Reconciliation of non-GAAP financial measures,
including FFO, Adjusted FFO, Property NOI, EBITDA and Adjusted
EBITDA are included in the accompanying financial tables.
Wheeler Real Estate Investment Trust, Inc.
(NASDAQ:WHLR) (“Wheeler” or the “Company”) today reported operating
and financial results for its year ended December 31, 2016.
2016 Fourth Quarter Highlights (all
comparisons to the same prior year period unless otherwise
noted)
- Total revenue from continuing operations increased 30.3% or
$2.8 million.
- Property Net Operating Income (“NOI”) from continuing
operations increased by 31.6% or $2.0 million.
- Adjusted Funds from Operations ("AFFO") of $0.02 per share of
the Company's common stock, $0.01 par value per share ("Common
Stock") and common unit ("Operating Partnership Unit" or "OP Unit")
in our operating partnership, Wheeler REIT, L.P. (the "Operating
Partnership").
- Average rental rate increase on renewals signed during the
quarter was 3.92%.
- Occupancy rate of 94.0% at December 31, 2016, compared to
94.2% at December 31, 2015.
- For the three month period, the Company declared monthly cash
dividends of approximately $0.0175 per share. On an annualized
basis, this amounted to a dividend of $0.21 per Common Stock share
and OP Unit, or a 12.4% dividend yield based on the
December 30, 2016 closing price of $1.70 per share.
- During the three months ended December 31, 2016, $14.4 million
of net proceeds were raised in the Series D Cumulative Convertible
Preferred Stock ("Series D Preferred Stock") offering.
- Completed the acquisition of nine properties totaling $115
million.
- Added 12th state, Pennsylvania, to the portfolio.
2016 Year-to-Date Highlights (all
comparisons to prior year unless otherwise noted)
- Total revenue from continuing operations increased by 59.9% or
$16.5 million for the year ended December 31, 2016.
- NOI from continuing operations increased by 64.9% to
approximately $30.2 million for the year ended December 31,
2016.
- During the year, the Company completed the acquisition of an
additional 1,760,850 square feet of gross leasable area.
- AFFO of $0.12 per Common Stock share and OP Unit.
- As of December 31, 2016, Wheeler’s property portfolio
included 64 operating properties with a gross leasable area of
4,906,511 square feet, 8 undeveloped properties totaling
approximately 71 acres of land, one redevelopment property and its
corporate office building. As of December 31, 2015, the
Company owned 42 properties with a gross leasable area of 3,151,358
square feet, 9 undeveloped properties totaling approximately 81
acres of land, one redevelopment property and its corporate office
building.
- Average rental rate increase on renewals signed during the year
was 4.9%.
- Increased credit facility with KeyBank National Association to
$75 million. The facility includes a provision that allows for
expansion of the facility under certain conditions to a maximum of
$100 million through syndication with other lenders.
- Other income increased 116.9% to $2.1 million for the year
ended December 31, 2016 as a result of development fees and leasing
commissions on non-REIT properties.
Jon S. Wheeler, Chairman and Chief Executive
Officer, commented, “2016 was an exceptional year for us on
multiple fronts. We acquired twenty-three grocery-anchored
properties for an aggregate purchase price of $186 million
representing a weighted average cap rate of 8.3%. We expanded the
portfolio geographically and added 1.76 million square feet of
gross leasable area, now owning 74 properties and 4.6 million
square feet in 12 states.
"Most importantly, we executed on our 2016 goal of
achieving a run-rate of $0.21 per share in AFFO, in line with our
Common Stock dividend. Management’s efforts to reduce general and
administrative costs, increase value at the property level and
acquire accretive acquisitions resulted in coverage of the dividend
with pro forma 4Q16 AFFO for the first time in the Company’s
history. We feel poised for continued success in 2017 and look
forward to sharing more information about our outlook and guidance
for the year on the call tomorrow morning."
2016 Fourth Quarter Financial
Review
- For the fourth quarter of 2016, total revenue from continuing
operations increased by approximately 30.3% to $12.0 million,
compared with total revenue from continuing operations of $9.2
million for the same prior year period.
- Net loss attributable to Wheeler Common Stock shareholders for
the three months ended December 31, 2016 was $6.2 million, or
$0.09 per basic and diluted share, compared to a net loss of $2.7
million or $0.04 per basic and diluted share, during the same 2015
period. The increase in net loss for the three months ended
December 31, 2016 was primarily due to a $1.9 million increase in
preferred stock dividends, a $1.0 million increase in interest
expense, and the $2.1 million gain on disposal of properties that
occurred in 2015. These amounts were partially offset by the
incremental NOI derived from 2016 retail property
acquisitions.
- Wheeler reported Funds From Operations (FFO) available to
Common Stock shareholders and holders of OP Units for the three
months ended December 31, 2016 of $(1.0) million, or $(0.01)
per share of Common Stock and OP Unit, compared to $0.5 million, or
$0.01 per share of Common Stock and OP Unit for the prior year
period.
- AFFO for the three months ended December 31, 2016 was $1.5
million, or $0.02 per share of Common Stock and OP Unit, compared
to $1.9 million, or $0.03 per Common Stock share and OP Unit for
the same period of the prior year.
- NOI from continuing operations increased by 31.6% to $8.2
million for the three months ended December 31, 2016, as
compared to NOI from continuing operations of $6.2 million for the
prior year period.
- Adjusted Earnings Before Interest, Taxes, Depreciation and
Amortization (“Adjusted EBITDA”) was $6.4 million for the three
months ended December 31, 2016, as compared to $4.7 million of
Adjusted EBITDA for the three months ended December 31,
2015.
- During the three months ended December 31, 2016, the Company
recorded $363 thousand in interest income on the notes receivable
and $64 thousand in development fees, net, attributable to Sea
Turtle Marketplace ("Sea Turtle Development").
