Exhibit 99.1

 

Picture 1

303 International Circle       P: 410.427.1700

Suite 200                                F: 410.427.8800

Hunt Valley, MD 21030

 

 

PRESS RELEASE – FOR IMMEDIATE RELEASE

OMEGA ANNOUNCES THIRD QUARTER 2019 FINANCIAL RESULTS

Completed $735 Million Acquisition in October

Increased Quarterly Dividend by $0.01 to $0.67 in October

Issued $500 Million 3.625% Notes due 2029 in September

$300 Million 7.5 Million Share Forward Stock Offering in September

 

HUNT VALLEY, MARYLAND – November 5, 2019

– Omega Healthcare Investors, Inc. (NYSE:OHI) (the “Company” or “Omega”) today announced its results of operations for the quarter ended September 30, 2019.  The Company reported net income of $142.9 million or $0.63 per common share. The Company also reported Funds From Operations (“FFO”) for the quarter of $163.1 million or $0.72 per common share, Adjusted Funds From Operations (“AFFO” or “Adjusted FFO”) of $172.5 million or $0.76 per common share, and Funds Available For Distribution (“FAD”) of $156.6 million.

Adjusted FFO excludes a few non-cash revenue and expense items from FFO.  FFO, AFFO and FAD are non-GAAP financial measures.  For more information regarding these non-GAAP measures, see the “Funds From Operations” schedule below and the Company’s website at www.omegahealthcare.com.

 

GAAP NET INCOME

 

For the quarter ended September 30, 2019, the Company reported net income of $142.9 million, or $0.63 per common share, on operating revenues of $233.2 million.  This compares to net income of $59.1 million, or $0.28 per common share, on operating revenues of $221.9 million, for the same period in 2018.

For the nine-month period ended September 30, 2019, the Company reported net income of $290.8 million, or $1.32 per common share, on operating revenues of $682.2 million.  This compares to net income of $229.0 million, or $1.10 per common share, on operating revenues of $661.9 million, for the same period in 2018.

The year-to-date increase in net income compared to the prior year was primarily due to (i) a $43.6 million increase in gains on the sale of assets, (ii) $20.2 million in net revenue from incremental new investments, (iii) a $10.3 million increase in net income from unconsolidated joint ventures related to gains on the sale of assets and (iv) a $9.5 million decrease in impairments on direct financing leases and real estate properties. The increase in net income was partially offset by (i) $10.5 million increase in depreciation and amortization expense related to new investments, (ii) a $4.6 million increase in impairments for uncollectible accounts and (iii) $5.1 million of merger costs related to the May 2019 acquisition of MedEquities Realty Trust, Inc. (“MedEquities”).

 

CEO COMMENTS

 

Taylor Pickett, Omega’s Chief Executive Officer, stated, “This has been another productive quarter.  Last week, we closed our previously announced acquisition of 60 facilities for $735 million and also entered into an agreement to acquire a 49% interest in a U.K. senior housing joint venture for $90 million.  In addition, we

continue to source smaller, attractively priced acquisitions and new development projects with our existing tenants, while opportunistically divesting of certain non-core holdings.”

Mr. Pickett continued, “While the $750,000 of cash received from Daybreak in the quarter fell below our expectations, we continue to work with this operator to help improve its operating cash flow.  Although the ultimate structure of this resolution is still being finalized, we believe the resulting rents will be at the mid to high end of the previously indicated range of $3 to $5 million per quarter.  In the meantime, we continue to support Daybreak’s commitment to providing excellent quality of care to its residents.”

Mr. Pickett concluded, “The new Medicare reimbursement model, the Patient Driven Payment Model or PDPM, became effective on October 1.  While it is too early to make any definitive conclusions, the initial feedback from our operators is positive.  When combined with the recent 2.4% increase in Medicare reimbursement and the promising demographic tailwinds, we believe our operators are well-positioned to weather the continued labor cost pressures and generate solid financial performance over time.”

 

2019 RECENT DEVELOPMENTS AND THIRD QUARTER HIGHLIGHTS

 

In Q4 2019, the Company

 

·

completed a $735 million acquisition (the “Encore Portfolio”).

·

entered into an agreement to purchase a 49% interest in a U.K. senior housing joint venture for $90 million.

·

declared a $0.67 per share quarterly common stock dividend, representing a $0.01 increase over the prior quarter.

 

In Q3 2019, the Company

 

·

issued $500 million aggregate principal amount of 3.625% Senior Notes due 2029.

·

priced a public offering to sell 7.5 million common shares on a forward basis.

·

sold 19 facilities for $177 million in cash proceeds generating a $53 million gain.

·

completed $33 million of new investments.

