BLOOMFIELD HILLS, Mich., Oct. 21, 2019 /PRNewswire/ -- Agree Realty Corporation (NYSE: ADC) (the "Company") today announced results for the quarter ended September 30, 2019. All per share amounts included herein are on a diluted per common share basis unless otherwise stated.
Third Quarter 2019 Financial and Operating Highlights:
Financial Results
Net Income
Net Income attributable to the Company for the three months ended September 30, 2019 increased 32.2% to $20.6 million, compared to $15.6 million for the comparable period in 2018. Net Income per share attributable to the Company for the three months ended September 30, 2019 increased 1.0% to $0.48, compared to $0.48 per share for the comparable period in 2018.
Net Income attributable to the Company for the nine months ended September 30, 2019 increased 27.9% to $57.5 million, compared to $45.0 million for the comparable period in 2018. Net Income per share attributable to the Company for the nine months ended September 30, 2019 decreased 0.7% to $1.41, compared to $1.42 per share for the comparable period in 2018.
Core Funds from Operations
Core FFO for the three months ended September 30, 2019 increased 42.2% to $33.4 million, compared to Core FFO of $23.5 million for the comparable period in 2018. Core FFO per share for the three months ended September 30, 2019 increased 8.8% to $0.78, compared to Core FFO per share of $0.72 for the comparable period in 2018.
Core FFO for the nine months ended September 30, 2019 increased 37.0% to $92.9 million, compared to Core FFO of $67.8 million for the comparable period in 2018. Core FFO per share for the nine months ended September 30, 2019 increased 6.4% to $2.27, compared to Core FFO per share of $2.13 for the comparable period in 2018.
Adjusted Funds from Operations
AFFO for the three months ended September 30, 2019 increased 40.0% to $32.7 million, compared to AFFO of $23.4 million for the comparable period in 2018. AFFO per share for the three months ended September 30, 2019 increased 7.1% to $0.77, compared to AFFO per share of $0.72 for the comparable period in 2018.
AFFO for the nine months ended September 30, 2019 increased 35.1% to $91.0 million, compared to AFFO of $67.4 million for the comparable period in 2018. AFFO per share for the nine months ended September 30, 2019 increased 4.9% to $2.22, compared to AFFO per share of $2.12 for the comparable period in 2018.
Dividend
The Company paid a cash dividend of $0.570 per share on October 11, 2019 to stockholders of record on September 27, 2019, a 5.6% increase over the $0.540 quarterly dividend declared in the third quarter of 2018. The quarterly dividend represents payout ratios of approximately 73% of Core FFO per share and 74% of AFFO per share, respectively.
For the nine months ended September 30, 2019, the Company declared dividends of $1.695 per share, a 5.9% increase over the dividends of $1.600 per share declared for the comparable period in 2018. The dividend represents payout ratios of approximately 75% of Core FFO per share and 76% of AFFO per share, respectively.
CEO Comments
"We are very pleased with another extremely strong quarter of execution," said Joey Agree, President and Chief Executive Officer of Agree Realty Corporation. "While achieving near record quarterly acquisition volume, we continued our mission to create the country's highest quality retail portfolio, with more than 85% of rent acquired during the quarter derived from leading investment grade retailers. Given our strong year-to-date acquisition activity and improved visibility into the pipeline for the remainder of 2019, we are increasing our full-year acquisition guidance to a range of $650 million to $700 million."
Portfolio Update
As of September 30, 2019, the Company's growing portfolio consisted of 789 properties located in 46 states totaling approximately 14.0 million square feet of gross leasable space.
The portfolio was approximately 99.7% leased, had a weighted-average remaining lease term of approximately 10.2 years, and generated 56.9% of annualized base rents from investment grade retail tenants or parent entities thereof.
Ground Lease Portfolio
As of September 30, 2019, the Company's ground lease portfolio consisted of 60 properties located in 23 states and totaled approximately 2.0 million square feet of gross leasable space. Properties ground leased to tenants accounted for 8.6% of annualized base rents.
The ground lease portfolio was fully occupied, had a weighted-average remaining lease term of approximately 10.9 years, and generated 89.6% of annualized base rents from investment grade retail tenants or parent entities thereof.
