PORT WASHINGTON, N.Y.,
Feb. 7, 2019 /PRNewswire/
-- Cedar Realty Trust, Inc. (NYSE: CDR – the "Company") today
reported results for the fourth quarter and full year 2018. Net
income attributable to common shareholders was $0.02 per diluted share for the fourth quarter
and net loss attributable to common shareholders was $(0.13) per diluted share for the full year
2018. Other highlights include:
Highlights
- NAREIT-defined funds from operations (FFO) of $0.13 per diluted share for the quarter and
$0.49 for the year
- Operating funds from operations (Operating FFO) of $0.13 per diluted share for the quarter and
$0.58 for the year
- Signed 44 new and renewal leases for 331,300 square feet in the
quarter and 169 new and renewal leases for 1,370,400 square feet
for the year
- Comparable cash-basis lease spreads of 6.1% for the quarter and
negative (1.4%) for the year
- Total portfolio 91.0% leased and same-property portfolio 91.8%
leased at year-end
- Repurchased 2,774,000 shares of common stock for $9.0 million or $3.25 per share (2,002,000 common shares for
$6.7 million or $3.33 per share subsequent to year-end)
"We continue to advance our ambitious redevelopment plans while
agilely exploiting the public-private market disconnect by selling
lower quality centers and using the proceeds to repurchase our
shares. We expect the combination of executing our long-term
capital allocation strategy with the opportunistic implementation
of our share buy-back will lead to long-term value creation for our
shareholders," commented Bruce
Schanzer, President and Chief Executive Officer.
Financial Results
Net income attributable to common shareholders for the fourth
quarter of 2018 was $1.9 million or
$0.02 per diluted share, compared to
net income of $2.6 million or
$0.03 per diluted share for the same
period in 2017. Net loss attributable to common shareholders for
the full year 2018 was $(10.5)
million or $(0.13) per diluted
share, compared to net loss of $(2.4)
million or $(0.04) per diluted
share for the same period in 2017. The principal differences in the
comparative three-month results are impairment reversals and early
extinguishment of debt costs in 2017. The principal differences in
the comparative full year results are lease termination income,
gain on sales, impairment charges, preferred stock redemption and
early extinguishment of debt costs.
NAREIT-defined FFO for the fourth quarter of 2018 was
$11.7 million or $0.13 per diluted share, compared to $12.2 million or $0.13 per diluted share for the same period in
2017. NAREIT-defined FFO for the full year 2018 was $45.2 million or $0.49 per diluted share, compared to $40.0 million or $0.45 per diluted share for the same period in
2017. Operating FFO for the fourth quarter of 2018 was $11.7 million or $0.13 per diluted share, compared to $12.4 million or $0.14 per diluted share for the same period in
2017. Operating FFO for the full year 2018 was $53.6 million or $0.58 per diluted share, compared to $48.3 million or $0.55 per diluted share for the same period in
2017. The principal differences between Operating FFO and FFO are
preferred stock redemption and early extinguishment of debt
costs.
Portfolio Update
During the fourth quarter of 2018, the Company signed 44 leases
for 331,300 square feet. On a comparable space basis, the Company
leased 290,800 square feet at a positive lease spread of 6.1% on a
cash basis (new leases increased 21.4% and renewals increased
1.0%). During the full year 2018, the Company signed 169 leases for
1,370,400 square feet. On a comparable space basis, the Company
leased 1,304,800 square feet at a negative lease spread of (1.4)%
on a cash basis (renewals decreased (1.7)% and new leases remained
unchanged).
Excluding six strategic leases signed in early 2018, comparable
lease spread for the full year 2018 would have been 4.9% (renewals
increased 4.7% and new leases increased 5.4%). These six strategic
leases consisted of (a) five anchor renewals in the first quarter
of 2018 totaling 303,000 square feet at reduced or flat base rental
rates that the Company proactively renewed with extended rental
terms, and (b) a new lease in the second quarter of 2018 for 29,000
square feet of unconventional retail space in the rear of a
shopping center at a significantly reduced rental rate. These
anchor tenants have good credit and generate high foot traffic at
their respective properties.
Same-property net operating income (NOI) decreased (0.3)% for
the full year 2018 and decreased (3.0)% for the fourth quarter of
2018. Both the full year and quarter results were impacted by two
Bon-Tons vacating and the Company proactively renewing and
extending five anchors at reduced or flat base rental rates.
Additionally, the quarter was impacted by Weiss vacating at the
beginning of the quarter at Oakland Mills and the new grocer not
commencing cash rent until late in the first quarter of 2019, along
with Fallas vacating.
