OHI - Earnings call transcript Q3 2024 | Omega Healthcare Investors, Inc.

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Operator

Thank you for standing by. My name is Joe, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Omega Healthcare Investors Inc.

Third Quarter Earnings Conference Call. [Operator Instructions]

to conference like Reber. to now would turn over the Michele I

may You begin.

Michele Reber

good today and With Taylor you, morning. Thank and me Vice of Dan CFO, Senior Pickett; Booth; is Bob Krull, Stephenson; Megan President Operations. COO, CEO, Omega's

in that prospects conference be such Factors forward-looking actual company's could and the regarding outlook during statements historical projections, financial results statements, not materially cause call generally. made SEC. detailed facts are to from are Comments potential in as with our filings this may forward-looking transactions, those differ statements operator that the the

During refer FFO, the generally principles are measures, FAD financial supplement. today, most non-GAAP the adjusted Reconciliations accepted such accounting EBITDA. the call under these of we to some quarterly measure in and FFO, available measures will as NAREIT to non-GAAP comparable

addition, coverage In that by is that based our we not data information Omega. been discuss financial operators provided independently verified by has operator on and certain

over I will now Taylor. call turn to the

C. Pickett

and morning, and certain joining I third results financial Good conference our quarter will operating discuss Michele. trends. Today, earnings XXXX thank key call. Thanks, quarter our third for you

continue Third are improve in available quarter of should distribution per as was over the which upside FAD, FAD better of and expected several quarters. for share portfolios being process in than result the $X.XX transitioned, funds to will few next

quarters. continue and dividend upcoming drop into to Our low XX% the range ratio should is the payout XX% in now

year-to-date portfolio $X.XX range our and of and of our increased a XXXX again share. a As to and per we guidance result transitions acquisitions, have AFFO narrowed $X.XX

and which robust equity of balance sheet. a has We to significant amount the have bolstered liquidity our delevered our pipeline, further fund issued

under operator and discuss, while key metrics EBITDAR concerns. material tenant metric coverage Dan Xx coverage risks strong rent or no will As occupancy are has the

million. we active. XXXX, of quarters invested $XXX over in year-to-date, $XXX X million issued have pipeline first the remains The equity. And over we've During very

from our revenue revenue housing senior large XX% portfolio. rate of billion, and coming exceeds now with $X.X run growing annual Our that

FAD well coverage. capital We continue AFFO, and dividend to our revenue, are deploy to positioned accretively, increasing

I will over the Bob. to turn call now

Robert O. Stephenson

Thanks, Taylor, and good morning.

the increase time and financials $XXX for million year-over-year offset third our XXXX. transitions asset partially new of million of of the and primarily The XXXX $XXX restructurings, from by XXXX, throughout and result for sales quarter the to impact for the investments Turning quarter that is quarter. the same third compared completed was timing third to completed during operator revenue Revenue period.

for million NAREIT quarter $X.XX million per $X.XX the share FFO quarter of share XXXX. or third $XXX was the or to compared per for third $XXX Our as

was FFO exclude Our share share per FAD to to adjusted our $XXX NAREIT $XXX items or per posted million outlined our both as and earnings in found release as income net million or our FFO FAD was third well for several reconciliations in $X.XX $X.XX supplemental FFO, our adjusted quarter, financial the and our and website. quarter

quarter than $X.XX third second FAD. quarter Our was our FAD greater

month October the in for million $XX.X versus Maplewood rent. paid earnings the highlighted they've starting million of $X in an second quarter quarter. paid $XX.X October, rent as press the release, $X.XX as the pay of $X continued per third monthly paid LaVie yesterday's LaVie in in third in million million in additional As rent million $X month June. million well. In paid to rent quarter in Maplewood in

second cash incremental income short-term and bond our million balance almost $XXX,XXX million quarter. quarter with $X continue both the over prefund acquisitions $XXX maturing we We second ended for incremental equity the issue interest prepare in in as $XXX million quarter generated January XXXX. lastly, we over And or to to of sheet the

cash ended funded the from to completed operations, million including combination of $XXX we In in of issuance the proceeds. in fully billion. CapEx, quarter, million through equity balance available new remain of with with investments, stock a assumption billion strong. debt borrowing credit of the Our the facility third $X.X million on a of shares $XXX capacity and million over in or continues common XX.X a sheet and the over quarter $X.XX balance investments and cash $XXX the We sheet in

