NHI - Earnings call 4 2023 | National Health Investors, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the NHI Fourth Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, today's call is being recorded Wednesday, February 21, 2024.

I would now like to turn the conference over to Dana Hambly. Please go ahead.

Dana Hambly

to for Health XXXX. the welcome to conference and results review fourth you, the Investors National call Thank quarter of

the John Eric Pascoe, are Accounting Officer. and call and Chief On Kevin CEO; David Mendelsohn, Travis, Chief Chief Spaid, President Officer; Financial Officer; Investment today

of facts media. been market results in closed historical involve The not accessibility forward-looking are and which a well call conference Any covered were any call performance. press notice as may this conference as that's cautions by NHI statements yesterday are future that financial risks are the investors of in released statements statements. the release of uncertainties this after not the forward-looking guarantees or

December the are by with the call. website date the Copies of at All including statements factors available NHI's reports its Exchange forward-looking this on or Commission, urged ended disclosures made SEC's in carefully of and Investors review other these nhireit.com. NHI various are in Securities and of NHI's filed on periodic represent NHI's year the disclosed the sec.gov risk as information filings to XX-K conference XX, judgment at website Form for XXXX.

Form information reconciliations measures, review used with provided with call to in together on addition, the NHI's In terms the other certain which encouraged are reconciliations non-GAAP SEC. in release. are those are release related X-K in this have earnings tables furnished which all been financial and of Listeners earnings in provided provided release that and schedules,

CEO, our Eric turn now I'll to over call the Mendelsohn.

D. Mendelsohn

strong quarter to good joining our us results the quarter, to year everyone capping We today. and fourth for had thanks expectations. exceeding with another finish a Hello,

housing experienced with consecutive original normalized improved we senior full FFO the other from third and cash our million as in rent guidance. the Bickford above has FAD X our collections, at no NAREIT repayments, industry midpoint fundamentals deferral improvement unexpected coverage The quarter portfolio EBITDARM $X November periods Similar of improved results, both benefit notable continues stable the operators. for and over triple-net FFO, were concessions. to and our For need-driven and to year, increased now

also with portfolio, increasing SHOP, XX% the better-than-expected of quarterly sequentially. senior quarter The contributed and the fourth housing to over or NOI results over XXXX XX%

upside of While excited business, piece our by profile. SHOP to still trends can growth drive continue small our and significant is we're relatively potential a organic improving believe in overall that the

of SHOP XX% expect XXXX. we Specifically, NOI to grow the range XX% in in to

portfolio a the this with were there less much on year. the other good line in basis and release on Bickford standpoint, are our which the described current guidance. discuss is press From our monthly repositioning their to expected progress quarter. Discovery in tenants We're rent structured negotiations November And rent in We with making an increase this rent. cash reset base cash leases,

sheet. believe positioned balance the our and strong growth better We're in also positions in for portfolio growth organic external our with shape NHI foreseeable for We much is future. fortress-like

quartile of the against one health the is lowest profile the REITs and in leverage when Our top of care REITs. all measured

or Given to the equity, capacity net in to without over need EBITDA. this we below capital staying to $XXX leverage, low deploy while have issue debt at million adjusted Xx

environment. in illiquidity still Higher call some longer of our of is appears during of about XXX more cannot all the solution points disparity longer housing last prevailing in for higher environment, rate certainly the be cost should be but with I capital capital and an peers, and the were obvious starting to industry. that and be larger the everyone's growing of the seller adjust realistic this borrowers There to that we're our for and they for changes the commented sellers behind to lender they basis cost expectations senior see reality.

to carefully which now We us that with starting to partner this their about advise to We choose will believe continue optimistic a makes success customers is the more the in resonate, work them pipeline. long run. towards

expect we our activity So to year. investment this accelerate

not year include as the expect better improve compared X. which accretive represents our guidance well grows. with we concessions, we to of guidance our dispositions for much our to visibility FAD for The midpoint SHOP, Turning the XXXX. more with from and pipeline will this growth rent -- any experience have believe less last over XXXX, we guidance as conservative X.X% noise Also, as investments, does deals

the Our a year the in top row the guidance the provided our achieved guidance. FAD where guidance XXXX of and year third full end represents represents have year our second since the pandemic we where result

in turning we and to return XXXX, now in XXXX. a the Before I'll over Kevin, call we're by a saying conclude growth deal great that strong position we accomplished as to in

be Our and for strong SHOP deferral levered finally seems to balance or capital ever, The supply/demand in elevated higher the is low due environments lending industry well-capitalized, like as favor. resets very it multipronged are rent opportunity providers favorable growth as and escalators be inflation. organic to tilting our repayments, investment NHI,

