CoreSite Realty Corporation (NYSE: COR), a national provider of
powerful, network-rich data centers, today announced financial
results for the fourth quarter 2011.
Quarterly Highlights
- Reported fourth-quarter FFO of $0.34
per diluted share and unit, representing a 36.0% increase over the
prior-year quarter
- Reported fourth-quarter revenue of
$46.0 million, representing a 3.7% increase over the prior quarter
and a 20.0% increase over the prior-year quarter
- Executed new and expansion data center
leases representing $6.8 million of annualized GAAP rent with a
weighted-average GAAP rental rate of $192 per net rentable square
foot
- Amended the company’s revolving credit
facility, expanding capacity to $225 million
- Announced 2012 FFO guidance with a
range of $1.36 to $1.50 per diluted share
- Increased quarterly dividend by 38% to
$0.18 per share
Tom Ray, CoreSite’s Chief Executive Officer, commented, “Our
leasing results in the fourth quarter reflect our continued drive
to further differentiate our network-centric data centers and
deliver excellence in our customer experience. Our strongest
leasing results in the quarter were in Virginia, Chicago and the
Bay area. We signed 19 new customers in the quarter, with key
network wins from both the carrier and cloud verticals. We also
continued to expand our platform, delivering new space in two
markets and remaining on schedule and on budget to complete
construction in the first half of 2012 on three additional
projects.”
Mr. Ray concluded, “We are pleased to have generated solid
growth for our investors in 2011 and to enter 2012 with a strong
asset base to drive internal growth and support expansion. We
believe that the investments we are making in our operating
platform will enable us to continue to drive the profitability of
our company. We remain focused upon serving our customers,
strengthening our go-to-market platform, executing in our
development program and generating returns for our investors.”
Financial Results
Fourth Quarter 2011
CoreSite reported funds from operations (“FFO”) of $15.8
million, or $0.34 per diluted share and unit, for the three months
ended December 31, 2011, compared to $11.5 million, or $0.25 per
diluted share and unit, for the three months ended December 31,
2010. Total operating revenue for the three months ended December
31, 2011, was $46.0 million, a 3.7% increase on a sequential
quarter basis and a 20.0% increase over the same quarter of the
prior year. The company reported net income for the three months
ended December 31, 2011, of $462,000 and net income attributable to
common shares of $179,000, or $0.01 per diluted share.
Full Year 2011
CoreSite reported FFO of $56.9 million, or $1.24 per diluted
share and unit, for the year ended December 31, 2011. Total
operating revenue for the year ended December 31, 2011, was $172.8
million. The company reported a net loss for the year ended
December 31, 2011, of $10.8 million and a net loss attributable to
common shares of $4.6 million, or $0.24 per share.
A reconciliation of GAAP net income to funds from operations can
be found in the company’s supplemental financial presentation
available on its website at www.CoreSite.com.
Leasing Activity
The company executed new and expansion data center leases
representing $6.8 million of annualized GAAP rent during the
quarter, comprised of 35,461 NRSF at a weighted average GAAP rate
of $192 per NRSF and a weighted average lease term of 3.6
years.
During the fourth quarter, data center lease commencements
totaled 38,864 NRSF at a weighted average GAAP rental rate of $168
per NRSF which represents $6.5 million of annualized GAAP rent.
Renewal leases totaling 22,911 NRSF commenced in the fourth
quarter at a weighted average GAAP rate of $133 per NRSF,
reflecting a 2.8% decrease in rent on a cash basis and a 4.8%
increase on a GAAP basis. The decrease in cash rent was materially
attributable to the decrease in rent associated with the renewal of
an 9,532 NRSF lease at the company’s facility in Milpitas,
California. Excluding this lease, renewal rent increased 7.3% on a
cash basis and 13.9% on a GAAP basis. The company’s rent retention
ratio for the fourth quarter was 69.4% and, adjusted to exclude the
termination of a 102,951 square-foot lease in the company’s Los
Angeles market, its rent retention ratio for the quarter was 90.7%.
For the calendar year 2011, the company’s rent retention ratio was
70.2% in total, and 78.9% adjusted to exclude the termination of
the 102,951 square-foot lease. For the year, rents on renewed
leases increased 17.1% on a cash basis and 27.5% on a GAAP
basis.
