0000798783false00007987832024-07-242024-07-24

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 24, 2024

UNIVERSAL HEALTH REALTY INCOME TRUST

(Exact name of Registrant as Specified in Its Charter)

Maryland

1-9321

23-6858580

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

Universal Corporate Center

367 South Gulph Road

King of Prussia, Pennsylvania

19406

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (610) 265-0688

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

 

Trading Symbol(s)

 

Name of each exchange on which registered

Shares of beneficial interest, $0.01 par value

 

UHT

 

New York Stock Exchange

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 


Item 2.02 Results of Operations and Financial Condition.

On July 24, 2024, the Trust made its second quarter, 2024 earnings release. A copy of the Trust’s press release is furnished as exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

Number

Description

 99.1

Press release dated July 24, 2024.

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 


Exhibit Index

 

Exhibit

Number

Description

 99.1

Press release dated July 24, 2024.

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

UNIVERSAL HEALTH REALTY INCOME TRUST

Date: July 24, 2024

By:

/s/ Charles F. Boyle

Name:

Charles F. Boyle

Title:

Senior Vice President and Chief Financial Officer

 


 

 

Exhibit 99.1

 

UNIVERSAL HEALTH REALTY INCOME TRUST

 

 

Universal Corporate Center

 

 

 

 

367 S. Gulph Road

 

 

 

 

P.O. Box 61558

 

 

 

 

King of Prussia, PA 19406

 

 

 

 

(610) 265-0688

 

FOR IMMEDIATE RELEASE

CONTACT:

 

Charles Boyle

 

July 24, 2024

 

 

Chief Financial Officer

 

 

 

 

(610) 768-3300

 

 

UNIVERSAL HEALTH REALTY INCOME TRUST

REPORTS 2024 SECOND QUARTER FINANCIAL RESULTS

Consolidated Results of Operations - Three-Month Periods Ended June 30, 2024 and 2023:

KING OF PRUSSIA, PA - Universal Health Realty Income Trust (NYSE:UHT) announced today that for the three-month period ended June 30, 2024, net income was $5.3 million, or $.38 per diluted share, as compared to $3.5 million, or $.25 per diluted share, during the second quarter of 2023.

The increase in our net income of $1.8 million, or $.13 per diluted share, during the second quarter of 2024, as compared to the comparable quarter of 2023, consisted of the following: (i) an increase of $1.5 million, or $.11 per diluted share, resulting from a reduction in the expenses related to our property located in Chicago, Illinois, including $862,000 from demolition expenses incurred during the second quarter of 2023, and $563,000 related to a property tax reduction recorded during the second quarter of 2024 which related primarily to prior periods; (ii) an increase of $706,000, or $.05 per diluted share, resulting from an aggregate net increase in the income generated at various properties, partially offset by; (iii) a decrease of $404,000, or $.03 per diluted share, resulting from an increase in interest expense due primarily to increases in our average borrowing rate as well as our average outstanding borrowings.

As calculated on the attached Schedule of Non-GAAP Supplemental Information (“Supplemental Schedule”), our funds from operations ("FFO") were $12.4 million, or $.90 per diluted share, during the second quarter of 2024, as compared to $10.6 million, or $.77 per diluted share during the second quarter of 2023. The increase of $1.8 million, or $.13 per diluted share, was due primarily to the above-mentioned increase in our net income during the second quarter of 2024, as compared to the second quarter of 2023.

Consolidated Results of Operations - Six-Month Periods Ended June 30, 2024 and 2023:

For the six-month period ended June 30, 2024, net income was $10.6 million, or $.76 per diluted share, as compared to $7.9 million, or $0.57 per diluted share during the first six months of 2023.

The increase in our net income of $2.6 million, or $.19 per diluted share, during the first six months of 2024, as compared to the comparable period of 2023, consisted of the following: (i) an increase of $2.1 million, or $.15 per diluted share, resulting from an aggregate net increase in the income generated at various properties; (ii) an increase of $1.8 million, or $.13 per diluted share, resulting from a reduction in the expenses related to our property located in Chicago, Illinois, including $1.1 million from demolition expenses incurred during the first six months of 2023, and $563,000 related to a property tax reduction recorded during the first six months of 2024 which related primarily to prior periods, partially offset by; (iii) a decrease of $1.3 million, or $.09 per diluted share, resulting from an increase in interest

 


 

 

expense due primarily to increases in our average borrowing rate as well as our average outstanding borrowings.

