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Care Investment Trust Inc. (CRE) filed Quarterly Report for the period ended 2011-06-30.
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This is the annual revenues and earnings per share of CRE over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of CRE.
Highlight of Business Operations:
Marketing, general and administrative expenses were approximately $1.2 million for the quarter ended June 30, 2011 and consist of fees for professional services, which include audit, legal and investor relations; directors & officers (“D&O”) insurance and other insurance; general overhead costs for the Company and employee salaries and benefits as well as fees paid to our directors, as compared with approximately $2.4 million for the comparable period ended June 30, 2010, a decrease of approximately $1.2 million. The decrease consists primarily of a reduction in legal fees of approximately $1.1 million, as well as lower expenses pertaining to our 2011 audit fees and D&O insurance of approximately $0.5 million. Such cost reductions were offset primarily by employee compensation expense of approximately $0.4 million during the period ended June 30, 2011 which was incurred as a result of the Company’s internalization of management and other employees. This expense did not occur during the comparable period in 2010 as the Company was externally-managed and did not have any employees during that period. Also included in the marketing, general and administrative expenses for each of the three month periods ended June 30, 2011 and 2010 are approximately $0.3 million of taxes, insurance and other escrows that we collect on behalf of our master tenant in our wholly-owned property portfolio and pass through to our mortgage lender to be paid upon coming due. We also expensed approximately $15,000 for the three month period ended June 30, 2011 consisting of the stock portion of the fees paid to our independent directors as part of their compensation for their service on our board for the second quarter of 2011. For the comparable period in 2010, our stock-based compensation expense for our independent directors was approximately $50,000, or approximately $35,000 more than in the current period. The annual fees paid to our directors were reduced following the Tiptree Transaction. Each independent director is now paid a base retainer of $50,000 annually, which is payable 70% in cash and 30% in stock. Payments are made quarterly in arrears. Shares of our common stock issued to our independent directors as part of their annual compensation vest immediately and are expensed by us accordingly.
For the three month period ended June 30, 2011, income from investments in partially-owned entities amounted to approximately $1.4 million as compared with a loss recognized of approximately $0.9 million for the comparable period in 2010, an increase of approximately $2.3 million. As a result of the new economic terms in our Cambridge investment (as outlined in the Omnibus Agreement dated April 15, 2011, which was retroactive as of January 1, 2011) we will receive a preferential distribution of cash flow from operations with a target distribution rate of 12% of our $40 million fixed dollar investment with any cash flow from operations in excess of the target distribution rate being retained by Cambridge, and we will no longer recognize 85% of the operating gain or loss (after depreciation and amortization) with respect to the Cambridge Portfolio. As per the new economic terms outlined in the Omnibus Agreement, we recognized in income $1.2 million to reflect our related preferred return distribution for the three months ended June 30, 2011. We also recognized our share of equity income in the SMC properties of approximately $0.2 million for the three months ended June 30, 2011. An impairment of approximately $0.1 million was recognized on our SMC investment during the three month period ended June 30, 2011 due to lower occupancy.
Marketing, general and administrative expenses were approximately $2.3 million for the six month period ended June 30, 2011 and consist of fees for professional services, which include audit, legal and investor relations; directors & officers (D&O) and other insurance; general overhead costs for the Company and employee salaries and benefits as well as fees paid to our directors, as compared with approximately $4.2 million for the comparable period ended June 30, 2010, a decrease of approximately $1.9 million. The decrease consists primarily of a reduction in legal fees of approximately $1.8 million, as well as lower expense related to our 2011 audit fees and D&O insurance of approximately $0.7 million. Such cost reductions were offset primarily by employee compensation expense of approximately $0.9 million during the period ended June 30, 2011, which was incurred as a result of the Company’s internalization of management and other employees. This expense did not occur during the comparable period in 2010 as the Company was externally-managed and did not have any employees. Also included in the marketing, general and administrative expenses for each of the six month periods ended June 30, 2011 and 2010 are approximately $0.6 million of taxes, insurance and other escrows that we collect on behalf of our tenant in our wholly-owned properties and pass through to our mortgage lender to be paid upon coming due. We also recognized compensation expense of approximately $30,000 for the six month period ended June 30, 2011 consisting of the stock portion of the fees paid to our independent directors as part of their compensation for their service on our board, compared with an expense of $100,000 for the six months ended June 30, 2010, a decrease of approximately $70,000. The annual fees paid to our directors were reduced following the Tiptree Transaction. Each independent director is now paid a base retainer of $50,000 annually, which is payable 70% in cash and 30% in stock. Payments are made quarterly in arrears. Shares of our common stock issued to our independent directors as part of their annual compensation vest immediately and are expensed by us accordingly.
For the six month period ended June 30, 2011, income from investments in partially-owned entities was approximately $0.8 million, as compared to a loss of approximately $1.5 million for the comparable period in 2010, an increase of approximately $2.3 million. As a result of the new economic terms in our Cambridge investment (as outlined in the Omnibus Agreement dated April 15, 2011, which was retroactive as of January 1, 2011), we receive a preferential distribution of cash flow from operations with a target distribution rate of 12% of our $40 million fixed dollar investment with any cash flow from operations in excess of the target distribution rate being retained by Cambridge. We will no longer recognize 85% of the operating income or loss (after depreciation and amortization) with respect to the Cambridge Portfolio. Our income for the six months ended June 30, 2011 consisted of the sum of $1.1 million representing 85% of the operating loss of Cambridge for the first quarter of 2011 and $1.2 million representing the preferential return under the terms of the Omnibus Agreement. Going forward, we will recognize income on the investment each period equal to our preferential return. We recognized our share of equity income in our SMC investment of approximately $0.6 million for the six months ended June 30, 2011. In addition, an impairment loss of approximately $0.1 million was recognized on our SMC investment during the six month period ended June 30, 2011.
Net cash provided by operating activities for the six months ended June 30, 2011 amounted to approximately $3.2 million as compared with approximately $2.6 million used in operating activities for the six months ended June 30, 2010, an increase of approximately $5.8 million. The positive change in cash from operating activities is primarily a result of the buy out payment to our former manager of $7.5 million during the six months ended June 30, 2010, which did not occur during the six months ended June 30, 2011, as well as a reduction in legal fees of approximately $1.8 million from the six months ended June 30, 2010. Net loss before adjustments was approximately $46,000 for the six months ended June 30, 2011. Distributions from investments in partially-owned entities added $2.2 million. Non-cash charges for straight-line effects of lease revenue, stock based compensation for shares issued to directors and related parties, income from investments in partially-owned entities, impairment on investments, unrealized loss on derivative instruments and depreciation and amortization provided approximately $3.0 million. The net change in operating assets provided approximately $0.4 million and consisted of a decrease in accrued interest receivable and decrease in other assets. The net change in operating liabilities used approximately $0.2 million and consisted of a decrease in accounts payable and accrued expenses and a decrease in other liabilities, including amounts due to a related party.
Net cash provided by investing activities for the six months ended June 30, 2011 was approximately $7.4 million as compared with approximately $15.9 million for the six months ended June 30, 2010, a decrease of approximately $8.5 million. The decrease is primarily attributable to the sale of a loan to a third party for $5.9 million and loan repayments received of $10.7 million which occurred during the first six months of 2010, as compared with loan repayments received of approximately $1.6 million along with an increase in cash from a return on investment in partially-owned entities of $6.1 million associated with the sale of three (3) of the Company’s four (4) properties in its SMC investment during the comparable period in 2011.
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