INDUS Realty Trust, Inc. (Nasdaq: INDT) (“INDUS” or the
“Company”), a U.S. based industrial/logistics REIT, reported
financial results for the quarter and full year ended December 31,
2022:
2022 Fourth Quarter & Recent
Highlights
- Net income of $1.9 million, or $0.19 per diluted share, for the
2022 fourth quarter compared to net income of $19.6 million, or
$1.94 per diluted share, for the 2021 fourth quarter
- Core Funds from Continuing Operations (“Core FFO from
continuing operations”)1 of $5.3 million, or $0.52 per diluted
share, for the 2022 fourth quarter compared to $3.6 million, or
$0.35 per diluted share, for the 2021 fourth quarter
- Net Operating Income from Continuing Operations (“NOI from
continuing operations”)1 of $10.0 million for the 2022 fourth
quarter compared to $8.7 million for the 2021 fourth quarter
- As of December 31, 2022, stabilized2 portfolio was 98.8%
leased; total in-service portfolio was 97.2% leased
- Executed six leases totaling 543,000 square feet across both
the Company’s portfolio and its acquisitions under contract in the
2022 fourth quarter
- Completed the sale of the Company’s office/flex portfolio for a
sales price of $11.0 million
- Announced a quarterly cash dividend of $0.18 per share of
common stock for the fourth quarter of 2022 which represents a
12.5% increase over the prior quarter
- Subsequent to quarter end, completed the previously disclosed
acquisitions of land parcels in the Orlando, Florida and Lehigh
Valley, Pennsylvania markets for a total purchase price of $19.7
million
- Subsequent to quarter end, entered into a definitive merger
agreement under which affiliates of Centerbridge Partners, L.P.
(“Centerbridge”) and GIC Real Estate, Inc. (“GIC”) have agreed to
acquire all of the outstanding shares of the Company for $67.00 per
share in cash, subject to certain adjustments
Results of Operations
INDUS reported total rental revenue of approximately $12.9
million and $49.2 million for the 2022 fourth quarter and full year
2022, respectively, as compared to approximately $11.2 million and
$40.2 million for the 2021 fourth quarter and full year,
respectively. The 16% increase in rental revenue for the fourth
quarter over the comparable prior year period was primarily due to
property acquisitions in 2022, as well as properties developed and
placed in-service in 2022, the commencement of leases on first
generation space, and to a lesser extent, rent changes on second
generation space. Rental revenue during the 2022 full year period
also benefitted by $0.4 million from a one-time termination fee
related to the early termination of a tenant lease in the third
quarter of 2022.
For the 2022 fourth quarter and full year, INDUS recorded net
income of approximately $1.9 million and $6.1 million,
respectively, as compared to net income of approximately $19.6
million and $14.1 million for the comparable quarter and full year
prior year periods.
Core FFO from continuing operations for the 2022 fourth quarter
and full year increased to approximately $5.3 million and $20.0
million, or $0.52 and $1.94 per diluted share, respectively,
compared to approximately $3.6 million and $12.7 million, or $0.35
and $1.57 per diluted share, for the comparable prior year
periods.
NOI from continuing operations, which is defined as rental
revenue less operating expenses of rental properties and real
estate taxes, increased to approximately $10.0 million and $38.1 in
the 2022 fourth quarter and full year, respectively, from
approximately $8.7 million and $30.0 million in the 2021 fourth
quarter and full year periods. The increases in NOI from continuing
operations are primarily attributable to the same acquisitions and
developments as noted above for rental revenue, offset by a
one-time tax payment expense of approximately $0.3 million in the
2022 fourth quarter related to a previous acquisition.
Cash NOI from continuing operations for the 2022 fourth quarter
and full year increased to approximately $9.2 million and $34.3
million, respectively, as compared to approximately $7.8 million
and $27.7 million for the comparable prior year periods. The
increases in Cash NOI from continuing operations were primarily
attributable to property acquisitions in 2022, properties developed
and placed in-service in 2022, and escalations on existing leases
in the portfolio. Additionally, 2022 NOI from continuing operations
and Cash NOI from continuing operations benefited from the full
year impact of acquisitions and developments that closed or were
placed in service during 2021, slightly offset by the sale of
properties that were sold in 2021 and were not part of discontinued
operations.
