Invesque Inc. Reports Second Quarter 2022 Results
Toronto, Ontario, August 9, 2022 – Invesque Inc. (TSX: IVQ.U and IVQ) (the “Company”) today announced its results for the three and six months ended June 30, 2022.
Second Quarter 2022 and Subsequent Highlights
- As highlighted previously, the Company has completed a number of sale transactions to date in 2022 in an effort to streamline and simplify the Company. To date in 2022, the Company has sold US$193 million of assets, with the majority of these sales occurring during and subsequent to the second quarter.
- On April 1, 2022, the Company sold two seniors housing communities with 99 units in New York. The net sale price of US$19.2M generated proceeds used to pay down the Company’s corporate credit facility and de-lever the balance sheet.
- On April 1, 2022, the Company closed on the sale of four transitional care skilled nursing facilities comprised of 339 beds in Texas previously managed by Bridgemoor Transitional Care. The portfolio was owned in a joint venture in which the Company held an approximate 66% ownership interest. The gross sale price of approximately US$52M generated proceeds used to fully satisfy the debt secured by the four facilities. The remaining proceeds were distributed to the joint venture owners.
- On June 15, 2022, the Company closed on the sale of its interests in two 55+ communities in New York. The pricing from the sale transaction was very favorable with an implied price per unit of US$145,000. The Company received net cash proceeds of US$10.0 million at closing and utilized proceeds to continue de-levering and simplifying its balance sheet.
- On July 26, 2022, the Company closed on the sale of a medical office building in Orlando, Florida for US$9.85 million. The sale price reflected the high quality of the underlying real estate equal to nearly US$300 per rentable square foot and a cap rate of 7.2% on trailing NOI.
- On July 28, 2022, the Company closed on the sale of substantially all of its medical office buildings in Canada for CAD$94.3 million. The pricing was equal to CAD$265 per rentable square foot and represented a 5.0% cap rate on trailing NOI.
- Reported funds from operations (“FFO”) of US$0.11 and US$0.18 per common share for the three and six months ending June 30, 2022. The Company reported adjusted funds from operations (“AFFO”) of US$0.12 and US$0.18 per common share for the three and six months ending June 30, 2022.
“I remain extremely proud of the efforts we have made to date this year with dispositions of a handful of non-core seniors housing assets, our Bridgemoor portfolio, and the recent announcement of the sale of the majority of our medical office portfolio. These dispositions have been completed at favorable pricing, with the goal of simplifying our company and focusing on private pay seniors housing assets operated by our core group of operating partners,” noted Scott White, Chairman & Chief Executive Officer of the Company. “I am also pleased to highlight the positive momentum we have seen in our SHOP portfolio over the last couple of months. Commonwealth Senior Living, our captive operating and management company, continues to grow census and actually hit pre-pandemic occupancy levels a couple of weeks ago. We expect to see continued growth from the Commonwealth team as we head into the second half of 2022.”
|Three months ended June 30,||Six months ended June 30,|
|(in thousands of U.S dollars, except per share values)||2022||2021||2022||2021|
|Net Income (loss)||($7,681)||($3,500)||($4,344)||($1,700)|
|FFO per share||$0.11||$0.18||$0.18||$0.27|
|AFFO per share||$0.12||$0.16||$0.18||$0.27|
(1) FFO and AFFO are measures used by management to evaluate operating performance. Please refer to the section “Non-IFRS Measures” in this press release for more information.
Balance Sheet and Portfolio Highlights
|(in thousands of U.S. dollars, except number of properties)||June 30, 2022||December 31, 2021|
|Number of properties||79(1)||102(2)|
(1) Excludes 15 medical office buildings held for sale as of June 30, 2022.
(2) Includes the asset sold in Harrisburg, PA during the first quarter of 2022. Excludes one asset held for sale as of December 31, 2021.
Investor Conference Call
A conference call hosted by the Company’s senior management team will be held on August 10, 2022, at 10:00 AM EST. The telephone numbers for the conference call are Local: (647) 484-0477, or Toll-Free: (800) 458-4121. The passcode for the conference call is 5873386. The conference will also be available via webcast at https://www.invesque.com/company-presentations/. Please log on at least 15 minutes before the call commences. The telephone numbers to listen to the call after it is completed (taped replay) are Local: (647) 436-0148, or Toll Free: (888) 203-1112. The Passcode for the taped replay is 5873386.
