(Source: Business Wire)
Omega Healthcare Investors, Inc. (NYSE:OHI) today announced its results
of operations for the quarter ended September 30, 2009. The Company also
reported Funds From Operations ("FFO") available to common stockholders
for the three months ended September 30, 2009 of $30.0 million or $0.36
per common share. The $30.0 million of FFO available to common
stockholders for the third quarter of 2009 includes a net loss of $0.1
million associated with owned and operated assets, $0.5 million of
non-cash restricted stock expense and a $0.1 million non-cash provision
for impairment on a real estate asset. FFO is presented in accordance
with the guidelines for the calculation and reporting of FFO issued by
the National Association of Real Estate Investment Trusts ("NAREIT").
Adjusted FFO was $0.37 per common share for the three months ended
September 30, 2009. FFO and Adjusted FFO are non-GAAP financial
measures. Adjusted FFO excludes the impact of certain non-cash items and
certain items of revenue or expenses, including: results of operations
of owned and operated facilities during the period, a non-cash provision
for impairment and restricted stock expense. For more information
regarding FFO and Adjusted FFO, see the "Funds From Operations" section
below.
GAAP NET INCOME
For the three-month period ended September 30, 2009, the Company
reported net income of $21.1 million, net income available to common
stockholders of $18.9 million, or $0.22 per diluted common share on
operating revenues of $49.8 million. This compares to net income of
$28.1 million, net income available to common stockholders of $25.6
million, or $0.33 per diluted common share on operating revenues of
$60.0 million for the same period in 2008.
For the nine-month period ended September 30, 2009, the Company reported
net income of $65.9 million, net income available to common stockholders
of $59.1 million, or $0.71 per diluted common share on operating
revenues of $148.1 million. This compares to net income of $62.4
million, net income available to common stockholders of $55.0 million,
or $0.76 per diluted common share on operating revenues of $144.6
million for the same period in 2008.
The year-to-date increases in net income and net income available to
common stockholders were primarily due to the impact of: i) $4.0 million
of net cash flow associated with legal settlements; ii) revenue
associated with $60 million of new investments completed since September
2008; iii) a $2.1 million reduction in interest expense; and iv) a $4.3
million expense for uncollectible accounts receivable recorded in 2008
and a net change of $1.5 million provision for impairment charge. This
impact was partially offset by: i) increased depreciation expense
associated with the new investments and ii) a $0.5 million charge
relating to the write-off of deferred financing credit facility costs
recorded in the second quarter of 2009.
THIRD QUARTER 2009 RESULTS
Operating Revenues and Expenses -- Operating revenues for
the three months ended September 30, 2009, excluding nursing home
revenues of owned and operated assets and therefore on a non-GAAP basis,
were $45.0 million. Operating expenses for the three months ended
September 30, 2009, on a non-GAAP basis excluding nursing home expenses
for owned and operated assets, totaled $13.9 million, comprised of $11.1
million of depreciation and amortization expense, $2.2 million of
general and administrative expenses, $0.5 million of restricted stock
expense and a real estate impairment of $0.1 million. A reconciliation
of these amounts to revenues and expenses reported in accordance with
GAAP is provided at the end of this release.
Other Income and Expense -- Other income and expense for
the three months ended September 30, 2009 was a net expense of $9.9
million and was primarily comprised of $9.2 million of interest expense
and $0.7 million of amortized deferred financing costs.
Funds From Operations -- For the three months ended
September 30, 2009, reportable FFO available to common stockholders was
$30.0 million, or $0.36 per common share on 83.9 million
weighted-average common shares outstanding, compared to $23.9 million,
or $0.31 per common share on 76.7 million weighted-average common shares
outstanding, for the same period in 2008.
