Company to Hold Conference Call this
Morning, May 15, 2014, at 10 a.m. ET
2014 First Quarter Highlights (all
comparisons to the same prior year period)
- Total revenue for the first quarter
2014 increased 126.5% to $3.7 million;
- Funds from Operations (“FFO”) increased
by over $370,900 for the three month period ended March 31,
2014;
- Occupancy rate of 94.2%
- The Company’s Board of Directors
approved the acquisition of Wheeler Development, LLC (“Wheeler
Development”)
- For the three month period, the Company
declared monthly cash dividends of approximately $0.035 per a
share. On an annualized basis, this amounted to a dividend of $0.42
per common share and common unit, or a 9.2% dividend yield based on
the March 31, 2014 closing price of $4.59 per share.
Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLR)
(“Wheeler” or the “Company”), today reported operating and
financial results for its first quarter ended March 31, 2014.
Jon S. Wheeler, Chairman and Chief Executive Officer, commented,
“We are very pleased with our results. We saw substantial increases
in revenue and FFO for the first quarter. We except to continue to
benefit from economies of scale as we grow, as evidenced by general
and administrative expenses decreasing to 22.7% of total revenues
as compared to 36.1% for the same period of the prior year. We feel
that 2014 is off to a great start with the inclusion of Wheeler
Development into the REIT, our capital market activity, and then
ending the quarter securing a $25 million guidance line credit
facility from a well-known leader in the banking community. We are
optimistic that this upward momentum will continue for the
remainder of 2014.”
2014 First Quarter Financial and
Operational Review
- Total revenue for the first quarter of
2014 was $3.7 million, compared to $1.6 million for the prior year
period.
- Wheeler reported FFO for the three
months ended March 31, 2014 of $539,700, or $0.06 per common share
and common unit, compared to $168,800, or $0.03 per common share
and common unit in the prior year comparable period.
- Total Core FFO for the three months
ended March 31, 2014 was approximately $596,700 as compared to
$168,800 for the same period of the prior year.
- Property net operating income (“NOI”)
was $2.7 million for the three months ended March 31, 2014,
compared to $1.3 million for the prior year comparable period.
- Net loss attributable to Wheeler REIT
for common shareholders for the three months ended March 31, 2014
was $1.2 million, or a loss of $0.17 per basic and diluted share,
compared to a net loss of $433,700 or $0.13 per basic and diluted
share, during the comparable 2013 period.
- In January 2014, the Company acquired,
for nominal consideration, Wheeler Development, an entity
wholly-owned by Wheeler’s Chairman and Chief Executive Officer. The
Company believes that this newly created taxable subsidiary
provides the Company with an opportunity to seek new development
and re-development projects that will potentially add value to the
REIT.
2014 First Quarter Leasing
Review
- The Company signed five renewal leases
totaling 7,900 square feet at a weighted average increase of $0.90
per square foot for the three months ended March 31, 2014. Renewals
during the first quarter of 2013 were comprised of three deals
totaling 7,539 square feet with a weighted average decrease of
$0.22 per square foot.
- For the three months ended March 31,
2014, Wheeler signed two new leases totaling approximately 2,486
square feet with a weighted average rate increase of $1.29 per
square foot. No new leases were signed for the three months ended
March 31, 2013.
- Approximately 5.11% of Wheeler’s gross
leasable area or 66,111 square feet is subject to leases that
expire during the twelve months ending March 31, 2015. Based on
recent market trends, the Company believes that these leases will
be renewed at amounts and terms comparable to existing lease
agreements.
Balance Sheet Summary
- Wheeler’s net investment properties
assets as of March 31, 2014 were $101.3 million, as compared to
$101.8 million in net investment properties assets as of December
31, 2013.
- The Company’s total fixed-rate debt was
$96.5 million at March 31, 2014, compared to 94.6 million at
December 31, 2013. Wheeler’s weighted average interest rate and
term of the Company’s fixed-rate debt was 5.39% and 5.24 years,
respectively, at March 31, 2014, compared to 5.31% and 5.61 years,
respectively, at December 31, 2013.
Financing Activity
- In January 2014, the Company closed the
second tranche of an approximate $2.2 million offering and sale of
non-convertible senior notes and warrants to purchase shares of
Wheeler common stock to 14 accredited investors. The notes bear
interest of 9% per annum. The warrants issued permit investors to
purchase an aggregate 227,372 shares of Wheeler common stock at an
exercise price of $4.75 per share. Wheeler completed the initial
portion of this financing in December 2013.
- Subsequent to the end of the first
quarter, the Company announced it has entered into a $25 million
secured guidance line credit facility with KeyBank National
Association. The Company will be able to utilize this credit
facility until December 31, 2015 and expects to use it towards
future acquisitions.
