Franklin Street Properties (FSP) - 2025 Q1 - Quarterly Results

Financial Performance - Rental revenue for Q1 2025 was $27.1 million, a decrease of 13.1% from $31.2 million in Q1 2024[12] - The company reported a net loss of $21.4 million for Q1 2025, compared to a net loss of $7.6 million in Q1 2024[12] - Adjusted EBITDA for Q1 2025 was $8.4 million, down from $11.1 million in Q1 2024, reflecting a decline of 24.5%[12] - Funds from Operations (FFO) for Q1 2025 were $2.7 million, slightly up from $2.7 million in Q4 2024[12] - Property Net Operating Income (NOI) from owned properties decreased by 7.6% year-over-year, from $12,247 million in Q1 2024 to $11,319 million in Q1 2025[22] - The company reported a net cash used for operating activities of $5,481 million for Q1 2025, compared to $7,088 million in Q1 2024[20] - Funds From Operations (FFO) for the three months ended March 31, 2025, were $2,727,000, down from $4,193,000 in the same period last year, representing a decrease of approximately 35%[26] - Adjusted Funds From Operations (AFFO) showed a loss of $693,000 for the three months ended March 31, 2025, compared to a loss of $659,000 in the prior year, reflecting a slight worsening in performance[26] - The company incurred a loss on the sale of properties and impairment of assets held for sale, netting $13,284,000 for the three months ended March 31, 2025[32] Property and Market Data - As of March 31, 2025, Franklin Street Properties Corp. owned a portfolio of 15 properties totaling 5.0 million square feet[10] - The occupancy rate for owned properties was 69.2% as of March 31, 2025, down from 73.3% a year earlier[12] - Total assets decreased from $1,038,963 million in March 2024 to $916,366 million in March 2025, a decline of approximately 11.8%[18] - Total liabilities decreased from $335,099 million in March 2024 to $282,980 million in March 2025, a reduction of approximately 15.5%[18] - The company’s total stockholders' equity decreased from $703,864 million in March 2024 to $633,386 million in March 2025, a decline of approximately 9.9%[18] - The total number of owned properties as of March 31, 2025, was 15, with a total square footage of 5,020,216[40] - The total portfolio square footage is 5,020,216, with 1,482,167 square feet classified as owned property vacant[61] Debt and Capitalization - Total market capitalization was approximately $434.5 million, with total debt outstanding at $250.2 million, resulting in a debt to total market capitalization ratio of 57.6%[12] - Total debt as of March 31, 2025, was $250,179,000, with a net debt of $218,620,000 after accounting for cash and cash equivalents[29] - The total debt outstanding, excluding unamortized financing costs, was $250,179 million, down from $303,000 million as of March 31, 2024[38] - The interest coverage ratio for the three months ended March 31, 2025, was 1.48, compared to 1.62 for the same period in 2024, indicating a decline in the ability to cover interest expenses[29] Dividends and Shareholder Returns - The company declared a dividend of $0.01 per share for Q1 2025, consistent with the previous quarters[12] - Total dividends declared for the quarter remained stable at $1,036 million, with a common dividend declared per share of $0.01[38] - The declared dividend as a percentage of net income per share was -5% for the quarter, compared to -14% in the previous year[38] Leasing Activity - New leasing activity for the quarter was zero, while renewals and expansions totaled 60,000 square feet, down from 136,000 square feet in the same quarter last year[53] - The weighted average lease term decreased to 5.2 years from 6.8 years year-over-year[53] - The average GAAP rents on leasing increased by 3.4% compared to the previous year, reaching $29.64 per square foot[53] - The company reported a weighted average lease cost of $6.65 per square foot, down from $9.00 in the previous year[53] Cash Flow and Investments - Cash, cash equivalents, and restricted cash decreased from $37,779 million in March 2024 to $31,559 million in March 2025, representing a decline of 16.4%[20] - Cash flows from investing activities resulted in a net cash outflow of $4,454 million in Q1 2025, compared to a net inflow of $25,570 million in Q1 2024[20] - For the three months ended March 31, 2025, total capital expenditures amounted to $4,177,000, including $2,374,000 for tenant improvements and $1,258,000 for non-investment capex[62] Company Definitions and Metrics - The Company defines Adjusted Funds From Operations (AFFO) as FFO excluding non-cash debt extinguishment losses and including distributions from non-consolidated REITs[84] - AFFO also accounts for straight-line rent adjustments, amortization of deferred financing costs, and recurring capital expenditures for property maintenance[84] - The Company emphasizes that AFFO should not be viewed as an alternative to net income or cash flows from operating activities as defined by GAAP[86] - The Company provides property performance metrics based on Net Operating Income (NOI), which is calculated as net income plus general and administrative expenses, depreciation, and interest expenses[81] - NOI is a non-GAAP measure and may not be comparable to similar measures reported by other REITs due to differing definitions[81] - The Company believes that net income is the most directly comparable GAAP financial measure to EBITDA and Adjusted EBITDA[80] - EBITDA is defined as net income plus interest, taxes, and depreciation, while Adjusted EBITDA excludes certain non-cash items and gains or losses on asset sales[80] - The Company highlights that all companies may not calculate EBITDA or Adjusted EBITDA in the same manner, affecting comparability[80] - The Company aims to provide useful information regarding its ability to service or incur debt through these financial metrics[80]