Four ners Property Trust(FCPT) - 2025 Q2 - Quarterly Results

Company Overview & Highlights FCPT reported strong Q2 2025 momentum with significant property acquisitions, high rent collection, and robust financial positioning Management Comments FCPT reported strong momentum in Q2 2025, acquiring over $84 million in properties, contributing to over $344 million in acquisitions over the past 12 months. The company maintains significant liquidity and a low leverage profile for future growth - Acquired over $84 million of properties in Q2 2025[2] - Acquired over $344 million of properties over the past 12 months[2] - Entering Q3 with significant liquidity and a low leverage profile to fuel further growth[2] Rent Collection Update As of June 30, 2025, FCPT achieved a high rent collection rate, receiving 99.8% of its portfolio contractual base rent for the quarter - Rent collection rate: 99.8% of contractual base rent for Q2 2025[3] Financial Performance FCPT achieved significant year-over-year growth in rental revenue and net income, alongside increases in FFO and AFFO per diluted share for Q2 2025 Rental Revenue and Net Income Attributable to Common Shareholders FCPT reported a 10.7% increase in Q2 2025 rental revenue year-over-year, reaching $64.8 million. Net income attributable to common shareholders also grew to $27.9 million, or $0.28 per diluted share, for the quarter Rental Revenue and Net Income Attributable to Common Shareholders (Q2) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | YoY Change | | :----- | :-------------------- | :-------------------- | :--------- | | Rental Revenue | $64.8 | $58.5 | +10.7% | | Net Income Attributable to Common Shareholders | $27.9 | $24.7 | +13.0% | | Diluted EPS (Net Income) | $0.28 | $0.27 | +$0.01 | Net Income Attributable to Common Shareholders (H1) | Metric | H1 2025 (in millions) | H1 2024 (in millions) | YoY Change | | :----- | :-------------------- | :-------------------- | :--------- | | Net Income Attributable to Common Shareholders | $54.1 | $48.7 | +11.1% | | Diluted EPS (Net Income) | $0.54 | $0.53 | +$0.01 | Funds from Operations (FFO) NAREIT-defined FFO per diluted share increased by $0.01 to $0.42 for Q2 2025 compared to the prior year, while FFO per diluted share for the six months ended June 30, 2025, remained flat at $0.82 NAREIT-defined FFO per Diluted Share (Q2) | Metric | Q2 2025 ($) | Q2 2024 ($) | YoY Change ($) | | :----- | :---------- | :---------- | :------------- | | NAREIT-defined FFO per diluted share | $0.42 | $0.41 | +$0.01 | NAREIT-defined FFO per Diluted Share (H1) | Metric | H1 2025 ($) | H1 2024 ($) | YoY Change ($) | | :----- | :---------- | :---------- | :------------- | | NAREIT-defined FFO per diluted share | $0.82 | $0.82 | Flat | Adjusted Funds from Operations (AFFO) AFFO per diluted share for Q2 2025 increased by $0.01 to $0.44 year-over-year, and for the six months ended June 30, 2025, it increased by $0.02 to $0.88 AFFO per Diluted Share (Q2) | Metric | Q2 2025 ($) | Q2 2024 ($) | YoY Change ($) | | :----- | :---------- | :---------- | :------------- | | AFFO per diluted share | $0.44 | $0.43 | +$0.01 | AFFO per Diluted Share (H1) | Metric | H1 2025 ($) | H1 2024 ($) | YoY Change ($) | | :----- | :---------- | :---------- | :------------- | | AFFO per diluted share | $0.88 | $0.86 | +$0.02 | General and Administrative (G&A) Expense G&A expense for Q2 2025 was $6.4 million, including $2.0 million in stock-based compensation, an increase from $6.0 million in Q2 2024. Cash G&A expense as a percentage of cash rental income decreased to 6.9% from 7.4% in the prior year General and Administrative Expense (Q2) | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | YoY Change (in millions) | | :----- | :-------------------- | :-------------------- | :----------------------- | | Total G&A Expense | $6.4 | $6.0 | +$0.4 | | Stock-based Compensation | $2.0 | $1.7 | +$0.3 | | Cash G&A Expense | $4.4 | $4.3 | +$0.1 | | Cash G&A as % of Cash Rental Income | 6.9% | 7.4% | -0.5 ppts | Dividends FCPT declared a quarterly dividend of $0.3550 per common share for Q2 2025 - Q2 2025 dividend declared: $0.3550 per common share[8] Real Estate Portfolio & Investment Activities FCPT maintained a robust real estate portfolio with high occupancy and actively expanded through strategic acquisitions in Q2 2025 Real Estate Portfolio As of June 30, 2025, FCPT's portfolio comprised 1,245 properties across 48 states, with a high occupancy rate of 99.4% and