CHCT - Earnings call transcript Q2 2020 | Community Healthcare Trust Incorporated

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Operator

Welcome to Community Healthcare Trust's 2020 Second Quarter Earnings Release conference Call.

On the call today, the company will discuss its 2020 second quarter financial results. It will also discuss progress made in various aspects of its business. [Operator Instructions]. The company's earnings release was distributed last evening and has also been posted on its website, www.chct.reit. X, emphasize on 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 this A release, for the of property company. its archive that reconciliation An available not in information. During are is and This without is otherwise or All 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

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

Timothy Wallace

joining XXXX us Thank you, for for everyone, Carrie. today you morning, quarter thank conference Good second and call.

Officer. today and Stach, Page our Officer; Barnes, the is Leigh Dupuy, Officer; Financial Accounting Chief Chief call David On with our me Chief our Operating

busy with on X-K, last the it and was as second and Once of was supplemental filed Form night last as business were and earnings our quarter, As is and report data announcement very report we our were usual, normal XX-Q again, night. during usual. also most quarterly our released an filed process,

course, However, COVID-XX. the I of quarter, of topic with guess start the I should

providers care the quarter, many pandemic. As the have health COVID-XX by been in first impacted

elective have patient have seeing of of patients, and/or procedures not number reduced Some visits. others them been seen a

or cash seen from improved have others from government experienced increases limited impact census While either have or funding. in even flows

As XX XXXX. agreements less deferred of to of base company to generally and expenses. pay installments these The third X to generally representing the the company the into than equal the of into approximately monthly our are with XX, of providing and continues tenants the tenant or has tenants deferral tenants, annualized entering X% anticipates X Pursuant rent amounts deferral July rent. entered during is months agreements, required to operating in quarters fourth repay with

history. best Our receivables the been in, company's in are in the have they shape

not significant group process, Our closed down in related the is the our done second to COVID-XX quarter acquisition asset but has pushed The properties the process. on XX. pipeline, effect the has This has the great quarter. COVID slowing end management of job a company most the had the to we

year. slow We the through it second the will half of also believe the process

normal I Now items. move to want more to

an program quarter, its share. the received average ATM know, issued net We shares of place. price And through million company an stock we program the second per proceeds As you $XX.XX at equity $XX.X in sales XXX,XXX active of X.XX% ATM have approximately of during gross current yield. at an approximate

feet The to performing The running of third in these and is properties agreement under $XX.X returns properties leases with expected quarter, X.X%. were XXX% million. company of company has for of close a two definitive the properties currently due and an quarter. expected return approximately approximately $X.X the properties purchase a with aggregate for price total approximately XXXX expects During million and These acquired purchase of approximately diligence of purchase X X.X% X.X%. we to square anticipated second price through XX,XXX annual leased aggregate

addition, million currently half properties an for company returns approximately expects to expected aggregate company in close purchase expected sale and ranging term of the aggregate In these price negotiating $XX.X has purchase and of The sheets to the signed and is X.X%. agreements XX under from the properties year. approximately X.X% second

continue also X $XX return investment purchase properties an additional under to approximately to agreements range We definitive on have X.X% The be from for aggregate should completion and expected expected investments and acquired after XX%. these to of sale occupancy million.

quarter these of properties XXXX. the middle We close through expect to fourth X other and in on of one the the

front, on have on we common in it annualized having every to equates quarter leases ATM our continue to by have our continue and continue with our acquisitions, XX% due returns have to declared operational raised an able to and the several our raised quarter. to the to On IPO. utilize per I under lease and and range. X% to average We and properties anticipated many We fund for our X.X have revolver approximately caused share. out to new an extended dividend the expect activity On quarter the properties sheets access anticipate of availability be Through markets. our proud term to equity dividend years. per was share, stable very This combination and to COVID-XX. opportunistically standpoint, a another review acquisitions, during enough since we our maintain at we muted remaining weighted strategically been $X.XXXX to of term to challenges $X.XX occupancy the say second Leasing was the somewhat we dividend

