TORONTO, March 15,
2024 /CNW/ - Invesque Inc. (TSX:
IVQ.U) (TSX: IVQ) (the "Company") today reported its results
for the three and twelve months ended December 31, 2023.
Fourth Quarter and Subsequent Highlights
- As previously announced, on October 27,
2023, the Company received final licensure approval for a
newly constructed seniors housing community in Parker, Colorado. The assisted living and
memory care community is part of a joint venture between the
Company and Health Dimensions Group.
- As previously announced, on November 1,
2023, the Company sold two seniors housing communities in
Georgia and two seniors housing
communities in South Carolina for
US$25.1 million.
- As previously announced, on November 8,
2023, 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 extended
the maturity from December 19, 2023,
to March 31, 2025.
- Reported funds from operations
("FFO")1 of US$0.03 and US$0.33
per common share for the three- and twelve-months ending
December 31, 2023. The Company
reported adjusted funds from operations
("AFFO")2 of US$0.03 and US$0.30
per common share for the three- and twelve-months ending
December 31, 2023.
- As previously announced, on January 31,
2024, the Company sold a seniors housing community in
South Carolina for US$4.0 million.
- On February 29, 2024, the Company
sold two skilled nursing facilities in Pennsylvania for gross proceeds of
$12.9 million. Proceeds generated by
the sale were used to paydown the KeyBank credit facility.
- On March 5, 2024, the Company
executed an amendment to the A&R Credit Agreement (the "A&R
Credit Agreement Amendment"). Subject to the Company meeting
specific conditions, including further repayment of the outstanding
principal balance, the A&R Credit Agreement Amendment provides
for the following adjustments to the covenant requirements:
- Reduction of the minimum fixed charge coverage ratio
- Reduction of the minimum required liquidity
- Reduction of the assumed debt service coverage ratio for assets
pledged to the borrowing base
- On March 5, 2024, the Company
sold two skilled nursing facilities in Texas and one skilled nursing facility in
Missouri previously operated under
a triple-net lease for gross proceeds of $55.5 million. Following the payoff of applicable
property-level debt, proceeds were used to further paydown the
KeyBank credit facility.
|
______________________________
|
|
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.
|
"I am pleased to announce the disposition of five skilled
nursing facilities over the last 30 days. A few years
ago, Invesque set out to become a predominately private pay
seniors housing company and with only four skilled nursing
facilities remaining in our portfolio today, the Company has
successfully achieved that goal," commented Scott White, Chairman and Chief Executive
Officer for the Company. "We will continue to focus on our seniors
housing portfolio, which we believe is positioned well to take
advantage of the expected increase in demand throughout 2024 and
beyond. Where possible, we will continue to sell non-strategic
assets, and make improvements to our balance sheet, as evidenced by
the A&R Credit Agreement Amendment that was executed last
week."
Financial Highlights
|
Three months
ended
December 31,
|
|
Year ended
December 31,
|
|
(in thousands of U.S
dollars,
except per share
values)
|
2023
|
2022
|
|
2023
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
46,290
|
$
|
50,044
|
|
$
|
192,829
|
$
|
198,035
|
|
Net income
(loss)
|
$
|
(38,308)
|
$
|
(30,965)
|
|
$
|
(99,240)
|
$
|
(48,810)
|
|
FFO
|
$
|
1,970
|
$
|
6,852
|
|
$
|
18,920
|
$
|
23,940
|
|
FFO per
share
|
$
|
0.03
|
$
|
0.12
|
|
$
|
0.33
|
$
|
0.42
|
|
AFFO
|
$
|
1,613
|
$
|
5,611
|
|
$
|
17,128
|
$
|
22,071
|
|
AFFO per
share
|
$
|
0.03
|
$
|
0.10
|
|
$
|
0.30
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet and Portfolio Highlights
|
(in thousands of U.S.
dollars, except number of properties)
|
December 31,
2023
|
|
December 31,
2022
|
|
|
|
|
|
Total assets
|
$828,283
|
|
$1,097,340
|
|
Number of
properties3
|
66
|
|
77
|
|
Debt
|
$588,245
|
|
$765,457
|
|
|
|
|
|
______________________________
|
|
3 Excludes
two medical office buildings and one seniors housing community held
for sale as of December 31, 2023. Excludes three medical office
buildings held for sale as of December 31, 2022.
|
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").
