National Health Investors Inc Reports Significant Growth in Q4 2023 Earnings
Net Income: Q4 net income per diluted share rose to $0.74, a significant increase from $0.04 in the same period last year.
FFO: NAREIT FFO per diluted share for Q4 reached $1.09, up from $0.74 year-over-year.
Normalized FFO: Q4 normalized FFO per diluted share improved to $1.09 from $0.85 compared to the prior year.
Normalized FAD: Q4 normalized FAD increased to $47.3 million from $44.7 million year-over-year.
Rental Income: Rental income for Q4 grew by $7.0 million, primarily due to pandemic-related rent repayments and new investments.
Guidance for 2024: NHI issued its annual guidance for 2024, projecting NAREIT FFO and normalized FFO per diluted share in the range of $4.31 - $4.37, and normalized FAD between $191.3 million and $194.1 million.
Occupancy Rates: Occupancy rates showed improvement across various segments, indicating a recovery in the senior housing industry.
On February 20, 2024, National Health Investors Inc (NYSE:NHI) released its 8-K filing, detailing the financial results for the fourth quarter and full year of 2023. The company, a real estate investment trust specializing in senior housing and medical facility investments, reported a substantial increase in net income and funds from operations (FFO), reflecting a strong performance despite the challenges faced by the industry.
Financial Highlights and Performance
National Health Investors Inc's net income attributable to common stockholders for the fourth quarter of 2023 was $0.74 per diluted share, a marked improvement from the $0.04 reported in the same period of the previous year. For the full year, net income per diluted share reached $3.13, up from $1.48 year-over-year. The company's FFO, a key metric for real estate investment trusts, also saw a significant rise. NAREIT FFO per diluted share for the quarter was $1.09, compared to $0.74 in the prior year's quarter. Normalized FFO, which adjusts for certain non-recurring items, matched the NAREIT FFO for the quarter at $1.09 per diluted share, an increase from $0.85 in the same period last year.
The company's financial achievements are particularly noteworthy in the context of the REIT industry, where FFO is a critical measure of operating performance. The increase in net income and FFO reflects the company's ability to effectively manage its portfolio and navigate the complexities of the healthcare real estate market.
Income Statement and Balance Sheet Details
Rental income recognized from the company's tenants for the quarter increased by $7.0 million, primarily due to an increase in pandemic-related rent repayments and new investments. Interest income and other was approximately $0.7 million higher, mainly due to new and existing loan fundings. The company's net operating income (NOI) from the Senior Housing Operating Portfolio (SHOP) segment also increased, totaling $2.9 million, which is $0.9 million higher than the same period in the prior year.
On the balance sheet, as of December 31, 2023, NHI had $1.1 billion in net debt, including $245.0 million outstanding on its $700.0 million revolving credit facility. The company maintains a strong financial profile with a net debt to adjusted EBITDA ratio of 4.4x, which is within the company's target range.
Portfolio and Market Activity
During the fourth quarter of 2023, NHI sold three properties with a net book value of approximately $5.9 million for net proceeds of approximately $7.0 million. For the year, NHI sold 12 properties with a net book value of approximately $45.1 million for net proceeds of approximately $59.1 million. These transactions are part of NHI's ongoing portfolio optimization strategy.
The company's occupancy rates have shown improvement across various segments, with the SHOP segment, in particular, benefiting from a sequential occupancy gain of 420 basis points and a 350-basis point improvement in the margin. This indicates a recovery in the senior housing industry and suggests potential for further growth.
In summary, National Health Investors Inc's fourth quarter and full-year 2023 results demonstrate a robust financial performance, with significant increases in net income and FFO. The company's strategic management of its portfolio and the recovery of the senior housing industry contribute to a positive outlook for 2024.
For more detailed information, investors are encouraged to review the full 8-K filing and listen to the investor conference call scheduled for February 21, 2024.
Explore the complete 8-K earnings release (here) from National Health Investors Inc for further details.
This article first appeared on GuruFocus.