operations and with the Hospital bankruptcy sale the As into it Highland to facility, was acquired Hospital, a lease Highland relates and company. been XXXX, on who X, entered its managing July completed had the operator, the of

to we facilitate that end are process. As we be year. receivable takes addressed $X.X think than repaid this the but can. by net expects the receivable believe now, contingencies that of as different is the provided the have we items what best that believe various might of cover. to situation the still be company the outcome I financing as disclosed, the care The company I occur wanted such we million. could previously today, Obviously, And this of approximately balance to there

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

David Dupuy

Tim, and million quarter review the X.X% revenue quarter second everyone. year. XXXX, Revenue XXXX XX.X% quarter results June I'm was $XX.X to representing financial XXXX. the $XX.X representing Thanks, the CHCT's over grew through million, growth. period from sequential in good pleased quarter Total for same of second first the Great. second XX, in million morning, last to $XX.X XXXX of growth

to $XX.X would already growth or of they acquisitions by Tim discussed in perspective, the fluctuations total our quarter, pro As effect acquisitions in the opening million the the have to Giving X these in revenue From to X.X%, increased though an quarter-to-quarter. end of revenue on comments, expense property normal day forma COVID-XX of quarter, quarter-over-quarter for delayed impacting total closed as resulting operating by approximately very second several quarter. quarter-over-quarter. expenses driven his $X,XXX,XXX of expenses experienced $X,XXX,XXX, decreased property over $XXX,XXX, from slightly second

to addition, Hospital decreased of decrease was rather, related $X,XXX,XXX, or Most reimbursement Highland $X,XXX,XXX, decrease In fees legal of from to a a XX.X%. G&A and result the in bankruptcy. of this

book ATM properties parcel same will property as acquisitions improve MOB quarter a our to remote related to traffic $X,XXX,XXX parking the proceeds the we during second we this quarter, a related used $XXX,XXX. and new Interest $XXX,XXX through loss. acquired reorient quarter, well of During first as program approximately for And But raised back-end net flow. to parking a the lot as loaded the be resulting the expense quarter. for of discussed. in the $XXX,XXX, also from our parcel rather, for sold decrease building one as quarter, our declined $X,XXX,XXX Tim in in the well adjacent entrance to and $XX,XXX nature in the to This as

first XXX.X%. of $X,XXX,XXX Our growth second Net to net second quarter $X,XXX,XXX the of representing growth the of from XXXX for $X,XXX,XXX, XXXX sequentially. quarter income for XX.X% year-over-year XXXX, income in was increased the representing quarter of

On share quarter for share basis. $XX XX.X%. the million XXXX XXXX Finally, increased grew share per the to for that from $X.XX FFO I'm or $XX.X FFO, quarter year-over-year. XX.X% from on of million diluted of a was funds growth pleased XXXX per diluted $X.XX second of in per FFO of quarter quarter X.X% quarter or the basis, to a to sequential second $X.X XXXX in the report first from second representing of in the million, Meanwhile, XXXX second operations,

quarter basis, quarter or XXXX addition, of On or million XX.X% compensation, $X.XX In with AFFO the the in per share in or XXXX operations, per stock-based growth AFFO, per second second rent of share a increased funds share adjusted XXXX from diluted which for $X.XX and diluted compared adjusts year-over-year. to XX.X%. totaled of second in quarter from the million straight-line $X.X $XX.X

second AFFO would all the quarter, representing million, all $XX.X pro forma have to was XXXX And quarter of share. perspective. $X.XX the start on quarter question-and-answer $XXX,XXX AFFO a I a if a approximately first growth first second the the That's have we're the to to from acquisitions session. forma of from perspective, of day pro Carrie, for AFFO occurred Finally, X.X% sequentially. $XX.X increased ready million, by a numbers increasing of

