Retail Opportunity Investments Corp. (Nasdaq:ROIC) announced today
financial and operating results for the quarter and year ended
December 31, 2011.
4TH QUARTER 2011
HIGHLIGHTS
- Net income of $0.2 million, or $0.01 per diluted share
for 4Q11
- Funds From Operation (FFO) of $7.5 million, or $0.17
per diluted share (1) for 4Q11
- $17.5 million grocery-anchored shopping center acquired
in 4Q11
- $77.2 million net proceeds raised through common stock
offering in 4Q11
- $0.12 per common share cash dividend
declared
YEAR 2011
HIGHLIGHTS
- Net income of $9.7 million, or $0.23 per diluted share
for 2011
- FFO of $33.0 million, or $0.78 per diluted share (1)
for 2011
- $288.2 million of shopping centers acquired in
2011
- 91.3% portfolio occupancy rate at December 31,
2011
- 24.5% debt-to-total assets ratio at December 31,
2011
|
|
(1) See the end of this press
release for a reconciliation of GAAP net income to FFO. |
Stuart A. Tanz, President and Chief Executive Officer of Retail
Opportunity Investments Corp. stated, "During 2011, we successfully
achieved a number of key objectives. Through our acquisition
program, we expanded our portfolio by 80%, in terms of gross
leasable area, enhancing our presence across all of our core
markets in the western United States. Additionally, we continued to
capitalize on the strong demand for space across our portfolio,
aggressively leasing space at newly acquired properties. We also
completed several important balance sheet initiatives, including
refinancing our unsecured credit facility, significantly lowering
the borrowing spread, as well as completing our first public stock
offering as a shopping center REIT. Looking ahead at 2012, we are
already off to a solid start with $65 million in shopping center
acquisitions committed to date. Additionally, with our leasing
activity during the past year, together with the current demand for
space, we are poised to generate strong, same-store cash net
operating income in 2012." Tanz stated further, "In the two years
time since commencing operations as a shopping center REIT, we have
successfully completed $654 million of shopping center investments
and established a solid operating platform in our core markets. We
believe we have the critical mass and infrastructure in place today
to drive strong operating results going forward and continue
growing our business."
FINANCIAL
SUMMARY
For the three months ended December 31, 2011, net income
attributable to common stockholders was $0.2 million, or $0.01 per
diluted share. FFO for the fourth quarter 2011 was $7.5 million, or
$0.17 per diluted share. For the year ended December 31, 2011,
net income was $9.7 million, or $0.23 per diluted share. FFO
for the twelve months of 2011 was $33.0 million, or $0.78 per
diluted share. ROIC reports FFO as a supplemental performance
measure. See the end of this press release for a
reconciliation of GAAP net income to FFO.
At December 31, 2011, ROIC had total assets of $694.4 million
with $169.9 million of debt outstanding, equating to a 24.5%
debt-to-total assets ratio. At December 31, 2011, ROIC had no
borrowings outstanding on its unsecured revolving credit
facility.
In December 2011, ROIC sold 7.5 million newly-issued shares
of common stock in an underwritten, public offering, raising $77.2
million in net proceeds. ROIC utilized the proceeds to repay
outstanding borrowings on its unsecured credit facility and to fund
a recent shopping center acquisition.
INVESTMENT SUMMARY
During 2011, ROIC acquired thirteen shopping centers for a total
of $288.2 million, including one shopping center acquired during
the fourth quarter for $17.5 million. ROIC funded the acquisitions
with a combination of cash, the assumption of mortgages securing
two of the acquired shopping centers and borrowings under its
unsecured credit facility.
Year-to-date in 2012, ROIC has thus far committed a total of
$65.3 million in shopping center acquisitions, including one
recently acquired shopping center for $29.4 million and binding
contracts to acquire two additional shopping centers, in separate
transactions, for a total of $35.9 million. ROIC funded the
recently acquired shopping center with cash and expects to fund the
two pending transactions with borrowings under its unsecured credit
facility.
Hillsboro Market Center
In November 2011, ROIC acquired Hillsboro Market Center for
$17.5 million. The shopping center is approximately 156,000
square feet and is anchored by Albertsons. The property is
located in Hillsboro, Oregon, within the Portland metropolitan area
and is currently 92.0% leased.
