STORE Capital Announces First Quarter 2022 Operating Results
STORE Capital reported a strong first quarter for 2022, with total revenues of $222.1 million, a 21.9% increase from the previous year. Net income rose to $87.0 million or $0.32 per share. Adjusted Funds From Operations (AFFO) increased 26% to $157.8 million, equating to $0.57 per share. The company raised its 2022 acquisition guidance to $1.3 billion to $1.5 billion and AFFO guidance to $2.20 to $2.23 per share. A quarterly dividend of $0.385 was declared, reflecting confidence in sustained growth from a diversified portfolio of 2,965 properties.
- Total revenues increased by 21.9% year-over-year to $222.1 million.
- Net income rose to $87.0 million, or $0.32 per share, up from $55.0 million in Q1 2021.
- AFFO grew by 26% to $157.8 million, equating to $0.57 per share.
- Record first-quarter investments of $512.5 million in 111 properties at a 7.1% initial cap rate.
- Raised 2022 AFFO per share guidance to $2.20 to $2.23.
- Raised annual acquisition guidance for 2022 to $1.3 billion to $1.5 billion.
- Net gain on real estate dispositions decreased to $6.1 million, down from $15.7 million in Q1 2021.
Raises 2022 Acquisition Volume and AFFO Guidance
Highlights
For the quarter ended
-
Total revenues of
$222.1 million -
Net income of
, or$87.0 million per basic and diluted share, including an aggregate net gain of$0.32 on dispositions of real estate$6.1 million -
AFFO of
, or$157.8 million per basic and diluted share$0.57 -
Declared a regular quarterly cash dividend per common share of
$0.38 5 -
Invested
in 111 properties at a weighted average initial cap rate of$512.5 million 7.1% -
Raised
in net proceeds from the sale of approximately 5.5 million common shares under the Company’s at-the-market equity program$166.2 million
Management Commentary
“One of STORE’s strategic advantages has always been our differentiated business model which was built to deliver sustainable growth and attractive returns. As we moved into 2022, we leveraged the momentum we built in 2021 and closed
Financial Results
Total Revenues
Total revenues were
Net Income
Net income was
Net income includes such items as gain or loss on dispositions of real estate and provisions for impairment, which can vary from quarter to quarter and impact net income and period-to-period comparisons.
Adjusted Funds from Operations (AFFO)
AFFO for the first quarter of 2022 increased
Dividend Information
As previously announced,
Real Estate Portfolio Highlights
Investment Activity
The Company originated
Disposition Activity
During the quarter ended
Portfolio
At
The Company’s portfolio of real estate investments is highly diversified across customers, brand names or business concepts, industries and geography. The following table presents a summary of the portfolio.
Portfolio At A Glance - As of |
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Customers |
|
573 |
|
Investment property locations |
|
2,965 |
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States |
|
49 |
|
Industries in which customers operate |
|
121 |
|
Investment portfolio subject to Master Leases(1) |
|
94 |
% |
Average investment amount/replacement cost (new)(2) |
|
80 |
% |
Weighted average annual lease escalation(3) |
|
1.8 |
% |
Weighted average remaining lease contract term |
|
~13.3 years |
|
Occupancy(4) |
|
99.5 |
% |
Locations subject to unit-level financial reporting |
|
99 |
% |
Weighted average 4‑Wall coverage ratio(5) |
|
4.7x |
|
Weighted average unit fixed charge coverage ratio (5) |
|
3.6x |
|
(1) |
Percentage, based on base rent and interest, of investment portfolio in multiple properties with a single customer subject to master leases. Approximately |
|
(2) | Represents the ratio of purchase price to replacement cost (new) at acquisition. |
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(3) |
Represents the weighted average annual escalation rate of the entire portfolio as if all escalations occurred annually. For escalations based on a formula including CPI, assumes the stated fixed percentage in the contract or assumes |
|
(4) |
The Company defines occupancy as a property being subject to a lease or loan contract. As of |
|
(5) |
The 4‑Wall coverage ratio refers to a unit’s FCCR before taking into account standardized corporate overhead expense. |
Capital Transactions
The Company established a
In
2022 Guidance
The Company is raising its 2022 AFFO per share guidance from a range of
Conference Call and Webcast
A conference call and audio webcast with analysts and investors will be held tomorrow,
- Live conference call: 855-656-0920 (domestic) or 412-542-4168 (international)
-
Conference call replay available through
May 19, 2022 : 877-344-7529 (domestic) or 412-317-0088 (international) using access code 6429704 - Live and archived webcast: https://ir.storecapital.com/news-results/webcasts/default.aspx
Supplemental Materials
The Company’s Supplemental Information for the first quarter ended
About
Forward-Looking Statements
Certain statements contained in this press release that are not historical facts contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, that are subject to the “safe harbor” created by those sections. Forward-looking statements can be identified by the use of words such as “estimate,” “anticipate,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “seek,” “approximate” or “plan,” or the negative of these words and phrases or similar words or phrases. Forward-looking statements, by their nature, involve estimates, projections, goals, forecasts and assumptions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. For more information on risk factors for STORE Capital’s business, please refer to the periodic reports the Company files with the
Non-GAAP Financial Measures
FFO and AFFO
STORE Capital’s reported results are presented in accordance with
The Company computes FFO in accordance with the definition adopted by the
To derive AFFO, the Company modifies the NAREIT computation of FFO to include other adjustments to GAAP net income related to certain revenues and expenses that have no impact on the Company’s long-term operating performance, such as straight-line rents, amortization of deferred financing costs and stock-based compensation. In addition, in deriving AFFO, the Company excludes certain other costs not related to its ongoing operations, such as the amortization of lease-related intangibles and executive severance and transition costs.
FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among the Company’s peers primarily because it excludes the effect of real estate depreciation and amortization and net gains (or losses) on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. Management believes that AFFO provides more useful information to investors and analysts because it modifies FFO to exclude certain additional revenues and expenses such as, as applicable, straight-line rents, including construction period rent deferrals, and the amortization of deferred financing costs, stock-based compensation, lease-related intangibles and executive severance and transition costs as such items have no impact on long-term operating performance. As a result, the Company believes AFFO to be a more meaningful measurement of ongoing performance that allows for greater performance comparability. Therefore, the Company discloses both FFO and AFFO and reconciles them to the most appropriate GAAP performance metric, which is net income. STORE Capital’s FFO and AFFO may not be comparable to similarly titled measures employed by other companies.
Condensed Consolidated Statements of Income (In thousands, except share and per share data) |
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Three months ended |
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2022 |
|
2021 |
||||
|
|
(unaudited) |
||||||
Revenues: |
|
|
|
|
|
|
||
Rental revenues |
|
$ |
202,061 |
|
|
$ |
169,328 |
|
Interest income on loans and financing receivables |
|
|
14,930 |
|
|
|
12,563 |
|
Other income |
|
|
5,125 |
|
|
|
370 |
|
Total revenues |
|
|
222,116 |
|
|
|
182,261 |
|
|
|
|
|
|
|
|
||
Expenses: |
|
|
|
|
|
|
||
Interest |
|
|
43,999 |
|
|
|
41,828 |
|
Property costs |
|
|
4,241 |
|
|
|
4,663 |
|
General and administrative |
|
|
17,016 |
|
|
|
25,006 |
|
Depreciation and amortization |
|
|
72,639 |
|
|
|
63,567 |
|
Provisions for impairment |
|
|
912 |
|
|
|
7,350 |
|
Total expenses |
|
|
138,807 |
|
|
|
142,414 |
|
Other income: |
|
|
|
|
|
|
||
Net gain on dispositions of real estate |
|
|
6,076 |
|
|
|
15,670 |
|
Loss from non-real estate, equity method investment |
|
|
(2,157 |
) |
|
|
(363 |
) |
Income before income taxes |
|
|
87,228 |
|
|
|
55,154 |
|
Income tax expense |
|
|
206 |
|
|
|
194 |
|
Net income |
|
$ |
87,022 |
|
|
$ |
54,960 |
|
|
|
|
|
|
|
|
||
Net income per share of common stock - basic and diluted: |
|
$ |
0.32 |
|
|
$ |
0.21 |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Weighted average common shares outstanding: |
|
|
|
|
|
|
||
Basic |
|
|
275,003,273 |
|
|
|
266,366,698 |
|
Diluted |
|
|
275,003,273 |
|
|
|
266,366,698 |
|
|
|
|
|
|
|
|
||
Dividends declared per common share |
|
$ |
0.385 |
|
|
$ |
0.36 |
|
Condensed Consolidated Balance Sheets (In thousands, except share and per share data) |
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||||
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(unaudited) |
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(audited) |
||||
Assets |
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Investments: |
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|
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Real estate investments: |
|
|
|
|
|
|
||
Land and improvements |
|
$ |
3,239,050 |
|
|
$ |
3,133,402 |
|
Buildings and improvements |
|
|
7,096,841 |
|
|
|
6,802,918 |
|
Intangible lease assets |
|
|
59,216 |
|
|
|
54,971 |
|
Total real estate investments |
|
|
10,395,107 |
|
|
|
9,991,291 |
|
Less accumulated depreciation and amortization |
|
|
(1,224,223 |
) |
|
|
(1,159,292 |
) |
|
|
|
9,170,884 |
|
|
|
8,831,999 |
|
Real estate investments held for sale, net |
|
|
33,234 |
|
|
|
25,154 |
|
Operating ground lease assets |
|
|
32,960 |
|
|
|
33,318 |
|
Loans and financing receivables, net |
|
|
736,410 |
|
|
|
697,269 |
|
Net investments |
|
|
9,973,488 |
|
|
|
9,587,740 |