2016 Year-to-Date Financial
Review
- For the year ended December 31, 2016, total revenue from
continuing operations increased by approximately 59.9% to $44.2
million, compared with total revenue from continuing operations of
$27.6 million for the same prior year period.
- NOI from continuing operations increased by 64.9% to $30.2
million for the year ended December 31, 2016, as compared to
NOI from continuing operations of $18.3 million for the year ended
December 31, 2015.
- Net loss attributable to Wheeler Common Stock shareholders for
the year ended December 31, 2016 was $15.9 million, or $0.24
per basic and diluted share, compared to a net loss of $103.8
million, or $2.67 per basic and diluted share, for the year ended
December 31, 2015. The decrease in net loss for the year ended
December 31, 2016 was primarily due to the reduction of
preferred stock dividends, the one-time $72.6 million deemed
dividend related to beneficial conversion feature of preferred
stock that occurred in the third quarter 2015, and the incremental
NOI derived from the property acquisitions occurring subsequent to
December 31, 2015. These amounts were partially offset by
additional depreciation, amortization and interest expense.
- Wheeler reported FFO available to Common Stock shareholders and
holders of OP Units for the year ended December 31, 2016 of
$3.4 million, or $0.05 per share of Common Stock and OP Unit,
compared to $(8.1) million, or $(0.19) per share of Common Stock
and OP Unit for the year ended December 31, 2015.
- AFFO for the year ended December 31, 2016 was $8.7
million, or $0.12 per share of Common Stock and OP Unit, compared
to $0.8 million, or $0.02 per share of Common Stock and OP Unit for
the year ended December 31, 2015.
- Adjusted EBITDA was $24.5 million for the year ended
December 31, 2016, as compared to $14.3 million of Adjusted
EBITDA for the year ended December 31, 2015.
- During the year ended December 31, 2016, the Company recorded
$657 thousand in interest income on the notes receivable, $234
thousand in development fees, and $184 thousand in commissions,
net, on Sea Turtle Development.
Acquisition Activity
- On April 12, 2016, the Company completed its acquisition
of 14 retail shopping centers located in Georgia and South Carolina
(collectively the “A-C Portfolio”) for an aggregate purchase price
of $71.00 million, paid through a combination of cash, debt and the
issuance of 888,889 OP Units in the Operating Partnership.
Collectively, the A-C Portfolio properties total 605,358 square
feet in leaseable space, and were 92% leased as of the acquisition
date by 77 primarily retail tenants. Each property is
anchored by either a Bi-Lo, Harris Teeter or Piggly Wiggly grocery
store.
- On November 10, 2016, we completed our acquisition of Berkley
Shopping Center, a 47,945 square foot shopping center located in
Norfolk, Virginia ("Berkley") from a related party for a contract
price of $4.18 million. Berkley was 100% leased as of the
acquisition date and is anchored by a Farm Fresh grocery store. We
acquired Berkley from a related party through a combination of cash
and the issuance of 221,476 OP Units in the Operating
Partnership.
- On November 10, 2016, we completed our acquisition of Sangaree
Plaza and Tri-County Plaza, a 66,948 and 67,577 square foot
shopping centers, respectively located in Summerville, South
Carolina and Royston, Georgia (collectively "Sangaree/Tri-County"),
from a related party for a total contract price of $10.77 million.
Sangaree/Tri-County was 95.2% leased as of the acquisition date and
are anchored by Bi-Lo grocery store. We acquired
Sangaree/Tri-County from a related party through a combination of
cash and the issuance of 122,250 OP Units in the Operating
Partnership.
- On November 15, 2016, the Company completed its acquisition of
Riverbridge Shopping Center ("Riverbridge"), a 91,188 square foot
shopping center located in Carollton, Georgia for a contract price
of $7.00 million. Riverbridge was 98.5% leased as of the
acquisition date and is anchored by Ingles. The Company acquired
Riverbridge through a combination of cash and debt.
- On December 7, 2016, the Company completed the acquisition of
Laburnum Square, a 109,405 square foot shopping center located in
Richmond, Virginia ("Laburnum") for a contract price of $10.50
million, paid through a combination of cash and debt. Laburnum was
96.9% leased as of the acquisition date and is anchored by
Kroger.
- On December 12, 2016, the Company completed the acquisition of
Franklin Village, a 151,673 square foot shopping center located in
Kittanning, Pennsylvania ("Franklin") for a contract price of
$13.10 million, paid through a combination of cash and debt.
Franklin was 98.0% leased as of the acquisition date and is
anchored by Shop ‘n Save.
- On December 16, 2016, the Company completed the acquisition of
Village at Martinsville, a 297,950 square foot shopping center
located in Martinsville, Virginia ("Martinsville") for a contract
price of $23.53 million, paid through a combination of cash and
debt. Martinsville was 97.0% leased as of the acquisition date and
is anchored by Kroger.
- On December 20, 2016, the Company completed the acquisition of
New Market Crossing, a 116,976 square foot shopping center located
in Mt. Airy, North Carolina ("New Market") for a contract price of
$9.00 million, paid through a combination of cash and debt. New
Market was 93% leased as of the acquisition date and is anchored by
Lowes Food Store.
- On December 21, 2016, the Company completed the acquisition of
Rivergate Shopping Center, a 205,810 square foot shopping center
located in Macon, Georgia ("Rivergate") for a contract price of
$37.25 million, paid through a combination of cash and debt.
Rivergate was 96.0% leased as of the acquisition date and is
anchored by Publix.
Leasing Review
- For the three months ended December 31, 2016, the Company
executed twenty-nine renewals totaling 137,572 square feet at a
weighted-average increase of $0.38 per square foot, representing an
increase of 3.92% over prior rates.
