EX-99.1 2 a11-23825_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

Contact:  Wendy L. Simpson, CEO & President

Pam Kessler, EVP & CFO

(805) 981-8655

 

LTC ANNOUNCES SECOND QUARTER OPERATING RESULTS, PURCHASE OF A SKILLED NURSING PROPERTY AND THE SALE OF $50M OF 4.8% SENIOR UNSECURED NOTES DUE 2021

 

WESTLAKE VILLAGE, CALIFORNIA, August 8, 2011 — LTC Properties, Inc. (NYSE:LTC) released results of operations for the three and six months ended June 30, 2011 and announced that net income available to common stockholders for the second quarter was $11.3 million or $0.37 per diluted share.  For the same period in 2010, net income available to common stockholders was $7.7 million or $0.33 per diluted share. The Company reported total revenues for the three months ended June 30, 2011, were $21.2 million versus $17.9 million for the same period last year.  For the six months ended June 30, 2011, net income available to common stockholders was $16.7 million or $0.59 per diluted share which included a $3.6 million charge related to the Company’s redemption of all of its 8.0% Series F Cumulative Preferred Stock (“Series F preferred stock”).  For the same period in 2010, net income available to common stockholders was $14.4 million or $0.61 per diluted share which included $0.9 million provision for doubtful accounts related to a mortgage loan secured by a school property.   Revenues for the six months ended June 30, 2011, were $41.4 million versus $35.5 million for the same period last year.

 

Additionally, the Company announced that subsequent to June 30, 2011 it purchased a 140-bed skilled nursing property located in Texas for $10.0 million.  The acquisition was funded from the Company’s unsecured revolving line of credit and cash on hand. The property was added to an existing master lease with an unrelated third-party operator at an incremental GAAP yield of 10.5%.  The Company also announced that subsequent to June 30, 2011 it sold $50.0 million aggregate principal amount of 4.8% senior unsecured notes fully amortizing to maturity on July 20, 2021 to affiliates and managed accounts of Prudential Investment Management, Inc.  Proceeds from the sale of the notes were used to pay down amounts outstanding on the Company’s unsecured revolving line of credit.

 

The Company will conduct a conference call on Tuesday, August 9, 2011, at 10:00 a.m. Pacific Time, in order to comment on the Company’s performance and operating results for the quarter ended June 30, 2011.  The conference call is accessible by dialing 877-317-6789.  The international number is 412-317-6789.  An audio replay of the conference call will be available from August 9, 2011 through August 24, 2011.  Callers can access the replay by dialing 877-344-7529 or 412-317-0088 and entering conference number 10002394.  The earnings release will be available on our website.  The Company’s supplemental information package for the current period will also be available on the Company’s website at www.LTCProperties.com in the “Presentations” section of the “Investor Information” tab.

 

At June 30, 2011, LTC had investments in 89 skilled nursing properties, 102 assisted living properties, 14 other senior housing properties and two schools.  These properties are located in 30 states.  Other senior housing properties consist of independent living properties and properties providing any combination of skilled nursing, assisted living and/or independent living services.  The Company is a self-administered real estate investment trust that primarily invests in senior housing and long-term care facilities through mortgage loans, facility lease transactions and other investments. For more information on LTC Properties, Inc., visit the Company’s website at www.LTCProperties.com.

 

1


 

This press release includes statements that are not purely historical and are “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the Company’s expectations, beliefs, intentions or strategies regarding the future.  All statements other than historical facts contained in this press release are forward looking statements.  These forward looking statements involve a number of risks and uncertainties.  Please see our most recent Annual Report on Form 10-K, our subsequent Quarterly Reports on Form 10-Q, and in our other publicly available filings with the Securities and Exchange Commission for a discussion of these and other risks and uncertainties. All forward looking statements included in this press release are based on information available to the Company on the date hereof, and the Company assumes no obligation to update such forward looking statements.  Although the Company’s management believes that the assumptions and expectations reflected in such forward looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct.  The actual results achieved by the Company may differ materially from any forward looking statements due to the risks and uncertainties of such statements.