As calculated on the attached Supplemental Schedule, our FFO were $24.8 million, or $1.79 per diluted share, during the first six months of 2024, as compared to $22.0 million, or $1.59 per diluted share during the comparable period of 2023. The increase of $2.8 million, or $.20 per diluted share, was due primarily to the above-mentioned increase in our net income during the first six months of 2024, as compared to the first six months of 2023, as well as an increase in depreciation and amortization expense.

Dividend Information:

The second quarter dividend of $.73 per share, or $10.1 million in the aggregate, was declared on June 5, 2024 and paid on June 28, 2024.

Capital Resources Information:

At June 30, 2024, we had $342.9 million of borrowings outstanding pursuant to the terms of our $375 million revolving credit agreement and $32.1 million of available borrowing capacity as of that date, net of outstanding borrowings.

Sierra Medical Plaza I:

In March, 2023, construction was substantially completed on the Sierra Medical Plaza I, an 86,000 square foot MOB located in Reno, Nevada. This MOB is located on the campus of the Northern Nevada Sierra Medical Center, a hospital that is owned and operated by a wholly-owned subsidiary of UHS, which was completed and opened during April, 2022. The master flex lease agreement in connection with this building, which commenced in March, 2023 and has a ten-year term scheduled to expire on March 31, 2033, covers approximately 68% of the rentable square feet of the MOB at an initial minimum rent of $1.3 million annually, plus a pro-rata share of the common area maintenance expenses. This master flex lease agreement is subject to reduction based upon the execution of third-party leases. The aggregate cost of the MOB is estimated to be approximately $35 million, approximately $30 million of which was incurred as of June 30, 2024.

Vacant Land/Specialty Facility:

Demolition of the former specialty hospital located in Chicago, Illinois, was completed during 2023. The aggregate demolition expenses amounted to approximately $1.5 million ($1.1 million of which were incurred during the first and second quarters of 2023 and $332,000 of which were incurred during the fourth quarter of 2022). In addition, in December, 2023, we sold the vacant specialty facility located in Corpus Christi, Texas.

We continue to market the vacant properties located in Chicago, Illinois and Evansville, Indiana. Future operating expenses related to these properties, will be incurred by us during the time they remain owned and unleased.

General Information, Forward-Looking Statements and Risk Factors and Non-GAAP Financial Measures:

Universal Health Realty Income Trust, a real estate investment trust, invests in healthcare and human-service related facilities including acute care hospitals, behavioral health care hospitals, specialty facilities, medical/office buildings, free-standing emergency departments and childcare centers. We have investments or commitments in seventy-six properties located in twenty-one states.

This press release contains forward-looking statements based on current management expectations. Numerous factors, including those disclosed herein, as well as the operations and financial results of each of our tenants, those related to healthcare industry trends and those detailed in our filings with the

 


 

 

Securities and Exchange Commission (as set forth in Item 1A-Risk Factors and in Item 7- Forward-Looking Statements in our Form 10-K for the year ended December 31, 2023 and in Item 7 - Forward-Looking Statements and Certain Risk Factors in our Form 10-Q for the quarter ended March 31, 2024), may cause the results to differ materially from those anticipated in the forward-looking statements. Readers should not place undue reliance on such forward-looking statements which reflect management’s view only as of the date hereof. We undertake no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

Many of the factors that could affect our future results are beyond our control or ability to predict. Future operations and financial results of our tenants, and in turn ours, could be materially impacted by various developments including, but not limited to, decreases in staffing availability and related increases to wage expense experienced by our tenants resulting from the nationwide shortage of nurses and other clinical staff and support personnel, the impact of government and administrative regulation of the health care industry; declining patient volumes and unfavorable changes in payer mix caused by deteriorating macroeconomic conditions (including increases in uninsured and underinsured patients as the result of business closings and layoffs); potential disruptions related to supplies required for our tenants’ employees and patients; and potential increases to other expenditures.

