NewLake Capital Partners (NLCP) Q4 2022 earnings summary

Executive summary

• Long-term, triple-net cannabis real estate portfolio: 32 properties across 12 states, leased to 13 tenants; 17 dispensaries and 15 cultivation facilities.

• Properties were 100% leased at year-end, with a 14.6-year weighted average remaining lease term; leases generally include parent or affiliate guarantees.

Financial highlights

• 2022 rental income was ~$42.4 million versus ~$27.4 million in 2021, an increase of ~$14.9 million, driven by acquired properties, tenant improvements and rent escalations.

• Net cash from operating activities rose to ~$37.0 million in 2022 from ~$26.7 million in 2021, primarily reflecting a larger real estate portfolio.

• Depreciation and amortization increased to ~$12.8 million from $8.1 million; G&A rose to $9.4 million from $8.5 million, including one-time executive severance costs.

• 2022 investing cash outflow was ~$86.5 million, including $45.2 million for tenant improvements, $37.0 million for acquisitions and $5.0 million for an unsecured loan.

Outlook and guidance

• Available liquidity was $134.2 million at year-end: $45.2 million cash and cash equivalents plus $89.0 million available under the $90.0 million revolving facility.

• Cash from operations and cash on hand were expected to cover the next 12 months of operations, dividends, OP Unit distributions and debt service; acquisitions and improvement costs may require external funding.

• Year-end unfunded commitments totaled $3.1 million; March 2023 plans included up to $16.2 million for a Missouri cultivation expansion and a non-binding intent to provide up to $7.5 million for an Arizona facility.