Gladstone Land(US:LAND)2020-08-06 18:10Financial Data and Key Metrics Changes - The company reported a net income of approximately $182,000 and a net loss to common shareholders of about $2.1 million, equating to $9.5 per common share [25] - Adjusted FFO for the current quarter was $10.1 per share, down from $25.3 per share in the first quarter [25] - Cash rents decreased by about $139,000 or 1% quarter-over-quarter, primarily due to a lease executed during the first quarter that included a rent-free period [26] Business Line Data and Key Metrics Changes - The company invested about $21 million in new farms during the quarter, with operations remaining strong and existing farms being leased at increased rental rates [8] - The company has about 89,000 acres across 150 farms valued at approximately $912 million, with 100% occupancy and 70 different tenants [16][17] - New leases executed or extended during the quarter are expected to increase annual net income by about $173,000, representing a 24% increase over prior leases [20] Market Data and Key Metrics Changes - Approximately 90-95% of products grown by farmers leasing the company's farms are sold to grocery stores, with demand for produce remaining high, up by 10% over 2019 [12] - The company noted that grocery store prices are up about 10%, particularly in the produce section [45] - The NCREIF Farmland Index has averaged an annual return of about 13.6% over the past 15 years, outperforming the S&P Index [38] Company Strategy and Development Direction - The company focuses on investing in farmland that grows fresh produce, which is seen as a hedge against inflation and a stable investment [40] - The company aims to increase dividends at a rate that outpaces inflation, having raised its common dividend 19 times over the past 22 quarters [32] - The company is exploring opportunities to acquire additional farms, with several potential acquisitions in negotiation [8][33] Management's Comments on Operating Environment and Future Outlook - Management indicated that farmers are currently very busy, impacting the company's ability to negotiate new contracts [33] - The company expects continued strong demand for fresh produce, with a focus on organic and non-GMO products [36] - Management expressed optimism about closing several farm acquisitions by year-end, despite challenges posed by the pandemic [48][49] Other Important Information - The company has raised about $6 million in net proceeds through sales of common stock and Series C Preferred Stock [23] - The loan-to-value ratio was about 52% as of June 30, indicating a comfortable leverage position [28] - The company has over $50 million in liquidity available for future acquisitions [30] Q&A Session Summary Question: What do you attribute the increase in opportunities to? - Management noted that farmers are busy, which has slowed down negotiations and due diligence processes due to local government shutdowns [43] Question: Has the pricing been impacted by procedural delays? - Management indicated that grocery store prices have remained steady, with an increase of about 10% in the produce section [45] Question: What is the expected CapEx budget for the rest of the year? - Management did not disclose a specific CapEx budget but noted that most projects from the first half of the year are nearing completion, leading to lower expected expenditures in the latter half [53] Question: Are you competing with federal rate programs for liquidity? - Management stated that they do not see significant competition from federal programs, as the market for farm financing is not as organized as other sectors [59]