X.Xx. adjusted our At and from to our X.XXx, in September second quarter, funded in ratio XX, fixed XX% net of down our debt charge $X.X was coverage debt X.XXx at billion rates the and was was annualized fixed EBITDA

quarter. existing assuming of pay rate Guardian ability As our an to $X.XX continues we're operator and quarter, year the We're assuming per the to $X.XX pay continues Taylor contractual to million assuming third FFO pay guidance to quarter consistent of million rent the adjusted basis at mentioned, We're to $X.X per change assumptions Maplewood's accrual new the key our per fourth to improve. a range related A transition in revenue of continues with month the full we $X between LaVie on revenue to no share. properties are: in of increased few operators rent recognition.

fourth We're as sale at to the for assuming third asset held in portion in of related sale sales revenue in in the the quarter. of we end a $XXX,XXX for $XX third of quarter million quarter, recorded the the the which classified facilities

quarter. new $XXX G&A between funded $XX.X run rates our the interest to completed We've with fourth expense relate assume interest material interest million October, and the balance the in the on cash or as charged expense were sheet quarterly investments We to to credit borrowings. market in in continue million included project equity. either impact million they We no on of which facility earned changes of $XX.X

our prefund XXXX assume maturity and issuing January to million bond by for we equity. continue will prepare $XXX acquisitions Finally, we

issued, for investments. our quarterly to slightly per work is million in by cash adjusted put As shares than a the new every is impacted until reminder, share FFO negatively X $X.XX less back

earnings than does sales mentioned what Our other was the any XXXX additional transactions or release. guidance as just asset include I capital not adjusted FFO what well or any investments in included as additional

call to now over Dan. the I turn will

Daniel J. Booth

good Bob, everyone. and morning, Thanks,

September in across the and spread operator states XXXX, These XX As XXX asset XX,XXX had within core of March operators XX of XXXX, XX, approximately trailing operating an Kingdom. facilities Omega third-party for to versus with were XXXX. portfolio operating facilities ended XX, beds. increased for as our XX-month United X.XXx period coverage XX-month the XX, EBITDAR June of X.XXx Trailing located portfolio

portfolio to matters. Turning

As of being its in confirmation activity of today, restructuring engaged mid-November. seeking Omega is in exception plan the be one its any material which of reorganization any currently operators, will not of LaVie, with

Turning to new investments.

previously our in in XX% care established quarter in rent include current Kingdom. million operators annual XX The homes XX of in inclusive JV buyout XXXX, third Omega $XX.X a the new X U.K. of CapEx. the announced care total of are investments, leased of partner to $XXX new $XX investments million with million. the of During completed homes United The

cash XX Inclusive new gross Omega's in care cash million, $XXX of homes in Kingdom. third a weighted of of yield investments million X Omega's X return a the in have involve of XX.X% $XXX of United the is which X.X%. states third total and investment million, quarter $XX average quarter investment results facilities additional The and

the October, facilities weighted has Omega including Kingdom in quarter investments, $XXX on in third excluding the of new in yield United a to $XXX closed of the X million CapEx The and on XX additional in facilities third quarter. involve investments new X CapEx. through closed have Year-to-date million states through investments, average and Omega XXXX, Subsequent XX.X%.

I now over will call turn Megan. to the

Megan Krull

of and to. morning, Dan, Thanks, to one metrics reimbursement that State to spoke continues the good everyone. be the improved keys Dan

tendency up guaranteed to many the fact would anyone have that we that in step term. these long ebb to and know also caution we continue are has flow, that states the continue While a therefore, in from support and increases to thinking and of meaningful ways, applaud very levels we reimbursement

the for they Meanwhile, the the awaiting we efforts respect staffing certain the filed mandate. judgment state summary argue authority. Texas court a federal in various associations, against outcome oversteps including which CMS' mandate, are in against all of motion to their anxiously with industry have lawsuit the Plaintiffs, of

of that While as as the on quarter not come guaranteed, first ruling XXXX. could early

against mandate Additionally, federal staffing the filed have court in in XX General Iowa. Attorneys suit also

While Chevron as rule post-election Congressional legislative stand reversal a according the remain the to by the would government pave legal on way save Court the certainly victory appears the the this to Budget the doctrum to overturning efforts $XX XX billion also Supreme federal front, year of years of the Office. the earlier for over

and With in a for more that that would changes, no are overturned specifically that future any the will be thoughtful otherwise, structural much federal earmarked funding mandate way. no will improvements regulatory we or and introduced staffing improve be the ultimately rule availability, imminent hopeful staffing

up I open questions. will the call now for

Operator

question comes from Raymond first line of Your Hughes Instructions] of [Operator Jonathan James. the

Jonathan Hughes

post-pandemic about. world. is to the supply-demand I and That's, coverage, EBITDAR dynamics I the for think, highest the favorable X.Xx. improving now strong Looking basically at we in think outlook it's due all know some that coverage And

say, maybe that leases and coverage ask net I wanted to necessarily to few about to, you just greater the don't But lease question them I've you would a ability modestly back take about have historical rent triple don't X.Xx to those does coverage increase but I know rent of paid either get increase. higher participate believe rather safety? X.X, for Or expire, range? renew and asked reset But and rent you do the what's higher upside, the that in I safety EBITDAR to ever you a expirations. lease the the structure.

