CareTrust REIT(US:CTRE)2024-08-01 22:38Company Operations - As of June 30, 2024, the company owned and leased 235 skilled nursing facilities, totaling 25,058 operational beds and units across 30 states[77]. - The company has a carrying value of $433.5 million in other real estate-related investments, including preferred equity and secured loans[77]. - The number of facilities held for sale increased to 20 as of June 30, 2024, with a net carrying value of $28.8 million[93]. Financial Performance - During the three months ended June 30, 2024, the company collected 98.3% of contractual rents and interest due from operators and borrowers[79]. - Total revenues for the six months ended June 30, 2024, increased by $15.0 million, or 16%, to $108.9 million compared to the same period in 2023[99]. - Rental income for the three months ended June 30, 2024, increased by $1.9 million, reaching $55.4 million, a 4% increase from the previous quarter[94]. - Interest and other income rose by $3.9 million, or 41%, to $13.5 million, primarily due to new loan investments[96]. - Interest and other income rose by $14.8 million, primarily due to an $8.3 million increase in interest income on money market funds and a $7.4 million increase from loans receivable originated after January 1, 2023[100]. - Net cash provided by operating activities increased by $34.8 million to $101.8 million for the six months ended June 30, 2024, compared to $67.0 million in 2023[107]. Impairment and Charges - The company recognized an impairment charge of $25.7 million for the three months and $28.5 million for the six months ended June 30, 2024, related to properties held for sale[89]. - Impairment of real estate investments recognized during the three months ended June 30, 2024, amounted to $25.7 million, a significant increase from $2.7 million in the previous quarter[97]. - Impairment charges of $28.5 million were recognized for properties held for sale during the six months ended June 30, 2024[102]. Capital and Financing Activities - The company entered into a new equity distribution agreement to issue up to $500.0 million in common stock through an "at-the-market" equity offering program[85]. - Cash used in investing activities totaled $468.6 million, primarily for acquisitions of real estate and related investments[107]. - Cash flows from financing activities included $572.2 million in net proceeds from the issuance of common stock for the six months ended June 30, 2024[107]. - The company has an unsecured revolving credit facility with a principal amount of $600.0 million and an unsecured term loan of $200.0 million[110]. - As of June 30, 2024, the company had $200.0 million outstanding under the Term Loan and no borrowings under the Revolving Facility[110]. Operating Costs and Economic Conditions - The company experienced labor shortages and increased operating costs due to current macroeconomic conditions, impacting tenants' financial obligations[79]. - California Senate Bill No. 525 mandates a minimum wage increase for healthcare workers, potentially affecting operating costs for facilities[80]. - Property taxes increased by $1.5 million, or 66%, due to a $1.9 million increase related to acquisitions made after January 1, 2023[102]. Interest Rates and Risk Management - The interest rates for the Revolving Facility range from 0.10% to 0.55% per annum or 1.10% to 1.55% per annum based on the debt to asset value ratio[110]. - The interest rate for the secured borrowing was 7.83% as of June 30, 2024[111]. - An increase of 100 basis points in interest rates would have increased interest expense by approximately $1.4 million for the six months ended June 30, 2024[117]. - The company had no swap agreements to hedge interest rate risks as of June 30, 2024[118]. - The company plans to manage interest rate risk by maintaining a mix of fixed and variable rates for its indebtedness[118]. Dividends and REIT Status - The company is required to pay dividends to maintain its REIT status, with annual dividends expected to be no less than 90% of its annual REIT taxable income[114].