CHCT - Earnings call transcript Q1 2024 | Community Healthcare Trust Incorporated

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Operator

Welcome to the Community Healthcare Trust 2024 First Quarter Earnings Release Conference Call.

On the call today, the company will discuss its 2024 first quarter financial results.

We will also discuss progress made in various aspects of its business.

Following the remarks, the phone lines will be open 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 on of based risk this as today, to may information on and wants contain of discussed may be call May 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

in regarding as these its earnings in of discussion you risk a statements and and uncertainties, filings. should as forward-looking well its review For risks the factors MD&A company's SEC disclosures release

obligation forward-looking update no as whether future of or result undertakes be as a company The to developments statements, information, law. required new by otherwise, may except

its the During is call, measures. in A GAAP between company this on and available non-GAAP which financial website. will discuss release, its X the earnings reconciliation posted is

advised approximately is playback call is prior are days participants distributed or available being the will otherwise conference without for this reproduced An or the purposes. of may the company. company's be that website XX recorded for on Relations call written This be made of the call archive the not and permission. property Investor recorded company's All

Please I ahead. to would call Trust. the to Dupuy, Now CEO Healthcare Community turn Dave of over like go

David Dupuy

everybody. Thank for Thank Nick, good call. for and Great. XXXX joining us you, today first you morning, our conference quarter

Officer; On the Meyer, Bill Accounting today and of Ann Chief Management. me Monroe, is Tim our call Leigh our with our Chief Financial Stach, Officer; Asset EVP

were and XX-Q. released along furnished report night Form supplemental our Form announcement on with data Our report earnings X-K, last on quarterly and

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

also standpoint from both busy was from first The operations an and an perspective. acquisition quarter

expect to new and lease in of one XXXX. to property A use, sign XX.X% its from former for to XX.X% This the was and increased commence our health in behavioral completed to the component from redevelopment key deliver require lease property the will on we redevelopment buildings services. the outpatient the long-term and increased during the occupancy occupancy care be quarter. lease of Our

or significant to renovations In addition when this are that them with project, redevelopment completed. the significant in renovations is of undergoing portions tenants place long-term X properties have or redevelopment we or

Our weighted than slightly average at years. the less X about term same, weeks remaining remains

X XXX,XXX During feet quarter, for a and total approximately of ranging were acquired in of from the to properties the million. XXXX purchase aggregate, price running we leases with The first square with XX.X% approximately X.XX%. anticipated a $XX.X leased through annual aggregate X.X% returns properties

of into we lease annual new XXXX rehabilitation Subsequent price a acquired million. We to purchase lease March a entered with new patient X.X%. of approximately XX, and $XX.X for a return anticipated a facility in expiration

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

We into expect properties of fourth quarter XXXX, in with and to 'XX XXXX. X close on one remaining throughout the 'XX, of closing these the properties

continue properties X% under XX%. turn indicative with to many review have have returns and of on sheets We to properties out

fund enough combined relationships growth provide the access to will and having facilities markets. our anticipate selected XXXX. yields availability banking modest sufficient and traditional equity we our attractive Given on throughout continued capital These through ATM sales proceeds strategically capital our to levels, expect our to the utilize leverage sources, at asset from credit opportunistically we acquisitions, with for

consultant. G&A our careful Board the changes in describe stockholder X consideration and months guidance compensation. section. detail first let approved I'll adopted as expense of proxy as well of Bill result feedback, Also more independent his to changes during quarter, the advisory executive our a of were These our analysis from firm of compensation in certain reports

per the equates our dividend common first up, of raised very wrap declared to to have annualized $X.XX to our to per every an dividend for since are and $X.XX share. share, proud we and we This it quarter our So IPO. quarter dividend raised

That takes care of the items I cover. wanted to

So the I off Bill will numbers. to to things discuss hand

William Monroe

I first growth Dave. report $XX.X more quarter in provide now I'm of will grew XXXX pleased first year. same $XX.X to XXXX, on performance. our details the period X.X% of representing financial revenue from first the the quarter you, that Thank in million last million to total annual quarter over

X.X% our total our When closed $XX.X was last by during revenue week timing the acquisitions in the quarter-over-quarter, quarter although million we XXXX, the of million total compared growth first revenue negatively our as $XX.X of to impacted fourth of the of we growth of acquisitions achieved quarter.

