Wheeler Real Estate Investment Trust, Inc. Announces 2012 Year End Financial Results

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Wheeler Real Estate Investment Trust, Inc. Announces 2012 Year End Financial Results

VIRGINIA BEACH, Va.--(BUSINESS WIRE)-- Wheeler Real Estate Investment Trust, Inc. (Nasdaq: WHLR) ("Wheeler" or the "Company"), a real estate investment trust ("REIT") specializing in owning, acquiring, financing, developing, renovating, leasing and managing income-producing assets, such as community centers, neighborhood centers, strip centers and free-standing retail properties, today reported financial results for the year ended December 31, 2012.

Significant Events for the Year Ended December 31, 2012

  • In November 2012, the Company completed its Initial Public Offering ("IPO"), generating approximately $13.4 million in net proceeds.
  • Since the completion of its IPO, Wheeler has purchased two grocery-anchored shopping centers and a free-standing retail property. The aggregate total purchase price of these three properties was approximately $11.4 million.
  • Currently, the Company is under contract to purchase an additional free-standing retail property located in Bixby, Oklahoma for a purchase price of $10.6 million.
  • The Company has declared a monthly dividend at an initial annual distribution of $0.42 per share, equal to approximately $0.035 per month.

Jon S. Wheeler, Chairman and Chief Executive Officer, commented, "We completed our IPO last November and have since acquired three additional assets, all of which fit the Company's acquisition criteria. We believe that as a public company, we have been provided an opportunity to capitalize on the steady pipeline of 'necessity-shopping' based properties in secondary and tertiary markets that are available for purchase. In the year ahead, we expect to continue to pursue acquisitions that will maximize the Company's return and create long-term value for shareholders."

2012 Financial Highlights

  • Wheeler reported Funds from Operations ("FFO") for the year ended December 31, 2012 of negative $383,506, or $0.12 per basic and diluted share. Same store total FFO was negative $489,785, as a result of an increase in corporate general and administrative expenses of $878,857, primarily related to the audit, operational and organizational costs that were incurred during the Company's IPO process. New store total FFO was $106,279, as result of the three acquisitions that occurred as part of the REIT formation transactions in November 2012 and the three acquisitions completed in December 2012.
  • Property net operating income ("NOI") was $1.9 million for the year ended December 31, 2012, consisting of approximately $1.6 million in same store NOI and approximately $332,000 of new store NOI. Same store property NOI benefited from an additional $83,183 received in base rental income and tenant reimbursements over the prior year.
  • Same store revenue was $2.0 million for the year ended December 31, 2012. New store revenue was $425,518 which relates to the three properties that the Company acquired as part of the REIT formation transactions in November 2012 and the three properties acquired during December 2012, as noted above.
  • Net loss attributable to common stockholders for the year ended December 31, 2012 was $1.2 million, or $0.35 per basic and diluted share.
  • Total other operating expense, which includes depreciation and amortization, provision for credit losses and general and administrative expenses, was $2.2 million for the year ended December 31, 2012. New stores total operating expenses were $233,570, while same store operating expenses increased to $1.9 million, primarily due to the $878,857 increase in corporate general and administrative expenses related to Wheeler's REIT formation process.

Additional "same store" and "new store" information is included in the accompanying tables.

FFO is a non-GAAP financial measure within the meaning of the rules of the Securities and Exchange Commission. See the discussion included in this press release for information regarding non-GAAP financial measures. A reconciliation of non-GAAP financial measures is included in the accompanying financial tables.

IPO and Acquisition Activity

As mentioned above, in November 2012, Wheeler closed its IPO of 3,016,045 shares of common stock at a price of $5.25 per share. The Company's shares were listed on The NASDAQ Capital Market and commenced trading on November 19, 2012. The Company realized approximately $13.4 million in net proceeds from the offering, after the deduction of underwriting fees and related costs.

Since completion of the IPO, the Company has acquired 2 grocery-anchored shopping centers and a free-standing retail property. The combined purchase price of these properties was approximately $11.4 million and was paid for using a combination of proceeds from the IPO, debt financing and the issuance of operating partnership units.