·

invested $38 million in capital renovation and construction-in-progress projects.

·

paid a $0.66 per share quarterly common stock dividend.

 

In Q2 2019, the Company

 

·

completed the $623 million acquisition by merger of MedEquities.

·

invested $55 million in capital renovation and construction-in-progress projects.

·

paid a $0.66 per share quarterly common stock dividend.

 

In Q1 2019, the Company

 

·

entered into a definitive merger agreement to acquire MedEquities.

·

finalized the Orianna portfolio restructuring.

·

invested $42 million in capital renovation and construction-in-progress projects.

·

paid a $0.66 per share quarterly common stock dividend.

 

THIRD QUARTER 2019 RESULTS

 

Operating Revenues and Expenses – Operating revenues for the quarter ended September 30, 2019 totaled $233.2 million, which included $15.0 million of non-cash revenue, $3.5 million of real estate tax and ground rents, and a write-off of $3.0 million in uncollectible accounts primarily related to straight-line revenue.

Operating expenses for the quarter ended September 30, 2019 totaled $99.1 million, consisting of $76.7 million of depreciation and amortization expense, $10.5 million of general and administrative (“G&A”) expense, $4.3 million of real estate tax and ground lease expense, $3.8 million of impairment on real estate properties, $2.9 million of stock-based compensation expense and $0.9 million of acquisition and merger related costs.

The Company’s third quarter 2019 G&A expense includes approximately $0.6 million in restructuring costs related to the buy-out of its Chicago office lease.  The office lease was scheduled to terminate in 2024.

Other Income and Expense – Other income and expense for the quarter ended September 30, 2019 was a net expense of $52.2 million, primarily consisting of $49.9 million of interest expense and $2.3 million of amortized deferred financing costs.

Funds From Operations – For the quarter ended September 30, 2019, FFO was $163.1 million, or $0.72 per common share, on 227 million weighted-average common shares outstanding, compared to $160.6 million, or $0.76 per common share on 210 million weighted-average common shares outstanding, for the same period in 2018.

The $163.1 million of FFO for the quarter ended September 30, 2019 includes a $3.0 million write-off of non-cash revenue (primarily straight-line revenue), $2.9 million of non-cash stock-based compensation expense, $2.0 million of interest refinancing cost related to an unconsolidated joint venture, $0.9 million of acquisition and merger costs and $0.6 million of restructuring costs.

The $160.6 million of FFO for the quarter ended September 30, 2018 includes the impact of $4.0 million of non-cash stock-based compensation expense offset by a  $2.0 million recovery for uncollectible accounts. 

 

Adjusted FFO was $172.5 million, or $0.76 per common share, for the quarter ended September 30, 2019, compared to $162.6 million, or $0.77 per common share, for the same quarter in 2018.  For further information see the “Funds From Operations” schedule below and the Company’s website.

FINANCING ACTIVITIES

 

$500 Million Senior Notes – On September 20, 2019, the Company issued $500 million aggregate principal amount of its 3.625% Senior Notes due October 2029 (the “2029 Notes”.)  The 2029 Notes were sold at a public offering price of 98.542% of their face value before the underwriters’ discount.  The Company’s net proceeds from the offering, after deducting underwriting discounts and expenses, were used to repay outstanding borrowings under the Company’s revolving credit facility and term loans. 

 

7.5 Million Share Forward Stock Offering – In connection with a $300 million underwritten public offering, the Company entered into a forward equity sales agreement on September 9, 2019 to sell 7.5 million shares of its common stock at an initial net price of $40.01 per share, after underwriting discounts and commissions, on one or more settlement dates to be selected by the Company no later than September 10, 2020.  The Company expects to settle the forward equity sales agreement entirely by the physical delivery of shares of common stock in exchange for cash proceeds, although it may elect cash settlement or net share settlement for all or a portion of its obligations under the forward equity sales agreement subject to certain conditions.  The forward sale price that the Company will receive upon settlement of the agreement is calculated based on the forward sale price as adjusted for a floating interest rate factor and other fixed amounts based on the passage of time, as specified in the forward equity sales agreement.  Net proceeds from the settlement of the forward sale

agreement will be used to repay a portion of the debt borrowed to finance the Encore Portfolio acquisition described below, with any remaining proceeds to be used for other potential acquisitions or investment opportunities, repayment of outstanding indebtedness and general corporate purposes.

