Conference Call Scheduled for Friday, August 2, 2024 at 1:00
pm ET
CareTrust REIT, Inc. (NYSE:CTRE) today reported operating
results for the quarter ended June 30, 2024, as well as other
recent events.
For the quarter, CareTrust REIT reported:
- Investments of $267.7 million during the quarter at an
estimated stabilized yield of 9.9%;
- 12.1 million shares sold under its ATM Program for gross
proceeds of $306.5 million;
- 98.3% of contractual rent and interest collected;
- Net income of $10.8 million and net income per share of
$0.07;
- Net Debt to Annualized Normalized Run Rate EBITDA of 0.4x;
- Normalized FFO of $52.5 million and normalized FFO per share of
$0.36;
- Normalized FAD of $54.0 million and normalized FAD per share of
$0.37;
- A quarterly dividend of $0.29 per share, representing a payout
ratio of approximately 78% on normalized FAD; and
- Year-over-year market cap growth of 84%.
Since quarter end, CareTrust REIT reported:
- Investments totaling approximately $378 million at an estimated
stabilized yield of 8.7% and $764.5 million year-to-date at an
estimated stabilized yield of 9.5%;
- Investment pipeline of approximately $270 million of triple-net
skilled nursing real estate acquisitions; and
- Cash on hand of approximately $100 million to complement a
fully undrawn $600 million line of credit.
CareTrust’s President and Chief Executive Officer, Dave
Sedgwick, commented on the Company’s 2024 second quarter results:
“We were happy to celebrate our ten-year anniversary milestone in
June with a record-breaking annual investment milestone and a total
shareholder return of 247% since inception. And, we are thrilled to
see the momentum build with a major transaction announced today and
a reloaded pipeline of $270 million of real estate acquisitions.”
Mr. Sedgwick continued, “I’m not sure what’s more remarkable, that
we have hit $765 million in new investments year-to-date or that it
feels like we’re just getting started.”
Financial Results for Quarter Ended June 30, 2024
Chief Financial Officer, Bill Wagner, reported that, for the
second quarter, CareTrust reported net income of $10.8 million, or
$0.07 per diluted weighted-average common share, normalized FFO of
$52.5 million, or $0.36 per diluted weighted-average common share,
and normalized FAD of $54.0 million, or $0.37 per diluted
weighted-average common share.
Liquidity
As of quarter end, CareTrust reported net debt-to-annualized
normalized run rate EBITDA of 0.4x, which is below the Company's
target leverage range of 4.0x to 5.0x, and a net debt-to-enterprise
value of approximately 2.6%. Mr. Wagner stated that, as of today,
the Company has no borrowings outstanding on its $600 million
revolving credit line, with no scheduled debt maturities prior to
2026. He also disclosed that CareTrust currently has approximately
$100 million in cash on hand. During the second quarter of 2024,
the Company sold 12.1 million shares under the ATM Program at a
weighted average sales price of $25.24 for gross proceeds of $306.5
million. As of June 30, 2024, the Company had $193.5 million
available for future issuances under the ATM Program. "We have
continued to use our ATM Program to take advantage of a current
cost of equity that allows us to fund a replenishing pipeline of
accretive investment opportunities," said Mr. Wagner.
Guidance Updated
The Company updated guidance for 2024, with Mr. Wagner
projecting on a per-diluted weighted-average common share basis net
income of approximately $0.86 to $0.88, normalized FFO of
approximately $1.46 to $1.48, and normalized FAD of approximately
$1.50 to $1.52. He noted that the 2024 guidance is based on a
diluted weighted-average common share count of 146.9 million
shares, and assumes the following:
- All investments year-to-date;
- No new investments;
- Dispositions and loan repayments made to date;
- No new dispositions or loan repayments beyond those completed
or announced to date;
- No new debt incurrences or new equity issuances; and
- Estimated 2.5% CPI-based rent escalators under CareTrust's
long-term net leases.
Dividend Maintained
During the quarter, CareTrust declared a quarterly dividend of
$0.29 per common share. On an annualized basis, the payout ratio
was approximately 81% based on second quarter 2024 normalized FFO,
and 78% based on second quarter 2024 normalized FAD.
Conference Call
A conference call will be held on Friday, August 2, 2024, at
1:00 p.m. Eastern Time (10:00 a.m. Pacific Time), during which
CareTrust’s management will discuss second quarter 2024 results,
recent developments and other matters. The toll-free dial-in number
is 1 (800) 715-9871 or toll dial-in number is 1 (646) 307-1963 and
the conference ID number is 2243604. To listen to the call online,
or to view any financial or other statistical information required
by SEC Regulation G, please visit the Investors section of the
CareTrust REIT website at http://investor.caretrustreit.com. This
call will be recorded, and will be available for replay via the
website for 30 days following the call.
