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Farmland Partners Inc. (NYSE: FPI) is a Buy

Farmland Partners Inc. (NYSE: FPI) (“FPI” or the “Company”) today reported financial results for the quarter ended March 31, 2021.

Selected Q1 2021 Highlights

During the quarter ended March 31, 2021, the Company:

  • recorded net income of $2.5 million, $5.0 million excluding litigation-related legal expenses1;
  • recorded AFFO of -$1.6 million, $0.9 million excluding litigation-related legal expenses;
  • completed two acquisitions, for total consideration of $2.9 million;
  • completed 14 dispositions, for total consideration of $28.5 million, total gain on sale of $3.4 million;
  • reduced debt by $20 million;
  • bought back 8,291 shares of Series B preferred stock at a weighted average price of $25.82 for an aggregate purchase price of $0.2 million; and
  • grew the off-balance sheet asset management business to ten properties and $21.5 million of AUM.

CEO Comments

Paul A. Pittman, Chairman and CEO said: “The demand-driven bull market and farm productivity gains are generating a strong profit outlook for farmers, which, in turn, are generating positive momentum in land values and lease renewal rates.  Q1 2021 was a strong quarter for Farmland Partners, other than for legal expenses related to the on-going Rota Fortunae litigation.  Specialty crop performance is on track to equal or exceed 2020, but it is still early in the season.”

Macro Comments

  • Commodity Demand: Soy exports for the 2020/2021 marketing year are forecasted to be the largest ever, with the first six months (August to February) showing an increase of 78% over the prior year. Soybean inventory reached its lowest level since March 2016. Corn exports increased 77% for the first six months of the 2020/2021 marketing year (August to February). Ethanol was down 6% over the same period, but gasoline production is expected to increase relative to prior year as gasoline consumption recovers from COVID-19 related travel restrictions.

Financial Results

  • For the three months ended March 31, 2021, the Company recorded net income of $2.5 million ($5.0 million excluding litigation-related legal expenses), as compared to net income of $0.4 million for the same period during 2020.
  • For the three months ended March 31, 2021, the Company recorded basic net loss to common stockholders of $0.02 per share (basic net income to common stockholders of $0.07 per share excluding litigation-related legal expenses), as compared to basic net loss to common stockholders of $­­­0.09 per share for the same period during 2020.
  • For the three months ended March 31, 2021, the Company recorded Adjusted Funds from Operations (“AFFO”) of -$1.6 million ($0.9 million excluding litigation-related legal expenses), as compared to AFFO of -$0.4 million for the same period during 2020.
  • For the three months ended March 31, 2021, the Company recorded AFFO per fully diluted share of -$0.05 ($0.03 excluding litigation-related legal expenses), as compared to AFFO per fully diluted share of -$0.01 for the same period during 2020.
  • For the three months ended March 31, 2021, the Company recorded Adjusted Earnings Before Interest Taxes Depreciation and Amortization for real estate (“Adjusted EBITDAre”) of $5.3 million ($7.8 million excluding litigation-related legal expenses), as compared to $7.4 million for the same period during 2020.
  • See “Non-GAAP Financial Measures” for complete definitions of AFFO and Adjusted EBITDAre and the financial tables accompanying this press release for reconciliations of net income to AFFO and Adjusted EBITDAre.

Operating Results            

  • For the three months ended March 31, 2021, the Company recorded total operating revenues of $11.6 million, as compared to $11.7 million for the same period during 2020.
  • For the three months ended March 31, 2021, the Company recorded total operating income of $3.1 million ($5.6 million excluding litigation-related legal expenses), as compared to total operating income of $5.3 million for the same period in 2020.
  • For the three months ended March 31, 2021, the Company recorded net operating income (“NOI”) of $9.6 million, as compared to NOI of $9.8 million for the same period in 2020.
  • See “Non-GAAP Financial Measures” for a complete definition of NOI and the financial tables included in this press release for reconciliations of net income to NOI.

Acquisition and Disposition Activity

  • During the quarter ended March 31, 2021, the Company completed two acquisitions for total consideration of $2.9 million.
  • During the quarter ended March 31, 2021, the company the Company completed disposal of 14 properties for total consideration of $28.5 million and total gain on sale was $3.4 million.

Balance Sheet

  • During the quarter ended March 31, 2021, the Company did not repurchase any shares of common stock.
  • During the quarter ended March 31, 2021, the Company repurchased 8,291 shares of Series B preferred stock at a weighted average price of $25.82 for an aggregate purchase price of $0.2 million.
  • As of March 31, 2021, and the date of this press release, the Company had 32,319,978 shares of common stock outstanding on a fully diluted basis.
  • The Company had total debt outstanding of $488.2 million at March 31, 2021, compared to total debt outstanding of $508.2 million at December 31, 2020.

Dividend Declarations

  • The Company’s Board of Directors declared a quarterly cash dividend of $0.05 per share of common stock and per Class A Common OP unit. The dividends are payable on July 15, 2021, to stockholders and common unit holders of record on July 1, 2021.
  • The Company’s Board of Directors declared a quarterly cash dividend of $0.3750 per share of Series B Participating Preferred Stock. The dividends are payable on June 30, 2021 to holders of Series B Participating Preferred Stock of record on June 15, 2021.

Conference Call Information

The Company has scheduled a conference call on May 13, 2021 at 11:00 a.m. (Eastern Time) to discuss the financial results and provide a company update.  The call can be accessed live over the phone toll-free by dialing 1-866-262-6804 (U.S.), or 1-855-669-9657 (Canada), or 1-412-902-4107 (International).  Participants can reference the Farmland Partners Inc. First Quarter 2021 Earnings Conference Call.  The conference call will also be available via a live listen-only webcast and can be accessed through the Investor Relations section of the Company’s website, www.farmlandpartners.com.  A replay of the conference call will be available beginning shortly after the end of the event until May 27, 2021 at 11:59 p.m. (Eastern Time), by dialing 1-877-344-7529 (U.S.), or 1-855-669-9658 (Canada), or 1-412-317-0088 (International); passcode: 10155371 . A replay of the webcast will also be accessible on the Investor Relations section of the Company’s website for a limited time following the event.

A supplemental information package accompanying this release will be made available on the Investor Relations section of the Company’s website.

S. Jack Heffernan Ph.Dhttps://www.shayneheffernan.com
S. Jack Heffernan Ph.D. Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.

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