| UNITED STATES | ||
| SECURITIES AND EXCHANGE COMMISSION | ||
Washington, D.C. 20549 | ||
FORM 8-K | ||
CURRENT REPORT PURSUANT | ||
TO SECTION 13 OR 15(d) OF THE | ||
SECURITIES EXCHANGE ACT OF 1934 | ||
Date of Report (Date of earliest event reported): August 6, 2004 (August 6, 2004) | ||
National Health Realty, Inc. | ||
(Exact name of Registrant as specified in its charter) | ||
Maryland | ||
(State or Other Jurisdiction of Incorporation) | ||
333-37173 | 52-2059888 | |
(Commission File No.) | (IRS Employer | |
Identification Number) | ||
100 Vine Street, Suite 1402 | ||
Murfreesboro, TN 37130 | ||
(Address of principal executive offices, including zip code) | ||
(615) 890-2020 | ||
(Registrant's telephone number, including area code) | ||
Not Applicable | ||
(Former name or former address, if changed since last report) | ||
Item 12. Results of Operations and Financial Condition
On August 5, 2004, National Health Realty, Inc. made its second quarter earnings announcement. A copy of the press release is furnished as an exhibit to this Form 8-K and is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| National Health Realty, Inc. | |
| By: /s/ W. Andrew Adams | |
| Name: W. Andrew Adams | |
| Title: Chief Executive Officer | |
| By: /s/ Donald K. Daniel | |
| Name: Donald K. Daniel | |
| Title: Principal Accounting Officer | |
| Date: August 6, 2004 |
Exhibit Index
| Number | Exhibit |
| 99 | Press release, dated August 5, 2004. |
EXHIBIT 99
For Release August 5, 2004
Contact: Gerald Coggin,Sr. VP Investor Relations
Phone: (615) 890-2020 ext. 1221
NHR reports second quarter results
MURFREESBORO, Tenn. -- National Health Realty, Inc., (AMEX: NHR) a real estate investment trust specializing in long-term health care investments, announced funds from operations for the quarter ended June 30 of $3,894,000, or 41 cents per basic and 40 cents diluted share, compared to $4,008,000, or 42 cents per basic and 41 cents diluted share, last year.
For the quarter ended June 30, net income was $2,570,000, or 27cents per basic and 26 cents diluted share, compared to $2,599,000, or 27 cents per basic and diluted share, last year. Revenues for the quarter totaled $4,886,000 compared to $5,828,000 in 2003.
For the six months ended June 30, net income was $5,674,000 compared to $5,340,000 for the same period last year. Net income per share was 59 cents basic and 58 cents diluted compared to 56 cents basic and 55 cents diluted last year. Funds from operations per share were 87 cents basic and 85 cents diluted compared to 85 cents basic and 84 cents diluted in 2003. Revenues for the six months totaled $10,296,000 compared to $11,770,000 in the prior year.
During the second quarter, we refinanced our $17 million of long-term debt, lowering the interest rate by approximately two percentage points while extending the maturity date until May 2007.
NHR owns the real property of 16 skilled nursing facilities, six assisted living centers and one retirement center. NHR also owns first and second mortgage notes totaling $13.7 million. These notes are secured by operating skilled nursing facilities and other health care properties. Additional information including NHR's most recent press releases may be obtained on NHR's web site at www.nationalhealthrealty.com. The company trades on the American Stock Exchange with the symbol NHR.
Statements in this press release that are not historical facts are forward looking statements. NHR cautions investors that any forward-looking statements made involve risks and uncertainties and are not guarantees of future performance. All forward-looking statements represent NHR's best judgment as of the date of this release.
Page 2 NHR Earnings
| Condensed Statements of Income |
| (in thousands except share and per | Three Months Ended | Six Months Ended June |
| 2004 | 2003 | 2004 | 2003 | |||||||
| Revenues: | ||||||||||
| Rental income | $ | 4,305 | $ | 4,244 | $ | 8,645 | $ | 8,602 | ||
| Mortgage interest income | 581 | 1,584 | 1,651 | 3,168 | ||||||
| 4,886 | 5,828 | 10,296 | 11,770 | |||||||
| Expenses: | ||||||||||
| Interest | 172 | 1,085 | 500 | 2,134 | ||||||
| Depreciation of real estate | 1,492 | 1,589 | 2,983 | 3,179 | ||||||
| Amortization of loan and | --- | 119 | 8 | 235 | ||||||
| General and administrative | 430 | 213 | 619 | 416 | ||||||
| 2,094 | 3,006 | 4,110 | 5,964 | |||||||
| Net income before minority interest | ||||||||||
| subsidiaries and non- | 2,792 | 2,822 | 6,186 | 5,806 | ||||||
| Non-operating income (investment | ||||||||||
| and interest income) | 103 | 106 | 205 | 210 | ||||||
| Minority interest in consolidated | (325) | (329) | (717) | (676) | ||||||
| Net income | $ | 2,570 | $ | 2,599 | $ | 5,674 | $ | 5,340 | ||
| Net income per common share: | ||||||||||
| Basic | $ | .27 | $ | .27 | $ | .59 | $ | .56 | ||
| Diluted | $ | .26 | $ | .27 | $ | .58 | $ | .55 | ||
| Funds from operations | ||||||||||
| Basic | $ | 3,894 | $ | 4,008 | $ | 8,321 | $ | 8,161 | ||
