LTC Announces Second Quarter Operating Results
WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)-- LTC Properties, Inc. (NYSE:LTC) released results of operations for the three and six months ended June 30, 2009 and announced that net income allocable to common stockholders for the second quarter was $6.8 million or $0.30 per diluted share. For the same period in 2008, net income allocable to common stockholders was $7.5 million or $0.33 per diluted share. Revenues for the three months ended June 30, 2009, were $17.4 million versus $17.9 million for the same period last year.
The Company announced that it had paid $15.8 million related to the repayment of two mortgage loans secured by 10 assisted living properties in the second quarter of 2009. The retired debt bore a weighted average interest rate of 8.81%. Also, the Company invested $0.8 million in the second quarter of 2009 under agreements to expand and renovate five properties operated by four different operators. These investments are at an average yield of 10.4%. The total commitment remaining under these agreements is $2.5 million as of June 30, 2009.
For the six months ended June 30, 2009, net income allocable to common stockholders was $14.8 million or $0.64 per diluted share which includes $0.6 million related to the repurchase of 109,484 share 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 $15.7 million or $0.69 per diluted share which includes $1.0 million related to the repurchase of 636,300 share of preferred stock. Revenues for the six months ended June 30, 2009, were $35.1 million versus $35.7 million for the same period last year.
The Company will conduct a conference call on Thursday, August 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 June 30, 2009. The conference call is accessible by dialing 888-241-0558. The international number is 647-427-3417. The earnings release will be available on our website. An audio replay of the conference call will be available from August 6, 2009 through August 20, 2009. Callers can access the replay by dialing 888-562-2825 or 402-220-7740 and entering encore passcode number 18957585.
At June 30, 2009, LTC had investments in 100 skilled nursing properties, 101 assisted living properties and two schools in 30 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 Six Months Ended
June 30, June 30,
2009 2008 2009 2008
Revenues:
Rental income $ 14,951 $ 14,625 $ 29,981 $ 29,259
Interest income from mortgage 2,106 2,577 4,477 5,235
loans
Interest and other income 328 649 643 1,204
Total revenues 17,385 17,851 35,101 35,698
Expenses:
Interest expense 814 1,085 1,706 2,261
Depreciation and amortization 3,694 3,730 7,395 7,422
Provisions for doubtful accounts 219 (10 ) 371 (10 )
Operating and other expenses 1,918 1,592 3,651 3,428
Total expenses 6,645 6,397 13,123 13,101
Income from continuing 10,740 11,454 21,978 22,597
operations
Discontinued operations:
Gain on sale of assets, net -- -- -- 92
Net income from discontinued -- -- -- 92
operations
Net income 10,740 11,454 21,978 22,689
Income allocated to (76 ) (77 ) (153 ) (154 )
noncontrolling interests
Net income attributable to LTC 10,664 11,377 21,825 22,535
Properties, Inc.
Income allocated to (35 ) (39 ) (71 ) (88 )
participating securities
Income allocated to preferred (3,786 ) (3,847 ) (6,945 ) (6,716 )
stockholders
Net income available to common $ 6,843 $ 7,491 $ 14,809 $ 15,731
stockholders
Basic earnings per common share:
Continuing operations $ 0.30 $ 0.33 $ 0.64 $ 0.68
Discontinued operations $ 0.00 $ 0.00 $ 0.00 $ 0.00
Net income allocable to common $ 0.30 $ 0.33 $ 0.64 $ 0.69
stockholders
Diluted earnings per common
share:
Continuing operations $ 0.30 $ 0.33 $ 0.64 $ 0.68
Discontinued operations $ 0.00 $ 0.00 $ 0.00 $ 0.00
Net income allocable to common $ 0.30 $ 0.33 $ 0.64 $ 0.69
stockholders
Weighted average shares used to
calculate earnings per common
share:
Basic 23,081 22,969 23,070 22,916
Diluted 23,163 23,099 23,151 23,058
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 Six Months Ended
June 30, June 30,
2009 2008 2009 2008
Net income allocable to common $ 6,843 $ 7,491 $ 14,809 $ 15,731
stockholders
Add: Real estate depreciation 3,694 3,730 7,395 7,422
Add: Non-cash compensation 351 306 665 617
charges
Add: Loss/less (gain) on sale of -- -- -- (92 )
assets, net
FFO allocable to common $ 10,888 $ 11,527 $ 22,869 $ 23,678
stockholders
Less: Non-cash compensation (351 ) (306 ) (665 ) (617 )
charges
FFO including non-cash $ 10,537 $ 11,221 $ 22,204 $ 23,061
compensation charges
Basic FFO allocable to common $ 0.47 $ 0.50 $ 0.99 $ 1.03
stockholders per share
Diluted FFO allocable to common $ 0.47 $ 0.49 $ 0.98 $ 1.01
stockholders per share
Diluted FFO allocable to common 23,081 22,969 23,070 22,916
stockholders
Weighted average shares used to