- For the year ended December 31, 2016, the Company executed
sixty-nine renewals totaling 286,263 square feet at a
weighted-average increase of $0.52 per square foot, representing an
increase of 4.90% over prior rates.
- For the three months ended December 31, 2016, Wheeler
signed nine new leases totaling approximately 56,914 square feet
with a weighted-average rate of $8.53 per square foot.
- For the year ended December 31, 2016, Wheeler signed
forty-seven new leases totaling approximately 148,328 square feet
with a weighted-average rate of $12.00 per square foot.
- Approximately 7.17% of Wheeler’s gross leasable area is subject
to leases that expire during the year ending December 31, 2016.
Based on recent market trends, the Company believes that tenants
will renew these leases at amounts and terms comparable to existing
lease agreements.
- Same-store NOI year-over-over growth for the three months ended
December 31, 2016, was (4.1%) on a GAAP basis and (5.2%) on a cash
basis. The same-store pool comprises the 1.7 million square feet
that the Company owned as of January 1, 2015. Same-store results
were driven by a 25 basis point increase in rental income, 33.6%
decrease in tenant reimbursements and other income, offset by an
18.8% decrease in property operating expenses.
- Same-store NOI year-over-over growth for the year ended
December 31, 2016, was 3.7% on a GAAP basis and 2.8% on a cash
basis. Same-store results were driven by a 2.3% increase in rental
income, a 5.3% decrease in property operating expenses, and offset
by a 3.8% decrease in tenant reimbursements and other revenue.
Balance Sheet Summary
- The Company’s cash and cash equivalents decreased to $4.9
million at December 31, 2016, compared to $10.5 million at
December 31, 2015.
- Wheeler’s net investment properties as of December 31,
2016 (including assets held for sale) were valued at $389.1
million, as compared to $240.0 million as of December 31,
2015.
- The Company’s total debt was $315.0 million (including debt
associated with assets held for sale) at December 31, 2016,
compared to $191.3 million at December 31, 2015. Wheeler’s
weighted-average interest rate and term of its debt (including debt
associated with assets held for sale) was 4.34% and 7.23 years,
respectively, at December 31, 2016, compared to 4.71% and 7.60
years, respectively, at December 31, 2015.
- During the year, the Company entered into an $11.0 million note
receivable for the partial funding of Sea Turtle Development and a
$1.0 million note receivable in consideration for the sale of 10.39
acres of land owned by the Company. The notes are collateralized by
a 2nd deed of trust on the property and accrue interest at 12%
annually. The Company earns 8% cash interest, with 4% accruing
until maturity of the loan.
One-for-Eight Reverse Stock
Split
- The Company's Board of Directors has approved a reverse stock
split of Wheeler's outstanding shares of Common Stock at a ratio of
one-for-eight. The reverse stock split is scheduled to take
effect at about 5:00 p.m. Eastern Time on March 31, 2017 (the
“Effective Time”). At the Effective Time, every eight issued and
outstanding shares of Common Stock of the Company will be converted
into one share of Common Stock of the Company. In addition, at the
Effective Time, the number of authorized shares of Common Stock
will also be reduced on a one-for-eight basis. The par value of
each share of Common Stock will remain unchanged. Trading in
Wheeler's Common Stock on a split adjusted basis is expected to
begin at the market open on April 3, 2017. Wheeler's Common Stock
will continue trading on the NASDAQ under the symbol “WHLR” but
will be assigned a new CUSIP number.
- As a result of the reverse stock split, the number of
outstanding shares of Wheeler’s Common Stock will be reduced from
approximately 68,030,549 to approximately 8,503,819. Concurrently,
the authorized number of shares of Common Stock will be reduced
from 150,000,000 to 18,750,000. No fractional shares will be
issued in connection with the reverse stock split. Instead,
Computershare, Wheeler’s transfer agent will aggregate all
fractional shares that otherwise would have been issued as a result
of the reverse stock split and those shares will be sold into the
market. Shareholders who would otherwise hold a fractional share of
Wheeler’s Common Stock will receive a cash payment from the net
proceeds of the sale in lieu of such fractional share. In addition,
the reverse stock split will effect a reduction in the number of
shares of Common Stock issuable upon the exercise or conversion, as
applicable, of the Company’s warrants, Series B Convertible
Preferred Stock (“Series B Preferred Stock”), Series D Preferred
Stock and convertible debt outstanding immediately prior to the
effectiveness of the reverse stock split, with corresponding
increases in the exercise and conversion prices, as applicable, of
such warrants, Series B Preferred Stock, Series D Preferred Stock
and convertible debt.
- The reverse stock split will apply to all of Wheeler’s
authorized and outstanding shares of Common Stock as of the
Effective Time. Stockholders of record will be receiving
information from Computershare, regarding their stock ownership
following the reverse stock split and cash in lieu of fractional
share payments, if applicable. Stockholders who hold their shares
in brokerage accounts or “street name” are not required to take any
action in connection with the reverse stock split. The reverse
stock split will also apply to the Operating Partnership Units, and
all outstanding and authorized Operating Partnership Units will be
reduced on the same one-for-eight basis as the Common Stock.
No fractional Operating Partnership Units will be issued as a
result of the reverse stock split and Operating Partnership Unit
holders will receive cash in lieu for their fractional Operating
Partnership Units, at the same rate as Common Stock holders receive
for fractional shares of Common Stock.
Dividend Distribution
- For the three months ended December 31, 2016, the Company
declared approximately $3.9 million in dividend payments for Common
Stock shareholders and holders of OP units.
- For the three months ended December 31, 2016, the Company
declared approximately $2.3 million in dividends to the Series A,
Series B and Series D Preferred Stock shareholders.
- For the year ended December 31, 2016, the Company declared
approximately $15.3 million in dividend payments for Common Stock
shareholders and holders of OP units.
- For the year ended December 31, 2016, the Company declared
approximately $4.3 million in dividends to the Series A, Series B
and Series D Preferred Stock shareholders.
