Alpine me Property Trust(PINE) - 2024 Q2 - Quarterly Results

Financial & Operational Highlights Alpine Income Property Trust reported strong Q2 2024 results, with FFO and AFFO per diluted share up 16.2% to $0.43, and raised full-year guidance Key Financial Metrics (Q2 2024) | Metric | Q2 2024 | YoY Change | | :--- | :--- | :--- | | FFO per Diluted Share | $0.43 | +16.2% | | AFFO per Diluted Share | $0.43 | +16.2% | - Acquired a net lease retail property for $14.6 million, which is 100% leased to two investment-grade tenants[36] - Originated a first mortgage construction loan with a total commitment of $6.1 million at a yield of 11.5%[5] - Sold two net lease properties for $6.6 million at a weighted average exit cash cap rate of 7.0%, generating gains of $0.9 million[11] - Increased full-year 2024 FFO and AFFO guidance, representing a 4.2% increase at the midpoint of the new ranges[6] Financial Performance The company achieved solid top-line growth and robust FFO and AFFO increases for both the quarter and year-to-date periods Quarterly Results (Q2 2024) Q2 2024 saw total revenues grow 10.1% to $12.5 million, with FFO and AFFO per diluted share significantly increasing to $0.43 Q2 2024 Financial Performance Summary (in thousands) | Financial Metric | Q2 2024 | Q2 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $12,490 | $11,348 | +10.1% | | Net Income Attributable to PINE | $204 | $80 | +155.0% | | FFO | $6,313 | $5,770 | +9.4% | | FFO per Diluted Share | $0.43 | $0.37 | +16.2% | | AFFO | $6,399 | $5,843 | +9.5% | | AFFO per Diluted Share | $0.43 | $0.37 | +16.2% | Year-to-Date Results (Six Months Ended June 30, 2024) Year-to-date total revenues increased 10.9% to $25.0 million, with FFO and AFFO per diluted share growing over 16% despite a net loss Year-to-Date Financial Performance Summary (in thousands) | Financial Metric | YTD 2024 | YTD 2023 | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | $24,956 | $22,504 | +10.9% | | Net (Loss) Income Attributable to PINE | ($56) | $3,419 | -101.6% | | FFO | $12,443 | $11,397 | +9.2% | | FFO per Diluted Share | $0.84 | $0.72 | +16.7% | | AFFO | $12,642 | $11,478 | +10.1% | | AFFO per Diluted Share | $0.85 | $0.73 | +16.4% | Investment & Disposition Activity Q2 2024 saw $20.7 million in investments, including property acquisitions and loan originations, alongside $20.2 million in dispositions - Acquired one retail property for $14.6 million, leased to investment-grade tenants Best Buy and Golf Galaxy (Dick's Sporting Goods)[40] - Originated one first mortgage construction loan with a total funding commitment of $6.1 million at a yield of 11.5%[41] - Sold two net lease properties for $6.6 million at a weighted average exit cash cap rate of 7.0%[43] - Sold a $13.6 million A-1 participation interest in a portfolio loan at a yield of 8.0%[19] Property Portfolio Overview PINE's portfolio consists of 137 high-quality properties with 99.1% occupancy, diversified across states and industries, with 67% ABR from investment-grade tenants Portfolio Summary The portfolio comprises 137 properties totaling 3.8 million square feet, with 99.1% occupancy and 90% of ABR from credit-rated tenants Property Portfolio Key Metrics | Metric | Value | | :--- | :--- | | Number of Properties | 137 | | Square Feet | 3.8 million | | Annualized Base Rent | $39.8 million | | Weighted Average Remaining Lease Term | 6.6 years | | Occupancy | 99.1% | | % of ABR from Investment Grade Rated Tenants | 67% | | % of ABR from Credit Rated Tenants | 90% | Top Tenants The portfolio's top tenants are primarily investment-grade retailers, with Walgreens, Dick's Sporting Goods, and Lowe's as the largest contributors Top Tenants by Annualized Base Rent | Tenant | % of Annualized Base Rent | | :--- | :--- | | Walgreens | 12% | | Dick's Sporting Goods | 10% | | Lowe's | 9% | | Dollar Tree/Family Dollar | 8% | | Best Buy | 6% | | Dollar General | 5% | | Walmart | 5% | Industry and Geographic Diversification The portfolio is diversified across defensive retail sectors and 34 states, with key concentrations in dollar stores, sporting goods, and New Jersey Industry Diversification by Annualized Base Rent | Industry | % of Annualized Base Rent | | :--- | :--- | | Dollar Stores | 14% | | Sporting Goods | 13% | | Pharmacy | 13% | | Home Improvement | 13% | Geographic Diversification by Annualized Base Rent | State | % of Annualized Base Rent | | :--- | :--- | | New Jersey | 12% | | Texas | 9% | | New York | 8% | | Illinois | 7% | | Michigan | 7% | | Ohio | 7% | Capital Structure and Liquidity As of June 30, 2024, PINE's total debt was $269.0 million at a 3.75% weighted average rate, with stable credit metrics Debt Structure as of June 30, 2024 | Debt Component | Principal | Wtd. Avg. Rate (as of 6/30/24) | Maturity Date | | :--- | :--- | :--- | :--- | | 2026 Term Loan | $100.0 million | 3.65% | May 2026 | | 2027 Term Loan | $100.0 million | 2.73% | January 2027 | | Revolving Credit Facility | $69.0 million | 5.39% | January 2027 | | Total Debt | $269.0 million | 3.75% | | - As of June 30, 2024, the company's net debt to Pro Forma EBITDA was 7.4x, and its fixed charge coverage ratio was 3.4x[28] Dividends The company declared a Q2 2024 cash dividend of $0.275 per share, representing a conservative 64.0% payout ratio of FFO and AFFO - Paid a Q2 2024 cash dividend of $0.275 per share, payable on June 28, 2024[29] - The dividend represents a payout ratio of 64.0% of Q2 2024 FFO and AFFO per diluted share[29] - The dividend represents an annualized yield of 6.5% based on the closing stock price on July 17, 2024[12] 2024 Full-Year Outlook PINE raised its full-year 2024 FFO and AFFO guidance to $1.58-$1.62 and $1.60-$1.64 per diluted share, respectively, maintaining investment and disposition volumes Revised 2024 Full-Year Guidance | Metric | Revised 2024 Outlook (Low) | Revised 2024 Outlook (High) | Change from Prior (Low) | Change from Prior (High) | | :--- | :--- | :--- | :--- | :--- | | Investments | $50 million | $80 million | - | - | | Dispositions | $50 million | $80 million | - | - | | FFO per Diluted Share | $1.58 | $1.62 | +$0.07 | +$0.06 | | AFFO per Diluted Share | $1.60 | $1.64 | +$0.07 | +$0.06 | - The guidance was increased as the company's net investment spreads have driven strong earnings growth[7] Appendix: Financial Statements & Non-GAAP Reconciliations This appendix presents unaudited consolidated financial statements and detailed reconciliations of GAAP Net Income to non-GAAP metrics like FFO, AFFO, and Pro Forma EBITDA Consolidated Statements of Operations The statements show Q2 2024 total revenues of $12.5 million and net income of $0.2 million, with year-to-date total revenues of $25.0 million and a net loss Consolidated Statements of Operations (in thousands) | (In thousands) | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total Revenues | $12,490 | $24,956 | | Total Operating Expenses | $10,411 | $20,294 | | Gain on Disposition of Assets | $918 | $918 | | Interest Expense | ($2,831) | ($5,766) | | Net Income (Loss) | $222 | ($61) | Consolidated Balance Sheets As of June 30, 2024, total assets were $565.8 million, with total liabilities at $297.4 million and total equity at $268.4 million Consolidated Balance Sheets (in thousands) | (In thousands) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Real Estate—Net | $445,111 | $443,593 | | Total Assets | $565,777 | $564,560 | | Total Liabilities | $297,423 | $288,947 | | Total Equity | $268,354 | $275,613 | | Total Liabilities and Equity | $565,777 | $564,560 | Non-GAAP Reconciliations This section details reconciliations from GAAP Net Income to FFO and AFFO for Q2 2024, and the calculation of Net Debt to Pro Forma EBITDA FFO and AFFO Reconciliation (Q2 2024, in thousands) | Reconciliation (Q2 2024, in thousands) | Amount | | :--- | :--- | | Net Income | $222 | | Depreciation and Amortization | $6,352 | | Gain on Disposition of Assets | ($918) | | Funds from Operations (FFO) | $6,313 | | Non-cash adjustments | $86 | | Adjusted Funds from Operations (AFFO) | $6,399 | - The reconciliation of Net Debt to Pro Forma EBITDA results in a ratio of 7.4x for the quarter ended June 30, 2024[87] - The company defines FFO per NAREIT guidelines and further adjusts for non-cash items like straight-line rent and amortization of financing costs to calculate AFFO, which management uses to assess operating performance[59][77][79]