Invesque Announces Suspension of Dividend and Provides Update on COVID-19 Impact
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Toronto, Ontario, April 10, 2020 – Invesque Inc. (TSX: IVQ.U and IVQ) announced today the suspension of the dividend for all common shareholders beginning from April 1, 2020 until further notice. As a result of the suspension of the dividend payable to all common shareholders, there will also be no further issuance of common shares under the Company’s dividend reinvestment program (the “DRIP”).
“Given the unprecedented, rapid changes taking place in the market, the board of directors and management believe it is prudent to preserve cash and strengthen the balance sheet by suspending the dividend at this time,” commented Scott White, Chairman and Chief Executive Officer for the Company. “While we have not yet seen material direct impacts to our cash flow, our properties provide care for the aging demographic, which is the highest risk age group, and we must proactively prepare. This is a fluid situation that we will continue to re-evaluate on a real time basis.”
To further enhance its liquidity position, the Company is analyzing a variety of options to reduce or defer non-essential capital expenditures and to reduce corporate-level costs, some of which have already been implemented. The Company has already taken immediate cost reduction measures, including executive compensation changes and other personnel cost cutbacks. Additionally, the Company is complying with “shelter-in-place” orders which have reduced the utilization of office space, travel, and other corporate-level expenses. While the impact of the deferral of non-essential capital expenditures is not yet quantified, the Company believes that the corporate level cost reduction will result in US$2.0 – US$2.5 million of cost savings.
Since the Company’s last disclosure to its investors on March 12, 2020, members of Invesque’s management team have remained in close contact with the Company’s operating partners to understand the current and prospective impact of COVID-19 to Invesque’s properties. As of April 8, 2020, the Company has confirmed that only 16 of its 108 seniors housing and skilled nursing properties have been directly impacted by COVID-19 based on positive test results for residents and/or staff members. Also, as of April 8, 2020, only three of the 108 locations had confirmed COVID-19 resident cases in the communities, all of which were under quarantine. Of the 16 communities impacted, 13 are subject to triple net operating leases. Only one of the Company’s communities operated by Commonwealth Senior Living has observed a positive COVID-19 test result, and none of Commonwealth’s residents have been directly impacted by COVID-19.
“Our operating partners have demonstrated incredible leadership during this period of disruption,” commented Adlai Chester, Chief Investment Officer for the Company. “Our operators promptly adopted CDC guidelines for resident care and have been creative and proactive in obtaining the supplies needed to meet the guidelines. We understand that providing the best quality of care and protection to residents and patients is the most important objective for our operators. Our endeavor has been to help strategize with, circulate best practices to, and help gain access to resources and knowledge of trends across the industry to our partners during this pandemic.”
Invesque is a North American health care real estate company with an investment thesis focused on the premise that an aging demographic in North America will continue to utilize health care services in growing proportion to the overall economy. Invesque currently capitalizes on this opportunity by investing in a highly diversified portfolio of income generating properties across the health care spectrum. Invesque’s portfolio includes investments in independent living, assisted living, memory care, skilled nursing, transitional care and medical office properties, which are operated primarily under long-term leases and joint venture arrangements with industry leading operating partners. Invesque’s portfolio also includes investments in owner-occupied seniors housing properties in which Invesque owns the real estate and provides management services through its subsidiary management company, Commonwealth Senior Living. For more information, please visit www.invesque.com.
This press release may contain forward-looking statements (within the meaning of applicable securities laws) relating to the business of the Company and the environment in which it operates including, without limitation, statements relating to the impact of the changing market conditions and the COVID-19 pandemic on the Company and its cash flows, its payment of future dividends and the amount of such dividends, and the corresponding reinstatement of the DRIP. Forward-looking statements generally can be identified by words such as “outlook”, “objective”, “may”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “should”, “plans”, “project”, or “continue” or similar expressions suggesting future outcomes or events. Such forward-looking statements reflect the Company’s current beliefs and are based on information currently available to management. This forward-looking information represents our views as of the date of this press release and such information should not be relied upon as representing our views as of any date subsequent to the date of this document. By its nature, such forward-looking statements are subject to various risks and uncertainties, which could cause the actual results and expectations to differ materially from the anticipated results or expectations expressed, including, without limitation, (a) risks in connection with the ability of the Company to maintain its dividend policy and DRIP, (b) risks in connection with the operations, cash flow and results of the Company relating to the uncertain duration, scope and effect of the current COVID-19 outbreak on occupancy rates and the operations of the Company and its tenants and operators, (c) general macroeconomic uncertainty and changing market conditions as a result of the COVID-19 pandemic and resulting risks facing the seniors housing and skilled nursing industry specifically, and (d) the ability and willingness of the Company’s tenants, operators and other third parties to satisfy their obligations under their contractual obligations with the Company. The Company’s actual future results and trends may differ materially from expectations depending on a variety of factors discussed above and in the risk factors disclosed in materials filed with the securities regulatory authorities in Canada from time to time, including, but not limited to, the Company’s annual information form available on SEDAR at www.sedar.com. The Company undertakes no obligation to update publicly or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law. All forward looking statements in this press release are qualified by these cautionary statements.
The Company reports its financial results in accordance with International Financial Reporting Standard (“IFRS”). Included in this news release are certain non-IFRS financial measures as supplemental indicators used by management to track the Company’s performance. These non-IFRS measures are NOI, FFO and AFFO. The Company believes that these non-IFRS financial measures provide useful information to both management and investors in measuring the financial performance and financial condition of the Company. These measures do not have a standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other companies, nor should they be construed as an alternative to other financial measures determined in accordance with IFRS. For a full definition of these measures and a reconciliation to net profit for the three months and twelve months ended December 31, 2019, please refer to the Financial Measures section of the December 31, 2019 MD&A available on the Company’s website and on SEDAR at www.sedar.com
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