CareTrust REIT (CTRE) 28 Feb 182017 Q4 Earnings call transcript

Company Profile

Participants

Gregory Stapley	Chairman, President and CEO
William Wagner	CFO, Treasurer and Secretary
David Sedgwick	VP of Operations
Mark Lamb	Director of Investments
Eric Gillis	Director of Asset Management
Jordan Sadler	KeyBanc
Chad Vanacore	Stifel
Jonathan Hughes	Raymond James
Michael Carroll	RBC Capital Markets
John Kim	BMO Capital Markets

Call transcript

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Operator

Welcome to CareTrust REIT's Q4 2017 Earnings Call. Please note that this call is being recorded.

Before we begin please be advised that any forward-looking statements made on today's call are based on management's current expectations, assumptions and beliefs about CareTrust REIT’s business and the environment in which it operates. These statements may include projections regarding future financial performance, dividends, acquisitions, investments, returns, financings and other matters, all of which are subject to risks and uncertainties that could cause actual results to materially differ from those expressed or implied here in. Listeners should not place undue reliance on forward-looking statements and are encouraged to review CareTrust SEC filings for a more complete discussion of factors that could impact results, as well as any financial or other statistical information required by SEC Regulation G.

Company FFO, non-GAAP normalized normalized the EBITDA, such FAD. call EBITDA, normalized FFO, the will metrics reference as During FAD and these exclusion but cautious When the they should more its with relied that reports. understanding measures upon be believes the complete business, viewed a GAAP can its GAAP of not provide of together Company results, arise of revise and undertake to not information, as Except any statements changing for affiliates forward-looking its circumstances required result by any law, do as or events, future other changes update new CareTrust or a REIT or publicly reason. also CareTrust can CareTrust www.caretrustreit.com. financial advised supplement Listeners Relations access its are quarterly press website at which of Investor that our be Form accompanying XX-K of and each its on filed and release the yesterday section availXable this website of call the limited be also will on period. replay a for A over would Greg to Stapley, the CareTrust turn I Chairman CEO. now call and REIT’s

Gregory Stapley

me like update Pristine. see guidance respect I'd issue activity a for of now our of $XXX new year seeing our the of finishing Dave Thank bond welcome. Gillis, was our X.X well of morning to in everyone, Good you Asset and our With Lamb, Director Mark Operations; our normalized a Wagner, are Investments; Sedgwick, Director With with still of our on you a and Bill Overall of Eric Officer; and XXXX. Financial Vice Latif. Management. debt-to-EBITDA Chief for President tenant again great We XXXX X-year still to leading and We $X.XX best year dividend the one I'd met year positioned record FFO an robust it a ATM And we're million our carrying debt new tamped ratio. million issued both CareTrust's with acquisitions. the year. increased issues. the XX% markets our couple mentioned, times posted payout tenant in we're industry All ratio. We was new We $XXX ever. solid while told, tenants equity and

to have from recall to assets, transfer, in went care Pristine is over QX the they portfolio financial agreed X% the year-end November the struggles less other exemplary with structure December same-store operators. only where legacy Ohio is X reduced the of Trillium but very changes debt properties another recovery manage to and profitable reported provide that address their their Xst at Trillium the grow of on X of to revenue. the but first Since This to that some results. also discovered smoothly. our run-rate than continued transition exposure X XX efforts. the Pristine they revenue our December their buildings the it transfer problems You persisted retained of the one than patient to place. XX% that things caused hampered to In difficult in shrink cost needed is to that in then in is X in of our this more was and much approximately climb an they to process, EBITDAR monthly over building for XX% posted The

they operators need reported X to obligation and able just the remaining to other cash a rent us. and reserve a facilities as a against to an they've X them deferred And placed us their to certain been now transition transition selected only also by accordingly last lease agreement on partially the result, other they've as signed to Trillium. As we've and basis transfer result, their obligations, post

do take from And in properties pleased multiple qualified X coming taken rental interruptions I the will continue the not transitions income market, strong discussions report transition have They and operators buildings. going complete expect months. in We those the those to the over of of business. to during period. of to sheets term and Pristine interest. have to rents in our We the is we their to we anticipate for out contemplate the part any properties hand am we’re interest operate there. taken they reduction None working already Pristine from and the transition their transfers. patients non-CareTrust we've have stake on their of security protect interest to And have new including through still these this they although following indicated value a all receivable and the preserve in Pristine in they transition and and and then will assets We nine lender are a orderly is capital and X we operators focus reserve, the of the holders assets working agree operations to accounts the maximize best there. staff with X

you our skill build us of sets imagine, We’ve and to full some to and with test sharpen can underwriting, new has new advantage asset others. broaden required of develop concentration experience in our tenant to risk. situation As the reduce capabilities taken set our Pristine and unique battle management

true represents not those was months just We've more address of demonstrated not X% to Ensign they on when commitment besides ability tenants and revenues, those occur occasions problems. new to in bring also solutions, changes than installed these X and our difficulties rare ago. With which transparency

pipeline real XXXX for other year. And for through cloud resolution address with like horizon to bright in obstacles that now, on would on financials. talk the that will details challenges growth provide presented conclude worked then We our us always, will is with Dave about Pristine suggesting been to relationship operator the have As our and will the Bill ahead. Dave? a otherwise with overcome we on one only XXXX a banner Mark