Development and Redevelopment
Activity
During the fourth quarter, the company completed construction on
27,649 NRSF of space in Boston and Los Angeles for a total cost of
$11.6 million, or approximately $420 per NRSF. Additionally, during
the first half of 2012, the company plans to complete 126,106 NRSF
of data center space currently under construction across three
development projects in Northern Virginia, Santa Clara and
Chicago.
The total estimated cost to complete the 126,106 NRSF of data
center space under construction at December 31, 2011 is $99.7
million, an average cost of $790 per NRSF. The company incurred
approximately $69.9 million through December 31, 2011, including
investments of $38.7 million in its Santa Clara project and $28.0
million in its Northern Virginia project.
Including the space currently under construction or in
preconstruction at December 31, 2011, as well as currently
operating space targeted for future redevelopment, CoreSite owns
land and buildings sufficient to develop or redevelop 936,390 feet
of data center space, comprised of (1) 126,106 NRSF of data center
space currently under construction, (2) 465,034 NRSF of office and
industrial space currently available for redevelopment, and (3)
345,250 NRSF of new data center space available for development on
land that the company currently owns at its Coronado-Stender
business park.
Balance Sheet and
Liquidity
As of December 31, 2011, the company had $121.9 million of total
long-term debt equal to 12.9% of total enterprise value and equal
to 1.7x annualized adjusted EBITDA for the quarter ended December
31, 2011.
In December, CoreSite amended its revolving credit facility,
extending the term to three years with an additional one-year
extension, and increasing the size of its facility from $110
million to $225 million. The facility contains an accordion feature
that can increase the facility by an additional $175 million with
lender approval.
Subsequent to December 31, 2011, the company has drawn an
additional $30.3 million on its revolving credit facility,
primarily to repay a $25.0 million senior mortgage loan secured by
the 427 S. LaSalle property. In conjunction with the repayment of
the senior mortgage loan, 427 S. LaSalle was added as a co-borrower
under the facility, with borrowings secured by a lien on the 427 S.
LaSalle property on a senior secured basis. As a result of
contributing this property to the borrowing base the company’s
accessible capacity has increased to $202.5 million, of which
$158.6 million is currently available.
Dividend
On December 7, 2011, the company’s board of directors declared a
dividend of $0.18 per share of common stock and common stock
equivalents for the fourth quarter of 2011. This represents a 38%
increase from the previous quarterly dividend of $0.13 per share
since the company’s initial public offering in September 2010. The
dividend was paid on January 17, 2012 to shareholders of record on
December 31, 2011.
2012 Guidance
The company is providing the following guidance predicated on
current economic conditions, internal assumptions about its
customer base, and the supply and demand dynamics of the markets in
which it operates. The guidance does not include the impact of any
acquisitions or capital markets transactions.
Low
High
Net income (loss) per share $ (0.02 ) $ 0.04 Real estate
related depreciation and
amortization per share
$ 1.38 $
1.46 FFO per share $ 1.36
$ 1.50
The company’s 2012 guidance provided in this press release
incorporates projected operating results based upon significant
drivers as follows:
- Total operating revenues of $195.0
million to $205.0 million based upon:
- Rent retention on renewals of 65% to
70%
- GAAP rent growth on renewals of 2% to
6%
- Total general and administrative
expenses of $22.0 million to $24.0 million
- Adjusted EBITDA of $76.0 million to
$84.0 million
- Development/redevelopment capital
expenditures of $85.0 million to $110.0 million
- Recurring capital expenditures of $3.0
million to $5.0 million
Conference Call Details
The company will host a conference call on February 23, 2012 at
12:00 p.m. (Eastern Time) to discuss its financial results, current
business trends and market conditions.
The call can be accessed live over the phone by dialing
877-407-3982 for domestic callers or 201-493-6780 for international
callers. A replay will be available shortly after the call and can
be accessed by dialing 877-870-5176 for domestic callers or
858-384-5517 for international callers. The passcode for the replay
is 387074. The replay will be available until March 1, 2012.
Interested parties may also listen to a simultaneous webcast of
the conference call by logging on to the company's website at
www.CoreSite.com and clicking on the “Investors” tab. The on-line
replay will be available for a limited time beginning immediately
following the call.
