Community Healthcare Trust Reports Q1 2025 Financial Results with Decreased Net Income

Community Healthcare Trust Incorporated reported its financial results for the first quarter of 2025, revealing a net income of $1.6 million, or $0.03 per diluted share, a decrease from $3.7 million, or $0.11 per diluted share, in the same period last year. The company's rental income increased by approximately $1.4 million, or 4.9%, to $29.7 million, driven primarily by properties acquired in 2024. However, a reduction in rental income due to a tenant being placed on a cash basis contributed to the overall decline in profitability. Total revenues for the quarter reached $30.1 million, compared to $29.3 million in the prior year.

In terms of expenses, Community Healthcare Trust saw a rise in property operating expenses, which increased by 5.2% to $6.1 million, and general and administrative expenses, which rose by 12% to $5.1 million. The increase in general and administrative expenses was largely attributed to higher compensation-related costs, including non-cash stock compensation. Interest expenses also surged by 25.5% to $6.4 million, reflecting higher average balances and interest rates on the company's credit facilities. Overall, total expenses for the quarter amounted to $22.1 million, up from $20.6 million in the previous year.

The company’s total assets as of March 31, 2025, were reported at $985.1 million, a slight decrease from $992.6 million at the end of 2024. The total liabilities increased to $523.8 million from $516.6 million, primarily due to an increase in debt, which rose to $496 million. Stockholders' equity decreased to $461.3 million from $476 million, influenced by dividend payments totaling $13.3 million during the quarter. The company maintained a debt-to-total capitalization ratio of approximately 41.0%, consistent with its financing policy.

Strategically, Community Healthcare Trust completed a financing transaction investment of approximately $9.7 million during the quarter, acquiring a property that will be accounted for as a sale-leaseback transaction. The company has also identified seven properties under definitive purchase agreements, with an expected aggregate purchase price of approximately $169.5 million, anticipated to close throughout 2025, 2026, and 2027. The company plans to fund these acquisitions through cash from operations, equity or debt issuances, or asset sales.

Looking ahead, Community Healthcare Trust remains focused on expanding its portfolio while managing its financial obligations. The company has declared a quarterly dividend of $0.47 per share, payable on May 23, 2025, reflecting its commitment to returning value to shareholders. However, management acknowledged potential challenges, including inflationary pressures and rising interest rates, which could impact operational costs and overall financial performance. The company continues to monitor market conditions closely as it navigates its growth strategy.