MCLEAN, Va., April 28, 2014 /PRNewswire/ -- Gladstone
Commercial Corporation (NASDAQ: GOOD), or the Company, today
reported financial results for the first quarter ended March 31, 2014. A description of funds from
operations, or FFO, a relative non-GAAP (generally accepted
accounting principles in the United
States) financial measure, is located at the end of this
press release. All per share references are to fully-diluted
weighted average shares of common stock, unless otherwise noted.
Please read the Company's Quarterly Report on Form 10-Q,
filed today with the U.S. Securities and Exchange Commission, or
the SEC, which can be retrieved from the SEC's website at
www.sec.gov or from the Company's website at
www.GladstoneCommercial.com.
Summary Information (dollars in thousands, except per
share data):
|
As of and for the
three months ended
March 31, 2014
|
|
As of and for the
three months ended
December 31, 2013
|
|
Change
|
|
% Change
|
Operating
Data:
|
|
|
|
|
|
|
|
Total operating
revenue
|
$ 17,136
|
|
$ 16,860
|
|
$ 276
|
|
1.6%
|
Total operating
expenses
|
(23,736)
|
|
(9,542)
|
|
(14,194)
|
|
148.8%
|
Other
expense
|
(6,914)
|
|
(6,984)
|
|
70
|
|
-1.0%
|
Net (loss)
income
|
$ (13,514)
|
|
$ 334
|
|
$ (13,848)
|
|
-4146.1%
|
Dividends
attributable to preferred stock
|
(1,023)
|
|
(1,023)
|
|
-
|
|
0.0%
|
Dividends
attributable to senior common stock
|
(100)
|
|
(97)
|
|
(3)
|
|
3.1%
|
Net loss attributable
to common stockholders
|
$ (14,637)
|
|
$ (786)
|
|
$ (13,851)
|
|
1762.2%
|
Real estate
depreciation and amortization
|
6,720
|
|
6,453
|
|
267
|
|
4.1%
|
Impairment
charge
|
13,958
|
|
-
|
|
13,958
|
|
100.0%
|
Funds from operations
available to common stockholders
|
$ 6,041
|
|
$ 5,667
|
|
$ 374
|
|
6.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share and Per
Share Data:
|
|
|
|
|
|
|
|
Net loss attributable
to common stockholders - basic and diluted
|
$ (0.93)
|
|
$ (0.05)
|
|
$ (0.88)
|
|
1760.0%
|
FFO available to
common stockholders - basic and diluted
|
$ 0.38
|
|
$ 0.38
|
|
$ -
|
|
0.0%
|
Weighted average
shares outstanding-basic
|
15,746,714
|
|
14,798,950
|
|
947,764
|
|
6.4%
|
Weighted average
shares outstanding-diluted
|
16,063,693
|
|
15,095,381
|
|
968,312
|
|
6.4%
|
Cash dividends
declared per common share
|
$ 0.375
|
|
$ 0.375
|
|
$ -
|
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Position:
|
|
|
|
|
|
|
|
Real estate, before
accumulated depreciation
|
$ 627,993
|
(1)
|
$ 642,353
|
|
$ (14,360)
|
|
-2.2%
|
Total
assets
|
$ 678,882
|
|
$ 690,525
|
|
$ (11,643)
|
|
-1.7%
|
Mortgage notes
payable, term preferred stock and borrowings
under the line of credit
|
$ 489,447
|
|
$ 485,502
|
|
$ 3,945
|
|
0.8%
|
Total stockholders'
equity
|
$ 169,850
|
|
$ 183,146
|
|
$ (13,296)
|
|
-7.3%
|
Properties
owned
|
89
|
|
87
|
|
2
|
|
2.3%
|
Square feet
owned
|
9,298,288
|
|
9,256,779
|
|
41,509
|
|
0.4%
|
Square feet
leased
|
96.8%
|
|
96.8%
|
|
0.0%
|
|
0.0%
|
|
|
|
|
|
|
|
|
(1) Does not include
real estate held for sale as of March 31, 2014.
