Postal Realty Trust(US:PSTL)2024-08-06 20:11Postal Realty Trust, Inc. Q2 2024 Earnings Release Financial & Operational Highlights Postal Realty Trust reported strong second-quarter 2024 results, highlighted by a 17% year-over-year revenue increase and the acquisition of 70 USPS properties for $28.3 million at a 7.6% weighted average capitalization rate, achieving net income of $0.8 million ($0.02/share), FFO of $6.5 million ($0.23/share), and AFFO of $7.5 million ($0.26/share), while maintaining 100% rent collection Q2 2024 Key Financial Metrics | Metric | Value | Per Diluted Share (USD) | | :--- | :--- | :--- | | Net Income (attributable to common shareholders) | $0.8 million | $0.02 | | Funds from Operations (FFO) | $6.5 million | $0.23 | | Adjusted Funds from Operations (AFFO) | $7.5 million | $0.26 | | Revenue Growth (YoY) | 17% | N/A | - Acquired 70 USPS properties for approximately $28.3 million at a weighted average capitalization rate of 7.6%3 - The company collected 100% of its contractual rents during the quarter2 - CEO Andrew Spodek highlighted progress with 2023 leases, which now include 3% annual rent escalations, and noted the company's strong financial position with minimal near-term debt maturities and ample liquidity for portfolio expansion3 Portfolio & Acquisition Activity As of June 30, 2024, the company's portfolio of 1,607 properties was 99.6% occupied, spanning 6.2 million net leasable square feet, with 70 last-mile and flex properties acquired for $28.3 million in Q2 Owned Portfolio Overview (as of June 30, 2024) | Metric | Value | Unit | | :--- | :--- | :--- | | Occupancy | 99.6% | % | | Number of Properties | 1,607 | Properties | | Net Leasable Square Feet | ~6.2 million | sq. ft. | | Weighted Average Rental Rate | $9.67 | / sq. ft. | | - Last-mile and flex properties | $11.78 | / sq. ft. | | - Industrial properties | $3.57 | / sq. ft. | Q2 2024 Acquisition Summary | Metric | Value | Unit | | :--- | :--- | :--- | | Properties Acquired | 70 | Properties (last-mile and flex) | | Total Cost | ~$28.3 million | USD | | Net Leasable Square Feet Added | ~176,000 | sq. ft. | | Weighted Average Rental Rate | $12.55 | / sq. ft. | Balance Sheet & Capital Markets As of June 30, 2024, the company maintained a strong balance sheet with approximately $272 million in net debt at a weighted average interest rate of 4.48%, with 85% of debt at fixed rates, and $108 million available on its revolving credit facility - As of quarter-end, the company had approximately $3 million in cash and property-related reserves and approximately $272 million of net debt6 Debt Profile (as of June 30, 2024) | Metric | Value | Unit | | :--- | :--- | :--- | | Weighted Average Interest Rate | 4.48% | % | | Fixed Rate Debt Percentage | 85% | % (including hedges) | | Undrawn Revolving Credit Facility | $108 million | USD | - During and subsequent to Q2, the company issued 364,701 shares of common stock and 61,998 common units, raising total gross proceeds of approximately $6.1 million at an average price of $14.35 per share/unit6 Dividend & Subsequent Events The company declared a quarterly dividend of $0.24 per share, equating to an annualized rate of $0.96 per share, and subsequently acquired nine properties for $3.4 million with another 16 properties under contract for $4.7 million - On July 23, 2024, the company declared a quarterly dividend of $0.24 per share, payable on August 30, 2024, to stockholders of record as of August 2, 20247 - Subsequent to quarter end (through July 29, 2024), the company acquired nine properties for approximately $3.4 million8 - The company has an additional 16 properties under definitive contracts for a total of approximately $4.7 million8 Financial Statements & Non-GAAP Reconciliation The financial statements detail the company's performance, showing a year-over-year increase in total revenues from $15.5 million to $18.1 million for the second quarter, with net income attributable to common stockholders at $0.8 million, and provide a reconciliation from net income to non-GAAP measures FFO and AFFO Consolidated Statements of Operations This section presents the company's income and expenses, showing total revenues increased to $18.05 million while net income attributable to common stockholders decreased to $0.82 million for Q2 2024 Q2 Statement of Operations Highlights (in thousands USD) | Account | Q2 2024 (thousands USD) | Q2 2023 (thousands USD) | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $18,050 | $15,457 | +16.8% | | Total Operating Expenses | $13,941 | $11,834 | +17.8% | | Income from Operations | $4,109 | $3,623 | +13.4% | | Net Income Attributable to Common Stockholders | $817 | $1,012 | -19.3% | | Diluted EPS | $0.02 | $0.03 | -33.3% | Consolidated Balance Sheets This section details the company's financial position, with total assets growing to $608.17 million and total equity reaching $309.53 million as of June 30, 2024 Balance Sheet Highlights (in thousands USD) | Account | June 30, 2024 (thousands USD) | Dec 31, 2023 (thousands USD) | | :--- | :--- | :--- | | Total Real Estate Properties, net | $554,380 | $512,730 | | Total Assets | $608,166 | $567,345 | | Total Liabilities | $298,634 | $265,720 | | Total Equity | $309,532 | $301,625 | Non-GAAP Financial Measures (FFO & AFFO) This section provides a reconciliation of net income to FFO and AFFO, key non-GAAP measures used to assess the company's operational performance by adjusting for real estate depreciation and other non-cash items - The company uses non-GAAP measures like FFO (Funds from Operations) and AFFO (Adjusted Funds from Operations) to provide a more complete understanding of its performance, as they exclude items like real estate depreciation which may not reflect the actual change in property values121315 Reconciliation of Net Income to FFO and AFFO for Q2 2024 (in thousands USD) | Metric | Amount (thousands USD) | | :--- | :--- | | Net Income | $1,032 | | Depreciation and amortization of real estate assets | $5,491 | | FFO | $6,523 | | Adjustments (Recurring capex, financing fees, etc.) | $959 | | AFFO | $7,482 | FFO and AFFO Per Share for Q2 2024 | Metric | Per Share/Unit (USD) | | :--- | :--- | | FFO per common share and common unit | $0.23 | | AFFO per common share and common unit | $0.26 |