Alpine Income Property Trust Reports Fourth Quarter and Full Year 2023 Operating Results
Select Full Year 2023 Highlights
- Reported Net Income per diluted share attributable to the Company of
$0.19 for the year endedDecember 31, 2023 . - Reported FFO per diluted share of
$1.47 for the year endedDecember 31, 2023 . - Reported AFFO per diluted share of
$1.49 for the year endedDecember 31, 2023 . - Acquired 14 net lease properties for total acquisition volume of
$82.9 million at a weighted average going-in cash cap rate of 7.4%. - Originated three first mortgage investments totaling
$38.6 million of funding commitments at a weighted average initial yield of 9.1%. - Sold 24 net lease properties for total disposition volume of
$108.3 million at a weighted average exit cap rate of 6.3%, generating total gains of$9.3 million . - Increased investment grade-rated tenant exposure to 65% as of
December 31, 2023 , up from 54% as ofDecember 31, 2022 . - Raised approximately
$12.4 million of net proceeds through the Company’s ATM offering program at a weighted average gross price of$18.96 per share. - Repurchased 899,011 shares of the Company’s common stock at a weighted average gross price of
$16.23 per share, for a total cost of$14.6 million . - Paid cash dividends during the full year 2023 of
$1.10 per share, representing a yield of 7.2% based on the closing price of the Company’s common stock onFebruary 7, 2024 .
Select Fourth Quarter 2023 Highlights
- Reported Net Income per diluted share attributable to the Company of
$0.02 for the quarter endedDecember 31, 2023 . - Reported FFO per diluted share of
$0.37 for the quarter endedDecember 31, 2023 . - Reported AFFO per diluted share of
$0.38 for the quarter endedDecember 31, 2023 . - Acquired two retail net lease properties for total acquisition volume of
$3.0 million , reflecting a weighted average going-in cash cap rate of 7.3%. - Originated two first mortgage investments totaling
$30.8 million of funding commitments at a weighted average initial yield of 9.2%. - Sold two net lease properties for total disposition volume of
$8.7 million at a weighted average exit cash cap rate of 7.3%, generating total gains of$1.6 million . - Repurchased 594,790 shares of the Company’s common stock at a weighted average gross price of
$16.01 per share, for a total cost of$9.5 million . - Paid a common stock cash dividend of
$0.275 per share.
CEO Comments
“We were opportunistic in 2023, creating value through core acquisitions and strategic dispositions, share repurchases, and more recently, originating first mortgage investments,” said
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 | $ | 11,581 | $ | 11,592 | $ | (11) | (0.1%) | ||||
| Net Income | $ | 370 | $ | 5,525 | $ | (5,155) | (93.3%) | ||||
| Net Income Attributable to PINE | $ | 335 | $ | 4,862 | $ | (4,527) | (93.1%) | ||||
| Net Income per Diluted Share Attributable to PINE | $ | 0.02 | $ | 0.34 | $ | (0.32) | (93.5%) | ||||
| FFO (1) | $ | 5,646 | $ | 5,304 | $ | 342 | 6.4% | ||||
| FFO per Diluted Share (1) | $ | 0.37 | $ | 0.37 | $ | 0.00 | 0.0% | ||||
| AFFO (1) | $ | 5,801 | $ | 5,763 | $ | 38 | 0.7% | ||||
| AFFO per Diluted Share (1) | $ | 0.38 | $ | 0.41 | $ | (0.03) | (7.3%) | ||||
| Dividends Declared and Paid, per Share | $ | 0.275 | $ | 0.275 | $ | 0.000 | 0.0% | ||||
(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. |
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Annual Operating Results Highlights
The table below provides a summary of the Company’s operating results for year ended
| Year Ended |
Year Ended |
Variance to Comparable Period in the Prior Year |
|||||||||
| Total Revenues | $ | 45,644 | $ | 45,191 | $ | 453 | 1.0% | ||||
| Net Income | $ | 3,266 | $ | 33,955 | $ | (30,689) | (90.4%) | ||||
| Net Income Attributable to PINE | $ | 2,917 | $ | 29,720 | $ | (26,803) | (90.2%) | ||||
| Net Income per Diluted Share Attributable to PINE | $ | 0.19 | $ | 2.17 | $ | (1.99) | (91.4%) | ||||
| FFO (1) | $ | 22,910 | $ | 23,718 | $ | (808) | (3.4%) | ||||
| FFO per Diluted Share (1) | $ | 1.47 | $ | 1.73 | $ | (0.26) | (15.0%) | ||||