a weighted average remaining lease term of approximately 7.2 years - Total properties: 1,245 located in 48 states[9] - Occupancy rate: 99.4% (measured by square feet)[9] - Weighted average remaining lease term: approximately 7.2 years[9] Acquisitions In Q2 2025, FCPT acquired 24 properties for $84.4 million, with an initial weighted average cash yield of 6.7% and a weighted average remaining lease term of 13.4 years. The acquisitions were primarily auto service (68%), casual dining (28%), and quick service restaurants (4%) - Number of properties acquired in Q2: 24[10] - Combined purchase price: $84.4 million[10] - Initial weighted average cash yield: 6.7%, with a weighted average remaining lease term of 13.4 years[10] - Acquisition breakdown by purchase price: 68% auto service, 28% casual dining, and 4% quick service restaurants[10] Dispositions FCPT did not sell any properties during the second quarter of 2025 - No properties sold in Q2 2025[11] Liquidity and Capital Structure FCPT maintained strong liquidity of $562 million, actively raised capital through ATM sales, and managed its debt with a leverage ratio of 5.4x Liquidity As of June 30, 2025, FCPT had approximately $562 million in available liquidity, including cash, anticipated net proceeds from forward sale agreements, and revolving credit facility capacity Liquidity Components (as of June 30, 2025) | Liquidity Component | Amount (in millions) | | :---------------------------------------- | :------------------- | | Total Available Liquidity | $562 | | Cash and Cash Equivalents | $6 | | Anticipated Net Proceeds (Forward Sale Agreements) | ~$206 | | Revolving Credit Facility Capacity | $350 | Capital Raising During Q2 2025, FCPT sold 841,556 shares via its ATM program for $23.6 million gross proceeds. Year-to-date through July 29, 2025, the company sold 6,108,008 shares for $172.7 million gross proceeds, with $146.1 million in anticipated gross proceeds remaining from unsettled forward sale agreements - Q2 2025 ATM sales: 841,556 shares at an average gross price of $28.08, for $23.6 million gross proceeds[16] - YTD (through July 29, 2025) ATM sales: 6,108,008 shares at an average gross price of $28.27, for $172.7 million gross proceeds[16] - Remaining unsettled shares under existing forward sale agreements (as of July 29, 2025): 5,163,790 shares for $146.1 million anticipated gross proceeds[16] Credit Facility and Unsecured Notes As of June 30, 2025, FCPT had $1,215 million in outstanding debt, consisting of term loans and unsecured fixed-rate notes, with no outstanding revolver balance. The company's leverage (net debt to adjusted EBITDAre) was 5.4x, or 4.5x including outstanding equity under forward sales agreements - Total outstanding debt (June 30, 2025): $1,215 million[14] - Debt composition: $590 million of term loans and $625 million of unsecured fixed rate notes, with no outstanding revolver balance[14] - Leverage (net debt to adjusted EBITDAre): 5.4x (4.5x inclusive of outstanding equity under forward sales agreements)[14] Additional Information This section provides details on FCPT's upcoming conference call, company overview, and important disclaimers regarding forward-looking statements and non-GAAP financial measures Conference Call Information FCPT will host a conference call and audio webcast on July 30, 2025, at 12:00 p.m. ET to discuss the results, with details provided for live access and replay - Conference call and audio webcast scheduled for Wednesday, July 30, 2025, at 12:00 p.m. Eastern Time[17] - Access details for phone, live webcast, pre-registration, and replay are provided[18] About FCPT FCPT is a real estate investment trust (REIT) primarily engaged in the ownership, acquisition, and leasing of restaurant and retail properties on a net basis - FCPT is a real estate investment trust (REIT)[19] - Primary business: ownership, acquisition, and leasing of restaurant and retail properties on a net basis[19] Cautionary Note Regarding Forward-Looking Statements The press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially. The company disclaims any obligation to update these statements, except as required by law - The press release contains forward-looking statements subject to federal securities laws[20] - Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially[20] - The Company disclaims any obligation to publicly release updates or revisions to forward-looking statements, except in the normal course of public disclosure