Four Corners Property Trust, Inc. (“FCPT” or the “Company”,
NYSE: FCPT) today announced financial results for the three months
and nine months ended September 30, 2023.
Management Comments
“Through the first three quarters, FCPT has achieved a record
acquisition growth year, up 13% over 2022 total volume, funded
through accretive capital raised earlier in the year. Additionally,
our portfolio continued to perform well with high rent collections
and occupancy,” said CEO Bill Lenehan. “We believe that we are
well-positioned in a higher rate environment and expect to be ready
to take advantage of opportunities as they arise.”
Rent Collection Update
As of September 30, 2023, the Company has received rent payments
representing 99.9% of its portfolio contractual base rent for the
quarter ending September 30, 2023.
Financial Results
Rental Revenue and Net Income Attributable to Common
Shareholders
- Rental revenue for the third quarter increased 17.3% over the
prior year to $57.2 million. Rental revenue consisted of $56.1
million in cash rents and $1.2 million of straight-line and other
non-cash rent adjustments.
- Net income attributable to common shareholders was $24.2
million for the third quarter, or $0.27 per diluted share. These
results compare to net income attributable to common shareholders
of $24.5 million for the same quarter in the prior year, or $0.30
per diluted share.
- Net income attributable to common shareholders was $70.9
million for the nine months ended September 30, 2023, or $0.80 per
diluted share. These results compare to net income attributed to
common shareholders of $74.9 million for the same nine-month period
in 2022, or $0.92 per diluted share.
Funds from Operations (FFO)
- NAREIT-defined FFO per diluted share for the third quarter was
$0.41, representing a $0.01 increase compared to the same quarter
in 2022.
- NAREIT-defined FFO per diluted share for the nine months ended
September 30, 2023 was $1.20, representing flat results compared to
the same nine-month period in 2022.
Adjusted Funds from Operations (AFFO)
- AFFO per diluted share for the third quarter was $0.42,
representing a $0.01 per share increase compared to the same
quarter in 2022.
- AFFO per diluted share for the nine months ended September 30,
2023 was $1.24, representing a $0.01 per share increase compared to
the same nine-month period in 2022.
General and Administrative (G&A) Expense
- G&A expense for the third quarter was $5.5 million, which
included $1.5 million of stock-based compensation. These results
compare to G&A expense in the third quarter of 2022 of $4.9
million, including $1.2 million of stock-based compensation.
- Cash G&A expense (after excluding stock-based compensation)
for the third quarter was $4.0 million, representing 7.2% of cash
rental income for the quarter.
Dividends
- FCPT declared a dividend of $0.34 per common share for the
third quarter of 2023.
Real Estate Portfolio
- As of September 30, 2023, the Company’s rental portfolio
consisted of 1,106 properties located in 47 states. The properties
are 99.8% occupied (measured by square feet) under long-term, net
leases with a weighted average remaining lease term of
approximately 8.0 years.
Acquisitions
- During the third quarter, FCPT acquired 31 properties for a
combined purchase price of $130.2 million at an initial weighted
average cash yield of 6.4%, on rents in place as of September 30,
2023 and a weighted average remaining lease term of 12.1
years.
Dispositions
- During the third quarter, FCPT sold two properties for sales
price of $11.2 million representing $0.3 million of gain and a cash
yield of 6.7% on rents that were previously in place and exclusive
of transaction costs.
Liquidity and Capital
Markets
Capital Raising
- During the third quarter, the Company did not utilize its
at-the-market (ATM) program.
- 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 September 30, 2023, FCPT had approximately $237 million of
available liquidity including $6 million of cash and cash
equivalents, $11 million of restricted cash from 1031 sales and
$220 million of undrawn revolving credit facility capacity.
Credit Facility and Unsecured Notes
- At September 30, 2023, FCPT had $1,135 million of outstanding
debt, consisting of $430 million of term loans and $675 million of
unsecured fixed rate notes and $30 million of outstanding revolver
balance. FCPT’s leverage, as measured by the ratio of net debt to
adjusted EBITDAre, is 5.6x at quarter-end.
