FCPT - Earnings call transcript Q4 2021 | Four Corners Property Trust, Inc.

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Operator

Good morning or good afternoon all and welcome to today’s Four Corner Property Trust Fourth Quarter 2021 Financial Conference Call. My name is Adam and I will be your operator today. [Operator Instructions] I will now hand you over to Gerry Morgan to begin, Mr. Gerry, please go ahead when you are ready.

Gerry Morgan

Thank you, Adam.

this on will by beliefs of which forward-looking us. course based are and the call, make we statements, During assumptions made

factors incorrect. to of future will COVID-XX Our known that guarantee are the be of will control pandemic assumptions scope, including or prove are our unknown a ability remaining duration actual some to our uncertainty to performance and affected severity and beyond be related predict, results and by not

potential some fcpt.com. risks, refer a presented more XXXX. of For can as at description SEC our found on current which XX, All please filings, today is detailed to information February of this be call the

in the call over presented that, addition, this AFFO as the call the to website. I'll report turn such Bill. found and company's available also And financial In supplemental reconciliation with on measures on FFO to be non-GAAP can

Bill Lenehan

our the improved Niccole at Patrick results. details to discuss fourth to then Officer morning. make XX.X% to discuss pipeline. to leading we results. the the Good our back remarks. will have In Chief joining us summary, for And you I'm going Thank acquisitions in quarter, Accounting Wernig and Stewart, continue quarter review XX.X%. for introductory collections around our to to Gerry financial industry occupancy some

other are restaurant above experiencing tenants retail Our pre-pandemic and top-line performance levels. often

to $X.XX quarter in year-over-year. of businesses a fourth X% restaurants, figures early AFFO by out increase Kerrow days the due want compared XXXX. a San included weaker the rents for dining low with XXXX year If investors of $X on share our the Kerrow fully AFFO here by We're of tenants. impact LongHorn understand share, remove just rebounded about positive a as the pandemic. EBITDA. reported characterized excited properties the One the a thought operations. is $X.XX But that and to offering quarter restrictions worth X.X% in year revenue. per do of also those in impact fourth point XX on last very our item to XXXX recurring the or year had Antonio. million Steakhouse AFFO this outlook QX Kerrow impact We I of acquired many and XXXX, high-quality on We which strong increase But Full We XXXX instead was XX% estate per focus rent we both business XXXX. real for growth AFFO and we the result and was contractual results core our core XXXX. focus AFFO X.X% compared our for grew nuance highlighting. and to full represented their

levels most to weekly restaurant with XXX% the performance recent at are of our cold continue quarter, weather XXXX results dining quick with strong levels is operating restaurants to casual recent much Moving in line country. tenants in approximately of have the on operators operating the XXXX service and in even

our restaurant with portfolio performance we're rental periods pre-pandemic by XX.X%, ago, Our Chili's by and two two International, compared tenants. positive amongst XX% the we've sales publicly comps respectively. were for and a quarter our brands announced highlighted past themselves. aligned at X%, best-in-class approximately are the operators, earnings are and portfolios, have continuing confident, the X.X%, these average to highly Restaurants and two We represent increased in and just of remain the Combined, to same LongHorn of and speak sales sample seeing versus as last Brinker tenants, months. results revenue, store Olive our their years strong largest Garden, Darden Those year

new credit tenant X.X%. us we fourth XX bringing detail for of million in The new a step XXXX. growth of a quarter's million Taking XXX group XXXX million dual figure back -- the volume price strong put that The of properties. quarter of million to next represents compares across in and include in and acquisition XXX into XXX brands the an total average investments and cash XXX perspective and in and XX% of includes we in investments of on acquired moment, segment the comments Turning properties tenant million a our the leases for XX has XXX volumes. Patrick XX how additional our acquired environment. initial us widening operators. to XX.X allowed combined total portfolio. yield XX acquisitions three The some investments, last in consistently that, for over profiles. investment to acquisitions platform XXXX, In two will which investment With I'll in years overall represent increase Patrick to to corporate XXX exposure the and with recent brands it are demonstrates properties and in turn This the a

