- Increases 2023 Annual Guidance -
Getty Realty Corp. (NYSE: GTY) (“Getty” or the “Company”)
announced today its financial and operating results for the quarter
ended March 31, 2023.
First Quarter 2023
Highlights
- Net earnings: $0.28 per share
- Funds From Operations (“FFO”): $0.50 per share
- Adjusted Funds From Operations (“AFFO”): $0.56 per share
- Invested $60.7 million across 26 properties, plus an additional
$12.7 million across five properties subsequent to quarter end
- As of April 26, 2023, had a committed investment pipeline of
more than $105 million for the development and acquisition of 34
convenience and automotive retail properties
“Getty continues to build momentum in 2023, as we started the
year by recognizing nearly 8% growth in first quarter AFFO per
share, investing more than $73 million in high quality convenience
and automotive retail assets, and completing several successful
capital markets transactions,” stated Christopher J. Constant,
Getty’s President & Chief Executive Officer. “Our investment
and capital markets activity is leading to accelerated earnings
growth that has enabled us to raise our annual outlook for 2023. We
also continue to underwrite new opportunities and maintain a
significant, and fully funded, pipeline of committed investments.
While we are mindful of the uncertain times in which we are
operating, we believe that our targeted investment strategy and
strong balance sheet position us well to meet our long term growth
and value creation objectives.”
Net Earnings, FFO and
AFFO
All per share amounts are presented on a fully diluted per
common share basis, unless stated otherwise. FFO and AFFO are
“Non-GAAP Financial Measures” which are defined and reconciled to
net earnings at the end of this release.
($ in thousands, except per share
amounts)
For the Three Months Ended
March 31,
2023
2022
Net earnings
$
14,082
$
18,749
Net earnings per share
0.28
0.39
FFO
$
24,445
$
23,262
FFO per share
0.50
0.49
AFFO
$
27,172
$
24,851
AFFO per share
0.56
0.52
Select Financial Results
Revenues from Rental Properties
($ in thousands)
For the Three Months Ended
March 31,
2023
2022
Rental income (a)
$
38,788
$
35,849
Tenant reimbursement income
3,579
3,135
Revenues from rental properties
$
42,367
$
38,984
(a)
Rental income includes base rental income,
additional rental income, if any, and certain non cash revenue
recognition adjustments.
For the quarter ended March 31, 2023, base rental income
increased 7.2% to $38.8 million, as compared to $36.2 million for
the same period in 2022.
The growth in base rental income was driven by incremental
revenue from recently acquired properties, contractual rent
increases for in-place leases, and rent commencements from
completed redevelopments, partially offset by property
dispositions.
Interest (Income) on Notes and Mortgages
Receivable
($ in thousands)
For the Three Months Ended
March 31,
2023
2022
Interest on notes and mortgages
receivable
$
653
$
337
The increase in interest earned from notes and mortgages
receivable was driven by an increase in construction loan advances
for the development of new-to-industry properties.
Property Costs
($ in thousands)
For the Three Months Ended
March 31,
2023
2022
Property operating expenses
$
4,523
$
4,295
Leasing and redevelopment expenses
177
331
Property costs
$
4,700
$
4,626
The change in property operating expenses was primarily due to
an increase in reimbursable real estate taxes, partially offset by
lower rent expense. The decrease in leasing and redevelopment
expenses was primarily due to a reduction in demolition costs for
redevelopment projects.
Other Expenses
($ in thousands)
For the Three Months Ended
March 31,
2023
2022
Environmental expenses
$
321
$
(141
)
General and administrative expenses
6,285
5,128
Impairments
522
1,038
The change in environmental expenses was primarily due to
changes in estimates related to unknown environmental liabilities,
partially offset by lower accretion expense. Environmental expenses
vary from period to period and, accordingly, undue reliance should
not be placed on the magnitude or the direction of changes in
reported environmental expenses for any one period, or a comparison
to prior periods.
The increase in general and administrative expenses was
primarily due to personnel costs, including $0.8 million of
non-recurring retirement expenses and a $0.2 million increase in
stock-based compensation for the quarter ended March 31, 2023.
