Community Healthcare Trust Announces Results for the Three Months Ended June 30, 2022

Rhea-AI Summary

Community Healthcare Trust Incorporated (NYSE: CHCT) announced its financial results for Q2 2022, reporting a net income of approximately $5.6 million or $0.21 per diluted share. Funds from operations (FFO) reached $0.57 and adjusted funds from operations (AFFO) totaled $0.62 per diluted share. The Company acquired a 37,720 square foot inpatient rehabilitation facility for $23.5 million, fully leased until 2037. Additionally, CHCT has three properties under purchase agreements totaling $23.4 million and another five properties expected at $117.5 million, with anticipated returns of 9.0% to 10.25%.

Positive

• Net income of approximately $5.6 million, or $0.21 per diluted share.
• Funds from operations (FFO) of $0.57 and adjusted funds from operations (AFFO) of $0.62 per diluted share.
• Acquisition of a 37,720 square foot inpatient rehabilitation facility for $23.5 million, 100% leased until 2037.
• Three additional properties under definitive purchase agreements totaling $23.4 million, with expected returns of 9.0% to 9.72%.
• Five properties to be acquired post-completion for $117.5 million, expected return of approximately 10.25%.
• Quarterly common stock dividend declared at $0.4425 per share.

Negative

• Uncertainty regarding the timing and completion of property transactions totaling $140.9 million.
• Potential risks associated with the pending acquisitions that may not close as expected.

FRANKLIN, Tenn., Aug. 2, 2022 /PRNewswire/ -- Community Healthcare Trust Incorporated (NYSE: CHCT) (the "Company") today announced results for the three months ended June 30, 2022. The Company reported net income for the three months ended June 30, 2022 of approximately $5.6 million, or $0.21 per diluted common share. Funds from operations ("FFO") and adjusted funds from operations ("AFFO") for the three months ended June 30, 2022 totaled $0.57 and $0.62, respectively, per diluted common share. 

Highlights include:

• During the three months ended June 30, 2022, the Company acquired a 37,720 square foot inpatient rehabilitation facility for a purchase price of approximately $23.5 million. Upon acquisition, the property was 100% leased with a lease expiration in 2037.
• The Company has three properties under definitive purchase agreements for an aggregate expected purchase price of approximately $23.4 million. The Company's expected returns on these investments range from 9.0% to 9.72%. The Company expects to close on these properties in the second half of 2022; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.
• The Company also has five properties under definitive purchase agreements, to be acquired after completion and occupancy, for an aggregate expected purchase price of approximately $117.5 million. The Company's expected return on these investments will approximate 10.25%. The Company anticipates closing on these properties from the fourth quarter of 2022 through the fourth quarter of 2023; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.
• On July 28, 2022, the Company's Board of Directors declared a quarterly common stock dividend in the amount of $0.4425 per share. The dividend is payable on August 26, 2022 to stockholders of record on August 12, 2022.

About Community Healthcare Trust Incorporated

Community Healthcare Trust Incorporated is a real estate investment trust that focuses on owning income-producing real estate properties associated primarily with the delivery of outpatient healthcare services in our target sub-markets throughout the United States. As of June 30, 2022, the Company had investments of approximately $869.5 million in 159 real estate properties (including a portion of one property accounted for as a financing lease). The properties are located in 34 states, totaling approximately 3.4 million square feet in the aggregate.

Additional information regarding the Company, including this quarter's operations, can be found at www.chct.reit.  Please contact the Company at 615-771-3052 to request a printed copy of this information.

Cautionary Note Regarding Forward-Looking Statements

This press release contains statements that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "believes", "expects", "may", "should", "seeks", "approximately", "intends", "plans", "estimates", "anticipates" or other similar words or expressions, including the negative thereof. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections or other forward-looking information. Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. Because forward-looking statements relate to future events, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company's control. Thus, the Company's actual results and financial condition may differ materially from those indicated in such forward-looking statements. Some factors that might cause such a difference include the following: general volatility of the capital markets and the market price of the Company's common stock, changes in the Company's business strategy, availability, terms and deployment of capital, the Company's ability to refinance existing indebtedness at or prior to maturity on favorable terms, or at all, changes in the real estate industry in general, interest rates or the general economy, adverse developments related to the healthcare industry, the degree and nature of the Company's competition, the ability to consummate acquisitions under contract, effects on global and national markets as well as businesses resulting from the COVID-19 pandemic, and the other factors described in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 and the Company's other filings with the Securities and Exchange Commission from time to time. Readers are therefore cautioned not to place undue reliance on the forward-looking statements contained herein which speak only as of the date hereof.  The Company intends these forward-looking statements to speak only as of the time of this release and the Company undertakes no obligation to update forward-looking statements, whether as a result of new information, future developments, or otherwise, except as may be required by law.

 

 

COMMUNITY HEALTHCARE TRUST INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars and shares in thousands, except per share amounts)
	(Unaudited)
	June 30, 2022		December 31, 2021
ASSETS
Real estate properties:
Land and land improvements	$                     101,909		$                   97,397
Buildings, improvements, and lease intangibles	764,338		736,465
Personal property	234		223
Total real estate properties	866,481		834,085
Less accumulated depreciation	(149,049)		(133,056)
Total real estate properties, net	717,432		701,029
Cash and cash equivalents	1,699		2,351
Restricted cash	659		516
Other assets, net	66,244		50,337
Total assets	$                     786,034		$                 754,233
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Debt, net	$                     291,726		$                 265,625
Accounts payable and accrued liabilities	7,219		7,845
Other liabilities, net	14,127		18,651
Total liabilities	313,072		292,121
Commitments and contingencies
Stockholders' Equity
Preferred stock, $0.01 par value; 50,000 shares authorized; none issued and outstanding	—		—
Common stock, $0.01 par value; 450,000 shares authorized; 25,099 and 24,983 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively	251		250
Additional paid-in capital	599,631		595,624
Cumulative net income	70,231		59,123
Accumulated other comprehensive gain (loss)	12,761		(4,980)
Cumulative dividends	(209,912)		(187,905)
Total stockholders' equity	472,962		462,112
Total liabilities and stockholders' equity	$                     786,034		$                 754,233
The Condensed Consolidated Balance Sheets do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

