Sabra Healthcare REIT (SBRA) Financials

Sabra Health Care REIT (NASDAQ: SBRA) has exhibited a generally stable financial profile over the past year, with some notable improvements and challenges observed across its quarterly reports.

Positive financial highlights:

• The Q1 2025 net income attributable to common shareholders was $40.3 million, showing a strong profitability compared to prior quarters.
• Operating cash flow remains robust, with $80.3 million generated in Q1 2025, reflecting ongoing effective cash management.
• Depreciation expense, while significant at approximately $43.5 million in Q1 2025, is consistent over the quarters, indicating stable asset base and capital expenditures.
• Sabra continues to pay stable cash dividends of $0.30 per share each quarter from Q1 2023 through Q1 2025, supporting shareholder returns.
• Total assets remain sizeable and stable around $5.2 to $5.5 billion, reflecting a strong asset base.
• Long-term debt levels have remained relatively consistent near $2.3 billion since early 2023, showing controlled leverage.
• The company shows consistent purchase and sales of investment securities, indicating active portfolio management to optimize returns.
• Stable issuance and repayment of debt around $20 million each quarter suggest active but balanced capital structuring.
• Total non-interest income has grown to $183.6 million by Q1 2025, up from $160-165 million in 2023, showing increasing revenue diversity.
• Net cash from operating activities has remained robust quarter-over-quarter, providing steady cash available for reinvestment and dividends.

Neutral financial observations:

• Interest expense on long-term debt remains high, around $27-29 million per quarter, reflecting sizeable debt financing costs.
• Provision for credit losses is minimal and sometimes negative, indicating stable credit exposure and loan performance.
• There is significant volatility quarter-to-quarter in other special charges and impairment charges, affecting total non-interest expense unpredictably.
• The weighted average shares outstanding remain around 230-240 million, showing no major dilution or stock buybacks recently.
• Net interest income continues to be negative due to interest expense outweighing interest income, a typical profile for a REIT with high debt.

Negative financial factors:

• The company recorded a large net loss of $84.9 million in Q4 2022 due to a significant impairment charge of over $21 million and other special charges.
• Impairment charges have fluctuated substantially, with notable charges such as $15.3 million in Q2 2024 and $7.3 million in Q4 2023, indicating potential asset write-down risks.
• Negative net income was reported in several quarters during 2022 and 2023, including Q3 2023 (-$15 million) and Q1 2023 (-$9.5 million), pointing to past profitability struggles.
• Cash flow from financing activities has been consistently negative, driven by dividend payments and repayments of debt exceeding issuances, which could constrain liquidity.
• Declines in cash and cash equivalents between periods (e.g., Q1 2025 cash fell to $22.7 million from $63 million in Q3 2024) suggest tightening liquidity.

Overall analysis: Sabra Health Care REIT has demonstrated solid operating income and cash flow in recent quarters, with stable asset and liability levels. However, the company faces pressure from high interest expenses and variable non-interest expenses, including impairment charges that have adversely affected earnings in the past. Continued dividends reflect confidence in cash generation, but liquidity trends warrant monitoring. Investors should watch for management's handling of debt costs and asset impairments to sustain profitability going forward.