Acquisitions
Total acquisition volume for the third quarter of 2019, excluding acquisition and closing costs, was approximately $246.2 million and included 68 assets net leased to notable retailers operating in the off-price retail, convenience store, auto parts, tire and auto service, dollar store, home improvement, pharmacy, and farm and rural supply sectors. The properties are located in 27 states and leased to tenants operating in 16 retail sectors. The properties were acquired at a weighted-average capitalization rate of 7.0%, had a weighted-average remaining lease term of approximately 12.3 years, and approximately 85.5% of annualized base rents were generated from investment grade retail tenants or parent entities thereof. Notable acquisition activity during the third quarter included a CVS in downtown Greenwich, Connecticut and a Mariano's guaranteed by The Kroger Co. near Chicago, Illinois.
For the nine months ended September 30, 2019, total acquisition volume, excluding acquisition and closing costs, was approximately $563.3 million. The 147 acquired properties are located in 37 states and leased to 45 diverse tenants who operate in 22 retail sectors. The properties were acquired at a weighted-average capitalization rate of 6.9% and had a weighted-average remaining lease term of approximately 11.9 years, and approximately 78.0% of annualized base rents were generated from investment grade retail tenants or parent entities thereof.
The Company's outlook for acquisition volume for the full-year 2019 is being increased to a range of $650 million to $700 million of high-quality retail net lease properties. The Company's acquisition guidance, which assumes continued growth in economic activity, positive business trends and other significant assumptions, is being increased from a previous range of $625 million to $675 million.
Dispositions
During the third quarter, the Company sold three properties for gross proceeds of approximately $8.0 million. The dispositions were completed at a weighted-average capitalization rate of 6.8%.
During the nine months ended September 30, 2019, the Company divested nine properties for total gross proceeds of $35.4 million. The weighted-average capitalization rate of the dispositions was 7.2%.
The Company's disposition guidance for 2019 remains between $50 million and $75 million.
Development and Partner Capital Solutions
In the third quarter of 2019, the Company completed four previously announced development and PCS projects, including the Company's third and fourth developments with Sunbelt Rentals in Georgetown, Kentucky and Carrizo Springs, Texas; the Company's first development with Gerber Collision in Round Lake, Illinois; and the Company's redevelopment of the former Kmart space in Mount Pleasant, Michigan for Hobby Lobby. The projects had total aggregate costs of approximately $12.2 million.
The Company commenced one new development project during the third quarter. The project is the Company's first development with Tractor Supply in Hart, Michigan, and is expected to be completed in the second quarter of 2020.
Construction continued during the third quarter on the Company's redevelopment of the former Kmart space in Frankfort, Kentucky for ALDI, Big Lots and Harbor Freight Tools.
For the nine months ended September 30, 2019, the Company had 10 development or PCS projects completed or under construction. Anticipated total costs are approximately $32.3 million and include the following projects:
Tenant |
Location |
Lease |
Lease |
Actual or |
Status |
|||||
Mister Car Wash |
Orlando, FL |
Build-to-Suit |
20 years |
Q1 2019 |
Complete |
|||||
Mister Car Wash |
Tavares, FL |
Build-to-Suit |
20 years |
Q1 2019 |
Complete |
|||||
Sunbelt Rentals |
Maumee, OH |
Build-to-Suit |
10 years |
Q1 2019 |
Complete |
|||||
Sunbelt Rentals |
Batavia, OH |
Build-to-Suit |
10 years |
Q2 2019 |
Complete |
|||||
Sunbelt Rentals |
Georgetown, KY |
Build-to-Suit |
15 years |
Q3 2019 |
Complete |
|||||
Gerber Collision |
Round Lake, IL |
Build-to-Suit |
15 years |
Q3 2019 |
Complete |
|||||
Sunbelt Rentals |
Carrizo Springs, TX |
Build-to-Suit |
10 years |
Q3 2019 |
Complete |
|||||
Hobby Lobby |
Mt. Pleasant, MI |
Build-to-Suit |
15 years |
Q3 2019 |
Complete |
|||||
Big Lots |
Frankfort, KY |
Build-to-Suit |
10 years |
Q1 2020 |
Under Construction |
|||||
Harbor Freight Tools |
Frankfort, KY |
Build-to-Suit |
10 years |
Q1 2020 |
Under Construction |
|||||
ALDI |
Frankfort, KY |
Build-to-Suit |
10 years |
Q2 2020 |
Under Construction |
|||||
Tractor Supply |
Hart, MI |
Build-to-Suit |
10 years |
Q2 2020 |
Under Construction |
Leasing Activity and Expirations
During the third quarter, the Company executed new leases, extensions or options on approximately 148,000 square feet of gross leasable area throughout the existing portfolio. Notable new leases, extensions or options included an approximately 30,800-square foot Best Buy in Sanford, Florida, which was executed commensurate with the acquisition of the property.
