Community Healthcare Trust(US:CHCT)2023-05-04 04:49Financial Data and Key Metrics Changes - Total revenue grew from $23.5 million in Q1 2022 to $27.2 million in Q1 2023, representing a 15.7% year-over-year growth [34] - Funds from operations (FFO) for Q1 2023 was $2.2 million, down from $13.5 million in Q1 2022, with FFO per diluted share at $0.09 compared to $0.56 in Q1 2022 [36] - Adjusted funds from operations (AFFO) increased from $14.8 million in Q1 2022 to $15.6 million in Q1 2023, marking a 5.2% growth year-over-year [14] Business Line Data and Key Metrics Changes - Property operating expenses increased from $4.2 million in Q4 2022 to $4.9 million in Q1 2023, a 17.3% increase, primarily due to expenses on newly acquired properties and rising property taxes [12] - General and administrative (G&A) expenses rose from $4.1 million to $16.2 million sequentially, largely due to the non-cash accelerated amortization of the late CEO's unvested shares totaling $11.8 million [35] Market Data and Key Metrics Changes - Occupancy remained stable at 91.6%, with good leasing activity reported [9] - The company signed agreements for nine properties to be acquired, with an expected investment of $214.5 million and anticipated returns ranging from 9% to 10.25% [10] Company Strategy and Development Direction - The company is focused on maintaining its shareholder-centric approach and plans to continue the operational strategy established by the late CEO, emphasizing consistency and replicability in business operations [52] - The acquisition pipeline is strong, with ongoing due diligence on properties expected to close in the coming years [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the quality of the new tenant, LifePoint Health, following the acquisition of properties from Everest Rehabilitation, indicating a positive outlook for future operations [42] - The management team is actively engaging with brokers and maintaining relationships to ensure continued deal flow despite the recent leadership transition [25] Other Important Information - The company declared a dividend of $0.45 per common share for the fourth quarter, marking a consistent increase since its IPO [33] - The management acknowledged the emotional impact of the late CEO's passing but emphasized the strength of the team and their commitment to continuing his legacy [3] Q&A Session Summary Question: What is the expected timeline for the nine properties totaling $215 million? - Management expects two properties to close in 2023, four in 2024, and three in 2025 [40] Question: How does the credit quality of LifePoint compare to Everest? - Management believes LifePoint represents an improvement in credit quality and validates the quality of the buildings and operations of Everest [42] Question: What are the current trends in cap rates? - Cap rates are consistent in the 9% to 10% range, with occasional opportunities above 10% [43] Question: Are there any developers facing challenges due to local banks pulling back on credit? - Management noted anecdotal evidence of developers struggling but emphasized their focus on generating the best yields through established client relationships [47] Question: What is the status of the CFO search? - The search for a new CFO is ongoing, with a focus on finding a qualified candidate while maintaining the company's compensation structure [64]