| AFFO (1) | $ | 23,211 | $ | 24,236 | $ | (1,025) | (4.2%) | ||||
| AFFO per Diluted Share (1) | $ | 1.49 | $ | 1.77 | $ | (0.28) | (15.8%) | ||||
| Dividends Declared and Paid, per Share | $ | 1.100 | $ | 1.090 | $ | 0.010 | 0.9% | ||||
(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. |
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Investments
During the three months ended
During the year ended
During the three months ended
During the year ended
The following table presents the Company's three mortgage investments as of
| Description | Location | Collateral | Funding Commitment |
Funded Balance |
Coupon Rate |
Initial Term |
First Mortgage |
33- Anchored by Wawa |
8.50% | 2 years | |||
First Mortgage |
5- Anchored by Wawa & McDonald’s |
11.00% | 2 years | |||
First Mortgage |
Various |
41 |
8.75% |
3 years |
||
Total / Weighted Average |
9.1% |
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On
Dispositions
During the three months ended
During the year ended
Property Portfolio
The Company’s property portfolio consisted of the following as of
| Number of Properties | 138 |
| Square Feet | 3.8 million |
| Annualized Base Rent | |
| Weighted Average Remaining Lease Term | 7.0 years |
| States where Properties are Located | 35 |
| Occupancy | 99.1% |
| % of Annualized Base Rent Attributable to Investment Grade Rated Tenants (1)(2) | 65% |
| % of Annualized Base Rent Attributable to Credit Rated Tenants (1)(3) | 89% |
Any differences are 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 property portfolio included the following top tenants that represent 2.0% or greater of the Company's total annualized base rent as of
| Tenant | Credit Rating (1) | % of Annualized Base Rent | |
| Walgreens | BBB- / Ba2 | 12% | |
| Lowe’s | BBB+ / Baa1 | 9% | |
| Dick’s Sporting Goods | BBB / Baa3 | 9% | |
| Dollar Tree/Family Dollar | BBB / Baa2 | 9% | |
| Dollar General | BBB / Baa2 | 5% | |
| Walmart | AA / Aa2 | 5% | |
| Best Buy | BBB+ / A3 | 4% | |
| At Home | CCC / Caa3 | 4% | |
| NR / NR | 3% | ||
| Home Depot | A / A2 | 3% | |
| B- / B3 | 2% | ||
| Kohl’s | BB / Ba2 | 2% | |
| BB+ / Ba2 | 2% | ||
| Camping World | B+ / B2 | 2% | |
| Other | 29% | ||
| Total | 100% | ||
Any differences are a result of rounding. (1) Credit Rating is the available rating from |
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The Company’s property portfolio consisted of the following industries as of
| Industry | % of Annualized Base Rent | ||
| Dollar Stores | 14% | ||
| Pharmacy | 13% | ||
| Home Improvement | 13% | ||
| Sporting Goods | 12% | ||
| Home Furnishings | 8% | ||
| General Merchandise | 6% | ||
| Consumer Electronics | 6% | ||
| Grocery | 5% | ||
| Entertainment | 5% | ||
| Off-Price Retail | 4% | ||
| Health & Fitness | 4% | ||
| Specialty Retail | 3% | ||
| Automotive Parts | 2% | ||
| 1% | |||
| 1% | |||
| Convenience Stores | 1% | ||
| Farm & Rural Supply | 1% | ||
| Casual Dining | <1% | ||
| <1% | |||
| Other (1) | < 1% | ||
| Total | 23 Industries | 100% | |
Any differences are a result of rounding. (1) Includes four industries collectively representing less than 1% of the Company’s ABR as of |
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The Company’s property portfolio included properties in the following states as of
| State | % of Annualized Base Rent | ||
| 12% | |||
| 9% | |||
| 9% | |||
| 8% | |||
| 7% | |||
| 5% | |||
| 5% | |||
| 4% | |||
| 4% | |||
| 3% | |||
| 3% | |||
| 3% | |||
| 3% | |||
| 2% | |||
| 2% | |||
| 2% | |||
| 2% | |||
| 2% | |||
| 2% | |||
| 2% | |||
| 2% | |||
| 2% | |||
| 1% | |||
| 1% | |||
| 1% | |||
| 1% | |||
| <1% | |||
| <1% | |||
| <1% | |||
| < 1% | |||
| < 1% | |||
| < 1% | |||
| < 1% | |||
| < 1% | |||
| < 1% | |||
| Total | 35 States | 100% | |
Any differences are a result of rounding. |
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Capital Markets and Balance Sheet
During the quarter ended
- Repurchased 594,790 shares of the Company’s common stock on the open market under its previously authorized
$15.0 million buyback program for a total cost of$9.5 million , or an average price of$16.01 per share.
