Exhibit 99-1
NewLake Capital Partners Reports Second Quarter 2023 Financial Results
Second Quarter 2023 Revenue Totaled $11.4 Million, an Increase of 8.2% Year-Over-Year
Second Quarter 2023 Net Income Attributable to Common Stockholders Totaled $5.8 Million, Funds from Operations Totaled $9.5 Million, and Adjusted Funds from Operations Totaled $9.9 Million
The Company Repurchased 56,372 Shares of Common Stock During the Second Quarter 2023
Conference Call and Webcast Scheduled for August 10, 2023, at 11 a.m. Eastern Time
New Canaan, CT, August 09, 2023 /GLOBE NEWSWIRE/ — NewLake Capital Partners, Inc. (OCTQX: NLCP) (the “Company” or “NewLake”), a leading provider of real estate capital to state-licensed cannabis operators, today announced its financial results for the second quarter ended June 30, 2023.
Anthony Coniglio, President and Chief Executive Officer, said, “We are pleased with our second quarter financial results, which were in line with the guidance we provided last quarter. We maintained our quarterly dividend of $0.39 per share and in the first six months of this year we have repurchased 105,679 shares in the open market through our $10.0 million stock repurchase program. We continue to believe our focus on properties in limited license jurisdictions with quality property level cash flows was the right strategic focus for our business and we are providing guidance for full year 2023 AFFO of $39.8 to $40.8 million. With over $40 million of cash and $89 million available under our credit facility, we are well positioned to take advantage of quality opportunities as they arise.”
Second Quarter 2023 Financial Highlights
Comparison to the first quarter ended March 31, 2023:
Quarter over quarter revenue, net income, Funds from Operations (“FFO”), and Adjusted Funds from Operations (“AFFO”) were flat. As a result, presented below are only the second quarter financial highlights.
◦Revenue totaled $11.4 million.
◦Net income attributable to common stockholders totaled $5.8 million.
◦FFO(1) totaled $9.5 million.
◦AFFO-diluted(1) totaled $9.9 million.
◦Cash and cash equivalents as of June 30, 2023, were $40.7 million, with $22.8 million committed to fund Tenant Improvements (“TIs”).
Comparison to the second quarter ended June 30, 2022:
◦Revenue totaled $11.4 million as compared to $10.5 million, an increase of 8.2% year-over-year.
◦Net income attributable to common stockholders totaled $5.8 million, as compared to $3.8 million.
◦FFO totaled $9.5 million, as compared to $6.6 million, an increase of 43.6% year-over-year.
◦AFFO totaled $9.9 million compared to $8.8 million, an increase of 13.3% year-over-year.
Six Months Ended June 30, 2023 Financial Highlights
Comparison to the six months ended June 30, 2022:
◦Revenue totaled $22.8 million as compared to $20.7 million, an increase of 10.2% year-over-year.
◦Net income attributable to common stockholders totaled $11.7 million, as compared to $8.8 million.
◦FFO totaled $19.0 million, as compared to $14.5 million, an increase of 31.3% year-over-year.
◦AFFO totaled $19.8 million compared to $17.2 million, an increase of 15.5% year-over-year.
Second Quarter 2023 Operational Highlights and Subsequent Events
◦For the three months ended June 30, 2023, the Company acquired, pursuant to its repurchase plan, 56,372 shares of its common stock at an average price, including commissions, of $12.62.
◦Declared a second quarter dividend of $0.39 per common share, equivalent to an annualized dividend of $1.56 per common share, paid on July 14, 2023 to stockholders of record on the close of business on June 30, 2023.
◦For the three months ended June 30, 2023, the Company funded approximately $1.6 million of TIs across three properties.
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(1) FFO diluted and AFFO diluted are calculated and presented on a fully diluted basis and comparative prior period balances for FFO and AFFO were calculated to conform to the first quarter’s presentation.
Investment Activity
The following tables present the Company's investment activity for six months ended June 30, 2023 (dollars in thousands).
