Invesque Inc. Reports Fourth Quarter and Full Year 2020 Results
Toronto, Ontario, March 10, 2021 – Invesque Inc. (TSX: IVQ.U and IVQ) (the “Company” or “Invesque”) today announced its results for the three- and twelve-months ended December 31, 2020.
Fourth Quarter and Subsequent Highlights
- Modified the Company’s senior credit facility led by KeyBank, which includes an incremental surge period through June 30, 2021
- Closed on the purchase of a 32-unit memory care facility located in Rogers, AR, further enhancing the Company’s private-pay portfolio exposure
- Upon closing of the acquisition, Invesque and Constant Care entered into an absolute triple-net (“NNN”) lease agreement with an initial 15-year term and two five-year extension options
- The new lease allows Invesque the ability to consolidate the Rogers, AR asset into the Company’s existing master lease with Constant Care
- The acquisition expands the Company’s relationship with Constant Care to eight properties with Constant Care representing approximately 4% of Invesque’s pro-forma net operating income (“NOI”)
- Completed expansion projects at three communities in Virginia within the Commonwealth Senior Living (“CSL”) portfolio
- The Commonwealth Senior Living at Abingdon property expansion added nine one-bedroom assisted living units, activity space, renovated dining, and new office space
- The Commonwealth Senior Living at Front Royal property expansion added 14 one-bedroom assisted living units, and two studio-size assisted living units
- The Commonwealth Senior Living at South Boston property expansion added 10 one-bedroom assisted living units, activity space and new office space
- All three properties have received inspection and licensure approval and began admitting residents in the first quarter of 2021
- Named one of the Best Places to Work in Indiana by the Indiana Chamber of Commerce and Best Company Group for the second consecutive year
- Reported funds from operations (“FFO”) of US$0.19 and US$0.87 per common share for the three- and twelve-months ending December 31, 2020, respectively. The Company reported adjusted funds from operations (“AFFO”) of US$0.17 and US$0.77 per common share for the three- and twelve-months ending December 31, 2020, respectively.
“The operating environment remained under stress through the end of the year and the beginning of 2021 for the entire industry given the current public health pandemic. With that said, I am optimistic the industry will continue to recover over the long-term with broader availability of the vaccine. As of today, 95% of our properties have cycled through phase one of the vaccine and 89% of our properties have cycled through phase two of the vaccine,” commented Scott White, Chairman & Chief Executive Officer for the Company. “We will continue to focus on our portfolio management initiatives throughout 2021 to maximize cash flow while making sure our residents are provided a safe and healthy environment.”
Financial Highlights
| Three months ended December 31, | Twelve months ended December 31, | |||
|---|---|---|---|---|
| (in thousands of U.S dollars, except per share values) | 2020 | 2019 | 2020 | 2019 |
| Revenue | $54,380 | $51,809 | $217,387 | $148,407 |
| Net income (loss) | ($36,315) | $6,684 | ($184,004) | ($5,359) |
| Funds from operations (“FFO”) (1) | $10,429 | $10,547 | $48,640 | $46,122 |
| FFO per share | $0.19 | $0.19 | $0.87 | $0.85 |
| Adjusted funds from operations (“AFFO”) (1) | $9,522 | $9,603 | $42,693 | $41,223 |
| AFFO per share | $0.17 | $0.18 | $0.77 | $0.76 |
(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, 2020 | December 31, 2019 |
|---|---|---|
| Total assets | $1,498,424 | $1,630,738 |
| Number of properties | 121(1) | 124 |
| Debt | $1,052,471 | $1,013,475 |
(1) Includes all Company assets currently operated by Symphony Care Network (“SymCare”), including those that are contemplated to be sold and/or transitioned under the previously disclosed non-binding memorandum or understanding (“MOU”) between the Company and Symcare. Excludes other assets held for sale as of December 31, 2020.