During the year ended
- Issued 665,929 common shares under its ATM offering program at a weighted average gross price of
$18.96 per share, for total net proceeds of$12.4 million . - Repurchased 899,011 shares of the Company’s common stock on the open market under the previously authorized
$15.0 million buyback program for a total cost of$14.6 million , or an average price of$16.23 per share.
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 | |||||||||
| 2026 Term Loan (1) | $ | 100.0 million | SOFR + 10 bps + [1.35% - 1.95%] |
|||||||||
| 2027 Term Loan (2) | $ | 100.0 million | SOFR + 10 bps + [1.25% - 1.90%] |
|||||||||
| Revolving Credit Facility (3) | $ | 76.5 million | SOFR + 10 bps + [1.25% - 2.20%] |
|||||||||
| Total Debt/Weighted Average Rate | $ | 276.5 million | 3.84% | |||||||||
(1) As of (2) As of (3) As of |
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As of
As of
Dividend
On
During the year ended
2024 Outlook
The Company's outlook and guidance for 2024 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 2024 is as follows:
| Low | High | |||
| Investments | to | |||
| Dispositions | to | |||
| FFO per Diluted Share | to | |||
| AFFO per Diluted Share | to | |||
| Weighted Average Diluted Shares Outstanding | 14.9 million | to | 14.9 million | |
Earnings Conference Call & Webcast
The Company will host a conference call to present its operating results for the quarter and year ended
A live webcast of the call will be available on the Investor Relations page of the Company’s website at www.alpinereit.com or at the link provided in the event details below. To access the call by phone, please go to the link provided in the event details below and you will be provided with dial-in details.
| Webcast: | https://edge.media-server.com/mmc/p/gtd9dd4u | |
| Dial-In: | https://register.vevent.com/register/BI528cf76e8c0445b8b9cdd986e4713b84 | |
We encourage participants to dial into the conference call at least fifteen minutes ahead of the scheduled start time. A replay of the earnings call will be archived and available online through the Investor Relations section of the Company’s website at www.alpinereit.com.