David Sedgwick

positive the to outlook in our particular. of enthusiastic coverage on not SNF about see individual about largest you the operators. and more group, improving saying by Again hard the when want be board average such result is is and across Ensign impressive the the than I our So, in to more factors that macro is close success It's showing ever. operator less business capabilities start

would same-store and of us grew end. instrumental, headwinds predicted with outside covered X.X the start During portfolio Ensign at year at times regulatory year X.XX actually us the share many market at observers its be the markets year the from of grew when in many

outlook progress upbeat by tenant allow rest portfolio in Greg moved lease bolstered new described, operators, doing Ohio move their recent as our is a already very we couple of us new will that Pristine issues to other to our with and are well of the termination under management. have agreement resolving asset Our the

Senior small in These with X% In we facilities were we Priority experienced placed them addition, and while be our willing trouble facilities four Better Florida just in related. were Senior them housing in transitioned Better our and over operational their work extent tenant, with fell existing hurricane to former rate Lifecare. December revenues. run tenant some rent for the to challenges behind of from accounted Living senior in QX, entirely

operations Our job deeper doing starts the of been management getting has an we on asset and decided problems to team Priority excellent December, track. them replace Since back quickly.

built the us keep is Remember, also when continue a at for The bought stabilized close deep account facility We we rental those bought a anticipated X.X and which as that in recently at level Albuquerque discount has on both buildings watch hit lease it. we our to up. we performing stride and on a affected The revenue. were two million building facilities, OnPointe together closely pre toward on are are our place. To don’t in monitoring over be that global if do assets. plans into specific OnPointe be continuously issues that they properties, that to have they spill sure the our unrelated they track operation week, last building is They believe based on also fine. is working still we but our will and stabilization, full that visits are that we basis

been. With our operators these than they ever two exceptions are have stronger

taking have we continually all our embedding operator strengthening learned We been process. in have

candidates. new our score operator in core and and exposing a current we is in that issues the us Our and proactively underwritten seen highlighting is address s and perspective most have the way card allows opportunities tool the to rigorous ever operators operator

operators continue manageable to of assets local are focus that And discipline business. smaller the on We growth the we to would to regional no to deals each XXXs their see core growth we year be the for say really stake. maintained and whose

have and successes on many challenges, especially building healthcare learning the the about positive on In market. addition remained the from we to we had

organization fourth are starting small we are us of into head relatively to our instead stronger board the we year XX move had and allows one, still As operators company’s with size across the year, the we needle.

and Speaking Mark? of market moving acquisitions will our the discuss now pipeline. the needle, Mark

Mark Lamb

all Thanks Dave We inning us. and was hello yield of a XXX of invested assets loan, to across great cost. QX new year breaking including everyone. transaction blended of X% inclusive the mortgage a the for in five transactions million just record

XXXX, year million full invested of we rate the blended X.XX%. at a XXX For

seen the operators cost over opportunities coverage. for you weeks we predominantly In facilities and new of specific are reposition and are investments deal and coming we long-time stable aware is we increase spite significant low the Turning and scale occupancy have that We to to and down geographically start, of volume of distresses from Deal intermediaries, at volume year as upside the markets great past repairs our can sizing assets. and strategy on weeks the portfolios in over mix acquire to as expect to to where that front, one-off few increased is we've to key believe with opportunities performing midsize from last even conversations months. small there still the concentrated compelling activity shady to we overall seeing non-strategic where non our our ranged are our and are brokers be deal some in this of with and occupancy, in operators will see view based operators with non-stable advantages. us most buildings operators time new slow

continue we will coverage and XXXX, standards can when if underwriting we close time we new range. upon we facilities Bill from pipeline market and look acquiring them. includes tenant to discuss with outstanding location. we up we partners remember existing bring pipeline intend The XXXX we as yields to nursing as and sit confidence yield and geographic us pairing And operators. apply financials. off here operators in and to only Like quote as as that skilled that it in senior then our today, $XXX million which are over a tenants well only great to As we opportunities to pair and the strong I’ll $XX new and existing have hand operating of strategy in our lock actively Please to can believe place time deals acquisition have level them housing we currently the million pursuing now, in our our current reasonable is of that pipe, both build we with to on we and quote our we for full

