Alpine Income Property Trust Reports Fourth Quarter and Full Year 2021 Operating Results
Select Highlights
- Reported Net Income per diluted share attributable to the Company of
$0.64 and$0.89 for the quarter and year endedDecember 31, 2021 , respectively. - Reported FFO per diluted share of
$0.42 and$1.58 for the quarter and year endedDecember 31, 2021 , respectively. - Reported AFFO per diluted share of
$0.41 and$1.59 for the quarter and year endedDecember 31, 2021 , respectively. - Acquired 26 net lease retail properties during the fourth quarter of 2021 for total acquisition volume of
$101.6 million , reflecting a weighted average going-in cash cap rate of 6.2%. - Sold two net lease office properties during the fourth quarter of 2021 for a sales price of
$24.5 million at an exit cap rate of 7.5%, generating a gain on sale of$9.1 million . - Paid a cash dividend for the fourth quarter of 2021 of
$0.27 per share, a 5.9% increase over the Company’s previous quarterly cash dividend and an annualized yield of 5.6% based on the closing price of the Company’s common stock onFebruary 9, 2022 . - During the year ended
December 31, 2021 , the Company acquired 68 net lease properties for total acquisition volume of$260.3 million , reflecting a weighted average going-in cash cap rate of 6.8%. - During the year ended
December 31, 2021 , the Company sold three net lease properties for total disposition volume of$28.3 million at a weighted average exit cap rate of 7.2%, generating aggregate gains of$9.7 million . - Paid cash dividends during the full year 2021 of
$1.015 per share, a 23.8% increase over the Company’s full year 2020 cash dividends.
Quarterly Operating Results Highlights
The table below provides a summary of the Company’s operating results for the quarter ended
| Three Months Ended |
Three Months Ended |
Variance to Comparable Period in the Prior Year |
|||||||||
| Total Revenues | $ | 9,470 | $ | 5,385 | $ | 4,085 | 75.9 | % | |||
| Net Income | $ | 9,549 | $ | 216 | $ | 9,333 | 4,320.8 | % | |||
| Net Income Attributable to PINE | $ | 8,302 | $ | 186 | $ | 8,116 | 4,363.4 | % | |||
| Net Income per Diluted Share Attributable to PINE | $ | 0.64 | $ | 0.02 | $ | 0.62 | 3,100.0 | % | |||
| FFO (1) | $ | 5,443 | $ | 3,162 | $ | 2,281 | 72.1 | % | |||
| FFO per Diluted Share (1) | $ | 0.42 | $ | 0.36 | $ | 0.06 | 16.7 | % | |||
| AFFO (1) | $ | 5,365 | $ | 3,106 | $ | 2,259 | 72.7 | % | |||
| AFFO per Diluted Share (1) | $ | 0.41 | $ | 0.36 | $ | 0.05 | 13.9 | % | |||
| Dividends Declared and Paid, per Share | $ | 0.270 | $ | 0.220 | $ | 0.050 | 22.7 | % | |||
| (1) | See the “Non-GAAP Financial Measures” section and tables at the end of this press release for a discussion and reconciliation of Net Income to non-GAAP financial measures, including FFO, FFO per diluted share, AFFO and AFFO per diluted share. |
Annual Operating Results Highlights
The table below provides a summary of the Company’s operating results for the year ended
| Year Ended |
Year Ended |
Variance to Comparable Period in the Prior Year |
|||||||||
| Total Revenues | $ | 30,128 | $ | 19,248 | $ | 10,880 | 56.5 | % | |||
| Net Income | $ | 11,462 | $ | 1,146 | $ | 10,316 | 900.2 | % | |||
| Net Income Attributable to PINE | $ | 9,964 | $ | 985 | $ | 8,979 | 911.6 | % | |||
| Net Income per Diluted Share Attributable to PINE | $ | 0.89 | $ | 0.11 | $ | 0.78 | 709.1 | % | |||
| . | |||||||||||
| FFO (1) | $ | 17,726 | $ | 10,808 | $ | 6,918 | 64.0 | % | |||
