CareTrust REIT Announces First Quarter 2024 Operating Results

Published

Conference Call Scheduled for Friday, May 3, 2024 at 1:00 pm ET

SAN CLEMENTE, Calif.--(BUSINESS WIRE)-- CareTrust REIT, Inc. (NYSE:CTRE) today reported operating results for the quarter ended March 31, 2024, as well as other recent events.

For the quarter, CareTrust REIT reported:

  • Investments of $118.8 million during the quarter and $206.5 million year-to-date at an estimated stabilized yield of 11.1% and 10.5%, respectively, after rent ramps under the applicable leases are completed;
  • 11.6 million shares sold under its ATM Program for gross proceeds of $273.2 million;
  • 98.0% of contractual rent and interest collected;
  • Net income of $28.7 million and net income per share of $0.22;
  • Net Debt to Annualized Normalized Run Rate EBITDA of 0.6x;
  • Normalized FFO of $46.5 million and normalized FFO per share of $0.35;
  • Normalized FAD of $48.7 million and normalized FAD per share of $0.37;
  • A 3.6% increase in the quarterly dividend, to $0.29 per share, representing a payout ratio of approximately 78% on normalized FAD;
  • Earning the Institutional Shareholders Services (ISS) ESG Prime Rating.

Since quarter end, CareTrust REIT reported:

  • Investments of $87.7 million at an estimate stabilized yield of 9.6%;
  • Investment pipeline of $260 million.

CareTrust’s President and Chief Executive Officer, Dave Sedgwick, commented on the Company’s 2024 first quarter results. “We started this year with approximately $300 million of cash on the balance sheet because we saw the potential for significant growth through new investments. We are off to a great start with approximately $205 million of new acquisition and financing deals completed already. Because the pipeline continues to replenish itself, we continue to position the balance sheet to capitalize on the consistent, steady flow of attractive investment opportunities and sourced, "off-market" acquisitions in front of us.” Mr. Sedgwick added, “The replenished investment pipeline sits today at roughly $260 million, not including larger portfolio deals under review.”

Financial Results for Quarter Ended March 31, 2024

Chief Financial Officer, Bill Wagner, reported that, for the first quarter, CareTrust reported net income of $28.7 million, or $0.22 per diluted weighted-average common share, normalized FFO of $46.5 million, or $0.35 per diluted weighted-average common share, and normalized FAD of $48.7 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 0.6x, which is below the Company's target leverage range of 4.0x to 5.0x, and a net debt-to-enterprise value of approximately 4.1%. 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 $345 million in cash on hand. During the first quarter of 2024, the Company sold 11.6 million shares under the ATM Program at a weighted average sales price of $23.55 for gross proceeds of $273.2 million. As of March 31, 2024, the Company had $0.9 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 $1.01 to $1.03, normalized FFO of approximately $1.42 to $1.44, and normalized FAD of approximately $1.46 to $1.48. He noted that the 2024 guidance is based on a diluted weighted-average common share count of 140.0 million shares, and assumes the following:

  • All investments year-to-date;
  • No new acquisitions;
  • Dispositions and loan repayments made to date;
  • No new dispositions, new loans or loan repayments beyond those completed or announced to date;
  • 1.5% - 2% uncollected rents;
  • No new debt incurrences or new equity issuances;
  • Estimated 2.5% CPI-based rent escalators under CareTrust's long-term net leases.

Dividend Increased

During the quarter, CareTrust increased its quarterly dividend from $0.28 to $0.29 per common share. On an annualized basis, the payout ratio was approximately 83% based on first quarter 2024 normalized FFO, and 78% based on normalized FAD.