if On a forma occurred first acquisitions quarter, million of had $XX.X first the total total day revenue have quarter the would on an quarter. first pro in a the of completed $XX.X pro the XXXX by additional first all increased of of basis, we $XXX,XXX the forma during to million our

by of maintenance. primarily increased result $X.X quarter-over-quarter a and properties, perspective, removal million, increases $XXX,XXX snow From and at expense in seasonal an with expense to as operating repairs higher expenses utilities several property along

increased quarter-over-quarter $X.X million. expenses to and General by administrative $XXX,XXX

in Dave provide first details me in plan the more but highlighted executive the on compensation increases quarter. to expense the design January, changes made G&A let

compensation taken under incentive are plan, long-term executive period is increased Only amortization compensation executive of remaining the $XXX,XXX stock-based cash shorter plan, $XXX,XXX total noncash the to compensation. is cash compensation was salaries equity first the to being of While expense because executives $XXX,XXX by new expected in during the with and the new the the less awards for be increase XX% quarter. under

payments employer XXXX combination and adjustments due The quarter of seasonal payments. first XXX(k) annual employee vesting tax salary remainder typical deferrals upon of to stock-based the the timing of due increases, employer the and from awards of tax quarter-over-quarter the increases a contributions were employer

interest Finally, million. from the by increased expense $X.X $XX,XXX to perspective, quarter-over-quarter expense

on basis to periods, $X.XX of funds declined share. per in to XXXX. basis, these fourth operations, And a $XX.X from quarter million common the FFO Turning a $X.XX XXXX. from from share per quarter-over-quarter FFO first $XX in FFO On of the was diluted decreased million quarter over

from which million XXXX, quarter first compares Adjusted stock-based straight-line X.X% million which the or and $XX.X first funds or operations, $XX.X in adjusts quarter of growth AFFO, to totaled of rent for year-over-year. compensation, a XXXX, per the X.X% And $XX.X diluted from fourth basis, On of these decreased $X.XX periods, share the quarter-over-quarter in XXXX. per share. common declined over basis on to million quarter a $X.XX by in AFFO AFFO from

first forma of pro of $XX.X quarter, the a on quarter if by completed finally, AFFO of million. on we pro to first would day during approximately first have And total forma had the acquisitions basis, XXXX the a occurred increased the $XXX,XXX

question-and-answer remarks. to the our That concludes prepared session. ready Nick, are we now begin

Operator

Thank you.

[Operator now session. question comes the from begin Instructions] Sandler. The question-and-answer Piper first Goldfarb Alexander will with We

Alexander Goldfarb

A few questions.

in opening close First, third acquisitions that outline any Or fourth remarks, in at is there outlined the quarter deal we the be are until in the in are that there quarter? your the Dave, that a acquisitions second just should press release of modeling going gap and also that to discussed for quarter? be remainder you looking you the the pipeline

David Dupuy

thanks the for question. Alex,

first relates acquisition near-term fewer you it as seen As which the to the flagged. pipeline, pipeline, quarter, have opportunities impacted has we in

core dip in work a for the with, too. they saw We activity, we have and brokers group

start some in the were to all. on Our would for was the have if Obviously, expectations we been pushed cuts. sidelines year, at hopes rate later that theirs sellers cuts guess seeing in that the and back

the fourth does last market third rehab investment at we're because cap facility sentiment that inpatient will more meetings pipeline interesting appear committee we beyond X rates, hopeful the to attractive quarter. start fourth building included quarters the I expecting be to and so the in that we our are changing opportunities that close say can for

But it in was of terms pretty the building first the pipeline light in quarter.

Alexander Goldfarb

Okay.

to So were extends aggressively guys X went to back made discipline. outbid, go you decision you X and maintain rates cap you guys -- going that COVID to We when to and question. wisely, then rates and the that the second chase weren't to during you rates

sort another of of period volatility. in we're Now

The point above you company, grown $XXX pipeline base something a -- hopefully of grow able multiples do acquire if is as the though, of that of sit to think especially what of has just guys the year, is to means holds that, a still in just Do of nature you to able that. million you'll Or sort grow you to be the be there, after? go of for back? assets sort it that to limited pool -- looking that it's true that you're that asset because and pipeline

David Dupuy

I a guess would couple that, Well, say I of related Alex. things to

in you're all, Fresh of right, is precious. find First is it capital different environment we very a ourselves today.

higher the disciplined. cost want the to are as quite looking are for maximize have, try have but for, We to yield that And sure we're looking that given are really going to we're especially this after and going making we being we we're we environment. quality acquisitions the so always

And so almost thus $XX look, in have we acquisitions million acquired far.

we're we're can it's sure think absolutely in and the of that million debt $XXX capital, get in environment. that capital range we're the we I $XXX so very but acquisitions both seeing right and with to right that quality balancing at the doing are And the given yields pricey making nature that achievable million today's equity that

to confident of bit we a get rope range. that tight can we're $XXX to walking, it's we feel but million So million tight $XXX that very a walk --

Operator

question Stevenson comes Rob from next Janney. The with

Robert Stevenson

the to I assets? is missed Genesis if press sorry allude of the that you one but vacant in sale the release, Dave, this, that Care

David Dupuy

It is.

