EX-99 2 ex99pr2q.htm PRESS RELEASE - 2ND QTR EARNINGS 2007 NHI Reports Second Qtr Income - Aug 6, 2007



EXHIBIT 99


For Release:  August 6, 2007

Contact: Kenneth D. DenBesten, SVP-Finance

Phone: (615) 890-9100


NHI reports second quarter income


MURFREESBORO, Tenn. -- National Health Investors, Inc., (NYSE: NHI) announced net income for the second quarter ended June 30, 2007 of $14,981,000 or 54 cents per basic and diluted share of common stock, compared to $19,780,000 or 71 cents per basic and diluted share for the same period in 2006.  Income for the second quarter of 2007 included $711,000 or 3 cents per basic and diluted share attributable to gains from realty sales.  Income for the second quarter of 2006 included $5,877,000 or 21 cents per basic and diluted share attributable to gains from realty sales and mortgage prepayment penalties.


Adjusting for the above-mentioned items, net income for the second quarter ended June 30, 2007 would have been $14,270,000 or 51 cents per basic and diluted share, compared to $13,903,000 or 50 cents per basic and diluted share for the same period in 2006, an increase of 2.6% and 2%, respectively.


Funds from operations (“FFO”) basic and diluted for the second quarter ended June 30, 2007 was $17,556,000 or 63 cents per basic and diluted share compared to $16,739,000 or 60 cents per basic and diluted share for the same period in 2006, an increase of 4.9% and 5%, respectively.  


Net income for the six months ended June 30, 2007 was $30,462,000 or $1.10 per basic and diluted share, compared to $32,400,000 or $1.17 per basic and diluted share for the same period in 2006.  Adjusted for the above-mentioned items, net income for the six months ended June 30, 2007 would have been $29,751,000 or $1.07 per basic and diluted share compared to $26,291,000 or 95 cents per basic and diluted share for the same period in 2006, an increase of 13.2% and 12.6%, respectively.


For the six months ended June 30, 2007, FFO was $35,691,000 or $1.28 basic and diluted share, compared to $31,995,000 or $1.15 per basic and diluted share for the same period in 2006, an increase of 11.5% and 11.3%, respectively.  Adjustments to FFO in 2006 for mortgage prepayment penalties increased FFO by 1 cent per share.


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NHI specializes in the financing of health care real estate by first mortgage and by purchase and leaseback transactions. The common stock of the company trades on the New York Stock

Exchange with the symbol NHI.  Additional information including NHI’s most recent press releases may be obtained on our web site at www.nhinvestors.com.


Statements in this press release that are not historical facts are forward-looking statements. NHI cautions investors that any forward-looking statements made involve risks and uncertainties and are not guarantees of future performance. All forward-looking statements represent NHI’s judgment as of the date of this release.


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Page 3 NHI’s Second Quarter 2007 Results


Condensed Statements of Income

 

 

 

 

 

 

 

(in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June 30

 

June 30

 

 

 

2007

 

2006

 

2007

 

2006

Revenues:

 

 

 

 

 

 

 

 

Mortgage interest income

 $      3,322

 

 $      4,219

 

 $       6,493

 

 $        7,866

 

Rental income

       12,901

 

       11,597

 

        25,217

 

         23,187

 

Facility operating revenues

       23,014

 

       22,275

 

        45,520

 

         43,496

 

 

 

 $     39,237

 

 $     38,091

 

 $     77,230

 

 $      74,549

Expenses:

 

 

 

 

 

 

 

 

Interest expense

 $       2,004

 

 $       2,042

 

 $       4,014

 

 $        4,070

 

Depreciation

         3,123

 

         2,917

 

         6,430

 

           5,836

 

Amortization of loan costs

              34

 

              33

 

              68

 

               67

 

Legal expense

            188

 

            181

 

            392

 

             226

 

Franchise, excise and other taxes

            191

 

              65

 

            262

 

             134

 

General and administrative

         1,782

 

         1,145

 

         3,210

 

           2,317

 

Loan and realty losses (recoveries)

                -

 

                -

 

        (1,700)

 

                  -

 

Facility operating expenses

       21,655

 

       20,613

 

        42,525

 

         40,973

 

 

 

 $     28,977

 

 $     26,996

 

 $     55,201

 

 $      53,623

 

 

 

 

 

 

 

 

 

 

Income Before Non-Operating Income

 $     10,260

 

 $     11,095

 

 $     22,029

 

 $      20,926

 

Non-operating income (investment Interest and other)

         3,390

 

         2,822

 

         7,084

 

           5,224

Income From Continuing Operations

 $     13,650

 

 $     13,917

 

 $     29,113

 

 $      26,150

 

 

 

 

 

 

 

 

 

 

Discontinued Operations

 

 

 

 

 

 

 

 

Income from discontinued operations

            662

 

            173

 

            680

 

             436

 

Net gain on sale of real estate

            669

 

         5,690

 

            669

 

           5,814

 

 

 

 $       1,331

 

