-----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, WA6fCsYLPTKUJR0SFYzjTrVdb1hBQ7I7uIMQmRItR92V1UiM1SYo+KabQf//q3Tl uI2xdZucYcn2jq9d4m2eNQ== 0001017062-96-000432.txt : 19961108 0001017062-96-000432.hdr.sgml : 19961108 ACCESSION NUMBER: 0001017062-96-000432 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961107 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: 96656197 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 QUARTERLY REPORT FOR PERIOD ENDING 9/30/96 =============================================================================== 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, 1996 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 INCORPORATION (I.R.S. EMPLOYER 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, 1996 -- 41,781,432. =============================================================================== NATIONWIDE HEALTH PROPERTIES, INC. FORM 10-Q SEPTEMBER 30, 1996 TABLE OF CONTENTS
PAGE ---- PART I--FINANCIAL INFORMATION 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, 1996 1995 ------------- ------------ (UNAUDITED) (DOLLARS IN THOUSANDS) Investments in real estate Real estate properties: Land............................................................. $ 69,207 $ 61,748 Buildings and improvements....................................... 561,602 530,979 --------- --------- 630,809 592,727 Less accumulated depreciation........................................ (85,826) (73,722) --------- --------- 544,983 519,005 Mortgage loans receivable, net....................................... 155,507 133,226 --------- --------- 700,490 652,231 Cash and cash equivalents............................................... 10,074 7,937 Receivables............................................................. 4,280 3,478 Other assets............................................................ 8,817 6,465 --------- --------- $ 723,661 $ 670,111 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Bank borrowings......................................................... $ 48,200 $ 93,900 Senior unsecured notes due 2000-2015.................................... 150,000 100,000 Convertible debentures.................................................. 65,000 65,000 Notes and bonds payable................................................. 9,249 23,364 Accounts payable and accrued liabilities................................ 22,249 16,025 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: 1996 - 41,781,432, 1995 - 38,720,532........ 4,178 3,872 Capital in excess of par value........................................ 462,351 401,438 Cumulative net income................................................. 285,178 245,135 Cumulative dividends.................................................. (322,744) (278,623) --------- --------- Total stockholders' equity....................................... 428,963 371,822 --------- --------- $ 723,661 $ 670,111 ========= =========
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, ------------------ ----------------- 1996 1995 1996 1995 ---- ---- ---- ---- Revenues: Minimum rent.......................................................... $16,792 $13,946 $49,431 $39,947 Interest and other income............................................. 4,314 3,669 12,242 10,826 Additional rent and additional interest............................... 3,198 3,250 8,862 8,909 ------- ------- ------- ------- 24,304 20,865 70,535 59,682 Expenses: Depreciation and non-cash charges..................................... 4,198 3,563 12,454 10,246 Interest and amortization of deferred financing costs................. 4,808 3,637 15,539 10,525 General and administrative............................................ 843 764 2,499 2,356 ------- ------- ------- ------- 9,849 7,964 30,492 23,127 ------- ------- ------- ------- Income from operations.................................................. 14,455 12,901 40,043 36,555 Gain on sale of facilities.............................................. - 989 - 989 ------- ------- ------- ------- Net Income.............................................................. $14,455 $13,890 $40,043 $37,544 ======= ======= ======= ======= Net income per share.................................................... $ 0.35 $ .36 $ 1.00 $ 1.00 ======= ======= ======= ======= Dividends paid per share................................................ $ 0.37 $ .36 $ 1.11 $ 1.05 ======= ======= ======= ======= Weighted average shares outstanding..................................... 41,781 38,720 39,899 37,500 ======= ======= ======= =======
See accompanying notes. 3 NATIONWIDE HEALTH PROPERTIES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, ---------------------- 1996 1995 --------- --------- Cash flow from operating activities: Net income.................................................................... $ 40,043 $ 37,544 Depreciation and non-cash charges............................................. 12,453 10,246 Gain on sale of facilities.................................................... - (989) Amortization of deferred financing costs...................................... 573 476 Net decrease in other assets and liabilities.................................. 1,891 3,789 --------- --------- Net cash provided by operating activities................................ 