For the nine months ended September 30, 2019, the Company executed new leases, extensions or options on approximately 315,000 square feet of gross leasable area throughout the existing portfolio.
At quarter end, the Company's 2019 lease maturities represented 0.2% of annualized base rents. The following table presents contractual lease expirations within the Company's portfolio as of September 30, 2019, assuming no tenants exercise renewal options:
Year |
Leases |
Annualized |
Percent of |
Gross Leasable Area |
Percent of Gross |
||||||
2019 |
3 |
418 |
0.2% |
27 |
0.2% |
||||||
2020 |
11 |
1,969 |
1.0% |
164 |
1.2% |
||||||
2021 |
26 |
5,228 |
2.7% |
313 |
2.2% |
||||||
2022 |
22 |
4,064 |
2.1% |
367 |
2.6% |
||||||
2023 |
39 |
7,158 |
3.6% |
719 |
5.1% |
||||||
2024 |
40 |
11,881 |
6.0% |
1,323 |
9.4% |
||||||
2025 |
47 |
10,569 |
5.4% |
948 |
6.8% |
||||||
2026 |
60 |
10,281 |
5.2% |
1,014 |
7.2% |
||||||
2027 |
64 |
15,671 |
8.0% |
1,176 |
8.4% |
||||||
2028 |
63 |
17,584 |
8.9% |
1,306 |
9.3% |
||||||
Thereafter |
493 |
111,966 |
56.9% |
6,679 |
47.6% |
||||||
Total Portfolio |
868 |
$196,789 |
100.0% |
14,036 |
100.0% |
||||||
The contractual lease expirations presented above exclude the effect of replacement tenant leases that had been executed as of September 30, 2019 but that had not yet commenced. For the three expirations occurring in 2019, one replacement lease had been executed as of September 30, 2019. |
|
Annualized Base Rent and gross leasable area (square feet) are in thousands; any differences are the result of rounding. |
|
(1) |
Annualized Base Rent represents the annualized amount of contractual minimum rent required by tenant lease agreements as of September 30, 2019, computed on a straight-line basis. Annualized Base Rent is not, and is not intended to be, a presentation in accordance with GAAP. The Company believes annualized contractual minimum rent is frequently useful to management, investors, and other interested parties in analyzing concentrations and leasing activity. |
Top Tenants
The Company added Home Depot to its top tenants in the third quarter of 2019. The following table presents annualized base rents for all tenants that represent 1.5% or greater of the Company's total annualized base rent as of September 30, 2019:
Tenant |
Annualized |
Percent of Annualized |
||
Sherwin-Williams |
$10,001 |
5.1% |
||
Walmart |
8,530 |
4.3% |
||
Walgreens |
7,372 |
3.7% |
||
TJX Companies |
7,270 |
3.7% |
||
Tractor Supply |
5,894 |
3.0% |
||
Dollar General |
5,712 |
2.9% |
||
LA Fitness |
5,644 |
2.9% |
||
CVS |
5,530 |
2.8% |
||
Best Buy |
5,098 |
2.6% |
||
O'Reilly Auto Parts |
4,518 |
2.3% |
||
Lowe's |
4,215 |
2.1% |
||
Sunbelt Rentals |
3,938 |
2.0% |
||
Dollar Tree |
3,918 |
2.0% |
||
Wawa |
3,793 |
1.9% |
||
AutoZone |
3,726 |
1.9% |
||
TBC Corporation |
3,627 |
1.8% |
||
Mister Car Wash |
3,510 |
1.8% |
||
Hobby Lobby |
3,362 |
1.7% |
||
Home Depot |
3,118 |
1.6% |
||
Burlington |
3,097 |
1.6% |
||
Dave & Buster's |
3,052 |
1.6% |
||
Other(2) |
91,864 |
46.7% |
||
Total Portfolio |
$196,789 |
100.0% |
