Shortly into Sabra Health Care REIT Inc.’s life as a standalone public company, the healthcare real estate owner seems to be holding its own.
Sabra reported its first financial results since spinning off in November from Irvine nursing home operator Sun Healthcare Group Inc.
The company, which owns 86 nursing home facilities and other buildings with 9,603 beds in 19 states, reported results for the seven weeks from Nov. 15 to Dec. 31.
Sabra’s adjusted funds from operations—a profit measure for real estate owners—totaled $4.5 million for the period, in line with expectations by analysts.
The company’s revenue came in at $8.8 million, also in line with Wall Street forecasts.
Sabra didn’t provide a 2011 forecast in its earnings release.
Analysts expect the company’s 2011 funds from operations to come in at $34.5 million on revenue of $71.3 million.
Sabra and Chief Executive Richard Matros recently were profiled on industry website REIT.com in an article that focused on demographic trends, particularly Census estimates that the number of Americans 65 and up is expected to double by 2030.
“With skyrocketing medical expenses, it’s important to be able to provide care for individuals in lower-cost settings,” Matros said.
Sabra’s nursing home buildings, which are leased to Sun, are able to offer long- and short-term residential healthcare to seniors, something that costs less than hospital stays, according to Matros.
Medtronic Breakup?
Last week, we profiled Medtronic Inc.’s Irvine-based CoreValve less-invasive replacement heart valve unit, including prospects for it to drive growth for its Minnesota parent, which has 700 workers in Orange County at several locations.
CoreValve is expanding at a time when some Medtronic shareholders are calling for a possible breakup of the company, which has some $16 billion in annual revenue. A breakup is touted as a way to spur gains for shareholders.
A recent Reuters story quoted institutional investors who said that Medtronic could make money for shareholders by breaking off some units.
The calls are intensifying as Chief Executive Bill Hawkins prepares to step down in April after serving four years at the device maker’s helm.
Medtronic, which had a recent market value of about $40 billion, has seen its shares fall some 20% since Hawkins became chief executive in 2007. Medtronic’s board is looking for a replacement.
“The stock has been a stagnant name for a long time,” David Heupel, a senior portfolio manager at Minneapolis-based Thrivent Investment Management, told Reuters. “They’ve seen the multiples compress and compress. They need to go in a new direction.”
Jeff Jonas, co-portfolio manager at Rye, N.Y.-based Gabelli Health and Wellness Trust Mutual Fund, said that he would like to see Medtronic break up and separate fast-growing businesses from mature ones, rather than making a big deal.
“I’d be more receptive to breaking it up than making it bigger and loading up with debt,” Jonas said.
Medtronic is dismissive of calls for a breakup.
In January, Gary Ellis, the company’s chief financial officer, said Medtronic’s board backed management’s current strategy and didn’t see a dramatic change in course under a new chief executive.
New Name, Expansion
ProStar Healthcare, an Irvine-based home healthcare and nursing company, recently changed its name to Cerna Healthcare Inc.
The company, which provides care for seniors with injuries and brain diseases, also said it expanded its service area to include Dallas.
Cerna was started in 2008 by Nick Payzant, former chief executive of US Modular Corp., an Irvine maker of data storage devices that’s now a division of Yorba Linda-based NetGuru Inc. Besides Orange County and Dallas, Cerna also serves patients in Los Angeles, Inland Empire and north San Diego County.
UCI: Mental Illness Alternatives
“Therapeutic lifestyle changes” such as more exercise, spending time outdoors and volunteering may be as effective as drugs or counseling in treating certain types of mental illnesses, according to researchers at the University of California, Irvine.
Roger Walsh, a UCI professor of psychiatry and human behavior, reviewed research on things such as exercising, improved nutrition, relaxation and stress management techniques.
In a release, Walsh said that he found such adjustments “can offer significant advantages for patients, therapists and societies, yet they’re insufficiently appreciated, taught or utilized.”
Study results appear online in American Psychologist, which is the flagship journal of the American Psychological Association.
