Medalist Diversified REIT, Inc. (NASDAQ:MDRR), a Virginia-based
real estate investment trust that specializes in acquiring, owning
and managing commercial real estate in the Southeast region of the
U.S., today reported financial results for the three months ended
March 31, 2022 and provided an update on its corporate activities.
In addition, the Company released supplemental financial
information about its first quarter financial results.
Key Highlights:
- Total revenues increased 8.7% to $2.90 million, up from $2.67
million for the same quarter in 2021.
- Retail center property revenues increased by 27.8% and flex
center property revenues increased by 235.5%, demonstrating the
full impact of the company’s 2021 acquisitions
- Net operating income increased 26% to $1.88 million, up from
$1.49 million for the same quarter in 2021.
- EBITDA increased 54% to $1,202,545, up from $782,860 for the
prior year quarter.
- Net loss attributable to common shareholders was $989,284, or
$(0.06) per basic and diluted share, compared to a net loss
attributable to common shareholders of $2,277,524, or $(0.39) per
basic and diluted common share, for the first quarter of 2021,
representing an improvement of $0.33 per basic and diluted common
share.
- Funds from operations (FFO) was $387,155, up from ($1,654,509)
in the prior year quarter.
- Adjusted funds from operations (AFFO) was $217,023, up from
($82,534) in the prior year quarter.
- 77% year-over-year increase in the square footage of retail and
flex properties, ending the year with seven properties encompassing
771,550 square feet, compared to 436,571 square feet in four
properties as of the end of the first quarter of 2021.
- Average occupancy rate for the Company’s seven retail and flex
properties increased to 94.0% as of March 31, 2022, compared to
92.1% for the Company’s four retail and flex properties owned as of
March 31, 2021.
- The Company paid its third consecutive quarterly common
dividend of $0.02 per common share.
“Our first quarter results demonstrate the full impact of our
2021 acquisitions,” stated Thomas E. Messier, Chairman and Chief
Executive Officer of the Company. “These three acquisitions have
increased our revenues, net operating income and funds from
operations (FFO) and adjusted funds from operations (AFFO) as those
are a key metric in measuring the performance of a REIT. Our
strategic short-term shift away from hotel property investments and
redeployment of capital to flex and retail properties is paying off
with more predictable and less cyclical operating results. We will
continue to implement this strategy during the remainder of 2022,
with our plans to acquire a fifth retail property, Salisbury
Marketplace, and our efforts to sell the Clemson Best Western Hotel
Property”.
As of March 31, 2022, the Company’s retail and flex property
portfolio consisted of seven properties with 771,550 square feet
with an average occupancy rate of 94.0% across the seven
properties. As of March 31, 2022, the Company’s hotel portfolio
consisted of one property with 148 rooms. The average occupancy of
this hotel was 100% for the three months ended March 31, 2022, due
to the Company’s occupancy agreement with Clemson University for
the entire hotel, which ends on May 15, 2022.
About Medalist Diversified REIT
Medalist Diversified REIT Inc. is a Virginia-based real estate
investment trust that specializes in acquiring, owning and managing
commercial real estate in the Southeast region of the U.S. The
Company’s strategy is to focus on commercial real estate which is
expected to provide an attractive balance of risk and returns.
Medalist utilizes a rigorous, consistent and replicable process for
sourcing and conducting due diligence of acquisitions.
For more information on Medalist, including additional
supplemental financial information, please visit the Company
website at https://www.medalistreit.com.
Forward Looking Statements
This press release contains statements that are “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995 and other federal securities laws. Forward
looking statements are statements that are not historical,
including statements regarding management’s intentions, beliefs,
expectations, representations, plans or predictions of the future,
and are typically identified by such words as “believe,” “expect,”
“anticipate,” “intend,” “estimate,” “may,” “will,” “should” and
“could.” Because such statements include risks, uncertainties and
contingencies, actual results may differ materially from those
expressed or implied by such forward looking statements. These
forward-looking statements are based upon the Company’s present
expectations, but these statements are not guaranteed to occur.
Furthermore, the Company disclaims any obligation to publicly
update or revise any forward-looking statement to reflect changes
in underlying assumptions or factors, of new information, data or
methods, future events or other changes. Investors should not place
undue reliance upon forward-looking statements. For further
discussion of the factors that could affect outcomes, please refer
to the “Risk Factors” section of the prospectus dated June 21, 2021
and its accompanying prospectus supplement dated November 17, 2021,
and in the Company’s subsequent annual and periodic reports and
other documents filed with the SEC, copies of which are available
on the SEC’s website, www.sec.gov.
Non-GAAP Financial
Measures
The foregoing supplemental financial data includes certain
non-GAAP financial measures that we believe are helpful in
understanding our business and performance, as further described
below. Our definition and calculation of these non-GAAP financial
measures may differ from those of other REITs, and may, therefore,
not be comparable.
NOI
While we believe net income (loss), as defined by accounting
principles generally accepted in the United States of America (U.S.