Impairment charges in both periods included the accumulation of
asset retirement costs at certain properties as a result of changes
in estimated environmental liabilities, which increased the
carrying values of these properties in excess of their fair values.
The quarter ended March 31, 2022 also included reductions in the
estimated fair value of certain properties based on third-party
indications of potential selling prices.
Portfolio Activities
Acquisitions and Development
Funding
During the quarter ended March 31, 2023, the Company invested
$60.7 million across 26 properties, including the acquisition of
fee simple interests in eight car wash properties and one
convenience store for an aggregate of $48.1 million (of which $43.7
million was invested during the quarter ended March 31, 2023, and
$4.4 million was previously funded as construction loan advances
that were repaid upon the acquisition of the completed subject
property).
In addition, the Company acquired fee simple interests in four
under construction car wash properties for an aggregate of $8.5
million and committed to provide additional funding during the
construction period to complete these projects.
The Company also advanced construction loans in the amount of
$8.5 million, including accrued interest, for the development of 13
new-to-industry car wash properties and convenience stores. As of
March 31, 2023, the Company had advanced aggregate construction
loans in the amount of $30.0 million, including accrued interest,
for the development of these 13 properties which the Company
expects to acquire via sale-leaseback transactions at the end of
the construction periods.
Subsequent to quarter end, the Company invested an incremental
$12.7 million for the development and acquisition of five
properties.
Investment Pipeline
As of April 26, 2023, the Company had a committed investment
pipeline of more than $105 million for the development and
acquisition of 34 car wash properties, convenience stores, auto
service centers, and quick service restaurants. The Company expects
to fund this investment activity, which includes multiple
transactions with eight different tenants, over approximately the
next 9-12 months. While the Company has fully executed agreements
for each transaction, the timing and amount of each investment is
ultimately dependent on its counterparties and the schedules under
which they are able to complete development projects and certain
business acquisitions for which the Company is providing sale
leaseback financing.
Redevelopments
As of March 31, 2023, the Company had four properties under
active redevelopment and others in various stages of feasibility
planning for potential recapture from our net lease portfolio.
Dispositions
During the quarter ended March 31, 2023, the Company sold three
properties for aggregate gross proceeds of $2.8 million and
recorded a net gain of $0.8 million on the dispositions.
Balance Sheet and Capital
Markets
As of March 31, 2023, the Company had $675 million of total
outstanding indebtedness consisting entirely of senior unsecured
notes with a weighted average interest rate of 3.9% and a weighted
average maturity of 7.2 years. The Company’s $300 million unsecured
revolving credit facility was undrawn at quarter end and total cash
and equivalents were $22.1 million. The Company has no scheduled
debt maturities until 2025.
Common Equity Offering
In February 2023, the Company completed a follow-on public
offering of 3,450,000 shares of common stock, including the full
exercise of the underwriters’ option to purchase 450,000 shares, in
connection with forward sales agreements. Upon settlement, the
offering is anticipated to raise gross proceeds of approximately
$112.5 million. As of April 26, 2023, no shares from the follow-on
public offering have been settled by the Company.
ATM Program
During the quarter ended March 31, 2023, the Company settled
2,714,136 shares of common stock subject to forward sale agreements
under its at-the-market (“ATM”) equity program for net proceeds of
approximately $83.0 million.
No shares subject to forward sale agreements under the ATM
program have been settled subsequent to quarter end. As of April
26, 2023, 1,007,230 shares remain subject to forward sale
agreements under the ATM program which, upon settlement, are
anticipated to raise total gross proceeds of approximately $32.2
million.
Unsecured Notes
During the quarter ended March 31, 2023, the Company issued $125
million of senior unsecured notes at a fixed rate of 3.65% and
maturing in January 2033 pursuant to note purchase and guarantee
agreements entered into in February 2022 and previously announced.
Proceeds were used, in part, to prepay $75 million of 5.35% senior
unsecured notes due June 2023, including related transaction
expenses.
2023 Guidance
As a result of year-to-date investment and capital markets
activity, the Company is raising its 2023 AFFO guidance to a range
of $2.22 to $2.24 per diluted share from the prior range of $2.19
to $2.21 per diluted share. The Company’s outlook includes
completed transaction activity as of the date of this release, but
does not include assumptions for prospective acquisitions,
dispositions, or capital markets activities (including the
settlement of outstanding forward sale agreements). The Company’s
outlook also assumes approximately $0.3 million of total demolition
costs for anticipated redevelopment projects with rent
commencements anticipated in 2023 and 2024.
