Farmland Partners Inc. Reports Second Quarter 2021 Results

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PR Newswire

DENVER, Aug. 4, 2021

DENVER, Aug. 4, 2021 /PRNewswire/ -- Farmland Partners Inc. (NYSE: FPI) ("FPI" or the "Company") today reported financial results for the three and six months ended June 30, 2021.

Selected 2021 Highlights

During the six months ended June 30, 2021, the Company:

experienced strong farmland values with accelerating appreciation, especially in row crop regions;
showed substantial increases in lease renewal rates so far, reflecting increased farmer profitability;
recorded net income of $(0.4) million, $4.2 million excluding litigation-related items¹, compared to $0.6 million, $1.4 million excluding litigation related items²for the same period in 2020;
recorded AFFO of $(5.3) million, $(0.6) million excluding litigation-related items¹, compared to $(1.8) million, $(1.0) million excluding litigation related items² for the same period in 2020;
completed four acquisitions, for total consideration of $29.9 million;
completed fifteen property dispositions, for total consideration of $28.3 million and total gain on sale of $3.5 million;
retained property management for ten out of fifteen disposed properties, growing the off-balance sheet asset management business to $21.5 million of AUM;
sold 1,954,293 shares of common stock at an average price of $13.11 for aggregate net proceeds of $25.4 million under the ATM Program; and
reached settlement with Quinton Mathews regarding the falsity of claims that were used to launch the "short and distort" scheme targeting FPI, its management, and its stockholders (FPI press release).


¹For the six months ended June 30, 2021, legal and accounting expense included $5.2 million related to litigation and revenue included $0.6 million of litigation settlement proceeds related to Rota Fortunae, resulting in a net impact of $4.6 million.
² For the six months ended June 30, 2020, legal and accounting expense included $0.8 million related to litigation.

CEO Comments

Paul A. Pittman, Chairman and CEO, said: "This was a solid quarter for FPI, but for the litigation expense. The demand-driven bull market in commodities continues to drive a strong profit outlook for farmers, which, in turn, are generating positive momentum in land values and lease renewal rates. Specialty crop performance is on track to exceed 2020, especially in citrus."

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Macro Comments

Farmers, particularly in the row crop sector, are experiencing strong financial recovery driven by increased exports to China and production problems in many other parts of the world.

Food Security: According to the Food and Agriculture Organization of the UN report released in July, global hunger and food insecurity were exacerbated in 2020 due to the COVID-19 pandemic. It is estimated that between 720 and 811 million people faced hunger in 2020 and 2.37 billion people faced food insecurity in 2020. This serves as a reminder of the important work that US farmers perform in providing stable food supply to meet steadily growing demand.
Commodity Demand: The United States corn export projection for the 2020/2021 marketing year remains at an all-time high, resulting in an almost 40% share in global corn trade. Corn prices for 2021/2022 marketing year are projected to be $5.60/bu—a 27% increase over prices for the 2020/2021 marketing year, driven by strong exports and tight supplies. Soybean prices for the 2021/2022 marketing year are projected to be $13.70/bu—a 24% increase over prices for the 2020/2021 marketing year, driven by low inventory levels.

Comments on Litigation

In commenting on litigation and related expenses, Mr. Pittman stated: "During the second quarter, we believe we positioned the Company to begin bringing both the class action litigation and the remaining affirmative case against Sabrepoint Partners to successful resolution. We obtained a recantation from Quinton Mathews (aka "Rota Fortunae") of numerous false statements he made in July 2018 that prompted a dramatic drop in our stock price and resulting class action litigation. We believe any accusations made by the class action plaintiffs and attorneys are frivolous and without merit, as further confirmed by Quinton Mathews' admission that his July 2018 Seeking Alpha article was full of false statements. While we saw an increase in the cost of defending the class action in the first half of the year, largely due to the lifting of a discovery stay, which increased the number of depositions and other discovery requests we had to fulfill, as well as our hitting the limit on our D&O insurance, we believe much of the discovery in the class action has been completed and such expenses will begin to decline in the upcoming quarters. Moreover, we believe Mr. Mathews' admission has increased the likelihood that we will obtain a favorable result in the Sabrepoint affirmative case."

Financial and Operating Results

The table below shows financial and operating results for the three months ended June 30, 2021 and June 30, 2020. The values are shown as reported and after adjusting for litigation items.


	As reported				Adjusted for litigation (1)
	For the three months ended				For the three months ended
	June 30,				June 30,
Financial Results:	2021		2020		2021		2020
Net Income (Loss)	$	(2,865)	$	172	$	(735)	$	757
Net income (loss) per share available to common stockholders	$	(0.19)	$	(0.10)	$	(0.02)	$	0.03
AFFO	$	(3,648)	$	(1,406)	$	(1,518)	$	(821)
AFFO per diluted weighted average share	$	(0.11)	$	(0.04)	$	(0.05)	$	(0.03)
Adjusted EBITDAre	$	3,182	$	6,012	$	5,312	$	6,597

Operating Results:
Total Operating Revenues	$	10,013	$	10,517	$	9,463	$	10,517
Operating Income	$	955	$	3,689	$	3,085	$	4,274
Net Operating Income (NOI)	$	8,305	$	8,699	$	7,755	$	8,699

(1)

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