Nationwide Announces $115.5 Million Common Stock Issue, Dividends and First Quarter Results
NEWPORT BEACH, Calif., Apr 29, 2003 /PRNewswire-FirstCall via COMTEX/ -- Nationwide Health Properties, Inc. (NYSE: NHP) announced today that it priced a direct placement of $115.5 million or 9,625,000 shares of its common stock to a number of large institutional investors including Morgan Stanley Investment Management on behalf of certain client accounts and Teachers Insurance and Annuity Association of America. The shares will be sold at a price of $12.00 per share and will provide the Company with net proceeds of approximately $113.0 million on May 2, 2003. The net proceeds will be used to reduce the amount outstanding on the Company's revolving line of credit. Cohen & Steers Capital Advisors, LLC acted as placement agent for the transaction.
In conjunction with this offering, the Company's Board of Directors declared today a common stock dividend of $.37 per share to shareholders of record on May 16, 2003, and payable on June 6, 2003. The common stock dividend of $.37 a share represents a reduction of 20%, which will lower the Company's dividend payout ratio to historical levels and at the conservative end of our peer group.
"In evaluating the Company's capital requirements for 2003 and 2004, including debt maturities and outstanding commitments to fund property expansions for our tenants, we determined that this was a prudent time to raise common equity to significantly strengthen our balance sheet and liquidity position. This additional equity will both address our current capital needs and alleviate concerns raised by investors in the past number of months" said R. Bruce Andrews, President and Chief Executive Officer. "It is our belief that the problems of the last few years in the senior housing and long-term care sectors are largely behind us. Although the Company generated sufficient earnings this period to cover its previous dividend, the Company is reducing its dividend going forward to take into account the effects of the equity transaction and to establish a more conservative dividend payout in the future. Overall the combination of a solid balance sheet, ample liquidity to address our capital needs and a conservative dividend payout solidifies our access to the broader capital markets and positions us well to resume our growth in the future."
The Board of Directors also declared a $1.91925 per share dividend on its preferred stock. The preferred dividend will be paid on June 30, 2003 to shareholders of record on June 2, 2003.
The Company also announced the results of its operations for the first quarter of 2003. Funds from operations (FFO) was $22,497,000 or $.46 per diluted share, compared with $21,051,000 or $.44 per diluted share for the first quarter of 2002. Revenues for the period were $41,528,000, up 12% over the $36,950,000 in 2002. Diluted net income (loss) available to common stockholders was $10,991,000, or $0.22 per share compared to $(2,053,000), or $(.04) per share in the first quarter of 2002. Included in the first quarter of 2002 were non-cash impairment charges of $14,537,000 or $.30 per share. (FFO is a non-GAAP measure that the Company believes is important to an understanding of its results of operations; a reconciliation between FFO and net income, the most directly comparable GAAP financial measure, is included in the accompanying financial data.)
"Earnings are in line with management's and analysts' expectations," said R. Bruce Andrews, President and Chief Executive Officer. "We continue to see improved operations within the Company's property sector."
As a result of the additional common shares which will be outstanding after the offering described above, the Company projects diluted per share funds from operations for 2003 to range between $1.71 to $1.73. Diluted FFO per share is predicated on a diluted earnings per share range of $.90 to $.92, adjusted for real estate depreciation of $.80 and impairments of assets of $.01. The only change in our previous earnings guidance is the dilution from this stock issuance.
The Company has scheduled a conference call and webcast for Wednesday, April 30, 2003 at 1:00 p.m. Pacific time in order to present the Company's performance and operating results for the quarter ended March 31, 2003. The conference call is accessible by dialing 800-553-0349 or by logging on to our website at www.nhp-reit.com and going to the Investor Information page. A digitized replay of the conference call will be available from 4:30 p.m. PT that day until midnight Thursday, May 21, 2003. Callers can access the replay be dialing 800-475-6701 or 320-365-3844 and entering reservation number 681973. Webcast replays will also be available on the website.
Nationwide Health Properties, Inc. is a real estate investment trust that invests in senior housing and long-term care facilities. The Company and its joint venture have investments in 383 facilities in 38 states. For more information on Nationwide Health Properties, Inc., visit the website at http://www.nhp-reit.com .
