MINOT, N.D., Sept. 10, 2018 /PRNewswire/ -- IRET (NYSE:
IRET) announced today its first quarter fiscal 2019 financial and
operating results. Net income and Funds from Operations
("FFO") per share for the three months ended July 31, 2018,
are detailed below. Core FFO adjusts FFO for certain
non-routine items, and both FFO and Core FFO are reconciled to net
income in the tables accompanying this earnings release.
|
|
Three Months
Ended
|
|
|
July
31,
|
Per
Share
|
|
2018
|
|
2017
|
Net Income
(Loss)
|
|
$
|
0.01
|
|
|
$
|
(0.11)
|
|
FFO
|
|
$
|
0.08
|
|
|
$
|
0.10
|
|
Core FFO
|
|
$
|
0.09
|
|
|
$
|
0.10
|
|
|
|
Year-Over-Year
Comparison
|
|
Sequential
Comparison
|
Multifamily
Same-Store Results
|
|
1Q19 vs.
1Q18
|
|
1Q19 vs.
4Q18
|
Revenues
|
|
3.0
|
%
|
|
0.7
|
%
|
Expenses
|
|
3.3
|
%
|
|
3.0
|
%
|
Net Operating Income
("NOI")
|
|
2.8
|
%
|
|
(1.0)
|
%
|
Multifamily
Same-Store Results
|
|
1Q19
|
|
4Q18
|
|
1Q18
|
Physical
Occupancy
|
|
94.0
|
%
|
|
96.4
|
%
|
|
94.5
|
%
|
Weighted Average
Occupancy
|
|
93.5
|
%
|
|
94.8
|
%
|
|
92.9
|
%
|
"We continued to improve as an organization in the first quarter
of fiscal 2019," said Mark O. Decker,
Jr., IRET's President and CEO. "Same-store NOI grew 2.8%
year-over-year, with strong revenue growth in most markets and
expense growth in line with our expectations. In addition,
our sale of the Williston
portfolio in the first quarter enabled us to exit a non-core market
and eliminate $30 million of recourse
debt. Finally, we made significant changes to our operations
in the first quarter, restructuring the leadership team with a
focus on achieving operational excellence. We believe that
these changes will advance the speed at which we can realize our
earnings potential and become the premier provider of apartment
homes in our markets."
First Quarter Fiscal Year 2019 Highlights
- Posted same-store NOI growth of 2.8%, our third consecutive
quarter of year-over-year NOI growth;
- Increased same-store revenue by 3.0% year-over-year, driven by
a 2.4% rental increase and a 0.6% average occupancy increase;
- Experienced an increase in same-store expenses of 3.3%
year-over-year, which is in line with expectations but does not
reflect the impact of expense reduction initiatives implemented
during the quarter;
- Sold seven non-core assets in the quarter for total proceeds of
$49.1 million, as described in
"Dispositions" below;
- Took a charge of $510,000 to
general and administrative expenses during the quarter related to
the realignment and reduction of corporate officers;
- Implemented operations expense reduction initiatives during the
quarter that resulted in a charge to property expenses of
$110,000; and
- Subsequent to quarter-end, refinanced our line of credit to
increase the overall borrowing capacity from $370 million to $395
million by right-sizing our revolver commitment to
$250 million, extending our existing
$70 million term loan maturity to
January 2024, and adding a new
$75 million term loan maturing in
August 2025.
Dispositions
During the quarter, we sold three
apartment communities, two commercial properties, and two parcels
of land for a total sale price of $49.1
million.
Balance Sheet
- At the end of the first quarter, we had $192.3 million of total liquidity on our balance
sheet, including $170.0 million
available on our corporate revolver and $6.0
million on our operating line of credit.
- During the quarter, we repurchased and retired approximately
118,000 common shares and redeemed approximately 90,000 Units for
an aggregate cost of approximately $1.1
million, representing an average price of approximately
$5.23 per share.
Quarterly Distributions
On June
5, 2018, IRET's Board of Trustees declared a regular
quarterly distribution of $0.07 per
share/unit payable on July 2, 2018,
to common shareholders and unitholders of record on June 15, 2018. This distribution was the
190th consecutive quarterly distribution paid by IRET since the
inception of our dividends in 1971. It represents an annualized
rate of $0.28 per share/unit.
