MILL VALLEY, Calif.--(BUSINESS WIRE)--
Four Corners Property Trust, Inc. (“FCPT” or the “Company”, NYSE: FCPT)
today announced financial results for the three months and year ended
December 31, 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/.
Management Comments
Bill Lenehan stated, “The fourth quarter and early weeks of 2018 have
been productive as we continue to demonstrate progress toward our
strategic acquisition goals. We enter 2018 with a very strong liquidity
position, significant financial flexibility, and a very high-quality
real estate portfolio with excellent metrics. While the capital markets
have been very volatile in early 2018, our business has been very
steady.”
Financial Results
Rental Revenue and Net Income Attributable to Common Shareholders
-
Rental revenue for the fourth quarter in 2017 reached $29.0 million, a
7.9% increase over the same quarter in 2016, and consisted of $26.8
million in cash rents and $2.3 million of straight-line rent
adjustments.
-
Net income attributable to common shareholders was $18.4 million in
the quarter, or $0.30 per diluted share, including a $3.2 million gain
on the sale of an Olive Garden property. These results compared to net
income of $32.5 million, or $0.54 per diluted share, including $16.6
million in gains for the same quarter in 2016.
-
Net income attributable to common shareholders for the year ended
December 31, 2017 was $71.4 million. After excluding $10.5 million and
$16.6 million in gains on sale in 2017 and 2016, respectively, and the
one-time, non-cash tax benefit of $80.4 million included in the 2016
results, the Company’s net income was $60.9 million, or $1.00 per
diluted share, for 2017, which compared to net income of $59.8
million, or $1.00 per diluted share, for 2016.
Funds from Operations (FFO)
-
NAREIT-defined FFO for the fourth quarter in 2017 was $20.8 million,
or $0.34 per diluted share, representing a decrease of 2.9% per
diluted share results compared to the same quarter in 2016. The
comparative results were negatively impacted by $424 thousand of
one-time deferred issuance costs amortization related to the debt
modification in the 2017 fourth quarter and a $791 thousand reduction
in non-cash interest expense related in the 2016 fourth quarter from
hedge ineffectiveness.
-
NAREIT-defined FFO for the year ended December 31, 2017 was $83.1
million, or $1.36 per diluted share, representing an increase of 0.7%
in per diluted share results compared to year ended December 31, 2016.
Adjusted Funds from Operations (AFFO)
-
AFFO for the fourth quarter in 2017 was $20.3 million, or $0.33 per
diluted share, representing an increase of 6.5% in per diluted share
results compared to the fourth quarter in 2016.
-
AFFO for the year ended December 31, 2017 was $78.6 million, or $1.29
per diluted share, representing an increase of 5.7% in per diluted
share results compared to the year ended December 31, 2016.
General and Administrative (G&A) Expense
-
G&A expense for the fourth quarter in 2017 was $3.0 million, including
$0.8 million of non-cash, stock-based compensation. These results
compared to G&A of $2.5 million, including $0.4 million of non-cash,
stock-based compensation for the same quarter in 2016.
-
Cash G&A expense (after excluding non-cash stock-based compensation)
for the year ended December 31, 2017 was $9.6 million, representing
9.2% of cash rental income for the year. These results compared
favorable to 2016, when cash G&A was 9.9% of cash rental income, as we
continue to benefit from increasing scale.
Dividends
-
FCPT declared a dividend of $0.2750 per common share for the fourth
quarter of 2017, which represented an increase of over 13% from the
prior quarter.
Portfolio Activities
Acquisitions
-
During the fourth quarter of 2017, FCPT acquired eight restaurant
properties in three transactions with a combined investment value of
$24.2 million, at an initial weighted average cash yield of 6.7%, and
a weighted average lease term of 20.1 years.
-
In addition, year to date in 2018 FCPT has acquired 12 restaurant
properties with a combined investment value of $20.4 million, at an
initial weighted average cash yield of 6.9% and a weighted average
lease term of 10 years. Ten of the properties were purchased from
Washington Prime Group Inc. and represented the first of two tranches
in the 41 property acquisition announced in September 2017. Closing of
the 31 remaining properties in the second tranche is expected to be
completed by the end of the second quarter of 2018, subject to
remaining due diligence and customary closing conditions.
Dispositions
-
During the fourth quarter, FCPT sold an Olive Garden property for a
gross sales price of $5.1 million, representing a 4.7% cash
capitalization rate, exclusive of transaction costs, and $3.2 million
of gain.
Liquidity and Capital Markets
Capital Raising
-
During the fourth quarter, FCPT raised $3.5 million in gross proceeds
at a weighted average share price of $26.56 via its At-The-Market
(ATM) stock offering program. For the year ended December 31, 2017,
FCPT raised $32.8 million in gross proceeds at a weighted average
share price of $24.35 via its ATM program.
Credit Facility and Unsecured Notes
-
At December 31, 2017 FCPT had $525 million of outstanding debt,
consisting of a $400 million term loan and $125 million of unsecured
fixed rate notes. FCPT was undrawn on its $250 million revolving
credit facility, and had $64.5 million of available cash and cash
equivalents.