| FFO per Diluted Share (1) | $ | 1.58 | $ | 1.23 | $ | 0.35 | 28.5 | % | |||
| AFFO (1) | $ | 17,904 | $ | 9,189 | $ | 8,715 | 94.8 | % | |||
| AFFO per Diluted Share (1) | $ | 1.59 | $ | 1.04 | $ | 0.55 | 52.9 | % | |||
| Dividends Declared and Paid, per Share | $ | 1.015 | $ | 0.820 | $ | 0.195 | 23.8 | % | |||
| (1) | See the “Non-GAAP Financial Measures” section and tables at the end of this press release for a discussion and reconciliation of Net Income to non-GAAP financial measures, including FFO, FFO per diluted share, AFFO and AFFO per diluted share. |
CEO Comments
“Our record fourth quarter capped off a very productive year as we exceeded our FFO and AFFO guidance, meaningfully grew our cash dividend, significantly increased the size and diversity of our high-quality net lease portfolio and provided one of the best total returns in the net lease REIT sector,” said
Acquisitions
During the three months ended
During the year ended
Dispositions
During the three months ended
During the year ended
Development
During the year ended
Income Property Portfolio
The Company’s portfolio consisted of the following as of
| Number of Properties | 113 | |
| Square Feet | 3.3 million | |
| Weighted Average Remaining Lease Term | 7.9 years | |
| States where Properties are Located | 32 | |
| Occupancy | 100% | |
| % of Annualized Base Rent attributable to Retail Tenants (1) | 92% | |
| % of Annualized Base Rent attributable to Office Tenants (1) | 8% | |
| % of Annualized Base Rent subject to Rent Escalations (1) | 45% | |
| % of Annualized Base Rent attributable to Investment Grade Rated Tenants (1)(2) | 45% | |
| % of Annualized Base Rent attributable to Credit Rated Tenants (1)(3) | 74% | |
| Any differences a result of rounding. |
|
| (1) | Annualized Base Rent (“ABR”) represents the annualized in-place straight-line base rent required by the tenant’s lease. ABR is a non-GAAP financial measure. We believe this non-GAAP financial measure is useful to investors because it is a widely accepted industry measure used by analysts and investors to compare the real estate portfolios and operating performance of REITs. |
| (2) | The Company defines an Investment Grade Rated tenant as a tenant or the parent of a tenant with a credit rating from |
| (3) | The Company defines a Credit Rated Tenant as a tenant or the parent of a tenant with a credit rating from |
The Company’s portfolio included the following top tenants as of
| Tenant | Credit Rating (1) | % of Annualized Base Rent | ||
| Wells Fargo | A+ | 8 | % | |
| At Home | B | 6 | % | |
| N/A | 6 | % | ||
| B+ | 5 | % | ||
| Dollar General | BBB | 5 | % | |
| Walmart | AA | 4 | % | |
| Walgreens | BBB | 4 | % | |
| Lowe’s | BBB+ | 4 | % | |
| Dollar Tree/Family Dollar | BBB | 3 | % | |
| Sportsman’s Warehouse | N/A | 3 | % | |
| Total | 48 | % | ||
| Any differences a result of rounding. |
|
| (1) | Credit rating is from |
The Company’s portfolio consisted of the following industries as of
| Industry | % of Annualized Base Rent | |||
| Home Furnishings | 12 | % | ||
| General Merchandise | 12 | % | ||
| Sporting Goods | 9 | % | ||
| Financial Services | 9 | % | ||
| Dollar Stores | 8 | % | ||
| Grocery | 6 | % | ||
| Pharmacy | 6 | % | ||
| 5 | % | |||
| Entertainment | 5 | % | ||
| Home Improvement | 4 | % | ||
| Consumer Electronics | 4 | % | ||
| Casual Dining | 3 | % | ||
| Health & Fitness | 3 | % | ||
| Automotive Parts | 2 | % | ||
| Off-Price Retail | 2 | % | ||
| Specialty Retail | 2 | % | ||