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, credit risk associated with the Company investing in first mortgage investments, illiquidity of real estate investments and potential damages from natural disasters, the impact of epidemics or pandemics (such as the COVID-19 Pandemic and its variants) on the Company’s business and the business of its tenants and the impact of such epidemics or pandemics 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 further modify the NAREIT computation of FFO to include other adjustments to GAAP net income related to non-cash revenues and expenses such as loss on extinguishment of debt, amortization of above- and below-market lease related intangibles, straight-line rental revenue, amortization of deferred financing costs, non-cash compensation, and other non-cash income or expense. 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, loss on extinguishment of debt, 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) |
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| As of | ||||||
| ASSETS | ||||||
| Real Estate: | ||||||
| Land, at Cost | $ | 149,314 | $ | 176,857 | ||
| Building and Improvements, at Cost | 328,993 | 322,510 | ||||
| 478,307 | 499,367 | |||||
| Less, Accumulated Depreciation | (34,714) | (22,313) | ||||
| Real Estate—Net | 443,593 | 477,054 | ||||
| Assets Held for Sale | 4,410 | — | ||||
| Commercial Loans and Investments | 35,080 | — | ||||
| Cash and Cash Equivalents | 4,019 | 9,018 | ||||
| Restricted Cash | 9,712 | 4,026 | ||||
| Intangible Lease Assets—Net | 49,292 | 60,432 | ||||
| Straight-Line Rent Adjustment | 1,409 | 1,668 | ||||
| Other Assets | 17,045 | 21,233 | ||||
| Total Assets | $ | 564,560 | $ | 573,431 | ||
| LIABILITIES AND EQUITY | ||||||
| Liabilities: | ||||||
| Accounts Payable, Accrued Expenses, and Other Liabilities | $ | 5,197 | $ | 4,411 | ||
| Prepaid Rent and Deferred Revenue | 3,166 | 1,479 | ||||
| Intangible Lease Liabilities—Net | 4,907 | 5,050 | ||||
| Long-Term Debt | 275,677 | 267,116 | ||||
| Total Liabilities | 288,947 | 278,056 | ||||
| Commitments and Contingencies | ||||||
| Equity: | ||||||
| Preferred Stock, |
— | — | ||||
| Common Stock, |
137 | 134 | ||||
| 243,690 | 236,841 | |||||
| Retained Earnings (Dividends in Excess of Net Income) | (2,359) | 10,042 | ||||
| Accumulated Other Comprehensive Income | 9,275 | 14,601 | ||||
| Stockholders' Equity | 250,743 | 261,618 | ||||
| Noncontrolling Interest | 24,870 | 33,757 | ||||
| Total Equity | 275,613 | 295,375 | ||||
| Total Liabilities and Equity | $ | 564,560 | $ | 573,431 | ||
Consolidated Statements of Operations (In thousands, except share, per share and dividend data) |
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| (Unaudited) Three Months Ended |
Year Ended | |||||||||||
2023 |
2022 |
2023 |
2022 |
|||||||||
| Revenues: | ||||||||||||
| Lease Income | $ | 11,016 | $ | 11,592 | $ | 44,967 | $ | 45,191 | ||||
| Interest Income from Commercial Loans and Investments | 525 | — | 637 | — | ||||||||
| Other Revenue | 40 | — | 40 | — | ||||||||
| Total Revenues | 11,581 | 11,592 | 45,644 | 45,191 | ||||||||
| Operating Expenses: | ||||||||||||
| Real Estate Expenses | 1,849 | 1,242 | 6,580 | 5,435 | ||||||||
| General and Administrative Expenses | 1,478 | 1,414 | 6,301 | 5,784 | ||||||||
| Provision for Impairment | 356 | — | 3,220 | — | ||||||||
| Depreciation and Amortization | 6,472 | 6,332 | 25,758 | 23,564 | ||||||||
| Total Operating Expenses | 10,155 | 8,988 | 41,859 | 34,783 | ||||||||
| Gain on Disposition of Assets | 1,552 | 6,553 | 9,334 | 33,801 | ||||||||
| Gain (Loss) on Extinguishment of Debt | — | (443) | 23 | (727) | ||||||||
| Net Income from Operations | 2,978 | 8,714 | 13,142 | 43,482 | ||||||||
| Investment and Other Income | 63 | 3 | 289 | 12 | ||||||||
