DENVER, Aug. 4, 2021 /PRNewswire/ -- Farmland Partners
Inc. (NYSE: FPI) ("FPI" or the "Company") today reported financial
results for the three and six months ended June 30, 2021.
Selected 2021 Highlights
During the six months ended June 30, 2021, the Company:
- experienced strong farmland values with accelerating
appreciation, especially in row crop regions;
- showed substantial increases in lease renewal rates so far,
reflecting increased farmer profitability;
- recorded net income of $(0.4)
million, $4.2 million
excluding litigation-related items1, compared to
$0.6 million, $1.4 million excluding litigation related
items2 for the same period in 2020;
- recorded AFFO of $(5.3) million,
$(0.6) million excluding
litigation-related items1, compared to $(1.8) million, $(1.0)
million excluding litigation related items2 for
the same period in 2020;
- completed four acquisitions, for total consideration of
$29.9 million;
- completed fifteen property dispositions, for total
consideration of $28.3 million and
total gain on sale of $3.5
million;
- retained property management for ten out of fifteen disposed
properties, growing the off-balance sheet asset management business
to $21.5 million of AUM;
- sold 1,954,293 shares of common stock at an average price of
$13.11 for aggregate net proceeds of
$25.4 million under the ATM Program;
and
- reached settlement with Quinton
Mathews regarding the falsity of claims that were used to
launch the "short and distort" scheme targeting FPI, its
management, and its stockholders (FPI press release).
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1 For
the six months ended June 30, 2021, legal and accounting expense
included $5.2 million related to litigation and revenue included
$0.6 million of litigation settlement proceeds related to Rota
Fortunae, resulting in a net impact of $4.6 million.
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2 For
the six months ended June 30, 2020, legal and accounting expense
included $0.8 million related to litigation.
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CEO Comments
Paul A. Pittman, Chairman and
CEO, said: "This was a solid quarter for FPI, but for the
litigation expense. The demand-driven bull market in
commodities continues to drive a strong profit outlook for farmers,
which, in turn, are generating positive momentum in land values and
lease renewal rates. Specialty crop performance is on track
to exceed 2020, especially in citrus."
Macro Comments
Farmers, particularly in the row crop sector, are experiencing
strong financial recovery driven by increased exports to
China and production problems in
many other parts of the world.
- Food Security: According to the Food and Agriculture
Organization of the UN report released in July, global hunger and
food insecurity were exacerbated in 2020 due to the COVID-19
pandemic. It is estimated that between 720 and 811 million
people faced hunger in 2020 and 2.37 billion people faced food
insecurity in 2020. This serves as a reminder of the
important work that US farmers perform in providing stable food
supply to meet steadily growing demand.
- Commodity Demand: The United
States corn export projection for the 2020/2021 marketing
year remains at an all-time high, resulting in an almost 40% share
in global corn trade. Corn prices for 2021/2022 marketing
year are projected to be $5.60/bu—a
27% increase over prices for the 2020/2021 marketing year, driven
by strong exports and tight supplies. Soybean prices for the
2021/2022 marketing year are projected to be $13.70/bu—a 24% increase over prices for the
2020/2021 marketing year, driven by low inventory levels.
Comments on Litigation
In commenting on litigation and related expenses, Mr. Pittman
stated: "During the second quarter, we believe we positioned the
Company to begin bringing both the class action litigation and the
remaining affirmative case against Sabrepoint Partners to
successful resolution. We obtained a recantation from Quinton Mathews (aka "Rota Fortunae") of
numerous false statements he made in July
2018 that prompted a dramatic drop in our stock price and
resulting class action litigation. We believe any accusations made
by the class action plaintiffs and attorneys are frivolous and
without merit, as further confirmed by Quinton Mathews' admission that his July 2018 Seeking Alpha article was full of false
statements. While we saw an increase in the cost of defending the
class action in the first half of the year, largely due to the
lifting of a discovery stay, which increased the number of
depositions and other discovery requests we had to fulfill, as well
as our hitting the limit on our D&O insurance, we believe much
of the discovery in the class action has been completed and such
expenses will begin to decline in the upcoming quarters. Moreover,
we believe Mr. Mathews' admission has increased the likelihood that
we will obtain a favorable result in the Sabrepoint affirmative
case."