About CoreSite
CoreSite Realty Corporation (NYSE: COR) is a national provider
of data center products and interconnection services. More than 700
customers such as Global 1000 enterprises, communications
providers, cloud and content companies, financial firms, media and
entertainment, healthcare, and government agencies choose CoreSite
for the confidence that comes with customer-focused data center
products, service and support systems, and scalability. CoreSite
data centers are business catalysts, featuring the Any2 Internet
exchange and network ecosystems, which include access to 200+
carriers and service providers and a growing mesh of more than
15,000 interconnections. The company features a diverse colocation
offering from individual cabinets to custom cages and private
suites, with 12 data center locations in seven major U.S. markets.
For more information, visit www.CoreSite.com.
Forward Looking Statements
This earnings release and accompanying supplemental information
may contain forward-looking statements within the meaning of the
federal securities laws. Forward-looking statements relate to
expectations, beliefs, projections, future plans and strategies,
anticipated events or trends and similar expressions concerning
matters that are not historical facts. In some cases, you can
identify forward-looking statements by the use of forward-looking
terminology such as “believes,” “expects,” “may,” “will,” “should,”
“seeks,” “approximately,” “intends,” “plans,” “pro forma,”
“estimates” or “anticipates” or the negative of these words and
phrases or similar words or phrases that are predictions of or
indicate future events or trends and that do not relate solely to
historical matters. Forward-looking statements involve known and
unknown risks, uncertainties, assumptions and contingencies, many
of which are beyond the company’s control, that may cause actual
results to differ significantly from those expressed in any
forward-looking statement. These risks include, without limitation:
the geographic concentration of the company’s data centers in
certain markets and any adverse developments in local economic
conditions or the demand for data center space in these markets;
fluctuations in interest rates and increased operating costs;
difficulties in identifying properties to acquire and completing
acquisitions; significant industry competition; the company’s
failure to obtain necessary outside financing; the company’s
failure to qualify or maintain our status as a REIT; financial
market fluctuations; changes in real estate and zoning laws and
increases in real property tax rates; and other factors affecting
the real estate industry generally. All forward-looking statements
reflect the company’s good faith beliefs, assumptions and
expectations, but they are not guarantees of future performance.
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. For a further discussion
of these and other factors that could cause the company’s future
results to differ materially from any forward-looking statements,
see the section entitled “Risk Factors” in the company’s most
recent annual report on Form 10-K, and other risks described in
documents subsequently filed by the company from time to time with
the Securities and Exchange Commission.
Consolidated Balance Sheet (in
thousands, except per share data)
December 31,
December 31, 2011 2010
ASSETS Investments in real estate: Land $ 84,738 $
84,738 Building and building improvements 499,717 450,097 Leasehold
improvements 81,057 75,800 665,512
610,635 Less: Accumulated depreciation and amortization
(64,428 ) (32,943 ) Net investment in operating properties
601,084 577,692 Construction in progress 73,084
11,987 Net investments in real estate 674,168 589,679
Cash and cash equivalents 6,628 86,246 Restricted cash 9,291 14,968
Accounts and other receivables, net of allowance for doubtful
accounts of $465 and $305 as of December 31, 2011 and 2010,
respectively 6,562 5,332 Lease intangibles, net of accumulated
amortization of $33,711 and $17,105 as of December 31, 2011 and
2010, respectively 36,643 71,704 Goodwill 41,191 41,191 Other
assets 33,743 23,906
Total
assets $ 808,226 $ 833,026
LIABILITIES
AND EQUITY Liabilities: Revolving credit facility $ 5,000 $ -
Mortgage loans payable 116,864 124,873 Accounts payable and accrued
expenses 38,822 26,393 Deferred rent payable 3,535 2,277 Acquired
below-market lease contracts, net of accumulated amortization of
$9,267 and $4,989 as of December 31, 2011 and 2010, respectively
