American Health Properties Inc. Reports Third Quarter Results for Core and Psychiatric Groups and Declares Dividends.DENVER--(BUSINESS WIRE)--Oct. 15, 1996--The Board of Directors of American Health American Health Inc. is a company that manufactures health supplements. It is located in Holbrook, New York. One of its products is labeled the "Chewable Original Papaya Enzyme" with the attached registered trademark, "The 'After Meal Supplement'". Properties, Inc. today declared a third quarter dividend of $.505 per share on the Company's Core Group Common Stock (NYSE NYSE See: New York Stock Exchange :AHE) and a third quarter dividend of $.65 per Psychiatric psy·chi·at·ric adj. Of or relating to psychiatry. psychiatric adjective Pertaining to psychiatry, mental disorders Group Depositary DEPOSITARY, contracts. He with whom a deposit is confided or made. 2. It is, the essence of the contract of deposits that it should be gratuitous on the part 'of the depositary. 9 M. R. 470. Share (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :AHEPZ), payable November November: see month. 15, 1996 to shareholders of record October October: see month. 31, 1996. The Core Group dividend remains at the same level as the preceding three quarters, consistent with the Company's previously announced plan to generally review the Core Group dividend on an annual basis. Core Group funds from operations Funds From Operations (FFO) Used by real estate and other investment trusts to define the cash flow from trust operations; earnings with depreciation and amortization added back. (FFO FFO See: Funds from operations ) for the third quarter of 1996 increased 14.8% to $13,416,000 ($.57 per share) compared to $11,690,000 ($.56 per share) for the third quarter of 1995. For the nine months ended September September: see month. 30, 1996, Core Group FFO increased 14.0% to $39,177,000 ($1.67 per share) compared to $34,374,000 ($1.64 per share) for the nine months ended September 30, 1995. Average shares outstanding during the 1996 periods increased to 23,500,000 from 20,900,000 during the 1995 periods reflecting an equity offering in October 1995. The financial performance of the psychiatric portfolio as reflected by the Psychiatric Group Depositary Shares (NASDAQ:AHEPZ) was modestly up relative to the second quarter of 1996. Psychiatric Group FFO for the third quarter of 1996 increased to $1,464,000 ($.70 per share) compared to $1,420,000 ($.68 per share) for the second quarter of 1996. Consistent with the Board's announced policy of setting the Psychiatric Group's dividend quarterly based on the FFO of that quarter, the Psychiatric Group's third quarter dividend remains the same as the second quarter dividend at $.65 per share. Joseph P. Sullivan, President and Chief Executive Officer, stated: "As of the end of the third quarter, the Company is in its strongest financial position in several years. The result of our focused investment strategy of only working with experienced operators is a highly seasoned core portfolio with operators coverage ratios of their obligations to the Company reaching 3.9 times overall. "During the quarter, the Company has been active in assisting various operators in the sale or merger of their businesses to larger public health care providers. Examples included the acquisition of Dynamic Health by the Forstmann Forstmann may refer to the one of the Forstmann brothers:
"In each case, our existing leases will be assumed by the acquiring company. We continued funding our second Alzheimer's Noun 1. Alzheimer's - a progressive form of presenile dementia that is similar to senile dementia except that it usually starts in the 40s or 50s; first symptoms are impaired memory which is followed by impaired thought and speech and finally complete helplessness investment and completed the construction funding and commenced the leases on three assisted living as·sist·ed living n. A living arrangement in which people with special needs, especially older people with disabilities, reside in a facility that provides help with everyday tasks such as bathing, dressing, and taking medication. facilities. Our investment efforts are focused on integrated health care integrated health care, n healthcare services combining the best of conventional and complementary health care. delivery systems, the long-term care long-term care (LTC), n the provision of medical, social, and personal care services on a recurring or continuing basis to persons with chronic physical or mental disorders. market and certain situations where we have the opportunity to build a broader relationship with an emerging health care operator." Highlights: Core Group (NYSE:AHE) -- Core Group operating results improved for the comparable periods, reflecting the acquisition of eleven new investments totaling approximately $61.9 million since the first quarter of 1995. Additional rent increased 13.3% for the third quarter of 1996 and 12.2% for the first nine months of 1996 over the comparable periods in 1995, reflecting continued revenue growth at a majority of the Core Group's facilities. -- Core Group net income for the third quarter of 1996 increased 19.9% to $9,873,000 ($.42 per share) on revenues of $20,344,000 as compared to net income of $8,235,000 ($.39 per share) on revenues of $20,304,000 for the third quarter of 1995. For the nine months ended September 30, 1996, Core Group net income increased 17.2% to $28,627,000 ($1.22 per share) on revenues of $60,711,000 as compared to net income of $24,417,000 ($1.17 per share) on revenues of $59,845,000 for the nine months ended September 30, 1995. -- Core