William Wagner

Thanks Mark.

prior share year and the quarter to to XX% For XX% per we $X.XX pleased $XX.X grew Normalized by to over report the grew $XX.X FAD FFO quarter, million normalized by grew prior quarter FAD million. $X.XX. by over per are to normalized the and XX% year grew by that XX% FFO to share normalized

Given on FAD our XX% per recent a of in on XX% dividends which payout best of healthcare again ratio of $X.XXX and the REIT most covered this dividend equates the one sector. FFO share, to represents

took go you me quarter walk $XX.X on, through Pristine. fourth in the to I relating let Before we the million charge

As a agreement entered lease Pristine. Greg discussed, we have into with termination

cash result, taxes accounts and have we well advance to not are collect property will other or us as that as we have by that XXXX. we to on Pristine related a owe likely As concluded for to prior that

advance is million XX-XX cash paid $X.X $XX.X the cash $X.X as taxes. rent of of expected XXXX, or for deferred XXXX So, to made in that is million $X.X up and of million tax to of the be relating million and the of has

income cash revenue XXXX assuming after our all for to have approximately term through only line $XXX the current $X.XX existing Pristine guidance Interest million of basing rents and further agreement, X-year expect paid are rents FFO the our investments count on two up term X%; amortization following only a includes XX.X for transition interest and term to the on rent. roughly XXX recognizing per This the yesterday's sheets received at period. roughly from are deferred be $X.X living In this expect on $XX.X to and fees million. interest $X.XX of annual shortly. our about year the transition and cash the made also rent are received year guidance transition of approximately press CPI assumed and expense approximately rates the scheduled date the for rental In a of the in from $XXX,XXX receive floating to four, or Again, under LIBOR on contractual the and rents lease expect the group-based $X.XX acquisitions That same plus from all better. $X we rents for stay that as also make rents the additional of again we date, of announced including release, million of financing and XXXX, facilities have In sign the after average calculations, and million or Pristine escalations includes $X.XX. bps cash Pristine's in year; debt revolver to do our the assumptions: approximately We we on $X.X of weighted rate year; no we will will and of million receive our share the loan. cash five, investments straight or share issuance of to per based have during of projected million; equity that termination LIBOR three NOI rent, loan are we rates six. Pristine FDA projected Three, share transition be same guidance our we X.XX%. independent cash assumed XXX any revolver to made relies this revenues total bps our a this one, current in the margin expense includes normalized

million. We million includes million comp. to G&A also are of G&A $XX.X $X amortization projecting projection of approximately stock $XX.X of roughly our

approximately calculated X.X is about ratio leverages fixed today, debt-to-EBITDA approximately on of As value XX% times. coverage enterprise times of and for our our run-rate stats is as basis credit charge X.X a

cash turn $XX that, million on of I it with have also We And hand. to will back Greg.

Gregory Stapley

Bill. Thanks

And operate the despite failure of we're standard occasional and note, right to and asset on operational inevitable. the for we we can Better Just the should premise still you also success the XXX% build we our tenant ability value past this of failure. to expense Pristine equipped but would unique demonstrated functioning We're as our that perspective, selection hope address to Senior, time. we swiftly with while sizably mitigate challenges circumstances. and ready in are get that same backgrounds our concede closing preserve years to issue both the unexpected high well at willingness and not to occasional difficult A the

coming continue the put on extensively many road will challenge out the and questions us things keep have We weeks and transitions execute plans. happening the answer will on to will happened posted that this good discuss be you Pristine our and in be in business to the and we as behind

anytime we on As this helpful. at answer been to looking again with now ways organization, that outstanding all and than XXXX, for you continued in that, your ever we're we'll the and like. we've And thank forward count we're hope Lafit? has an We to been happy support. you discussion be stronger would questions

Operator

Sadler line KeyBanc. question of [Operator first the you, comes Jordan of sir. Instructions] from Thank Our

line Your is open.

Jordan Sadler

just kind of give of is for a to to some iteration caused on I'm so in to second process Why understand from sort that the curious November? why you things this Pristine for So be moving us we're didn’t the I recast this to and second in of just base where That it maybe do time stage deteriorate here. lease What today? touch a the had this happened you there November? that just all quickly context to and wanted

