Continued Progress Improving the Balance
Sheet Via Refinancings and Asset Sales
TORONTO, Aug. 8, 2024
/CNW/ - Invesque Inc. (TSX: IVQ.U) (TSX: IVQ) (the
"Company") today announced its results for the three and six months
ended June 30, 2024.
Second Quarter and Recent Highlights
On June 24, 2024, the Company sold
a skilled nursing facility in Glendale,
Wisconsin for gross proceeds of US$5.1 million, bringing total asset sales year
to date to $77.5 million.
During the second quarter, the Company refinanced and/or
extended the maturity of $209.5
million of debt. These refinancings, along with the
Glendale, Wisconsin SNF sale,
reduced the KeyBank credit facility by approximately $33.0 million and increased the Company's
consolidated average debt maturity to nearly three years.
The Company reported funds from operations ("FFO")1
of US$0.03 and $0.07 per common share for the three- and
six-months ending June 30, 2024, and
reported adjusted funds from operations ("AFFO")2 of
US$0.02 and US$0.06 per common share for the three- and
six-months ending June 30, 2024.
"We made further progress reducing our KeyBank credit facility
during the second quarter and expect to continue to do so during
the second half of 2024 with additional refinancings and asset
sales on the horizon", commented Kari
Onweller, EVP of Investments and Investor Relations of the
Company. "Our primary goal as a Company right now is to right size
leverage, and to achieve that goal, we expect to continue disposing
assets in the coming months."
Financial Highlights
|
Three months ended June
30,
|
|
|
Six months ended June
30,
|
|
(in thousands of U.S
dollars, except per
share values)
|
2024
|
2023
|
|
2024
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
43,099
|
$
|
50,257
|
|
$
|
86,741
|
$
|
99,798
|
|
Net income
(loss)
|
$
|
(15,815)
|
$
|
(45,926)
|
|
$
|
(22,058)
|
$
|
(61,524)
|
|
FFO
|
$
|
1,424
|
$
|
5,824
|
|
$
|
3,928
|
$
|
12,727
|
|
FFO per
share
|
$
|
0.03
|
$
|
0.10
|
|
$
|
0.07
|
$
|
0.22
|
|
AFFO
|
$
|
1,111
|
$
|
5,927
|
|
$
|
3,192
|
$
|
12,498
|
|
AFFO per
share
|
$
|
0.02
|
$
|
0.10
|
|
$
|
0.06
|
$
|
0.22
|
|
_____________________________
|
|
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.
|
Balance Sheet and Portfolio Highlights
|
(in thousands of U.S.
dollars, except number of properties)
|
June 30,
2024
|
|
December 31,
2023
|
|
|
|
|
|
Total assets
|
$730,351
|
|
$828,283
|
|
Number of
properties3
|
49
|
|
66
|
|
Debt
|
$516,088
|
|
$588,245
|
|
_____________________________
|
|
3 Excludes
two medical office buildings and eleven seniors housing communities
held for sale as of June 30, 2024. Excludes two medical office
buildings and one seniors housing community held for sale as of
December 31, 2023.
|
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.
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, the
disposition by the Company of assets. Forward-looking information
is typically identified by terms such as "anticipate," "believe,"
"continue," "expect," "expectations," "look," "may," "plan,"
"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 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. These risks include the inability of the Company
to divest certain assets on terms favorable to the Company or at
all. The Company's actual results may differ because 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.sedarplus.ca,
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 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 March 31, 2024, MD&A
available on the Company's website and on SEDAR at
www.sedarplus.ca, which information is incorporated herein by
reference, and the full reconciliation of which is included
below.
