NHI Announces Third Quarter 2021 Results – Form 8-K








NHI Announces Third Quarter 2021 Results

MURFREESBORO, Tenn. – (November 8, 2021) National Health Investors, Inc. (NYSE:NHI) announced today its results for the three and nine months ended September 30, 2021.

Financial Results

•Net income attributable to common stockholders per diluted common share for the three months ended September 30, 2021 was $0.67, a decrease of 29.5% from the same period in the prior year. Net income attributable to common stockholders per diluted common share for the nine months ended September 30, 2021 was $2.31, a decrease of 30.2% from the same period in the prior year. The nine month decline is attributable to impairment charges recorded on five real estate properties totaling $22.5 million, $17.2 million additional rent deferrals incurred during the nine months ended September 30, 2021, Holiday Retirement’s (“Holiday”) nonpayment of contractual rent of $4.8 million and a $4.7 million year-over-year increase in non-cash stock-based compensation. These declines were offset by increases of approximately $5.4 million in gains from the sales of real estate assets as compared to the same period in the prior year and new investments funded since September 2020.

•Normalized FAD for the three months ended September 30, 2021 was $51.2 million, a decrease of 15.1% from the same period in the prior year. Normalized FAD for the nine months ended September 30, 2021 was $163.6 million, a decrease of 9.5% from the same period in the prior year.

•Normalized FFO per diluted common share for the three months ended September 30, 2021 was $1.15, a decrease of 19.0% from the same period in the prior year. Normalized FFO per diluted common share for the nine months ended September 30, 2021 was $3.55, a decrease of 16.1% from the same period in the prior year.

•National Association of Real Estate Investment Trusts (“NAREIT”) FFO per diluted common share for the three months ended September 30, 2021 was $1.16, a decrease of 18.3% from the same period in the prior year. NAREIT FFO per diluted common share for the nine months ended September 30, 2021 was $3.55, a decrease of 15.9% from the same period in the prior year.

•Net income, Normalized FFO and NAREIT FFO per common share for the three and nine months ended September 30, 2021 include the dilutive impact of 1,121,442 common shares issued since September 30, 2020.

Eric Mendelsohn, NHI President and CEO, stated, “We have made tremendous progress on optimizing our portfolio this year. We have completed dispositions of 19 properties for approximately $216 million including 16 underperforming senior housing properties for approximately $173 million at a low single digit cap rate. We are in the process of disposing another subset of underperforming senior housing properties at similar cap rates which we expect will be largely completed by the first quarter of 2022. We now expect that dispositions will be at the upper end of our target of $250 million – $400 million.”

Mr. Mendelsohn continued, “We have reduced our tenant concentrations with both Bickford and Holiday and have established frameworks that we believe greatly improve the coverage and growth profiles of NHI. Our balance sheet is in great shape as we have reduced leverage despite our tenant deferrals and Holiday’s non-payment of rent. We have full capacity on our revolver and little need to issue new equity as we pivot towards growth.”

Mr. Mendelsohn concluded, “This year has been as challenging as we anticipated, and our operators continue to struggle particularly with labor. Fortunately, NHI is in a good position to assist our partners through these near-term issues, and we remain resolute in our favorable outlook on the long-term growth prospects of the senior housing industry.”

NHI Reports Third Quarter 2021 Results

Page 2

November 8, 2021

Asset Dispositions

Senior Living Management: On September 30 2021, NHI sold a senior living community located in Florida for cash consideration of $14.0 million that was received October 1, 2021, including transaction costs of $1.2 million and recorded a gain of approximately $9.4 million. Rental income was $0.3 million and $0.8 million, for the three and nine months ended September 30, 2021, respectively, and $0.3 million and $1.0 million for the three and nine months ended September 30, 2020, respectively.

Quorum Health: In September 2021, NHI sold an acute care hospital located in Kentucky for cash consideration of $9.0 million, including $0.7 million of transaction costs, and recorded a net loss of approximately $1.3 million. Rental income was $0.7 million and $2.5 million, for the three and nine months ended September 30, 2021, respectively, and $0.9 million and $2.3 million, for the three and nine months ended September 30, 2020, respectively.

In September 2021, NHI sold a property that was leased to Holiday located in Indiana with a net book value of $10.4 million for total cash consideration of $5.8 million, including transactions costs of $0.1 million, and recognized an impairment of approximately $4.6 million associated with this transaction. Rental income was $0.1 million and $0.4 million, for the three and nine months ended September 30, 2021, respectively and $0.2 million and $0.5 million for the three and nine months ended September 30, 2020, respectively.

Holiday: In August 2021, NHI sold a portfolio of eight properties that was leased to Holiday with an aggregate net book value of $113.6 million for total cash consideration of $115.0 million, including transaction costs of $0.9 million, and recognized a gain of approximately $1.9 million associated with this transaction. Rental income was $0.9 million and $5.9 million, for the three and nine months ended September 30, 2021, respectively, and $2.5 million and $7.5 million for the three and nine months ended September 30, 2020, respectively.

TrustPoint Hospital:In July 2021, NHI sold a behavioral hospital located in Tennessee for cash consideration of $31.2 million and recorded a gain of approximately $8.6 million. Rental income was $0.1 million and $1.4 million, for the three and nine months ended September 30, 2021, respectively, and $0.7 million and $2.0 million for the three and nine months ended September 30, 2020, respectively.

Assets Held for Sale & Impairment of Real Estate

During the third quarter of 2021, the Company reclassified three transition properties to assets held for sale on the Condensed Consolidated Balance Sheet at September 30, 2021 and recorded impairment charges of approximately $16.6 million to reduce their net book values to fair values less estimated transaction costs. Two of the properties are located in Texas and one property is located in Tennessee. Rental income for these properties was based on operating income, net of management fees and did not generate significant revenues for both the nine months ended September 30, 2021 and 2020.

As discussed above, NHI recognized real estate impairment charges of approximately $5.9 million during the three and nine months ended September 30, 2021, related to the disposition of one Holiday property located in Indiana and an acute care hospital located in Kentucky.

Collections and Deferrals

During the third quarter of 2021, NHI granted rent concessions in the form of rent deferrals totaling approximately $5.8 million. Of this total, approximately $3.5 million of deferrals were related to Bickford…



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