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Community Healthcare Trust Announces Results for the Three Months Ended December 31, 2023

FRANKLIN, Tenn., Feb. 13, 2024 /PRNewswire/ — Community Healthcare Trust Incorporated (NYSE: CHCT) (the “Company”) today announced results for the three months ended December 31, 2023. The Company reported net income for the three months ended December 31, 2023 of approximately $4.6 million, or $0.15 per diluted common share. Funds from operations (“FFO”) and adjusted funds from operations (“AFFO”) for the three months ended December 31, 2023 totaled $0.57 and $0.61, respectively, per diluted common share. 

Items Impacting Our Results include:

  • During the three months ended December 31, 2023, the Company acquired two real estate properties for an aggregate purchase price of approximately $7.1 million. Upon acquisition, the properties totaling approximately 48,000 square feet, were 97.5% leased in the aggregate with lease expirations through 2031.
      
  • Subsequent to December 31, 2023, the Company acquired one long term acute care hospital (LTACH) for a purchase price of approximately $6.5 million and cash consideration of approximately $6.6 million. Upon acquisition, the property was 100.0% leased with a lease expiration in 2039. The acquisition was funded with proceeds from the Company’s Revolving Credit Facility.
      
  • The Company has three properties under definitive purchase agreements for an expected aggregate purchase price of approximately $27.9 million. The Company’s expected aggregate return on these investments ranges from approximately 9.08% to 9.20%. The Company expects to close on these properties during the first half of 2024; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.
      
  • The Company has seven properties under definitive purchase agreements, to be acquired after completion and occupancy, for an aggregate expected purchase price of approximately $166.5 million. The Company’s expected returns on these investments are approximately 9.1% to 9.75%. The Company anticipates closing on two of these properties in 2024 with the remainder throughout 2025 and 2026; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.
      
  • During the fourth quarter of 2023, the Company issued, through its at-the-market offering program, approximately 348,000 shares of common stock at an average gross sales price of $27.73 per share for net proceeds of approximately $9.5 million at an approximate 6.70% current equity yield.
      
  • The Company has one property under a definitive sale agreement. The sales price less estimated costs to sell exceed the carrying value of the property. The Company expects to close on this property during the second or third quarter of 2024; however, the Company cannot provide assurance as to the timing of when, or whether, this transaction will actually close.
      
  • To provide an update on the bankruptcy with one of the Company’s tenants, on November 22, 2023, GenesisCare had its disclosure statement and plan of reorganization approved by the U.S. Bankruptcy Court. As part of their plan of reorganization, GenesisCare is expected to assume or assign to buyers all of the Company’s remaining leases with no material changes to the lease terms. The effective date of the plan of reorganization is expected to be during the first quarter of 2024; however, GenesisCare already closed on the assignment of two of the Company’s leases during January 2024 with two separate buyers. GenesisCare has met substantially all of its lease payment obligations due to the Company through February 2024. 
      
  • On February 8, 2024, the Company’s Board of Directors declared a quarterly common stock dividend in the amount of $0.4575 per share. The dividend is payable on March 1, 2024 to stockholders of record on February 20, 2024.

About Community Healthcare Trust Incorporated
Community Healthcare Trust Incorporated is a real estate investment trust that focuses on owning income-producing real estate properties associated primarily with the delivery of outpatient healthcare services in our target sub-markets throughout the United States. As of December 31, 2023, the Company had investments of approximately $1.1 billion in 193 real estate properties (including a portion of one property accounted for as a sales-type lease and two properties classified as held for sale). The properties are located in 34 states, totaling approximately 4.3 million square feet in the aggregate.

Additional information regarding the Company, including this quarter’s operations, can be found at www.chct.reit. Please contact the Company at 615-771-3052 to request a printed copy of this information.