|
|
|
First Quarter Activity:
- Acquired and Developed Properties: Invested a
total of $11.8 million at a weighted
average cap rate of 10.2%. Acquired 2 properties consisting of
41,509 square feet for an aggregate purchase price of $10.0 million at a cap rate of 10.3%. Ongoing
development includes the $5.5
million, 150,000 square foot expansion of an existing
tenant's property; of which $1.8
million was expended during the quarter at an average cap
rate of 9.8%;
- Assumed Debt: Assumed a mortgage loan for
$6.3 million, which is collateralized
by the 2 properties acquired this quarter at a fixed interest rate
of 5.6%;
- Extended Line of Credit: Extended the line of credit for
one year to August 2017 and amended
certain terms including reducing the applicable LIBOR margin by 25
basis points;
- Issued Common Stock: Issued 419,000 shares of common
stock through the ATM program, resulting in net proceeds of
$7.2 million;
- Recorded Impairment Charge: Recorded an impairment
charge of $14.0 million on
Roseville, Minnesota property;
and
- Paid Distributions: Paid monthly cash distributions for
the quarter totaling $0.375 per share
on the common stock, $0.4843749 per
share on the Series A Preferred Stock, $0.46875 per share on the Series B Preferred
Stock, $0.4453125 per share on the
Series C Term Preferred Stock and $0.2625 per share on the senior common
stock.
Q1 2014 Results: FFO available to common stockholders for
the three months ended March 31,
2014, was $6.0 million, or
$0.38 per share, a 6.6% increase when
compared to the three months ended December
31, 2013. FFO increased primarily due to the increase in
operating revenues derived from the two properties acquired this
quarter coupled with a full quarter of earnings from the two
properties acquired during the fourth quarter of 2013, which was
partially offset by an increase in interest expense due to the
mortgage debt issued and assumed in the past two quarters coupled
with an increase in overall operating expenses. FFO per share
remained flat during the quarter as the additional revenue achieved
from new acquisitions was offset by additional common shares issued
during the first quarter.
Net loss attributable to common stockholders for the three
months ended March 31, 2014, was
$14.6 million, or $0.93 per share, compared to net loss available
to common stockholders for the three months ended December 31, 2013, of $0.8
million, or $0.05 per share. A
reconciliation of FFO to net loss for the three months ended
March 31, 2014 and December 31, 2013, which the Company believes is
the most directly comparable GAAP measure to FFO, and a computation
of basic and diluted FFO per weighted average share of common stock
and basic and diluted net income per weighted average share of
common stock is set forth in the Summary Information table above.
Comments from the Company's President, Bob Cutlip: "Our financial results for the
quarter reflect an increase in revenues from our real estate
investments made during the past two quarters. The weighted average
cap rate on our invested capital during the first quarter of 2014,
including acquisitions and expansions, was 10.2%.We have
successfully increased our total assets for 10 consecutive
quarters. While we did take an impairment charge on one of
our properties during the quarter, we believe the remainder of our
portfolio is on solid footing. Additionally, we have a very
strong pipeline today and expect to close a substantial amount of
deals during the remainder of 2014. We also continue to focus on
our portfolio, working with our existing tenants to extend leases
scheduled to expire in 2015 and to re-lease our space that remains
vacant. We are looking forward to an active 2014."
Subsequent to the end of the quarter:
- Acquired Property: Purchased a 61,358 square foot office
property for $8.2 million at a cap
rate of 8.5%,
- Issued Debt: Borrowed $4.9
million, collateralized by the above property at a fixed
interest rate of 4.9%; and
- Declared Distributions: Declared monthly cash
distributions for April, May and June
2014 totaling $0.375 per share
on the common stock, $0.4843749 per
share on the Series A Preferred Stock, $0.46875 per share on the Series B Preferred
Stock, $0.4453125 per share on the
Series C Term Preferred Stock and $0.2625 per share on the senior common
stock.
