Modiv(US:MDV)2024-03-04 14:49Financial Data and Key Metrics Changes - Fourth quarter adjusted funds from operations (AFFO) increased to $4.5 million, up 41% from $3.82 million in the prior year quarter after excluding the 2022 lease termination fee [15][36] - Revenue for the fourth quarter was $12.3 million compared to $13.8 million in the prior year, but increased by 23% when excluding the 2022 lease termination fee [35] - Full year revenue was $46.9 million, a 17% increase from $40 million in the prior year, excluding the lease termination fee [36] - AFFO for the full year was $14.7 million, up 14% from $12.9 million in the prior year [36] - AFFO per fully diluted share increased to $1.33 from $1.26 in the prior year, reflecting a 6% increase despite an increase in shares outstanding [36] Business Line Data and Key Metrics Changes - The increase in AFFO was driven by a $6.9 million revenue increase, offset by a $3 million increase in straight-line rents and a $5.1 million increase in cash interest expense [16] - General and administrative (G&A) expenses decreased by $1.2 million, reflecting lower headcount and the absence of the 2022 relocation reserve [16][49] - Property expenses decreased by $1.4 million due to the disposition of properties with modified gross leases and double net leases [16][49] Market Data and Key Metrics Changes - As of December 31, 2023, total cash and cash equivalents were $3.1 million, with $280 million of debt outstanding [5] - The company’s debt consists of $31 million in mortgages and $250 million in borrowings on a $400 million credit facility, with a fixed interest rate of 4.52% [5] Company Strategy and Development Direction - The company plans to announce potential strategic partnerships before the end of April, indicating a focus on collaboration for future growth [44] - Management is optimistic about the potential sale of a property to Costco, with a timeline for closure potentially before 2025 [54] - The company is actively monitoring the market for individual property deals, although the current pipeline is lighter due to market conditions [61] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in the current market environment but remains optimistic about future opportunities as the spring season approaches [42][61] - The company is focused on maintaining liquidity and balancing equity issuance with market conditions [62] - Management emphasized the importance of clear communication with stakeholders to enhance understanding of the company's operations and strategies [66] Other Important Information - The Board of Directors declared a cash dividend of approximately $0.95 per common share for the first quarter of 2024, representing a yield of 7.5% based on the closing price [37] - The company’s portfolio consists of 42 properties with an attractive weighted average lease term of 14 years, with 33% of tenants having investment-grade credit ratings [50] Q&A Session Summary Question: What is the timing for the Costco sale closing? - Management indicated that the timing is contingent on the completion of necessary approvals, with a potential closing date before 2025 [54] Question: Can you provide more details on the pipeline? - Management noted that the pipeline is currently lighter due to market conditions, but they are seeing individual property deals and are prepared to deploy cash if strategic partnerships do not materialize [61] Question: What was the reason for selling shares during the quarter? - The share sales were part of an At-The-Market (ATM) program to test liquidity and manage price surges, with a focus on balancing equity issuance [62]