NHI Reports First Quarter Income and Announces Stock Repurchase Program.MURFREESBORO Murfreesboro (mûr`frēzbûr'ə), city (1990 pop. 44,922), seat of Rutherford co., central Tenn., on Stones River; inc. 1817. It is the processing center of a dairy, livestock, and farm area. , Tenn. -- National Health Investors, Inc., (NYSE NYSE See: New York Stock Exchange : NHI NHI abbr. National Health Insurance ) announced net income for the first quarter ended March 31, 2006 of $12,620,000 or 45 cents per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share compared to $16,794,000 or 61 cents per basic and diluted share for the same period in 2005. Income for the first quarter of 2005 included $5,270,000 or 19 cents per basic and diluted share of income attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to gains and losses from asset sales, impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. writedowns on realty realty n. a short form of "real estate." (See: real estate) REALTY. An abstract of real, as distinguished from personalty. Realty relates to lands and tenements, rents or other hereditaments. Vide Real Property. , securities and mortgage notes receivable and prepayment penalties Prepayment penalty A fee a borrower pays a lender when the borrower repays a loan before its scheduled time of maturity. compared to $232,000 of such items in 2006. Adjusting for the above-mentioned A`bove´-men`tioned a. 1. Mentioned or named before; aforesaid; mentioned or named earlier in the same text (in written documents). Adj. 1. items, net income for the first quarter of 2006 would have been $12,388,000 or 44 cents per basic and diluted share compared to $11,524,000 or 42 cents per basic and diluted shares for 2005, an increase of 7.5% and 4.8%, respectively. 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 first quarter ended March 31, 2006 was $15,268,000 or 55 cents per basic and diluted share compared to $18,902,000 or 69 cents per basic and $18,930,000 or 68 cents per diluted share in 2005. Adjusting for the items mentioned in the first paragraph above, FFO for the first quarter of 2006 would have been $15,160,000 or 54 cents basic and diluted compared to $14,380,000 or 52 cents basic, an increase of 5.4% and 3.8%, respectively. FFO per diluted share, adjusted by the items mentioned above, for the first quarter of 2005 was 52 cents. Accomplishments during the first quarter included the investment of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $11,330,000 in notes receivable and real property. Additionally, the company announced that its Board of Directors approved the purchase of up to $10,000,000 of its common stock in open market purchases. NHI specializes in the financing of health care real estate by first mortgage and by purchase and leaseback A transaction whereby land is sold and subsequently rented by the seller from the purchaser who is the new owner. transactions. The common stock of the company trades on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. with the symbol NHI. Additional information including NHI's most recent press releases may be obtained on our web site at www.nhinvestors.com. Statements in this press release that are not historical facts are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . NHI cautions investors that any forward-looking statements made involve risks and uncertainties and are not guarantees of future performance. All forward-looking statements represent NHI's judgment as of the date of this release.
Condensed Statements of Income
(in thousands, except share and per share amounts)
Three Months Ended
March 31
-----------------------
Revenues: 2006 2005
----------- -----------
Mortgage interest income $ 3,647 $ 3,907
Rental income 12,037 11,538
Facility operating revenue 21,221 20,562
----------- -----------
$ 36,905 $ 36,007
----------- -----------
Expenses:
Interest 2,028 2,470
Depreciation 3,023 3,092
Amortization of loan costs 34 72
Legal expense 45 147
Franchise, excise and other taxes 69 67
General and administrative 1,172 1,103
Loan, realty and security losses
(recoveries), net --- (472)
Facility operating expense 20,360 19,375
----------- -----------
$ 26,731 $ 25,854
----------- -----------
Income Before Non-Operating Income 10,174 10,153
Non-operating income (investments and other) 2,402 5,954
----------- -----------
Income From Continuing Operations $ 12,576 $ 16,107
Discontinued Operations:
Operating Loss - discontinued (80) (61)
Net gain on sale of real estate 124 748
----------- -----------
$ 44 $ 687
----------- -----------
Net Income $ 12,620 $ 16,794
=========== ===========
Weighted average common shares outstanding
Basic 27,843,217 27,580,665
Diluted 27,859,290 27,774,954
Earnings per share:
Basic:
Income from continuing operations $ .45 $ .58
Discontinued operations --- .03
Net income .45 .61
Diluted:
Income from continuing operations $ .45 $ .58
Discontinued operations --- .03
Net income .45 .61
Funds from operations
Basic $ 15,268 $ 18,902
Diluted 15,268 18,930
Funds from operations per common share
Basic $ .55 $ .69
Diluted .55 .68
Dividends per common share $ .48 $ .45
Balance Sheet Data
(in thousands) March 31 December 31
2006 2005
----------- -----------
Real estate properties, net $ 254,145 $ 263,129
Mortgages receivable, net 124,219 118,800
Preferred stock investment 38,132 38,132
Cash and marketable securities 150,702 152,022
Debt 116,593 117,252
Convertible debt --- 201
Stockholders' equity 426,115 424,968
Reconciliation of Funds From Operations (1)(2)
The following table reconciles net income to funds from operations:
Three Months Ended March
31
2006 2005
----------- -----------
(in thousands, except share and per share
amounts)
Net income $ 12,620 $ 16,794
Elimination of non-cash items in net income:
Real estate depreciation 2,710 2,795
Real estate depreciation in discontinued
operations 62 61
Gain on sale of real estate (124) (748)
----------- -----------
Basic funds from operations 15,268 18.902
Interest on convertible subordinated
debentures --- 28
----------- -----------
Diluted funds from operations $ 15,268 $ 18,930
=========== ===========
Basic funds from operations per share $ .55 $ .69
Diluted funds from operations per share $ .55 $ .68
Shares for basic funds from operations per
share 27,843,217 27,580,665
Shares for diluted funds from operations per
share 27,859,290 27,774,954
(1) Management believes that funds from operations (FFO) is an
important supplemental measure of operating performance for a real
estate investment trust. Because the historical cost accounting
convention used for real estate assets requires straight-line
depreciation (except on land), such accounting presentation implies
that the value of real estate assets diminishes predictably over time.