Certain information contained in this news release includes forward- looking statements. Forward looking statements include statements regarding our expectations, beliefs, intentions, plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements which are other than statements of historical facts. These statements may be identified, without limitation, by the use of forward looking terminology such as "may", "will", "anticipates", "expects", "believes", "intends", "should" or comparable terms or the negative thereof. All forward-looking statements included in this news release are based on information available to us on the date hereof. Such statements speak only as of the date hereof and we assume no obligation to update such forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include (without limitation) the following: the effect of economic and market conditions and changes in interest rates; the general distress of the healthcare industry; government regulations, including changes in the reimbursement levels under the Medicare and Medicaid programs; continued deterioration of the operating results or financial condition, including bankruptcies, of our tenants; the ability of the Company to attract new operators for certain facilities; occupancy levels at certain facilities; the ability of our operators to repay deferred rent or loans in future periods; our ability to attract new operators for certain facilities; occupancy levels at certain facilities; our ability to sell certain facilities for their book value; the amount and yield of any additional investments; changes in tax laws and regulations affecting real estate investment trusts; access to the capital markets and the cost of capital; and changes in the ratings of our debt securities. Some of these risk factors are described from time to time in the SEC reports filed by the Company.
For further information, please contact: R. Bruce Andrews, President & CEO, or Mark L. Desmond, Senior Vice President & CFO, both of Nationwide Health Properties, Inc., 949-718-4400.
NATIONWIDE HEALTH PROPERTIES, INC.
STATEMENTS OF OPERATIONS
MARCH 31, 2003
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Three Months Ended
March 31,
2003 2002
Revenues:
Rental income $37,774 $32,669
Interest and other income 3,261 4,281
Income from joint venture 493 ---
41,528 36,950
Expenses:
Interest & amortization of deferred
financing costs 15,130 12,501
Depreciation and amortization 10,674 8,072
General and administrative 1,861 2,008
Impairment of assets --- 12,472
27,665 35,053
Income from continuing operations 13,863 1,897
Discontinued operations (953) (2,031)
Net income 12,910 (134)
Preferred stock dividends (1,919) (1,919)
Net income available to common stockholders $10,991 ($2,053)
Adjustments for funds from operations:
Depreciation and amortization 10,674 8,072
Depreciation in income from joint venture 187 ---
Depreciation in discontinued operations --- 495
Impairment of assets in discontinued
operations 645 2,065
Impairment of assets --- 12,472
Funds From Operations ("FFO") available
to common stockholders(1) $22,497 $21,051
Basic/diluted per share amounts available
to common stockholders:
Income from continuing operations $0.24 $0.00
Net income $0.22 ($0.04)
Funds from operations(1) $0.46 $0.44
Weighted average shares outstanding 49,169 47,977
(1) We believe that funds from operations is an important supplemental
measure of operating performance.We therefore disclose funds from
operations, although it is a measurement that is not defined by
accounting principles generally accepted in the United States. We
generally use the National Association of Real Estate Investment
Trusts (NAREIT) measure of funds from operations.We define funds
from operations as income before extraordinary items adjusted for
certain non-cash items, primarily real estate depreciation, less
gains/losses on sales of facilities.Our measure may not be
comparable to similarly titles measures used by other REITs.
Consequently, our funds from operations may not provide a meaningful
measure of our performance as compared to that of other REITs.Funds
from operations does not represent cash generated from operating
activities as defined by accounting principles generally accepted in
the United States (funds from operations does not include changes in
operating assets and liabilities) and, therefore, should not be
considered as an alternative to net income as the primary indicator
of operating performance or to cash flow as a measure of liquidity.
NATIONWIDE HEALTH PROPERTIES, INC.
BALANCE SHEETS
MARCH 31, 2003
(IN THOUSANDS)
March 31, December 31,
ASSETS 2003 2002
Investments in real estate:
Real estate properties
Land $155,878 $154,563
Buildings and improvements 1,317,007 1,299,625
1,472,885 1,454,188
Less accumulated depreciation (234,867) (224,400)
1,238,018 1,229,788
Mortgage loans receivable, net 99,074 99,292
Investment in unconsolidated joint venture 15,516 16,115
1,352,608 1,345,195
Cash and cash equivalents 9,834 8,387
Receivables 4,613 4,429
Assets held for sale 8,397 9,682
Other assets 43,208 42,240
$1,418,660 $1,409,933
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank borrowings $122,000 $107,000
Senior notes due 2003 - 2038 614,750 614,750
Notes and bonds payable 110,953 111,303
Accounts payable and accrued liabilities 53,684 47,740
Stockholders' equity:
Preferred stock 100,000 100,000
Common stock 4,917 4,916
Capital in excess of par value 610,237 610,173
Cumulative net income 693,421 680,511
Cumulative dividends (891,302) (866,460)
Total stockholders' equity 517,273 529,140
$1,418,660 $1,409,933
NATIONWIDE HEALTH PROPERTIES, INC.