54,960 51,066 Cash flow from investing activities: Acquisition of real estate properties......................................... (38,082) (54,345) Disposition of real estate properties......................................... - 8,940 Investment in mortgage loans receivable....................................... (26,350) (28,680) Principal payments on mortgage loans receivable............................... 5,180 11,265 --------- --------- Net cash used in investing activities.................................... (59,252) (62,820) Cash flow from financing activities: Issuance of common stock...................................................... 60,905 35,494 Bank borrowings............................................................... 96,050 112,400 Repayment of bank borrowings.................................................. (141,750) (143,900) Issuance of senior debt....................................................... 50,000 56,000 Dividends paid................................................................ (44,121) (39,145) Principal payments on notes and bonds......................................... (14,115) (6,330) Other, net.................................................................... (540) (468) --------- --------- Net cash provided by financing activities................................ 6,429 14,051 --------- --------- Increase in cash and cash equivalents............................................. 2,137 2,297 Cash and cash equivalents, beginning of period.................................... 7,937 3,742 --------- --------- Cash and cash equivalents, end of period.......................................... $ 10,074 $ 6,039 ========= =========
See accompanying notes. 4 NATIONWIDE HEALTH PROPERTIES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1996 (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, 1996 and 1995 pursuant to the rules and regulations of the Securities and Exchange Commission. All of such adjustments are of a normal recurring nature. 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 1995 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, 1996 and 1995 are not necessarily indicative of the results for a full year. (ii) Net income per share is calculated by dividing net income by the weighted average common shares outstanding during the period. The effect of common stock options is immaterial, and the effect of convertible debentures is anti-dilutive. (iii) In January 1996, the Board of Directors of the Company authorized a two-for-one stock split of the Company's common stock effective March 8, 1996. The financial statements included herein have been restated to reflect the stock split. Additionally, certain amounts in the 1995 financial statements have been reclassified for consistent financial statement presentation. (iv) 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. (v) The Company invests in health care related real estate and, as of September 30, 1996, had investments in 224 facilities, including 182 long-term health care facilities, 40 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 19 years, and the leases generally have two or more multiple- 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. (vi) During the nine-month period ended September 30, 1996, the Company acquired five assisted living facilities and three long-term care facilities in seven separate transactions for an aggregate purchase price of approximately $28,347,000. 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. 5 In addition to the acquisitions, the Company provided new construction financing of approximately $3,200,000 for 4 assisted living facilities and capital improvement funding in the aggregate amount of approximately $6,000,000 in accordance with certain existing lease agreements. During the nine-month period ended September 30, 1996, the Company provided two mortgage loans secured by eight long-term health care facilities in the aggregate amount of $21,650,000 and a $3,000,000 note was funded which is cross-collateralized by properties under existing mortgage loans with the Company. Additionally, proceeds of approximately $3,608,000 were received in connection with the repayment of two mortgage loans secured by two long-term health care facilities. During the nine months ended September 30, 1996, the Company issued $50,000,000 in medium-term notes. The notes bear fixed interest at a weighted average of 7.19% and have a weighted average maturity of 6 years. The proceeds were used to reduce borrowings on the Company's bank line of credit. In June 1996, the Company issued 3,047,500 shares of common stock in a public offering at a price of $21.125 per share. Proceeds from the offering, net of underwriters' fees and associated expenses, were approximately $60,988,000. The net proceeds were used to repay borrowings under the Company's bank line of credit. 6 NATIONWIDE HEALTH PROPERTIES, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SEPTEMBER 30, 1996 OPERATING RESULTS Nine Months 1996 Compared to Nine Months 1995 Revenues for the nine-months ended September 30, 1996 increased $10,853,000 or 18% over the same period in 1995. The increase is due to increased minimum rent and interest income resulting from additional investments in real estate properties and mortgage loans receivable during the last twelve months. Total expenses for the nine-month period increased $7,365,000 or 32% over the same period in 1995. The increase is primarily due to increased interest expense as a result of the issuance of fixed rate medium term notes during 1995 and 1996, the proceeds of which were used to repay lower cost variable rate bank debt. 