04/29/2024 | Press release | Distributed by Public on 04/29/2024 14:20
LTC Properties, Inc. (NYSE: LTC) ("LTC" or the "Company"), a real estate investment trust that primarily invests in seniors housing and health care properties, today announced operating results for the first quarter ended March 31, 2024.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240429003451/en/
Three Months Ended |
||||||
March 31, |
||||||
2024 |
2023 |
|||||
(unaudited) |
||||||
Net income available to common stockholders |
$ |
24,065 |
$ |
32,929 |
||
Diluted earnings per common share |
$ |
0.56 |
$ |
0.80 |
||
NAREIT funds from operations ("FFO") attributable to common stockholders |
$ |
29,909 |
$ |
27,200 |
||
NAREIT diluted FFO per common share |
$ |
0.69 |
$ |
0.66 |
||
FFO attributable to common stockholders, excluding non-recurring items |
$ |
27,532 |
$ |
27,462 |
||
Funds available for distribution ("FAD") |
$ |
31,274 |
$ |
30,085 |
||
FAD, excluding non-recurring items |
$ |
28,897 |
$ |
28,515 |
First quarter 2024 financial results were impacted by:
During the first quarter of 2024, LTC completed the following transactions:
Subsequent to March 31, 2024, LTC completed the following transactions:
"After solid execution in 2023 during which we further optimized and strengthened our portfolio, we entered this year stronger and in a better position to concentrate on growing our company," said Wendy Simpson, LTC's Chairman and Chief Executive Officer. "Our senior management team is devoting the majority of their time on producing this strategic, long-term and sustainable growth, and we feel very good about LTC's future opportunities."
Conference Call Information
LTC will conduct a conference call on Tuesday, April 30, 2024, at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time), to provide commentary on its performance and operating results for the quarter ended March 31, 2024. The conference call is accessible by telephone and the internet. Interested parties may access the live conference call via the following:
Webcast |
||
USA Toll-Free Number |
(888) 506-0062 |
|
International Number |
(973) 528-0011 |
|
Conference Access Code |
674331 |
Additionally, an audio replay of the call will be available one hour after the live call through May 14, 2024 via the following:
USA Toll-Free Number |
(877) 481-4010 |
|
International Number |
(919) 882-2331 |
|
Conference Number |
50325 |
About LTC
LTC is a real estate investment trust (REIT) investing in seniors housing and health care properties primarily through sale-leasebacks, mortgage financing, joint-ventures and structured finance solutions including preferred equity and mezzanine lending. LTC's investment portfolio includes 194 properties in 26 states with 32 operating partners. Based on its gross real estate investments, LTC's investment portfolio is comprised of approximately 50% seniors housing and 50% skilled nursing properties. Learn more at www.LTCreit.com .
Forward-Looking Statements
This press release includes statements that are not purely historical and are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the Company's expectations, beliefs, intentions or strategies regarding the future. All statements other than historical facts contained in this press release are forward-looking statements. These forward-looking statements involve a number of risks and uncertainties. Please see LTC's most recent Annual Report on Form 10-K, its subsequent Quarterly Reports on Form 10-Q, and its other publicly available filings with the Securities and Exchange Commission for a discussion of these and other risks and uncertainties. All forward-looking statements included in this press release are based on information available to the Company on the date hereof, and LTC assumes no obligation to update such forward-looking statements. Although the Company's management believes that the assumptions and expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. The actual results achieved by the Company may differ materially from any forward-looking statements due to the risks and uncertainties of such statements.
