LTC Announces Fourth Quarter Operating Results
WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)-- LTC Properties, Inc. (NYSE:LTC) released results of operations for the three and twelve months ended December 31, 2008 and announced that net income available to common stockholders for the fourth quarter was $6.0 million or $0.26 per diluted share. For the same period in 2007, net income available to common stockholders was $6.9 million or $0.30 per diluted share. This 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 the Company incurred $0.6 million, or $0.03 per diluted share, of one-time charges in the fourth quarter of 2008 related primarily to lease/loan defaults and terminated transactions. Revenues for the three months ended December 31, 2008, were $16.7 million versus $18.0 million for the same period last year.
The Company announced that during the fourth quarter of 2008 it invested approximately $1.4 million in a mortgage loan on a skilled nursing property with 84 beds located in Utah. This loan has an initial interest rate of 10.0% increasing 0.15% annually, with a 20-year amortization and matures in 11 years.
The Company also announced that for the twelve months ended December 31, 2008, net income available to common stockholders was $28.6 million or $1.24 per diluted share. For the same period in 2007, net income available to common stockholders was $30.8 million or $1.32 per diluted share. Revenues for the twelve months ended December 31, 2008, were $69.4 million compared to $74.8 million for the same period last year.
The Company has scheduled a conference call for Thursday, February 26, 2009, at 10:00 a.m. Pacific time, in order to comment on the Company's performance and operating results for the quarter ended December 31, 2008. 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 February 26, 2009 through March 12, 2009. Callers can access the replay by dialing 888-567-0341 or 402-220-4372 and entering encore passcode number 81778411.
At December 31, 2008, LTC had investments in 101 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.
LTC filed its Form 10-K with the Securities and Exchange Commission on February 25, 2009. Shareholders have the ability to receive a hard copy of the complete audited financial statements free of charge upon request by contacting our corporate office or by visiting our 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)
Three Months Ended Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
(unaudited)
Revenues:
Rental income $ 14,223 $ 14,551 $ 57,562 $ 57,841
Interest income from mortgage 2,023 2,620 9,708 12,502
loans
Interest and other income 414 851 2,087 4,447
Total revenues 16,660 18,022 69,357 74,790
Expenses:
Interest expense 953 1,240 4,114 4,957
Depreciation and amortization 3,793 3,610 14,960 14,305
Legal expenses 116 21 251 260
Operating and other expenses 1,907 1,909 6,840 7,229
Total expenses 6,769 6,780 26,165 26,751
Income before minority 9,891 11,242 43,192 48,039
interest
Minority interest (77 ) (85 ) (307 ) (343 )
Income from continuing 9,814 11,157 42,885 47,696
operations
Discontinued operations:
(Loss) from discontinued -- (8 ) -- (47 )
operations
(Loss) gain on sale of assets, -- (43 ) 92 106
net
Net (loss) income from -- (51 ) 92 59
discontinued operations
Net income 9,814 11,106 42,977 47,755
Preferred stock buyback -- -- 989 --
Preferred stock dividends (3,841 ) (4,224 ) (15,390 ) (16,923 )
Net income available to common $ 5,973 $ 6,882 $ 28,576 $ 30,832
stockholders
Net Income per Common Share
from Continuing Operations net
of Preferred Stock Dividends
and Preferred Stock Buyback:
Basic $ 0.26 $ 0.30 $ 1.24 $ 1.33
Diluted $ 0.26 $ 0.30 $ 1.24 $ 1.32
Net Income per Common Share
from Discontinued Operations:
Basic $ -- $ -- $ -- $ --
Diluted $ -- $ -- $ -- $ --
Net Income per Common Share
Available to Common
Stockholders:
Basic $ 0.26 $ 0.30 $ 1.24 $ 1.33
Diluted $ 0.26 $ 0.30 $ 1.24 $ 1.32
Basic weighted average shares 23,043 22,754 22,974 23,215
outstanding
NOTE: 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. 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 available to common stockholders.
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 available 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 available to common stockholders determined in accordance with accounting principles generally accepted in the United States.
The following table reconciles net income available to common stockholders to funds from operations available to common stockholders (unaudited, amounts in thousands, except per share amounts):
Three Months Ended Twelve Months Ended
December 31, December 31,
2008 2007 2008 2007
Net income available to common $ 5,973 $ 6,882 $ 28,576 $ 30,832
stockholders
Add: Real estate depreciation 3,793 3,618 14,960 14,352
Add: Non-cash compensation 306 631 1,229 2,242
charges
Add loss/ less (gain) on sale of -- 43 (92 ) (106 )
assets, net
FFO available to common $ 10,072 $ 11,174 $ 44,673 $ 47,320
stockholders
Less: Non-cash compensation (306 ) (631 ) (1,229 ) (2,242 )
charges
FFO including non-cash $ 9,766 $ 10,543 $ 43,444 $ 45,078
compensation charges
Basic FFO available to common $ 0.44 $ 0.49 $ 1.94 $ 2.04
stockholders per share
Diluted FFO available to common $ 0.43 $ 0.48 $ 1.91 $ 1.99
stockholders per share
Basic FFO including non-cash $ 0.42 $ 0.46 $ 1.89 $ 1.94
compensation charges per share
Diluted FFO including non-cash $ 0.42 $ 0.46 $ 1.86 $ 1.90
compensation charges per share
Basic weighted average shares 23,043 22,754 22,974 23,215
outstanding
Weighted average shares used to 25,211 25,337 25,310 25,828
calculate diluted FFO per share
Basic FFO including non-cash $ 9,766 $ 10,543 $ 43,444 $ 45,078
compensation charges
Diluted FFO including non-cash $ 10,604 $ 11,532 $ 47,133 $ 49,064
compensation charges
LTC PROPERTIES, INC.