Annualized Base Rent is in thousands; any differences are the result of rounding. |
|
Bolded and italicized tenants represent additions for the three months ended September 30, 2019. |
|
(1) |
Refer to footnote 1 on page 5 for the Company's definition of Annualized Base Rent. |
(2) |
Includes tenants generating less than 1.5% of Annualized Base Rent. |
Retail Sectors
The following table presents annualized base rents for the Company's top retail sectors that represent 2.5% or greater of the Company's total annualized base rent as of September 30, 2019:
Sector |
Annualized |
Percent of Annualized |
|||
Home Improvement |
$20,167 |
10.2% |
|||
Tire and Auto Service |
15,164 |
7.7% |
|||
Pharmacy |
14,272 |
7.3% |
|||
Grocery Stores |
13,045 |
6.6% |
|||
Off-Price Retail |
12,578 |
6.4% |
|||
Convenience Stores |
12,289 |
6.2% |
|||
Auto Parts |
9,468 |
4.8% |
|||
Dollar Stores |
8,422 |
4.3% |
|||
General Merchandise |
7,791 |
4.0% |
|||
Health and Fitness |
7,747 |
3.9% |
|||
Farm and Rural Supply |
6,996 |
3.6% |
|||
Restaurants - Quick Service |
6,708 |
3.4% |
|||
Consumer Electronics |
6,454 |
3.3% |
|||
Crafts and Novelties |
5,741 |
2.9% |
|||
Warehouse Clubs |
4,988 |
2.5% |
|||
Other(2) |
44,959 |
22.9% |
|||
Total Portfolio |
$196,789 |
100.0% |
Annualized Base Rent is in thousands; any differences are the result of rounding. |
|
(1) |
Refer to footnote 1 on page 5 for the Company's definition of Annualized Base Rent. |
(2) |
Includes sectors generating less than 2.5% of Annualized Base Rent. |
Geographic Diversification
The following table presents annualized base rents for all states that represent 2.5% or greater of the Company's total annualized base rent as of September 30, 2019:
State |
Annualized |
Percent of Annualized |
||
Michigan |
$16,228 |
8.2% |
||
Texas |
14,111 |
7.2% |
||
Florida |
12,459 |
6.3% |
||
Illinois |
12,030 |
6.1% |
||
Pennsylvania |
10,721 |
5.4% |
||
Ohio |
9,576 |
4.9% |
||
New Jersey |
8,688 |
4.4% |
||
Virginia |
7,840 |
4.0% |
||
Georgia |
7,060 |
3.6% |
||
Missouri |
6,426 |
3.3% |
||
Wisconsin |
6,410 |
3.3% |
||
Louisiana |
5,774 |
2.9% |
||
North Carolina |
5,513 |
2.8% |
||
Other(2) |
73,953 |
37.6% |
||
Total Portfolio |
$196,789 |
100.0% |
Annualized Base Rent is in thousands; any differences are the result of rounding. |
|
(1) |
Refer to footnote 1 on page 5 for the Company's definition of Annualized Base Rent. |
(2) |
Includes states generating less than 2.5% of Annualized Base Rent. |
Capital Markets and Balance Sheet
Capital Markets
In April 2019, the Company commenced a follow-on public offering of 3,162,500 shares of common stock in connection with forward sale agreements. Upon settlement, the offering is anticipated to raise net proceeds of approximately $197.4 million after deducting fees and expenses. To date, the Company has not received any proceeds from the sale of shares of its common stock by the forward purchasers. When deducting the anticipated net proceeds of $197.4 million from the Company's net debt of $921.1 million, the Company's proforma net debt to recurring EBITDA is 4.0 times.