11,872 16,415 Prepaid rent and other liabilities 11,946
8,603
Total liabilities 188,039 178,561
Stockholders' equity: Common stock, par value $0.01, 100,000,000
shares authorized and 20,747,794 and 19,644,042 shares issued and
outstanding at December 31, 2011 and 2010, respectively 204 194
Additional paid-in capital 256,183 239,453 Accumulated other
comprehensive income (loss) (34 ) 52 Accumulated deficit
(23,545 ) (7,460 ) Total stockholders' equity 232,808
232,239 Noncontrolling interests 387,379
422,226
Total equity 620,187
654,465
Total liabilities and equity $ 808,226
$ 833,026
Consolidated Statement of Operations
(in thousands, except share and per
share data)
The Company
The Predecessor
Year EndedDecember 31,
2011
For the period September
28, 2010 through December 31,
2010
For the period January 1,
2010 through September 27, 2010
Year ended
December 31, 2009
Operating revenues: Rental revenue $ 108,597 $ 24,428 $ 24,377 $
18,974 Power revenue 43,402 9,403 8,520 7,372 Tenant reimbursement
6,344 1,501 1,406 1,061 Other revenue 14,503
3,020 1,254 1,424 Total
operating revenues 172,846 38,352 35,557 28,831 Operating expenses:
Property operating and maintenance 55,049 12,107 14,272 13,954 Real
estate taxes and insurance 9,119 1,642 1,262 1,787 Management fees
to related party - - 3,582 2,244 Depreciation and amortization
68,967 19,146 11,848 11,193 Sales and marketing 5,744 1,341 125 135
General and administrative 21,846 4,987 2,258 1,401 Transaction
costs 875 3,275 - - Rent 18,336 4,551
2,177 2,816 Total operating expenses
179,936 47,049 35,524
33,530 Operating income (loss) (7,090 ) (8,697 ) 33
(4,699 ) Gain on early extinguishment of debt 939 - - - Interest
income 117 77 2 3 Interest expense (5,275 ) (2,325 )
(1,590 ) (2,343 ) Loss before income taxes (11,309 )
(10,945 ) (1,555 ) (7,039 ) Income tax benefits 530
223 - - Net loss $
(10,779 ) $ (10,722 ) $ (1,555 ) $ (7,039 ) Net loss attributable
to noncontrolling interests (6,168 ) (7,371 )
- - Net loss attributable to common shares $
(4,611 ) $ (3,351 ) $ (1,555 ) $ (7,039 ) Basic and diluted loss
per common share: Net loss per share attributable to common shares
$ (0.24 ) $ (0.17 ) N/A N/A Weighted
average common shares outstanding 19,609,375
19,458,605 N/A N/A
Consolidated Statement of Operations
(in thousands,
except share and per share data)
Three Months Ended: December 31, 2011 September
30, 2011 June 30, 2011 March 31, 2011 December
31, 2010 Operating revenues: Rental revenue $ 29,064 $ 27,616 $
26,707 $ 25,210 $ 24,428 Power revenue 11,411 11,450 10,760 9,781
9,403 Tenant reimbursement 1,767 1,432 1,425 1,720 1,501 Other
revenue 3,787 3,869 3,592
3,255 3,020 Total operating revenues
46,029 44,367 42,484 39,966 38,352 Operating expenses: Property
operating and maintenance 15,063 14,133 13,830 12,023 12,107 Real
estate taxes and insurance 2,064 2,163 2,149 2,743 1,642
Depreciation and amortization 15,743 16,091 17,660 19,473 19,146
Sales and marketing 1,619 1,315 1,433 1,377 1,341 General and
administrative 5,880 4,747 5,602 5,617 4,987 Transaction costs -
192 683 - - Rent 4,588 4,601
4,600 4,547 4,551 Total
operating expenses 44,957 43,242
45,957 45,780 43,774 Operating
income (loss) 1,072 1,125 (3,473 ) (5,814 ) (5,422 ) Gain on early
extinguishment of debt - (10 ) 949 - - Interest income 2 9 40 66 77
Interest expense (838 ) (916 ) (1,269 )
(2,252 ) (2,325 ) Income (loss) before income taxes 236 208
(3,753 ) (8,000 ) (7,670 ) Income tax benefits 226
55 165 84 223
Net income (loss) per share attributable to common shares:
462 263 (3,588 ) (7,916 ) (7,447 ) Net income (loss) attributable
to noncontrolling interests 283 151
(2,058 ) (4,544 ) (4,275 ) Net income (loss)
attributable to common shares $ 179 $ 112 $ (1,530 )
$ (3,372 ) $ (3,172 ) Net income (loss) per share attributable to
common shares: Basic $ 0.01 $ 0.01 $ (0.08 ) $ (0.17 ) $ (0.16 )
Diluted $ 0.01 $ 0.01 $ (0.08 ) $ (0.17 ) $ (0.16 )
Weighted average common shares outstanding: Basic 19,988,150
19,494,703 19,473,219 19,458,605 19,458,605 Diluted 20,082,003
19,587,961 19,473,219 19,458,605 19,458,605
Reconciliation of Net Income (Loss) to Funds From Operations
(in thousands, except per
share data)
Three
Months Ended:
December 31,
2011
September 30,
2011
June 30,
2011
March 31,
2011
December 31,
2010
Net income (loss) $ 462 $ 263 $ (3,588 ) $ (7,916 ) $ (7,447 )
Adjustments: Real estate depreciation and amortization
15,307 15,738 17,391
19,237 18,936 FFO available to