Operator

[Operator Instructions].

question Crossett come Berenberg. first will of from The Nate

Nathan Crossett

could changes acquisition does changes Has What look been you like? pricing? any deal size in was of the you types? seeing pipeline I what us property the kind of any announced. maybe you've Are help already wondering, flow there outside in

Timothy Wallace

the or there's or say been far, we're pricing what that reported seeing much So difference we've what quarters. can't in the pipeline we from in previous really

specialty We stuff. are lot seeing a of

being We year year's a psych-related, a and we and on comfortable very We our for on active able good are feel targets start also. properties. the of do acquisition target very to meet behavior-related pipeline, lot a seeing next have have

Nathan Crossett

increased decline there opportunities? you to any is take say of? sellers has Okay. distressed mean in kind you're advantage of Would the that I kind able COVID that of that

Timothy Wallace

that X seeing any aren't don't X ones don't -- most distressed. pretty that mean But I mean are looking we're much We it of distressed think, I may I to aren't. actively and not know own of patients. tenants for strong really We now. health We if operators. strong think properties. maybe care, And small vaccine is we're distress. operating business. I back I we're our own looking or have not all sellers. that for is

we So for we haven't it. seen haven't looking but really been that,

Nathan Crossett

million just close Okay. big I'm the agreement, definitive XQ? that's under how one expected that's The to is in curious, $XX

Timothy Wallace

is $XX it's Page, it? think I million,

William Barnes

Yes.

Timothy Wallace

million. $XX

Nathan Crossett

question your of we to net kind I a bigger about how portfolio? about wanted I how guess? should telehealth. should this last, could just Is kind thinking of picture ask on think And positive? a be Or just Okay. it we How this, impact

Timothy Wallace

think the Well, on look basis health at a net telehealth, care. positive overall we to telehealth, we way is

most in If can't of we have inpatient we mean what I have it look telephone. happens you our over at site, rehab. buildings, happen inpatient

We radiation oncology, oncology. have

answer et upon happen. lot the can't you the happen depending do kidney We've would various your visits to upon Telehealth of skin mean consultants, and and dialysis. very more ophthalmologic lot I what of favor would curve doctors. centers. it accessible. there's liable the take by Teladoc-Livongo Most can it standpoint and of lot have of we will remote severe That's visits think then have is mean the something We from get we surgery you're to discussion, So they the come upon particularly degrees didn't a few merger bend in you very that or of good dermatologists, we as do a in talks, today of very a can't lighting, they on depends happen even on got a shortage I it you, them get legal they held telehealth. protocols years, cetera. health to can dental and that much But what if when for and the of a they standpoint do simple and basis, standpoint turns long-winded But care of there's et And of of be told defined, basis. good something the I mean, camera, stuff going next that not have can't will have that be looked still some to told trying be do of it, to there's well send not you with have a the it over doctors But of we issues. know of doctor, see the we our think it of with don't are a out but done what they from on -- help cetera. and telehealth. it's ones it are coloration, be theoretically, the of severe talked will question. is, all that it should picture liability the doctors. to they can we've But if coloration might that? we behavioral i.e., to some a in at, something can it, shortage that talk make depending telehealth. issues can still the around a from like there's something doctors, to telehealth of the I a a some potential related probably lot And as if

Operator

will from next Mehta National come Gaurav The of Securities. question

Gaurav Mehta

acquisitions, Following revolver, was could given is up about price how today? acquisitions between equity I stock if on you're comment wondering you thinking where and on your funding

Timothy Wallace

always makes to that always it we've ATM the will, produces being because our is, back and if we later something as said, is that stock can more use that equity leverage And the sheet the issues, to we to use you the not happens, price Well, markets. there's view very cetera. it the we and et advantageous have that able opportunistically, balance leverage access have, produce if sheet the come balance growth equity

you all acquisitions as of in the quarter, we funded match equity. the with So basically saw second

