Farmland Partners Inc. Reports Full Year 2023 Results
Completed Nearly
Selected Fiscal Year 2023 Highlights
During the year ended
-
recorded net income of
$31.7 million , or$0.55 per share available to common stockholders, compared to$12.0 million , or$0.16 per share available to common stockholders for the same period in 2022; -
recorded AFFO of
$8.1 million , or$0.16 per share, compared to$15.8 million , or$0.30 per share, for the same period in 2022; -
completed dispositions of 74 properties for approximately
$195.5 million in aggregate consideration, recognized an aggregate gain on sale of approximately$36.1 million , and deferred an additional net gain on sale of$2.1 million in connection with dispositions of certain properties with seller financing; -
declared a one-time special dividend of
$0.21 per share of common stock and Class A Common OP Unit inDecember 2023 which was paid inJanuary 2024 ; -
completed acquisitions of four properties for total consideration of
$22.2 million ; -
repurchased 6,551,087 shares of its common stock at a weighted average price of
$11.00 per share; -
decreased indebtedness by
$76.4 million , from$439.5 million of total debt outstanding atDecember 31, 2022 , or 40% of net real estate value, to$363.1 million atDecember 31, 2023 , or 38% of net real estate value; -
increased liquidity to
$206.6 million as ofDecember 31, 2023 , compared to$176.7 million as ofDecember 31, 2022 ; and - renewed fixed cash farm leases expiring in 2023, which represented approximately 14% of total revenue for 2023, at average rent increases of approximately 20%.
CEO Comments
Financial and Operating Results
-
The table below shows financial and operating results for the years ended
December 31, 2023 and 2022.
(in thousands) |
|
For the years ended
|
|
|
|
|
|||||
Financial Results: |
|
2023 |
|
2022 |
|
|
Change |
||||
Net Income |
|
$ |
31,681 |
|
$ |
11,960 |
|
|
164.9 |
|
% |
Net income per share available to common stockholders (1) |
|
$ |
0.55 |
|
$ |
0.16 |
|
|
243.8 |
|
% |
AFFO |
|
$ |
8,140 |
|
$ |
15,761 |
|
|
(48.4 |
) |
% |
AFFO per weighted average common shares |
|
$ |
0.16 |
|
$ |
0.30 |
|
|
(46.7 |
) |
% |
Adjusted EBITDAre |
|
$ |
33,403 |
|
$ |
34,759 |
|
|
(3.9 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Operating Results: |
|
|
|
|
|
|
|
|
|
|
|
Total Operating Revenues |
|
$ |
57,466 |
|
$ |
61,210 |
|
|
(6.1 |
) |
% |
Net Operating Income (NOI) |
|
$ |
44,052 |
|
$ |
47,054 |
|
|
(6.4 |
) |
% |
___________________ | |
NM = Not Meaningful |
|
(1) |
Basic net income per share available to common stockholders. See “Note 9—Stockholders’ Equity and Non-controlling Interests” in the Annual Report on Form 10-K for the year ended |
- See “Non-GAAP Financial Measures” for complete definitions of AFFO, Adjusted EBITDAre, and NOI and the financial tables accompanying this press release for reconciliations of net income to AFFO, Adjusted EBITDAre and NOI.
Acquisition and Disposition Activity
-
During the year ended
December 31, 2023 , the Company acquired four properties for total consideration of$22.2 million . -
During the year ended
December 31, 2023 , the Company completed 74 property dispositions for approximately$195.5 million in aggregate consideration, including$11.8 million in seller financing, and total gain on sale of$36.1 million . In addition, the Company deferred a net gain on sale of$2.1 million in connection with dispositions of certain properties with seller financing.