About CareTrustTM
CareTrust REIT, Inc. is a self-administered, publicly-traded
real estate investment trust engaged in the ownership, acquisition,
development and leasing of skilled nursing, seniors housing and
other healthcare-related properties. With a nationwide portfolio of
long-term net-leased properties, and a growing portfolio of quality
operators leasing them, CareTrust REIT is pursuing both external
and organic growth opportunities across the United States. More
information about CareTrust REIT is available at
www.caretrustreit.com.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995:
This press release contains, and the related conference call
will include, forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements include all statements that are not historical
statements of fact and statements regarding the Company’s intent,
belief or expectations, including, but not limited to, statements
regarding the following: future financial and financing plans;
strategies related to the Company's business and its portfolio,
including acquisition opportunities and disposition plans; growth
prospects; operating and financial performance; expectations
regarding the settlement of ATM forward contracts and the making of
distributions and payment of dividends; and the performance of the
Company’s tenants and operators and their respective
facilities.
Words such as “anticipate,” “believe,” “could,” “expect,”
“estimate,” “intend,” “may,” “plan,” “seek,” “should,” “will,”
“would,” and similar expressions, or the negative of these terms,
are intended to identify such forward-looking statements, though
not all forward-looking statements contain these identifying words.
The Company’s forward-looking statements are based on management’s
current expectations and beliefs, and are subject to a number of
risks and uncertainties that could lead to actual results differing
materially from those projected, forecasted or expected. Although
the Company believes that the assumptions underlying these
forward-looking statements are reasonable, they are not guarantees
and the Company can give no assurance that its expectations will be
attained. Factors which could have a material adverse effect on the
Company’s operations and future prospects or which could cause
actual results to differ materially from expectations include, but
are not limited to: (i) the ability and willingness of our tenants
to meet and/or perform their obligations under the triple-net
leases we have entered into with them, including without
limitation, their respective obligations to indemnify, defend and
hold us harmless from and against various claims, litigation and
liabilities; (ii) the risk that we may have to incur additional
impairment charges related to our assets held for sale if we are
unable to sell such assets at the prices we expect; (iii) the
impact of healthcare reform legislation, including minimum staffing
level requirements, on the operating results and financial
conditions of our tenants; (iv) the ability of our tenants to
comply with applicable laws, rules and regulations in the operation
of the properties we lease to them; (v) the ability and willingness
of our tenants to renew their leases with us upon their expiration,
and the ability to reposition our properties on the same or better
terms in the event of nonrenewal or in the event we replace an
existing tenant, as well as any obligations, including
indemnification obligations, we may incur in connection with the
replacement of an existing tenant; (vi) the availability of and the
ability to identify (a) tenants who meet our credit and operating
standards, and (b) suitable acquisition opportunities and the
ability to acquire and lease the respective properties to such
tenants on favorable terms; (vii) the ability to generate
sufficient cash flows to service our outstanding indebtedness;
(viii) access to debt and equity capital markets; (ix) fluctuating
interest rates; (x) the impact of public health crises, including
significant COVID-19 outbreaks as well as other pandemics or
epidemics; (xi) the ability to retain our key management personnel;
(xii) the ability to maintain our status as a real estate
investment trust (“REIT”); (xiii) changes in the U.S. tax law and
other state, federal or local laws, whether or not specific to
REITs; (xiv) other risks inherent in the real estate business,
including potential liability relating to environmental matters and
illiquidity of real estate investments; and (xv) any additional
factors included in our Annual Report on Form 10-K for the year
ended December 31, 2023 and our Quarterly Reports on Form 10-Q for
the quarters ended March 31, 2024 and June 30, 2024, including in
the section entitled “Risk Factors” in Item 1A of such reports, as
such risk factors may be amended, supplemented or superseded from
time to time by other reports we file with the SEC.
This press release and the related conference call provides
information about the Company's financial results as of and for the
quarter ended June 30, 2024 and is provided as of the date hereof,
unless specifically stated otherwise. The Company expressly
disclaims any obligation to update or revise any information in
this press release or the related conference call (and replays
thereof), including forward-looking statements, whether to reflect
any change in the Company’s expectations, any change in events,
conditions or circumstances, or otherwise.