The Company's total portfolio, excluding properties held for
sale, was 91.0% leased at December 31,
2018, compared to 91.6% at September
30, 2018 and 92.9% at December 31,
2017. The Company's same-property portfolio was 91.8% leased
at December 31, 2018, compared to
92.3% at September 30, 2018 and 93.3%
at December 31, 2017. The decreases
in lease percentages are primarily the result of two Bon-Ton spaces
(117,000 square feet) vacating in the second quarter of 2018 and
two Fallas spaces (68,000 square feet) vacating in the fourth
quarter of 2018.
Balance Sheet
Debt
As of December 31, 2018, the
Company had $132.2 million available
under its revolving credit facility and reported net debt to
earnings before interest, taxes, depreciations, and amortization
for real estate (EBITDAre) of 7.8 times.
Equity
On December 18, 2018, the
Company's Board of Directors approved a stock repurchase program,
which authorizes the Company to purchase up to $30.0 million of the Company's common stock in
the open market or through private transactions, subject to market
conditions, from time to time, over the next 12 months. The Company
has repurchased 2,774,000 shares of common stock for $9.0 million or $3.25 per share (2,002,000 common shares for
$6.7 million or $3.33 per share subsequent to year-end).
2019 Guidance
The Company's initial 2019 guidance is as follows:
|
|
Guidance
|
Net income
attributable to common shareholders per diluted share
|
|
$0.02 -
$0.04
|
NAREIT-defined FFO
per diluted share
|
|
$0.43 -
$0.45
|
Operating FFO per
diluted share
|
|
$0.44 -
$0.46
|
The guidance is based, in part, on the following:
- Lease costs required to be expensed beginning in 2019 of
$2.5 to $3.0
million under new accounting standard
- Same-property NOI growth including redevelopment properties of
1% and excluding redevelopments relatively flat
- Development marketing and community outreach costs at urban
properties of $750,000 reflected in
redevelopment NOI
- Increase in general and administrative costs of $1.5 million from additional personnel related to
urban properties and legal expense in connection with the
termination of former Chief Operating Officer
- Decrease in amortization income from intangible lease
liabilities of $2.0 million
(inclusive of $1.5 million related to
terminating a dark anchor in 2018)
- Dispositions of approximately $40
million
The principal difference between NAREIT-defined FFO and
Operating FFO in the above for 2019 is demolition costs related to
redevelopments.
Non-GAAP Financial Measures
NAREIT-defined FFO is a widely recognized supplemental non-GAAP
measure utilized to evaluate the financial performance of a REIT.
The Company considers NAREIT-defined FFO to be an appropriate
measure of its financial 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 other depreciable assets. The Company
also considers Operating FFO to be an additional meaningful
financial measure of financial performance because it excludes
items the Company does not believe are indicative of its core
operating performance, such as acquisition pursuit costs, amounts
relating to early extinguishment of debt and preferred stock
redemption costs, management transition costs and certain
redevelopment costs. The Company believes Operating FFO further
assists in comparing the Company's performance across reporting
periods on a consistent basis by excluding such items.
NAREIT-defined FFO and Operating FFO should be reviewed with GAAP
net income attributable to common shareholders, the most directly
comparable GAAP financial measure, when trying to understand the
Company's operating performance. A reconciliation of net income
(loss) attributable to common shareholders to NAREIT-defined FFO
and Operating FFO for the three months ended and full year ended
December 31, 2018 and 2017 is
detailed in the attached schedule.
EBITDAre is a recognized supplemental non-GAAP financial
measure. The Company presents EBITDAre in accordance with the
definition adopted by NAREIT, which generally defines EBITDAre as
net income plus interest expense, income tax expense, depreciation,
amortization, and impairment write-downs of depreciated property,
plus or minus losses and gains on the disposition of depreciated
property, and adjustments to reflect the Company's share of
EBITDAre of unconsolidated affiliates. The Company believes
EBITDAre provides additional information with respect to the
Company's performance and ability to meet its future debt service
requirements. The Company also considers Adjusted EBITDAre to be an
additional meaningful financial measure of financial performance
because it excludes items the Company does not believe are
indicative of its core operating performance, such as acquisition
pursuit and redevelopment costs. The Company believes Adjusted
EBITDAre further assists in comparing the Company's performance
across reporting periods on a consistent basis by excluding such
items. EBITDAre and Adjusted EBITDAre should be reviewed with GAAP
net income, the most directly comparable GAAP financial measure,
when trying to understand the Company's operating performance.
