Gladstone Land Corporation (LAND)
Q4 2012 Earnings Conference Call
March 28, 2013 8:30 a.m. ET
David Gladstone - President and Chief Executive Officer
Danielle Jones - Chief Financial Officer and Treasurer
Ryan Connors - Janney Montgomery Scott
Dan Donlan - Ladenburg Thalmann
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I would now like to turn the conference over to David Gladstone. Please go ahead.
Thank you, Emily for that nice introduction and welcome to the first conference call for Gladstone Land. We’re here to discuss the company which completed its IPO in January and then filed its initial Form K with the SEC yesterday. Thanks to all of you for calling in today. We always enjoy the time with shareholders and I wish there were more of these phone calls so we could explain things as we go along.
Please if you’re in the Washington D.C area, we’re located in a suburb called McLean, Virginia. You have an open invitation to stop by and see us if you’re in that area. We’re here close to 60 members of the team now and we no longer are small and we also have a couple of puppy dogs that come into the office every day.
Now let me read the forward-looking statements. This report that we’re about to give may include statements that may constitute forward-looking statements within the meaning of the Securities Act of 1933, Securities Exchange Act of 1934, including with regard to future performance of the company. These forward-looking statements may involve certain risks and uncertainties that are based on our current plan we believe that plan to be reasonable.
There are many factors that may cause our actual results to be materially different from any future results expressed or implied in these forward-looking statements, including all those factors listed under the Cash and Risk Factors in our Company’s 10-K filing that was filed with the Securities Exchange Commission and this 10-K can be found on our website at www.gladstoneland.com and on the SEC website. The Company undertakes no obligation to publicly update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise.
In our talk today, we plan to talk about funds from operation or FFO and since FFO is a non-GAAP accounting term, I need you to find FFO as net income, excluding the gains and losses from the sale of real estate, but we haven’t had any of that and any impaired losses or depreciation, amortization of the real estate is added back. The National Association of REITS or NAREIT had endorsed FFO as one of those non-accounting standards that we can use to discuss Real Estate Investment Trust. We see in our 10-K filed yesterday with the SEC you’ll see our financial statements and a detailed description of FFO.
Folks, since this is our first call, we begin this call today with some of the background of the company and then discuss our recent activity. The company was originally incorporated as most of you know, in 1997 and it’s now in the State of Maryland incorporated and we seek to be taxed as a Real Estate Investment Trust and hope to make that happen in 2013. We expect to elect this status as our cash return for the year ending December 31, 2013. We do that when we actually file the tax return.
We were originally growing and selling berries back in the days before. We even thought about being a Real Estate Investment Trust. We were growing all kinds of row crops, mostly strawberries and raspberries and - farmland and farm buildings located in the United States and we leased a lot of farms. 4,000, 5,000, 6,000 acres were leased and we only owned about 1,000 acres. Then in January 29, 2013 our shares of common stock begin trading on NASDAQ under the trading symbol LAND and we priced that IPO and we raised about $51.5 million in connection with our IPO.
Prior to 2004, we owned some farmland, but as I mentioned leased most of the acreage where we grew some vegetables, but mostly berries and we were engaged in farming and contract growing and packaging and marketing and selling and distribution of fresh berries and all those other crops. For many years we did that. We did some commission selling and then contract cooling services for independent berry growers.
All of that changed in 2004 as we sold our agricultural operation business and since 2004 our business has consisted solely of owning farmland and leasing our farms to independent tenant farmers and larger -- the corporate tenant farmers. Since 2004 we’ve been buying farms to add to our list of farms.
Our farmland is predominantly concentrated in locations where farmers are able to grow annual row crops such as berries, lettuce and other row crops. These are planted and harvested annually. Sometimes even more frequently you get two or three crops per year and we may also acquire some properties related to farming such as we have one large cooler and a box barn and then in Florida we bought another cooler along with a farm down there. We’ll look at other things such as processing plants and packaging buildings, but we’re really only looking at those in terms of how it relates to buying additional farmland. You’ll see mostly farmland in our portfolio and not buildings.