CareTrust REIT(CTRE)2025-02-13 21:45Financial Data and Key Metrics Changes - Normalized FFO increased by 68.1% year-over-year to 74.3 million [26] - On a per-share basis, normalized FFO increased by 11.1% to 0.41 [26][28] - The company initiated guidance for normalized FFO per share of 1.72 and for normalized FAD per share of 1.76 for the year [28] Business Line Data and Key Metrics Changes - The company completed new investments totaling just over 325 million, primarily consisting of skilled nursing facilities and some senior housing [22][24] - Cap rates for skilled nursing remain stable between 12.5% to 13.5%, while there is slight compression in senior housing cap rates [45] Company Strategy and Development Direction - The company remains focused on long-term FFO per share growth, emphasizing the importance of matching the right operators with the right opportunities [12] - The management is optimistic about external growth opportunities, expecting significant deal flow similar to the previous year [17][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of the operating environment, with most parts of the portfolio at or ahead of pre-pandemic occupancy levels [14] - There is optimism regarding Medicaid and Medicare policies, with expectations that the minimum staffing rule will be reversed and that Medicaid will remain a cornerstone of healthcare [15][54] Other Important Information - The company has 1.2 billion available under a new revolver, maintaining strong liquidity [32][33] - The net debt normalized EBITDA ratio stands at 0.5 times, with a fixed charge coverage ratio of 17 times [33] Q&A Session Summary Question: Future investment activity and pipeline expansion - Management indicated that the pipeline is expected to broaden, with potential for both existing and new operators [38] Question: Bad debt concerns related to PACS - Management confirmed there is no bad debt included in guidance and does not expect any from PACS or other operators [42] Question: Cap rate shifts and compression - Cap rates for skilled nursing remain stable, while slight compression is noted in senior housing [45] Question: Cost of debt and equity considerations - Management discussed the balance between using equity and the revolver based on the investment pipeline and market conditions [50][61] Question: Medicaid reimbursement expectations - Management does not expect negative surprises in Medicaid reimbursement and noted optimism for potential increases in Texas [106] Question: PACS investment appetite - Management is in a holding pattern regarding PACS until they release earnings, indicating caution [90] Question: Senior housing deal flow and appetite - Management expressed ongoing interest in senior housing, contingent on finding the right entry points [84] Question: Future coverage ratios for new operators - Management indicated that stabilization for new operators may take longer, with specific timelines varying by operator [77]