Dividend Payout Schedule
Amended
- Effective April 1, 2017 the Company’s Board of Directors has
approved a change in the Company’s Common Stock dividend payment
schedule such that future dividends will be paid quarterly
commencing in July 2017 to shareholders of record on June 30, 2017.
Giving effect to the reverse stock split, the distribution rate
will be multiplied by 8, or $0.42 per share on a quarterly basis.
Expected record and payment dates for the next four quarters are
set out in the table below:
|
Record
date |
|
|
Payable
date |
|
|
Amount |
|
|
|
|
|
|
|
|
|
June 30, 2017 |
|
|
July 15, 2017 |
|
|
$0.42 |
|
|
|
|
|
|
|
|
|
September 29, 2017 |
|
|
October 15, 2017 |
|
|
$0.42 |
|
|
|
|
|
|
|
|
|
December 29, 2017 |
|
|
January 15, 2018 |
|
|
$0.42 |
|
|
|
|
|
|
|
|
|
March 30, 2018 |
|
|
April 15, 2018 |
|
|
$0.42 |
|
|
|
|
|
|
|
|
2017 Outlook and
GuidanceManagement will discuss its outlook for 2017 and
establish Full-Year and First Quarter Core FFO and AFFO per
split-adjusted share guidance on the earnings call (February 28,
2017) at 10:00 AM ET.
Conference Call Dial-in and Webcast
Information:The dial-in numbers are:Live Participant
Dial-In (Toll-Free): 877-407-3101 Live Participant Dial-In
(International): 201-493-6789
The conference call will also be webcast. To listen
to the call, please go to the Investor Relations section of
Wheeler’s website at www.whlr.us, or click on the following link:
http://whlr.equisolvewebcast.com/q4-2016.
Supplemental InformationFurther
details regarding Wheeler Real Estate Investment Trust, Inc.’s
operations and financials for the year ended December 31,
2016, including a supplemental presentation, are available through
the Company’s website by visiting www.whlr.us.
About Wheeler Real Estate Investment Trust,
Inc.Headquartered in Virginia Beach, VA, Wheeler Real
Estate Investment Trust, Inc. is a fully-integrated, self-managed
commercial real estate investment company focused on acquiring and
managing income-producing retail properties with a primary focus on
grocery-anchored centers. Wheeler’s portfolio contains
well-located, potentially dominant retail properties in secondary
and tertiary markets that generate attractive, risk-adjusted
returns, with a particular emphasis on grocery-anchored retail
centers. For additional information about the Company, please
visit: www.whlr.us.
Financial InformationA copy of
Wheeler’s Annual Report on Form 10-K, which includes the Company’s
consolidated financial statements and management’s discussion &
analysis of financial condition and results of operations, 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, AFFO, Pro Forma AFFO, Property NOI, EBITDA and
Adjusted EBITDA are non-GAAP financial measures within the meaning
of the rules of the Securities and Exchange Commission. Wheeler
considers FFO, AFFO, Pro Forma AFFO, Property NOI, EBITDA and
Adjusted EBITDA to be important supplemental measures 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 and gains and
losses from property dispositions, the Company believes that 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 the
closest GAAP measurement, 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 AFFO, which is a
non-GAAP financial measure, to exclude such items. Management
believes that reporting AFFO and Pro Forma AFFO 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. Management also believes that Property NOI,
EBITDA and Adjusted EBITDA represent important supplemental
measures for securities analysts, investors and other interested
parties, as they are often used in calculating net asset value,
leverage and other financial metrics used by these parties in the
evaluation of REITs.
Forward-Looking StatementThis
press release may contain “forward-looking” statements as defined
in the Private Securities Litigation Reform Act of 1995. When the
Company uses words such as “may,” “will,” “intend,” “should,”
“believe,” “expect,” “anticipate,” “project,” “estimate” or similar
expressions that do not relate solely to historical matters, it is
making forward-looking statements. Forward-looking statements are
not guarantees of future performance and involve risks and
uncertainties that may cause the actual results to differ
materially from the Company’s expectations discussed in the
forward-looking statements. The Company’s expected results may not
be achieved, and actual results may differ materially from
expectations. Specifically, the Company’s statements regarding: (i)
the future generation of financial returns from the acquisition of
‘necessity based’ retail focused properties; (ii) the Company’s
ability to complete futureacquisitions of properties; (iii) the
Company's expectation to maintain and/or increase its historical
occupancy rates; (iv) the Company’s expectation that tenants will
renew leases at amounts and terms comparable to existing lease
agreements; (v) the Company's ability to maintain and/or increase
rent spreads; (vi) the Company's anticipated ability to effectuate
the reverse stock split; (vii) the anticipated implementation of
the Company’s acquisition strategy; and (viii) the anticipated
ability to produce returns and growth for the Company and its
shareholders are forward-looking statements. 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. In addition, this press release states
that the Company’s quarterly dividend rate on the Company’s common
stock is $0.42 per share. A possible implication of this
statement is that the Company will continuously pay quarterly
dividends on the Company’s common stock of $0.42 per share, or
$1.68 per share per year in the future. The Company’s
dividend rates are set and may be reset from time to time by its
Board of Directors. The Company’s Board of Directors will
consider many factors when setting dividend rates, including the
Company’s historical and projected income, normalized funds from
operations, the then current and expected needs and availability of
cash to pay the Company’s obligations, distributions which may be
required to be paid to maintain the Company’s tax status as a real
estate investment trust and other factors deemed relevant by the
Board of Directors in its discretion. Accordingly, future
dividend rates may be increased or decreased and there is no
assurance as to the rate at which future dividends will be
paid. For these reasons, among others, investors are
cautioned not to place undue reliance upon any forward-looking
statements in this press release.