 

2


 

LTC PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands, except per share amounts)

(Unaudited)

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

Revenues:

 

 

 

 

 

 

 

 

 

Rental income

 

$

19,337

 

$

15,790

 

$

37,517

 

$

31,128

 

Interest income from mortgage loans

 

1,613

 

1,836

 

3,269

 

3,815

 

Interest and other income

 

230

 

299

 

647

 

574

 

Total revenues

 

21,180

 

17,925

 

41,433

 

35,517

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Interest expense

 

1,543

 

419

 

2,647

 

820

 

Depreciation and amortization

 

4,943

 

3,880

 

9,400

 

7,608

 

(Recovery) Provisions for doubtful accounts

 

(4

)

51

 

(14

)

1,184

 

Acquisition costs

 

35

 

30

 

165

 

113

 

Operating and other expenses

 

2,327

 

1,872

 

4,651

 

3,504

 

Total expenses

 

8,844

 

6,252

 

16,849

 

13,229

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

12,336

 

11,673

 

24,584

 

22,288

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

Loss from discontinued operations

 

(74

)

(43

)

(168

)

(88

)

Net Loss from discontinued operations

 

(74

)

(43

)

(168

)

(88

)

Net income

 

12,262

 

11,630

 

24,416

 

22,200

 

Income allocated to non-controlling interests

 

(48

)

(48

)

(96

)

(96

)

Net income attributable to LTC Properties, Inc.

 

12,214

 

11,582

 

24,320

 

22,104

 

 

 

 

 

 

 

 

 

 

 

Income allocated to participating securities

 

(85

)

(58

)

(174

)

(101

)

Income allocated to preferred stockholders

 

(818

)

(3,785

)

(7,442

)

(7,570

)

Net income available to common stockholders

 

$

11,311

 

$

7,739

 

$

16,704

 

$

14,433

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per common share:

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.38

 

$

0.33

 

$

0.60

 

$

0.62

 

Discontinued operations

 

$

(0.00

)

$

(0.00

)

$

(0.01

)

$

(0.00

)

Net income available to common stockholders

 

$

0.38

 

$

0.33

 

$

0.59

 

$

0.62

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per common share:

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.38

 

$

0.33

 

$

0.60

 

$

0.62

 

Discontinued operations

 

$

(0.00

)

$

(0.00

)

$

(0.01

)

$

(0.00

)

Net income available to common stockholders

 

$

0.37

 

$

0.33

 

$

0.59

 

$

0.61

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares used to calculate earnings per common share:

 

 

 

 

 

 

 

 

 

Basic

 

30,135

 

23,643

 

28,233

 

23,464

 

Diluted

 

30,168

 

23,743

 

28,264

 

23,563

 

 

NOTE:  Computations of per share amounts from continuing operations, discontinued operations and net income are made independently.  Therefore, the sum of per share amounts from continuing operations and discontinued operations may not agree with the per share amounts from net income allocable to common stockholders.  Quarterly and year-to-date computations of per share amounts are made independently.  Therefore, the sum of per share amounts for the quarters may not agree with the per share amounts for the year.

 

3


 

Reconciliation of Funds From Operations (“FFO”)

 

FFO is a supplemental measure of a real estate investment trust’s (“REIT”) financial performance that is not defined by U.S. generally accepted accounting principles (“GAAP”).  The Company uses FFO as a supplemental measure of our operating performance and we believe FFO is helpful in evaluating the operating performance of a REIT.  Real estate values historically rise and fall with market conditions, but cost accounting for real estate assets in accordance with U.S. GAAP assumes that the value of real estate assets diminishes predictably over time.  We believe that by excluding the effect of historical cost depreciation, which may be of limited relevance in evaluating current performance, FFO and modified FFO facilitate comparisons of operating performance between periods.

 

FFO is defined as net income available to common stockholders (computed in accordance with U.S. GAAP) excluding gains or losses on the sale of assets plus real estate depreciation and amortization, with adjustments for unconsolidated partnerships and joint ventures.  Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis.  Modified FFO represents FFO adjusted from certain items detailed in the reconciliations. The Company’s computation of FFO may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current National Association of Real Estate Investment Trusts’ (“NAREIT”) definition or that have a different interpretation of the current NAREIT definition from the Company; therefore, caution should be exercised when comparing our company’s FFO to that of other REITs.