Gateway Shopping Center
In February 2012, ROIC acquired Gateway Shopping Center for
$29.4 million. The shopping center is approximately 101,000
square feet and is anchored by WinCo Foods (NAP) and Rite
Aid. The property is located in Marysville, Washington, within
the Seattle metropolitan area and is currently 94.0% leased.
Euclid Plaza
ROIC has a binding contract to acquire Euclid Plaza for $15.9
million. The shopping center is approximately 68,000 square
feet and is anchored by Vallarta Supermarket, a Southern California
based grocer, and Walgreens. The property is located in San
Diego, California and is currently 100.0% leased to four tenants.
The shopping center is fully entitled for a 10,000 square foot
expansion for new shop retailers. Following the closing of the
acquisition, ROIC intends to pursue the expansion opportunity.
Wilsonville Old Town Square
ROIC has a contractual right to acquire Wilsonville Old Town
Square based upon a 7.75% cap rate upon reaching a stipulated
leasing threshold. The property is a newly developed 200,000
square foot shopping center and is anchored by Kroger (Fred Meyer)
(NAP). The property is located in Wilsonville, Oregon, within
the Portland metropolitan area. The property is currently 89.3%
leased.
CASH DIVIDEND
ROIC's Board of Directors has declared a quarterly cash dividend
on its common stock of $0.12 per share, payable on March 15, 2012
to holders of record on February 29, 2012.
2012 FFO & DIVIDEND
GUIDANCE
ROIC currently estimates that FFO for 2012 will be within the
range of $0.68 to $0.78 per diluted share, and net income will be
within the range of $0.08 to $0.14 per diluted share. The
following table provides a reconciliation of GAAP net income to
FFO. (In Thousands)
|
For the year
ending December 31, 2012 |
|
|
|
|
|
Low End |
High End |
|
|
|
Net income for period |
$ 4,250 |
$ 7,250 |
Plus: |
|
|
Depreciation and Amortization |
30,000 |
32,000 |
Funds From Operations (FFO) |
34,250 |
39,250 |
Plus: Acquisition transaction costs |
2,250 |
2,750 |
Modified Funds From Operations (MFFO) |
$ 36,500 |
$ 42,000 |
|
|
|
Earnings per share (dilutive) |
$ 0.08 |
$ 0.14 |
FFO per share (dilutive) |
$ 0.68 |
$ 0.78 |
MFFO per share (dilutive) |
$ 0.73 |
$ 0.83 |
ROIC plans to target cash dividends on its common stock during
2012, equivalent to approximately 70%- 80% of FFO. ROIC's estimates
are based on numerous critical assumptions, including, but not
limited, completing approximately $250 million of shopping center
investments during 2012. ROIC management will discuss its
estimates and underlying assumptions on the company's February 23,
2012 conference call (see information below). ROIC's guidance
is a forward-looking statement and is subject to risks and other
factors described elsewhere in this press release.
CONFERENCE CALL
ROIC will conduct a conference call and audio webcast to discuss
its quarterly results on February 23, 2012 at 12:00 p.m. Eastern
Time. Those interested in participating in the conference call
should dial (877) 312-8783 (domestic), or (408) 940-3874
(international) at least ten minutes prior to the scheduled start
of the call. When prompted, provide the Conference ID: 41312151. A
live webcast will also be available in listen-only mode at
http://www.roicreit.com/. The conference call will be recorded and
available for replay beginning at 3:00 p.m. Eastern Time on
February 23, 2012 and will be available until 11:59 p.m. Eastern
Time on March 1, 2012. To access the conference call recording,
dial (855) 859-2056 (domestic), or (404) 537-3406 (international)
and use the Conference ID: 41312151. The conference call will also
be archived on http://www.roicreit.com/ for approximately 90
days.
ABOUT RETAIL OPPORTUNITY INVESTMENTS
CORP.
Retail Opportunity Investments Corp. (Nasdaq:ROIC) is a fully
integrated, self-managed real estate investment trust. The
Company specializes in the acquisition, ownership and management of
necessity-based community and neighborhood shopping centers,
anchored by national or regional supermarkets and drugstores. The
Company's property portfolio includes 34 shopping centers
encompassing approximately 3.8 million square feet. Additional
information is available at www.roicreit.net.