Conference Call
Information
Company management will host a conference call and audio webcast
on Thursday, November 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: 334967
Live webcast:
https://events.q4inc.com/attendee/459557056
In order to pre-register for the call,
investors can visit
https://www.netroadshow.com/events/login?show=2d8ebe4f&confId=56347
Replay: Available through January 31, 2023 by
dialing 1 866 813 9403 (domestic) or 1 929 458 6194
(international), Replay Access Code 231950
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 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. 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 Third 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
September 30, Nine Months Ended September 30,
2023
2022
2023
2022
Revenues: Rental revenue
$
57,243
$
48,719
$
162,267
$
143,526
Restaurant revenue
7,596
7,289
23,196
22,304
Total revenues
64,839
56,008
185,463
165,830
Operating expenses: General and administrative
5,498
4,917
17,153
14,884
Depreciation and amortization
13,418
10,588
37,411
30,420
Property expenses
2,916
1,999
8,742
5,835
Restaurant expenses
7,229
6,790
21,721
20,725
Total operating expenses
29,061
24,294
85,027
71,864
Interest expense
(12,276
)
(9,177
)
(32,245
)
(26,583
)
Other income, net
283
164
809
250
Realized gain on sale, net
318
1,828
2,053
7,584
Income tax expense
89
23
(50
)
(209
)
Net income
24,192
24,552
71,003
75,008
Net income attributable to noncontrolling interest
(31
)
(34
)
(92
)
(105
)
Net Income Attributable to Common Shareholders
$
24,161
$
24,518
$
70,911
$
74,903
Basic net income per share
$
0.27
$
0.30
$
0.81
$
0.93
Diluted net income per share
$
0.27
$
0.30
$
0.80
$
0.92
Regular dividends declared per share
$
0.3400
$
0.3325
$
1.0200
$
0.9975
Weighted-average shares outstanding: Basic
90,366,861
81,884,974
87,872,205
80,797,829
Diluted
90,595,872
82,119,447
88,105,134
81,011,737
Four Corners Property Trust Consolidated Balance
Sheets (In thousands, except share and per share data)
September 30, 2023 (Unaudited)
December 31, 2022 ASSETS Real estate investments:
Land
$
1,235,943
$
1,115,827
Buildings, equipment and improvements
1,700,513
1,539,875
Total real estate investments
2,936,456
2,655,702
Less: Accumulated depreciation
(730,014
)
(706,702
)
Total real estate investments, net
2,206,442
1,949,000
Intangible lease assets, net
122,132
106,206
Total real estate investments and intangible lease assets, net
2,328,574
2,055,206
Real estate held for sale
3,150
7,522
Cash and cash equivalents
5,675
26,296
Straight-line rent adjustment
63,844
61,027
Derivative assets
31,292
35,276
Deferred tax assets
1,221
988
Other assets
22,138
12,272
Total Assets
$
2,455,894
$
2,198,587
LIABILITIES AND EQUITY Liabilities: Term loan
and revolving credit facility ($460,000 and $430,000 of principal,
respectively)
$
455,342
$
424,134
Senior unsecured notes
670,756
571,343
Dividends payable
30,724
29,064
Rent received in advance
13,204
11,710
Derivative liabilities
-
9
Other liabilities
32,224
24,017
Total liabilities
1,202,250
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, 90,565,195 and 85,637,293 shares issued and
outstanding, respectively
9
9
Additional paid-in capital
1,235,247
1,104,522
Accumulated other comprehensive income
35,314
30,944
Noncontrolling interest
2,239
2,259
Retained earnings (deficit)
(19,165
)
576
Total equity
1,253,644
1,138,310
Total Liabilities and Equity
$
2,455,894
$
2,198,587
Four Corners Property Trust FFO and AFFO
(Unaudited) (In thousands, except share and per share
data) Three Months Ended September 30,
Nine Months Ended September 30,
2023
2022
2023
2022
Funds from operations (FFO): Net income
$
24,192
$
24,552
$
71,003
$
75,008
Depreciation and amortization
13,382
10,558
37,308
30,322
Realized gain on sales of real estate
(318
)
(1,828
)
(2,053
)
(7,584
)
FFO (as defined by NAREIT)
$
37,256
$
33,282
$
106,258
$
97,746
Straight-line rental revenue
(1,719
)
(1,648
)
(4,358
)
(4,939
)
Deferred income tax (benefit) expense (1)
(184
)
(118
)
(232
)
(57
)
Stock-based compensation
1,472
1,206
4,798
3,739
Non-cash amortization of deferred financing costs
592
496
1,720
1,460
Non-real estate investment depreciation
36
30
103
98
Other non-cash revenue adjustments
526
543
1,510
1,600
Adjusted Funds from Operations (AFFO)
$
37,979
$
33,791
$
109,799
$
99,647
Fully diluted shares
outstanding (2)
90,710,431
82,234,006
88,219,693
81,126,296
FFO per diluted
share
$
0.41
$
0.40
$
1.20
$
1.20
AFFO per diluted share
$
0.42
$
0.41
$
1.24
$
1.23
(1)
Amount represents non-cash deferred income tax benefit
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/20231101645529/en/
FCPT Bill Lenehan, 415-965-8031 CEO
Gerry Morgan, 415-965-8032 CFO
Four Corners Property (NYSE:FCPT)
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