SBRA

Sabra Reports Third Quarter 2024 Results; Updates 2024 Guidance

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      <h1 class="epi-fontLg" style="font-size: 24px; font-weight: bold;">Sabra Reports Third Quarter 2024 Results; Updates 2024 Guidance</h1>
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      <time datetime="2024-10-31T20:05:00Z" itemprop="dateModified">October 31, 2024 04:05 PM Eastern Daylight Time</time>
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      <p>TUSTIN, Calif.--(<span itemprop="provider publisher copyrightHolder" itemscope="itemscope" itemtype="https://schema.org/Organization" itemid="https://www.businesswire.com"><span itemprop="name"><a referrerpolicy="unsafe-url" rel="nofollow" itemprop="url" href="https://www.businesswire.com/">BUSINESS WIRE</a></span></span>)--Sabra Health Care REIT, Inc. (“Sabra,” the “Company” or “we”) (Nasdaq: SBRA) today announced its results of operations for the third quarter of 2024.</p>
      <p><b><i><span class="bwuline" style="text-decoration: underline;">THIRD QUARTER 2024 RESULTS AND RECENT EVENTS</span></i></b></p>
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          Results per diluted common share for the third quarter of 2024 were as follows:
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            <li>Net Income: $0.13</li>
            <li>FFO: $0.34</li>
            <li>Normalized FFO: $0.35</li>
            <li>AFFO: $0.36</li>
            <li>Normalized AFFO: $0.37</li>
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          EBITDARM Coverage Summary:
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            <li>Skilled Nursing/Transitional Care: 1.94x</li>
            <li>Senior Housing - Leased: 1.37x</li>
            <li>Behavioral Health, Specialty Hospitals and Other: 3.68x</li>
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        <li>Same store managed senior housing Cash NOI increased 17.8% on a year-over-year basis.</li>
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        <li>As previously announced, in the third quarter of 2024, Sabra closed on the $75.8 million acquisition of two managed senior housing communities operated by the Leo Brown Group, with an initial expected cash yield of 8.1%. Additionally, subsequent to quarter end, Sabra closed on another managed senior housing community operated by the Leo Brown Group for $24.0 million with an initial expected cash yield of 8.6%.</li>
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        <li>As previously announced, in the third quarter of 2024, Sabra closed on the disposition of four skilled nursing facilities for gross proceeds of $34.9 million with a trailing twelve-month cash yield of 4.0%.</li>
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        <li>This year through September 30, 2024, Sabra has utilized the forward feature under its at-the-market equity offering program to allow for the sale of up to 7.3 million shares at an initial weighted average price of $15.41 per share, net of commissions. As of September 30, 2024, 2.2 million shares remained outstanding under the forward sale agreements, with an initial weighted average price of $16.77 per share, net of commissions.</li>
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        <li>As of September 30, 2024, Net Debt to Adjusted EBITDA was 5.30x.</li>
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        <li>On October 31, 2024, Sabra’s Board of Directors declared a quarterly cash dividend of $0.30 per share of common stock. The dividend will be paid on November 29, 2024, to common stockholders of record as of the close of business on November 15, 2024.</li>
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      <p><b><i><span class="bwuline" style="text-decoration: underline;">2024 GUIDANCE</span></i></b></p>
      <p>Sabra is updating its 2024 earnings guidance ranges as follows (attributable to common stockholders, per diluted common share):</p>
      <p><span class="bwuline" style="text-decoration: underline;">Updated Guidance</span></p>
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        <li>Net Income: $0.48 - $0.49</li>
        <li>FFO: $1.35 - $1.36</li>
        <li>Normalized FFO: $1.39 - $1.40</li>
        <li>AFFO: $1.41 - $1.42</li>
        <li>Normalized AFFO: $1.43 - $1.44</li>
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      <p><span class="bwuline" style="text-decoration: underline;">Previous Guidance</span></p>