Additional factors are discussed in the Company's
filings with the U.S. Securities and Exchange Commission, which are
available for review at www.sec.gov. The Company undertakes no
obligation to publicly revise these forward-looking statements to
reflect events or circumstances that arise after the date
hereof.
Wheeler Real Estate Investment Trust, Inc. and
Subsidiaries |
Consolidated Statements of
Operations |
|
|
Three Months EndedDecember
31, |
|
Years EndedDecember
31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
REVENUE: |
|
|
|
|
|
|
|
Rental
revenues |
$ |
9,377,123 |
|
|
$ |
6,810,000 |
|
|
$ |
33,164,924 |
|
|
$ |
20,553,870 |
|
Asset
management fees |
231,517 |
|
|
123,173 |
|
|
854,857 |
|
|
588,990 |
|
Commissions |
130,420 |
|
|
54,692 |
|
|
963,936 |
|
|
361,984 |
|
Tenant
reimbursement and other income |
2,288,773 |
|
|
2,245,735 |
|
|
9,176,691 |
|
|
6,110,614 |
|
Total Revenue |
12,027,833 |
|
|
9,233,600 |
|
|
44,160,408 |
|
|
27,615,458 |
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
Property
operations |
3,399,475 |
|
|
2,832,261 |
|
|
11,898,190 |
|
|
8,351,456 |
|
Non-REIT
management and leasing services |
215,488 |
|
|
175,647 |
|
|
1,567,128 |
|
|
1,174,833 |
|
Depreciation and amortization |
5,330,609 |
|
|
5,160,298 |
|
|
20,636,940 |
|
|
16,882,462 |
|
Provision
for credit losses |
228,614 |
|
|
28,713 |
|
|
424,925 |
|
|
243,029 |
|
Corporate
general & administrative |
3,633,901 |
|
|
2,800,761 |
|
|
9,924,361 |
|
|
13,415,961 |
|
Total Operating Expenses |
12,808,087 |
|
|
10,997,680 |
|
|
44,451,544 |
|
|
40,067,741 |
|
Operating Loss |
(780,254 |
) |
|
(1,764,080 |
) |
|
(291,136 |
) |
|
(12,452,283 |
) |
Interest
income |
390,559 |
|
|
5,009 |
|
|
691,937 |
|
|
118,747 |
|
Interest
expense |
(3,554,669 |
) |
|
(2,593,300 |
) |
|
(13,356,111 |
) |
|
(9,043,761 |
) |
Net Loss from Continuing Operations Before Income
Taxes |
(3,944,364 |
) |
|
(4,352,371 |
) |
|
(12,955,310 |
) |
|
(21,377,297 |
) |
Income
tax expense |
(107,464 |
) |
|
— |
|
|
(107,464 |
) |
|
— |
|
Net Loss from Continuing Operations |
(4,051,828 |
) |
|
(4,352,371 |
) |
|
(13,062,774 |
) |
|
(21,377,297 |
) |
Discontinued Operations |
|
|
|
|
|
|
|
Income
from discontinued operations |
20,996 |
|
|
151,698 |
|
|
136,459 |
|
|
499,781 |
|
Gain on
disposal of properties |
(535 |
) |
|
2,104,114 |
|
|
688,289 |
|
|
2,104,114 |
|
Net Income from Discontinued Operations |
20,461 |
|
|
2,255,812 |
|
|
824,748 |
|
|
2,603,895 |
|
Net Loss |
(4,031,367 |
) |
|
(2,096,559 |
) |
|
(12,238,026 |
) |
|
(18,773,402 |
) |
Less: Net
income (loss) attributable to noncontrolling interests |
(267,777 |
) |
|
78,571 |
|
|
(1,035,456 |
) |
|
(1,252,723 |
) |
Net Loss Attributable to Wheeler REIT |
(3,763,590 |
) |
|
(2,175,130 |
) |
|
(11,202,570 |
) |
|
(17,520,679 |
) |
Preferred
stock dividends |
(2,449,759 |
) |
|
(511,300 |
) |
|
(4,713,169 |
) |
|
(13,627,532 |
) |
Deemed
dividend related to beneficial conversion feature of preferred
stock |
— |
|
|
— |
|
|
— |
|
|
(72,644,506 |
) |
Net Loss Attributable to Wheeler REIT Common
Shareholders |
$ |
(6,213,349 |
) |
|
$ |
(2,686,430 |
) |
|
$ |
(15,915,739 |
) |
|
$ |
(103,792,717 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per
share from continuing operations (Basic and Diluted) |
$ |
(0.09 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.25 |
) |
|
$ |
(2.73 |
) |
Income
per share from discontinued operations |
0.00 |
|
|
0.03 |
|
|
0.01 |
|
|
0.06 |
|
|
$ |
(0.09 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.24 |
) |
|
$ |
(2.67 |
) |
|
|
|
|
|
|
|
|
Weighted-average number of shares: |
|
|
|
|
|
|
|
Basic and
Diluted |
67,981,896 |
|
|
66,189,261 |
|
|
67,362,991 |
|
|
38,940,463 |
|
Wheeler Real Estate Investment Trust, Inc. and
Subsidiaries |
Consolidated Balance Sheets |
|
|
|
December 31, |
|
|
2016 |
|
2015 |
ASSETS: |
|
|
|
|
Investment properties, net |
|
$ |
388,880,290 |
|
|
$ |
238,764,631 |
|
Cash and
cash equivalents |
|
4,863,372 |
|
|
10,477,576 |
|
Restricted cash |
|
9,652,178 |
|
|
7,592,984 |
|
Rents and
other tenant receivables, net |
|
3,983,949 |
|
|
2,970,380 |
|
Related
party receivable |
|
1,456,131 |
|
|
482,320 |
|
Notes
receivable |
|
12,000,000 |
|
|
— |
|
Goodwill |
|
5,485,823 |
|
|
5,485,823 |
|
Assets
held for sale |
|
365,880 |
|
|
1,692,473 |
|
Above
market lease intangibles, net |
|
12,962,169 |
|
|
6,517,529 |
|
Deferred
