CareTrust REIT(CTRE)2022-02-18 00:04Financial Data and Key Metrics Changes - In Q4 2021, normalized FFO grew by 9% year-over-year to 39.8 million [20] - On a per share basis, normalized FFO rose by 8.3% to 0.41 [20] - Cash collections for the quarter were 100% of contractual cash rent, with January collections at 93% and February at 92% [20] Business Line Data and Key Metrics Changes - The company reported a flat occupancy rate across skilled nursing and seniors housing in Q4, impacted by the Omicron variant [7][8] - The company is pursuing the sale or repurposing of up to 32 assets, representing approximately 10% of contractual rent, to improve the risk profile of its portfolio [10][12] Market Data and Key Metrics Changes - The market for nursing homes is described as robust, with limited supply leading to significant bidding for available assets [16] - The company anticipates that the tight supply will loosen as more owners consider selling their assets due to the drying up of stimulus and a tighter labor market [18] Company Strategy and Development Direction - The company plans to repurpose some of the identified assets into behavioral health facilities, marking a new growth vertical [12][14] - The management is focused on proactively addressing underperforming operators and properties to strengthen the portfolio [10][38] Management Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the pandemic, particularly the impact of the Omicron variant on employee infection rates and labor costs [8][47] - The company is optimistic about the potential for new investments and partnerships, particularly in the behavioral health sector [12][14] Other Important Information - The company has postponed guidance for 2022 until there is more clarity on the sale or repurposing of the identified assets [21] - The management emphasized the importance of maintaining a strong balance sheet and liquidity, with approximately 510 million available under the revolver [20] Q&A Session Summary Question: Opportunity in Behavioral Health - Management expressed interest in the behavioral health sector, noting potential for acquiring distressed facilities and repurposing them [22][23] Question: Sales and Repositioning of Assets - Management indicated that all options are on the table for redeploying proceeds from asset sales, including investments in behavioral health [29][30] Question: Coverage Levels and Timing - Management expects coverage levels to improve as they address the identified properties, with sales likely executed by summer [39][40] Question: Dividend Safety - Management reassured that there are no concerns regarding the safety of the dividend, with decisions on increases to be made in March [70]