| Other (1) | 2 | % | ||
| Farm & Rural Supply | 1 | % | ||
| 1 | % | |||
| 1 | % | |||
| Total | 26 Industries | 100 | % | |
| Any differences a result of rounding. |
|
| (1) | Includes 7 industries collectively representing 2% of the Company’s ABR as of |
The Company’s portfolio included properties in the following states as of
| State | % of Annualized Base Rent | |||
| 18 | % | |||
| 9 | % | |||
| 8 | % | |||
| 6 | % | |||
| 6 | % | |||
| 6 | % | |||
| 5 | % | |||
| 4 | % | |||
| 3 | % | |||
| 3 | % | |||
| 3 | % | |||
| 3 | % | |||
| 3 | % | |||
| 3 | % | |||
| 2 | % | |||
| 2 | % | |||
| 2 | % | |||
| 2 | % | |||
| 2 | % | |||
| 1 | % | |||
| 1 | % | |||
| 1 | % | |||
| 1 | % | |||
| 1 | % | |||
| <1% | ||||
| <1% | ||||
| <1% | ||||
| <1% | ||||
| <1% | ||||
| <1% | ||||
| <1% | ||||
| <1% | ||||
| Total | 32 States | 100 | % | |
Any differences a result of rounding.
Capital Markets and Balance Sheet
During the quarter ended
- The Company issued 151,673 common shares under its ATM offering program at a weighted average gross price of
$19.04 per share, for total net proceeds of$2.8 million .
During the year ended
- Executed a 5-year,
$60.0 million unsecured term loan (the “2026 Term Loan”). The 2026 Term Loan matures inMay 2026 and includes an accordion option that allows the Company to request additional lender commitments up to a total of$160.0 million . - Assumed an existing
$30.0 million secured mortgage, which bears a fixed interest rate of 4.33%, in connection with the acquisition of six properties from CTO Realty Growth, Inc., a publicly traded real estate investment trust and the sole member of the Company’s external manager. The mortgage note matures inOctober 2034 and is prepayable without penalty beginning inOctober 2024 . - Executed a 5-year, $80.0 million unsecured term loan (the “2027 Term Loan”). The 2027 Term Loan matures in January 2027 and includes an accordion option that allows the Company to request additional lender commitments up to a total of $200.0 million in the aggregate.
- Completed an inaugural follow-on underwritten public offering of 3,220,000 shares of common stock, which included the underwriters' full exercise of their option to purchase additional shares. Total net proceeds were
$54.3 million after deducting the underwriting discount and expenses. - Issued 479,640 OP Units at an
$18.85 per OP Unit value for a total value of$9.0 million in connection with the acquisition of ten net lease properties. - Issued 761,902 common shares under the ATM offering program at a weighted average gross price of
$18.36 per share, for total net proceeds of$13.8 million .
The following table provides a summary of the Company’s long-term debt as of
| Component of Long-Term Debt | Principal | Interest Rate | Maturity Date | |||||
| Revolving Credit Facility | $ | 99.0 million | 30-Day LIBOR + [1.35% - 1.95%] |
|||||
| 2026 Term Loan (1) | $ | 60.0 million | 30-Day LIBOR + [1.35% - 1.95%] |
|||||
| 2027 Term Loan (2) | $ | 80.0 million | 30-Day LIBOR + [1.25% - 1.90%] |
|||||
| Mortgage Note Payable – CMBS Portfolio | $ | 30.0 million | 4.33% | |||||
| Total Debt/Weighted Average Rate | $ | 269.0 million | 2.10% | |||||
| (1) | Effective |
| (2) | Effective |
As of
As of
Dividend
On
During year ended
2022 Outlook
The Company’s initial 2022 outlook assumes stable or improving economic activity, strong underlying business trends related to each of our tenants and other significant assumptions.