The Retail Opportunity Investments Corp. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=6855
When used herein, the words "believes," "anticipates,"
"projects," "should," "estimates," "expects," and similar
expressions are intended to identify forward-looking statements
with the meaning of that term in Section 27A of the Securities Act
of 1933, as amended, and in Section 21F of the Securities and
Exchange Act of 1934, as amended. Certain statements contained
herein may constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of
1995. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of ROIC to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such factors include, among others, risks
associated with the timing of and costs associated with property
improvements, financing commitments and general competitive
factors. Additional information regarding these and other factors
is described in ROIC's filings with the SEC, including its most
recent Annual Report on Form 10-K.
RETAIL OPPORTUNITY
INVESTMENTS CORP. |
CONSOLIDATED BALANCE
SHEETS |
|
|
December 31, 2011 |
December 31, 2010 |
ASSETS |
|
|
Real Estate Investments: |
|
|
Land |
$ 167,191,883 |
$ 85,473,305 |
Building and improvements |
413,640,527 |
187,259,539 |
|
580,832,410 |
272,732,844 |
Less: accumulated depreciation |
14,451,032 |
3,078,160 |
|
566,381,378 |
269,654,684 |
Mortgage notes receivable |
10,000,000 |
57,778,044 |
Investment in and advances to unconsolidated
joint ventures |
26,242,514 |
16,779,355 |
Real Estate Investments, net |
602,623,892 |
344,212,083 |
Cash and cash equivalents |
34,317,588 |
84,736,410 |
Restricted cash |
1,230,808 |
2,838,261 |
Tenant and other receivables |
6,895,806 |
2,055,881 |
Deposits |
500,000 |
1,500,000 |
Acquired lease intangible asset, net of
accumulated amortization |
32,024,153 |
17,672,608 |
Prepaid expenses |
672,679 |
798,655 |
Deferred charges, net of accumulated
amortization |
15,342,132 |
9,576,904 |
Other |
825,569 |
801,700 |
Total assets |
$ 694,432,627 |
$ 464,192,502 |
|
|
|
LIABILITIES AND EQUITY |
|
|
Liabilities: |
|
|
Credit facilities |
$ 110,000,000 |
$ -- |
Mortgage notes payable |
59,905,964 |
42,417,100 |
Acquired lease intangibles liability, net of
accumulated amortization |
46,700,620 |
20,996,167 |
Accounts payable and accrued expenses |
7,475,283 |
4,889,350 |
Tenants' security deposits |
1,552,630 |
859,537 |
Other liabilities |
18,309,076 |
4,506,778 |
Total liabilities |
243,943,573 |
73,668,932 |
Commitments and Contingencies |
-- |
-- |
|
|
|
Equity: |
|
|
Preferred stock, $.0001 par value 50,000,000
shares authorized; none issued and outstanding |
-- |
-- |
Common stock, $.0001 par value 500,000,000
shares authorized; and 49,375,738 and 41,638,100 shares issued and
outstanding at December 31, 2011 and 2010 |
4,938 |
4,164 |
Additional paid‑in‑capital |
484,194,434 |
403,915,775 |
Accumulated deficit |
(19,617,877) |
(12,880,840) |
Accumulated other comprehensive loss |
(14,094,830) |
(517,918) |
Total Retail Opportunity Investments Corp.
stockholders' equity |
450,486,665 |
390,521,181 |
Noncontrolling interests |
2,389 |
2,389 |
Total equity |
450,489,054 |
390,523,570 |
Total liabilities and
equity |
$ 694,432,627 |
$ 464,192,502 |
|
|
RETAIL
OPPORTUNITY INVESTMENTS CORP. |
CONSOLIDATED
STATEMENTS OF OPERATIONS |
|
|
For the Three
Months Ended |
For the Year
Ended |
|
December 31,
2011 |
December 31,
2010 |
December 31,
2011 |
December 31,
2010 |
Revenues |
|
|
|
|
Base rents |
$ 13,140,344 |
$ 5,299,741 |
$ 39,581,142 |
$ 12,381,427 |
Recoveries from tenants |
3,302,406 |
1,238,562 |
10,247,715 |
2,878,582 |
Mortgage interest |
204,561 |
432,606 |
1,908,655 |
1,068,960 |
Total revenues |
16,647,311 |
6,970,909 |
51,737,512 |
16,328,969 |
|
|
|
|
|
Operating expenses |
