Four Corners Property Trust, Inc. (“FCPT” or the “Company”)
(NYSE: FCPT) today announced financial results for the three and
nine months ended September 30, 2022.
Management Comments
“FCPT continued its strong performance in the third quarter. We
acquired $70 million of high-quality restaurant and retail
properties and raised over $87 million through equity issuances and
dispositions,” said CEO Bill Lenehan. “Investment yields have begun
to increase meaningfully, and we are poised to take advantage of
opportunities where we see value given our strong balance sheet and
liquidity position.”
Rent Collection Update
As of September 30, 2022, the Company has received rent payments
representing 99.8% of its portfolio contractual base rent for the
quarter ending September 30, 2022.
Financial Results
Rental Revenue and Net Income Attributable to Common
Shareholders
- Rental revenue for the third quarter increased 11.4% over the
prior year to $48.7 million. Rental revenue consisted of $47.6
million in cash rents and $1.1 million of straight-line and other
non-cash rent adjustments.
- Net income attributable to common shareholders was $24.5
million for the third quarter, or $0.30 per diluted share. These
results compare to net income attributable to common shareholders
of $21.2 million for the same quarter in the prior year, or $0.28
per diluted share.
- Net income attributable to common shareholders was $74.9
million for the nine months ended September 30, 2022, or $0.92 per
diluted share. These results compare to net income attributed to
common shareholders of $61.9 million for the same nine-month period
in 2021, or $0.81 per diluted share.
Funds from Operations (FFO)
- NAREIT-defined FFO per diluted share for the third quarter was
$0.40, representing a $0.01 per share increase compared to the same
quarter in 2021.
- NAREIT-defined FFO per diluted share for the nine months ended
September 30, 2022 was $1.20, representing a $0.06 per share
increase compared to the same nine-month period in 2021.
Adjusted Funds from Operations (AFFO)
- AFFO per diluted share for the third quarter was $0.41,
representing a $0.02 per share increase compared to the same
quarter in 2021.
- AFFO per diluted share for the nine months ended September 30,
2022 was $1.23, representing $0.08 per share increase compared to
the same nine-month period in 2021.
General and Administrative (G&A) Expense
- G&A expense for the third quarter was $4.9 million, which
included $1.2 million of stock-based compensation. These results
compare to G&A expense in the third quarter of 2021 of $4.3
million, including $0.8 million of stock-based compensation.
- Cash G&A expense (after excluding stock-based compensation)
for the third quarter was $3.7 million, representing 7.8% of cash
rental income for the quarter.
Dividends
- FCPT declared a dividend of $0.3325 per common share for the
third quarter of 2022.
Portfolio Activities
Acquisitions
- During the third quarter, FCPT acquired 26 properties for a
combined purchase price of $69.9 million at an initial weighted
average cash yield of 6.3%, reflecting rent credits at closing and
near-term rent increases, or 6.2% on rents in place as of September
30, 2022 and a weighted average remaining lease term of 9.3
years.
Dispositions
- During the third quarter, FCPT sold four properties for a
combined sales price of $8.6 million representing $1.8 million of
gain and a 5.5% cash capitalization rate on rents that were
previously in place and exclusive of transaction costs.
Liquidity and Capital
Markets
Capital Raising
- During the third quarter, the Company raised $78.9 million of
equity via the at-the-market (ATM) program at a weighted average
share price of $28.09. Of this total, 1,723,426 shares were sold
via the forward component of the ATM program for anticipated net
proceeds of $48.5 million, and 1,087,250 shares were sold and
issued for net proceeds of $30.4 million.
- In the quarter, the Company also settled previously executed
forward sale agreements of 1,190,532 shares for net proceeds of
$31.6 million.
Liquidity
- At September 30, 2022, FCPT had approximately $358 million of
available liquidity including $37 million of cash and cash
equivalents, $250 million of undrawn credit line capacity and
2,595,477 shares remaining to be settled under existing forward
sale agreements for anticipated net proceeds of approximately $71
million.
- In addition, at quarter end, FCPT has $75 million of forward
interest rate swaps in place, effectively fixing the Treasury base
rate at approximately 2.6% for a contemplated long-term unsecured
debt issuance.
Credit Facility and Unsecured Notes
- As announced on October 25, 2022, FCPT amended its credit
facility to convert from LIBOR to SOFR borrowings, to extend and
increase term loans of $50 million maturing in 2023 and $100
million maturing in 2024 to a $90 million term loan maturing in
2027 and a $90 million term loan maturing in 2028. In the
transaction, FCPT raised an incremental $30 million to fund
investment activity. Based on FCPT’s current investment grade
ratings of BBB/Baa3 (Fitch/Moody’s), term loans under the amended
revolving facility are priced at SOFR plus 105 to 110 basis points
depending on the tranche.
- At September 30, 2022, FCPT had $975 million of outstanding
debt, consisting of $400 million of term loans and $575 million of
unsecured fixed rate notes and no outstanding revolver balance.
FCPT’s leverage, as measured by the ratio of net debt to adjusted
EBITDAre, is 5.5x at quarter-end.
Real Estate Portfolio
- As of September 30, 2022, the Company’s rental portfolio
consisted of 982 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 8.6 years.
