Executives from Sabra Health Care REIT, Amedysis and The RMR Group highlighted their quarterly earnings Thursday to analysts and investors.
Sabra Health Care REIT
Irvine, CA-based Sabra Health Care REIT is seeing “good traction in operational recovery,” CEO Rick Matros said.
“Occupancy in our skilled nursing portfolio has now improved every month in the fourth quarter and continued through January. Occupancy October through January in our skilled nursing portfolio improved to 130 basis points,” he said.
During the first quarter of 2023, the real estate investment trust closed on the acquisition of one senior housing managed community for $48 million and one senior housing leased community for $3.3 million, with estimated stabilized cash yields of 8%. Additionally, the REIT acquired an 85% interest in one Canadian senior housing managed community for $18.9 million, with an estimated stabilized cash yield of 8%.
Also during the first quarter, Sabra generated $190 million of gross proceeds from the disposition of seven skilled nursing facilities (including one leased to a tenant under a sales-type lease) and two senior housing communities.
As of March 31, the REIT had approximately $954 million of liquidity, consisting of unrestricted cash and cash equivalents of $33.5 million and available borrowings of $920.4 million under its revolving credit facility. The company also at that time had $500 million available under the at-the-market program.
“The combination of a low leverage, fixed-rate balance sheet with meaningful liquidity and no near-term maturities affords us the luxury of not needing to access the capital markets in the foreseeable future,” Chief Financial Officer Michael Costa said.
The RMR Group
Diversified Healthcare Trust and Office Properties Income Trust have not yet filed a preliminary proxy and registration statement with the Securities and Exchange Commission related to their merger, announced last month, The RMR Group said Wednesday on the company’s latest earnings call.
In the deal, OPI will acquire all of the outstanding common shares of DHC in an all-share transaction. OPI will be the surviving entity and will change its name to Diversified Properties Trust upon closing of the transaction.
“The merger will create a diversified REIT [real estate investment trust] with a broad portfolio … and strong growth potential,” RMR Group President and CEO Adam Portnoy said. “Financially, the merger is expected to be accretive to both entities leveraged in cash flow.”
The combined REIT is expected to provide an annual dividend of $1 per share with potential dividend growth in the future, Portnoy said.
DHC has $700 million in debt coming due in early 2024. One of the benefits of the merger for DHC, Portnoy said, is that it will enable the REIT to access refinancing once the new company is formed.
Regarding AlerisLife’s $44 million acqusition by ABP Acquisition 2 LLC, which closed in March, Portnoy said, “We believe AlerisLife, now a private company, will be able to enhance its focus on operational excellence and best position the company to successfully deliver on its business plan.”
Portnoy was managing director of AlerisLife and now is the sole director of ABP. The RMR Group provides management services to AlerisLife, DHC and OPI. All of the companies are based in Newton, MA.
Home health admissions and hospice adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, margin improvement outpaced internal projections, according to Amedysis Acting Chief Operating Officer, Executive Vice President and Chief Financial Officer Scott Ginn.
“We are on track in our clinical optimization initiatives, which benefited the hospice segment in the first quarter but will ultimately benefit all segments as we eliminate administrative processes in our care centers in order to have a singular focus on patient care,” Finn said in a press release issued in lieu of an earnings call.
The company’s adjusted net service revenue for 2023 is anticipated to be in the range of $2.254 billion to $2.274 billion, adjusted EBITDA is anticipated to be in the range of $235 million to $245 million, and adjusted diluted earnings per share is anticipated to be in the range of $4.14 to $4.36 based on an estimated 32.8 million shares outstanding.
The Amedysis’ full year 2023 financial guidance excludes the effect of the company’s pending combination with Option Care Health, announced Wednesday. Amedisys and the provider of home and alternate site infusion services have entered into an agreement to combine in an all-stock transaction that values Amedisys at approximately $3.6 billion, including the assumption of net debt, the companies said.