As used in this press release or the related conference call,
unless the context requires otherwise, references to “CTRE,”
"CareTrust," “CareTrust REIT” or the “Company” refer to CareTrust
REIT, Inc. and its consolidated subsidiaries. GAAP refers to
generally accepted accounting principles in the United States of
America.
CARETRUST REIT, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per
share data)
(Unaudited)
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2024
2023
2024
2023
Revenues:
Rental income
$
55,407
$
47,745
$
108,909
$
93,908
Interest and other income
13,484
3,808
23,052
8,251
Total revenues
68,891
51,553
131,961
102,159
Expenses:
Depreciation and amortization
13,860
12,716
27,308
24,954
Interest expense
8,679
11,040
16,907
20,867
Property taxes
1,976
1,390
3,777
2,270
Impairment of real estate investments
25,711
21,392
28,455
23,278
Property operating expenses
255
658
915
1,621
General and administrative
6,136
4,718
12,974
9,779
Total expenses
56,617
51,914
90,336
82,769
Other loss:
Gain on sale of real estate, net
21
2,028
32
1,958
Unrealized loss on other real estate
related investments, net
(1,877
)
(2,151
)
(2,489
)
(2,605
)
Total other loss
(1,856
)
(123
)
(2,457
)
(647
)
Net income (loss)
10,418
(484
)
39,168
18,743
Net loss attributable to noncontrolling
interests
(340
)
—
(336
)
—
Net income (loss) attributable to
CareTrust REIT, Inc.
$
10,758
$
(484
)
$
39,504
$
18,743
Earnings (loss) per common share
attributable to CareTrust REIT, Inc.:
Basic
$
0.07
$
(0.01
)
$
0.28
$
0.19
Diluted
$
0.07
$
(0.01
)
$
0.28
$
0.19
Weighted-average number of common
shares:
Basic
144,895
99,117
138,866
99,090
Diluted
145,258
99,117
139,230
99,194
Dividends declared per common
share
$
0.29
$
0.28
$
0.58
$
0.56
CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME
(LOSS) TO NON-GAAP FINANCIAL MEASURES
(in thousands)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net income (loss) attributable to
CareTrust REIT, Inc.
$
10,758
$
(484
)
$
39,504
$
18,743
Depreciation and amortization
13,860
12,716
27,308
24,954
Interest expense[1]
8,222
11,040
16,450
20,867
Amortization of stock-based
compensation
1,406
924
3,526
1,860
EBITDA attributable to CareTrust REIT,
Inc.
34,246
24,196
86,788
66,424
Impairment of real estate investments
25,711
21,392
28,455
23,278
Property operating expenses
361
831
1,333
1,965
Gain on sale of real estate, net
(21
)
(2,028
)
(32
)
(1,958
)
Unrealized loss on other real estate
related investments, net
1,877
2,151
2,489
2,605
Normalized EBITDA attributable to
CareTrust REIT, Inc.
62,174
46,542
$
119,033
$
92,314
Full impact of quarterly
investments[2]
3,188
2,931
Normalized Run Rate EBITDA attributable
to CareTrust REIT, Inc.
$
65,362
$
49,473
Net income (loss) attributable to
CareTrust REIT, Inc.
$
10,758
$
(484
)
$
39,504
$
18,743
Real estate related depreciation and
amortization
13,853
12,712
27,295
24,945
Impairment of real estate investments
25,711
21,392
28,455
23,278
Gain on sale of real estate, net
(21
)
(2,028
)
(32
)
(1,958
)
Funds from Operations (FFO)
attributable to CareTrust REIT, Inc.
50,301
31,592
95,222
65,008
Property operating expenses
361
831
1,333
1,965
Unrealized loss on other real estate
related investments, net
1,877
2,151
2,489
2,605
Normalized FFO attributable to
CareTrust REIT, Inc.
$
52,539
$
34,574
$
99,044
$
69,578
NET DEBT TO ANNUALIZED
NORMALIZED RUN RATE EBITDA RECONCILIATION
(in thousands)
(Unaudited)
Three Months Ended June
30,
2024
2023
Total debt[1]
$
600,000
$
880,000
Cash, cash equivalents
(495,134
)
(1,145
)
Net proceeds from ATM forward[3]
—
(131,120
)
Net Debt
$
104,866
$
747,735
Annualized Normalized Run Rate EBITDA
attributable to CareTrust REIT, Inc.[3]
$
261,448
$
197,892
Net Debt to Annualized Normalized Run
Rate EBITDA attributable to CareTrust REIT, Inc.
0.4
x
3.8
x
[1] Interest expense and Total debt
exclude the effect of the $75.0 million participation interest
recorded as a secured borrowing in the consolidated balance
sheets.