Gregory Stapley

good. was of but question, into level This and and behind fiscal doable. able we in lifeline fourth a even The were the the clear Pristine they was projections muster. actually not real urgency them is acquired discipline that third did today, certainly Greg. withstand the frankly level quite Yes, Jordan. they look to We amendment Listen, one November given

strength As it's didn’t in lot I grow they mentioned a well. than to my to prepared easier comments, is just shrink it faster and

certain that In execution they thing that needed as maxed debt and thought of buildings it execution thousand they just did them immediately they line realistic it could the XA capital job done as a lumpy, nine struggles the took felt can Look, the hold answers seems and which they seem the so, that a do ended their call would death the indeed do ways. cuts of do about, their to conscious the too. overhead They they just shrink want. all they was everybody be for they that a we somewhat there. but was line only it significant They've through with for great were in in to where feasible, was flows while that the XX facilities the X once clinically. successfully weren’t as always up projection were is negotiated they operations they that They meantime, the presented the experienced, these a both capital they they with obviously and the as were very paired lot November? back the in the legacy they care this on out plan you of wasn’t. and been XX finance were and degree, like gap this of working exits. I always even quickly Why the which been a not at being between depended by significant able have challenge wanted more that haven't to mentioned, of lot following cash load caring excess their And a working Those little through pretty they caring weren't felt a vendors work it of zillion also dealing for it we but and the and assets. And was of very transition kind

up, their of were XX% or December to leading those the by account account If year you their losses transition. up at seven that seven looked and the giving X they

and So as war exit Intel, in they the by to insisting And have and that last could done often everything answers it. the What and again asset threatened, were it it we looked that but might a absolutely, that a as was in good and they with do and when we had was if gone this to that to things deal chance one lot negotiated us the swoop were this of like more one nine the hope the value fell value and step, fairly fall, to time. bankruptcies in otherwise grafting cost and like allowed operation wall, I with preserve step then question. that second deterioration stable handwriting another all doing which the on retain do preserve the

Jordan Sadler

the was those required million What required not they of was the function under that nature payments lease rent of base make? payments X.X obviously not the but of as That additional what? a did

Gregory Stapley

represents X.X to lease centered those that and other require additional net Jordan. Yes, under that pay to triple taxes taxes property net triple they Those will lease.

Jordan Sadler

be Did they suppose to impounding?

Gregory Stapley

under amendment, the Well we impounding. fourth stop

pay. they to So require

William Wagner

were did we XXXX in of that those. impounded pay and December that before stop some There they

fees debt permit also some are their referenced I those taxes, that included think franchise there. in

basis. when taxes the have Ohio in be to So the share on and quarterly Medicaid taxes, paid that bad Jordan, that filings is property lion you other see a our really

Jordan Sadler

What other The concession Better I Senior. which was to the on new the it's tenant, rent Priority? think I question have is

Gregory Stapley

our in year basis, at had year facilities have look versus -- the last versus took cash recognizing Priority any Senior year. that not year October contractual all beginning started rental those XX.X revenue combined paying Remember, we they million any nor November. would we last in guidance Better have and last on we fronts over pay X.X it a even under assurance pay had this cash rents revenue that. X.X QX for in if we in of cash did about this, Yes, did and

Operator

you. Thank

next question line the Our from of Vanacore Chad comes Stifel. of

Your line is open.

Chad Vanacore

don’t so that stay with rent at new second. operators? is been In you for contractual this a the going haircut expect right, X just the to I’m million transferred, I’m Pristine for have currently and a X.X properties

Gregory Stapley

That’s correct.

Chad Vanacore

come EBITDAR coverage, in? level what And expect the EBITDA coverage would then, when on of or you new kind operators

Gregory Stapley

With we X.X start are as assets. coverage somewhere the in rents on in discussing, operators these new to at the going expect coming them right around off an we initial

Chad Vanacore

deteriorating you in are was And What you then the side? trigger operation management the the while about thinking Or so the when fast. at the problem, more level? the problem facility pulled really

Gregory Stapley

meet management -- yesterday the That The was It's think more obligations. in the legacy our to operations release I the side. just debt as facilities on current press clearly their and the the we view. in old assets mentioned ready the pretty their might they they ability cash hampered flow really level management our assets solid have and have things and to the the otherwise in with other problems done are shape do but that’s operation for what

Chad Vanacore

not your but operations the other dropped occupancy sector. question you've housing senior portfolio seen substantially. related Overall, transferring are one that to Then on is to pretty housing Pristine maybe

for So as far that what’s portfolio occupancy outlook as your in XXXX?