 

The Company uses FFO, modified FFO, modified FFO excluding non-cash rental income and modified FFO excluding non-cash rental income and non-cash compensation charges as supplemental performance measures of our cash flow generated by operations and cash available for distribution to stockholders.  FFO, modified FFO, modified FFO excluding non-cash rental income and modified FFO excluding non-cash rental income and non-cash compensation charges do not represent cash generated from operating activities in accordance with U.S. GAAP, and are not necessarily indicative of cash available to fund cash needs and should not be considered an alternative to net income available to common stockholders.

 

4


 

The following table reconciles net income available to common stockholders to FFO available to common stockholders, modified FFO available to common stockholders, modified FFO available to common stockholders excluding non-cash rental income and modified FFO available to common stockholders excluding non-cash rental income and non-cash compensation charges (unaudited, amounts in thousands, except per share amounts):

 

 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2011

 

2010

 

2011

 

2010

 

Net income available to common stockholders

 

$

11,311

 

$

7,739

 

$

16,704

 

$

14,433

 

Add: Depreciation and amortization (continuing and discontinued operations)

 

4,987

 

4,014

 

9,508

 

7,874

 

FFO available to common stockholders

 

16,298

 

11,753

 

26,212

 

22,307

 

Add: Preferred stock redemption charge

 

—

 

—

 

3,566

(1)

—

 

Add: Preferred stock redemption dividend

 

—

 

—

 

472

(2)

—

 

Add: Non-cash interest related to earn-out liabilities

 

177

 

—

 

177

 

—

 

Add: Non-recurring one-time items

 

—

 

—

 

—

 

852

(3)

Modified FFO available to common stockholders

 

16,475

 

11,753

 

30,427

 

23,159

 

Less: Non-cash rental income

 

(750

)

(763

)

(1,356

)

(1,527

)

Modified FFO excluding non-cash rental income

 

15,725

 

10,990

 

29,071

 

21,632

 

Add: Non-cash compensation charges

 

363

 

355

 

721

 

721

 

Modified FFO excluding non-cash rental income and non-cash compensation charges

 

$

16,088

 

$

11,345

 

$

29,792

 

$

22,353

 

 

(1)          Represents the original issue costs related to the Series F preferred stock.

(2)          Represents the dividends on the Series F preferred stock up to the redemption date.

(3)          Includes a $0.9 million provision for doubtful accounts charge related to a mortgage loan secured by a school property located in Minnesota.

 

Basic FFO available to common stockholders per share

 

$

0.54

 

$

0.50

 

$

0.93

 

$

0.95

 

Diluted FFO available to common stockholders per share

 

$

0.53

 

$

0.49

 

$

0.92

 

$

0.94

 

 

 

 

 

 

 

 

 

 

 

Diluted FFO

 

$

17,249

 

$

12,697

 

$

28,118

 

$

24,180

 

Weighted average shares used to calculate diluted FFO per share available to common stockholders

 

32,483

 

26,009

 

30,584

 

25,808

 

 

 

 

 

 

 

 

 

 

 

Basic modified FFO available to common stockholders per share

 

$

0.55

 

$

0.50

 

$

1.08

 

$

0.99

 

Diluted modified FFO available to common stockholders per share

 

$

0.54

 

$

0.49

 

$

1.06

 

$

0.97

 

 

 

 

 

 

 

 

 

 

 

Diluted modified FFO

 

$

17,426

 

$

12,697

 

$

32,333

 

$

25,032

 

Weighted average shares used to calculate diluted modified FFO per share available to common stockholders

 

32,483

 

26,009

 

30,584

 

25,808

 

Basic modified FFO excluding non-cash rental income per share

 

$

0.52

 

$

0.46

 

$

1.03

 

$

0.92

 

Diluted modified FFO excluding non-cash rental income per share

 

$

0.51

 

$

0.46

 

$

1.01

 

$

0.91

 

 

 

