First Quarter 2025 Revenue Totaled $13.2 Million, an Increase of 4.8% Year-Over-Year
First Quarter 2025 Net Income Attributable to Common Stockholders Totaled $6.3 Million, Funds from Operations Totaled $10.3 Million, and Adjusted Funds from Operations Totaled $10.7 Million
Conference Call and Webcast Scheduled for May 8, 2025, at 11 a.m. Eastern Time
NEW CANAAN, Conn., May 07, 2025 (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 first quarter ended March 31, 2025.
"Our first quarter financial results underscore the consistency and resilience of our portfolio," said Anthony Coniglio, NewLake's President and Chief Executive Officer. "Rent collections were in line with expectations, and we delivered an 84% AFFO payout ratio. I'm proud of how our team continues to execute in a challenging industry landscape and a volatile macroeconomic environment. These consistent results reflect the benefits of the proactive steps we've taken in portfolio construction and disciplined risk management."
First Quarter 2025 Financial and Operational Highlights(1)
- Revenue totaled $13.2 million.
- Net income attributable to common stockholders totaled $6.3 million.
- Funds From Operations ("FFO")(2) totaled $10.3 million.
- Adjusted Funds From Operations ("AFFO")(2) totaled $10.7 million.
- Declared a first quarter dividend of $0.43 per common share, equivalent to an annualized dividend of $1.72 per common share.
- Collected approximately 98% of contractual rent during the quarter, inclusive of applying the remaining escrow deposit and security deposit of one tenant as described below.
Balance Sheet Highlights as of March 31, 2025
- Cash and cash equivalents as of March 31, 2025, were $19.9 million, with $11.7 million committed to fund future improvements.
- Total liquidity of $102.3 million, consisting of cash and cash equivalents and availability under the Company's revolving credit facility.
- Gross real estate assets of $431.7 million.
- 1.6% debt to total gross assets and a debt service coverage ratio of approximately 113x.
- No debt maturity until May 2027.
Comparison to the first quarter ended March 31, 2024(1)
- Revenue totaled $13.2 million, as compared to $12.6 million, an increase of approximately 4.8% year-over-year.
- Net income attributable to common stockholders totaled $6.3 million, as compared to $6.9 million.
- FFO totaled $10.3 million, as compared to $10.6 million, a decrease of 2.6% year-over-year.
- AFFO totaled $10.7 million, as compared to $11.0 million, a decrease of 2.2% year-over-year.
- For the first quarter ended March 31, 2025, the Company declared a dividend of $0.43 per common share, an increase of approximately 4.9% compared to the first quarter ended March 31, 2024.
(1) Quarterly comparisons of net income, FFO, and AFFO were impacted by two tenants who defaulted on their lease agreements. For one tenant, the remaining escrow and security deposit were applied to offset the unpaid rent, while the other tenant, who had no escrow or deposit available, contributed directly to the decrease in these metrics.
(2) FFO and AFFO are presented on a dilutive basis.
Investment Activity
Acquisitions
The following table presents the Company's investment activity for the three months ended March 31, 2025 (in thousands):
| Tenant | Market | Site Type | Closing Date | Real Estate Acquisition Costs | |||||
| Cresco Labs | Ohio | Dispensary | February 19, 2025 | $ | 285 | ||||
| Total | $ | 285 | |||||||
Real Estate Commitments
Improvement Allowances
The following table presents the funded and remaining unfunded commitments for the three months ended March 31, 2025 (in thousands):
| Tenant | Market | Site Type | Closing Date | Funded Commitments | Unfunded Commitments | |||||||
| C3 Industries | Connecticut | Cultivation | May 7, 2024 | $ | - | $ | 11,043 | |||||
| Cresco Labs | Ohio | Dispensary | February 19, 2025 | - | 705 | |||||||
| Total | $ | - | $ | 11,748 | ||||||||
Condition of Our Tenants
During the fourth quarter of 2023, the Company amended our leases with: a) Revolutionary Clinics as part of a restructuring of their business, the receipt of new third-party capital and new management, and b) Calypso in connection with their sale to Canvas Acquisition Corporation. Both tenants began experiencing operating challenges in the second half of 2024, impacting their ability to pay rent as described below. The Company has reserved all rights under the lease agreements.
