Strawberry Fields (STRW) Q2 2024 earnings summary

Executive summary

• Owns 114 healthcare facilities with over 12,800 licensed beds across 9 states, specializing in skilled nursing, long-term acute care, and assisted living, with most properties leased on a triple-net basis to tenants who cover operating costs and capital expenditures.

• Demonstrated strong growth in Adjusted EBITDA (10.7% CAGR) and Adjusted FFO (17.1% CAGR) from 2018 through Q2 2024, with 100% contractual rent collection through Q3 2024.

• Facilities are leased to third-party operators, with a significant portion leased to related parties, and leases are primarily triple net with annual escalations.

• Operates as a REIT, distributing at least 90% of taxable income to shareholders.

• Maintains a diversified operator and consultant base, leveraging experienced consulting groups for operational support.

Financial highlights

• Q3 2024 rental income was $29.5M (up 14.3% YoY); net income was $6.9M (up from $4.7M); FFO for Q3 2024 was $15.2M and AFFO was $14.3M.

• For the nine months ended September 30, 2024, rental income was $86.6M (up 16.5%); net income was $19.9M (up 37.2%).

• Q2 2024 annualized AFFO: $56.7M; 2024 forecasted AFFO/share: $1.10 (2023: $1.02).

• 2024 annualized dividend yield: 4.6%; declared a cash dividend of $0.14 per share, payable December 30, 2024.

• Cash and cash equivalents plus restricted cash at June 30, 2024 totaled $42.1M.

Outlook and guidance

• Management expects continued growth through acquisitions, supported by a robust pipeline and demographic trends.

• ATM equity program established in August 2024 to provide additional capital for growth and liquidity.

• 2024 projections include additional rent from a new Indiana Master Lease.