Eric Gillis

This very is feel the going comfortable Eric, occupancy forward. we and about

in with were I of have the are now occupancy. level XXX% that area to of occupancy up buildings XX% on about our had worked tenants so and XX% there several apples the have that and lease as state in many oppose leased We several a to we up

numbers bit. up a So we of coming seeing are some are that those quite

go especially Better portfolio with up confident Priority. that numbers the continue the to So will Senior Florida feel with these we very over transitioning

handover seeing We with increase some to the in occupancies already priorities. are the

pretty about feel we So that. good

Chad Vanacore

Eric, rather lease what portfolio of on the see do line than the stabilized you portfolio? up

Eric Gillis

that stabilized and Well, has Florida again if up. gone portfolio at you with the look

We in -- with have our portfolio we well premiere. up the Midwest also Again, gone comfortable. operator feel seen some as in has another

increases over quite of operators We have of seen a some last a bit That’s worked the quarter. the bit we senior time our to skilled with have and steady housing it.

like set into we some feel success. that up there is good for XXXX going So

Operator

James. comes of Hughes next from Jonathan question of Our Raymond the line

open. Your line is

Jonathan Hughes

there, to sounds And earlier, you big deals to the for are in portfolio it safe in step added glad $XXX butter but bread are the smaller the XXXX? deals say will new tenants Pristine that going for bolt-on from like platform? you well discussions back more to to do is an hear, Thanks Pristine operators' million be and color existing like find was taking you plus a it

Gregory Stapley

it's deals XX Jonathan. We or some. them. not of a maybe would My deal make or every has Yes, year fair underwrite question to XX XXX been of fall this on in answer necessarily be offers XXX

about and price. already good being the location, very available take very, in knows we're or the been. successfully it's They're is constitute selective good operator what care do. can deal what deal big well they're good we So And small markets a well taking That deal. at And a deal, the the operate is of foremost, person right them to be paired with who an that how assets.

year chunk operators past of to with million get you those, our And we range acquisition bread we we historically, us those much incrementally one hit one two though if in right look them find grow existing at if love. million, will even likely $XXX $XXX because as or that for $XX and the there, frequently the still as So couple at the years. done deal. price. $X it's to the And we we deals, don’t takes we've or It share do deals or love butter our million we of of that very pattern, million we

to do with that size. any that solely experienced size So we And of we're I the the not thing mean it's on based all that the we opportunity challenges think the away with don't Pristine really turn transaction. good, having

Jonathan Hughes

what's of expectations kind external combinative of next think you to any growth maybe your cost there, on this that deals year, in if out you seeing? don't do I just on And the growth for how shaking leads give a question, markets but into funding equity you'll And capital. planned provide Okay. formal how guidance do you're but pricing a

Gregory Stapley

for we're only as even around recently as Yes, years. years that ago. we've accommodated remember it, two capital quite to not been X markets not even And

just the to but work I that's is, So a kind continue know what this this what that's at a It's do we how don't what market in we hostile. little bit we think to do. is.

which deals terms they So looking how of spread still investors, are. at accretive in

fluctuate now obviously due gone this will due we're issues also solving, capital we but for to probably challenges market just that with the in have of cost it's Our time-to-time, the all from to partly Pristine macro REITs. up partly

we stride. are all and challenges And those so taking

debt will We That's match our a that to continue do and equity deals so as we needed, very find to to accretive adjust what those out will value. again deals do. create and we we best usage shareholders go and fund

Jonathan Hughes

Okay. any that up pricing? deals on And out Has then just seeing update you're on recently there? moved

Mark Lamb

Hey really bag Mark. Jonathan, out I there. it's it's similar to the guess mixed

chasing still you seen continue skilled that today But of they've Midwest place been. Virginia, Maryland some secondary private you've to is a nursing like hot Florida, think I maybe as California, in of markets have I kind where assets. pressure they're the pricing ever come lot have you money tertiary, And there a think with down. from SNF perspective,

there maybe not see are haven't still on out you'll a is the are than that but we and perspective of of buildings and interest occasionally for pricing of seen SNF kind volume kind lot but come bid the market the from this the a say early years see so distressed but it's spread expected basis in probably we drastically here. most to short-term down to maybe getting those non-stable so a part on over it's So, ask they to to still come the or over is lot you'll the narrow there

Jonathan Hughes

weren’t list the in are properties so for your the Okay, one remarks relative watch maybe and Are that prepared more underperforming that either other there any Dave. underwriting on mentioned to then expectations?

David Sedgwick

I get on. more attention the we schedule I are the -- of I ahead things with some that think of my we've closely that as been covers really were world in sharing that today sit of it lot of that what we now think right kind monitoring spending prepared transparent paying remarks

to So add anything I don't has that? to know if Eric

Eric Gillis

operators lot and over I with that to really that their of really to increasing are group coverage excited I excited continue year of been are grow guys really the to half we think with we've growth on as lot exciting we of quarter working that last feel stable these our seen the to a to good with growth operators in last just a good these It's the see grow like the to a be we've some got of operators. a are with. them. have and and with buildings the now lot we like SNF

Operator

Our RBC of Capital comes question of line Markets. Michael from next the Carroll

Your line is open.