FFO Table
|
Three months ended June
30,
|
Six months ended June
30,
|
|
2024
|
2023
|
2024
|
2023
|
|
Net loss from
continuing operations for
the period
|
$
(15,128)
|
$
(46,256)
|
$
(20,962)
|
$
(57,269)
|
|
Add/(deduct):
|
|
|
|
|
|
Change in fair value of
investment
properties
|
7,585
|
49,811
|
3,493
|
49,647
|
|
Property taxes
accounted for under
IFRIC 21
|
(1,609)
|
(5,371)
|
2,842
|
3,687
|
|
Depreciation and
amortization
expense
|
3,497
|
3,633
|
6,955
|
7,259
|
|
Amortization of tenant
inducements
|
60
|
61
|
121
|
122
|
|
Accretion expense and
amortization of
non-cash adjustments to the 2016
Convertible Debentures
|
2,383
|
775
|
4,531
|
1,500
|
|
Change in fair value of
financial
instruments
|
777
|
(9,475)
|
1,158
|
(6,538)
|
|
Change in fair value of
contingent
consideration
|
—
|
—
|
—
|
—
|
|
Transaction
Costs
|
42
|
655
|
318
|
655
|
|
Debt extinguishment
costs
|
—
|
—
|
—
|
—
|
|
Loss on sale of
property, plant and
equipment
|
(18)
|
—
|
(26)
|
(12)
|
|
Impairment of property,
plant and
equipment
|
454
|
—
|
1,830
|
—
|
|
Executive
severance
|
3,060
|
|
3,060
|
|
|
Deferred income tax
recovery
|
(716)
|
(959)
|
(1,605)
|
(959)
|
|
Allowance for credit
losses on loans
and interest receivable
|
195
|
13,123
|
455
|
14,170
|
|
Change in
non-controlling interest
liability in respect of the above
|
(171)
|
(35)
|
(169)
|
(70)
|
|
Adjustments for equity
accounted
entities
|
1,299
|
4
|
2,601
|
828
|
|
|
|
|
|
|
FFO from continuing
operations
|
$
1,710
|
$
5,966
|
$
4,602
|
$
13,020
|
|
FFO from discontinued
operations
|
(286)
|
(142)
|
(674)
|
(293)
|
|
|
|
|
|
|
Total FFO
|
$
1,424
|
$
5,824
|
$
3,928
|
$
12,727
|
|
Weighted average number
of shares,
including fully vested deferred shares:
Basic
|
56,678,639
|
56,736,310
|
56,668,537
|
56,741,343
|
|
|
|
|
|
|
Funds from operations
per share
|
$
0.03
|
$
0.10
|
$
0.07
|
$
0.22
|
AFFO Table
|
Three months ended June
30,
|
Six months ended June
30,
|
|
2024
|
2023
|
2024
|
2023
|
|
Cash flows provided by
(used in)
operating activities
|
$
(97)
|
$
8,002
|
$
543
|
$
3,520
|
|
Change in non-cash
working capital
|
(1,150)
|
(2,046)
|
2,364
|
7,151
|
|
Less: interest
expense
|
(9,809)
|
(9,893)
|
(20,406)
|
(19,812)
|
|
Less: change in
non-controlling
interest liability
|
(188)
|
(69)
|
(312)
|
(136)
|
|
Plus: loss from joint
ventures
|
(1,448)
|
1,872
|
(2,654)
|
1,848
|
|
Plus: interest
paid
|
9,926
|
8,186
|
19,340
|
19,288
|
|
Less: interest
received
|
46
|
(112)
|
(124)
|
(256)
|
|
Plus: debt
extinguishment costs
|
—
|
366
|
(412)
|
357
|
|
Plus: realized loss on
currency
exchange
|
3
|
(24)
|
10
|
(29)
|
|
Plus: amortization of
lease asset
|
(8)
|
(64)
|
28
|
(126)
|
|
Plus: current income
tax
|
—
|
441
|
—
|
992
|
|
Plus: non-cash portion
of non-
controlling interest expense
|
(170)
|
(37)
|
(156)
|
(75)
|
|
Plus: adjustments for
equity
accounted entities
|
1,392
|
14
|
2,714
|
848
|
|
Plus: deferred share
incentive plan
compensation
|
(74)
|
(6)
|
(59)
|
334
|
|
Plus: executive
severance
|
3,060
|
—
|
3,060
|
—
|
|
Less: capital
maintenance reserve
|
(372)
|
(703)
|
(744)
|
(1,406)
|
|
|
|
|
|
|
AFFO
|
$
1,111
|
$
5,927
|
$
3,192
|
$
12,498
|
|
Weighted average number
of shares,
including fully vested deferred shares:
Basic
|
56,678,639
|
56,736,310
|
56,668,537
|
56,741,343
|
|
|
|
|
|
|
Funds from operations
per share
|
$
0.02
|
$
0.10
|
$
0.06
|
$
0.22
|
SOURCE Invesque Inc.