Balance Sheet
-
The Company had total debt outstanding of
$363.1 million atDecember 31, 2023 , or 38% of net real estate value, compared to total debt outstanding of$439.5 million atDecember 31, 2022 , or 40% of net real estate value. -
At
December 31, 2023 , the Company had access to liquidity of$206.6 million , consisting of$5.5 million in cash and$201.1 million in undrawn availability under its credit facilities compared to cash of$7.7 million and$169.0 million in undrawn availability under its credit facilities atDecember 31, 2022 . -
During the year ended
December 31, 2023 , the Company repurchased 6,551,087 shares of its common stock at a weighted average price of$11.00 per share. -
In
December 2023 , the Company declared a one-time special dividend of$0.21 per share of common stock and Class A Common OP Unit which was paid inJanuary 2024 ; -
As of
February 23, 2024 , the Company had 49,231,777 shares of common stock outstanding on a fully diluted basis.
Dividend Declarations
The Company’s Board of Directors declared a quarterly cash dividend of
2023 Earnings Guidance and Supplemental Package
For 2024 earnings guidance, please see page 15 of the supplemental package, which can be accessed through the Investor Relations section of the Company's website.
Conference Call Information
The Company has scheduled a conference call on
The call can be accessed live over the phone by dialing 1-888-596-4144 and using the conference ID 9397607. The conference call will also be available via a live listen-only webcast that can be accessed through the Investor Relations section of the Company's website, www.farmlandpartners.com.
A replay of the conference call will be available beginning shortly after the end of the event until
About
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the federal securities laws, including, without limitation, statements with respect to our outlook and the outlook for the farm economy generally, proposed and pending acquisitions and dispositions, financing activities, crop yields and prices and anticipated rental rates. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “should,” “could,” “would,” “predicts,” “potential,” “continue,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” or similar expressions or their negatives, as well as statements in future tense. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, beliefs and expectations, such forward-looking statements are not predictions of future events or guarantees of future performance and our actual results could differ materially from those set forth in the forward-looking statements. Some factors that might cause such a difference include the following: the on-going war in
|
||||||||
Consolidated Balance Sheets |
||||||||
As of |
||||||||
(in thousands) |
||||||||
|
|
|
|
|
|
|
||
|
|
|
|
|
||||
|
|
2023 |
|
2022 |
||||
ASSETS |
|
|
|
|
|
|
||
Land, at cost |
|
$ |
869,848 |
|
|
$ |
980,521 |
|
Grain facilities |
|
|
12,222 |
|
|
|
11,349 |
|
Groundwater |
|
|
11,472 |
|
|
|
17,682 |
|
Irrigation improvements |
|
|
41,988 |
|
|
|
50,097 |
|
Drainage improvements |
|
|
10,315 |
|
|
|
12,543 |
|
Permanent plantings |
|
|
39,620 |