 

Equity Shelf Program and Dividend Reinvestment and Common Stock Purchase Plan – During the quarter ended September 30, 2019, the Company sold 1.1 million shares of its common stock, generating $42.2 million of gross proceeds.  The following table outlines shares of the Company’s common stock issued under its Equity Shelf Program and its Dividend Reinvestment and Common Stock Purchase Plan:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

Equity Shelf (At-the-Market) Program for 2019

 

 

 

(in thousands, except price per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

Q2

 

Q3

 

 

Year To Date

Number of shares

 

 

2,221

 

 

733

 

 

124

 

 

 

3,078

Average price per share

 

$

35.26

 

$

36.81

 

$

36.54

 

 

$

35.68

Gross proceeds

 

$

78,325

 

$

26,993

 

$

4,498

 

 

$

109,816

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

 

Dividend Reinvestment and Common Stock Purchase Plan for 2019

 

 

 

(in thousands, except price per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1

 

Q2

 

Q3

 

 

Year To Date

Number of shares

 

 

892

 

 

589

 

 

997

 

 

 

2,478

Average price per share

 

$

36.19

 

$

37.02

 

$

37.87

 

 

$

37.06

Gross proceeds

 

$

32,286

 

$

21,817

 

$

37,742

 

 

$

91,845

 

2019 RECENT AND THIRD QUARTER PORTFOLIO ACTIVITY

 

Post Q3 Portfolio Activity:

 

$735 Million Encore Portfolio Acquisition – On October 31, 2019, the Company completed the previously announced 60 facility acquisition for $735 million.  Consideration consisted of approximately $346 million of cash and the assumption of approximately $389 million in mortgage loans guaranteed by the U.S. Department of Housing and Urban Development.  These loans have a blended “all-in” rate (interest rates and mortgage insurance premiums) of 3.66% per annum with maturities between September 2046 and December 2051.

 

The 60 facilities, consisting of 58 skilled nursing facilities (“SNFs”) and two assisted living facilities (“ALFs”) representing 6,590 operating beds are located in Florida (37), North Carolina (8), Mississippi (6), Louisiana (4), Idaho (2), Kentucky (1), Missouri (1) and Montana (1).  These facilities are leased to two operators within three triple net leases providing for approximately $64 million in 2020 annual contractual cash rent.

 

$90 Million Joint Venture – On October 30, 2019, the Company entered into an agreement to purchase from Healthpeak Properties, Inc. (formerly HCP, Inc.) its 49% joint venture interest in a U.K. portfolio consisting of 67 senior housing facilities, as well as related development and working capital loans, for an aggregate purchase price of approximately $90 million.  Completion of the transaction is subject to customary closing conditions.  No assurance can be given as to when or if the closing conditions will be satisfied and the transaction will be completed.

 

Q3 Portfolio Activity:

 

$71 Million of New Investments in Q3 2019 – In the third quarter of 2019, the Company completed approximately $33 million of new investments and $38 million in capital renovations and new construction consisting of the following:

 

$25 Million Acquisition –  On July 1, 2019, the Company acquired three SNFs for $24.9 million from an unrelated third party. The facilities, with 320 beds located in North Carolina (2) and Virginia, were added to an existing operator’s master lease with an initial cash yield of 9.5% with 2.0% annual rent escalators. 

 

$38 Million of New Investments – In the third quarter of 2019, the Company invested $37.7 million under its capital renovation and construction-in-progress programs.

 

Asset Sales and Impairments:

 

$177 Million in Assets Sales – In the third quarter of 2019, the Company sold 19 properties for $177.0 million in cash, recognizing a gain of approximately $53.1 million, consisting of the following:

 

$84 Million Asset Sale –  the Company completed the previously announced sale of ten SNFs located in Kentucky and formerly leased to Diversicare Healthcare Services, Inc. (NASDAQ: DVCR). The Company sold the facilities to an unrelated third party for approximately $84 million in cash, recognizing a gain of approximately $31 million. 

 

$93 Million in Other Asset Sales –the Company sold nine facilities to various unrelated third parties for approximately $93 million in cash, recognizing net gains of approximately $22 million.

 

Impairments and Assets Held for Sale – During the third quarter of 2019, the Company recorded a net impairment charge of $3.9 million consisting of $5.7 million of impairment (to reduce the net book values on four properties to their estimated fair values or expected selling prices) reduced by the recovery of $1.8 million in insurance proceeds (cash from insurance policies on two facilities that were previously impaired).

 

As of September 30, 2019, the Company had four properties classified as assets held for sale totaling approximately $2.2 million.  The Company expects to sell these properties over the next few quarters.

 

DIVIDENDS

 

On October 14, 2019, the Board of Directors declared a common stock dividend of $0.67 per share, to be paid November 15, 2019 to common stockholders of record as of the close of business on October 31, 2019, representing a $0.01 per share increase in the quarterly common dividend.