2014 First Quarter Dividend
Distribution
- For the three months ended March 31,
2014, the Company distributed approximately $967,000 to holders of
common shares and common units, as compared to $541,800 for the
same period of the prior year.
- The Company has accrued $40,703 in
quarterly dividends to holders of preferred shares for the three
months ended March 31, 2014.
Conference Call Details
Date/Time: Thursday, May 15, 2014, at 10 a.m. ET
Participant Dial-In Numbers:(United States):
877-407-3101(International): 201-493-6789
Webcast
The call will also be simultaneously webcast over the Internet
via the “Investor Relations” section of Wheeler’s website at
www.whlr.us or by clicking on the conference call link:
http://whlr.equisolvewebcast.com/q1-2014.
Supplemental Information
Further details regarding Wheeler Real Estate Investment Trust,
Inc.’s operations and financials for the period ended March 31,
2014 are available through the Company’s website by visiting
www.whlr.us.
About Wheeler Real Estate Investment
Trust, Inc.
Headquartered in Virginia Beach, VA, the Company specializes in
owning, acquiring, financing, developing, renovating, leasing and
managing income producing assets, such as community centers,
neighborhood centers, strip centers and free-standing retail
properties. Wheeler’s portfolio contains strategically selected
properties, primarily leased by nationally and regionally
recognized retailers of consumer goods and located in the
Northeast, Mid-Atlantic, Southeast and Southwest regions of the
United States. For additional information about the Company, please
visit: www.whlr.us.
Financial Information
A copy of Wheeler’s Quarterly Report on Form 10-Q which includes
the Company’s consolidated financial statements and Management’s
Discussion & Analysis, will be available upon filing via the
U.S. Securities and Exchange Commission website (www.sec.gov) or
through Wheeler’s website at www.whlr.us.
FFO is a non-GAAP financial measure within the meaning of the
rules of the Securities and Exchange Commission. Wheeler considers
FFO to be an important supplemental measure of its operating
performance and believes it is frequently used by securities
analysts, investors and other interested parties in the evaluation
of REITs, many of which present FFO when reporting their results.
FFO is intended to exclude GAAP historical cost depreciation and
amortization of real estate and related assets, which assumes that
the value of real estate assets diminishes ratably over time.
Historically, however, real estate values have risen or fallen with
market conditions. Because FFO excludes depreciation and
amortization unique to real estate, gains and losses from property
dispositions and extraordinary items, it provides a performance
measure that, when compared year-over-year, reflects the impact to
operations from trends in occupancy rates, rental rates, operating
costs, development activities and interest costs, providing
perspective not immediately apparent from net income.
Management believes that the computation of FFO in accordance
with NAREIT’s definition includes certain items that are not
indicative of the operating performance of the Company’s real
estate assets. These items include, but are not limited to,
non-recurring expenses, legal settlements, legal and professional
fees, and acquisition costs. Management uses Core FFO, which is a
non-GAAP financial measure, to exclude such items. Management
believes that reporting Core FFO in addition to FFO is a useful
supplemental measure for the investment community to use when
evaluating the operating performance of the Company on a
comparative basis. A reconciliation of non-GAAP financial measures
is included in the accompanying financial tables.
Forward-Looking
Statement
This press release contains forward-looking statements,
including (i) discussion and analysis of the Company’s financial
condition; (ii) anticipated cost savings from economies of scale;
(iii) the Company’s ability to complete future acquisitions; (iv)
the Company’s ability to obtain sufficient and economical financing
to complete potential acquisitions; (v) the amount of the Company’s
anticipated cash distributions to the Company’s shareholders in the
future; (vi) the anticipated ability of the Company to successfully
utilize Wheeler Development to complete development and
re-development projects; (vii) the anticipated renewals of the
Company’s existing leases; and (viii) other matters. These
forward-looking statements are not historical facts but are the
intent, belief or current expectations of management based on its
knowledge and understanding of our business and industry.
Forward-looking statements are typically identified by the use of
terms such as “may,” “will,” “should,” “potential,” “predicts,”
“anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,”
“estimates,” or the negative of such terms and variations of these
words and similar expressions. These statements are not guarantees
of future performance and are subject to risks, uncertainties and
other factors, some of which are beyond our control, are difficult
to predict and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking
statements.