Patrick Wernig

properties exposure our I'd to on efforts up revenue restaurant We touching Bill. Thanks, to by like XX%. portfolio in overall we're and restaurant XX% at well. properties with XX% seeing Darden remain sector, service other areas rental of as are now ongoing start retail non-restaurant and the in of our anchored meaningful Darden diversification. makes but oriented

was categories remain year, evaluate XX% investing of We've been our the for retail other with service well. opportunities focus seeing and For primary for new Medical we'll our new XX%. accounted we're investments as XX% categories retail the was these service and continue was restaurants pleased acquisitions, oriented while remaining adjacent in and the auto that seven retail. to

with has operators rising has public market finding strong regardless value The in been equity cap to tend private levels. Generally, rates. recently assets Our and rates for the competency not of seen focus core cap interest market markets lag quality public private real to we've this consistent translated XXXX sub-sector. months. several Pricing continue will with the market XXXX in rates yet by estate is in and volatility year-to-date,

In we the for opportunities prudent hold. later stimulus interim, year, this rate on being rates hikes select current carefully. in we're some see relief pullback a just though, may So fed the and cap to expectations

take properties of years, course select seller's a selling the an also the with few more as you anticipate year of market may have as transactions. the planning dispositions a advantage disposition us to see source do alternative compared recent over We We with handful of be opportunistic not than capital. more to of

in fixed and a to tenants Turning remain pipeline, Despite for the we stable deals real able pipeline our the we up building high active estate. mid build been with XXXX. to pricing area in headwind, the quality cap retail rate still

for restaurants, volume services our final quarter Our in medical is low what similar has we pipeline acquisitions. One and next been sector historically, for QX XXXX. did to auto reminder,

closed million of XX being volumes. up in XX% Those respectively. For and example, XX% XX 'XX, and QX' XX ended full we year our million and

Now back portfolio and to financial Gerry results. for discussion of our

Gerry Morgan

generated couple Thanks, fourth and other non-cash rental XX.X quote of of income we for the the quarter, million in typically Patrick. after A we cash straight quarter adjustments. excluding X.X rental numbers million line as of

rent for the As of current rate credit collections balance fourth XX.X% the for highlighted, rent nor quarter XX.X% of the sheet stock-based we rental cash and was reported all of December G&A escalator end place leases our Bill excluding for for collectability Cash weighted XX annual base impairments. our Cash total. compensation reserves changes expense in or remains income. for XX.X the as is X.X%. quarter annual our average basis, representing in the the year was On quarter, run ending of XX, and million. of any cash cash XXX.X in material million to year XXXX X.X% G&A No a X.X year at million

of growth. be X% XX The increase to our For XXXX principally for million, existing representing our tied additional purposes, we bolster approximately on expenses, and operating will prowess. forecasting retention your team under investment expect and to team compensation cash focus G&A is members we

as of will the expand systems on. We and team continue technology to Nicole the into invest and improve efficiency

the I'll to to for estimate the at the is quality pre fourth two of add portfolio. underlying pandemic statistics the be par rent which Turning other X.Xx portfolio, our levels. we on with quarter coverage

First, of restaurants X% original rent it figures. set where Darden low were we level see level similar common sales estimate the rents to to ground with rent portfolio, X% to to is at leases, to XX% a sales for

set that building. the rents further into invest tenant reminded the we Overall, light now the the Secondly, land of you of a higher where of have renewal value to leases note the tied should ability tenant we the levels portfolio to if constructed typically since the as low, lease full our consists low were lead needed to XX% before ground FCPT properties support portfolio, probability retenanting. in and or give to upgrades

December, revolver. In sheet the average was equity and XXX debt million than to the we are meant of the balance [issued] per we XX.X which stock agreement senior million XX-year rate XX X or unsecured to fixing million before ended We March a million December and comprised quarter spread rates of we greater on quarter and from into on quarter increase to and of Turning a of fortunate recent on liquidity environment. delevered acquisition net the to fourth this million weighted the program ATM given The raise issued in volume we This share. at $XX.XX X.XX% in priced the XXX the our notes nine X.Xx X.Xx. the availability feel in at our of with quarter. which cash price entered of EBITDA notes, [ph] quickly fund quarter, of XXX for and scheduled common

