Gladstone Land(LAND) - 2024 Q3 - Quarterly Results

Financial Performance - Net income for Q3 2024 was approximately $6,000, a decrease from $3.1 million in Q3 2023, with a net loss to common stockholders of approximately $5.8 million, or $0.16 per share, compared to a loss of $3.0 million, or $0.08 per share, in the prior-year quarter[4] - Total operating revenues decreased by 4.1% to $22,571,000 compared to $23,534,000 in the same quarter last year[11] - Net income dropped significantly by 99.8% to $6,000 from $3,141,000 year-over-year[11] - FFO available to common stockholders decreased by 5.3% to $5,970,000 from $6,306,000[11] - AFFO available to common stockholders fell by 15.7% to $4,526,000 compared to $5,369,000 in the previous year[11] - Cash flows from operations showed a significant decline of 1,808.8% to $(1,367,000) from $80,000[11] Revenue and Lease Agreements - Total cash lease revenues decreased by approximately $2.6 million, primarily due to the sale of a large farm in Florida and reduced fixed base rents from certain properties, partially offset by an increase of approximately $1.1 million in participation rents[5] - The company executed 21 amended or new lease agreements, resulting in an expected aggregate increase in annual net operating income of approximately $309,000, or 11%, from row crop farms, while nine leases on permanent crop farms are expected to decrease annual net operating income by approximately $441,000, or 15%[3] Assets and Liabilities - Total assets decreased by 6.3% to $1,317,935,000 from $1,406,112,000[11] - Total indebtedness reduced by 8.3% to $593,635,000 from $647,672,000[11] - The net cost basis of real estate holdings and related assets is $1,273,579, while the estimated fair value of these holdings is $1,462,362[21] - The fair value adjustment for long-term liabilities is $34,299, contributing to the overall NAV calculation[22] Cash Distributions - The company declared monthly cash distributions of $0.1401 per share of common stock for Q3 2024, an increase of 0.21% from the previous run rate[3] - The current monthly cash distribution per common share is $0.0467, with a total annual distribution of $0.5604[13] NAV and Valuation - The estimated NAV per share decreased by $4.76 to $15.57 at September 30, 2024, primarily due to valuation decreases in certain farms and an increase in the fair value of long-term borrowings[7] - Estimated NAV is $914,286, resulting in an estimated NAV available to common stockholders and non-controlling OP Unitholders of $557,984[22] - Total common shares and non-controlling OP Units outstanding amount to 35,838,442, leading to an estimated NAV per common share and non-controlling OP Unit of $15.57[22] - The company intends to have each property valued by an independent appraiser at least once every three years, ensuring accurate fair value assessments[20] - The company’s valuation policy is approved by the board of directors and includes methodologies such as income capitalization and discounted cash flow analysis[20] - The independent auditors have neither audited nor reviewed the company's calculation of NAV or NAV per share[22] Future Outlook - Forward-looking statements indicate expectations for increases in farmland values and operating revenues, though these are subject to risks and uncertainties[23] - The company cautions against undue reliance on forward-looking statements due to potential economic downturns and competition risks[23] Operational Changes - Cash flows from operations decreased by approximately $1.4 million from the prior-year quarter, largely due to cash allowances provided in new leases and increased payments for water asset acquisitions[7] - In October 2024, the company entered into agreements to sell 11 blueberry farms for total consideration of approximately $5.0 million, expected to close by December 31, 2024[8] - The company continues to acquire water at below-market prices, enhancing water security for its farms[10] Occupancy and Portfolio - The occupancy rate slightly decreased to 99.5% from 100.0% year-over-year[11] - The company owns 168 farms across approximately 112,000 acres, with a farmland portfolio value of $1,462,362,000[13] - Total equity per balance sheet is $691,204, with a net fair value adjustment for real estate holdings of $188,783[21]