LTC PROPERTIES, INC. CONSOLIDATED STATEMENTS OF INCOME ( amounts in thousands, except per share amounts) |
||||||||
Three Months Ended |
||||||||
March 31, |
||||||||
2024 |
2023 |
|||||||
(unaudited) |
||||||||
Revenues: |
||||||||
Rental income |
$ |
33,549 |
$ |
31,735 |
||||
Interest income from financing receivables (1) |
3,830 |
3,751 |
||||||
Interest income from mortgage loans |
12,448 |
11,244 |
||||||
Interest and other income |
1,539 |
2,770 |
||||||
Total revenues |
51,366 |
49,500 |
||||||
Expenses: |
||||||||
Interest expense |
11,045 |
10,609 |
||||||
Depreciation and amortization |
9,095 |
9,210 |
||||||
Impairment loss |
- |
434 |
||||||
Provision for credit losses |
24 |
1,731 |
||||||
Transaction costs |
266 |
117 |
||||||
Property tax expense |
3,383 |
3,293 |
||||||
General and administrative expenses |
6,491 |
6,294 |
||||||
Total expenses |
30,304 |
31,688 |
||||||
Other operating income: |
||||||||
Gain on sale of real estate, net |
3,251 |
15,373 |
||||||
Operating income |
24,313 |
33,185 |
||||||
Income from unconsolidated joint ventures |
376 |
376 |
||||||
Net income |
24,689 |
33,561 |
||||||
Income allocated to non-controlling interests |
(459 |
) |
(427 |
) |
||||
Net income attributable to LTC Properties, Inc. |
24,230 |
33,134 |
||||||
Income allocated to participating securities |
(165 |
) |
(205 |
) |
||||
Net income available to common stockholders |
$ |
24,065 |
$ |
32,929 |
||||
Earnings per common share: |
||||||||
Basic |
$ |
0.56 |
$ |
0.80 |
||||
Diluted |
$ |
0.56 |
$ |
0.80 |
||||
Weighted average shares used to calculate earnings per |
||||||||
common share: |
||||||||
Basic |
42,891 |
41,082 |
||||||
Diluted |
43,032 |
41,189 |
||||||
Dividends declared and paid per common share |
$ |
0.57 |
$ |
0.57 |
(1) |
Represents rental income from acquisitions through sale-leaseback transactions, subject to leases which contain purchase options. In accordance with GAAP, the properties are required to be presented as financing receivables on our Consolidated Balance Sheets and the rental income to be presented as Interest income from financing receivables on our Consolidated Statements of Income . |
Supplemental Reporting Measures
FFO and FAD are supplemental measures of a real estate investment trust's ("REIT") financial performance that are not defined by U.S. generally accepted accounting principles ("GAAP"). Investors, analysts and the Company use FFO and FAD as supplemental measures of operating performance. The Company believes FFO and FAD are helpful in evaluating the operating performance of a REIT. Real estate values historically rise and fall with market conditions, but cost accounting for real estate assets in accordance with GAAP assumes that the value of real estate assets diminishes predictably over time. We believe that by excluding the effect of historical cost depreciation, which may be of limited relevance in evaluating current performance, FFO and FAD facilitate like comparisons of operating performance between periods. Occasionally, the Company may exclude non-recurring items from FFO and FAD in order to allow investors, analysts and our management to compare the Company's operating performance on a consistent basis without having to account for differences caused by unanticipated items.
FFO, as defined by the National Association of Real Estate Investment Trusts ("NAREIT"), means net income available to common stockholders (computed in accordance with GAAP) excluding gains or losses on the sale of real estate and impairment write-downs of depreciable real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. The Company's computation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or have a different interpretation of the current NAREIT definition from that of the Company; therefore, caution should be exercised when comparing our Company's FFO to that of other REITs.
We define FAD as FFO excluding the effects of straight-line rent, amortization of lease inducement, effective interest income, deferred income from unconsolidated joint ventures, non-cash compensation charges, capitalized interest and non-cash interest charges. GAAP requires rental revenues related to non-contingent leases that contain specified rental increases over the life of the lease to be recognized evenly over the life of the lease. This method results in rental income in the early years of a lease that is higher than actual cash received, creating a straight-line rent receivable asset included in our consolidated balance sheet. At some point during the lease, depending on its terms, cash rent payments exceed the straight-line rent which results in the straight-line rent receivable asset decreasing to zero over the remainder of the lease term. Effective interest method, as required by GAAP, is a technique for calculating the actual interest rate for the term of a mortgage loan based on the initial origination value. Similar to the accounting methodology of straight-line rent, the actual interest rate is higher than the stated interest rate in the early years of the mortgage loan thus creating an effective interest receivable asset included in the interest receivable line item in our consolidated balance sheet and reduces down to zero when, at some point during the mortgage loan, the stated interest rate is higher than the actual interest rate. FAD is useful in analyzing the portion of cash flow that is available for distribution to stockholders. Investors, analysts and the Company utilize FAD as an indicator of common dividend potential. The FAD payout ratio, which represents annual distributions to common shareholders expressed as a percentage of FAD, facilitates the comparison of dividend coverage between REITs.