General and administrative expenses increased to approximately
$4.1 million and $12.4 million for the 2022 fourth quarter and full
year period, respectively, as compared to approximately $3.8
million and $11.8 million for the comparable prior year periods
primarily due to additional costs related to the Company’s review
of strategic alternatives of approximately $0.8 million in the 2022
fourth quarter and additional compensation costs due to higher
employee head count and incentive compensation expense as compared
to prior periods. These increases were partially offset by a
reduction in expenses related to the Company’s non-qualified
deferred compensation plan due to lower stock market performance in
2022 than in prior year periods.
Interest expense decreased to approximately $1.6 million and
$4.7 million for the 2022 fourth quarter and full year period,
respectively, as compared to approximately $1.7 million and $6.9
million in the 2021 fourth quarter and full year period, primarily
reflecting the reduction in the aggregate debt balance over this
time period and higher capitalized interest related to construction
development activities in 2022. Additionally, the full year 2022
included a gain of approximately $1.2 million from the termination
of several interest rate swap agreements in connection with the
repayment of mortgage debt.
Leasing Activity
During the 2022 fourth quarter, INDUS executed six leases
totaling 543,000 square feet across its portfolio and acquisitions
under contract.
- 127,000 square foot lease extension in the Hartford,
Connecticut market that is expected to commence in 2024. This early
extension is for an additional two years at a starting cash rent
that is 15.9% above the recently executed renewal rate.
- 48,000 square feet across two first generation leases at the
Company’s recently delivered two-building development project in
the Orlando, Florida market (“Landstar Logistics”). With the
addition of these leases, Landstar Logistics is now 49.3%
leased.
- 105,000 square feet across two first generation leases at the
Company’s planned acquisition in the Nashville, Tennessee market,
bringing the project to 100.0% pre-leased prior to closing (see
below section on “Acquisitions Under Contract”).
- 263,000 square foot first generation lease at the Company’s
planned acquisition in the Charleston, South Carolina market,
bringing the building to 100.0% pre-leased prior to closing (see
below section on “Acquisitions Under Contract”).
For the 2022 full year period, INDUS reported the following
second generation leasing metrics3:
Number of Leases
Square Feet
Weighted Avg. Lease Term in
Years
Weighted Avg. Lease Costs PSF
per Year4
Weighted Avg. Rent
Growth5
Straight-line Basis
Cash Basis
New Lease
2
226,615
5.1
$1.42
45.8%
38.4%
Renewal/Extension Leases
5
438,073
2.7
$0.36
31.2%
26.5%
Total /Average
7
664,688
3.5
$0.72
35.1%
29.6%
As of December 31, 2022, INDUS’ 42 buildings aggregated 6.1
million square feet. INDUS’ portfolio percentage leased and
percentage leased of stabilized properties were as follows:
Dec. 31, 2022
Sept. 30, 2022
June 30, 2022
Mar. 31, 2022
Dec. 31, 2021
Percentage Leased
97.2%
97.6%
99.4%
100.0%
98.4%
Percentage Leased – Stabilized
Properties
98.8%
100.0%
100.0%
100.0%
100.0%
Acquisitions Under
Contract
The following is a summary of INDUS’ acquisitions under contract
as of December 31, 2022:
Market
Building Count
Building Size (SF)
Type
Purchase Price (in
millions)
Charleston
1
263,000
Forward (100.0% pre-leased)
$28.0
Nashville6
2
184,000
Forward (100.0% pre-leased)
$28.4
Greenville-Spartanburg
1
284,400
Forward
$28.5
Charlotte
1
231,000
Forward
$21.2
Total Acquisitions Under
Contract
5
962,400
$106.1
The acquisitions under contract are each subject to certain
remaining contingencies. There can be no guarantee that these
transactions will be completed under their current terms,
anticipated timelines, or at all.
Development Activities
As of December 31, 2022, INDUS had one ongoing development
project in the Lehigh Valley (“American Parkway”). The American
Parkway development is a speculative development project consisting
of one building totaling approximately 206,000 square feet.
During the 2022 fourth quarter, INDUS completed the acquisition
of 8 acres of land in the Lehigh Valley for a purchase price of
$6.5 million, before transaction costs (the “Windsor Land”). The
Windsor Land is entitled to support the development of one
industrial/logistics building totaling 91,000 square feet.
