Sabra Health Care REIT (SBRA) Q1 2025 Earnings Call May 06, 2025 01:00 PM ET Company Participants Lukas Hartwich - Executive Vice President FinanceRick Matros - Director, President, Chairman & CEOTalya Nevo-Hacohen - Executive VP, Chief Investment Officer & TreasurerMichael Costa - Executive VP, CFO & SecretaryElmer Chang - Equity Research AssociateFarrell Granath - Equity Research AssociateJuan Sanabria - Managing DirectorGeorgi Dinkov - Senior Equity Research AssociateRichard Anderson - Managing Director ...

Financial Data and Key Metrics Changes - For Q1 2025, normalized FFO per share was $0.35 and normalized AFFO per share was $0.37, compared to $0.34 and $0.35 in Q1 2024, representing a year-over-year increase of 79% for both metrics [14][15] - Cash rental income from the triple net portfolio totaled $90 million, up from $89 million in Q1 2024, despite the disposal of $115 million of real estate from the portfolio last year [15] - Cash NOI from the managed senior housing portfolio totaled $24.1 million, compared to $19.1 million in Q1 2024, driven by strong occupancy and margin gains [15][12] Business Line Data and Key Metrics Changes - Skilled nursing and triple net senior housing EBITDARM rent coverage reached new highs at 2.19 and 1.41, respectively, with behavioral health coverage at 3.77 [5] - Skilled occupancy increased by 80 basis points sequentially, while triple net senior housing occupancy rose by 50 basis points [6] - Revenue for the same store managed senior housing portfolio grew 6.3% year-over-year, with occupancy at 85.4% compared to 82.6% in Q1 2024 [11] Market Data and Key Metrics Changes - The domestic portfolio occupancy was 83%, gaining 340 basis points year-over-year, while the Canadian portfolio occupancy was 90.9%, adding 140 basis points [11] - RevPAR in the same store portfolio increased by 2.8% year-over-year, with Canadian RevPAR growing by 4.9% [11] - The company noted a robust deal pipeline, with over $200 million in awarded deals, which is more than the total for all of 2024 [7][8] Company Strategy and Development Direction - The company is focusing on internal and external growth opportunities in senior housing, with little new supply expected in the coming years [10] - Management emphasized a commitment to maintaining a balanced portfolio between senior housing and skilled nursing, avoiding large portfolio acquisitions to keep operations predictable [78] - The company is actively using its ATM program to raise equity for funding growth, with a focus on accretive capital [16][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued occupancy growth and potential Medicaid rate increases in the summer, which could enhance coverage [86] - The company is cautious about the skilled nursing facility (SNF) market due to challenges in structuring leases around underperforming assets [66][68] - Management believes that the current operating environment will allow for improved coverage and revenue growth, despite potential headwinds from provider taxes [85] Other Important Information - The Board of Directors declared a quarterly dividend of $0.30 per share, representing a payout of 81% of the first quarter normalized AFFO per share [19] - The company has ample liquidity of over $1 billion, consisting of unrestricted cash and available borrowings [18] Q&A Session Summary Question: Update on skilled nursing facility sale - Management confirmed that the expected $50 million skilled nursing facility sale is still on track, though regulatory hurdles have delayed the process [21] Question: Trajectory of RevPOR and expense growth - Management expects occupancy to rise, which will allow for increased pricing power, while expenses are anticipated to remain stable [22][23] Question: Guidance on acquisitions and SHOP performance - Management reiterated that acquisitions are not included in current guidance until closed, and reaffirmed expectations for low to mid-teens cash NOI growth [27][28] Question: Insights on transaction market and deal flow - Management noted a robust pipeline of deals, primarily in senior housing, with private equity firms as frequent sellers [31][33] Question: Details on $200 million of awarded deals - All awarded deals are domestic, primarily in the Eastern U.S., with growth potential embedded in the assets [40][41] Question: Changes in underwriting criteria - Management stated that underwriting criteria remain unchanged, focusing on cost of capital and accretive deals [60] Question: Concerns regarding SNF acquisitions - Management highlighted challenges in acquiring SNFs due to financial instability and the difficulty in structuring leases [66][68] Question: Expectations for SHOP occupancy cadence - Management anticipates an increase in occupancy as seasonal factors improve, particularly in Canadian assets [70] Question: Interest in large portfolio acquisitions - Management confirmed a commitment to smaller, more manageable deals to maintain operational simplicity and predictability [78] Question: Medicare reimbursement impacts - Management expressed confidence that Medicare will not be significantly impacted by current government budget discussions [97]

Strategic. Disciplined. Opportunistic. Investor Presentation | May 5, 2025 Disclaimers Forward-Looking Statements This presentation contains "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. Any statements that do not relate to historical or current facts or matters are forward-looking statements. These statements may be identified, without limitation, by the use of "expects," "believes," "intends," "should" or comparable terms or the negative thereof. Examples ...

For the quarter ended March 2025, Sabra Healthcare (SBRA) reported revenue of $183.54 million, up 10.1% over the same period last year. EPS came in at $0.37, compared to $0.11 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $181.82 million, representing a surprise of +0.95%. The company delivered an EPS surprise of +2.78%, with the consensus EPS estimate being $0.36.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-34950 SABRA HEALTH CARE REIT, INC. (Exact Name of Registrant as Specified in Its Charter) Maryland 27-2560479 ...