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share amounts)
December 31, 2008 December 31, 2007
ASSETS
Real Estate Investments:
Buildings and improvements, net of
accumulated depreciation and amortization: $ 337,171 $ 342,222
2008 -- $130,475; 2007 -- $115,766
Land 34,971 34,429
Properties held for sale, net of
accumulated depreciation and amortization: -- 463
2008 -- $0; 2007 -- $0
Mortgage loans receivable, net of
allowance for doubtful accounts: 2008 -- 77,541 91,278
$760; 2007 -- $890
Real estate investments, net 449,683 468,392
Other Assets:
Cash and cash equivalents 21,118 42,631
Debt issue costs, net 831 326
Interest receivable 2,010 2,553
Straight-line rent receivable, net of
allowance for doubtful accounts: 2008 -- 13,900 10,548
$140; 2007 -- $0
Prepaid expenses and other assets 9,148 9,899
Notes receivable 2,895 3,292
Marketable securities 6,468 6,464
Total Assets $ 506,053 $ 544,105
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank borrowings $ -- $ --
Mortgage loans payable 32,063 47,165
Bonds payable 4,690 5,130
Accrued interest 251 349
Accrued expenses and other liabilities 5,015 5,381
Distributions payable 3,022 3,406
Total Liabilities 45,041 61,431
Minority interest 3,134 3,518
Stockholders' equity:
Preferred stock $0.01 par value; 15,000
shares authorized; shares issued and 189,560 208,553
outstanding: 2008 -- 8,042; 2007 -- 8,802
Common stock: $0.01 par value; 45,000
shares authorized; shares issued and 231 229
outstanding: 2008 -- 23,136; 2007 --
22,872
Capital in excess of par value 321,979 316,609
Cumulative net income 533,565 490,588
Other 735 956
Cumulative distributions (588,192 ) (537,779 )
Total Stockholders' Equity 457,878 479,156
Total Liabilities and Stockholders' Equity $ 506,053 $ 544,105
LTC PROPERTIES, INC.
SUPPLEMENTAL INFORMATION
(Unaudited, dollar amounts in thousands)
Non-Cash Revenue Components
4Q08 1Q09(1) 2Q09(1) 3Q09(1) 4Q09(1)
Straight-line rent $ 875 $ 1,147 $ 1,055 $ 1,007 $ 906
Amort. Lease break fee (161 ) (162 ) (162 ) (162 ) (162 )
Net $ 714 $ 985 $ 893 $ 845 $ 744
(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 2 leases on 1 lease on 3 leases on 2 leases on
Maturities 2 -- 1 property 3 properties 2 properties
properties
Mortgage
Loan
Receivable $7,616 $652 $7,537 $2,249 $16,096
Maturities
(1)
Debt $23,675 (2) $7,581 (3) -- -- --
Maturities
(1) Represents amount due at maturity.
(2) $15,627 at 8.8% fixed, prepayable June 1 and $8,048 at 8.4% fixed,
prepayable July 1.
(3) 8.7% fixed prepayable May 1.
Note: At December 31, 2008, the Company had a floating rate debt balance of
$4,690 at an all-in floating rate of 4.8%. This debt amortizes to $720 which is
due in 2015 and is not prepayable.
Portfolio Snapshot
Year ended
12/31/08 # of
% of # of Beds/ Investment
Interest Revenues Properties Units per
Type of Gross % of Rental Income (3) (1) Bed/Unit
Property Investments Investments Income (2)
Assisted
Living $ 282,084 48.6 % $ 28,046 $ 3,063 46.2 % 101 4,598 $ 61.35
Properties
Skilled
Nursing 285,814 49.2 % 28,349 6,338 51.6 % 101 11,707 $ 24.41
Properties
Schools 13,020 2.2 % 1,167 307 2.2 % 2 N/A N/A
Totals $ 580,918 100.0 % $ 57,562 $ 9,708 100.0 % 204 16,305
(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
12/31/08 9/30/08 6/30/08 3/31/08 12/31/07
Debt to book
capitalization 7.4 % 7.4 % 7.4 % (4) 10.0 % 9.8 %
ratio
Debt &
Preferred
Stock to book 45.8 % 45.6 % 45.5 % (4) 47.0 % 49.1 %
capitalization
ratio
Debt to market
capitalization 5.5 % (1) 4.2 % 4.6 % (4) 6.2 % 6.4 %
ratio
Debt &
Preferred
Stock to 30.2 % (1) 23.1 % 26.9 % (4) 28.7 % 30.1 %
market
capitalization
ratio
Interest 15.4x (2) 17.1x (3) 15.0x (3) 13.6x 13.0x
coverage ratio
Fixed charge 3.1x 3.2x 3.3x 3.2x 2.9x
coverage ratio
(1) Increase primarily due to the decrease in market capitalization.
(2) This 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.
(3) Increase primarily due to decrease in interest expense relating to repayment of
a $14.2 million mortgage loan secured by four assisted living properties located in
Ohio.
(4) Decrease due to repayment of a $14.2 million mortgage loan secured by four
assisted living properties located in Ohio.
Source: LTC Properties, Inc.
Released February 25, 2009