CoreSite Realty Corporation (NYSE:COR), a leading provider of
network-dense, cloud-enabled data center solutions, today announced
financial results for the third quarter ended September 30,
2013.
Quarterly Highlights
- Reported third-quarter funds from
operations (“FFO”) of $0.47 per diluted share and unit,
representing a 17.5% increase year-over-year
- Reported third-quarter operating
revenue of $60.6 million, representing a 12.8% increase
year-over-year
- Executed new and expansion data center
leases representing $4.0 million of annualized GAAP rent at a rate
of $170 of annualized GAAP rent per square foot
- Realized rent growth on signed renewals
of 6.6% on a cash basis and 10.7% on a GAAP basis and rental churn
of 2.7%
- Commenced 37,243 net rentable square
feet of new and expansion leases with annualized GAAP rent of $180
per square foot
Tom Ray, CoreSite’s Chief Executive Officer, commented, “Our
third-quarter results reflect continued execution and focus upon
our business plan. We executed 106 new and expansion leases in the
quarter including agreements with 21 new customers, 67% of which
were in our network and cloud verticals, and we executed a record
44 leases signed with customers deploying in more than one
location.” Mr. Ray continued, “Our development activities are
progressing and we look forward to delivering our build-to-suit at
SV5 as well as our first computer room at NY2 toward the end of the
fourth quarter. Furthermore, we expect our additional development
project at LA2 to deliver in the first quarter of 2014 and our VA2
project in Northern Virginia to deliver at the end of the second
quarter in 2014. We remain focused upon and optimistic regarding
executing upon our strategy of differentiating CoreSite as a
leading provider of performance-sensitive colocation products and
services, enhanced by a premium customer experience.”
Financial Results
CoreSite reported FFO attributable to shares and units of $21.9
million for the three months ended September 30, 2013, a 17.3%
increase year-over-year and an increase of 3.6%
quarter-over-quarter. On a per diluted share and unit basis, FFO
increased 17.5% to $0.47 for the three months ended September 30,
2013, as compared to $0.40 per diluted share and unit for the three
months ended September 30, 2012. Total operating revenue for the
three months ended September 30, 2013, was $60.6 million, a 12.8%
increase year over year. Revenue growth in the third quarter was
diluted by 1.1% due to our customer at SV3 decreasing their metered
power draw as they continue to transition certain applications out
of that facility. CoreSite reported net income attributable to
common shares of $2.9 million, or $0.14 per diluted share.
Sales Activity
CoreSite executed 106 new and expansion data center leases
representing $4.0 million of annualized GAAP rent during the third
quarter, comprised of 23,294 NRSF at a weighted average GAAP rate
of $170 per NRSF.
CoreSite’s renewal leases signed in the third quarter totaled
$4.6 million in annualized GAAP rent, comprised of 29,567 NRSF at a
weighted average GAAP rate of $155 per NRSF, reflecting a 6.6%
increase in rent on a cash basis and a 10.7% increase on a GAAP
basis. The third-quarter rental churn rate was 2.7%.
CoreSite’s third-quarter data center lease commencements totaled
37,243 NRSF at a weighted average GAAP rental rate of $180 per
NRSF, which represents $6.7 million of annualized GAAP rent.
Development Activity
CoreSite had 249,961 NRSF of data center space under
construction at four key locations as of September 30, 2013. The
projects under construction include new data centers at SV5 (San
Francisco Bay Area), VA2 (Northern Virginia), NY2 (New York market)
and additional inventory at LA2 (Los Angeles). As of September 30,
2013, CoreSite had incurred $111.5 million of the estimated $199.6
million required to complete these projects.
Balance Sheet and
Liquidity
As of September 30, 2013, CoreSite had $166.6 million of total
long-term debt equal to 1.5x annualized adjusted EBITDA and $281.6
million of long-term debt and preferred stock equal to 2.6x
annualized adjusted EBITDA.
At quarter end, CoreSite had $289.3 million of total liquidity,
consisting primarily of available capacity under its credit
facility.
Dividend
On August 30, 2013, CoreSite announced a dividend of $0.27 per
share of common stock and common stock equivalents for the third
quarter of 2013. The dividend was paid on October 15, 2013, to
shareholders of record on September 30, 2013.
CoreSite also announced on August 30, 2013, a dividend of
$0.4531 per share of Series A preferred stock for the period July
15, 2013, to October 14, 2013. The preferred dividend was paid on
October 15, 2013, to shareholders of record on September 30,
2013.