Since real estate values instead have historically risen and fallen
with market conditions, presentations of operating results for a real
estate investment trust that uses historical cost accounting for
depreciation could be less informative, and should be supplemented
with a measure such as FFO. The term FFO was designed by the real
estate investment trust industry to address this issue. Our measure
may not be comparable to similarly titled measures used by other
REITs. Consequently, our funds from operations may not provide a
meaningful measure of our performance as compared to that of other
REITs. Since other REITs may not use our definition of FFO, caution
should be exercised when comparing our Company's FFO to that of other
REITs. Funds from operations in and of itself does not represent cash
generated from operating activities in accordance with GAAP (funds
from operations does not include changes in operating assets and
liabilities) and therefore should not be considered an alternative to
net earnings as an indication of operating performance, or to net cash
flow from operating activities as determined by GAAP in the United
States, as a measure of liquidity and is not necessarily indicative of
cash available to fund cash needs.
(2) We have complied with the SEC's interpretation that recurring
impairments taken on real property may not be added back to net income
in the calculation of FFO. The SEC's position is that recurring
impairments on real property are not an appropriate adjustment.
National Health Investors, Inc. Portfolio Summary March 31 ,2006
Portfolio Statistics Investment
Properties Investment Percentage
--------------------------------------
Real Estate Properties 93 254,144,000 69%
Mortgages and Notes
Receivables 62 114,194,000 31%
--------------------------------------
Total Real Estate Portfolio 155 368,338,000 100%
======================================
Real Estate Properties Properties Beds Investments
--------------------------------------
Nursing Homes 68 8,957 $167,129,000
Assisted Living 15 1,138 59,297,000
Medical Office Buildings 4 124,427 sq.ft. 10,091,000
Retirement Homes 5 517 10,466,000
Hospitals 1 55 7,161,000
--------------------------------------
Total Real Estate Properties 93 $254,144,000
Mortgages and Notes Receivable Properties Beds Investments
--------------------------------------
Nursing Homes 44 4,887 $107,968,000
Retirement Homes 1 60 1,973,000
Developmentally Disabled 17 108 4,253,000
--------------------------------------
Total Mortgages and Notes
Receivable 62 $114,194,000
------------ -------------
Total Real Estate
Portfolio 155 $368,338,000
Summary of Facilities by Type:
Percentage of Total
Properties Total Dollars Dollars
--------------------------------------
Nursing Homes 112 74.69% $275,097,000
Assisted Living 15 16.10% 59,297,000
Medical Office Buildings 4 2.84% 10,466,000
Retirement Homes 6 3.28% 12,064,000
Hospitals 1 1.94% 7,161,000
Developmentally Disabled 17 1.15% 4,253,000
--------------------------------------
Total Real Estate Portfolio 155 100.00% $368,338,000
======================================
Portfolio by Operator Type
Percentage
# of of Total
Total
Properties Dollars Dollars
---------------------------------
Public 62 25.46% $93,778,000
Regional 77 62.15% 228,918,000
Small Operator 16 12.39% 45,642,000
---------------------------------
Total Real Estate Portfolio 155 100.00% $368,338,000
=================================
Public Operators Percentage
Of Total Dollar
Portfolio Amount
-----------------------
National HealthCare Corp. 13.56% $49,933,000
Community Health Systems, Inc. 3.65% 13,460,000
Sunrise Senior Living Services 3.58% 13,196,000
Sun Healthcare 2.38% 8,769,000
Res-Care, Inc. 1.15% 4,253,000
HCA-The Healthcare Company 1.13% 4,167,000
-----------------------
Total Public Operators 25.46% $93,778,000
National Health Summary of Facilities March 31, 2006
Investors, Inc. by State
Percent
Acute Dev. Asst. Retire- Investment Total
LTC Care MOB Disab. Living ment Total Amount Portfolio
---------------------------------------------------------
Florida 15 1 14 5 35 $84,672,000 22.99%
Texas 27 2 1 30 83,276,000 22.61%
Tennessee 20 3 3 2 28 33,675,000 9.14%
Missouri 8 1 9 19,357,000 5.26%
New Jersey 2 1 3 25,105,000 6.82%
Virginia 8 8 20,067,000 5.45%
Arizona 1 4 5 18,354,000 4.98%
New Hampshire 3 1 4 14,710,000 3.99%
Georgia 7 7 15,032,000 4.08%
Massachusetts 4 4 10,975,000 2.98%
Kansas 7 7 11,254,000 3.06%
Kentucky 3 1 4 8,712,000 2.37%
South
Carolina 3 1 4 7,643,000 2.07%
Idaho 1 1 2 5,315,000 1.44%
Pennsylvania 0 1 1 4,342,000 1.18%
Alabama 2 2 2,146,000 0.58%
Wisconsin 1 1 2,188,000 0.59%
Illinois 0 1 1 1,515,000 0.41%
---------------------------------------------------------
112 1 4 17 15 6 155 $368,338,000 100.00%
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