The Company’s outlook for 2022 is as follows:
| Low | High | |||||
| Acquisitions | to | |||||
| Dispositions | to | |||||
| FFO per Diluted Share | to | |||||
| AFFO per Diluted Share | to | |||||
| Weighted Average Diluted Shares Outstanding | 17.0 million | to | 18.5 million | |||
Fourth Quarter 2021 Earnings Conference Call & Webcast
The Company will host a conference call to present its operating results for the quarter and year ended
Teleconference:
| 1 (877) 815-0077 | ||
| International: | 1 (631) 625-3206 |
Please dial in at least fifteen minutes prior to the scheduled start time and use the code 3796094 when prompted.
A webcast of the call can be accessed at: https://edge.media-server.com/mmc/p/mqy6ijb4. To access the webcast, log on to the web address noted above or go to http://www.alpinereit.com and log in at the investor relations section of the website.
About
We encourage you to review our most recent investor presentation which is available on our website at http://www.alpinereit.com.
Safe Harbor
This press release may contain “forward-looking statements.” Forward-looking statements include statements that may be identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements are based on the Company’s current expectations and assumptions regarding capital market conditions, the Company’s business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, the Company’s actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include general business and economic conditions, continued volatility and uncertainty in the credit markets and broader financial markets, risks inherent in the real estate business, including tenant defaults, potential liability relating to environmental matters, illiquidity of real estate investments and potential damages from natural disasters, the impact of the COVID-19 Pandemic and its variants on the Company’s business and the business of its tenants and the impact on the
Non-GAAP Financial Measures
Our reported results are presented in accordance with accounting principles generally accepted in
FFO, AFFO, and Pro Forma EBITDA do not represent cash generated from operating activities and are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as reported on our statement of cash flows as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.
We compute FFO in accordance with the definition adopted by the
To derive AFFO, we modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, amortization of above- and below-market lease related intangibles, non-cash compensation, and other non-cash income. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We use AFFO as one measure of our performance when we formulate corporate goals.
To derive Pro Forma EBITDA, GAAP net income or loss is adjusted to exclude extraordinary items (as defined by GAAP), net gain or loss from sales of depreciable real estate assets, impairment write-downs associated with depreciable real estate assets and real estate related depreciation and amortization, including the pro rata share of such adjustments of unconsolidated subsidiaries, non-cash revenues and expenses such as straight-line rental revenue, amortization of deferred financing costs, above- and below-market lease related intangibles, non-cash compensation, and other non-cash income or expense. Cash interest expense is also excluded from Pro Forma EBITDA, and GAAP net income or loss is adjusted for the annualized impact of acquisitions, dispositions and other similar activities.
FFO is used by management, investors and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers primarily because it excludes the effect of real estate depreciation and amortization and net gains or losses on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions. We believe that AFFO is an additional useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by other non-cash revenues or expenses. We also believe that Pro Forma EBITDA is an additional useful supplemental measure for investors to consider as it allows for a better assessment of our operating performance without the distortions created by other non-cash revenues, expenses or certain effects of the Company’s capital structure on our operating performance. FFO, AFFO, and Pro Forma EBITDA may not be comparable to similarly titled measures employed by other companies.