I'll what on growth. to more of Kevin to NHI years we turn sum, is to exceptional details call on In Kevin? be poised expect operations. capitalize now the provide in our to opportunities many

Kevin Pascoe

and my performance on I'll as you, our investment classes asset comments of Thank and activity, disposition concentrate operators. well major Eric. as

nursing inquiries increased activity. looking We're Eric noted, we're actionable the in continuum double has as that senior starting depending investment iceberg we're lease loan, yields, have the and joint more digits. opportunities. across pipeline, the venture the On are tip significantly months. low of at skilled digits Initial high to in several the of multiple of see included seeing and We're and last the housing hopeful as volume new and products, on product, across single deals to which the

not ownership, find to has been changed. estate a In investments, always path the has future our loan to real new view case that of philosophy and

asset management. to Turning

X X for sold seller $X.X we fourth the and quarter for sale. disclosed, just have We property in held previously proceeds in buildings $X.X net currently of million As financing. million

evaluate to opportunities our no our in but portfolio, included include we future which continue XXXX dispositions asset may further outlook. sales, We material have improve to

were largely As quarter Eric solid quarter results mimicked our strong noted, performance. our and third very fourth

on average improved Reviewing to part have the basis. need-driven large operators, points XXX with third the continued trailing XX.X%. EBITDARM positive The Bickford the sequential straight representing coverage sequentially driven Bickford at basis increase quarter of X.XXx, occupancy was The at occupancy been Fourth quarter the XX-month period trends coverage in seventh from excellent. X.XXx trends a by growth.

seasonal increase January quarter, December increased resident after to that occupancy some continues Bickford's move this basis X% expect November. With typically in occupancy coupled higher. weakness gains, the resident coverage rent we XX expect to we This first the rent increase, a in of comes While XX.X%. occupancy improvement average from points with

their approximately quarterly Bickford the was repayments, are thresholds. repayment, operating to reflects $X million fourth which in XXXX. results Total approximately including strong million repaid as deferral the was underlying repayments their from of rent balance $XX highest portfolio's quarter. during Bickford, This tied cash revenue

leases, X. agreement which mentioned, April on we on of close a are Bickford for an reaching to with their Eric As terms are reset scheduled

won't are be will ongoing, further, higher the repayments, to we than As including we that in reiterate other believe XXXX. rent, comment discussions cash

quarter. XX at Reported in is of straight operating and continue other need-driven the highest approximately second improvement. the sequential fourth X.XXx the period million properties XXXX, Four during operators since the tenants to deferrals eighth repaid of coverage Our quarter show improvement. $X

the housing senior primarily solid nice to X.XXx discretionary at expectations continues SLC, since entrance largest portfolio, portfolio on to well Our of performed which that by fee uptick our includes began, from tenant, driven case. be improved the pandemic has and sales. above entrance X.XXx Coverage fee another quarter our our a sequentially

fee Discretionary our the coverage, uneven sales fourth see declined not but This X.XXx largely of we're sales, at X.Xx. well-capitalized to SLC, from yet the stronger entrance was quarter reflects to which in performance calculation. due fee to tenant, communities, is entry excluding happy reflected which X other

portfolio hospital sequentially X.XXx, coverage solid has improved reported at X.XXx. The and which SNF specialty from

Lastly, year-over-year increase NOI Discovery to Fourth our by just continues year-over-year XXX our Resident X.X%, increased a fees momentum with basis the Gardens. partners expenses portfolio XX.X%. to leading XX.X% million. XX.X%. Merrill a in on quarter throughout occupancy basis point to point portfolio, $X.X in year-over-year to SHOP to increased X.X% increased XXX build improvement and Operating margin