While the Company uses FFO and FAD as supplemental performance measures of our cash flow generated by operations and cash available for distribution to stockholders, such measures are not representative of cash generated from operating activities in accordance with GAAP, and are not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income available to common stockholders.
Reconciliation of FFO and FAD
The following table reconciles GAAP net income available to common stockholders to each of NAREIT FFO attributable to common stockholders and FAD (unaudited, amounts in thousands, except per share amounts) :
Three Months Ended |
|||||||||||
March 31, |
|||||||||||
2024 |
2023 |
||||||||||
GAAP net income available to common stockholders |
$ |
24,065 |
$ |
32,929 |
|||||||
Add: Impairment loss |
- |
434 |
|||||||||
Add: Depreciation and amortization |
9,095 |
9,210 |
|||||||||
Less: Gain on sale of real estate, net |
(3,251 |
) |
(15,373 |
) |
|||||||
NAREIT FFO attributable to common stockholders |
29,909 |
27,200 |
|||||||||
Add: Non-recurring items |
(2,377 |
) |
(1 |
) |
262 |
(2 |
) |
||||
FFO attributable to common stockholders, excluding non-recurring items |
$ |
27,532 |
$ |
27,462 |
|||||||
NAREIT FFO attributable to common stockholders |
$ |
29,909 |
$ |
27,200 |
|||||||
Non-cash income: |
|||||||||||
Add: straight-line rental adjustment |
550 |
465 |
|||||||||
Add: amortization of lease incentives |
233 |
209 |
|||||||||
Less: Effective interest income |
(1,644 |
) |
(1,608 |
) |
|||||||
Net non-cash income |
(861 |
) |
(934 |
) |
|||||||
Non-cash expense: |
|||||||||||
Add: Non-cash compensation charges |
2,202 |
2,088 |
|||||||||
Add: Provision for credit losses |
24 |
1,731 |
(3 |
) |
|||||||
Net non-cash expense |
2,226 |
3,819 |
|||||||||
Funds available for distribution (FAD) |
$ |
31,274 |
$ |
30,085 |
|||||||
Less: Non-recurring income |
(2,377 |
) |
(1 |
) |
(1,570 |
) |
(4 |
) |
|||
Funds available for distribution (FAD), excluding non-recurring items |
$ |
28,897 |
$ |
28,515 |
(1) |
Represents the repayment of rent credit received in connection with the sale of a 110-unit assisted living community in Wisconsin. The rent credit was provided to the operator during new construction lease-up. |
(2) |
Represents the net of (3) and (4) below. |
(3) |
Includes $1,832 of provision for credit losses related to the $121,321 acquisition accounted for as a financing receivable and $61,900 of mortgage loan originations. |
(4) |
Represents the exit IRR and prepayment fee received in 2023 in connection to the payoff of two mezzanine loans. |
Reconciliation of FFO and FAD (continued)
The following table continues the reconciliation between GAAP net income available to common stockholders and each of NAREIT FFO attributable to common stockholders and FAD ( unaudited, amounts in thousands, except per share amounts ):
Three Months Ended |
||||||
March 31, |
||||||
2024 |
2023 |
|||||
NAREIT Basic FFO attributable to common stockholders per share |
$ |
0.70 |
$ |
0.66 |
||
NAREIT Diluted FFO attributable to common stockholders per share |
$ |
0.69 |
$ |
0.66 |
||
NAREIT Diluted FFO attributable to common stockholders |
$ |
30,074 |
$ |
27,200 |
||
Weighted average shares used to calculate NAREIT diluted FFO per share attributable to common stockholders |
43,309 |
41,189 |
||||
Diluted FFO attributable to common stockholders, excluding non-recurring items |
$ |
27,697 |
$ |
27,462 |
||
