Community Healthcare Trust Inc - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - August 4, 2020

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Exhibit 99.1


News Release

Community Healthcare Trust Announces Results for the Three Months Ended June 30, 2020

FRANKLIN, Tenn., August 4, 2020 / PRNewswire / -- Community Healthcare Trust Incorporated (NYSE: CHCT) (the "Company") today announced results for the three months ended June 30, 2020. The Company reported net income for the second quarter of approximately $4.5 million, or $0.19 per diluted common share. Funds from operations and adjusted funds from operations ("AFFO") for the three months ended June 30, 2020 totaled $0.51 and $0.52, respectively, per diluted common share. 

Highlights include:
•
During the second quarter of 2020, the Company issued, through its at-the-market offering program ("ATM Program"), 578,759 shares of common stock at an average gross sales price of $41.70 per share and received net proceeds of approximately $23.7 million at an approximate 4.11% current equity yield.

•
During the second quarter of 2020, the Company acquired seven real estate properties totaling approximately 92,000 square feet and also acquired a land parcel adjacent to one of our existing properties to be used for additional parking for an aggregate purchase price of approximately $21.3 million and cash consideration of approximately $21.5 million. Upon acquisition, the real estate properties were 100% leased in the aggregate with lease expirations through 2035.

•
The Company has two properties under definitive purchase agreements for an aggregate expected purchase price of approximately $2.6 million and expected aggregate returns of approximately 9.3%. The Company expects to close on these properties in the third quarter of 2020; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.

•
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 on one of these properties in the fourth quarter and the other two through the middle of 2021; however, the Company cannot provide assurance as to the timing of when, or whether, these transactions will actually close.

•
On August 3, 2020, the Company’s Board of Directors declared a quarterly common stock dividend in the amount of $0.4225 per share. The dividend is payable on August 28, 2020 to stockholders of record on August 17, 2020.

COVID-19 Pandemic
•
Many healthcare providers have been impacted by the COVID-19 pandemic. Some of them were unable to see patients for a period of time; others have seen a reduced number of elective procedures and/or patient visits; while others have experienced limited impact, or have even seen improved cash flows from either increases in census or from government funding.

•
As of July 31, 2020, the Company has entered into, or anticipates entering into, deferral agreements with up to approximately 20 tenants representing less than one percent of our annualized rent. Pursuant to these agreements, the tenants are generally required to repay the deferred amounts in equal monthly installments during the third and fourth quarters of 2020.

Highland Update:
•
On July 1, 2020, the bankruptcy sale of Highland Hospital was completed and the operator who had been managing the facility acquired its operations and entered into a lease with the Company.


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•
The Company provided debtor in possession financing (the “DIP”) to facilitate the sale and, as of the closing of the sale, had an approximately $1.2 million net payable. In addition, the Company continued to have a net investment of $550,000 in a separate note (the “Note”), secured by all assets of Highland Hospital.

•
As of the date of this filing, the DIP and the Note have been combined into a single net receivable balance of approximately $1.4 million.

•
The Company expects this receivable to be repaid in the next few months, as well as other amounts previously owed to the Company. However, the Company cannot provide assurance as to the timing or whether the receivable and other amounts will be received.


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. The Company had investments of approximately $664.7 million in 131 real estate properties as of June 30, 2020, located in 33 states, totaling approximately 2.8 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, effects on global and national markets as well as businesses resulting from the COVID-19 pandemic, 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, 2019, in the Quarterly Report on Form 10-Q for the Quarter Ending March 31, 2020, 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.