[2] Quarterly adjustments give effect to
the investments completed and loans receivable pay downs during the
three months ended for the respective period as though such
investments and pay downs were completed as of the beginning of the
period.
[3] Annualized Normalized Run Rate EBITDA
is calculated as Normalized Run Rate EBITDA attributable to
CareTrust REIT, Inc. for the quarter multiplied by four (4).
CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME
(LOSS) TO NON-GAAP FINANCIAL MEASURES (continued)
(in thousands, except per
share data)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net income (loss) attributable to
CareTrust REIT, Inc.
$
10,758
$
(484
)
$
39,504
$
18,743
Real estate related depreciation and
amortization
13,853
12,712
27,295
24,945
Amortization of deferred financing
fees
614
608
1,228
1,217
Amortization of stock-based
compensation
1,406
924
3,526
1,860
Straight-line rental income
7
7
14
14
Amortization of lease incentive
4
—
4
—
Amortization of below market lease
intangible
(575
)
—
(1,150
)
—
Impairment of real estate investments
25,711
21,392
28,455
23,278
Gain on sale of real estate, net
(21
)
(2,028
)
(32
)
(1,958
)
Funds Available for Distribution (FAD)
attributable to CareTrust REIT, Inc.
51,757
33,131
98,844
68,099
Property operating expenses
361
831
1,333
1,965
Unrealized loss on other real estate
related investments, net
1,877
2,151
2,489
2,605
Normalized FAD attributable to
CareTrust REIT, Inc.
$
53,995
$
36,113
$
102,666
$
72,669
FFO per share attributable to CareTrust
REIT, Inc.
$
0.35
$
0.32
$
0.68
$
0.65
Normalized FFO per share attributable
to CareTrust REIT, Inc.
$
0.36
$
0.35
$
0.71
$
0.70
FAD per share attributable to CareTrust
REIT, Inc.
$
0.36
$
0.33
$
0.71
$
0.69
Normalized FAD per share attributable
to CareTrust REIT, Inc.
$
0.37
$
0.36
$
0.74
$
0.73
Diluted weighted average shares
outstanding [1]
145,380
99,360
139,354
99,278
[1] For the periods presented, the diluted
weighted average shares have been calculated using the treasury
stock method.
CARETRUST REIT, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS - 5 QUARTER TREND
(in thousands, except per
share data)
(Unaudited)
Quarter
Quarter
Quarter
Quarter
Quarter
Ended
Ended
Ended
Ended
Ended
June 30, 2023
September 30, 2023
December 31, 2023
March 31, 2024
June 30, 2024
Revenues:
Rental income
$
47,745
$
51,218
$
53,473
$
53,502
$
55,407
Interest and other income
3,808
4,659
6,261
9,568
13,484
Total revenues
51,553
55,877
59,734
63,070
68,891
Expenses:
Depreciation and amortization
12,716
13,034
13,211
13,448
13,860
Interest expense
11,040
11,750
8,266
8,228
8,679
Property taxes
1,390
2,167
1,733
1,801
1,976
Impairment of real estate investments
21,392
8,232
4,791
2,744
25,711
Property operating expenses
658
1,239
563
660
255
General and administrative
4,718
5,519
6,507
6,838
6,136
Total expenses
51,914
41,941
35,071
33,719
56,617
Other (loss) income:
Gain on sale of real estate, net
2,028
—
260
11
21
Unrealized (loss) gain on other real
estate related investments, net
(2,151
)
(5,251
)
1,371
(612
)
(1,877
)
Total other (loss) income
(123
)
(5,251
)
1,631
(601
)
(1,856
)
Net (loss) income
(484
)
8,685
26,294
28,750
10,418
Net (loss) income attributable to
noncontrolling interests
—
(11
)
(2
)
4
(340
)
Net (loss) income attributable to
CareTrust REIT, Inc.
$
(484
)
$
8,696
$
26,296
$
28,746
$
10,758
Diluted (loss) earnings per share
attributable to CareTrust REIT, Inc.
$
(0.01
)
$
0.08
$
0.22
$
0.22
$
0.07
Diluted weighted average shares
outstanding
99,117
104,311
121,684
133,202
145,258
CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME
(LOSS) TO NON-GAAP FINANCIAL MEASURES - 5 QUARTER TREND
(in thousands)
(Unaudited)
Quarter
Quarter
Quarter
Quarter
Quarter
Ended
Ended
Ended
Ended
Ended
June 30, 2023
September 30, 2023
December 31, 2023
March 31, 2024
June 30, 2024
Net (loss) income attributable to
CareTrust REIT, Inc.