EBITDAre and Adjusted EBITDAre do not represent cash generated from
operating activities and should not be considered as an alternative
to income from continuing operations or to cash flow from operating
activities. The Company's computation of Adjusted EBITDAre may
differ from the computations utilized by other companies and,
accordingly, may not be comparable to such companies.
Same-property NOI is a widely recognized supplemental non-GAAP
financial measure for REITs. Properties are included in
same-property NOI if they are owned and operated for the entirety
of both periods being compared, except for properties undergoing
significant redevelopment and expansion until such properties have
stabilized, and properties classified as held for sale. Consistent
with the capital treatment of such costs under GAAP, tenant
improvements, leasing commissions and other direct leasing costs
are excluded from same-property NOI. The Company considers
same-property NOI useful to investors as it provides an indication
of the recurring cash generated by the Company's properties by
excluding certain non-cash revenues and expenses, as well as other
infrequent items such as lease termination income which tends to
fluctuate more than rents from year to year. Same property NOI
should be reviewed with consolidated operating income, the most
directly comparable GAAP financial measure.
Supplemental Financial Information Package
The Company has issued "Supplemental Financial Information" for
the period ended December 31, 2018.
Such information has been filed today as an exhibit to Form 8-K and
will also be available on the Company's website
at www.cedarrealtytrust.com.
Investor Conference Call
The Company will host a conference call today, February 7, 2019, at 5:00
PM (ET) to discuss the quarterly and yearly results. The
conference call can be accessed by dialing (877) 705-6003 or
(1) (201) 493-6725 for international participants. A live
webcast of the conference call will be available online on the
Company's website at www.cedarrealtytrust.com.
A replay of the call will be available from 8:00 PM (ET) on
February 7, 2019, until midnight (ET)
on February 21, 2019. The replay
dial-in numbers are (844) 512-2921 or
(1) (412) 317-6671 for international callers. Please use
passcode 13686371 for the telephonic replay. A replay of the
Company's webcast will be available on the Company's website for a
limited time.
About Cedar Realty Trust
Cedar Realty Trust, Inc. is a fully-integrated real estate
investment trust which focuses on the ownership, operation and
redevelopment of grocery-anchored shopping centers in high-density
urban markets from Washington,
D.C. to Boston. The
Company's portfolio (excluding properties treated as "held for
sale") comprises 58 properties, with approximately 8.7 million
square feet of gross leasable area.
For additional financial and descriptive information on the
Company, its operations and its portfolio, please refer to the
Company's website at www.cedarrealtytrust.com.
Forward-Looking Statements
Statements made in this press release that are not strictly
historical are "forward-looking" statements. Forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause actual results, performance and outcomes to
differ materially from those expressed or implied in
forward-looking statements. Factors which could cause actual
results to differ materially from current expectations include,
among others: adverse general economic conditions in
the United States and uncertainty
in the credit and retail markets; financing risks, such as the
inability to obtain new financing or refinancing on favorable terms
as the result of market volatility or instability; risks related to
the market for retail space generally, including reductions in
consumer spending, variability in retailer demand for leased space,
tenant bankruptcies, adverse impact of internet sales demand,
ongoing consolidation in the retail sector and changes in economic
conditions and consumer confidence; risks endemic to real estate
and the real estate industry generally; the impact of the Company's
level of indebtedness on operating performance; inability of
tenants to meet their rent and other lease obligations; adverse
impact of new technology and e-commerce developments on the
Company's tenants; competitive risk; risks related to the
geographic concentration of the Company's properties in the
Washington D.C. to Boston corridor; the effects of natural and
other disasters; and the inability of the Company to realize
anticipated returns from its redevelopment activities. Please refer
to the documents filed by Cedar Realty Trust, Inc. with the SEC,
specifically the Company's Annual Report on Form 10-K for the year
ended December 31, 2017, as it may be
updated or supplemented in the Company's Quarterly Reports on Form
10-Q and the Company's other filings with the SEC, which identify
additional risk factors that could cause actual results to differ
from those contained in forward-looking statements.
|
CEDAR REALTY
TRUST, INC.