|
Cash and cash equivalents |
|
|
39,340 |
|
|
|
64,269 |
|
Other assets, net |
|
|
118,320 |
|
|
|
121,073 |
|
Total assets |
|
$ |
10,131,148 |
|
|
$ |
9,773,082 |
|
|
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|
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Liabilities and stockholders’ equity |
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Liabilities: |
|
|
|
|
|
|
||
Credit facility |
|
$ |
359,000 |
|
|
$ |
130,000 |
|
Unsecured notes payable, net |
|
|
1,783,440 |
|
|
|
1,782,813 |
|
Non-recourse debt obligations of consolidated special purpose entities, net |
|
|
2,410,834 |
|
|
|
2,425,708 |
|
Dividends payable |
|
|
107,644 |
|
|
|
105,415 |
|
Operating lease liabilities |
|
|
37,330 |
|
|
|
37,637 |
|
Accrued expenses, deferred revenue and other liabilities |
|
|
145,909 |
|
|
|
147,380 |
|
Total liabilities |
|
|
4,844,157 |
|
|
|
4,628,953 |
|
|
|
|
|
|
|
|
||
Stockholders’ equity: |
|
|
|
|
|
|
||
Common stock, |
|
|
2,796 |
|
|
|
2,738 |
|
Capital in excess of par value |
|
|
5,910,856 |
|
|
|
5,745,692 |
|
Distributions in excess of retained earnings |
|
|
(624,558 |
) |
|
|
(602,137 |
) |
Accumulated other comprehensive loss |
|
|
(2,103 |
) |
|
|
(2,164 |
) |
Total stockholders’ equity |
|
|
5,286,991 |
|
|
|
5,144,129 |
|
Total liabilities and stockholders’ equity |
|
$ |
10,131,148 |
|
|
$ |
9,773,082 |
|
Reconciliations of Non-GAAP Financial Measures (In thousands, except per share data)
Funds from Operations and Adjusted Funds from Operations |
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Three months ended |
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|
2022 |
|
2021 |
||||
|
|
(unaudited) |
||||||
|
|
|
|
|
|
|
||
Net income |
|
$ |
87,022 |
|
|
$ |
54,960 |
|
Depreciation and amortization of real estate assets |
|
|
72,566 |
|
|
|
63,507 |
|
Provision for impairment of real estate |
|
|
1,200 |
|
|
|
5,350 |
|
Net gain on dispositions of real estate |
|
|
(6,076 |
) |
|
|
(15,670 |
) |
Funds from Operations (1) |
|
|
154,712 |
|
|
|
108,147 |
|
|
|
|
|
|
|
|
||
Adjustments: |
|
|
|
|
|
|
||
Straight-line rental revenue: |
|
|
|
|
|
|
||
Fixed rent escalations accrued |
|
|
(1,502 |
) |
|
|
(1,511 |
) |
Construction period rent deferrals |
|
|
1,366 |
|
|
|
628 |
|
Amortization of: |
|
|
|
|
|
|
||
Equity-based compensation (2) |
|
|
3,068 |
|
|
|
12,905 |
|
Deferred financing costs and other |
|
|
2,161 |
|
|
|
2,100 |
|
Lease-related intangibles and costs |
|
|
678 |
|
|
|
827 |
|
(Reduction in) provision for loan losses |
|
|
(288 |
) |
|
|
2,000 |
|
Lease termination fees |
|
|
(4,174 |
) |
|
|
— |
|
Capitalized interest |
|
|
(410 |
) |
|
|
(214 |
) |
Loss from non-real estate, equity method investment |
|
|
2,157 |
|
|
|
363 |
|
Adjusted Funds from Operations (1) |
|
$ |
157,768 |
|
|
$ |
125,245 |
|
|
|
|
|
|
|
|
||
Dividends declared to common stockholders |
|
$ |
107,644 |
|
|
$ |
97,203 |
|
|
|
|
|
|
|
|
||
Net income per share of common stock: (3) |
|
|
|
|
|
|
||
Basic and Diluted |
|
$ |
0.32 |
|
|
$ |
0.21 |
|
FFO per share of common stock: (3) |
|
|
|
|
|
|
||
Basic and Diluted |
|
$ |
0.56 |
|
|
$ |
0.41 |
|
AFFO per share of common stock: (3) |
|
|
|
|
|
|
||
Basic and Diluted |
|
$ |
0.57 |
|
|
$ |
0.47 |
|
(1) |
FFO and AFFO for the three months ended |
|
(2) |
For the three months ended |
|
(3) | Under the two-class method, earnings attributable to unvested restricted stock are deducted from earnings in the computation of per share amounts where applicable. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220504005743/en/
STORECapital@finprofiles.com
Investors or Media:
Source:
FAQ
What were STORE Capital's total revenues for Q1 2022?
How much did STORE Capital raise its 2022 AFFO per share guidance?
What was the net income for STORE Capital in Q1 2022?
What is the new acquisition volume guidance for STORE Capital in 2022?