In July 2019, the Company entered into a new $400.0 million ATM Program through which the Company may, from time to time, sell shares of common stock. In addition to selling shares of common stock, the Company may enter into forward sale agreements through its ATM Program. The Company uses the proceeds generated from its ATM Program for general corporate purposes, including funding our investment activity, the repayment or refinancing of outstanding indebtedness, working capital and other general purposes.
During the quarter ended September 30, 2019, the Company sold 444,228 shares of common stock through its new ATM Program at an average price of $74.30, raising gross proceeds of approximately $33.0 million.
Balance Sheet
As of September 30, 2019, the Company's net debt to recurring EBITDA was 5.1 times and its fixed charge coverage ratio was 4.3 times. The Company's total debt to enterprise value was 23.0%. Enterprise value is calculated as the sum of net debt and the market value of the Company's outstanding shares of common stock, assuming conversion of operating partnership units into common stock.
For the three and nine months ended September 30, 2019, the Company's fully diluted weighted-average shares outstanding were 42.3 million and 40.6 million, respectively. The basic weighted-average shares outstanding for the three and nine months ended September 30, 2019 were 41.8 million and 40.0 million, respectively.
For the three and nine months ended September 30, 2019, the Company's fully diluted weighted-average shares and units outstanding were 42.7 million and 41.0 million, respectively. The basic weighted-average shares and units outstanding for the three and nine months ended September 30, 2019 were 42.2 million and 40.3 million, respectively.
The Company's assets are held by, and its operations are conducted through, Agree Limited Partnership, of which the Company is the sole general partner. As of September 30, 2019, there were 347,619 operating partnership units outstanding and the Company held a 99.2% interest in the operating partnership.
Conference Call/Webcast
The Company will host its quarterly analyst and investor conference call on Tuesday, October 22, 2019 at 9:00 AM ET. To participate in the conference call, please dial (866) 363-3979 approximately ten minutes before the call begins.
Additionally, a webcast of the conference call will be available through the Company's website. To access the webcast, visit www.agreerealty.com ten minutes prior to the start time of the conference call and go to the Invest section of the website. A replay of the conference call webcast will be archived and available online through the Invest section of www.agreerealty.com.
About Agree Realty Corporation
Agree Realty Corporation is a publicly traded real estate investment trust primarily engaged in the acquisition and development of properties net leased to industry-leading retail tenants. As of September 30, 2019, the Company owned and operated a portfolio of 789 properties, located in 46 states and containing approximately 14.0 million square feet of gross leasable space. The common stock of Agree Realty Corporation is listed on the New York Stock Exchange under the symbol "ADC". For additional information, please visit www.agreerealty.com.
Forward-Looking Statements
This press release may contain certain "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "will," "should," "potential," "intend," "expect," "seek," "anticipate," "estimate," "approximately," "believe," "could," "project," "predict," "forecast," "continue," "assume," "plan," references to "outlook" or other similar words or expressions. Forward-looking statements are based on certain assumptions and can include future expectations, future plans and strategies, financial and operating projections and forecasts and other forward-looking information and estimates. These forward-looking statements are subject to various risks and uncertainties, many of which are beyond the Company's control, which could cause actual results to differ materially from such statements. These risks and uncertainties are described in greater detail in the Company's filings with the Securities and Exchange Commission, including, without limitation, the Company's Annual Report on Form 10-K for the year ended December 31, 2018 and in subsequent quarterly reports. Except as required by law, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. For further information about the Company's business and financial results, please refer to the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections of the Company's SEC filings, including, but not limited to, its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which may be obtained at the Invest section of the Company's website at www.agreerealty.com.
All information in this press release is as of October 21, 2019. The Company undertakes no duty to update the statements in this press release to conform the statements to actual results or changes in the Company's expectations.