Revolutionary Clinics
From June 2024 through March 2025, Revolutionary Clinics paid approximately 50% of its contractual rent. On December 13, 2024, Revolutionary Clinics entered into receivership. In the first quarter of 2025, the Company entered into a stipulation agreement with the court appointed receiver to receive 50% of contractual rent paid weekly, along with weekly payments for the reimbursement of certain delinquent real estate taxes and utilities that were paid by the Company. The receiver is working to either liquidate or sell the tenant's business. The Company has hired a broker to help lease the property. The Company has reserved all of its rights under the lease agreement.
Calypso Enterprises
At December 31, 2024, the Company held the remaining escrow and security deposits of approximately $490 thousand, which were applied to satisfy contractual rent due for January 2025 and a portion of February 2025. At March 31, 2025 there were no remaining escrow or security deposits. In connection with a financial restructuring of Calypso to raise new third-party capital, the Company received the remaining outstanding rent for the first quarter of 2025. This payment received during the first quarter covered the remaining portion of February and March contractual rent, resulting in the collection of all rent due for the three months ended March 31, 2025.
Financing Activity
Revolving Credit Facility
As of March 31, 2025, the Company had approximately $7.6 million in borrowings under the Revolving Credit Facility and $82.4 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% through May 5, 2025 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, 2025, the Company was in compliance with the financial covenants under the agreement.
At the Market Equity Program
As of March 31, 2025, the Company has not issued any shares under the ATM Program.
Dividend
On March 4, 2025, the Company's Board of Directors declared a first quarter 2025 cash dividend of $0.43 per share of common stock, equivalent to an annualized dividend of $1.72 per share of common stock. The dividend was paid on April 15, 2025, to stockholders of record at the close of business on March 31, 2025, and represents an AFFO payout ratio of 84%
Conference Call and Webcast Details:
Management will host a conference call and webcast at 11:00 a.m. Eastern Time on May 8, 2025, to discuss its quarterly financial results and answer questions about the Company's operational and financial highlights for the first quarter ended March 31, 2025.
| Event: | NewLake Capital Partners Inc. First Quarter 2025 Earnings Call |
| Date: | Thursday, May 8, 2025 |
| 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=1713492&tp_key=f18bc17e02 |
For interested individuals unable to join the conference call, a dial-in replay of the call will be available until May 22, 2025, 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: 13752702.
About NewLake Capital Partners, Inc.
NewLake Capital Partners, Inc. is an internally-managed real estate investment trust ("REIT") 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 33 properties comprised of 15 cultivation facilities and 18 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.
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
NewLake@KCSA.com
PH: (212) 896-1254
Media Contact:
Ellen Mellody, Senior Vice President
KCSA Strategic Communications
EMellody@KCSA.com
PH: (570) 209-2947
| NEWLAKE CAPITAL PARTNERS, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share amounts) | |||||||
| March 31, 2025 | December 31, 2024 | ||||||
| Assets: | |||||||
| Real Estate | |||||||
| Land | $ | 23,073 | $ | 22,891 | |||
| Building and Improvements | 408,655 | 408,552 | |||||
| Total Real Estate | 431,728 | 431,443 | |||||
| Less Accumulated Depreciation | (48,091 | ) | (44,709 | ) | |||
| Net Real Estate | 383,637 | 386,734 | |||||
| Cash and Cash Equivalents | 19,943 | 20,213 | |||||
| In-Place Lease Intangible Assets, net | 17,297 | 17,794 | |||||
| Loan Receivable, net (Current Expected Credit Loss of $103 and $116, respectively) | 4,897 | 4,884 | |||||