|
|
Condensed
Consolidated Balance Sheets
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
2018
|
|
2017
|
|
ASSETS
|
|
|
|
|
|
Real estate, at
cost
|
|
$
1,508,682,000
|
|
$
1,534,599,000
|
|
Less accumulated
depreciation
|
|
(361,969,000)
|
|
(341,943,000)
|
|
Real estate,
net
|
|
1,146,713,000
|
|
1,192,656,000
|
|
Real estate held for
sale
|
|
11,592,000
|
|
-
|
|
Cash and cash
equivalents
|
|
1,977,000
|
|
3,702,000
|
|
Restricted
cash
|
|
-
|
|
3,517,000
|
|
Receivables
|
|
21,977,000
|
|
17,193,000
|
|
Other assets and
deferred charges, net
|
|
40,642,000
|
|
35,350,000
|
|
TOTAL
ASSETS
|
|
$
1,222,901,000
|
|
$
1,252,418,000
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
Mortgage loans
payable
|
|
$
47,315,000
|
|
$
127,969,000
|
|
Capital lease
obligation
|
|
5,387,000
|
|
-
|
|
Unsecured revolving
credit facility
|
|
100,000,000
|
|
55,000,000
|
|
Unsecured term
loans
|
|
472,132,000
|
|
397,156,000
|
|
Accounts payable and
accrued liabilities
|
|
26,142,000
|
|
24,519,000
|
|
Unamortized
intangible lease liabilities
|
|
13,209,000
|
|
17,663,000
|
|
Total
liabilities
|
|
664,185,000
|
|
622,307,000
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
Preferred
stock
|
|
159,541,000
|
|
207,508,000
|
|
Common stock and
other shareholders' equity
|
|
395,884,000
|
|
420,828,000
|
|
Noncontrolling
interests
|
|
3,291,000
|
|
1,775,000
|
|
Total
equity
|
|
558,716,000
|
|
630,111,000
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND EQUITY
|
|
$
1,222,901,000
|
|
$
1,252,418,000
|
CEDAR REALTY
TRUST, INC.
|
Condensed
Consolidated Statements of Operations
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Years ended
December 31,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
PROPERTY
REVENUES
|
|
|
|
|
|
|
|
|
Rents
|
|
$
28,126,000
|
|
$
28,486,000
|
|
$
113,858,000
|
|
$
113,276,000
|
Expense
recoveries
|
|
8,578,000
|
|
8,424,000
|
|
33,378,000
|
|
31,220,000
|
Other
|
|
228,000
|
|
227,000
|
|
4,784,000
|
|
1,512,000
|
Total property
revenues
|
|
36,932,000
|
|
37,137,000
|
|
152,020,000
|
|
146,008,000
|
PROPERTY OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
Operating,
maintenance and management
|
|
7,589,000
|
|
6,668,000
|
|
27,771,000
|
|
24,752,000
|
Real estate and other
property-related taxes
|
|
4,951,000
|
|
4,980,000
|
|
20,123,000
|
|
19,577,000
|
Total property
operating expenses
|
|
12,540,000
|
|
11,648,000
|
|
47,894,000
|
|
44,329,000
|
|
|
|
|
|
|
|
|
|
PROPERTY OPERATING
INCOME
|
|
24,392,000
|
|
25,489,000
|
|
104,126,000
|
|
101,679,000
|
|
|
|
|
|
|
|
|
|
OTHER EXPENSES AND
INCOME
|
|
|
|
|
|
|
|
|
General and
administrative
|
|
4,170,000
|
|
4,413,000
|
|
16,915,000
|
|
16,907,000
|
Acquisition pursuit
costs
|
|
-
|
|
-
|
|
-
|
|
156,000
|
Depreciation and
amortization
|
|
9,808,000
|
|
9,937,000
|
|
40,053,000
|
|
40,115,000
|
Gain on
sale
|
|
-
|
|
-
|
|
(4,864,000)
|
|
(7,099,000)
|
Impairment
(reversals)/charges
|
|
-
|
|
(312,000)
|
|
20,689,000
|
|
9,538,000
|
Total other expenses
and income
|
|
13,978,000
|
|
14,038,000
|
|
72,793,000
|
|
59,617,000
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
10,414,000
|
|
11,451,000
|
|
31,333,000
|
|
42,062,000
|
|
|
|
|
|
|
|
|
|
NON-OPERATING
INCOME AND EXPENSES
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(5,678,000)
|
|
(5,561,000)
|
|
(22,146,000)
|
|
(22,199,000)
|
Early extinguishment
of debt costs
|
|
-
|
|
(210,000)
|
|
(4,829,000)
|
|
(210,000)
|
Total non-operating
income and expense
|
|
(5,678,000)
|
|
(5,771,000)
|
|
(26,975,000)
|
|
(22,409,000)
|
|
|
|
|
|
|
|
|
|
NET
INCOME
|
|
4,736,000
|
|
5,680,000
|
|
4,358,000
|
|
19,653,000
|
|
|
|
|
|
|
|
|
|
Attributable to
noncontrolling interests
|
|
(116,000)
|
|
(139,000)
|
|
(469,000)
|
|
(510,000)
|
|
|
|
|
|
|
|
|
|
NET INCOME
ATTRIBUTABLE TO CEDAR REALTY TRUST, INC.
