Getty Realty Corp. Announces First Quarter 2021 Results

Rhea-AI Summary

Getty Realty Corp. (NYSE: GTY) reported strong financial results for Q1 2021, with net earnings increasing to $17.9 million ($0.40 per share), up from $12.7 million ($0.30 per share) in Q1 2020. Funds From Operations (FFO) totaled $19.9 million ($0.44 per share), slightly down from $20.0 million ($0.47 per share) year-over-year. Adjusted Funds From Operations (AFFO) rose to $20.9 million ($0.47 per share), compared to $19.3 million ($0.46 per share) last year. The Company invested $30.3 million across nine properties and reaffirmed its 2021 AFFO guidance of $1.86 to $1.88 per share.

Positive

• Net earnings increased to $17.9 million from $12.7 million year-over-year.
• AFFO rose to $20.9 million ($0.47 per share), up from $19.3 million ($0.46 per share) in Q1 2020.
• Invested $30.3 million across nine properties.

Negative

• FFO decreased to $19.9 million ($0.44 per share) from $20.0 million ($0.47 per share) in the previous year.
• General and administrative expenses increased to $5.5 million from $4.1 million due to non-recurring costs.

Getty Realty Corp. (NYSE: GTY) (“Getty” or the “Company”) announced today its financial results for the quarter ended March 31, 2021.

First Quarter Highlights

• Net earnings of $0.40 per share
• Funds From Operations (“FFO”) of $0.44 per share
• Adjusted Funds From Operations (“AFFO”) of $0.47 per share
• Invested an aggregate of $30.3 million across nine properties

“The continued stability of our core portfolio and the strength of our tenants’ operating businesses resulted in another quarter of growth at Getty. We delivered strong financial results while effectively executing on our strategic growth plans, including investing more than $30 million in our target asset classes,” stated Christopher J. Constant, Getty’s President & Chief Executive Officer. “As we look ahead, we are excited about the depth of our acquisition and redevelopment pipelines, and believe that our conservatively leveraged balance sheet and access to capital provide ample capacity to support our ongoing focus on growth opportunities.”

Net Earnings

The Company reported net earnings for the quarter ended March 31, 2021 of $17.9 million, or $0.40 per share, as compared to net earnings of $12.7 million, or $0.30 per share, for the same period in 2020.

Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO)

FFO for the quarter ended March 31, 2021 was $19.9 million, or $0.44 per share, as compared to $20.0 million, or $0.47 per share, for the same period in 2020.

AFFO for the quarter ended March 31, 2021 was $20.9 million, or $0.47 per share, as compared to $19.3 million, or $0.46 per share, for the same period in 2020.

All per share amounts are presented on a fully diluted per common share basis, unless stated otherwise. FFO and AFFO are defined and reconciled to net earnings in the financial tables at the end of this release. See “Non-GAAP Financial Measures” below.

Results of Operations

Revenues from Rental Properties

For the quarter ended March 31, 2021, revenues from rental properties increased 6.6%, or $2.3 million, to $37.0 million, as compared to $34.7 million for the same period in 2020, including rental income contractually due from tenants of $33.5 million, as compared to $31.4 million for the same period in 2020.

The growth in revenues from rental properties was primarily due to incremental revenue from properties acquired by the Company in 2020 and the first quarter of 2021, as well as contractual rent increases for certain in-place leases.

Tenant reimbursements included in revenues from rental properties, which consist of real estate taxes and other municipal charges paid by the Company which are reimbursed by tenants pursuant to the terms of triple-net lease agreements, were $3.8 million and $3.3 million for the quarters ended March 31, 2021 and 2020, respectively.

Property Costs

Property costs were $5.3 million for the quarter ended March 31, 2021, as compared to $4.9 million for the same period in 2020.

The change in property costs was principally due to an increase in reimbursable real estate taxes, partially offset by reductions in rent expense and expenses related to property redevelopments.

Environmental Expenses

Environmental expenses were $0.5 million for the quarter ended March 31, 2021, as compared to $0.2 million for the same period in 2020.

The change in environmental expenses was principally due to a $0.5 million increase in environmental remediation costs and estimates, partially offset by a $0.2 million reduction in environmental professional fees.

