New Senior Investment Group Inc. (“New Senior” or the “Company”)
(NYSE: SNR) announced today its results for the quarter ended and
full year ended December 31, 2020.
FULL YEAR 2020 & FOURTH QUARTER
2020 FINANCIAL HIGHLIGHTS
- Full year 2020 highlights:
- Net loss of $6.2 million or $(0.08) per diluted share
- Total net operating income (“NOI”) of $138.2 million; total
same store cash NOI of $135.8 million
- Total same store cash NOI decreased 5.1% versus full year
2019
- Adjusted Funds from Operations (“AFFO”) of $59.1 million, or
$0.71 per diluted share, above the midpoint of the Company’s 2020
revised expectations
- Fourth quarter 2020 highlights:
- Declared a dividend of $0.065 per common share
- Net loss of $3.8 million or $(0.05) per diluted share
- Total NOI of $33.7 million; total same store cash NOI of $32.5
million
- Total same store cash NOI decreased 9.6% versus fourth quarter
2019
- Normalized Funds from Operations (“Normalized FFO”) of $13.5
million, or $0.16 per diluted share
- AFFO of $14.5 million, or $0.17 per diluted share
- Normalized Funds Available for Distribution (“Normalized FAD”)
of $12.8 million, or $0.15 per diluted share
FULL YEAR 2020
HIGHLIGHTS
- Despite declining occupancy and additional operating expenses
related to COVID-19, delivered solid full year 2020 total same
store cash NOI and AFFO per diluted share results, consistent with
and above the midpoint of the Company’s 2020 revised expectations,
respectively
- Completed the sale of the entire Assisted Living/Memory Care
portfolio in February 2020, for a gross sale price of $385 million
(the “AL/MC Transaction”)
- In conjunction with the AL/MC Transaction, significantly
strengthened the balance sheet through the following activities:
- Repaid approximately $360 million of debt with proceeds from
the AL/MC Transaction
- Completed nearly $400 million of debt refinancing activity,
resulting in lower debt costs and an extension of the Company’s
average debt maturity by two years at that time
- Took significant steps during the COVID-19 pandemic to manage
its impact on the Company’s business:
- Worked closely with the Company’s operators to implement and
adapt protocols and operating strategies to protect the health and
safety of residents and associates, while promoting leasing
activities and effectively managing expenses
- Further improved the balance sheet by entering into a 5-year
$270 million interest rate swap, increasing the Company’s fixed
rate exposure from 52% to 72%
- Reduced cash general & administrative expenses through
targeted initiatives
- Repaid $20 million of preferred stock issued at the time of the
Company’s internalization
RECENT BUSINESS
HIGHLIGHTS
- Announced new strategic partnership with Atria Senior Living
(“Atria”), which includes the transition of the management of 21
properties, marking an important step in the Company’s ongoing
efforts to address operator diversification and alignment
- Significant progress being made on vaccine distribution as 83%
of the communities in the Company’s portfolio have held at least
one vaccine clinic or have a confirmed provider for a future
clinic
- Rate of new COVID-19 cases within the Company’s portfolio has
declined significantly over the last few weeks – trailing 7-day
average of approximately 3 new cases per day is down 78% from the
January peak of approximately 13 new cases per day
- Continued to improve corporate governance and appointed two new
independent directors to the Board of Directors since November
2020
- Issued 1Q21 guidance based on latest trends and results
Susan Givens, President & Chief Executive Officer of the
Company commented, “Concluding an incredibly challenging year, all
of us at New Senior are extremely grateful to our operators and the
associates at our communities for their dedication and
responsiveness throughout the ongoing COVID-19 pandemic. Despite a
rise in cases during the fourth quarter, our operators continued to
effectively manage the impact of COVID-19 within our communities
through their unwavering focus and tenacity. While the pandemic
continues to have a significant impact on our business, we are
encouraged by the recent declines in case counts nationally and
within our communities.”
Givens continued, “We continue to see features unique to our
Independent Living properties that have allowed our operators to
adjust protocols within our communities and effectively manage the
spread of the virus while also reducing expenses in response to
lower occupancy levels. Further, decisions we made heading into
2020 to strengthen our balance sheet with lower-cost floating rate
debt allowed us to significantly benefit from the volatility in the
interest rate environment. As a result, we are pleased to finish
2020 with AFFO per share results consistent with both our revised
expectations, as well as with the initial guidance that we provided
in February 2020 prior to the onset of the pandemic.”
“Going forward, we remain focused on continuing to safely
navigate through the pandemic and position New Senior for growth.
To that end, I am excited to announce our new partnership with
Atria Senior Living, a best-in-class senior housing operator. Atria
is one of the most well-respected operators in the industry and has
a proven track record of driving strong occupancy and financial
performance at communities similar to those in our transition
portfolio. In addition to transitioning 21 communities to Atria
under an incentive-aligned management contract, we expect the
relationship to improve our operator diversification, provide new
perspectives on the long-term performance of our Independent Living
portfolio and additional growth opportunities,” Givens
concluded.
