- Earnings call transcript Q3 2022

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Operator

Welcome to Community Healthcare Trust 2022 Third Quarter Earnings Release Conference Call.

On the call today, the company will discuss its 2022 third quarter financial results.

We 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. Xnd, emphasize on of based risk this as today, to may information on and wants contain of discussed may be call November 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 disclosure update release, of as

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

call would to I Community turn Tim the like Healthcare over Now to Wallace, Trust. CEO of

Tim Wallace

joining for XXXX our conference for today thank us morning, you and Good everyone, third quarter call.

EVP, Dupuy, Management. is Chief Officer; Stach, today the Officer; Dave Tim Chief our and call Asset me with our On Accounting our Financial Meyer, Leigh

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

updated to last presentation investor our an website posted addition, In night. was

busy third from an standpoint. standpoint acquisition an from both quarter operations and was The

risen to have seen has we XX.X%, continued pickup leasing in and activity. Our a occupancy

activity encouraged by continue be the providers. the of health we care on We see to part

than less at remains eight remaining about lease slightly weighted the term average years. Our same

Our tenant busy controlling expenses, asset maintaining very managers while satisfaction. have been

have long-term the As are when tenants properties I for done. with have are significant or indicated undergoing redevelopments to of that significant last quarters, portions and redevelopment renovations or in place we five renovations the different continue several them

to performing an the to and year. The these The these acquired after X% expected fourth properties annual two of square During investments a range company on to $XX.X a X.XX%. $XXX.X million. to and be approximately have in The currently XX.XX%. five currently investment and anticipated and for expected an agreements and signed up purchase the XX.XX%. XXXX company properties price approximately definitive for returns price properties million with approximately approximately running leased, quarter XXX,XXX purchase returns of occupancy expects on acquired X% close of sale properties XX diligence feet these The to purchase of with has million. total of is through we properties aggregate purchase quarter, The agreements for should company this are $XX.X of XXX% for third completion due continues expected of under to return properties leases approximately aggregate expected

We expect into to these and XXXX properties close possibly XXXX. on throughout

items of front, declared that relationships to proud the facilities dividend to opportunistically I out and properties per of utilize quarter to we the IPO. I acquisitions, our credit hand We our our and $X.XX our and sheets to anticipate believe equity ATM another expect returns numbers. have and term review our of dividend cover, on continue third $X.XXX properties XX%. access an we availability On to to annualized be we say Dave have and with every raised to the to equates cover so things on continue the I per quarter several it raised to fund our This enough to since share. off for wanted to markets. anticipated under to have dividend share, I'll having X% through many takes the banking strategically common We care

Dave Dupuy

$XXX,XXX XXXX would total in well fund $XX.X expenses total in have Revenue floating diluted million everybody. facility third $X Great. with some Interest million day was This remained revenue along additional same G&A of increase pro on FFO third of acquisitions, perspective, the or $X.X increased the million third cash quarter. $X.X were morning, or XXXX from revolving Thanks, first From to $X.X growth million acquisition quarter operations occurred the forma $X.X X.X%. X.X% million. utilities $XX.X I'm of third had million a of the expense Likewise, share quarter operating Tim, FFO to an over forma pleased million as in compensation. amortization quarter part quarter to increased quarter-over-quarter. increased property per million Meanwhile, expense in our the decreased from from the if per driven million increased quarter to non-cash months, good approximately a representing was in $X.X the of to in On in and by quarter third basis, the the third to from report borrowings XXXX in XXXX, rates. in X.X% from grew in increased revenue quarter property by growth the third $X.X or $XX increase to interest X.X%. quarter the $XX.X second due increase an year. a flat third in in million that XXXX quarter hot the expense the in to third for quarter to The second quarter. third credit at of X.X%. from quarter-over-quarter quarter, due the an on flat $X.X tax second $X.XX increases $XX.X million, Funds on our of the basis, expense increases period by the as summer million grew last G&A in properties. total in second was G&A or million in stock-based for at share. to representing under second the caused Increases quarter assessments the pro seasonal was quarter of

