Global Medical REIT(GMRE) - 2025 Q1 - Quarterly Results

Financial & Operational Highlights The company reported steady Q1 results, highlighted by the completion of a $69.6 million five-property acquisition at an attractive 9.0% cap rate, while FFO and AFFO per share saw slight year-over-year decreases, and net income attributable to common stockholders more than doubled, with portfolio leased occupancy remaining high at 95.6% Q1 2025 Key Financial Metrics vs. Q1 2024 | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income (to common stockholders) | $2.1 million | $0.8 million | | Diluted EPS | $0.03 | $0.01 | | FFO per share and unit | $0.20 | $0.21 | | AFFO per share and unit | $0.22 | $0.23 | - Completed the acquisition of a five-property medical real estate portfolio for $69.6 million at a 9.0% cap rate, adding 486,598 leasable square feet and $6.3 million in annualized base rent[2][4] - Completed the disposition of two medical facilities for gross proceeds of $8.2 million, realizing a gain of $1.4 million, with the cap rate on the single occupied facility sold at 6.7%[4][11] - Portfolio leased occupancy was 95.6% as of March 31, 2025[4] Financial Performance In Q1 2025, rental revenue decreased by 1.4% year-over-year to $34.6 million, while total expenses also decreased to $32.2 million, primarily due to lower G&A costs related to executive compensation changes, consequently, net income attributable to common stockholders increased significantly to $2.1 million from $0.8 million in the prior year period Condensed Statement of Operations (YoY Comparison) | Account (in millions) | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Rental Revenue | $34.6 | $35.1 | -1.4% | | Total Expenses | $32.2 | $32.8 | -1.8% | | Net Income | $3.7 | $2.3 | +61.5% | | Net Income (to common stockholders) | $2.1 | $0.8 | +162.5% | - General and administrative expenses decreased to $3.6 million from $4.4 million year-over-year, mainly due to a reduction in non-cash LTIP compensation expense related to the CEO's transition agreement[6] - Interest expense increased to $7.2 million from $6.9 million year-over-year, primarily due to higher average borrowings, which was partially offset by lower interest rates[7] Portfolio and Investment Activity The company was active in portfolio management, completing a significant $69.6 million, five-property acquisition and disposing of two facilities for $8.2 million, while maintaining a high portfolio occupancy of 95.6% and actively managing a tenant, Prospect Medical Group, which filed for Chapter 11 bankruptcy Investment Activity - Completed a five-property portfolio acquisition for $69.6 million at a 9.0% cap rate, adding 486,598 leasable square feet and $6.3 million in annualized base rent[9][10] - The acquisition was completed in two tranches: three properties for $31.5 million in February 2025 and the remaining two for $38.1 million in April 2025[9][10] - Disposed of two medical facilities for aggregate gross proceeds of $8.2 million, resulting in a $1.4 million gain, with the cap rate on the sale of the occupied facility at 6.7%[11] Portfolio Status Portfolio Statistics (as of March 31, 2025) | Metric | Value | | :--- | :--- | | Occupancy | 95.6% | | Leasable Square Feet | 4.9 million | | Annualized Base Rent | $113.4 million | | Weighted Average Lease Term | 5.6 years | | Weighted Average Annual Rent Escalations | 2.2% | | Portfolio Rent Coverage Ratio | 4.4 times | - Tenant Prospect Medical Group filed for Chapter 11 bankruptcy, rejecting its lease at the East Orange, NJ facility, and as of May 6, 2025, has paid the Company $250 thousand in post-petition amounts due through February 28, 2025 for that facility[13] Balance Sheet, Capital, and Dividends As of March 31, 2025, the company had total debt of $677.0 million with a leverage ratio of 46.1% and a weighted average interest rate of 3.84%, declaring its regular quarterly cash dividends for both common and Series A Preferred Stock without issuing any shares under its ATM program during the quarter Balance Sheet and Capital Structure Debt & Leverage (as of March 31, 2025) | Metric | Value | | :--- | :--- | | Total Debt Outstanding | $677.0 million | | Leverage | 46.1% | | Weighted Average Interest Rate | 3.84% | | Weighted Average Remaining Term | 1.8 years | - As of May 6, 2025, the Company had $187 million of borrowing capacity under its credit facility[16] - No shares of common stock were issued under the ATM program during Q1 2025 or through May 6, 2025[16] Dividends - Declared a Q1 2025 cash dividend of $0.21 per share for common stockholders, paid on April 9, 2025[17] - Declared a quarterly cash dividend of $0.46875 per share for Series A Preferred Stock, paid on April 30, 2025[18] 2025 Guidance The company reaffirmed its full-year 2025 AFFO per share and unit guidance of $0.89 to $0.93, based on assumptions including no additional unannounced acquisitions, dispositions, or equity/debt issuances, and excluding one-time costs related to the CEO succession plan - Reaffirmed full-year 2025 AFFO per share and unit guidance of $0.89 to $0.93[19] - Key guidance assumptions include: - No additional acquisitions or dispositions beyond what has been announced - No additional equity or debt issuances outside of normal Revolver activity - Exclusion of one-time obligations related to the CEO succession plan[19][24] Appendix: Financial Statements and Reconciliations This section provides the detailed unaudited financial statements for the period ended March 31, 2025, including the Condensed Consolidated Balance Sheets and Statements of Operations, and reconciliations of GAAP Net Income to non-GAAP measures such as Funds from Operations (FFO), Adjusted Funds from Operations (AFFO), and Adjusted EBITDAre Condensed Consolidated Balance Sheets Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Investment in real estate, net | $1,178,002 | $1,161,995 | | Total Assets | $1,269,555 | $1,256,486 | | Total Liabilities | $731,452 | $700,570 | | Total Equity | $538,103 | $555,916 | Condensed Consolidated Statements of Operations Statement of Operations Summary (in thousands) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total Revenue | $34,618 | $35,118 | | Total Expenses | $32,199 | $32,804 | | Net Income | $3,737 | $2,314 | | Net income attributable to common stockholders | $2,104 | $794 | Reconciliation of Net Income to FFO and AFFO FFO and AFFO Reconciliation (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Income | $3,737 | $2,314 | | FFO attributable to common stockholders | $14,779 | $14,883 | | AFFO attributable to common stockholders | $16,019 | $16,529 | Reconciliation of Net Income to EBITDAre and Adjusted EBITDAre EBITDAre Reconciliation (in thousands) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Income | $3,737 | $2,314 | | EBITDAre | $23,458 | $23,288 | | Adjusted EBITDAre | $24,200 | $24,772 | Appendix: Non-GAAP Measures and Definitions This section defines the non-GAAP financial measures used by the company, including Funds From Operations (FFO), Adjusted Funds From Operations (AFFO), and EBITDA for Real Estate (EBITDAre), and clarifies the calculation methodology for key operational metrics like Rent Coverage Ratio, Annualized Base Rent, and Capitalization Rate, which are used to evaluate portfolio performance - FFO is defined per NAREIT standards, starting with net income and excluding gains/losses from property sales, impairment losses, and real estate depreciation to measure core operating performance[27] - AFFO further adjusts FFO for items such as straight-line rent, stock-based compensation, and amortization of debt issuance costs to provide a measure of recurring operating performance[28] - EBITDAre and Adjusted EBITDAre are used to evaluate and compare core operating results and the ability to service debt[30][31] - The Rent Coverage Ratio calculation excludes certain credit-rated tenants and approximately 21% of the portfolio due to lack of financial information or small tenant size[32]