STRATEGIC PARTNERSHIP WITH ATRIA SENIOR
LIVING
New Senior announced today that it has entered into a strategic
partnership with Atria Senior Living, which represents a
significant step in the Company’s ongoing efforts to address
operator diversification and alignment. Under the terms of the new
partnership, New Senior intends to transition the management of 21
properties from Holiday Retirement (“Holiday”) to Atria in the
second quarter of 2021. Post-transition, Atria will manage 20% of
the properties in the Company’s Independent Living portfolio and
Holiday will continue to be its largest operator relationship,
managing 75% of its Independent Living properties.
Atria is a leading national operator of senior housing
communities across the United States and Canada, including
independent living communities similar to those within New Senior’s
portfolio. They have a proven track record of successfully
transitioning other independent living portfolios and improving
occupancy and financial results. Atria’s experienced management
team has built a data-driven organization which utilizes
proprietary tools and technologies to optimize sales and
operations. Over the past year, they have been at the forefront of
the senior housing industry’s response to the COVID-19 pandemic and
have taken extensive actions to combat the pandemic. New Senior
expects these transitions to drive strong performance at these
properties over time.
New Senior expects the partnership to result in the following
benefits:
- Establishes relationship with one of the largest and most
innovative operators in the senior housing industry
- Improves operator diversification
- Creates alignment between owner and operator through
incentive-driven management agreement
- Provides the Company with new perspectives and best practices
to drive long-term, organic growth
- Access to experienced development team with a strong track
record of managing capital expenditure projects
- Cultivates future growth opportunities
FOURTH QUARTER 2020
RESULTS
Dollars in thousands, except per share data
For the Quarter Ended December
31, 2020
For the Quarter Ended December
31, 2019
Amount
Per Basic Share
Per Diluted Share
Amount
Per Basic Share
Per Diluted Share
GAAP (Unaudited) Net loss
attributable to common stockholders
$
(3,789
)
$
(0.05
)
$
(0.05
)
$
(6,661
)
$
(0.08
)
$
(0.08
)
Non-GAAP (Unaudited)(A)
NOI
$
33,714
N/A
N/A
$
36,063
N/A
N/A
FFO
11,980
0.15
0.14
12,053
0.15
0.14
Normalized FFO
13,508
0.16
0.16
13,451
0.16
0.16
AFFO
14,546
0.18
0.17
15,125
0.18
0.18
Normalized FAD
12,751
0.15
0.15
12,196
0.15
0.14
FULL YEAR 2020 RESULTS
Dollars in thousands, except per share data
For the Year Ended December
31, 2020
For the Year Ended December
31, 2019
Amount
Per Basic Share
Per Diluted Share
Amount
Per Basic Share
Per Diluted Share
GAAP Net loss attributable to
common stockholders
$
(6,162
)
$
(0.08
)
$
(0.08
)
$
(393
)
$
(0.00
)
$
(0.00
)
Non-GAAP (Unaudited)(A)
NOI
$
138,220
N/A
N/A
$
141,546
N/A
N/A
FFO
40,137
0.49
0.48
81,026
0.99
0.97
Normalized FFO
53,752
0.65
0.64
49,110
0.60
0.59
AFFO
59,072
0.72
0.71
55,849
0.68
0.67
Normalized FAD
53,027
0.64
0.63
45,635
0.56
0.54
(A) See end of press release for reconciliation of non-GAAP
measures to net loss.
FOURTH QUARTER 2020 GAAP
RESULTS
New Senior recorded a GAAP net loss of $3.8 million, or $(0.05)
per diluted share, for the fourth quarter of 2020, compared to a
GAAP net loss of $6.7 million, or $(0.08) per diluted share, for
the fourth quarter of 2019. The year-over-year increase was
primarily driven by the reduction of interest expense.
FOURTH QUARTER AND FULL YEAR 2020
PORTFOLIO PERFORMANCE
Same Store Cash NOI - Fourth
Quarter
Properties
4Q 2019
4Q 2020
YoY
IL Properties
102
$
34,502
$
31,011
(10.1%)
CCRC
1
1,450
1,490
2.7%
Total Portfolio
103
$
35,952
$
32,501
(9.6%)
Total Portfolio
103
$
35,952
$
32,501
(9.6%)
COVID-19 Related Expenses
-
-
442
-
Total Portfolio Adjusted for
COVID-19 Related Expenses
103
$
35,952
$
32,943
(8.4%)
Same Store Cash NOI - Full
Year
Properties
2019
2020
YoY
IL Properties
102
$
137,307
$
129,870
(5.4%)
CCRC
1
5,749
5,907
2.7%
Total Portfolio
103
$
143,056
$
135,777
(5.1%)
Total Portfolio
103
$
143,056
$
135,777
(5.1%)
COVID-19 Related Expenses
-
-
3,171
-
Total Portfolio Adjusted for
COVID-19 Related Expenses
103
$
143,056
$
138,948
(2.9%)
FOURTH QUARTER DIVIDEND
On February 24, 2021, the Company’s Board of Directors declared
a cash dividend of $0.065 per share for the quarter ended December
31, 2020. The dividend is payable on March 26, 2021 to shareholders
of record on March 12, 2021.