2013 Guidance
CoreSite is tightening its FFO per share and OP unit guidance
and now expects FFO per share in the range of $1.80 to $1.84,
compared to the previous range of $1.76 to $1.84.
This outlook is predicated on current economic conditions,
internal assumptions about CoreSite’s customer base, and the supply
and demand dynamics of the markets in which CoreSite operates. The
guidance does not include the impact of any future financing,
investment or disposition activities.
Upcoming Conferences and
Events
CoreSite will participate in NAREIT’s REITWorld conference from
November 13 through November 14 at the San Francisco Marriott
Marquis in San Francisco, CA.
Conference Call Details
CoreSite will host a conference call on October 31, 2013, at
12:00 p.m., Eastern time (10:00 a.m., Mountain 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 10000326. The replay will be available until November 7,
2013.
Interested parties may also listen to a simultaneous webcast of
the conference call by logging on to CoreSite’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) propels customer growth
and long-term competitive advantage by connecting Internet, private
networking, mobility, and cloud communities within and across its
fourteen high-performance data center campuses and through the
CoreSite Mesh. More than 750 of the world's leading carriers and
mobile operators, content and cloud providers, media and
entertainment companies, and global enterprises choose CoreSite to
run their performance-sensitive applications and to connect and do
business with each other. With direct access to more than 275
carriers and ISPs, North America inter-site connectivity and the
nation's first Open Cloud Exchange that provides access to the
"most lit" buildings and cloud "on-ramps," CoreSite provides easy,
efficient and valuable gateways to global business opportunities.
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 CoreSite’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 its 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)
September 30,
2013
December 31,
2012
Assets: Investments in real estate: Land $ 76,227 $ 85,868
Building and building improvements 668,580 596,405 Leasehold
improvements 92,996 85,907 837,803
768,180 Less: Accumulated depreciation and amortization
(142,133 ) (105,433 ) Net investment in operating properties
695,670 662,747 Construction in progress 157,200
61,328
Net investments in real estate
852,870 724,075 Cash and cash equivalents 702
8,130 Accounts and other receivables, net 11,095 9,901 Lease
intangibles, net 12,460 19,453 Goodwill 41,191 41,191 Other assets
47,583 42,582
Total
assets $ 965,901 $ 845,332
Liabilities and equity: Liabilities
Revolving credit facility $ 108,000 $ - Mortgage loans payable
58,625 59,750 Accounts payable and accrued expenses 75,248 50,624
Deferred rent payable 9,579 4,329 Acquired below-market lease
contracts, net 7,050 8,539 Prepaid rent and other liabilities
11,697 11,317
Total liabilities
270,199 134,559
Stockholders'
equity Series A cumulative preferred stock 115,000 115,000
Common stock, par value $0.01 208 207 Additional paid-in capital
265,483 259,009 Distributions in excess of net income
(45,953 ) (35,987 ) Total stockholders' equity 334,738
338,229 Noncontrolling interests 360,964
372,544
Total equity 695,702
710,773
Total liabilities and equity $
965,901 $ 845,332
Consolidated Statement of Operations (in thousands, except
share and per share data)
Three Months Ended Nine
Months Ended
September 30,
2013
June 30,
2013
September 30,
2012
September 30,
2013
September 30,
2012
Operating revenues: Rental revenue $ 35,283 $ 34,205 $
31,603 $ 102,590 $ 91,837 Power revenue 15,979 14,486 14,230 43,994
39,543 Interconnection revenue 7,441 7,053 6,177 21,066 15,268
Tenant reimbursement and other 1,932 1,923
1,752 5,743 5,034
Total operating revenues 60,635 57,667 53,762 173,393 151,682
Operating expenses: Property operating and maintenance
17,368 15,118 16,360 47,013 46,029 Real estate taxes and insurance
2,226 2,304 2,158 6,750 6,304 Depreciation and amortization 16,424
16,261 16,583 48,634 47,991 Sales and marketing 3,206 3,936 2,231
10,931 6,941 General and administrative 7,045 6,177 6,389 20,225
18,777 Rent 5,082 4,756 4,689 14,631 13,957 Transaction costs
25 249 293 279
576 Total operating expenses 51,376
48,801 48,703 148,463
140,575
Operating income 9,259 8,866
5,059 24,930 11,107 Interest income 14 2 5 18 12 Interest expense