Agree Realty Corporation |
|||
Consolidated Balance Sheet |
|||
($ in thousands, except share and per-share data) |
|||
(Unaudited) |
|||
September 30, 2019 |
December 31, 2018 |
||
Assets: |
|||
Real Estate Investments: |
|||
Land |
$ 713,711 |
$ 553,704 |
|
Buildings |
1,510,423 |
1,194,985 |
|
Accumulated depreciation |
(121,444) |
(100,312) |
|
Property under development |
16,238 |
12,957 |
|
Net real estate investments |
2,118,928 |
1,661,334 |
|
Real estate held for sale, net |
7,928 |
- |
|
Cash and cash equivalents |
9,353 |
53,955 |
|
Cash held in escrows |
1,449 |
20 |
|
Accounts receivable - tenants |
25,495 |
21,547 |
|
Lease intangibles, net of accumulated amortization of $82,297 and $62,543 |
335,840 |
280,153 |
|
Other assets, net |
24,328 |
11,180 |
|
Total Assets |
$ 2,523,321 |
$ 2,028,189 |
|
Liabilities: |
|||
Mortgage notes payable, net |
$ 58,423 |
$ 60,926 |
|
Unsecured term loans, net |
237,984 |
256,419 |
|
Senior unsecured notes, net |
384,171 |
384,064 |
|
Unsecured revolving credit facility |
248,000 |
19,000 |
|
Dividends and distributions payable |
24,353 |
21,031 |
|
Accounts payable, accrued expenses and other liabilities |
52,644 |
21,045 |
|
Lease intangibles, net of accumulated amortization of $18,607 and $15,177 |
27,332 |
27,218 |
|
Total Liabilities |
$ 1,032,907 |
$ 789,703 |
|
Equity: |
|||
Common stock, $.0001 par value, 90,000,000 shares authorized, 42,412,827 |
$ 4 |
$ 4 |
|
Preferred stock, $.0001 par value per share, 4,000,000 shares authorized |
- |
- |
|
Additional paid-in capital |
1,556,124 |
1,277,592 |
|
Dividends in excess of net income |
(54,841) |
(42,945) |
|
Accumulated other comprehensive income (loss) |
(13,068) |
1,424 |
|
Total Equity - Agree Realty Corporation |
$ 1,488,219 |
$ 1,236,075 |
|
Non-controlling interest |
2,195 |
2,411 |
|
Total Equity |
$ 1,490,414 |
$ 1,238,486 |
|
Total Liabilities and Equity |
$ 2,523,321 |
$ 2,028,189 |
|
Agree Realty Corporation |
|||||||
Consolidated Statements of Operations and Comprehensive Income |
|||||||
($ in thousands, except share and per share-data) |
|||||||
(Unaudited) |
|||||||
Three months ended |
Nine months ended |
||||||
2019 |
2018 |
2019 |
2018 |
||||
Revenues |
|||||||
Rental Income |
$ 48,020 |
$ 33,971 |
$ 135,240 |
$ 99,279 |
|||
Other |
55 |
82 |
102 |
173 |
|||
Total Revenues |
$ 48,075 |
$ 34,053 |
$ 135,342 |
$ 99,452 |
|||
Operating Expenses |
|||||||
Real estate taxes |
$ 3,674 |
$ 2,824 |
$ 11,016 |
$ 7,825 |
|||
Property operating expenses |
1,598 |
978 |
4,832 |
3,655 |
|||
Land lease expense |
354 |
172 |
922 |
511 |
|||
General and administrative |
3,832 |
2,947 |
11,746 |
8,994 |
|||
Depreciation and amortization |
11,897 |
8,142 |
32,597 |
23,949 |
|||
Provision for impairment |
- |
488 |
1,609 |
1,651 |
|||
Total Operating Expenses |
$ 21,355 |
$ 15,551 |
$ 62,722 |
$ 46,585 |
|||
Income from Operations |
$ 26,720 |
$ 18,502 |
$ 72,620 |
$ 52,867 |
|||
Other (Expense) Income |
|||||||
Interest expense, net |
$ (8,352) |
$ (6,538) |
$ (23,363) |
$ (17,965) |
|||
Gain (loss) on sale of assets, net |
2,597 |
3,917 |
8,973 |
10,949 |
|||
Income tax expense |
(184) |
(125) |
(210) |
(391) |
|||
Net Income |