C. Pickett

That's question, a great Jonathan.

If a has a we XXXX. pretty where have XX- typically at of you it's at couple XX-year this renewals lease of structure the a big that industry that good are in operator's example to option. And have look in -- maturities the you

big really there's leases to structurally, reset. So in opportunity not a most

not reasons. don't has of reset how industry a have you rights with -- that's terms handful various the in overall model, But this evolved. for just We

Jonathan Hughes

just I'll looking Okay. then at leverage. one stick with and more And

or Bob well. as you, for maybe So Taylor

spreads never don't refied. that I I a it's than all-time equity is, since XXXX. investment and X.Xx the think has at be wide point, really know to any but is today lower accretive low. what I today the think, are obviously using The decade low leverage

been several change Or is consideration target a the you Maybe it to is, in range? years? any position So next for still there my question X to has running the put leverage any even to to Xx? that opportunities lower of over better

Robert O. Stephenson

spread still currency would you changed mentioned, It's Xx. guidance. X the to pipeline go that -- would it the the just given given I the and think equity you and I between haven't and think continue stated We would down. But

Operator

comes line Griffin Michael of of question next Citi. the Your from

Michael Griffin

or of this it are? to sequential drivers us occupancy on this of Obviously, kind on bit. at staffing a in your to think wanted are you for a a the on touch I'm facility do can of curious Is increase above penetration? the And term pre-COVID of in to resident some give what to kind scenario we're Is Just occupancy? greater And level and increasing? a where you due if near continues blocks building it basis. due world we

Megan Krull

going mean look, I the go Yes. -- think is to up. to continue occupancy I

might I But ultimately, might it staffing lot months, little going -- go increases couple In summer a there's where a it's improved winter, from where we've go times bit. it of areas. the a bit. sort to back I seen different the a -- cyclical think bit. is. to struggle time has last a in some think, It's down in where still But of yes, we're the in months even little a down that of little number the

different to And in going occupancies so what's be areas on continues staffing But you'll on. depending different concern. certainly, a see

Michael Griffin

maybe and just then of maturities comment and can't upcoming refi? would be has And become these narrowed you kind more thoughts the you if the acquisition could any too. your somewhat? of activity bridge sellers HUD of spreads environment. have that on helpful. Are lending, And deals deep have helpful, a Or That's availability the to driven motivated lot liquid by they seeing to bid-ask then the market that and turning on transaction Great. mostly maybe

C. Pickett

to mean, Yes. has and market been I awfully active. continues be the

big available. the so that's a I come There dollars and now. think seeing out But that capital people bit more rates obviously, down there's become no tell why to point there active. one little have to, reason to is are

months. just overall, market. active XX So a least that's creating see for I next that going I forward think And think very here we'll the at

Operator

next of line Kilichowski Your Wells comes Fargo. from John of question the

Unknown Analyst

It's [ for Jesus John. ] on

elevated discussions Just we levels, heard at here staffing, also, thoughts each SNF denying SNF else like be And at the of? outside on how Advantage the candidate should what landscape. ballot We've on home, of the is like would aware just care impact Medicare cetera. that your we'd around minimum et claims

Megan Krull

election there's or put But determine really end to when into industry we does power. with better happen can't always I happen would gets mean, look, on what the a balance the at who what's day, this of of power. the going depending

it. presidency we who regardless of of that be sort balance to wins looking at So the will of piece Congress

those health that You mentioned on really, Potentially. of and impact be regulatory I going stuff nursing the And items everybody pushed bunch there. But already industry? to to the don't home substantially have have homes a would could be certainly, will edges, out but think industry. that It's really you'll a around change needs-based industry. see the think that an there's I anything

Unknown Analyst

the And a just Appreciate color. follow-up here. quick

or to there emerge you as are situation back rent about any restructured expect indicate you here to play XQ just resolution as how result out So transition? talk during in of to of a comments the the process this and of going expectations with for guys Is come some expecting bankruptcy original balance downtime loss the that here the out here. mid-November June LaVie be to seem sheet

