Sabra(SBRA) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION This section details the company's financial performance, including statements, management's analysis, market risks, and internal controls Item 1. Financial Statements Total assets slightly decreased to $5.23 billion as of March 31, 2025, with Q1 2025 net income rising to $40.3 million and operating cash flow increasing to $80.3 million Consolidated Balance Sheets Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Real estate investments, net | $4,488,111 | $4,513,734 | | Cash and cash equivalents | $22,653 | $60,468 | | Total Assets | $5,233,198 | $5,303,679 | | Liabilities & Equity | | | | Total liabilities | $2,530,966 | $2,562,391 | | Total equity | $2,702,232 | $2,741,288 | | Total Liabilities and Equity | $5,233,198 | $5,303,679 | Consolidated Statements of Income Consolidated Income Statement Highlights (in thousands, except per share data) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenues | $183,543 | $166,747 | | Total expenses | $143,082 | $140,205 | | Impairment of real estate | $0 | $3,137 | | Net income | $40,304 | $26,254 | | Diluted EPS | $0.17 | $0.11 | Consolidated Statements of Cash Flows Consolidated Cash Flow Highlights (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $80,263 | $52,795 | | Net cash used in investing activities | ($16,444) | ($13,224) | | Net cash used in financing activities | ($101,242) | ($20,229) | | Net (decrease) increase in cash | ($37,423) | $19,342 | Notes to Consolidated Financial Statements The notes detail the company's accounting policies, real estate portfolio composition, debt structure, and equity activities. Key details include a real estate portfolio valued at $4.49 billion, total debt of $2.39 billion, and an active at-the-market (ATM) equity offering program. The company's primary business is owning and financing healthcare real estate, including skilled nursing facilities and senior housing - The company's primary business is acquiring, financing, and owning healthcare-related real estate, which is leased to third-party tenants or operated by third-party managers. The portfolio is mainly comprised of skilled nursing/transitional care facilities and senior housing communities[26] Real Estate Portfolio by Property Type (as of March 31, 2025) | Property Type | Number of Properties | Net Real Estate Investments (in thousands) | | :--- | :--- | :--- | | Skilled Nursing/Transitional Care | 224 | $2,318,918 | | Senior Housing - Managed | 69 | $1,189,907 | | Senior Housing - Leased | 39 | $411,033 | | Behavioral Health | 17 | $395,122 | | Specialty Hospitals and Other | 15 | $171,271 | | Total | 364 | $4,486,251 | - As of March 31, 2025, future minimum rental payments under non-cancelable operating leases total approximately $2.79 billion[52] Debt Summary (as of March 31, 2025, in thousands) | Debt Type | Net Book Value | | :--- | :--- | | Senior Unsecured Notes | $1,736,213 | | Term Loans, net | $530,194 | | Revolving Credit Facility | $82,684 | | Secured Debt, net | $44,811 | | Total Debt, Net | $2,393,902 | - The company utilizes an at-the-market (ATM) equity offering program. During Q1 2025, it used the forward feature for up to 4.9 million shares at an initial weighted average price of $17.32 per share. As of March 31, 2025, $297.7 million remained available under the program[94][95][96] - Subsequent to the quarter's end, on May 5, 2025, the board of directors declared a quarterly cash dividend of $0.30 per share of common stock[103] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management highlights a 10% increase in Q1 2025 total revenues to $183.5 million, strong $1.1 billion liquidity, and improved AFFO per share despite market challenges Overview and Market Trends - The company's strategy is to grow and diversify its healthcare real estate portfolio through direct investments, development, and selective asset sales[108] - Operations are impacted by adverse market conditions, including increased interest rates, labor shortages, and inflation, which negatively affect tenant operating results. However, improvements in occupancy and increased reimbursement rates for the skilled nursing portfolio are encouraging trends[111][113] Results of Operations Comparison of Operations (in thousands) | Line Item | Q1 2025 | Q1 2024 | Variance | % Change | | :--- | :--- | :--- | :--- | :--- | | Rental and related revenues | $96,037 | $91,776 | $4,261 | 5% | | Resident fees and services | $77,447 | $66,031 | $11,416 | 17% | | Total Revenues | $183,543 | $166,747 | $16,796 | 10% | | Net Income | $40,304 | $26,254 | $14,050 | 53% | - The $4.3 million increase in rental income was driven by a net decrease in non-cash rent write-offs, increased cash revenue from certain leases, and rent escalators, partially offset by property dispositions[121] - The $11.4 million increase in resident fees and services was primarily due to acquisitions and transitions of Senior Housing - Managed communities, as well as increased occupancy and rates[124] - No real estate impairment was recognized in Q1 2025, compared to a $3.1 million impairment in Q1 2024[132] FFO and AFFO Reconciliation (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $40,304 | $26,254 | | FFO | $85,978 | $74,534 | | AFFO | $88,154 | $81,150 | | FFO per diluted share | $0.36 | $0.32 | | AFFO per diluted share | $0.37 | $0.35 | Liquidity and Capital Resources - As of March 31, 2025, the company had approximately $1.1 billion in liquidity, comprising $22.7 million in cash, $917.3 million available under its Revolving Credit Facility, and $110.5 million related to shares outstanding under forward sale agreements[139] - Net cash from operating activities was $80.3 million in Q1 2025, a significant increase from $52.8 million in Q1 2024, primarily due to completed investment activity and timing of collections[146][24] - Net cash used in financing activities was $101.2 million, mainly consisting of $71.4 million in dividend payments and $23.9 million in net repayments on the Revolving Credit Facility[148] - As of March 31, 2025, the company has a commitment for future capital expenditures of approximately $14 million related to its triple-net leased facilities[155] Item 3. Quantitative and Qualitative Disclosures About Market Risk No material changes occurred in the company's quantitative and qualitative market risk disclosures from the 2024 Annual Report on Form 10-K - There have been no material changes to the market risk disclosures previously reported in the 2024 Annual Report on Form 10-K[170] Item 4. Controls and Procedures Management confirmed effective disclosure controls and procedures as of March 31, 2025, with no material changes in internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[171] - No changes occurred in the internal control over financial reporting during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, these controls[172] PART II. OTHER INFORMATION This section addresses legal proceedings, updated risk factors, additional disclosures, and filed exhibits Item 1. Legal Proceedings The company and its subsidiaries are not party to any material legal proceedings - The company is not a party to any material legal proceedings, although it may be involved in ordinary course of business litigation from time to time[174] Item 1A. Risk Factors No material changes occurred in the company's risk factors from those disclosed in the 2024 Annual Report on Form 10-K - There have been no material changes in the company's risk factors from those previously disclosed in the 2024 Annual Report on Form 10-K[175] Item 5. Other Information The company reported no other information for this item - None[176] Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including corporate governance documents, material contracts, and required certifications - The exhibits include certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, as well as XBRL data files[177]