FCPT Four Corners Property Trust Inc

Four Corners Property Trust, Inc. (“FCPT” or the “Company”, NYSE: FCPT) today announced financial results for the second quarter and six months ended June 30, 2017.

A supplemental financial and operating report that contains non-GAAP measures and other defined terms, along with this press release, has been posted to the investor relations section of the Company’s website at http://investors.fcpt.com/.

Q2 and Year to Date 2017 Highlights:

• Second quarter net income attributable to common shareholders of $18.3 million, or $0.30 per diluted share, including a $3.3 million gain on the sale of an Olive Garden property. These results compared to net income of $14.8 million, or $0.25 per diluted share, for the same period in 2016.On a year to date basis, the Company reported net income attributable to common shareholders of $33.8 million. After excluding the $3.3 million gain on sale in 2017 and the one-time, non-cash tax benefit of $80.4 million included in the 2016 results, the Company’s net income was $30.5 million, or $0.51 per diluted share for 2017, which compared to net income of $28.7 million, or $0.48 per diluted share, for the same period in 2016.

• Second quarter GAAP rental income of $28.3 million, representing an increase of 8.2% when compared to the same period in 2016 and consisting of $25.9 million in cash rents and $2.4 million of straight-line rent adjustments.
• Second quarter NAREIT-defined Funds from Operations (FFO) of $20.6 million, or $0.34 per diluted share, representing an increase of 1.6% in per diluted share results compared to the same period in 2016.Year to date FFO of $41.6 million, or $0.69 per diluted share, representing an increase of 4.4% in per diluted share results compared to the same period in 2016.

• Second quarter Adjusted Funds from Operations (AFFO) of $19.3 million, or $0.32 per diluted share, representing an increase of 4.2% in per diluted share results compared to the same period in 2016.Year to date AFFO of $38.9 million, or $0.64 per diluted share, representing an increase of 6.3% in per diluted share results compared to the same period in 2016.

• Second quarter general and administrative (G&A) expenses of $3.5 million including $0.7 million of non-cash, stock-based compensation.Year to date cash G&A expenses (after excluding non-cash, stock-based compensation) were 10.0% of cash rental income, compared to 10.8% of cash rental income for the same period in 2016.

• Declared regular dividend of $0.2425 per common share for the second quarter of 2017.

• Acquired in the second quarter 23 restaurant properties in two transactions with a combined investment value of $51.1 million, at an initial weighted average cash yield of 7.0%, and a weighted average lease term of 20.0 years.
• Sold an Olive Garden property in the second quarter for a gross sales price of $5.2 million, representing a 5.1% cash capitalization rate.
• Issued 1,167,092 common shares in the second quarter via the Company’s At-The-Market (ATM) stock offering program. The shares were sold at a weighted average share price of $24.29, generating $28.3 million in gross proceeds, excluding brokerage and other issuance costs.
• At quarter-end, FCPT had $525 million of outstanding debt, including $125 million of unsecured fixed rate notes that closed on June 7, 2017. FCPT was undrawn on its $350 million revolving credit facility, and had $81.3 million of available cash and cash equivalents.

Management Comments:

“June 30 marked the end of a full year with our acquisition team and processes, and we are quite pleased with the results. Over that period, we closed on over $160 million of acquisitions across 91 properties, with an average initial cash capitalization rate of 6.7% and 18 years of lease term,” said Bill Lenehan, Chief Executive Officer. “In the second quarter, we also executed on an inaugural investment grade note financing at an attractive long-term rate, and raised $28.3 million of gross proceeds under our ATM equity program. We ended the quarter well positioned to fund our acquisition strategy while maintaining a net debt to EBITDA level of 4.4x which is well below our targeted level of 5.5x to 6.0x.”

Real Estate Portfolio:

As of June 30, 2017, the Company’s rental portfolio consisted of 506 restaurant properties located in 44 states. The properties are 100% occupied under long-term, triple-net leases with a weighted average remaining lease term of approximately 13.4 years and an estimated portfolio weighted average EBITDAR to Lease Rent coverage of 4.7x.

Conference Call Information:

Company management will host a conference call and audio webcast on Thursday, August 3, 2017 at 11:00 am Eastern Time to discuss the results.

Interested parties can listen to the call via the following:

Internet: Go to http://dpregister.com/10110505 at least 15 minutes prior to start time of the call in order to register and to download any necessary audio software. Please note for those that register, the dial-in number will be provided upon registration.

Phone: 1-888-346-5243 (domestic) / 1-412-317-5120 (international). Participants not pre-registered must ask to be joined into the Four Corners Property Trust call.

Replay: Available through November 3, 2017 by dialing 1-877-344-7529 (domestic) / 1-412-317-0088 (international), Access Code 10110505.

About FCPT:

FCPT is a real estate investment trust primarily engaged in the acquisition and leasing of restaurant properties. The Company seeks to grow its portfolio by acquiring additional real estate to lease, on a triple-net basis, for use in the restaurant and related food services industry.

