Four Corners Property Trust, Inc. (“FCPT” or the “Company”)
(NYSE: FCPT) today announced financial results for the three months
and six months ended June 30, 2023.
Management Comments
“In the second quarter, FCPT capitalized on the more
buyer-friendly market environment to acquire $170 million of
high-quality properties. Including the $110 million of acquisitions
closed in July, our year to date acquisition totals are $301
million, which surpasses our previous highest annual acquisition
total,” said CEO Bill Lenehan. “Our portfolio is performing well
with high occupancy and collections, and we believe that we are
poised to continue making progress on our investment
strategies.”
Rent Collection Update
As of June 30, 2023, the Company has received rent payments
representing 99.7% of its portfolio contractual base rent for the
quarter ending June 30, 2023.
Financial Results
Rental Revenue and Net Income Attributable to Common
Shareholders
- Rental revenue for the second quarter increased 10.3% over the
prior year to $52.8 million. Rental revenue consisted of $52.0
million in cash rents and $0.8 million of straight-line and other
non-cash rent adjustments.
- Net income attributable to common shareholders was $23.6
million for the second quarter, or $0.27 per diluted share. These
results compare to net income attributable to common shareholders
of $28.1 million for the same quarter in the prior year, or $0.35
per diluted share.
- Net income attributable to common shareholders was $46.7
million for the six months ended June 30, 2023, or $0.54 per
diluted share. These results compare to net income attributed to
common shareholders of $50.4 million for the same six-month period
in 2022, or $0.63 per diluted share.
Funds from Operations (FFO)
- NAREIT-defined FFO per diluted share for the second quarter was
$0.40, representing flat results compared to the same quarter in
2022.
- NAREIT-defined FFO per diluted share for the six months ended
June 30, 2023 was $0.79, representing a $0.01 per share decrease
compared to the same six-month period in 2022.
Adjusted Funds from Operations (AFFO)
- AFFO per diluted share for the second quarter was $0.42,
representing a $0.01 per share increase compared to the same
quarter in 2022.
- AFFO per diluted share for the six months ended June 30, 2023
was $0.83, representing a $0.01 per share increase compared to the
same six-month period in 2022.
General and Administrative (G&A) Expense
- G&A expense for the second quarter was $5.6 million, which
included $1.6 million of stock-based compensation. These results
compare to G&A expense in the second quarter of 2022 of $4.7
million, including $1.0 million of stock-based compensation.
- Cash G&A expense (after excluding stock-based compensation)
for the second quarter was $4.0 million, representing 7.8% of cash
rental income for the quarter.
Dividends
- FCPT declared a dividend of $0.34 per common share for the
second quarter of 2023.
Real Estate Portfolio
- As of June 30, 2023, the Company’s rental portfolio consisted
of 1,077 properties located in 47 states. The properties are 99.9%
occupied (measured by square feet) under long-term, net leases with
a weighted average remaining lease term of approximately 8.1
years.
Acquisitions
- During the second quarter, FCPT acquired 48 properties for a
combined purchase price of $169.7 million at an initial weighted
average cash yield of 6.85%, on rents in place as of June 30, 2023
and a weighted average remaining lease term of 12.7 years.
Dispositions
- During the second quarter, FCPT sold one property for sales
price of $2.1 million representing $0.2 million of gain and a cash
yield of 6.6% on rents that were previously in place and exclusive
of transaction costs.
Liquidity and Capital
Markets
Capital Raising
- During the second quarter, the Company sold 350,000 shares of
Common Stock via the at-the-market (ATM) program at an average
price of $26.11 per share for net proceeds of $9.0 million.
- In the quarter, the Company also settled previously executed
forward sale agreements of 4,113,788 shares for net proceeds of
$110.3 million.
- As announced on June 5, 2023, FCPT entered into agreements to
issue $100 million of senior unsecured notes (the “Notes”) with a
ten-year term and priced at a fixed interest rate of 6.44%. In
connection with the offering of the Notes, the Company terminated
interest rate swaps entered into previously to hedge the interest
rate of this offering. This resulted in a gain of $8.1 million for
the Company and a 5.39% yield to maturity including the gain. The
gain will be amortized straight line over the life of the Notes and
effectively makes the Note’s all-in interest rate, after amortizing
the gain, 5.63%. The Notes funded on July 12, 2023.
Liquidity
- At June 30, 2023, FCPT had approximately $246 million of
available liquidity including $11 million of cash and cash
equivalents and $235 million of undrawn credit line capacity.
