Gladstone Land(US:LAND)2025-11-05 21:03Company Overview - The company owns 148 farms totaling 100,323 acres across 15 states in the U.S., with 55,532 acre-feet of water assets in California[131]. - The company has 93 farms leased on a pure triple-net basis, while 42 farms are on a partial-net basis, and 4 farms are directly operated[137]. - The company has 101 leases expiring by September 30, 2025, covering 100,323 acres, with lease revenue from these expiring leases totaling $46.835 million[139]. - The company is exploring options for lease expirations, including negotiating terms with existing tenants and considering sale options[139]. - The company currently operates in a selective credit environment, limiting its ability to pursue new farmland acquisitions despite improved financing conditions[141]. Financial Performance - For the nine months ended September 30, 2025, total lease revenue was $46.835 million, a decrease from $63.667 million for the same period in 2024, representing a decline of approximately 26.5%[136]. - California farms account for 34.7% of total acres and 61.5% of total lease revenue, with lease revenue decreasing from $43.331 million in 2024 to $28.783 million in 2025[136]. - Total operating revenues for the three months ended September 30, 2025, decreased by $4.786 million, or 21.2%, to $17.785 million compared to $22.571 million in 2024[170]. - Operating income for the nine months ended September 30, 2025, decreased by $14.042 million, or 63.8%, to $7.955 million compared to $21.997 million in 2024[170]. - For the three months ended September 30, 2025, operating income decreased by 34.6% to $4.493 million compared to $6.872 million in the same period of 2024[190]. - Net income attributable to common stockholders for the three months ended September 30, 2025, was $2.087 million, a significant increase of 34,683.3% compared to $6,000 in the same period of 2024[190]. - The company recorded a net capital gain of approximately $21.6 million from the sale of farms during the nine months ended September 30, 2025, compared to a net gain of approximately $10.4 million in the same period of 2024[195]. Lease and Revenue Changes - Fixed lease payments for the three months ended September 30, 2025, decreased by $6.635 million, or 35.1%, to $12.278 million compared to $18.913 million in 2024[170]. - Total lease revenues for the nine months ended September 30, 2025, decreased by $16.832 million, or 26.4%, to $46.835 million compared to $63.667 million in 2024[172]. - Lease termination income for the nine months ended September 30, 2025, was recognized at $2.380 million, which was not present in 2024[172]. - Participation rents for the three months ended September 30, 2025, increased by $1.852 million, or 52.7%, to $5.364 million compared to $3.512 million in 2024[172]. Expenses and Impairments - Property operating expenses for the nine months ended September 30, 2025, increased by $277,000, or 8.0%, to $3.753 million compared to $3.476 million in 2024[180]. - Impairment charges for the three months ended September 30, 2025, decreased by $1.790 million, or 85.0%, to $316,000 compared to $2.106 million in 2024[170]. - The company recognized an impairment charge of approximately $316,000 on one property during the three months ended September 30, 2025, compared to an aggregate impairment charge of approximately $2.1 million in the same period of 2024[189]. Market Conditions - The consumer price index (CPI) rose at an annual rate of 3.0% through September 30, 2025, with food prices increasing by 3.1% over the same period[140]. - Nationwide farm real estate values increased by 4.3% year-over-year, while cropland values rose by 4.7%[140]. - Almond prices are currently 15% to 25% higher year-over-year due to lower-than-expected production for 2025, contributing to upward pricing pressure[144]. - Current pistachio prices for the 2024 crop are approximately 13% to 18% higher than the prior year, with demand particularly strong in international markets[145]. Debt and Liquidity - Over 99.9% of the company's borrowings are at fixed rates, with an effective interest rate of 3.39% for another 3.0 years, insulating the debt portfolio from interest rate volatility[142]. - The company’s current available liquidity is approximately $171.6 million, consisting of $25.2 million in cash and approximately $146.3 million available under its credit facility[198]. - Interest expense decreased by 10.2% to $4.850 million for the three months ended September 30, 2025, compared to $5.402 million in the same period of 2024[190]. - The company expects its current and short-term cash resources to be sufficient for servicing debt, funding operating costs, and paying dividends on preferred securities[202]. - The company plans to utilize a significant portion of future liquidity to acquire additional farms and farm-related assets, subject to due diligence[203]. Stock and Capital Management - The company has entered into an ATM Program allowing for the issuance of up to $500.0 million in common stock, with gross proceeds of $10.0 million from the sale of 1,082,175 shares[156]. - The company has issued approximately $4.4 million of Series E Preferred Stock and $16.9 million of common stock under the 2023 Registration Statement[216]. Future Expectations - The 2025-2026 water year has started favorably with above-average rainfall, leading to expectations of surface water allocations between 30% to 50%[148]. - The company aims to limit the impact of interest rate changes on earnings and cash flows by primarily borrowing at fixed rates[231].