EPR Properties(US:EPR)2021-05-06 18:29Financial Data and Key Metrics Changes - FFO adjusted for Q1 2021 was $0.48 per share, down from $0.97 in the prior year [30] - AFFO for the quarter was $0.52 per share compared to $1.14 in the prior year [30] - Total revenue from continuing operations was $111.8 million, down from $151 million in the prior year, primarily due to restructured agreements and property dispositions [31] Business Line Data and Key Metrics Changes - Total investments at the end of Q1 were approximately $6.5 billion with 354 properties in service and 93% occupancy [13] - The experiential portfolio, comprising 280 properties, accounted for 91% of total investments, approximately $5.9 billion [14] - 71% of theaters were open as of April 30, with expectations that 98% will be open by the end of May [15] Market Data and Key Metrics Changes - Box office performance in April reached $189 million, a 66% increase from March's $113 million [16] - The strong performance was driven by films like King Kong Vs Godzilla, Mortal Kombat, and Demon Slayer [16] - Approximately 96% of non-theater operators are open, with strong performance in drive-to destinations and experiential lodging [21] Company Strategy and Development Direction - The company aims to exit covenant relief, reestablish dividends, and return to sustained growth [10] - Focus on capital recycling activities, including the acquisition of a Topgolf facility using deferred rent as currency [13][27] - The company is not looking to increase theater exposure but will focus on other experiential areas such as gaming and live entertainment [73] Management's Comments on Operating Environment and Future Outlook - Management noted improvements in cash collection levels and consumer confidence due to vaccine deployment [8] - The company expects continued strong performance in the second half of 2021 as restrictions ease and consumer demand increases [40] - Management is optimistic about the film slate for 2021, anticipating strong box office numbers for upcoming releases [68] Other Important Information - Cash collections improved to 72% of contractual cash revenue for Q1 and 77% in April [36] - The company has $538.1 million in cash on hand and has paid down its revolving credit facility to zero [35] - The company expects to collect deferred rent and interest primarily over the next 36 months [37] Q&A Session Summary Question: Will new content pull up as more theaters reopen? - Management believes there is a chance, but most dates are settled now, with potential shifts occurring in the fourth quarter [42] Question: How comfortable is the company with investing additional capital during the covenant relief period? - Management indicated that capital deployment will ramp up in the second half of the year, with a focus on building a pipeline for execution [43] Question: What attendance levels are needed for theaters to cover contractual rents? - Management indicated a 35% to 45% reduction in revenue could sustain operations, with flexibility in expense structures [44] Question: What is the status of deferred rent collections? - Management noted that deferred accounts receivable is approximately $59 million, with expectations to normalize over the next 36 months [47] Question: What is the roadmap to exit covenant relief? - Compliance with covenants at the end of a quarter without waivers is necessary, with expectations to potentially exit in the second half of the year [51]