COVID-19 IMPACT ON THE
COMPANY
The fourth quarter of 2020 continued to see the effects of the
COVID-19 pandemic on our financial results. We have outlined our
observations of the impact on our results to date and potential
future implications below:
Overview
As of December 31, 2020, we owned a portfolio of 102 Independent
Living (“IL”) properties and one Continuing Care Retirement
Community (“CCRC”). We have approximately 10,000 residents across
our 103 properties, which are currently managed by three different
operators and one tenant.
Property Status
- All of our properties have remained open and operational since
the start of the COVID-19 pandemic
- While significant restrictions were implemented at the outset
of the pandemic, over 90% of our properties are currently operating
with less severe restrictions which allow for limited communal
dining, group activities and transportation, as well as typical
sales activities and outside visitors with enhanced screening
- Our operators are constantly reviewing and refining property
protocols in an effort to balance both resident engagement and
resident health and safety; protocols will continue to evolve as
the vaccination process unfolds
Known Cases
- As of February 22, our operators reported 73 active cases
across 23 properties (60 residents and 13 associates)
- Of the 23 properties, 20 currently have fewer than 4 active
cases
- The 60 active resident cases represent 0.6% of our current
total resident population
- Rate of new cases has declined significantly in recent weeks,
consistent with national trends
- Trailing 7-day average of approximately 3 new cases per day is
down 78% from the January peak of approximately 13 new cases per
day
Vaccine Status
- As of February 22, 83% of the properties in our portfolio have
held at least one vaccine clinic or have a confirmed provider for a
future clinic
- To date, vaccine participation rates have averaged 80% for
residents and 50% for associates
Occupancy
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21 E
Ending Occupancy
87.4%
86.2%
85.6%
84.9%
84.4%
83.9%
83.3%
83.1%
82.5%
81.8%
81.0%
80.4%
Sequential Decline
(130bps)
(120bps)
(60bps)
(70bps)
(50bps)
(50bps)
(60bps)
(20bps)
(60bps)
(70bps)
(80bps)
(60bps)
1Q 2020
2Q 2020
3Q 2020
4Q 2020
Ending Occupancy
87.4%
84.9%
83.3%
81.8%
Sequential Decline
(130bps)
(250bps)
(160bps)
(150bps)
- Occupancy trends for the fourth quarter of 2020:
- Ending occupancy fell by 150bps versus prior quarter, an
improvement from the sequential decline of 160bps in the third
quarter of 2020
- Following stronger October results, monthly occupancy trend
worsened in November and December due to surge in national case
counts
- Leads increased 6% versus prior quarter and increased 12%
versus prior year
- Move-ins decreased 5% versus prior quarter and decreased 16%
versus prior year
- Move-outs decreased 5% versus prior quarter and increased 3%
versus prior year
- Occupancy trends for the first quarter of 2021:
- January ending occupancy fell by 80bps sequentially as trends
continued to worsen as new COVID-19 cases reached new highs both
nationally and within our portfolio
- Currently expect February ending occupancy to decline by 60bps
sequentially, an improvement versus the sequential decline in
January
Expenses
- In the fourth quarter of 2020, operating expenses decreased
3.7% versus prior year
- The year-over-year decline was driven by reduced spend on
occupancy-related and other controllable expenses
- In the fourth quarter of 2020, operating expenses specifically
associated with COVID-19 were approximately $0.5 million, or 1% of
total expenses for the quarter
- These expenses were down 40% versus the prior quarter as our
operators implemented new strategies to reduce costs throughout
2020
NOI & AFFO
4Q 2020
FY 2020
Total Same Store Cash NOI YoY
Change
(9.6%)
(5.1%)
AFFO Per Diluted Share
$0.17
$0.71
- In the fourth quarter of 2020, total same store cash NOI
decreased by 9.6% versus the fourth quarter of 2019. Revenue losses
driven by occupancy declines from the COVID-19 pandemic continue to
be partially offset by lower expenses
- AFFO for the fourth quarter of 2020 was $0.17 per share.
Interest expense in the fourth quarter of 2020 generally saw no
change from the third quarter of 2020 as average one-month LIBOR
remained near 15bps in both quarters
- In full year 2020, total same store cash NOI decreased by 5.1%
versus the same period of 2019
- AFFO for full year 2020 was $0.71 per share. NOI declines due
to the impact of the COVID-19 pandemic were entirely offset by
interest expense savings due to the decline in LIBOR, as well as
targeted G&A reductions
FIRST QUARTER 2021
GUIDANCE
Due to the ongoing uncertainty caused by the pandemic, New
Senior will not be providing full year 2021 guidance at this time.