As in of noted SHOP in NOI forecast we to our XXXX XX% XX%. the growth guidance, range

quarterly we a basis up cadence give occupancy NOI higher expect points throughout guidance, do start do off we to January year. XX the XX.X%, averaged is as not the to December. good from While move

range mid-XX% NOI generate high on in that the this the remains margins portfolio, can Our teens longer-term unchanged. view dollars on in it

John? John now guidance. call results discuss the our financial I'll turn to to over and

John Spaid

you, and everyone. hello, Kevin, Thank

normalized per diluted our were For represents share, the XX, December common FFO XXX%, ended which per and of XX% net and year-over-year share $X.XX, and respectively, $X.XX year NAREIT $X.XX respectively. X%, improvements XXXX, income, FFO

we For holiday FAD down with X.X% revenues settlement prior year-over-year. our million, related was But December $XXX.X during of significant that result the year our recognized ended XX, as recall Welltower. XXXX, year a

of assets and we're that on fact the of XX, close Net end the our record high expected income one that our and report year and Eric expected the metrics guidance, reflects held for the not December fourth pro our to ended sale to gain. compared each in did As not of quarter did our at we the pleased property sale as for forma guidance. mentioned, when came

is fourth were quarter payments Sequentially, down XXXX. the X for FAD $XX.X quarters fourth to recurring tenants of prior but a the Our fourth compared was was quarter $XXX,XXX. increase the basis quarter the amounts which quarter. quarter discrete cash XXXX for recall, third saw compared when million, in owed to XXXX, to which from FAD not previously X.X% But third

compared XXXX metrics improvements respectively. QX and XXXX compared when adjusted ratios to QX to to EBITDA to XX.X% of net X.Xx, payout and X.Xx, Our FAD debt further and XX.X% saw

first where, The a time did fourth the record QX we any quarter milestone not since impairments. XXXX, also saw for

without As tenant Eric concessions. the mentioned, second the sequentially fourth quarter quarter unexpected was any

approximately in XXXX, of acquisitions We retired approximately $XXX million and from our dispositions loan made million. revolver. paid and saw investments of using a from debt, proceeds loan million $XX In $XX term in we repayments approximately loan new and proceeds or

million $XXX under any stock During our ATM issue $XXX authority. program under equity XXXX, did repurchase our any buyback we million or stock not

XXXX. Last full year night our guidance we issued for

in a $X.XX FFO Our or XXXX guidance the for million to $XXX.X $XXX.X to range is million, range $X.XX share. of of normalized per

are the $XXX.X million high FAD million, of at to representing to point. at forecasting the X.X% range midpoint $XXX.X year-over-year X.X% of the and growth be We in

no of includes As to year-over-year growth NOI XX% Eric up mentioned, investment. guidance SHOP our new and incremental

majority the we that telling our of that includes to attributable we While is you remember deferred Bickford. are rent the of that guidance collection deferrals, collect

collect Kevin we additional the step-up Eric be finalizing are we with will have to mentioned, XXXX, not estimate deferred As Bickford, our on will and our able guidance. an which rent to close in in which for included the rent the NOI, is impact but Bickford on negotiations

a And At million sheet maturity variable Our will $XXX our $XX interest source had a the be of our for revolver, our debt maturities, debt continues September. year, January, outstanding $XXX million for and liquidity. balance single of year strength million end average only rate focus on this and to this be the us. at end weighted we of on levels, debt

to ratio mentioned, adjusted debt favorably, As leverage continues trend ending to our net at XXXX EBITDA. Eric X.Xx

January, of and over $XXX ample million we program. full our revolver in At end liquidity available ATM the and cash under the million availability have $XXX of

$XXX NHI's towards which this Looking XXXX, does of loan, million extend debt $XXX additional have at the debt option, in for year. million maturing we up is the X to an to ability our have, term maturing. loan

the XX, under of At million an debt rate percentage retire we'll rate debt. total interest in just In to next X was December fixed our additional years, $XXX the variable XX%.

