Modiv(MDV) - 2024 Q4 - Annual Results

Financial Performance - Full year 2024 net income attributable to common stockholders was $2.3 million, or $0.25 per diluted share[14] - Fourth quarter 2024 net income attributable to common stockholders was $0.6 million, or $0.07 per diluted share[14] - Full year 2024 AFFO was $14.99 million, or $1.34 per diluted share, exceeding street expectations by $0.08 per share[14] - Fourth quarter AFFO was $4.1 million, or $0.37 per diluted share, beating consensus estimates by 22%[14] - Total income for Q4 2024 was $11.730 million, compared to $12.388 million in Q4 2023, reflecting a decline of approximately 5.3% year-over-year[30] - Operating income for Q4 2024 increased to $5.330 million from $3.838 million in Q4 2023, representing a growth of approximately 38.9%[30] - The company reported a comprehensive income of $1.387 million for Q4 2024, compared to a comprehensive loss of $2.101 million in Q4 2023[34] - For the three months ended December 31, 2024, Modiv Industrial, Inc. reported a net income of $1,642,000, compared to a net loss of $1,048,000 for the previous quarter[36] - The earnings per share attributable to common stockholders for the latest quarter was $0.07, recovering from a loss of $0.18 in the prior quarter[36] - Funds from Operations (FFO) attributable to common stockholders and Class C OP Unit holders was $5,072,000 for the quarter ended December 31, 2024, up from $2,216,000 in the previous quarter[38] - Adjusted Funds from Operations (AFFO) attributable to common stockholders and Class C OP Unit holders was $4,067,000 for the latest quarter, compared to $3,702,000 in the prior quarter[38] - Modiv's AFFO per share on a fully diluted basis was $0.37 for the quarter ended December 31, 2024, compared to $0.34 in the previous quarter[38] - Annualized adjusted EBITDA for the year was $39,936,000, compared to $38,596,000 in the prior year[40] - Net income for the quarter was $1,642,000, a significant recovery from a net loss of $1,048,000 in the previous quarter[40] Asset Management and Acquisitions - The company plans to grow AFFO through acquiring positive income-producing assets and improving expense efficiency[20] - A small $2 million asset was sold, and a $6 million asset acquisition is expected to close by March 14, 2025[18] - The company has implemented a disciplined acquisition strategy, focusing on evaluating opportunities without overextending itself[17] - The total property acquisition activity from January 1, 2023, to December 31, 2024, includes 1,730,704 square feet with an initial lease price of $134.274 million[54] - The company disposed of properties totaling 405,025 square feet, generating $62.732 million in disposition price[57] - The company completed a non-core acquisition of a KIA auto dealership in Los Angeles County for $32.8 million, structured as an OP Unit transaction at a cost basis of $25.00 per share[63] - The company has a 12-year lease with OES for a legacy asset in Rancho Cordova, California, which includes a purchase option that OES may exercise until December 31, 2026[63] - A legacy property leased to Costco in Issaquah, Washington is under a purchase agreement with KB Home for $25.3 million, with a potential increase of $0.3 million for each additional townhome added before closing[63] Debt and Equity - Consolidated debt as of December 31, 2024, was $280,918,000, with a net debt to adjusted EBITDA ratio of 7.0x[40] - The leverage ratio as of December 31, 2024, was 48.0%, up from 47.6% in the previous quarter[44] - The company reported a total equity of $214,050,000, down from $225,122,000 in the previous year[47] - The weighted average interest rate for total debt outstanding was 4.27% as of December 31, 2024[46] - Total debt as of December 31, 2024, is $279.776 million, with a weighted average interest rate of 4.27%[48] - The company has a maximum leverage ratio of 47.6%, which is below the required limit of 60%[51] - The company reduced its Revolver line of credit from $150 million to $30 million, saving $0.3 million in annual unused fees[49] - New swap agreements were entered into for $250 million, fixing SOFR at 2.45% for the year ending December 31, 2025, resulting in a fixed rate of 4.25%[49] - The company has a minimum consolidated tangible net worth of $281.553 million, exceeding the required $221.737 million[51] Rental Income and Portfolio - Total rental income for Q4 2024 was $11.664 million, a decrease from $12.289 million in Q4 2023, attributed to the sale of 14 properties in August 2023 and two properties in Q1 2024[30] - The top 20 tenants contribute $35.439 million in annual base rent (ABR), representing 88% of the total portfolio[59] - Industrial core properties account for 78% of the total ABR, with 39 properties and 4,196,496 square feet[61] - California accounts for 30% of the total ABR, with 11,925 thousand dollars, while Ohio contributes 12% with 4,866 thousand dollars[65] - Lease expirations indicate that 5% of ABR, amounting to $1.812 million, is set to expire in 2025, with cumulative expirations reaching 100% by 2034[66] - The company holds 43 properties with an Annual Base Rent (ABR) of $39.638 million, representing 100% of the total portfolio[64] Impairment and Depreciation - The impairment charge for Q4 2023 was related to an office property in Nashville, Tennessee, which was sold in February 2024[32] - The impairment charge for the fourth quarter of 2023 was related to an office property in Nashville, Tennessee, which was sold on February 28, 2024[42] - The company experienced a depreciation and amortization of real estate properties totaling $4,163,000 for the quarter ended December 31, 2024[38] Definitions and Metrics - The company defines Funds from Operations (FFO) as net income excluding gains/losses from sales of depreciable property, plus real estate-related depreciation, providing a clearer view of operating performance[69] - Adjusted Funds from Operations (AFFO) excludes non-routine and certain non-cash items, offering insight into sustainable operating performance[70] - The leverage ratio is defined as total debt as a percentage of the aggregate fair value of real estate properties, including cash and cash equivalents[76] - The initial cap rate for property acquisitions is defined as the initial annual cash rent divided by the purchase price of the property[78]