Four Corners Property Trust, Inc. (“FCPT” or the “Company”,
NYSE: FCPT) today announced financial results for the three and six
months ended June 30, 2022.
Management Comments
“We are pleased with FCPT’s strong performance through the first
half of the year. In the second quarter, we experienced continued
high rent collections, and acquired a number of quality restaurant
and retail properties. We continue to maintain a conservative
balance sheet and ample liquidity and obtained our second
investment grade rating from Moody’s Investors Service in May which
improves our cost of debt,” said CEO Bill Lenehan. “The Company is
set up well to take advantage of investment opportunities in the
second half of the year.”
Rent Collection Update
As of June 30, 2022, the Company has received rent payments
representing 99.9% of its portfolio contractual base rent for the
quarter ending June 30, 2022.
Financial Results
Rental Revenue and Net Income Attributable to Common
Shareholders
- Rental revenue for the second quarter increased 13.6% over the
prior year to $47.9 million. Rental revenue consisted of $46.8
million in cash rents and $1.1 million of straight-line and other
non-cash rent adjustments.
- Net income attributable to common shareholders was $28.1
million for the second quarter, or $0.35 per diluted share. These
results compare to net income attributable to common shareholders
of $20.1 million for the same quarter in the prior year, or $0.26
per diluted share.
- Net income attributable to common shareholders was $50.4
million for the six months ended June 30, 2022, or $0.63 per
diluted share. These results compare to net income attributed to
common shareholders of $40.7 million for the same six-month period
in 2021, or $0.53 per diluted share.
Funds from Operations (FFO)
- NAREIT-defined FFO per diluted share for the second quarter was
$0.40, representing a $0.03 per share increase compared to the same
quarter in 2021.
- NAREIT-defined FFO per diluted share for the six months ended
June 30, 2022 was $0.80, representing a $0.05 per share increase
compared to the same six-month period in 2021.
Adjusted Funds from Operations (AFFO)
- AFFO per diluted share for the second quarter was $0.41,
representing a $0.03 per share increase compared to the same
quarter in 2021.
- AFFO per diluted share for the six months ended June 30, 2022
was $0.82, representing $0.06 per share increase compared to the
same six-month period in 2021.
General and Administrative (G&A) Expense
- G&A expense for the second quarter was $4.7 million, which
included $1.0 million of stock-based compensation. These results
compare to G&A expense in the second quarter of 2021 of $4.5
million, including $0.9 million of stock-based compensation.
- Cash G&A expense (after excluding stock-based compensation)
for the second 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
second quarter of 2022.
Portfolio Activities
Acquisitions
- During the second quarter of 2022, FCPT acquired 26 properties
for a combined purchase price of $54.0 million at an initial
weighted average cash yield of 6.4%, reflecting rent credits at
closing and near-term rent increases, or 6.1% on rents in place as
of June 30, 2022 and a weighted average remaining lease term of 5.6
years.
Dispositions
- During the second quarter of 2022, FCPT sold three properties
for a combined sales price of $12.8 million representing $5.8
million of gain and a 4.7% cash capitalization rate on rents that
were previously in place and exclusive of transaction costs.
Liquidity and Capital
Markets
Capital Raising
- During the quarter, the Company settled 173,424 shares of
Common Stock that had been sold pursuant to a forward sale
agreement at a price of $26.16 for gross proceeds of $4.6 million.
At quarter end, 2,062,583 shares of Common Stock were sold by a
forward purchaser through a manager for gross proceeds of
approximately $56.4 million based on the initial weighted average
forward price of $27.35. The Company currently expects to fully
physically settle the forward sale agreement with the forward
purchaser on one or more dates prior to December 31, 2022.
- During the quarter, FCPT received an inaugural Investment Grade
rating from Moody’s Investors Service of Baa3, stable outlook, on
its senior unsecured revolving and term loan facility. This rating,
along with the BBB rating from Fitch, qualifies FCPT for lower
credit spreads under its Credit Facility which will save over $1
million in annual interest expense, and benefit the company on
future debt offerings.
Liquidity
- At June 30, 2022, FCPT had approximately $267.7 million of
available liquidity including $17.7 million of cash and cash
equivalents and $250 million of undrawn credit line capacity.
Credit Facility and Unsecured Notes
- At June 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 5.7x at quarter-end.
Real Estate Portfolio
- As of June 30, 2022, the Company’s rental portfolio consisted
of 960 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 8.8
years.
Conference Call
Information
Company management will host a conference call and audio webcast
on Wednesday, July 27 at 11:00 a.m. Eastern Time to discuss the
results.