Financial and Operating Results
- The table below shows financial and operating results for the
three months ended June 30, 2021 and
June 30, 2020. The values are shown
as reported and after adjusting for litigation items.
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As
reported
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Adjusted for
litigation (1)
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For the three months
ended
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For the three months
ended
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June 30,
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June 30,
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Financial
Results:
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2021
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2020
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2021
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2020
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Net Income
(Loss)
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$
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(2,865)
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$
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172
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$
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(735)
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$
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757
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Net income (loss) per
share available to common stockholders
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$
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(0.19)
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$
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(0.10)
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$
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(0.02)
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$
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0.03
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AFFO
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$
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(3,648)
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$
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(1,406)
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$
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(1,518)
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$
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(821)
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AFFO per diluted
weighted average share
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$
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(0.11)
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$
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(0.04)
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$
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(0.05)
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$
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(0.03)
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Adjusted
EBITDAre
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$
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3,182
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$
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6,012
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$
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5,312
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$
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6,597
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Operating
Results:
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Total Operating
Revenues
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$
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10,013
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$
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10,517
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$
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9,463
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$
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10,517
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Operating
Income
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$
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955
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$
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3,689
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$
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3,085
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$
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4,274
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Net Operating Income
(NOI)
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$
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8,305
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$
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8,699
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$
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7,755
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$
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8,699
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(1)
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Legal and accounting
expense for the three months ended June 30, 2021 and 2020
included $2.7 million and $0.6 million, respectively, related to
litigation. Revenue for the three months ended June 30, 2021
and 2020 included $0.6 million and $0.0 million, respectively, of
litigation settlement proceeds related to Rota Fortunae resulting
in a net impact of $2.1 million and $0.6 million,
respectively.
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- The table below shows financial and operating results for the
six months ended June 30, 2021 and
June 30, 2020. The values are shown
as reported and after adjusting for litigation items.
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As
reported
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Adjusted for
litigation (1)
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For the six months ended
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For the six months ended
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June 30,
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June 30,
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Financial
Results:
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2021
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2020
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2021
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2020
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Net Income
(Loss)
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$
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(388)
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$
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592
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$
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4,250
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$
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1,362
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Net income (loss) per
share available to common stockholders
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$
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(0.21)
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$
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(0.19)
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$
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0.14
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$
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0.05
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AFFO
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$
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(5,259)
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$
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(1,774)
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$
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(621)
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$
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(1,004)
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AFFO per diluted
weighted average share
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$
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(0.16)
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$
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(0.06)
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$
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(0.02)
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$
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(0.03)
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Adjusted
EBITDAre
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$
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8,511
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$
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13,422
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$
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13,149
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$
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14,192
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Operating
Results:
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Total Operating
Revenues
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$
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21,589
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$
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22,168
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$
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21,039
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$
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22,168
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Operating
Income
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$
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4,054
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$
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8,979
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$
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8,692
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$
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9,749
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Net Operating Income
(NOI)
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$
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17,950
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$
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18,489
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$
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17,400
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$
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18,489
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(1)
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Legal and accounting
expense for the six months ended June 30, 2021 and 2020
included $5.2 million and $0.8 million, respectively, related to
litigation. Revenue for the six months ended June 30, 2021 and
2020 included $0.6 million and $0.0 million, respectively, of
litigation settlement proceeds related to Rota Fortunae resulting
in a net impact of $4.6 million and $0.8 million,
respectively.
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- See "Non-GAAP Financial Measures" for complete definitions of
AFFO, Adjusted EBITDAre, and NOI and the financial tables
accompanying this press release for reconciliations of net income
to AFFO, Adjusted EBITDAre and NOI.
Acquisition and Disposition Activity
- During the six months ended June 30,
2021, the Company completed four acquisitions for total
consideration of $29.9 million.
- During the six months ended June 30,
2021, the Company completed disposal of fifteen properties
for total consideration of $30.7
million and total gain on sale of $3.5 million.
Balance Sheet
- During the six months ended June 30,
2021, the Company did not repurchase any shares of common
stock.
