Omega Healthcare Investors Inc (OHI, Financial) released its earnings report for the quarter ended September 30, 2023, on November 2, 2023. The company reported a revenue increase of $2.6 million compared to the same period in 2022, totaling $242.0 million. However, net income decreased by $11.2 million, totaling $93.9 million.
Financial Performance and Highlights
Omega's CEO, Taylor Pickett, stated that the company's Q3 financial performance exceeded expectations due to higher-than-expected interest income and unanticipated rent payments from some operators. The company also strengthened its balance sheet by issuing a $429 million term loan, fixed at 5.6%, and repaying $350 million of bonds that matured in August.
Income Statement Overview
Revenues for Q3 2023 increased primarily due to the timing of operator restructurings and transitions and revenue from new investments completed throughout 2022 and 2023. Expenses for the quarter totaled $194.5 million, an increase of $16.8 million over the same period in 2022. The increase in expenses primarily resulted from an increase in impairment on real estate properties and an increase in stock-based compensation expense. Net income for the quarter totaled $93.9 million, a decrease of $11.2 million over the same period in 2022.
Balance Sheet and Liquidity
As of September 30, 2023, the company had $5.3 billion of outstanding indebtedness with a weighted-average annual interest rate of 4.34%. The company's indebtedness consisted of an aggregate principal amount of $4.6 billion of senior unsecured notes, $478.5 million of unsecured term loans, $289.4 million of secured debt, and $19.5 million of borrowings outstanding under its unsecured revolving credit facility. As of September 30, 2023, total cash and cash equivalents were $554.7 million, and the company had $1.4 billion of undrawn capacity under its unsecured revolving credit facility.
Dividends
On October 20, 2023, the Board of Directors declared a quarterly cash dividend of $0.67 per share, to be paid on November 15, 2023, to common stockholders of record as of the close of business on October 31, 2023.
Future Outlook
Despite some smaller restructurings ongoing, many tenants still on a cash-basis, and some security deposits being depleted, Omega remains constructive on the longer-term opportunities within the industry. The operating backdrop continues to improve, with occupancy increasing and the tight labor market slowly moderating. In the longer term, the skilled nursing industry is well-positioned to benefit from multi-decade demographic tailwinds.
Explore the complete 8-K earnings release (here) from Omega Healthcare Investors Inc for further details.