• Fourth Quarter Revenue: $11.7 million.
• Fourth Quarter Adjusted Funds from Operations (AFFO): $4.1 million.
• Fourth Quarter AFFO per Share: $0.37 per diluted share.
• Full Year Rental Income: $46.5 million.
• Full Year AFFO: $14.99 million.
• Full Year AFFO per Share: $1.34 per diluted share.
• Annualized Base Rent (ABR): $39.6 million from 43 properties.
• Weighted Average Lease Term: 13.8 years.
• Cash and Cash Equivalents: $11.5 million as of December 30, 2024.
• Total Debt Outstanding: $280 million.
• Weighted Average Interest Rate: 4.27% on fixed interest rate debt.
• Leverage Ratio: 47.6% at year-end.
• Dividend Rate: $1.17 per share annualized, yielding 7.5%.

• Warning! GuruFocus has detected 6 Warning Signs with MDV.

Release Date: March 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Modiv Industrial Inc (NYSE:MDV) reported fourth-quarter revenue of $11.7 million and adjusted funds from operations (AFFO) of $4.1 million, exceeding analyst estimates by $0.08 per share.
• The company achieved a full-year rental income of $46.5 million and AFFO of $14.99 million, reflecting improved financial performance.
• Modiv Industrial Inc (NYSE:MDV) has a strong portfolio with a weighted average lease term of 13.8 years and 32% of tenants having an investment-grade rating.
• The company successfully reduced its revolver from $150 million to $30 million, saving $300,000 annually in unused fees.
• Modiv Industrial Inc (NYSE:MDV) declared a cash dividend with an annualized rate of $1.17 per share, yielding 7.5% based on the recent stock price.

Negative Points

• Revenue decreased by $400,000 due to property sales in early 2024, impacting overall income.
• The company faces a volatile economic landscape, leading to a cautious approach in acquisitions and potential growth opportunities.
• Modiv Industrial Inc (NYSE:MDV) has a high leverage ratio of 47.6%, with $280 million in debt, which could pose financial risks.
• The company is experiencing staff reductions, including the retirement of the Chief Accounting Officer, which may affect operations.
• There is uncertainty regarding the timing and outcome of significant asset sales, such as the Costco asset and solar turbine splitting sale.

Q & A Highlights

Q: Any updates on the timing of the sale of the Costco asset and the solar turbine splitting sale? A: The Costco sale is expected to close by August 15, 2025. They have options to extend, which would result in additional payments to us. The solar turbine splitting sale is progressing with the city, and we anticipate it could take up to six months, but municipal processes are unpredictable.

Q: What is the status of the OES purchase option exercise? A: OES has started the process by obtaining an appraiser. The decision will depend on the appraisal and budget approvals, which could be influenced by California's budget constraints. We expect to know more by summer.

Q: Can you explain the Fujifilm lease option exercise and its impact on earnings? A: Fujifilm has two seven-year options with rent set at 95% of fair market value. We are negotiating the rent, which will include mechanisms for rent increases. They are a strong tenant, and we expect them to stay long-term.

Q: How should we think about G&A expenses in 2025, especially with non-cash stock compensation? A: Non-cash G&A will be around $2.5 million annually, amortized over the service period. Cash G&A will decrease due to staff reductions and changes in executive compensation.

Q: What are the plans for the $6 million acquisition and the development opportunity on the land parcel? A: We are considering developing a 60,000 to 100,000 square foot facility on the land parcel, potentially with the current tenant. We will work with a turnkey builder and evaluate this and other similar opportunities during our strategic meeting in April.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.