Michael Carroll

ratio, provide some what coverage that lease color from coverage maybe you total ratios, the calculation? can the if on Greg, is we portfolios the Ensign exclude

Gregory Stapley

published number up but not Ensign get have you at that our there. we X.XX times think revenue of if Michael, can I XX% pick you

Michael Carroll

guess, how through through mean, cap where ranges? the, And Ensign, should have Is or should times? anything of -- about think about I the I below then there guess, those that's I where distribute the we coverage X.X portfolios we And outside that? how they think

Gregory Stapley

answer Eric let to the going I'm question. that to

Eric Gillis

a portfolio we're last skilled so. our especially a nursing quarter over From side, in of lot increases actually seeing the or

increased, a those of their For to example, which Healthcare line. we the along in coverage have others great continues that same partner and ours Idaho market, Cascadia is are

because some continues to Illinois of have they facilities coverage a name We the that WLC, the to we've and portfolio as of great great well and by their coverage Southern have. take down operator their in

talked starting exception we're last to with press and really of facilities And seeing year, Dave out we're the there. negative about. that with so that lot these nursing actually the a all everything This see field

skilled coverage staying doing some the job nursing great in of aspect. is Our increasing stronger and a

Michael Carroll

skilled what mix was the And point figure? today what's it and portfolio XX

William Wagner

this in number we’ve a not and to that’s you color want provide disclosed. that around the though skilled some do Eric, calculated mix buildings? Again,

Eric Gillis

our the of portfolio? skilled skilled Are you mix about buildings talking or mix in

Michael Carroll

buildings length in as worked mix the profitability of the how stays. turning Medicare portfolio and in Has Has underwriting throughout operators under and and reductions plan has skilled probably skilled your the having a that way. of while improvements that out? seeing trended it's higher more industry some patients in general? mix market, kind has lower the pressure the bringing they the within bought CareTrust the what's you're within been that’s Well, Has your that trended I seeing impact recently typically Medicare know of buildings, lower portfolio?

Eric Gillis

Okay, yes, question understood.

say been that come they there skilled in what have skilled That this have and or operators increases we well -- would would we’re portfolio in they to distressed operators the the our and the where increase and on I brought buildings to the our that and some skilled been on mix year skill so up as increase we that a I've So lot we a of building asset, were west. coverage in call that able seeing some as Washington that there mix. say. have

and of they ticks new has mix well as on that would that that some stable we've skilled I on the but that seen continue still We to our operators of can, business skilled in strong feel So is, Medicare building. we’ve some lot increase in and a been like uptake focus say seen and our portfolio. up,

Gregory Stapley

a great mix There this and up move want that, talk operators what Mike is very And want has also do I it good basically, straight operators. skilled that to just strategy just tack shops some been and Medicare great and Ensign that that’s operators strategy was there Crag, successfully. and toward to we in to and there on we about have Prestige do just who running great is

make where in tenants those out or doing strategy places is Medicare anyone everybody a have to care we same and front well. not don’t feel clear there We skilled to strategy, Just about other is patients any their perusing on that there other concerns a the but is bot. are managed like be ways very

Operator

you. Thank

from Our line Securities. the comes next question of Capital Daniel Bernstein of

please. question Your

Daniel Bernstein

it I for is much maybe quite turnaround and an seems word need. of is some how heading more some how it upside strategy up form that the asset, or investment lease your get I you around, right you’re or of the turnaround more portfolio some of but think about from not like more upside have do revolves the this question operational towards operational have buying assets

a to think And acquisitions? much to future about much in how understanding turnaround risk, so portfolio within want gone operational from the say standpoint? just you And trying your do how do how risk you

Gregory Stapley

just that the that Probably is to -- Greg, of assets experience. about our briefly successful than the one that’s out talked listen not there turnover Mark the strategy. in of primary level look stabilized do that that that of would kind operator assets like of where with where Also into of you acquired be will XX% we want still can ours though, on kinds you we they the a not in its great stabilized provide. those pre-stabilized for a Even asset new, we which we operations. be about portfolio assets you operators, very where is this have lower Thanks are stabilized attractiveness than a of assets, some probably nice necessarily a seen we that be put to oversight we talked great less and turnaround portfolio. great it and is additions of somewhere it price, it basis are, and have portfolio but operator market turnarounds we Dan get see to think we can performs our and at are have We distressed some our tolerance don’t

Michael Carroll

understand benefit just type those do upside the investments? with better or I’m might it When that up trying just the the income? of down well you on as the extra pops pickup and you coverage? there are those structure some you you senior Is the lease buy overall up get looks down of on assets, response road? on investment just road slower to the picking yield income the the how operational when how additional resets maybe Is rent coverage given you

