Part I - FINANCIAL INFORMATION Financial Statements Financial statements for Q2 and H1 2025 reflect asset growth and increased revenues, offset by net losses from expenses and property acquisitions Condensed Consolidated Balance Sheets Total assets grew to $856.5 million by June 30, 2025, driven by real estate, while liabilities increased and equity slightly decreased Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $856,512 | $821,809 | | Real estate held for investment, net | $688,212 | $679,008 | | Cash and cash equivalents | $8,363 | $5,094 | | Total Liabilities | $352,561 | $299,131 | | Debt, net | $316,892 | $266,538 | | Total Equity | $503,951 | $522,678 | Condensed Consolidated Statements of Operations and Comprehensive Loss Q2 2025 revenues increased to $17.6 million, but a $4.5 million net loss was recorded due to higher expenses and impairment, while H1 net loss slightly narrowed Statement of Operations Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $17,554 | $14,610 | $33,797 | $29,869 | | Total Operating Expenses | $15,459 | $10,855 | $28,479 | $22,423 | | Net Loss | $(4,530) | $(3,012) | $(5,867) | $(6,381) | | Net Loss per Share (Basic & Diluted) | $(0.16) | N/A | $(0.22) | N/A | Condensed Consolidated Statements of Cash Flows H1 2025 saw operating cash flow double to $17.4 million, while investing activities used $51.8 million for acquisitions, and financing provided $37.7 million Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $17,359 | $7,720 | | Net cash (used in) provided by investing activities | $(51,795) | $8,531 | | Net cash provided by (used in) financing activities | $37,705 | $(16,760) | | Net increase (decrease) in cash | $3,269 | $(509) | Notes to the Condensed Consolidated Financial Statements Notes detail the company's REIT operations, 319 properties, $67.9 million in acquisitions, $318.5 million total debt, and declared dividends - The company is an internally-managed net-lease REIT that owned a diversified portfolio of 319 properties across 37 U.S. states as of June 30, 202529 - In the first six months of 2025, the company acquired 22 properties for $67.9 million and sold 10 properties for $24.7 million8789 - Total debt as of June 30, 2025, was $318.5 million, consisting of a $118.5 million balance on the Revolving Credit Facility and a $200.0 million Term Loan9799 Dividends Declared (Six Months Ended June 30, 2025) | Declaration Date | Dividend per Share | Record Date | Total Amount (in thousands) | Payment Date | | :--- | :--- | :--- | :--- | :--- | | 18-Mar-2025 | $0.215 | 31-Mar-2025 | $6,178 | 15-Apr-2025 | | 13-May-2025 | $0.215 | 30-Jun-2025 | $6,102 | 15-Jul-2025 | Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q2 2025 revenue growth from portfolio expansion, increased G&A post-internalization, reduced interest expense, and $131.5 million available liquidity Our Real Estate Investment Portfolio The portfolio comprises 319 properties across 37 states with a 97.8% lease rate, diversified by tenant and industry, and an average lease term of 7.3 years - The portfolio comprises 319 properties in 37 U.S. states with an ABR weighted average remaining lease term of 7.3 years135137 - The portfolio is highly diversified, with 157 different tenant concepts, where the top 10 concepts represent only 22.6% of the portfolio's ABR137141 - Approximately 97.3% of leases (by ABR) feature contractual rent escalations, with the majority being fixed percentage increases137156158 Results of Operations Q2 2025 revenues grew 20% to $17.6 million, but operating expenses rose 42% due to G&A and impairment, while interest expense decreased 30% Results of Operations Comparison - Three Months Ended June 30 (in thousands) | Line Item | 2025 (Successor) | 2024 (Predecessor) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $17,554 | $14,610 | $2,944 | 20% | | Total Operating Expenses | $15,459 | $10,855 | $4,604 | 42% | | General and administrative expenses | $3,279 | $643 | $2,636 | >100% | | Interest Expense | $4,647 | $6,597 | $(1,950) | (30)% | | Impairment loss | $2,978 | $— | $2,978 | >100% | | Net Loss | $(4,530) | $(3,012) | $(1,518) | 50% | - The elimination of property and asset management fees (totaling $1.5 million in Q2 2024) was a direct result of the Internalization completed on October 2, 2024170 Liquidity and Capital Resources Liquidity is supported by cash from operations and $131.5 million available on the Revolving Credit Facility, with interest rate swaps mitigating risk on the Term Loan - As of June 30, 2025, the company had $131.5 million of available capacity under its $250.0 million Revolving Credit Facility195 - To manage interest rate risk on its variable-rate Term Loan, the company entered into interest rate swap agreements on March 3, 2025, effectively converting $200.0 million of floating-rate debt to a fixed rate of 3.664%204205 Contractual Obligations as of June 30, 2025 (in thousands) | Year of Maturity | Revolving Credit Facility | Term Loan | Interest Expense | Dividend Commitments | Investment Commitments | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Remainder of 2025 | $— | $— | $8,959 | $6,102 | $15,771 | $30,832 | | 2026 | $— | $— | $17,917 | $— | $— | $17,917 | | 2027 | $118,500 | $200,000 | $14,931 | $— | $— | $333,431 | | Total | $118,500 | $200,000 | $41,807 | $6,102 | $15,771 | $382,180 | Non-GAAP Financial Measures Q2 2025 FFO was $6.7 million ($0.24 per share) and AFFO was $9.0 million ($0.32 per share), with Net Debt to Annualized Adjusted EBITDAre at 5.5x Reconciliation of Net Loss to FFO and AFFO (in thousands, except per share amounts) | Metric | Q2 2025 | Six Months 2025 | | :--- | :--- | :--- | | Net loss | $(4,530) | $(5,867) | | Adjustments (Depreciation, Gain on sale, Impairment) | $11,240 | $19,016 | | Funds from Operations (FFO) | $6,720 | $13,149 | | FFO per share | $0.24 | $0.47 | | Further Adjustments (Straight-line rent, Amortization, etc.) | $2,308 | $4,108 | | Adjusted Funds from Operations (AFFO) | $9,028 | $17,257 | | AFFO per share | $0.32 | $0.62 | Leverage Ratios as of June 30, 2025 | Metric | Value | | :--- | :--- | | Gross Debt | $318,500 thousand | | Net Debt | $310,137 thousand | | Net Debt to Annualized EBITDAre | 6.2x | | Net Debt to Annualized Adjusted EBITDAre | 5.5x | Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate fluctuations on floating-rate debt, mitigated by interest rate swap agreements for its Term Loan - The main market risk is interest rate fluctuations on floating-rate debt, which is based on the Adjusted SOFR242 - The company utilizes interest rate swaps to manage interest rate risk on its Term Loan, effectively converting variable-rate debt to a fixed rate243 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the quarter ended June 30, 2025244 - No changes occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting245 Part II - OTHER INFORMATION Legal Proceedings The company is not a party to any legal proceedings expected to materially adversely affect its business or financial condition - The company reports no material legal proceedings246 Risk Factors A new risk factor addresses potential defaults on seller-financed mortgage loans, with no other material changes since the 2024 Annual Report - A new risk factor was added regarding potential losses from defaults on seller-financed mortgage loans provided to property buyers247 - There have been no other material changes to the risk factors since the filing of the 2024 Annual Report on Form 10-K248 Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred during the reporting period - None249 Other Information No officers or directors adopted or terminated Rule 10b5-1 trading plans or other non-Rule 10b5-1 arrangements during the period - No officers or directors adopted or terminated any contract, instruction, or written plan for the purchase or sale of securities under Rule 10b5-1(c)252 Exhibits The report includes exhibits such as corporate governance documents, an employment agreement, and CEO/CFO certifications - Exhibits filed with the report include corporate bylaws, partnership agreements, an employment agreement for Pierre Revol, and CEO/CFO certifications256
FrontView REIT, Inc.(FVR) - 2025 Q2 - Quarterly Report