Forward-looking statements that were true at the time made may
ultimately prove to be incorrect or false. You are cautioned to not
place undue reliance on forward-looking statements, which reflect
management’s view only as of the date of this press release. The
Company undertakes no obligation to update or revise
forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating
results. Factors that could cause actual results to differ
materially from any forward-looking statements made in this press
release include:
- the imposition of federal taxes if the
Company fails to qualify as a REIT in any taxable year or opts to
forego an opportunity to ensure REIT status;
- uncertainties related to the national
economy, the real estate industry in general and in our specific
markets;
- legislative or regulatory changes,
including changes to laws governing REITs;
- adverse economic or real estate
developments in Virginia, Florida, Georgia, South Carolina, North
Carolina, New Jersey, Tennessee, or Oklahoma;
- increases in interest rates and
operating costs;
- inability to obtain necessary outside
financing;
- litigation risks;
- lease-up risks;
- inability to obtain new tenants upon
the expiration of existing leases;
- inability to generate sufficient cash
flows due to market conditions, competition, uninsured losses,
changes in tax or other applicable laws; and
- the need to fund tenant improvements or
other capital expenditures out of operating cash flow.
Wheeler Real Estate Investment Trust
Consolidated Statement of
Operations
Three Months Ended March 31, 2014
2013 REVENUE: Rental revenues $
2,948,810 $ 1,393,032 Other revenues 715,342 224,884
Total Revenue 3,664,152 1,617,916
OPERATING
EXPENSES: Property operations 923,182 300,702 Depreciation and
amortization 1,785,602 648,132 Provision for credit losses - 15,000
Corporate general & administrative 832,318 583,792
Total Operating Expenses 3,541,102 1,547,626
Operating Income 123,050 70,290 Interest expense
(1,368,938) (549,628)
Net Loss (1,245,888) (479,338)
Less: Net loss attributable to noncontrolling interests
(87,252) (45,656)
Net Loss Attributable to Wheeler
REIT (1,158,636) (433,682) Preferred stock dividends
(40,703) -
Net Loss Attributable to Wheeler REIT
Common Shareholders $ (1,199,339) $ (433,682) Loss
per share: Basic and Diluted $ (0.17) $ (0.13)
Weighted-average number of shares: Basic and Diluted 7,185,550
3,301,502
Wheeler Real Estate Investment Trust
Consolidated Balance Sheet
March 31, December 31,
2014 2013 ASSETS: Investment properties, net $
101,254,487 $ 101,772,335 Cash and cash equivalents 2,136,330
1,155,083 Rents and other tenant receivables, net 1,869,008
1,594,864 Deferred costs and other assets, net 19,828,594
20,847,984
Total Assets $ 125,088,419 $
125,370,266
LIABILITIES: Loans payable $ 96,477,256 $
94,562,503 Below market lease intangible, net 2,645,626 3,673,019
Accounts payable, accrued expenses and other liabilities
2,608,844 938,896
Total Liabilities
101,731,726 99,763,457 Commitments and contingencies
- -
EQUITY: Series A preferred stock (no par value,
5,000,000 and 500,000 shares authorized, 1,809 shares issued and
outstanding, respectively) 1,458,050 1,458,050 Common stock ($0.01
par value, 75,000,000 shares authorized, 7,216,238 and 7,121,000
shares issued and outstanding, respectively) 72,162 71,210
Additional paid-in capital 28,563,214 28,169,693 Accumulated
deficit (13,255,297) (11,298,253) Total Shareholders'
Equity 16,838,129 18,400,700 Noncontrolling interests
6,518,564 7,206,109
Total Equity
23,356,693 25,606,809
Total Liabilities and
Equity $ 125,088,419 $ 125,370,266
Wheeler Real Estate Investment
Trust
Funds From Operations (FFO)
Three Months Ended March 31,
Same Stores New Stores Total
Period Over Period Changes 2014
2013 2014 2013
2014 2013 $
% Net income (loss)
$ (663,072)
$ (479,338)
$ (582,816)
$ -
$ (1,245,888)
$ (479,338)
$
(766,550) (159.92%)
Depreciation of real estateassets
513,358 648,132 1,272,244 - 1,785,602 648,132 1,137,470 175.50%
Total FFO
$ (149,714) $
168,794
$ 689,428
$ -
$
539,714
$ 168,794
$ 370,920 219.75%
FFO/Share and Unit
$ (0.02)
$ (0.02)
$ 0.088
$ -
$ 0.06
$ 0.03
$ 0.04
200.00%
Wheeler Real Estate Investment
Trust
Core Funds From Operations (Core
FFO)
Three Months Ended March 31, 2014
2013 Total FFO $ 539,714 $ 168,794 Acquisition fees - -
Legal and accounting costs for acquisitions 57,000 - Total Core FFO
$ 596,714 $ 168,794 Core FFO/Share and Unit $ 0.06 $ 0.03
Wheeler Real Estate Investment Trust,
Inc.Robin HanischCorporate Secretary(757) 627-9088 /
robin@whlr.usorINVESTOR RELATIONS:The
Equity Group Inc.Terry DownsAssociate(212) 836-9615 /
tdowns@equityny.comorAdam PriorSenior Vice President(212) 836-9606
/ aprior@equityny.com
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