Robert Stevenson

is you to for about able you going plan other closer the should talk can Okay. being to be plan the release asset? that And about getting one? Is sale? what be that? How likely we also current thinking -- a the Or are that then to

David Dupuy

LOI is re-leased. That's that's there currently the for news be under actually -- -- good to

get very So right draft we're property here soon. lease that and will working on hopefully, now, a leased

were So getting that rates it's similar Care portfolio. it's to the rates of are part and that at -- as the Genesis we

very good that getting feel we about property re-leased. So

Robert Stevenson

meaningful the in on from assets how expense drag first was Bill, line? the Okay. the quarter vacant the

William Monroe

rent. were have mean, Care and of I properties annualized rejected million about assets? vacant is The $X the total obviously, that discussed we Genesis

the we're that will having so that, we mentioned, re-lease can And sell we certainly, work Fort it that excited through. contract to property drag, as Asheville property, then is able the a have Myers Dave that that being capital but of and to obviously, so under help kind about to something drag. recycle is reduce that Again,

Robert Stevenson

cetera. revenue meaningful? is of expense there get Was know mean, selling expenses goes et when guess, and the away has the But away goes that $X.XXX, there able I resolved? insurance, the those get wind that assets -- there if taxes, come for side, that, was But material not the is you numbers. net it triple drag that on not of is on Or of re-leasing? out there $X.XX amount to that -- from any expenses is you're up the any I We any,

William Monroe

of front in expect I -- but it's me, don't have that the right don't I helps. incrementally it's meaningful. certainly number it

Robert Stevenson

And is out question guess item I've in that of then have look great we third guess get the I was from -- first to the G&A that sort the what what of and the I line And fourth But remains is, comp the quarter, it what goes the one Okay. while quarters? Bill, stuff? you, got -- I and second away the when to line various breakdown. from

William Monroe

from There quarter-to-quarter. is a lot of movement

expect for awards. the some XX long-term kind there are would quarter. plan, incentive those months to first the changes we the as However, look But the amortization in we seasonality schedules compensation of at is over

cash So those the will will remain remain. salary --

amount. it first to the expect see typically would movement be we the I quarter second versus So quarter, some material not in a but

other announced new The plan X -- executive quarter, on per the the align of that would first throughout $X.XX paid right? here to in an cash salaries to AFFO of similar approved we as we in goes so executive what similar at the would impact waited for expect We start be to will the January. to we Kind the about enacted incremental And of for this performance third to period, accruing which with start compensation to new the kind in highlight is cash of July thing year bonuses be compensation beginning part bonus quarter, of as of impact look quarter. we XX% $XXX,XXX from we executive XX. XX% in of that the cash always quarter, have June to

Robert Stevenson

Okay.

running you we quarter million higher second the to fourth shouldn't through back last expecting -- up $X.X year? quarters that these the of to the way of be going to in the It's million, comp because of revert G&A the GAAP. So work with that a in $X.X had programs sort than wind

William Monroe

expense. not as That's GAAP lower, right. will It while same is executive -- compensation compensation be is the

and compensation forward. that to there kind of amount amortization so going a is of And have noncash we significant will continue

Robert Stevenson

you're that sort one then, could be development 'XX? When at -- Or about to And this closing 'XX, helpful. last development Seems is the out pipeline? far why 'XX, added That's Dave, as delay? the 'XX, new future. get even a Did the out into far that was me. Manhattan development it as in -- assets respect talking some one awfully I of there completed some point. by 'XX high-rise for significant

that more curious the and there. suburban seems what's just taking if but awfully a one like half the is don't know as to for 'XX in So I when of long on -- it assets, an of sort cycle -- back 'XX,

David Dupuy

A a couple question, fair that's things No, Rob. Yes. of on. going

snapshot the push -- of deal do Florida actually problems. one these we -- were not resulted on forward and of projects, with some site First amount this you new on of of the deal were endangered a a in and expense there's issues and and to just going some to there added both this significant to gives that group move site plant the that animal the We've we we decided with, lot world that in a a into back with species, that year. all, one again, net

in group. So one part group, of new those X projects. of of the and Florida Texas, added of projects are out fell new Both the now are that the we

through getting is, getting those COVID, beginning we projects least projects -- to XX-month totally typically a X- of as since because add just at the And years. a end, to been takes So couple from there's signed constructed. these projects it to even just it relates deals, the reality ever these

as these as our online possible. get Believe me, both as partner us well to as quickly want

so seeing. And you're what that's

just have seeing we You're one pipeline. facilities of literally we a net X new signed that new XXXX the of addition up sort that these recognizes for just that