$
(484
)
$
8,696
$
26,296
$
28,746
$
10,758
Depreciation and amortization
12,716
13,034
13,211
13,448
13,860
Interest expense
11,040
11,750
8,266
8,228
8,222
Amortization of stock-based
compensation
924
1,519
1,774
2,120
1,406
EBITDA attributable to CareTrust REIT,
Inc.
24,196
34,999
49,547
52,542
34,246
Impairment of real estate investments
21,392
8,232
4,791
2,744
25,711
Property operating expenses
831
1,416
714
972
361
Gain on sale of real estate, net
(2,028
)
—
(260
)
(11
)
(21
)
Unrealized loss (gain) on other real
estate related investments, net
2,151
5,251
(1,371
)
612
1,877
Normalized EBITDA attributable to
CareTrust REIT, Inc.
$
46,542
$
49,898
$
53,421
$
56,859
$
62,174
Net (loss) income attributable to
CareTrust REIT, Inc.
$
(484
)
$
8,696
$
26,296
$
28,746
$
10,758
Real estate related depreciation and
amortization
12,712
13,028
13,206
13,442
13,853
Impairment of real estate investments
21,392
8,232
4,791
2,744
25,711
Gain on sale of real estate, net
(2,028
)
—
(260
)
(11
)
(21
)
Funds from Operations (FFO)
attributable to CareTrust REIT, Inc.
31,592
29,956
44,033
44,921
50,301
Property operating expenses
831
1,416
714
972
361
Unrealized loss (gain) on other real
estate related investments, net
2,151
5,251
(1,371
)
612
1,877
Normalized FFO attributable to
CareTrust REIT, Inc.
$
34,574
$
36,623
$
43,376
$
46,505
$
52,539
CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME
(LOSS) TO NON-GAAP FINANCIAL MEASURES - 5 QUARTER TREND
(continued)
(in thousands, except per
share data)
(Unaudited)
Quarter
Quarter
Quarter
Quarter
Quarter
Ended
Ended
Ended
Ended
Ended
June 30, 2023
September 30, 2023
December 31, 2023
March 31, 2024
June 30, 2024
Net (loss) income attributable to
CareTrust REIT, Inc.
$
(484
)
$
8,696
$
26,296
$
28,746
$
10,758
Real estate related depreciation and
amortization
12,712
13,028
13,206
13,442
13,853
Amortization of deferred financing
fees
608
609
610
614
614
Amortization of stock-based
compensation
924
1,519
1,774
2,120
1,406
Straight-line rental income
7
7
8
7
7
Amortization of lease incentive
—
—
—
—
4
Amortization of below market lease
intangible
—
—
(384
)
(575
)
(575
)
Impairment of real estate investments
21,392
8,232
4,791
2,744
25,711
Gain on sale of real estate, net
(2,028
)
—
(260
)
(11
)
(21
)
Funds Available for Distribution (FAD)
attributable to CareTrust REIT, Inc.
33,131
32,091
46,041
47,087
51,757
Property operating expenses
831
1,416
714
972
361
Unrealized loss (gain) on other real
estate related investments, net
2,151
5,251
(1,371
)
612
1,877
Normalized FAD attributable to
CareTrust REIT, Inc.
$
36,113
$
38,758
$
45,384
$
48,671
$
53,995
FFO per share attributable to CareTrust
REIT, Inc.
$
0.32
$
0.29
$
0.36
$
0.34
$
0.35
Normalized FFO per share attributable
to CareTrust REIT, Inc.
$
0.35
$
0.35
$
0.36
$
0.35
$
0.36
FAD per share attributable to CareTrust
REIT, Inc.
$
0.33
$
0.31
$
0.38
$
0.35
$
0.36
Normalized FAD per share attributable
to CareTrust REIT, Inc.
$
0.36
$
0.37
$
0.37
$
0.37
$
0.37
Diluted weighted average shares
outstanding [1]
99,360
104,422
121,854
133,328
145,380
[1] For the periods presented, the diluted
weighted average shares have been calculated using the treasury
stock method.
CARETRUST REIT, INC.