Conference Call

A conference call will be held on Friday, May 3, 2024, at 1:00 p.m. Eastern Time (10:00 a.m. Pacific Time), during which CareTrust’s management will discuss first 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 7862003. 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 CareTrust

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 Report on Form 10-Q for the quarter ended March 31, 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 March 31, 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 INCOME STATEMENTS

(in thousands, except per share data)

(Unaudited)

 

 

For the Three Months Ended March 31,

 

 

2024

 

2023

Revenues:

 

 

Rental income

$

53,502

 

$

46,163

 

Interest and other income

 

9,568

 

 

4,443

 

Total revenues

 

63,070

 

 

50,606

 

Expenses:

 

 

Depreciation and amortization

 

13,448

 

 

12,238

 

Interest expense

 

8,228

 

 

9,827

 

Property taxes

 

1,801

 

 

880

 

Impairment of real estate investments

 

2,744

 

 

1,886

 

Property operating expenses

 

660

 

 

963

 

General and administrative

 

6,838

 

 

5,061

 

Total expenses

 

33,719

 

 

30,855

 

Other loss:

 

 

Gain (loss) on sale of real estate, net

 

11

 

 

(70

)

Unrealized loss on other real estate related investments, net

 

(612

)

 

(454

)

Total other loss

 

(601

)

 

(524

)

Net income

 

28,750

 

 

19,227

 

Net income attributable to noncontrolling interests

 

4

 

 

 

Net income attributable to CareTrust REIT, Inc.

$

28,746

 

$

19,227

 

 

 

 

Earnings per common share attributable to CareTrust REIT, Inc.:

 

 

Basic

$

0.22

 

$

0.19

 

Diluted

$

0.22

 

$

0.19

 

 

 

 

Weighted-average number of common shares:

 

 

Basic

 

132,836

 

 

99,063

 

Diluted

 

133,202

 

 

99,087

 

 

 

 

Dividends declared per common share

$

0.29

 

$

0.28

 

 

CARETRUST REIT, INC.

RECONCILIATIONS OF NET INCOME TO NON-GAAP FINANCIAL MEASURES

(in thousands)

(Unaudited)

 

 

Three Months Ended March 31,

 

 

2024

 

2023

 

 

 

Net income attributable to CareTrust REIT, Inc.

$

28,746

 

$

19,227

 

Depreciation and amortization

 

13,448

 

 

12,238

 

Interest expense

 

8,228

 

 

9,827

 

Amortization of stock-based compensation

 

2,120

 

 

936

 

EBITDA attributable to CareTrust REIT, Inc.

 

52,542

 

 

42,228

 

Impairment of real estate investments

 

2,744

 

 

1,886

 

Property operating expenses

 

972

 

 

1,134

 

(Gain) loss on sale of real estate, net

 

(11

)

 

70

 

Unrealized loss on other real estate related investments, net

 

612

 

 

454

 

Normalized EBITDA attributable to CareTrust REIT, Inc.

 

56,859

 

 

45,772

 

Full impact of quarterly investments[1]

 

1,493

 

 

 

Normalized Run Rate EBITDA attributable to CareTrust REIT, Inc.

$

58,352

 

$

45,772

 

 

 

 

Net income attributable to CareTrust REIT, Inc.

$

28,746

 

$

19,227

 

Real estate related depreciation and amortization

 

13,442

 

 

12,233

 

Impairment of real estate investments

 

2,744

 

 

1,886

 

(Gain) loss on sale of real estate, net

 

(11

)

 

70

 

Funds from Operations (FFO) attributable to CareTrust REIT, Inc.

 

44,921

 

 

33,416

 

Property operating expenses

 

972

 

 

1,134

 

Unrealized loss on other real estate related investments, net

 

612

 

 

454

 

Normalized FFO attributable to CareTrust REIT, Inc.

$

46,505

 

$

35,004

 

 

 

 

NET DEBT TO ANNUALIZED NORMALIZED RUN RATE EBITDA RECONCILIATION

(in thousands)

(Unaudited)

 

 

Three Months Ended March 31,

 

 

2024

 

2023

Total debt

$

600,000

 

$

735,000

 

Cash, cash equivalents

 

(451,173

)

 

(43,992

)

Net Debt

$

148,827

 

$

691,008

 

Annualized Normalized Run Rate EBITDA attributable to CareTrust REIT, Inc.[2]

$

233,408

 

$

183,088

 

Net Debt to Annualized Normalized Run Rate EBITDA attributable to CareTrust REIT, Inc.

0.6x

3.8x

[1] 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.

