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Share Name | Share Symbol | Market | Type |
---|---|---|---|
LTC Properties Inc | NYSE:LTC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 33.64 | 1 | 12:00:00 |
-- Company Substantially Reduces Leverage Earlier than Expected to Better Position it for Future Growth --
LTC Properties, Inc. (NYSE: LTC) (“LTC” or the “Company”), a real estate investment trust that primarily invests in seniors housing and health care properties, today announced operating results for the fourth quarter ended December 31, 2023.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240215693522/en/
Three Months Ended
December 31,
2023
2022
(unaudited)
Net income available to common stockholders
$
28,057
$
17,809
Diluted earnings per common share
$
0.67
$
0.44
NAREIT funds from operations ("FFO") attributable to common stockholders
$
23,902
$
29,218
NAREIT diluted FFO per common share
$
0.57
$
0.72
FFO attributable to common stockholders, excluding non-recurring items
$
27,463
$
29,218
Funds available for distribution ("FAD")
$
30,021
$
30,013
FAD, excluding non-recurring items
$
30,021
$
30,013
Fourth quarter 2023 financial results were impacted by:
During the fourth quarter of 2023, LTC completed the following transactions:
Subsequent to December 31, 2023, LTC completed the following transactions:
“2023 was a year of execution for LTC, and due to the hard work of our team, we resolved substantially all of the challenges we faced during the year,” said Wendy Simpson, LTC’s Chairman and Chief Executive Officer. “Importantly, we more than fully replaced the rent generated by our original Brookdale portfolio, reached a permanent solution for one of our transitioned portfolios, received all of the contractual interest owed under the Prestige mortgage loan ahead of schedule, and reduced our leverage earlier than expected, successfully positioning LTC for growth in 2024 and beyond.”
Conference Call Information
LTC will conduct a conference call on Friday, February 16, 2024, at 8:00 a.m. Pacific Time (11:00 a.m. Eastern Time), to provide commentary on its performance and operating results for the quarter ended December 31, 2023. The conference call is accessible by telephone and the internet. Interested parties may access the live conference call via the following:
Webcast
www.LTCreit.com
USA Toll-Free Number
(888) 506‑0062
International Number
(973) 528‑0011
Conference Access Code
662760
Additionally, an audio replay of the call will be available one hour after the live call through March 1, 2024 via the following:
USA Toll-Free Number
(877) 481‑4010
International Number
(919) 882-2331
Conference Number
49667
About LTC
LTC is a real estate investment trust (REIT) investing in seniors housing and health care properties primarily through sale-leasebacks, mortgage financing, joint-ventures and structured finance solutions including preferred equity and mezzanine lending. LTC’s investment portfolio includes 201 properties in 26 states with 29 operating partners. Based on its gross real estate investments, LTC’s investment portfolio is comprised of approximately 50% seniors housing and 50% skilled nursing properties. Learn more at www.LTCreit.com.
Forward-Looking Statements
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 LTC’s most recent Annual Report on Form 10‑K, its subsequent Quarterly Reports on Form 10‑Q, and its 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 LTC 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.
LTC PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share amounts)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2023
2022
2023
2022
(unaudited)
(audited)
Revenues:
Rental income
$
32,489
$
34,707
$
127,350
$
128,244
Interest income from financing receivables(1)
3,830
1,405
15,243
1,762
Interest income from mortgage loans
12,308
10,488
47,725
40,600
Interest and other income
1,568
1,239
6,926
4,547
Total revenues
50,195
47,839
197,244
175,153
Expenses:
Interest expense
12,419
8,830
47,014
31,437
Depreciation and amortization
9,331
9,294
37,416
37,496
Impairment loss
3,265
2,136
15,775
3,422
Provision for credit losses
3,571
74
5,678
1,528
Transaction costs
607
100
1,144
828
Property tax expense
3,518
3,306
13,269
15,486
General and administrative expenses
5,942
6,299
24,286
23,706
Total expenses
38,653
30,039
144,582
113,903
Other operating income:
Gain on sale of real estate, net
16,751
21
37,296
37,830
Operating income
28,293
17,821
89,958
99,080
Income from unconsolidated joint ventures
377
377
1,504
1,504
Net income
28,670
18,198
91,462
100,584
Income allocated to non-controlling interests
(440
)
(259
)
(1,727
)
(560
)
Net income attributable to LTC Properties, Inc.
