LTC Announces Third Quarter Operating Results
WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)-- LTC Properties, Inc. (NYSE:LTC) released results of operations for the three and nine months ended September 30, 2009 and announced that net income allocable to common stockholders for the third quarter was $7.4 million or $0.32 per diluted share. For the same period in 2008, net income allocable to common stockholders was $6.7 million or $0.29 per diluted share. Revenues for the three months ended September 30, 2009, were $17.3 million versus $17.0 million for the same period last year.
The Company announced that in the third quarter it repaid an $8.1 million mortgage loan secured by an assisted living property located in California. The retired debt was at an interest rate of 8.43%. Also, the Company invested $0.7 million in the third quarter of 2009 under agreements to expand and renovate eight properties operated by six different operators. These investments are at an average yield of 10.6%. The total commitment remaining under these agreements is $2.9 million as of September 30, 2009.
For the nine months ended September 30, 2009, net income allocable to common stockholders was $22.2 million or $0.96 per diluted share which includes $0.6 million related to the repurchase of 109,484 shares of preferred stock and $0.2 million related to the prepayment of a mortgage loan. For the same period in 2008, net income allocable to common stockholders was $22.5 million or $0.98 per diluted share which includes $1.0 million related to the repurchase of 636,300 shares of preferred stock. Revenues for the nine months ended September 30, 2009, were $52.4 million versus $52.7 million for the same period last year.
The Company will conduct a conference call on Friday, November 6, 2009, at 10:00 a.m. Pacific time, in order to comment on the Company's performance and operating results for the quarter ended September 30, 2009. The conference call is accessible by dialing 877-407-4134. The international number is 201-689-8430. The earnings release will be available on our website. An audio replay of the conference call will be available from November 6, 2009 through November 20, 2009. Callers can access the replay by dialing 877-660-6853 or 201-612-7415 and entering account number 356 and encore passcode number 333917.
At September 30, 2009, LTC had investments in 99 skilled nursing properties, 101 assisted living properties and two schools in 29 states. The Company is a self-administered real estate investment trust that primarily invests in long-term care and other health care related facilities through mortgage loans, facility lease transactions and other investments. For more information on LTC Properties, Inc., visit the Company's website at www.LTCProperties.com.
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. All forward looking statements included in this press release are based on information available to the Company on the date hereof, and the Company assumes no obligation to update such forward looking statements. Although the Company's management believes that the assumptions and expectations reflected in such forward looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. The actual results achieved by the Company may differ materially from any forward looking statements due to the risks and uncertainties of such statements.
LTC PROPERTIES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Revenues:
Rental income $ 14,961 $ 14,080 $ 44,942 $ 43,339
Interest income from mortgage 2,061 2,450 6,538 7,685
loans
Interest and other income 306 469 949 1,673
Total revenues 17,328 16,999 52,429 52,697
Expenses:
Interest expense 340 900 2,046 3,161
Depreciation and amortization 3,694 3,745 11,089 11,167
Provisions for doubtful 202 (30 ) 573 (40 )
accounts
Operating and other expenses 1,766 1,680 5,417 5,108
Total expenses 6,002 6,295 19,125 19,396
Income from continuing 11,326 10,704 33,304 33,301
operations
Discontinued operations:
Gain on sale of assets, net -- -- -- 92
Net income from discontinued -- -- -- 92
operations
Net income 11,326 10,704 33,304 33,393
Income allocated to (76 ) (76 ) (229 ) (230 )
noncontrolling interests
Net income attributable to LTC 11,250 10,628 33,075 33,163
Properties, Inc.
Income allocated to (34 ) (36 ) (105 ) (124 )
participating securities
Income allocated to preferred (3,785 ) (3,844 ) (10,730 ) (10,560 )
stockholders
Net income available to common $ 7,431 $ 6,748 $ 22,240 $ 22,479
stockholders
Basic earnings per common
share:
Continuing operations $ 0.32 $ 0.29 $ 0.96 $ 0.98
Discontinued operations $ 0.00 $ 0.00 $ 0.00 $ 0.00
Net income allocable to common $ 0.32 $ 0.29 $ 0.96 $ 0.98
stockholders
Diluted earnings per common
share:
Continuing operations $ 0.32 $ 0.29 $ 0.96 $ 0.97
Discontinued operations $ 0.00 $ 0.00 $ 0.00 $ 0.00
Net income allocable to common $ 0.32 $ 0.29 $ 0.96 $ 0.98
stockholders
Weighted average shares used to
calculate earnings per common
share:
Basic 23,108 23,019 23,083 22,950
Diluted 23,193 23,142 23,165 23,087
NOTE: Computations of per share amounts from continuing operations, discontinued operations and net income are made independently. Therefore, the sum of per share amounts from continuing operations and discontinued operations may not agree with the per share amounts from net income allocable to common stockholders. Quarterly and year-to-date computations of per share amounts are made independently. Therefore, the sum of per share amounts for the quarters may not agree with the per share amounts for the year.