However, based on the Company’s financial results to date, as well
as the observations and trends discussed above in “COVID-19 Impact
on the Company,” New Senior is providing first quarter 2021
guidance for occupancy, total same store cash NOI and AFFO per
share as follows:
First Quarter 2021
Guidance
Sequential IL Occupancy
Decline
Down appx. 170bps
Total Same Store Cash NOI YoY
(103 Properties)
Down appx. 15%
AFFO Per Share
$0.14 to $0.15
The first quarter 2021 occupancy assumption includes monthly
sequential declines of 80bps in January, 60bps in February and
30bps in March. The occupancy declines are estimated to improve
throughout the quarter based on the latest trends observed, which
includes an increase in lead volume in January and February. In
addition, declining COVID-19 cases and the accelerating rollout of
vaccines across the portfolio are expected to drive near-term
improvement in occupancy trends.
The estimates above are based on a number of assumptions that
are subject to change and many of which are outside of the
Company’s control. If actual results vary from these assumptions,
the Company’s expectations may change. There can be no assurance
that the Company will achieve these results. A reconciliation of
the Company’s expectations to its projected GAAP measures is
included in this press release.
OTHER ANNOUNCEMENTS – ATM
PROGRAM
The Company also announced today that it intends to establish an
"at-the-market" program through which it may issue and sell, from
time to time, up to an aggregate of $100 million of the Company's
common stock through designated broker-dealers at prevailing market
prices and in such share amounts as the Company may specify.
ADDITIONAL INFORMATION
For additional information that management believes to be useful
for investors, including more information regarding the COVID-19
pandemic and its impact on our business, please refer to the
Company Update and to the Quarterly Supplement, each of which is
posted in the Investor Relations section of New Senior’s website,
www.newseniorinv.com.
EARNINGS CONFERENCE CALL
Management will host a conference call on February 25, 2021 at
9:00 A.M. Eastern Time. The conference call may be accessed by
dialing (888) 317-6003 (from within the U.S.) or (412) 317-6061
(from outside of the U.S.) ten minutes prior to the scheduled start
of the call; please use entry number “0782659”. 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 March 25, 2021 by dialing (877) 344-7529 (from within the
U.S.) or (412) 317-0088 (from outside the U.S.); please use access
code “10152039.”
ABOUT NEW SENIOR
New Senior Investment Group Inc. (NYSE: SNR) is a
publicly-traded real estate investment trust with a diversified
portfolio of senior housing properties located across the United
States. New Senior is one of the largest owners of senior housing
properties, with 103 properties across 36 states. More information
about New Senior can be found at www.newseniorinv.com.
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS
Certain information in this press release may constitute
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995, including without
limitation statements regarding New Senior’s 2021 strategic
priorities and expectations with respect to the potential range of
2021 financial results; the expected impact of the COVID-19
pandemic on our business, liquidity, properties, operators and the
health systems and populations that we serve; the cost and
effectiveness of measures we have taken to respond to the COVID-19
pandemic, including health and safety protocols and system capacity
enhancements that are intended to limit the transmission of
COVID-19 at our properties; our expected occupancy rates and
operating expenses; and the declaration or amount of any future
dividend. These statements are not historical facts. They represent
management’s current expectations regarding future events and are
subject to a number of risks 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.
These risks and uncertainties include, but are not limited to,
risks and uncertainties relating to the continuing impact of
COVID-19 on our operations and the operation of our facilities,
including ongoing cases at certain of our facilities, the speed,
geographic reach and duration of the COVID-19 pandemic; the legal,
regulatory and administrative developments that occur at the
federal, state and local levels; the efficacy of our operators’
infectious disease protocols and prevention efforts; the broader
impact of the pandemic on local economies and labor markets; the
overall demand for our communities in the recovery period following
the pandemic; our ability to successfully manage the asset
management by third parties; and market conditions generally which
affect demand and supply for senior housing. We believe that the
adverse impact that COVID-19 will have on the future operations and
financial results at our communities will depend upon many factors,
most of which are beyond our ability to control or predict.