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 December 31, 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
December 31,
|
Year ended December
31,
|
|
2023
|
2022
|
2023
|
2022
|
|
Net loss from
continuing operations for
the period
|
$
(33,592)
|
$
(25,993)
|
$
(90,110)
|
$
(42,010)
|
|
Add/(deduct):
|
|
|
|
|
|
Change in fair value of
investment
properties
|
13,506
|
17,545
|
64,716
|
52,978
|
|
Property taxes
accounted for under
IFRIC 21
|
(2,310)
|
(2,798)
|
(46)
|
26
|
|
Depreciation and
amortization
expense
|
4,181
|
5,744
|
15,182
|
17,059
|
|
Amortization of tenant
inducements
|
60
|
60
|
243
|
242
|
|
Accretion expense and
amortization of
non-cash adjustments to the 2016
Convertible Debentures
|
1,939
|
679
|
9,463
|
2,883
|
|
Change in fair value of
financial
instruments
|
4,286
|
21
|
(14,214)
|
(23,129)
|
|
Transaction
Costs
|
(541)
|
—
|
787
|
—
|
|
Debt extinguishment
costs
|
3,270
|
—
|
3,270
|
—
|
|
Loss on sale of
property, plant and
equipment
|
(10)
|
—
|
(22)
|
3,009
|
|
Impairment of property,
plant and
equipment
|
5,147
|
4,513
|
8,783
|
4,513
|
|
Deferred income tax
recovery
|
1,605
|
—
|
(312)
|
(1,127)
|
|
Allowance for credit
losses on loans
and interest receivable
|
1,097
|
9,239
|
15,732
|
16,461
|
|
Change in
non-controlling interest
liability in respect of the above
|
(64)
|
(50)
|
(163)
|
10
|
|
Adjustments for equity
accounted
entities
|
4,256
|
(1,995)
|
6,939
|
(7,422)
|
|
|
|
|
|
|
FFO from continuing
operations
|
$
2,830
|
$
6,965
|
$
20,248
|
$
23,493
|
|
FFO from discontinued
operations
|
(860)
|
(113)
|
(1,328)
|
447
|
|
|
|
|
|
|
Total FFO
|
$
1,970
|
$
6,852
|
$
18,920
|
$
23,940
|
|
Weighted average number
of shares,
including fully vested deferred shares:
Basic
|
56,659,499
|
56,488,064
|
56,703,764
|
56,634,772
|
|
|
|
|
|
|
Funds from operations
per share
|
$
0.03
|
$
0.12
|
$
0.33
|
$
0.42
|
AFFO Tables
|
Three months ended
December 31,
|
Year ended December
31
|
|
|
2023
|
2022
|
2023
|
2022
|
|
|
Cash flows provided by
(used in)
operating activities
|
$
(2,193)
|
$
(2,375)
|
$
6,031
|
$
11,912
|
|
|
Change in non-cash
working capital
|
3,115
|
8,817
|
9,006
|
10,891
|
|
|
Less: interest
expense
|
(9,500)
|
(9,644)
|
(38,625)
|
(38,760)
|
|
|
Less: change in
non-controlling
interest liability
|
(11)
|
2
|
(242)
|
(446)
|
|
|
Plus: loss from joint
ventures
|
(4,527)
|
2,249
|
(4,133)
|
6,395
|
|
|
Plus: interest
paid
|
8,545
|
8,810
|
37,385
|
40,293
|
|
|
Less: interest
received
|
(499)
|
(135)
|
(774)
|
(549)
|
|
|
Plus: debt
extinguishment costs
|
3,387
|
(247)
|
3,740
|
337
|
|
|
Plus: realized loss on
currency
exchange
|
(14)
|
409
|
(21)
|
409
|
|
|
Plus: amortization of
lease asset
|
(25)
|
671
|
(217)
|
671
|
|
|
Plus: current income
tax
|
(110)
|
—
|
882
|
—
|
|
|
Plus: non-cash portion
of non-
controlling interest expense
|
(51)
|
(54)
|
(147)
|
(5)
|
|
|
Plus: adjustments for
equity
accounted entities
|
4,271
|
(1,979)
|
6,984
|
(6,352)
|
|
|
Plus: deferred share
incentive plan
compensation
|
(72)
|
(184)
|
71
|
192
|
|
|
Less: capital
maintenance reserve
|
(703)
|
(729)
|
(2,812)
|
(2,917)
|
|
|
|
|
|
|
|
|
AFFO
|
$
1,613
|
$
5,611
|
$
17,128
|
$
22,071
|
|
|
Weighted average number
of
shares, including fully vested
deferred shares: Basic
|
56,659,499
|
56,488,064
|
56,703,764
|
56,634,772
|
|
|
|
|
|
|
|
|
Funds from operations
per share
|
$
0.03
|
$
0.10
|
$
0.30
|
$
0.39
|
|
|
|
|
|
|
|
|
|
SOURCE Invesque Inc.