LTC Properties(US:LTC)2024-07-30 18:05Financial Data and Key Metrics Changes - Net income available to common shareholders increased due to an impairment loss last year, higher interest income from loan originations, receipt of insurance proceeds, and lower interest expense, partially offset by higher G&A expense and provision for credit loss [25] - Fully diluted FFO per share was $0.65 compared to $0.66, while excluding non-recurring items, FFO per share was $0.67 compared to $0.66 [25] - Total liquidity at June 30 was nearly $190 million, including over $6 million in cash, about $118 million available on the line of credit, and roughly $65 million under the ATM [7] Business Line Data and Key Metrics Changes - The company agreed to defer a total of $1.5 million in rent from ALG for May and June related to an 11-property assisted living portfolio in North Carolina [21] - The joint venture investments related to 17 properties were restructured, with a $64.5 million mortgage loan exchanged for a 53% interest in a joint venture owning 13 assisted living communities [22] - The company sold 204,700 shares of common stock for net proceeds of $6.5 million under the ATM program [10] Market Data and Key Metrics Changes - The debt to annualized adjusted EBITDA for real estate decreased to 5.3x from 5.5x in the prior quarter, while the annualized adjusted fixed charge coverage ratio increased to 3.7x from 3.5x [28] - The company expects to record approximately $884,000 of revenue from a $12.7 million mortgage loan to Ignite Medical Resorts for the full year [8] Company Strategy and Development Direction - The company remains committed to its 2024 guidance and future growth despite challenges presented by industry and operator-specific headwinds [20] - The strategy includes providing rent assistance to improve occupancy and security while gaining majority ownership in investments [30][41] - The company is actively monitoring the market for potential investment opportunities, particularly in light of $25 billion in debt maturities through 2026 [48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of occupancy rates and the overall improvement across the industry [30][103] - The company is focused on addressing staffing challenges and improving occupancy in certain communities [39] - Management noted that the impact of a cyber attack on Medicaid revenues was a temporary issue that affected ALG [39] Other Important Information - The company welcomed a new Board member, Bradley Preber, who is the Chairman of the Audit Committee [12] - The company recorded $2.6 million of income from former operators related to portfolio transitions in prior years [27] Q&A Session Summary Question: What caused the deferrals and changes with ALG? - The issues stemmed from occupancy challenges and a cyber attack affecting Medicaid revenues, leading to staffing challenges in certain communities [39][34] Question: How does the company view the purchase options provided to ALG? - The purchase options were part of negotiations to provide a pathway for recovery of deferred rent and to maintain a good relationship with ALG [40][68] Question: What is the outlook for occupancy recovery in the affected assets? - Management indicated that occupancy is beginning to recover, and ALG is addressing staffing challenges [50][103] Question: How significant are the deferral balances and recovery agreements? - The primary balance outstanding is approximately $3.5 million, with various security instruments in place for recovery [51][53] Question: What is the company's strategy regarding future investments and market opportunities? - The company is actively monitoring the market for investment opportunities, particularly in light of upcoming debt maturities [48]