Gladstone Land(US:LAND)2021-05-13 17:29Financial Data and Key Metrics Changes - The company reported a net income of approximately $554,000 and a net loss to common shareholders of $2.2 million or $0.082 per common share for the first quarter [20] - Adjusted FFO for the first quarter was approximately $4.7 million, an increase of about 31% compared to $3.6 million in the fourth quarter of 2020 [20] - AFFO per share increased to $0.174 in the first quarter from $0.147 in the previous quarter, representing an 18% increase [20] Business Line Data and Key Metrics Changes - Fixed base cash rents increased by about $2 million or 15% quarter-over-quarter, primarily driven by additional revenue from recent acquisitions [21] - Participation rents decreased by approximately $1.2 million compared to the prior quarter [21] - The company executed new leases or extended existing leases on four properties located in California, Colorado, Florida, and Michigan [14] Market Data and Key Metrics Changes - The company owns about 104,000 acres of farmland, valued at over $1.2 billion, with farms located in 13 different states and 27 different growing regions [9] - Demand for products grown on the farms, such as berries and vegetables, remains high, particularly in grocery stores [12] - The company expects new leases on farms to be equal to or slightly higher than current rates [14] Company Strategy and Development Direction - The company continues to focus on acquiring farmland and growing fresh produce, which aligns with market trends towards healthy eating [29] - The company is actively working on developing formal policies related to environmental social governance (ESG) [15] - The establishment of Gladstone Acquisition as a SPAC aims to capitalize on opportunities to buy both land and operating businesses [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the acquisition pipeline, with about $150 million in potential deals being evaluated [41] - The company is navigating uncertainties related to potential tax changes that could impact farm sales [42] - Management noted that farmland continues to perform well compared to other asset classes, with stable demand for prime farmland [34] Other Important Information - The company raised its common dividend to $0.045 per share per month, marking a total increase of over 50% in monthly common distributions over the past 25 quarters [27] - The company has over $100 million in liquidity and about $40 million in unpledged properties [26] - The company recorded about $2.4 million in participation rents in each of the past two years, with expectations for a sizable increase in 2021 [15] Q&A Session Summary Question: Current pipeline and acquisition guidance - Management indicated that about $150 million in deals are being evaluated, with half to two-thirds under signed PSAs [41] Question: Impact of potential tax changes on OP Units - Management noted that the uncertainty around tax changes is affecting decision-making for potential sellers [44] Question: Pricing trends and competition - Management stated that while there are buyers for farms, competition is limited due to the company's established presence and relationships with farmers [46] Question: Appraisal value changes by geography - Recent appraisals showed value increases in areas like Salinas and Florida, while the Midwest remained relatively flat [51] Question: Status of Gladstone Acquisition investments - Management confirmed that no investments have been made yet as they await the first tranche of SPAC funding [53] Question: Source of other income in Q1 - The $2.2 million of other income was attributed to interest patronage from Farm Credit loans, expected to be recurring annually [56]