Invesque Inc. Continues Streamlining of Portfolio and Reports First Quarter 2022 Results

Toronto, Ontario, May 11, 2022 – Invesque Inc. (TSX: IVQ.U and IVQ) (the “Company”) today announced its results for the three-month period ending March 31, 2022.

First Quarter 2022 and Subsequent Highlights

  • Effective January 1, 2022, the Company repaid US$10.0M to the Municipal Capital Appreciation Partners (“MCAP”) preferred equity holders. The paydown reflects the Company’s continued focus on reducing fixed costs and strengthening the balance sheet.
  • On February 1, 2022, the Company closed on the purchase of a 38-unit memory care community located in Grand Rapids, Michigan, which was added to the existing master lease with Constant Care Management Company (“Constant Care”). The acquisition expands the Company’s relationship with Constant Care to nine properties and increases the Company’s overall private-pay seniors housing exposure.
  • To date in 2022, the Company has completed a number of sale transactions, all of which align with the stated goal of disposing of non-strategic assets to focus on building a high-quality portfolio of private-pay seniors housing assets. Relative to first quarter performance, the sales of the communities discussed below will have a positive aggregate impact to AFFO per share of approximately US$0.11 – $0.12 per share on an annual basis.
    • On March 1, 2022, the Company sold a non-core assisted living and memory care community in Harrisburg, Pennsylvania. The community was sold for approximately US$5.5M, and proceeds were used to further reduce the Company’s existing indebtedness. The community was previously managed by Greenfield Senior Living and operational management was transitioned to the Company’s subsidiary management company, Commonwealth Senior Living (“Commonwealth”) in 2019.
    • On March 31, 2022, the Company closed on the sale of a vacant community in Port Royal, South Carolina for US$3.5M. All proceeds were used to pay down the debt associated with these assets. The standalone memory care community that was previously managed by Phoenix Senior Living and will be repurposed for an alternate use by its new owner.
    • On April 1, 2022, the Company sold two seniors housing communities with 99 units in New York. The gross sale price of US$19.2M generated proceeds used to pay down the Company’s corporate credit facility and further 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 (“Bridgemoor”). The Bridgemoor portfolio was owned in a joint venture in which the Company holds 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.
  • The majority of the seniors housing communities operated by Commonwealth have earned the highest possible rating from U.S. News & World Report’s inaugural Best Senior Living ratings.
  • Reported funds from operations (“FFO”) of US$0.07 per common share for the three-month period ending March 31, 2022. The Company reported adjusted funds from operations (“AFFO”) of US$0.06 per common share for the three-month period ending March 31, 2022.

“As we close out the first quarter of 2022, I want to highlight the progress we are making in executing on our strategy. We continue to streamline our portfolio to focus more on private-pay seniors housing assets. As a result of our transaction activity over the last 18 months, we have made significant progress toward executing on this strategy,” noted Scott White, Chairman and Chief Executive Officer of the Company. “In addition to streamlining our portfolio, we want to grow with our preferred operating partners. I’m very pleased with the continued growth of our relationship with Constant Care. I’m proud of the progress our team has made and where we are as a company today, and I am optimistic that we will see continued improvement in the operations of our portfolio over the rest of 2022.”

Financial Highlights

Three months ended March 31,
(in thousands of U.S dollars, except per share values) 2022 2021
Revenue $52,050 $53,671
Net income (loss) $3,337 $1,800
FFO (1) $3,906 $5,032
FFO per share $0.07 $0.09
AFFO (1) $3,194 $5,677
AFFO per share $0.06 $0.10

(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) March 31, 2022 December 31, 2021
Total assets $1,304,888 $1,301,011
Number of properties 96(1) 102(2)
Debt $916,810 $893,746

(1) Excludes two consolidated assets held for sale as of March 31, 2022, and four joint venture properties held for sale as of March 31, 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 May 12, 2022, at 10:00 AM EST. The telephone numbers for the conference call are Local: (647) 794-4605, or Toll-Free: (888) 204-3590. The passcode for the conference call is 8323162. 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 8323162.

About Invesque

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.

Forward-Looking Information

This press release (this “Press Release”) contains forward-looking information and / or statements (“forward-looking statements”) that reflect the current expectations of the Company’s management about the future results and opportunities for the Company. Forward-looking statements are generally 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. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Company’s control. Although the Company believes that the expectations in its forward-looking statements are reasonable, its forward-looking statements have been based on factors and assumptions concerning future events which may prove to be inaccurate. Those factors and assumptions are based upon currently available information. Such statements are subject to known and unknown risks, uncertainties, and other factors that could influence actual results or events and cause actual results or events to differ materially from those stated, anticipated, or implied in forward-looking statements. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. Additional risks, uncertainties, material assumptions, and other factors that could affect actual results are discussed in the Company’s public disclosure documents available at www.sedar.com, including in the risk factors described in the Company’s current annual information form. In addition, the Company is subject to the risk and uncertainties related to the COVID-19 pandemic. In particular, a novel strain of coronavirus causing the disease known as COVID-19 has spread throughout the world, including across the United States and Canada, causing the World Health Organization to declare the COVID-19 outbreak a pandemic in March 2020. To contain the spread and impact of the pandemic, authorities throughout the United States and Canada have implemented measures such as travel bans and restrictions, stay-at-home orders, social distancing guidelines, and limitations on other business activities. The pandemic has resulted in a significant economic downturn in the United States, Canada, and globally, and has also led to disruptions and volatility in capital markets. The Company has already experienced negative impacts on its financial results due to the pandemic and is not able to fully quantify the impact that the COVID-19 pandemic will have on the Company’s financial results in the future, but the Company expects that the pandemic could continue to have a material adverse effect on its results of operations, financial position and/or cash flows, particularly if negative economic and public health conditions in the United States and Canada persist for a significant period of time. The ultimate impact of the pandemic on the Company’s financial results will depend on, among other factors, the duration, and severity of the pandemic as well as negative economic conditions arising therefrom, the impact of the pandemic on occupancy rates in our communities, the volume of COVID-19 patients cared for across our portfolio, rent deferral rates, and the impact of government actions on the seniors housing industry and the broader economy, including through existing and future stimulus efforts. The impact of COVID-19 has been partially offset to date by certain government stimulus programs which have helped to offset COVID-19 related expenses and compensate for lost revenues, but the Company is not able to assure that such programs may continue to be available in the future. 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 to not 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.

Non-IFRS Measures

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 months ended March 31, 2022, please refer to the Financial Measures section of the March 31, 2022, MD&A available on the Company’s website and on SEDAR at www.sedar.com.

For Information Contact: ir@invesque.com