You but goal lower at not good. quarter, our our it drift range, every us the XX% do to times total long-term capitalization the that in little XX% stock a keep to in to we're is having debt price probably won't but about concerned when see is

Gaurav Mehta

Okay.

year. expiration The second have question on I for the is lease the

on You releasing you're could And prospects expiring XXXX. was have in the comment you Maybe if X% what of I from in portfolio? talk vacancy you your of current tenants. about also have that hoping hearing then your leases

Timothy Wallace

area at about with them X had COVID dealing basis, thinking most have that's a mean COVID, slowed down. much I what's leasing. that on Sure. and care health hands has things less providers daily systems full coming their

vacancy basically this year. We a going overall, year. stable we're the do fairly and get we're to leasing with to make have feel some with the rate leases rate, a the hopeful but relatively can several end plus relatively results would still think minus relatively XX%. are we're that. I rate, good like out through gone the well occupancy the think or produce And in that we that actively soon working signed comfortable with occupancy So has dent that We come of

Operator

will next Alexander come question The Sandler. from Goldfarb Piper of

Alexander Goldfarb

for are to acquisitions? guys you you driving around I have to still the ask, are RV back Or airplane?

Timothy Wallace

out do so guy could it. acquisition Actually, went RV, the and bought an we

he's doing an RV to yes, around by And get that, So side still inspections he's existing see of we and acquisitions. using plus to are on the doing it his properties. our is, stopping while

mean So inspections done them I back something, and he'll so... for weeks, week, a get he'll XX and go have or X.X out

Alexander Goldfarb

and of lot the road. a like sounds coffee That Jims Slim on

Timothy Wallace

say will with wise I Well, it's going him.

or of So vacation something. it's kind like almost a

Alexander Goldfarb

Slim Jims. Oh, be serving then you can't

You got to upskill.

So two questions here.

mentioned you of the than had, Tim, are impressive. receivables of X% First, that less clearly, some ABR your deferral best quite is in you've

financially impacted in see that stories et of because we going been clubs, been we retail, these the have cetera, have where the impact. and entertainment, areas what's to firms cut salaries, from So lawyers on impacted closures. Clearly, read law -- fitness about having

parts other like impacted. of all tenants industrials going your -- if it's what's really impressive. think there, And still a were mean, number a time, you closed And everyone just just on industrial, got period lot had more practices like It impacted. as were PPP? it practices? in for So real really I I just e-commerce. the of a Or that capitalized they're well even is all minimal is there, say, impact these estate medical And

insulated? what's is your that so on in So going portfolio

Timothy Wallace

tenant, it's lot and a is process. segment this by industry the providing geography in different benefit one number think is Number things. I by of Well, by of diversification a

inpatient or piece mean, do it people kidney Another do of portfolio other And in site, i.e., rehab, you can't in if cetera. it, any et I of is, lot that don't radiation our we provide oncology, hurt, dialysis, a die what you severely way. inpatient

they lot community. the the our withstand didn't. process diversification, having any think one by major single-tenant of not we've one not And what this having is industry needed in got the test But kind said of the a the significant by a are therefore, again, of all basically, community. spread the I if different is our this needed And all out others then will is, how -- there's we've along seen time. it, substantially acquisition is so So piece what is of this be property of of industry criteria segment between hurt, segments, of part properties

so... overall, I and got base, a good -- think So we've tenant

Alexander Goldfarb

second that portfolio a question. your and sufficiently that think all two then X% the to that that When XX you X%. as will you Okay. when PowerPoint, tenants leads below the think USHEALTH Everest the you are that do grow do have your sort Page over look weighting? pipeline, tenants, And -- me at are in you so of

Timothy Wallace

know don't threshold. to look a significant as Alex. at being the We I really X% don't that, answer