-
On October 2, 2017, FCPT announced that it had entered into a $650
million credit agreement consisting of a 5-year term loan of $400
million and a 4-year revolving credit facility of $250 million to
replace the Company’s existing bank credit facility. The recasting
extended the maturities of both the term loan and the revolving
facility by two years, and increased the Company’s weighted average
debt maturity to approximately 5.8 years. Under the terms of the
recast facility, FCPT expects to save at least $1.8 million in annual
cash interest expense due to reduced margin pricing and lower unused
capacity.
Real Estate Portfolio
As of December 31, 2017, the Company’s rental portfolio consisted of 515
restaurant properties located in 44 states. The properties are 99.8%
occupied under long-term, net leases with a weighted average remaining
lease term of approximately 13.0 years and an estimated portfolio
weighted average EBITDAR to Lease Rent coverage of 4.6x.
Conference Call Information
Company management will host a conference call and audio webcast on
Wednesday, February 21, 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/10116615
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 May 21, 2018 by dialing 1-877-344-7529
(domestic) / 1-412-317- 0088 (international), Replay Access Code
10116615.
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 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.
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 Fourth 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 Operations
(Unaudited)
(In thousands,
except share and per share data) |
|
| |
| |
| |
| |
| | Three Months Ended December 31, | | Year Ended December 31, |
| | 2017 | | 2016 | | 2017 | | 2016 |
| | | | | | | |
|
|
Revenues:
| | | | | | | | |
|
Rental revenue
| |
$
|
29,011
| | |
$
|
26,876
| |
|
$
|
113,937
| |
|
$
|
105,624
| |
|
Restaurant revenue
| |
|
4,827
|
| |
|
4,391
|
|
|
|
19,272
|
|
|
|
18,394
|
|
|
Total revenues
| | |
33,838
| | | |
31,267
| | | |
133,209
| | | |
124,018
| |
| | | | | | | |
|
|
Operating expenses:
| | | | | | | | |
|
General and administrative
| | |
3,044
| | | |
2,546
| |
| |
12,259
| |
| |
10,977
| |
|
Depreciation and amortization
| | |
5,557
| | | |
5,231
| |
| |
21,811
| |
| |
20,577
| |
|
Restaurant expenses
| | |
4,829
| | | |
4,253
| |
| |
18,652
| |
| |
17,853
| |
|
Interest expense
| |
|
5,403
|
| |
|
3,239
|
|
|
|
19,469
|
|
|
|
14,828
|
|
|
Total operating expenses
| | |
18,833
| | | |
15,269
| | | |
72,191
| | | |
64,235
| |
| | | | | | | |
|
|
Other income
| | |
113
| |
| |
9
| |
| |
324
| |
| |
97
| |
|
Realized gain on sale, net
| |
|
3,198
|
|
|
|
16,623
|
|
|
|
10,532
|
|
|
|
16,623
|
|
| | | | | | | |
|
|
Income before income tax
| | |
18,316
| | | |
32,630
| |
| |
71,874
| |
| |
76,503
| |
|
Income tax benefit (expense) (1) | |
|
157
|
|
|
|
(108
|
)
|
|
|
18
|
|
|
|
80,347
|
|
| | | | | | | |
|
|
Net income
| | |
18,473
| | | |
32,522
| |
| |
71,892
| |
| |
156,850
| |
|
Net income attributable to noncontrolling interest
| |
|
(123
|
)
| |
|
(41
|
)
|
|
|
(498
|
)
|
|
|
(41
|
)
|
| Net Income Attributable to Common Shareholders | |
$
|
18,350
|
| |
$
|
32,481
|
| |
$
|
71,394
|
| |
$
|
156,809
|
|
| | | | | | | |
|
|
Basic net income per share
| |
$
|
0.30
| | |
$
|
0.54
| |
|
$
|
1.18
| | |
$
|
2.75
| |
|
Diluted net income per share
| |
$
|
0.30
| | |
$
|
0.54
| |
|
$
|
1.18
| | |
$
|
2.63
| |
|
Regular dividends declared per share
| |
$
|
0.2750
| | |
$
|
0.2425
| | |
$
|
1.0025
| | |
$
|
0.9700
| |
| | | | | | | |
|
|
Weighted-average shares outstanding:
| | | | | | | | |
|
Basic
| | |
61,130,319
| | | |
59,837,636
| |
| |
60,627,423
| | | |
56,984,561
| |
|
Diluted
| | |
61,233,277
| | | |
59,871,465
| |
| |
60,695,834
| | | |
59,568,067
| |
| | | | | | | |
|
|
(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) |
