FCPT Announces Fourth Quarter 2023 Financial and Operating Results

Rhea-AI Summary

Four Corners Property Trust, Inc. (FCPT) announces strong financial results for Q4 and 2023, with a 15% increase in rental revenue and high rent collections. Net income for Q4 was $24.4 million, and AFFO per diluted share increased to $0.43. The company remains focused on disciplined capital allocation and acquisitions.

Insights

Financial Analyst

The reported increase in rental revenue and net income by Four Corners Property Trust (FCPT) demonstrates a robust performance, particularly in a period where real estate investment trusts (REITs) are navigating through economic uncertainties. The 15% rise in rental revenue signifies a strong operational capacity, likely driven by strategic acquisitions and effective property management. The high rent collection rates nearing 100% reflect FCPT's ability to maintain a reliable tenant base, which is crucial for cash flow stability.

From an investment perspective, the uptick in Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) per share, albeit modest, is a positive indicator of FCPT's financial health. These metrics are vital in assessing a REIT's performance as they provide a clearer picture of its operating performance by excluding the effects of depreciation and other non-cash items. The slight increases in FFO and AFFO suggest that FCPT is managing its portfolio efficiently while delivering incremental value to shareholders.

The dividend declaration of $0.345 per share aligns with the company's financial results and represents a tangible return to investors. Dividend stability and growth are often key considerations for REIT investors and the consistent payouts by FCPT may be viewed favorably in the market.

Real Estate Market Analyst

FCPT's strategic acquisitions, totaling $333 million, have expanded their portfolio and contributed to a 14% growth in rent, which is indicative of an aggressive growth strategy in the REIT sector. The initial weighted average cash yield of 7.4% from the new acquisitions is a critical metric for investors, suggesting that these properties are expected to generate strong returns relative to the purchase price. The weighted average remaining lease term of approximately 7.8 years offers long-term visibility into FCPT's revenue stream, which is a positive sign for investors seeking stability.

The disposition of a property with a gain also indicates active portfolio management. By capitalizing on market conditions to realize gains, FCPT demonstrates its ability to strategically cycle out of assets when appropriate. This can optimize the portfolio's performance and provide capital for reinvestment into higher-yielding opportunities.

The leverage ratio of 5.5x net debt to adjusted EBITDAre is within a reasonable range for REITs, implying that FCPT maintains a balanced approach to leveraging, which mitigates financial risk while still allowing for growth through debt financing.

Market Research Analyst

The capital raising efforts through the at-the-market (ATM) program reflect FCPT's proactive approach to maintaining liquidity and funding its growth initiatives. The ability to raise capital at an average price of $25.34 per share, in a potentially volatile market, speaks to investor confidence in the company's fundamentals and future prospects. The $259 million of available liquidity, including undrawn revolving credit facility capacity, positions FCPT favorably to take advantage of market opportunities as they arise.

It is important to note that the real estate market, particularly the commercial sector where FCPT operates, may face headwinds from economic factors such as interest rate changes and consumer spending patterns. However, the company's diversified portfolio across 47 states and high occupancy rates suggest resilience against localized market downturns.

Overall, these financial results and strategic moves by FCPT may lead to a positive perception among investors and analysts, potentially influencing the stock's performance in the market.

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 twelve months ended December 31, 2023.

Management Comments

“2023 was a solid acquisition year. We grew rent 14% with $333 million of high-quality acquisitions,” said Bill Lenehan. “Additionally, our portfolio continues to perform well with high rent collections and occupancy, and we start the year with low leverage. We remain disciplined allocators of capital and are finding interesting investment opportunities as we focus on building an accretive pipeline.”

Rent Collection Update

As of December 31, 2023, the Company has received rent payments representing 99.8% of its portfolio contractual base rent for the quarter ending December 31, 2023, and 99.9% for the year ending December 31, 2023.

Financial Results

Rental Revenue and Net Income Attributable to Common Shareholders

• Rental revenue for the fourth quarter increased 15.0% over the prior year to $57.6 million. Rental revenue consisted of $57.0 million in cash rents and $0.6 million of straight-line and other non-cash rent adjustments.
• Net income attributable to common shareholders was $24.4 million for the fourth quarter, or $0.27 per diluted share. These results compare to net income attributable to common shareholders of $22.9 million for the same quarter in the prior year, or $0.27 per diluted share.
• Net income attributable to common shareholders was $95.3 million for the twelve months ended December 31, 2023, or $1.07 per diluted share. These results compare to net income attributed to common shareholders of $97.8 million for the same twelve-month period in 2022, or $1.20 per diluted share.