The Board of Trustees also declared a distribution of
$0.4140625 per share on the 6.625%
Series C Cumulative Redeemable Preferred Shares (NYSE:
IRET PRC) payable on July 2,
2018, to holders of record on June
15, 2018. Series C preferred share distributions are
cumulative and payable quarterly in arrears at an annual rate of
$1.65625 per share.
Earnings Call
Live webcast and
replay: http://ir.iretapartments.com
|
|
|
|
Live Conference
Call
|
|
Conference Call
Replay
|
Tuesday, September
11, 2018, at 10:00 AM ET
|
|
Replay available
until September 25, 2018
|
USA Toll Free
Number
|
1-877-509-9785
|
|
USA Toll Free
Number
|
1-877-344-7529
|
International Toll
Free Number
|
1-412-902-4132
|
|
International Toll
Free Number
|
1-412-317-0088
|
Canada Toll Free
Number
|
1-855-669-9657
|
|
Canada Toll Free
Number
|
1-855-669-9658
|
|
|
|
Conference
Number
|
10123388
|
Supplemental Information
Supplemental Operating and
Financial Data for the Quarter ended July 31, 2018
("Supplemental Information"), is available in the Investors section
on IRET's website at www.iretapartments.com or by calling Investor
Relations at 701-837-7104. Non-GAAP financial measures
and other capitalized terms, as used in this earnings release, are
defined and reconciled in the Supplemental Information that
accompanies this earnings release.
About IRET
IRET is a real estate company focused on
the ownership, management, acquisition, redevelopment, and
development of apartment communities. As of July 31,
2018, we owned interests in 87 apartment communities
consisting of 13,703 apartment homes. IRET's common
shares and Series C preferred shares are publicly traded on the New
York Stock Exchange (NYSE symbols: "IRET" and "IRET PRC,"
respectively).
Forward Looking Statements
Certain statements in this
press release are based on our current expectations and
assumptions, and are "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements do not discuss historical
fact, but instead include statements related to expectations,
projections, intentions or other items related to the future.
Words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates," and variations of those words and
similar expressions are intended to identify forward-looking
statements. These forward-looking statements involve known
and unknown risks, uncertainties, and other factors that may cause
the actual results, performance, or achievements to be materially
different from the results of operations, financial conditions, or
plans expressed or implied by the forward-looking statements.
Although we believe the expectations reflected in our
forward-looking statements are based upon reasonable assumptions,
we can give no assurance that our expectations will be
achieved. Any statements contained herein that are not
statements of historical fact should be deemed forward-looking
statements. As a result, reliance should not be placed on
these forward-looking statements as these statements are subject to
known and unknown risks, uncertainties, and other factors beyond
our control and could differ materially from our actual results and
performance. Such risks and uncertainties are detailed from
time to time in our filings with the SEC, including the
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Risk Factors" contained in our Annual
Report on Form 10-K for the fiscal year ended April 30, 2018, in our subsequent quarterly
reports on Form 10-Q, and in other public reports. We
assume no obligation to update or supplement forward-looking
statements that become untrue due to subsequent events.
IRET
|
RECONCILIATION OF NET
INCOME ATTRIBUTABLE TO
|
IRET TO FFO AND CORE
FFO
|
|
|
(in thousands, except per share amounts)
|
Three Months Ended
July 31,
|
2018
|
|
2017
|
|
Amount
|
|
Weighted
Avg Shares
and Units(1)
|
|
Per
Share
And
Unit(2)
|
|
Amount
|
|
Weighted
Avg Shares
and Units(1)
|
|
Per
Share
And
Unit(2)
|
Net income (loss)
attributable to controlling interests
|
$
|
2,916
|
|
|
|
|
|
|
$
|
(11,264)
|
|
|
|
|
|
Less dividends to
preferred shareholders
|
(1,705)
|
|
|
|
|
|
|
(2,286)
|
|
|
|
|
|
Less redemption of
preferred shares
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
Net income (loss)
available to common shareholders
|
1,211
|
|
|
119,245
|
|
|
$
|
0.01
|
|
|
(13,550)
|
|
|
120,421
|
|
|
$
|
(0.11)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interest – Operating Partnership
|
135
|
|
|
14,026
|
|
|
|
|
(1,644)
|
|
|
15,128
|
|
|
|
Depreciation and
amortization
|
17,837
|
|
|
|
|
|
|
28,119
|
|
|
|
|
|
Gains on depreciable
property sales attributable to controlling interests
|
(8,628)
|
|
|
|
|
|
|
(124)
|
|
|
|
|
|
FFO applicable to
Common Shares and Units(1)
|
$
|
10,555
|
|
|
133,271
|
|
|
$
|
0.08
|
|
|
$
|
13,057
|
|
|
135,549
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to Core
FFO:
|
|
|
|
|
|
|
|
|
|
|
|
Loss on
extinguishment of debt
|
552
|
|
|
|
|
|
|
199
|
|
|
|
|
|
Transition and
severance costs
|
510
|
|
|
|
|
|
|
464
|
|
|
|
|
|
Core FFO
applicable to common shares and Units(1)
|
$
|
11,617
|
|
|
133,271
|
|
|
$
|
0.09
|
|
|
$
|
13,720
|
|
|
135,549
|
|
|
$
|
0.10
|
|
|
|
(1)
|
Units of the
Operating Partnership are exchangeable for cash or, at our
discretion, Common Shares on a one-for-one basis.