costs and other assets, net |
|
49,396,543 |
|
|
35,259,526 |
|
|
|
|
|
|
Total Assets |
|
$ |
489,046,335 |
|
|
$ |
309,243,242 |
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
Loans
payable, net |
|
$ |
305,972,679 |
|
|
$ |
184,629,082 |
|
Liabilities associated with assets held for sale |
|
1,350,000 |
|
|
1,992,318 |
|
Below
market lease intangible, net |
|
12,680,405 |
|
|
7,721,335 |
|
Accounts
payable, accrued expenses and other liabilities |
|
11,320,614 |
|
|
7,533,769 |
|
Total Liabilities |
|
331,323,698 |
|
|
201,876,504 |
|
|
|
|
|
|
Commitments and contingencies |
|
— |
|
|
— |
|
Series D
Cumulative Convertible Preferred Stock (no par value, 4,000,000 and
0 shares authorized, 2,237,000 and 0 shares issued and
outstanding, respectively; $55.93 million aggregate
liquidation preference) |
|
52,530,051 |
|
|
— |
|
|
|
|
|
|
EQUITY: |
|
|
|
|
Series A
Preferred Stock (no par value, 4,500 shares authorized, 562 shares
issued and outstanding) |
|
452,971 |
|
|
452,971 |
|
Series B
Convertible Preferred Stock (no par value, 5,000,000 and 3,000,000
shares authorized, 1,871,244 and 729,119 shares issued and
outstanding, respectively; $46.78 million and $18.23 million
aggregate liquidation preference, respectively) |
|
40,732,621 |
|
|
17,085,147 |
|
Common
Stock ($0.01 par value, 150,000,000 and 150,000,000 shares
authorized, 68,030,549 and 66,259,673 shares issued and
outstanding, respectively) |
|
680,305 |
|
|
662,596 |
|
Additional paid-in capital |
|
223,344,937 |
|
|
220,370,984 |
|
Accumulated deficit |
|
(170,377,414 |
) |
|
(140,306,846 |
) |
Total
Shareholders' Equity |
|
94,833,420 |
|
|
98,264,852 |
|
|
|
|
|
|
Noncontrolling interests |
|
10,359,166 |
|
|
9,101,886 |
|
|
|
|
|
|
Total Equity |
|
105,192,586 |
|
|
107,366,738 |
|
|
|
|
|
|
Total Liabilities and Equity |
|
$ |
489,046,335 |
|
|
$ |
309,243,242 |
|
|
|
|
|
|
Wheeler Real Estate Investment Trust, Inc. and
Subsidiaries |
Reconciliation of Funds From Operations
(FFO) |
|
Years Ended December 31, |
|
|
Same Stores |
|
New Stores |
|
Total |
|
Year Over Year Changes |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
$ |
|
% |
Net
loss |
|
$ |
(10,449,484 |
) |
|
$ |
(13,921,009 |
) |
|
$ |
(1,788,542 |
) |
|
$ |
(4,852,393 |
) |
|
$ |
(12,238,026 |
) |
|
$ |
(18,773,402 |
) |
|
$ |
6,535,376 |
|
|
34.81 |
% |
Depreciation of real estate assets from continuing operations |
|
7,068,209 |
|
|
9,548,148 |
|
|
13,568,731 |
|
|
7,334,314 |
|
|
20,636,940 |
|
|
16,882,462 |
|
|
3,754,478 |
|
|
22.24 |
% |
Depreciation of real estate assets from discontinued
operations |
|
— |
|
|
510,818 |
|
|
— |
|
|
69,073 |
|
|
— |
|
|
579,891 |
|
|
(579,891 |
) |
|
(100.00 |
)% |
Depreciation of real estate assets |
|
7,068,209 |
|
|
10,058,966 |
|
|
13,568,731 |
|
|
7,403,387 |
|
|
20,636,940 |
|
|
17,462,353 |
|
|
3,174,587 |
|
|
18.18 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
sale of discontinued operations |
|
(688,289 |
) |
|
(2,104,114 |
) |
|
— |
|
|
— |
|
|
(688,289 |
) |
|
(2,104,114 |
) |
|
1,415,825 |
|
|
67.29 |
% |
FFO |
|
$ |
(4,069,564 |
) |
|
$ |
(5,966,157 |
) |
|
$ |
11,780,189 |
|
|
$ |
2,550,994 |
|
|
$ |
7,710,625 |
|
|
$ |
(3,415,163 |
) |
|
$ |
11,125,788 |
|
|
325.78 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
Same Stores |
|
New Stores |
|
Total |
|
Year Over Year Changes |
|
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
|
$ |
|
% |
Net
loss |
|
$ |
(3,675,960 |
) |
|
$ |
(905,502 |
) |
|
$ |
(355,407 |
) |
|
$ |
(1,191,057 |
) |
|
$ |
(4,031,367 |
) |
|
$ |
(2,096,559 |
) |
|
$ |
(1,934,808 |
) |
|
(92.28 |
)% |
Depreciation of real estate assets from continuing operations |
|
1,614,715 |
|
|
2,129,878 |
|
|
3,715,894 |
|
|
3,030,420 |
|
|
5,330,609 |
|
|
5,160,298 |
|
|
170,311 |
|
|
3.30 |
% |
Depreciation of real estate assets from discontinued
operations |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
% |
Depreciation of real estate assets |
|
1,614,715 |
|
|
2,129,878 |
|
|
3,715,894 |
|
|
3,030,420 |
|
|
5,330,609 |
|
|
5,160,298 |
|
|
170,311 |
|
|
3.30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on
sale of discontinued operations |
|
535 |
|
|
(2,104,114 |
) |
|
— |
|
|
— |
|
|
535 |
|
|
(2,104,114 |
) |
|
2,104,649 |
|
|
100.03 |
% |
FFO |
|
$ |
(2,060,710 |
) |
|
$ |
(879,738 |
) |
|
$ |
3,360,487 |
|
|
$ |
1,839,363 |
|
|
$ |
1,299,777 |
|
|
$ |
959,625 |
|
|
$ |
340,152 |
|
|