|
| |
| |
| | December 31, |
| | 2017 | | 2016 |
| ASSETS | | | | |
|
Real estate investments:
| | | | |
|
Land
| |
$
|
449,331
| | |
$
|
421,941
| |
|
Buildings, equipment and improvements
| |
|
1,115,624
|
| |
|
1,055,624
|
|
|
Total real estate investments
| | |
1,564,955
| | | |
1,477,565
| |
|
Less: Accumulated depreciation
| |
|
(598,846
|
)
| |
|
(583,307
|
)
|
|
Total real estate investments, net
| | |
966,109
| | | |
894,258
| |
|
Cash and cash equivalents
| | |
64,466
| | | |
26,643
| |
|
Straight-line rent adjustment
| | |
21,130
| | | |
11,594
| |
|
Derivative assets
| | |
4,997
| | | |
837
| |
|
Other assets
| |
|
11,957
|
| |
|
3,819
|
|
| Total Assets | |
$
|
1,068,659
|
| |
$
|
937,151
|
|
| | | |
|
| LIABILITIES AND EQUITY | | | | |
| | | |
|
|
Liabilities:
| | | | |
|
Long-term debt ($525,000 net of deferred financing costs)
| |
$
|
515,539
| | |
$
|
438,895
| |
|
Dividends payable
| | |
16,843
| | | |
14,519
| |
|
Rent received in advance
| | |
8,295
| | | |
7,974
| |
|
Derivative liabilities
| | |
8
| | | |
-
| |
|
Deferred tax liabilities
| | |
-
| | | |
196
| |
|
Other liabilities
| |
|
5,706
|
| |
|
5,450
|
|
|
Total liabilities
| |
|
546,391
|
| |
|
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, 61,329,489 and 59,923,557 shares issued and
outstanding at December 31, 2017 and 2016, respectively
| | |
6
| | | |
6
| |
|
Additional paid-in capital
| | |
473,685
| | | |
438,864
| |
|
Accumulated other comprehensive income
| | |
4,478
| | | |
207
| |
|
Noncontrolling interest
| | |
7,781
| | | |
5,097
| |
|
Retained earnings
| |
|
36,318
|
| |
|
25,943
|
|
|
Total equity
| |
|
522,268
|
| |
|
470,117
|
|
| Total Liabilities and Equity | |
$
|
1,068,659
|
| |
$
|
937,151
|
|
|
|
Four Corners Property Trust
FFO and AFFO
(Unaudited)
(In
thousands, except share and per share data) |
|
| |
| |
| |
| |
| | Three Months Ended December 31, | | Year Ended December 31, |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Funds from operations (FFO): | | | | | | | | |
|
Net income
| |
$
|
18,473
| | |
$
|
32,522
| | |
$
|
71,892
| | |
$
|
156,850
| |
|
Depreciation and amortization (1) | | |
5,544
| | | |
5,221
| | | |
21,775
| | | |
20,550
| |
|
Deferred tax benefit from REIT election
| | |
-
| | | |
-
| | | |
-
| | | |
(80,410
|
)
|
|
Realized gain on sales of real estate
| |
|
(3,198
|
)
| |
|
(16,623
|
)
| |
|
(10,532
|
)
| |
|
(16,623
|
)
|
| FFO (as defined by NAREIT) | |
$
|
20,819
|
| |
$
|
21,120
|
| |
$
|
83,135
|
| |
$
|
80,367
|
|
|
Non-cash stock-based compensation
| | |
756
| | | |
394
| | | |
2,676
| | | |
1,550
| |
|
Non-cash amortization of deferred financing costs
| | |
879
| | | |
398
| | | |
2,144
| | | |
1,592
| |
|
Other non-cash interest expense
| | |
40
| | | |
(749
|
)
| | |
145
| | | |
(610
|
)
|
|
Non-real estate investment depreciation
| | |
13
| | | |
10
| | | |
36
| | | |
27
| |
|
Straight-line rent adjustment
| |
|
(2,252
|
)
| |
|
(2,295
|
)
| |
|
(9,536
|
)
| |
|
(10,095
|
)
|
| Adjusted Funds from Operations (AFFO) | |
$
|
20,255
|
| |
$
|
18,878
|
| |
$
|
78,600
|
| |
$
|
72,831
|
|
| | | | | | | |
|
|
Fully diluted shares outstanding (2) | | |
61,642,597
| | | |
60,029,741
| | | |
61,014,256
| | | |
59,607,852
| |
| | | | | | | |
|
| FFO per diluted share | |
$
|
0.34
| | |
$
|
0.35
| | |
$
|
1.36
| | |
$
|
1.35
| |
| | | | | | | |
|
| AFFO per diluted share | |
$
|
0.33
| | |
$
|
0.31
| | |
$
|
1.29
| | |
$
|
1.22
| |
| | | | | | | |
|
|
(1) For the three months ended December 31, 2017, includes $228
thousand of non-cash impairment expense on intangible lease assets.
|
|
(2) Assumes the issuance of common shares for OP units held by
non-controlling interests.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180220006536/en/
FCPT
Bill Lenehan, 415-965-8031
CEO
or
Gerry
Morgan, 415-965-8032
CFO
Source: Four Corners Property Trust, Inc.