Aviv REIT Announces First Quarter 2013 Earnings Results

CHICAGO, May 7, 2013 /PRNewswire/ -- Aviv REIT, Inc. ("Aviv" or the "Company") (NYSE: AVIV) released its earnings for the first quarter ended March 31, 2013. 

Recent Highlights

• AFFO of $15.6 million, or $0.45 per basic and diluted share; and net loss of $11.4 million, or $0.33 per basic and diluted share
• Adjusted EBITDA of $31.2 million
• Completed an initial public offering of common stock raising net proceeds of $282.3 million
• Closed on a new $400 million revolver with current pricing of LIBOR plus 235 basis points
• Received a two notch upgrade to BB on the Company's senior unsecured issue-level rating and a one notch upgrade to BB- from S&P on Aviv's corporate credit rating, with a stable outlook
• Invested $6.7 million for property reinvestment and new construction during the first quarter
• Invested $5.1 million of acquisitions during the second quarter to date comprised of four properties

"We are excited to begin this next step in the evolution of our business and I am extremely pleased with the success of our IPO," said Craig M. Bernfield, Chairman and Chief Executive Officer of Aviv.  "We appreciate the support we have from our new shareholders and we are committed to transparency, disclosure, communication and performance. Our portfolio continues to perform well, driven by the performance of and relationships with our market-leading operators.  As a result of our access to public debt and equity capital, we believe we are well-positioned to take advantage of the consolidation opportunity that exists in the skilled nursing sector. We are optimistic that we can continue to execute our growth strategy."

Adjusted FFO ("AFFO") for the quarter ended March 31, 2013 was $15.6 million, or $0.45 per diluted share. Adjusted EBITDA for the quarter ended March 31, 2013 was $31.2 million, compared to $25.7 million for the comparable 2012 period. Net (loss) income for the quarter ended March 31, 2013 was $(11.4) million, or $(0.33) per diluted share, compared to $6.0 million, or $0.21 per diluted share, for the comparable 2012 period.

Please refer to the "Reconciliation of Financial Measures" section of this press release for additional information on these financial measures. The Company is also making available certain supplemental information regarding its properties for the first quarter at www.avivreit.com under the Investor Relations tab.

2013 AFFO Guidance

Aviv expects its 2013 AFFO to range between $1.73 and $1.77 per diluted share. The Company's AFFO guidance for 2013 assumes the impact of approximately $220 million of projected investment activity, which includes acquisitions, property reinvestment and new construction activity.  A reconciliation of the AFFO guidance to the Company's projected GAAP earnings is provided on a schedule attached to this press release. The Company's guidance is based on a number of other assumptions that are subject to change and many of which are outside the control of the Company. If actual results vary from these assumptions, the Company's expectations may change. There can be no assurance that the Company will achieve these results. The Company may from time to time update its publicly announced guidance, but it is not obligated to do so.

Conference Call

A conference call to discuss the first quarter 2013 earnings will take place today at 11:00 a.m. central time / 12:00 p.m. eastern time.  The dial-in number for the conference call is (877) 941-1466 (U.S.) or (480) 629-9772 (International). The conference call can also be accessed via webcast at www.avivreit.com under the Investor Relations tab. A replay of the call will be available through June 5, 2013 on the Company's website or by calling (800) 406-7325, access code 4615625.  

About Aviv

Aviv REIT, Inc., based in Chicago, is a real estate investment trust that specializes in owning post-acute and long-term care skilled nursing facilities and other healthcare properties. Aviv is one of the largest owners of SNFs in the United States and has been in the business for over 30 years. The Company currently owns 260 properties that are triple-net leased to 36 operators in 29 states.

For more information about the Company, please visit our website at www.avivreit.com

Forward-Looking Statements

This press release may include forward-looking statements. Forward-looking statements can be identified by the use of words such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "intends," "continue" or similar terminology.  These forward-looking statements are made based on our current expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements. These uncertainties include, but are not limited to, uncertainties relating to the operations of our tenants, including those relating to reimbursement by government and other third-party payors, compliance with regulatory requirements and occupancy levels, regulatory, reimbursement and other changes in the healthcare industry, the performance and reputation of our tenants, our ability to successfully engage in strategic acquisitions and investments, the effect of general market, economic and political conditions, the availability and cost of capital, changes in tax laws and regulations affecting REITs and our ability to maintain our status as a REIT.  Important factors that could cause actual results to differ materially from our expectations include those disclosed under "Risk Factors" and elsewhere in filings made by Aviv REIT, Inc. and Aviv Healthcare Properties Limited Partnership with the Securities and Exchange Commission.

Reconciliation of Financial Measures

We use financial measures in this release that are derived on the basis of methodologies other than in accordance with GAAP. We derive these measures as follows:

• The National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as net income (computed in accordance with GAAP), excluding gains and losses from sales of property (net) and impairments of depreciated real estate, plus real estate depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures. Applying the NAREIT definition to our financial statements results in FFO representing net income before depreciation and amortization, impairments of assets and gain (loss) on sale of assets.
• Normalized FFO represents FFO before loss on extinguishment of debt, reserves for uncollectible loan receivables, transaction costs and change in fair value of derivatives.
• AFFO represents Normalized FFO before amortization of deferred financing costs, non-cash stock-based compensation, straight-line rent and rental income from intangible amortization.
• EBITDA represents net income before interest expense (net) and depreciation and amortization.
• Adjusted EBITDA represents EBITDA before impairment of assets, gain (loss) on sale of assets, transaction costs, write-off of straight-line rents, non-cash stock-based compensation, loss on extinguishment of debt, reserves for uncollectible loan receivables and change in fair value of derivatives.

Our management uses FFO, Normalized FFO, AFFO, EBITDA and Adjusted EBITDA as important supplemental measures of our operating performance and liquidity. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. The term FFO was designed by the real estate industry to address this issue and as an indicator of our ability to incur and service debt. Because FFO, Normalized FFO and AFFO exclude depreciation and amortization unique to real estate, impairment, gains and losses from property dispositions and extraordinary items and because EBITDA and Adjusted EBITDA exclude certain non-cash charges and adjustments and amounts spent on interest and taxes, they provide our management with performance measures that, when compared year over year or with other real estate investment trusts, or REITs, reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and, with respect to FFO, Normalized FFO and AFFO, interest costs, in each case providing perspective not immediately apparent from net income. In addition, we believe that FFO, Normalized FFO, AFFO, EBITDA and Adjusted EBITDA are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs.

We offer these measures to assist the users of our financial statements in assessing our financial performance and liquidity under GAAP, but these measures are non-GAAP measures and should not be considered measures of liquidity, alternatives to net income or indicators of any other performance measure determined in accordance with GAAP, nor are they indicative of funds available to fund our cash needs, including our ability to make payments on our indebtedness. In addition, our calculations of these measures are not necessarily comparable to similar measures as calculated by other companies that do not use the same definition or implementation guidelines or interpret the standards differently from us. Investors should not rely on these measures as a substitute for any GAAP measure, including net income or revenues.

The following table illustrates the Company's AFFO guidance for the year ending December 31, 2013:

SOURCE Aviv REIT, Inc.