Reconciliation of Funds From Operations ("FFO")
FFO is a supplemental measure of a REIT's financial performance that is not defined by accounting principles generally accepted in the United States. We define FFO as net income allocable to common stockholders adjusted to exclude the gains or losses on the sale of assets and adjusted to add back impairment charges, real estate depreciation and other non-cash charges. Other REITs may not use this definition of FFO and therefore, caution should be exercised when comparing our company's FFO to that of other REITs. FFO is used in the REIT industry as a supplemental measure of financial performance, but is not a substitute for net income per share allocable to common stockholders determined in accordance with accounting principles generally accepted in the United States.
The following table reconciles net income allocable to common stockholders to funds from operations allocable to common stockholders (unaudited, amounts in thousands, except per share amounts):
Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Net income allocable to common $ 7,431 $ 6,748 $ 22,240 $ 22,479
stockholders
Add: Real estate depreciation 3,694 3,745 11,089 11,167
Add: Non-cash compensation 360 306 1,025 923
charges
Add loss / less (gain) on sale of -- -- -- (92 )
assets, net
FFO allocable to common 11,485 10,799 34,354 34,477
stockholders
Less: Non-cash compensation (360 ) (306 ) (1,025 ) (923 )
charges
FFO including non-cash $ 11,125 $ 10,493 $ 33,329 $ 33,554
compensation charges
Basic FFO allocable to common $ 0.50 $ 0.47 $ 1.49 $ 1.50
stockholders per share
Diluted FFO allocable to common $ 0.49 $ 0.46 $ 1.46 $ 1.47
stockholders per share
Diluted FFO allocable to common $ 12,399 $ 11,717 $ 37,097 $ 37,251
stockholders
Weighted average shares used to
calculate diluted FFO per share 25,373 25,322 25,345 25,267
allocable to common stockholders
Basic FFO including non-cash $ 0.48 $ 0.46 $ 1.44 $ 1.46
compensation charges per share
Diluted FFO including non-cash $ 0.47 $ 0.45 $ 1.42 $ 1.44
compensation charges per share
Diluted FFO including non-cash $ 12,039 $ 11,411 $ 36,072 $ 36,328
compensation charges
Weighted average shares used to
calculate diluted FFO per share 25,373 25,322 25,345 25,267
including non-cash compensation
charges
LTC PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
September 30, 2009 December 31, 2008
ASSETS (unaudited) (audited)
Real Estate Investments:
Buildings and improvements, net of
accumulated depreciation and $ 328,737 $ 337,171
amortization: 2009 -- $141,473; 2008 --
$130,475
Land 34,971 34,971
Mortgage loans receivable, net of
allowance for doubtful 71,548 77,541
accounts: 2009 -- $720; 2008 -- $760
Real estate investments, net 435,256 449,683
Other Assets:
Cash and cash equivalents 5,076 21,118
Debt issue costs, net 555 831
Interest receivable 1,802 2,010
Straight-line rent receivable, net of
allowance for doubtful 16,532 13,900
accounts: 2009 -- $413; 2008 -- $140
Prepaid expenses and other assets 8,767 9,148
Notes receivable 2,553 2,895
Marketable securities 6,472 6,468
Total Assets $ 477,013 $ 506,053
LIABILITIES AND EQUITY
Bank borrowings $ -- $ --
Mortgage loans payable 7,728 32,063
Bonds payable 4,225 4,690
Accrued interest 67 251
Accrued expenses and other liabilities 6,931 5,015
Distributions payable 2,967 3,022
Total Liabilities 21,918 45,041
Stockholders' equity:
Preferred stock $0.01 par value; 15,000
shares authorized;
shares issued and outstanding: 2009 -- 186,801 189,560
7,932; 2008 -- 8,042
Common stock: $0.01 par value; 45,000
shares authorized;
shares issued and outstanding: 2009 -- 232 231
23,215; 2008 -- 23,136
Capital in excess of par value 323,905 321,979
Cumulative net income 566,640 533,565
Other 418 735
Cumulative distributions (626,035 ) (588,192 )
Total LTC Properties, Inc. Stockholders' 451,961 457,878
Equity
Noncontrolling interests 3,134 3,134
Total Equity 455,095 461,012
Total Liabilities and Equity $ 477,013 $ 506,053
LTC PROPERTIES, INC.