calculate diluted FFO per share 25,343 25,279 25,331 25,238
allocable to common stockholders
Basic FFO including non-cash $ 0.46 $ 0.49 $ 0.96 $ 1.01
compensation charges per share
Diluted FFO including non-cash $ 0.45 $ 0.48 $ 0.95 $ 0.99
compensation charges per share
Diluted FFO including non-cash 23,081 22,969 23,070 22,916
compensation charges
Weighted average shares used to
calculate diluted FFO per share 25,343 25,279 25,331 25,238
including non-cash compensation
charges
LTC PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
June 30, 2009 December 31, 2008
ASSETS (unaudited) (audited)
Real Estate Investments:
Buildings and improvements, net of accumulated
depreciation and amortization: 2009 -- $ 331,575 $ 337,171
$137,808; 2008 -- $130,475
Land 34,971 34,971
Mortgage loans receivable, net of allowance
for doubtful accounts: 2009 -- $740; 2008 -- 73,546 77,541
$760
Real estate investments, net 440,092 449,683
Other Assets:
Cash and cash equivalents 14,108 21,118
Debt issue costs, net 599 831
Interest receivable 1,972 2,010
Straight-line rent receivable, net of
allowance for doubtful accounts: 2009 -- $530; 15,719 13,900
2008 -- $140
Prepaid expenses and other assets 8,577 9,148
Notes receivable 2,703 2,895
Marketable securities 6,470 6,468
Total Assets $ 490,240 $ 506,053
LIABILITIES AND EQUITY
Bank borrowings $ 5,500 $ --
Mortgage loans payable 15,871 32,063
Bonds payable 4,225 4,690
Accrued interest 134 251
Accrued expenses and other liabilities 5,983 5,015
Distributions payable 2,967 3,022
Total Liabilities 34,680 45,041
Stockholders' equity:
Preferred stock $0.01 par value; 15,000 shares
authorized; shares issued and outstanding: 186,801 189,560
2009 -- 7,932; 2008 -- 8,042
Common stock: $0.01 par value; 45,000 shares
authorized; shares issued and outstanding: 232 231
2009 -- 23,177; 2008 -- 23,136
Capital in excess of par value 322,761 321,979
Cumulative net income 555,390 533,565
Other 446 735
Cumulative distributions (613,204 ) (588,192 )
Total LTC Properties, Inc. Stockholders' 452,426 457,878
Equity
Noncontrolling interests 3,134 3,134
Total Equity 455,560 461,012
Total Liabilities and Equity $ 490,240 $ 506,053
LTC PROPERTIES, INC.
SUPPLEMENTAL INFORMATION
(Unaudited, dollar amounts in thousands)
Non-Cash Revenue Components
2Q09 3Q09(1) 4Q09(1) 1Q10(1) 2Q10(1)
Straight-line rent $ 1,057 $ 1,005 $ 904 $ 696 $ 620
Amort. Lease break fee (164 ) (164 ) (164 ) (164 ) (164 )
Net $ 893 $ 841 $ 740 $ 532 $ 456
(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 1 lease on 3 leases on 2 leases on
Maturities -- --
1 property 3 properties 2 properties
Mortgage Loan
Receivable $ 7,544 $ 646 $ 7,455 $ 2,221 $ 16,209
Maturities (1)
Debt $ 8,048 (2) $ 7,581 (3) -- -- --
Maturities (1)
(1) Represents principal amount due at maturity.
(2) $8,048 at 8.4% fixed, prepayable July 1. Subsequent to June 30, 2008, this
loan was paid off.
(3) 8.7% fixed prepayable May 1.
Note: At June 30, 2009, the Company had a floating rate debt balance of $4,225
at an all-in floating rate of 1.3%. This debt amortizes to $720 which is due in
2015 and is redeemable at anytime.
Portfolio Snapshot
Six months ended
6/30/09 Number
Investment
% of Number of of
per
Type of Gross % of Rental Interest Revenues Properties Beds/
(3) Bed/Unit
Property Investments Investments Income Income Units
(2) (1)
Assisted
Living $ 282,132 48.8 % $ 15,021 $ 1,547 48.1 % 101 4,598 $ 61.36
Properties
Skilled
Nursing 283,488 49.0 % 14,371 2,777 49.8 % 100 11,587 $ 24.47
Properties
Schools 13,020 2.2 % 589 153 2.1 % 2 N/A N/A
Totals $ 578,640 100.0 % $ 29,981 $ 4,477 100.0 % 203 16,185
(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.
LTC PROPERTIES, INC.
SUPPLEMENTAL INFORMATION
(Unaudited, dollar amounts in thousands)
Balance Sheet Metrics
Three Months Ended
6/30/09 3/31/09 12/31/08 9/30/08 6/30/08
Debt to book
capitalization 5.3 % (1) 7.3 % 7.4 % 7.4 % 7.4 %
ratio
Debt & Preferred
Stock to book 44.1 % (1) 45.2 % 45.5 % 45.3 % 45.2 %
capitalization
ratio
Debt to market
capitalization 3.8 % (1) 5.9 % (4) 5.4 % (4) 4.2 % (6) 4.6 %
ratio
Debt & Preferred
Stock to market 29.5 % (1) 32.8 % (4) 30.1 % (4) 23.0 % (6) 26.8 %
capitalization
ratio
Interest coverage 18.7x (2) 17.7x (3) 15.4x (5) 17.1x (2) 15.0x
ratio
Fixed charge 3.3x 3.4x 3.1x 3.2x 3.3x
coverage ratio
(1) Decrease primarily due to the repayment of $15.8 million on two mortgage
loans secured by 10 assisted living properties located in various states.
(2) Increase primarily due to decrease in interest expense relating to the
repayment of debt.
(3) 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.
(4) Increase primarily due to the decrease in market capitalization.
(5) 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.
(6) Decrease primarily due to increase in market capitalization.
Source: LTC Properties, Inc.
Released August 5, 2009