Alexander Goldfarb

I of out benchmark. was that just a Yes. throwing as sort

Timothy Wallace

right. All instance, and good very we more very comfortable some USHEALTH, I still and we with business for doing with business feel Everest, them. mean getting with more think properties good anticipate we're clients, they're

our acquisitions in them I digits. mean concentration somebody seeing have them don't them. down diversification particularly like allow double We digits. but up I don't of to we with I but they like are because investment double in I think guidelines that I the mean XX%, require slowing with seeing

clients they tried So sure portfolio to do. we our to And as the of is rest are those spread challenge those But or have that grows the make and faster out. them is, down tenants. slowed than fast our

Operator

come McGrath The Evercore next Instructions]. [Operator Sheila from of question will

Sheila McGrath

the and go the wonder takes and the it of payback on kind of likely, just $X.X was Hospital. out Highland restructuring looks when I on situation? this whole than it good Is through I -- highly the a maybe wondering or bit which puts scenario? CHCT better where prior just that news does on come interest, million, Tim, was assuming you with

Timothy Wallace

end with because new $XX lease probably the net-net the little better a million a We $X it's we Number wrote valuation upon $XX a old we on that up bit is valuation, million based whilst stronger upon a million one, had the a Actually, based lease loan we off. basis. was lot tenant. mezz --

be of the to period basically, was getting as loan the there. So if mezz lease, still we're going over the paid

very outcome. currently. a our was get bit It be clients opportunities So to X little it reviewing like overall, a we're another with or are of we because operator was one but good them think it comfortable, new a there, looks out we the to may turn of pain other and X very

Sheila McGrath

COVID That's just is maybe, there what was savings with lower Okay. great. shutdown, second the And it first you. this to about a for for for quarter. not On think G&A, this Dave, G&A? traveling? quarter for Were run year in good then compared should we Or some rate

David Dupuy

mentioned reduction for got the in some to situation. the a reimbursement of G&A remarks, legal we -- my of Well, the in lot the Highland was as had with do associated I with costs

Timothy Wallace

in And quarters. not legal having costs prior

David Dupuy

that having of It's exactly. it. both, paid, there's a reduction you've not got bit goes -- And plus little into a

is people the positions for think that while of new to I in we're balancing us. that, news, look, grow company as So are a joining company. a good couple continue important got We've we're actually which

But time of relationship we'll And -- to to continue of a important we add that, proxy I that to is we've mentioned income to continue be going going continue we're we're it's to And grow, terms other think roles. to for G&A. to accountants, to in to where see going XX% as add we so staff, And add think we're a pretty XX% similar I good be. grow. I over see rental think going we you'll

bit XX%. so and do to XX% of And think was little see we'll that blip, to I drop a is continue that a

Sheila McGrath

behind land certainly a And there's small curious a item if I parcel that? there small Was or very something. any story in around last a it think was you but of like the question, Great. XX-Q, story sold Okay. just

Timothy Wallace

dog tear Yes. and bought to adjacent dog And basically, company building better lot property. the bought and X to like blocks was of and traffic do been that of of actually X the When them the we'll with But we to bought were a parking property, what in was there in a it, the down. to side access. the that allow X flow it Dave mentioned we a and it to attached reorient that particular there's And to away. stand. I a of us comments, is them were kind hot use we X the parking hot building lots front reorient his building mean joke building, going there stand and get as that is as now, here this

parking basically, for land in the at lot . new $XXX,XXX way a it look we that I out parking lot. we another investment for bought for $XXX,XXX. $XXX,XXX, net lot X is We so flipped a So parking one sold another We had

Operator

And the this turn back to session. like remarks. any for concludes now I closing Tim question-and-answer over to would Wallace conference our

Timothy Wallace

appreciate in Well, having to in to the we again. today, talking a Thanks on and your months. quarter look X certainly forward and third we you call good interest being

Operator

you for all now The conference Thank attending presentation. today's concluded. has

Have disconnect now great a lines. may your You day.

Community Healthcare Trust (CHCT) 5 Aug 202020 Q2 Earnings call transcript