LTC Properties(US:LTC)2024-04-30 18:20Financial Data and Key Metrics Changes - Total rental revenue increased by $1.8 million due to property sales and operator transitions [29] - Fully diluted FFO per share was $0.69, compared to $0.66 in the previous year [17] - Net income available to common shareholders decreased by $8.9 million primarily due to lower gains on the sale of real estate [31] - Interest expense increased by $436,000 mainly due to higher interest rates and a higher outstanding balance on the revolving line of credit [30] Business Line Data and Key Metrics Changes - Interest income from mortgage loans increased by $1.2 million, mainly related to mortgage loan originations in 2023 and funding of a construction loan in 2024 [7] - The provision for credit losses decreased by $1.7 million due to a higher dollar volume of loan originations in the prior year [16] - Annual rent in 2024 is projected to be $9 million, a $1 million increase over 2023 [22] Market Data and Key Metrics Changes - In Florida, operators will benefit from an unprecedented 8% Medicaid rate increase, resulting in increased coverage for LTC [27] - Occupancy for the Prestige Healthcare loan secured by 15 properties in Michigan was 77% in March 2024, up from 73% a year ago [39] - Private pay occupancy was 88% at March 31, up from 87% at both January 31 and September 30, 2023 [48] Company Strategy and Development Direction - The company is focusing on strategic long-term and sustainable growth as its key focus for 2024 [3] - The seniors housing and care industry is on a promising upturn, driven by favorable demographic trends and improving margins [11] - The company is evaluating multiple investment opportunities and aims to enhance its portfolio while achieving the best risk-adjusted returns for shareholders [26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the reimbursement landscape, particularly with a 4.1% increase anticipated under the SNF payment rule for fiscal 2025 [4] - The company is building its pipeline with varied opportunities across financing vehicles, property types, and operators [41] - Management noted that inflation remains a wild card, but they are confident in their ability to navigate the current environment [41] Other Important Information - The company sold six properties in Florida and Texas with a combined sales price of $26.3 million, receiving proceeds of $25.4 million net of transaction costs [32] - The company has total liquidity of nearly $197 million, including $9 million in cash on hand [35] - The company has a debt to annualized adjusted EBITDA for real estate metric of 5.5 times, which is expected to improve by year-end [20] Q&A Session Summary Question: Can you share additional detail around the style and scope of the pipeline? - Management indicated that they are seeing more opportunities to invest in private pay assets and select skilled nursing opportunities, with a focus on senior loans and construction loans [54][55] Question: What is the appetite for loan-type investments and their average duration? - Management expressed a strong appetite for loan-type investments, indicating that they are looking at opportunities that could lead to equity investments in the future [72] Question: Can you provide more color on the HMG lease negotiations? - Management explained that the lease amendment was facilitated by improved occupancy and margins, allowing for a longer-term agreement with increased rent [95][118]