Cautionary Note Regarding Forward-Looking Statements
In addition to the historical information contained within, the matters discussed in this press release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “believes”, “expects”, “may”, “will,” “should”, “seeks”, “approximately”, “intends”, “plans”, “estimates”, “anticipates” or other similar words or expressions, including the negative thereof. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections or other forward-looking information. Such forward-looking statements reflect management’s current beliefs and are based on information currently available to management. Because forward-looking statements relate to future events, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the control of Community Healthcare Trust Incorporated (the “Company”). Thus, the Company’s actual results and financial condition may differ materially from those indicated in such forward-looking statements. Some factors that might cause such a difference include the following: general volatility of the capital markets and the market price of the Company’s common stock, changes in the Company’s business strategy, availability, terms and deployment of capital, the Company’s ability to refinance existing indebtedness at or prior to maturity on favorable terms, or at all, changes in the real estate industry in general, interest rates or the general economy, adverse developments related to the healthcare industry, changes in governmental regulations, the degree and nature of the Company’s competition, the ability to consummate acquisitions under contract, catastrophic or extreme weather and other natural events and the physical effects of climate change, the occurrence of cyber incidents, effects on global and national markets as well as businesses resulting from increased inflation, rising interest rates, supply chain disruptions, labor conditions, the conflict between Russia and Ukraine, and/or new and ongoing hostilities between Israel and Hamas, and the other factors described in the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and the Company’s other filings with the Securities and Exchange Commission from time to time. Readers are therefore cautioned not to place undue reliance on the forward-looking statements contained herein which speak only as of the date hereof. The Company intends these forward-looking statements to speak only as of the time of this press release and undertakes no obligation to update forward-looking statements, whether as a result of new information, future developments, or otherwise, except as may be required by law.

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONSOLIDATED BALANCE SHEETS

(Dollars and shares in thousands, except per share amounts)










December 31, 2023


December 31, 2022





ASSETS




Real estate properties:




Land and land improvements

$                     136,532


$                 117,657

Buildings, improvements, and lease intangibles

913,416


825,257

Personal property

299


253

Total real estate properties

1,050,247


943,167

Less accumulated depreciation

(200,810)


(165,341)

Total real estate properties, net

849,437


777,826

Cash and cash equivalents

3,491


11,233

Restricted cash

1,142


835

Real estate properties held for sale

7,466


Other assets, net

83,876


86,531

Total assets

$                     945,412


$                 876,425





LIABILITIES AND STOCKHOLDERS’ EQUITY




Liabilities




Debt, net

$                     403,256


$                 352,997

Accounts payable and accrued liabilities

12,032


11,377

Other liabilities, net

16,868


15,237

Total liabilities

432,156


379,611





Commitments and contingencies








Stockholders’ Equity




Preferred stock, $0.01 par value; 50,000 shares authorized; none issued and outstanding


Common stock, $0.01 par value; 450,000 shares authorized; 27,613 and 25,897 shares
issued and outstanding at December 31, 2023 and December 31, 2022, respectively

276


259

Additional paid-in capital

688,156


625,136

Cumulative net income

88,856


81,142

Accumulated other comprehensive gain

16,417


22,667

Cumulative dividends

(280,449)


(232,390)

Total stockholders’ equity

513,256


496,814

Total liabilities and stockholders’ equity

$                     945,412


$                 876,425

The Consolidated Balance Sheets do not include all of the information and footnotes required by accounting principles generally accepted in
the United States of America for complete financial statements.

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE AND  TWELVE MONTHS ENDED MONTHS ENDED DECEMBER 31, 2023 AND 2022

( Dollars and shares in thousands, except per share amounts)



Three Months Ended

December 31,


Twelve Months Ended

December 31,


2023


2022


2023


2022


(Unaudited)





REVENUES








Rental income

$       28,100


$       24,383


$     108,682


$       94,103

Other operating interest

1,024


959


4,163


3,576


29,124


25,342


112,845


97,679









EXPENSES








Property operating

5,598


4,156


20,713


16,636

General and administrative (1)

3,728


4,149


27,338


14,837

Depreciation and amortization

10,248


8,317


39,693


32,339


19,574


16,622


87,744


63,812









OTHER INCOME (EXPENSE)








Impairment of real estate asset



(102)


Interest expense

(5,019)


(3,464)


(17,792)


(11,873)

Deferred income tax expense


(21)


(306)


(41)

Interest and other income, net

36


3


813


66


(4,983)


(3,482)


