CHCT - Earnings call transcript Q2 2018 | Community Healthcare Trust Incorporated

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Operator

Welcome to Community Healthcare Trust's 2018 Second Quarter Earnings Release Conference Call.

On the call today, the company will discuss its 2018 second quarter financial results. It will also discuss progress made in various aspects of its business.

Following the remarks, the phone lines will be opened for a question-and-answer session. The company's earnings release was distributed last evening and has also been posted on its website, www.chct.reit. X, emphasize in of based risk this as today, to may information on and wants contain of discussed may be call August uncertainty. company that that the some that information forward-looking The statements and involve XXXX, will be Actual may statements. from forth in those results set materially such differ

MD&A regarding filings. as these its required earnings in future by company law. of discussion you as its a except obligation forward-looking statements Factors and uncertainties, to may SEC new or should developments statements a as forward-looking well in review undertakes no For whether be otherwise, risks information, the The result Risk and company's its disclosures update release of as

company’s available the A release for the of property company. its archive that reconciliation An available not in permission. During are is and This without is otherwise or Call is which the call is being between written recorded playback XX GAAP this call, be of distributed the the call measures. will two earnings company website prior company’s on conference the the call advised discuss participants purposes. its posted reproduced may this be made for website. financial approximately and or days recorded on Investor will Relations non-GAAP

of Now, President Trust Healthcare Community the Chief over call to Executive I’d Incorporated. turn like Officer to Timothy and Chairman, Wallace,

Timothy Wallace

Stach, second our President our today Ann morning conference for is Good for Vice Officer; our us With XXXX Barnes, Executive Officer. Financial Accounting and and quarter you me everyone and the Page thank call. Chief today Chief on Leigh call joining

quarterly night released an and also X-K, filed supplemental our last XX-Q normal is process, As Form on with and earnings announcement night. and report filed was data were report last our our

an have indicating extremely ATM indicated a place and have busy we during agency sales As to up $XXX quarter. a supplement agreement we program shares. perspective X-K the million Once I past probably the also noticed, were put we’ve would, we that entered filed in as an in in and you’ve for into again

we discussed, receivable, established care the flows company the note assets anticipate during accounts cash, long-term of earning the accounts providing and X% We to on previously by As new nine ownership cash or rehabilitation $XX funded interest, a -- million other a note. cash newly secured quarter hospitals. approximately acute

cash However, real this flows that the quarter and of closing we quickly. the refinancing had anticipated and the for lieu out a estate million. relatively $X.X to during received repaid by original based was will mortgage by its on of secured redeem new our in a note anticipating potential bankruptcy terms, Also a we issue, significant be are company, It amount valuation approximately foreclosure.

XXX% approximately this tenant a lease is have term square While a for to sheet the vacant, feet. which single XX,XXX building building signed is we of

X.X%. with In million. properties annual a of a XXX% total XXXX, were approximately of addition, leased XX,XXX properties $X.X we approximately These to till for quarter, during the returns feet price with of acquired purchase leases anticipated two X% with square running additional

during and X.XX% As these on our expected for to should negotiated quarter. it that fully close a aggregate up investments an have third with we range investment the The we return $X.X purchase sale relates to pipeline, million. of will property it anticipate approximately one expected agreement and

the be range for end X.X% investments properties $XXX return occupancy should million. completion XXXX. additional close under acquired purchase agreements an and we of In of these definitive addition, we to The on after from expected will approximately investment aggregate XX% these and and anticipate to sale expected have that five through

acquisitions. markets. on term the the strategically and But our to now we having equity anticipated XX%. fund we We properties of to returns have sheets to many anticipate availability it utilizing under our access opportunistically in X% outstanding anticipate place, continue we review that have ATM enough We several revolver have with to

the On or feet terminating we property. during to approximately feet. foreclosed related six of related during the renewed the had XX,XXX expiring leasing terminated leases extended or and Occupancy front, drop square-foot months to leases leased, XXX,XXX the we quarter first square the relating did to approximately leases square -- vacant year, principally XX,XXX

we tenant. XXX% lease However, sheet to have single as to mentioned term a the property earlier, a of signed

On declared per anticipate and be every raised dividend dividend we up get our the the share after IPO. say another we This to all occupancy So equates takes $X.XX signed. of we for to it I items I $X.XXXX we care second that our to popping annualized quarter an common have share. back of lease front, cover. to have and that proud quarter since our to wanted continued I dividend raised per believe

