Gladstone Land(LAND) - 2021 Q2 - Quarterly Report

PART I FINANCIAL INFORMATION This section details the unaudited financial statements and management's discussion for Gladstone Land Corporation's performance as of June 30, 2021 Financial Statements (Unaudited) This section provides the unaudited condensed consolidated financial statements and related notes for the period ended June 30, 2021 Condensed Consolidated Balance Sheets The balance sheet shows a significant increase in total assets to $1.20 billion as of June 30, 2021, from $1.07 billion at year-end 2020, driven by real estate acquisitions Condensed Consolidated Balance Sheets (in thousands) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total Assets | $1,201,634 | $1,067,289 | | Total real estate, net | $1,104,964 | $1,046,203 | | Cash and cash equivalents | $66,789 | $9,218 | | Total Liabilities | $720,320 | $683,499 | | Notes and bonds payable, net | $627,408 | $623,961 | | Total Equity | $481,314 | $383,790 | Condensed Consolidated Statements of Operations and Comprehensive Income For the second quarter of 2021, the company reported a net loss attributable to common stockholders of $3.5 million, an increase from a $2.1 million loss in Q2 2020 Key Operating Results (in thousands, except per-share data) | Metric | Q2 2021 | Q2 2020 | Six Months 2021 | Six Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $16,893 | $12,638 | $32,927 | $27,918 | | Total operating expenses | $9,495 | $6,454 | $19,402 | $14,537 | | Net (Loss) Income | ($531) | $182 | $23 | $3,283 | | Net Loss Attributable to Common Stockholders | ($3,469) | ($2,078) | ($5,679) | ($1,144) | | Loss Per Common Share (Basic and diluted) | ($0.12) | ($0.10) | ($0.20) | ($0.05) | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2021, net cash from operating activities increased to $17.0 million, while investing activities used $85.0 million, and financing activities provided $125.6 million Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,965 | $9,937 | | Net cash used in investing activities | ($84,950) | ($35,100) | | Net cash provided by financing activities | $125,556 | $36,254 | | Net increase in cash and cash equivalents | $57,571 | $11,091 | Notes to Condensed Consolidated Financial Statements This section details significant accounting policies, real estate acquisitions, financing activities, and subsequent events impacting the financial statements - During the six months ended June 30, 2021, the company acquired 16 new farms for a total purchase price of approximately $85.3 million[53][54] - In January 2021, the company issued 2,415,000 shares of 5.00% Series D Cumulative Term Preferred Stock for gross proceeds of approximately $60.4 million[82] In February 2021, it redeemed all outstanding shares of its 6.375% Series A Cumulative Term Preferred Stock for approximately $28.8 million[83] - The company sold 4,259,045 shares of common stock under its At-the-Market (ATM) program during the first six months of 2021, raising net proceeds of $85.5 million[109][110] - Subsequent to quarter-end, on July 13, 2021, the company amended its advisory agreement, increasing the base management fee from an annual rate of 0.50% to 0.60% of Gross Tangible Real Estate, effective for the quarter ending September 30, 2021[124] Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Management discusses the company's financial condition, operational results, liquidity, and non-GAAP metrics, including portfolio details and key performance indicators Overview and Portfolio The company is an agricultural REIT owning 153 farms totaling 105,282 acres across 14 states, leased to 79 different tenants growing over 55 crop types - As of June 30, 2021, the company owned 153 farms comprised of 105,282 acres in 14 states, leased to 79 different, unrelated third-party tenants[131][132] Geographic Concentration of Lease Revenue (Six Months Ended June 30, 2021) | State | % of Total Lease Revenue | | :--- | :--- | | California | 62.6% | | Florida | 20.5% | | Colorado | 4.2% | | Washington | 3.6% | | Arizona | 2.9% | | Other | 6.2% | Results of Operations For Q2 2021, operating revenues increased 33.7% to $16.9 million, while operating expenses rose 47.1% to $9.5 million, resulting in a 19.6% increase in operating income to $7.4 million Operating Results Comparison (in thousands) | Metric | Q2 2021 | Q2 2020 | % Change | | :--- | :--- | :--- | :--- | | Total operating revenues | $16,893 | $12,638 | 33.7% | | Total operating expenses | $9,495 | $6,454 | 47.1% | | Operating income | $7,398 | $6,184 | 19.6% | - The increase in lease revenue from properties acquired was the primary driver of revenue growth, contributing $4.4 million in Q2 2021 compared to just $87,000 in Q2 2020[166][168] - Depreciation and amortization expense increased by 63.5% in Q2 2021 year-over-year, mainly due to new farms acquired since March 31, 2020[169] Liquidity and Capital Resources The company reports strong liquidity with approximately $131.3 million available, comprising $84.3 million in cash and $47.0 million in available credit, primarily used for property acquisitions - As of the reporting date, the company had approximately $131.3 million in available liquidity, consisting of $84.3 million in cash and $47.0 million of availability under its credit facilities[185] - The increase in cash from financing activities was primarily due to a $70.2 million increase in net proceeds from equity issuances and $31.6 million in net proceeds from the issuance of Series D Term Preferred Stock after redeeming the Series A Term Preferred Stock[192] Non-GAAP Financial Information The company provides non-GAAP metrics including FFO, CFFO, and AFFO, with Diluted AFFO per share at $0.13 for Q2 2021 and an estimated Net Asset Value (NAV) per common share of $13.16 Non-GAAP Performance Metrics (per share) | Metric | Q2 2021 | Q2 2020 | Six Months 2021 | Six Months 2020 | | :--- | :--- | :--- | :--- | :--- | | Diluted FFO | $0.13 | $0.11 | $0.30 | $0.36 | | Diluted CFFO | $0.13 | $0.11 | $0.31 | $0.36 | | Diluted AFFO | $0.13 | $0.10 | $0.30 | $0.35 | - The company estimated its Net Asset Value (NAV) per common share to be $13.16 as of June 30, 2021[212] This is reconciled from total equity of $481.3 million by adjusting for the fair value of real estate and long-term debt[214] - The estimated NAV per share increased from $12.69 at March 31, 2021, to $13.16 at June 30, 2021, primarily driven by the accretive effect of equity issuances ($+0.70) and net appreciation in the farmland portfolio ($+0.20), offset by distributions and other factors[215] Quantitative and Qualitative Disclosures About Market Risk This item is not applicable as the company qualifies as a smaller reporting company - This section is not applicable as Gladstone Land Corporation is a smaller reporting company[216] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2021, with no material changes in internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of June 30, 2021[217] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[218] PART II OTHER INFORMATION This section provides other information including legal proceedings, risk factors, equity sales, and exhibits Legal Proceedings The company is not currently subject to any material legal proceedings, nor is it aware of any threatened material legal proceedings - The company reports no material legal proceedings as of the filing date[220] Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2020 - No material changes to risk factors from the previously filed Form 10-K are reported[221] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no sales of unregistered securities and no issuer purchases of its equity securities during the period - There were no unregistered sales of equity securities or issuer purchases of equity securities during the quarter[222] Exhibits This section lists all exhibits filed with the Form 10-Q, including certifications, key agreements, and XBRL data files - Key exhibits filed include the Fifth Amended and Restated Investment Advisory Agreement, dated July 13, 2021, and various purchase and sale agreements for the Lerdo Highway property in California[224]