Strawberry Fields (STRW) Q3 2024 earnings summary

Executive summary

• Owns and leases 114 healthcare facilities across nine states with over 12,800 licensed beds as of September 30, 2024, specializing in skilled nursing, long-term acute care, and assisted living, with continued expansion expected by year-end.

• Achieved 100% contractual rent collection through Q3 2024, with no tenants delinquent on rent payments.

• Completed acquisitions in Texas, Tennessee, and Indiana, and entered agreements for further expansion in Missouri, Kansas, and Oklahoma.

• Launched an at-the-market (ATM) equity program following SEC approval to enhance liquidity and financing flexibility.

• Increased quarterly dividend to $0.14 per share, marking the ninth consecutive quarter of dividends and the fourth increase.

Financial highlights

• Total assets reached $661.5 million as of September 30, 2024, up 4% sequentially; liabilities increased to $606.3 million, mainly due to a Series A bond raise.

• Net income for Q3 2024 was $6.9 million, up from $4.7 million year-over-year; year-to-date net income as of September 2024 was $19.9 million, up 37.8% year-over-year.

• Rental income for Q3 2024 was $29.5 million, up from $25.8 million year-over-year; nine-month rental revenues were $86.6 million, up from $74.3 million.

• FFO for Q3 2024 was $15.2 million; AFFO was $14.3 million; for the nine months ended September 30, 2024, FFO was $44.6 million and AFFO was $41.6 million.

• Dividend yield annualized at 4.6% for Q3 2024.

Outlook and guidance

• Expects to close on approximately $110 million of additional assets in Q4 2024, including eight Missouri facilities for $87.5 million and an Indiana facility for $6.0 million.

• Forecasts 2025 revenue of $125 million and FFO of $75 million, assuming no further acquisitions.

• Management expects continued growth with a robust acquisition pipeline and ongoing expansion in Tennessee and Texas.

• ATM program is expected to provide additional capital for future growth and liquidity.

• Demand for healthcare facilities expected to grow due to aging U.S. population.