Print News Release

FCPT Announces Third Quarter 2020 Financial and Operating Results

10/27/2020

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 nine months ended September 30, 2020.

Management Comments

“We are very gratified with our third quarter results and in particular with the high collection level of over 99% of contractual rent collections in the quarter which has continued into October,” said CEO Bill Lenehan. “We remained quite active in the acquisition market by focusing on properties in our pipeline with strong tenants and attractive locations, and were able to fund that growth and strengthen our balance sheet by raising over $62 million of equity via the ATM program in the quarter.”

Mr. Lenehan further commented, “On October 5th, we announced a new strategic venture with Lubert-Adler to acquire vacant retail real estate that will be principally re-tenanted with credit-worthy operators expanding their store count. This venture allows us to prudently apply our expertise in collaboration with an experienced partner that has deep tenant relationships. This venture could help our tenants, keep retail areas vibrant and potentially lead to a future pipeline for our core business at attractive economics.”

Rent Collection Update

As of October 27, 2020, the Company has received rent payments representing over 99% of its portfolio contractual base rent for the quarter ending September 30, 2020.

In addition, as of October 27, 2020, the Company has received October rent payments representing approximately 99% of its portfolio contractual base rent for the month of October 2020.

Financial Results

Rental Revenue and Net Income Attributable to Common Shareholders

  • Rental revenue for the third quarter increased 10.6% over the prior year to $38.9 million. Rental revenue consisted of $36.8 million in cash rental revenue and $1.8 million of straight-line and other non-cash rent adjustments.
  • Net income attributable to common shareholders was $19.3 million for the third quarter, or $0.27 per diluted share. These results compare to net income attributable to common shareholders of $18.3 million, or $0.27 per diluted share, for the same quarter in the prior year.
  • Net income attributable to common shareholders was $57.0 million for the nine months ended September 30, 2020, or $0.81 per diluted share. These results compare to net income attributable to common shareholders of $53.7 million, or $0.78 per diluted share, for the same nine-month period in the prior year.

Funds from Operations (FFO)

  • NAREIT-defined FFO per diluted share for the third quarter was $0.38, representing a $0.02 per share increase compared to the same quarter in the prior year.
  • NAREIT-defined FFO per diluted share for the nine months ended September 30, 2020 was $1.11, representing a $0.04 per share increase compared to the same nine-month period in the prior year.

Adjusted Funds from Operations (AFFO)

  • AFFO per diluted share for the third quarter was $0.37, representing a $0.02 per share increase compared to the same quarter in the prior year.
  • AFFO per diluted share for the nine months ended September 30, 2020 was $1.07, representing a $0.04 per share increase compared to the same nine-month period in the prior year.

General and Administrative (G&A) Expense

  • G&A expense for the third quarter was $3.7 million, which included $0.9 million of stock-based compensation. These results compare to G&A expense in the third quarter of 2019 of $3.4 million, which included $0.8 million of stock-based compensation.
  • Cash G&A expense (after excluding stock-based compensation) for the nine months ended September 30, 2020 was $8.8 million, representing 8.2% of cash rental income for the quarter, compared to 8.2% in the third quarter of 2019.

Dividends

  • FCPT declared a dividend of $0.305 per common share for the third quarter of 2020.

Portfolio Activities

Acquisitions

  • During the third quarter of 2020, FCPT acquired 18 properties for a combined purchase price of $48.0 million at an initial weighted average cash yield of 6.3% and a weighted average remaining lease term of 9 years, and in addition acquired a site for $2.4 million on which the Company has recently begun development of a LongHorn Steakhouse to be operated by the Company’s Kerrow operating business.

Liquidity and Capital Markets

Capital Raising

  • During the third quarter, FCPT issued 2,435,958 shares of common stock via its At-The-Market (ATM) stock program at a weighted average offering price of $25.65 for gross proceeds of $62.5 million.

Liquidity

  • At September 30, 2020, FCPT had approximately $268 million of available liquidity including $17.7 million of cash and cash equivalents and $250 million of undrawn credit facility capacity.

Credit Facility and Unsecured Note

  • At September 30, 2020, FCPT had $750 million of outstanding debt, consisting of $400 million of term loans and $350 million of unsecured fixed rate notes, and was undrawn on its $250 million revolving credit facility.