SUPPLEMENTAL INFORMATION
(Unaudited, dollar amounts in thousands)
Non-Cash Revenue Components
3Q09 4Q09(1) 1Q10(1) 2Q10(1) 3Q10
Straight-line rent $ 1,036 $ 993 $ 789 $ 758 $ 670
Amort. Lease break fee (164 ) (164 ) (164 ) (164 ) (164 )
Net $ 872 $ 829 $ 625 $ 594 $ 506
(1) Projections based on current in-place leases and do not assume any
increase in straight-line rent from acquisitions.
Maturities
2009 2010 2011 2012 2013
Lease Maturities -- -- 1 lease on 3 leases on 2 leases on
1 property 3 properties 2 properties
Mortgage Loan
Receivable Maturities $ -- $ 646 $ 7,301 $ 2,221 $ 16,212
(1)
Debt Maturities (1) $ -- $ 7,581 (2) $ -- $ -- $ --
(1) Represents principal amount due at maturity.
(2) 8.7% fixed prepayable May 1. Represents principal amount due at maturity.
Note: At September 30, 2009, the Company had a floating rate debt balance of
$4,225 at an all-in floating rate of 2.24%. This debt amortizes to $720 which
is due in 2015 and is redeemable at anytime.
Portfolio Snapshot
Nine months ended
9/30/09 Number
% of of Investment
Revenues Number of Beds/ per
Type of Gross % of Rental Interest (3) Properties Units Bed/Unit
Property Investments Investments Income Income (1)
(2)
Assisted
Living $ 282,209 48.9 % $ 22,484 $ 2,312 48.2 % 101 4,598 $ 61.38
Properties
Skilled
Nursing 282,220 48.9 % 21,573 3,996 49.7 % 99 11,460 $ 24.63
Properties
Schools 13,020 2.2 % 885 230 2.1 % 2 N/A N/A
Totals $ 577,449 100.0 % $ 44,942 $ 6,538 100.0 % 202 16,058
(1) See the Company's Annual Report on Form 10-K for the year ended December 31, 2008, Item 1.
Business General - Owned Properties for discussion of bed/unit count.
(2) Includes Interest Income from Mortgage Loans.
(3) Includes Rental Income and Interest Income from Mortgage Loans.
Balance Sheet Metrics
Three Months Ended
9/30/09 6/30/09 3/31/09 12/31/08 9/30/08
Debt to book 2.6% (1) 5.3% (3) 7.3% 7.4% 7.4%
capitalization ratio
Debt & Preferred Stock
to book capitalization 42.6% (1) 44.1% (3) 45.2% 45.5% 45.3%
ratio
Debt to market 1.6% (1) 3.8% (3) 5.9% (5) 5.4% (5) 4.2%
capitalization ratio
Debt & Preferred Stock
to market 25.3% (1) 29.5% (3) 32.8% (5) 30.1% (5) 23.0%
capitalization ratio
Interest coverage 45.2x (2) 18.7x (2) 17.7x (4) 15.4x (6) 17.1x
ratio
Fixed charge coverage 3.7x (2) 3.3x 3.4x (4) 3.1x (6) 3.2x
ratio
(1) Decrease primarily due to the repayment of $23.9 million of mortgage debt in
June and July 2009.
(2) Increase primarily due to the decrease in interest expense relating to the
repayment of debt.
(3) Decrease primarily due to the repayment of $15.8 million on two mortgage
loans secured by 10 assisted living properties located in various states.
(4) Increase primarily due to increases in rental income resulting from lease
restructuring and one-time interest income resulting from the prepayment of a
mortgage loan.
(5) Increase primarily due to the decrease in market capitalization.
(6) Decrease is due primarily to non-payment of rental income and mortgage
interest income from affiliates of Sunwest Management, Inc., loan pay-offs and
lower invested cash balances at lower interest rates, partially offset by lower
interest expense due to debt paid off in 2008. Additionally in the fourth
quarter of 2008, we incurred $0.6 million of one-time charges related primarily
to lease/loan defaults and terminated transactions.
Source: LTC Properties, Inc.
Released November 5, 2009