Community Healthcare Trust Announces Results for the Three Months Ended June 30, 2018

 

FRANKLIN, Tenn., Aug. 7, 2018 /PRNewswire/ -- Community Healthcare Trust Incorporated (NYSE: CHCT) (the "Company") today announced results for the three months ended June 30, 2018. The Company reported net income for the second quarter of approximately $2.4 million, or $0.12 per diluted common share. Normalized funds from operations and adjusted funds from operations ("AFFO") for the three months ended June 30, 2018 totaled $0.40 and $0.42, respectively, per diluted common share.

Highlights include:

  • During the second quarter of 2018, the Company acquired three real estate properties totaling approximately 68,000 square feet for an aggregate purchase price of approximately $11.7 million, including cash consideration of approximately $7.4 million and $4.5 million fair value of real estate received in foreclosure. Upon acquisition, two of the properties were 100% leased in the aggregate with lease expirations ranging from 2020 through 2026, and one property previously secured a mortgage note receivable held by the Company. The property is subject to a signed term sheet to be leased to a single tenant as soon as the lease can be negotiated.
  • On April 25, 2018, the Company provided a $23.0 million loan to a newly formed company (Newco), secured by all assets and ownership interests in seven long-term acute care hospitals and one inpatient rehabilitation hospital that, along with a series of investments by the management of Newco, allowed Newco to acquire certain assets of the Borrower.
  • Also on April 25, 2018, $10.95 million of promissory notes purchased in late 2017 and first quarter of 2018 and approximately $0.261 million of interest on those promissory notes and approximately $0.25 million in fees and reimbursement of expenses and approximately $6.7 million principal and accrued interest related to its mortgage note receivable were satisfied with proceeds from the loan. In addition, the Company received title to the property previously financed by the mortgage note receivable at an approximate $4.5 million valuation.
  • On July 30, 2018, the Company acquired a real estate property totaling approximately 17,000 square feet for a purchase price and cash consideration of approximately $3.5 million. The building was 100% leased at acquisition with lease expirations in 2023.
  • The Company has one property under a definitive purchase agreement for an expected purchase price of approximately $3.2 million. The Company anticipates the property will close during the third quarter of 2018. However, the Company is currently performing due diligence procedures customary for these types of transactions and cannot provide assurance as to the timing of when, or whether, the transaction will actually close.
  • The Company also has five properties under definitive purchase agreements, to be acquired after completion and occupancy, for an aggregate expected purchase price of approximately $103.0 million. The Company's expected aggregate returns on these investments range from approximately 9.4% to 11.0%. The Company expects to close these properties through the end of 2019; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.
  • On August 1, 2018, the Company's Board of Directors declared a quarterly common stock dividend in the amount of $0.4025 per share. The dividend is payable on August 31, 2018 to stockholders of record on August 17, 2018.

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 non-urban markets throughout the United States. The Company had investments of approximately $416.8 million in 91 real estate properties as of June 30, 2018, located in 27 states, totaling approximately 2.1 million square feet.

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

This press release contains statements that are "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", "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 Company's control. 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, the degree and nature of the Company's competition, the ability to consummate acquisitions under contract 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, 2017 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 release and the Company 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

                                               CONDENSED CONSOLIDATED BALANCE SHEETS

                                                            (Unaudited)

                                         (Dollars in thousands, except per share amounts)


                                                          June 30, 2018                  December 31, 2017
                                                          -------------               -----------------


    ASSETS

    Real estate properties:

    Land and land improvements                                              $47,080                           $44,419

    Buildings, improvements, and lease
     intangibles                                                369,563                              343,955

    Personal property                                               129                                  112
                                                                    ---                                  ---

    Total real estate properties                                416,772                              388,486

    Less accumulated depreciation                              (45,682)                            (36,136)
                                                                -------                              -------

    Total real estate properties, net                           371,090                              352,350

    Cash and cash equivalents                                     1,784                                2,130

    Mortgage note receivable, net                                     -                              10,633

    Other assets, net                                            37,910                               20,653
                                                                 ------                               ------

    Total assets                                                           $410,784                          $385,766
                                                                           ========                          ========


    LIABILITIES AND STOCKHOLDERS' EQUITY

    Liabilities

    Debt, net                                                              $125,417                           $93,353

    Accounts payable and accrued
     liabilities                                                  4,439                                4,056

    Other liabilities                                             4,570                                4,983
                                                                  -----                                -----

    Total liabilities                                           134,426                              102,392


    Commitments and contingencies


    Stockholders' Equity

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

    Common stock, $0.01 par value;
     450,000,000 shares authorized;
     18,199,975 and 18,085,798 shares
     issued and outstanding at June 30,
     2018 and December 31, 2017,
     respectively                                                   182                                  181

    Additional paid-in capital                                  325,719                              324,303

    Cumulative net income                                         9,064                                4,775

    Accumulated other comprehensive
     loss                                                         2,039                                  258

    Cumulative dividends                                       (60,646)                            (46,143)
                                                                -------                              -------

    Total stockholders' equity                                  276,358                              283,374
                                                                -------                              -------