Strategic Joint Venture Announcement

  • FCPT believes a unique opportunity will exist for a limited time to acquire vacant restaurant properties in high quality real estate locations and convert them into new stores for strong and growing brands.
  • On October 5, 2020, FCPT announced a strategic venture with Lubert-Adler Real Estate Funds that could potentially invest as much as $150 million to acquire and re-tenant vacant buildings.
  • FCPT’s investment into this venture could reach $20 million, with Lubert-Adler contributing the remainder of the capital. In addition, FCPT will have the right, but not the obligation, to purchase properties from the venture for FCPT’s long-term ownership portfolio once the properties stabilize.

Real Estate Portfolio

  • As of September 30, 2020, the Company’s rental portfolio consisted of 751 properties located in 46 states. The properties were 99.6% occupied (measured by square feet) under long-term, net leases with a weighted average remaining lease term of approximately 10.5 years.

Conference Call Information

Company management will host a conference call and audio webcast on Wednesday, October 28 at 11:00 a.m. Eastern Time, to discuss the results.

Interested parties can listen to the call via the following:

Internet: Go to https://dpregister.com/sreg/10148405/d9fa80f30c 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 January 28, 2021 by dialing 1-877-344-7529 (domestic) / 1-412-317-0088 (international), Replay Access Code 10148405.

About FCPT

FCPT, headquartered in Mill Valley, CA, is a real estate investment trust primarily engaged in the acquisition and leasing of restaurant properties. The Company seeks to grow its portfolio by acquiring additional real estate to lease, on a net basis, for use in the restaurant and retail industries.

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, as supplemented by the risk factor described under “Item 1A. ‘Risk Factors’” in the Company’s quarterly report on Form 10-Q filed with the Securities and Exchange Commission on May 8, 2020, 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 2020 operating results and other information on the Company are available on the investors relations section of FCPT’s website at www.investors.fcpt.com.

Four Corners Property Trust

Consolidated Statements of Income

(Unaudited)

(In thousands, except share and per share data)

 

Three Months Ended September 30,

Nine Months Ended September 30,

2020

2019

2020

2019

 
Revenues:
Rental revenue

$

38,871

 

$

35,209

 

$

114,631

 

$

103,832

 

Restaurant revenue

 

4,097

 

 

4,974

 

 

11,696

 

 

15,520

 

Total revenues

 

42,968

 

 

40,183

 

 

126,327

 

 

119,352

 

Operating expenses:
General and administrative

 

3,741

 

 

3,389

 

 

11,303

 

 

10,766

 

Depreciation and amortization

 

7,523

 

 

6,653

 

 

21,670

 

 

19,532

 

Property expenses

 

838

 

 

346

 

 

2,539

 

 

1,071

 

Restaurant expenses

 

3,987

 

 

4,805

 

 

11,799

 

 

14,742

 

Total operating expenses

 

16,089

 

 

15,193

 

 

47,311

 

 

46,111

 

 
Interest expense

 

(7,410

)

 

(6,665

)

 

(21,732

)

 

(19,969

)

Other income, net

 

2

 

 

153

 

 

168

 

 

872

 

Income tax expense

 

(67

)

 

(69

)

 

(192

)

 

(198

)

Net income

 

19,404

 

 

18,409

 

 

57,260

 

 

53,946

 

 
Net income attributable to noncontrolling interest

 

(55

)

 

(78

)

 

(180

)

 

(244

)

Net Income Attributable to Common Shareholders

$

19,349

 

$

18,331

 

$

57,080

 

$

53,702

 

 
Basic net income per share

$

0.27

 

$

0.27

 

$

0.81

 

$

0.79

 

Diluted net income per share

$

0.27

 

$

0.27

 

$

0.81

 

$

0.78

 

Regular dividends declared per share

$

0.3050

 

$

0.2875

 

$

0.9150

 

$

0.8625

 

 
Weighted-average shares outstanding:
Basic

 

71,009,154

 

 

68,315,915

 

 

70,430,037

 

 

68,274,167

 

Diluted

 

71,230,481

 

 

68,527,187

 

 

70,658,500

 

 

68,495,013

 

 

Four Corners Property Trust

Consolidated Balance Sheets

(In thousands, except share data)

