Strawberry Fields(STRW) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a total asset increase of 27.7% to $170 million, driven by significant portfolio expansion [16] - Total liabilities rose by 23.6$134.5 million, while equity increased by 76.8% year-over-year, amounting to $36 million [17] - Revenue grew by$17.3 million or 17.3%, resulting in a net income of $26.5 million, which is a 30.9$55.8 million, and adjusted EBITDA was $90.6 million, reflecting year-over-year growth rates of 12.6$84 million in 2020 to $104 million in 2024, with expectations to reach around$130 million in 2025 [8][25] - The average lease term improved from 4.6 years to 7.4 years by the end of 2024 [9] Market Data and Key Metrics Changes - The company has grown its tenant base from ten operators to forty, indicating a diversification in its operational partnerships [7] - The company collected 100% of its contractual rents during the year, showcasing strong operational performance [10] Company Strategy and Development Direction - The company aims to continue its growth trajectory by focusing on acquisitions that fit its operational model, emphasizing disciplined investment strategies [22][24] - The management expressed a commitment to maintaining a strong dividend policy, increasing the dividend from $0.12 to$0.14 per share, representing a 16.6% increase [21] - The company is looking to improve its market presence and stock liquidity by engaging with institutional investors and participating in conferences [26][28] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the future, expecting to close approximately $150 million in acquisitions in 2025, with a focus on controlled growth [45] - Concerns regarding reimbursement rates and regulatory environments were acknowledged, but management expressed confidence in the ability to navigate these challenges [84][85] Other Important Information - The company has authorized a cash dividend of$0.14 per share, marking its tenth consecutive quarter of dividend payments [14] - The company has established an ATM program and completed its first underwritten public offering, raising 35 million [11] Q&A Session Summary Question: Can you provide details on the transaction market and deal flow? - Management indicated that they are seeing consistent deal flow but will only pursue opportunities that fit their investment criteria [41][42] Question: What are the leverage expectations for 2025? - Management expects to maintain a debt-to-equity ratio between 45% and 55%, aiming for the lower end of that range [46][47] Question: What is the forecast for 2025 AFFO per share? - Management anticipates an AFFO per share in the range of 1.20, with expectations to potentially exceed that figure [50][51] Question: Can you discuss the status of lease expirations for 2025? - Management confirmed that most leases have renewed, with only two remaining, one of which is expected to renew and the other is being actively marketed for a new tenant [58][60] Question: How significant was the ATM issuance in the fourth quarter? - The ATM issuance in the fourth quarter involved approximately 71,000 shares, raising around $161,000 [70] Question: Are there any concerns about tenants moving out? - Management expressed confidence in their tenant relationships, noting that only one tenant is expected to move out, and they are actively pursuing a new tenant for that asset [88][90]