C. Pickett

There So they're which and And in approvals. that plan confirmation between difference that scheduled sponsor go The monthly We months a the the the the $X expect rent lease will is $X effectiveness, and includes period. in of the timing date do rent receive in that for be or mid-November. we going payments effective to but currently full confirmation stands we to is today, regulatory million it forward. plan to of relying -- a full as million, through. assume upon the expect X expect

Operator

of from of the Green John Your Street. Pawlowski line comes question next

John Pawlowski

for your for Megan, on of front. has months? the surprised negatively while positive you Have I actually state any staffing kind roles in of reimbursement surprise support service been know regulatory a recent states a now. one major or tied

Megan Krull

Can the you of repeat that? Sorry, end that?

John Pawlowski

states recent any has Yes. months support any state in negatively essentially in your surprised states? Have -- of any

Megan Krull

nice anything ones I There slightly is have been there's negative. slightly to where sizable neutral we've negative, seeing some most haven't pretty what seen but been positive of increases.

John Pawlowski

kind then the in in now concerning scenario any And right market any Okay. kind in of rules of Pennsylvania-like realm a staffing states? of the other rumored

Megan Krull

mean, things bit mandate. always a holding think is staffing what No. looking I like with but see states doing are off I to everybody at little that, happens look, the

Operator

Your next comes the Scotia Nick from question of Bank. Yulico of line

Elmer Chang

different at I This segments, ticked exposure what between and given least this this exposure you've levels, is I But skilled Chang Nick. these with is X thinking skilled a Elmer just in. down maybe mean, nursing, senior are your housing, historical of investing on you below to looking at mean, to function operational how nursing quarter, about volatility forward investments segments? going been

C. Pickett

Our -- relationships. by partner our really driven by operating investments principally are our

So housing, than little over there's is goal bit. to spreads right other any continuing the capital with last relationships to continues, going happens that's couple our to particular percentages seen probably go. think the the that trend into to lot of with but a change lever years, capital a capital those driven relationships. underwriting, senior can extent meaningful that those And existing no of and you've where we've I our housing senior allocate It we into more

Elmer Chang

side. sense. Makes sticking Okay. then to investment And the

You avenue development and skilled depending did Florida, investment spreads to think quarter as pipeline. on are in a maybe you believe you're facility thinking seeing? I the -- add this going market an I about How into that development forward exposure nursing

C. Pickett

allocate much and But to into of better continue we'll -- operator, right the state reimbursement the Florida. has with gotten Again, that the market. in

it's So a years environment friendlier than was lot a few it ago.

fits that it we'll state. to continue underwriting, our allocate if So into

Operator

Juan from comes the of Markets. Sanabria question Capital of next BMO Your line

Unknown Analyst

And the at Maplewood, Robin for curious for is I the just stabilization point? [ This out at in occupancy what's what's this second the sitting outlook trend assets? Juan. Haneland on ] was

C. Pickett

There's note legal more just just chop wood there. financial and but done a financial But no So the ownership We're little there's restructuring Maplewood. around to legal with work some on the there. little a still a has documents. not -- restructuring, It's on of change material Maplewood side. note those

is residents when net it's It's XX%, adding really hill. Inspir to but -- takes trudge I some it's month. XX%, up are each they'll going know slow it's -- XX% it take that to And just occupied. be -- they time. a don't now

sometime levels hopeful seen. those being them in at remains I'm of So about to occupancy, talking be XXXX, but we're

Unknown Analyst

it. Got

rents? what's Maplewood of On level development, there the DC the can that confidence increase incremental

C. Pickett

Can time? of you me level can The more one increase? help that confidence we

Megan Krull

rent. Incremental

C. Pickett

receiving Yes, DC pretty is going and them. X%, rent meaningfully. expectation X% to be net we'll additive to be It's our is X%, year-over-year, our

Unknown Analyst

bigger Okay. the to at And appetite what's do this just on point? pipe, the investment deals

C. Pickett

bit opportunity little I a there been bigger deals others. Maybe passed is in We've these disciplined them. some some structure or, mean, our on we look role on go-forward than an still have at deals there. degree, a of cap their We've more bigger basis. some some mostly out might play to had underwriting to

Operator

Markets. from next line Justin the Haasbeek Your question comes Capital of of RBC

Justin Haasbeek

Just where Should do think opportunities? you opportunities in the market? best new the investment best see care we the home still U.K. being about

