NEW CANAAN, Conn. — NewLake Capital Partners,
Inc., 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.
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) 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.
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.