|
(2)
|
Net income
attributable to IRET is calculated on a per Common Share basis. FFO
is calculated on a per Common Share and Unit basis.
|
IRET
|
RECONCILIATION OF NET
OPERATING INCOME TO THE
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
(in
thousands)
|
Three Months Ended
July 31, 2018
|
Multifamily
|
|
All Other
|
|
Total
|
Real estate
revenue
|
$
|
43,089
|
|
|
$
|
2,857
|
|
|
$
|
45,946
|
|
Real estate
expenses
|
18,486
|
|
|
1,043
|
|
|
19,529
|
|
Net operating
income
|
$
|
24,603
|
|
|
$
|
1,814
|
|
|
$
|
26,417
|
|
Property management
expenses
|
|
|
|
|
(1,367)
|
|
Casualty
loss
|
|
|
|
|
(225)
|
|
Depreciation and
amortization
|
|
|
|
|
(18,612)
|
|
General and
administrative expenses
|
|
|
|
|
(3,870)
|
|
Interest
expense
|
|
|
|
|
(8,385)
|
|
Loss on debt
extinguishment
|
|
|
|
|
(552)
|
|
Interest and other
income
|
|
|
|
|
516
|
|
Loss before gain on
sale of real estate and other investments and income from
discontinued operations
|
|
|
|
|
(6,078)
|
|
Gain on sale of real
estate and other investments
|
|
|
|
|
9,224
|
|
Income (loss) from
continuing operations
|
|
|
|
|
3,146
|
|
Income (loss) from
discontinued operations
|
|
|
|
|
570
|
|
Net income
(loss)
|
|
|
|
|
$
|
3,716
|
|
|
|
|
(in
thousands)
|
Three Months Ended
July 31, 2017
|
Multifamily
|
|
All Other
|
|
Total
|
Real estate
revenue
|
$
|
35,999
|
|
|
$
|
4,979
|
|
|
$
|
40,978
|
|
Real estate
expenses
|
15,734
|
|
|
1,793
|
|
|
17,527
|
|
Net operating
income
|
$
|
20,265
|
|
|
$
|
3,186
|
|
|
$
|
23,451
|
|
Property management
expenses
|
|
|
|
|
(1,356)
|
|
Casualty
loss
|
|
|
|
|
(485)
|
|
Depreciation and
amortization
|
|
|
|
|
(25,338)
|
|
Loss on
impairment
|
|
|
|
|
(256)
|
|
General and
administrative expenses
|
|
|
|
|
(4,002)
|
|
Interest
expense
|
|
|
|
|
(8,131)
|
|
Loss on debt
extinguishment
|
|
|
|
|
(199)
|
|
Interest and other
income
|
|
|
|
|
228
|
|
Loss before gain on
sale of real estate and other investments and income from
discontinued operations
|
|
|
|
|
(16,088)
|
|
Gain on sale of real
estate and other investments
|
|
|
|
|
124
|
|
Income (loss) from
continuing operations
|
|
|
|
|
(15,964)
|
|
Income (loss) from
discontinued operations
|
|
|
|
|
2,685
|
|
Net income
(loss)
|
|
|
|
|
$
|
(13,279)
|
|
Investor Relations Contact:
Jonathan Bishop
701-837-7104
IR@iret.com
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SOURCE IRET