CareTrust REIT Sees FY 2015 Rental Revs Of $66.0M, Fy 2016 Rental Revs $80.6M

CareTrust REIT, Inc.

today updated its earnings guidance for 2015 and provided guidance for 2016, in each case accounting for recently-announced acquisitions and financing activity. During the month of August, the company completed a common stock offering of over 16 million shares, obtained a new $300 million unsecured revolving credit facility and announced its pending $175 million investment in the Liberty portfolio which is expected to close on October 1, 2015. Each of these material events is now incorporated into the guidance provided below. Neither the 2015 nor the 2016 guidance numbers contemplate any new investments, other than those previously announced, nor do they include scheduled rent escalations, which are based on the Consumer Price Index and will not be determined until the respective escalation dates for CareTrust's several leases. CareTrust's updated 2015 guidance is based on the following: $56.0 million in rental revenue from its Ensign assets, and $10.0 million from all other investments closed through September 1, 2015 plus the previously-announced $175 million Liberty investment which is expected to close on October 1, 2015; $0.9 million in interest income from the $7.5 million preferred equity investment at 12%; $0.2 million in net operating income from the three independent living facilities that CareTrust owns and operates; $25.4 million in interest expense, which includes $2.2 million in amortization of deferred financing costs plus a $1.2 million write-off of deferred financing fees related to the replacement of CareTrust's prior secured revolving credit facility by the recently-announced closing of its new $300 million unsecured revolving credit facility, and assumes $45 million outstanding on the unsecured revolving credit facility after the Liberty closing; and $7.6 million to $8.4 million of general & administrative expenses, which includes approximately $1.5 million in amortization of stock-based compensation. CareTrust's 2016 guidance is based on the following: $56.0 million in rental revenue from its Ensign assets, and $24.6 million from all other investments closed through September 1, 2015 plus the pending Liberty investment; $0.9 million in interest income from the $7.5 million preferred equity investment at 12%; $0.2 million in net operating income from the three independent living facilities that CareTrust owns and operates; $25.0 million in interest expense, which includes $2.2 million in amortization of deferred financing costs and assumes $45 million outstanding on the unsecured credit facility; and $7.8 million to $8.8 million of general & administrative expenses, which includes approximately $1.8 million in amortization of stock-based compensation. Commenting on the forward-looking guidance, Greg Stapley, CareTrust's Chairman and Chief Executive Officer, remarked that the company was pleased to be able to project FFO and FAD growth on a per-share basis, even after the recent equity raise in which over 16 million new shares were issued. "More importantly," he said, "we significantly improved our balance sheet and liquidity this year by being able to match fund our recent equity raise to the pending $175 million Liberty investment, all of which we believe will set the stage for an exciting 2016." He added that, "Pro forma for all of the transactions that the company has announced to date, our debt-to-EBITDA ratio will decline from 7.0x to 5.5x, our fixed charge coverage ratio will increase from 2.6x to 3.4x, and we will have taken our Ensign revenue concentration from 84% to 67%. We will also have over $150 million of liquidity under our new unsecured credit facility, with each new investment after Liberty adding even more liquidity."