[2] 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 TO NON-GAAP FINANCIAL MEASURES (continued)

(in thousands, except per share data)

(Unaudited)

 

 

Three Months Ended March 31,

 

 

2024

 

2023

 

 

 

Net income attributable to CareTrust REIT, Inc.

$

28,746

 

$

19,227

 

Real estate related depreciation and amortization

 

13,442

 

 

12,233

 

Amortization of deferred financing fees

 

614

 

 

609

 

Amortization of stock-based compensation

 

2,120

 

 

936

 

Straight-line rental income

 

7

 

 

7

 

Amortization of below market lease intangible

 

(575

)

 

 

Impairment of real estate investments

 

2,744

 

 

1,886

 

(Gain) loss on sale of real estate, net

 

(11

)

 

70

 

Funds Available for Distribution (FAD) attributable to CareTrust REIT, Inc.

 

47,087

 

 

34,968

 

Property operating expenses

 

972

 

 

1,134

 

Unrealized loss on other real estate related investments, net

 

612

 

 

454

 

Normalized FAD attributable to CareTrust REIT, Inc.

$

48,671

 

$

36,556

 

 

 

 

FFO per share attributable to CareTrust REIT, Inc.

$

0.34

 

$

0.34

 

Normalized FFO per share attributable to CareTrust REIT, Inc.

$

0.35

 

$

0.35

 

 

 

 

FAD per share attributable to CareTrust REIT, Inc.

$

0.35

 

$

0.35

 

Normalized FAD per share attributable to CareTrust REIT, Inc.

$

0.37

 

$

0.37

 

 

 

 

Diluted weighted average shares outstanding [1]

 

133,328

 

 

99,195

 

 

 

 

[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

 

March 31, 2023

 

June 30, 2023

 

September 30, 2023

 

December 31, 2023

 

March 31, 2024

Revenues:

 

 

 

 

 

Rental income

$

46,163

 

$

47,745

 

$

51,218

 

$

53,473

 

$

53,502

 

Interest and other income

 

4,443

 

 

3,808

 

 

4,659

 

 

6,261

 

 

9,568

 

Total revenues

 

50,606

 

 

51,553

 

 

55,877

 

 

59,734

 

 

63,070

 

Expenses:

 

 

 

 

 

Depreciation and amortization

 

12,238

 

 

12,716

 

 

13,034

 

 

13,211

 

 

13,448

 

Interest expense

 

9,827

 

 

11,040

 

 

11,750

 

 

8,266

 

 

8,228

 

Property taxes

 

880

 

 

1,390

 

 

2,167

 

 

1,733

 

 

1,801

 

Impairment of real estate investments

 

1,886

 

 

21,392

 

 

8,232

 

 

4,791

 

 

2,744

 

Property operating expenses

 

963

 

 

658

 

 

1,239

 

 

563

 

 

660

 

General and administrative

 

5,061

 

 

4,718

 

 

5,519

 

 

6,507

 

 

6,838

 

Total expenses

 

30,855

 

 

51,914

 

 

41,941

 

 

35,071

 

 

33,719

 

Other (loss) income:

 

 

 

 

(Loss) gain on sale of real estate, net

 

(70

)

 

2,028

 

 

 

 

260

 

 

11

 

Unrealized (loss) gain on other real estate related investments, net

 

(454

)

 

(2,151

)

 

(5,251

)

 

1,371

 

 

(612

)

Total other (loss) income

 

(524

)

 

(123

)

 

(5,251

)

 

1,631

 

 

(601

)

Net income (loss)

 

19,227

 

 

(484

)

 

8,685

 

 

26,294

 

 

28,750

 

Net (loss) income attributable to noncontrolling interests

 

 

 

 

 

(11

)

 

(2

)

 

4

 

Net income (loss) attributable to CareTrust REIT, Inc.

$

19,227

 

$

(484

)

$

8,696

 

$

26,296

 

$

28,746

 

 

 

 

 

 

 

Diluted earnings (loss) per share attributable to CareTrust REIT, Inc.