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        <li>Net Income: $0.48 - $0.51</li>
        <li>FFO: $1.33 - $1.36</li>
        <li>Normalized FFO: $1.36 - $1.39</li>
        <li>AFFO: $1.39 - $1.42</li>
        <li>Normalized AFFO: $1.41 - $1.44</li>
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      <p>Guidance ranges assume year-over-year same store Cash NOI growth in the mid-to-high teens for the managed senior housing portfolio. Guidance also incorporates all announced investment and disposition activity, as well as announced activity under the at-the-market equity offering program. Guidance does not assume additional investment, disposition or capital transactions beyond those already disclosed.</p>
      <p>The foregoing guidance ranges reflect management’s view of current and future market conditions. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth above. Except as otherwise required by law, the Company assumes no, and hereby disclaims any, obligation to update any of the foregoing guidance ranges as a result of new information or new or future developments.</p>
      <p>Commenting on the third quarter’s results, Rick Matros, CEO and Chair, said, “It feels good to be providing essentially the same update as the last several quarters. Skilled nursing and managed senior housing continue to see higher occupancy and margins. EBITDARM coverage for our skilled nursing portfolio has surpassed 2019 levels, while our triple net senior housing portfolio is approaching that milestone. Among our key triple-net relationships, the only tenant that saw a sequential coverage decline was Avamere, but that was specifically due to the percentage rent we have been collecting as performance improves. Avamere’s coverage remains healthy, and the lease restructure has worked out exactly as anticipated.</p>
      <p>Leverage continues to tick down. Investments for the quarter and subsequent to quarter end totaled roughly $100 million, including those previously announced. Our investment pipeline has seen increased activity, and we are currently reviewing more potential investments than we have seen all year.</p>
      <p>Additionally, we have increased the midpoint of our guidance, which implies year-over-year earnings growth of more than 6% for the full year.”</p>
      <p><b>LIQUIDITY</b></p>
      <p>As of September 30, 2024, we had approximately $947.8 million of liquidity, consisting of unrestricted cash and cash equivalents of $63.0 million, available borrowings under our revolving credit facility of $847.4 million and $37.4 million related to shares outstanding under forward sale agreements under our ATM program. As of September 30, 2024, we also had $386.7 million available under the ATM program.</p>
      <p><b>CONFERENCE CALL AND COMPANY INFORMATION</b></p>
      <p>A conference call with a simultaneous webcast to discuss the 2024 third quarter results will be held on Friday, November 1, 2024, at 10:00 am Pacific Time. The webcast URL is <a referrerpolicy="unsafe-url" target="_blank" href="https://cts.businesswire.com/ct/CT?id=smartlink&amp;url=https%3A%2F%2Fevents.q4inc.com%2Fattendee%2F444925126&amp;esheet=54145036&amp;newsitemid=20241031740142&amp;lan=en-US&amp;anchor=https%3A%2F%2Fevents.q4inc.com%2Fattendee%2F444925126&amp;index=1&amp;md5=0857543e3e8a0f7bf84a8b5a69235d91" rel="nofollow" shape="rect">https://events.q4inc.com/attendee/444925126</a>. The dial-in number for U.S. participants is (888) 880-4448. For participants outside the U.S., the dial-in number is (646) 960-0572. The conference ID number is 1382596. A digital replay of the call will be available on the Company’s website at <a referrerpolicy="unsafe-url" target="_blank" href="https://cts.businesswire.com/ct/CT?id=smartlink&amp;url=http%3A%2F%2Fwww.sabrahealth.com&amp;esheet=54145036&amp;newsitemid=20241031740142&amp;lan=en-US&amp;anchor=www.sabrahealth.com&amp;index=2&amp;md5=99f523b614d6cb4a7b8076fb98cdc77e" rel="nofollow" shape="rect">www.sabrahealth.com</a>. The Company’s supplemental information package for the third quarter will also be available on the Company’s website in the “Investors” section.</p>
      <p><b>ABOUT SABRA</b></p>