Gregory Stapley

they And comes so some at to as cost all, fairly And might little to with not happy is really even we upside CPI us. who are at the And do of miles we for risk, that as but our looking No, pick of escalators assets, with step-in get that kind Understand where risk we that rate operator that’s some heavily just participate really extra up are stepping over also or that, period is. for that into into in asset work. a low on their pre-stabilized of in taking entitled they're reward can a those them time. based a those. that they a yield focus of fix the long occupancy the advantage coverage

reward enhanced our leased coverage in upside down road. is Our the

Michael Carroll

going additional the some right, pipeline. question had yield was back to upfront maybe And the other acquisition I

the seeing of seeing past you of done another Or the and a in that or -- have lot have thought just If not private there, is you deals years? you competing level that at it have level that are to not back are make continue same that you all pulling acquisitions out publicly equity still I’m that guys different about prior this tone. from your range in stepping back just very you had into per price and se, you and looked can but accretive want most a are said asking the stock recently at budget? I quarter view, guidance for we general you

trying how So I’m acquisition are understand, looking market past just at years? to relative to you the

Mark Lamb

Hey Dan as year, are that look at down were volumes XXX its there, Mark, we transactions. I’d last we we opportunities say discussed the out underwrote

the you fit for on mean, assets sense strategically, I even make it’s those not box. -- that are of type our digit of going to operators kind hit assets that pairing percentages So single not

as are tenants. Greg we out coverage that our opportunities grow lease for to with our said looking So

we've million we said And past the so, over $XX where that's years. been I $XXX two think to million

refine we of fits along for look of if our changed. those two one to hasn't do are think add of in we fine so little we'll And Volumes we be harder strategy should find opportunities. But a continue that hasn't these. strategy Our little a comes got just But bigger chunk our a to further underwriting I underwriting. bit means overall think And continue our down, occasionally to work a your as and dig that changed. we that. we And I operator XXXX. new deal these

should I think be there. the opportunity

Operator

And your Markets. John BMO from Capital Kim next question of line comes of

Your question please.

John Kim

Apologize, you've improved I were tell But Pristine of this the performance missed talked about if transferred can you Trillium? that to from on and the earlier. average assets

Eric Gillis

this XX% in from seen about thanks the is Yes, the question, November and their EBITDAR from We've increased same for to shop. Eric. December

come that of even and lot mind. care will the before was managed So we see -- on, contracts were in a

X, so they about until patients, seeing, cost start now took it all could got was we're so February, where more the that February the done contracts with they in control. so largely increase XX% accepting And in mind and the

population in perspective. a from the now, the census stayed opportunities have more so to they up accept managed patients, is great Ohio. that can revenue the seeing And We care we're same. see in which about because build But was February, even a

Trillium job. great So done a

with We buildings to they excited on. future expect those increase continue them about and that the took X to

Gregory Stapley

and we I'll that just felt Pristine, it with or X holidays. discussing the are relatively owe step of notice to that willingness to as coming one We the Greg. the like with is on naturally great done great that anecdotally the them this them John exit they've road. that been the down hey with those on job Yes, their we more relationship chance take into Trillium during have the look buildings at X add have short a we

they the right nice They digested we And that. point, like And So ask like to of grow answer is got. the but times. building. you was step we're focused portfolio. at be we've to very the into hope And the that kind gate. if you their not we we that in further the one to We'd as apply ready able to on that. going covers a That we're they're said, we're about kind and they're love And that to of we'll now performing have just date two answer really acquisitions building. and at the be answer know, proofs can great as taken. pleased But do your until one and operationally gave enlightening. putting with as it with is do would again them sold to this grow the they we've now we discipline exactly that what future some want very of of they know right That well out absolutely We are the hear of them from tenants. that assets in doing

John Kim

they that right Trillium before that that your hand off? they improvement operations? improved performance, they're just comparing cover since Or it since taken that Pristine EBITDAR the an over versus is But is

Gregory Stapley

because to No, all in they and didn’t tied to mid at patients far go you they need the of so through those we we've kind were December. pointed a sequential they out, working contracts one their manage while that have back November the or that adjustments And give was one make it as as that of take their with from to behind make for so took results three transitions. from Eric to

John Kim

remaining is how the…. it transferring on and as far the think they the potentially assets you table off absorb or as then And really so table Trillion is

Gregory Stapley

other term for who are of interested are has all we whom in significant that were coming several highly but other some candidate of have Ohio they not all are to excellent some two very-very for in couple assets. have now and who candidates qualified a and operators sheets mentioned we we are already Trillion hand those, all be or indicated Ohio as would of heft of those

John Kim

I up quarter was because quarter the Pristine well. think fourth it with the for the wondering reason now was your again you if the opening that ATM why in And I you as use third then was are announcements didn’t the reason that

Gregory Stapley

sale our mentioned careful that and not the market right out news now, closely. sure the the raises we we as people was any will but watching need as price really very turning know earlier we and to like if free so there and we like we or we the down have that's we about stock match I'm as I ATM need a about to all growth columns know wouldn’t are so sure be Yes, had the being is fund far

John Kim

that just on or then And numeric supplement yields your the remind is to current Page can number? from how number calculated the just X you of showing one us the the me of cash were final GAAP

Gregory Stapley

a cash It's number.

