-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Qsw+QxlTPXpduq2YhlwGd1tfu46t/gzzm8ldH131L9PLEfziP3QzTuMJh57Xazk2 qzzgu8t4FxRgh52VlRAf5A== 0000898430-95-002160.txt : 19951108 0000898430-95-002160.hdr.sgml : 19951108 ACCESSION NUMBER: 0000898430-95-002160 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951107 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONWIDE HEALTH PROPERTIES INC CENTRAL INDEX KEY: 0000780053 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 953997619 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09028 FILM NUMBER: 95587809 BUSINESS ADDRESS: STREET 1: 4675 MACARTHUR COURT STE 1170 CITY: NEWPORT BEACH STATE: CA ZIP: 92660 BUSINESS PHONE: 7142511211 MAIL ADDRESS: STREET 1: 4675 MACARTHUR COURT STREET 2: STE 1170 CITY: NEWSPORT BEACH STATE: CA ZIP: 92660 FORMER COMPANY: FORMER CONFORMED NAME: BEVERLY INVESTMENT PROPERTIES INC DATE OF NAME CHANGE: 19890515 10-Q 1 FORM 10-Q ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (MARK ONE) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________________ to ____________________ Commission file number 1-9028 NATIONWIDE HEALTH PROPERTIES, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MARYLAND 95-3997619 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER) 4675 MACARTHUR COURT, SUITE 1170 NEWPORT BEACH, CALIFORNIA 92660 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (714) 251-1211 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS. Yes X No ---- ---- Shares of registrant's common stock, $.10 par value, outstanding at October 31, 1995--19,360,266. ================================================================================ NATIONWIDE HEALTH PROPERTIES, INC. FORM 10-Q SEPTEMBER 30, 1995 TABLE OF CONTENTS PART I--FINANCIAL INFORMATION
PAGE ---- Item 1. Financial Statements Condensed Consolidated Balance Sheets................. 2 Condensed Consolidated Statements of Operations....... 3 Condensed Consolidated Statements of Cash Flows....... 4 Notes to Condensed Consolidated Financial Statements.. 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................... 7 PART II--OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K...................... 9
1 PART I NATIONWIDE HEALTH PROPERTIES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS
SEPTEMBER 30, DECEMBER 31, 1995 1994 -------------- ---------------- (UNAUDITED) (DOLLARS IN THOUSANDS) Investments in real estate Real estate properties: Land.......................................................... $ 46,896 $ 39,981 Buildings..................................................... 454,089 418,137 -------- -------- 500,985 458,118 Less accumulated depreciation................................. (70,220) (62,080) -------- -------- 430,765 396,038 -------- -------- Mortgage loans receivable........................................ 126,610 105,824 -------- -------- 557,375 501,862 Cash and cash equivalents.......................................... 6,039 3,742 Receivables........................................................ 3,411 2,936 Other assets....................................................... 5,269 5,269 --------- -------- $ 572,094 $513,809 ========= ======== LIABILITIES AND STOCKHOLDERS' EQUITY Bank borrowings.................................................... $ 48,700 $ 80,200 Senior notes due 2000-2015......................................... 56,000 - Notes and bonds payable............................................ 14,190 20,520 Convertible debentures............................................. 65,000 65,000 Senior subordinated convertible debentures......................... - 2,690 Accounts payable and accrued liabilities........................... 15,301 9,293 Stockholders' equity: Preferred stock $1.00 par value; 5,000,000 shares authorized; none issued or outstanding Common stock $.10 par value; 100,000,000 shares authorized; issued and outstanding: 1995 - 19,360,268, 1994 - 18,238,193... 1,936 1,824 Capital in excess of par value................................... 403,245 364,959 Cumulative net income............................................ 232,308 194,764 Cumulative dividends............................................. (264,586) (225,441) --------- --------- Total stockholders' equity.................................. 372,903 336,106 --------- --------- $ 572,094 $ 513,809 ========= =========
See accompanying notes. 2 NATIONWIDE HEALTH PROPERTIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------ ------------------ 1995 1994 1995 1994 -------- ------- ------- -------- Revenues: Minimum rent............................................ $13,946 $12,349 $39,947 $35,211 Interest and other income............................... 3,669 2,982 10,826 9,254 Additional rent and additional interest................. 3,250 2,544 8,909 7,290 Gain on sale of facilities.............................. 989 - 989 - ------- ------- ------- ------- 21,854 17,875 60,671 51,755 Expenses: Depreciation and non-cash charges....................... 3,563 3,130 10,246 8,984 Interest and amortization of deferred financing costs... 3,637 2,614 10,525 6,961 General and administrative.............................. 764 760 2,356 2,287 ------- ------- ------- ------- 7,964 6,504 23,127 18,232 ------- ------- ------- ------- Net income................................................ $13,890 $11,371 $37,544 $33,523 ======= ======= ======= ======= Net income per share...................................... $0.72 $ 0.62 $ 2.00 $ 1.85 ======= ======= ======= ======= Dividends paid per share.................................. $.7125 $ .6625 $ 2.10 $ 1.95 ======= ======= ======= ======= Weighted average shares outstanding....................... 19,360 18,209 18,750 18,161 ======= ======= ======= =======