Additionally, as of December 31, 2022, INDUS was under contract
to acquire 11 acres of land in the Lehigh Valley, Pennsylvania
market (the “Lehigh Valley Land”), 75 acres of land in the greater
Orlando, Florida market (the “Orlando Land”), and 231 acres of land
in the greater Charlotte, North Carolina market (the “Charlotte
Land”). The Lehigh Valley land is entitled to support the
development of a 90,000 square foot industrial/logistics building
and the Orlando Land is entitled to support the development of
three industrial/logistics buildings totaling 574,000 square feet.
The Charlotte Land currently is undergoing its entitlement
process.
Subsequent to the end of the quarter, INDUS completed its
acquisitions of the Lehigh Valley Land and the Orlando Land, for a
combined purchase price of $19.7 million, before transaction costs.
INDUS remains under contract to purchase the Charlotte Land for a
contractual purchase price of $4.8 million.
Closing on the purchase of Charlotte Land and the commencement,
completion and/or stabilization of any existing or new development
projects are each subject to a number of contingencies. There can
be no guarantee that these transactions and developments will be
completed under their current terms, anticipated timelines, or at
all.
Disposition Activities
During the 2022 fourth quarter, the Company completed the sale
of its office/flex portfolio, including a small storage building
used in the operations of the portfolio (the “Office/Flex
Portfolio”), for a sale price of $11.0 million. The Office/Flex
Portfolio was comprised of eight buildings totaling 193,000 square
feet located in Bloomfield, Connecticut. During 2022, the
Office/Flex Portfolio was reported under Discontinued
Operations.
Additionally, the Company has several agreements in place to
sell undeveloped land parcels in Connecticut and Massachusetts for
total proceeds of approximately $26.7 million. These land sales are
subject to a number of contingencies, including the completion of
due diligence and/or receipt of regulatory approvals by the
purchasers. There can be no guarantee that these transactions will
be completed under their current terms, anticipated timelines, or
at all.
Liquidity & Capital
Resources
During December 2022, the Company completed the second draw
totaling $30.0 million under its Delayed Draw Term Loan facility
(the “DDTL Facility”). As of December 31, 2022, the Company has
drawn $90.0 million under the $150.0 million DDTL Facility.
As of December 31, 2022, the Company maintained approximately
$206.5 million of liquidity which reflects approximately $52.4
million of cash and cash equivalents (including $0.4 million in
restricted cash), $60.0 million of available draws under the
Company’s DDTL Facility and $94.1 million of borrowing capacity
under the revolving credit facility. The Company currently has no
borrowings outstanding under its revolving credit facility,
however, as of December 31, 2022, the revolving credit facility was
used to secure approximately $5.9 million in standby letters of
credit related to INDUS’ development activities. Additionally, the
Company has no floating rate debt outstanding as the Company’s DDTL
Facility, including future available draws, is hedged at a fixed
effective interest rate of 4.15%.
Common Stock Dividend
During the 2022 fourth quarter, INDUS’ board of directors
declared a quarterly cash distribution on its common stock of $0.18
per share, or $0.64 per share on an annualized basis. The 2022
fourth quarter dividend was paid on January 17, 2023 to
stockholders of record on December 30, 2022.
Pending Merger
Transaction
On February 22, 2023, INDUS entered into an Agreement and Plan
of Merger (the “Merger Agreement”) whereby affiliates of
Centerbridge Partners, L.P., a leading global private investment
firm with deep experience in real estate, and GIC Real Estate,
Inc., a global institutional investor, will acquire all outstanding
shares of INDUS’ common stock through a merger transaction (the
“Merger”) in which INDUS will be the surviving entity. Subject to
the terms and conditions set forth in the Merger Agreement, each
share of INDUS’ common stock will be cancelled and converted into
the right to receive an amount in cash equal to $67.00, without
interest, subject to certain adjustments as set forth in the Merger
Agreement. The Merger is expected to close in the summer of 2023,
subject to the satisfaction or waiver of certain closing
conditions, including approval of the Merger by the affirmative
vote of the holders of at least a majority of the outstanding
shares of the INDUS’ common stock entitled to vote on the Merger
and the clearance by the Committee on Foreign Investment in the
United States and the approval by the European Commission under
Council Regulation (EC) No. 139/2004 (as amended). INDUS can
provide no assurances regarding whether the Merger will close when
expected or at all.
About INDUS
INDUS is a real estate business principally engaged in
developing, acquiring, managing and leasing industrial/logistics
properties. INDUS owns 42 industrial/logistics buildings totaling
6.1 million square feet in Connecticut, Pennsylvania, North
Carolina, South Carolina and Florida.