CONSOLIDATED BALANCE
SHEETS
(in thousands)
(Unaudited)
June 30, 2024
December 31, 2023
Assets:
Real estate investments, net
$
1,706,231
$
1,567,119
Other real estate related investments
(including accrued interest of $3,540 and $1,727 as of June 30,
2024 and December 31, 2023, respectively)
433,532
180,368
Assets held for sale
28,753
15,011
Cash and cash equivalents
495,134
294,448
Accounts and other receivables
1,096
395
Prepaid expenses and other assets, net
30,502
23,337
Deferred financing costs, net
3,506
4,160
Total assets
$
2,698,754
$
2,084,838
Liabilities and Equity:
Senior unsecured notes payable, net
$
396,483
$
396,039
Senior unsecured term loan, net
199,665
199,559
Secured borrowing
75,000
—
Accounts payable, accrued liabilities and
deferred rent liabilities
37,112
33,992
Dividends payable
44,721
36,531
Total liabilities
752,981
666,121
Equity:
Common stock
1,539
1,300
Additional paid-in capital
2,456,187
1,883,147
Cumulative distributions in excess of
earnings
(514,037
)
(467,628
)
Total stockholders' equity
1,943,689
1,416,819
Non-controlling interests
2,084
1,898
Total equity
1,945,773
1,418,717
Total liabilities and equity
$
2,698,754
$
2,084,838
CARETRUST REIT, INC.
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
(Unaudited)
For the Six Months Ended June
30,
2024
2023
Cash flows from operating activities:
Net income
$
39,168
$
18,743
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization (including
below-market ground leases)
27,337
24,983
Amortization of deferred financing
costs
1,228
1,217
Unrealized loss on other real estate
related investments, net
2,489
2,605
Amortization of stock-based
compensation
3,526
1,860
Straight-line rental income
14
14
Amortization of lease incentive
4
—
Amortization of below market rent
(1,150
)
—
Noncash interest income
(1,813
)
184
Gain on sale of real estate, net
(32
)
(1,958
)
Impairment of real estate investments
28,455
23,278
Change in operating assets and
liabilities:
Accounts and other receivables
(719
)
14
Prepaid expenses and other assets, net
(983
)
(330
)
Accounts payable, accrued liabilities and
deferred rent liabilities
4,271
(3,624
)
Net cash provided by operating
activities
101,795
66,986
Cash flows from investing activities:
Acquisitions of real estate, net of
deposits applied
(204,554
)
(172,453
)
Purchases of equipment, furniture and
fixtures and improvements to real estate
(1,323
)
(6,380
)
Investment in real estate related
investments and other loans receivable
(244,825
)
(27,262
)
Preferred equity investments
(9,000
)
—
Principal payments received on real estate
related investments and other loans receivable
—
15,287
Escrow deposits for potential acquisitions
of real estate
(9,075
)
(300
)
Net proceeds from sales of real estate
140
14,464
Net cash used in investing activities
(468,637
)
(176,644
)
Cash flows from financing activities:
Proceeds from the issuance of common
stock, net
572,236
(629
)
Proceeds from the secured borrowing
75,000
—
Borrowings under unsecured revolving
credit facility
—
155,000
Payments of deferred financing costs
(24
)
(21
)
Net-settle adjustment on restricted
stock
(2,483
)
(1,479
)
Dividends paid on common stock
(77,723
)
(55,246
)
Contributions from noncontrolling
interests
576
—
Distributions to noncontrolling
interests
(54
)
—
Net cash provided by financing
activities
567,528
97,625
Net increase (decrease) in cash and cash
equivalents
200,686
(12,033
)
Cash and cash equivalents as of the
beginning of period
294,448
13,178
Cash and cash equivalents as of the end
of period
$
495,134
$
1,145
CARETRUST REIT, INC.
DEBT SUMMARY
(dollars in thousands)
(Unaudited)
June 30, 2024
Interest
Maturity
% of
Deferred
Net Carrying
Debt
Rate
Date
Principal
Principal
Loan Costs
Value
Fixed Rate Debt
Senior unsecured notes payable
3.875
%
2028
$
400,000
66.7
%
$
(3,517
)
$
396,483
Floating Rate Debt
Senior unsecured term loan
6.942
%
[1]
2026
200,000
33.3
%
(335
)
199,665
Unsecured revolving credit facility
—
%
[2]
2027
[3]
—
—
%
—
[4]
—
6.942
%
200,000
33.3
%
(335
)
199,665
Total Debt
4.897
%
$
600,000
100.0
%
$
(3,852
)
$
596,148
[1] Funds can be borrowed at applicable
SOFR plus 1.50% to 2.20% or at the Base Rate (as defined) plus
0.50% to 1.20%.
[2] Funds can be borrowed at applicable
SOFR plus 1.10% to 1.55% or at the Base Rate (as defined) plus
0.10% to 0.55%.
[3] Maturity date does not assume exercise
of two 6-month extension options.
[4] Deferred financing fees are not shown
net for the unsecured revolving credit facility and are included in
assets on the balance sheet.