$ 20,781 |
$ 15,756 |
$ 58,020 |
$ 45,460 |
|||
Less Net Income Attributable to Non-Controlling Interest |
170 |
170 |
498 |
499 |
|||
Net Income Attributable to Agree Realty Corporation |
$ 20,611 |
$ 15,586 |
$ 57,522 |
$ 44,961 |
|||
Net Income Per Share Attributable to Agree Realty Corporation |
|||||||
Basic |
$ 0.49 |
$ 0.49 |
$ 1.43 |
$ 1.43 |
|||
Diluted |
$ 0.48 |
$ 0.48 |
$ 1.41 |
$ 1.42 |
|||
Other Comprehensive Income |
|||||||
Net Income |
$ 20,781 |
$ 15,756 |
$ 58,020 |
$ 45,460 |
|||
Changes in fair value of interest rate swaps |
(7,418) |
454 |
(14,617) |
3,166 |
|||
Realized gain (loss) on settlement of interest rate swaps |
- |
- |
802 |
- |
|||
Total Comprehensive Income |
13,363 |
16,210 |
44,205 |
48,626 |
|||
Comprehensive Income Attributable to Non-Controlling Interest |
(109) |
(174) |
(367) |
(534) |
|||
Comprehensive Income Attributable to Agree Realty Corporation |
$ 13,254 |
$ 16,036 |
$ 43,838 |
$ 48,092 |
|||
Weighted Average Number of Common Shares Outstanding - Basic |
41,832,457 |
31,758,925 |
39,992,703 |
31,131,530 |
|||
Weighted Average Number of Common Shares Outstanding - Diluted |
42,318,042 |
32,287,352 |
40,625,441 |
31,471,251 |
|||
Agree Realty Corporation |
||||||||
Reconciliation of Net Income to FFO, Core FFO and Adjusted FFO |
||||||||
($ in thousands, except share and per-share data) |
||||||||
(Unaudited) |
||||||||
Three months ended |
Nine months ended |
|||||||
2019 |
2018 |
2019 |
2018 |
|||||
Net Income |
$ 20,781 |
$ 15,756 |
$ 58,020 |
$ 45,460 |
||||
Depreciation of rental real estate assets |
8,866 |
6,156 |
24,785 |
17,745 |
||||
Amortization of lease intangibles - in-place leases and leasing costs |
2,965 |
1,966 |
7,618 |
6,141 |
||||
Provision for impairment |
- |
488 |
1,609 |
1,651 |
||||
(Gain) loss on sale of assets, net |
(2,597) |
(3,917) |
(8,973) |
(10,949) |
||||
Funds from Operations |
$ 30,015 |
$ 20,449 |
$ 83,059 |
$ 60,048 |
||||
Amortization of above (below) market lease intangibles, net |
3,381 |
3,038 |
9,882 |
7,794 |
||||
Core Funds from Operations |
$ 33,396 |
$ 23,487 |
$ 92,941 |
$ 67,842 |
||||
Straight-line accrued rent |
(1,975) |
(1,138) |
(5,165) |
(3,344) |
||||
Deferred tax expense (benefit) |
- |
- |
(475) |
- |
||||
Stock based compensation expense |
1,033 |
850 |
2,972 |
2,375 |
||||
Amortization of financing costs |
176 |
135 |
541 |
433 |
||||
Non-real estate depreciation |
66 |
20 |
194 |
63 |
||||
Adjusted Funds from Operations |
$ 32,696 |
$ 23,354 |
$ 91,008 |
$ 67,369 |
||||
Funds from Operations per common share - Basic |
$ 0.71 |
$ 0.64 |
$ 2.06 |
$ 1.91 |
||||
Funds from Operations per common share - Diluted |
$ 0.70 |
$ 0.63 |
$ 2.03 |
$ 1.89 |
||||
Core Funds from Operations per common share - Basic |
$ 0.79 |
$ 0.73 |
$ 2.30 |
$ 2.16 |
||||
Core Funds from Operations per common share - Diluted |
$ 0.78 |
$ 0.72 |
$ 2.27 |
$ 2.13 |
||||
Adjusted Funds from Operations per common share - Basic |
$ 0.78 |
$ 0.73 |
$ 2.26 |
$ 2.14 |
||||
Adjusted Funds from Operations per common share - Diluted |
$ 0.77 |
$ 0.72 |
$ 2.22 |
$ 2.12 |
||||
Weighted Average Number of Common Shares and Units Outstanding - Basic |
42,180,076 |
32,106,544 |