Funds from Operations (FFO)

• NAREIT-defined FFO per diluted share for the fourth quarter was $0.41, representing a $0.01 increase compared to the same quarter in 2022.
• NAREIT-defined FFO per diluted share for the twelve months ended December 31, 2023 was $1.62, representing a $0.02 increase compared to the same twelve-month period in 2022.

Adjusted Funds from Operations (AFFO)

• AFFO per diluted share for the fourth quarter was $0.43, representing a $0.02 per share increase compared to the same quarter in 2022.
• AFFO per diluted share for the twelve months ended December 31, 2023 was $1.67, representing a $0.03 per share increase compared to the same twelve-month period in 2022.

General and Administrative (G&A) Expense

• G&A expense for the fourth quarter was $5.5 million, which included $1.5 million of stock-based compensation. These results compare to G&A expense in the fourth quarter of 2022 of $5.2 million, including $1.2 million of stock-based compensation.
• Cash G&A expense (after excluding stock-based compensation) for the fourth quarter was $4.1 million, representing 7.1% of cash rental income for the quarter.

Dividends

• FCPT declared a dividend of $0.345 per common share for the fourth quarter of 2023.

Real Estate Portfolio

• As of December 31, 2023, the Company’s rental portfolio consisted of 1,111 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 7.8 years.

Acquisitions

• During the fourth quarter, FCPT acquired 6 properties for a combined purchase price of $12.8 million at an initial weighted average cash yield of 7.4%, on rents in place as of December 31, 2023 and a weighted average remaining lease term of 15.2 years.

Dispositions

• During the fourth quarter, FCPT sold one property for sales price of $3.8 million representing $0.3 million of gain.

Liquidity and Capital Markets

Capital Raising

• During the fourth quarter, the Company sold 1,017,364 shares of Common Stock via the at-the-market (ATM) program at an average price of $25.34 per share for net proceeds of $25.2 million.

Liquidity

• At December 31, 2023, FCPT had approximately $259 million of available liquidity including $16 million of cash and cash equivalents, $8 million of restricted cash from 1031 sales and $234 million of undrawn revolving credit facility capacity.

Credit Facility and Unsecured Notes

• At December 31, 2023, FCPT had $1,121 million of outstanding debt, consisting of $430 million of term loans and $675 million of unsecured fixed rate notes and $16 million of outstanding revolver balance. FCPT’s leverage, as measured by the ratio of net debt to adjusted EBITDAre, is 5.5x at quarter-end.

Conference Call Information

Company management will host a conference call and audio webcast on Thursday, February 15 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: 601472

Live webcast: https://events.q4inc.com/attendee/452973381

In order to pre-register for the call, investors can visit https://www.netroadshow.com/events/login?show=a4a4eaa5&confId=59555

Replay: Available through May 15, 2024 by dialing 1 866 813 9403 (domestic) or 1 929 458 6194 (international), Replay Access Code 934206

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 Fourth 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
(In thousands, except share and per share data)
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2023				2022				2023				2022
		(Unaudited)
Revenues:
Rental revenue		$	57,614			$	50,085			$	219,881			$	193,611
Restaurant revenue			7,529				7,279				30,725				29,583
Total revenues			65,143				57,364				250,606				223,194
Operating expenses:
General and administrative			5,527				5,159				22,680				20,043
Depreciation and amortization			13,320				11,051				50,731				41,471
Property expenses			2,808				2,154				11,550				7,989
Restaurant expenses			6,986				7,097				28,707				27,822
Total operating expenses			28,641				25,461				113,668				97,325
Interest expense			(12,361	)			(9,822	)			(44,606	)			(36,405	)
Other income, net			110				292				919				542
Realized gain on sale, net			288				555				2,341				8,139
Income tax expense			(80	)			(28	)			(130	)			(237	)
Net income			24,459				22,900				95,462				97,908
Net income attributable to noncontrolling interest			(30	)			(31	)			(122	)			(136	)
Net Income Attributable to Common Shareholders		$	24,429			$	22,869			$	95,340			$	97,772
Basic net income per share		$	0.27			$	0.27			$	1.08			$	1.20
Diluted net income per share		$	0.27			$	0.27			$	1.07			$	1.20
Regular dividends declared per share		$	0.3450			$	0.3400			$	1.3650			$	1.3375
Weighted-average shares outstanding:
Basic			90,467,426				83,941,172				88,526,343				81,590,124
Diluted			90,703,366				84,190,208				88,747,028				81,807,065