In addition, the increase in interest rates has substantially increased our borrowings costs and reduced our ability to access the capital markets on favorable terms. Additional increases in interest rates could have a significant unfavorable impact on our future results of operations and the resulting effect on the capital markets could adversely affect our ability to carry out our strategy.

We believe that, if and when applicable, adjusted net income and adjusted net income per diluted share (as reflected on the Supplemental Schedule), which are non-GAAP financial measures (“GAAP” is Generally Accepted Accounting Principles in the United States of America), are helpful to our investors as measures of our operating performance. In addition, we believe that, when applicable, comparing and discussing our financial results based on these measures, as calculated, is helpful to our investors since it neutralizes the effect in each year of material items that are non-recurring or non-operational in nature including items such as, but not limited to, gains on transactions.

Funds from operations (“FFO”) is a widely recognized measure of performance for Real Estate Investment Trusts (“REITs”). We believe that FFO and FFO per diluted share, which are non-GAAP financial measures, are helpful to our investors as measures of our operating performance. We compute FFO, as reflected on the attached Supplemental Schedules, in accordance with standards established by the National Association of Real Estate Investment Trusts (“NAREIT”), which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than we interpret the definition. FFO adjusts for the effects of certain items, such as gains or losses on transactions that occurred during the periods presented. FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered to be an alternative to net income determined in accordance with GAAP. In addition, FFO should not be used as: (i) an indication of our financial performance determined in accordance with GAAP; (ii) an alternative to cash flow from operating activities determined in accordance with GAAP; (iii) a measure of our liquidity, or; (iv) an indicator of funds available for our cash needs, including our ability to make cash distributions to shareholders. A reconciliation of our reported net income to FFO is reflected on the Supplemental Schedules included below.

To obtain a complete understanding of our financial performance these measures should be examined in connection with net income, determined in accordance with GAAP, as presented in the condensed consolidated financial statements and notes thereto in this report or in our other filings with the Securities and Exchange Commission including our Report on Form 10-K for the year ended

 


 

 

December 31, 2023 and our Report on Form 10-Q for the quarter ended March 31, 2024. Since the items included or excluded from these measures are significant components in understanding and assessing financial performance under GAAP, these measures should not be considered to be alternatives to net income as a measure of our operating performance or profitability. Since these measures, as presented, are not determined in accordance with GAAP and are thus susceptible to varying calculations, they may not be comparable to other similarly titled measures of other companies. Investors are encouraged to use GAAP measures when evaluating our financial performance.

 

(more)

 


 

 

Universal Health Realty Income Trust

Consolidated Statements of Income

For the Three and Six Months Ended June 30, 2024 and 2023

(amounts in thousands, except share information)

(unaudited)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

  Lease revenue - UHS facilities (a.)

 

$

8,454

 

 

$

8,236

 

 

$

17,118

 

 

$

16,023

 

  Lease revenue - Non-related parties

 

 

14,359

 

 

 

13,668

 

 

 

28,846

 

 

 

27,029

 

  Other revenue - UHS facilities

 

 

220

 

 

 

245

 

 

 

440

 

 

 

476

 

  Other revenue - Non-related parties

 

 

342

 

 

 

292

 

 

 

751

 

 

 

773

 

  Interest income on financing leases - UHS facilities

 

 

1,359

 

 

 

1,365

 

 

 

2,720

 

 

 

2,731

 

 

 

 

24,734

 

 

 

23,806

 

 

 

49,875

 

 

 

47,032

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

  Depreciation and amortization

 

 

6,806

 

 

 

6,849

 

 

 

13,615

 

 

 

13,467

 

  Advisory fees to UHS

 

 

1,369

 

 

 

1,323

 

 

 

2,707

 

 

 

2,625

 

  Other operating expenses

 

 

6,975

 

 

 

8,250

 

 

 

14,506

 

 

 

15,771

 

 

 

 

15,150

 

 

 

16,422

 

 

 

30,828

 

 

 

31,863

 

Income before equity in income of unconsolidated limited liability companies ("LLCs") and interest expense

 

 

9,584

 