CARETRUST REIT, INC.
RECONCILIATIONS OF NET INCOME
TO NON-GAAP FINANCIAL MEASURES
(shares in thousands)
(Unaudited)
2024 Guidance Updated
Full Year 2024
Guidance[1]
Low
High
Net income attributable to CareTrust
REIT, Inc.
$
0.86
$
0.88
Real estate related depreciation and
amortization
0.38
0.38
Impairment of real estate investment
0.19
0.19
(Gain) loss on sale of real estate
—
—
Funds from Operations (FFO)
attributable to CareTrust REIT, Inc.
1.43
1.45
Property operating expenses
0.01
0.01
Unrealized loss on other real estate
related investments, net
0.02
0.02
Normalized FFO attributable to
CareTrust REIT, Inc.
$
1.46
$
1.48
Net income attributable to CareTrust
REIT, Inc.
$
0.86
$
0.88
Real estate related depreciation and
amortization
0.38
0.38
Amortization of deferred financing
fees
0.02
0.02
Amortization of stock-based
compensation
0.04
0.04
Straight-line rental income
—
—
Amortization of below market lease
intangible
(0.02
)
(0.02
)
Impairment of real estate investment
0.19
0.19
(Gain) loss on sale of real estate
—
—
Funds Available for Distribution (FAD)
attributable to CareTrust REIT, Inc.
1.47
1.49
Property operating expenses
0.01
0.01
Unrealized loss on other real estate
related investments, net
0.02
0.02
Normalized FAD attributable to
CareTrust REIT, Inc.
$
1.50
$
1.52
Weighted average shares
outstanding:
Diluted
146,868
146,868
[1] This guidance assumes and includes (i)
all investments, dispositions and loan repayments made to date,
(ii) no new investments, dispositions, new loans or loan repayments
beyond those completed or announced to date, (iii) no new debt
incurrences or new equity issuances, and (iv) estimated 2.5%
CPI-based rent escalators under CareTrust's long-term net
leases.
Non-GAAP Financial Measures
EBITDA attributable to CareTrust REIT, Inc. represents net
income (loss) attributable to CareTrust REIT, Inc. before interest
expense (including amortization of deferred financing costs),
amortization of stock-based compensation, and depreciation and
amortization. Normalized EBITDA attributable to CareTrust REIT,
Inc. represents EBITDA attributable to CareTrust REIT, Inc. as
further adjusted to eliminate the impact of certain items that the
Company does not consider indicative of core operating performance,
such as recovery of previously reversed rent, lease termination
revenue, property operating expenses, gains or losses from
dispositions of real estate, real estate impairment charges,
provision for loan losses, non-routine transaction costs, loss on
extinguishment of debt, unrealized loss on other real estate
related investments and provision for doubtful accounts and lease
restructuring, as applicable. EBITDA attributable to CareTrust
REIT, Inc. and Normalized EBITDA attributable to CareTrust REIT,
Inc. do not represent cash flows from operations or net income as
defined by GAAP and should not be considered an alternative to
those measures in evaluating the Company’s liquidity or operating
performance. EBITDA attributable to CareTrust REIT, Inc. and
Normalized EBITDA attributable to CareTrust REIT, Inc. do not
purport to be indicative of cash available to fund future cash
requirements, including the Company’s ability to fund capital
expenditures or make payments on its indebtedness. Further, the
Company’s computation of EBITDA and Normalized EBITDA may not be
comparable to EBITDA and Normalized EBITDA reported by other
REITs.
Funds from Operations (“FFO”), as defined by the National
Association of Real Estate Investment Trusts (“Nareit”), and Funds
Available for Distribution (“FAD”) are important non-GAAP
supplemental measures of operating performance for a REIT. 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
have historically risen or fallen with market and other conditions,
presentations of operating results for a REIT that uses historical
cost accounting for depreciation could be less informative. Thus,
Nareit created FFO as a supplemental measure of operating
performance for REITs that excludes historical cost depreciation
and amortization, among other items, from net income, as defined by
GAAP.
FFO is defined by Nareit as net income computed in accordance
with GAAP, excluding gains or losses from dispositions of real
estate investments, real estate related depreciation and
amortization and real estate impairment charges, and adjustments
for unconsolidated partnerships and joint ventures. The Company
computes FFO attributable to CareTrust REIT, Inc. in accordance
with Nareit’s definition.
