Active Stock to Observe: Gaming and Leisure Properties, Inc. (NASDAQ: GLPI)

On Friday, shares of Gaming and Leisure Properties, Inc. (NASDAQ: GLPI) oscillated between $34.52 and $34.86 before concluding trading period lower/higher -0.32% or 34.56 at $-0.11. The stock recorded total trading quantity of 1,145,585 shares as compared to its ninety days average volume of 1,207,583 shares.

Gaming and Leisure Properties, Inc. (GLPI) recently reported results for the quarter ended June 30, 2018.

⁽¹⁾   The guidance figures in the tables above present the guidance provided on April 25, 2018 for the three months ended June 30, 2018.

⁽²⁾   Funds from operations (“FFO”) is net income, not including (gains) or losses from sales of property and real estate depreciation as defined by NAREIT.

⁽³⁾   Adjusted funds from operations (“AFFO”) is FFO, not including stock based compensation expense, debt issuance costs amortization, other depreciation, amortization of land rights, straight-line rent adjustments, direct financing lease adjustments, losses on debt extinguishment and retirement costs, reduced by capital maintenance expenditures.

⁽⁴⁾   Adjusted EBITDA is net income, not including interest, taxes on income, depreciation, (gains) or losses from sales of property, stock based compensation expense, straight-line rent adjustments, direct financing lease adjustments, the amortization of land rights, losses on debt extinguishment and retirement costs.

Chief Executive Officer, Peter M. Carlino, commented “The second quarter was a period of important progress for the Company. We have addressed all 2018 debt maturities through our new debt financing transactions.  We successfully refinanced the 2018 notes and repaid our Term Loan A as well as a portion of our Term Loan A-1 with a new $1.0B issuance of 7 year and 10 year notes at an attractive blended interest rate of 5.5%.  We now have a well-laddered maturity schedule with no over $1.0B of debt maturing in any calendar year with no maturities until November 2020.  In addition, we amended our revolving credit facility to both extend the maturity to 2023 and raise the capacity to $1.1B.  The new revolver will afford us substantial flexibility for financing future acquisitions while also importantly reducing our refinancing risk.  We believe these transactions position the Company with a stable capital structure and the flexibility to grow.”

Portfolio Update

GLPI owns over 4,400 acres of land and about 15M square feet of building space, which was 100% occupied as of June 30, 2018. At the end of the second quarter of 2018, the Company owned the real estate associated with 38 casino facilities and leases 20 of these facilities to PENN, 15 of these facilities to PNK and one to Casino Queen in East St. Louis, Illinois. Two of the gaming facilities, located in Baton Rouge, Louisiana and Perryville, Maryland, are owned and operated by a subsidiary of GLPI, GLP Holdings, Inc., (collectively, the “TRS Properties”).

Capital maintenance expenditures for the Company were $1.2M for the three months ended June 30, 2018.

Dividends

On April 24, 2018, the Company’s Board of Directors reported the second quarter 2018 dividend.  Shareholders of record on June 15, 2018 received $0.63 per ordinary share, which was paid on June 29, 2018.  On July 31, 2018, the Company reported its third quarter 2018 dividend of 0.63 per ordinary share, payable on September 21, 2018 to shareholders of record on September 7, 2018.

Guidance

The table below sets forth current guidance targets for financial results for the 2018 third quarter and full year, based on the following assumptions:

• Excludes any impact of the transactions reported on December 18, 2017 with PENN, PNK, and BYD, which are predictable to close in the fourth quarter of 2018;
• Excludes any impact of the transaction reported on April 16, 2018, to acquire the real estate assets of Tropicana, which is predictable to close by the end of 2018;
• Stated rental income of about $885.8M for the year and $223.4M for the third quarter, consisting of:

• Cash rent includes incremental escalator on the PENN building rent component effective November 1, 2018, which raises 2018 yearlyrent by $0.9M, consistent with tenant’s July 26, 2018 earnings press release;
• Five year variable rent reset on the PENN lease effective November 1, 2018, which reduces 2018 yearlyrent by $1.9M, consistent with tenant’s July 26, 2018 earnings press release;
• Cash rent includes incremental escalator on the PNK building rent component effective April 28, 2018, which raises 2018 yearlyrent by $3.9M;
• Two year variable rent reset on the PNK lease effective April 28, 2018, which reduces 2018 yearlyrent by $0.8M;
• Adjusted EBITDA from the TRS Properties of about $32.9M for the year and $7.3M for the third quarter;
• Blended income tax rate at the TRS Properties of 33%;
• LIBOR is based on the forward yield curve; and
• The basic share count is about 213.7M shares for the year and 213.9M shares for the third quarter and the fully diluted share count is about 214.8M shares for the year and 214.9M shares for the third quarter.

(GLPI) has PEG ratio of 1.29 and price to cash ratio of 51.07. Operating profit margin was calculated at 61.50% while gross profit margin was measured as 89.10%. Beta factor, which measures the riskiness of the security, was registered at 0.79.