 

 

 

 

 

 

 

 

Diluted modified FFO excluding non-cash rental income

 

$

16,676

 

$

11,934

 

$

30,977

 

$

23,505

 

Weighted average shares used to calculate diluted modified FFO excluding non-cash rental income per share available to common stockholders

 

32,483

 

26,009

 

30,584

 

25,808

 

 

 

 

 

 

 

 

 

 

 

Basic modified FFO excluding non-cash rental income and non-cash compensation charges per share

 

$

0.53

 

$

0.48

 

$

1.06

 

$

0.95

 

Diluted modified FFO excluding non-cash rental income and non-cash compensation charges per share

 

$

0.52

 

$

0.47

 

$

1.04

 

$

0.94

 

 

 

 

 

 

 

 

 

 

 

Diluted modified FFO excluding non-cash rental income and non-cash compensation charges

 

$

17,039

 

$

12,289

 

$

31,698

 

$

24,226

 

Weighted average shares used to calculate diluted modified FFO excluding non-cash rental income and non-cash compensation charges per share available to common stockholders

 

32,483

 

26,009

 

30,584

 

25,808

 

 

5


 

LTC PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

 

 

 

June 30, 2011

 

December 31, 2010

 

 

 

(unaudited)

 

(audited)

 

ASSETS

 

 

 

 

 

Real estate investments:

 

 

 

 

 

Land

 

$

48,230

 

$

43,031

 

Buildings and improvements

 

625,945

 

567,017

 

Accumulated depreciation and amortization

 

(167,537

)

(158,204

)

Net operating real estate property

 

506,638

 

451,844

 

Properties held-for-sale, net of accumulated depreciation and amortization: 2011 — $613; 2010 — $505

 

5,018

 

5,113

 

Net real estate property

 

511,656

 

456,957

 

Mortgage loans receivable, net of allowance for doubtful accounts: 2011 — $945; 2010 — $981

 

55,410

 

59,026

 

Real estate investments, net

 

567,066

 

515,983

 

Other assets:

 

 

 

 

 

Cash and cash equivalents

 

6,395

 

6,903

 

Debt issue costs, net

 

2,421

 

743

 

Interest receivable

 

1,535

 

1,571

 

Straight-line rent receivable, net of allowance for doubtful accounts: 2011 — $656; 2010 — $634

 

21,757

 

20,090

 

Prepaid expenses and other assets

 

7,772

 

8,162

 

Other assets related to properties held-for-sale, net of allowance for doubtful accounts: 2011 — $839; 2010 — $839

 

51

 

51

 

Notes receivable

 

945

 

1,283

 

Marketable securities

 

6,481

 

6,478

 

Total assets

 

$

614,423

 

$

561,264

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

Bank borrowings

 

$

70,000

 

$

37,700

 

Senior unsecured notes

 

50,000

 

50,000

 

Bonds payable

 

3,200

 

3,730

 

Accrued interest

 

858

 

675

 

Earn-out liabilities

 

10,018

 

—

 

Accrued expenses and other liabilities

 

10,180

 

9,737

 

Accrued expenses and other liabilities related to properties held-for-sale

 

62

 

132

 

Distributions payable

 

—

 

1,768

 

Total Liabilities

 

144,318

 

103,742

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Preferred stock $0.01 par value; 15,000 shares authorized; shares issued and outstanding: 2011 — 2,000; 2010 — 5,536

 

38,500

 

126,913

 

Common stock: $0.01 par value; 45,000 shares authorized; shares issued and outstanding: 2011 — 30,341; 2010 — 26,345

 

303

 

263

 

Capital in excess of par value

 

506,513

 

398,599

 

Cumulative net income

 

647,811

 

623,491

 

Other

 

234

 

264

 

Cumulative distributions

 

(725,218

)

(693,970

)

Total LTC Properties, Inc. stockholders’ equity

 

468,143

 

455,560

 

 

 

 

 

 

 

Non-controlling interests

 

1,962

 

1,962

 

Total equity

 

470,105

 

457,522

 

Total liabilities and equity

 

$

614,423

 

$

561,264

 

 

6