35.45 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wheeler Real Estate Investment Trust, Inc. and
Subsidiaries |
Reconciliation of Adjusted Funds From
Operations (AFFO) |
|
|
Three Months EndedDecember
31, |
|
Years EndedDecember
31, |
|
2016 |
|
2015 (3) |
|
2016 |
|
2015 (3) |
Net loss |
$ |
(4,031,367 |
) |
|
$ |
(2,096,559 |
) |
|
$ |
(12,238,026 |
) |
|
$ |
(18,773,402 |
) |
Depreciation of real estate assets from continuing
operations |
5,330,609 |
|
|
5,160,297 |
|
|
20,636,940 |
|
|
16,882,462 |
|
Depreciation of real estate assets from discontinued
operations |
— |
|
|
— |
|
|
— |
|
|
579,891 |
|
Depreciation of real estate assets |
5,330,609 |
|
|
5,160,297 |
|
|
20,636,940 |
|
|
17,462,353 |
|
Loss (gain) on sale of discontinued operations |
535 |
|
|
(2,104,114 |
) |
|
(688,289 |
) |
|
(2,104,114 |
) |
Total FFO |
1,299,777 |
|
|
959,624 |
|
|
7,710,625 |
|
|
(3,415,163 |
) |
Preferred stock dividends |
(2,449,759 |
) |
|
(511,300 |
) |
|
(4,713,169 |
) |
|
(13,627,532 |
) |
Preferred stock accretion adjustments |
161,178 |
|
|
88,525 |
|
|
416,598 |
|
|
8,925,221 |
|
FFO available to common shareholders and common
unitholders |
(988,804 |
) |
|
536,849 |
|
|
3,414,054 |
|
|
(8,117,474 |
) |
Acquisition costs |
1,114,440 |
|
|
703,659 |
|
|
2,028,742 |
|
|
3,871,037 |
|
Capital related costs |
203,015 |
|
|
207,584 |
|
|
513,562 |
|
|
2,655,474 |
|
Other non-recurring and non-cash expenses (1) |
157,361 |
|
|
203,944 |
|
|
663,618 |
|
|
770,757 |
|
Share-based compensation |
872,660 |
|
|
191,000 |
|
|
1,454,410 |
|
|
547,000 |
|
Straight-line rent |
(162,822 |
) |
|
(68,843 |
) |
|
(385,965 |
) |
|
(270,873 |
) |
Loan cost amortization |
661,235 |
|
|
252,190 |
|
|
2,125,582 |
|
|
1,300,901 |
|
Above (below) market lease amortization |
(39,838 |
) |
|
53,678 |
|
|
29,371 |
|
|
616,665 |
|
Perimeter legal accrual |
— |
|
|
5,478 |
|
|
— |
|
|
133,282 |
|
Accrued interest income |
(120,987 |
) |
|
— |
|
|
(415,025 |
) |
|
— |
|
Recurring capital expenditures and tenant improvement
reserves |
(245,326 |
) |
|
(221,400 |
) |
|
(759,900 |
) |
|
(658,500 |
) |
AFFO |
$ |
1,450,934 |
|
|
$ |
1,864,139 |
|
|
$ |
8,668,449 |
|
|
$ |
848,269 |
|
|
|
|
|
|
|
|
|
Weighted Average Common Shares |
67,981,896 |
|
|
66,189,261 |
|
|
67,362,991 |
|
|
38,940,463 |
|
Weighted Average Common Units |
5,946,188 |
|
|
4,058,398 |
|
|
5,513,296 |
|
|
3,863,339 |
|
Total Common Shares and Units |
73,928,084 |
|
|
70,247,659 |
|
|
72,876,287 |
|
|
42,803,802 |
|
FFO per Common Share and Common Units |
$ |
(0.01 |
) |
|
$ |
0.01 |
|
|
$ |
0.05 |
|
|
$ |
(0.19 |
) |
AFFO per Common Share and Common Units |
$ |
0.02 |
|
|
$ |
0.03 |
|
|
$ |
0.12 |
|
|
$ |
0.02 |
|
Pro forma AFFO per Common Share and Common Units (2) |
$ |
0.05 |
|
|
|
|
$ |
0.21 |
|
|
|
(1) Annual other non-recurring expenses are
detailed in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included in our December 2016
Annual Report on Form 10-K.(2) Pro forma AFFO assumes the following
transactions had occurred on January 1, 2016: (i) the A-C
Portfolio, Sangaree Plaza, Tri-County Plaza, Berkley Shopping
Center, Riverbridge Shopping Center, Laburnum Square, Franklin
Village, Village at Martinsville, New Market Crossing, and
Rivergate Shopping Center acquisitions; the sales of
Starbucks/Verizon; and the Series B and D Preferred Stock capital
raises. Adjustments also include $46 thousand bad debt
expense for six months for Career Point and otherwise a 0.5% bad
debt reserve based on NOI, $60 thousand a month in development
fees, 15% pre-tax profit on non-reit business, and adjustments for
seasonal expenses. Additionally, we excluded all
non-recurring expenses detailed in “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” included
in our December 2016 Annual Report on Form 10-K, and any additional
Common Stock and common units issued during the year ended December
31, 2016 were outstanding for the entire period. The Pro forma AFFO
is being presented solely for purposes of illustrating the
potential impact of these transactions as if they occurred on
January 1, 2016, based on information currently available to
management, and is not necessarily indicative of what actual
results would have been had the transactions referred to above
occurred on January 1, 2016.(3) We did not provide Pro Forma AFFO
per common share and common unit for 2015 as we consider it not
meaningful to the 2016 presentation.