Acquisitions
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | |
Tenant | | Market | | Site Type | | Closing Date | | Acquisitions | |
| Bloom Medicinal | | Missouri | | Cultivation | | March 3, 2023 | | $ | 350 | | (1) |
Total | | | | | | | | $ | 350 | | |
| | | | | | | | | |
(1) The Company exercised its option to purchase the adjacent parcel of land to expand its cultivation facility in Missouri and has committed to fund $16.2 million for the expansion. | |
Tenant Improvements Funded
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tenant | | Market | | Site Type | | Closing Date | | TI Funded | | Unfunded Commitments | |
| Mint | | Arizona | | Cultivation | | June 24, 2021 | | $ | 1,890 | | | $ | 6,179 | | (1) |
| Organic Remedies | | Missouri | | Cultivation | | December 20, 2021 | | 282 | | | — | | |
| Bloom Medicinal | | Missouri | | Cultivation | | April 1, 2022 | | 824 | | | 15,860 | | |
| Ayr Wellness, Inc. | | Pennsylvania | | Cultivation | | June 30, 2022 | | — | | | 750 | | |
Total | | $ | 2,996 | | | $ | 22,789 | | |
| | | | | | | | | | | |
| (1) The tenant had been paying rent on approximately $1.6 million of the TI funded since July 2022 in accordance with the lease agreement. Effective June 1, 2023, the lease agreement was amended to include an additional commitment of approximately $6.5 million. | |
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Financing Activity
Revolving Credit Facility
As of June 30, 2023, the Company had approximately $1.0 million in borrowings under the Revolving Credit Facility and $89.0 million in funds available to be drawn, subject to sufficient collateral in the borrowing base. The facility bears 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 June 30, 2023, the Company is compliant with the covenants of the agreement.
Seller Financing
In January 2023, the Company made its annual principal payment of $1.0 million. The loan’s outstanding principal balance as of June 30, 2023 was $1.0 million. The loan bears interest at a rate of 4.00% per annum with annual principal payments. The remaining principal payment of $1.0 million is due in January 2024.
Stock Repurchase Program
On November 7, 2022, the Board of Directors approved a repurchase program of up to $10.0 million of the Company’s common stock through December 31, 2023. For the six months ended June 30, 2023, pursuant to the repurchase plan the Company acquired 105,679 shares of common stock at an average price, including
commissions, of $12.62, totaling approximately $1.3 million. The remaining availability under the program as of June 30, 2023, was approximately $8.7 million.
Dividend
On June 15, 2023, the Company declared a second quarter 2023 cash dividend of $0.39 per share of common stock, equivalent to an annualized dividend of $1.56 per share of common stock. The dividend was paid on July 14, 2023 to stockholders of record at the close of business on June 30, 2023.
Outlook for 2023
NewLake Capital is providing AFFO guidance for full year 2023 of $39.8 to $40.8 million, an increase of 4.1% over AFFO for the same period the prior year, assuming the midpoint of that range.
Conference Call and Webcast Details:
Management will host a conference call and webcast at 11:00 a.m. Eastern Time on August 10, 2023 to discuss its quarterly financial results and answer questions about the Company's operational and financial highlights for the second quarter ended June 30, 2023.
| | | | | |
Event: | NewLake Capital Partners Inc. Second Quarter 2023 Earnings Call |
Date: | Thursday, August 10, 2023 |
Time: | 11:00 a.m. Eastern Time |
Live Call: | 1-877-407-3982 (U.S. Toll-Free) or +1-201-493-6780 (International) |
Webcast: | https://viavid.webcasts.com/starthere.jsp?ei=1625621&tp_key=89cf302ff1 |
For interested individuals unable to join the conference call, a dial-in replay of the call will be available until May 24, 2023 and can be accessed by dialing +1-844-512-2921 (U.S. Toll Free) or +1-412-317-6671 (International) and entering replay pin number: 13740233.
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 cultivation facilities and dispensaries that are leased to single tenants on a triple-net basis. For more information, please visit www.newlake.com.
Forward-Looking Statements
This press release contains “forward-looking statements.” Forward-looking statements can be identified by words like “may,” “will,” “likely,” “should,” “expect,” “anticipate,” “future,” “plan,” “believe,” “intend,” “goal,” “project,” “continue” and similar expressions. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs and expectations. 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. All of our statements regarding anticipated growth in our funds from operations, adjusted funds from operations, anticipated market conditions, and results of operations are forward-looking statements. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of
any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements, except as required by law.
Use of Non-GAAP Financial Information
FFO and AFFO are supplemental non-GAAP financial measures used in the real estate industry to measure and compare the operating performance of real estate companies. A complete reconciliation containing adjustments from GAAP net income attributable to common stockholders to FFO and AFFO and definitions of terms are included at the end of this release.