- During the six months ended June 30,
2021, the Company repurchased 25,073 shares of Series B
preferred stock at a weighted average price of $25.92 for an aggregate purchase price of
$0.7 million.
- During the six months ended June 30,
2021, the Company sold 1,954,293 shares of common stock at
an average price of $13.11 for
aggregate net proceeds of $25.4
million under the ATM Program.
- Subsequent to June 30, 2021, the
Company sold 5,219 shares of common stock for aggregate net
proceeds of $0.1 million under the
ATM Program.
- As the date of this press release, and the date of this press
release, the Company had 34,300,035 shares of common
stock outstanding on a fully diluted basis.
- The Company had total debt outstanding of $502.2 million at June 30,
2021, compared to total debt outstanding of $508.2 million at December
31, 2020.
Dividend Declarations
- The Company's Board of Directors declared a quarterly cash
dividend of $0.05 per share of common
stock and per Class A Common OP unit. The dividends are
payable on October 15, 2021, to
stockholders and common unit holders of record on October 1, 2021.
- The Company's Board of Directors declared a quarterly cash
dividend of $0.3750 per share of
Series B Participating Preferred Stock. The dividends are
payable on September 30, 2021 to
holders of Series B Participating Preferred Stock of record on
September 15, 2021.
Conference Call Information
The Company has scheduled a conference call on August 5, 2021 at 12:00
p.m. (Eastern Time) to discuss the financial results and
provide a company update. The call can be accessed live over
the phone toll-free by dialing 1-866-262-6804 (U.S.), or
1-855-669-9657 (Canada), or
1-412-902-4107 (International). Participants can reference the
Farmland Partners Inc. Second Quarter 2021 Earnings Conference
Call. The conference call will also be available via a live
listen-only webcast and can be accessed through the Investor
Relations section of the Company's website,
www.farmlandpartners.com. A replay of the conference call will
be available beginning shortly after the end of the event until
August 15, 2021 at 11:59 p.m. (Eastern Time), by dialing
1-877-344-7529 (U.S.), or 1-855-669-9658 (Canada), or 1-412-317-0088 (International);
passcode: 10158970. A replay of the webcast will also be accessible
on the Investor Relations section of the Company's website for a
limited time following the event.
About Farmland Partners Inc.
Farmland Partners Inc. is an internally managed real estate
company that owns and seeks to acquire high-quality North American
farmland and makes loans to farmers secured by farm real estate. As
of the date of this release, the Company owns and/or manages
approximately 161,000 acres in 16 states, including Alabama, Arkansas, California, Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North
Carolina, South Carolina,
South Dakota and Virginia. We have approximately 26 crop types
and over 100 tenants. The Company elected to be taxed as a real
estate investment trust, or REIT, for U.S. federal income tax
purposes, commencing with the taxable year ended December 31, 2014. Additional information:
www.farmlandpartners.com or (720) 452-3100.
Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the federal securities laws, including, without
limitation, statements with respect to our outlook, proposed and
pending acquisitions and dispositions, the potential impact of
trade disputes and recent extreme weather events on the Company's
results, financing activities, crop yields and prices and
anticipated rental rates. Forward-looking statements generally can
be identified by the use of forward-looking terminology such as
"may," "should," "could," "would," "predicts," "potential,"
"continue," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates" or similar expressions or their negatives,
as well as statements in future tense. Although the Company
believes that the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, beliefs and
expectations, such forward-looking statements are not predictions
of future events or guarantees of future performance and our actual
results could differ materially from those set forth in the
forward-looking statements. Some factors that might cause such a
difference include the following: general volatility of the capital
markets and the market price of the Company's common stock or
Series B participating preferred stock, changes in the Company's
business strategy, availability, terms and deployment of capital,
the Company's ability to refinance existing indebtedness at or
prior to maturity on favorable terms, or at all, availability of
qualified personnel, changes in the Company's industry, interest
rates or the general economy, adverse developments related to crop
yields or crop prices, the degree and nature of the Company's
competition, the timing, price or amount of repurchases, if any,
under the Company's share repurchase program, the ability to
consummate acquisitions or dispositions under contract and the
other factors described in the section entitled "Risk Factors" in
the Company's Annual Report on Form 10-K for the year ended
December 31, 2020, and the Company's other filings with the
Securities and Exchange Commission. Any forward-looking
information presented herein is made only as of the date of this
press release, and the Company does not undertake any obligation to
update or revise any forward-looking information to reflect changes
in assumptions, the occurrence of unanticipated events, or
otherwise.