See accompanying notes. 3 NATIONWIDE HEALTH PROPERTIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, --------------------- 1995 1994 --------- --------- Cash flow from operating activities: Net income.......................................... $ 37,544 $ 33,523 Depreciation and non-cash charges................... 10,246 8,984 Gain on sale of facility............................ (989) - -------- -------- Funds from operations............................ 46,801 42,507 Amortization of deferred financing costs....... 476 438 Net decrease in other assets and liabilities... 3,789 2,201 -------- -------- Net cash provided by operating activities...... 51,066 45,146 Cash flow from investing activities: Acquisition of real estate properties............... (54,345) (61,916) Disposition of real estate properties............... 8,940 - Investment in mortgage loans receivable............. (28,680) (26,656) Principal payments on mortgage loans receivable..... 11,265 11,753 -------- -------- Net cash used in investing activities............ (62,820) (76,819) Cash flow from financing activities: Bank borrowings, net................................ (31,500) 70,800 Issuance of common stock............................ 35,494 - Issuance of senior debt............................. 56,000 - Dividends paid...................................... (39,145) (35,443) Principal payments on notes and bonds............... (6,330) (1,907) Other, net.......................................... (468) (148) -------- -------- Net cash provided by financing activities........ 14,051 33,302 -------- -------- Increase in cash and cash equivalents................. 2,297 1,629 Cash and cash equivalents, beginning of period........ 3,742 3,627 -------- -------- Cash and cash equivalents, end of period.............. $ 6,039 $ 5,256 ======== ========
See accompanying notes. 4 NATIONWIDE HEALTH PROPERTIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1995 (UNAUDITED) (i) The condensed consolidated financial statements included herein have been prepared by the Company, without audit, and include all adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the three-month and nine-month periods ended September 30, 1995 and 1994 pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. Although the Company believes that the disclosures in such financial statements are adequate to make the information presented not misleading, these condensed consolidated financial statements should be read in conjunction with the Company's financial statements and the notes thereto included in the Company's 1994 Annual Report on Form 10-K filed with the Securities and Exchange Commission. The results of operations for the three- month and nine-month periods ended September 30, 1995 and 1994 are not necessarily indicative of the results for a full year. (ii) Certain amounts in the 1994 financial statements have been reclassified for consistent financial statement presentation. (iii) The Company qualifies as a real estate investment trust under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. The Company intends to continue to qualify as such and therefore to distribute at least 95 percent of its taxable income to its stockholders. Accordingly, no provision has been made for federal income taxes. (iv) The Company invests in health care related real estate and, as of September 30, 1995, had investments in 192 facilities, including 173 long-term health care facilities, 17 assisted living facilities and 2 rehabilitation hospitals. The Company's facilities which are owned and leased under "net" leases are accounted for as operating leases. The leases have initial terms ranging from 10 to 14 years, and most of the leases have eight five-year renewal options. The Company earns fixed monthly minimum rents and may earn periodic additional rents. The additional rent payments are generally computed as a percentage of facility net patient revenues in excess of base amounts. The base amounts, in most cases, are net patient revenues for the first year of the lease. Under the terms of the leases, the lessee is responsible for all maintenance, repairs, taxes and insurance on the leased properties. Forty-five of the facilities were leased to and operated by subsidiaries of Beverly Enterprises, Inc. (v) During the nine-month period ended September 30, 1995, the Company acquired 10 assisted living facilities in 10 separate transactions for an aggregate purchase price of approximately $52,600,000. The acquisitions were funded by bank borrowings on the Company's bank line of credit and cash on hand. The facilities were concurrently leased under terms generally similar to the Company's existing leases. During the nine-month period ended September 30, 1995, the Company provided four mortgage loans secured by two long-term health