The Company 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. The Company currently capitalizes on this opportunity by investing in a portfolio of income-generating properties across the health care spectrum. The Company’s portfolio includes investments in independent living, assisted living, memory care, skilled nursing, transitional care, and medical office properties, which are operated under long-term leases and joint venture arrangements with industry-leading operating partners. The Company’s portfolio also includes investments in owner-occupied seniors housing properties in which the Company owns the real estate and provides management services through Commonwealth Senior Living, LLC, a Delaware limited liability company (“Commonwealth”).
This press release (this “Press Release”) contains certain forward-looking information and/or statements (“forward-looking statements”), that reflect and are provided for the purpose of presenting information about management’s current expectations and plans relating to the future, including, without limitation, statements regarding the Company’s utilization of proceeds of dispositions and statements regarding continued growth from the Commonwealth team. Forward-looking information is typically identified by terms such as “anticipate,” “believe,” “continue,” “expect,” “expectations,” “may,” “plan,” “project,” “should,” “will,” and other similar expressions that do not relate solely to historical matters and suggest future outcomes or events. Readers should not place undue reliance on forward-looking statements and are cautioned that forward-looking statements may not be appropriate for other purposes. Forward-looking statements in this Press Release are based on current beliefs, expectations, and certain assumptions of the Company’s management and are subject to significant known and unknown risks, uncertainties, and other factors that are beyond the Company’s ability to predict or control and may cause actual results or events to differ materially from those expressed or implied by such statements and, accordingly, should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. The Company’s actual results may differ as a result of various factors, including without limitation, the negative impact of COVID-19 pandemic on the Company’s business and the business of operators/tenants, including without limitation, uncertainty regarding the duration and severity thereof and negative economic conditions arising therefrom, uncertainty regarding implementation and impact of existing and future stimulus and other Covid-19 relief legislation, laws, orders, and guidance throughout the United States and Canada may be available to operators/tenants to offset the costs and conditions related thereto, and the extent to which support may terminate upon termination of any federally declared public health emergency, the negative effect of travel bans and restrictions, stay-at-home orders, social distancing guidelines, limitations on other business activities, staffing shortages, increased costs, and the impact on occupancy rates in our communities in connection therewith, rent deferral rates, the ability of operators/tenants to comply with infection control and vaccine protocols, the long-term impact of vaccines on facility infection rates; the status of the economy; the status of capital markets, including, without limitation, availability and cost of capital; issues facing the health care industry, including, without limitation, compliance with, and changes to, regulations and payment policies, responding to government investigations and settlements and operators’/tenants’ ability to cost effectively obtaining and maintaining adequate liability and other insurance; the risk that the Company’s operators/tenants and borrowers may become subject to bankruptcy or insolvency proceedings; changes in financing terms; competition throughout the health care and senior housing industries; the operating results or financial condition of operators/tenants, including, without limitation, their ability to pay rent and repay loans, the Company’s ability to transition, buy, or sell properties with profitable results as and when anticipated, and occupancy levels; the effect of other factors affecting the Company’s business and facilities outside of the Company’s or operators’/tenants control, including without limitation, natural disasters, other health crises or pandemics, governmental action, particularly in the healthcare industry, protests, strikes, and shortages in supply chains, as well as the risks described in the Company’s current annual information form and management’s discussion and analysis, available on SEDAR at www.sedar.com, which risks may be dependent on market factors and not entirely within the Company’s control. Although management believes that it has a reasonable basis for the expectations reflected in these forward-looking statements, actual results may differ from those suggested by the forward-looking statements for various reasons. These forward-looking statements reflect current expectations of the Company as of the date of this Press Release and speak only as of the date of this Press Release. The Company does not undertake any obligation to publicly update or revise any forward-looking statements except as may be required by applicable law.
There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers are cautioned not to place undue reliance on any such forward-looking statements, which are given as of the date hereof, and not to use such forward-looking statements for anything other than the intended purpose. Further, except as expressly required by applicable law, the Company assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise. Forward-looking statements contained in this Press Release are expressly qualified by this cautionary statement.
The Company reports its financial results in accordance with International Financial Reporting Standard (“IFRS”). Included in this Press Release are certain non-IFRS financial measures as supplemental indicators used by the Company’s 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 the Company’s 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 and/or net loss for the three and six months ended June 30, 2022, please refer to the Financial Measures section of the June 30, 2022, MD&A available on the Company’s website and on SEDAR at www.sedar.com.
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