Community Healthcare Trust Announces Results for the Three Months Ended March 31, 2021

Rhea-AI Summary

Community Healthcare Trust reported a net income of approximately $5.3 million for Q1 2021, translating to $0.21 per diluted share. Funds from operations amounted to $0.54 and adjusted funds from operations to $0.57 per diluted share. The company issued 435,272 shares at an average price of $46.70, raising net proceeds of $19.9 million. Six properties were acquired for $59.8 million, fully leased until 2036. A $125 million term loan was established, expiring in 2028, and a quarterly dividend of $0.43 per share was declared.

Positive

• Net income of approximately $5.3 million for Q1 2021.
• Funds from operations totaled $0.54 per diluted share.
• Raised $19.9 million through the issuance of 435,272 shares.
• Acquired six properties for $59.8 million, 100% leased until 2036.
• Established a new seven-year $125 million term loan.

Negative

• COVID-19 impact on tenants, though minimal rent deferrals occurred.

FRANKLIN, Tenn., May 4, 2021 /PRNewswire/ -- Community Healthcare Trust Incorporated (NYSE: CHCT) (the "Company") today announced results for the three months ended March 31, 2021. The Company reported net income for the first quarter of approximately $5.3 million, or $0.21 per diluted common share. Funds from operations and adjusted funds from operations ("AFFO") for the three months ended March 31, 2021 totaled $0.54 and $0.57, respectively, per diluted common share.

Highlights include:

• During the first quarter of 2021, the Company issued, through its at-the-market offering program ("ATM Program"), 435,272 shares of common stock at an average gross sales price of $46.70 per share and received net proceeds of approximately $19.9 million at an approximate 3.74% current equity yield.
• During the first quarter of 2021, the Company acquired six real estate properties totaling approximately 159,000 square feet for an aggregate purchase price of approximately $59.8 million and cash consideration of approximately $60.0 million. Upon acquisition, the properties were 100% leased in the aggregate with lease expirations through 2036. Concurrent with the acquisitions, the Company entered into a $6.0 million term loan and a revolver loan up to $4.0 million with the tenant on two of these properties. These acquisitions were funded with cash on hand, proceeds from the Company's ATM Program, and proceeds from the Company's Revolving Credit Facility.
• Subsequent to March 31, 2021, the Company acquired one property for a purchase price of approximately $4.2 million and cash consideration of approximately $3.5 million. The property was approximately 90.9% leased with lease expirations through 2028. This acquisition was funded with cash on hand.
• The Company has two properties under definitive purchase agreements for an aggregate expected purchase price of approximately $8.4 million and expected aggregate returns of approximately 9.3%. The Company expects to close on these properties during the second or third quarter of 2021; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close. The Company expects to fund these acquisitions with cash on hand, proceeds from the Company's ATM Program, and proceeds from the Company's Revolving Credit Facility.
• On March 19, 2021, the Company entered into a third amended and restated credit agreement, adding a new seven-year, $125.0 million term loan (the "A-4 Term Loan"), which matures on March 19, 2028, repaid a $50.0 million term loan with a March 29, 2022 maturity, extended the maturity of the revolving credit facility to March 19, 2026, removed collateral security provisions, provided the Company the ability to apply lower margins to its annual interest rate after it obtains an investment grade rating of BBB-/Baa3 (or the equivalent) from a rating agency, and modified its debt covenants. Also, on March 23, 2021, the Company entered into interest rate swap agreements that fixed the interest rate on the A-4 Term Loan, resulting in a fixed rate ranging from 3.256% to 3.49% per annum.
• On April 29, 2021, the Company's Board of Directors declared a quarterly common stock dividend in the amount of $0.43 per share. The dividend is payable on May 28, 2021 to stockholders of record on May 14, 2021.

COVID-19 Pandemic

• During 2020, the world was, and continues to be, impacted by the novel coronavirus (COVID-19) pandemic. COVID-19 and measures to prevent its spread impacted many healthcare providers, including some of our tenants. During 2020, some of them were not seeing patients, others saw a reduced number of elective procedures and/or patient visits, while others experienced limited impact, or even saw improved cash flows from either increases in census or government funding.
• During 2020, as a result of the pandemic, the Company entered into deferral agreements with 18 tenants, with deferrals representing less than one percent of our annualized rent in the aggregate. Amounts due under the deferral agreements were generally repaid during 2020, however, at March 31, 2021, there was approximately $51,000 remaining to be billed and paid during the remainder of 2021.

