Print News Release

FCPT Announces Third Quarter 2023 Financial and Operating Results

11/01/2023

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, 2023.

Management Comments

“Through the first three quarters, FCPT has achieved a record acquisition growth year, up 13% over 2022 total volume, funded through accretive capital raised earlier in the year. Additionally, our portfolio continued to perform well with high rent collections and occupancy,” said CEO Bill Lenehan. “We believe that we are well-positioned in a higher rate environment and expect to be ready to take advantage of opportunities as they arise.”

Rent Collection Update

As of September 30, 2023, the Company has received rent payments representing 99.9% of its portfolio contractual base rent for the quarter ending September 30, 2023.

Financial Results

Rental Revenue and Net Income Attributable to Common Shareholders

  • Rental revenue for the third quarter increased 17.3% over the prior year to $57.2 million. Rental revenue consisted of $56.1 million in cash rents and $1.2 million of straight-line and other non-cash rent adjustments.
  • Net income attributable to common shareholders was $24.2 million for the third quarter, or $0.27 per diluted share. These results compare to net income attributable to common shareholders of $24.5 million for the same quarter in the prior year, or $0.30 per diluted share.
  • Net income attributable to common shareholders was $70.9 million for the nine months ended September 30, 2023, or $0.80 per diluted share. These results compare to net income attributed to common shareholders of $74.9 million for the same nine-month period in 2022, or $0.92 per diluted share.

Funds from Operations (FFO)

  • NAREIT-defined FFO per diluted share for the third quarter was $0.41, representing a $0.01 increase compared to the same quarter in 2022.
  • NAREIT-defined FFO per diluted share for the nine months ended September 30, 2023 was $1.20, representing flat results compared to the same nine-month period in 2022.

Adjusted Funds from Operations (AFFO)

  • AFFO per diluted share for the third quarter was $0.42, representing a $0.01 per share increase compared to the same quarter in 2022.
  • AFFO per diluted share for the nine months ended September 30, 2023 was $1.24, representing a $0.01 per share increase compared to the same nine-month period in 2022.

General and Administrative (G&A) Expense

  • G&A expense for the third quarter was $5.5 million, which included $1.5 million of stock-based compensation. These results compare to G&A expense in the third quarter of 2022 of $4.9 million, including $1.2 million of stock-based compensation.
  • Cash G&A expense (after excluding stock-based compensation) for the third quarter was $4.0 million, representing 7.2% of cash rental income for the quarter.

Dividends

  • FCPT declared a dividend of $0.34 per common share for the third quarter of 2023.

Real Estate Portfolio

  • As of September 30, 2023, the Company’s rental portfolio consisted of 1,106 properties located in 47 states. The properties are 99.8% occupied (measured by square feet) under long-term, net leases with a weighted average remaining lease term of approximately 8.0 years.

Acquisitions

  • During the third quarter, FCPT acquired 31 properties for a combined purchase price of $130.2 million at an initial weighted average cash yield of 6.4%, on rents in place as of September 30, 2023 and a weighted average remaining lease term of 12.1 years.

Dispositions

  • During the third quarter, FCPT sold two properties for sales price of $11.2 million representing $0.3 million of gain and a cash yield of 6.7% on rents that were previously in place and exclusive of transaction costs.

Liquidity and Capital Markets

Capital Raising

  • During the third quarter, the Company did not utilize its at-the-market (ATM) program.
  • As announced on June 5, 2023, FCPT entered into agreements to issue $100 million of senior unsecured notes (the “Notes”) with a ten-year term and priced at a fixed interest rate of 6.44%. In connection with the offering of the Notes, the Company terminated interest rate swaps entered into previously to hedge the interest rate of this offering. This resulted in a gain of $8.1 million for the Company and a 5.39% yield to maturity including the gain. The gain will be amortized straight line over the life of the Notes and effectively makes the Note’s all-in interest rate, after amortizing the gain, 5.63%. The Notes funded on July 12, 2023.

Liquidity

  • At September 30, 2023, FCPT had approximately $237 million of available liquidity including $6 million of cash and cash equivalents, $11 million of restricted cash from 1031 sales and $220 million of undrawn revolving credit facility capacity.