| Diluted | $ | 3,894 | $ | 4,008 | $ | 8,321 | $ | 8,161 | ||
| Funds from operations per share | ||||||||||
| Basic | $ | .41 | $ | .42 | $ | .87 | $ | .85 | ||
| Diluted | $ | .40 | $ | .41 | $ | .85 | $ | .84 | ||
| Weighted average common shares | ||||||||||
| Basic | 9,594,214 | 9,570,32 | 9,592,401 | 9,570,32 | ||||||
| Diluted | 9,793,784 | 9,744,24 | 9,803,939 | 9,738,74 | ||||||
| Common dividends declared | $ | .3325 | $ | .3325 | $ | .6650 | $ | .6650 | ||
| Balance Sheet Data | June 30 | Decemb | ||||||||
| (in thousands) | 2004 | 2003 | ||||||||
| Real estate properties, net | $ | 123,948 | $ | 126,931 | ||||||
| Mortgages receivable | 13,753 | 44,595 | ||||||||
| Long-term debt | 17,000 | 47,820 | ||||||||
| Stockholders equity | $ | 114,114 | $ | 114,242 | ||||||
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Page 3 NHR Earnings
Reconciliation of Funds from Operations(1)
The following table reconciles net income applicable to common stockholders to funds from operations applicable to common stockholders:
| Three Months Ended | Six Months Ended | |
| June 30 | June 30 |
| (in thousands) | 2004 | 2003 | 2004 | 2003 |
| Net income applicable to common stockholders | $ | 2,570 | $ | 2,599 | $ | 5,674 | $ | 5,340 |
| Adjustments: | ||||||||
| Real estate depreciation | 1,492 | 1,589 | 2,983 | 3,179 | ||||
| Adjustment for minority interest-affiliates(2) | (168) | (180) | (336) | (358) | ||||
| Funds from operations applicable to common stockholders | $ | 3,894 | $ | 4,008 | $ | 8,321 | $ | 8,161 |
| Basic funds from operations per share | $ | .41 | $ | .42 | $ | .87 | $ | .85 |
| Diluted funds from operations per share | $ | .40 | $ | .41 | $ | .85 | $ | .84 |
| Weighted average shares: |
| Basic | 9,594,214 | 9,570,323 | 9,592,401 | 9,570,323 |
| Diluted | 9,793,784 | 9,744,245 | 9,803,939 | 9,738,749 |
(1)We believe that funds from operations is an important supplemental measure of operating performance for a real estate investment trust. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen and fallen with market conditions, presentations of operating results for a real estate investment trust that use historical cost accounting for depreciation could be less informative, and should be supplemented with a measure such as FFO. The term FFO was designed by the real estate investment trust industry to address this issue. Our measure may not be comparable to similarly titled measures used by other REITs. Consequently, our funds from operations may not provide a meaningful measure of our performance as compared to that of other REITs. Since other REITs may not use our definition of FFO, caution should be exercised when comparing our Company's FFO to that of other REITs. Funds from operations in and of itself does not represent cash generated from operating activities in accordance with GAAP (funds from operations does not include changes in operating assets and liabilities) and therefore should not be considered an alternative to net earnings as an indication of operating performance, or to net cash flow from operating activities as determined by GAAP in the United States, as a measure of liquidity and is not necessarily indicative of cash available to fund cash needs.
(2)Minority interest in NHR/OP, L.P. share of add back for real estate depreciation.
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Page 4 NHR Earnings
| National Health Realty, Inc. Portfolio Summary June 30, 2004 |
| Portfolio Summary | Investment |
| Properties | Investment | Percentage | ||||
| Mortgage Loan Receivables | 5 | $ 13,753,000 | 10% | |||
| Equity Ownership | 23 | 123,948,000 | 90% | |||
| Total Real Estate Portfolio | 28 | $137,701,000 | 100% | |||
| Mortgage Loan Receivables | Properties | Beds | Investment |
| Nursing Homes | 5 | 714 | $ 13,753,000 | |||
| Equity Ownership | Properties | Beds | Investment |
| Nursing Homes | 16 | 1,908 | $ 75,726,000 | |||
| Assisted Living | 6 | 488 | 33,407,000 | |||
| Retirement Homes | 1 | 58 | 14,815,000 | |||
| 23 | 2,454 | $ 123,948,000 | ||||
| 28 | 3,168 | $ 137,701,000 | ||||
| Summary of Facilities By Type: |
| % of | Total | |||||
| Properties | Total $ | Dollars | ||||
| Nursing Homes | 21 | 64.98% | $ 89,479,000 | |||
| Assisted Living | 6 | 24.26% | 33,407,000 | |||
| Retirement Homes | 1 | 10.76% | 14,815,000 | |||
| 28 | 100.00% | $ 137,701,000 | ||||
| Summary of Facilities By State: |
| Percent | ||||||
| Nursing | Asst. | Retire- | Investment | Total | ||
| Homes | Living | ment | Amount | Portfolio | ||
| 1 | Florida | 8 | 3 | - | $ 61,734,000 | 44.84% |
| 2 | Tennessee | 2 | 2 | 1 | 35,613,000 | 25.86% |
| 3 | South Carolina | 7 | - | - | 30,043,000 | 21.82% |
| 4 | Indiana | 3 | - | - | 3,875,000 | 2.81% |
| 5 | Alabama | - | 1 | - | 3,834,000 | 2.78% |
| 6 | Missouri | 1 | - | - | 2,602,000 | 1.89% |
| 21 | 6 | 1 | $137,701,000 | 100.00% |
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