 $       5,863

 

 $       1,349

 

 $        6,250

 

 

 

 

 

 

 

 

 

 

Net income

 $     14,981

 

 $     19,780

 

 $     30,462

 

 $      32,400

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 27,703,539

 

 27,752,502

 

 27,703,389

 

   27,791,255

 

Diluted

 27,799,749

 

 27,768,307

 

 27,788,307

 

   27,807,194

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

Basic:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 $        0.49

 

 $        0.50

 

 $         1.05

 

 $          0.94

 

 

Discontinued operations

           0.05

 

           0.21

 

           0.05

 

            0.23

 

 

Net income available to common stockholders

           0.54

 

           0.71

 

           1.10

 

            1.17

 

 

 

 

 

 

 

 

 

 

 

Diluted:

 

 

 

 

 

 

 

 

 

Income from continuing operations

 $        0.49

 

 $        0.50

 

 $         1.05

 

 $          0.94

 

 

Discontinued operations

           0.05

 

           0.21

 

           0.05

 

            0.23

 

 

Net income available to common stockholders

           0.54

 

           0.71

 

           1.10

 

            1.17

 

 

 

 

 

 

 

 

 

 

Funds from operations

 

 

 

 

 

 

 

 

Basic

 $     17,556

 

 $     16,739

 

 $     35,691

 

 $      31,995

 

Diluted

 $     17,556

 

 $     16,739

 

 $     35,691

 

 $      31,995

 

 

 

 

 

 

 

 

 

 

Funds from operations per common share

 

 

 

 

 

 

 

 

Basic

 $         0.63

 

 $         0.60

 

 $         1.28

 

 $          1.15

 

Diluted

 $         0.63

 

 $         0.60

 

 $         1.28

 

 $          1.15

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

 $         0.50

 

 $         0.48

 

 $         1.00

 

 $          0.96


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Page 4 NHI’s Second Quarter 2007 Results


Selected Balance Sheet Data

 

 

 

(in thousands)

 

 

 

 

June 30

 

December 31

 

2007

 

2006

Real estate properties, net

 $    229,189

 

 $    235,199

Mortgages receivable, net

       100,272

 

         99,532

Preferred stock investment

         38,132

 

         38,132

Cash and marketable securities

       192,578

 

       203,278

Debt

       112,059

 

       113,492

Stockholders' equity

       430,993

 

       431,671


Reconciliation of Funds From Operations (1)(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following table reconciles net income to funds from operations available to common stockholders:

 

 

 

(in thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30

 

June 30

 

 

2007

 

2006

 

2007

 

2006

Net income

$    14,981

 

$    19,780

 

$    30,462

 

$    32,400

Elimination of non-cash items in net income:

 

 

 

 

 

 

 

 

Real estate depreciation

         3,282

 

         2,649

 

          5,923

 

         5,270

 

Real estate depreciation in discontinued operations

               4

 

                -

 

              17

 

            139

 

Gain on sale of real estate-continuing operations

             (42)

 

                -

 

             (42)

 

                -

 

Gain on sale of real estate-discontinued operations

           (669)

 

        (5,690)

 

            (669)

 

        (5,814)

Basic funds from operations

       17,556

 

       16,739

 

        35,691

 

       31,995

 

 

 

 

 

 

 

 

 

Other Adjustments

                -

 

                -

 

                 -

 

                -

 

 

 

 

 

 

 

 

 

Diluted funds from operations

 $     17,556

 

 $     16,739

 

 $     35,691

 

 $     31,995

 

 

 

 

 

 

 

 

 

Basic funds from operations per share

 $         0.63

 

 $         0.60

 

 $         1.28

 

 $         1.15

Diluted funds from operations per share

 $         0.63

 

 $         0.60

 

 $         1.28

 

 $         1.15

 

 

 

 

 

 

 

 

 

Shares for basic funds from operations per share

 27,703,539

 

 27,752,502

 

  27,703,389

 

 27,791,255

Shares for diluted funds from operations per share

 27,799,749

 

 27,768,307

 

  27,788,307

 

 27,807,194

 

 

 

 

 

 

 

 

 

 

(1)Management believes that funds from operations (FFO) is an important supplemental measure of operating performance for a real estate investment trust.  Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time.  Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a real estate investment trust that uses historical cost accounting for depreciation could be less informative, and should be supplemented with a measure such as FFO.  The term FFO was designed by the real estate investment trust industry to address this issue.  Our measure may not be comparable to similarly titled 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.  Since other REITs may not use our definition of FFO, caution should be exercised when comparing our Company’s FFO to that of other REITs.  Funds from operations in and of itself does not represent cash generated from operating activities in accordance with GAAP (funds from operations does not include changes in operating assets and liabilities) and therefore should not be considered an alternative to net earnings as an indication of operating performance, or to net cash flow from operating activities as determined by GAAP in the United States, as a measure of liquidity and is not necessarily indicative of cash available to fund cash needs.