XX.XX, the Nicole we of for to paid mentioned DA charge And a We dividend range in the our quarter fixed X.X the Our quarter. is increase X. a few previous accounting earlier, to which net was is as X.X% of debt turn below an comments X.X. which X.Xx with EBIT And is that, coverage over for on our targeted over matters. to of quarter

Niccole Stewart

$XXX,XXX deferred we Kerrow of that Thank a restaurant evaluation operating assets benefit quarter allowance, the fourth tax removal In non-cash business. you, our a recognized net one-time financials, tax arose at from Gerry. the

has and in included reduce Kerrow. positive but FF achieved implementing this position, operations. can reflect definition any FCPT benefit cumulative These backed to busy financial non-cash it of has funds a accounting Kerrow largely comment wants credits, charitable out in adjusted that XXXX, MRI similarly three-year O, items wanted the are for is NAREIT funds tax among this FICA their and from future the calculation the like tax we operations, credits accordance reporting. of to In investor factors. to been software contributions calculation that Now highlight tax other from also be in benefits income taxes with in in that I of tip used food point in for FFO. taxable case the We

address this senior to the portfolio increased members In one areas, technology As of presentation with as size been process payable, number up has has yesterday, and website two Thanks. complexity have This more accounting to increase portfolio. in Q&A. volume. size also portfolio. and of and investor as XXX. the doubled the gone of staffing, accounts use in is inception, uploaded since growth than in years, team two for increase we back and significant the accountants from the the our well its through the of of level we has noted over to turn the our have our true now to efficiencies, we'll team increased Adam a it for where With other past added such over and seen set in finance tenants accounting future And that, staff as

Operator

question today Instructions] Anthony from [Operator Paolone from first JPMorgan. Our you. Thank comes

Anthony Paolone

get runway you balance company think question first equity you about getting would terms be can if of do capacity. just want the to about overnight the quickly pretty can we if on way, an in market quickly. as market. you the I you interested thoughts quarter, a debt equity EBITDA leverage how sheet. smaller that to of And in But really did And Because out have think and needle net in also you volatility go your the you guess the like equity My deal. and move relates much could reduced other and you how the cut

the think to like, on balance deal to of your right is sort do the be runway So you able flow? sheet continue what

Bill Lenehan

you. a terrific It’s Thank Anthony. question,

be to tried we operated opportunistic. think I

end knew were to we the of flurry acquisition had acquisitions. of the we end heading strong a volumes, into year, So the had we year going with

took we Our price And of was level today. it. stock an elevated to compared advantage

just leverage just the in ball you shape. imprudent to get your don't want sheet tried and as as to the So keep we've behind balance far metrics, eight

due think for in the minds -- we in I our to of good make metrics minds in well. our back that's keep sure other upgrade thing that those so wanting shape our the is as an in ratings,

Anthony Paolone

two, both something just three up, six kept your you if pace that maybe something equity that? or with the Is for and like in Do can would move it leverage you think, quickly? move it quarters, directions like, you feel again, didn't like size, because your your do or you comfortable to next acquisition given seemingly,

Bill Lenehan

target have would sure, I that say an of to off but XX% I top For the exact and don't we've our stated our X.Xx we've head, of figure leverage existence below plus. of been being Xx my

don't So sure we've make is we we have times room, think just elevated. tried that to we six

if that there, we be But would today. haven't needed so went okay. we And to

Gerry Morgan

And I would very coverage that high talked coverage. we low the yes, have, and high rate remember, the interest about just into also we translates reps,

our coverage So over Xx. is today

of where that metric quality above five, cash of six supporting is that the expense And Bill, to the strong. at a there's period we're we've be time so much is I time, interest agree but could that a it, target, below with the been five flow you, short