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 March 31, 2021, the Company had investments of approximately $801.0 million in 147 real estate properties (including a portion of one property accounted for as a financing lease and one property classified as held for sale). The properties are located in 33 states, totaling approximately 3.2 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, 2020 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 in thousands, except per share amounts)
	(Unaudited)
	March 31, 2021				December 31, 2020
ASSETS
Real estate properties:
Land and land improvements	$	91,428			$	83,714
Buildings, improvements, and lease intangibles	705,224				651,398
Personal property	218				247
Total real estate properties	796,870				735,359
Less accumulated depreciation	(109,908)				(102,899)
Total real estate properties, net	686,962				632,460
Cash and cash equivalents	5,605				2,483
Restricted cash	398				409
Other assets, net	42,346				33,050
Total assets	$	735,311			$	668,402
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Debt, net	$	260,446			$	212,374
Accounts payable and accrued liabilities	6,526				5,743
Other liabilities, net	18,253				20,369
Total liabilities	285,225				238,486
Commitments and contingencies
Stockholders' Equity
Preferred stock, $0.01 par value; 50,000,000 shares authorized; none issued and outstanding	—				—
Common stock, $0.01 par value; 450,000,000 shares authorized; 24,417,124 and 23,888,090 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively	244				239
Additional paid-in capital	571,781				550,391
Cumulative net income	41,946				36,631
Accumulated other comprehensive loss	(8,111)				(11,846)
Cumulative dividends	(155,774)				(145,499)
Total stockholders' equity	450,086				429,916
Total liabilities and stockholders' equity	$	735,311			$	668,402

 

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 MONTHS ENDED MARCH 31, 2021 AND 2020
(Unaudited; Dollars in thousands, except per share amounts)
	Three Months Ended March 31,
	2021				2020
REVENUES
Rental income	$	20,780			$	17,428
Other operating interest	615				508
	21,395				17,936
EXPENSES
Property operating	3,729				3,343
General and administrative	2,859				2,192
Depreciation and amortization	7,225				6,059
	13,813				11,594
INCOME FROM OPERATIONS	7,582				6,342
Interest expense	(2,229)				(2,249)
Deferred income tax expense	(39)				—
Interest and other income, net	1				7
NET INCOME	$	5,315			$	4,100
NET INCOME PER COMMON SHARE:
Net income per common share – Basic	$	0.21			$	0.18
Net income per common share – Diluted	$	0.21			$	0.18
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING-BASIC	22,809				20,735
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING-DILUTED	22,809				20,735

 

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; Amounts in thousands, except per share amounts)
	Three Months Ended March 31,
	2021				2020
Net income	$	5,315			$	4,100
Real estate depreciation and amortization	7,276				6,109
FFO	$	12,591			$	10,209
Straight-line rent	(838)				(878)
Stock-based compensation	1,558				1,019
AFFO	$	13,311			$	10,350
FFO per Common Share-Diluted	$	0.54			$	0.48
AFFO Per Common Share-Diluted	$	0.57			$	0.49
Weighted Average Common Shares Outstanding-Diluted (2)	23,500				21,310

 

(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 Q1 2021 financial results for CHCT?

Community Healthcare Trust reported a net income of approximately $5.3 million and earnings of $0.21 per diluted share for Q1 2021.

How many shares did CHCT issue in Q1 2021?

CHCT issued 435,272 shares at an average gross sales price of $46.70 per share.

What acquisitions did CHCT make in early 2021?

CHCT acquired six real estate properties totaling approximately 159,000 square feet for about $59.8 million.

What is the dividend announced by CHCT?

The Board of Directors declared a quarterly dividend of $0.43 per share, payable on May 28, 2021.

What was the impact of COVID-19 on CHCT tenants?

COVID-19 affected several tenants, leading to minimal rent deferrals representing less than 1% of annualized rent.