MILL VALLEY, Calif.--(BUSINESS WIRE)--Four Corners Property Trust, Inc. (“FCPT” or the “Company”, NYSE: FCPT) today announced financial results for the three and nine months ended September 30, 2017.
A supplemental financial and operating report that contains non-GAAP measures and other defined terms, along with this press release, has been posted to the investor relations section of the Company’s website at http://investors.fcpt.com/.
“Our third quarter financial results were in line with our expectations, and we have recently made good progress sourcing high quality diversifying acquisitions, recasting our credit facility, and internalizing our accounting function. We also are in a very strong liquidity position with significant capacity to fund future acquisitions.”
Rental Revenue and Net Income Attributable to Common Shareholders
- Rental revenue for the third quarter was $28.8 million, a 9.4% increase over the same quarter in 2016, and consisted of $26.3 million in cash rents and $2.5 million of straight-line rent adjustments.
- Net income attributable to common shareholders for the third quarter was $19.2 million, or $0.31 per diluted share, including a $4.0 million gain on the sale of an Olive Garden property. These results compared to net income of $15.2 million, or $0.25 per diluted share, for the same quarter in 2016.
- Net income attributable to common shareholders for the nine months ended September 30, 2017 was $53.0 million. After excluding $7.3 million in gains on sale in 2017 and the one-time, non-cash tax benefit of $80.4 million included in the 2016 results, the Company’s net income was $45.7 million, or $0.75 per diluted share for 2017, which compared to net income of $43.9 million, or $0.74 per diluted share, for the same nine-month period in 2016.
Funds from Operations (FFO)
- NAREIT-defined FFO for the third quarter was $20.7 million, or $0.34 per diluted share, representing flat per diluted share results compared to the third quarter in 2016.
- NAREIT-defined FFO for the nine months ended September 30, 2017 was $62.3 million, or $1.02 per diluted share, representing an increase of 2.0% in per diluted share results compared to the same nine-month period in 2016.
Adjusted Funds from Operations (AFFO)
- AFFO for the third quarter was $19.4 million, or $0.32 per diluted share, representing an increase of 6.7% in per diluted share results compared to the third quarter in 2016.
- AFFO for the nine months ended September 30, 2017 was $58.3 million, or $0.96 per diluted share, representing an increase of 5.5% in per diluted share results compared to the same nine-month period in 2016.
General and Administrative (G&A) Expense
- G&A expense for the third quarter was $2.9 million, including $0.7 million of non-cash, stock-based compensation.
- Cash G&A expense (after excluding non-cash stock-based compensation) for the nine months ended September 30, 2017 was 9.4% of cash rental income, compared to 10.3% of cash rental income for the same nine-month period in 2016.
- FCPT declared a dividend of $0.2425 per common share for the third quarter of 2017.
- During the third quarter, FCPT acquired 3 restaurant properties in two transactions with a combined investment value of $6.1 million, at an initial weighted average cash yield of 6.9%, and a weighted average lease term of 15 years.
- On September 20, 2017, FCPT announced it had signed a definitive agreement to acquire 41 outparcel properties from Washington Prime Group (WPG) for $67.2 million in cash at a cap rate consistent with past FCPT acquisitions. The transaction is expected to close in two tranches, with the first tranche representing approximately one-third of the properties expected to close in the fourth quarter of 2017 and the remaining properties expected to close by the end of the second quarter of 2018.
- During the third quarter, FCPT sold an Olive Garden property for a gross sales price of $5.9 million, representing a 4.8% cash capitalization rate and $4.0 million of gain.
Liquidity and Capital Markets
- FCPT did not sell common shares during the third quarter. For the nine months ended September 30, 2017, FCPT raised $28.3 million in gross proceeds at a weighted average share price of $24.29.
Credit Facility and Unsecured Note
- At September 30, 2017 FCPT had $525 million of outstanding debt, consisting of a $400 million term loan and $125 million of unsecured fixed rate notes. FCPT was undrawn on its $350 million revolving credit facility, and had $82.9 million of available cash and cash equivalents.
- On October 2, 2017, FCPT announced that it had entered into a $650 million credit agreement consisting of a 5-year term loan of $400 million and a 4-year revolving credit facility of $250 million to replace the Company’s existing bank credit facility. The recasting extended the maturities of both the term loan and the revolving facility by two years, and increased the Company’s weighted average debt maturity to approximately 5.8 years. Under the terms of the recast facility, FCPT expects to save at least $1.8 million in annual cash interest expense due to reduced margin pricing and lower unused capacity.
Real Estate Portfolio
As of September 30, 2017, the Company’s rental portfolio consisted of 508 restaurant properties located in 44 states. The properties are 100% occupied under long-term, net leases with a weighted average remaining lease term of approximately 13.2 years and an estimated portfolio weighted average EBITDAR to Lease Rent coverage of 4.7x.