Accordingly, you should not place undue reliance on any
forward-looking statements contained herein. For a discussion of
these and other 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 most recent
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 us to predict or assess
the impact of every factor that may cause our results to differ
materially from those anticipated by any forward-looking
statements. Forward-looking statements contained herein, and all
statements made in this press release, speak only as of the date of
this press release, and the Company expressly disclaims any duty or
obligation to release publicly any updates or revisions to any
statements contained herein to reflect any change in the Company’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)
December 31, 2020
December 31, 2019
Assets Real estate investments: Land
$ 134,643
$ 134,643
Buildings, improvements and other
1,983,363
1,970,036
Accumulated depreciation
(417,455
)
(351,555
)
Net real estate property
1,700,551
1,753,124
Acquired lease and other intangible assets
7,642
7,642
Accumulated amortization
(2,595
)
(2,238
)
Net real estate intangibles
5,047
5,404
Net real estate investments
1,705,598
1,758,528
Assets from discontinued operations
-
363,489
Cash and cash equivalents
33,046
39,614
Receivables and other assets, net
34,892
33,078
Total Assets
$ 1,773,536
$ 2,194,709
Liabilities, Redeemable Preferred Stock and Equity
Liabilities Debt, net
$ 1,486,164
$ 1,590,632
Liabilities from discontinued operations
-
267,856
Accrued expenses and other liabilities
63,886
59,320
Total Liabilities
1,550,050
1,917,808
Redeemable Preferred Stock, par value $0.01 per share with
$100 liquidation preference, 200,000 shares authorized, issued, and
outstanding as of December 31, 2020 and 400,000 shares authorized,
issued, and outstanding as of December 31, 2019
20,253
40,506
Equity Preferred Stock par value $0.01 per share, 99,800,000
shares (excluding 200,000 shares of redeemable preferred stock)
authorized and none issued or outstanding as of December 31, 2020
and 99,600,000 shares (excluding 400,000 shares of redeemable
preferred stock) authorized and none issued or outstanding as of
December 31, 2019
-
-
Common stock par value $0.01 per share, 2,000,000,000 shares
authorized, 83,023,970 and 82,964,438 shares issued and outstanding
as of December 31, 2020 and 2019, respectively
830
830
Additional paid-in capital
907,577
901,889
Accumulated deficit
(694,194
)
(660,588
)
Accumulated other comprehensive loss
(10,980
)
(5,736
)
Total Equity
203,233
236,395
Total Liabilities, Redeemable Preferred Stock and Equity
$ 1,773,536
$ 2,194,709
Consolidated Statements of Operations (dollars in
thousands, except share data)
Three Months Ended December
31,
Year Ended December
31,
2020
2019
2020
2019
(unaudited)
Revenues Resident fees and services
$ 80,411
$ 84,630
$ 329,951
$ 339,573
Rental revenue
1,582
1,583
6,330
6,330
Total revenues
81,993
86,212
336,281
345,903
Expenses Property operating expense
48,279
50,149
198,061
204,357
Interest expense
14,522
17,982
61,562
76,364
Depreciation and amortization
15,769
17,502
66,291
68,806
General and administrative expense
5,373
5,925
23,018
21,672
Acquisition, transaction and integration expense
272
332
467
1,501
Loss on extinguishment of debt
-
-
5,884
335
Other expense
944
683
1,464
2,076
Total expenses
85,159
92,573
356,747
375,111
Loss on sale of real estate
-
-
-
(122
)
Litigation proceeds, net
-
82
-
38,308
Income (loss) before income taxes
(3,166
)
(6,279
)
(20,466
)
8,978
Income tax expense
22
22
178
210
Income (loss) from continuing operations
(3,188
)
(6,301
)
(20,644
)
8,768
Discontinued Operations: Gain on sale of real estate
-
-
19,992
-
Income (loss) from discontinued operations
-
245
(3,107
)
(6,754
)
Discontinued operations, net
-
245
16,885
(6,754
)
Net income (loss)
(3,188
)
(6,056
)
(3,759
)
2,014
Deemed dividend on redeemable preferred stock
(601
)
(605
)
(2,403
)
(2,407
)
Net loss attributable to common stockholders
($ 3,789
)
($ 6,661
)
($ 6,162
)
($ 393
)
Basic earnings per common share: (A) Income (loss)
from continuing operations attributable to common stockholders
($ 0.05
)
($ 0.08
)
($ 0.28
)
$ 0.08
Discontinued operations, net
-
0.00
0.20
(0.08
)
Net loss attributable to common stockholders
(0.05
)
(0.08
)
(0.08
)
(0.00
)
Diluted earnings per common share: Income (loss) from
continuing operations attributable to common stockholders
($ 0.05
)
($ 0.08
)
($ 0.28
)
$ 0.08
Discontinued operations, net
-
0.00
0.20
(0.08
)
Net loss attributable to common stockholders
(0.05
)
(0.08
)
(0.08
)
(0.00
)
Weighted average number of shares of common stock
outstanding Basic
82,568,966
82,209,844
82,496,460
82,208,173
Diluted (B)
82,568,966
82,209,844
82,496,460
82,208,173
Dividends declared per share of common stock
$ 0.07
$ 0.13
$ 0.33
$ 0.52
(A) Basic earnings per common share (“EPS”) is calculated by
dividing net income (loss) attributable to common stockholders by
the weighted average number of shares of common stock outstanding.
The outstanding shares used to calculate the weighted average basic
shares exclude 454,921 and 754,594 restricted stock awards, net of
forfeitures, as of December 31, 2020 and 2019 respectively, as
those shares were issued but were not vested and therefore, not
considered outstanding for purposes of computing basic income
(loss) per share. Diluted EPS is computed by dividing net income
(loss) attributable to common stockholders 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) Dilutive share equivalents and options were excluded for the
three months ended December 31, 2020 and 2019, and for the year
ended December 31, 2020 as their inclusion would have been
anti-dilutive given our loss position.