The guidance is based on current assumptions and is subject to
risks and uncertainties more fully described in this press release
and the Company’s periodic reports filed with the SEC.
Webcast Information
Getty Realty Corp. will host a conference call and webcast on
Thursday, April 27, 2023 at 8:30 a.m. ET. To participate in the
call, please dial 1-877-423-9813, or 1-201-689-8573 for
international participants, ten minutes before the scheduled start.
Participants may also access the call via live webcast by visiting
the investors section of the Company's website at
ir.gettyrealty.com.
If you cannot participate in the live event, a replay will be
available on Thursday, April 27, 2023 beginning at 11:30 a.m. ET
through 11:59 p.m. ET, Thursday, May 4, 2023. To access the replay,
please dial 1-844-512-2921, or 1-412-317-6671 for international
participants, and reference pass code 13737430.
About Getty Realty Corp.
Getty Realty Corp. is a publicly traded, net lease REIT
specializing in the acquisition, financing and development of
convenience, automotive and other single tenant retail real estate.
As of March 31, 2023, the Company’s portfolio included 1,047
freestanding properties located in 39 states across the United
States and Washington, D.C.
Non-GAAP Financial
Measures
In addition to measurements defined by accounting principles
generally accepted in the United States of America (“GAAP”), the
Company also focuses on Funds From Operations (“FFO”) and Adjusted
Funds From Operations (“AFFO”) to measure its performance.
FFO and AFFO are generally considered by analysts and investors
to be appropriate supplemental non-GAAP measures of the performance
of REITs. FFO and AFFO are not in accordance with, or a substitute
for, measures prepared in accordance with GAAP. In addition, FFO
and AFFO are not based on any comprehensive set of accounting rules
or principles. Neither FFO nor AFFO represent cash generated from
operating activities calculated in accordance with GAAP and
therefore these measures should not be considered an alternative
for GAAP net earnings or as a measure of liquidity. These measures
should only be used to evaluate the Company’s performance in
conjunction with corresponding GAAP measures.
FFO is defined by the National Association of Real Estate
Investment Trusts (“NAREIT”) as GAAP net earnings before (i)
depreciation and amortization of real estate assets, (ii) gains or
losses on dispositions of real estate assets, (iii) impairment
charges, and (iv) the cumulative effect of accounting changes.
The Company defines AFFO as FFO excluding (i) certain revenue
recognition adjustments (defined below), (ii) certain environmental
adjustments (defined below), (iii) stock-based compensation, (iv)
amortization of debt issuance costs and (v) other non-cash and/or
unusual items that are not reflective of the Company’s core
operating performance.
Other REITs may use definitions of FFO and/or AFFO that are
different than the Company’s and, accordingly, may not be
comparable.
The Company believes that FFO and AFFO are helpful to analysts
and investors in measuring the Company’s performance because both
FFO and AFFO exclude various items included in GAAP net earnings
that do not relate to, or are not indicative of, the core operating
performance of the Company’s portfolio. Specifically, FFO excludes
items such as depreciation and amortization of real estate assets,
gains or losses on dispositions of real estate assets, and
impairment charges. With respect to AFFO, the Company further
excludes the impact of (i) deferred rental revenue (straight-line
rent), the net amortization of above-market and below-market
leases, adjustments recorded for the recognition of rental income
from direct financing leases, and the amortization of deferred
lease incentives (collectively, “Revenue Recognition Adjustments”),
(ii) environmental accretion expenses, environmental litigation
accruals, insurance reimbursements, legal settlements and
judgments, and changes in environmental remediation estimates
(collectively, “Environmental Adjustments”), (iii) stock-based
compensation expense, (iv) amortization of debt issuance costs and
(v) other items, which may include allowances for credit losses on
notes and mortgages receivable and direct financing leases, losses
on extinguishment of debt, retirement and severance costs, and
other items that do not impact the Company’s recurring cash flow
and which are not indicative of its core operating performance.