 

 

COMMUNITY HEALTHCARE TRUST INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021 (Unaudited; Dollars and shares in thousands, except per share amounts)
	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
REVENUES
Rental income	$       23,197		$       22,006		$       45,801		$       42,786
Other operating interest	852		682		1,729		1,297
	24,049		22,688		47,530		44,083
EXPENSES
Property operating	4,062		3,843		8,153		7,572
General and administrative	3,610		2,893		6,926		5,752
Depreciation and amortization	8,077		7,539		16,019		14,763
	15,749		14,275		31,098		28,087
INCOME BEFORE INCOME TAXES AND OTHER ITEMS	8,300		8,413		16,432		15,996
Interest expense	(2,755)		(2,736)		(5,381)		(4,966)
Deferred income tax (expense) benefit	(16)		(20)		1		(59)
Interest and other income	55		53		56		54
NET INCOME	$         5,584		$         5,710		$       11,108		$       11,025
NET INCOME PER COMMON SHARE:
Net income per common share – Basic	$           0.21		$           0.22		$           0.41		$           0.43
Net income per common share – Diluted	$           0.21		$           0.22		$           0.41		$           0.43
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING-BASIC	23,578		23,195		23,574		23,003
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING-DILUTED	23,578		23,195		23,574		23,003
The Condensed Consolidated Statements of Income do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

 

 

COMMUNITY HEALTHCARE TRUST INCORPORATED RECONCILIATION OF FFO and AFFO (1) (Unaudited; Dollars and shares in thousands, except per share amounts)
	Three Months Ended June 30,
	2022		2021
Net income	$                    5,584		$                    5,710
Real estate depreciation and amortization	8,141		7,593
FFO	$                  13,725		$                  13,303
Straight-line rent	(917)		(981)
Stock-based compensation	2,184		1,606
AFFO	$                  14,992		$                  13,928
FFO per Common Share-Diluted	$                      0.57		$                      0.56
AFFO per Common Share-Diluted	$                      0.62		$                      0.58
Weighted Average Common Shares Outstanding-Diluted (2)	24,247		23,908

 

(1)

Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time.  However, since real estate values have historically risen or fallen with market conditions, many industry investors deem presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For that reason, the Company considers funds from operations ("FFO") and adjusted funds from operations ("AFFO") to be appropriate measures of operating performance of an equity real estate investment trust ("REIT"). In particular, the Company believes that AFFO is useful because it allows investors, analysts and Company management to compare the Company's operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences caused by unanticipated items and other events.    The Company uses the National Association of Real Estate Investment Trusts, Inc. ("NAREIT") definition of FFO. FFO and FFO per share are operating performance measures adopted by NAREIT. NAREIT defines FFO as the most commonly accepted and reported measure of a REIT's operating performance equal to net income (calculated in accordance with GAAP), excluding gains or losses from the sale of certain real estate assets, gains and losses from change in control, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, plus depreciation and amortization related to real estate properties, and after adjustments for unconsolidated partnerships and joint ventures. NAREIT also provides REITs with an option to exclude gains, losses and impairments of assets that are incidental to the main business of the REIT from the calculation of FFO.   In addition to FFO, the Company presents AFFO and AFFO per share. The Company defines AFFO as FFO, excluding certain expenses related to closing costs of properties acquired accounted for as business combinations and mortgages funded, excluding straight-line rent and the amortization of stock-based compensation, and including or excluding other non-cash items from time to time. AFFO presented herein may not be comparable to similar measures presented by other real estate companies due to the fact that not all real estate companies use the same definition.    FFO and AFFO should not be considered as alternatives to net income (determined in accordance with GAAP) as indicators of the Company's financial performance or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of the Company's liquidity, nor are they necessarily indicative of sufficient cash flow to fund all of the Company's needs. The Company believes that in order to facilitate a clear understanding of the consolidated historical operating results of the Company, FFO and AFFO should be examined in conjunction with net income as presented elsewhere herein.

(2)

Diluted weighted average common shares outstanding for FFO and AFFO are calculated based on the treasury method, rather than the 2-class method used to calculate earnings per share.

 

CONTACT:  David H. Dupuy, 615-771-3052

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SOURCE Community Healthcare Trust, Inc.

FAQ

What were the financial results for CHCT in Q2 2022?

In Q2 2022, Community Healthcare Trust reported a net income of approximately $5.6 million, or $0.21 per diluted share.

What is the expected return on the properties CHCT is acquiring?

CHCT expects returns ranging from 9.0% to 10.25% on properties under acquisition.

What was the dividend announced by CHCT in August 2022?

CHCT's Board of Directors declared a quarterly dividend of $0.4425 per share, payable on August 26, 2022.

How much did CHCT pay for the 37,720 square foot facility?

CHCT acquired the 37,720 square foot inpatient rehabilitation facility for approximately $23.5 million.

How many properties does CHCT have under purchase agreements as of August 2022?

CHCT has three properties under definitive purchase agreements totaling approximately $23.4 million and five additional properties for approximately $117.5 million.