|
|
4,620,000
|
|
5,541,000
|
|
3,889,000
|
|
19,143,000
|
|
|
|
|
|
|
|
|
|
Preferred stock
dividends
|
|
(2,688,000)
|
|
(2,913,000)
|
|
(10,863,000)
|
|
(13,652,000)
|
Preferred stock
redemption costs
|
|
-
|
|
-
|
|
(3,507,000)
|
|
(7,890,000)
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
ATTRIBUTABLE TO COMMON SHAREHOLDERS
|
|
$
1,932,000
|
|
$
2,628,000
|
|
$
(10,481,000)
|
|
$
(2,399,000)
|
|
|
|
|
|
|
|
|
|
NET INCOME (LOSS)
PER COMMON SHARE ATTRIBUTABLE TO COMMON
SHAREHOLDERS (BASIC AND DILUTED)
|
|
$
0.02
|
|
$
0.03
|
|
$
(0.13)
|
|
$
(0.04)
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares - basic and diluted
|
|
88,998,000
|
|
87,526,000
|
|
88,420,000
|
|
84,168,000
|
CEDAR REALTY
TRUST, INC.
|
Reconciliation of
Net Income (Loss) Atributable to Common Shareholders
to
|
Funds From
Operations and Operating Funds From Operations
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Years ended
December 31,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income (loss)
attributable to common shareholders
|
|
$
1,932,000
|
|
$
2,628,000
|
|
$
(10,481,000)
|
|
$
(2,399,000)
|
Real estate
depreciation and amortization
|
|
9,763,000
|
|
9,886,000
|
|
39,858,000
|
|
39,922,000
|
Limited partners'
interest
|
|
13,000
|
|
9,000
|
|
(28,000)
|
|
(13,000)
|
Gain on
sales
|
|
-
|
|
-
|
|
(4,864,000)
|
|
(7,099,000)
|
Impairment
(reversals)/charges
|
|
-
|
|
(312,000)
|
|
20,689,000
|
|
9,538,000
|
Consolidated minority
interests:
|
|
|
|
|
|
|
|
|
Share of
income
|
|
103,000
|
|
130,000
|
|
497,000
|
|
523,000
|
Share of
FFO
|
|
(87,000)
|
|
(118,000)
|
|
(430,000)
|
|
(440,000)
|
Funds From
Operations ("FFO") applicable to diluted common
shares
|
|
11,724,000
|
|
12,223,000
|
|
45,241,000
|
|
40,032,000
|
Adjustments for items
affecting comparability:
|
|
|
|
|
|
|
|
|
Preferred stock
redemption costs
|
|
-
|
|
-
|
|
3,507,000
|
|
7,890,000
|
Financing
costs
|
|
-
|
|
210,000
|
|
4,829,000
|
|
210,000
|
Acquisition pursuit
costs
|
|
-
|
|
-
|
|
-
|
|
156,000
|
Redevelopment
costs
|
|
-
|
|
-
|
|
-
|
|
37,000
|
Operating Funds
From Operations ("Operating FFO") applicable to diluted
common
shares
|
|
$
11,724,000
|
|
$
12,433,000
|
|
$
53,577,000
|
|
$
48,325,000
|
|
|
|
|
|
|
|
|
|
FFO per diluted
common share:
|
|
$
0.13
|
|
$
0.13
|
|
$
0.49
|
|
$
0.45
|
|
|
|
|
|
|
|
|
|
Operating FFO per
diluted common share:
|
|
$
0.13
|
|
$
0.14
|
|
$
0.58
|
|
$
0.55
|
|
|
|
|
|
|
|
|
|
Weighted average
number of diluted common shares:
|
|
|
|
|
|
|
|
|
Common shares and
equivalents
|
|
92,907,000
|
|
91,317,000
|
|
92,361,000
|
|
87,948,000
|
OP Units
|
|
553,000
|
|
348,000
|
|
429,000
|
|
350,000
|
|
|
93,460,000
|
|
91,665,000
|
|
92,790,000
|
|
88,298,000
|
|
|
|
|
|
|
|
|
|
View original
content:http://www.prnewswire.com/news-releases/cedar-realty-trust-reports-fourth-quarter-and-full-year-2018-results-300791955.html
SOURCE Cedar Realty Trust, Inc.