Gladstone Land(US:LAND)2024-08-08 20:05Farm Portfolio and Operations - The company owns 168 farms comprising 111,836 acres across 15 states in the U.S. and 53,975 acre-feet of water assets in California [115]. - California farms account for 31.2% of total acres and generated lease revenue of $27,628,000, which is 67.2% of total lease revenue [118]. - The farmland portfolio is diversified with 93 different tenants growing over 60 types of crops [116]. - The company has a focus on farmland suitable for fresh produce and permanent crops, with an ancillary focus on commodity crops [116]. - The company operates through an externally-managed structure, with Gladstone Management Corporation managing the real estate portfolio [115]. - The company has 103 farms leased on a pure triple-net basis, with 49 on a partial-net basis, and 12 farms directly operated [119]. - The company had 22 farms that were either vacant, direct-operated, or placed on non-accrual during all or a portion of the reporting periods [144]. - The company did not acquire any new farms from January 1, 2023, through June 30, 2024, and had one farm disposition [144]. Financial Performance - Total lease revenue for the six months ended June 30, 2024, was $41,096,000, representing 100% of total revenue [121]. - Total lease revenue for the six months ended June 30, 2024, was $41,096, a decrease of 3.1% from $42,412 in 2023 [148]. - For the three months ended June 30, 2024, total operating revenues increased to $21,297, a 0.4% increase from $21,210 in the same period of 2023 [147]. - Operating income for the three months ended June 30, 2024, was $7,864, reflecting a 0.5% increase from $7,827 in 2023 [147]. - Net loss attributable to common stockholders for the three months ended June 30, 2024, was $(6,654) million, a decrease of 485.3% compared to a net income of $1,727 million in the same period last year [168]. - Net income for the six months ended June 30, 2024, was $12,744 million, representing a 32.7% increase from $9,605 million in the same period last year [168]. - Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO) are key non-GAAP measures used to assess operational performance, with adjustments made for non-recurring charges and cash rent normalization [190][194]. Lease and Revenue Details - 9.9% of total acreage (11,079 acres) is scheduled to expire in 2024, contributing $5,079,000 or 12.4% of total lease revenue for the six months ended June 30, 2024 [121]. - The company is exploring options for nine agricultural leases expiring within the next six months, including negotiating new terms and potential sales [122]. - During the six months ended June 30, 2024, lease revenue from vacant, direct-operated, and non-accrual properties was approximately $561,000, a decrease from approximately $1.8 million in the prior-year period [124]. - Lease revenue from vacant, direct-operated, or non-accrual properties decreased by 43.3% to $561 for the three months ended June 30, 2024 [151]. - Fixed lease payments for the three months ended June 30, 2024, decreased to $20,068, down 5.0% from $21,118 in 2023 [147]. Expenses and Costs - Property operating expenses for the three months ended June 30, 2024, increased by 37.4% to $1,219 compared to $887 in 2023 [147]. - The company experienced a 198.2% increase in tenant-reimbursed property operating expenses for the six months ended June 30, 2024, totaling $328 million compared to $110 million in 2023 [159]. - General and administrative expenses decreased due to lower stockholder-related expenses and acquisition-related costs, contributing to overall cost management [167]. - Property operating expenses for properties acquired or disposed of decreased significantly due to the sale of a farm in Florida [161]. Capital and Financing - The company repaid approximately $6.0 million of loans with a weighted-average interest rate of 4.31% and an effective rate of 3.06% [128]. - The Series E Preferred Stock offering raised net proceeds of approximately $90,000 from the sale of 3,995 shares at an average price of $24.90 per share [129]. - The company approved a share repurchase program for up to $20.0 million of Series B Preferred Stock and $35.0 million of Series C Preferred Stock [130]. - Current available liquidity is approximately $179.2 million, consisting of $32.7 million in cash and $146.5 million available under a credit facility [170]. - The company plans to use a significant portion of available liquidity to purchase additional farms and farm-related facilities as opportunities arise [173]. - The company expects to enter into additional borrowing agreements with existing and new lenders for potential acquisitions in the future [186]. Market and Valuation - The total fair value of the real estate portfolio as of June 30, 2024, was $1,485,653 million, with 97.4% derived from third-party appraisals [200]. - The estimated NAV per common share as of June 30, 2024, is $17.59, down from $18.50 as of March 31, 2024 [207]. - The closing price of common stock on June 30, 2024, was $13.69 per share, significantly lower than the estimated NAV per share [207]. - The fair value of long-term borrowings as of June 30, 2024, is approximately $503.0 million, compared to a carrying value of approximately $551.9 million [203]. - The company plans to have each property valued by an independent appraiser at least once every three years to ensure accurate fair value assessments [199]. Cash Flow - Net cash flow from operating activities decreased by 14.4% to $19,333,000 in 2024 from $22,577,000 in 2023 [180]. - Cash flow from investing activities increased significantly by 1,889.0% to $61,678,000 in 2024, primarily due to proceeds from the sale of a 3,748-acre farm in Florida for approximately $65.7 million [180][182]. - Cash flow from financing activities decreased by 29.0% to $(49,825,000) in 2024, attributed to a reduction in net cash proceeds from equity offerings [180][183]. - The total net change in cash and cash equivalents was $31,186,000 in 2024, a substantial increase compared to $(12,933,000) in 2023, representing a change of 341.1% [180].