Daniel J. Booth

the first what quarter currently I will even of. quarter, of run, pipeline short maybe think a fourth that meaning lot and is made up in be the

the that, this after has pipeline the quite think throughout we'll up I year. U.S. a Obviously, or U.S. bit see. picked activity

shift So I will some XXXX. in expect that point at

Justin Haasbeek

the are there Can Okay. guys some color the you you did just pipeline asset market of right portfolios mix now and bigger mentioned see. the provide that size And sort on then and of you the some pipeline, location? the on that

Daniel J. Booth

of little bag. It's a a mixed bit

activity we've We're the of mostly sprinkled I ALFs U.K. we're in in as a but still U.S. at deals looking The As there SNFs, said, well. pipeline some up. has number got looking we've that at got picked

on but that's comment out the the big to So at as virtually exists in -- pipeline, far we the including there obviously looking ones. don't goes, deal market, we're what as it's every hard size inside

Operator

Alec line Baird. comes of question of Feygin next from Your the

Alec Feygin

the Kind question, U.K., so lending in been versus of can estate far about XQ? talked and you weighted loan the where is pipeline side. versus but U.S. like already about off pipeline headed talk real it's looks the you to acquisitions the It

Daniel J. Booth

Yes.

heavily I see in estate think acquisitions us simple part, more still the you'll themselves. in the obviously, real most for invested, properties fee

a We There's attributes. loans of some Those to have leases late. look like long-term provisions. loans There's lot dabbled actually financing. in mezz have the different as bit lease. that loans little some There's loan side a lockout with of

of of So vast you mixed are. loans a type pretty they got what bag

some just of do will some needs. operators are of meeting we and their So A existing of involved those. lot those

are of Some the just a them a portfolio space. of new to -- additive new finding operators, in in terms new operator getting potentially

Alec Feygin

Okay. And And the XX can portfolio maybe then are also on for the be candidate speak for assets of how currently a that sales? much asset held sale?

C. Pickett

Yes.

have up operators. We made X really of XX currently. It's

limited. said opportunities, my ways we that in As fourth that We're there quarter of as And always early looking portfolio half of existing I other year. the be I there is to expect today. the here be the very but within lot in and a really sold not and portfolio talking there's the sit might half next point, to improve at sales

Operator

of question Daniel America. comes ] Byon the from [ next Your line of Bank of

Unknown Analyst

you Maplewood Just you to back pushed Maplewood. for Do back development? the on go timing the any color on why provide on

C. Pickett

and we development, now January. scheduled DC like for were The looks December it

certificate but quarter-to-quarter, XX days. of goes the is really up it construction and So getting the talking buttoning about pieces We're CO. this last getting

Operator

of the from comes Dickstein question of next Jefferies. Joe Your line

Joseph Dickstein

the I rent. SNF list, on operator if to operator is new what just maybe decline a EBITDAR in? provide like states guess, drove where the added of could Xx coverage what and you some representing looks color located X.X% was sub maybe -- the It coverage

Megan Krull

Yes.

sort or that that increase. the We a below have Florida, they're falling to is but rate which of in going of above operator is state X.Xx, large of have on one always primarily cusp

the several we quarters, out to, of its So over expect bucket. way that next that work

Operator

Juan And BMO your of last Markets. question comes from Sanabria Capital the line of

Unknown Analyst

what follow-up This Curious is rents paid to Robin would forward $XX.X take here on had going unlock slightly why I actually. it and again. million. a just the full they higher Guarding

C. Pickett

hit able obviously we XXXX until to for the end were we know Yes. hit rent whether Obviously, of I the the we range. won't upper rent XXXX. higher mean,

Unknown Analyst

Megan, just And for you. it. Got one Okay.

areas just you mentioned states seeing some You that are difficulties Could specific still. are there staffing elaborate on or maybe markets?

Megan Krull

rate is think out getting, I Florida mean, tough the that Texas little with bit. at they're tough. is but times, hopefully a I increase helps things look,

still. a Some these of bit just little tougher find areas rural are staffing to the

system And hospital are have the people you the do can't because pushed just get do there's who ability not that. in stuck out so to who

Operator

now Pickett that you. with Taylor back Thank conference And concludes I'll over that, turn closing session. our Q&A remarks. for to the

C. Pickett

calls joining everyone, today. a the Have Thanks, follow-up day. Please team. any for to great direct

Operator

conference call. concludes This today's

now disconnect. may You

Omega Healthcare Investors (OHI) 31 Oct 242024 Q3 Earnings call transcript