SUPPLEMENTAL ANALYST INFORMATION
MARCH 31, 2003
PORTFOLIO COMPOSITION
EQUITY OWNERSHIP 94%
MORTGAGE LOANS RECEIVABLE 6%
100%
ASSISTED LIVING FACILITIES 48%
SKILLED NURSING FACILITIES 38%
CONTINUING CARE RETIREMENT COMMUNITIES 13%
OTHER 1%
100%
OWNED FACILITIES
FACILITIES INVESTMENT
ASSISTED LIVING
FACILITIES 133 $736,750,000 $71,703 PER UNIT
SKILLED NURSING
FACILITIES 160 $534,826,000 $29,238 PER BED
CONTINUING CARE
RETIREMENT COM. 11 $184,238,000 $62,944 PER BED/UNIT
REHABILITATION
HOSPITAL 1 $10,710,000 $178,500 PER BED
LONG-TERM ACUTE
CARE HOSPITAL 1 $6,361,000 $113,589 PER BED
MORTGAGE LOANS
RECEIVABLE
FACILITIES INVESTMENT
SKILLED NURSING
FACILITIES 25 $67,995,000 $22,141 PER BED
ASSISTED LIVING
FACILITIES 4 $18,086,000 $40,102 PER UNIT
CONTINUING CARE
RETIREMENT COM. 1 $12,993,000 $52,391 PER BED/UNIT
2003 2002 2001
TOTAL RENT COVERAGE - MATURE FACILITIES
ASSISTED LIVING FACILITIES 1.39 1.42 1.67
SKILLED NURSING FACILITIES 1.68 1.71 1.57
CONTINUING CARE RETIREMENT COMMUNITIES 1.46 1.47 1.69
REHABILITATION HOSPITAL 3.95 3.90 2.48
OCCUPANCY - MATURE FACILITIES
ASSISTED LIVING FACILITIES 88% 88% 89%
SKILLED NURSING FACILITIES 83% 84% 87%
CONTINUING CARE RETIREMENT COMMUNITIES 90% 90% 92%
REHABILITATION HOSPITAL 90% 84% 78%
PERCENT PRIVATE PAY AND MEDICARE
ASSISTED LIVING FACILITIES 100% 100% 100%
SKILLED NURSING FACILITIES 30% 29% 28%
REHABILITATION HOSPITAL 89% 89% 93%
INVESTMENT BY OPERATOR
(excluding assets
held for sale) NUMBER OF INVESTMENT PERCENT OF PERCENT OF
FACILITIES AMOUNT INVESTMENT REVENUES
ALTERRA HEALTHCARE
CORPORATION* 59 $208,244,000 13% 14%
AMERICAN RETIREMENT
CORPORATION* 16 185,297,000 12% 11%
ARV ASSISTED LIVING,
INC. 16 102,518,000 7% 9%
BEVERLY ENTERPRISES,
INC.* 30 97,447,000 6% 8%
SENIOR SERVICES OF
AMERICA 10 69,922,000 5% 1%
LAUREATE GROUP 4 69,702,000 4% 4%
COMPLETE CARE SERVICES 33 65,633,000 4% 5%
NEXION HEALTH MANAGEMENT,
INC. 23 59,339,000 4% 5%
AMERICAN SENIOR LIVING 10 58,888,000 4% 3%
EPOCH SENIOR LIVING, INC. 6 53,354,000 3% 3%
LIBERTY HEALTHCARE 14 50,538,000 3% 3%
LIFE CARE CENTERS OF
AMERICA, INC. 6 46,705,000 3% 3%
THE NEWTON GROUP, LLC 3 32,227,000 2% 2%
INTEGRATED HEALTH
SERVICES* 7 29,470,000 2% 2%
AMERICAN HEALTH CENTERS 6 22,495,000 2% 2%
SUN HEALTHCARE GROUP,
INC.* 5 22,361,000 1% 2%
ATRIA COMMUNITIES 1 21,811,000 1% 1%
HARBORSIDE HEALTHCARE
CORP.* 4 19,592,000 1% 1%
OTHER -- PUBLIC
COMPANIES 16 59,236,000 4% 4%
OTHER 67 297,180,000 19% 17%
336 $1,571,959,000 100% 100%
* PUBLIC COMPANY
SECURITY DEPOSITS
BANK LETTERS OF CREDIT $30,139,000
CASH DEPOSITS $17,759,000
CURRENT CAPITALIZATION
REVOLVING BANK LINE OF CREDIT $122,000,000 8%
SENIOR DEBT $725,703,000 45%
