Invesque Inc. Reports Fourth Quarter and Full Year 2018 Results
Toronto, Ontario, March 13, 2019 – Invesque Inc. (TSX: IVQ.U) (the “Company”) today announced its results for the three and twelve months ended December 31, 2018.
Fourth Quarter Highlights
- Executed on a new US$400 million senior unsecured credit facility with an accordion feature to increase the size up to US$750 million.
- Announced a share buyback program to repurchase up to 2,647,954 of common shares, or up to approximately 5%, of the Company’s outstanding shares over a twelve month period.
- Expanded partnership with Hearth Management with the closing of the US$11.0 million acquisition of the previously announced Keepsake Village at Greenpoint located in Liverpool, New York.
- Closed the sale of seven skilled nursing facilities located in Georgia, operated by Traditions Senior Management, for approximately US$70.0 million. The transaction reduced the effective age of the Company’s remaining skilled nursing portfolio to 9.5 years, which is among the youngest in the industry.
- Reported funds from operations (“FFO”) of US$0.16 per common share, and US$0.96 per common share for the three and twelve months respectively ending December 31, 2018. The Company reported adjusted funds from operations (“AFFO”) of US$0.19 per common share, and US$0.86 per common share for the three and twelve months respectively ending December 31, 2018. Excluding deal pursuit costs, the Company reported FFO of US$1.00 per common share for the twelve months ending December 31, 2018. Excluding deal pursuit costs, the Company reported AFFO of US$0.90 per common share for the twelve months ending December 31, 2018
“The fourth quarter was an active quarter for Invesque, highlighted by our capital markets and asset management activities. Our pipeline of growth opportunities is as strong as it has ever been and is expected to provide us with the ability to expand our relationships with our existing operators and cultivate new relationships with best-in-class operating partners,” commented Scott White, chief executive officer for the Company. “In addition to a strong focus on asset growth in 2019, we will continue to actively asset manage our current portfolio. We expect to continue to trim non-core assets while recycling capital to further build a diversified, high-quality portfolio.”
Financial Highlights
| Three months ended December 31, | Years ended December 31, | |||
|---|---|---|---|---|
| (in thousands of U.S dollars, except per share values) | 2018 | 2017 | 2018 | 2017 |
| Revenue | $29,953 | $16,875 | $113,927 | $64,004 |
| Net income (loss) | ($33,775) | $2,003 | ($12,275) | $16,263 |
| Funds from operations (“FFO”) (1) | $8,596 | $6,007 | $48,219 | $28,188 |
| Funds from operations per share | $0.16 | $0.19 | $0.96 | $0.87 |
| Adjusted funds from operations (“AFFO”) (1) | $10,300 | $7,509 | $43,105 | $30,920 |
| Adjusted funds from operations per share | $0.19 | $0.23 | $0.86 | $0.96 |
(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) | December 31, 2018 | December 31, 2017 |
|---|---|---|
| Total assets | $1,283,959 | $785,005 |
| Number of properties | 98 | 40 |
| Debt | $731,215 | $428,377 |
| Debt / Gross Book Value | 57.0% | 54.6% |
“The closing of our new US$400 million senior unsecured credit facility marks an important milestone in Invesque’s history by providing us with improved pricing and a well laddered debt maturity profile,” commented Scott Higgs, chief financial officer for the Company. “We are also excited to have put into place our new share buyback program which will allow us to opportunistically repurchase our shares.”
Subsequent Events
Grand Brook Acquisition
In January 2019, the Company completed its acquisition of a stabilized memory care community (total of 30 units) located in Allen, Texas for US$8.1 million. The community is leased to Constant Care Management Company (“Constant Care”), a Dallas, Texas based operator of memory care communities with a regional presence in the midwestern and southern United States. The Company and Constant Care amended the existing absolute net master lease agreement to renew the 15-year term and two five-year extension options.
The acquisition expands the Company’s relationship with Constant Care to four properties. The acquisition also enhances the Company’s payor mix as 100% of revenue is currently derived from private pay funding sources. The Company continues to execute on the right to fund and purchase Constant Care’s new memory care developments at stabilization. The Allen, TX property is the first of three acquisition opportunities for which the Company was granted the right of first refusal when it acquired the initial Grand Brook portfolio.
Senior Management Team Expansion
In February 2019, the Company expanded the senior management team with the addition of Vineet Bedi, CFA as Senior Vice President – Head of Capital Markets & Corporate Strategy. In this role, Vineet will assist the Company in evaluating strategic opportunities to further enhance shareholder value, while also leading our capital markets and investor outreach efforts.
Vineet brings a long history of public real estate, private equity, and capital markets experience to the Company. Over the course of Vineet’s career, he has structured deals across the capital structure in public and private real estate with a focus on health care real estate.
Investor Conference Call
A conference call hosted by the Company’s senior management team will be held Thursday, March 14, 2019 at 10:00 AM ET. The telephone numbers for the conference call are: Local: (647) 427-7450 or Toll Free: (888) 231-8191. The passcode for the conference call is: 4161507. The conference will also be available via webcast at https://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: (416) 849-0833 or Toll Free: (855) 859-2056. The Passcode for the taped replay is 4161507.
About Invesque
Invesque is a health care real estate company with an investment thesis centered around the opportunity created by the global aging demographic trend. Invesque currently capitalizes on this opportunity by investing in a highly diversified portfolio of income generating health care properties located across the United States and Canada through long-term absolute net leases, joint ventures, and development capital. For more information, visit www.invesque.com.
Forward-Looking Information
This press release contains forward-looking information that reflects the current expectations of management about the future results and opportunities for the Company. Forward-looking statements generally can be 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. Such forward-looking statements reflect the Company’s current beliefs and are based on information currently available to management. This forward-looking information represents our views as of the date of this press release and such information should not be relied upon as representing our views as of any date subsequent to the date of this document. We have attempted to identify important factors that could cause actual results or performance to vary from those current expectations or estimates expressed or implied by the forward-looking information. See risk factors highlighted in materials filed with the securities regulatory authorities in Canada from time to time, including, but not limited to, the Company’s annual information form available on SEDAR at www.sedar.com.
Non-IFRS Measures
The Company reports its financial results in accordance with International Financial Reporting Standard (“IFRS”). Included in this news release are certain non-IFRS financial measures as supplemental indicators used by management to track the Company’s performance. These non-IFRS measures are FFO and AFFO.
The Company believes that these non-IFRS financial measures provide useful information to both 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 for the three months and twelve months respectively ended December 31, 2018, please refer to the Financial Measures section of the December 31, 2018 MD&A available on the Company’s website and on SEDAR at www.sedar.com.
For Information Contact:
Investor Relations
1-317-643-4017
ir@invesque.com