28,230
17,939
89,735
100,024
Income allocated to participating securities
(173
)
(130
)
(587
)
(580
)
Net income available to common stockholders
$
28,057
$
17,809
$
89,148
$
99,444
Earnings per common share:
Basic
$
0.67
$
0.44
$
2.16
$
2.49
Diluted
$
0.67
$
0.44
$
2.16
$
2.48
Weighted average shares used to calculate earnings per
common share:
Basic
41,701
40,596
41,272
39,894
Diluted
42,046
40,769
41,358
40,067
Dividends declared and paid per common share
$
0.57
$
0.57
$
2.28
$
2.28
____________________________(1)
Represents rental income from acquisitions through sale-leaseback transactions, subject to leases which contain purchase options. In accordance with GAAP, the properties are required to be presented as financing receivables on our Consolidated Balance Sheets and the rental income to be presented as Interest income from financing receivables on our Consolidated Statements of Income.Supplemental Reporting Measures
FFO and FAD are supplemental measures of a real estate investment trust’s (“REIT”) financial performance that are not defined by U.S. generally accepted accounting principles (“GAAP”). Investors, analysts and the Company use FFO and FAD as supplemental measures of operating performance. The Company believes FFO and FAD are 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 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 FAD facilitate like comparisons of operating performance between periods. Occasionally, the Company may exclude non-recurring items from FFO and FAD in order to allow investors, analysts and our management to compare the Company’s operating performance on a consistent basis without having to account for differences caused by unanticipated items.
FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), means net income available to common stockholders (computed in accordance with GAAP) excluding gains or losses on the sale of real estate and impairment write-downs of depreciable real estate, plus real estate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. 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 NAREIT definition or have a different interpretation of the current NAREIT definition from that of the Company; therefore, caution should be exercised when comparing our Company’s FFO to that of other REITs.
We define FAD as FFO excluding the effects of straight-line rent, amortization of lease inducement, effective interest income, deferred income from unconsolidated joint ventures, non-cash compensation charges, capitalized interest and non-cash interest charges. GAAP requires rental revenues related to non-contingent leases that contain specified rental increases over the life of the lease to be recognized evenly over the life of the lease. This method results in rental income in the early years of a lease that is higher than actual cash received, creating a straight-line rent receivable asset included in our consolidated balance sheet. At some point during the lease, depending on its terms, cash rent payments exceed the straight-line rent which results in the straight-line rent receivable asset decreasing to zero over the remainder of the lease term. Effective interest method, as required by GAAP, is a technique for calculating the actual interest rate for the term of a mortgage loan based on the initial origination value. Similar to the accounting methodology of straight-line rent, the actual interest rate is higher than the stated interest rate in the early years of the mortgage loan thus creating an effective interest receivable asset included in the interest receivable line item in our consolidated balance sheet and reduces down to zero when, at some point during the mortgage loan, the stated interest rate is higher than the actual interest rate. FAD is useful in analyzing the portion of cash flow that is available for distribution to stockholders. Investors, analysts and the Company utilize FAD as an indicator of common dividend potential. The FAD payout ratio, which represents annual distributions to common shareholders expressed as a percentage of FAD, facilitates the comparison of dividend coverage between REITs.
While the Company uses FFO and FAD as supplemental performance measures of our cash flow generated by operations and cash available for distribution to stockholders, such measures are not representative of cash generated from operating activities in accordance with 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.
Reconciliation of FFO and FAD
The following table reconciles GAAP net income available to common stockholders to each of NAREIT FFO attributable to common stockholders and FAD (unaudited, amounts in thousands, except per share amounts):
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2023
2022
2023
2022
GAAP net income available to common stockholders
$
28,057
$
17,809
$
89,148
$
99,444
Add: Impairment loss
3,265
2,136
15,775
3,422
Add: Depreciation and amortization
9,331
9,294
37,416
37,496
Less: Gain on sale of real estate, net
(16,751
)
(21
)
(37,296
)
(37,830
)
NAREIT FFO attributable to common stockholders
23,902
29,218
105,043
102,532
Add: Non-recurring items
3,561
(1)
—
3,823
(3)
824
(6)
FFO attributable to common stockholders, excluding non-recurring items
$
27,463
$
29,218
$
108,866
$
103,356
NAREIT FFO attributable to common stockholders
$
23,902
$
29,218
105,043
102,532
Non-cash income:
Add: straight-line rental adjustment
443
406
2,078
1,369
Add: amortization of lease incentives
189
212
799
1,133
(7)
Less: Effective interest income
(215
)
(2)
(1,910
)
(6,739
)
(6,461
)
Net non-cash income
417
(1,292
)
(3,862
)
(3,959
)
Non-cash expense:
Add: Non-cash compensation charges
2,131
2,013
8,479
7,964
Add: Provision for credit losses
3,571
(1)
74
5,678
(4)
1,528
(8)
Net non-cash expense
5,702
2,087
14,157
9,492
Funds available for distribution (FAD)
$
30,021
$
30,013
115,338
108,065
Less: Non-recurring income
—
—
(1,570
)
(5)
(681
)
(9)