| Other Assets | 1,770 | 1,911 | |||||
| Total Assets | $ | 427,544 | $ | 431,536 | |||
| Liabilities and Equity: | |||||||
| Liabilities: | |||||||
| Accounts Payable and Accrued Expenses | $ | 1,051 | $ | 1,515 | |||
| Revolving Credit Facility | 7,600 | 7,600 | |||||
| Dividends and Distributions Payable | 9,015 | 9,246 | |||||
| Security Deposits | 7,633 | 8,117 | |||||
| Rent Received in Advance | 1,054 | 684 | |||||
| Other Liabilities | 93 | 402 | |||||
| Total Liabilities | 26,446 | 27,564 | |||||
| Commitments and Contingencies | |||||||
| Equity: | |||||||
| Preferred Stock, $0.01 Par Value, 100,000,000 Shares Authorized, 0 Shares Issued and Outstanding, respectively | - | - | |||||
| Common Stock, $0.01 Par Value, 400,000,000 Shares Authorized, 20,538,785 and 20,514,583 Shares Issued and Outstanding, respectively | 205 | 205 | |||||
| Additional Paid-In Capital | 446,709 | 446,627 | |||||
| Accumulated Deficit | (52,677 | ) | (50,067 | ) | |||
| Total Stockholders' Equity | 394,237 | 396,765 | |||||
| Noncontrolling Interests | 6,861 | 7,207 | |||||
| Total Equity | 401,098 | 403,972 | |||||
| Total Liabilities and Equity | $ | 427,544 | $ | 431,536 | |||
| NEWLAKE CAPITAL PARTNERS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except share and per share amounts) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue: | ||||||||
| Rental Income | $ | 12,586 | $ | 12,127 | ||||
| Interest Income from Loans | 134 | 131 | ||||||
| Fees and Reimbursables | 489 | 350 | ||||||
| Total Revenue | 13,209 | 12,608 | ||||||
| Expenses: | ||||||||
| Property Expenses | 626 | 22 | ||||||
| Depreciation and Amortization Expense | 3,883 | 3,568 | ||||||
| General and Administrative Expenses: | ||||||||
| Compensation Expense | 1,205 | 1,235 | ||||||
| Professional Fees | 605 | 402 | ||||||
| Other General and Administrative Expenses | 410 | 418 | ||||||
| Total General and Administrative Expenses | 2,220 | 2,055 | ||||||
| Total Expenses | 6,729 | 5,645 | ||||||
| Provision for Current Expected Credit Loss | 13 | 14 | ||||||
| Income From Operations | 6,493 | 6,977 | ||||||
| Other Income (Expense): | ||||||||
| Other Income | 86 | 100 | ||||||
| Interest Expense | (175 | ) | (83 | ) | ||||
| Total Other Income (Expense) | (89 | ) | 17 | |||||
| Net Income | 6,404 | 6,994 | ||||||
| Net Income Attributable to Noncontrolling Interests | (107 | ) | (125 | ) | ||||
| Net Income Attributable to Common Stockholders | $ | 6,297 | $ | 6,869 | ||||
| Net Income Attributable to Common Stockholders Per Share - Basic | $ | 0.31 | $ | 0.33 | ||||
| Net Income Attributable to Common Stockholders Per Share - Diluted | $ | 0.31 | $ | 0.33 | ||||
| Weighted Average Shares of Common Stock Outstanding - Basic | 20,597,584 | 20,541,840 | ||||||
| Weighted Average Shares of Common Stock Outstanding - Diluted | 20,973,610 | 20,942,254 | ||||||
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 adjusting for non-cash and certain non-recurring transactions, including non-cash components of compensation expense and the effect of provisions for credit loss. 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 months ended March 31, 2025 and 2024 (in thousands, except share and per share amounts):
| Three Months Ended March 31, | |||||||||
| 2025 | 2024 | ||||||||
| Net Income Attributable to Common Stockholders | $ | 6,297 | $ | 6,869 | |||||
| Net Income Attributable to Noncontrolling Interests | 107 | 125 | |||||||
| Net Income | 6,404 | 6,994 | |||||||
| Adjustments: | |||||||||
| Real Estate Depreciation and Amortization | 3,879 | 3,564 | |||||||
| FFO Attributable to Common Stockholders - Diluted | 10,283 | 10,558 | |||||||
| Provision for Current Expected Credit Loss | (13 | ) | (14 | ) | |||||
| Stock-Based Compensation | 388 | 350 | |||||||
| Non-cash Interest Expense | 67 | 67 | |||||||
| Amortization of Straight-line Rent Expense | (1 | ) | (1 | ) | |||||
| AFFO Attributable to Common Stockholders - Diluted | $ | 10,724 | $ | 10,960 | |||||
| FFO per share - Diluted | $ | 0.49 | $ | 0.50 | |||||
| AFFO per share - Diluted | $ | 0.51 | $ | 0.52 | |||||
