Highlights
-- Authorizes fourth quarter 1998 distribution of $0.365 per share, based
on an annual distribution of $1.46 per share
-- Addresses recent Genesis Health Ventures earnings release
KENNETT SQUARE, Pa., Feb. 9 /PRNewswire/ -- ElderTrust (NYSE: ETT), a
health care REIT, today announced that it had authorized the payment on or
about February 26, 1999, to shareholders of record on February 18, 1999, of a
quarterly distribution, covering the fourth quarter ended December 31, 1998,
of $0.365 per share, which represents a pro rata distribution based on an
annual distribution of $1.46 per share.
In response to growing concerns about the long term health care industry,
ElderTrust also today addressed recent announcements by its primary tenant,
Genesis Health Ventures, Inc. (NYSE: GHV), and other long term care operators.
Genesis' recent first quarter 1999 earnings release and pre-announcements of
earnings disappointments by Sun Healthcare Group and Vencor have heightened
investor concerns about the impact of the new Medicare Prospective Payment
System (PPS) on operator cash flows. These concerns also appear to be
reflected in recent trading activity for the healthcare REIT sector as well.
"We believe that the implementation of PPS is just one of several factors
impacting the healthcare industry and each company in the sector has a
different story," said Edward B. Romanov, Jr., ElderTrust President and Chief
Executive Officer. "However, as we announced last October ElderTrust
continues to monitor PPS' impact on our properties and we have seen no
significant deterioration in our portfolio's operating income. Furthermore,
in spite of recently announced earnings that failed to meet street
expectations our primary tenant Genesis Health Ventures, continues to generate
increasing overall cash flows and generates approximately 50% of its revenue
from its pharmacy business. As reported by Genesis Health Ventures Inc. in
the above noted earnings release, its net income for the quarter ended
December 31, 1998 declined to $5.2 million from $10.9 million for the
comparable period one year ago. However, its earnings before interest, taxes,
depreciation and rent increased by 24% to $71.2 million compared to $57.2
million for the earlier period.
Mr. Romanov added, "We also believe that the REIT sector continues to be
an under appreciated segment in the overall investment marketplace. Internet
companies such as Yahoo, Lycos, Excite, uBID, Amazon and Network Solutions
continue to attract significant market attention while REITs, on the other
hand, have attracted little positive attention since falling out of favor in
1998. This is in spite of providing attractive dividend yields in a falling
interest rate environment." ElderTrust distributes $1.46 per share per year
which yields 16.22% on a $9 share price.
ElderTrust is a real estate investment trust that invests in real estate
properties used in the healthcare services industry, principally along the
East Coast of the United States. Since commencing operations in January 1998,
the Company has acquired a portfolio of 27 buildings and has loaned
$47.5 million in construction and term financing on 10 additional healthcare
facilities.
Certain matters discussed within this press release may be deemed to be
forward looking statements within the meaning of the Private Securities Act of
1995. Although ElderTrust believes the expectations reflected in such forward
looking statements are reasonable assumptions, it can give no assurance that
its expectations will be attained. Factors that could cause actual results to
differ materially from ElderTrust's expectations include real estate
conditions, information determined in the course of due diligence review,
changes in economic conditions and other risks detailed from time to time in
the Company's SEC reports and filings, including its Form 10-K as well as
quarterly reports on Form 10-Q and reports on Form 8-K. The Company assumes
no obligation to update or supplement forward looking statements that become
untrue because of subsequent events.
SOURCE ElderTrust
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Related links:
http://www.eldertrust.com
CONTACT:
D. Lee McCreary, Jr., Senior Vice President &
Chief Financial Officer of ElderTrust, 610-925-4200
NOTE TO EDITORS: For more information on ElderTrust via fax at no
charge, please dial 1-800-PRO-INFO and enter ticker symbol ETT,
or visit ElderTrust's Web site at http://www.eldertrust.com
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