NEW CANAAN, Conn., May 09, 2024 (GLOBE NEWSWIRE) — NewLake Capital Partners, Inc. (OCTQX: NLCP), a leading provider of real estate capital to state-licensed cannabis operators, today announced its financial results for the first quarter ended March 31, 2024.
Anthony Coniglio, President and Chief Executive Officer, said, “We are pleased with the performance of our portfolio and financial results during the first quarter of 2024. Our growth in revenue and AFFO year-over-year and sequentially, after deducting one-time adjustments in the fourth quarter, are what drove our second consecutive quarterly dividend increase to $0.41 per share, or $1.64 per share annually. Looking forward, the cannabis industry has much to be excited about following the proposal to reschedule cannabis from Schedule I to Schedule 3, an increase in meaningful dialogue among congressional leaders, and medical to adult-use conversion in Ohio and the Adult-use ballot in Florida.”
First Quarter 2024 Financial Highlights
Quarter-over-quarter Revenue, Net Income, Funds from Operations (“FFO”), and Adjusted Funds from Operations (“AFFO”) were impacted by non-recurring revenue recognized in the fourth quarter 2023. As a result, presented below reflects only the first quarter financial results.
First quarter 2024 financial results
- Revenue totaled $12.6 million.
- Net income attributable to common stockholders totaled $6.9 million.
- FFO(1) totaled $10.6 million.
- AFFO(1) totaled $11.0 million.
- Cash and cash equivalents as of March 31, 2024, were $21.5 million, with $6.5 million committed to fund Tenant Improvements (“TIs”).
Comparison to the first quarter ended March 31, 2023:
Quarterly year-over-year financial results were impacted by the non-payment of contractual rent from one tenant in 2023.
- Revenue totaled $12.6 million, as compared to $11.4 million, a increase of 10.4% year-over-year.
- Net income attributable to common stockholders totaled $6.9 million, as compared to $5.9 million.
- FFO totaled $10.6 million, as compared to $9.5 million, an increase of 10.8% year-over-year.
- AFFO totaled $11.0 million, as compared to $9.9 million, an increase of 10.6% year-over-year.
First Quarter 2024 Operational Highlights and Recent Developments
- Increased our first quarter dividend to $0.41 per common share, equivalent to an annualized dividend of $1.64 per common share.
- For the three months ended March 31, 2024, the Company funded approximately $7.9 million of TIs across two properties.
- In May 2024, the Company purchased a cultivation facility in Connecticut for approximately $4 million and committed to fund $12 million for TI. The property was leased to an existing tenant.
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(1) FFO and AFFO are presented on a dilutive basis.
Investment Activity
Tenant Improvements Funded
The following table presents the tenant improvements funded and the remaining unfunded tenant improvement commitments for the three months ended March 31, 2024:
| Tenant | Market | Site Type | Closing Date | TI Funded | Unfunded Commitments | ||||||||
| Mint | Arizona | Cultivation | June 24, 2021 | $ | 2,361 | $ | 1,427 | ||||||
| Organic Remedies | Missouri | Cultivation | December 20, 2021 | 5,533 | 3,294 | ||||||||
| Bloom Medicinal | Missouri | Cultivation | April 1, 2022 | — | 750 | ||||||||
| Ayr Wellness, Inc. | Pennsylvania | Cultivation | June 30, 2022 | — | 987 | ||||||||
| Total | $ | 7,894 | $ | 6,458 | |||||||||
Financing Activity
Revolving Credit Facility
As of March 31, 2024, the Company had approximately $4.0 million in borrowings under the Revolving Credit Facility and $86.0 million in funds available to be drawn, subject to sufficient collateral in the borrowing base. The facility bears interest at a fixed rate of 5.65% for the first three years and thereafter a variable rate based upon the greater of (a) the Prime Rate quoted in the Wall Street Journal (Western Edition) (“Base Rate”) plus an applicable margin of 1.0% or (b) 4.75%.
The facility is subject to certain liquidity and operating covenants and includes customary representations and warranties, affirmative and negative covenants and events of default. As of March 31, 2024, the Company was in compliance with the terms of such covenants under the agreement.
Loan Payable
On January 3, 2024, the Company made its final annual principal and interest payment of approximately $1.0 million on its loan payable to the seller of a cultivation facility in Chaffee, Missouri.
Dividend
On March 8, 2024, the Company’s Board of Directors declared a first quarter 2024 cash dividend of $0.41 per share of common stock, equivalent to an annualized dividend of $1.64 per share of common stock. The dividend was paid on April 15, 2024, to stockholders of record at the close of business on March 29, 2024 and represents an AFFO payout ratio of 78.3%.
Recent Developments
Tenant Improvements
Subsequent to March 31, 2024, the Company funded approximately $1.9 million of tenant improvements for its cultivation facilities in Arizona and Missouri.
About NewLake Capital Partners, Inc.
NewLake Capital Partners, Inc. is an internally-managed real estate investment trust that provides real estate capital to state-licensed cannabis operators through sale-leaseback transactions and third-party purchases and funding for build-to-suit projects. NewLake owns a portfolio of 32 properties comprised of 15 cultivation facilities and 17 dispensaries that are leased to single tenants on a triple-net basis. For more information, please visit www.newlake.com.