Bill Lenehan

And that tap shares interest our to demand been shareholders efficient far, been our a equity in you, has agree way our acquiring less markets. an way I for for us would in strong also number Anthony, ATM more have has with offering. expensive and just Thus the of shares wholeheartedly the expressed

Anthony Paolone

it. Got

and much on And calls, like existing idea which of previous that any or portfolio, a how reinvesting to pipeline mentioned, of the the as you're transactions in sense your in the from second then harvesting talked Okay. those question just of about just types assets? you just also

Bill Lenehan

the we're accretive to always It's on edges de things minimis been to-date, find do. to but working

showed to buy our one helpful opportunity something to me properties, of our adjacent Patrick advantageous an economically tenants some Just doing example, and to yesterday, land for ourselves. Darden for

to We properties. -- we're have nearly getting XXXX close

at So those opportunities were inception. they are more apparent today than

Operator

of from comes McGrath question Evercore. next The Sheila

Sheila McGrath

opportunities was year, a Just the XXXX was of with just mall more the vein? Or acquisition that in because Are active wondering distressed there landlord? that you programmatic about like wondering. had just an time? opportunities

Bill Lenehan

of those Actually, today. it's of kinds we sort the in interesting, Sheila, transactions have number a of pipeline

hear So be quarter that next about would you'll guess. in more my

suited providing for So like who COVID. us. The centers performed -- liquidity and portfolio mall to We performed good really has good been it's for exceptionally well are ongoing an a them process. liquidity and deal or properties, our a acquiring well folks in the shopping those have space properties well for are during deal

Sheila McGrath

you're to addition the then, leases. now think ground I an mentioned That's highlight, Okay, Gerry great. XX% that interesting And the disclosures.

opportunities have those you to sell ground versus the sourcing in you pools? to like, like opportunities buying would be, elsewhere? you if where leases those cap if curious, that, do ground team leases? are curious, your acquisition rate Just aggregate a were search And from just the Or the you portfolio, when a opinion you're bunch of what

Bill Lenehan

Yes.

very at leases, low rents, they at low sourced So, outparcels way right, but have the Sheila sales. most Darden to very high ground mean, in of strategy. look leases, I are I the they word the it, our lease, coverage, say fact the rent for of their the the those ground very top don't

going probably they're these, we But speculate rate, on we're buying very do smartly, as think far I'm the and exit to safe. not As cap that.

long-term, the it'll we're million, mean, happy. Sheila. yes, give to just So out Transaction credit. $X ton Brat work I'll the but well. hard serve a They're do of very a It's I over to lot really -- or do. $X, to a hard put Chief was of Jim Officer that's They're

Sheila McGrath

be more right? to So similar the Bill coverages on is coverages those would that Dardan. the

Bill Lenehan

building. that Yes. very just invested because EBITDA And suspect they've rent low very are built low heavily it'd coverage. be I would similar, very the sales, very high tenants rents,

Sheila McGrath

Okay. And the question on last restaurant.

challenges, talks pretty turned everybody you're positive. what curious labor about observing, but you Just the because

labor is the managing challenges. operation Just wondering, how your

Bill Lenehan

almost It's unfair.

does subsidiaries is Kerrow Dilts. by run tremendous job. person an Carol exceptional She and business is a Our

seven everyone We are a feeling that it she operating like job manner. tremendous division, else. running to we're But does a in very up now strong restaurants

been average. year-over-year. definitely it a affected – more will profitability, as job. inflation, pickup you dining has notice food in than is of very And labor, large are a So doing an steak she casual real But incredible subcategory

Operator

next Stevenson The Janney. Rob of question from comes

Rob Stevenson

acquisitions more to and were forward, factor this were in the deals basis What's look of and restaurants diversify Bill, your points, overriding mix sort restaurant cap do to When more you And in XX what's they non XX% going want cap versus of terms higher you at XXXX rates. those point? restaurant forward? driving acquisitions that higher that what of XXXX than the XX to acquisitions of you the portfolio? today right rate