|
|
|
50,394 |
|
Other |
|
|
4,696 |
|
|
|
6,967 |
|
Construction in progress |
|
|
4,453 |
|
|
|
14,810 |
|
Real estate, at cost |
|
|
994,614 |
|
|
|
1,144,363 |
|
Less accumulated depreciation |
|
|
(33,083 |
) |
|
|
(38,447 |
) |
Total real estate, net |
|
|
961,531 |
|
|
|
1,105,916 |
|
Deposits |
|
|
426 |
|
|
|
148 |
|
Cash and cash equivalents |
|
|
5,489 |
|
|
|
7,654 |
|
Assets held for sale |
|
|
28 |
|
|
|
33 |
|
Loans and financing receivables, net |
|
|
31,020 |
|
|
|
21,921 |
|
Right of use asset |
|
|
399 |
|
|
|
325 |
|
Deferred offering costs |
|
|
— |
|
|
|
63 |
|
Accounts receivable, net |
|
|
7,743 |
|
|
|
7,055 |
|
Derivative asset |
|
|
1,707 |
|
|
|
2,084 |
|
Inventory |
|
|
2,335 |
|
|
|
2,808 |
|
Equity method investments |
|
|
4,136 |
|
|
|
4,185 |
|
Intangible assets, net |
|
|
2,035 |
|
|
|
2,055 |
|
|
|
|
2,706 |
|
|
|
2,706 |
|
Prepaid and other assets |
|
|
2,447 |
|
|
|
3,196 |
|
TOTAL ASSETS |
|
$ |
1,022,002 |
|
|
$ |
1,160,149 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND EQUITY |
|
|
|
|
|
|
||
LIABILITIES |
|
|
|
|
|
|
||
Mortgage notes and bonds payable, net |
|
$ |
360,859 |
|
|
$ |
436,875 |
|
Lease liability |
|
|
399 |
|
|
|
325 |
|
Dividends payable |
|
|
13,286 |
|
|
|
3,333 |
|
Accrued interest |
|
|
4,747 |
|
|
|
4,135 |
|
Accrued property taxes |
|
|
1,898 |
|
|
|
2,008 |
|
Deferred revenue |
|
|
2,149 |
|
|
|
44 |
|
Accrued expenses |
|
|
7,854 |
|
|
|
9,215 |
|
Total liabilities |
|
|
391,192 |
|
|
|
455,935 |
|
|
|
|
|
|
|
|
||
Commitments and contingencies |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Redeemable non-controlling interest in operating partnership, Series A preferred units |
|
|
101,970 |
|
|
|
110,210 |
|
|
|
|
|
|
|
|
||
EQUITY |
|
|
|
|
|
|
||
Common stock, |
|
|
466 |
|
|
|
531 |
|
Additional paid in capital |
|
|
577,253 |
|
|
|
647,346 |
|
Retained earnings |
|
|
31,411 |
|
|
|
3,567 |
|
Cumulative dividends |
|
|
(95,939 |
) |
|
|
(73,964 |
) |
Other comprehensive income |
|
|
2,691 |
|
|
|
3,306 |
|
Non-controlling interests in operating partnership |
|
|
12,958 |
|
|
|
13,218 |
|
Total equity |
|
|
528,840 |
|
|
|
594,004 |
|
|
|
|
|
|
|
|
||
TOTAL LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS IN OPERATING PARTNERSHIP AND EQUITY |
|
$ |
1,022,002 |
|
|
$ |
1,160,149 |
|
|
||||||||
Consolidated Statements of Operations |
||||||||
Years Ended |
||||||||
(in thousands except per share amounts) |
||||||||
|
|
|
|
|
|
|
||
|
|
For the Years Ended |
||||||
|
|
|
||||||
|
|
2023 |
|
2022 |
||||
OPERATING REVENUES: |
|
|
|
|
|
|
||
Rental income |
|
$ |
49,185 |
|
|
$ |
48,879 |
|
Crop sales |
|
|
2,257 |
|
|
|
5,372 |
|
Other revenue |
|
|
6,024 |
|
|
|
6,959 |
|
Total operating revenues |
|
|
57,466 |
|
|
|
61,210 |
|
|
|
|
|
|
|
|
||
OPERATING EXPENSES |
|
|
|
|
|
|
||
Depreciation, depletion and amortization |
|
|
7,499 |
|
|
|
6,960 |
|
Property operating expenses |
|
|
8,660 |
|
|
|
8,190 |
|
Cost of goods sold |
|
|
4,754 |
|
|
|
5,966 |
|
Acquisition and due diligence costs |
|
|
17 |
|
|
|
111 |
|
General and administrative expenses |
|
|
11,274 |
|
|
|
12,005 |
|
Legal and accounting |
|
|
1,279 |
|
|
|
2,874 |
|