EQUITY (UNDEPRECIATED BOOK BASIS) $752,140,000 47%
CURRENT QUARTER ACQUISITIONS
2 SKILLED NURSING FACILITIES 242 BEDS $9,077,000
1 ASSISTED LIVING FACILITIES 74 UNITS 4,586,000
$13,663,000
MEDIUM TERM NOTE MATURITIES
YEAR AMOUNT
Q2 2003 $35,000,000
Q3 2003 71,000,000 (1)
Q4 2003 41,500,000 (2)
Q1 2004 23,750,000
Q3 2004 44,000,000
Q4 2004 55,000,000 (3)
Q1 2005 18,000,000
2006 63,500,000
2007 85,000,000
2008 25,000,000
2009 50,000,000
2010 --
2011 --
2012 100,000,000
THEREAFTER 3,000,000
$614,750,000
(1) Includes $40,000,000 of 6.59% MTNs putable July of 2003, '08, '13,
'18, '23, '28 with a final maturity in 2038.
(2) Includes $41,500,000 of 7.6% MTNs putable November of 2003, '08, '13,
'18, '23 with a final maturity in 2028.
(3) Includes $55,000,000 of 6.9% MTNs putable October of 2004, '07, '09,
'12, '17, '27 with a final maturity in 2037.
LEASE EXPIRATIONS
MINIMUM NUMBER OF
YEAR RENT FACILITIES
2003 $639,000 1
2004 720,000 2
2005 10,967,000 21
2006 9,018,000 22
2007 5,638,000 13
2008 2,477,000 5
2009 2,973,000 5
2010 14,650,000 30
2011 6,008,000 19
2012 17,526,000 24
THEREAFTER 76,501,000 163
$147,117,000 305
MORTGAGE LOAN RECEIVABLE PRINCIPAL PAYMENTS
PRINCIPAL NUMBER
YEAR PAYMENTS OF FACILITIES
2003 $5,965,000 4
2004 1,435,000 --
2005 4,624,000 6
2006 10,045,000 4
2007 19,086,000 3
2008 5,559,000 1
2009 874,000 --
2010 1,022,000 --
2011 6,751,000 2
2012 1,244,000 --
THEREAFTER 44,257,000 10
$100,862,000 30
JOINT VENTURE INFORMATION FOR THE PERIOD ENDED MARCH 31, 2003
(dollars in thousands)
NHP has a 25% interest in a joint venture that owns 49 assisted living
facilities operated by Alterra. In addition to its share of the income,
NHP receives a management fee of 2.5% of the joint venture revenues.
This fee is included in general and administrative expense below.
INCOME STATEMENT
Three Months
Ended
March 31, 2003
Rental income $3,693
Expenses:
Interest and amortization of deferred financing costs 1,196
Depreciation and amortization 749
General and administrative 145
2,090
Net income $1,603
BALANCE SHEET
ASSETS LIABILITIES AND EQUITY
Investments in real estate: Notes and bonds payable $60,822
Land $13,410 Accounts payable and
Buildings and accr. liab. 3,349
improvements 107,829
121,239 Equity:
Less accumulated
depreciation (2,693) Capital Contributions 65,501
118,546 Distributions (8,900)
Cash and cash
equivalents 6,092 Cumulative net income 5,462
Other assets 1,596 Total equity 62,063
$126,234 $126,234
SOURCE Nationwide Health Properties, Inc.
R. Bruce Andrews, President & CEO, or Mark L. Desmond, Senior Vice President & CFO, both of Nationwide Health Properties, Inc., 949-718-4400
http://www.nhp-reit.com
News provided by COMTEX. User agreement applies