Farmland Partners(FPI) - 2024 Q2 - Quarterly Results

Q2 2024 Performance Highlights Selected Highlights Farmland Partners Inc. reported a ($2.1) million net loss in Q2 2024, with AFFO improving to $0.5 million Q2 2024 vs Q2 2023 Financial Highlights | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net Income (Loss) | ($2.1) million | $7.9 million | | Net Income (Loss) per Share | ($0.06) | $0.14 | | AFFO | $0.5 million | ($1.1) million | | AFFO per Share | $0.01 | ($0.02) | | Total Operating Expenses | Decreased 7.0% | - | - The decrease in average gross book value of real estate by 10.4% to $1.01 billion is a result of dispositions that occurred in 2023[2] - Susan Landi was appointed as the company's new Chief Financial Officer (CFO) and Treasurer[2] CEO Comments CEO Luca Fabbri attributed strong Q2 performance to portfolio improvements and cost savings, planning further asset disposals - The company's strong Q2 performance is credited to portfolio improvements, debt reduction from 2023 activities, and a resilient farm economy[3] - Future strategy includes further asset disposals to fund additional debt or preferred equity reductions and stock buybacks[3] - Management is optimistic that lower interest rates, a leaner corporate structure, and continued strong results will reduce the discount of the current stock price to its intrinsic value[3] Financial and Operating Results Summary of Financial and Operating Results Q2 2024 saw a 1.2% decrease in revenues but a 7.8% increase in NOI to $8.8 million; H1 AFFO grew 690.9% Financial and Operating Results (in thousands) | Metric | Q2 2024 | Q2 2023 | Change | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $(2,052) | $7,899 | NM | $(644) | $9,612 | NM | | AFFO | $530 | $(1,131) | NM | $3,314 | $419 | 690.9% | | AFFO per share | $0.01 | $(0.02) | NM | $0.07 | $0.01 | 600.0% | | Adjusted EBITDAre | $6,521 | $5,400 | 20.8% | $15,103 | $12,487 | 20.9% | | Total Operating Revenues | $11,445 | $11,584 | (1.2)% | $23,435 | $24,256 | (3.4)% | | Net Operating Income (NOI) | $8,814 | $8,176 | 7.8% | $18,465 | $17,720 | 4.2% | Acquisition and Disposition Activity In H1 2024, the company was a net acquirer, purchasing three properties for $16.3 million with no dispositions - Acquired three properties for a total of $16.3 million during the six months ended June 30, 2024[7] - There were no dispositions of properties during the first six months of 2024[7] Balance Sheet and Liquidity As of June 30, 2024, total debt increased to $393.0 million, with total liquidity at $163.8 million Balance Sheet and Liquidity Highlights | Metric | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Debt Outstanding | $393.0 million | $363.1 million | | Total Liquidity | $163.8 million | $206.6 million | | - Cash | $5.7 million | $5.5 million | | - Undrawn Credit Facilities | $158.1 million | $201.1 million | - As of July 19, 2024, the company had 49,370,199 shares of common stock outstanding on a fully diluted basis[7] Dividend Declarations The Board declared a quarterly cash dividend of $0.06 per share, payable October 15, 2024 - A quarterly cash dividend of $0.06 per share has been declared[8] - The dividend is payable on October 15, 2024, to stockholders of record on October 1, 2024[8] Financial Statements Consolidated Balance Sheets Total assets grew slightly to $1.028 billion as of June 30, 2024, driven by increased real estate assets Consolidated Balance Sheet Data (in thousands) | Account | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total real estate, net | $975,513 | $961,531 | | Cash and cash equivalents | $5,746 | $5,489 | | TOTAL ASSETS | $1,028,491 | $1,022,002 | | Mortgage notes and bonds payable, net | $391,059 | $360,859 | | Total liabilities | $406,537 | $391,192 | | Total equity | $521,469 | $528,840 | | TOTAL LIABILITIES AND EQUITY | $1,028,491 | $1,022,002 | Consolidated Statements of Operations Q2 2024 total operating revenues were $11.4 million, resulting in a net loss of ($2.1) million Consolidated Statements of Operations (in thousands) | Account | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $11,445 | $11,584 | $23,435 | $24,256 | | Total operating expenses | $8,205 | $8,827 | $15,048 | $16,663 | | (Gain) loss on disposition of assets, net | $10 | $(11,060) | $96 | $(12,886) | | Interest expense | $5,249 | $5,844 | $10,285 | $10,768 | | NET INCOME (LOSS) | $(2,052) | $7,899 | $(644) | $9,612 | | Basic net income (loss) per share | $(0.06) | $0.14 | $(0.05) | $0.15 | Reconciliation of Non-GAAP Measures Reconciliation of FFO and AFFO Q2 2024 net loss of ($2.1) million reconciled to an AFFO of $0.5 million Q2 Reconciliation of Net Income to AFFO (in thousands) | Line Item | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net income (loss) | $(2,052) | $7,899 | | (Gain) loss on disposition of assets, net | $10 | $(11,060) | | Depreciation, depletion and amortization | $1,430 | $2,207 | | FFO | $(612) | $(954) | | Severance expense | $1,373 | $— | | Distributions on Preferred units and stock | $(743) | $(683) | | AFFO | $530 | $(1,131) | Reconciliation of EBITDAre and Adjusted EBITDAre Q2 2024 Adjusted EBITDAre increased to $6.5 million, adjusted for interest, D&A, and severance Reconciliation of Net Income to Adjusted EBITDAre (in thousands) | Line Item | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(2,052) | $7,899 | $(644) | $9,612 | | Interest expense | $5,249 | $5,844 | $10,285 | $10,768 | | Depreciation, depletion and amortization | $1,430 | $2,207 | $2,911 | $4,001 | | (Gain) loss on disposition of assets, net | $10 | $(11,060) | $96 | $(12,886) | | EBITDAre | $4,636 | $4,894 | $12,666 | $11,508 | | Severance expense | $1,373 | $— | $1,373 | $— | | Adjusted EBITDAre | $6,521 | $5,400 | $15,103 | $12,487 | Reconciliation of Net Operating Income (NOI) Q2 2024 NOI increased to $8.8 million from $8.2 million, driven by reduced operating expenses Reconciliation to NOI (in thousands) | Line Item | Q2 2024 | Q2 2023 | H1 2024 | H1 2023 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $11,445 | $11,584 | $23,435 | $24,256 | | Property operating expenses | $(1,870) | $(2,428) | $(3,668) | $(4,610) | | Cost of goods sold | $(761) | $(980) | $(1,302) | $(1,926) | | NOI | $8,814 | $8,176 | $18,465 | $17,720 | Company Information and Outlook Company Overview Farmland Partners Inc. is an internally managed REIT owning 180,100 acres across 17 U.S. states - As of June 30, 2024, the company owns and/or manages approximately 180,100 acres in 17 U.S. states[12] - The portfolio includes approximately 26 crop types and over 100 tenants[12] - The company elected to be taxed as a REIT starting with the taxable year ended December 31, 2014[12] Forward-Looking Statements This report contains forward-looking statements subject to risks including geopolitical conflicts, inflation, and interest rates - Forward-looking statements are subject to risks that could cause actual results to differ materially[13] - Key risk factors include the war in Ukraine, conflict in the Middle East, high inflation, elevated interest rates, extreme weather events, and changes in trade policies[13] Conference Call Information A conference call to discuss financial results was scheduled for July 25, 2024, with a replay available - A conference call to discuss financial results was scheduled for July 25, 2024, at 11:00 a.m. (U.S. Eastern Time)[10] - A replay of the call will be available until August 4, 2024[11] Definitions of Non-GAAP Financial Measures FFO (Funds From Operations) FFO is a non-GAAP measure per Nareit standards, excluding property sales gains/losses and real estate depreciation - FFO is calculated per Nareit standards, defined as net income excluding gains/losses from sales of depreciable property and real estate-related depreciation and amortization[23] AFFO (Adjusted Funds From Operations) AFFO adjusts FFO to represent sustainable operating performance by excluding acquisition costs and severance - AFFO adjusts FFO to exclude items not reflective of sustainable operating performance, such as acquisition costs, stock-based compensation, and severance expense[24] - Management considers AFFO a useful supplemental metric as it is more indicative of operational performance than FFO[25] EBITDAre and Adjusted EBITDAre EBITDAre is calculated per Nareit standards, with Adjusted EBITDAre removing stock-based compensation and acquisition costs - EBITDAre is calculated according to Nareit standards The company also reports Adjusted EBITDAre, which adjusts for items like stock-based compensation and acquisition costs[26][27] Net Operating Income (NOI) NOI is total operating revenues less property-level operating expenses and cost of goods sold, reflecting direct asset profitability - NOI is calculated as total operating revenues minus property operating expenses and cost of goods sold[29] - It provides a performance measure that reflects revenues and expenses directly associated with owning and leasing farmland real estate[29]