EX-99.1 3 dex991.htm PRESS RELEASE DATED APRIL 29, 2003 Press Release dated April 29, 2003

 

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

CONTACT:

     

R. Bruce Andrews

   

Mark L. Desmond

      

President & CEO

   

Senior Vice President & CFO

      

(949) 718-4400

   

(949) 718-4400

 

 

NATIONWIDE ANNOUNCES

$115.5 MILLION COMMON STOCK ISSUE, DIVIDENDS

AND FIRST QUARTER RESULTS

 

(NEWPORT BEACH, California, April 29, 2003) … 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.

 

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)

 

ASSETS

 

   

March 31,

2003

     

December 31,

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%

 

NATIONWIDE HEALTH PROPERTIES, INC.

SUPPLEMENTAL ANALYST INFORMATION

MARCH 31, 2003

 

 

INVESTMENT BY OPERATOR

   

NUMBER OF

   

 

INVESTMENT

   

 

PERCENT OF

   

PERCENT OF

(excluding assets held for sale)

   

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

     

 

NATIONWIDE HEALTH PROPERTIES, INC.

SUPPLEMENTAL ANALYST INFORMATION

MARCH 31, 2003

 

 

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

 

    YEAR    

   

  MINIMUM  

       RENT       

   

NUMBER OF 

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

NATIONWIDE HEALTH PROPERTIES, INC.

SUPPLEMENTAL ANALYST INFORMATION

MARCH 31, 2003

 

 

MORTGAGE LOAN RECEIVABLE PRINCIPAL PAYMENTS

 

 

YEAR

  

PRINCIPAL

PAYMENTS

     

NUMBER

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 accr. liab.

   

 

3,349

 

Buildings and improvements

   

 

107,829

 

              
    
             
    

 

121,239

 

   

Equity:

         

Less accumulated depreciation

   

 

(2,693

)

   

Capital Contributions

   

 

65,501

 

    
             
    

 

118,546

 

   

Distributions

   

 

(8,900

)

 

NATIONWIDE HEALTH PROPERTIES, INC.

SUPPLEMENTAL ANALYST INFORMATION

MARCH 31, 2003

 

 

Cash and cash equivalents

   

 

6,092

   

Cumulative net income

   

 

5,462

                

Other assets

   

 

1,596

   

Total equity

   

 

62,063

    
       
    

$

126,234

        

$

126,234