Reconciliation of NOI to Net Income (dollars in
thousands)
For the Quarter Ended
For the Year Ended
December 31, 2020
December 31, 2020
Total revenues
$
81,993
$
336,281
Property operating expense
(48,279
)
(198,061
)
NOI
33,714
138,220
Interest expense
(14,522
)
(61,562
)
Depreciation and amortization
(15,769
)
(66,291
)
General and administrative expense
(5,373
)
(23,018
)
Acquisition, transaction and integration expense
(272
)
(467
)
Loss on extinguishment of debt
—
(5,884
)
Other expense
(944
)
(1,464
)
Income tax expense
(22
)
(178
)
Loss from continuing operations
(3,188
)
(20,644
)
Discontinued Operations: Gain on sale of real estate
—
19,992
Loss from discontinued operations
—
(3,107
)
Discontinued operations, net
-
16,885
Net loss
(3,188
)
(3,759
)
Deemed dividend on redeemable preferred stock
(601
)
(2,403
)
Net loss attributable to common stockholders
$
(3,789
)
$
(6,162
)
Reconciliation of Net Income
to FFO, Normalized FFO, AFFO and Normalized FAD (unaudited)
(dollars and shares in
thousands, except per share data)
For the Quarter Ended
For the Year Ended
December 31, 2020
December 31, 2020
Net loss attributable to common stockholders
$
(3,789
)
$
(6,162
)
Adjustments: Gain on sale of real estate
-
(19,992
)
Depreciation and amortization
15,769
66,291
FFO
$
11,980
$
40,137
FFO per basic share
$
0.15
$
0.49
FFO per diluted share
$
0.14
$
0.48
Acquisition, transaction and integration expense
272
1,504
Compensation expense related to transition awards
299
1,280
Loss on extinguishment of debt
-
9,486
Other expense(A)
957
1,345
Normalized FFO
$
13,508
$
53,752
Normalized FFO per basic share
$
0.16
$
0.65
Normalized FFO per diluted share
$
0.16
$
0.64
Straight-line rent
(95
)
(431
)
Amortization of deferred financing costs
799
3,380
Amortization of deferred community fees and other(B)
(1,118
)
(3,022
)
Amortization of equity-based compensation
1,452
5,393
AFFO
$
14,546
$
59,072
AFFO per basic share
$
0.18
$
0.72
AFFO per diluted share
$
0.17
$
0.71
Routine capital expenditures
(1,795
)
(6,045
)
Normalized FAD
$
12,751
$
53,027
Normalized FAD per basic share
$
0.15
$
0.64
Normalized FAD per diluted share
$
0.15
$
0.63
Weighted average basic shares outstanding
82,569
82,496
Weighted average diluted shares outstanding(C)
84,272
83,547
(A) Primarily includes insurance recoveries and casualty related
charges.
(B) Includes amortization of deferred community fees and other,
which includes the net change in deferred community fees and other
rent discounts or incentives.
(C) Diluted share amounts have been calculated using the
treasury stock method.
Reconciliation of Year-over-Year Cash NOI (unaudited)
(dollars in thousands)
4Q 2020
4Q 2019
IL Properties
CCRC
Total
IL Properties
CCRC
Total
Same Store Cash NOI (excluding COVID-19 related expenses)
$31,453
$1,490
$32,943
$34,502
$1,450
$35,952
COVID-19 related expenses
(442
)
-
(442
)
—
-
-
Same Store Cash NOI
31,011
1,490
32,501
34,502
1,450
35,952
Straight-line rental revenue
-
95
95
-
134
134
Amortization of deferred community fees and other(A)
1,120
(2
)
1,118
(21
)
(2
)
(23
)
Total NOI
$32,131
$1,583
$33,714
$34,481
$1,583
$36,063
Interest expense
(14,522
)
(17,982
)
Depreciation and amortization
(15,769
)
(17,502
)
General and administrative expense
(5,373
)
(5,925
)
Acquisition, transaction & integration expense
(272
)
(332
)
Other expense
(944
)
(683
)
Income tax expense
(22
)
(22
)
Litigation proceeds, net
—
82
Loss from continuing operations
(3,188
)
(6,301
)
Discontinued operations, net
—
245
Net loss
(3,188
)
(6,056
)
Deemed dividend on redeemable preferred stock
(601
)
(605
)
Net loss attributable to common stockholders
($3,789
)
($6,661
)
(A) Consists of amortization of deferred community fees and
other, which includes the net change in deferred community fees and
other rent discounts or incentives.