John Kim

it's of it that assets the X. part from Pristine a Okay, XX.X been to this just the original is or of about client transferred. X.X asking so I'm sequence in the we're went the to was it reflected

Mark Lamb

did gave its the Pristine new that the yields that yield last transaction. investment based in in cash year so would the Yes, originally been in going that have we XXXX we rents item are Pristine cash reflected adjustment line on cash. not when is

Gregory Stapley

John, see one, that just investments what properties current Slide on of made that to can in rents those to we the are supplement. and the you the add-on X

Operator

line the KeyBanc. next Jordan from question Sadler of of comes Our

open. is line Your

Jordan Sadler

rent. of if they some understand, to they were leases if their XX% the of million rent just to come obligation I obligations? obligations not obligations $X.X prior but a of period. trying regarding from and it, portion that made lease, under made were prior not wanted of reflective to sale repay or to they since to obligations the I'm other Pristine those million obligations base X.X XX% back unable their payments X.X or that current of harp to on recast was of but -- your were or payments since pay those with million In recast words, the that

Gregory Stapley

ahead. go Yes, Bill,

William Wagner

the that referring the were to lease. X.X relates The to XXXX we under obligations -- X.X

paid Does like period. prior that sense? taxes are So for that the in make property

Jordan Sadler

that significant are mess very meeting Yes, a reflective January it’s two behind are guess quarter factor the inability it obligation of been seem, reflective I November, of would mean have to that their it they obligation by does. or missing are that, they assuming the then would fourth they comparable getting this I'm pay XX%. and What are whatever. not obligations their of were December, the I

is that how conviction get guys understand what when underwriting to we XQ to so operator are you or that And the these. they that driving to I'm big able or new XQ that is the that you have be report report, done surrounding badly are trying anticipating potential that meet suppose to why tenant will what or amount? What the miss these or we properties

William Wagner

they X Okay basis. they XXXX. payable we on QX -- to get taxes all relates million X.X that the the from bad approximately are property so of for let's taxes to EBITDAR, the relates EBITDAR on -- properties, XXXX, accrual X.X are include performance When the for all X.X on of

generally that of went into the pay lot those that debt in bad would during recorded bills are not month a a cash there types XXX X accrual, so cash is of The tax bills. a They're actual last due property showed there of likely collections at that came bad Pristine they of bucks X%, say gap and year collection X%, taxes. of more last million were enough debt but to taxes can property have that is So EBITDAR that Those for like these on for have year ran expense came income. problem bills. there bad pay million every was X% for XXXX that that missed was revenue sufficient Pristine

it a lower better we around debt against collections procedures and operator results benchmark tenant X%. their collections it forward debt bad that better another We going than Ohio Pristine more with So a disciplined cash focuses will and around an in call bad and think produce is expense. expense was and have processes cash on has less

it it we done, So know by XXXX just can be wasn’t done during Pristine.

Gregory Stapley

done had I and Greg, it was the and Jordan. done, very it it This last doing we is they it If had was fourth was the it, think that been to having about progress fall, in don’t they wall processes these where lumpy. nicely and slow they very post Nor it, just of -- was hit if are been done we move it their on amendment but very they have moving sort stacked. were a to January be making and that’s will inability October now, any in them in but conversations November it

Jordan Sadler

sort question right are I within like know you where the for would normally of for the to one appetite? just range leverage And another be. you there what I at feel six Bill, like

up to front? on close the appetite order what’s and acquisition execute lever in in So the continue to to incrementally the near term deals

William Wagner

four on when stated well range is we a Jordan our we Yes, EBITDA, out five to above were that. came debt to times

are debt the comfortable down some managing So high levels. we

also below -- the have we debt handle to been we had We EBITDA. four. in were on three year, Last

investment the times, to want upon between kind goes. but hit we'll leverage four depending flow play we guide So, and that deals and five where how of where

And over it. the we months, the next million we to would if put XX So, I I’m ATM guess to the it to of likely line XX the over of short-term. deals match portion million them what couple on to in is maybe saying use call have fund

Operator

to time remarks, this you. call any the Thank And turn closing to sir? like Mr. for over back Stapley I’d

Gregory Stapley

for you call. being thank and the Latif, Thanks, everybody on

earlier, more questions mentioned we I have. answering As that happy are you to

to I in next You find the then. weeks be hope us few you and know on to here where care. road we see out and will Take

Operator

for this conference. Thank gentlemen today’s you, and concludes you your participation Thank have sir. a Ladies and day. wonderful

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