obligations[20] Notice Regarding Non-GAAP Financial Measures The press release and supplemental materials include non-GAAP financial measures, which are presented in addition to, not as a substitute for, GAAP measures. Reconciliations are available in the supplemental report - Non-GAAP financial measures are included in addition to, not as a substitute for, GAAP measures[21] - Reconciliations to comparable GAAP financial measures are available in the supplemental financial and operating report[21] Supplemental Materials and Website Supplemental materials for Q2 2025 operating results and other company information are available on FCPT's investor relations website - Supplemental materials on Second Quarter 2025 operating results are available on investors.fcpt.com[22] Consolidated Financial Statements This section presents FCPT's detailed consolidated statements of income and balance sheets, highlighting revenue growth, net income, and changes in assets and liabilities Consolidated Statements of Income The consolidated statements of income show detailed revenues, operating expenses, interest expense, and net income for the three and six months ended June 30, 2025, compared to the prior year. Key figures include total revenues of $72.8 million for Q2 2025 and net income attributable to common shareholders of $27.9 million Consolidated Statements of Income | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | | :-------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Revenues: | | | | | | Rental revenue | $64,814 | $58,539 | $128,296 | $117,112 | | Restaurant revenue | 8,028 | 7,940 | 16,022 | 15,834 | | Total revenues | 72,842 | 66,479 | 144,318 | 132,946 | | Operating expenses: | | | | | | General and administrative | 6,440 | 6,004 | 14,079 | 12,217 | | Depreciation and amortization | 14,620 | 13,345 | 29,049 | 26,812 | | Property expenses | 3,386 | 2,836 | 6,651 | 5,917 | | Restaurant expenses | 7,361 | 7,332 | 14,916 | 14,896 | | Total operating expenses | 31,807 | 29,517 | 64,695 | 59,842 | | Interest expense | (13,081) | (12,324) | (25,812) | (24,605) | | Net income | 27,955 | 24,702 | 54,141 | 48,776 | | Net Income Attributable to Common Shareholders | $27,924 | $24,672 | $54,080 | $48,716 | | Diluted net income per share | $0.28 | $0.27 | $0.54 | $0.53 | | Regular dividends declared per share | $0.3550 | $0.3450 | $1.3900 | $0.6900 | Consolidated Balance Sheets The consolidated balance sheets present FCPT's financial position as of June 30, 2025, and December 31, 2024. Total assets increased to $2,765.5 million from $2,653.0 million, driven by growth in real estate investments. Total liabilities also increased to $1,282.6 million Consolidated Balance Sheets | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------- | :--------------------------- | :------------------------------- | | ASSETS: | | | | Total real estate investments, net | $2,538,855 | $2,423,139 | | Cash and cash equivalents | 5,981 | 4,081 | | Total Assets | $2,765,517 | $2,653,026 | | LIABILITIES: | | | | Term loan and revolving credit facility | $580,780 | $516,250 | | Senior unsecured notes | 621,965 | 621,639 | | Dividends payable | 36,210 | 35,358 | | Total liabilities | 1,282,575 | 1,202,236 | | EQUITY: | | | | Total equity | 1,482,942 | 1,450,790 | | Total Liabilities and Equity | $2,765,517 | $2,653,026 | Non-GAAP Financial Measures Reconciliation This section provides a detailed reconciliation of net income to FFO and AFFO, key non-GAAP financial measures, for the three and six months ended June 30, 2025 and 2024 FFO and AFFO Reconciliation This section provides a reconciliation of net income to FFO and AFFO for the three and six months ended June 30, 2025 and 2024. FFO (as defined by NAREIT) was $42.5 million for Q2 2025, and AFFO was $45.0 million for the same period FFO and AFFO Reconciliation | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | | :-------------------- | :--------------------- | :--------------------- | :--------------------- | :--------------------- | | Net income | $27,955 | $24,702 | $54,141 | $48,776 | | Depreciation and amortization | 14,582 | 13,309 | 28,974 | 26,740 | | FFO (as defined by NAREIT) | $42,537 | $38,011 | $83,115 | $75,516 | | Stock-based compensation | 2,001 | 1,731 | 4,761 | 3,371 | | Adjusted Funds from Operations (AFFO) | $44,989 | $39,795 | $88,851 | $78,923 | | FFO per diluted share | $0.42 | $0.41 | $0.82 | $0.82 | | AFFO per diluted share | $0.44 | $0.43 | $0.88 | $0.86 |