Reconciliation of Quarter-over-Quarter Cash NOI (unaudited)
(dollars in thousands)
4Q 2020
3Q 2020
IL Properties
CCRC
Total
IL Properties
CCRC
Total
Same Store Cash NOI (excluding COVID-19 related expenses)
$31,453
$1,490
$32,943
$32,250
$1,490
$33,740
COVID-19 related expenses
(442
)
-
(442
)
(785
)
-
(785
)
Same Store Cash NOI
31,011
1,490
32,501
31,465
1,490
32,955
Straight-line rental revenue
-
95
95
-
95
95
Amortization of deferred community fees and other(A)
1,120
(2
)
1,118
160
(2
)
158
Total NOI
$32,131
$1,583
$33,714
$31,625
$1,583
$33,208
Interest expense
(14,522
)
(14,540
)
Depreciation and amortization
(15,769
)
(16,204
)
General and administrative expense
(5,373
)
(5,905
)
Acquisition, transaction & integration expense
(272
)
(43
)
Other expense
(944
)
(192
)
Income tax expense
(22
)
(74
)
Net loss
(3,188
)
(3,750
)
Deemed dividend on redeemable preferred stock
(601
)
(605
)
Net loss attributable to common stockholders
($3,789
)
($4,355
)
(A) Consists of amortization of deferred community fees and
other, which includes the net change in deferred community fees and
other rent discounts or incentives.
Reconciliation of Year-over-Year Cash NOI (unaudited)
(dollars in thousands)
2020
2019
IL Properties
CCRC
Total
IL Properties
CCRC / Other
Properties
Total
Same Store Cash NOI (excluding COVID-19 related expenses)
$133,041
$5,907
$138,948
$137,307
$5,749
$143,056
COVID-19 related expenses
(3,171
)
-
(3,171
)
-
-
-
Same Store Cash NOI
129,870
5,907
135,777
137,307
5,749
143,056
Non-Same Store Cash NOI
-
-
-
-
(626
)
(626
)
Straight-line rental revenue
-
431
431
-
589
589
Amortization of deferred community fees and other(A)
2,020
(8
)
2,012
(1,539
)
66
(1,473
)
Total NOI
$131,890
$6,330
$138,220
$135,768
$5,778
$141,546
Interest expense
(61,562
)
(76,364
)
Depreciation and amortization
(66,291
)
(68,806
)
General and administrative expense
(23,018
)
(21,672
)
Acquisition, transaction & integration expense
(467
)
(1,501
)
Loss on extinguishment of debt
(5,884
)
(335
)
Other expense
(1,464
)
(2,076
)
Income tax expense
(178
)
(210
)
Litigation proceeds, net
—
38,308
Loss on sale of real estate
—
(122
)
Income (loss) from continuing operations
(20,644
)
8,768
Gain on sale of real estate
19,992
—
Loss from discontinued operations
(3,107
)
(6,754
)
Discontinued operations, net
16,885
(6,754
)
Net income (loss)
(3,759
)
2,014
Deemed dividend on redeemable preferred stock
(2,403
)
(2,407
)
Net loss attributable to common stockholders
($6,162
)
($393
)
(A) Consists of amortization of deferred community fees and
other, which includes the net change in deferred community fees and
other rent discounts or incentives.
Interest Expense
Reconciliation
(dollars in thousands)
4Q 2020
3Q 2020
2Q 2020
Interest expense
$
14,522
$
14,540
$
15,281
Amortization of deferred financing costs
(799
)
(803
)
(872
)
Cash interest expense
$
13,723
$
13,737
$
14,409
First Quarter 2021 Guidance Reconciliation Reconciliation
of Net Loss to FFO, Normalized FFO and AFFO (unaudited)
First Quarter 2021
Per Diluted Share
Low
High
Net loss attributable to common stockholders
$(0.08)
-
$(0.07)
Depreciation & amortization
0.19
-
0.19
FFO
$0.11
-
$0.12
Acquisition, transaction & integration expense
0.01
-
0.01
Normalized FFO
$0.12
-
$0.13
Amortization of deferred financing costs
0.01
-
0.01
Amortization of deferred community fees & other
(0.01)
-
(0.01)
Amortization of equity-based compensation
0.02
-
0.02
AFFO
$0.14
-
$0.15
ROUNDING
Throughout this Press Release, totals and subtotals of certain
tables may not sum due to rounding.
NON-GAAP FINANCIAL
MEASURES
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 consider certain non-GAAP
financial measures to be useful supplemental measures of our
operating performance. GAAP accounting for real estate assets
assumes that the value of real estate assets diminishes predictably
over time, even though real estate values historically have risen
or fallen with market conditions. As a result, many industry
investors look to non-GAAP financial measures for supplemental
information about real estate companies.
You should not consider non-GAAP measures as alternatives to
GAAP net (loss) income, which is an indicator of our financial
performance, or as alternatives to GAAP cash flow from operating
activities, which is a liquidity measure, nor are non-GAAP measures
necessarily indicative of our ability to satisfy our funding
requirements. In order to facilitate a clear understanding of our
consolidated historical operating results, you should examine our
non-GAAP measures in conjunction with GAAP net (loss) income as
presented in our Consolidated Financial Statements and other
financial data included elsewhere in this press release. Moreover,
the comparability of non-GAAP financial measures across companies
may be limited as a result of differences in the manner in which
real estate companies calculate such measures, the capital
structure of such companies or other factors.