$

0.19

 

$

(0.01

)

$

0.08

 

$

0.22

 

$

0.22

 

 

 

 

 

 

 

Diluted weighted average shares outstanding

99,087

99,117

104,311

121,684

133,202

 

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

 

 

March 31, 2023

 

June 30, 2023

 

September 30, 2023

 

December 31, 2023

 

March 31, 2024

 

 

 

 

 

 

 

 

 

 

Net income (loss) attributable to CareTrust REIT, Inc.

$

19,227

 

$

(484

)

$

8,696

 

$

26,296

 

$

28,746

 

Depreciation and amortization

 

12,238

 

 

12,716

 

 

13,034

 

 

13,211

 

 

13,448

 

Interest expense

 

9,827

 

 

11,040

 

 

11,750

 

 

8,266

 

 

8,228

 

Amortization of stock-based compensation

 

936

 

 

924

 

 

1,519

 

 

1,774

 

 

2,120

 

EBITDA attributable to CareTrust REIT, Inc.

 

42,228

 

 

24,196

 

 

34,999

 

 

49,547

 

 

52,542

 

Impairment of real estate investments

 

1,886

 

 

21,392

 

 

8,232

 

 

4,791

 

 

2,744

 

Property operating expenses

 

1,134

 

 

831

 

 

1,416

 

 

714

 

 

972

 

Loss (gain) on sale of real estate, net

 

70

 

 

(2,028

)

 

 

 

(260

)

 

(11

)

Unrealized loss (gain) on other real estate related investments, net

 

454

 

 

2,151

 

 

5,251

 

 

(1,371

)

 

612

 

Normalized EBITDA attributable to CareTrust REIT, Inc.

$

45,772

 

$

46,542

 

$

49,898

 

$

53,421

 

$

56,859

 

 

 

 

 

 

 

Net income (loss) attributable to CareTrust REIT, Inc.

$

19,227

 

$

(484

)

$

8,696

 

$

26,296

 

$

28,746

 

Real estate related depreciation and amortization

 

12,233

 

 

12,712

 

 

13,028

 

 

13,206

 

 

13,442

 

Impairment of real estate investments

 

1,886

 

 

21,392

 

 

8,232

 

 

4,791

 

 

2,744

 

Loss (gain) on sale of real estate, net

 

70

 

 

(2,028

)

 

 

 

(260

)

 

(11

)

Funds from Operations (FFO) attributable to CareTrust REIT, Inc.

 

33,416

 

 

31,592

 

 

29,956

 

 

44,033

 

 

44,921

 

Property operating expenses

 

1,134

 

 

831

 

 

1,416

 

 

714

 

 

972

 

Unrealized loss (gain) on other real estate related investments, net

 

454

 

 

2,151

 

 

5,251

 

 

(1,371

)

 

612

 

Normalized FFO attributable to CareTrust REIT, Inc.

$

35,004

 

$

34,574

 

$

36,623

 

$

43,376

 

$

46,505

 

 

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

 

 

March 31, 2023

 

June 30, 2023

 

September 30, 2023

 

December 31, 2023

 

March 31, 2024

 

 

 

 

 

 

 

 

Net income (loss) attributable to CareTrust REIT, Inc.

$

19,227

 

$

(484

)

$

8,696

 

$

26,296

 

$

28,746

 

Real estate related depreciation and amortization

 

12,233

 

 

12,712

 

 

13,028

 

 

13,206

 

 

13,442

 

Amortization of deferred financing fees

 

609

 

 

608

 

 

609

 

 

610

 

 

614

 

Amortization of stock-based compensation

 

936

 

 

924

 

 

1,519

 

 

1,774

 

 

2,120

 

Straight-line rental income

 

7

 

 

7

 

 

7

 

 

8

 

 

7

 

Amortization of below market lease intangible

 

 

 

 

 

 

 

(384

)

 

(575

)

Impairment of real estate investments

 

1,886

 

 

21,392

 

 

8,232

 

 

4,791

 

 

2,744

 

Loss (gain) on sale of real estate, net

 

70

 

 

(2,028

)

 

 

 

(260

)

 

(11

)

Funds Available for Distribution (FAD) attributable to CareTrust REIT, Inc.