Credit Facility and Unsecured Notes
- At June 30, 2023, FCPT had $1,020 million of outstanding debt,
consisting of $430 million of term loans and $575 million of
unsecured fixed rate notes and $15 million of outstanding revolver
balance. FCPT’s leverage, as measured by the ratio of net debt to
adjusted EBITDAre, is 5.5x at quarter-end.
Conference Call
Information
Company management will host a conference call and audio webcast
on Wednesday, August 2 at 11:00 a.m. Eastern Time to discuss the
results.
Interested parties can listen to the call via the following:
Phone: 1 833 470 1428 (domestic) or 1 404 975
4839 (international), Call Access Code: 124473
Live webcast:
https://events.q4inc.com/attendee/581324737
In order to pre-register for the call,
investors can visit
https://www.netroadshow.com/events/login?show=9d0b3840&confId=53354
Replay: Available through November 1, 2023 by
dialing 1 866 813 9403 (domestic) or 44 204 525 0658
(international), Replay Access Code 982548
About FCPT
FCPT, headquartered in Mill Valley, CA, is a real estate
investment trust primarily engaged in the ownership, acquisition
and leasing of restaurant and retail properties. The Company seeks
to grow its portfolio by acquiring additional real estate to lease,
on a net basis, for use in the restaurant and retail industries.
Additional information about FCPT can be found on the website at
fcpt.com.
Cautionary Note Regarding
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. Forward-looking
statements include all statements that are not historical
statements of fact and those regarding the Company’s intent, belief
or expectations, including, but not limited to, statements
regarding: operating and financial performance, announced
transactions, expectations regarding the making of distributions
and the payment of dividends, and the effect of pandemics such as
COVID-19 on the business operations of the Company and the
Company’s tenants and their continued ability to pay rent in a
timely manner or at all. Words such as “anticipate(s),”
“expect(s),” “intend(s),” “plan(s),” “believe(s),” “may,” “will,”
“would,” “could,” “should,” “seek(s)” and similar expressions, or
the negative of these terms, are intended to identify such
forward-looking statements. Forward-looking statements speak only
as of the date on which such statements are made and, except in the
normal course of the Company’s public disclosure obligations, the
Company expressly disclaims any obligation to publicly release any
updates or revisions to any forward-looking statements to reflect
any change in the Company’s expectations or any change in events,
conditions or circumstances on which any statement is based.
Forward-looking statements are based on management’s current
expectations and beliefs and the Company can give no assurance that
its expectations or the events described will occur as described.
Forward-looking statements are subject to a number of risks and
uncertainties that could cause actual results to differ materially
from those set forth in or implied by such forward-looking
statements. In addition, the extent to which COVID-19 impacts the
Company and its tenants will depend on future developments, which
are highly uncertain and cannot be predicted with confidence,
including the scope, severity and duration of the pandemic, the
actions taken to contain the pandemic or mitigate its impact and
the direct and indirect economic effects of the pandemic and
containment measures, among others. For a further discussion of
these and other factors that could cause the company’s future
results to differ materially from any forward-looking statements,
see the section entitled “Risk Factors” in the company’s most
recent annual report on Form 10-K, and other risks described in
documents subsequently filed by the company from time to time with
the Securities and Exchange Commission.
Notice Regarding Non-GAAP Financial
Measures:
In addition to U.S. GAAP financial measures, this press release
and the referenced supplemental financial and operating report
contain and may refer to certain non-GAAP financial measures. These
non-GAAP financial measures are in addition to, not a substitute
for or superior to, measures of financial performance prepared in
accordance with GAAP. These non-GAAP financial measures should not
be considered replacements for, and should be read together with,
the most comparable GAAP financial measures. Reconciliations to the
most directly comparable GAAP financial measures and statements of
why management believes these measures are useful to investors are
included in the supplemental financial and operating report, which
can be found in the investor relations section of our website.
Supplemental Materials and
Website:
Supplemental materials on the Second Quarter 2023 operating
results and other information on the Company are available on the
investors relations section of FCPT’s website at
investors.fcpt.com.