Credit Facility and Unsecured Notes

  • At September 30, 2023, FCPT had $1,135 million of outstanding debt, consisting of $430 million of term loans and $675 million of unsecured fixed rate notes and $30 million of outstanding revolver balance. FCPT’s leverage, as measured by the ratio of net debt to adjusted EBITDAre, is 5.6x at quarter-end.

Conference Call Information

Company management will host a conference call and audio webcast on Thursday, November 2 at 11:00 a.m. Eastern Time to discuss the results.

Interested parties can listen to the call via the following:

Phone: 1 833 470 1428 (domestic) or 1 404 975 4839 (international), Call Access Code: 334967

Live webcast: https://events.q4inc.com/attendee/459557056

In order to pre-register for the call, investors can visit https://www.netroadshow.com/events/login?show=2d8ebe4f&confId=56347

Replay: Available through January 31, 2023 by dialing 1 866 813 9403 (domestic) or 1 929 458 6194 (international), Replay Access Code 231950

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 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. For a further discussion of these and other factors that could cause the company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the company’s most recent annual report on Form 10-K, and other risks described in documents subsequently filed by the company from time to time with the Securities and Exchange Commission.

Notice Regarding Non-GAAP Financial Measures:

In addition to U.S. GAAP financial measures, this press release and the referenced supplemental financial and operating report contain and may refer to certain non-GAAP financial measures. These non-GAAP financial measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures should not be considered replacements for, and should be read together with, the most comparable GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measures and statements of why management believes these measures are useful to investors are included in the supplemental financial and operating report, which can be found in the investor relations section of our website.

Supplemental Materials and Website:

Supplemental materials on the Third Quarter 2023 operating results and other information on the Company are available on the investors relations section of FCPT’s website at investors.fcpt.com.

Four Corners Property Trust
Consolidated Statements of Income
(Unaudited)
(In thousands, except share and per share data)
 
 
 
Three Months Ended September 30, Nine Months Ended September 30,

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues:
Rental revenue

$

57,243

 

$

48,719

 

$

162,267

 

$

143,526

 

Restaurant revenue

 

7,596

 

 

7,289

 

 

23,196

 

 

22,304

 

Total revenues

 

64,839

 

 

56,008

 

 

185,463

 

 

165,830

 

Operating expenses:
General and administrative

 

5,498

 

 

4,917

 

 

17,153

 

 

14,884

 

Depreciation and amortization

 

13,418

 

 

10,588

 

 

37,411

 

 

30,420

 

Property expenses

 

2,916

 

 

1,999

 

 

8,742

 

 

5,835

 

Restaurant expenses

 

7,229

 

 

6,790

 

 

21,721

 

 

20,725

 

Total operating expenses

 

29,061

 

 

24,294

 

 

85,027

 

 

71,864

 

 
Interest expense

 

(12,276

)

 

(9,177

)

 

(32,245

)

 

(26,583

)

Other income, net

 

283

 

 

164

 

 

809

 

 

250

 

Realized gain on sale, net

 

318

 

 

1,828

 

 

2,053

 

 

7,584

 

Income tax expense

 

89

 

 

23

 

 

(50

)

 

(209

)

Net income

 

24,192

 

 

24,552

 

 

71,003

 

 

75,008

 

 
Net income attributable to noncontrolling interest

 

(31

)

 

(34

)

 

(92

)

 

(105

)

Net Income Attributable to Common Shareholders

$

24,161

 

$

24,518

 

$

70,911

 

$

74,903

 

 
Basic net income per share

$

0.27

 

$

0.30

 

$

0.81

 

$

0.93

 

Diluted net income per share

$

0.27

 

$

0.30

 

$

0.80

 

$

0.92

 

Regular dividends declared per share

$

0.3400

 

$

0.3325

 

$

1.0200

 

$

0.9975

 

 
Weighted-average shares outstanding:
Basic

 

90,366,861

 

 

81,884,974

 

 

87,872,205

 

 

80,797,829

 

Diluted

 

90,595,872

 

 

82,119,447

 

 

88,105,134

 

 

81,011,737

 

Four Corners Property Trust
Consolidated Balance Sheets
(In thousands, except share and per share data)
 
 
September 30, 2023
(Unaudited) December 31, 2022
ASSETS
Real estate investments:
Land