(17,387)


(11,848)

NET INCOME

$         4,567


$         5,238


$         7,714


$       22,019









NET INCOME PER COMMON SHARE (1):








Net Income per common share – Basic

$           0.15


$           0.19


$           0.20


$           0.81

Net Income per common share – Diluted

$           0.15


$           0.19


$           0.20


$           0.81

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-BASIC

25,981


23,787


25,202


23,631

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-DILUTED

25,981


23,787


25,202


23,631

___________







(1) General and administrative expenses for the twelve months ended December 31, 2023 included stock-based compensation expense
totaling approximately $20.0 million, including the accelerated amortization of stock-based compensation totaling approximately $11.8
million, or $0.47 per diluted common share, recognized upon the passing of our former CEO and President. General and administrative
expenses for the twelve months ended December 31, 2022 included stock-based compensation expense totaling approximately $9.4 million.

The Consolidated Statements of Income do not include all of the information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statements.

COMMUNITY HEALTHCARE TRUST INCORPORATED

RECONCILIATION OF FFO and AFFO (1)

(Unaudited; Dollars and shares in thousands, except per share amounts)




Three Months Ended December 31,


2023


2022

Net income

$                    4,567


$                    5,238

   Real estate depreciation and amortization

10,347


8,382

   Total adjustments

10,347


8,382

FFO

$                  14,914


$                  13,620

   Straight-line rent

(872)


(854)

   Stock-based compensation

2,029


2,645

AFFO

$                  16,071


$                  15,411

   FFO per Common Share-Diluted

$                      0.57


$                      0.56

   AFFO per Common Share-Diluted

$                      0.61


$                      0.63

Weighted Average Common Shares Outstanding-Diluted (2)

26,346


24,471

(1)

Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time.  However, since real estate values have historically risen or fallen with market conditions, many industry investors deem presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. For that reason, the Company considers funds from operations (“FFO”) and adjusted funds from operations (“AFFO”) to be appropriate measures of operating performance of an equity real estate investment trust (“REIT”). In particular, the Company believes that AFFO is useful because it allows investors, analysts and Company management to compare the Company’s operating performance to the operating performance of other real estate companies and between periods on a consistent basis without having to account for differences caused by unanticipated items and other events. 

 

The Company uses the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) definition of FFO. FFO is an operating performance measure adopted by NAREIT. NAREIT defines FFO as the most commonly accepted and reported measure of a REIT’s operating performance equal to net income (calculated in accordance with GAAP), excluding gains or losses from the sale of certain real estate assets, gains and losses from change in control, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, plus depreciation and amortization related to real estate properties, and after adjustments for unconsolidated partnerships and joint ventures. NAREIT also provides REITs with an option to exclude gains, losses and impairments of assets that are incidental to the main business of the REIT from the calculation of FFO.

 

In addition to FFO, the Company presents AFFO and AFFO per share. The Company defines AFFO as FFO, excluding certain expenses related to closing costs of properties acquired accounted for as business combinations and mortgages funded, excluding straight-line rent and the amortization of stock-based compensation, and including or excluding other non-cash items from time to time. AFFO presented herein may not be comparable to similar measures presented by other real estate companies due to the fact that not all real estate companies use the same definition. 

 

FFO and AFFO should not be considered as alternatives to net income (determined in accordance with GAAP) as indicators of the Company’s financial performance or as alternatives to cash flow from operating activities (determined in accordance with GAAP) as measures of the Company’s liquidity, nor are they necessarily indicative of sufficient cash flow to fund all of the Company’s needs. The Company believes that in order to facilitate a clear understanding of the consolidated historical operating results of the Company, FFO and AFFO should be examined in conjunction with net income as presented elsewhere herein.



(2)

Diluted weighted average common shares outstanding for FFO and AFFO are calculated based on the treasury method, rather than the 2-class method used to calculate earnings per share.

CONTACT:  Bill Monroe, 615-771-3052

SOURCE Community Healthcare Trust Incorporated

Originally published at https://www.prnewswire.com/news-releases/community-healthcare-trust-announces-results-for-the-three-months-ended-december-31-2023-302061131.html
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