Community Healthcare Trust Announces Results for the Three Months Ended September 30, 2019

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Community Healthcare Trust Incorporated

Nov 05, 2019, 16:15 ET

FRANKLIN, Tenn., Nov. 5, 2019 /PRNewswire/ -- Community Healthcare Trust Incorporated (NYSE: CHCT) (the "Company") today announced results for the three months ended September 30, 2019. The Company reported net income for the third quarter of approximately $2.6 million, or $0.12 per diluted common share. Funds from operations and adjusted funds from operations ("AFFO") for the three months ended September 30, 2019 totaled $0.44 and $0.46, respectively, per diluted common share.

Highlights include:

During the third quarter of 2019, the Company issued, through its at-the-market offering program ("ATM Program"), 680,309 shares of common stock at an average gross sales price of $42.70 per share and received net proceeds of approximately $28.5 million at an approximate 3.94% current equity yield.
During the third quarter of 2019, the Company acquired three real estate properties totaling approximately 130,000 square feet for an aggregate purchase price of approximately $52.6 million and cash consideration of approximately $52.2 million. Upon acquisition, the properties were 100% leased in the aggregate with lease expirations through 2034.
Subsequent to September 30, 2019, the Company acquired seven real estate properties, including one that was previously under construction, totaling approximately 114,000 square feet for a purchase price of approximately $34.8 million and cash consideration of approximately $34.4 million. Upon acquisition, the properties were 100% leased in the aggregate with lease expirations through 2034.
The Company has three properties under definitive purchase agreements, to be acquired after completion and occupancy, for an aggregate expected purchase price of approximately $68.0 million. The Company's expected aggregate returns on these investments range from approximately 9.5% to 11.0%. The Company expects to close these properties through 2020; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.
On October 31, 2019, the Company's Board of Directors declared a quarterly common stock dividend in the amount of $0.4150 per share. The dividend is payable on November 29, 2019 to stockholders of record on November 15, 2019.

Highland Transition Update:

A new operator is currently managing Highland Hospital pursuant to a management agreement and is in the process of preparing for transfer of licenses and other assets.
Highland Hospital will likely be the subject of a pre-packaged bankruptcy, with an anticipated sale to the new operator, to expedite and facilitate the transfer of licenses.
The Company has received and anticipates continuing to receive monthly payments of approximately $0.3 million.
The Company's lease with the new operator will become effective upon the transfer of the licenses to the new operator.
The Company does not anticipate any material adverse long-term effect to its cash flows or net income related to the transition or subsequent leasing of this facility.
The Company cannot provide assurance as to the timing or whether, this transaction will actually close.

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 $566.3 million in 111 real estate properties as of September 30, 2019, located in 32 states, totaling approximately 2.5 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, 2018 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)*


	September 30, 2019		December 31, 2018

ASSETS
Real estate properties:
Land and land improvements	$	63,015	$	50,270
Buildings, improvements, and lease intangibles	503,110		394,527
Personal property	202		133
Total real estate properties	566,327		444,930
Less accumulated depreciation	(71,617)		(55,298)
Total real estate properties, net	494,710		389,632
Cash and cash equivalents	1,724		2,007
Restricted cash	224		385
Other assets, net	36,414		34,546
Total assets	$	533,072	$	426,570

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Debt, net	$	215,460	$	147,766
Accounts payable and accrued liabilities	4,004		3,196
Other liabilities	12,661		3,949
Total liabilities	232,125		154,911

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; 20,177,693 and 18,634,502 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively	202		186
Additional paid-in capital	391,247		337,180
Cumulative net income	15,341		9,178
Accumulated other comprehensive (loss) income	(6,826)		633
Cumulative dividends	(99,017)		(75,518)
Total stockholders' equity	300,947		271,659
Total liabilities and stockholders' equity	$	533,072	$	426,570

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 NINE MONTHS ENDED SEPTEMBER 30, 2019 AND 2018 *(Unaudited; Dollars in thousands, except per share amounts)*


	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
REVENUES
Rental income	$	15,718	$	11,858	$	41,977	$	34,743
Other operating interest	541		679		2,039		1,625
	16,259		12,537		44,016		36,368

EXPENSES
Property operating	3,327		2,627		9,395		7,497
General and administrative	2,041		1,395		5,602		4,092
Depreciation and amortization	5,774		4,925		16,319		14,471
	11,142		8,947		31,316		26,060

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND OTHER ITEMS	5,117		3,590		12,700		10,308
Interest expense	(2,483)		(1,643)		(6,788)		(4,482)
Interest and other income, net	13		52		251		462
INCOME FROM CONTINUING OPERATIONS	2,647		1,999		6,163		6,288
NET INCOME	$	2,647	$	1,999	$	6,163	$	6,288

NET INCOME PER COMMON SHARE:
Net income per common share – Basic	$	0.12	$	0.10	$	0.28	$	0.31
Net income per common share – Diluted	$	0.12	$	0.10	$	0.28	$	0.31
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING-BASIC	18,833		17,670		18,348		17,696
WEIGHTED AVERAGE COMMON SHARE OUTSTANDING-DILUTED	18,833		17,670		18,348		17,696

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 and AFFO ⁽¹⁾ *(Unaudited; Amounts in thousands, except per share amounts)*


	Three Months Ended September 30,
	2019		2018
Net income	$	2,647	$	1,999
Real estate depreciation and amortization	5,812		4,918
Total adjustments	5,812		4,918
Funds From Operations	$	8,459	$	6,917
Straight-line rent	(603)		(359)
Stock-based compensation	1,007		690
AFFO	$	8,863	$	7,248
Funds from Operations per Common Share-Diluted	$	0.44	$	0.39
AFFO Per Common Share-Diluted	$	0.46	$	0.40
Weighted Average Common Shares Outstanding-Diluted ⁽²⁾	19,315		17,948


(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 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 (calculated in accordance with GAAP), excluding gains or losses from the sale of certain real estate assets and gains or losses from change in control, plus depreciation and amortization related to real estate, plus 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, and after adjustments for unconsolidated partnerships and joint ventures, as well as other items discussed in NAREIT's Funds From Operations White Paper - 2018 Restatement. 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 are calculated based on the treasury method, rather than the 2-class method used to calculate earnings per share.