Additional Information and Where to Find It
In connection with the proposed transaction, the Company will
file with the Securities and Exchange Commission (“SEC”) a proxy
statement on Schedule 14A. Promptly after filing its definitive
proxy statement with the SEC, the Company will mail the definitive
proxy statement and a proxy card to each stockholder entitled to
vote at the special meeting relating to the proposed transaction.
INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE
PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO)
AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE TRANSACTION
THAT THE COMPANY FILES WITH THE SEC WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION. The definitive proxy statement, the preliminary proxy
statement and any other documents filed by the Company with the SEC
(when available) may be obtained free of charge at the SEC’s
website at www.sec.gov or by accessing the Investor Relations
section of the Company’s website at https://www.indusrt.com.
Participants in the Solicitation
The Company and its directors and certain of its executive
officers may be deemed to be participants in the solicitation of
proxies from the Company’s stockholders with respect to the
proposed transaction. Information about the Company’s directors and
executive officers and their ownership of the Company’s securities
is set forth in the Company’s proxy statement on Schedule 14A for
its 2022 annual meeting of stockholders, filed with the SEC on
April 27, 2022, and subsequent documents filed with the SEC.
Additional information regarding the identity of participants in
the solicitation of proxies, and a description of their direct or
indirect interests in the proposed transaction, by security
holdings or otherwise, will be set forth in the proxy statement and
other materials to be filed with the SEC in connection with the
proposed transaction when they become available.
Cautionary Statement Regarding Forward Looking
Statements
Some of the statements contained in this release constitute
forward-looking statements within the meaning of the federal
securities laws. Forward-looking statements relate to expectations,
beliefs, projections, future plans and strategies, anticipated
events or trends and similar expressions concerning matters that
are not historical facts. In some cases, you can identify
forward-looking statements by the use of forward-looking
terminology such as “may,” “will,” “should,” “expects,” “intends,”
“plans,” “anticipates,” “believes,” “estimates,” “predicts,” or
“potential” or the negative of these words and phrases or similar
words or phrases which are predictions of or indicate future events
or trends and which do not relate solely to historical matters. You
can also identify forward-looking statements by discussions of
strategy, plans or intentions.
The forward-looking statements contained in this release reflect
the Company’s current views about future events and are subject to
numerous known and unknown risks, uncertainties, assumptions and
changes in circumstances, many of which are beyond the control of
the Company, that may cause actual results and future events to
differ significantly from those expressed in any forward-looking
statement, which risks and uncertainties include, but are not
limited to: the ability to complete the proposed Merger on the
proposed terms or on the anticipated timeline, or at all, including
risks and uncertainties related to securing the necessary
stockholder approval and satisfaction of other closing conditions
to consummate the Merger; the occurrence of any event, change or
other circumstance that could give rise to the termination of the
Merger Agreement relating to the proposed Merger; risks that the
proposed Merger disrupts the Company’s current plans and operations
or diverts the attention of the Company’s management or employees
from ongoing business operations; the risk of potential
difficulties with the Company’s ability to retain and hire key
personnel and maintain relationships with customers and other third
parties as a result of the proposed Merger; the failure to realize
the expected benefits of the proposed Merger; the risk that the
proposed Merger may involve unexpected costs and/or unknown or
inestimable liabilities; the risk that the Company’s business may
suffer as a result of uncertainty surrounding the proposed Merger;
the risk that stockholder litigation in connection with the
proposed Merger may affect the timing or occurrence of the proposed
Merger or result in significant costs of defense, indemnification
and liability; effects relating to the announcement of the Merger
or any further announcements or the consummation of the proposed
Merger on the market price of the Company’s common stock.
While forward-looking statements reflect the Company’s good
faith beliefs, they are not guarantees of future performance or
events. Any forward-looking statement speaks only as of the date on
which it was made. The Company disclaims any obligation to publicly
update or revise any forward-looking statement to reflect changes
in underlying assumptions or factors, of new information, data or
methods, future events or other changes. For a further discussion
of these and other factors that could cause the Company’s future
results to differ materially from any forward-looking statements,
see the section entitled “Risk Factors” in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2021, filed
with the SEC on March 11, 2022, as updated by the Company’s
subsequent periodic reports filed with the SEC.