 

 

7,384

 

 

 

19,047

 

 

 

15,169

 

  Equity in income of unconsolidated LLCs

 

 

272

 

 

 

268

 

 

 

656

 

 

 

639

 

  Interest expense, net

 

 

(4,580

)

 

 

(4,176

)

 

 

(9,127

)

 

 

(7,873

)

Net income

 

$

5,276

 

 

$

3,476

 

 

$

10,576

 

 

$

7,935

 

Basic earnings per share

 

$

0.38

 

 

$

0.25

 

 

$

0.77

 

 

$

0.58

 

Diluted earnings per share

 

$

0.38

 

 

$

0.25

 

 

$

0.76

 

 

$

0.57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding - Basic

 

 

13,798

 

 

 

13,784

 

 

 

13,795

 

 

 

13,781

 

Weighted average number of shares outstanding - Diluted

 

 

13,832

 

 

 

13,809

 

 

 

13,828

 

 

 

13,806

 

 

(a.) Includes bonus rental on McAllen Medical Center, a UHS acute care hospital facility, of $758 and $730 for the three-month periods ended June 30, 2024 and 2023, respectively, and $1,541 and $1,495 for the six-month periods ended June 30, 2024 and 2023, respectively.

 

 

 

 


 

 

Universal Health Realty Income Trust

Schedule of Non-GAAP Supplemental Information (“Supplemental Schedule”)

For the Three Months Ended June 30, 2024 and 2023

(amounts in thousands, except share information)

(unaudited)

 

Calculation of Adjusted Net Income

 

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

 

Amount

 

 

Per
Diluted Share

 

 

Amount

 

 

Per
Diluted Share

 

Net income

 

$

5,276

 

 

$

0.38

 

 

$

3,476

 

 

$

0.25

 

Adjustments

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Subtotal adjustments to net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Adjusted net income

 

$

5,276

 

 

$

0.38

 

 

$

3,476

 

 

$

0.25

 

 

Calculation of Funds From Operations (“FFO”)

 

 

Three Months Ended

 

 

Three Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

 

Amount

 

 

Per
Diluted Share

 

 

Amount

 

 

Per
Diluted Share

 

Net income

 

$

5,276

 

 

$

0.38

 

 

$

3,476

 

 

$

0.25

 

Plus: Depreciation and amortization expense:

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated investments

 

 

6,806

 

 

 

0.50

 

 

 

6,849

 

 

 

0.50

 

Unconsolidated affiliates

 

 

303

 

 

 

0.02

 

 

 

298

 

 

 

0.02

 

FFO

 

$

12,385

 

 

$

0.90

 

 

$

10,623

 

 

$

0.77

 

Dividend paid per share

 

 

 

 

$

0.730

 

 

 

 

 

$

0.720

 

 

 

 

 


 

 

Universal Health Realty Income Trust

Schedule of Non-GAAP Supplemental Information (“Supplemental Schedule”)

For the Six Months Ended June 30, 2024 and 2023

(amounts in thousands, except share information)

(unaudited)

 

Calculation of Adjusted Net Income

 

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

 

Amount

 

 

Per
Diluted Share

 

 

Amount

 

 

Per
Diluted Share

 

Net income

 

$

10,576

 

 

$

0.76

 

 

$

7,935

 

 

$

0.57

 

Adjustments

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Subtotal adjustments to net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Adjusted net income

 

$

10,576

 

 

$

0.76

 

 

$

7,935

 

 

$

0.57

 

 

Calculation of Funds From Operations (“FFO”)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

Six Months Ended

 

 

 

June 30, 2024

 

 

June 30, 2023

 

 

 

Amount

 

 

Per
Diluted Share

 

 

Amount

 

 

Per
Diluted Share

 

Net income

 

$

10,576

 

 

$

0.76

 

 

$

7,935

 

 

$

0.57

 

Plus: Depreciation and amortization expense:

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated investments

 

 

13,615

 

 

 

0.99

 

 

 

13,467

 

 

 

0.98

 

Unconsolidated affiliates

 

 

607

 

 

 

0.04

 

 

 

591

 

 

 

0.04

 

FFO

 