|
|
|
|
Property operating |
3,120,245 |
1,487,923 |
8,403,771 |
2,847,702 |
Property taxes |
1,460,903 |
751,701 |
5,022,544 |
1,697,200 |
Depreciation and amortization |
6,602,806 |
3,160,285 |
21,264,172 |
6,080,571 |
General & Administrative Expenses |
2,547,417 |
2,034,257 |
9,801,233 |
8,381,358 |
Acquisition transaction costs |
515,304 |
1,157,089 |
2,290,838 |
2,635,675 |
Total operating
expenses |
14,246,675 |
8,591,255 |
46,782,558 |
21,642,506 |
|
|
|
|
|
Operating income (loss) |
2,400,636 |
(1,620,346) |
4,954,954 |
(5,313,537) |
Non-operating income (expenses) |
|
|
|
|
Interest expense and other finance
expenses |
(2,492,459) |
(247,289) |
(6,225,084) |
(324,126) |
Gain on bargain purchase |
-- |
2,216,824 |
9,449,059 |
2,216,824 |
Equity in earnings from unconsolidated joint
ventures |
320,747 |
38,013 |
1,458,249 |
38,013 |
Interest Income |
4,654 |
172,360 |
19,143 |
1,108,507 |
Other Income |
-- |
1,873,398 |
-- |
1,873,398 |
|
|
|
|
|
Net Income (Loss) Attributable to
Retail Opportunity Investments Corp. |
$ 233,578 |
$ 2,432,960 |
$ 9,656,321 |
$ (400,921) |
Basic and diluted per
share: |
$ 0.01 |
$ 0.06 |
$ 0.23 |
$ (0.01) |
Dividends per common
share |
$ 0.12 |
$ 0.06 |
$ 0.39 |
$ 0.18 |
|
|
CALCULATION OF FUNDS
FROM OPERATIONS |
(unaudited) |
|
|
For the Three
Months Ended |
For the Year
Ended |
|
December 31,
2011 |
December
31, 2010 |
December
31, 2011 |
December 31,
2010 |
|
|
|
|
|
Net income (Loss) for period |
$ 233,578 |
$ 2,432,960 |
$ 9,656,321 |
$ (400,921) |
Plus: Real property depreciation |
3,040,218 |
1,069,772 |
9,460,303 |
2,347,536 |
Amortization of tenant improvements and
allowances |
977,998 |
500,471 |
2,931,160 |
710,573 |
Amortization of deferred leasing costs |
3,225,622 |
1,613,855 |
10,993,941 |
3,046,274 |
Funds from operations |
$ 7,477,416 |
$ 5,617,058 |
$ 33,041,725 |
$ 5,703,462 |
Plus: Acquisition transaction costs |
515,304 |
1,157,089 |
2,290,838 |
2,635,675 |
Modified funds from operations |
$ 7,992,720 |
$ 6,774,147 |
$ 35,332,563 |
$ 8,339,137 |
|
|
|
|
|
Net Cash Provided by (Used in): |
|
|
|
|
|
|
|
|
|
Operating Activities |
$ 3,462,969 |
$ 2,301,893 |
$ 17,286,197 |
$ 2,305,270 |
Investing Activities |
$ (19,875,614 ) |
$ (93,287,337) |
$ (225,154,948) |
$ (290,775,946) |
Financing Activities |
$ 42,469,799 |
$ (5,001,518) |
$ 157,449,929 |
$ (10,033,740) |
ROIC computes FFO in accordance with the "White Paper" on FFO
published by NAREIT, which defines FFO as net income attributable
to common shareholders (determined in accordance with GAAP)
excluding gains or losses from debt restructuring and sales of
property and impairments, plus real estate related depreciation and
amortization, and after adjustments for partnerships and
unconsolidated joint ventures. FFO as defined by ROIC may not be
comparable to similarly titled items reported by other real estate
investment trusts due to possible differences in the application of
the NAREIT definition used by such REITs. In addition,
ROIC calculates modified FFO, by adding acquisition transaction
costs associated with business combinations which have been
expensed in accordance with GAAP to FFO as defined above. For the
three months ended December 31, 2011 and 2010, ROIC expensed
$515,304 and $1,157,089, respectively relating to real estate
acquisitions. For the year ended December 31, 2011 and 2010, ROIC
expensed $2,290,838 and $2,635,675, respectively relating to real
estate acquisitions. The table above provides a reconciliation of
net income applicable to stockholders in accordance with GAAP to
FFO and modified FFO for the three and twelve months ended December
31, 2011 and 2010.
CONTACT: Liz Coughlin, Investor Relations
914-620-2702
lcoughlin@roireit.net
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