common shareholders and OP unitholders $ 15,769 $
16,001 $ 13,803 $ 11,321 $ 11,489
Weighted average common shares and OP units
outstanding - diluted 45,862,220 45,822,653 45,822,653 45,784,080
45,689,418 FFO per common share and OP unit - diluted $ 0.34
$ 0.35 $ 0.30 $ 0.25 $ 0.25
CoreSite Realty Corporation considers FFO to be a supplemental
measure of performance which should be considered along with, but
not as an alternative to, net income and cash provided by operating
activities as a measure of operating performance and liquidity. The
Company calculates FFO in accordance with the standards established
by NAREIT. FFO represents net income (loss) (computed in accordance
with GAAP), excluding gains (or losses) from sales of property and
impairment write-downs of depreciable real estate, plus real estate
related depreciation and amortization (excluding amortization of
deferred financing costs) and after adjustments for unconsolidated
partnerships and joint ventures. Management uses FFO as a
supplemental performance measure because, in excluding real estate
related depreciation and amortization and gains and losses from
property dispositions, it provides a performance measure that, when
compared year over year, captures trends in occupancy rates, rental
rates and operating costs.
The Company offers this measure because management recognizes
that FFO will be used by investors as a basis to compare operating
performance with that of other REITs. However, because FFO excludes
depreciation and amortization and captures neither the changes in
the value of the properties that result from use or market
conditions, nor the level of capital expenditures and capitalized
leasing commissions necessary to maintain the operating performance
of the properties, all of which have real economic effect and could
materially impact financial condition and results from operations,
the utility of FFO as a measure of performance is limited. FFO is a
non-GAAP measure and should not be considered a measure of
liquidity, an alternative to net income, cash provided by operating
activities or any other performance measure determined in
accordance with GAAP, nor is it indicative of funds available to
fund cash needs, including the ability to pay dividends or make
distributions. In addition, the Company’s calculations of FFO are
not necessarily comparable to FFO as calculated by other REITs that
do not use the same definition or implementation guidelines or
interpret the standards differently. Investors in the Company’s
securities should not rely on these measures as a substitute for
any GAAP measure, including net income.
Reconciliation of Net Income (Loss) to
Earnings Before Interest, Taxes Depreciation and
Amortization
(in thousands, except per share data)
Three Months Ended: December 31, 2011
September 30, 2011 June 30, 2011 March 31,
2011 December 31, 2010 Net income (loss) $ 462 $ 263 $
(3,588 ) $ (7,916 ) $ (7,447 ) Adjustments: Interest expense, net
of interest income 836 907 1,229 2,186 2,248 Income taxes (226 )
(55 ) (165 ) (84 ) (223 ) Depreciation and amortization
15,743 16,091
17,660 19,473 19,146
EBITDA $ 16,815 $ 17,206 $ 15,136 $ 13,659 $ 13,724 Non-cash
compensation 693 879 889 497 517 Gain on early extinguishment of
debt - 10 (949 ) - - Transaction costs -
192 683 -
- Adjusted EBITDA $ 17,508
$ 18,287 $ 15,759 $ 14,156
$ 14,241
EBITDA is defined as earnings before interest, taxes,
depreciation and amortization. The Company calculates adjusted
EBITDA by adding non-cash compensation expense and transaction
costs to EBITDA as well as adjusting for the impact of gains or
losses on early extinguishment of debt. Management uses EBITDA and
adjusted EBITDA as indicators of the Company’s ability to incur and
service debt. In addition, management considers EBITDA and adjusted
EBITDA to be appropriate supplemental measures of the Company’s
performance because they eliminate depreciation and interest, which
permits investors to view income from operations without the impact
of non-cash depreciation or the cost of debt. However, because
EBITDA and adjusted EBITDA are calculated before recurring cash
charges including interest expense and taxes, and are not adjusted
for capital expenditures or other recurring cash requirements of
our business, their utilization as a cash flow measurement is
limited.
Cencora (NYSE:COR)
Historical Stock Chart
From Sep 2024 to Oct 2024
Cencora (NYSE:COR)
Historical Stock Chart
From Oct 2023 to Oct 2024