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Contact Information:
Lisa Meyer
Chief Financial Officer, Treasurer and Secretary
NewLake Capital Partners, Inc.
lmeyer@newlake.com
Investor Contact:
Valter Pinto, Managing Director
KCSA Strategic Communications
Valter@KCSA.com
PH: (212) 896-1254
Media Contact:
McKenna Miller
KCSA Strategic Communications
MMiller@KCSA.com
PH: (212) 896-1254
NEWLAKE CAPITAL PARTNERS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
| | | | | | | | | | | |
| June 30, 2023 | | December 31, 2022 |
| Assets: | (Unaudited) | | |
| Real Estate | | | |
| Land | $ | 21,397 | | | $ | 21,427 | |
| Building and Improvements | 379,473 | | | 378,047 | |
| Total Real Estate | 400,870 | | | 399,474 | |
| Less Accumulated Depreciation | (25,864) | | | (19,736) | |
| Net Real Estate | 375,006 | | | 379,738 | |
| Cash and Cash Equivalents | 40,674 | | | 45,192 | |
| In-Place Lease Intangible Assets, net | 20,772 | | | 21,765 | |
| Loan Receivable | 5,000 | | | 5,000 | |
| Property Held for Sale | 1,949 | | | — | |
| Other Assets | 2,036 | | | 2,554 | |
| Total Assets | $ | 445,437 | | | $ | 454,249 | |
| | | |
| Liabilities and Equity: | | | |
| | | |
| Liabilities: | | | |
| Accounts Payable and Accrued Expenses | $ | 1,424 | | | $ | 1,659 | |
| Revolving Credit Facility | 1,000 | | | 1,000 | |
| Loan Payable, net | 993 | | | 1,986 | |
| Dividends and Distributions Payable | 8,468 | | | 8,512 | |
| Security Deposits | 7,461 | | | 7,774 | |
| Rent Received in Advance | 698 | | | 1,375 | |
| Other Liabilities | 217 | | | 1,005 | |
| Total Liabilities | 20,261 | | | 23,311 | |
| | | |
| Commitments and Contingencies | | | |
| | | |
| Equity: | | | |
| | | |
| Preferred Stock, $0.01 Par Value, 100,000,000 Shares Authorized, 0 and 0 Shares Issued and Outstanding, Respectively | — | | | — | |
| Common Stock, $0.01 Par Value, 400,000,000 Shares Authorized, 21,302,515 and 21,408,194 Shares Issued and Outstanding, Respectively | 213 | | | 214 | |
| Additional Paid-In Capital | 455,143 | | | 455,822 | |
| Accumulated Deficit | (37,508) | | | (32,487) | |
| Total Stockholders' Equity | 417,848 | | | 423,549 | |
| | | |
| Noncontrolling Interests | 7,328 | | | 7,389 | |
| Total Equity | 425,176 | | | 430,938 | |
| | | |
| Total Liabilities and Equity | $ | 445,437 | | | $ | 454,249 | |
NEWLAKE CAPITAL PARTNERS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended |
| June 30, | | June 30, |
| 2023 | | 2022 | | 2023 | | 2022 |
| Revenue: | | | | | | | |
| Rental Income | $ | 11,183 | | | $ | 9,524 | | | $ | 22,340 | | | $ | 18,621 | |
| Interest Income from Loans | 131 | | | 948 | | | 259 | | | 1,867 | |
| Fees and Reimbursables | 62 | | | 41 | | | 193 | | | 191 | |
| Total Revenue | 11,376 | | | 10,513 | | | 22,792 | | | 20,679 | |
| | | | | | | |
| Expenses: | | | | | | | |
| Depreciation and Amortization Expense | 3,568 | | | 2,804 | | | 7,130 | | | 5,483 | |
| General and Administrative Expenses: | | | | | | | |
| Compensation expense | 1,150 | | | 2,817 | | | 2,277 | | | 4,059 | |
| Professional fees | 364 | | | 660 | | | 686 | | | 1,207 | |
| Other general and administrative expenses | 507 | | | 444 | | | 1,070 | | | 968 | |
| Total general and administrative expenses | 2,021 | | | 3,921 | | | 4,033 | | | 6,234 | |
| Total Expenses | 5,589 | | | 6,725 | | | 11,163 | | | 11,717 | |
| | | | | | | |
| Loss on Sale of Real Estate | — | | | — | | | — | | | (60) | |
| | | | | | | |
| Income From Operations | 5,787 | | | 3,788 | | | 11,629 | | | 8,902 | |
| | | | | | | |
| Other Income (Expenses): | | | | | | | |
| Interest Income | 208 | | | 48 | | | 428 | | | 96 | |
| Interest Expense | (97) | | | (46) | | | (189) | | | (73) | |
| Total Other Income (Expense) | 111 | | | 2 | | | 239 | | | 23 | |