Operator

Kamet next from The comes question Instructions] [Operator Evercore. Jim with

James Kammert

some sounds But Can assumed you on they to leases? or qualitative tenants as be they're would sort material the here. just were color presume the helpful. It assumed whole pretty any well they regarding were. pretty that like or much provide signed assets new X I Genesis situation of leases? resolved increments And comments the any diminution there were there

William Monroe

Yes. all and by the properties certainly long to Care. or It X of a outcome but those remaining team's process, we're proud to of work assigned was Genesis get the bankruptcy assumed buyers the hard new

it As provider, some those was large buyers new local They oncology include look large at were separate X signed, you a that buyers. a oncology and hospital system practices.

part Genesis of good perceived new and these facilities. and so as these about from those working with in to on And new tenants assurance tenants forward the bankruptcy Care those adequate assignments process feel look

assumed in The X Care leverage again, different is from remaining Care -- Genesis that they after properties position exiting entering much a bankruptcy. than bankruptcy, were Genesis

forward adequate and working received again, look so to Care new them And assurance Genesis with as well. the around

David Dupuy

what will I to new lease lower had additional rates CPIs handful and during we're a tenants. market. we're probably, going probably And to uncapped on would -- for up these enter look, way these extensions leases Jim, a there's more to say that actively with And working COVID,those the because of -- market of we'll went out turn, lease make during is, leases

feel good got now. we've in right in news a the those good businesses, we good place is they're that and like But operators

James Kammert

you a X% on sell look is well potentially could David, investments. your had the partial mean number the where I cap around rate devil's think of think, assets consensus the presume I I you of then And that. a playing new I at helpful. inside for some implied stock, equity. And X%, at accretive looking asset very advocate, just sales That's mentioned obviously, that funding, you

philosophy try process equity Just sales there, asset what's the just to think to through your versus please.

David Dupuy

too. the raising Yes. I that finally, funds way raise the is then we ATM. aren't great with The sales look through under can is raised about at, revolver The capital appreciate still -- way Jim. environment one, a opportunistically number in yes. and And -- question, No, fund fit to we yes, this portfolio something think asset the the and

a sale help expect second later to mentioned, Bill held sale or close the on is we to opportunistically be which going may perspective. those us fit that from capital we As we'll assets good evaluate assets and third if already portfolio, evaluate other a for think not in to to we for long-term continue And and quarter, a the sale sense. the makes going of it

that which a sell to is way AFFO that, going fund something have think that and cap because that primary certainly we growth in if basically capital you when be opportunity not I attractive we're in excited it's can raise a forward. want and rates. trading wanted we option, look, agree, ways, to property, Today, certainly But don't to to an we other We that's de-lever doing. don't you're we it do at always going about the the

So And more. half we'll eye an year, doing evaluate in it. of may keep we the the on second

Operator

next comes [ The Barrett Alex Fagan with [ ]. from ] question

Alex Fagan

me the there's about credit? First new clear raising debt. about thoughts any of in timing And one for kind is, debt potentially to that you what's can the line if of raising talk

David Dupuy

Yes.

revolver, until total keeping modest XXXX. have on at It $XX capitalization The XX. policy maturity at kind we is was available March modest not a debt million We of to at Right are focused of now, kind X/XX. XX% and March of levels. financial of next on our adds our

any So nice near-term a we there have maturities. runway are until

this a past. worked lets term it's the us but expect of have evaluating We're time. out those which that's with the undrawn. new revolver less well What then us that into again in we look kind for revolver that, I reset to will historically borrowings we done market, loan, is do what always term

year, closer in about or look be get rate later from we to of be into we we And be maybe lower out. March interest that look, our the those kind next look I to would out early that environment, maturities, revolver but think that termed be as think a year year this natural as a time will in XXXX would

Alex Fagan

helpful. That's

sorry for year? me, for G&A G&A are throughout I one cash the but and going and total if this, Second forward the expectations what missed the

William Monroe

and that outlined I it's Yes. from G&A, mix, noncash we had you look what as We kind past, first in at of as been obviously, in -- we quarter earlier, awards a and third in move annual new the expect become as cash year as throughout beginning it's our is, the the supplemental. the to well. our we similar mentioned The again, only plan change quarter, the would design under will incentive compensation

those XX% so of would salaries be of towards begin $X.XX the the bonuses similar $XXX,XXX. It And in was quarter. we cash, about to XX% effect in for first be to which paid would AFFO executive accruing a or cash

Operator

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

David Dupuy

Thank for to thank in Okay. much, today. June. everybody, coming at joining I you, you seeing up and very us forward everybody look NAREIT

Operator

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

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Community Healthcare Trust (CHCT) 1 May 242024 Q1 Earnings call transcript