Farmland Partners
Inc.
Consolidated Balance
Sheets
As of June 30,
2021 (unaudited) and December 31, 2020 (audited)
(in thousands except
par value and share data)
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June 30,
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December 31,
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2021
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2020
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ASSETS
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Land, at
cost
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$
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930,665
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$
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924,952
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Grain
facilities
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11,283
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12,091
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Groundwater
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10,214
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10,214
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Irrigation
improvements
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52,335
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53,887
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Drainage
improvements
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12,606
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12,805
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Permanent
plantings
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53,519
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54,374
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Other
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6,890
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8,167
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Construction in
progress
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10,228
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9,284
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Real estate, at
cost
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1,087,740
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1,085,774
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Less accumulated
depreciation
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(35,230)
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(32,654)
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Total real estate,
net
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1,052,510
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1,053,120
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Deposits
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65
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—
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Cash
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40,159
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27,217
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Assets held for
sale
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530
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—
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Notes and interest
receivable, net
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2,440
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2,348
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Convertible notes
receivable
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2,428
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—
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Right of use
asset
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178
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93
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Deferred offering
costs
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75
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—
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Deferred financing
fees, net
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44
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87
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Accounts receivable,
net
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3,520
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4,120
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Inventory
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742
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1,117
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Prepaid and other
assets
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1,628
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2,889
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TOTAL
ASSETS
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$
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1,104,319
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$
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1,090,991
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LIABILITIES AND
EQUITY
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LIABILITIES
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Mortgage notes and
bonds payable, net
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$
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500,705
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$
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506,625
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Lease
liability
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178
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93
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Dividends
payable
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1,715
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1,612
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Derivative
liability
|
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1,738
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2,899
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Accrued
interest
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3,373
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3,446
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Accrued property
taxes
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1,752
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1,817
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Deferred
revenue
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2,420
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37
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Accrued
expenses
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11,132
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8,272
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Total
liabilities
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523,013
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524,801
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Commitments and
contingencies (See Note 8)
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Series B Participating
Preferred Stock, $0.01 par value, 6,037,500 shares authorized;
5,806,797
shares issued and outstanding at June 30, 2021, and 5,831,870
at December 31, 2020
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139,116
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139,766
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Redeemable
non-controlling interest in operating partnership, Series A
preferred units
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118,755
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120,510
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EQUITY
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Common stock, $0.01
par value, 500,000,000 shares authorized; 32,810,518 shares issued
and
outstanding at June 30, 2021, and 30,571,271 shares
issued and outstanding at December 31, 2020
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317
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297
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Additional paid in
capital
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373,299
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345,870
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Retained
earnings
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(5,457)
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|
1,037
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Cumulative
dividends
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(57,932)
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(54,751)
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Other comprehensive
income
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(908)
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(2,380)
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Non-controlling
interests in operating partnership
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14,116
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|
15,841
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Total
equity
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323,435
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305,914
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TOTAL LIABILITIES,
REDEEMABLE NON-CONTROLLING INTERESTS IN OPERATING
PARTNERSHIP AND EQUITY
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$
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1,104,319
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$
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1,090,991
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Farmland Partners
Inc.