The Company pays particular attention to AFFO which it believes
provides the most useful depiction of the core operating
performance of its portfolio. By providing AFFO, the Company
believes it is presenting information that assists analysts and
investors in their assessment of the Company’s core operating
performance, as well as the sustainability of its core operating
performance with the sustainability of the core operating
performance of other real estate companies. For a tabular
reconciliation of FFO and AFFO to GAAP net earnings, see the table
captioned “Reconciliation of Net Earnings to Funds From Operations
and Adjusted Funds From Operations” included herein.
Forward-Looking
Statements
CERTAIN STATEMENTS CONTAINED HEREIN MAY CONSTITUTE
“FORWARD-LOOKING STATEMENTS” WITHIN THE MEANING OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995. WHEN THE WORDS
“BELIEVES,” “EXPECTS,” “PLANS,” “PROJECTS,” “ESTIMATES,”
“ANTICIPATES,” “PREDICTS,” “OUTLOOK” AND SIMILAR EXPRESSIONS ARE
USED, THEY IDENTIFY FORWARD-LOOKING STATEMENTS. THESE
FORWARD-LOOKING STATEMENTS ARE BASED ON MANAGEMENT’S CURRENT
BELIEFS AND ASSUMPTIONS AND INFORMATION CURRENTLY AVAILABLE TO
MANAGEMENT AND INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND
OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR
ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY
FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY
THESE FORWARD-LOOKING STATEMENTS. EXAMPLES OF FORWARD-LOOKING
STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO, THOSE REGARDING THE
COMPANY’S 2023 AFFO PER SHARE GUIDANCE, THOSE MADE BY MR. CONSTANT,
STATEMENTS REGARDING THE RECAPTURE AND TRANSFER OF CERTAIN NET
LEASE RETAIL PROPERTIES, STATEMENTS REGARDING THE ABILITY TO OBTAIN
APPROPRIATE PERMITS AND APPROVALS, AND STATEMENTS REGARDING AFFO AS
A MEASURE BEST REPRESENTING CORE OPERATING PERFORMANCE AND ITS
UTILITY IN COMPARING THE SUSTAINABILITY OF THE COMPANY’S CORE
OPERATING PERFORMANCE WITH THE SUSTAINABILITY OF THE CORE OPERATING
PERFORMANCE OF OTHER REITS.
INFORMATION CONCERNING FACTORS THAT COULD CAUSE THE COMPANY’S
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THESE FORWARD-LOOKING
STATEMENTS CAN BE FOUND ELSEWHERE IN THIS PRESS RELEASE, INCLUDING,
WITHOUT LIMITATION, THOSE STATEMENTS IN THE COMPANY’S PERIODIC
REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE
COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY RELEASE REVISIONS TO
THESE FORWARD-LOOKING STATEMENTS TO REFLECT FUTURE EVENTS OR
CIRCUMSTANCES OR REFLECT THE OCCURRENCE OF UNANTICIPATED
EVENTS.
GETTY REALTY CORP.
CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(in thousands, except per
share amounts)
March 31, 2023
December 31, 2022
ASSETS
Real estate:
Land
$
812,198
$
802,010
Buildings and improvements
740,105
707,352
Investment in direct financing leases,
net
64,760
66,185
Construction in progress
515
578
Real estate held for use
1,617,578
1,576,125
Less accumulated depreciation and
amortization
(241,686
)
(232,812
)
Real estate held for use, net
1,375,892
1,343,313
Real estate held for sale, net
2,568
3,757
Real estate, net
1,378,460
1,347,070
Notes and mortgages receivable
46,797
34,313
Cash and cash equivalents
22,067
8,713
Restricted cash
1,448
2,536
Deferred rent receivable
51,585
50,391
Accounts receivable
4,189
4,247
Right-of-use assets - operating
17,316
18,193
Right-of-use assets - finance
251
277
Prepaid expenses and other assets, net
93,011
96,555
Total assets
$
1,615,124
$
1,562,295
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Borrowings under credit agreement
$
—
$
70,000
Senior unsecured notes, net
673,218
623,492
Environmental remediation obligations
23,020
23,155
Dividends payable
20,969
20,576
Lease liability - operating
19,024
19,959
Lease liability - finance
1,439
1,518
Accounts payable and accrued
liabilities
41,246
43,745
Total liabilities
778,916
802,445
Commitments and contingencies
—
—
Stockholders’ equity:
Preferred stock, $0.01 par value;
20,000,000 shares authorized; unissued
—
—
Common stock, $0.01 par value; 100,000,000
shares authorized; 49,493,173 and 46,734,790 shares issued and
outstanding, respectively
495
467
Additional paid-in capital
905,557
822,340
Dividends paid in excess of earnings
(69,844
)
(62,957
)
Total stockholders’ equity
836,208
759,850
Total liabilities and stockholders’
equity
$
1,615,124
$
1,562,295
GETTY REALTY CORP.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Unaudited)
(in thousands, except per
share amounts)
For the Three Months Ended
March 31,
2023
2022
Revenues:
Revenues from rental properties
$
42,367
$
38,984
Interest on notes and mortgages
receivable
653
337
Total revenues
43,020
39,321
Operating expenses:
Property costs
4,700
4,626
Impairments
522
1,038
Environmental
321
(141
)
General and administrative
6,285
5,128
Depreciation and amortization
10,428
9,628
Total operating expenses
22,256
20,279
Gain on dispositions of real estate
587
6,153
Operating income
21,351
25,195
Other income, net
288
91
Interest expense
(7,514
)
(6,537
)
Loss on extinguishment of debt
(43
)
—
Net earnings
$
14,082
$
18,749
Basic earnings per common share:
Net earnings
$
0.29
$
0.39
Diluted earnings per common share:
Net earnings
$
0.28
$
0.39
Weighted average common shares
outstanding:
Basic
46,989
46,721
Diluted
47,571
46,742
GETTY REALTY CORP.
RECONCILIATION OF NET EARNINGS
TO
FUNDS FROM OPERATIONS AND
ADJUSTED FUNDS FROM OPERATIONS
(Unaudited)
(in thousands, except per
share amounts)
For the Three Months Ended
March 31,
2023
2022
Net earnings
$
14,082
$
18,749
Depreciation and amortization of real
estate assets
10,428
9,628
Gains on dispositions of real estate
(587
)
(6,153
)
Impairments
522
1,038
Funds from operations (FFO)
24,445
23,262
Revenue recognition adjustments
Deferred rental revenue (straight-line
rent)
(1,194
)
(704
)
Amortization of above and below market
leases, net
(249
)
(290
)
Amortization of investments in direct
financing leases
1,426
1,271
Amortization of lease incentives
274
299
Total revenue recognition adjustments
257
576
Environmental Adjustments
Accretion expense
158
444
Changes in environmental estimates
(57
)
(821
)
Environmental litigation accruals
—
—
Insurance reimbursements
(52
)
—
Legal settlements and judgments
—
—
Total environmental adjustments
49
(377
)
Other Adjustments
Stock-based compensation expense
1,275
1,084
Amortization of debt issuance costs
255
229
Loss on extinguishment of debt
43
—
Retirement and severance costs
848
77
Total other adjustments
2,421
1,390
Adjusted Funds from operations (AFFO)
$
27,172
$
24,851
Basic per share amounts:
Net earnings
$
0.29
$
0.39
FFO (1)
0.51
0.49
AFFO (1)
0.56
0.52
Diluted per share amounts:
Net earnings
$
0.28
$
0.39
FFO (1)
0.50
0.49
AFFO (1)
0.56
0.52
Weighted average common shares
outstanding:
Basic
46,989
46,721
Diluted
47,571
46,742
(1)
Dividends paid and undistributed earnings allocated, if any, to
unvested restricted stockholders are deducted from FFO and AFFO for
the computation of the per share amounts. The following amounts
were deducted:
For the Three Months Ended
March 31,
2023
2022
FFO
$
644
$
554
AFFO
716
602
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230426005840/en/
Brian Dickman Chief Financial Officer (646) 349-6000
Investor Relations (646) 349-0598 ir@gettyrealty.com
Getty Realty (NYSE:GTY)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
Getty Realty (NYSE:GTY)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024