      <p>As of September 30, 2024, Sabra’s investment portfolio included 373 real estate properties held for investment (consisting of (i) 233 skilled nursing/transitional care facilities, (ii) 39 senior housing communities (“senior housing - leased”), (iii) 68 senior housing communities operated by third-party property managers pursuant to property management agreements (“senior housing - managed”), (iv) 18 behavioral health facilities and (v) 15 specialty hospitals and other facilities), 14 investments in loans receivable (consisting of three mortgage loans and 11 other loans), five preferred equity investments and two investments in unconsolidated joint ventures. As of September 30, 2024, Sabra’s real estate properties held for investment included 37,793 beds/units, spread across the United States and Canada.</p>
      <p><b>FORWARD-LOOKING STATEMENTS SAFE HARBOR</b></p>
      <p>This release contains “forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. Any statements that do not relate to historical or current facts or matters are forward-looking statements. These statements may be identified, without limitation, by the use of “expects,” “believes,” “intends,” “should” or comparable terms or the negative thereof. Examples of forward-looking statements include all statements regarding our expectations regarding earnings growth; and our other expectations regarding our future financial position (including our earnings guidance for 2024, as well as the assumptions set forth therein), our expectations regarding occupancy, results of operations, cash flows, liquidity, business strategy, growth opportunities, potential investments and dispositions and our expectations regarding our investment activity, and plans and objectives for future operations and capital raising activity.</p>
      <p>Our actual results may differ materially from those projected or contemplated by our forward-looking statements as a result of various factors, including, among others, the following: increased labor costs and historically low unemployment; increases in market interest rates and inflation; pandemics or epidemics, including COVID-19, and the related impact on our tenants, borrowers and senior housing - managed communities; operational risks with respect to our senior housing - managed communities; competitive conditions in our industry; the loss of key management personnel; uninsured or underinsured losses affecting our properties; potential impairment charges and adjustments related to the accounting of our assets; the potential variability of our reported rental and related revenues as a result of Accounting Standards Update (“ASU”) 2016-02, Leases, as amended by subsequent ASUs; risks associated with our investment in our unconsolidated joint ventures; catastrophic weather and other natural or man-made disasters, the effects of climate change on our properties and a failure to implement sustainable and energy-efficient measures; increased operating costs and competition for our tenants, borrowers and senior housing - managed communities; increased healthcare regulation and enforcement; our tenants’ dependency on reimbursement from governmental and other third-party payor programs; the effect of our tenants, operators or borrowers declaring bankruptcy or becoming insolvent; our ability to find replacement tenants and the impact of unforeseen costs in acquiring new properties; the impact of litigation and rising insurance costs on the business of our tenants; the impact of required regulatory approvals of transfers of healthcare properties; environmental compliance costs and liabilities associated with real estate properties we own; our tenants’, borrowers’ or operators’ failure to adhere to applicable privacy and data security laws, or a material breach of our or our tenants’, borrowers’ or operators’ information technology; our concentration in the healthcare property sector, particularly in skilled nursing/transitional care facilities and senior housing communities, which makes our profitability more vulnerable to a downturn in a specific sector than if we were investing in multiple industries; the significant amount of and our ability to service our indebtedness; covenants in our debt agreements that may restrict our ability to pay dividends, make investments, incur additional indebtedness and refinance indebtedness on favorable terms; adverse changes in our credit ratings; our ability to make dividend distributions at expected levels; our ability to raise capital through equity and debt financings; changes and uncertainty in macroeconomic conditions and disruptions in the financial markets; risks associated with our ownership of property outside the U.S., including currency fluctuations; the relatively illiquid nature of real estate investments; our ability to maintain our status as a real estate investment trust (“REIT”) under the federal tax laws; compliance with REIT requirements and certain tax and tax regulatory matters related to our status as a REIT; changes in tax laws and regulations affecting REITs; the ownership limits and takeover defenses in our governing documents and under Maryland law, which may restrict change of control or business combination opportunities; and the exclusive forum provisions in our bylaws.</p>