 

2019 GUIDANCE UPDATED

 

The Company adjusted its 2019 annual guidance range to be between $1.70 and $1.73 of Net income per diluted share from $1.44 and 1.48 per share.  The Company also increased the low end of its Adjusted FFO by $0.01 to a range of $3.04 to $3.07 per diluted share.

 

Bob Stephenson, Omega’s CFO commented, “We have tightened our 2019 year-end AFFO guidance as a result of closing the $735 million Encore acquisition last week, third quarter asset sales, continuing to record Daybreak on a cash basis and our third quarter capital markets activity.”  Mr. Stephenson continued, “We are

pleased to have sold 7.5 million common shares on a forward basis and to have extended our debt maturities by issuing $500 million of 3.625% ten-year senior unsecured debt, thereby freeing up our credit facility for potential acquisitions.”

 

The following table presents a reconciliation of Omega’s guidance regarding Adjusted FFO to projected GAAP earnings.

 

 

 

 

 

 

 

    

 

    

 

 

 

2019 Q4

 

2019 Annual 

 

 

Guidance Range

 

Guidance Range

 

 

(per diluted common

 

(per diluted common

 

 

share)

 

share)

Net Income

 

$0.39 - $0.42

 

$1.70- $1.73

Depreciation

 

0.35

 

1.35

Depreciation – unconsolidated joint venture

 

 

0.03

Provision for real estate impairment

 

 

0.04

Unrealized loss on warrants

 

 

0.00

Gain on assets sold – net (1)

 

 

(0.27)

FFO

 

$0.74 - $0.77

 

$2.85 - $2.88

Adjustments:

 

 

 

 

One-time revenue items

 

 

(0.01)

Acquisition and merger related costs

 

 

0.02

One-time termination payment

 

 

0.01

Interest – refinancing costs - unconsolidated joint ventures

 

 

0.01

Restructuring expenses

 

 

0.00

Provision or write-off of uncollectible accounts

 

 

0.05

Impairment on direct financing leases

 

 

0.04

Stock-based compensation expense

 

0.02

 

0.07

Adjusted FFO

 

$0.76 - $0.79

 

$3.04 - $3.07

(1)

Includes gains from unconsolidated joint venture asset sales

 

Note: All per share numbers rounded to 2 decimals.

 

The Company's Adjusted FFO guidance for 2019 includes (i) the Encore Portfolio acquisition (closed on October 31),  (ii) over $35 million of planned capital renovation projects with fourth quarter 2019 estimated in-service dates or spending that should generate cash in the fourth quarter of 2019 and (iii) Daybreak continuing on a cash basis.  It excludes additional acquisitions and asset sales, the impact of gains and losses from the sale of assets, certain revenue and expense items, interest refinancing expense, capital transactions, acquisition costs, and additional provisions for uncollectible accounts, if any.

The Company's guidance is based on a number of assumptions, which are subject to change and many of which are outside the Company’s control.  If actual results vary from these assumptions, the Company's expectations may change.  Without limiting the generality of the foregoing, the timing of collection of rental obligations from operators on a cash basis, the timing and completion of acquisitions, divestitures, capital and financing transactions, and variations in stock-based compensation expense may cause actual results to vary materially from our current expectations. There can be no assurance that the Company will achieve its projected results.  The Company may, from time to time, update its publicly announced Adjusted FFO guidance, but it is not obligated to do so.

 

CONFERENCE CALL

The Company will be conducting a conference call on Wednesday, November 6, 2019 at 10 a.m. Eastern to review the Company’s 2019 third quarter results and current developments.  Analysts and investors within the United States interested in participating are invited to call (877) 511-2891.  The Canadian toll-free dial-in

number is (855) 669-9657.  All other international participants may use the dial-in number (412) 902-4140.  Ask the operator to be connected to the “Omega Healthcare’s Third Quarter 2019 Earnings Call.”

To listen to the conference call via webcast, log on to www.omegahealthcare.com and click the “earnings call” icon on the Company’s home page.  Webcast replays of the call will be available on the Company’s website for two weeks following the call.

*   *   *   *   *   *

Omega is a real estate investment trust that invests in the long-term healthcare industry, primarily in skilled nursing and assisted living facilities.  Its portfolio of assets is operated by a diverse group of healthcare companies, predominantly in a triple-net lease structure.  The assets span all regions within the US, as well as in the UK.

 

FOR FURTHER INFORMATION, CONTACT

Matthew Gourmand, SVP, Investor Relations

or

Bob Stephenson, CFO at (410) 427-1700


The following information was filed by Ohi Healthcare Properties Limited Partnership on Tuesday, November 5, 2019 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

View differences made from one quarter to another to evaluate Ohi Healthcare Properties Limited Partnership's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 10-Q Quarterly Report to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Ohi Healthcare Properties Limited Partnership.

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account