Wheeler Real Estate Investment Trust, Inc. and
Subsidiaries |
Reconciliation of Property Net Operating
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Years Ended |
December 31, |
December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Property Revenues |
$ |
11,590,957 |
|
|
$ |
9,055,735 |
|
|
$ |
42,097,531 |
|
|
$ |
26,664,484 |
|
Property Expenses |
3,399,475 |
|
|
2,832,261 |
|
|
11,898,190 |
|
|
8,351,456 |
|
Property
Net Operating Income |
8,191,482 |
|
|
6,223,474 |
|
|
30,199,341 |
|
|
18,313,028 |
|
Asset Management and
Commission Revenue |
361,937 |
|
|
177,865 |
|
|
1,818,793 |
|
|
950,974 |
|
Other Non-property
Income |
74,939 |
|
|
— |
|
|
244,084 |
|
|
— |
|
Other
Income |
436,876 |
|
|
177,865 |
|
|
2,062,877 |
|
|
950,974 |
|
Non-REIT management and
leasing services |
215,488 |
|
|
175,647 |
|
|
1,567,128 |
|
|
1,174,833 |
|
Depreciation and
amortization |
5,330,609 |
|
|
5,160,298 |
|
|
20,636,940 |
|
|
16,882,462 |
|
Provision for credit
losses |
228,614 |
|
|
28,713 |
|
|
424,925 |
|
|
243,029 |
|
Corporate general &
administrative |
3,633,901 |
|
|
2,800,761 |
|
|
9,924,361 |
|
|
13,415,961 |
|
Total
Other Operating Expenses |
9,408,612 |
|
|
8,165,419 |
|
|
32,553,354 |
|
|
31,716,285 |
|
Interest income |
390,559 |
|
|
5,009 |
|
|
691,937 |
|
|
118,747 |
|
Interest expense |
(3,554,669 |
) |
|
(2,593,300 |
) |
|
(13,356,111 |
) |
|
(9,043,761 |
) |
Net Loss from
Continuing Operations Before Income Taxes |
(3,944,364 |
) |
|
(4,352,371 |
) |
|
(12,955,310 |
) |
|
(21,377,297 |
) |
Income tax expense |
(107,464 |
) |
|
— |
|
|
(107,464 |
) |
|
— |
|
Net Loss from
Continuing Operations |
(4,051,828 |
) |
|
(4,352,371 |
) |
|
(13,062,774 |
) |
|
(21,377,297 |
) |
Discontinued
Operations |
|
|
|
|
|
|
|
Income
from discontinued operations |
20,996 |
|
|
151,698 |
|
|
136,459 |
|
|
499,781 |
|
Gain
(loss) on disposal of properties |
(535 |
) |
|
2,104,114 |
|
|
688,289 |
|
|
2,104,114 |
|
Net Income from
Discontinued Operations |
20,461 |
|
|
2,255,812 |
|
|
824,748 |
|
|
2,603,895 |
|
Net
Loss |
$ |
(4,031,367 |
) |
|
$ |
(2,096,559 |
) |
|
$ |
(12,238,026 |
) |
|
$ |
(18,773,402 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wheeler Real Estate Investment Trust, Inc. and
Subsidiaries |
Reconciliation of Earnings Before Interest,
Taxes, Depreciation and Amortization - EBITDA |
|
|
|
Three Months Ended |
|
Years Ended |
December 31, |
December 31, |
|
2016 |
|
2015 |
|
2016 |
|
2015 |
Net Loss |
$ |
(4,031,367 |
) |
|
$ |
(2,096,559 |
) |
|
$ |
(12,238,026 |
) |
|
$ |
(18,773,402 |
) |
Add back:
Depreciation and amortization (1) |
5,290,771 |
|
|
5,213,975 |
|
|
20,666,311 |
|
|
18,079,018 |
|
Interest
Expense (2) |
|
3,568,053 |
|
|
|
2,618,384 |
|
|
|
13,425,458 |
|
|
|
9,758,842 |
|
Income
taxes |
|
107,464 |
|
|
— |
|
|
|
107,464 |
|
|
— |
|
EBITDA |
|
4,934,921 |
|
|
|
5,735,800 |
|
|
|
21,961,207 |
|
|
|
9,064,458 |
|
Adjustments
for items affecting comparability: |
|
|
|
|
|
|
|
Acquisition costs |
1,114,440 |
|
|
703,659 |
|
|
2,028,742 |
|
|
3,871,037 |
|
Capital
related costs |
203,015 |
|
|
207,584 |
|
|
513,562 |
|
|
2,655,474 |
|
Other
non-recurring expenses (3) |
157,361 |
|
|
203,944 |
|
|
663,618 |
|
|
770,757 |
|
Gain on
disposal of properties |
|
535 |
|
|
(2,104,114 |
) |
|
(688,289 |
) |
|
(2,104,114 |
) |
Adjusted
EBITDA |
$ |
6,410,272 |
|
|
$ |
4,746,873 |
|
|
$ |
24,478,840 |
|
|
$ |
14,257,612 |
|
|
(1) Includes above (below) market lease amortization and amounts
associated with assets held for sale.(2) Includes loan cost
amortization and amounts associated with assets held for sale.(3)
Annual other non-recurring expenses are detailed in "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included in our December 2016 Annual Report on Form
10-K.
Wheeler Real Estate Investment Trust, Inc.
Wilkes Graham
Chief Financial Officer
(757) 627-9088 / wilkes@whlr.us
Laura Nguyen
Director of Investor Relations
(757) 627-9088 / laura@whlr.us
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