Below is a description of the non-GAAP financial measures
presented herein.
NOI, Cash NOI and Cash Interest Expense
The Company evaluates the performance of our properties based on
NOI and cash NOI. The Company defines NOI as total revenues less
property-level operating expenses, which include property
management fees and travel cost reimbursements. The sum of the NOI
for each segment is total NOI, which the Company uses to evaluate
the aggregate performance of its segments. The Company defines Cash
NOI as NOI excluding the effects of straight-line rent,
amortization of above / below market lease intangibles and
amortization of deferred community fees and other, which includes
the net change in deferred community fees and other rent discounts
or incentives. We believe that NOI and Cash NOI serve as useful
supplemental measures to net income because they allow investors,
analysts and management to measure unlevered property-level
operating results and to compare our operating results between
periods and to the operating results of other real estate companies
on a consistent basis.
Same store NOI and same store cash NOI include only properties
owned for the entirety of comparable periods. Properties acquired,
sold, transitioned to other operators or between segments, or
classified as held for sale or discontinued operations during the
comparable periods are excluded from the same store amounts. Please
see the Company’s most recent quarterly report filed with the
Securities and Exchange Commission for more information.
Cash interest expense is defined as interest expense excluding
the amortization of deferred financing costs and includes the
interest expense on debt repaid upon the sale of the AL/MC
portfolio (classified as discontinued operations).
FFO and Other Non-GAAP Measures
We use Funds From Operations ("FFO") and Normalized FFO as
supplemental measures of our operating performance. We use the
National Association of Real Estate Investment Trusts ("NAREIT")
definition of FFO. NAREIT defines FFO as GAAP net income (loss)
attributable to common stockholders, which includes loss from
discontinued operations, excluding gains (losses) from sales of
depreciable real estate assets and impairment charges of
depreciable real estate, plus real estate depreciation and
amortization, and after adjustments for unconsolidated entities and
joint ventures to reflect FFO on the same basis. FFO does not
account for debt principal payments and is not intended as a
measure of a REIT’s ability to satisfy such payments or any other
cash requirements.
Normalized FFO, as defined below, measures the financial
performance of our portfolio of assets excluding items that,
although incidental to, are not reflective of the day-to-day
operating performance of our portfolio of assets. We believe that
Normalized FFO is useful because it facilitates the evaluation of
our portfolio’s operating performance (i) between periods on a
consistent basis and (ii) to the operating performance of other
real estate companies. However, comparability may be limited
because our calculation of Normalized FFO may differ significantly
from that of other companies or because of features of our business
that are not present in other companies.
We define Normalized FFO as FFO excluding the following income
and expense items, as applicable: (a) acquisition, transaction and
integration related expenses; (b) the write off of unamortized
discounts, premiums, deferred financing costs, or additional costs,
make whole payments and penalties or premiums incurred as the
result of early repayment of debt (collectively “Gain (Loss) on
extinguishment of debt”); (c) incentive compensation to affiliate
recognized as a result of sales of real estate; (d) the
remeasurement of deferred tax assets; (e) valuation allowance on
deferred tax assets, net; (f) termination fee to affiliate; (g)
gain on lease termination; (h) compensation expense related to
transition awards; (i) litigation proceeds; and (j) other items
that we believe are not indicative of operating performance,
generally reported as “Other expense (income)” in our Consolidated
Statements of Operations.
We also use Adjusted FFO (“AFFO”) and Normalized FAD as
supplemental measures of our operating performance. We believe AFFO
is useful because it facilitates the evaluation of (i) the current
economic return on our portfolio of assets between periods on a
consistent basis and (ii) our portfolio versus those of other real
estate companies that report AFFO. However, comparability may be
limited because our calculation of AFFO may differ significantly
from that of other companies, or because of features of our
business that are not present in other companies.
We define AFFO as Normalized FFO excluding the impact of the
following: (a) straight-line rents; (b) amortization of above /
below market lease intangibles; (c) amortization of deferred
financing costs; (d) amortization of premium or discount on
mortgage notes payable; (e) amortization of deferred community fees
and other, which includes the net change in deferred community fees
and other rent discounts or incentives, and (f) amortization of
equity-based compensation expense.
We define Normalized FAD as AFFO less routine capital
expenditures, which we view as a cost associated with the current
economic return. Normalized FAD, which does not reflect debt
principal payments and certain other expenses, does not represent
cash available for distribution to shareholders. We believe
Normalized FAD is useful because it fully reflects the additional
economic costs of maintaining the condition of the portfolio.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210225005329/en/
Jane Ryu (646) 822-3700
New Senior Investment (NYSE:SNR)
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