Consolidated
Statements of Operations
For the three and six
months ended June 30, 2021 and 2020
(unaudited, in
thousands except par value and share data)
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For the Three
Months Ended
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For the Six Months
Ended
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June 30,
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June 30,
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2021
|
|
2020
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2021
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2020
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OPERATING
REVENUES:
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Rental
income
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$
|
8,291
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$
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9,141
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$
|
18,551
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$
|
19,215
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Tenant
reimbursements
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|
|
839
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|
|
883
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|
|
1,777
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|
|
1,744
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Crop sales
|
|
|
237
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|
|
362
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|
|
453
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|
|
697
|
Other
revenue
|
|
|
646
|
|
|
131
|
|
|
808
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|
|
512
|
Total operating
revenues
|
|
|
10,013
|
|
|
10,517
|
|
|
21,589
|
|
|
22,168
|
|
|
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|
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OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
|
1,885
|
|
|
2,003
|
|
|
3,820
|
|
|
4,003
|
Property operating
expenses
|
|
|
1,708
|
|
|
1,818
|
|
|
3,639
|
|
|
3,679
|
Cost of goods
sold
|
|
|
667
|
|
|
745
|
|
|
917
|
|
|
1,311
|
Acquisition and due
diligence costs
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
General and
administrative expenses
|
|
|
1,897
|
|
|
1,402
|
|
|
3,514
|
|
|
2,854
|
Legal and
accounting
|
|
|
2,901
|
|
|
848
|
|
|
5,643
|
|
|
1,330
|
Other operating
expenses
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
1
|
Total operating
expenses
|
|
|
9,058
|
|
|
6,828
|
|
|
17,535
|
|
|
13,189
|
OPERATING
INCOME
|
|
|
955
|
|
|
3,689
|
|
|
4,054
|
|
|
8,979
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER (INCOME)
EXPENSE:
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income)
expense
|
|
|
(8)
|
|
|
(33)
|
|
|
(52)
|
|
|
88
|
(Gain) on disposition
of assets
|
|
|
(74)
|
|
|
(917)
|
|
|
(3,467)
|
|
|
(831)
|
Interest
expense
|
|
|
3,902
|
|
|
4,467
|
|
|
7,961
|
|
|
9,130
|
Total other
expense
|
|
|
3,820
|
|
|
3,517
|
|
|
4,442
|
|
|
8,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
before income tax expense
|
|
|
(2,865)
|
|
|
172
|
|
|
(388)
|
|
|
592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
|
|
(2,865)
|
|
|
172
|
|
|
(388)
|
|
|
592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (income) loss
attributable to non-controlling interests in operating
partnership
|
|
|
130
|
|
|
(10)
|
|
|
13
|
|
|
(36)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to the Company
|
|
|
(2,735)
|
|
|
162
|
|
|
(375)
|
|
|
556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonforfeitable
distributions allocated to unvested restricted
shares
|
|
|
(14)
|
|
|
(16)
|
|
|
(28)
|
|
|
(32)
|
Distributions on
Series A Preferred Units and Series B Preferred Stock
|
|
|
(3,055)
|
|
|
(3,088)
|
|
|
(6,120)
|
|
|
(6,203)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss available to
common stockholders of Farmland Partners Inc.
|
|
$
|
(5,804)
|
|
$
|
(2,942)
|
|
$
|
(6,523)
|
|
$
|
(5,679)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted per
common share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net (loss)
available to common stockholders
|
|
$
|
(0.19)
|
|
$
|
(0.10)
|
|
$
|
(0.21)
|
|
$
|
(0.19)
|
Diluted net (loss)
available to common stockholders
|
|
$
|
(0.19)
|
|
$
|
(0.10)
|
|
$
|
(0.21)
|
|
$
|
(0.19)
|
Basic weighted average
common shares outstanding
|
|
|
31,072
|
|
|
29,433
|
|
|
30,747
|
|
|
29,485
|
Diluted weighted
average common shares outstanding
|
|
|
31,072
|
|
|
29,433
|
|
|
30,747
|
|
|
29,485
|
Dividends declared per
common share
|
|
$
|
0.05
|
|
$
|
0.05
|
|
$
|
0.10
|
|
$
|
0.10
|
Farmland Partners
Inc.