discussed, from FFO $XX.X per increase growth compensation, third million $XX.X by per the which in for in ‘XX with quarter ‘XX basis, of in and impacted quarter a third X.X% per As of or to was On quarter-over-quarter. of rent XXXX of quarter million the of amortization share in or or $X.XX straight-line amortization that compared share experienced year-over-year. XXXX, stock-based pleased in totaled funds the the AFFO non-cash non-cash adjusts share AFFO, am I third compensation adjusted of stock-based report the diluted to from $X.XX diluted quarter third X.X%. operations increased

to a That's have $XX.X AFFO third the second day increased Finally, to numbers I if have occurred the basis, pro the total Q&A X.X% in a to on third increase. session. million, in share. million a per diluted $X.XX of $X.XX quarter, or first quarter the approximately from diluted on $XXX,XXX quarter to basis, would start Jason, the $XX a from AFFO a representing perspective. all forma $X.XX quarter per on of quarter. grew second And had by third per we're per quarter-over-quarter AFFO the forma $XX.X acquisitions increased million the ‘XX of share in from share pro share diluted And ready

Operator

you. session. ahead. the Mitchell Instructions] begin first question-and-answer Connor go Our Thank comes Please We’ll from now Sandler. [Operator from question Piper

Connor Mitchell

morning. I two questions. have good Hey,

good relationship have guys you out spaces. with a first, specialty So developers building

types these So propensity has deals? macro had the any weakening for on of impact the

Tim Wallace

Good environment. activity side, morning, we have good is what in not tell the leasing pipeline Connor, can everything now, we're weakening looking from you mean, very in our seen any the I effect we're as acquisition seeing right and and macro. out excited our by about the no, yet

Connor Mitchell

the touched in the great. how then can bit a funding on my acquisition briefly regarding Okay, second acquisitions color guys remarks, of more debt provide it ATM you you thinking line on but are the little and credit? pipeline, reduce about pipeline question, expected opening or the to just of your And

Tim Wallace

Yes.

anticipating extremely debt leverage few to maintained the up utilize a into are anticipate the that probably taking isn't over down. we've historically last looking said and half ATM at We We've pull to bit our what book the mid-XX% this levels. We little change and low to a level it from quarters. then

We have and that. have our acquisitions fund indicated banks -- a willingness our very do are to to excited

the the So then we're bank lines, utilize ATM looking lines stuff. our reduce to of, kind normal to utilize the bank and

Connor Mitchell

Allright, Thank you. very helpful.

Tim Wallace

Thank you, Connor.

Operator

comes go Please Janney. Rob The question next Stevenson from from ahead.

Rob Stevenson

in pickup up Tim, the occupancy the to few guys. expecting basis morning, over XX occupancy are drove which how just quarter-over-quarter much Good the next points quarters pick under XX%? you portfolio? And assets additional

Tim Wallace

now. think special, I of the Tim portfolio. special any pretty MOBs. Was looking anything it's much that's at I there assets. I'm type across mean, mostly Meyer

Tim Meyer

but our MOBs, we're it really mostly across and forward. and use continuing see going strong a Yes, pipeline to type, entire was portfolio

Rob Stevenson

Okay

Tim Wallace

mean, So would increase still. I anticipate seeing I that

So --

Rob Stevenson

sellers substantial right. this -- pressure still are to there adjust you that seeing you upward point lag how seeing are for much rates Or for to cap conditions? All then is willing And you current on a and at guys? market

Tim Wallace

that switch, like type properties, that of point No, things mean, a and or thought sudden was first it couldn't switch what lot had gotten, stuff. just it's kind six away, of was the in out But went like they we've increase, gone really environment first properties. people, second our sometime of interested the types and were of, determined figured of basis it normal I flipped. think who find a the caps, them a in more back second it all was selling. have quarter, and And they quarter, types had we've and is switch of as back at once almost XX flip seen crazy our in I caps, six -- nobody that that the we quarter, second maybe first after that is a had then to then they buying

Rob Stevenson

the last cost, this you me. timing not that issue summer just Dave, the you're Okay. to before That's of a And taxes, helpful. one this reimbursed? is for stuff because hot Or get the reimbursed utilities then is for? and get property going

Dave Dupuy

various Most issue, that agreements. have lease we of

those we of of XXX% but XX% don't I'd say, plus. get increases, so most reimbursed. get And those

timing most a So difference. that is of just

Rob Stevenson

time. the guys. Appreciate Thanks Okay.