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 1996 Compared to Third Quarter 1995 Revenues for the three months ended September 30, 1996 increased $3,439,000 or 16% over the same period in 1995. The increase is primarily due to increased minimum rent and interest income resulting from additional investments in real estate properties and mortgage loans receivable during the last twelve months. Total expenses for the three months ended September 30, 1996 increased $1,885,000 or 24% over the same period in 1995. The increase is attributed to an increase in interest expense due to the issuance of fixed rate medium term notes during 1995 and 1996, the proceeds of which were used to repay lower cost variable rate bank debt. This increase was partially offset by a decrease in interest expense on the Company's bank line of credit due to lower levels of borrowing resulting from paying down bank borrowings with proceeds from the Company's June common stock offering. 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. The Company also expects increased interest income resulting from additional investments in mortgage loans over the last twelve months. The Company also expects increased additional rent and additional interest because the Company's leases and mortgages generally contain provisions under which additional rents or interest income with increases in facility revenues and/or increases in the Consumer Price Index. Historically, revenues at the Company's facilities and the Consumer Price Index generally have increased; although, there are no assurances that they will continue to increase in the future. Sales of facilities or repayments of mortgages would serve to offset the aforementioned revenue increases. 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. 7 LIQUIDITY AND CAPITAL RESOURCES During the nine-month period ended September 30, 1996, the Company acquired five assisted living facilities and three long-term care facilities in seven separate transactions for an aggregate purchase price of approximately $28,347,000. The acquisitions were funded by bank borrowings under 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. In addition to the acquisitions, the Company provided new construction financing of approximately $3,200,000 for 4 assisted living facilities and capital improvement funding in the aggregate amount of approximately $6,000,000 in accordance with certain existing lease agreements. New construction and capital improvements were funded by cash on hand and bank borrowings on the Company's bank line of credit. During the nine-month period ended September 30, 1996, the Company provided two mortgage loans secured by eight long-term health care facilities in the aggregate amount of $21,650,000 and a $3,000,000 note was funded which is cross- collateralized by properties under existing mortgage loans with the Company. Additionally, proceeds of approximately $3,608,000 were received in connection with the repayment of two mortgage loans secured by two long-term health care facilities. The loans were funded by bank borrowings under the Company's bank line of credit and cash on hand. During the nine months ended September 30, 1996, the Company issued $50,000,000 in medium-term notes. The notes bear fixed interest at a weighted average of 7.19% and have a weighted average maturity of 6 years. The proceeds were used to reduce borrowings on the Company's bank line of credit. In June 1996, the Company issued 3,047,500 shares of common stock in a public offering at a price of $21.125 per share. Proceeds from the offering, net of underwriters' fees and associated expenses, were approximately $60,988,000. The net proceeds were used to repay borrowings under the Company's bank line of credit. At September 30, 1996, the Company had $51,800,000 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 $150,000,000 in aggregate principal amount of medium term notes and (b) up to $33,121,562 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. STATEMENT REGARDING FORWARD LOOKING DISCLOSURE Certain information contained in this report includes forward looking statements, which can be identified by the use of forward looking terminology such as "may", "will", "expect", "should" or comparable terms or the negative thereof. 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, government regulations, changes in the health industry, the amount of any additional investments, access to capital markets and changes in the ratings of the Company's debt securities. 8 OTHER INFORMATION PART II ITEM 4. NONE. 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 three- month period ended September 30, 1996. 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, 1996 NATIONWIDE HEALTH PROPERTIES, INC. By /s/ MARK L. DESMOND -------------------------------- Mark L. Desmond Senior Vice President and Chief Financial Officer (Principal Financial Officer) 10 EX-27 2 FINANCIAL DATA SCHEDULE - ARTICLE 5
5 1,000 9-MOS DEC-31-1996 JAN-01-1996 SEP-30-1996 10,074 0 4,280 0 0 8,817 630,809 85,826 723,661 22,249 272,449 0 0 4,178 424,785 723,661 0 70,535 0 30,492 0 0 15,539 40,043 0 40,043 0 0 0 40,043 1.00 1.00
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