Impairment of assets |
|
|
5,840 |
|
|
|
— |
|
Other operating expenses |
|
|
144 |
|
|
|
130 |
|
Total operating expenses |
|
|
39,467 |
|
|
|
36,236 |
|
|
|
|
|
|
|
|
||
OTHER (INCOME) EXPENSE: |
|
|
|
|
|
|
||
Other (income) |
|
|
(39 |
) |
|
|
(663 |
) |
(Income) from equity method investment |
|
|
(1 |
) |
|
|
(52 |
) |
(Gain) on disposition of assets, net |
|
|
(36,133 |
) |
|
|
(2,641 |
) |
Interest expense |
|
|
22,657 |
|
|
|
16,143 |
|
Total other expense |
|
|
(13,516 |
) |
|
|
12,787 |
|
|
|
|
|
|
|
|
||
Net income before income tax (benefit) expense |
|
|
31,515 |
|
|
|
12,187 |
|
|
|
|
|
|
|
|
||
Income tax (benefit) expense |
|
|
(166 |
) |
|
|
227 |
|
|
|
|
|
|
|
|
||
NET INCOME |
|
|
31,681 |
|
|
|
11,960 |
|
|
|
|
|
|
|
|
||
Net (income) attributable to non-controlling interests in operating partnership |
|
|
(768 |
) |
|
|
(286 |
) |
|
|
|
|
|
|
|
||
Net income attributable to the Company |
|
|
30,913 |
|
|
|
11,674 |
|
|
|
|
|
|
|
|
||
Nonforfeitable distributions allocated to unvested restricted shares |
|
|
(157 |
) |
|
|
(63 |
) |
Distributions on Series A Preferred Units |
|
|
(2,970 |
) |
|
|
(3,210 |
) |
|
|
|
|
|
|
|
||
Net income available to common stockholders of |
|
$ |
27,786 |
|
|
$ |
8,401 |
|
|
|
|
|
|
|
|
||
Basic and diluted per common share data: |
|
|
|
|
|
|
||
Basic net income available to common stockholders |
|
$ |
0.55 |
|
|
$ |
0.16 |
|
Diluted net income available to common stockholders |
|
$ |
0.53 |
|
|
$ |
0.16 |
|
Basic weighted average common shares outstanding |
|
|
50,243 |
|
|
|
50,953 |
|
Diluted weighted average common shares outstanding |
|
|
58,292 |
|
|
|
50,953 |
|
Dividends declared per common share |
|
$ |
0.24 |
|
|
$ |
0.23 |
|
Please note: a presentation change to the consolidated statements of operations now groups tenant reimbursement into rental income. Please see “Note 2—Revenue Recognition” of the Annual Report on Form 10-K for the year ended |
|
||||||||
Reconciliation of Non-GAAP Measures |
||||||||
Years Ended |
||||||||
|
|
|
|
|
|
|
||
|
|
For the years ended
|
||||||
(in thousands except per share amounts) |
|
2023 |
|
2022 |
||||
Net income |
|
$ |
31,681 |
|
|
$ |
11,960 |
|
(Gain) on disposition of assets, net |
|
|
(36,133 |
) |
|
|
(2,641 |
) |
Depreciation, depletion and amortization |
|
|
7,499 |
|
|
|
6,960 |
|
Impairment of assets |
|
|
5,840 |
|
|
|
— |
|
FFO |
|
$ |
8,887 |
|
|
$ |
16,279 |
|
|
|
|
|
|
|
|
||
Stock-based compensation and incentive |
|
|
2,008 |
|
|
|
1,999 |
|
Deferred impact of interest rate swap terminations |
|
|
198 |
|
|
|
582 |
|
Real estate related acquisition and due diligence costs |
|
|
17 |
|
|
|
111 |
|
Distributions on Preferred units and stock |
|
|
(2,970 |
) |
|
|
(3,210 |
) |
AFFO |
|
$ |
8,140 |
|
|
$ |
15,761 |
|
|
|
|
|
|
|
|
||
AFFO per diluted weighted average share data: |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
AFFO weighted average common shares |
|
|
51,810 |
|
|
|
52,531 |
|
|
|
|
|
|
|
|
||
Net income available to common stockholders of |
|
$ |
0.55 |
|
|
$ |
0.16 |
|
Income available to redeemable non-controlling interest and non-controlling interest in operating partnership |