care facilities and three assisted living facilities in the aggregate amount of $28,680,000. In addition, the Company received a principal repayment of approximately $9,800,000 in connection with the maturity of one mortgage loan secured by two long-term health care facilities. The proceeds were used to repay bank borrowings. During April 1995, the Company sold two long-term health care facilities to Beverly Enterprises, Inc., the lessee of such facilities, for an aggregate purchase price of $6,250,000. The Company received $625,000 in cash and $5,625,000 in mortgage notes which are secured by the two facilities. The related gain of approximately 5 $3,864,000 on such sale will be recognized into income on a deferred basis in proportion to the receipt of principal payments on the mortgage loans provided by the Company. During the first six months of 1995, the Company issued $56,000,000 in medium- term notes. The notes bear fixed interest at a weighted average of 8.5% and have a weighted average maturity of 8.5 years. The proceeds were used to paydown borrowings on the Company's bank line of credit. In May 1995, the Company issued a notice of redemption and expiration of conversion privilege in connection with its 8.9% senior subordinated convertible debentures due 2001. Of the $2,277,000 in debentures outstanding at the time of notice, $2,267,000 of debentures were converted into 88,894 shares of the Company's common stock and the remaining $10,000 in debentures were redeemed at par plus accrued interest. In June 1995, the Company issued 1,000,000 shares of common stock in a public offering at a price of $37.50 per share. Proceeds from the offering, net of underwriters' fees and associated expenses, were approximately $35,484,000. The net proceeds were used to repay borrowings under the Company's bank line of credit. In July 1995, the Company amended the terms of its bank line of credit to, among other things, extend its maturity date to March 31, 1998 and to provide the Company with the option to automatically extend the bank line of credit to a three year maturity with concurrence of the bank group. Additionally, the pricing structure was amended to provide for reduced borrowing costs as the Company's debt ratings are upgraded and to reduce the current pricing from LIBOR plus 125 basis points to LIBOR plus 90 basis points. During September 1995, the Company sold one long-term health care facility to the lessee of such facility pursuant to a purchase option in the facilitiy's lease for a purchase price of approximately $8,344,000. The gain on such sale is approximately $989,000. The Company received cash of approximately $8,344,000 of which approximately $4,796,000 was used to repay a mortgage secured by such facility. 6 NATIONWIDE HEALTH PROPERTIES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SEPTEMBER 30, 1995 OPERATING RESULTS Nine Months 1995 Compared to Nine Months 1994 Revenues for the nine-months ended September 30, 1995 increased $8,916,000 or 17% over the same period in 1994. The increase is primarily due to increased minimum rent and interest income resulting from investments in additional facilities during the last twelve months and increased additional rent and additional interest earned under the Company's existing leases and mortgages receivable. The increase in total revenues is also attributed to a gain on the sale of one of the Company's facilities. Total expenses for the nine-month period increased $4,895,000 or 27% over the same period in 1994. The increase is primarily due to increased interest expense as a result of increased borrowings on the Company's bank line of credit and the issuance of $56,000,000 in medium term notes in the first half of 1995. The increase in total expenses was also attributable to increased depreciation due to the acquisition of additional facilities in the last twelve months. Third Quarter 1995 Compared to Third Quarter 1994 Revenues for the three months ended September 30, 1995 increased $3,979,000 or 22% over the same period in 1994. The increase is primarily due to increased minimum rent and interest income resulting from investments in additional facilities during the last twelve months and increased additional rent and additional interest earned under the Company's existing leases and mortgages receivable. The increase in total revenues is also attributed to a gain on the sale of one of the Company's facilities. Total expenses for the three-months ended September 30, 1995 increased $1,460,000 or 22% over the same period in 1994. The increase is primarily due to increased interest expense as a result of increased levels of borrowing on the Company's bank line of credit and the issuance of $56,000,000 in medium term notes in the first half of 1995. The increase in total expenses was also attributable to increased depreciation due to the acquisition of additional facilities in the last twelve months. The Company expects increased rental revenues due to the addition of facilities to its property base in the last twelve months and due to increased additional rents under its leases. The Company also expects increased interest income resulting from additional investments in mortgage loans over the last twelve months. Additional investments in