FCPT Announces First Quarter 2024 Financial and Operating Results
Four Corners Property Trust, Inc. (FCPT) announced solid financial results for Q1 2024, with high rent collection levels and $85 million in Term Loans issuance. Rent collection stood at 99.7% of contractual base rent, while rental revenue increased by 12.3% to $58.6 million. Net income attributable to common shareholders was $24.0 million, with FFO per share at $0.41 and AFFO per share at $0.43. G&A expenses slightly increased, and FCPT declared a dividend of $0.345 per common share. The company's real estate portfolio is well-positioned, with 1,115 properties across 47 states.
High rent collection levels and solid financial position
Increase in rental revenue by 12.3% to $58.6 million
Net income of $24.0 million for Q1 2024
FFO per share increased to $0.41 compared to the same quarter in 2023
AFFO per share rose to $0.43 compared to Q1 2023
Slight increase in G&A expenses
Insights
The first quarter financial results of Four Corners Property Trust, Inc. show a positive trajectory in rental revenue, rising 12.3% year over year. This suggests effective asset management and an ability to grow cash flows, which is a cornerstone for REIT investors focused on dividend reliability and growth potential.
Additionally, their ability to maintain a high rent collection rate of 99.7% demonstrates operational efficiency and a strong tenant base. This can instill confidence in investors as it indicates stability in the company's cash flow. Furthermore, the increase in FFO and AFFO per share indicates the company's profitability is improving on a per-share basis, which is key for evaluating REIT performance.
The liquidity position, with
The strategic move in the credit market, with the issuance of an 85 million term loan and subsequent interest rate swaps to fix the reference rate at 3.94%, showcases FCPT's proactive management of their balance sheet. This fixed rate, against a backdrop of potentially rising interest rates, could lock in lower debt costs, enhancing future cash flow predictability and potentially shield the company's earnings from interest rate volatility.
Considering the net lease sector, with 99.6% occupancy and an average lease term of 7.6 years, FCPT is well-positioned with a stable income stream. The net lease structure typically transfers most property expenses to tenants, which can mean more predictable net income for the REIT. Moreover, this long-term lease structure is attractive during uncertain economic times, potentially making FCPT a more defensive investment.
The acquisitions of four new properties at a 6.9% initial yield could be viewed as an expansion strategy with an eye toward yield optimization, which is often favorable among investors seeking growth combined with income. The absence of dispositions hints at a hold and grow strategy core to FCPT's operational ethos.
From a strategic perspective, managing stock issuance through an ATM program, particularly with a minimal dilution effect on existing shareholders, indicates a careful balance between growth financing and shareholder value conservation. This could be a reassuring signal to investors that management is aligning with shareholder interests by avoiding excessive dilution.
Management Comments
“FCPT had a solid start to 2024, with continued high rent collection levels and the issuance of
Rent Collection Update
As of March 31, 2024, the Company has received rent payments representing
Financial Results
Rental Revenue and Net Income Attributable to Common Shareholders
-
Rental revenue for the first quarter increased
12.3% over the prior year to$58.6 million $58.0 million $0.6 million
-
Net income attributable to common shareholders was
$24.0 million $0.26 $23.1 million $0.27
Funds from Operations (FFO)
-
NAREIT-defined FFO per diluted share for the first quarter was
$0.41 $0.02
Adjusted Funds from Operations (AFFO)
-
AFFO per diluted share for the first quarter was
$0.43 $0.02
General and Administrative (G&A) Expense
-
G&A expense for the first quarter was
$6.2 million $1.6 million $6.1 million $1.8 million
-
Cash G&A expense (after excluding stock-based compensation) for the first quarter was
$4.6 million 7.9% of cash rental income for the quarter.
Dividends
-
FCPT declared a dividend of
$0.34 5
Real Estate Portfolio
-
As of March 31, 2024, the Company’s rental portfolio consisted of 1,115 properties located in 47 states. The properties are
99.6% occupied (measured by square feet) under long-term, net leases with a weighted average remaining lease term of approximately 7.6 years.
Acquisitions
-
During the first quarter, FCPT acquired 4 properties for a combined purchase price of
$15.9 million 6.9% , on rents in place as of March 31, 2023 and a weighted average remaining lease term of 9.9 years.