Four Corners Property
Trust
Consolidated Statements of
Income
(Unaudited)
(In thousands, except share
and per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Revenues: Rental revenue
$
52,843
$
47,904
$
105,040
$
94,807
Restaurant revenue
7,845
7,521
15,600
15,015
Total revenues
60,688
55,425
120,640
109,822
Operating expenses: General and administrative
5,600
4,698
11,655
9,967
Depreciation and amortization
11,817
10,128
23,993
19,832
Property expenses
2,676
1,987
5,843
3,836
Restaurant expenses
7,197
7,052
14,492
13,935
Total operating expenses
27,290
23,865
55,983
47,570
Interest expense
(10,051
)
(9,031
)
(19,969
)
(17,406
)
Other income, net
226
29
526
86
Realized gain on sale, net
173
5,756
1,735
5,756
Income tax expense
(91
)
(144
)
(139
)
(232
)
Net income
23,655
28,170
46,810
50,456
Net income attributable to noncontrolling interest
(30
)
(40
)
(61
)
(71
)
Net Income Attributable to Common Shareholders
$
23,625
$
28,130
$
46,749
$
50,385
Basic net income per share
$
0.27
$
0.35
$
0.54
$
0.63
Diluted net income per share
$
0.27
$
0.35
$
0.54
$
0.63
Regular dividends declared per share
$
0.3400
$
0.3325
$
0.6800
$
0.6650
Weighted-average shares outstanding: Basic
87,366,335
80,294,804
86,604,202
80,245,247
Diluted
87,556,011
80,494,443
86,825,150
80,446,167
Four Corners Property
Trust
Consolidated Balance
Sheets
(In thousands, except share
data)
June 30, 2023
December 31,
(Unaudited)
2022
ASSETS Real estate investments: Land
$
1,187,742
$
1,115,827
Buildings, equipment and improvements
1,641,941
1,539,875
Total real estate investments
2,829,683
2,655,702
Less: Accumulated depreciation
(722,241
)
(706,702
)
Total real estate investments, net
2,107,442
1,949,000
Intangible lease assets, net
114,298
106,206
Total real estate investments and intangible lease assets, net
2,221,740
2,055,206
Real estate held for sale
-
7,522
Cash and cash equivalents
11,197
26,296
Straight-line rent adjustment
62,891
61,027
Derivative assets
27,668
35,276
Deferred tax assets
1,037
988
Other assets
13,448
12,272
Total Assets
$
2,337,981
$
2,198,587
LIABILITIES AND EQUITY Liabilities: Term loan
and revolving credit facility ($445,000 and $430,000 of principal,
respectively)
$
439,940
$
424,134
Senior unsecured notes ($575,000 and $575,000 of principal,
respectively)
571,665
571,343
Dividends payable
30,725
29,064
Rent received in advance
13,240
11,710
Derivative liabilities
-
9
Other liabilities
27,270
24,017
Total liabilities
1,082,840
1,060,277
Equity: Preferred stock, $0.0001 par value per share,
25,000,000 shares authorized, zero shares issued and outstanding
-
-
Common stock, $0.0001 par value per share, 500,000,000 shares
authorized, 90,565,846 and 85,637,293 shares issued and
outstanding, respectively
9
9
Additional paid-in capital
1,233,775
1,104,522
Accumulated other comprehensive income
31,757
30,944
Noncontrolling interest
2,202
2,259
Retained earnings (deficit)
(12,602
)
576
Total equity
1,255,141
1,138,310
Total Liabilities and Equity
$
2,337,981
$
2,198,587
Four Corners Property
Trust
FFO and AFFO
(Unaudited)
(In thousands, except share
and per share data)
Three Months Ended June
30,
Six Months Ended June
30,
2023
2022
2023
2022
Funds from operations (FFO): Net income
$
23,655
$
28,170
$
46,810
$
50,456
Depreciation and amortization
11,782
10,095
23,927
19,763
Realized gain on sales of real estate
(173
)
(5,756
)
(1,735
)
(5,756
)
FFO (as defined by NAREIT)
$
35,264
$
32,509
$
69,002
$
64,463
Straight-line rental revenue
(1,335
)
(1,649
)
(2,639
)
(3,291
)
Deferred income tax (benefit) expense (1)
(4
)
61
(48
)
61
Stock-based compensation
1,560
1,033
3,326
2,533
Non-cash amortization of deferred financing costs
564
496
1,128
964
Non-real estate investment depreciation
35
33
66
69
Other non-cash revenue adjustments
490
527
984
1,057
Adjusted Funds from Operations (AFFO)
$
36,574
$
33,010
$
71,819
$
65,856
Fully diluted shares outstanding (2)
87,670,570
80,609,002
86,939,709
80,560,726
FFO per diluted share
$
0.40
$
0.40
$
0.79
$
0.80
AFFO per diluted share
$
0.42
$
0.41
$
0.83
$
0.82
(1)
Amount represents non-cash deferred income tax (benefit)
expense recognized at the Kerrow Restaurant Business
(2)
Assumes the issuance of common shares for OP units held by
non-controlling interest.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230801937495/en/
FCPT Bill Lenehan, 415-965-8031
CEO
Gerry Morgan, 415-965-8032 CFO
Four Corners Property (NYSE:FCPT)
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