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; and expectations regarding the making of distributions and the payment of dividends. 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.

Factors that could have a material adverse effect on the Company’s operations and future prospects or that could cause actual results to differ materially from the Company’s expectations are included in the sections entitled “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2017.

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 2017 operating results and other information on the Company are available on the investors relations section of FCPT’s website at www.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,   2017     2016     2017     2016   Revenues: Rental income $ 28,327 $ 26,192 $ 56,091 $ 52,385 Restaurant revenues   4,826     4,701     9,766     9,560 Total revenues 33,153 30,893 65,857 61,945   Operating expenses: General and administrative 3,459 2,508 6,316 5,826 Depreciation and amortization 5,426 5,101 10,829 10,288 Restaurant expenses 4,583 4,593 9,251 9,291 Interest expense   4,508     3,858     8,604     8,039 Total operating expenses 17,976 16,060 35,000 33,444   Other income 34 18 39 78 Realized gain on sale, net   3,291     -     3,291     -   Income before income tax 18,502 14,851 34,187 28,579 Income tax (expense) benefit (1)   (61 )   (50 )   (106 )   80,506   Net income 18,441 14,801 34,081 109,085 Net income attributable to noncontrolling interest   (128 )   -     (245 )   - Net Income Attributable to Common Shareholders $ 18,313   $ 14,801   $ 33,836   $ 109,085   Basic net income per share $ 0.30 $ 0.25 $ 0.56 $ 2.02 Diluted net income per share $ 0.30 $ 0.25 $ 0.56 $ 1.84 Regular dividends declared per share $ 0.2425 $ 0.2425 $ 0.4850 $ 0.4850   Weighted-average shares outstanding: Basic 60,319,521 59,830,284 60,125,477 54,102,565 Diluted 60,430,606 59,844,059 60,215,050 59,271,807   (1) The 2016 results include a $80.4 million income tax benefit which was principally the result of the reversal of deferred tax liabilities recognized in connection with the Company's election to be taxed as a REIT.   Four Corners Property Trust Consolidated Balance Sheets (In thousands, except share and per share data)           June 30, 2017 (Unaudited) December 31, 2016 ASSETS Real estate investments: Land $ 441,035 $ 421,941 Buildings, equipment and improvements   1,098,306     1,055,624   Total real estate investments 1,539,341 1,477,565 Less: Accumulated depreciation   (589,913 )   (583,307 ) Total real estate investments, net 949,428 894,258 Real estate held for sale 1,691 - Cash and cash equivalents 81,328 26,643 Deferred rent 16,389 11,594 Derivative assets 1,630 837 Other assets   3,827     3,819   Total Assets $ 1,054,293   $ 937,151     LIABILITIES AND EQUITY   Liabilities: Revolving facility ($350,000 available capacity) $ - $ 45,000 Term loan ($400,000, net of deferred financing costs) 394,691 393,895 Unsecured notes ($125,000, net of deferred financing costs) 123,327 - Dividends payable 14,820 14,519 Deferred rental revenue 8,228 7,974 Deferred tax liabilities 157 196 Other liabilities   4,932     5,450   Total liabilities   546,155     467,034     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, 61,193,753 and 59,923,557 shares issued and outstanding

at June 30, 2017 and December 31, 2016, respectively

6 6 Additional paid-in capital 468,933 438,864 Accumulated other comprehensive income 1,059 207 Noncontrolling interest 7,717 5,097 Retained earnings   30,423     25,943   Total equity   508,138     470,117   Total Liabilities and Equity $ 1,054,293   $ 937,151     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,   2017     2016     2017     2016   Funds from operations (FFO): Net income $ 18,441 $ 14,801 $ 34,081 $ 109,085 Depreciation and amortization 5,426 5,101 10,829 10,288 Deferred tax benefit from REIT election - - - (80,409 ) Realized gain on sales of real estate   (3,291 )   -     (3,291 )   -   FFO (as defined by NAREIT) $ 20,576   $ 19,902   $ 41,619   $ 38,964   Non-cash stock-based compensation 704 429 1,198 742 Non-cash amortization of deferred financing costs 415 398 813 796 Other non-cash interest expense 11 55 63 435 Straight-line rent   (2,422 )   (2,595 )   (4,795 )   (5,191 ) Adjusted funds from operations (AFFO) $ 19,284   $ 18,189   $ 38,898   $ 35,746     Fully diluted shares outstanding (1) 60,870,695 59,844,059 60,649,120 59,271,807   FFO per diluted share $ 0.34 $ 0.33 $ 0.69 $ 0.66   AFFO per diluted share $ 0.32 $ 0.30 $ 0.64 $ 0.60   (1) Assumes the issuance of common shares for OP units held by non-controlling partners.

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FCPTBill Lenehan, 415-965-8031CEOGerry Morgan, 415-965-8032CFO