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Sabra Reports Second Quarter 2013 Results And Declares Quarterly Dividends; Amends And Expands Revolving Credit Facility; Agrees To Terms On A New Pipeline Agreement; Reaffirms 2013 Guidance

Stocks in this article: SBRA

IRVINE, Calif., July 31, 2013 (GLOBE NEWSWIRE) -- Sabra Health Care REIT, Inc. ("Sabra," the "Company" or "we") (Nasdaq:SBRA) today announced results of operations for the second quarter of 2013, a new pipeline agreement and reaffirmed its 2013 guidance.


  • For the second quarter of 2013, FFO, Normalized FFO, AFFO, Normalized AFFO and net (loss) income attributable to common stockholders per diluted common share were $0.13, $0.41, $0.15, $0.41 and $(0.09), respectively, compared to $0.36, $0.37, $0.42, $0.42 and $0.16, respectively, for the second quarter of 2012. FFO and AFFO were normalized to eliminate the impact of non-recurring expenses associated with our capital raising activities.  
  • During the second quarter, we originated a $12.4 million mezzanine loan to an entity having a portfolio of twelve skilled nursing facilities. The mezzanine loan has an 18-month term with an option to extend the maturity an additional six months and bears interest at a fixed rate of 12.0% per annum. We also have an option to purchase up to $50.0 million of properties within the portfolio.  
  • During the second quarter, we purchased a 32-unit assisted living facility located in Woodstock, Virginia for $6.2 million.  
  • During the second quarter, we completed an underwritten public offering of $200 million aggregate principal amount of 5.375% senior unsecured notes due in 2023 (the "2023 Notes"). The notes were sold at par, resulting in gross proceeds of $200.0 million and net proceeds of approximately $194.9 million after deducting commissions and expenses.  
  • During the second quarter, we redeemed $113.8 million of the $325 million aggregate principal amount outstanding of 8.125% senior unsecured notes (the "2018 Notes"), representing 35% of the aggregate principal amount of the 2018 Notes outstanding. The 2018 Notes were redeemed at a redemption price of 108.125% of the principal amount redeemed, plus accrued and unpaid interest up to the redemption date.   
  • On July 29, 2013, we agreed to terms on a non-binding term sheet with Meridian Realty Advisors ("Meridian") to acquire newly constructed senior housing, memory care and skilled nursing properties with an estimated aggregate cost of $100.0 million.  
  • On July 29, 2013, we amended and restated our secured revolving credit facility to increase our borrowing capacity to $375.0 million, improve pricing terms and include an accordion feature that allows us to increase the borrowing availability up to $600.0 million, subject to terms and conditions.  
  • With our 2013 capital raising activities (inclusive of the $100.0 million available under our ATM program), our total potential capital for acquisitions increased to over $550.0 million.  
  • On July 31, 2013, our board of directors declared a quarterly cash dividend of $0.34 per share of common stock. The dividend will be paid on August 30, 2013 to common stockholders of record as of the close of business on August 15, 2013.  
  • Also on July 31, 2013, our board of directors declared a quarterly cash dividend of $0.4453125 per share of Series A Preferred Stock. The dividend will be paid on August 30, 2013 to preferred stockholders of record as of the close of business on August 15, 2013.

Commenting on the second quarter results, Rick Matros, CEO and Chairman, said, "Although deal activity was light for the quarter, our pipeline showed an increase in activity by the end of the quarter and continues to be healthy at approximately $300.0 million, comprised of approximately 65% senior housing assets and 35% skilled nursing/post-acute assets. We expect to hit our targeted range of investments for 2013 and we reaffirm our guidance as well, which excludes the impact of future investment activity. The operating statistics of our tenants were strong this quarter. Skilled nursing/post-acute EBITDARM and EBITDAR rent coverages were up over second quarter of 2012 for the first time since the 2011 Centers for Medicare & Medicaid Services ("CMS") rate changes both for our total portfolio and on a same store basis. Our stabilized senior housing portfolio EBITDARM and EBITDAR rent coverages improved on a same store basis for the quarter. Skilled mix was slightly down 50 basis points for the quarter compared to the second quarter of 2012, which was the narrowest year-over-year margin we have seen in two years. However, skilled mix was up sequentially for the first time since the CMS changes in 2011 and hospital observation days began to significantly impact skilled mix, increasing 180 basis points to 38.3%. Occupancy for the skilled nursing/post-acute portfolio was down 80 basis points year over year while our senior housing portfolio was up 320 basis points year over year. We expect to see rent coverage continue to improve particularly in the Genesis portfolio as a result of the realization of synergies, the unexpected mitigation of sequestration, and improving skilled mix. We also expect to announce additional development programs, primarily in assisted living and memory care asset classes."

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