in this Press Release are
expressly qualified by this cautionary statement.
Non-IFRS Measures
The Company reports its financial
results in accordance with International Financial Reporting
Standard ("IFRS"). Included in this Press Release are certain
non-IFRS financial measures as supplemental indicators used by the
Company's management to track the Company's performance. These
non-IFRS measures are NOI, FFO, and AFFO. The Company believes that
these non-IFRS financial measures provide useful information to
both the Company's management and investors in measuring the
financial performance and financial condition of the Company. These
measures do not have a standardized meaning prescribed by IFRS and,
therefore, may not be comparable to similar measures presented by
other companies, nor should they be construed as an alternative to
other financial measures determined in accordance with IFRS. For a
full definition of these measures, please refer to the Financial
Measures section of the September 30, 2023, MD&A available
on the Company's website and on SEDAR at www.sedar.com, which
information is incorporated herein by reference, and the full
reconciliation to which are included below.
FFO Tables
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|
2023
|
2022
|
2023
|
2022
|
|
Net loss from
continuing operations for the period
|
$
751
|
$
(12,449)
|
$
(56,518)
|
$
(16,017)
|
|
Add/(deduct):
|
|
|
|
|
|
Change in fair value of
investment properties
|
1,563
|
13,898
|
51,210
|
35,433
|
|
Property taxes
accounted for under IFRIC 21
|
(1,423)
|
(2,827)
|
2,264
|
2,824
|
|
Depreciation and
amortization expense
|
3,742
|
3,838
|
11,001
|
11,315
|
|
Amortization of tenant
inducements
|
61
|
61
|
183
|
182
|
|
Accretion expense and
amortization of non-cash adjustments to the 2016 Convertible
Debentures
|
6,024
|
635
|
7,524
|
2,204
|
|
Change in fair value of
financial instruments
|
(11,962)
|
(6,463)
|
(18,500)
|
(23,150)
|
|
Change in fair value of
contingent consideration
|
—
|
—
|
—
|
—
|
|
Transaction
Costs
|
673
|
68
|
1,328
|
—
|
|
Loss on sale of
property, plant and equipment
|
—
|
3,670
|
(12)
|
3,009
|
|
Impairment of property,
plant and equipment
|
3,636
|
—
|
3,636
|
—
|
|
Deferred income tax
recovery
|
(958)
|
—
|
(1,917)
|
(1,127)
|
|
Allowance for credit
losses on loans and interest receivable
|
465
|
6,752
|
14,635
|
7,222
|
|
Change in
non-controlling interest liability in respect of the
above
|
(29)
|
(38)
|
(99)
|
60
|
|
Adjustments for equity
accounted entities
|
1,855
|
(295)
|
2,683
|
(5,428)
|
|
|
|
|
|
|
FFO from continuing
operations
|
$
4,398
|
$
6,850
|
$
17,418
|
$
16,527
|
|
FFO from discontinued
operations
|
(175)
|
(125)
|
(468)
|
560
|
|
|
|
|
|
|
Total FFO
|
$
4,223
|
$
6,725
|
$
16,950
|
$
17,087
|
|
Weighted average number
of shares, including fully vested deferred shares: Basic
|
56,674,097
|
56,626,021
|
56,718,681
|
56,684,212
|
|
|
|
|
|
|
Funds from operations
per share
|
$
0.07
|
$
0.12
|
$
0.30
|
$
0.30
|
AFFO Tables
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|
2023
|
2022
|
2023
|
2022
|
|
Cash flows provided by
(used in) operating activities
|
$
4,704
|
$
6,168
|
$
8,224
|
$
14,287
|
|
Change in non-cash
working capital
|
(1,260)
|
(719)
|
5,891
|
2,074
|
|
Less: interest
expense
|
(9,313)
|
(9,655)
|
(29,125)
|
(29,116)
|
|
Less: change in
non-controlling interest liability
|
(95)
|
(72)
|
(231)
|
(448)
|
|
Plus: loss from joint
ventures
|
(1,454)
|
221
|
394
|
4,146
|
|
Plus: interest
paid
|
9,552
|
11,412
|
28,840
|
31,483
|
|
Less: interest
received
|
(19)
|
(144)
|
(275)
|
(414)
|
|
Plus: debt
extinguishment costs
|
(4)
|
(10)
|
353
|
584
|
|
Plus: realized loss on
currency exchange
|
22
|
—
|
(7)
|
—
|
|
Plus: amortization of
lease asset
|
(66)
|
—
|
(192)
|
—
|
|
Plus: current income
tax
|
—
|
—
|
992
|
—
|
|
Plus: transaction costs
for business combination
|
—
|
—
|
—
|
—
|
|
Plus: non-cash portion
of non-controlling interest expense
|
(21)
|
(42)
|
(96)
|
49
|
|
Plus: adjustments for
equity accounted entities
|
1,865
|
(286)
|
2,713
|
(4,373)
|
|
Plus: deferred share
incentive plan compensation
|
(191)
|
63
|
143
|
376
|
|
Less: capital
maintenance reserve
|
(703)
|
(729)
|
(2,109)
|
(2,188)
|
|
|
|
|
|
|
AFFO
|
$
3,017
|
$
6,207
|
$
15,515
|
$
16,460
|
|
Weighted average number
of shares, including fully vested deferred shares: Basic
|
56,674,097
|
56,626,021
|
56,718,681
|
56,684,212
|
|
|
|
|
|
|
Adjusted Funds from
operations per share
|
$
0.05
|
$
0.11
|
$
0.27
|
$
0.29
|
SOURCE Invesque Inc.