Group FFO increased 14.8% on a gross basis to $13,416,000 ($.57 per share) for the third quarter of 1996 from $11,690,000 ($.56 per share) for the third quarter of 1995. For the nine months ended September 30, 1996, Core Group FFO increased 14.0% on a gross basis to $39,177,000 ($1.67 per share) from $34,374,000 ($1.64 per share) for the nine months ended September 30, 1995. The Core Group third quarter dividend of $.505 per share represents a payout ratio Payout Ratio The percentage of earnings paid out in dividends. It is calculated by dividing dividends per share by earnings per share. Notes: The payout ratio indicates how well earnings support the dividend payments: the lower the ratio, the more secure the dividend. of approximately 89% of FFO. -- During the quarter, the Core Group completed the $16 million construction funding of three assisted living facilities and commenced the leases on these facilities with Emeritus e·mer·i·tus adj. Retired but retaining an honorary title corresponding to that held immediately before retirement: a professor emeritus. n. pl. Corporation. The Core Group continued to fund its $2.6 million expansion commitment at one acute care hospital and its $4.4 million construction commitment for the Pine Haven II Alzheimer's Care Center in southwest Houston, Texas “Houston” redirects here. For other uses, see Houston (disambiguation). Houston (pronounced /'hjuːstən/) is the largest city in the state of Texas and the . Highlights: Psychiatric Group Depositary Shares (NASDAQ:AHEPZ) -- Psychiatric Group FFO increased to $.70 per share in the third quarter of 1996 from $.68 per share in the second quarter of 1996. -- For the nine months ended September 30, 1996, Psychiatric Group net income decreased to $3,944,000 ($1.89 per share) on revenues of $6,747,000 as compared to net income of $4,679,000 ($2.24 per share) on revenues of $7,866,000 for the nine months ended September 30, 1995. Psychiatric Group operating results for the comparable periods reflect a decrease in revenue due to the sale of two properties in February February: see month. 1995, the partial deferral deferral - Waiting for quiet on the Ethernet. of rent and interest of two facilities during 1996 and financial advisory and restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). costs in 1996. -- The Psychiatric Group dividend for the third quarter of 1996 remains the same as the second quarter dividend at $.65 per share. It continues to be the policy of the Board to review the dividend for the Psychiatric Group on a quarterly basis and to maintain a dividend payout ratio Dividend Payout Ratio The percentage of earnings paid to shareholders in dividends. Calculated as: for each quarter in excess of 90% of that quarter's FFO. The Psychiatric Group third quarter dividend of $.65 per depositary share represents a payout ratio of approximately 93% of FFO. -- The Company remains committed to optimizing the value of each of the investments in the psychiatric portfolio over time and continues to closely monitor the fundamental changes occurring in the psychiatric industry and their potential impact on individual facilities in the portfolio. The Company recognizes that a successful response to these changes may require restructuring of individual facilities and operators may request interim rent or interest relief while a facility is being restructured to meet the needs of its local or regional market. Each such request is evaluated on its merits and in the context of what is believed to be in the best long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. interests of the Psychiatric Group and the operator. The Company believes a quarterly adjusted dividend rate is also consistent with this period of change in the industry. -- During the third quarter, the Company continued to be in active dialogue with each of its operators. -- The Psychiatric Group completed formal documentation of the previously reported agreement with the operator of the two New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Four Winds facilities to release certain of its security interests in the operator's short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. assets on a staged basis to permit the operator to obtain the capital required to develop an integrated behavioral health Behavioral health was first used in the 1980's to name the combination of the fields mental health and substance abuse. As an example, an organization serving both mental health and substance abuse clients might refer to its practice as behavioral health or care delivery system in lower and upper New York State. Although such a system is intended to address the potential negative consequences of the expected changes in Medicaid Medicaid, national health insurance program in the United States for low-income persons; established in 1965 with passage of the Social Security Amendments and now run by the Centers for Medicare and Medicaid Services. reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. and the increase in managed care penetration in the state of New York, it is not possible to predict the impact and timing of such changes and whether the proposed system will be successful in that new environment. -- As previously reported, the two Florida psychiatric facilities (The Retreat and The Manors) have been experiencing operational and cash flow difficulties during 1996 which have negatively impacted their ability to pay their rental and interest obligations to the Psychiatric Group as they become due. The operator has retained the Intensive Resource Division of Quorum A majority of an entire body; e.g., a quorum of a legislative assembly. A quorum is the minimum number of people who must be present to pass a law, make a judgment, or conduct business. Health Resources Inc. (Quorum) for the management of the facilities. -- The Psychiatric Group completed formal documentation of an agreement with the operator for the deferral of rent and interest payments of The Manors while the operator and Quorum carry out certain restructuring and restaffing of the facility. Pursuant to the deferral arrangements, The Manors monthly base rent payments of $50,000 are deferred from February 1996 through September 1996 and such deferred payments become payable twelve months from the month of deferral. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the terms of the deferral arrangements, The Manors resumed making its full monthly base rent payment of $50,000 on October 1, 1996. The Manors monthly interest payments of approximately $16,600 are deferred from February 1996 until March 1, 1997 on which date all such deferred interest is payable in full. The Manors deferred obligations are not recognized as income or FFO by the Psychiatric Group until such time as they are paid. During the third quarter and first nine months of 1996, The Manors base rent and interest deferrals amounted to approximately $.09 and $.25 per Psychiatric Group Depositary Share, respectively. Although the operator and Quorum are both highly experienced and the new programs appear promising, there can be no assurance as to the eventual outcome of such changes. -- Although The Retreat has made all of its required rental and interest payments in 1996, The Retreat did not pay its July rent until August due to cash flow constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. . The Psychiatric Group continues to monitor the situation while the operator and Quorum restructure and restaff the facility, and there can be no assurance that some measure of rent and interest relief will not be necessary in the future. Quarterly base rent and interest obligations of The Retreat total approximately $285,000, or $.14 per Psychiatric Group Depositary Share. -- As previously reported, Rock Creek Rock Creek may refer to:
See peg. operations and implements its revised business plan. Pursuant to the deferral arrangements, 100% of RCC's monthly base rent payments of $83,000 were deferred for May and June of 1996 and 50% of such monthly payments ($42,000) are deferred from July 1996 through October 1996, at which time monthly base rent is scheduled to return to 100%. Deferred base rent is payable in the future only when the facility's cash exceeds a specified level, and the property tax advance is payable in monthly installments. RCC's deferred rent obligations are not recognized as income or FFO by the Psychiatric Group until such time as they are paid. The Psychiatric Group's property tax advance has been reduced by monthly payments to $168,000 as of September 30, 1996. RCC s rent deferral amounted to approximately $.06 per Psychiatric Group Depositary Share for the third quarter and $.14 per Psychiatric Group Depositary Share for the first nine months of 1996. Although the deferral arrangements provide interim financial relief while the operator implements its strategy, there can be no assurance as to the eventual outcome of these measures. The Board of Directors of the Company will continue to review the Psychiatric Group dividend quarterly. The level of future dividends will continue to be based on the financial performance and cash flows of the Psychiatric Group. In light of the completed restructurings for the Psychiatric Group, we have negotiated a reduction in the quarterly monitoring fee of the Psychiatric Group's outside financial advisor from $75,000 to $25,000 effective October 1, 1996. In addition to the foregoing developments, future cash flows of the Psychiatric Group may be effected by the level of additional rent and interest and the possibility for the payment of additional financial advisory fees. Summary Background Information: On July 25, 1995, the Company completed the distribution of Depositary Shares representing a new class of Psychiatric Group Preferred Stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. to the holders of its Common Stock. Shareholders received one Depositary Share for every ten shares of Common Stock held of record at the close of business on July 14, 1995. The Common Stock represents the Company's approximately $600 million of core investments in acute care hospitals, rehabilitation hospitals Hospital devoted to the rehabilitation of patients with various neurologic, musculoskeletal, orthopedic and other medical conditions following stabilization of their acute medical issues. , long-term care facilities long-term care facility n. See skilled nursing facility. and a medical office building (the "Core Group"). The Psychiatric Group Depositary Shares represent the Company s $64 million of investments in five psychiatric hospitals psychiatric hospital n. A hospital for the care and treatment of patients affected with acute or chronic mental illness. Also called mental hospital. (the "Psychiatric Group"). The assets, liabilities, revenues and expenses of the Company have been allocated between the Core Group and the Psychiatric Group. AHE is a real estate investment trust (REIT REIT See: Real Estate Investment Trust REIT See real estate investment trust (REIT). ) specializing in quality health care facilities. The Company currently has in excess of $600 million of investments in health care facilities located in 17 states. -0-
AMERICAN HEALTH PROPERTIES, INC.