Tim Wallace

Rob. Thanks,

Operator

Our comes Please next Evercore. Ma Instructions] question from go ahead. Wendy from [Operator

Wendy Ma

you, for questions. have you my Thank taking I Thank one.

properties and sale So timing. the I about question purchase have the about that these one just five agreements under

quarter’s -- into will early ‘XX and the four XXXX. like more in XQ other the So XXXX conference maybe throughout throughout it's I call, in timing last now be you XXXX. And one and think mentioned expected timing

time it of So delay of like or and of there the assume could -- a is the XXXX spread be for occupancy evenly four we the of this leaning will there be reason quarters. properties should any instead half by completion this second more for and to forward like more

Tim Wallace

I've I've issues. Good would morning, the And jobs where estimate And supply to construction almost trying stopped when it's to Wendy. chain be basically got complete.

For elevators. inpatient specialty and that hospitals, you like items and various you need units generators compressor need HVAC double and even

For delivered. extremely as that specialty dates and matter, the not even estimated now they doors, manufacturers to have true times lead be long some when giving doors are can

to for again, can a the -- you it it tough determine the for determine doors or generator HVAC be be done really can't it's So to the going if the units it. when project construction for specialty getting or you're even when or

think but -- it's in fourth they've and that's my ‘XX and one somewhat why depending pushed why end mean into gets why been upon rata one back, up we'll pro And the and we then pushed been closing I chain. a don't all one one ‘XX the for closing end guess, quarter it's estimate that's best didn't why quarter pushed that probably back. we is So best up supply a

Wendy Ma

That’s Okay, thank helpful. very you.

Operator

ahead. from go [Operator comes Dave Instructions] next Rodgers The question from Baird. Please

Dave Rodgers

down quarter. to on $XX Good guys. you're for to quarter kind $XX average and I million quarter million. go assets, the Tim, or wanted acquisitions pipeline was to $X here set million in of back morning, the about to close The that Yes. this fourth shrinks this pre

if you're wondering are if there. as that, these there sourced that So or assets? about maybe talk multiple on one transactions little credit bit in you've smaller-sized something And a all in considering I'm individual those portfolios like

Tim Wallace

There assets. and assets we've last properties we've morning, our or basically, seven types group are in Well, public. of there it that the is invested of good however long is our years, different is these Dave. eight bread-and-butter And two couple that properties. for one that been them of are a have They multiple

up make there's properties. transactions that I think eight all or total, the nine that XX

basically, And portfolio. not are bread-and-butter single a there's So our they acquisitions. just large kind of

our stands all unique. there's nothing and buildings invested Again, really them physician in. out that makes I office But bread we've clinics. they that of are think are or medical them or basic butter

Dave Rodgers

I see number But square your coming that's I back Or kind redevelopment, questions know you, So maybe in just you somewhere, of hear on today? relative on feet show would this place. redevelopment, occupancy first tenants of didn't that market occupancy and question. one properties, up And future does mentioned the then bucket this it talked so maybe your to of maybe two properties we other five quarter, And second is something really is, or the guess, it. helpful. I today? in that be the have about five occupancy stat the to And you with last

Tim Wallace

Tim? Tim, first, nothing against you don't we've think it. know foot, disclosed not how that, at square we do I'm sure the but looking I'm there's I -- really

-- So

Tim Meyer

No, is leased we occupancy. it not, but have

occupancy So included it in figures. our is

Tim Wallace

Okay. feet, And how would you many estimate? square

Tim Meyer

XX,XXX square roughly. between Anywhere XX,XXX feet and

Dave Rodgers

Well, guys. Thank appreciate Great. I helpful. you. that's it,

Tim Wallace

Okay.

Operator

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

Tim Wallace

us look after so seeing all to and out in year. and good the first forward of Bye. to today having Well, fourth Thanks the NAREIT. everyone being you appreciate mean you quarter we a I of some much. talking with

Operator

for concluded. now Thank attending you presentation. has Conference today's

You may now disconnect.

Community Healthcare Trust (CHCT) 2 Nov 222022 Q3 Earnings call transcript