Interested parties can listen to the call via the following:
Phone: 1 844 200 6205 (domestic) or 1 929 526
1599 (international), Call Access Code: 315589 Live webcast:
https://events.q4inc.com/attendee/252670393 In order to
pre-register for the call, investors can visit
https://ige.netroadshow.com/registration/q4inc/11310/fcpt-second-quarter-2022-financial-results-conference-call/
and enter in their contact information Replay: Available through
October 25, 2022 by dialing 1 866 813 9403 (domestic) or 44 204 525
0658 (international), Replay Access Code 612618
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 Second 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 June
30,
Six Months Ended June
30,
2022
2021
2022
2021
Revenues: Rental revenue
$
47,904
$
42,162
$
94,807
$
83,677
Restaurant revenue
7,521
7,110
15,015
12,341
Total revenues
55,425
49,272
109,822
96,018
Operating expenses: General and administrative
4,698
4,465
9,967
9,228
Depreciation and amortization
10,128
8,388
19,832
16,624
Property expenses
1,987
1,202
3,836
2,204
Restaurant expenses
7,052
6,589
13,935
11,448
Total operating expenses
23,865
20,644
47,570
39,504
Interest expense
(9,031
)
(8,384
)
(17,406
)
(16,017
)
Other income, net
29
7
86
8
Realized gain on sale, net
5,756
-
5,756
431
Income tax expense
(144
)
(71
)
(232
)
(134
)
Net income
28,170
20,180
50,456
40,802
Net income attributable to noncontrolling interest
(40
)
(42
)
(71
)
(85
)
Net Income Attributable to Common Shareholders
$
28,130
$
20,138
$
50,385
$
40,717
Basic net income per share
$
0.35
$
0.26
$
0.63
$
0.54
Diluted net income per share
$
0.35
$
0.26
$
0.63
$
0.53
Regular dividends declared per share
$
0.3325
$
0.3175
$
0.6650
$
0.6350
Weighted-average shares outstanding: Basic
80,294,804
76,058,812
80,245,247
76,014,595
Diluted
80,494,443
76,167,465
80,446,167
76,147,769
Four Corners Property Trust Consolidated Balance
Sheets (In thousands, except share and per share data)
June 30, 2022 (Unaudited) December
31, 2021 ASSETS Real estate investments: Land
$
1,014,297
$
966,565
Buildings, equipment and improvements
1,471,086
1,437,840
Total real estate investments
2,485,383
2,404,405
Less: Accumulated depreciation
(693,855
)
(682,430
)
Total real estate investments, net
1,791,528
1,721,975
Intangible lease assets, net
105,311
104,251
Total real estate investments and intangible lease assets, net
1,896,839
1,826,226
Real estate held for sale
1,374
-
Cash and cash equivalents
17,714
6,300
Straight-line rent adjustment
58,419
55,397
Derivative assets
19,558
2,591
Deferred tax assets
803
864
Other assets
16,010
11,601
Total Assets
$
2,010,717
$
1,902,980
LIABILITIES AND EQUITY Liabilities: Long-term
debt ($975,000 and $760,000 principal, respectively)
$
966,493
$
877,591
Dividends payable
26,730
26,655
Rent received in advance
10,739
11,311
Derivative liabilities
-
7,517
Deferred tax liabilities
-
-
Other liabilities
15,207
16,014
Total liabilities
1,019,169
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, 80,543,986 and 80,279,217 shares issued and
outstanding, respectively
8
8
Additional paid-in capital
964,607
958,737
Accumulated other comprehensive income (loss)
14,945
(9,824
)
Noncontrolling interest
2,248
2,218
Retained earnings
9,740
12,753
Total equity
991,548
963,892
Total Liabilities and Equity
$
2,010,717
$
1,902,980
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,
2022
2021
2022
2021
Funds from operations (FFO): Net income
$
28,170
$
20,180
$
50,456
$
40,802
Depreciation and amortization
10,095
8,367
19,763
16,582
Realized gain on sales of real estate
(5,756
)
-
(5,756
)
(431
)
FFO (as defined by NAREIT)
$
32,509
$
28,547
$
64,463
$
56,953
Straight-line rental revenue
(1,649
)
(1,785
)
(3,291
)
(3,796
)
Deferred income tax expense (1)
61
-
61
-
Stock-based compensation
1,033
876
2,533
2,247
Non-cash amortization of deferred financing costs
496
890
964
1,433
Non-real estate investment depreciation
33
21
69
42
Other non-cash revenue adjustments
527
548
1,057
1,054
Adjusted Funds from Operations (AFFO)
$
33,010
$
29,097
$
65,856
$
57,933
Fully diluted shares outstanding (2)
80,609,002
76,326,857
80,560,726
76,307,161
FFO per diluted share
$
0.40
$
0.37
$
0.80
$
0.75
AFFO per diluted share
$
0.41
$
0.38
$
0.82
$
0.76
(1) Amount represents non-cash deferred income tax
expense recognized in the second quarter of 2022 for income tax
expense 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/20220726006075/en/
FCPT Bill Lenehan, 415-965-8031 CEO
Gerry Morgan, 415-965-8032 CFO
Four Corners Property (NYSE:FCPT)
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