 

34,968

 

 

33,131

 

 

32,091

 

 

46,041

 

 

47,087

 

Property operating expenses

 

1,134

 

 

831

 

 

1,416

 

 

714

 

 

972

 

Unrealized loss (gain) on other real estate related investments, net

 

454

 

 

2,151

 

 

5,251

 

 

(1,371

)

 

612

 

Normalized FAD attributable to CareTrust REIT, Inc.

$

36,556

 

$

36,113

 

$

38,758

 

$

45,384

 

$

48,671

 

 

 

 

 

 

 

FFO per share attributable to CareTrust REIT, Inc.

$

0.34

 

$

0.32

 

$

0.29

 

$

0.36

 

$

0.34

 

Normalized FFO per share attributable to CareTrust REIT, Inc.

$

0.35

 

$

0.35

 

$

0.35

 

$

0.36

 

$

0.35

 

 

 

 

 

 

 

FAD per share attributable to CareTrust REIT, Inc.

$

0.35

 

$

0.33

 

$

0.31

 

$

0.38

 

$

0.35

 

Normalized FAD per share attributable to CareTrust REIT, Inc.

$

0.37

 

$

0.36

 

$

0.37

 

$

0.37

 

$

0.37

 

 

 

 

 

 

 

Diluted weighted average shares outstanding [1]

 

99,195

 

 

99,360

 

 

104,422

 

 

121,854

 

 

133,328

 

 

 

 

 

 

 

[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)

 

March 31, 2024

December 31, 2023

Assets:

 

 

Real estate investments, net

$

1,619,438

 

$

1,567,119

 

Other real estate related investments (including accrued interest of $2,152 and $1,727 as of March 31, 2024 and December 31, 2023, respectively)

 

233,346

 

 

180,368

 

Assets held for sale

 

12,483

 

 

15,011

 

Cash and cash equivalents

 

451,173

 

 

294,448

 

Accounts and other receivables

 

402

 

 

395

 

Prepaid expenses and other assets, net

 

27,749

 

 

23,337

 

Deferred financing costs, net

 

3,845

 

 

4,160

 

Total assets

$

2,348,436

 

$

2,084,838

 

 

 

 

Liabilities and Equity:

 

 

Senior unsecured notes payable, net

$

396,261

 

$

396,039

 

Senior unsecured term loan, net

 

199,612

 

 

199,559

 

Accounts payable, accrued liabilities and deferred rent liabilities

 

35,275

 

 

33,992

 

Dividends payable

 

41,192

 

 

36,531

 

Total liabilities

 

672,340

 

 

666,121

 

 

 

 

Equity:

 

 

Common stock

 

1,417

 

 

1,300

 

Additional paid-in capital

 

2,152,454

 

 

1,883,147

 

Cumulative distributions in excess of earnings

 

(480,074

)

 

(467,628

)

Total stockholders' equity

 

1,673,797

 

 

1,416,819

 

Non-controlling interests

 

2,299

 

 

1,898

 

Total equity

 

1,676,096

 

 

1,418,717

 

Total liabilities and equity

$

2,348,436

 

$

2,084,838

 

 

CARETRUST REIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

 

For the Three Months Ended March 31,

 

 

2024

 

2023

Cash flows from operating activities:

 

 

Net income

$

28,750

 

$

19,227

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

Depreciation and amortization (including below-market ground leases)

 

13,462

 

 

12,252

 

Amortization of deferred financing costs

 

614

 

 

609

 

Unrealized losses on other real estate related investments, net

 

612

 

 

454

 

Amortization of stock-based compensation

 

2,120

 

 

936

 

Straight-line rental income

 

7

 

 

7

 

Amortization of below market rent

 

(575

)

 

 

Noncash interest income

 

(425

)

 

150

 

(Gain) loss on sale of real estate, net

 

(11

)

 

70

 

Impairment of real estate investments

 

2,744

 

 

1,886

 

Change in operating assets and liabilities:

 

 

Accounts and other receivables

 

(15

)

 

(33

)

Prepaid expenses and other assets, net

 

(322

)

 

61

 

Accounts payable, accrued liabilities and deferred rent liabilities

 

1,859

 

 

(499

)

Net cash provided by operating activities

 

48,820

 

 

35,120

 

