Community Healthcare Trust Announces Results for the Three Months Ended September 30, 2024

COMMUNITY HEALTHCARE TRUST INCORPORATED

CONSOLIDATED BALANCE SHEETS

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

(Unaudited)

September 30, 2024

December 31, 2023

ASSETS

Real estate properties:

Land and land improvements

$                     146,118

$                 136,532

Buildings, improvements, and lease intangibles

989,019

913,416

Personal property

326

299

Total real estate properties

1,135,463

1,050,247

Less accumulated depreciation

(232,747)

(200,810)

Total real estate properties, net

902,716

849,437

Cash and cash equivalents

2,836

3,491

Restricted cash

—

1,142

Real estate properties held for sale

6,351

7,466

Other assets, net

69,876

83,876

Total assets

$                     981,779

$                 945,412

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities

Debt, net

$                     473,716

$                 403,256

Accounts payable and accrued liabilities

14,422

12,032

Other liabilities, net

16,489

16,868

Total liabilities

504,627

432,156

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; 28,242 and 27,613 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

282

276

Additional paid-in capital

702,014

688,156

Cumulative net income

83,843

88,856

Accumulated other comprehensive gain

10,016

16,417

Cumulative dividends

(319,003)

(280,449)

Total stockholders' equity

477,152

513,256

Total liabilities and stockholders' equity

$                     981,779

$                 945,412

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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

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

Three Months Ended

September 30,

Nine Months Ended

September 30,

2024

2023

2024

2023

REVENUES

Rental income

$             29,335

$          27,690

$       85,582

$       80,582

Other operating interest, net

304

1,045

906

3,139

29,639

28,735

86,488

83,721

EXPENSES

Property operating

5,986

5,456

17,349

15,115

General and administrative ⁽¹⁾

4,935

3,618

14,249

23,610

Depreciation and amortization

10,927

11,208

31,981

29,445

21,848

20,282

63,579

68,170

OTHER (EXPENSE) INCOME

Gain on sale (impairment) of depreciable real estate asset

5

(102)

(135)

(102)

Interest expense

(6,253)

(4,641)

(17,301)

(12,773)

Credit loss reserve

—

—

(11,000)

—

Deferred income tax expense

—

(221)

—

(306)

Interest and other income, net

206

3

514

777

(6,042)

(4,961)

(27,922)

(12,404)

NET INCOME (LOSS)

$               1,749

$            3,492

$       (5,013)

$         3,147

NET INCOME (LOSS) PER COMMON SHARE ⁽¹⁾

Net income (loss) per common share - Basic

$                 0.04

$              0.11

$         (0.27)

$           0.05

Net income (loss) per common share - Diluted

$                 0.04

$              0.11

$         (0.27)

$           0.05

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-BASIC

26,660

25,514

26,479

24,940

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING-DILUTED

26,660

25,514

26,479

24,940

___________

⁽¹⁾ General and administrative expenses for the nine months ended September 30, 2024 included stock-based compensation expense totaling approximately $7.4 million. General and administrative expenses for the nine months ended September 30, 2023 included stock-based compensation expense totaling approximately $17.9 million, including the accelerated amortization of stock-based compensation totaling approximately $11.8 million, recognized upon the passing of our former CEO and President in the first quarter of 2023.

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 September 30,

2024

2023

Net income

$                    1,749

$                    3,492

   Real estate depreciation and amortization

11,077

11,375

(Gain on sale) impairment of depreciable real estate asset

(5)

102

   Total adjustments

11,072

11,477

FFO ⁽¹⁾

$                  12,821

$                  14,969

   Straight-line rent

(679)

(444)

   Stock-based compensation

2,497

1,898

AFFO ⁽¹⁾

$                  14,639

$                  16,423

   FFO per Common Share-Diluted ⁽¹⁾

$                      0.48

$                      0.58

   AFFO per Common Share-Diluted ⁽¹⁾

$                      0.55

$                      0.63

Weighted Average Common Shares Outstanding-Diluted ⁽²⁾

26,853

26,025

(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.