LA JOLLA, Calif., Aug. 15, 2017 /PRNewswire/ -- Reven Housing
REIT, Inc. (the "Company", "Reven Housing", "RVEN") (NASDAQ: RVEN),
an owner and operator of single-family residential properties,
today reported financial results for the second quarter ended
June 30, 2017.
Second Quarter Highlights
- Reported net loss of $289,884, or
$(0.03) per share, as compared to a
net loss of $270,362, or $(0.04) per share, in the prior year period
- Increased Core FFO to $188,035,
or $0.02 per share, from $73,473, or $0.01
per share, in the prior year period due to the acquisition of 227
single-family homes in the last 12 months
- Increased rental income by 45.6% to $2.03 million from $1.4
million in the prior year period due to the acquisition of
227 single family homes in the last 12 months
- Achieved portfolio occupancy of 97.5%
- Acquired 68 single family homes in Birmingham, Alabama for an average price of
$77,100 per home
- Sold one property for a gain of $36,823
Year-to-Date Highlights
- Reported net loss of $654,562, or
$(0.06) per share, compared to a net
loss of $648,242, or $(0.09) per share, in the prior year period
- Increased Core FFO to $175,739
from $109,199 in the prior year
period
- Increased rental revenue to $3.8
million from $2.8 million due
to the acquisition of 227 single family homes over the last 12
months
- Achieved portfolio occupancy of 97.5%
- Acquired 132 single family homes in Atlanta, Georgia, Birmingham, Alabama, and Memphis Tennessee for approximately
$10.0 million
- Sold two properties for a gain of $75,796
Chad Carpenter, Chief Executive
Officer of Reven Housing REIT, stated, "We've had a strong first
half of the year, deploying over $10
million of capital into three, high-quality portfolios and
successfully integrating 132 homes on to our growing platform. The
supply and demand dynamics of the SFR industry present a compelling
investment opportunity and our potential to participate in the
institutionalization of our industry is enormous given the
estimated 15 million single-family homes available for rent in the
United States. Our size allows Reven to grow earnings faster
in a consolidating industry; and, we are diligently working toward
finding additional accretive acquisitions and the required capital
to build scale, enhance earnings growth and increase shareholder
value over time."
Second Quarter Financial Results
- For the second quarter ended June 30,
2017, Reven Housing reported rental income growth of 45.6%
to $2.03 million. The main driver for
the year-over-year increase in rental revenue is due to the
acquisition of 227 homes, which brought the Company's portfolio to
754 homes. As of June 30, 2017, the
portfolio was 97.5% occupied which represents a 510 bps increase
from the quarter ended June 30,
2016.
- Net operating income (NOI) from rentals was $1.07 million, or 52.9% of revenue, versus NOI
from rentals of $0.78 million, or
55.9% of revenue, in 2016. The reason for the 300 bps decrease in
NOI margin is primarily due to higher real estate taxes as a
percentage of total income.
- Net loss for the second quarter 2017 was $0.29 million, or ($0.03) per share, compared to a net loss of
$0.27 million, or ($0.04) per share, in the prior year period. Per
share loss decreased while the overall loss widened due to an
increase in the weighted average shares outstanding associated with
the issuance of additional shares during the second half of 2016
associated with the Company's public offering.
Year-to-Date Financial Results
- For the six months ended June 30,
2017, total rental income increased 36% to $3.77 million, due to the increase in rental
homes.
- NOI for the first six months of 2017 was $2.03 million, or 53.8% of rental revenue,
compared to NOI of $1.54 million, or
55.7% of rental revenue, in the prior year period. The 190-bps
reduction in NOI margin was due primarily to higher real estate
taxes as a percentage of rental income.
- Net loss for the six months ended June
30, 2017 was $0.65 million, or
($0.06) per share, compared to a net
loss of $0.65 million, or
($0.09) per share, for the six months
ended June 30, 2016. The decrease in
per share loss while the overall loss was relatively flat is due to
a higher share count associated with the Company's public offering
in 2016.
Operations, Acquisitions and Dispositions
At the end of the second quarter of 2017, Reven Housing REIT
owned 754 homes in major metropolitan areas across the southwest
and southeast regions of the United States. At quarter-end,
the portfolio was 97.5% occupied and had an average monthly rent of
$978.00 per month.
As previously communicated on April
20, Reven purchased a 68-home portfolio located in the
Birmingham, Alabama metropolitan
area. The contract purchase price for the 68 acquired properties
was approximately $5,241,667,
exclusive of closing costs. The Company funded 100% of the purchase
with cash. The acquired properties average 1,297 square feet and
are mostly three-bedroom, 1.5-bath homes. Of the acquired
properties, 62 are currently subject to one-year leases and five
are subject to month-to-month leases.
During the second quarter, Reven sold one single-family home in
Houston, Texas for a gain of
$36,823.
Subsequent Events
On August 1, 2017, the Company
received loans proceeds and issued a promissory note worth
approximately $1.8 million at a fixed
interest rate of 4.5%.
About Reven Housing REIT, Inc.
Reven Housing REIT, Inc. (NASDAQ: RVEN) engages in the
acquisition and ownership of portfolios of occupied single family
rental properties in the United
States. Reven currently owns and operates single family
rental properties in Alabama,
Florida, Georgia, Mississippi, Tennessee and Texas.
For more information, please visit
http://www.revenhousingreit.com/.