Environmental expenses vary from period to period and, accordingly, undue reliance should not be placed on the magnitude or the direction of changes in reported environmental expenses for any one period, or a comparison to prior periods.

General and Administrative Expenses

General and administrative expenses were $5.5 million for the quarter ended March 31, 2021, as compared to $4.1 million for the same period in 2020.

General and administrative expenses increased approximately $1.2 million principally due to non-recurring retirement costs, other employee-related expenses and certain professional fees.

Impairment Charges

Impairment charges were $0.8 million for the quarter ended March 31, 2021, as compared to $1.0 million for the same period in 2020.

Impairment charges for the quarter ended March 31, 2021 were primarily attributable to the accumulation of asset retirement costs at certain properties as a result of changes in estimated environmental liabilities, which increased the carrying values of these properties in excess of their fair values.

Portfolio and Redevelopment Activities

Acquisitions

During the quarter ended March 31, 2021, the Company acquired fee simple interests in six car wash properties for $21.9 million. The properties are located in the Cincinnati (OH), Lexington (KY), Louisville (KY) and San Antonio (TX) metropolitan areas.

In addition, the Company advanced construction loans in the amount of $8.4 million, including accrued interest, for the development of three new-to-industry convenience stores in the Charleston (SC) metropolitan area. The Company expects to acquire the properties via a sale-leaseback transaction at the end of the construction period.

Redevelopments

As of March 31, 2021, the Company was actively redeveloping six properties and was in various stages of feasibility planning for the recapture of other select properties from its net lease portfolio that are suitable for redevelopment, including five properties for which the Company has signed new leases or letters of intent and which will be transferred to redevelopment when the appropriate entitlements, permits and approvals have been secured.

Dispositions

During the quarter ended March 31, 2021, the Company sold five properties for aggregate gross proceeds of $8.4 million and recorded a gain of $7.3 million on the dispositions.

Balance Sheet

As of March 31, 2021, the Company had $525.0 million of outstanding indebtedness with a weighted average interest rate of 4.2% and weighted average maturity of 7.3 years.

The Company’s indebtedness consisted of an aggregate principal amount of $525.0 million of senior unsecured notes. There were no borrowings outstanding under the Company’s bank credit agreement which provides the Company with $300.0 million of undrawn capacity on its unsecured revolving credit facility.

Total cash and cash equivalents were $33.8 million as of March 31, 2021.

2021 Guidance

The Company reaffirms its 2021 AFFO guidance of $1.86 to $1.88 per diluted share. The Company’s outlook includes completed transaction activity as of the date of this release, but does not otherwise assume additional investment or capital markets activities for the remainder of 2021. The guidance is based on current plans and assumptions and is subject to risks and uncertainties more fully described in this press release and the Company’s periodic reports filed with the Securities and Exchange Commission.

Webcast Information

Getty Realty Corp. will host a conference call and webcast on Thursday, April 29, 2021 at 8:30 a.m. EST. To participate in the call, please dial 1-877-423-9813, or 1-201-689-8573 for international participants, ten minutes before the scheduled start. Participants may also access the call via live webcast by visiting the investors section of the Company's website at ir.gettyrealty.com.

If you cannot participate in the live event, a replay will be available on Thursday, April 29, 2021 beginning at 11:30 a.m. EST through 11:59 p.m. EST, Thursday, May 6, 2021. To access the replay, please dial 1-844-512-2921, or 1-412-317-6671 for international participants, and reference pass code 13718390.

About Getty Realty Corp.

FAQ

What were Getty Realty's Q1 2021 net earnings?

Getty Realty reported net earnings of $17.9 million for Q1 2021.

What is Getty Realty's funds from operations (FFO) for Q1 2021?

The FFO for Q1 2021 was $19.9 million, or $0.44 per share.

How much did Getty Realty invest in new properties in Q1 2021?

Getty Realty invested an aggregate of $30.3 million across nine properties in Q1 2021.

What is the AFFO guidance for Getty Realty in 2021?

Getty Realty reaffirmed its 2021 AFFO guidance of $1.86 to $1.88 per diluted share.