$

1,235,943

 

$

1,115,827

 

Buildings, equipment and improvements

 

1,700,513

 

 

1,539,875

 

Total real estate investments

 

2,936,456

 

 

2,655,702

 

Less: Accumulated depreciation

 

(730,014

)

 

(706,702

)

Total real estate investments, net

 

2,206,442

 

 

1,949,000

 

Intangible lease assets, net

 

122,132

 

 

106,206

 

Total real estate investments and intangible lease assets, net

 

2,328,574

 

 

2,055,206

 

Real estate held for sale

 

3,150

 

 

7,522

 

Cash and cash equivalents

 

5,675

 

 

26,296

 

Straight-line rent adjustment

 

63,844

 

 

61,027

 

Derivative assets

 

31,292

 

 

35,276

 

Deferred tax assets

 

1,221

 

 

988

 

Other assets

 

22,138

 

 

12,272

 

Total Assets

$

2,455,894

 

$

2,198,587

 

 
LIABILITIES AND EQUITY
 
Liabilities:
Term loan and revolving credit facility ($460,000 and $430,000 of principal, respectively)

$

455,342

 

$

424,134

 

Senior unsecured notes

 

670,756

 

 

571,343

 

Dividends payable

 

30,724

 

 

29,064

 

Rent received in advance

 

13,204

 

 

11,710

 

Derivative liabilities

 

-

 

 

9

 

Other liabilities

 

32,224

 

 

24,017

 

Total liabilities

 

1,202,250

 

 

1,060,277

 

 
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, 90,565,195 and 85,637,293 shares issued and outstanding, respectively

 

9

 

 

9

 

Additional paid-in capital

 

1,235,247

 

 

1,104,522

 

Accumulated other comprehensive income

 

35,314

 

 

30,944

 

Noncontrolling interest

 

2,239

 

 

2,259

 

Retained earnings (deficit)

 

(19,165

)

 

576

 

Total equity

 

1,253,644

 

 

1,138,310

 

Total Liabilities and Equity

$

2,455,894

 

$

2,198,587

 

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,

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Funds from operations (FFO):
Net income

 $

                    24,192

 

 $

                    24,552

 

 $

                71,003

 

 $

                75,008

 

Depreciation and amortization

 

                       13,382

 

 

                       10,558

 

 

                   37,308

 

 

                   30,322

 

Realized gain on sales of real estate

 

                           (318

)

 

                        (1,828

)

 

                   (2,053

)

 

                   (7,584

)

FFO (as defined by NAREIT)

 $

                    37,256

 

 $

                    33,282

 

 $

              106,258

 

 $

                97,746

 

Straight-line rental revenue

 

                        (1,719

)

 

                        (1,648

)

 

                   (4,358

)

 

                   (4,939

)

Deferred income tax (benefit) expense (1)

 

                           (184

)

 

                           (118

)

 

                      (232

)

 

                        (57

)

Stock-based compensation

 

                         1,472

 

 

                         1,206

 

 

                     4,798

 

 

                     3,739

 

Non-cash amortization of deferred financing costs

 

                            592

 

 

                            496

 

 

                     1,720

 

 

                     1,460

 

Non-real estate investment depreciation

 

                              36

 

 

                              30

 

 

                        103

 

 

                          98

 

Other non-cash revenue adjustments

 

                            526

 

 

 

                            543

 

 

 

                     1,510

 

 

 

                     1,600

 

Adjusted Funds from Operations (AFFO)

 $

                    37,979

 

 

 $

                    33,791

 

 

 $

              109,799

 

 

 $

                99,647

 

           
Fully diluted shares outstanding (2)

 

                90,710,431

 

 

 

                82,234,006

 

 

 

            88,219,693

 

 

 

            81,126,296

 

           
FFO per diluted share

 $

                        0.41

 

 

 $

                        0.40

 

 

 $

                    1.20

 

 

 $

                    1.20

 

     
AFFO per diluted share

 $

                        0.42

 

 

 $

                        0.41

 

 

 $

                    1.24

 

 

 $

                    1.23

 

(1) 

  Amount represents non-cash deferred income tax benefit recognized at the Kerrow Restaurant Business

(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.