Funds available for distribution (FAD), excluding non-recurring items
$
30,021
$
30,013
$
113,768
$
107,384
____________________________
(1)
Provision for credit losses includes the $3,561 write off of a note receivable in connection with the pending sale of seven properties in Texas and transition of three properties to new operators. The note was related to these 10 assisted living communities under a master lease.(2)
Decrease due to the $1,500 repayment of deferred interest under LTC’s agreement to defer $300 per month for May through September 2023 in interest payments due on a mortgage loan secured by 15 skilled nursing centers located in Michigan, which are operated by Prestige Healthcare.(3)
Represents the net of (4) and (5) below.(4)
Includes the $3,561 note receivable write off in (1) above and $1,832 of provision for credit losses related to the acquisition of 11 assisted living communities accounted for as a financing receivable and two mortgage loan originations.(5)
Represents the prepayment fee income and exit IRR income related to the payoff of two mezzanine loans totaling $1,570.(6)
Represents the (7) and (8) offset by (9) below.(7)
Includes a lease incentive balance write-off of $173 related to a closed property and lease termination.(8)
Includes $1,332 of provision for credit loss related to the acquisition of the three skilled nursing centers accounted for as a financing receivable, and the origination of two mortgage loans and one mezzanine loan.(9)
Represents the lease termination fee income of $1,181 received in connection with the sale of an assisted living community partially offset by the lease termination fee expense of $500 paid to a former operator of 12 assisted living communities in exchange for cooperation and assistance in facilitating an orderly transition of the communities to ALG. LTC sold two of the properties during 2023, entered into a contract to sell five of the properties, closed one property, plans to close an additional property, and transitioned two properties to an operator new to LTC. The remaining property is expected to be transitioned to a different operator.Reconciliation of FFO and FAD (continued)
The following table continues the reconciliation between GAAP net income available to common stockholders and each of NAREIT FFO attributable to common stockholders and FAD (unaudited, amounts in thousands, except per share amounts):
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2023
2022
2023
2022
NAREIT Basic FFO attributable to common stockholders per share
$
0.57
$
0.72
$
2.55
$
2.57
NAREIT Diluted FFO attributable to common stockholders per share
$
0.57
$
0.72
$
2.54
$
2.56
NAREIT Diluted FFO attributable to common stockholders
$
23,902
$
29,348
$
105,630
$
103,112
Weighted average shares used to calculate NAREIT diluted FFO per share attributable to common stockholders
41,787
40,998
41,614
40,296
Diluted FFO attributable to common stockholders, excluding non-recurring items
$
27,463
$
29,348
$
109,453
$
103,936
Weighted average shares used to calculate diluted FFO, excluding non-recurring items, per share attributable to common stockholders
41,787
40,998
41,614
40,296
Diluted FAD
$
30,194
$
30,143
$
115,925
$
108,645
Weighted average shares used to calculate diluted FAD per share
42,046
40,998
41,614
40,296
Diluted FAD, excluding non-recurring items
$
30,194
$
30,143
$
114,355
$
107,964
Weighted average shares used to calculate diluted FAD, excluding non-recurring items, per share
42,046
40,998
41,614
40,296
LTC PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except per share, audited)
December 31, 2023
December 31, 2022
ASSETS
Investments:
Land
$
121,725
$
124,665
Buildings and improvements
1,235,600
1,273,025
Accumulated depreciation and amortization
(387,751
)
(389,182
)
Operating real estate property, net
969,574
1,008,508
Properties held-for-sale, net of accumulated depreciation: 2023—$3,616; 2022—$2,305
18,391
10,710
Real property investments, net
987,965
1,019,218
Financing receivables,(1) net of credit loss reserve: 2023—$1,980; 2022—$768
196,032
75,999
Mortgage loans receivable, net of credit loss reserve: 2023—$4,814; 2022—$3,930
477,266
389,728
Real estate investments, net
1,661,263
1,484,945
Notes receivable, net of credit loss reserve: 2023—$611; 2022—$589
60,490
58,383
Investments in unconsolidated joint ventures
19,340
19,340
Investments, net
1,741,093
1,562,668
Other assets:
Cash and cash equivalents
20,286
10,379
Debt issue costs related to revolving line of credit
1,557
2,321
Interest receivable
53,960
46,000
Straight-line rent receivable
19,626
21,847
Lease incentives
2,607
1,789
Prepaid expenses and other assets
15,969
11,099
Total assets
$
1,855,098
$
1,656,103
LIABILITIES
Revolving line of credit
$
302,250
$
130,000
Term loans, net of debt issue costs: 2023—$342; 2022—$489
99,658
99,511
Senior unsecured notes, net of debt issue costs: 2023—$1,251; 2022—$1,477
489,409
538,343
Accrued interest
3,865
5,234
Accrued expenses and other liabilities
43,649
32,708
Total liabilities
938,831
805,796
EQUITY
Stockholders’ equity:
Common stock: $0.01 par value; 60,000 shares authorized; shares issued and outstanding: 2023—43,022; 2022—41,262
430
412
Capital in excess of par value
991,656
931,124
Cumulative net income
1,634,395
1,544,660
Accumulated other comprehensive income
6,110
8,719
Cumulative distributions
(1,751,312
)
(1,656,548
)
Total LTC Properties, Inc. stockholders’ equity
881,279
828,367
Non-controlling interests
34,988
21,940
Total equity
916,267
850,307
Total liabilities and equity
$
1,855,098
$
1,656,103
____________________________(1)
Represents acquisitions through sale-leaseback transactions, subject to leases which contain purchase options. In accordance with GAAP, the properties are required to be presented as financing receivables on our Consolidated Balance Sheets.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240215693522/en/
Mandi Hogan (805) 981‑8655
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