Consolidated Balance Sheets
(In thousands, except share and per share data)
| As of | |||||||
| ASSETS | |||||||
| Real Estate: | |||||||
| Land, at Cost | $ | 178,172 | $ | 83,210 | |||
| Building and Improvements, at Cost | 266,236 | 142,679 | |||||
| 444,408 | 225,889 | ||||||
| Less, Accumulated Depreciation | (15,419 | ) | (6,550 | ) | |||
| Real Estate—Net | 428,989 | 219,339 | |||||
| Cash and Cash Equivalents | 8,851 | 1,894 | |||||
| Restricted Cash | 646 | — | |||||
| Intangible Lease Assets—Net | 58,821 | 36,881 | |||||
| Straight-Line Rent Adjustment | 1,838 | 2,045 | |||||
| Other Assets | 6,369 | 2,081 | |||||
| Total Assets | $ | 505,514 | $ | 262,240 | |||
| LIABILITIES AND EQUITY | |||||||
| Liabilities: | |||||||
| Accounts Payable, Accrued Expenses, and Other Liabilities | $ | 2,363 | $ | 1,984 | |||
| Prepaid Rent and Deferred Revenue | 2,033 | 1,055 | |||||
| Intangible Lease Liabilities—Net | 5,476 | 3,299 | |||||
| Long-Term Debt | 267,740 | 106,809 | |||||
| Total Liabilities | 277,612 | 113,147 | |||||
| Commitments and Contingencies | |||||||
| Equity: | |||||||
| Preferred Stock, |
— | — | |||||
| Common Stock, |
114 | 75 | |||||
| 200,906 | 132,878 | ||||||
| Dividends in Excess of Net Income | (6,419 | ) | (5,713 | ) | |||
| Accumulated Other Comprehensive Income (Loss) | 1,922 | (481 | ) | ||||
| Stockholders' Equity | 196,523 | 126,759 | |||||
| Noncontrolling Interest | 31,379 | 22,334 | |||||
| Total Equity | 227,902 | 149,093 | |||||
| Total Liabilities and Equity | $ | 505,514 | $ | 262,240 | |||
Consolidated Statements of Operations
(In thousands, except share, per share and dividend data)
| (Unaudited) Three Months Ended |
Year Ended | ||||||||||||||
| Revenues: | |||||||||||||||
| Lease Income | $ | 9,470 | $ | 5,385 | $ | 30,128 | $ | 19,248 | |||||||
| Total Revenues | 9,470 | 5,385 | 30,128 | 19,248 | |||||||||||
| Operating Expenses: | |||||||||||||||
| Real Estate Expenses | 1,284 | 611 | 3,673 | 2,316 | |||||||||||
| General and Administrative Expenses |
1,340 | 1,125 | 5,027 | 4,660 | |||||||||||
| Depreciation and Amortization | 5,025 | 2,946 | 15,939 | 9,949 | |||||||||||
| Total Operating Expenses | 7,649 | 4,682 | 24,639 | 16,925 | |||||||||||
| Gain on Disposition of Assets | 9,131 | — | 9,675 | 287 | |||||||||||
| Net Income from Operations | 10,952 | 703 | 15,164 | 2,610 | |||||||||||
| Interest Expense | 1,403 | 487 | 3,702 | 1,464 | |||||||||||
| Net Income | 9,549 | 216 | 11,462 | 1,146 | |||||||||||
| Less: Net Income Attributable to Noncontrolling Interest |
(1,247 | ) | (30 | ) | (1,498 | ) | (161 | ) | |||||||
| Net Income Attributable to |
$ | 8,302 | $ | 186 | $ | 9,964 | $ | 985 | |||||||
| Per Common Share Data: | |||||||||||||||
| Net Income Attributable to |
|||||||||||||||
| Basic | $ | 0.73 | $ | 0.02 | $ | 1.02 | $ | 0.13 | |||||||
| Diluted | $ | 0.64 | $ | 0.02 | $ | 0.89 | $ | 0.11 | |||||||
| Weighted Average Number of Common Shares: | |||||||||||||||
| Basic | 11,347,778 | 7,458,755 | 9,781,066 | 7,588,349 | |||||||||||
| Diluted (1) | 13,051,272 | 8,682,609 | 11,246,227 | 8,812,203 | |||||||||||