| | | | | | | |
| Net Income | 5,898 | | | 3,790 | | | 11,868 | | | 8,925 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Net Income Attributable to Noncontrolling Interests | (101) | | | (32) | | | (203) | | | (149) | |
| | | | | | | |
| Net Income Attributable to Common Stockholders | $ | 5,797 | | | $ | 3,758 | | | $ | 11,665 | | | $ | 8,776 | |
| | | | | | | |
| Net Income Attributable to Common Stockholders Per Share - Basic | $ | 0.27 | | | $ | 0.18 | | | $ | 0.55 | | | $ | 0.41 | |
| | | | | | | |
| Net Income Attributable to Common Stockholders Per Share - Diluted | $ | 0.27 | | | $ | 0.18 | | | $ | 0.55 | | | $ | 0.41 | |
| | | | | | | |
| Weighted Average Shares of Common Stock Outstanding - Basic | 21,369,489 | | 21,307,621 | | 21,396,330 | | 21,279,919 |
| | | | | | | |
| Weighted Average Shares of Common Stock Outstanding - Diluted | 21,743,071 | | 21,732,289 | | 21,769,912 | | 21,734,180 |
Non-GAAP Financial Information
Funds From Operations
The Company calculates FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines FFO as follows: net income (loss) (computed in accordance with GAAP) excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by an entity. Other REITs may not define FFO in accordance with the NAREIT definition or may interpret the current NAREIT definition differently and therefore the Company’s computation of FFO may not be comparable to such other REITs.
Adjusted Funds From Operations
The Company calculates AFFO by starting with FFO and adding back non-cash and certain non-recurring transactions, including non-cash components of compensation expense. Other REITs may not define AFFO in the same manner and therefore the Company’s calculation of AFFO may not be comparable to such other REITs. You should not consider FFO and AFFO to be alternatives to net income as a reliable measure of our operating performance; nor should you consider FFO and AFFO to be alternatives to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity.
The table below is a reconciliation of net income attributable to common stockholders to FFO and AFFO for the three and three months ended June 30, 2023 and 2022 (in thousands, except share and per share amounts):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended | | For the Six Months Ended |
| | June 30, | | June 30, |
| | 2023 | | 2022 | | 2023 | | 2022 |
| | | | | | | | |
| Net Income Attributable to Common Stockholders | | $ | 5,797 | | | $ | 3,758 | | | $ | 11,665 | | | $ | 8,776 | |
| Net Income Attributable to Noncontrolling Interests | | 101 | | | 32 | | | 203 | | | 149 | |
| Net Income | | 5,898 | | | 3,790 | | | 11,868 | | | 8,925 | |
| | | | | | | | |
| Adjustments: | | | | | | | | |
| Real Estate Depreciation and Amortization | | 3,568 | | | 2,804 | | | 7,130 | | | 5,483 | |
| Loss on Sale of Real Estate | | — | | | — | | | — | | | 60 | |
FFO Attributable to Common Stockholders - Diluted (1) | | 9,466 | | | 6,594 | | | 18,998 | | | 14,468 | |
| Severance | | — | | | 1,611 | | | — | | | 1,727 | |
| Stock-Based Compensation | | 373 | | | 515 | | | 681 | | | 921 | |
| Non-cash Interest Expense | | 73 | | | 26 | | | 140 | | | 33 | |
| Amortization of Straight-line Rent Expense | | — | | | 6 | | | — | | | 6 | |
AFFO Attributable to Common Stockholders - Diluted (1) | | $ | 9,912 | | | $ | 8,752 | | | $ | 19,819 | | | $ | 17,155 | |
| | | | | | | | |
| FFO per share – Diluted | | $ | 0.44 | | | $ | 0.30 | | | $ | 0.87 | | | $ | 0.67 | |
| | | | | | | | |
| AFFO per share – Diluted | | $ | 0.46 | | | $ | 0.40 | | | $ | 0.91 | | | $ | 0.79 | |
(1) FFO diluted and AFFO diluted are calculated and presented on a fully diluted basis and comparative prior period balances for FFO and AFFO were calculated to conform to this presentation.