Conference Call Information
Company management will host a conference call and audio webcast on Friday, November 3, 2017 at 11:00 am Eastern Time to discuss the results.
Interested parties can listen to the call via the following:
Internet: Go to http://dpregister.com/10113461 at least 15 minutes prior to start time of the call in order to register and to download any necessary audio software. Please note for those that register, the dial-in number will be provided upon registration.
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.
Replay: Available through February 3, 2018 by dialing 1-877-344-7529 (domestic) / 1-412-317-0088 (international), Replay Access Code 10113461.
FCPT 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 for use in the restaurant and related food services industry.
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; and expectations regarding the making of distributions and the payment of dividends. 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.
Factors that could have a material adverse effect on the Company’s operations and future prospects or that could cause actual results to differ materially from the Company’s expectations are included in the sections entitled “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2017.
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 Third Quarter 2017 operating results and other information on the Company are available on the investors relations section of FCPT’s website at www.investors.fcpt.com.
Four Corners Property Trust
Consolidated Statements of Income
(In thousands, except share and per share data)
|Three Months Ended September 30,||Nine Months Ended September 30,|
|General and administrative||2,899||2,608||
|Depreciation and amortization||5,425||5,059||
|Total operating expenses||18,358||15,524||53,358||48,969|
|Realized gain on sale, net||4,042||
|Income before provision for income taxes||19,367||15,292||
|Income tax (expense) benefit (1)||(33||)||
|Net income attributable to noncontrolling interest||(129||)||-||
|Net Income Attributable to Common Shareholders||$||19,205||$||15,240||$||53,044||$||124,325|
|Basic net income per share||$||0.31||$||0.25||
|Diluted net income per share||$||0.31||$||0.25||
|Regular dividends declared per share||$||0.2425||$||0.2425||$||0.7275||$||0.7275|
|Weighted-average shares outstanding:|
|(1) The 2016 results include a $80.4 million income tax benefit which was principally the result of the reversal of deferred tax liabilities recognized in connection with the Company’s election to be taxed as a REIT.|
|Four Corners Property Trust|
Consolidated Balance Sheets
(In thousands, except share data)
|September 30, 2017|
|(Unaudited)||December 31, 2016|
|Real estate investments:|
|Buildings, equipment and improvements||1,100,430||1,055,624|
|Total real estate investments||1,541,892||1,477,565|
|Less: Accumulated depreciation||(593,609||)||(583,307||)|
|Total real estate investments, net||948,283||894,258|
|Real estate held for sale||1,712||-|
|Cash and cash equivalents||82,865||26,643|
|LIABILITIES AND EQUITY|
|Notes payable ($525,000 net of deferred financing costs)||$||518,353||$||438,895|
|Deferred rental revenue||7,964||7,974|
|Deferred tax liabilities||164||196|
|Preferred stock, $0.0001 par value per share, 25,000,000 shares|
|authorized, zero shares issued and outstanding||-||-|
|Common stock, $0.0001 par value per share, 500,000,000 shares|
|authorized, 61,196,087 and 59,923,557 shares issued and outstanding|
|at September 30, 2017 and December 31, 2016, respectively||6||6|
|Additional paid-in capital||469,571||438,864|
|Accumulated other comprehensive income||1,545||207|
|Total Liabilities and Equity||$||1,061,774||$||937,151|
|Four Corners Property Trust|
|FFO and AFFO|
|(In thousands, except share and per share data)|
|Three Months Ended September 30,||Nine Months Ended September 30,|
|Funds from operations (FFO):|
|Depreciation and amortization||5,414||5,051||16,231||15,330|
|Deferred tax benefit from REIT election||-||-||-||(80,410||)|
|Realized gain on sales of real estate||(4,042||)||-||(7,333||)||-|
|FFO (as defined by NAREIT)||$||20,706||$||20,291||$||62,316||$||59,245|
|Non-cash stock-based compensation||722||412||1,920||1,158|
|Non-cash amortization of deferred financing costs||452||398||1,265||1,194|
|Other non-cash interest expense||42||(296||)||105||139|
|Non-real estate investment depreciation||11||8||23||17|
|Adjusted Funds from Operations (AFFO)||$||19,445||$||18,204||$||58,346||$||53,954|
|Fully diluted shares outstanding (1)||61,665,465||59,863,109||60,992,881||59,469,008|
|FFO per diluted share||$||0.34||$||0.34||$||1.02||$||1.00|
|AFFO per diluted share||$||0.32||$||0.30||$||0.96||$||0.91|
|(1) Assumes the issuance of common shares for OP units held by non-controlling partners.|