Community Healthcare Trust Announces Results for the Three Months Ended December 31, 2023

Rhea-AI Summary

Community Healthcare Trust Incorporated (CHCT) reported net income of $4.6 million for Q4 2023, with FFO and AFFO per share at $0.57 and $0.61 respectively. The company acquired properties worth $7.1 million and a long term acute care hospital for $6.5 million. They have properties under purchase agreements totaling $27.9 million and $166.5 million. Additionally, they issued 348,000 shares of common stock, generating $9.5 million. GenesisCare's bankruptcy update shows positive progress, with lease payments met through February 2024.

Positive

• None.

Negative

• The Company's acquisition of properties and issuance of common stock might lead to dilution for existing shareholders.
• The uncertainty regarding the timing of closing on various properties under purchase agreements could impact the Company's future financial performance.
• The bankruptcy situation with GenesisCare, while showing progress, still poses a potential risk until the plan of reorganization is fully executed in Q1 2024.

FRANKLIN, Tenn., Feb. 13, 2024 /PRNewswire/ -- Community Healthcare Trust Incorporated (NYSE: CHCT) (the "Company") today announced results for the three months ended December 31, 2023. The Company reported net income for the three months ended December 31, 2023 of approximately $4.6 million, or $0.15 per diluted common share. Funds from operations ("FFO") and adjusted funds from operations ("AFFO") for the three months ended December 31, 2023 totaled $0.57 and $0.61, respectively, per diluted common share. 

Items Impacting Our Results include:

• During the three months ended December 31, 2023, the Company acquired two real estate properties for an aggregate purchase price of approximately $7.1 million. Upon acquisition, the properties totaling approximately 48,000 square feet, were 97.5% leased in the aggregate with lease expirations through 2031.
    
• Subsequent to December 31, 2023, the Company acquired one long term acute care hospital (LTACH) for a purchase price of approximately $6.5 million and cash consideration of approximately $6.6 million. Upon acquisition, the property was 100.0% leased with a lease expiration in 2039. The acquisition was funded with proceeds from the Company's Revolving Credit Facility.
    
• The Company has three properties under definitive purchase agreements for an expected aggregate purchase price of approximately $27.9 million. The Company's expected aggregate return on these investments ranges from approximately 9.08% to 9.20%. The Company expects to close on these properties during the first half of 2024; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.
    
• The Company has seven properties under definitive purchase agreements, to be acquired after completion and occupancy, for an aggregate expected purchase price of approximately $166.5 million. The Company's expected returns on these investments are approximately 9.1% to 9.75%. The Company anticipates closing on two of these properties in 2024 with the remainder throughout 2025 and 2026; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.
    
• During the fourth quarter of 2023, the Company issued, through its at-the-market offering program, approximately 348,000 shares of common stock at an average gross sales price of $27.73 per share for net proceeds of approximately $9.5 million at an approximate 6.70% current equity yield.
    
• The Company has one property under a definitive sale agreement. The sales price less estimated costs to sell exceed the carrying value of the property. The Company expects to close on this property during the second or third quarter of 2024; however, the Company cannot provide assurance as to the timing of when, or whether, this transaction will actually close.
    
• To provide an update on the bankruptcy with one of the Company's tenants, on November 22, 2023, GenesisCare had its disclosure statement and plan of reorganization approved by the U.S. Bankruptcy Court. As part of their plan of reorganization, GenesisCare is expected to assume or assign to buyers all of the Company's remaining leases with no material changes to the lease terms. The effective date of the plan of reorganization is expected to be during the first quarter of 2024; however, GenesisCare already closed on the assignment of two of the Company's leases during January 2024 with two separate buyers. GenesisCare has met substantially all of its lease payment obligations due to the Company through February 2024. 
    
• On February 8, 2024, the Company's Board of Directors declared a quarterly common stock dividend in the amount of $0.4575 per share. The dividend is payable on March 1, 2024 to stockholders of record on February 20, 2024.