|
|
0.08 |
|
|
|
0.08 |
|
Depreciation, depletion and amortization |
|
|
0.14 |
|
|
|
0.13 |
|
Impairment of assets |
|
|
0.11 |
|
|
|
0.00 |
|
Stock-based compensation and incentive |
|
|
0.04 |
|
|
|
0.04 |
|
(Gain) on disposition of assets, net |
|
|
(0.70 |
) |
|
|
(0.05 |
) |
Distributions on Preferred units and stock |
|
|
(0.06 |
) |
|
|
(0.06 |
) |
AFFO per diluted weighted average share |
|
$ |
0.16 |
|
|
$ |
0.30 |
|
|
|
|
|
|
|
|
||
|
|
For the years ended
|
||||||
(in thousands) |
|
2023 |
|
2022 |
||||
Net income |
|
$ |
31,681 |
|
|
$ |
11,960 |
|
Interest expense |
|
|
22,657 |
|
|
|
16,143 |
|
Income tax (benefit) expense |
|
|
(166 |
) |
|
|
227 |
|
Depreciation, depletion and amortization |
|
|
7,499 |
|
|
|
6,960 |
|
Impairment of assets |
|
|
5,840 |
|
|
|
— |
|
(Gain) on disposition of assets, net |
|
|
(36,133 |
) |
|
|
(2,641 |
) |
EBITDAre |
|
$ |
31,378 |
|
|
$ |
32,649 |
|
|
|
|
|
|
|
|
||
Stock-based compensation and incentive |
|
|
2,008 |
|
|
|
1,999 |
|
Real estate related acquisition and due diligence costs |
|
|
17 |
|
|
|
111 |
|
Adjusted EBITDAre |
|
$ |
33,403 |
|
|
$ |
34,759 |
|
|
||||||||
Reconciliation of Non-GAAP Measures |
||||||||
Years Ended |
||||||||
|
|
|
|
|
|
|
||
|
|
For the years ended
|
||||||
($ in thousands) |
|
2023 |
|
2022 |
||||
OPERATING REVENUES: |
|
|
|
|
|
|
||
Rental income |
|
$ |
49,185 |
|
|
$ |
48,879 |
|
Crop sales |
|
|
2,257 |
|
|
|
5,372 |
|
Other revenue |
|
|
6,024 |
|
|
|
6,959 |
|
Total operating revenues |
|
|
57,466 |
|
|
|
61,210 |
|
|
|
|
|
|
|
|
||
Property operating expenses |
|
|
8,660 |
|
|
|
8,190 |
|
Cost of goods sold |
|
|
4,754 |
|
|
|
5,966 |
|
NOI |
|
|
44,052 |
|
|
|
47,054 |
|
|
|
|
|
|
|
|
||
Depreciation, depletion and amortization |
|
|
7,499 |
|
|
|
6,960 |
|
Acquisition and due diligence costs |
|
|
17 |
|
|
|
111 |
|
General and administrative expenses |
|
|
11,274 |
|
|
|
12,005 |
|
Legal and accounting |
|
|
1,279 |
|
|
|
2,874 |
|
Impairment of assets |
|
|
5,840 |
|
|
|
— |
|
Other operating expenses |
|
|
144 |
|
|
|
130 |
|
Other (income) |
|
|
(39 |
) |
|
|
(663 |
) |
(Income) from equity method investment |
|
|
(1 |
) |
|
|
(52 |
) |
(Gain) loss on disposition of assets, net |
|
|
(36,133 |
) |
|
|
(2,641 |
) |
Interest expense |
|
|
22,657 |
|
|
|
16,143 |
|
Income tax (benefit) expense |
|
|
(166 |
) |
|
|
227 |
|
NET INCOME |
|
$ |
31,681 |
|
|
$ |
11,960 |
|
Please note: a presentation change to the consolidated statements of operations now groups tenant reimbursement into rental income. Please see “Note 2—Revenue Recognition” of the Annual Report on Form 10-K for the year ended |
Non-GAAP Financial Measures
The Company considers the following non-GAAP measures as useful to investors as key supplemental measures of its performance: FFO, NOI, AFFO, EBITDAre and Adjusted EBITDAre. These non-GAAP financial measures should be considered along with, but not as alternatives to, net income or loss as a measure of the Company’s operating performance. FFO, NOI, AFFO, EBITDAre and Adjusted EBITDAre, as calculated by the Company, may not be comparable to other companies that do not define such terms exactly as the Company.