Note Regarding Non-GAAP Financial Measures:
The Company uses FFO, Core FFO from continuing operations, Core
FFO from continuing operations per share, Adjusted FFO from
continuing operations, NOI from continuing operations, and Cash NOI
from continuing operations, as supplemental non-GAAP performance
measures. Management believes that the use of these measures
combined with net income (loss) (which remains the Company’s
primary measure of performance), improves the understanding of the
Company’s operating results among the investing public and makes
comparisons of operating results to other REITs more
meaningful.
The Company presents a funds from operations metric
substantially similar to funds from operations as calculated in
accordance with standards established by Nareit (“Nareit FFO”).
Nareit FFO is calculated as net income (calculated in accordance
with U.S. GAAP), excluding: (a) depreciation and amortization
related to real estate, (b) gains and losses from the sale of
certain real estate assets, (c) gains and losses from change in
control and (d) impairment write-downs of certain real estate
assets and investments in entities when the impairment is directly
attributable to decreases in the value of depreciable real estate
held by the entity.
The Company defines Core FFO from continuing operations and Core
FFO per share from continuing operations as FFO and FFO per share,
respectively, excluding: (a) discontinued operations, (b) strategic
transaction costs, (c) expense related to the performance of the
non-qualified deferred compensation plan, (d) gains or losses on
insurance recoveries and/or extinguishment of debt or derivative
instruments, (e) change in fair value of financial instruments, and
(f) costs related to the conversion to a REIT . Per share metrics
are calculated as Core FFO from continuing operations for the
period divided by the weighted average diluted share count for the
period.
The Company defines Adjusted FFO from continuing operations as
Core FFO from continuing operations less (a) noncash rental revenue
including straight-line rents, (b) amortization of debt issuance
costs, (c) noncash compensation expenses, (d) non-real estate
depreciation and amortization expense, (e) tenant improvements and
leasing commissions of second generation space and (f) maintenance
capital expenditures needed to maintain the Company’s existing
buildings.
NOI from continuing operations is a non-GAAP measure that
includes the rental revenue and operating expenses and real estate
taxes directly attributable to the Company’s real estate
properties. The Company uses NOI from continuing operations as a
supplemental performance measure because, in excluding income tax
benefit, real estate depreciation and amortization expense, general
and administrative expenses, interest expense, change in fair value
of financial instruments, gains (or losses) on the sale of real
estate assets, impairment of real estate assets, gains (or losses)
on debt extinguishment, investment income and other income, other
expenses and other non-operating items, it provides a performance
measure that, when compared year over year, captures trends in
occupancy rates, rental rates and operating costs. The Company also
believes that NOI from continuing operations will be useful to
investors as a basis to compare its operating performance with that
of other REITs. However, because NOI from continuing operations
excludes depreciation and amortization expense and captures neither
the changes in the value of the Company’s properties that result
from use or market conditions, nor the level of capital
expenditures and leasing commissions necessary to maintain the
operating performance of its properties (all of which have a real
economic effect and could materially impact the Company’s results
from operations), the utility of NOI from continuing operations as
a measure of the Company’s performance is limited. Other equity
REITs may not calculate NOI from continuing operations in a similar
manner and, accordingly, the Company’s NOI from continuing
operations may not be comparable to such other REITs’ NOI from
continuing operations. Accordingly, NOI from continuing operations
should be considered only as a supplement to net income (loss) as a
measure of the Company’s performance. NOI from continuing
operations should not be used as a measure of the Company’s
liquidity, nor is it indicative of funds available to fund the
Company’s cash needs. NOI from continuing operations should not be
used as a substitute for cash flow from operating activities in
accordance with U.S. GAAP.
Cash NOI from continuing operations is a non-GAAP measure that
the Company calculates by adding or subtracting non-cash rental
revenue, including straight-line rental revenue, from NOI from
continuing operations. The Company uses Cash NOI from continuing
operations together with NOI from continuing operations, as
supplemental performance measures. Cash NOI from continuing
operations should not be used as a measure of the Company’s
liquidity, nor is it indicative of funds available to fund the
Company’s cash needs. Cash NOI from continuing operations should
not be used as a substitute for cash flow from operating activities
computed in accordance with U.S. GAAP.
INDUS REALTY TRUST, INC.
