Landmark Infrastructure Partners LP Reports 2Q 2016 Results
OREANDA-NEWS. Landmark Infrastructure Partners LP today announced its second quarter 2016 financial results.
Highlights:
- Reported Q2 2016 revenue of $7.8 million, a 77% increase year-over-year;
- Reported Q2 2016 net loss of $0.4 million, EBITDA of $4.6 million, and Adjusted EBITDA of $7.2 million, an 81% increase in Adjusted EBITDA year-over-year;
- Reported Q2 2016 distributable cash flow of $4.7 million, a 58% increase year-over-year;
- On August 1, the Partnership acquired a portfolio of 59 tenant sites from its sponsor, Landmark Dividend LLC (“Landmark”), for total consideration of $24.4 million;
- Assets under management with affiliates of Landmark increased to more than 930 assets as of June 30, 2016, including greater than 820 assets that are subject to the Partnership’s right of first offer (ROFO);
- On April 15, the Partnership completed its first third-party acquisition with units through the Partnership’s unit exchange program (UEP);
- On June 16, the Partnership completed its first fixed rate debt placement through a securitization at a fixed rate of 4.27%, creating approximately $112 million of open capacity under its revolving credit facility;
- On April 4, the Partnership completed the issuance of 8% Series A preferred units; and
- Announced a quarterly distribution of $0.3325 per common unit, representing year-over-year distribution growth of 8.1%;
- Announced an initial quarterly distribution of $0.5611 per Series A preferred unit;
- Maintained an occupancy rate of 97%.
Second Quarter and Six Months 2016 Results
Revenue for the quarter ended June 30, 2016 increased 77% to $7.8 million compared to the second quarter of 2015. Net loss attributable to common and subordinated unitholders for the second quarter was $0.4 million, or ($0.02) per basic and diluted common unit. EBITDA (earnings before interest, income taxes, depreciation and amortization) for the quarter ended June 30, 2016 increased 34% to $4.6 million compared to the second quarter of 2015. The net loss and EBITDA amounts include the impact from $1.8 million of unrealized loss on interest rate swaps. Adjusted EBITDA for the quarter ended June 30, 2016 increased 81% to $7.2 million compared to the second quarter of 2015, and distributable cash flow increased 58% to $4.7 million compared to the second quarter of 2015.
For the six months ended June 30, 2016, the Partnership reported revenue of $15.6 million, net loss attributable to common and subordinated unitholders of $0.8 million, or ($0.05) per basic and diluted common unit. The Partnership reported EBITDA of $8.6 million, Adjusted EBITDA of $14.5 million, and distributable cash flow of $9.8 million in the six month period ending June 30, 2016. The net loss and EBITDA amounts include the impact from $4.9 million of unrealized loss on interest rate swaps and $0.4 million of gain on sale of real property interests.
“We are excited to announce another quarter of solid financial and operating performance,” said Tim Brazy, the Chief Executive Officer of the Partnership’s general partner. “We continue to see very strong acquisition activity at Landmark, and with the capacity created under our revolving credit facility through the securitization completed in June, we are focused on completing the $200 to $300 million in acquisitions for 2016 that we have previously provided in our guidance.”
Quarterly Distribution
As previously announced, on July 27, 2016, the Board of Directors of the Partnership’s general partner declared a cash distribution of $0.3325 per common unit, or $1.33 per common unit on an annualized basis, for the quarter ended June 30, 2016. This quarter’s cash distribution, which represents a 15.7% increase over the minimum quarterly distribution and a 0.8% increase compared to the first quarter 2016 distribution of $0.33 per unit, marks the sixth consecutive quarter that the Partnership has increased its quarterly cash distribution since its IPO in November 2014. The distribution is payable on August 15, 2016 to common unitholders of record as of August 8, 2016.
As previously announced, on June 16, 2016, the Board of Directors of the Partnership’s general partner declared an initial quarterly cash distribution of $0.5611 per Series A preferred unit, which was paid on July 15, 2016 to unitholders of Series A preferred units of record as of July 1, 2016.
Capital and Liquidity
As of June 30, 2016, the Partnership had $106.0 million of outstanding borrowings under its revolving credit facility (the “Facility”) and $144.0 million of undrawn borrowing capacity under the Facility, subject to compliance with certain covenants.
On June 16, 2016, LMRK Issuer Co. (the “Issuer”), a wholly-owned subsidiary of the Partnership, issued $116.6 million aggregate principal amount of Secured Tenant Site Contract Revenue Notes, Series 2016-1 (the “Notes”) consisting of two classes of notes. The Notes are secured by and payable solely from the assets and cash flow generated by a portfolio of real property interests leased to companies in the wireless communication industry. The Notes have an effective weighted average fixed interest rate of 4.27%.
Through its at-the-market (“ATM”) issuance programs, the Partnership issued 220,202 common units and 63,657 preferred units for net proceeds of approximately $3.6 million and $1.6 million, respectively, from the beginning of the second quarter through July.
Guidance
The Partnership’s sponsor, Landmark, has expressed its intent to offer us the right to purchase assets in the range of $200 million to $300 million in total over the remainder of 2016. These expected acquisitions, combined with organic portfolio growth expected from contractual rent escalators, leasing activity and revenue sharing arrangements, are expected to drive distribution growth of 10% to 15% over the fourth quarter 2015 distribution of $0.325 per common unit by the fourth quarter 2016 (distribution to be paid in February 2017).
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