Global Medical REIT(US:GMRE)2025-05-08 20:05PART I FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents Global Medical REIT Inc.'s unaudited condensed consolidated financial statements as of March 31, 2025, and for the three months ended March 31, 2025 and 2024, including balance sheets, statements of operations, comprehensive income, equity, and cash flows, with detailed notes on accounting policies Condensed Consolidated Balance Sheets As of March 31, 2025, total assets increased to $1.27 billion, driven by real estate investment, while total liabilities rose to $731.5 million due to increased borrowings, leading to a decrease in total equity to $538.1 million Condensed Consolidated Balance Sheet Highlights (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 | | Credit Facility, net | $662,782 | $631,732 | | Total liabilities | $731,452 | $700,570 | | Total equity | $538,103 | $555,916 | Condensed Consolidated Statements of Operations Net income for Q1 2025 significantly increased to $3.7 million from $2.3 million year-over-year, primarily due to a $1.4 million gain on property sales, despite a slight revenue decrease to $34.6 million Q1 2025 vs. Q1 2024 Statement of Operations (in thousands, except per share amounts) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenue | $34,618 | $35,118 | | Total expenses | $32,199 | $32,804 | | Gain on sale of investment properties | $1,358 | $— | | Net income | $3,737 | $2,314 | | Net income attributable to common stockholders | $2,104 | $794 | | Net income per share – basic and diluted | $0.03 | $0.01 | Condensed Consolidated Statements of Cash Flows Net cash from operations decreased to $12.3 million in Q1 2025, while investing activities used $27.2 million, and financing activities provided $13.6 million, resulting in a $1.4 million overall cash decrease Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $12,272 | $14,293 | | Net cash used in investing activities | ($27,224) | ($2,716) | | Net cash provided by (used in) financing activities | $13,598 | ($10,495) | | Net (decrease) increase in cash | ($1,354) | $1,082 | Notes to the Unaudited Condensed Consolidated Financial Statements Notes detail accounting policies, Q1 2025 property acquisitions and dispositions, debt structure including a $900 million credit facility and interest rate swaps, and the $300 million ATM program - During Q1 2025, the Company acquired three properties and sold two medical office buildings, resulting in a gain of $1.3 million4750 - The Company has a $900 million unsecured syndicated credit facility, comprising $500 million in term loans and a $400 million revolver, with compliance to all financial covenants as of March 31, 20256061 - The Company uses nine interest rate swaps to fix the SOFR component on its $350 million Term Loan A at 1.36% through April 2026 and its $150 million Term Loan B at 2.54% through January 202869 - The company declared and paid quarterly dividends of $0.21 per common share and $0.46875 per Series A Preferred share during Q1 20257577 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 financial performance, including $31.5 million in property acquisitions and $8.2 million in dispositions, monitoring interest rates and wage inflation, and addressing a tenant's Chapter 11 filing, while reconciling GAAP to non-GAAP metrics - The company's strategy focuses on investing in healthcare properties like medical office buildings in secondary markets, aiming for attractive dividends and stock price appreciation128130 - In Q1 2025, the company acquired three properties for $31.5 million and sold two properties for $8.2 million, resulting in a $1.4 million gain147148 - A tenant, Prospect Medical Group, filed for Chapter 11 bankruptcy, with an agreement reached for lease rejection at the East Orange, NJ facility and payment of post-petition amounts due through February 2025149 Q1 2025 vs. Q1 2024 Key Performance Metrics (per share/unit) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income attributable to common stockholders | $0.03 | $0.01 | | FFO attributable to common stockholders | $0.20 | $0.21 | | AFFO attributable to common stockholders | $0.22 | $0.23 | | Dividends per share of common stock | $0.21 | $0.21 | Consolidated Results of Operations Q1 2025 total revenue decreased by $0.5 million to $34.6 million due to dispositions, while G&A expenses fell by $0.8 million, and a $1.4 million gain on property sales drove net income to $3.7 million - Total revenue decreased by $0.5 million year-over-year, primarily due to property dispositions completed since March 31, 2024160162 - General and administrative expenses decreased by $0.8 million, mainly due to a $1.0 million reduction in non-cash LTIP compensation expense related to the CEO's transition agreement163 - Interest expense rose by $0.3 million due to higher average debt balances, despite a slight decrease in the weighted average interest rate from 3.90% to 3.83%167168 - A gain on sale of investment properties of $1.4 million was recognized in Q1 2025, with no comparable gains in Q1 2024170 Liquidity and Capital Resources Liquidity is sourced from operations, debt, and equity, with $187 million available on the Revolver and a $300 million ATM program, while fixed-rate debt totals $514.3 million at 3.18% - Short-term liquidity requirements include interest, principal payments, including a $13 million loan maturing in July 2025, G&A expenses, and dividends176 - Primary external liquidity sources are the Credit Facility and equity issuances, with $187 million available on the Revolver as of May 6, 2025181183 - The company has a $300 million "at-the-market" (ATM) equity offering program, with no shares sold under it during Q1 2025182 - Net cash from financing activities provided $13.6 million in Q1 2025, a reversal from a $10.5 million use in Q1 2024, driven by higher net borrowings on the Credit Facility191 Non-GAAP Financial Measures The company utilizes non-GAAP measures like FFO and AFFO, reporting Q1 2025 FFO per share at $0.20 and AFFO per share at $0.22, with detailed reconciliations provided Reconciliation of Net Income to FFO and AFFO (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 (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 | Item 3. Quantitative and Qualitative Disclosures About Market Risk Primary market risk is interest rate fluctuations on variable-rate debt, with $167.1 million unhedged borrowings; a 100 basis point SOFR increase would reduce annual cash flow by $1.7 million, mitigated by interest rate swaps - The primary market risk is interest rate changes affecting debt used to acquire facilities, particularly borrowings under the Credit Facility201202 - As of March 31, 2025, the company had $167.1 million of unhedged variable-rate debt; a 100 basis point change in SOFR would impact annual cash flow by approximately $1.7 million203 - The company's risk management objectives are to limit the impact of interest rate changes and lower borrowing costs, utilizing instruments like interest rate swaps204 Item 4. Controls and Procedures Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025207 - No changes were made to internal control over financial reporting during the most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls209 PART II OTHER INFORMATION Item 1. Legal Proceedings The company is not currently involved in any material legal proceedings, nor is it aware of any threatened litigation that would materially impact its financial condition - The Company is not presently subject to any material litigation nor is any material litigation threatened against it211 Item 1A. Risk Factors This section supplements annual risk factors, highlighting potential adverse effects of global trade disruptions, trade barriers, and economic downturns on company performance - A new risk factor is disclosed concerning global trade disruption, trade barriers, and bilateral trade frictions, which could adversely affect the company's performance213 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred during the period - None214 Item 3. Defaults Upon Senior Securities No defaults upon senior securities occurred during the period - None215 Item 5. Other Information No other information to report for the period - None217 Item 6. Exhibits This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and XBRL data, incorporating previously filed documents by reference - The report includes CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1) and Inline XBRL documents as filed exhibits218