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 December 31, 2023, the Company had investments of approximately $1.1 billion in 193 real estate properties (including a portion of one property accounted for as a sales-type lease and two properties classified as held for sale). The properties are located in 34 states, totaling approximately 4.3 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
In addition to the historical information contained within, the matters discussed in this press release may contain "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", "will," "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 control of Community Healthcare Trust Incorporated (the "Company"). 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, changes in governmental regulations, the degree and nature of the Company's competition, the ability to consummate acquisitions under contract, catastrophic or extreme weather and other natural events and the physical effects of climate change, the occurrence of cyber incidents, effects on global and national markets as well as businesses resulting from increased inflation, rising interest rates, supply chain disruptions, labor conditions, the conflict between Russia and Ukraine, and/or new and ongoing hostilities between Israel and Hamas, 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, 2023, 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 press release and 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 CONSOLIDATED BALANCE SHEETS (Dollars and shares in thousands, except per share amounts)
	December 31, 2023		December 31, 2022
ASSETS
Real estate properties:
Land and land improvements	$                     136,532		$                 117,657
Buildings, improvements, and lease intangibles	913,416		825,257
Personal property	299		253
Total real estate properties	1,050,247		943,167
Less accumulated depreciation	(200,810)		(165,341)
Total real estate properties, net	849,437		777,826
Cash and cash equivalents	3,491		11,233
Restricted cash	1,142		835
Real estate properties held for sale	7,466		—
Other assets, net	83,876		86,531
Total assets	$                     945,412		$                 876,425
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Debt, net	$                     403,256		$                 352,997
Accounts payable and accrued liabilities	12,032		11,377
Other liabilities, net	16,868		15,237
Total liabilities	432,156		379,611
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; 27,613 and 25,897 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively	276		259
Additional paid-in capital	688,156		625,136
Cumulative net income	88,856		81,142
Accumulated other comprehensive gain	16,417		22,667
Cumulative dividends	(280,449)		(232,390)
Total stockholders' equity	513,256		496,814
Total liabilities and stockholders' equity	$                     945,412		$                 876,425

 

The 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 CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE AND  TWELVE MONTHS ENDED MONTHS ENDED DECEMBER 31, 2023 AND 2022 ( Dollars and shares in thousands, except per share amounts)
	Three Months Ended December 31,				Twelve Months Ended December 31,
	2023		2022		2023		2022
	(Unaudited)
REVENUES
Rental income	$       28,100		$       24,383		$     108,682		$       94,103
Other operating interest	1,024		959		4,163		3,576
	29,124		25,342		112,845		97,679
EXPENSES
Property operating	5,598		4,156		20,713		16,636
General and administrative (1)	3,728		4,149		27,338		14,837
Depreciation and amortization	10,248		8,317		39,693		32,339
	19,574		16,622		87,744		63,812
OTHER INCOME (EXPENSE)
Impairment of real estate asset	—		—		(102)		—
Interest expense	(5,019)		(3,464)		(17,792)		(11,873)
Deferred income tax expense	—		(21)		(306)		(41)
Interest and other income, net	36		3		813		66
	(4,983)		(3,482)		(17,387)		(11,848)
NET INCOME	$         4,567		$         5,238		$         7,714		$       22,019
NET INCOME PER COMMON SHARE (1):
Net Income per common share - Basic	$           0.15		$           0.19		$           0.20		$           0.81
Net Income per common share - Diluted	$           0.15		$           0.19		$           0.20		$           0.81
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-BASIC	25,981		23,787		25,202		23,631
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-DILUTED	25,981		23,787		25,202		23,631
___________
(1) General and administrative expenses for the twelve months ended December 31, 2023 included stock-based compensation expense totaling approximately $20.0 million, including the accelerated amortization of stock-based compensation totaling approximately $11.8 million, or $0.47 per diluted common share, recognized upon the passing of our former CEO and President. General and administrative expenses for the twelve months ended December 31, 2022 included stock-based compensation expense totaling approximately $9.4 million.

 

The 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 December 31,
	2023		2022
Net income	$                    4,567		$                    5,238
Real estate depreciation and amortization	10,347		8,382
Total adjustments	10,347		8,382
FFO	$                  14,914		$                  13,620
Straight-line rent	(872)		(854)
Stock-based compensation	2,029		2,645
AFFO	$                  16,071		$                  15,411
FFO per Common Share-Diluted	$                      0.57		$                      0.56
AFFO per Common Share-Diluted	$                      0.61		$                      0.63
Weighted Average Common Shares Outstanding-Diluted (2)	26,346		24,471

 

(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 is an operating performance measure 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:  Bill Monroe, 615-771-3052

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SOURCE Community Healthcare Trust Incorporated

FAQ

What was Community Healthcare Trust Incorporated's (CHCT) net income for Q4 2023?

Community Healthcare Trust Incorporated reported net income of approximately $4.6 million for the three months ended December 31, 2023.

How many properties did CHCT acquire in Q4 2023 and at what total cost?

CHCT acquired two real estate properties for approximately $7.1 million and one long term acute care hospital for $6.5 million.

What is the expected aggregate return range on the investments for properties under definitive purchase agreements by CHCT?

The expected aggregate return on investments for properties under definitive purchase agreements ranges from approximately 9.08% to 9.75%.

How many shares of common stock did CHCT issue in Q4 2023 and at what average price?

CHCT issued approximately 348,000 shares of common stock at an average gross sales price of $27.73 per share.

What was the quarterly common stock dividend declared by CHCT on February 8, 2024?

CHCT's Board of Directors declared a quarterly common stock dividend of $0.4575 per share, payable on March 1, 2024.

What is the update on GenesisCare's bankruptcy situation and its impact on CHCT?

GenesisCare had its plan of reorganization approved, with expectations to assume or assign all of CHCT's remaining leases with no material changes. GenesisCare has met its lease payment obligations through February 2024.