$

24,798

 

 

$

1.79

 

 

$

21,993

 

 

$

1.59

 

Dividend paid per share

 

 

 

 

$

1.455

 

 

 

 

 

$

1.435

 

 

 


 

 

Universal Health Realty Income Trust

Consolidated Balance Sheets

(amounts in thousands, except share information)

(unaudited)

 

 

 

June 30,

 

 

December 31,

 

 

 

2024

 

 

2023

 

Assets:

 

 

 

 

 

 

Real Estate Investments:

 

 

 

 

 

 

Buildings and improvements and construction in progress

 

$

651,638

 

 

$

649,374

 

Accumulated depreciation

 

 

(274,622

)

 

 

(262,449

)

 

 

 

377,016

 

 

 

386,925

 

Land

 

 

56,870

 

 

 

56,870

 

               Net Real Estate Investments

 

 

433,886

 

 

 

443,795

 

Financing receivable from UHS

 

 

83,043

 

 

 

83,279

 

               Net Real Estate Investments and Financing receivable

 

 

516,929

 

 

 

527,074

 

Investments in limited liability companies ("LLCs")

 

 

14,328

 

 

 

9,102

 

Other Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

 

5,577

 

 

 

8,212

 

Lease and other receivables from UHS

 

 

6,816

 

 

 

6,180

 

Lease receivable - other

 

 

7,905

 

 

 

8,166

 

Intangible assets (net of accumulated amortization of $11.4 million and
   $12.5 million, respectively)

 

 

8,193

 

 

 

9,110

 

Right-of-use land assets, net

 

 

10,932

 

 

 

10,946

 

Deferred charges, notes receivable and other assets, net

 

 

15,871

 

 

 

17,579

 

               Total Assets

 

$

586,551

 

 

$

596,369

 

Liabilities:

 

 

 

 

 

 

Line of credit borrowings

 

$

342,900

 

 

$

326,600

 

Mortgage notes payable, non-recourse to us, net

 

 

19,970

 

 

 

32,863

 

Accrued interest

 

 

1,024

 

 

 

490

 

Accrued expenses and other liabilities

 

 

10,145

 

 

 

13,500

 

Ground lease liabilities, net

 

 

10,932

 

 

 

10,946

 

Tenant reserves, deposits and deferred and prepaid rents

 

 

10,879

 

 

 

11,036

 

               Total Liabilities

 

 

395,850

 

 

 

395,435

 

Equity:

 

 

 

 

 

 

Preferred shares of beneficial interest,
   $.01 par value; 5,000,000 shares authorized;
   none issued and outstanding

 

 

-

 

 

 

-

 

Common shares, $.01 par value;
   95,000,000 shares authorized; issued and outstanding: 2024 - 13,848,950;
   2023 - 13,823,899

 

 

138

 

 

 

138

 

Capital in excess of par value

 

 

270,592

 

 

 

270,398

 

Cumulative net income

 

 

836,637

 

 

 

826,061

 

Cumulative dividends

 

 

(923,107

)

 

 

(902,975

)

Accumulated other comprehensive income

 

 

6,441

 

 

 

7,312

 

     Total Equity

 

 

190,701

 

 

 

200,934

 

               Total Liabilities and Equity

 

$

586,551

 

 

$

596,369

 

 

 


v3.24.2
Document and Entity Information
Jul. 24, 2024
Cover [Abstract]  
Document Type 8-K
Amendment Flag false
Document Period End Date Jul. 24, 2024
Entity Registrant Name UNIVERSAL HEALTH REALTY INCOME TRUST
Entity Central Index Key 0000798783
Entity Emerging Growth Company false
Entity File Number 1-9321
Entity Incorporation, State or Country Code MD
Entity Tax Identification Number 23-6858580
Entity Address, Address Line One Universal Corporate Center
Entity Address, Address Line Two 367 South Gulph Road
Entity Address, City or Town King of Prussia
Entity Address, State or Province PA
Entity Address, Postal Zip Code 19406
City Area Code 610
Local Phone Number 265-0688
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Shares of beneficial interest, $0.01 par value
Trading Symbol UHT
Security Exchange Name NYSE

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