FCPT Announces First Quarter 2021 Financial and Operating Results

Rhea-AI Summary

Four Corners Property Trust (FCPT) reported robust first-quarter financial results for 2021, with rental revenue increasing by 10% to $41.5 million. The company achieved a 99.7% rent collection rate. Net income attributable to common shareholders rose to $20.6 million, matching the $0.27 per diluted share from last year. FCPT also raised $100 million in senior unsecured notes at a low interest rate of 2.70%. The company acquired 13 properties for $33.9 million, enhancing its portfolio of 810 properties with a 10-year average lease term.

Positive

• Rental revenue increased by 10% to $41.5 million.
• Net income attributable to common shareholders was $20.6 million, matching last year's $0.27 per diluted share.
• Achieved a 99.7% rent collection rate.
• Acquired 13 properties for $33.9 million, enhancing the portfolio.
• Successfully raised $100 million in senior unsecured notes at an all-in interest rate of 2.70%.

Negative

• G&A expenses increased to $4.8 million from $3.8 million, impacting operational efficiency.

Four Corners Property Trust, Inc. (“FCPT” or the “Company”, NYSE: FCPT) today announced financial results for the three months ended March 31, 2021.

Management Comments

“First quarter results demonstrate the continuing robustness of the Four Corners’ portfolio,” said CEO Bill Lenehan. “We maintained industry-leading collections in the existing portfolio and benefited from a full quarter of ownership of the properties acquired at the end of 2020. We continue to acquire quality properties while remaining disciplined in our pricing. We recently raised an unsecured private note offering at an all-time low rate as a result of our strong balance sheet.”

Rent Collection Update

As of March 31, 2021, the Company has received rent payments representing 99.7% of its portfolio contractual base rent for the quarter ending March 31, 2021.

Financial Results

Rental Revenue and Net Income Attributable to Common Shareholders

• Rental revenue for the first quarter increased 10.0% over the prior year to $41.5 million. Rental revenue consisted of $40.0 million in cash rents and $1.5 million of straight-line and other non-cash rent adjustments.
• Net income attributable to common shareholders was $20.6 million for the first quarter, or $0.27 per diluted share. These results compare to net income attributable to common shareholders of $19.3 million in the prior year, or $0.27 per diluted share.

Funds from Operations (FFO)

• NAREIT-defined FFO per diluted share for the first quarter was $0.37, representing flat per share results compared to the first quarter in 2020.

Adjusted Funds from Operations (AFFO)

• AFFO per diluted share for the first quarter was $0.38, representing a $0.01 per share increase compared to the first quarter in 2020.

General and Administrative (G&A) Expense

• G&A expense for the first quarter was $4.8 million, which included $1.4 million of stock-based compensation. These results compare to G&A expense in the first quarter of 2020 of $3.8 million, including $0.8 million of stock-based compensation.
• Cash G&A expense (after excluding stock-based compensation) for the first quarter was $3.4 million, representing 8.5% of cash rental income for the quarter. Cash G&A expenses increased over the subsequent quarter principally due to seasonally higher payroll-related taxes in the first quarter and team member additions to support the growth of the portfolio and our operations.

Dividends

• FCPT declared a dividend of $0.3175 per common share for the first quarter of 2021.

Portfolio Activities

Acquisitions

• During the first quarter of 2021, FCPT acquired 13 properties for a combined purchase price of $33.9 million at an initial weighted average cash yield of 6.6% and a weighted average remaining lease term of 9.9 years.

Dispositions

• During the first quarter of 2021, FCPT sold 2 properties for a combined purchase price of $3.5 million representing $0.4 million of gain and a 6.1% cash capitalization rate on rents that were previously in place and exclusive of transaction costs.

Liquidity and Capital Markets

Capital Raising

• During the first quarter, FCPT issued 161,509 shares of common stock via its At-The-Market (ATM) stock program at a weighted average offering price of $29.56 for gross proceeds of $4.8 million.
• As announced on February 25, 2021, FCPT recently entered into agreements to issue $100 million of senior unsecured notes (the “Notes”) in the second quarter. The Notes consist of $50 million of notes with a ten-year term maturing on April 29, 2031, and priced at a fixed interest rate of 2.99%, and $50 million of notes with a eight-year term, maturing on April 30, 2029, and priced at a fixed interest rate of 2.74%. Both notes funded on April 27, 2021. In connection with this offering, the Company terminated interest rate swaps entered into previously to partially hedge the Treasury rate of this offering at a gain which will be amortized over the life of the Notes and lower by approximately 0.17% the all-in annual interest rate expense on these Notes. Including the gain amortization, the all-in interest rate on the combined offering is 2.70%.

Liquidity

• At March 31, 2021, FCPT had $227.5 million of available liquidity including $11.5 million of cash and cash equivalents and $216 million of undrawn credit line capacity.

Credit Facility and Unsecured Note

• At March 31, 2021, FCPT had $784 million of outstanding debt, consisting of $400 million of term loans, $350 million of unsecured fixed rate notes, and $34 million drawn on FCPT’s $250 million revolving credit facility. FCPT’s leverage, as measured by the ratio of net debt to adjusted EBITDAre, is 5.3x at quarter-end.

Kerrow Restaurant Operating Business

• The Kerrow restaurant subsidiary, which now operates seven LongHorn Steakhouses in San Antonio, reported improving results with positive EBITDA of $373 thousand in the first quarter as compared to EBITDA of $244 thousand in the fourth quarter of 2020. Kerrow opened its seventh LongHorn restaurant in late April. The additional restaurant will contribute to results for the rest of the year offset with pre-opening costs that will occur in the second quarter.

Real Estate Portfolio

• As of March 31, 2021, the Company’s rental portfolio consisted of 810 properties located in 46 states. The properties are 99.7% occupied (measured by square feet) under long-term, net leases with a weighted average remaining lease term of approximately 10.0 years. 

Conference Call Information

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

Interested parties can listen to the call via the following:

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.
Internet: Live webcast: https://services.choruscall.com/links/fcpt210428.html

In order to pre-register for the call, investors can visit https://dpregister.com/sreg/10154505/e67b592d35 and enter in their contact information.

Replay: Available through July 28, 2021 by dialing 1-877-344-7529 (domestic) / 1-412-317-0088 (international), Replay Access Code 10154505.

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 suc

FAQ

What were FCPT's rental revenue results for Q1 2021?

FCPT reported rental revenue of $41.5 million for the first quarter of 2021, an increase of 10% compared to the previous year.

How much net income did FCPT report for the first quarter?

FCPT's net income attributable to common shareholders for Q1 2021 was $20.6 million, or $0.27 per diluted share.

What was the rent collection rate for FCPT in Q1 2021?

The rent collection rate for FCPT in Q1 2021 was 99.7%.

How many properties did FCPT acquire in the first quarter?

In the first quarter of 2021, FCPT acquired 13 properties for a total purchase price of $33.9 million.

What interest rate did FCPT secure for its new senior unsecured notes?

FCPT secured an all-in interest rate of 2.70% for its newly issued $100 million senior unsecured notes.