Dispositions
- During the first quarter, FCPT did not sell any properties.
Liquidity and Capital Markets
Capital Raising
-
During the first quarter, the Company sold 280,914 shares of Common Stock via the at-the-market (ATM) program at an average price of
$24.56 $6.9 million
Liquidity
-
At March 31, 2024, FCPT had approximately
$277 million $27 million $250 million
Credit Facility and Unsecured Notes
-
As announced on March 14, 2024, FCPT utilized the accordion feature of the Credit Agreement to enter into a new
$85 million $50 million $85 million 3.94% through maturity. Including a credit margin of0.95% determined under the Credit Agreement by FCPT’s current investment grade ratings of BBB/Baa3 (Fitch/Moody’s), the effective interest rate on the Term Loan is4.89% .
-
At March 31, 2023, FCPT had
$1,140 million $515 million $625 million
Conference Call Information
Company management will host a conference call and audio webcast on Thursday, May 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: 103269
Live webcast: https://events.q4inc.com/attendee/400587509
In order to pre-register for the call, investors can visit https://www.netroadshow.com/events/login?show=eec199e8&confId=63645
Replay: Available through July 31, 2024 by dialing 1 866 813 9403 (domestic) or 1 929 458 6194 (international), Replay Access Code 291808
About FCPT
FCPT, headquartered in
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
Supplemental Materials and Website:
Supplemental materials on the First Quarter 2024 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 March 31, | ||||||||
|
2024 |
|
|
2023 |
|
|||
| Revenues: | ||||||||
| Rental revenue | $ |
58,573 |
|
$ |
52,197 |
|
||
| Restaurant revenue |
|
7,894 |
|
|
7,755 |
|
||
| Total revenues |
|
66,467 |
|
|
59,952 |
|
||
| Operating expenses: | ||||||||
| General and administrative |
|
6,213 |
|
|
6,055 |
|
||
| Depreciation and amortization |
|
13,467 |
|
|
12,176 |
|
||
| Property expenses |
|
3,081 |
|
|
3,167 |
|
||
| Restaurant expenses |
|
7,564 |
|
|
7,295 |
|
||
| Total operating expenses |
|
30,325 |
|
|
28,693 |
|
||
| Interest expense |
|
(12,281 |
) |
|
(9,918 |
) |
||
| Other income, net |
|
240 |
|
|
300 |
|
||
| Realized gain on sale, net |
|
- |
|
|
1,562 |
|
||
| Income tax expense |
|
(27 |
) |
|
(48 |
) |
||
| Net income |
|
24,074 |
|
|
23,155 |
|
||
| Net income attributable to noncontrolling interest |
|
(30 |
) |
|
(31 |
) |
||
| Net Income Attributable to Common Shareholders | $ |
24,044 |
|
$ |
23,124 |
|
||
| Basic net income per share | $ |
0.26 |
|
$ |
0.27 |
|
||
| Diluted net income per share | $ |
0.26 |
|
$ |
0.27 |
|
||
| Regular dividends declared per share | $ |
0.3450 |
|
$ |
0.3400 |
|
||
| Weighted-average shares outstanding: | ||||||||
| Basic |
|
91,719,475 |
|
|
85,833,602 |
|
||
| Diluted |
|
91,929,760 |
|
|
86,095,554 |
|
||
| Four Corners Property Trust | ||||||||
| Consolidated Balance Sheets | ||||||||
| (In thousands, except share data) | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| ASSETS | (Unaudited) | |||||||
| Real estate investments: | ||||||||
| Land | $ |
1,244,659 |
|
$ |
1,240,865 |
|
||
| Buildings, equipment and improvements |
|
1,719,745 |
|
|
1,708,556 |
|
||
| Total real estate investments |
|
2,964,404 |
|
|