    Total liabilities and stockholders'
     equity                                                                $410,784                          $385,766
                                                                           ========                          ========


    The Condensed 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

                                                           CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                                                    FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018 AND 2017

                                                                           (Unaudited)

                                                        (Amounts in thousands, except per share amounts)


                                     Three Months Ended                                Six Months Ended
                                          June 30,                                         June 30,

                                     2018                    2017                      2018                   2017
                                     ----                    ----                      ----                   ----

    REVENUES

    Rental income                            $10,220                                          $7,338                 $19,855  $13,956

    Tenant reimbursements           1,590                               1,334                               3,030       2,462

    Mortgage interest                   -                                258                                   -        519

    Other operating interest          592                                   -                                946           -
                                      ---                                 ---                                ---         ---

                                   12,402                               8,930                              23,831      16,937


    EXPENSES

    Property operating              2,506                               2,140                               4,870       3,878

    General and administrative      1,504                                 835                               2,697       1,605

    Depreciation and amortization   4,630                               4,281                               9,546       8,205

    Bad debts                           -                                  -                                  -         67
                                      ---                                ---                                ---        ---

                                    8,640                               7,256                              17,113      13,755

    OTHER INCOME (EXPENSE)

    Interest expense              (1,571)                            (1,209)                            (2,839)    (1,806)

    Other income (expense)            226                                   1                                 410           3
                                      ---                                 ---                                 ---         ---

                                  (1,345)                            (1,208)                            (2,429)    (1,803)

    NET INCOME                                $2,417                                            $466                  $4,289   $1,379
                                              ======                                            ====                  ======   ======


    NET INCOME PER COMMON SHARE:

    Net income per common share -
     Basic                                     $0.12                                           $0.04                   $0.22    $0.11
                                               =====                                           =====                   =====    =====

    Net income per common share -
     Diluted                                   $0.12                                           $0.04                   $0.22    $0.11
                                               =====                                           =====                   =====    =====

    WEIGHTED AVERAGE COMMON SHARE
     OUTSTANDING-BASIC             17,574                              12,686                              17,574      12,686
                                   ======                              ======                              ======      ======

    WEIGHTED AVERAGE COMMON SHARE
     OUTSTANDING-DILUTED           17,574                              12,816                              17,574      12,841
                                   ======                              ======                              ======      ======


    The Condensed 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, NORMALIZED FFO, and AFFO (1)

                        (Amounts in thousands, except per share amounts)

                                          (Unaudited)


                                       Three Months Ended June 30,

                                          2018                   2017
                                          ----                   ----

    Net income                                    $2,417                           $466

       Real estate
        depreciation
        and
        amortization                     4,624                             4,276
                                         -----                             -----

       Total
        adjustments                      4,624                             4,276
                                         -----                             -----

    Funds From
     Operations                                   $7,041                         $4,742

       Transaction
        costs (2)                           57                                 -

    Normalized
     Funds From
     Operations                                   $7,098                         $4,742
                                                  ======                         ======

       Straight line
        rent                             (391)                            (270)

       Deferred
        compensation                       801                               338

    AFFO                                          $7,508                         $4,810
                                                  ======                         ======

       Funds from
        Operations
        per Common
        Share-
        Diluted                                    $0.40                          $0.37
                                                   =====                          =====

       Normalized
        Funds From
        Operations
        Per Common
        Share-
        Diluted                                    $0.40                          $0.37
                                                   =====                          =====

       AFFO Per
        Common Share-
        Diluted                                    $0.42                          $0.38
                                                   =====                          =====

    Weighted
     Average
     Common Shares
     Outstanding-
     Diluted (3)                        17,800                            12,816
                                        ======                            ======


             (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"), normalized
                                 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 normalized FFO and AFFO are
                                 useful because they allow 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 and FFO per
                                 share are operating performance
                                 measures adopted by NAREIT. NAREIT
                                 defines FFO as the most commonly
                                 accepted and reported measure of a
                                 REIT's operating performance equal
                                 to "net income (computed in
                                 accordance with GAAP), excluding
                                 gains (or losses) from sales of
                                 property, plus depreciation and
                                 amortization, and after adjustments
                                 for unconsolidated partnerships and
                                 joint ventures." The Company has
                                 included normalized FFO which it has
                                 defined as FFO excluding certain
                                 expenses related to closing costs of
                                 properties acquired accounted for as
                                 business combinations and mortgages
                                 funded and has included AFFO which
                                 it has defined as normalized FFO
                                 excluding straight-line rent and
                                 deferred compensation and may
                                 include other non-cash items from
                                 time to time. Normalized FFO and
                                 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 definitions.



                     FFO, normalized 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,
                                 normalized FFO and AFFO should be
                                 examined in conjunction with net
                                 income as presented elsewhere
                                 herein.


             (2)     The transaction costs of $57 above
                                 for the three months ended June 30,
                                 2018 relate to costs associated with
                                 the acquisition of the $23.0 million
                                 promissory note.


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

 

CONTACT: W. Page Barnes, 615-771-3052

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SOURCE Community Healthcare Trust Incorporated

Company Codes: NYSE:CHCT

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