Conference Call: The Company will hold a conference call
on Tuesday, April 29, 2014, at
8:30 a.m. EDT to discuss its earnings
results. Please call (888) 734-0328 and use code 25652881 to
enter the conference call. An operator will monitor the call
and set a queue for any questions. A conference call replay will be
available beginning one hour after the call and will be accessible
through May 29, 2014. To hear
the replay, please dial (800) 585-8367 and use conference number
25652881. The live audio broadcast of the Company's quarterly
conference call will also be available online at the Company's
website, www.GladstoneCommercial.com. The event will also be
archived and available for replay on the Company's website through
June 29, 2014.
About Gladstone Commercial: Gladstone Commercial
Corporation is a real estate investment trust that invests in and
owns net leased industrial, commercial and retail real property and
selectively makes long-term industrial and commercial mortgage
loans. Including payments through April 2014, the Company has paid 112 consecutive
monthly cash distributions on its common stock. Prior to
paying distributions on a monthly basis, the Company paid 5
consecutive quarterly cash distributions. The Company has also paid
100 consecutive monthly cash distributions on its Series A
Preferred Stock, 91 consecutive monthly cash distributions on its
Series B Preferred Stock, 27 consecutive monthly cash distributions
on its Series C Term Preferred Stock and 49 consecutive monthly
cash distributions on its senior common stock. The Company
has never skipped, reduced or deferred a distribution since
inception, over 11 years ago. Further information on the
Company can be found at www.gladstonecommercial.com.
About the Gladstone Companies: Information on the
business activities of all the Gladstone funds can be found at
www.gladstonecompanies.com.
Investor Relations: For Investor Relations inquiries
related to any of the monthly dividend paying Gladstone funds, please visit
www.gladstone.com.
Non-GAAP Financial Measure – FFO: The National
Association of Real Estate Investment Trusts ("NAREIT") developed
FFO as a relative non-GAAP supplemental measure of operating
performance of an equity REIT in order to recognize that
income-producing real estate historically has not depreciated on
the basis determined under GAAP. FFO, as defined by NAREIT,
is net income (computed in accordance with GAAP), excluding gains
(or losses) from sales of property and impairment losses on
property, plus depreciation and amortization of real estate assets,
and after adjustments for unconsolidated partnerships and joint
ventures. FFO does not represent cash flows from operating
activities determined in accordance with GAAP and should not be
considered an alternative to net income as an indication of its
performance or to cash flow from operations as a measure of
liquidity or ability to make distributions. The Company
believes that FFO per share provides investors with an additional
context for evaluating its financial performance and as a
supplemental measure to compare it to other REITs; however,
comparisons of its FFO to the FFO of other REITs may not
necessarily be meaningful due to potential differences in the
application of the NAREIT definition used by such other
REITs. To learn more about FFO, please refer to the Company's
Form 10-Q for the quarter ended March 31,
2014, as filed with the SEC today.
The statements in this press release regarding the Company's
ability, plans or prospects to re-lease its unoccupied properties,
grow its portfolio, and negotiate to extend leases are
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These
forward-looking statements inherently involve certain risks and
uncertainties, although they are based on the Company's current
plans that are believed to be reasonable as of the date of this
press release. Factors that may cause actual results to
differ materially from these forward-looking statements
include, but are not limited to, the Company's ability to raise
additional capital; availability and terms of capital and
financing, both to fund its operations and to refinance its
indebtedness as it matures; the duration of, or further downturns
in, the current economic environment; the performance of its
tenants; the impact of competition on its efforts to renew existing
leases or re-lease space; and significant changes in interest
rates. Additional factors that could cause actual results to
differ materially from those stated or implied by its
forward-looking statements are disclosed under the caption "Risk
factors" of its Form 10-K for the fiscal year ended December 31, 2013, as filed with the SEC on
February 18, 2014.
The Company cautions readers not to place undue
reliance on any such forward-looking statements, which speak only
as of the date made. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except
as required by law.
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SOURCE Gladstone Commercial Corporation