(708 ) (783 ) (1,595 ) (1,930 )
(3,922 ) Income before income taxes 8,565 8,085 3,469 23,018 7,197
Income tax expense (56 ) (206 ) (522 )
(435 ) (1,059 ) Net income 8,509 7,879 2,947 22,583 6,138
Net income attributable to noncontrolling interests 3,524
3,176 1,627 8,962
3,389 Net income attributable to CoreSite Realty
Corporation 4,985 4,703 1,320 13,621 2,749 Preferred dividends
(2,084 ) (2,085 ) - (6,253 )
- Net income attributable to common shares $ 2,901
$ 2,618 $ 1,320 $ 7,368 $ 2,749
Net income per share attributable to common shares: Basic $ 0.14 $
0.13 $ 0.06 $ 0.35 $ 0.13 Diluted $ 0.14 $ 0.12 $
0.06 $ 0.34 $ 0.13 Weighted average common
shares outstanding: Basic 20,871,504 20,829,375 20,554,893
20,793,596 20,514,713 Diluted 21,479,971 21,445,875 21,027,635
21,465,710 20,890,894
Reconciliations of Net
Income to FFO (in thousands, except per share data)
Three Months Ended
Nine Months Ended
September 30,
2013
June 30,
2013
September 30,
2012
September 30,
2013
September 30,
2012
Net income $ 8,509 $ 7,879 $ 2,947 $ 22,583 $ 6,138 Real estate
depreciation and amortization 15,443 15,309
15,689 45,894 46,133 FFO $ 23,952 $ 23,188 $
18,636 $ 68,477 $ 52,271 Preferred stock dividends
(2,084) (2,085) - (6,253) - FFO
available to common shareholders and OP unit holders
$ 21,868 $ 21,103 $ 18,636 $ 62,224
$ 52,271 Weighted average common shares outstanding -
diluted 21,479,971 21,445,875 21,027,635 21,465,710 20,890,894
Weighted average OP units outstanding - diluted 25,353,942
25,353,709 25,346,805 25,353,787 25,345,998 Total weighted average
shares and units outstanding - diluted 46,833,913 46,799,584
46,374,440 46,819,497 46,236,892 FFO per common share and OP unit -
diluted $ 0.47 $ 0.45 $ 0.40 $ 1.33 $ 1.13
Funds From Operations “FFO” is a supplemental
measure of our 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. We calculate FFO in accordance with the standards
established by the National Association of Real Estate Investment
Trusts (“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. FFO attributable to
common shares and units represents FFO less preferred stock
dividends declared during the period.
Our 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.
We offer this measure because we recognize
that FFO will be used by investors as a basis to compare our
operating performance with that of other REITs. However, because
FFO excludes depreciation and amortization and captures neither the
changes in the value of our 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 our properties, all of which have real economic
effect and could materially impact our financial condition and
results from operations, the utility of FFO as a measure of our
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 our cash needs, including our ability to
pay dividends or make distributions. In addition, our 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 from us.
Investors in our securities should not rely on these measures as a
substitute for any GAAP measure, including net income.
Reconciliations of Net Income to EBITDA and
Adjusted EBITDA (in thousands)
Three Months Ended Nine Months
Ended
September 30,
2013
June 30,
2013
September 30,
2012
September 30,
2013
September 30,
2012
Net income $ 8,509 $ 7,879 $ 2,947 $ 22,583 $ 6,138 Adjustments:
Interest expense, net of interest income 694 781 1,590 1,912 3,910
Income taxes 56 206 522 435 1,059 Depreciation and amortization
16,424 16,261
16,583 48,634 47,991 EBITDA $
25,683 $ 25,127 $ 21,642 $ 73,564 $ 59,098 Non-cash compensation
1,759 1,683 1,556 5,337 4,083 Transaction costs / litigation
25 399 293
529 2,026 Adjusted EBITDA $
27,467 $ 27,209 $ 23,491 $ 79,430
$ 65,207
EBITDA is defined as earnings before
interest, taxes, depreciation and amortization. We calculate
adjusted EBITDA by adding our non-cash compensation expense,
transaction costs and litigation expense 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 our ability to incur and service debt. In addition, we consider
EBITDA and adjusted EBITDA to be appropriate supplemental measures
of our 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.
CoreSite Investor Relations ContactGreer Aviv | CoreSite
Investor Relations Director+1 303.405.1012 | +1
303.222.7276Greer.Aviv@CoreSite.com
Cencora (NYSE:COR)
Historical Stock Chart
From Jul 2024 to Aug 2024
Cencora (NYSE:COR)
Historical Stock Chart
From Aug 2023 to Aug 2024