Reconciliation of
Non-GAAP Measures
For the three and six
months ended June 30, 2021 and 2020
(unaudited, in
thousands except par value and share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended
June 30,
|
|
For the six months
ended June 30,
|
(in thousands
except per share amounts)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net income
(loss)
|
|
$
|
(2,865)
|
|
$
|
172
|
|
$
|
(388)
|
|
$
|
592
|
(Gain) loss on
disposition of assets
|
|
|
(74)
|
|
|
(917)
|
|
|
(3,467)
|
|
|
(831)
|
Depreciation,
depletion and amortization
|
|
|
1,885
|
|
|
2,003
|
|
|
3,820
|
|
|
4,003
|
FFO
|
|
|
(1,054)
|
|
|
1,258
|
|
|
(35)
|
|
|
3,764
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
334
|
|
|
276
|
|
|
585
|
|
|
517
|
Deferred impact of
interest rate swap terminations
|
|
|
127
|
|
|
137
|
|
|
311
|
|
|
137
|
Real estate related
acquisition and due diligence costs
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
Distributions on
Preferred units
|
|
|
(3,055)
|
|
|
(3,088)
|
|
|
(6,120)
|
|
|
(6,203)
|
AFFO
|
|
$
|
(3,648)
|
|
$
|
(1,406)
|
|
$
|
(5,259)
|
|
$
|
(1,774)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO per diluted
weighted average share data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AFFO weighted average
common shares
|
|
|
32,836
|
|
|
31,656
|
|
|
32,527
|
|
|
31,708
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
available to common stockholders
|
|
$
|
(0.19)
|
|
$
|
(0.10)
|
|
$
|
(0.21)
|
|
$
|
(0.19)
|
Income available to
redeemable non-controlling interest and non-controlling interest in
operating partnership
|
|
|
0.10
|
|
|
0.11
|
|
|
0.21
|
|
|
0.21
|
Depreciation and
depletion
|
|
|
0.06
|
|
|
0.06
|
|
|
0.12
|
|
|
0.13
|
Stock-based
compensation
|
|
|
0.01
|
|
|
0.01
|
|
|
0.02
|
|
|
0.02
|
(Gain) loss on
disposition of assets
|
|
|
—
|
|
|
(0.03)
|
|
|
(0.11)
|
|
|
(0.03)
|
Distributions on
Preferred units
|
|
|
(0.09)
|
|
|
(0.10)
|
|
|
(0.19)
|
|
|
(0.20)
|
AFFO per diluted
weighted average share
|
|
$
|
(0.11)
|
|
$
|
(0.04)
|
|
$
|
(0.16)
|
|
$
|
(0.06)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months
ended
|
|
For the six months ended
|
|
|
June 30,
|
|
June 30,
|
(in
thousands)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net Income
(loss)
|
|
$
|
(2,865)
|
|
$
|
172
|
|
$
|
(388)
|
|
$
|
592
|
Interest
expense
|
|
|
3,902
|
|
|
4,467
|
|
|
7,961
|
|
|
9,130
|
Income tax
expense
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Depreciation,
depletion and amortization
|
|
|
1,885
|
|
|
2,003
|
|
|
3,820
|
|
|
4,003
|
(Gain) loss on
disposition of assets
|
|
|
(74)
|
|
|
(917)
|
|
|
(3,467)
|
|
|
(831)
|
EBITDAre
|
|
$
|
2,848
|
|
$
|
5,725
|
|
$
|
7,926
|
|
$
|
12,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
334
|
|
|
276
|
|
|
585
|
|
|
517
|
Indirect equity
offering costs
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
Real estate related
acquisition and due diligence costs
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
Adjusted
EBITDAre
|
|
$
|
3,182
|
|
$
|
6,012
|
|
$
|
8,511
|
|
$
|
13,422
|
Farmland Partners
Inc.