| Dividends Declared and Paid | $ | 0.270 | $ | 0.220 | $ | 1.015 | $ | 0.820 | |||||||
| (1) | Includes the weighted average impact of 1,703,494 shares underlying OP units including (i) 1,223,854 shares underlying OP Units issued to CTO Realty Growth, Inc. and (ii) 479,640 shares underlying OP Units issued to an unrelated third party. |
Non-GAAP Financial Measures
Funds From Operations and Adjusted Funds From Operations
(Unaudited)
(In thousands, except per share data)
| Three Months Ended | Year Ended | ||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
| Net Income | $ | 9,549 | $ | 216 | $ | 11,462 | $ | 1,146 | |||||||
| Depreciation and Amortization | 5,025 | 2,946 | 15,939 | 9,949 | |||||||||||
| Gain on Disposition of Assets | (9,131 | ) | — | (9,675 | ) | (287 | ) | ||||||||
| Funds from Operations | $ | 5,443 | $ | 3,162 | $ | 17,726 | $ | 10,808 | |||||||
| Adjustments: | |||||||||||||||
| Straight-Line Rent Adjustment | (214 | ) | (287 | ) | (607 | ) | (1,524 | ) | |||||||
| COVID-19 Rent Repayments (Deferrals), Net |
22 | 160 | 430 | (378 | ) | ||||||||||
| Non-Cash Compensation | 78 | 67 | 309 | 268 | |||||||||||
| Amortization of Deferred Financing Costs to Interest Expense |
126 | 55 | 362 | 188 | |||||||||||
| Amortization of Intangible Assets and Liabilities to Lease Income |
(89 | ) | (30 | ) | (257 | ) | (108 | ) | |||||||
| Other Non-Cash (Income) Expense | (1 | ) | (12 | ) | (18 | ) | (22 | ) | |||||||
| Recurring Capital Expenditures | — | (9 | ) | (41 | ) | (43 | ) | ||||||||
| Adjusted Funds from Operations | $ | 5,365 | $ | 3,106 | $ | 17,904 | $ | 9,189 | |||||||
| FFO per Diluted Share | $ | 0.42 | $ | 0.36 | $ | 1.58 | $ | 1.23 | |||||||
| AFFO per Diluted Share | $ | 0.41 | $ | 0.36 | $ | 1.59 | $ | 1.04 | |||||||
Non-GAAP Financial Measures
Reconciliation of Net Debt to Pro Forma EBITDA
(Unaudited)
(In thousands)
| Three Months Ended | |||
| Net Income | $ | 9,549 | |
| Adjustments: | |||
| Depreciation and Amortization | 5,025 | ||
| Gain on Disposition of Assets | (9,131 | ) | |
| Straight-Line Rent Adjustment | (214 | ) | |
| Non-Cash Compensation | 78 | ||
| Amortization of Deferred Financing Costs to Interest Expense | 126 | ||
| Amortization of Intangible Assets and Liabilities to Lease Income | (89 | ) | |
| Other Non-Cash (Income) Expense | (1 | ) | |
| Interest Expense, Net of Deferred Financing Costs Amortization | 1,278 | ||
| EBITDA | $ | 6,621 | |
| Annualized EBITDA | $ | 26,484 | |
| Pro Forma Annualized Impact of Current Quarter Acquisitions and Dispositions, Net (1) | 5,582 | ||
| Pro Forma EBITDA | $ | 32,066 | |
| Total Long-Term Debt | 267,740 | ||
| Financing Costs, Net of Accumulated Amortization | 1,260 | ||
| Cash and Cash Equivalents | (8,851 | ) | |
| Restricted Cash | (646 | ) | |
| Net Debt | $ | 259,503 | |
| Net Debt to Pro Forma EBITDA | 8.1x | ||
| (1) | Reflects the pro forma annualized impact on Annualized EBITDA of the Company’s acquisition and disposition activity during the three months ended |
| Contact: | |
| Senior Vice President, Chief Financial Officer & Treasurer | |
| (386) 944-5643 | |
| mpartridge@alpinereit.com |
Source: Alpine Income Property Trust