      <p>Additional information concerning risks and uncertainties that could affect our business can be found in our filings with the Securities and Exchange Commission (the “SEC”), including in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023. We do not intend, and we undertake no obligation, to update any forward-looking information to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events, unless required by law to do so.</p>
      <p><b>TENANT AND BORROWER INFORMATION</b></p>
      <p>This release includes information regarding certain of our tenants that lease properties from us and our borrowers, most of which are not subject to SEC reporting requirements. The information related to our tenants and borrowers that is provided in this release has been provided by, or derived from information provided by, such tenants and borrowers. We have not independently verified this information. We have no reason to believe that such information is inaccurate in any material respect. We are providing this data for informational purposes only.</p>
      <p><b>NOTE REGARDING NON-GAAP FINANCIAL MEASURES</b></p>
      <p>This release includes the following financial measures defined as non-GAAP financial measures by the SEC: Net Debt to Adjusted EBITDA, funds from operations (“FFO”), Normalized FFO, Adjusted FFO (“AFFO”), Normalized AFFO, FFO per diluted common share, Normalized FFO per diluted common share, AFFO per diluted common share, Normalized AFFO per diluted common share, net operating income (“NOI”) and Cash NOI. These measures may be different than non-GAAP financial measures used by other companies, and the presentation of these measures is not intended to be considered in isolation or as a substitute for financial information prepared and presented in accordance with U.S. generally accepted accounting principles. An explanation of these non-GAAP financial measures is included under “Reporting Definitions” in this release, and reconciliations of these non-GAAP financial measures to the GAAP financial measures we consider most comparable are included on the Investors section of our website at <a referrerpolicy="unsafe-url" target="_blank" href="https://cts.businesswire.com/ct/CT?id=smartlink&amp;url=https%3A%2F%2Fir.sabrahealth.com%2Finvestors%2Ffinancials%2Fquarterly-results&amp;esheet=54145036&amp;newsitemid=20241031740142&amp;lan=en-US&amp;anchor=https%3A%2F%2Fir.sabrahealth.com%2Finvestors%2Ffinancials%2Fquarterly-results&amp;index=3&amp;md5=a3bcdea060702b1f7ebe71aa923c29be" rel="nofollow" shape="rect">https://ir.sabrahealth.com/investors/financials/quarterly-results</a>.</p>
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              <td class="bwpadl0 bwalignc" colspan="16" rowspan="1"><p class="bwcellpmargin bwalignc" style="font-weight:bold;">SABRA HEALTH CARE REIT, INC.</p></td>
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              <td class="bwpadl0 bwalignc" colspan="16" rowspan="1"><p class="bwcellpmargin bwalignc" style="font-weight:bold;">CONSOLIDATED STATEMENTS OF INCOME (LOSS)</p></td>
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              <td class="bwpadl0 bwalignc" colspan="16" rowspan="1"><p class="bwcellpmargin bwalignc">(dollars in thousands, except per share data)</p></td>
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        <h2 style="font-size: 18px; margin-bottom: 10px;">Contacts</h2>
        <p>Investor &amp; Media Inquiries: (888) 393-8248 or <a referrerpolicy="unsafe-url" target="_blank" href="mailto:investorinquiries@sabrahealth.com" rel="nofollow" shape="rect">investorinquiries@sabrahealth.com</a></p>
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Sabra's Q3 2024 net income was $29.8 million or $0.13/share.
Same store managed senior housing Cash NOI rose 17.8% year-over-year.
They completed $75.8M acquisition and $34.9M facility disposition.
Adjusted EBITDA was approximately $230.6 million through Q3 2024.
2024 normalized FFO guidance revised to $1.39 - $1.40 per share.

Sabra Reports Third Quarter 2024 Results; Updates 2024 Guidance

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