health care facilities would also increase rental and/or interest income. As additional investments in facilities are made, depreciation and/or interest expense could also increase. Any such increases, however, are expected to be more than offset by rents or interest income associated with the investments. LIQUIDITY AND CAPITAL RESOURCES During the nine-month period ended September 30, 1995, the Company acquired 10 assisted living facilities in 10 separate transactions for an aggregate purchase price of approximately $52,600,000. The acquisitions were funded by bank borrowings on the Company's bank line of credit and cash on hand. The facilities were concurrently leased under terms generally similar to the Company's existing leases. During the nine-month period ended September 30, 1995, the Company provided four mortgage loans secured by two long-term health care facilities and three assisted living facilities in the aggregate amount of 7 $28,680,000. Such mortgages were funded by bank borrowings on the Company's bank line of credit and cash on hand. In addition, the Company received a principal repayment of approximately $9,800,000 in connection with the maturity of one mortgage loan secured by two long-term health care facilities. The proceeds were used to repay short-term bank borrowings. During April 1995, the Company sold two long-term health care facilities to Beverly Enterprises, Inc., the lessee of such facilities, for an aggregate purchase price of $6,250,000. The Company received $625,000 in cash and $5,625,000 in mortgage notes which are secured by the two facilities. The related gain of approximately $3,864,000 on such sale will be recognized into income on a deferred basis in proportion to the receipt of principal payments on the mortgage loans provided by the Company. During the first six months of 1995, the Company issued $56,000,000 in medium- term notes. The notes bear fixed interest at a weighted average of 8.5% and have a weighted average maturity of 8.5 years. The proceeds were used to paydown borrowings on the Company's bank line of credit. In May 1995, the Company issued a notice of redemption and expiration of conversion privilege in connection with its 8.9% senior subordinated convertible debentures due 2001. Of the $2,277,000 in debentures outstanding at the time of notice, $2,267,000 of debentures were converted into 88,894 shares of the Company's common stock and the remaining $10,000 in debentures were redeemed at par plus accrued interest. In June 1995, the Company issued 1,000,000 shares of common stock in a public offering at a price of $37.50 per share. Proceeds from the offering, net of underwriters' fees and associated expenses, were approximately $35,484,000. The net proceeds were used to repay borrowings under the Company's bank line of credit. In July 1995, the Company amended the terms of its bank line of credit to, among other things, extend its maturity date to March 31, 1998 and to provide the Company with the option to automatically extend the bank line of credit to a three year maturity with concurrence of the bank group. Additionally, the pricing structure was amended to provide for reduced borrowing costs as the Company's debt ratings are upgraded and to reduce the current pricing from LIBOR plus 125 basis points to LIBOR plus 90 basis points. During September 1995, the Company sold one long-term health care facility to the lessee of such facility pursuant to a purchase option in the facility's lease. The Company received cash of approximately $8,344,000 of which approximately $4,796,000 was used to repay a mortgage secured by such facility for a purchase price of approximately $8,344,000. The gain on such sale is approximately $989,000. At September 30, 1995, the Company had $51,300,000 available under its $100,000,000 bank line of credit. The Company has effective shelf registrations on file with the Securities and Exchange Commission under which the Company may issue (a) up to $44,000,000 in aggregate principal amount of medium term notes and (b) up to $97,500,000 of securities including debt, convertible debt, common and preferred stock. The Company anticipates making additional investments in health care related facilities. Financing for such future investments may be provided by borrowings under the Company's bank line, private placements or public offerings of debt or equity, and the assumption of secured indebtedness. The Company believes it has sufficient liquidity and financing capability to finance future investments as well as repay borrowings at or prior to their maturity. 8 PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits None. (b) Reports on Form 8-K No reports on Form 8-K were filed by the Company during the nine-month period ended September 30, 1995. 9 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: November 7, 1995 NATIONWIDE HEALTH PROPERTIES, INC. By /s/ MARK L. DESMOND ------------------------------ Mark L. Desmond Vice President and Treasurer (Principal Financial Officer) 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 6,039 0 3,411 0 0 5,269 500,985 70,220 572,094 0 183,890 1,936 0 0 370,967 572,094 0 60,671 0 23,127 2,356 0 10,525 37,544 0 0 0 0 0 37,544 2.00 0
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