 
 
September 30, 2020
(Unaudited) December 31, 2019
ASSETS
Real estate investments:
Land

$

764,439

 

$

690,575

 

Buildings, equipment and improvements

 

1,306,725

 

 

1,277,159

 

Total real estate investments

 

2,071,164

 

 

1,967,734

 

Less: Accumulated depreciation

 

(652,849

)

 

(635,630

)

Total real estate investments, net

 

1,418,315

 

 

1,332,104

 

Intangible lease assets, net

 

79,459

 

 

57,917

 

Total real estate investments and intangible lease assets, net

 

1,497,774

 

 

1,390,021

 

Cash and cash equivalents

 

17,735

 

 

5,083

 

Straight-line rent adjustment

 

45,868

 

 

39,350

 

Derivative assets

 

54

 

 

1,451

 

Other assets

 

12,194

 

 

10,165

 

Total Assets

$

1,573,625

 

$

1,446,070

 

 
LIABILITIES AND EQUITY
 
Liabilities:
Long-term debt ($750,000 and $677,000 principal, respectively)

$

743,335

 

$

669,940

 

Dividends payable

 

22,163

 

 

21,325

 

Rent received in advance

 

9,835

 

 

10,463

 

Derivative liabilities

 

20,923

 

 

-

 

Other liabilities

 

19,218

 

 

17,601

 

Total liabilities

 

815,474

 

 

719,329

 

 
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, 72,769,345 and 70,020,660 shares issued and
outstanding, respectively

 

7

 

 

7

 

Additional paid-in capital

 

752,568

 

 

686,181

 

Accumulated other comprehensive (loss) income

 

(28,811

)

 

(3,539

)

Noncontrolling interest

 

3,910

 

 

5,691

 

Retained earnings

 

30,477

 

 

38,401

 

Total equity

 

758,151

 

 

726,741

 

Total Liabilities and Equity

$

1,573,625

 

$

1,446,070

 

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,

2020

 

2019

 

2020

 

2019

Funds from operations (FFO):
Net income

$

19,404

 

$

18,409

 

$

57,260

 

$

53,946

 

Depreciation and amortization

 

7,503

 

 

6,636

 

 

21,615

 

 

19,481

 

FFO (as defined by NAREIT)

$

26,907

 

$

25,045

 

$

78,875

 

$

73,427

 

Straight-line rental revenue

 

(2,248

)

 

(2,415

)

 

(6,519

)

 

(7,008

)

Recognized rental revenue abated (1)

 

(196

)

 

-

 

 

(1,568

)

 

-

 

Stock-based compensation

 

868

 

 

802

 

 

2,496

 

 

2,792

 

Non-cash amortization of deferred financing costs

 

543

 

 

512

 

 

1,589

 

 

1,539

 

Other non-cash interest income (expense)

 

1

 

 

1

 

 

(1

)

 

(4

)

Non-real estate investment depreciation

 

20

 

 

17

 

 

55

 

 

51

 

Other non-cash revenue adjustments

 

412

 

 

25

 

 

799

 

 

49

 

Adjusted Funds from Operations (AFFO)

$

26,307

 

$

23,987

 

$

75,726

 

$

70,846

 

 
Fully diluted shares outstanding (2)

 

71,434,873

 

 

68,816,579

 

 

70,879,855

 

 

68,805,612

 

 
FFO per diluted share

$

0.38

 

$

0.36

 

$

1.11

 

$

1.07

 

 
AFFO per diluted share

$

0.37

 

$

0.35

 

$

1.07

 

$

1.03

 

(1)

Amount represents base rent that the Company has agreed to abate as a result of lease amendments. Upon finalization of lease amendments with tenants, the Company abated $1.6 million of rental revenue recognized in the second quarter of 2020, of which $1.4 million was included as an adjustment to AFFO in the second quarter of 2020. In the third quarter, receivables of $1.6 million were recognized as lease incentives and will be amortized as a reduction to rental revenue over the amended lease terms.

(2)

Assumes the issuance of common shares for OP units held by non-controlling interest.

 

FCPT
Bill Lenehan, 415-965-8031
CEO
Gerry Morgan, 415-965-8032
CFO

Source: Four Corners Property Trust, Inc.

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