2,949,421 |
|
||
| Less: Accumulated depreciation |
|
(747,958 |
) |
|
(738,946 |
) |
||
| Total real estate investments, net |
|
2,216,446 |
|
|
2,210,475 |
|
||
| Intangible lease assets, net |
|
115,812 |
|
|
118,027 |
|
||
| Total real estate investments and intangible lease assets, net |
|
2,332,258 |
|
|
2,328,502 |
|
||
| Cash and cash equivalents |
|
26,079 |
|
|
16,322 |
|
||
| Straight-line rent adjustment |
|
65,926 |
|
|
64,752 |
|
||
| Derivative assets |
|
24,414 |
|
|
20,952 |
|
||
| Deferred tax assets |
|
1,320 |
|
|
1,248 |
|
||
| Other assets |
|
12,613 |
|
|
19,858 |
|
||
| Total Assets | $ |
2,462,610 |
|
$ |
2,451,634 |
|
||
| LIABILITIES AND EQUITY | ||||||||
| Liabilities: | ||||||||
| Term loan and revolving credit facility ( |
$ |
509,780 |
|
$ |
441,745 |
|
||
| Senior unsecured notes |
|
621,150 |
|
|
670,944 |
|
||
| Dividends payable |
|
31,656 |
|
|
31,539 |
|
||
| Rent received in advance |
|
12,300 |
|
|
14,309 |
|
||
| Derivative liabilities |
|
607 |
|
|
2,968 |
|
||
| Other liabilities |
|
22,887 |
|
|
30,266 |
|
||
| Total liabilities |
|
1,198,380 |
|
|
1,191,771 |
|
||
| Equity: | ||||||||
| Preferred stock, |
|
- |
|
|
- |
|
||
| Common stock, |
|
9 |
|
|
9 |
|
||
| Additional paid-in capital |
|
1,268,361 |
|
|
1,261,940 |
|
||
| Accumulated other comprehensive income |
|
27,538 |
|
|
21,977 |
|
||
| Noncontrolling interest |
|
2,210 |
|
|
2,213 |
|
||
| Accumulated deficit |
|
(33,888 |
) |
|
(26,276 |
) |
||
| Total equity |
|
1,264,230 |
|
|
1,259,863 |
|
||
| Total Liabilities and Equity | $ |
2,462,610 |
|
$ |
2,451,634 |
|
||
| Four Corners Property Trust | ||||||||
| FFO and AFFO | ||||||||
| (Unaudited) | ||||||||
| (In thousands, except share and per share data) | ||||||||
| Three Months Ended March 31, | ||||||||
|
2024 |
|
|
2023 |
|
|||
| Funds from operations (FFO): | ||||||||
| Net income | $ |
24,074 |
|
$ |
23,155 |
|
||
| Depreciation and amortization |
|
13,430 |
|
|
12,145 |
|
||
| Realized gain on sales of real estate |
|
- |
|
|
(1,562 |
) |
||
| FFO (as defined by NAREIT) | $ |
37,504 |
|
$ |
33,738 |
|
||
| Straight-line rental revenue |
|
(1,174 |
) |
|
(1,433 |
) |
||
| Deferred income tax benefit (1) |
|
(72 |
) |
|
(68 |
) |
||
| Stock-based compensation |
|
1,640 |
|
|
1,767 |
|
||
| Non-cash amortization of deferred financing costs |
|
638 |
|
|
644 |
|
||
| Non-real estate investment depreciation |
|
37 |
|
|
31 |
|
||
| Other non-cash revenue adjustments |
|
555 |
|
|
551 |
|
||
| Adjusted Funds from Operations (AFFO) | $ |
39,128 |
|
$ |
35,230 |
|
||
| Fully diluted shares outstanding (2) |
|
92,044,319 |
|
|
86,210,113 |
|
||
| FFO per diluted share | $ |
0.41 |
|
$ |
0.39 |
|
||
| AFFO per diluted share | $ |
0.43 |
|
$ |
0.41 |
|
||
(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 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240501626033/en/
FCPT
Bill Lenehan, 415-965-8031
CEO
Gerry Morgan, 415-965-8032
CFO
Source: Four Corners Property Trust
FAQ
What were FCPT's rental revenue and net income for Q1 2024?
What was FCPT's Funds from Operations (FFO) per diluted share in Q1 2024?
How many properties does FCPT own as of March 31, 2024?
Did FCPT acquire or sell any properties in Q1 2024?
What was the dividend declared by FCPT for Q1 2024?