The $30.0 million of FFO for the quarter includes the impact of $0.5
million of non-cash restricted stock expense, a $0.1 million net loss
associated with owned and operated assets and a real estate impairment
of $0.1 million. The $23.9 million of FFO for the three months ended
September 30, 2008, includes the impact of: (i) a $1.5 million net loss
associated with owned and operated assets; (ii) $0.5 million of non-cash
restricted stock expense; (iii) a $0.2 million non-cash provision for
real estate impairment; and (iv) $0.1 million reduction in the Company's
provision for income taxes.
When excluding the above mentioned items in 2009 and 2008, Adjusted FFO
was $30.7 million, or $0.37 per common share, for the three months ended
September 30, 2009, compared to $26.0 million, or $0.34 per common
share, for the same period in 2008. The Company had 7.2 million
additional weighted-average shares for the three months ended September
30, 2009, compared to the same period in 2008. The increase in
weighted-average common shares was primarily a result of: i) a 6.0
million share common stock offering on September 19, 2008; ii)
approximately 1.3 million common shares issued under the Company's
Dividend Reinvestment and Common Stock Purchase Plan; and iii)
approximately 1.4 million common shares issued under the Company's
Equity Shelf Program. For further information, see the attached "Funds
From Operations" schedule and notes.
FINANCING ACTIVITIES
New $200 Million Revolving Credit Facility -- On
June 30, 2009, the Company entered into a new $200 million revolving
senior secured credit facility (the "New Credit Facility"). Banc of
America Securities LLC and Deutsche Bank Trust Company Americas were
joint lead arrangers for the New Credit Facility. Bank of America, N.A.
was the administrative agent and UBS Securities LLC and General Electric
Capital Corporation participated in the New Credit Facility in various
agent capacities. The New Credit Facility will be used for acquisitions
and general corporate purposes.
The New Credit Facility replaces the Company's previous senior secured
credit facility (the "Prior Credit Facility"). The New Credit Facility
matures in three years, on June 30, 2012, and includes an "accordion
feature" that permits the Company to expand its borrowing capacity to
$300 million in certain circumstances during the first two years
thereof, and is currently priced at LIBOR plus 400 basis points with a
200 basis point LIBOR floor.
For the nine-month period ended September 30, 2009, the Company recorded
a non-recurring, non-cash charge of approximately $0.5 million relating
to the write-off of deferred financing costs associated with the
replacement of the Prior Credit Facility. At September 30, 2009, the
Company had $9.0 million of borrowings outstanding under the New Credit
Facility.
Equity Shelf Program -- On June 12, 2009, the
Company entered into separate Equity Distribution Agreements with each
of UBS Securities LLC, Deutsche Bank Securities Inc. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, each as sales agents and/or
principal (the "Managers"). Under the terms of these agreements, the
Company may sell shares of its common stock, from time to time, through
or to the Managers having an aggregate gross sales price of up to
$100,000,000 (the "Equity Shelf Program"). Sales of the shares, if any,
will be made by means of ordinary brokers' transactions on the New York
Stock Exchange at market prices, or as otherwise agreed with the
applicable Manager. The Company will pay each Manager, compensation for
sales of the shares equal to 2% of the gross sales price per share of
shares sold through such Manager, as sales agent, under the applicable
agreement.
During the third quarter of 2009, the Company issued 1.4 million shares
of its common stock under the Equity Shelf Program at an average price
of $17.17 per share, resulting in net proceeds of approximately $23.8
million.
DIVIDENDS
Common Dividends -- On October 20, 2009, the Company's
Board of Directors announced a common stock dividend of $0.30 per share
to be paid November 16, 2009 to common stockholders of record on
November 2, 2009. At the date of this release, the Company had
approximately 85.1 million outstanding common shares.
Series D Preferred Dividends -- On October 20, 2009,
the Company's Board of Directors declared the regular quarterly
dividends for the Company's 8.375% Series D Cumulative Redeemable
Preferred Stock ("Series D Preferred Stock") to stockholders of record
on November 2, 2009. The stockholders of record of the Series D
Preferred Stock on November 2, 2009 will be paid dividends in the amount
of $0.52344 per preferred share on November 16, 2009. The liquidation
preference for the Company's Series D Preferred Stock is $25.00 per
share. Regular quarterly preferred dividends for the Series D Preferred
Stock represent dividends for the period August 1, 2009 through October
30, 2009.