our variable points than long-term to and comfortable this strategy basis current risk year higher Our only improving At interest our maturities at our keeping for be for variable interest debt our to XX interest rates at our rates. XX for are look levels. rate will average interest rates, debt options

debt we impacts meaningful So to significant as a facility. new don't any XXXX our guidance result expect any of

March last record shareholders X, As Board our XXXX. Directors for payable at declared May and announced $X.XX XXXX, per dividend of we night, of on share XX, a

also Board stock year. for repurchase million our plan, Our is X effective which reauthorized $XXX

remarks. That concludes prepared our

for the you thank today. With again, lines open call that, once questions. So joining please for our operator,

Operator

[Operator Instructions] comes Our Richard Wedbush. with question first from Anderson

Richard Anderson

I probably and John, forget the then So ask could confirm me, quarter, answer. just you for I this if question every

up in of the Bickford guidance? doubling getting deferral repayments, kind then that anybody happen full there where with when On but plus is Does payment XXXX it offered you the in else you deferral in your a XXXX? you're or didn't record deferral,

John Spaid

word. Rich, that's doubling up, the right not

are question is what think our some the -- you're on asking deferrals you're And the what of telling revenues? sheet to that GAAP balance we through I yes. me is, answer putting

press And our million million the so we $X release in of and deferral in $X.X had year. quarter the fourth that mentioned we repayments for

does mentioned determination. of we deferrals And the So work, GAAP we some that's that right? so into of revenues because how do those part pull that XXX our

so component, soon we FAD. into possible. do it it as And and to the not when FFO shows because we collect up all in may move as flows income. And try those or collect of straight-line But net them, down

the was in it -- I call would was number for that net $X.X our, was quarter deferral That's million. fourth recognition. And the in it, year, so $XXX,XXX income. And already accrual-based

Richard Anderson

Okay.

like doubling not a the of have -- This is up sort there's obviously is of So no buckets. no Understood. -- couple word.

John Spaid

opposed try FAD. better to We'll these FFO in might understand the future how everybody as affect to deferrals a Yes. that keep straight, do knowing wants job to this to

we everything ends going deferrals through but if because move these income. the we're up collect recognizing or And GAAP revenues, FFO straight-line not revenues so net of that's collection to or them FAD, early, in even

Richard Anderson

what obviously, your of degree the on within that's I'm Eric, triple-net converting pipeline SHOP, your through Got great substantially enticed in you SHOP housing the Okay. senior portfolio portfolio to portfolio. you SHOP, a organically this you. if informs of wondering from in into results existing assets acquisitions? how X.X% seeing a go of up are by radar being number that either going or terms

D. Mendelsohn

compliment. the for Rich, Thanks,

SHOP now CapEx results to But perk not We've the But our a done, definitely portfolio it that time finished. a get as long make. you trend quarters us does know, are are gratified X We quarter been our took up. see to and X encouraging. program it's impatient, or

room this So I feel I product well how and more is -- this run. doing. I'm guidance, And definitely to our still attention a still in our is feel it's it's catching has like sure Board's that

My right. portfolio, lot Kevin's add a And in is to certainly either to SHOP conversions. the through that. opportunity and and you're of a there's goal lot goal So interested there or of acquisitions people

Richard Anderson

for me. question Last

the on you in of Are John, have you sort Is an of deferrals how the future way April that rent new the -- it? on said become are reset this of sort rent still table, think, about I -- the you higher will for to sort collections. Bickford you'll impact deferral will from the saying right Bickford that? that's think account that that and

John Spaid

the right? is to us as tell the continue with NOI a to end split Right. allows so right? We're our negotiations XXXX deferral because signal to from the that's can't that guidance you coming right can't the And I the our of will our collections now. component the deferral -- our in majority really can to I improve we're is Bickford's in The can't you do, What they to that what just up Bickford. why, in improvement show and of of I deferral of telling here you really deferrals be is NOI which, strategy yet. or you component rent being understand signal FAD, And guidance through -- you in stepped-up either collection going Bickford,

on Sorry I stumbled that...