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COMMUNITY HEALTHCARE TRUST INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited; Dollars in thousands, except per share amounts)
 
June 30, 2020
 
December 31, 2019
 
 
 
 
ASSETS
 
 
 
Real estate properties:
 
 
 
Land and land improvements
$
78,999

 
$
68,129

Buildings, improvements, and lease intangibles
585,454

 
534,503

Personal property
234

 
220

Total real estate properties
664,687

 
602,852

Less accumulated depreciation
(89,698
)
 
(77,523
)
Total real estate properties, net
574,989

 
525,329

Cash and cash equivalents
4,896

 
1,730

Restricted cash
351

 
293

Other assets, net
32,068

 
35,179

Total assets
$
612,304

 
$
562,531

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
Liabilities
 
 
 
Debt, net
$
197,309

 
$
194,243

Accounts payable and accrued liabilities
5,497

 
3,606

Other liabilities
22,395

 
11,271

Total liabilities
225,201

 
209,120

 
 
 
 
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; 22,726,141 and 21,410,578 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively
227

 
214

Additional paid-in capital
500,477

 
447,916

Cumulative net income
26,180

 
17,554

Accumulated other comprehensive (loss) income
(13,969
)
 
(4,808
)
Cumulative dividends
(125,812
)
 
(107,465
)
Total stockholders’ equity
387,103

 
353,411

Total liabilities and stockholders' equity
$
612,304

 
$
562,531


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.
 


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COMMUNITY HEALTHCARE TRUST INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2020 AND 2019
(Unaudited; Dollars in thousands, except per share amounts)
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2020
 
2019
 
2020
 
2019
REVENUES
 
 
 
 
 
 
 
Rental income
$
17,830

 
$
13,361

 
$
35,258

 
$
26,259

Other operating interest
450

 
955

 
958

 
1,498

 
18,280

 
14,316

 
36,216

 
27,757

 
 
 
 
 
 
 
 
EXPENSES
 
 
 
 
 
 
 
Property operating
3,223

 
2,993

 
6,566

 
6,068

General and administrative
1,919

 
1,776

 
4,111

 
3,561

Depreciation and amortization
6,119

 
5,299

 
12,178

 
10,545

 
11,261

 
10,068

 
22,855

 
20,174

 
 
 
 
 
 
 
 
OTHER INCOME (EXPENSE)
 
 
 
 
 
 
 
Loss on sale of real estate
(313
)
 
—

 
(313
)
 
—

Interest expense
(2,183
)
 
(2,251
)
 
(4,432
)
 
(4,305
)
Interest and other income, net
3

 
69

 
10

 
238

 
(2,493
)
 
(2,182
)
 
(4,735
)
 
(4,067
)
NET INCOME
$
4,526

 
$
2,066

 
$
8,626

 
$
3,516

 
 
 
 
 
 
 
 
NET INCOME PER COMMON SHARE:
 
 
 
 
 
 
 
Net income per common share – Basic
$
0.19

 
$
0.09

 
$
0.37

 
$
0.16

Net income per common share – Diluted
$
0.19

 
$
0.09

 
$
0.37

 
$
0.16

WEIGHTED AVERAGE COMMON SHARE OUTSTANDING-BASIC
21,264

 
18,246

 
20,999

 
18,101

WEIGHTED AVERAGE COMMON SHARE OUTSTANDING-DILUTED
21,264

 
18,246

 
20,999

 
18,101


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.



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COMMUNITY HEALTHCARE TRUST INCORPORATED
RECONCILIATION OF FFO and AFFO (1) 
(Unaudited; Amounts in thousands, except per share amounts)
 
Three Months Ended June 30,
 
2020
 
2019
Net income
$
4,526

 
$
2,066

   Real estate depreciation and amortization
6,168

 
5,340

   Loss on sale of depreciable real estate
313

 
—

   Total adjustments
6,481

 
5,340

Funds From Operations
$
11,007

 
$
7,406

   Straight-line rent
(725
)
 
(413
)
   Stock-based compensation
1,070

 
899

AFFO
$
11,352

 
$
7,892

   Funds from Operations per Common Share-Diluted
$
0.51

 
$
0.40

   AFFO Per Common Share-Diluted
$
0.52

 
$
0.42

Weighted Average Common Shares Outstanding-Diluted (2)
21,750

 
18,685

 
(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. 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. 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.
 
CONTACT: David H. Dupuy, 615-771-3052
SOURCE: Community Healthcare Trust Incorporated

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Community Healthcare Trust Inc Reports