Cash flows from investing activities:

 

 

Acquisitions of real estate, net of deposits applied

 

(66,619

)

 

 

Purchases of equipment, furniture and fixtures and improvements to real estate

 

(398

)

 

(2,019

)

Investment in real estate related investments and other loans receivable

 

(52,165

)

 

 

Principal payments received on real estate related investments and other loans receivable

 

 

 

15,143

 

Escrow deposits for potential acquisitions of real estate

 

(4,105

)

 

(17,172

)

Net proceeds from sales of real estate

 

46

 

 

3,230

 

Net cash used in investing activities

 

(123,241

)

 

(818

)

Cash flows from financing activities:

 

 

Proceeds from the issuance of common stock, net

 

269,787

 

 

(501

)

Borrowings under unsecured revolving credit facility

 

 

 

10,000

 

Payments of deferred financing costs

 

(24

)

 

(21

)

Net-settle adjustment on restricted stock

 

(2,483

)

 

(1,479

)

Dividends paid on common stock

 

(36,531

)

 

(27,409

)

Contributions from noncontrolling interests

 

444

 

 

 

Distributions to noncontrolling interests

 

(47

)

 

 

Net cash provided by (used in) financing activities

 

231,146

 

 

(19,410

)

Net increase in cash and cash equivalents

 

156,725

 

 

14,892

 

Cash and cash equivalents as of the beginning of period

 

294,448

 

 

13,178

 

Cash and cash equivalents as of the end of period

$

451,173

 

$

28,070

 

 

CARETRUST REIT, INC.

DEBT SUMMARY

(dollars in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 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

%

 

$

(3,739

)

 

 

 

$

396,261

Floating Rate Debt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior unsecured term loan

6.929

%

 

[1]

 

2026

 

 

 

 

200,000

 

33.3

%

 

 

(388

)

 

 

 

 

199,612

Unsecured revolving credit facility

%

 

[2]

 

2027

 

[3]

 

 

 

%

 

 

 

 

[4]

 

 

 

6.929

%

 

 

 

 

 

 

 

 

200,000

 

33.3

%

 

 

(388

)

 

 

 

 

199,612

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Debt

4.893

%

 

 

 

 

 

 

 

$

600,000

 

100.0

%

 

$

(4,127

)

 

 

 

$

595,873

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[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.

$

1.01

 

$

1.03

 

Real estate related depreciation and amortization

 

0.38

 

 

0.38

 

Impairment of real estate investment

 

0.02

 

 

0.02

 

(Gain) loss on sale of real estate

 

 

 

 

 

Funds from Operations (FFO) attributable to CareTrust REIT, Inc.

 

1.41

 

 

1.43

 

Property operating expenses

 

0.01

 

 

0.01

 

Unrealized (gain) loss on other real estate related investments

 

 

 

 

Normalized FFO attributable to CareTrust REIT, Inc.

$

1.42

 

$

1.44

 

 

 

 

Net income attributable to CareTrust REIT, Inc.

$

1.01

 

$

1.03

 

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

 

0.02

 

 

0.02

 

(Gain) loss on sale of real estate

 

 

 

 

Funds Available for Distribution (FAD) attributable to CareTrust REIT, Inc.

 

1.45

 

 

1.47

 

Property operating expenses

 

0.01

 

 

0.01

 

Unrealized (gain) loss on other real estate related investments

 

 

 

 

Normalized FAD attributable to CareTrust REIT, Inc.

$

1.46

 

$

1.48

 

Weighted average shares outstanding:

 

 

Diluted

 

140,010

 

 

140,010

 

 

 

 

[1] This guidance assumes and includes (i) all investments, dispositions and loan repayments made to date, (ii) no new acquisitions, dispositions, new loans or loan repayments beyond those completed or announced to date, (iii) no new debt incurrences or new equity issuances, (iv) estimated 2.5% CPI-based rent escalators under CareTrust's long-term net leases, and (v) assumes 1.5% - 2% uncollected rents for the year.

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, 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.

CareTrust REIT, Inc. (949) 542-3130 ir@caretrustreit.com

Source: CareTrust REIT, Inc.

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