• Net Income: $6,000 for the third quarter.
• Net Loss to Common Shareholders: $5.8 million or 16 per share.
• Adjusted FFO: Approximately $4.5 million or 13 per share.
• Dividends Declared per Common Share: 14 in both quarters.
• Fixed Base Cash Rents: Decreased by about $2.6 million year over year.
• Participation Rents: Increased by $1.1 million during the current quarter.
• Impairment Charge: $2 million related to Michigan Blueberry farms.
• Net Asset Value per Common Share: $15.57 as of September 30th, down from $17.59 at June 30th.
• Liquidity: Over $160 million of liquidity, including about $20 million of cash on hand.
• Debt Maturities: About $39 million coming due over the next 12 months.
• Dividend Yield: 4.1% based on current stock price of $13.66 per share.

• Warning! GuruFocus has detected 6 Warning Signs with LAND.

Release Date: November 07, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Gladstone Land Corp (NASDAQ:LAND) executed 21 new or amended leases, resulting in an aggregate increase of net operating income by $309,000 or 11% over prior leases.
• The company has nearly 18 billion gallons of water assets, valued alongside their land at approximately $1.5 billion.
• Gladstone Land Corp (NASDAQ:LAND) has a diversified portfolio with farms in 15 different states and 29 growing areas, providing stability and risk mitigation.
• The company successfully raised $4.5 million from sales of common stock and $80,000 from Series E preferred stock, enhancing liquidity.
• Gladstone Land Corp (NASDAQ:LAND) maintains over $160 million in liquidity, with 99.9% of borrowings at fixed rates, minimizing exposure to interest rate fluctuations.

Negative Points

• Net income for the third quarter was only $6,000, with a net loss to common shareholders of $5.8 million or 16 per share.
• The company experienced a decrease in net operating income by $638,000 due to tenant issues and vacant properties.
• Gladstone Land Corp (NASDAQ:LAND) recorded an impairment charge of about $2 million related to Michigan Blueberry farms.
• The company anticipates a $20 million swing from fixed base rents to participation rents over the next five quarters, impacting short-term cash flow.
• NAV per common share decreased from $17.59 to $15.57, primarily due to declines in the value of permanent crop farms.

Q & A Highlights

Q: Can you provide the number of leases expiring in 2025 and how many of those are permanent crops? A: In 2025, we have 17 leases expiring, which account for about 20% of our revenue. Approximately 60% of these leases are for annual row crops, and 40% are for permanent crops. - Lewis Parrish, CFO

Q: Were the lease amendments in the third quarter due to expirations or other reasons? A: The amendments were due to a mix of reasons. Some leases were near expiration, while others were amended for different reasons, including those expiring in 2024 and 2028. - Lewis Parrish, CFO

Q: Are the 11 Blueberry Farms part of the properties for sale, and is there another farm agreed to be sold? A: Yes, the 11 Blueberry Farms are part of the properties for sale. Another farm is leased through the middle of next year, and while there's an agreement to sell, it's not certain yet. - Lewis Parrish, CFO

Q: What impact will the sale of the Michigan Blueberry farms have on NOI? A: The Michigan Blueberry farms were a drag on NOI, averaging a quarterly drag of about $125,000. The sale will relieve us of this NOI drag and the associated interest expense. - Lewis Parrish, CFO

Q: Regarding the lease changes, what is the $20 million annualized number referring to? A: The $20 million refers to the swing from fixed base rents to participation rents over the next five quarters, starting Q4 2024. This involves four properties where leases were restructured. - Lewis Parrish, CFO

For the complete transcript of the earnings call, please refer to the full earnings call transcript.