Bill Lenehan

question. Great

a will deep the they and tenants have there with we're the the you acquisitions grow. existing made the our to restaurant be number history see space, think feel we are as doing very high We of in In And we we've the relationships restaurant that relationships years. We for restaurant and nurtured in long XXXX. quality, want acquisitions that business. a like I over were

far made we does our the service, medical to involve auto aperture, to glad combustion retail that are auto specifically As not engine. especially as non-restaurant acquisitions, service pre-COVID the expand and we decision

So our slightly we're non-restaurant lists, with are always an we sectors of The aperture and quarterly to try fairly are appropriate. view, And that of wide rates and taking find that looking risks. deserved, Board for keep them for to are, have as other we in as detailed review different those our attractive, we can. cap cap sorts are rates we properties higher sensible

we're So medium the a brief, cap mill would we don't of I'm getting I comment also the similarly is very for comments free rates to And my not would dining. trying that during And payment lunch a QSR today that did that and I add feel quality there. low. like keep even run dining casual have even COVID low. casual is very record rate cap consistent

rates quite some we accretive sell trading cap to cap us rate. be year. to see expect would properties this will our you the And So

Rob Stevenson

rate in characteristic question that acquisitions talked accurate defense going it terms or the is because was XXXX? the Okay, bid, finding, going so business want more up it you're mix? sounds year that those that low don't my be or are the you offense do you of you're that in sort to that What's for guys so with teeing to those next forward of taking is more, about dispositions of tenants overriding a in cap the like than the

Bill Lenehan

It's a it's mix. And in cases, some both.

Operator

Ladenburg from question John [Operator next Instructions] junk Our Massocca from comes Thalmann.

John Massocca

relatively disclosure that the cap I new I to Or to I non-restaurant. be your both XXXX kind compression, least kind look appreciate rate is both So the cap in forward, bifurcated out kind acquisitions in kind and the as achieve mind XXXX. going near in going Thinking cap year? to seen restaurant both given mean, do specifically we've stable term in you of on of amongst further buckets was either able rates rate this of that that of were on mean, categories in it, is at or the we categories? restaurants

Bill Lenehan

rates I a think you'd not probably bit, but little see ton. down go a John, cap

seeing that. in doing amount. been of competitors, of But I we interested mid lot in you're a rates haven't rates And our the Some down will come fives. small cap think a cap

to us is half is every to rates us, cap and it at. a we're that points that we said, want accretive turn. But arm, quite like remain for still basis assets acquiring being acquire For our competitive, twisting

rate, have know, second risk half will But free guess. look if the second than nor would in look very, the comment presume which prepared made like? year the would And the very different half is with cap mean, a what the the don't happened you slightly does regime Pat may think of anyone I a be interesting his my general So year I at current. what's that I lower rate remarks, one else.

John Massocca

XXXX the kind of out a been last, what of the some about, there? specifically, more then lack any in given of we've tend changes, And from nine market And months, you say, related because legislation the say talking you to change six assets. over see buy question and to let's to granular demand

Bill Lenehan

ground. really. we've There's trade regs in than the feeling Not on way the more been been what

John Massocca

more from buyers even mean press – XXXX or You

Bill Lenehan

simply and Yes, complexity is for down if to operators, more just what COVID to franchisees There ownership If around generational business older change. and of amongst environment, regulatory be. hearing is, fatigue the franchisees a multiples operating that And sell. given older didn't we're led really staring press just regulatory press who more transfer about high some have are looking the macro come to you're anything, trend,

so And from seeing we're some flow that dynamic. deal

Operator

Nothing [Operator further Instructions]. in queue. the

back As for to we have team any closing the no further questions, remarks. hand management I'll

Bill Lenehan

call. practice. you, thank let for an astoundingly XX conference Well, long attending become Corners that won't We minute our everyone Four

here you questions Thank anyone if like for We for attending. are follow-up. would

Operator

This very you concludes today's call attendance. your and for thank much

may now disconnect You lines.

Four Corners Property Trust (FCPT) 17 Feb 222021 Q4 Earnings call transcript