numbers. will the cover off So I hand Page things to to

Page Barnes

quarter million quarter XXXX. the on $XXX,XXX over interest expenses second share. per first the XXXX. forma quarter. pro basis, versus for outstanding for $XX second On basis, would the the million for period on pro all acquisitions slight for acquisitions to Again first the were the forma, million quarter for reported forma for and Primarily period titled $X.XX the for in of plus total ready approximately or first $X.X a day per net Lafayette, share $X.X income property quarter, deferred for pro net forma $XXX,XXX diluted increases of million for versus the a the receiving for to second $X,XXX,XXX. Thanks, quarter in was second Total depreciation second increased pro $XX.X estate XXXX revenues $X.XX day standpoint. same revenues to pleased increased the per in ended quarter, of performance $XXX,XXX occurred the General if forma entire were XXXX the versus million to XX.X% $X.X $X.X AFFO to all quarter, the of $X little second consisted decreased same XXXX expense $X.X operations a $XX.X expense AMG second the interest a total second quarter a $X.X $X,XXX,XXX a to the for for total acquisitions Q&A portfolio company $X.XX million increasing would $X.X session. depreciation same share of Louisiana, all $X.X period approximately occurred $XXX,XXX if am On forma period have to amortization amortization by over Tim. and $X.X the rents I XX, the pro of by believe the adjusting XXXX quarter or in second June number a income day the from Total million of the AFFO under for Depreciation XXXX. a to the the million occurred million expenses period for over $X.XX AFFO additional and Rental total second quarter. XXXX start adjusts same increased for if versus and to of just $X.X an versus for were company’s for million compensation and The same due a XXXX second million I quarter revenues and from by the the the That’s for all quarter XXXX. of of review quarter financial FFO XXXX. million have the leased. real by pro of on total XXXX. on approximately of have million. amortization quarter which we’re were and million. Funds and the would XXXX the administrative debt straight-line the I quarter, Operator, -- rental

Operator

And Sandler Please from [Operator our Goldfarb go Alexander first O'Neill. ahead. Instructions] question comes with

Alexander Goldfarb

questions. So a just few

that place. also you then XX good about? But have of that different in million that just the term changed thinking guys your you that pace Tim, the has change about be plans have XX on your loans, talked financing, we First, that curious that types you’ve in see should to previously obviously million picture you targeted? bigger acquisition does anything ATM, to capital And now

Timothy Wallace

We the going ATM, to XX is just we’ve the from to XX%, a to XX% long-term XX% that’s question it’s manage our don’t XX%, to it requirements. another be anticipate the rate. way standpoint, lot should got debt, still for is that’s going view run the XX so a it’s which ATM good arrow goal million million with our in and equity we the changing, be On a capital quiver And see in place be granular basically, and acquisitions better quarter, to structure a capital the first no. so being answer

Alexander Goldfarb

certainly expected the than is then and And thing higher bit can grow. was the G&A obviously a ATM, little the we now that you’ve next you

you versus before you should So be for thinking are should -- but about up XXX,XXX, had creeping a be how where -- in think few maybe quarter? we how year this about mentioned thinking and second next the we I G&A were there

Timothy Wallace

second of in that anomaly deferred In We to had to taken Board Claire had issues CFO was significant Quorum our doing that The happened and we that two we departure quarter left Alfred’s there. for the somewhat Alfred first stock. added basically become we as Lumsdaine accelerate compensation Board an had at Gulmi.

closing professional dollars to close dollars So hundred also bankruptcy. of then close out second to had probably to of that in was couple -- of hundred the thousand it’s a and the related couple we quarter basically thousand fees

run rate a quarter quarter is we’ve rate in fairly got of we second good the probably were we and items had like So the feel couple these hopefully -- unique. first run again that

Alexander Goldfarb

a just final And question. Okay.

getting You restructuring mentioned repaid anticipation. about your and bankrupt about early the is

that. You’ve been on consistent pretty

thinking coming we’re year we much everything about place? make want staying we this year your earnings that's in much due about an think that correctly. thinking again, should is about that that next, this how perspective, Just to should X%, versus on be sure perspective how earnings thinking Now note about closed, back from things for and

Timothy Wallace

standpoint, Right -- from any anticipate wouldn’t don’t I a put I’ll think model I in. repayments now,

year. very possible an into it’s turn don’t million of we we I accelerate probably that we repaid it think I that to get end the XX put X But that in know did would If would acquisition to the I could by offset. model. million

facilities, So of in source likely months the also about frankly quarter based additional that or of funding months. they terms. have just bankruptcy, their of in finished operations feel it’s the pretty quite be think planned repaid like it. something six upon to ahead so had it’s an we first potential but the kind we it’s And they future We budget, that -- were good XX the not

Operator

[Operator go next comes Evercore. ahead. Sheila from McGrath question Our Please with Instructions]

Sheila McGrath

which wondering on and building vacant the -- how a little detail a was I to if was you after you get does you in just is that transaction on CHCT that then you give how the whole does prior at you complex totality bit out, if the more note, there mentioned than transaction? compare that out the term look whole back rent? come way And paid Tim, went back could assuming us sheet better or rent this that

Timothy Wallace

wood we will on the we I if had when -- standpoint assuming have knock have to very rent about term signed, cap I’ll with would similar the this. what that gets rate from it talk mortgage. sheet a But on prior

it’s back basically end valuation and putting into it. and in $X.X -- coming up will million we $X will probably million renovations at around We

I it the works of transaction I’m So around out going we a lot the we get take feel management of other It and professional basis, return. to. like assuming to first by and test good professional fees will we’ve say time X% the but anticipating did everything of in back, lot get a with there and fees looks back now. overall good valuation come a right million we like management well to right far an did to and very time all that’s up it’s we if came it out pretty kind our looks coming everything than, On would end that $X.X take