Consolidated Statements of
Operations
(dollars and share count in
thousands, except per share data)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31
2022
2021
2022
2021
Rental revenue
$
12,904
$
11,151
$
49,195
$
40,227
Expenses:
Operating expenses of rental
properties
409
858
3,942
4,267
Real estate taxes
2,494
1,628
7,137
5,969
Depreciation and amortization expense
5,069
4,407
18,370
14,455
General and administrative expenses
4,149
3,839
12,387
11,816
Total expenses
12,121
10,732
41,836
36,507
Other income (expense):
Interest expense
(1,556)
(1,717)
(4,734)
(6,877)
Impairment of real estate assets
—
—
—
(3,000)
Change in fair value of financial
instruments
—
—
—
(2,746)
Losses on early extinguishment of debt
—
(2,114)
(653)
(2,114)
Gain on sales of real estate assets
—
22,966
—
24,758
Investment and other income
50
19
245
260
Other expense
—
14
(32)
14
(1,506)
19,168
(5,174)
10,295
Income (loss) from continuing operations
before income taxes
(723)
19,587
2,185
14,015
Income tax (provision) benefit
—
(2)
585
(26)
Income (loss) from continuing
operations
(723)
19,585
2,770
13,989
Gain from discontinued operations
2,503
—
2,706
—
Income from discontinued operations
123
25
634
155
2,626
25
3,340
155
Net income (loss)
$
1,903
$
19,610
$
6,110
$
14,144
Income (loss) from continuing
operations
($
0.07
)
$
1.98
$
0.27
$
1.77
Income from discontinued operations
$
0.26
$
0.00
$
0.33
$
0.02
Net income (loss) per common share -
basic
$
0.19
$
1.98
$
0.60
$
1.79
Income (loss) from continuing
operations
($
0.07
)
$
1.94
$
0.27
$
1.73
Income from discontinued operations
$
0.26
$
0.00
$
0.32
$
0.02
Net income (loss) per common share –
diluted
$
0.19
$
1.94
$
0.59
$
1.75
Weighted average shares outstanding -
basic
10,192
9,920
10,189
7,908
Weighted average shares outstanding -
diluted
10,273
10,131
10,348
8,081
INDUS REALTY TRUST, INC.
Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
December 31, 2022
December 31, 2021
ASSETS
Real estate assets at cost, net
$
489,661
$
387,647
Cash and cash equivalents
52,014
150,263
Restricted cash
358
10,644
Interest rate swap assets
6,971
188
Assets of discontinued operations
29
7,990
Other assets
47,774
33,914
Total assets
$
596,807
$
590,646
LIABILITIES AND STOCKHOLDERS'
EQUITY
Mortgage loans and construction loan, net
of debt issuance costs
$
79,653
$
169,818
Delayed draw term loan, net of debt
issuance costs
88,713
—
Deferred revenue
6,741
7,365
Accounts payable and accrued
liabilities
10,940
9,671
Interest rate swap liabilities
—
3,995
Dividends payable
1,835
1,629
Liabilities of discontinued operations
119
832
Other liabilities
11,537
11,259
Total liabilities
199,538
204,569
Stockholders' equity
Common stock
102
102
Additional paid-in capital
401,370
399,754
Accumulated deficit
(11,486)
(10,869)
Accumulated other comprehensive income
(loss)
7,283
(2,910)
Total stockholders' equity
397,269
386,077
Total liabilities and stockholders'
equity
$
596,807
$
590,646
INDUS REALTY TRUST, INC.