2009 ADJUSTED FFO GUIDANCE AFFIRMATION
The Company affirmed its 2009 Adjusted FFO available to common
stockholders guidance of between $1.47 and $1.50 per diluted share, as
previously announced on February 6, 2009.
The Company's Adjusted FFO guidance for 2009 excludes the impacts of
future acquisitions, gains and losses from the sale of assets,
additional divestitures, certain revenue and expense items, capital
transactions and restricted stock amortization expense. A reconciliation
of the Adjusted FFO guidance to the Company's projected GAAP earnings is
provided on a schedule attached to this press release. The Company may,
from time to time, update its publicly announced Adjusted FFO guidance,
but it is not obligated to do so.
The Company's Adjusted FFO guidance is based on a number of assumptions,
which are subject to change and many of which are outside the control of
the Company. If actual results vary from these assumptions, the
Company's expectations may change. Without limiting the generality of
the foregoing, the completion of acquisitions, divestitures, capital and
financing transactions, variations in restricted stock amortization
expense, and the factors identified below may cause actual results to
vary materially from our current expectations. There can be no assurance
that the Company will achieve its projected results.
CONFERENCE CALL
The Company will be conducting a conference call on Thursday, October
29, 2009, at 10 a.m. EDT to review the Company's 2009 third quarter
results and current developments. To listen to the conference call via
webcast, log on to www.omegahealthcare.com
and click the "earnings call" icon on the Company's home page. Webcast
replays of the call will be available on the Company's website for two
weeks following the call.
The Company is a real estate investment trust investing in and providing
financing to the long-term care industry. At September 30, 2009, the
Company owned or held mortgages on 254 skilled nursing facilities and
assisted living facilities with approximately 29,126 licensed beds
(27,708 available beds) located in 28 states and operated by 25
third-party healthcare operating companies.
This announcement includes forward-looking statements, including
without limitation the information under the heading "2009 Adjusted FFO
Guidance Affirmation." Actual results may differ materially from
those reflected in such forward-looking statements as a result of a
variety of factors, including, among other things: (i) uncertainties
relating to the business operations of the operators of the Company's
properties, including those relating to reimbursement by third-party
payors, regulatory matters and occupancy levels; (ii) regulatory and
other changes in the healthcare sector, including without limitation,
changes in Medicare reimbursement; (iii) changes in the financial
position of the Company's operators; (iv) the ability of operators in
bankruptcy to reject unexpired lease obligations, modify the terms of
the Company's mortgages, and impede the ability of the Company to
collect unpaid rent or interest during the pendency of a bankruptcy
proceeding and retain security deposits for the debtor's obligations;
(v) the availability and cost of capital; (vi) the Company's ability to
maintain its credit ratings; (vii) competition in the financing of
healthcare facilities; (viii) the Company's ability to maintain its
status as a real estate investment trust; (ix) the Company's ability to
manage, re-lease or sell any owned and operated facilities; (x)
the Company's ability to sell closed or foreclosed assets on a timely
basis and on terms that allow the Company to realize the carrying value
of these assets; (xi) the effect of economic and market conditions
generally, and particularly in the healthcare finance industry; (xii)
the potential impact of a general economic slowdown on governmental
budgets and healthcare reimbursement expenditures; and (xiii) other
factors identified in the Company's filings with the Securities and
Exchange Commission.Statements regarding future events and developments
and the Company's future performance, as well as management's
expectations, beliefs, plans, estimates or projections relating to the
future, are forward-looking statements. The Company undertakes no
obligation to update any forward-looking statements contained in this
material.
OMEGA HEALTHCARE INVESTORS, INC.