Richard Anderson

coverage I coverage growth. would they I caution against net. triple that market rent eating probably improvement, just into than value more values in the think

the sheets... but a -- you It's [ commentary probably just ] already. cheat know from So that

John Spaid

coverage ratio. too, repayment by to ratio one our present excludes of the way. metrics is you the of the And That deferrals that coverage we

Operator

Okusanya with from Omotayo comes question Bank. Deutsche next Our

Omotayo Okusanya

reset XXXX. Yes. that there is rent a resets, lines how was Discovery to little rent talk guidance? also believe you of I the of Along related kind a is in Could included in not just or about bit

John Spaid

November that call. renegotiation it places guidance. we said. is we Tayo, of in that was several Well, think we went in the our outcome -- deal in about great a with line included what in talked And mentioned that I We

X of the reduction for there So leases. of that a we said rent was

The guidance. is changed. hasn't that is So it and -- out expected, our in came as amount

else really so And report. there's nothing to

Omotayo Okusanya

Got you.

And kind a is really of terms helpful. in a sense it in Could look more like? transactions acquisitions, bit good actual around then give about versus pipeline finance of how could what transaction? just again, regard. could really it structured That's does Okay. the of much you just little acquisition could simple sound you that or a you're And mortgage loan how of seeing us comments be fee year Eric, that like your talk much

D. Mendelsohn

which lot as to acquisition, right we're the it, A it right price, have line Tayo, robust we to right. a seeing you're like an absolutely But finance, to at of and loan-to-own. call willing do sight if market structured very is we're I of now.

message more falling are market it's the think a at potential but of are think that difficult I It's market now still that lending, and getting different I market, to sellers, deals financing rational are more brokers with their through pricing banks the are expectations, in higher options. there's apart, a rate not sellers cap not XXXX. a getting

Operator

Sanabria question from Capital with next Our BMO Juan comes Markets.

Juan Sanabria

your a talk whether guidance, maybe RevPOR or parts could it the be XX% little or to you XX% piece in hoping please? occupancy, of same-store about growth expense SHOP growth, NOI the margins bit underlying of some Just

Kevin Pascoe

headline occupancy. for Juan, this is is Sure. The sure Kevin.

but of job holding inflationary XXXX, have mindful do expense those a over a the to the talked sure in that that we As side, been is, getting also for continue using we've That's and about where on some want. make will occupancy increases. being year-over-year, line to expect good very done the effect had XXXX we strategy be type we've we're before, partners the incentives operating positive

lagged, occupancy just this of also better piece is usage in forecast really Once the for occupancy see than see we throughout continued we'll think the want I our of quarter but increased we that's you follow, the we as those get is occupancy. typically see again, how kind is built year. -- to is why go. NOI we fourth year, would occupancy, little the that expect, where And incentives, anyway, biggest So a to NOI which

you NIC If you update, the see business buildings. our in see where versus we look MAP markets can our

occupancy perspective. grow plenty still an of from there's So room to

absolutely number So that's again, think I one.

You'll see to be, occupancy little be kind going two. want where that's rates once a a we bit follow we to but it get of phase

Juan Sanabria

enthusiasm Great. your just sounds if Okay. maybe the some investment more It the enthusiasm just opportunities But And on you then for includes like to do the curious opportunities. loans have more the the just in not. Board no, do, to sounds from have if It new investments, of in but wanted terms you like greenlight confirm. SHOP and fact, in or opportunities.

I net. And I seems is from to to SHOP, net have do you away of size guess, opportunities picture, the triple how best pipeline the opportunity talk the about think mean, the way going about and set forward just things? versus bigger the moved investment triple the perhaps market is in

D. Mendelsohn

It's Eric. be SHOP Board noticed from RIDEA. would certainly that popped more the is by signal SHOP getting this or Juan, and open our to a we're Board that has they

that. about excited we're So

pickle. bank best and of X lease. a I that, either term and of to to that worst the the And opportunities find lease due it. real fewer agree it or in kind some that you're or far say world has loan should a estate the would the to doing As maybe shortage triple-net no the finance of a comes really years doing replace a are to and between. when I able customers that. that the would a so venture get I there's maybe the eyes that with thing they thing XX- also And joint leases that's was of to best isn't But a real isn't conclusion estate are you consider people to saying way triple-net shutting and it's is driven having likes in really a his in a But Kevin not down, SHOP X you're that the earlier, structured in new opened XX-year loan result

