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FCPT Announces Second Quarter 2018 Financial and Operating Results

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Four Corners Property Trust, Inc. (("FCPT" or the "Company", NYSE:FCPT)
today announced financial results for the three months and six months
ended June 30, 2018.

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/.

Management Comments

"Our second quarter financial results were in line with our expectations
and, in a competitive market, we sourced accretive acquisitions and
strategically diversified our high-quality real estate portfolio," said
Bill Lenehan. "Our team continues to source attractive acquisition
opportunities while maintaining our financial flexibility and liquidity.
We are excited about our 2018 results and the opportunities we are
seeing today."

Financial Results

Rental Revenue and Net Income Attributable to Common Shareholders

  • Rental revenue for the second quarter reached $29.6 million, a 4.6%
    increase over the prior year, and consisted of $27.3 million in cash
    rents and $2.3 million of straight-line and other non-cash rent
    adjustments.
  • Net income attributable to common shareholders was $27.4 million for
    the second quarter, or $0.44 per diluted share, including a $10.9
    million gain on the sale of a property. These results compared to net
    income attributable to common shareholders of $18.3 million in the
    prior year, or $0.30 per diluted share, including a $3.3 million gain
    on the sale of a property.
  • Net income attributable to common shareholders was $43.7 million for
    the six months ended June 30, 2018, or $0.71 per diluted share,
    including a $10.9 million gain on the sale of properties. These
    results compared to net income attributable to common shareholders of
    $33.8 million, or $0.56 per diluted share, including a $3.3 million
    gain on the sale of a property, for the same six-month period in the
    prior year.

Funds from Operations (FFO)

  • NAREIT-defined FFO for the second quarter was $22.0 million, or $0.35
    per diluted share, representing an increase of 2.9% in per diluted
    share results compared to the prior year.
  • NAREIT-defined FFO for the six months ended June 30, 2018 was $43.4
    million, or $0.70 per diluted share, representing an increase of 1.4%
    in per diluted share results compared to the same six-month period in
    the prior year.

Adjusted Funds from Operations (AFFO)

  • AFFO for the second quarter in 2018 was $21.1 million, or $0.34 per
    diluted share, representing an increase of 6.3% in per diluted share
    results compared to the prior year.
  • AFFO for the six months ended June 30, 2018 was $41.9 million, or
    $0.68 per diluted share, representing an increase of 6.3% in per
    diluted share results compared to same six-month period in the prior
    year.

General and Administrative (G&A) Expense

  • G&A expense for the second quarter was $3.2 million, including $0.9
    million of non-cash, stock-based compensation. These results compared
    to G&A expense of $3.5 million, including $0.7 million of non-cash,
    stock-based compensation for the same quarter in the prior year.
  • Cash G&A expense (after excluding non-cash stock-based compensation)
    for the six months ended June 30, 2018 was $4.8 million, representing
    8.7% of cash rental income for the quarter. These results compared
    favorably to the same six-month period in the prior year, when cash
    G&A expense was 10.0% of cash rental income.

Dividends

  • FCPT declared a dividend of $0.2750 per common share for the second
    quarter of 2018.

Portfolio Activities

Acquisitions

  • During the second quarter, FCPT acquired 9 restaurant properties with
    a combined investment value of $16.3 million, at an initial weighted
    average cash yield of 6.3% and a weighted average lease term of 13.7
    years.

Dispositions

  • During the second quarter, FCPT sold a Darden-leased Bahama Breeze
    property for a gross sales price of $16.2 million, representing a 5.0%
    cash capitalization rate, exclusive of transaction costs, and $10.9
    million of gain.

Liquidity and Capital Markets

Capital Raising

  • During the second quarter, FCPT raised $35.2 million in gross proceeds
    at a weighted average share price of $22.97 via its At-The-Market
    (ATM) stock program.

Credit Facility and Unsecured Note

  • At June 30, 2018, FCPT had $525 million of outstanding debt,
    consisting of a $400 million term loan and $125 million of unsecured
    fixed rate notes. At quarter end, FCPT was undrawn on its $250 million
    revolving credit facility, and had $88.4 million of available cash and
    cash equivalents.

Real Estate Portfolio

  • As of June 30, 2018, the Company's rental portfolio consisted of 535
    restaurant properties located in 44 states. The properties are 99.9%
    occupied (measured by square feet) under long-term, net leases with a
    weighted average remaining lease term of approximately 12.5 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
Thursday, July 26, 2018 at 9:00 am Eastern Time to discuss the results.

Interested parties can listen to the call via the following:

Internet: Go to http://dpregister.com/10122534
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 October 25, 2018 by dialing 1-877-344-7529
(domestic) / 1-412-317-0088 (international), Replay Access Code 10122534.

