Second Quarter 2000:
-- Reported FFO of ($3.40) per share for 2Q'00
-- Reported revenue of $6.5 million for 2Q'00
-- Recognized bad debt and asset impairment charges of $27.7 million
-- Announced suspension of shareholder distribution
KENNETT SQUARE, Penn., Aug. 4 /PRNewswire/ -- ElderTrust (NYSE: ETT), an
equity healthcare REIT, today reported results for the second quarter ended
June 30, 2000. During the second quarter the Company recognized bad debt and
asset impairment charges, principally relating to the recent bankruptcy
filings by major customers. In addition, the Company announced that it is
suspending quarterly distributions to its shareholders.
Funds from operations (FFO) for the second quarter ended June 30, 2000,
totaled ($24.2) million, or ($3.40) per share, on revenues of $6.5 million.
In comparison, FFO for the second quarter of 1999, totaled $0.6 million, or
$0.08 per share, on revenues of $7.1 million.
The net loss for the second quarter of 2000 totaled ($26.7 million), or
($3.75) per basic and diluted share. In comparison, the net loss was
($1.8 million), or ($0.25) per basic and diluted share, for the comparable
quarter of 1999.
For the six months ended June 30, 2000, FFO totaled ($21.3 million), or
($2.99) per share, on revenues of $13.5 million. The net loss for the six
months ended June 30, 2000 was ($26.2 million) or ($3.68) per basic and
diluted share. For the comparable period in 1999, FFO totaled $4.0 million,
or $0.55 per basic and diluted share, on revenues of $14.2 million. The net
loss for the six months ended June 30, 1999 was ($0.9 million) or ($0.12) per
basic and diluted share.
The second quarter 2000 results of operations included bad debt expenses
of $20.3 million, comprised of probable credit losses of $18.1 million on real
estate loans receivable, $1.2 million on notes receivable from ET Capital
Corp., an unconsolidated entity, and $1.0 million on a note receivable from a
former officer. In addition, equity in losses of unconsolidated entities
recorded during the second quarter of 2000 included a loss of $7.4 million
related to the Company's 95% interest in a third party loan payable to ET
Capital Corp. which was determined to be fully impaired at June 30, 2000.
The Company also announced that it did not meet certain financial covenant
requirements under two bonds payable totaling $20.1 million and its Credit
Facility with an outstanding balance of $39.1 million at June 30, 2000.
In addition, the Company announced that its Board of Trustees had
suspended the further payment of quarterly distributions to shareholders. The
Company believes that distributions made to date are sufficient to meet its
REIT distribution requirements for the year 2000. The Company's distribution
policy will continue to be assessed on a quarterly basis.
"The most significant event of the second quarter was the previously
reported June 22, 2000 voluntary Chapter 11 bankruptcy filings by Genesis
Health Ventures, Inc., and The Multicare Companies, Inc., ElderTrust's most
significant customers. The second quarter results from operations reflect the
immediate impact of these filings on ElderTrust," said D. Lee McCreary, Jr.,
President & Chief Executive Officer. "As we have previously announced, we are
working with Genesis and Multicare to reach a mutually acceptable resolution
of the many transactions between us."
Addressing the suspension of distributions to shareholders, Mr. McCreary
stated, "We regret taking this step. However, the bankruptcy filings by
Genesis and Multicare will adversely affect our cash flow and has forced us to
retain our available cash to meet corporate obligations. As we believe our
shareholder distributions to date are sufficient to meet our year 2000 REIT
distribution requirements, we do not expect this decision will have an adverse
impact on our status as a REIT."
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 direct and indirect interests in 31 buildings and has
loans outstanding of $31 million, net of allowance, in construction and term
financing on eight 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
Litigation Reform 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 the extent to which Genesis and Multicare continue to make lease and
loan payments to the Company, the outcome of the Genesis and Multicare
bankruptcy proceedings, real estate conditions, the Company's ability to
refinance its existing bank credit facility when it matures in June 2001,
changes in the economic conditions and other risks detailed from time to time
in the Company's SEC reports and filings. The Company assumes no obligation
to update or supplement forward-looking statements that become untrue because
of subsequent events.
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 .
ELDERTRUST
Financial Supplement
CONDENSED CONSOLIDATED INCOME STATEMENT
(unaudited)
($000's, except per share data)
For the three months endedFor the six months ended
June 30, June 30,
2000 1999 2000 1999
Revenues:
Rental revenues $4,686 $4,599 $9,366 $9,222
Interest, net of
amortization of
deferred loan
origination costs 991 1,553 2,310 3,018
Interest from
unconsolidated
equity investees 764 950 1,711 1,891
Other income 60 20 118 39
Total revenues 6,501 7,122 13,505 14,170
Expenses:
Property operating
expenses 314 273 608 572
Interest expense,
including amortization
of deferred finance
costs 3,500 3,221 6,887 6,156
Depreciation 1,487 1,453 2,941 2,893
General and
administrative 1,365 709 2,012 1,462
Bad debt expense 20,267 - 20,267 -
Separation
agreement expenses - 2,800 - 2,800
Total expenses 26,933 8,456 32,715 13,883
Net income (loss)
before equity in losses
of unconsolidated
entities and minority
interest (20,432) (1,334) (19,210) 287
Equity in losses of
unconsolidated
entities, net (8,216) (627) (8,882) (1,219)
Minority interest 1,926 129 1,886 59
Net loss ($26,722) ($1,832) ($26,206) ($873)
Basic and diluted
weighted average
number of common
shares outstanding 7,119 7,201 7,119 7,208
Basic and diluted
net loss per share ($3.75) ($0.25) ($3.68) ($0.12)
Funds from
operations ($24,210) $610 ($21,259) $3,988
Basic and diluted
per share funds
from operations ($3.40) $0.08 ($2.99) $0.55
ELDERTRUST
Financial Supplement
SELECTED BALANCE SHEET DATA
(unaudited)
($000's)
June 30, December 31,
2000 1999
(dollars in thousands)
Balance Sheet Data
Investments in Real Estate, net $169,281 $171,681
Investments in mortgages and loans,
net of allowances 30,540 48,646
Total Real Estate Assets 199,821 220,327
Investments in and advances to
unconsolidated entities,
net of allowances 20,456 31,129
Working capital (A) (57,452) 2,559
Total assets 233,391 266,482
Long-term debt (B) 148,657 149,754
Shareholders' equity 73,952 103,440
(A) Working capital is reduced by borrowings outstanding under the Bank
Credit Facility of approximately $39.1 million and $0.9 million as
of June 30, 2000 and December 31, 1999, respectively, which mature
within one year from the respective balance sheet. Also, working
capital is reduced as of June 30, 2000 by two bonds payable
totaling $20.1 million due to events of default being declared
because the Company does not meet certain financial covenant
requirements under guarantee agreements relating to the underlying
mortgages.
(B) Includes amounts due within the next twelve months on long-term
debt.
SOURCE ElderTrust
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Related links:
http://www.eldertrust.com
CONTACT:
Investor Relations, Kelly A. McAteer of
ElderTrust, 610-925-4200
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