So can it's a it's think funny lot that we in. a business I do market out of but one there,

Juan Sanabria

the I about And last fourth on guess, think the that or restructuring, it the point adjust in the talked don't its should in get run I for call, lease? quarter just the strength the run last how the is, question, quarter but Discovery you Discovery. on fourth I rate, the change is rate we

John Spaid

That's that fourth it's guidance. in a is can you is with rate. I properly simply in just right say the Best now do It good quarter question. on not run reflected

a through Let filings, me little think give maybe about our help on that. more you where we can,

Operator

next question Markets. Wurschmidt [Operator Instructions] KeyBanc Our comes from Austin from Capital

Austin Wurschmidt

I back original X% for believe going incremental guys or $X entitled Just rent. you were to yield your million around to Bickford moment. an investment annual on a of

above repayments rent fourth quarter, of So with on market but you of less the market say amount than the be the $X reset? include you're deferral to million But is that rent you'll in the top of deferrals the there. essentially if fair reset it could kind of that X% be

Kevin Pascoe

of I able mean, maintain our coverage of in of had really be X addition in Rich within that's you earlier excess. mindful a together, buildings. Yes, what and it just and when and repayment to within cobble being they can we're absolute would the what assumption, the to mentioned level enterprise What be portfolio, looking maintaining is our at is, then to the fair

just of make We've done the to don't remain that So them this we're a kind pieces to sure to that up. looking lot point. at they sure all mess want We we're get of work making and healthy.

you look the X% you that the base number. of in excess in When to being be I you're So again, at should it's rent, just addition think But the mindful. repayments right. number,

Austin Wurschmidt

in just some that. totality guess versus increase Bickford, further, deferral in component it deferrals. is the in XXXX? trying of in understand how mean, around guidance is bit taking deferrals just an you big there's a what's with increase referenced I assumed just Or in then And a to repayments XQ I'm versus assuming increase I rate? of little significant it. is in the guidance. you're Got the run Because Bickford increase

John Spaid

we do Well, I what intentionally XXXX. growth see NOI going for negotiation because there not Bickford. future you would the is say in And Bickford are with on telling what's of we the

run will quarter -- we prior see rate hope time the you'll over improve. So will

the tell Now again, to number give split said, with and already divide between way probably we lot you. you it. that in has you the NOI, to deferrals guidance. step-up the May, we our and yet conference But repayment that be call will between, rent, like have a able in our tell more that We'll our I first expectations quarter guidance which

Austin Wurschmidt

Got it. Understood.

little on the a SHOP residents And additional this how just detail curious to concessions occupancy? around average bit detail Just provide you're point. those Can offering portfolio. or sticky drive have of the been quickly at on you

Kevin Pascoe

from Well, over saw to where increased monitoring little tell would the the we bit latter you, operated it's quarters. part Holiday of portfolio, down the length question, few it's the when we've stay. been a last but I of

So we're on seeing the length the positive of in stay portfolio. improvement

But could a bit happy where So, what it within reason with of overall, competitors. little sits we terms it with better. see be in it's

have. But after the or move-in, of the concessions, There operators month shorter the of but make of go it's month's the rate of tool some the after a to we market first on large, bucket discount period pricing is that concessions to terms a on some we're first usually, in bit time. more hit would mechanisms upfront. rent by then and try rents That form the In a of way more taking little track.

those call loaded. some to cases, where of So very in see period those just we giving about time. rough them generally net going future and incentive our dollars the it's, residents, but half stickier be move-in. around -- more for rents then the we're front-end in a incentive longer-term rate there's to market be get are against say, stick bit the more to X/X we early of X/X -- of would But that can ones numbers, again, looking of -- it, little get using the a And -- to for income it

Operator

questions are this time. There further at no

D. Mendelsohn

road to forward look or at We our conference. everyone. on Thanks, or show seeing NIC you

Operator

That you line. call you does conclude We a for participation please day, Have the disconnect your thank your ask that everyone. today. and for conference great

National Health Investors (NHI) 21 Feb 242023 Q4 Earnings call transcript