Four Corners Property Trust Consolidated Balance Sheets (In thousands, except share data)
		December 31, 2023				December 31, 2022
ASSETS
Real estate investments:
Land		$	1,240,865			$	1,115,827
Buildings, equipment and improvements			1,708,556				1,539,875
Total real estate investments			2,949,421				2,655,702
Less: Accumulated depreciation			(738,946	)			(706,702	)
Total real estate investments, net			2,210,475				1,949,000
Intangible lease assets, net			118,027				106,206
Total real estate investments and intangible lease assets, net			2,328,502				2,055,206
Real estate held for sale			-				7,522
Cash and cash equivalents			16,322				26,296
Straight-line rent adjustment			64,752				61,027
Derivative assets			20,952				35,276
Deferred tax assets			1,248				988
Other assets			19,858				12,272
Total Assets		$	2,451,634			$	2,198,587
LIABILITIES AND EQUITY
Liabilities:
Term loan and revolving credit facility ($446,000 and $430,000 of principal, respectively)		$	441,745			$	424,134
Senior unsecured notes			670,944				571,343
Dividends payable			31,539				29,064
Rent received in advance			14,309				11,710
Derivative liabilities			2,968				9
Other liabilities			30,266				24,017
Total liabilities			1,191,771				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, 91,617,477 and 85,637,293 shares issued and outstanding, respectively			9				9
Additional paid-in capital			1,261,940				1,104,522
Accumulated other comprehensive income			21,977				30,944
Noncontrolling interest			2,213				2,259
Retained earnings (deficit)			(26,276	)			576
Total equity			1,259,863				1,138,310
Total Liabilities and Equity		$	2,451,634			$	2,198,587

Four Corners Property Trust FFO and AFFO (Unaudited) (In thousands, except share and per share data)
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2023				2022				2023				2022
Funds from operations (FFO):
Net income		$	24,459			$	22,900			$	95,462			$	97,908
Depreciation and amortization			13,284				11,020				50,592				41,342
Realized gain on sales of real estate			(288	)			(555	)			(2,341	)			(8,139	)
FFO (as defined by NAREIT)		$	37,455			$	33,365			$	143,713			$	131,111
Straight-line rental revenue			(1,165	)			(1,433	)			(5,523	)			(6,372	)
Deferred income tax benefit (1)			(27	)			(68	)			(259	)			(125	)
Stock-based compensation			1,473				1,239				6,271				4,978
Non-cash amortization of deferred financing costs			592				644				2,311				2,104
Non-real estate investment depreciation			36				31				139				129
Other non-cash revenue adjustments			551				551				2,061				2,151
Adjusted Funds from Operations (AFFO)		$	38,915			$	34,329			$	148,713			$	133,976
Fully diluted shares outstanding (2)			90,817,925				84,304,767				88,861,587				81,921,624
FFO per diluted share		$	0.41			$	0.40			$	1.62			$	1.60
AFFO per diluted share		$	0.43			$	0.41			$	1.67			$	1.64

(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/20240214609657/en/

FCPT

Bill Lenehan, 415-965-8031

CEO

Gerry Morgan, 415-965-8032

CFO

Source: Four Corners Property Trust, Inc.

FAQ

What are the financial results announced by FCPT for the fourth quarter of 2023?

FCPT reported a 15% increase in rental revenue to $57.6 million, with a net income of $24.4 million for the quarter.

How did FCPT's AFFO per diluted share perform for the fourth quarter of 2023?

FCPT's AFFO per diluted share for the fourth quarter was $0.43, representing a $0.02 per share increase compared to the same quarter in 2022.

What was FCPT's dividend declaration for the fourth quarter of 2023?

FCPT declared a dividend of $0.345 per common share for the fourth quarter of 2023.

How many properties were in FCPT's rental portfolio as of December 31, 2023?

As of December 31, 2023, FCPT's rental portfolio consisted of 1,111 properties located in 47 states.

What was the total outstanding debt of FCPT as of December 31, 2023?

As of December 31, 2023, FCPT had $1,121 million of outstanding debt, with a leverage ratio of 5.5x at quarter-end.