(2) Our computations above are intended to comply with the SEC’s interpretation that recurring impairments taken on real property may not be added back to net income in the calculation of FFO.  The SEC’s position is that recurring impairments on real property are not an appropriate adjustment.  


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Page 5 NHI’s Second Quarter 2007 Results


National Health Investors, Inc.     Portfolio Summary      June 30, 2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Portfolio Statistics

 

Investment

 

 

 

Properties

Percentage

Investment

 

Real Estate Properties

89

71.3%

 $   229,189,000

 

Mortgages and Notes Receivables

48

28.7%

92,372,000

 

     Total Real Estate Portfolio

137

100%

 $   321,561,000

 

 

 

 

 

 

Other Notes Receivables

0

 

7,900,000

 

     Total Portfolio

137

 

 $   329,461,000

 

 

 

 

 

Real Estate Properties

Properties

Beds

Investments

 

Nursing Homes

65

                       8,364

 $   144,636,000

 

Assisted Living

14

                       1,161

       58,591,000

 

Medical Office Buildings

4

 124,427 sq.ft.

         9,770,000

 

Retirement Homes

5

                          534

         9,448,000

 

Hospitals

1

                            55

         6,744,000

 

    Total Real Estate Properties

89

 

 $   229,189,000

 

 

 

 

 

Mortgages and Notes Receivables

Properties

Beds

Investments

 

Nursing Homes

30

                       3,257

 $     86,423,000

 

Developmentally Disabled

17

                          108

         4,041,000

 

Retirement Homes

1

                            60

         1,908,000

 

    Total Mortgages and Notes Receivable

48

                       3,425

 $     92,372,000

 

        Total Real Estate Portfolio

137

 

 $   321,561,000

 

 

 

 

 

 

 

 

 

 

Summary of Facilities by Type:

 

 

 

 

 

 

Percentage of

Total

 

 

Properties

Total Dollars

Dollars

 

Nursing Homes

95

71.9%

 $   231,059,000

 

Assisted Living

14

18.2%

       58,591,000

 

Retirement Homes

6

3.5%

       11,356,000

 

Medical Office Buildings

4

3.0%

         9,770,000

 

Hospitals

1

2.1%

         6,744,000

 

Developmentally Disabled

17

1.3%

         4,041,000

 

    Total Real Estate Portfolio

137

100.0%

 $   321,561,000




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Page 6 NHI’s Second Quarter 2007 Results


Portfolio by Operator Type

 

 

 

 

 

# of

Percentage of

Total

 

 

Properties

Total Dollars

Dollars

 

Regional

63

62.10%

 $ 199,683,000

 

Public

62

26.37%

       84,799,000

 

Small Operator

12

11.53%

       37,079,000

 

 

137

100.00%

 $ 321,561,000


Public Operators

 

 

Percentage

 

 

 

Dollar

Of Total

 

 

 

Amount

Portfolio

 

National HealthCare Corp.

 $    43,097,000

13.40%

 

Sunrise Senior Living Services

      12,759,000

3.97%

 

Community Health Systems, Inc.

      12,585,000

3.91%

 

Sun Healthcare

        8,388,000

2.61%

 

Res-Care, Inc.

        4,041,000

1.26%

 

HCA-The Healthcare Company

        3,929,000

1.22%

 

    Total Public Operators

 $    84,799,000

26.37%



National Health Investors, Inc.    Summary of Facilities by State    June 30, 2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Percent

 

 

Acute

 

Dev.

Assisted

Retire-

 

Investment

Total

 

LTC

Care

MOB

Disab.

Living

ment

Total

Amount

Portfolio

Florida

11

 

1

14

4

 

30

 $79,745,000

24.8%

Texas

19

 

2

 

 

1

22

     72,656,000

22.6%

Tennessee

20

 

 

3

3

2

28

     28,379,000

8.8%

Virginia

8

 

 

 

 

 

8

     19,731,000

6.1%

Missouri

8

 

 

 

 

1

9

     18,511,000

5.8%

Arizona

1

 

 

 

4

 

5

     17,686,000

5.5%

New Hampshire

3

 

 

 

 

1

4

     13,402,000

4.2%

New Jersey

0

 

 

 

1

 

1

     12,759,000

4.0%

Kansas

7

 

 

 

 

 

7

     11,246,000

3.5%

Georgia

6

 

 

 

 

 

6

       9,934,000

3.1%

Massachusetts

4

 

 

 

 

 

4

       9,878,000

3.1%

Kentucky

2

1

 

 

 

 

3

       7,726,000

2.4%

South Carolina

3

 

 

 

1

 

4

       7,138,000

2.2%

Idaho

1

 

 

 

 

1

2

       5,094,000

1.6%

Pennsylvania

0

 

 

 

1

 

1

       4,218,000

1.3%

Alabama

2

 

 

 

 

 

2

       2,012,000

0.6%

Illinois

0

 

1

 

 

 

1

       1,446,000

0.4%

 

95

1

4

17

14

6

137

 $321,561,000

100%



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