| Interest Expense | (2,671) | (3,192) | (10,165) | (9,539) | ||||||||
| Net Income | 370 | 5,525 | 3,266 | 33,955 | ||||||||
| Less: Net Income Attributable to Noncontrolling Interest | (35) | (663) | (349) | (4,235) | ||||||||
| Net Income Attributable to |
$ | 335 | $ | 4,862 | $ | 2,917 | $ | 29,720 | ||||
| Per Common Share Data: | ||||||||||||
| Net Income Attributable to |
||||||||||||
| Basic | $ | 0.02 | $ | 0.39 | $ | 0.21 | $ | 2.48 | ||||
| Diluted | $ | 0.02 | $ | 0.34 | $ | 0.19 | $ | 2.17 | ||||
| Weighted Average Number of Common Shares: | ||||||||||||
| Basic | 13,698,617 | 12,500,785 | 13,925,362 | 11,976,001 | ||||||||
| Diluted (1) | 15,131,010 | 14,204,279 | 15,560,524 | 13,679,495 | ||||||||
| Dividends Declared and Paid | $ | 0.275 | $ | 0.275 | $ | 1.100 | $ | 1.090 | ||||
(1) Includes the weighted average of 1,432,393 shares during the three months ended |
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Non-GAAP Financial Measures Funds From Operations and Adjusted Funds From Operations (Unaudited) (In thousands, except per share data) |
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| Three Months Ended | Year Ended | |||||||||||
2023 |
2022 |
2023 |
2022 |
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| Net Income | $ | 370 | $ | 5,525 | $ | 3,266 | $ | 33,955 | ||||
| Depreciation and Amortization | 6,472 | 6,332 | 25,758 | 23,564 | ||||||||
| Provision for Impairment | 356 | — | 3,220 | — | ||||||||
| Gain on Disposition of Assets | (1,552) | (6,553) | (9,334) | (33,801) | ||||||||
| Funds from Operations | $ | 5,646 | $ | 5,304 | $ | 22,910 | $ | 23,718 | ||||
| Adjustments: | ||||||||||||
| Loss (Gain) on Extinguishment of Debt | — | 443 | (23) | 727 | ||||||||
| Amortization of Intangibles to Lease Income | (118) | (80) | (417) | (328) | ||||||||
| Straight-Line Rent Adjustment | (16) | (198) | (402) | (935) | ||||||||
| COVID-19 Rent Repayments, Net | — | — | — | 45 | ||||||||
| Non-Cash Compensation | 80 | 74 | 318 | 310 | ||||||||
| Amortization of Deferred Financing Costs to Interest Expense | 180 | 192 | 710 | 599 | ||||||||
| Other Non-Cash Expense | 29 | 28 | 115 | 100 | ||||||||
| Adjusted Funds from Operations | $ | 5,801 | $ | 5,763 | $ | 23,211 | $ | 24,236 | ||||
| FFO per Diluted Share | $ | 0.37 | $ | 0.37 | $ | 1.47 | $ | 1.73 | ||||
| AFFO per Diluted Share | $ | 0.38 | $ | 0.41 | $ | 1.49 | $ | 1.77 | ||||
Non-GAAP Financial Measures Reconciliation of Net Debt to Pro Forma EBITDA (Unaudited) (In thousands) |
||
| Three Months Ended | ||
| Net Income | $ | 370 |
| Adjustments: | ||
| Depreciation and Amortization | 6,472 | |
| Provision for Impairment | 356 | |
| Gain on Disposition of Assets | (1,552) | |
| Straight-Line Rent Adjustment | (16) | |
| Non-Cash Compensation | 80 | |
| Amortization of Deferred Financing Costs to Interest Expense | 180 | |
| Amortization of Intangible Assets and Liabilities to Lease Income | (118) | |
| Other Non-Cash Expense | 29 | |
| Interest Expense, Net of Deferred Financing Costs Amortization | 2,491 | |
| EBITDA | $ | 8,292 |
| Annualized EBITDA | $ | 33,168 |
| Pro Forma Annualized Impact of Current Quarter Acquisitions and Dispositions, Net (1) | 849 | |
| Pro Forma EBITDA | $ | 34,017 |
| Total Long-Term Debt | $ | 275,677 |
| Financing Costs, Net of Accumulated Amortization | 823 | |
| Cash and Cash Equivalents | (4,019) | |
| Restricted Cash | (9,712) | |
| Net Debt | $ | 262,769 |
| Net Debt to Pro Forma EBITDA | 7.7x | |
(1) Reflects the pro forma annualized impact on Annualized EBITDA of the Company’s acquisition and disposition activities during the three months ended |
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Contact:
Senior Vice President, Chief Financial Officer & Treasurer
(407) 904-3324
mpartridge@alpinereit.com
Source: Alpine Income Property Trust