Weighted average shares used to calculate diluted FFO, excluding non-recurring items, per share attributable to common stockholders |
43,309 |
41,189 |
||||
Diluted FAD |
$ |
31,439 |
$ |
30,085 |
||
Weighted average shares used to calculate diluted FAD per share |
43,309 |
41,189 |
||||
Diluted FAD, excluding non-recurring items |
$ |
29,062 |
$ |
28,515 |
||
Weighted average shares used to calculate diluted FAD, excluding non-recurring items, per share |
43,309 |
41,189 |
||||
LTC PROPERTIES, INC. CONSOLIDATED BALANCE SHEETS (amounts in thousands, except per share, audited) |
||||||||
March 31, 2024 |
December 31, 2023 |
|||||||
(unaudited) |
(audited) |
|||||||
ASSETS |
||||||||
Investments: |
||||||||
Land |
$ |
120,137 |
$ |
121,725 |
||||
Buildings and improvements |
1,219,622 |
1,235,600 |
||||||
Accumulated depreciation and amortization |
(383,782 |
) |
(387,751 |
) |
||||
Operating real estate property, net |
955,977 |
969,574 |
||||||
Properties held-for-sale, net of accumulated depreciation: 2024-$2,773; 2023-$3,616 |
389 |
18,391 |
||||||
Real property investments, net |
956,366 |
987,965 |
||||||
Financing receivables, (1) net of credit loss reserve: 2024-$1,980; 2023-$1,980 |
196,010 |
196,032 |
||||||
Mortgage loans receivable, net of credit loss reserve: 2024-$4,845; 2023-$4,814 |
480,250 |
477,266 |
||||||
Real estate investments, net |
1,632,626 |
1,661,263 |
||||||
Notes receivable, net of credit loss reserve: 2024-$605; 2023-$611 |
59,946 |
60,490 |
||||||
Investments in unconsolidated joint ventures |
19,340 |
19,340 |
||||||
Investments, net |
1,711,912 |
1,741,093 |
||||||
Other assets: |
||||||||
Cash and cash equivalents |
9,010 |
20,286 |
||||||
Debt issue costs related to revolving line of credit |
1,786 |
1,557 |
||||||
Interest receivable |
55,842 |
53,960 |
||||||
Straight-line rent receivable |
19,075 |
19,626 |
||||||
Lease incentives |
3,578 |
2,607 |
||||||
Prepaid expenses and other assets |
17,192 |
15,969 |
||||||
Total assets |
$ |
1,818,395 |
$ |
1,855,098 |
||||
LIABILITIES |
||||||||
Revolving line of credit |
$ |
277,050 |
$ |
302,250 |
||||
Term loans, net of debt issue costs: 2024-$305; 2023-$342 |
99,695 |
99,658 |
||||||
Senior unsecured notes, net of debt issue costs: 2024-$1,194; 2023-$1,251 |
483,466 |
489,409 |
||||||
Accrued interest |
4,861 |
3,865 |
||||||
Accrued expenses and other liabilities |
34,481 |
43,649 |
||||||
Total liabilities |
899,553 |
938,831 |
||||||
EQUITY |
||||||||
Stockholders' equity: |
||||||||
Common stock: $0.01 par value; 60,000 shares authorized; shares issued and outstanding: 2024-43,271; 2023-43,022 |
433 |
430 |
||||||
Capital in excess of par value |
996,631 |
991,656 |
||||||
Cumulative net income |
1,658,625 |
1,634,395 |
||||||
Accumulated other comprehensive income |
6,488 |
6,110 |
||||||
Cumulative distributions |
(1,775,928 |
) |
(1,751,312 |
) |
||||
Total LTC Properties, Inc. stockholders' equity |
886,249 |
881,279 |
||||||
Non-controlling interests |
32,593 |
34,988 |
||||||
Total equity |
918,842 |
916,267 |
||||||
Total liabilities and equity |
$ |
1,818,395 |
$ |
1,855,098 |
(1) |
Represents acquisitions through sale-leaseback transactions, subject to leases which contain purchase options. In accordance with GAAP, the properties are required to be presented as financing receivables on our Consolidated Balance Sheets . |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240429003451/en/
Mandi Hogan
(805) 981-8655