FAD attributable to CareTrust REIT, Inc. is defined as FFO
attributable to CareTrust REIT, Inc. excluding noncash income and
expenses, such as amortization of stock-based compensation,
amortization of deferred financing fees, amortization of above and
below market intangibles, amortization of lease incentives and the
effects of straight-line rent. The Company considers FAD
attributable to CareTrust REIT, Inc. to be a useful supplemental
measure to evaluate the Company’s operating results excluding these
income and expense items to help investors, analysts and other
interested parties compare the operating performance of the Company
between periods or as compared to other companies on a more
consistent basis.
In addition, the Company reports Normalized FFO attributable to
CareTrust REIT, Inc. and Normalized FAD attributable to CareTrust
REIT, Inc., which adjust FFO and FAD for certain revenue and
expense items that the Company does not believe are indicative of
its ongoing operating results, such as provision for loan losses,
non-routine transaction costs, provision for doubtful accounts and
lease restructuring, loss on extinguishment of debt, unrealized
loss on other real estate related investments, recovery of
previously reversed rent, lease termination revenue and property
operating expenses. By excluding these items, investors, analysts
and our management can compare Normalized FFO and Normalized FAD
between periods more consistently.
While FFO, Normalized FFO, FAD and Normalized FAD are relevant
and widely-used measures of operating performance among REITs, they
do not represent cash flows from operations or net income as
defined by GAAP and should not be considered an alternative to
those measures in evaluating the Company’s liquidity or operating
performance. FFO, Normalized FFO, FAD and Normalized FAD do not
purport to be indicative of cash available to fund future cash
requirements.
Further, the Company’s computation of FFO, Normalized FFO, FAD
and Normalized FAD may not be comparable to FFO, Normalized FFO,
FAD and Normalized FAD reported by other REITs that do not define
FFO in accordance with the current Nareit definition or that
interpret the current Nareit definition or define FAD differently
than the Company does.
The Company also discloses Net Debt to Annualized Normalized Run
Rate EBITDA, which compares the Company’s Net Debt as of the last
day of the quarter to the Annualized Run Rate EBITDA attributable
to CareTrust REIT, Inc. for the quarter. Net Debt is defined as the
Company’s Total Debt as of the last day of the specified quarter
adjusted to exclude the Company’s cash, cash equivalents,
restricted cash and escrow deposits on acquisition of real estate
as of such date as well as the net proceeds from the expected
settlement of shares sold under equity forward contracts through
the Company’s ATM Program that are outstanding as of such date.
Normalized Run Rate EBITDA represents Normalized EBITDA, adjusted
to give effect to the investments completed during the three months
ended for the respective period as though such investments were
completed as of the beginning of the period. Annualized Normalized
Run Rate EBITDA is calculated as Normalized Run Rate EBITDA
attributable to CareTrust REIT, Inc. for the specified quarter
multiplied by four.
The Company believes that net income attributable to CareTrust
REIT, Inc., as defined by GAAP, is the most appropriate earnings
measure. The Company also believes that the use of EBITDA,
Normalized EBITDA, FFO, Normalized FFO, FAD and Normalized FAD,
combined with the required GAAP presentations, improves the
understanding of operating results of REITs among investors and
makes comparisons of operating results among such companies more
meaningful. The Company considers EBITDA and Normalized EBITDA, in
each case attributable to CareTrust REIT, Inc., useful in
understanding the Company’s operating results independent of its
capital structure, indebtedness and other charges that are not
indicative of its ongoing results, thereby allowing for a more
meaningful comparison of operating performance between periods and
against other REITs. The Company considers FFO, Normalized FFO, FAD
and Normalized FAD, in each case attributable to CareTrust REIT,
Inc., to be useful measures for reviewing comparative operating and
financial performance because, by excluding gains or losses from
real estate dispositions, impairment charges and real estate
related depreciation and amortization, and, for FAD and Normalized
FAD, by excluding noncash income and expenses such as amortization
of stock-based compensation, amortization of deferred financing
fees, and the effects of straight-line rent, FFO, Normalized FFO,
FAD and Normalized FAD can help investors compare the Company’s
operating performance between periods and to other REITs. The
Company believes that the disclosure of Net Debt to Annualized
Normalized Run Rate EBITDA provides a useful measure to investors
to evaluate the credit strength of the Company and its ability to
service its debt obligations and to compare the Company’s credit
strength to prior reporting periods and to other companies without
the effect of charges that are not indicative of the Company’s
ongoing performance or that could obscure the Company’s actual
credit quality and after considering the effect of investments
occurring during the period.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240731961087/en/
CareTrust REIT, Inc. (949) 542-3130 ir@caretrustreit.com
CareTrust REIT (NYSE:CTRE)
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