Reconciliation of
Non-GAAP Measures
For the three and six
months ended June 30, 2021 and 2020
(unaudited, in
thousands except par value and share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended
June 30,
|
|
For the Six Months Ended
June 30,
|
($ in
thousands)
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
OPERATING
REVENUES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
|
$
|
8,291
|
|
$
|
9,141
|
|
$
|
18,551
|
|
$
|
19,215
|
Tenant
reimbursements
|
|
|
839
|
|
|
883
|
|
|
1,777
|
|
|
1,744
|
Crop sales
|
|
|
237
|
|
|
362
|
|
|
453
|
|
|
697
|
Other
revenue
|
|
|
646
|
|
|
131
|
|
|
808
|
|
|
512
|
Total operating
revenues
|
|
|
10,013
|
|
|
10,517
|
|
|
21,589
|
|
|
22,168
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
expenses
|
|
|
1,708
|
|
|
1,818
|
|
|
3,639
|
|
|
3,679
|
NOI
|
|
|
8,305
|
|
|
8,699
|
|
|
17,950
|
|
|
18,489
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation,
depletion and amortization
|
|
|
1,885
|
|
|
2,003
|
|
|
3,820
|
|
|
4,003
|
Cost of goods
sold
|
|
|
667
|
|
|
745
|
|
|
917
|
|
|
1,311
|
Acquisition and due
diligence costs
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
11
|
General and
administrative expenses
|
|
|
1,897
|
|
|
1,402
|
|
|
3,514
|
|
|
2,854
|
Legal and
accounting
|
|
|
2,901
|
|
|
848
|
|
|
5,643
|
|
|
1,330
|
Other operating
expenses
|
|
|
—
|
|
|
1
|
|
|
2
|
|
|
1
|
Other (income)
expense
|
|
|
(8)
|
|
|
(33)
|
|
|
(52)
|
|
|
88
|
(Gain) on disposition
of assets
|
|
|
(74)
|
|
|
(917)
|
|
|
(3,467)
|
|
|
(831)
|
Interest
expense
|
|
|
3,902
|
|
|
4,467
|
|
|
7,961
|
|
|
9,130
|
NET INCOME
(LOSS)
|
|
$
|
(2,865)
|
|
$
|
172
|
|
$
|
(388)
|
|
$
|
592
|
Non-GAAP Financial Measures
The Company considers the following non-GAAP measures as useful
to investors as key supplemental measures of its performance: FFO,
NOI, AFFO, EBITDAre and Adjusted EBITDAre. These non-GAAP financial
measures should be considered along with, but not as alternatives
to, net income or loss as a measure of the Company's operating
performance. FFO, NOI, AFFO, EBITDAre and Adjusted EBITDAre, as
calculated by the Company, may not be comparable to other companies
that do not define such terms exactly as the Company.
FFO
The Company calculates FFO in accordance with the standards
established by the National Association of Real Estate Investment
Trusts, or NAREIT. NAREIT defines FFO as net income (loss)
(calculated in accordance with GAAP), excluding gains (or losses)
from sales of depreciable operating property, plus real estate
related depreciation, depletion and amortization (excluding
amortization of deferred financing costs), and after adjustments
for unconsolidated partnerships and joint ventures. Management
presents FFO as a supplemental performance measure because it
believes that FFO is beneficial to investors as a starting point in
measuring the Company's operational performance. Specifically, in
excluding real estate related depreciation and amortization and
gains and losses from sales of depreciable operating properties,
which do not relate to or are not indicative of operating
performance, FFO provides a performance measure that, when compared
year over year, captures trends in occupancy rates, rental rates
and operating costs. The Company also believes that, as a widely
recognized measure of the performance of REITs, FFO will be used by
investors as a basis to compare the Company's operating performance
with that of other REITs. However, other equity REITs may not
calculate FFO in accordance with the NAREIT definition as the
Company does, and, accordingly, the Company's FFO may not be
comparable to such other REITs' FFO.
AFFO
The Company calculates AFFO by adjusting FFO to exclude the
income and expenses that the Company believes are not reflective of
the sustainability of the Company's ongoing operating performance,
including, but not limited to, real estate related acquisition and
due diligence costs and stock-based compensation.
