Gladstone Land(LAND) - 2021 Q3 - Quarterly Report

PART I FINANCIAL INFORMATION Financial Statements (Unaudited) This section presents Gladstone Land Corporation's unaudited condensed consolidated financial statements for periods ending September 30, 2021 Condensed Consolidated Balance Sheets Total assets increased to $1.26 billion by September 30, 2021, driven by real estate growth, with liabilities and equity also rising Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total real estate, net | $1,156,928 | $1,046,203 | | Cash and cash equivalents | $66,491 | $9,218 | | TOTAL ASSETS | $1,261,836 | $1,067,289 | | Notes and bonds payable, net | $645,967 | $623,961 | | Total liabilities | $736,389 | $683,499 | | Total equity | $525,447 | $383,790 | | TOTAL LIABILITIES AND EQUITY | $1,261,836 | $1,067,289 | Condensed Consolidated Statements of Operations and Comprehensive Income Q3 2021 operating revenues increased to $19.6 million, with net income slightly down and net loss attributable to common stockholders widening Statement of Operations Highlights (in thousands, except per-share data) | Metric | Q3 2021 | Q3 2020 | YTD 2021 | YTD 2020 | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $19,591 | $13,989 | $52,518 | $41,907 | | Total operating expenses | $11,207 | $6,858 | $30,609 | $21,395 | | Net income | $1,503 | $1,581 | $1,526 | $4,864 | | Net loss attributable to common stockholders | $(1,639) | $(837) | $(7,319) | $(1,981) | | Loss per common share (Basic and diluted) | $(0.05) | $(0.04) | $(0.25) | $(0.09) | Condensed Consolidated Statements of Equity Total equity increased to $525.4 million by September 30, 2021, driven by common and preferred stock issuances, partially offset by distributions - Total stockholders' equity increased from $479.3 million at June 30, 2021, to $523.3 million at September 30, 2021[26] - For the nine months ended September 30, 2021, net proceeds from the issuance of Series C Preferred Stock were $34.6 million, and net proceeds from common stock issuance were $122.1 million[29] Condensed Consolidated Statements of Cash Flows Operating cash flow increased, investing activities used more cash, and financing activities surged, leading to a net increase in cash Cash Flow Summary (in thousands) | Activity | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $20,356 | $11,593 | | Net cash used in investing activities | $(149,501) | $(75,620) | | Net cash provided by financing activities | $186,418 | $56,794 | | Net increase (decrease) in cash | $57,273 | $(7,233) | | Cash at end of period | $66,491 | $6,455 | Notes to Condensed Consolidated Financial Statements This section details the company's accounting policies and financial results, including real estate, debt, equity, and related-party transactions Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition, operations, liquidity, and capital resources, covering portfolio growth, leasing, and non-GAAP measures Overview The company, an agricultural REIT, owns 160 diversified farms across 14 states, totaling 108,301 acres, leased to 82 tenants - As of the report date, the company owns 160 farms comprised of 108,301 acres in 14 states, leased to 82 different, unrelated third-party tenants[135][136] Geographic Diversity by Lease Revenue (Nine Months Ended Sep 30, 2021) | State | % of Total Lease Revenue | | :--- | :--- | | California | 64.1% | | Florida | 19.4% | | Colorado | 3.8% | | Washington | 3.4% | | Arizona | 2.8% | | Other | 6.5% | - Most leases are triple-net with terms of 3-10 years for row crops and 7-15 years for permanent crops; 40 farms include a variable rent component (participation rents)[139] Results of Operations Q3 2021 operating revenue increased 40.0% to $19.6 million due to acquisitions, while operating expenses grew 63.4% to $11.2 million Comparison of Operating Results (in thousands) | Metric | Q3 2021 | Q3 2020 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total operating revenues | $19,591 | $13,989 | $5,602 | 40.0% | | Total operating expenses | $11,207 | $6,858 | $4,349 | 63.4% | | Operating income | $8,384 | $7,131 | $1,253 | 17.6% | Lease Revenue Breakdown (in thousands) | Revenue Source | YTD 2021 | YTD 2020 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Same-property basis | $38,500 | $40,658 | $(2,158) | (5.3)% | | Properties acquired | $13,952 | $808 | $13,144 | 1,626.7% | | Total Lease revenues | $52,518 | $41,907 | $10,611 | 25.3% | - The base management fee paid to the Adviser increased due to asset growth and a fee rate increase from 0.50% to 0.60% of Gross Tangible Real Estate, effective July 1, 2021[182] Liquidity and Capital Resources Available liquidity is approximately $135.7 million, with capital used for distributions, operations, debt service, and acquisitions, funded by equity and debt - Current available liquidity is approximately $135.7 million, consisting of $85.7 million in cash and about $50.0 million of availability under the MetLife facility[191] - The company has several properties under signed purchase agreements or non-binding letters of intent and expects to consummate them in the coming months[192] Net Cash Flow Changes (in thousands) | Activity | YTD 2021 | YTD 2020 | $ Change | | :--- | :--- | :--- | :--- | | Operating activities | $20,356 | $11,593 | $8,763 | | Investing activities | $(149,501) | $(75,620) | $(73,881) | | Financing activities | $186,418 | $56,794 | $129,624 | Non-GAAP Financial Information This section details non-GAAP metrics like FFO, CFFO, and AFFO, with Q3 2021 Diluted AFFO per share at $0.17, used to assess operational performance Non-GAAP Financial Metrics Per Share | Metric (Diluted, per share) | Q3 2021 | Q3 2020 | YTD 2021 | YTD 2020 | | :--- | :--- | :--- | :--- | :--- | | FFO | $0.17 | $0.15 | $0.47 | $0.50 | | CFFO | $0.17 | $0.15 | $0.48 | $0.51 | | AFFO | $0.17 | $0.14 | $0.47 | $0.50 | - Management uses FFO, CFFO, and AFFO to assess overall performance, make decisions on acquisitions and equity raises, and determine common stock distributions[205] Net Asset Value The estimated Net Asset Value (NAV) per common share increased to $13.80 as of September 30, 2021, driven by equity issuances and farmland appreciation Estimated NAV per Common Share Calculation (as of Sep 30, 2021) | Item | Amount (in thousands) | | :--- | :--- | | Total equity per balance sheet | $525,447 | | Net fair value adjustment for real estate | $136,049 | | Net fair value adjustment for long-term debt | $2,230 | | Estimated NAV | $663,726 | | Less: Fair value of preferred stock | $(218,681) | | NAV available to common stockholders | $445,045 | | Total common shares and OP Units outstanding | 32,248,767 | | Estimated NAV per common share | $13.80 | NAV per Share Roll-Forward (Q3 2021) | Description | Per Share Amount | | :--- | :--- | | NAV at June 30, 2021 | $13.16 | | Net loss attributable to common stockholders | $(0.05) | | Net change in valuations | $0.33 | | Distributions on common stock | $(0.14) | | Net accretive effect of equity issuances | $0.50 | | NAV at September 30, 2021 | $13.80 | 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 to smaller reporting companies[223] Controls and Procedures Management concluded that disclosure controls and procedures were effective as of September 30, 2021, with no material changes in internal control - Management concluded that disclosure controls and procedures were effective as of September 30, 2021[224] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[225] PART II OTHER INFORMATION 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 is not currently subject to any material legal proceedings[227] Risk Factors There have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020 - There have been no material changes to the risk factors from those previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2020[228] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities and no issuer purchases of equity securities during the period - There were no unregistered sales of equity securities or no issuer purchases of equity securities[229] Defaults Upon Senior Securities This item is not applicable Mine Safety Disclosures This item is not applicable Other Information The company reported no other information for this item Exhibits This section lists all exhibits filed with the report, including articles of incorporation, material agreements, and CEO/CFO certifications - Key exhibits filed include the Fifth Amended and Restated Investment Advisory Agreement (Exhibit 10.1), CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1, 32.2), and the Estimated Value Methodology for Series C Preferred Stock (Exhibit 99.1)[231]