FINANCIAL HIGHLIGHTS - THIRD QUARTER
(In thousands except per share amounts)
(Unaudited)
Consolidated Core Group Psychiatric
Group
Three Months Ended Sept. 30,
----------------------------
1996 1995 1996 1995 1996 1995
Revenues
Rental income $17,315 $17,182 $16,911 $16,501 $ 404 $ 681
Mortgage interest
income 1,493 2,079 - 609 1,493 1,470
Additional rental
and interest
income 3,092 2,769 2,882 2,543 210 226
Other interest income 238 375 126 218 112 157
Interest on loans to
Psychiatric Group - - 425 433 - -
------ ------ ------ ------ ------ ------
22,138 22,405 20,344 20,304 2,219 2,534
Expenses
Depreciation and
amortization 3,761 3,674 3,575 3,488 186 186
Interest expense 5,285 7,126 5,285 7,126 - -
Interest on loans from
Core Group - - - - 425 433
General and
administrative 1,887 1,664 1,557 1,398 330 266
------ ----- ----- ----- ----- ----
10,933 12,464 10,417 12,012 941 885
Minority Interest 54 57 54 57 - -
Net Income $11,151 $ 9,884 $ 9,873 $ 8,235 $ 1,278 $ 1,649
Funds From
Operations (a) $14,880 $13,525 $13,416 $11,690 $ 1,464 $ 1,835
Per Share Amounts
Net Income $ 0.42 $ 0.39 $ 0.61 $ 0.79
Funds From
Operations (a) $ 0.57 $ 0.56 $ 0.70 $ 0.88
Dividends $ 0.505 $ 0.495 $ 0.65 $ 0.80
Average Shares Outstanding 23,522 20,920 2,093 2,091
(a) The Company adopted the new NAREIT definition of Funds From
Operations (FFO) in the first quarter of 1996. Prior year FFO
amounts have been restated.
AMERICAN HEALTH PROPERTIES, INC.
FINANCIAL HIGHLIGHTS - YEAR TO DATE
(In thousands except per share amounts)
(Unaudited)
Consolidated Core Group Psychiatric
Group
Nine Months Ended September 30,
-------------------------
1996 1995 1996 1995 1996 1995
Revenues
Rental income $ 51,693 $ 50,477 $ 50,343 $ 48,105 $ 1,350 $2,372
Mortgage interest
income 4,479 5,018 -- 609 4,479 4,409
Additional rental and
interest income 9,103 8,122 8,491 7,570 612 552
Other interest income 911 2,492 605 1,959 306 533
Interest on loans to
Psychiatric Group -- -- 1,272 1,602 -- --
------ ------ ------ ------ ------ -----
66,186 66,109 60,711 59,845 6,747 7,866
Expenses
Depreciation and
amortization 11,204 10,667 10,646 10,051 558 616
Interest Expense 16,564 20,860 16,564 20,860 -- --
Interest on loans from
Core Group -- -- -- -- 1,272 1,602
General and
administrative 5,678 4,967 4,705 4,298 973 669
Targeted stock
issuance costs -- 300 -- -- -- 300
------ ------ ------ ------ ------ -----
33,446 36,794 31,915 35,209 2,803 3,187
Minority Interest 169 219 169 219 -- --
Net Income $ 32,571 $ 29,096 $ 28,627 $ 24,417 $ 3,944 $4,679
Funds From
Operations (a) $ 43,679 $ 39,969 $ 39,177 $ 34,374 $ 4,502 $5,595
Per Share Amounts
Net Income $1.22 $1.17 $1.89 $2.24
Funds From Operations (a) $1.67 $1.64 $2.15 $2.68
Dividends $1.515 $1.485 $2.00 $2.40
Average Shares Outstanding 23,511 20,911 2,092 2,091
Balance Sheet Information
As of September 30,
1996 1995 1996 1995 1996 1995
Total Assets $ 579,127 $ 603,623 $ 529,639 $ 553,355 $ 63,794 $ 64,623
Total Debt $ 210,044 $ 280,323 $ 210,044 $ 280,323 $ 14,306 $ 14,355
Total
Shareholders'
Equity $ 347,125 $ 300,821 $ 299,142 $ 252,834 $ 47,983 $ 47,987
(a) The Company adopted the new NAREIT definition of Funds From
Operations (FFO) in the first quarter of 1996. Prior year FFO
amounts have been restated.
-0-
CONTACT: American Health Properties, Inc. Joseph P. Sullivan, 303/796-9793 |
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