Conference Call
Information
Company management will host a conference call and audio webcast
on Wednesday, November 2 at 11:00 a.m. Eastern Time to discuss the
results.
Interested parties can listen to the call via the following:
Phone: 1 833 927 1758 (domestic) or 1 929 526
1599 (international), Call Access Code: 716461
Live webcast:
https://events.q4inc.com/attendee/935891965
In order to pre-register for the call,
investors can visit
https://www.netroadshow.com/events/login?show=e37b94da&confId=42874
Replay: Available through January 31, 2023 by
dialing 1 866 813 9403 (domestic) or 44 204 525 0658
(international), Replay Access Code 163029
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 Third Quarter 2022 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,
2022
2021
2022
2021
Revenues: Rental revenue
$
48,719
$
43,673
$
143,526
$
127,350
Restaurant revenue
7,289
7,033
22,304
19,374
Total revenues
56,008
50,706
165,830
146,724
Operating expenses: General and administrative
4,917
4,262
14,884
13,490
Depreciation and amortization
10,588
8,831
30,420
25,455
Property expenses
1,999
1,453
5,835
3,657
Restaurant expenses
6,790
6,546
20,725
17,994
Total operating expenses
24,294
21,092
71,864
60,596
Interest expense
(9,177
)
(8,311
)
(26,583
)
(24,328
)
Other income, net
164
2
250
10
Realized gain on sale, net
1,828
-
7,584
431
Income tax expense
23
(97
)
(209
)
(231
)
Net income
24,552
21,208
75,008
62,010
Net income attributable to noncontrolling interest
(34
)
(44
)
(105
)
(129
)
Net Income Attributable to Common Shareholders
$
24,518
$
21,164
$
74,903
$
61,881
Basic net income per share
$
0.30
$
0.28
$
0.93
$
0.81
Diluted net income per share
$
0.30
$
0.28
$
0.92
$
0.81
Regular dividends declared per share
$
0.3325
$
0.3175
$
0.9975
$
0.9525
Weighted-average shares outstanding: Basic
81,884,974
76,250,614
80,797,829
76,094,133
Diluted
82,119,447
76,360,526
81,011,737
76,222,167
Four Corners Property
Trust
Consolidated Balance
Sheets
(In thousands, except share
data)
September 30, 2022 (Unaudited) December 31,
2021 ASSETS Real estate investments: Land
$
1,056,228
$
966,565
Buildings, equipment and improvements
1,490,729
1,437,840
Total real estate investments
2,546,957
2,404,405
Less: Accumulated depreciation
(700,499
)
(682,430
)
Total real estate investments, net
1,846,458
1,721,975
Intangible lease assets, net
106,947
104,251
Total real estate investments and intangible lease assets, net
1,953,405
1,826,226
Cash and cash equivalents
36,669
6,300
Straight-line rent adjustment
59,873
55,397
Derivative assets
36,448
2,591
Deferred tax assets
920
864
Other assets
12,562
11,601
Total Assets
$
2,099,877
$
1,902,980
LIABILITIES AND EQUITY Liabilities: Long-term
debt ($975,000 and $760,000 principal, respectively)
$
966,989
$
877,591
Dividends payable
27,487
26,655
Rent received in advance
11,870
11,311
Derivative liabilities
-
7,517
Other liabilities
24,800
16,014
Total liabilities
1,031,146
939,088
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, 82,822,584 and 80,279,217 shares issued and
outstanding, respectively
8
8
Additional paid-in capital
1,027,716
958,737
Accumulated other comprehensive income (loss)
31,968
(9,824
)
Noncontrolling interest
2,268
2,218
Retained earnings
6,771
12,753
Total equity
1,068,731
963,892
Total Liabilities and Equity
$
2,099,877
$
1,902,980
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,
2022
2021
2022
2021
Funds from operations (FFO): Net income
$
24,552
$
21,208
$
75,008
$
62,010
Depreciation and amortization
10,558
8,797
30,322
25,378
Realized gain on sales of real estate
(1,828
)
-
(7,584
)
(431
)
FFO (as defined by NAREIT)
$
33,282
$
30,005
$
97,746
$
86,957
Straight-line rental revenue
(1,648
)
(1,979
)
(4,939
)
(5,775
)
Deferred income tax (benefit) expense (1)
(118
)
-
(57
)
-
Stock-based compensation
1,206
844
3,739
3,092
Non-cash amortization of deferred financing costs
496
468
1,460
1,901
Non-real estate investment depreciation
30
34
98
77
Other non-cash revenue adjustments
543
536
1,600
1,590
Adjusted Funds from Operations (AFFO)
$
33,791
$
29,908
$
99,647
$
87,842
Fully diluted shares outstanding (2)
82,234,006
76,519,431
81,126,296
76,381,395
FFO per diluted share
$
0.40
$
0.39
$
1.20
$
1.14
AFFO per diluted share
$
0.41
$
0.39
$
1.23
$
1.15
(1)
Amount represents non-cash deferred income tax benefit recognized
in the third quarter and nine months ended September 30, 2022 for
income tax benefit 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/20221101006222/en/
FCPT Bill Lenehan, 415-965-8031 CEO
Gerry Morgan, 415-965-8032 CFO
Four Corners Property (NYSE:FCPT)
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