Changes in GAAP accounting and reporting rules that were put in
effect after the establishment of NAREIT's definition of FFO in
1999 result in the inclusion of a number of items in FFO that do
not correlate with the sustainability of the Company's operating
performance. Therefore, in addition to FFO, the Company
presents AFFO and AFFO per share, fully diluted, both of which are
non-GAAP measures. Management considers AFFO a useful
supplemental performance metric for investors as it is more
indicative of the Company's operational performance than FFO. AFFO
is not intended to represent cash flow or liquidity for the period
and is only intended to provide an additional measure of the
Company's operating performance. Even AFFO, however, does not
properly capture the timing of cash receipts, especially in
connection with full-year rent payments under lease agreements
entered into in connection with newly acquired farms. Management
considers AFFO per share, fully diluted to be a supplemental metric
to GAAP earnings per share. AFFO per share, fully diluted provides
additional insight into how the Company's operating performance
could be allocated to potential shares outstanding at a specific
point in time. Management believes that AFFO is a widely recognized
measure of the operations of REITs and presenting AFFO will enable
investors to assess the Company's performance in comparison to
other REITs. However, other REITs may use different methodologies
for calculating AFFO and AFFO per share, fully diluted and,
accordingly, the Company's AFFO and AFFO per share, fully diluted
may not always be comparable to AFFO and AFFO per share amounts
calculated by other REITs. AFFO and AFFO per share, fully diluted
should not be considered as an alternative to net income (loss) or
earnings per share (determined in accordance with GAAP) as an
indication of financial performance, or as an alternative to net
income (loss) earnings per share (determined in accordance with
GAAP) as a measure of the Company's liquidity, nor are they
indicative of funds available to fund the Company's cash needs,
including its ability to make distributions.
EBITDAre and Adjusted EBITDAre
The Company calculates Earnings Before Interest Taxes
Depreciation and Amortization for real estate ("EBITDAre") in
accordance with the standards established by NAREIT in its
September 2017 White Paper. NAREIT
defines EBITDAre as net income (calculated in accordance with GAAP)
excluding interest expense, income tax, depreciation and
amortization, gains or losses on disposition of depreciated
property (including gains or losses on change of control),
impairment write-downs of depreciated property and of investments
in unconsolidated affiliates caused by a decrease in value of
depreciated property in the affiliate, and adjustments to reflect
the entity's pro rata share of EBITDAre of unconsolidated
affiliates. EBITDAre is a key financial measure used to
evaluate the Company's operating performance but should not be
construed as an alternative to operating income, cash flows from
operating activities or net income, in each case as determined in
accordance with GAAP. The Company believes that EBITDAre is a
useful performance measure commonly reported and will be widely
used by analysts and investors in the Company's industry. However,
while EBITDAre is a performance measure widely used across the
Company's industry, the Company does not believe that it correctly
captures the Company's business operating performance because it
includes non-cash expenses and recurring adjustments that are
necessary to better understand the Company's business operating
performance. Therefore, in addition to EBITDAre, management
uses Adjusted EBITDAre, a non-GAAP measure.
The Company calculates Adjusted EBITDAre by adjusting EBITDAre
for certain items such as stock-based compensation and real estate
related acquisition and due diligence costs that the Company
considers necessary to understand its operating performance. The
Company believes that Adjusted EBITDAre provides useful
supplemental information to investors regarding the Company's
ongoing operating performance that, when considered with net income
and EBITDAre, is beneficial to an investor's understanding of the
Company's operating performance. However, EBITDAre and Adjusted
EBITDAre have limitations as analytical tools and should not be
considered in isolation or as a substitute for analysis of the
Company's results as reported under GAAP.
In prior periods, the Company has presented EBITDA and Adjusted
EBITDA. In accordance with NAREIT's recommendation, beginning with
the Company's reported results for the three months ended
March 31, 2018, the Company is
reporting EBITDAre and Adjusted EBITDAre in place of EBITDA and
Adjusted EBITDA.
Net Operating Income (NOI)
The Company calculates net operating income (NOI) as total
operating revenues (rental income, tenant reimbursements, crop
sales and other revenue) less property operating expenses (direct
property expenses and real estate taxes). Since net operating
income excludes general and administrative expenses, interest
expense, depreciation and amortization, acquisition-related
expenses, other income and losses and extraordinary items, it
provides a performance measure that, when compared year over year,
reflects the revenues and expenses directly associated with owning
and leasing farmland real estate, providing a perspective not
immediately apparent from net income. However, net operating income
should not be viewed as an alternative measure of the Company's
financial performance since it does not reflect general and
administrative expenses, interest expense, depreciation and
amortization costs, other income and losses.
View original
content:https://www.prnewswire.com/news-releases/farmland-partners-inc-reports-second-quarter-2021-results-301348763.html
SOURCE Farmland Partners Inc.