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Sabra Reports Fourth Quarter 2023 Results; Introduces 2024 Guidance

TUSTIN, Calif. , February 27 /Businesswire/ - Sabra Health Care REIT, Inc. (“Sabra,” the “Company” or “we”) (Nasdaq: SBRA) today announced its results of operations for the fourth quarter of 2023.

FOURTH QUARTER 2023 RESULTS AND RECENT EVENTS

  • Results per diluted common share for the fourth quarter of 2023 were as follows:
    • Net Income: $0.07
    • FFO: $0.30
    • Normalized FFO: $0.32
    • AFFO: $0.32
    • Normalized AFFO: $0.33
  • EBITDARM Coverage Summary:
    • Skilled Nursing/Transitional Care: 1.78x (1.72x excluding Provider Relief Funds)
    • Senior Housing - Leased: 1.28x
    • Behavioral Health: 1.85x
    • Specialty Hospitals & Other: 7.00x
  • During the fourth quarter of 2023, Sabra expanded its relationship with Ignite Medical Resorts through the $38.8 million acquisition of two skilled nursing facilities with a cash lease yield of 9.5%.
  • On February 1, 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 February 29, 2024 to common stockholders of record as of the close of business on February 13, 2024.

2024 GUIDANCE

We are introducing 2024 earnings guidance ranges as follows (attributable to common stockholders, per diluted common share):

  • Net Income: $0.53 - $0.57
  • FFO: $1.33 - $1.37
  • Normalized FFO: $1.34 - $1.38
  • AFFO: $1.38 - $1.42
  • Normalized AFFO: $1.39 - $1.43

Earnings guidance above assumes no 2024 acquisition or disposition activity.

Commenting on the fourth quarter’s results, Rick Matros, CEO and Chair, said, “We are pleased with the continued progress toward stability and growth that we experienced in the fourth quarter of 2023. Occupancy and rent coverage continued to improve in our skilled nursing and senior housing platforms. We expanded our relationship with Ignite Medical Resorts, an operator who had outstanding success navigating through the pandemic. For the first time since the pandemic, Sabra has introduced full-year guidance as we look forward to a return to earnings growth. Achieving the midpoint of our Normalized FFO per share and Normalized AFFO per share guidance range would represent a year-over-year increase of 5% and 6%, respectively. We want to thank all of our stakeholders for their continued support.”

LIQUIDITY

As of December 31, 2023, we had approximately $946.9 million of liquidity, consisting of unrestricted cash and cash equivalents of $41.3 million and available borrowings of $905.6 million under our revolving credit facility. As of December 31, 2023, we also had $500.0 million available under the ATM program.

CONFERENCE CALL AND COMPANY INFORMATION

A conference call with a simultaneous webcast to discuss the 2023 fourth quarter results will be held on Wednesday, February 28, 2024, at 10:00 am Pacific Time. The webcast URL is https://events.q4inc.com/attendee/290282806. The dial-in number for U.S. participants is (888) 596-4144. For participants outside the U.S., the dial-in number is (646) 968-2525. The conference ID number is 1382596. A digital replay of the call will be available on the Company’s website at www.sabrahealth.com. The Company’s supplemental information package for the fourth quarter will also be available on the Company’s website in the “Investors” section.

ABOUT SABRA

As of December 31, 2023, Sabra’s investment portfolio included 378 real estate properties held for investment (consisting of (i) 241 Skilled Nursing/Transitional Care facilities, (ii) 43 senior housing communities (“Senior Housing - Leased”), (iii) 61 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 two mortgage loans and 12 other loans), five preferred equity investments and two investments in unconsolidated joint ventures. As of December 31, 2023, Sabra’s real estate properties held for investment included 37,834 beds/units, spread across the United States and Canada.

FORWARD-LOOKING STATEMENTS SAFE HARBOR

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), results of operations, cash flows, liquidity, business strategy, growth opportunities, potential investments and dispositions, and plans and objectives for future operations and capital raising activity.

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.

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.

TENANT AND BORROWER INFORMATION

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.

NOTE REGARDING NON-GAAP FINANCIAL MEASURES

This release includes the following financial measures defined as non-GAAP financial measures by the SEC: 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 and Normalized AFFO per diluted common share. 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 https://ir.sabrahealth.com/investors/financials/quarterly-results.

SABRA HEALTH CARE REIT, INC.

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(dollars in thousands, except per share data)

 

 

Three Months Ended December 31,

 

Year Ended December 31,

 

2023

 

2022

 

2023

 

2022

Revenues:

 

 

 

 

 

 

 

Rental and related revenues (1)

$

93,037

 

 

$

103,318

 

 

$

376,266

 

 

$

400,586

 

Resident fees and services

 

61,256

 

 

 

52,699

 

 

 

236,153

 

 

 

186,672

 

Interest and other income

 

9,104

 

 

 

8,968

 

 

 

35,095

 

 

 

37,553

 

 

 

 

 

 

 

 

 

Total revenues

 

163,397

 

 

 

164,985

 

 

 

647,514

 

 

 

624,811

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

Depreciation and amortization

 

42,876

 

 

 

49,927

 

 

 

183,087

 

 

 

187,782

 

Interest

 

27,940

 

 

 

27,898

 

 

 

112,964

 

 

 

105,471

 

Triple-net portfolio operating expenses

 

4,689

 

 

 

4,640

 

 

 

17,932

 

 

 

19,623

 

Senior housing - managed portfolio operating expenses

 

45,189

 

 

 

39,155

 

 

 

177,313

 

 

 

142,990

 

General and administrative

 

16,679

 

 

 

10,853

 

 

 

47,472

 

 

 

39,574

 

(Recovery of) provision for loan losses and other reserves

 

(358

)

 

 

153

 

 

 

191

 

 

 

141

 

Impairment of real estate

 

7,268

 

 

 

21,440

 

 

 

14,332

 

 

 

94,042

 

 

 

 

 

 

 

 

 

Total expenses

 

144,283

 

 

 

154,066

 

 

 

553,291

 

 

 

589,623

 

 

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

(1,541

)

 

 

(411

)

Other income (expense)

 

28

 

 

 

4

 

 

 

2,598

 

 

 

(1,097

)

Net loss on sales of real estate

 

(732

)

 

 

(7,430

)

 

 

(76,625

)

 

 

(12,011

)

 

 

 

 

 

 

 

 

Total other expense

 

(704

)

 

 

(7,426

)

 

 

(75,568

)

 

 

(13,519

)

 

 

 

 

 

 

 

 

Income before loss from unconsolidated joint ventures and income tax expense

 

18,410

 

 

 

3,493

 

 

 

18,655

 

 

 

21,669

 

 

 

 

 

 

 

 

 

Loss from unconsolidated joint ventures

 

(761

)

 

 

(88,317

)

 

Webcast, Conference Call, Earnings, Nursing, Residential Building & Real Estate, Commercial Building & Real Estate, Construction & Property, REIT, Health, General Health, Seniors, Mental Health, Hospitals, Consumer, United States, North America, California,
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