Forward-Looking Statements
This press release includes "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995
and other federal securities laws. These forward-looking statements
may include, but are not limited to, statements related to our
expectations regarding the performance of our business, our
financial results, our liquidity and capital resources, and other
non-historical statements. In some cases, you can identify
these forward-looking statements by the use of words such as
"outlook," "believes," "expects," "potential," "continues," "may,"
"will," "should," "could," "seeks," "projects," "predicts,"
"intends," "plans," "estimates," "anticipates" or the negative
version of these words or other comparable words. Such
forward-looking statements are subject to various risks and
uncertainties, including, among others, risks inherent to the
single-family rental industry sector and our business model;
macroeconomic factors beyond our control; competition in
identifying and acquiring our properties; competition in the
leasing market for quality residents; increasing property taxes;
homeowners' association ("HOA") and insurance costs; our dependence
on third parties for key services; risks related to evaluation of
properties; poor resident selection and defaults and non-renewals
by our residents; performance of our information technology
systems; our ability to raise the capital required to acquire
additional properties; risks related to our indebtedness and those
other risk factors described under Part I. Item 1A. "Risk Factors,"
in our Annual Report on Form 10-K for the year ended December 31, 2016, as such factors may be updated
from time to time in our periodic filings with the Securities and
Exchange Commission. These factors should not be construed as
exhaustive and should be read in conjunction with the other
cautionary statements that are included in the Annual Report on
Form 10-K and in our other periodic filings. The forward-looking
statements speak only as of the date made, and we expressly
disclaim any obligation or undertaking to publicly update or review
any forward-looking statement, whether as a result of new
information, future developments or otherwise, except to the extent
otherwise required by law.
Use of Non-GAAP Financial Measures
In this release, we refer to net operating income, or NOI, and
Funds From Operations, or FFO, each of which is a non-GAAP
financial measure that we believe, when considered with our
financial statements determined in accordance with GAAP, is helpful
to investors in understanding our performance. We define NOI
as total revenue less property operating and maintenance and real
estate taxes. NOI is a non-GAAP measurement that excludes
acquisition costs, depreciation and amortization, general and
administration, legal and accounting, and interest expenses.
We define Core FFO as net income, computed in accordance with GAAP,
excluding gains (or losses) from sales of, and impairment losses
recognized with respect to, depreciable property, depreciation and
amortization, acquisition fees and costs, share-based compensation,
non-cash interest expense related to amortization of deferred
financing costs, and certain other non-comparable costs.
We consider NOI and Core FFO to be meaningful financial measures
when considered with our financial statements determined in
accordance with GAAP. We believe NOI is helpful to investors
in understanding the amount of income after operating expenses
which is generated in a given period and we believe Core FFO is
helpful to investors in understanding our performance because it
captures features particular to real estate performance by
recognizing that real estate generally appreciates over time or
maintains residual value to a much greater extent than do other
depreciable assets.
The following is a reconciliation of our NOI to net loss as
determined in accordance with GAAP for the three and six month
periods ended June 30, 2017 and
2016:
|
Three Months ended
June 30,
|
|
Six Months ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Net loss
|
$
(289,884)
|
|
$
(270,362)
|
|
$
(654,562)
|
|
$
(648,242)
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
479,240
|
|
313,508
|
|
920,965
|
|
638,924
|
General and
administration
|
601,067
|
|
479,463
|
|
1,302,398
|
|
980,486
|
Acquisition
costs
|
-
|
|
-
|
|
-
|
|
57,863
|
Interest expense and
other income
|
282,923
|
|
257,092
|
|
458,211
|
|
515,034
|
|
|
|
|
|
|
|
|
Net operating
income
|
$
1,073,346
|
|
$
779,701
|
|
$
2,027,012
|
|
$
1,544,065
|
|
|
|
|
|
|
|
|
Net operating income
as a percentage of total revenue
|
52.9%
|
|
55.9%
|
|
53.8%
|
|
55.7%
|
The following table sets forth a reconciliation of our net loss
as determined in accordance with GAAP and our calculations Core FFO
for the three and six months ended June 30,
2017 and 2016:
|
Three Months ended
June 30,
|
|
Six Months ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
Net loss
|
$
(289,884)
|
|
$
(270,362)
|
|
$
(654,562)
|
|
$
(648,242)
|
|
|
|
|
|
|
|
|
Add back depreciation
and amortization
|
479,240
|
|
313,508
|
|
920,965
|
|
638,924
|
Less gain on sale of
residential property
|
(36,823)
|
|
-
|
|
(75,796)
|
|
-
|
|
|
|
|
|
|
|
|
Funds from (used in)
operations
|
$
152,533
|
|
$
43,146
|
|
$
190,607
|
|
$
(9,318)
|
|
|
|
|
|
|
|
|
Add back noncash
amortization of deferred loan fees
|
35,502
|
|
30,327
|
|
68,119
|
|
60,654
|
Less net casualty
gain
|
-
|
|
-
|
|
(82,987)
|
|
-
|
Add back acquisition
costs
|
-
|
|
-
|
|
-
|
|
57,863
|
|
|
|
|
|
|
|
|
Core funds from (used
in) operations
|
$
188,035
|
|
$
73,473
|
|
$
175,739
|
|
$
109,199
|
NOI and Core FFO should not be considered as alternatives to net
loss or net cash flows from operating activities, as determined in
accordance with GAAP, as indications of our performance or as
measures of liquidity. Nor is NOI or Core FFO necessarily
indicative of cash available to fund future cash needs or
distributions to shareholders. In addition, although we use
NOI and Core FFO for comparability in assessing our performance
against other REITs, not all REITs compute the same non-GAAP
measure of NOI or Core FFO. Accordingly, our basis for
computing this non- GAAP measure may not be comparable with that of
other REITs.
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SOURCE Reven Housing REIT, Inc.