GAAP), is the most appropriate measure, we consider NOI, given its
wide use by and relevance to investors and analysts, an appropriate
supplemental performance measure. NOI provides a measure of rental
operations, and does not include depreciation and amortization,
interest expense and non-property specific expenses such as
corporate-wide interest expense and general and administrative
expenses. As used herein, we calculate NOI as follows:
NOI from property operations is calculated as net loss, as
defined by U.S. GAAP, plus preferred dividends, legal, accounting
and other professional fees, corporate general and administrative
expenses, depreciation, amortization of intangible assets and
liabilities, interest expense, including amortization of financing
costs, share based compensation expense, net amortization of above
and below market leases, loss on impairment, impairment of assets
held for sale, and other income. The components of NOI consist of
recurring rental and reimbursement revenue, less real estate taxes
and operating expenses, such as insurance, utilities, and repairs
and maintenance.
The following tables reflect net loss attributable to common
shareholders with a reconciliation to NOI, as computed in
accordance with GAAP for the periods presented:
Three months ended
March 31,
Net Operating
Income
2022
(Unaudited)
2021
(Unaudited)
Net Loss
$
(980,383
)
$
(2,307,742
)
Plus: Preferred dividends, including
amortization of capitalized issuance costs
153,923
149,449
Plus: Legal, accounting and other
professional fees
459,869
491,855
Plus: Corporate general and administrative
expenses
80,706
69,137
Plus: Depreciation expense
771,560
454,774
Plus: Amortization of intangible
assets
383,637
198,459
Plus: Interest expense, including
amortization of capitalized loan issuance costs
687,501
2,284,683
Plus: Share based compensation expense
233,100
149,981
Plus: Loss on impairment
36,670
-
Plus: Impairment of assets held for
sale
175,671
-
Less: Other income
(95,439
)
(1,352
)
(Less) Plus: Net amortization of above and
below market leases
(26,034
)
3,237
Net Operating Income - NOI
$
1,880,781
$
1,492,481
EBITDA
EBITDA is net income (or loss), as defined by U.S. GAAP, plus
preferred dividends, interest expense, including amortization of
financing costs, depreciation and amortization, net amortization of
acquired above and below market lease revenue, loss on impairment,
and impairment of assets held for sale.
The following tables reflect net loss with a reconciliation to
EBITDA, as computed in accordance with GAAP for the periods
presented:
Three months ended
March 31
2022
(Unaudited)
2021
(Unaudited)
Net Loss
$
(980,383
)
$
(2,307,742
)
Plus: Preferred dividends, including
amortization of capitalized issuance costs
153,923
149,449
Plus: Interest expense, including
amortization of capitalized loan issuance costs
687,501
2,284,683
Plus: Depreciation expense
771,560
454,774
Plus: Amortization of intangible
assets
383,637
198,459
(Less) Plus: Net amortization of above and
below market leases
(26,034
)
3,237
Plus: Loss on impairment
36,670
-
Plus: Impairment of assets held for
sale
175,671
-
EBITDA
$
1,202,545
$
782,860
FFO and AFFO
Funds from operations (“FFO”), a non-GAAP measure, is an
alternative measure of operating performance, specifically as it
relates to results of operations and liquidity. FFO is computed in
accordance with standards established by the Board of Governors of
the National Association of Real Estate Investment Trusts
(“NAREIT”) in its March 1995 White Paper (as amended in November
1999, April 2002 and December 2018). As defined by NAREIT, FFO
represents net income (computed in accordance with GAAP), excluding
gains (or losses) from sales of property, plus real estate related
depreciation and amortization (excluding amortization of loan
origination costs and above and below market leases) and after
adjustments for unconsolidated partnerships and joint ventures. In
addition to FFO, Adjusted FFO (“AFFO”), excludes non-cash items
such as amortization of loans and above and below market leases,
unbilled rent arising from applying straight line rent revenue
recognition and share-based compensation expenses. Additionally,
the impact of capital expenditures, including tenant improvement
and leasing commissions, net of reimbursements of such expenditures
by property escrow funds, is included in the calculation of
AFFO.
The following tables reflect net loss with a reconciliation to
FFO and AFFO for the periods presented:
Three months ended
March 31,
2022
(Unaudited)
2021
(Unaudited)
Funds from
operations
Net Loss
$
(980,383
)
$
(2,307,742
)
Depreciation of tangible real property
assets
602,845
365,726
Depreciation of tenant improvements
148,924
74,336
Amortization of leasing commissions
19,791
14,712
Amortization of intangible assets
383,637
198,459
Loss on impairment
36,670
-
Impairment of assets held for sale
175,671
-
Funds from operations
$
387,155
$
(1,654,509
)
Adjusted funds
from operations
Funds from operations
$
387,155
$
(1,654,509
)
Amortization of above market leases
69,583
53,613
Amortization of below market leases
(95,617
)
(50,376
)
Straight line rent
(14,921
)
(88,092
)
Capital expenditures
(366,059
)
(45,150
)
Increase in fair value of interest rate
cap
(91,042
)
(160
)
Amortization of loan issuance costs
28,118
44,190
Amortization of preferred stock discount
and offering costs
53,923
49,449
Amortization of convertible debenture
discount, offering costs and beneficial conversion feature
-
1,455,324
Share-based compensation
233,100
149,981
Bad debt expense
12,783
3,196
Adjusted funds from operations
(AFFO)
$
217,023
$
(82,534
)
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version on businesswire.com: https://www.businesswire.com/news/home/20220509006265/en/
Dave Gentry RedChip Companies 407-491-4498
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