FFO
The Company calculates FFO in accordance with the standards established by the
AFFO
The Company calculates AFFO by adjusting FFO to exclude the income and expenses that the Company believes are not reflective of the sustainability of the Company’s ongoing operating performance, including, but not limited to, real estate related acquisition and due diligence costs, stock-based compensation and incentive, deferred impact of interest rate swap terminations, and distributions on the Company’s preferred units.
Changes in GAAP accounting and reporting rules that were put in effect after the establishment of NAREIT’s definition of FFO in 1999 result in the inclusion of a number of items in FFO that do not correlate with the sustainability of the Company’s operating performance. Therefore, in addition to FFO, the Company presents AFFO and AFFO per share, fully diluted, both of which are non-GAAP measures. Management considers AFFO a useful supplemental performance metric for investors as it is more indicative of the Company’s operational performance than FFO. AFFO is not intended to represent cash flow or liquidity for the period and is only intended to provide an additional measure of the Company’s operating performance. Even AFFO, however, does not properly capture the timing of cash receipts, especially in connection with full-year rent payments under lease agreements entered into in connection with newly acquired farms. Management considers AFFO per share, fully diluted to be a supplemental metric to GAAP earnings per share. AFFO per share, fully diluted provides additional insight into how the Company’s operating performance could be allocated to potential shares outstanding at a specific point in time. Management believes that AFFO is a widely recognized measure of the operations of REITs and presenting AFFO will enable investors to assess the Company’s performance in comparison to other REITs. However, other REITs may use different methodologies for calculating AFFO and AFFO per share, fully diluted and, accordingly, the Company’s AFFO and AFFO per share, fully diluted may not always be comparable to AFFO and AFFO per share amounts calculated by other REITs. AFFO and AFFO per share, fully diluted should not be considered as an alternative to net income (loss) or earnings per share (determined in accordance with GAAP) as an indication of financial performance, or as an alternative to net income (loss) earnings per share (determined in accordance with GAAP) as a measure of the Company’s liquidity, nor are they indicative of funds available to fund the Company’s cash needs, including its ability to make distributions.
EBITDAre and Adjusted EBITDAre
The Company calculates Earnings Before Interest Taxes Depreciation and Amortization for real estate (“EBITDAre”) in accordance with the standards established by NAREIT in its
The Company calculates Adjusted EBITDAre by adjusting EBITDAre for certain items such as stock-based compensation and incentive and real estate related acquisition and due diligence costs that the Company considers necessary to understand its operating performance. The Company believes that Adjusted EBITDAre provides useful supplemental information to investors regarding the Company’s ongoing operating performance that, when considered with net income and EBITDAre, is beneficial to an investor’s understanding of the Company’s operating performance. However, EBITDAre and Adjusted EBITDAre have limitations as analytical tools and should not be considered in isolation or as a substitute for analysis of the Company’s results as reported under GAAP.
In prior periods, the Company has presented EBITDA and Adjusted EBITDA. In accordance with NAREIT’s recommendation, beginning with the Company’s reported results for the three months ended
Net Operating Income (NOI)
The Company calculates net operating income (NOI) as total operating revenues (rental income, tenant reimbursements, crop sales and other revenue), less property operating expenses (direct property expenses and real estate taxes), less cost of goods sold. Since net operating income excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expenses, other income and losses and extraordinary items, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and leasing farmland real estate, providing a perspective not immediately apparent from net income. However, net operating income should not be viewed as an alternative measure of the Company’s financial performance since it does not reflect general and administrative expenses, interest expense, depreciation and amortization costs, other income and losses.
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ir@farmlandpartners.com
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