Reconciliations of Non-GAAP Financial Measures March 31, 2025 (Unaudited) SABRA HEALTH CARE REIT, INC. RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES FFO, Normalized FFO, AFFO and Normalized AFFO (dollars in thousands, except per share data) | | | | Three Months Ended March 31, | | | --- | --- | --- | --- | --- | | | | 2025 | | 2024 | | Net income | $ | 40,304 | $ | 26,254 | | Add: | | | | | | Depreciation and amortization of real estate assets | | 43,494 | | 42,914 | | Depreciation and amortization of real ...

Tariff uncertainty is still lingering over the stock market. As we speak, the Dow Jones Index ( DJI ) is down over 1,000 points, while the S&P ( SP500 ) is down more than 100 (points).Contributing analyst to the iREIT+Hoya Capital investment group. The Dividend Collectuh is not a registered investment professional nor financial advisor and these articles should not be taken as financial advice. This is for educational purposes only and I encourage everyone to do their own due diligence. I'm a Navy veteran w ...

Group 1 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1] - The service offers a free two-week trial for potential investors to explore top ideas across exclusive income-focused portfolios [1] Group 2 - The analyst has over 14 years of investment experience and an MBA in Finance, focusing on defensive stocks with a medium- to long-term investment horizon [2] - The analyst holds a beneficial long position in SBRA shares through stock ownership, options, or other derivatives [3]

Financial Data and Key Metrics Changes - For Q4 2024, normalized FFO per share was $0.35 and normalized AFFO per share was $0.36, with normalized AFFO totaling $86.9 million, consistent with Q3 [26][28] - Year-over-year normalized AFFO per share growth was 7%, with full-year 2024 normalized FFO per share at $1.39 and normalized AFFO per share at $1.44 [28][29] - The net debt to adjusted EBITDA ratio improved to 5.27% as of December 31, 2024, a decrease from the previous quarter and nearly half a turn from the previous year [33] Business Line Data and Key Metrics Changes - The senior housing and skilled portfolio showed strong performance, with SHOP same-store occupancy up 80 basis points sequentially and cash NOI at 17.9% for the quarter [9][10] - Managed senior housing portfolio revenue grew 3.5% sequentially, with cash NOI growth of 5.4% and margin expansion of 50 basis points [18] - Cash NOI from the managed senior housing portfolio increased to $24.1 million, driven by same-store growth and a new property acquisition [27] Market Data and Key Metrics Changes - The skilled occupancy rate increased by 60 basis points sequentially, with EBITDARM coverage reaching an all-time high of 2.09% [10] - The Canadian communities within the same-store portfolio saw revenue growth of 10.6% year-over-year, while domestic portfolio occupancy grew by 2.8% [20][21] - Total expenses for the same-store portfolio rose 3.4% year-over-year, with labor costs increasing by 2.1% [21][22] Company Strategy and Development Direction - The company plans to build upon its successful 2024 strategy, anticipating a higher volume of deals in 2025, particularly in the skilled nursing space [11][12] - The focus will be on acquiring newer, nearly stabilized senior housing communities that offer care to residents, with a strategic shift towards increasing SHOP exposure [24][74] - The company is optimistic about its ability to withstand potential Medicaid cuts due to strong portfolio performance and robust lobbying efforts [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the political environment's impact on business, noting historical protections for the elderly population regarding Medicaid [13][14] - The company expects revenue growth to continue outpacing expense growth, leading to ongoing cash NOI growth [23] - Management highlighted a robust acquisition pipeline, with many opportunities arising from private equity firms looking to exit investments [52][54] Other Important Information - A quarterly cash dividend of $0.30 per share was declared, representing a payout of 83% of the fourth quarter normalized AFFO per share [34] - The company has ample liquidity of $980 million, consisting of cash and available borrowings under its revolving credit facility [33] Q&A Session Summary Question: What are your thoughts on the pacing of occupancy in the senior housing space for 2025? - Management noted that operators are balancing rate increases with occupancy growth, making it difficult to predict exact occupancy trends [36][40] Question: Are you seeing any impacts in pricing for skilled nursing facilities due to the current environment? - The transaction market for skilled nursing is robust, with significant competition from strategic buyers [41][43] Question: What has changed in the acquisition pipeline that gives you confidence for 2025? - The company is seeing higher deal volume and improved cost of capital, allowing for more favorable acquisition opportunities [48][50] Question: How do you expect cash NOI growth to trend in 2025? - Cash NOI growth for the same-store managed senior housing portfolio is expected to be in the low to mid-teens, with a conservative approach to growth assumptions [31][58] Question: Can you elaborate on the strategies operators are implementing to mitigate costs? - Operators have embraced digital marketing for recruitment and revamped onboarding processes to improve employee retention [66] Question: What is the current size of the cash basis tenant base? - The cash basis tenant pool is less than 5% of total NOI, with some sales in the quarter related to cash basis tenants [138][140]

Core Insights - Sabra Healthcare (SBRA) reported revenue of $182.35 million for Q4 2024, marking an 11.6% year-over-year increase, with EPS of $0.36 compared to $0.07 a year ago [1] - The reported revenue fell slightly short of the Zacks Consensus Estimate of $183.22 million, resulting in a surprise of -0.48%, while the EPS met the consensus estimate [1] Revenue Breakdown - Interest and other income amounted to $9.41 million, slightly below the average estimate of $9.71 million, reflecting a year-over-year increase of 3.4% [4] - Resident fees and services generated $76.87 million, exceeding the estimated $75.05 million, representing a significant year-over-year increase of 25.5% [4] - Rental and related revenues were reported at $96.07 million, slightly below the average estimate of $96.34 million, with a year-over-year change of 3.3% [4] Stock Performance - Over the past month, Sabra's shares have returned -3.5%, contrasting with the Zacks S&P 500 composite's increase of 2.4% [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance against the broader market in the near term [3]