Non-GAAP Reconciliations – Funds
from Operations (“FFO”) and Core FFO
(dollars and share count in
thousands, except per share measures)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2022
20218
2022
20218
Net income (loss):
$
1,903
$
19,610
$
6,110
$
14,144
Exclude:
Depreciation and amortization expense
5,069
4,407
18,370
14,455
FFO adjustments related to discontinued
operations
—
243
236
897
Non-real estate depreciation &
amortization expense
(49)
(25)
(112)
(88)
Gain on sales of real estate assets
—
(22,966)
—
(24,758)
Impairment of real estate assets
—
—
—
3,000
FFO
6,923
1,269
24,604
7,650
Exclude:
Core FFO adjustments related to
discontinued operations7
(2,626)
(268)
(3,576)
(1,052)
Amortization of terminated swap
agreement
—
66
(1,812)
66
General and administrative expenses
related to non-qualified deferred compensation plan performance
272
335
(616)
686
General and administrative expenses
related to strategic transaction costs
774
—
774
—
Change in fair value of financial
instruments
—
—
—
2,746
Losses on early extinguishment of debt
—
2,114
653
2,114
General and administrative expenses
related to REIT conversion
—
63
—
470
Core FFO from continuing
operations
5,343
3,579
20,027
12,680
Exclude:
Noncash rental revenue including
straight-line rents
(776)
(830)
(3,832)
(2,311)
Amortization of debt issuance costs
179
228
898
1,047
Noncash compensation expenses
407
300
1,492
1,110
Non-real estate depreciation and
amortization expense
49
25
112
88
Tenant improvements and leasing
commissions (2nd generation space)
(432)
(1,104)
(1,347)
(2,330)
Maintenance capital expenditures
(98)
(638)
(1,403)
(1,158)
Adjusted FFO from continuing
operations
$
4,672
$
1,560
$
15,947
$
9,126
Weighted average number of shares
outstanding - basic
10,192
9,920
10,189
7,908
Dilutive securities
81
211
159
173
Weighted average number of shares
outstanding – diluted
10,273
10,131
10,348
8,081
Core FFO from continuing
operations/share – diluted
$
0.52
$
0.35
$
1.94
$
1.57
INDUS REALTY TRUST, INC.
Non-GAAP Reconciliations – NOI
and Cash NOI
(dollars in thousands)
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2022
20218
2022
20218
Income (loss) from continuing
operations
$
(723)
$
19,585
$
2,770
$
13,989
Income tax provision (benefit)
—
2
(585)
26
Pretax income (loss) from continuing
operations
(723)
19,587
2,185
14,015
Exclude:
Depreciation and amortization expense
5,069
4,407
18,370
14,455
General and administrative expenses
4,149
3,839
12,387
11,816
Interest expense
1,556
1,717
4,734
6,877
Change in fair value of financial
instruments
—
—
—
2,746
Gain on sales of real estate assets
—
(22,966)
—
(24,758)
Impairment of real estate assets
—
—
—
3,000
Other expense
—
(14)
32
(14)
Losses on early extinguishment of debt
—
2,114
653
2,114
Investment and other income
(50)
(19)
(245)
(260)
NOI from continuing operations
10,001
8,665
38,116
29,991
Noncash rental revenue including
straight-line rents
(776)
(830)
(3,832)
(2,311)
Cash NOI from continuing
operations
$
9,225
$
7,835
$
34,284
$
27,680
____________________________
1 Core FFO, Core FFO from continuing
operations per share, NOI from continuing operations and Cash NOI
from continuing operations are not financial measures in conformity
with generally accepted accounting principles in the United States
of America (“U.S. GAAP”). For additional information see “Note
Regarding Non-GAAP Financial Measures.”
2 Stabilized Properties reflect buildings
that have reached 90% leased or have been in service for at least
one year since development completion or acquisition date,
whichever is earlier.
3 Leasing metrics exclude new and renewal
leases which have an initial term of twelve months or less, as well
as leases for first generation space on properties acquired or
developed by INDUS. Leasing metrics also exclude leases tied to
properties undergoing redevelopment or repositioning.
4 Lease cost per square foot per year
reflects total lease costs (tenants improvements, leasing
commissions and legal costs) per square foot per year of the lease
term. Lease costs exclude any base building improvements.
5 Weighted average rent growth reflects
the percentage change of annualized rental rates between the
previous leases and the current leases. The rental rate change on a
straight-line basis represents average annual base rental payments
on a straight-line basis for the term of each lease including free
rent periods. Cash basis rent growth represents the change in
starting rental rates per the lease agreement on new and renewed
leases signed during the period, as compared to the previous ending
rental rates for that same space. The cash rent growth calculation
excludes free rent periods.
6 In December 2022, INDUS and the seller
of the two-building Nashville forward portfolio executed an
amendment to the Purchase and Sale Agreement which lowered the
purchase price on the portfolio from $31.5 million to $28.4
million.
7 The 2022 fourth quarter and full year
periods include the gain on sale of discontinued operations of
$2,706.
8 The year and three months ended December
31, 2021 includes the results of four office/flex properties that
were sold in 2021 and were not part of discontinued operations.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230306005263/en/
Ashley Pizzo Vice President, Capital Markets &
Investor Relations (212) 218-7914 apizzo@indusrt.com
Jon Clark Executive Vice President, Chief
Financial Officer (860) 286-2419 jclark@indusrt.com
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