Business Update
COVID-19 and Vaccination Update
Invesque’s management team has remained in close contact with the Company’s operating partners regarding the impact of COVID-19. As of March 5, 2021, the Company has confirmed that 92 of its 105 seniors housing and skilled nursing properties have been impacted by COVID-19 based on positive test results for either residents or staff members over the last twelve months. Of the 92 impacted communities, 46 are subject to NNN lease agreements. Also, as of March 5, 2021, there were only 32 total patients or residents with COVID-19 being treated and quarantined in the Company’s communities. The current rate of incidence in the Company’s portfolio is a fraction of the peak activity observed in mid-May 2020 and has been substantially similar since the first week of July 2020.
In addition to the continued decline in the rate of COVID-19 incidence across the Company’s properties, the Company has confirmed that initial COVID-19 vaccine clinics have been completed at 95% of the Company’s seniors housing and skilled nursing facilities. The communities that have not yet completed COVID-19 vaccine clinics are located outside the United States or are not designated as health care facilities and are coordinating vaccine administration for their residents on their own in advance of additional vaccine availability. “We are encouraged about the prospects the rollout of the COVID-19 vaccine will have for ensuring the safety of our patients, residents, and facility-level staff,” noted Adlai Chester, Chief Investment Officer for the Company. “Though cases have remained low relative to peak incidence in 2020, the risk of infection has constrained our operators’ ability to welcome new patients and residents. Vaccine clinics will help existing and prospective patients and residents feel safe in Invesque facilities. We are thankful for the efforts of our operating partners who have provided care to the most vulnerable population throughout the global health pandemic.”
Investor Conference Call
A conference call hosted by the Company’s senior management team will be held March 11, 2021 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: 9392901. 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: (416) 849-0833 or Toll Free: (855) 859-2056. The passcode for the taped replay is 9392901.
About Invesque
Invesque 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. Invesque currently capitalizes on this opportunity by investing in a highly diversified portfolio of income generating properties across the health care spectrum. Invesque’s portfolio includes investments in independent living, assisted living, memory care, skilled nursing, transitional care, and medical office properties, which are operated primarily under long-term leases and joint venture arrangements with industry leading operating partners. Invesque’s portfolio also includes investments in owner-occupied seniors housing properties in which Invesque owns the real estate and provides management services through its subsidiary management company, Commonwealth Senior Living. For more information, please 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, including without limitation information with respect to the restructuring of the Company’s relationship with SymCare pursuant to the MOU and information with respect to the recovery of the industry. 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. 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, including with respect to the recovery of the industry due to broader availability of the vaccine and the completion of the transactions contemplated in the MOU. 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 the forward-looking statements, including that the industry will not recover from the pandemic and that the transactions contemplated in the MOU with SymCare will not be completed for various reasons. Accordingly, readers are cautioned not to place undue reliance on the 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 activity. 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. These trends are likely to continue into 2021 and beyond. The Company announced on April 10, 2020 that it has suspended the dividend for all common shares beginning from April 1, 2020 until further notice. The pandemic has had an impact on results and operations of the Company, including decreased occupancy, delays in collections from tenants, and increased operating expenses. The Company is not able to fully quantify the impact that the COVID-19 pandemic will have on its future financial results but expects that the pandemic could have a negative effect on its results of operations, financial position, and 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 future developments, which are highly uncertain and cannot be predicted with confidence. This includes, 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 the Company’s communities, the volume of COVID-19 patients cared for across the portfolio, and the impact of government actions on the seniors housing industry and 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 provide assurance that such programs may continue to be available in the future. The Company experienced negative impacts on its financial results due to the pandemic and was not able to fully quantify the impact that the COVID-19 pandemic had on the Company’s financial results during 2020 but the Company expects that the pandemic could 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, as well as its future prospects, 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, and the impact of government actions on the seniors housing industry and broader economy, including through existing and future stimulus efforts. 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.
Non-IFRS Measures
The Company reports its financial results in accordance with International Financial Reporting Standards (“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 NOI, 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 ended December 31, 2020, please refer to the Financial Measures section of the December 31, 2020 MD&A available on the Company’s website and on SEDAR at www.sedar.com.
For Information Contact:
ir@invesque.com