40,340,322 |
31,479,149 |
||||
Weighted Average Number of Common Shares and Units Outstanding - Diluted |
42,665,661 |
32,634,971 |
40,973,060 |
31,818,870 |
||||
Supplemental Information: |
||||||||
Scheduled principal repayments |
$ 543 |
$ 838 |
$ 2,150 |
$ 2,486 |
||||
Capitalized interest |
118 |
88 |
321 |
381 |
||||
Capitalized building improvements |
240 |
966 |
1,200 |
1,042 |
||||
Non-GAAP Financial Measures |
Agree Realty Corporation |
||||||||
Reconciliation of Net Debt to Recurring EBITDA |
||||||||
($ in thousands, except share and per-share data) |
||||||||
(Unaudited) |
||||||||
Three months ended |
||||||||
2019 |
||||||||
Net Income |
$ 20,781 |
|||||||
Interest expense, net |
8,352 |
|||||||
Income tax expense |
184 |
|||||||
Depreciation of rental real estate assets |
8,866 |
|||||||
Amortization of lease intangibles - in-place leases and leasing costs |
2,965 |
|||||||
Non-real estate depreciation |
66 |
|||||||
(Gain) loss on sale of assets, net |
(2,597) |
|||||||
EBITDAre |
$ 38,617 |
|||||||
Run-Rate Impact of Investment and Disposition Activity |
$ 2,782 |
|||||||
Amortization of above (below) market lease intangibles, net |
3,381 |
|||||||
Recurring EBITDA |
$ 44,780 |
|||||||
Annualized Recurring EBITDA |
$ 179,120 |
|||||||
Total Debt |
$ 931,867 |
|||||||
Cash, cash equivalents and cash held in escrows |
(10,802) |
|||||||
Net Debt |
$ 921,065 |
|||||||
Net Debt to Recurring EBITDA |
5.1x |
|||||||
Net Debt |
$ 921,065 |
|||||||
Anticipated Net Proceeds from April 2019 Forward Equity Offering |
(197,356) |
|||||||
Proforma Net Debt |
$ 723,709 |
|||||||
Proforma Net Debt to Recurring EBITDA |
4.0x |
|||||||
Non-GAAP Financial Measures |
|||||||
Agree Realty Corporation |
||||||||
Rental Income |
||||||||
($ in thousands, except share and per share-data) |
||||||||
(Unaudited) |
||||||||
Three months ended |
Nine months ended |
|||||||
2019 |
2018 |
2019 |
2018 |
|||||
Rental Income Source(1) |
||||||||
Minimum rents(2) |
$ 44,558 |
$ 32,311 |
$ 124,789 |
$ 92,890 |
||||
Percentage rents(2) |
- |
- |
287 |
216 |
||||
Operating cost reimbursement(2) |
4,868 |
3,560 |
14,881 |
10,615 |
||||
Straight-line rental adjustments(3) |
1,975 |
1,138 |
5,165 |
3,352 |
||||
Amortization of (above) below market lease intangibles(4) |
(3,381) |
(3,038) |
(9,882) |
(7,794) |
||||
Total Rental Income |
$ 48,020 |
$ 33,971 |
$ 135,240 |
$ 99,279 |
||||
(1) The Company adopted Financial Accounting Standards Board Accounting Standards Codification ("FASB ASC") 842 "Leases" using the modified retrospective approach as of January 1, 2019. The Company adopted the practical expedient in FASB ASC 842 that alleviates the requirement to separately present lease and non-lease components of lease contracts. As a result, all income earned pursuant to tenant leases is reflected as one line, "Rental Income," in the consolidated statement of operations. The purpose of this table is to provide additional supplementary detail of Rental Income. |
View original content to download multimedia:http://www.prnewswire.com/news-releases/agree-realty-corporation-reports-third-quarter-2019-results-300942136.html
SOURCE Agree Realty Corporation