About FCPT

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.
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 Second Quarter 2018 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

(Unaudited)
(In thousands, except share and per share data)
 
Three Months Ended June 30, Six Months Ended June 30,
2018 2017 2018 2017
 
Revenues:
Rental revenue $ 29,596 $ 28,327

 

$ 59,186

 

$ 56,091
Restaurant revenue   5,079     4,826     10,293     9,766  
Total revenues 34,675 33,153 69,479 65,857
 
Expenses:
General and administrative 3,204 3,459 6,873 6,316
Depreciation and amortization 5,225 5,426 10,569 10,829
Restaurant expenses 4,786 4,583 9,656 9,251
Interest expense   4,877     4,508     9,733     8,604  
Total expenses 18,092 17,976 36,831 35,000
 
Other income 231 34 588 39
Realized gain on sale, net   10,879     3,291     10,879     3,291  
Income before income tax 27,693 18,502 44,115 34,187
 
Income tax expense   (66 )   (61 )   (125 )   (106 )
Net income 27,627 18,441 43,990 34,081
 
Net income attributable to noncontrolling interest   (182 )   (128 )   (291 )   (245 )
Net Income Attributable to Common Shareholders $ 27,445   $ 18,313   $ 43,699   $ 33,836  
 
Basic net income per share $ 0.44 $ 0.30 $ 0.71 $ 0.56
Diluted net income per share $ 0.44 $ 0.30 $ 0.71 $ 0.56
Regular dividends declared per share $ 0.2750 $ 0.2425 $ 0.5500 $ 0.4850
 
Weighted-average shares outstanding:
Basic 61,751,530 60,319,521 61,511,183 60,125,477
Diluted 61,911,699 60,430,606 61,661,560 60,215,050
 
     
Four Corners Property Trust
Consolidated Balance Sheets

(In thousands, except share data)

 
 
June 30, 2018
(Unaudited) December 31, 2017
ASSETS
Real estate investments:
Land $ 471,870 $ 449,331
Buildings, equipment and improvements   1,118,348     1,115,624  
Total real estate investments 1,590,218 1,564,955
Less: Accumulated depreciation   (605,407 )   (598,846 )
Total real estate investments, net 984,811 966,109
Cash and cash equivalents 88,371 64,466
Straight-line rent adjustment 25,505 21,130
Derivative assets 12,284 4,997
Other assets   11,903     11,957  
Total Assets $ 1,122,874   $ 1,068,659  
 
LIABILITIES AND EQUITY
 
Liabilities:
Long-term debt ($525,000 net of deferred financing costs) $ 516,449 $ 515,539
Dividends payable 17,278 16,843
Rent received in advance 8,461 8,295
Derivative liabilities - 8
Other liabilities   4,946     5,706  
Total liabilities   547,134     546,391  
 
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, 62,930,370 and 61,329,489 shares issued and
outstanding, respectively

6 6
Additional paid-in capital 510,235 473,685
Accumulated other comprehensive income 12,185 4,478
Noncontrolling interest 7,896 7,781
Retained earnings   45,418     36,318  
Total equity   575,740     522,268  
Total Liabilities and Equity $ 1,122,874   $ 1,068,659  
 
           
Four Corners Property Trust
FFO and AFFO

(Unaudited)

(In thousands, except share and per share data)
 
 
Three Months Ended June 30, Six Months Ended June 30,
2018 2017 2018 2017
Funds from operations (FFO):
Net income $ 27,627 $ 18,441 $ 43,990 $ 34,081
Depreciation and amortization 5,209 5,419 10,540 10,814
Realized gain on sales of real estate (10,879 ) (3,291 ) (10,879 ) (3,291 )
Realized gain on exchange of real estate (1)   -     -     (228 )   -  
FFO (as defined by NAREIT) $ 21,957   $ 20,569   $ 43,423   $ 41,604  
Straight-line rent (2,280 ) (2,422 ) (4,563 ) (4,795 )
Non-cash stock-based compensation 924 704 2,107 1,198
Non-cash amortization of deferred financing costs 455 415 910 813
Other non-cash interest (income) expense (1 ) 11 (6 ) 63
Non-real estate investment depreciation 16 7 29 15
Amortization of above and below market leases   15     -     31     -  
Adjusted Funds from Operations (AFFO) $ 21,086   $ 19,284   $ 41,931   $ 38,898  
 
Fully diluted shares outstanding (2) 62,321,019 60,870,695 62,070,880 60,649,120
 
FFO per diluted share $ 0.35 $ 0.34 $ 0.70 $ 0.69
 
AFFO per diluted share $ 0.34 $ 0.32 $ 0.68 $ 0.64
 

(1)

   

Non-cash gain recognized for GAAP purposes on the transfer of
nonfinancial assets related to an excess land parcel exchange.

(2)

Assumes the issuance of common shares for OP units held by
non-controlling interest.

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