Sheila McGrath

you some between it’s mentioned might of that’s the perspective could if targeted was of great. if give the And much to just any? I how now closings end pipeline Okay, that then XXXX that agreement you purchase million us -- on XXXX. and close under in $XXX be the of wondering

Timothy Wallace

probably having be again it our hoping Right well although in out future and -- now we’re we’re add-on most possibility it think lumps a there is feel to transparency XXXX, and will won’t But parts way lumps. years, in and that come in by that a may XXXX looks excited of of of XXXX to and our on far is provides pipeline then about lot acquisitions we’re a just but that into going we’re of it already over spread there’s and takes like few that the we made. the come be it late

Sheila McGrath

correct? all properties as new well, it’s And

Timothy Wallace

Yes, leases. it’s a fully do XX-year it’s full all been existing basically an now. is property but right new renovated, Well, properties, all one renovation to it’s a going

Sheila McGrath

question, at management wondering just was paid us was and ownership last the I company? the that could your And senior insider update stock, is largely on that. and Is IPO, if company’s the the much still how at you case

Timothy Wallace

anymore because we doing that the we that important stock in the part compensation why makes us dividend. very of company is know very our flow way and guys of level do everybody a they selling. but we what only why XXX% very frankly the like take is of of is DNA of part we that the takes what sure who everybody of very executives Ann that’s buying tell And think level of -- Page, what of us compensation I a and important but company am reasons a they’re basically in -- took they a that a good in investors have the are take only I a all one good the main in why it’s Leigh investors the meetings that and investing. other get and stock room that into they’re we and our as are quite that a us through And in and cash but get the myself, the we’re meetings room still level still We all who same not investors it. here that’s get There’s majority taken and couple their

Operator

And from our Eric SunTrust. comes next Fleming Please with ahead. question go

Eric Fleming

it partners $XXX details couple more three of On $XX pipeline, properties into we’re million adding of was -- any $XX there of outlook Is add of those more a are hoping are and million. plus, the million who four kind development what’s continuing term properties ago details kind and just grow on $XXX operators, million, last on longer at specific to buildings the five it. that plus on as you you’re of Obviously kind the that -- on the relationships how was at now get quarters quarter there?

Timothy Wallace

call it’s very facility pipeline. to and million of we’ve HealthSouth, in is be but got operator, client that in of their our and in-patient these US they if with It’s in-patient I that’s one be forgot is so an new has probably develop the these relationships but the sold team rehab we’ve the what since is, HealthSouth that’s it’s talked to he They operators we’ve would this we’re which two, It’s with trying second Sach them and years US previous management get, of their done I’d that pleased, or particular team. what part five $XX facilities them to has current in-patient of about that clients had site one is company beginning team a experienced HealthVest -- now in-patient would their management -- sold ago, name Solutions. or we’re trying up of that but management time or with the few this, to -- -- to then rehab a -- This third six rehab Chicago. to Universal and HealthVest I we and a one company a is Encompass had

them serial -- very dealing with we're we entrepreneurs. So call

This first -- dialysis also around. was the we've it company. fourth on quarter, -- time one actually is We is a with closed relationship have in

teams sell have and capital with five experience or so. as to the in management earn significant the to look and them we going again frankly they behind their comfortable and years are and they So we quite at feel credit, it we very probably them are therein two going

Eric Fleming

just in guess? of disclose what I terms mean pipelines get the you how big -- willing to you're think do I

Timothy Wallace

get there, we keep be I XXX can to would very if million and pleased. it we it say would

Operator

go And with follow-up from we a question Please do Evercore. McGrath ahead. Sheila have

Sheila McGrath

of we’re quick assuming year real better from year? next Tim, will on the a is you or think this that off A proposed new start perspective that something lease, Yes. timing that modeling

Timothy Wallace

honest hesitant place third done be but it To you, by am hoping get August it hoping this the happen, to have quarter to to say that in in was anyway. of point Xst, the I with I the end didn’t place at I’m But time. in

Sheila McGrath

Okay.

rents recognizing would does would mean you to the it So take that and? do a renovation start or while

Timothy Wallace

unfortunately we a mean, and rent No, makes rent. some start accounting I paying beginning -- from straight fortunately GAAP the they started and would line

anticipated it’s we rental so straight lease basically to over take and -- a line. So in year XX stream years be to the XX

would would recognition So straight deferred be of rent. basically liner be it some there immediate rental although

Operator

further time, questions. this I’m At showing no

Tim the remarks. So I turn to would like Wallace closing to conference back for any

Timothy Wallace

again And today talk we us, a like months. forward and to Austin. for for call great and helping looking the to thank us third supporting three we’re in for and participating Thanks, to in would everybody Thanks. you quarter

Operator

is attending Thank today’s conference you concluded. for presentation. now The

You disconnect. now may

Community Healthcare Trust (CHCT) 9 Aug 182018 Q2 Earnings call transcript