Currently, the Company is under contract to purchase for $10.6 million a free-standing retail property. The property is a 75,000 sq. foot supermarket located in Bixby, Oklahoma.

Portfolio Summary

    

 

            
Property   Location   Year Built/Renovated   GLA   % Leased
Amscot Building   Tampa, FL   2004   2,500   100%
Harps Food Store   Grove, OK   2012   31,705   100%
Lumber River Village   Lumberton, NC   1985/1997-98/2004   66,781   100%
Monarch Bank   Virginia Beach, VA   2002   3,620   100%
Perimeter Square   Tulsa, OK   1982-1983   58,277   95.7%
Riversedge North   Virginia Beach, VA   2007   10,550   100%
Shoppes at TJ Maxx   Richmond, VA   1982/1999   93,552   90.6%
Surrey Plaza   Hawkinsville, GA   1993   42,680   100%
The Shoppes at Eagle Harbor   Carrollton, VA   2009   23,303   100%
Twin City Crossing   Batesburg-Leesville, SC   1998   47,680   100%
Walnut Hill Plaza   Petersburg, VA   1959/2006/2008   89,907   82.7%
Totals   470,350   94.3%

The above table does not include the pending acquisition of Bixby Commons which is 100% leased and will add approximately 75,000 sq. feet of GLA to Wheeler's portfolio.

About Wheeler Real Estate Investment Trust, Inc.

Headquartered in Virginia Beach, VA, the Company specializes in owning, acquiring, financing, developing, renovating, leasing and managing income producing assets, such as community centers, neighborhood centers, strip centers and free-standing retail properties. Wheeler's portfolio contains strategically selected properties, primarily leased by nationally and regionally recognized retailers of consumer goods and located in the Mid-Atlantic, Southeast and Southwest regions of the United States.

Additional information about Wheeler and its properties can be found at its corporate website: www.whlr.us.

Financial Information

Additional information about Wheeler, including a copy of Wheeler's Annual Report on Form 10-K which includes the Company's audited consolidated financial statements and Management's Discussion & Analysis, will be available upon filing via the U.S. Securities and Exchange Commission website (www.sec.gov) or through Wheeler's website at www.whlr.us.

Forward-Looking Statement

This press release contains forward-looking statements, including discussion and analysis of our financial condition, anticipated capital expenditures required to complete projects, amounts of anticipated cash distributions to the Company's shareholders in the future and other matters. These forward-looking statements are not historical facts but are the intent, belief or current expectations of management based on its knowledge and understanding of our business and industry. Forward-looking statements are typically identified by the use of terms such as "may," "will," "should," "potential," "predicts," "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," or the negative of such terms and variations of these words and similar expressions. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.

Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. You are cautioned to not place undue reliance on forward-looking statements, which reflect management's view only as of the date of this press release. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results. Factors that could cause actual results to differ materially from any forward-looking statements made in this press release include:

  • the imposition of federal taxes if the Company fails to qualify as a REIT in any taxable year or opts to forego an opportunity to ensure REIT status;
  • uncertainties related to the national economy, the real estate industry in general and in our specific markets;
  • legislative or regulatory changes, including changes to laws governing REITs;
  • adverse economic or real estate developments in Virginia, Florida, Georgia, South Carolina, North Carolina or Oklahoma;
  • increases in interest rates and operating costs;
  • inability to obtain necessary outside financing;
  • litigation risks;
  • lease-up risks;
  • inability to obtain new tenants upon the expiration of existing leases;
  • inability to generate sufficient cash flows due to market conditions, competition, uninsured losses, changes in tax or other applicable laws; and
  • the need to fund tenant improvements or other capital expenditures out of operating cash flow.
      

Wheeler Real Estate Investment Trust

Condensed Consolidated Statements of Income

(in thousands, except for share data)

     
Years Ended December 31,
  2012  2011 
 

REVENUE:

Minimum rent$1,954,321$1,458,083
Percentage of sales rent9,3606,525
Tenant reimbursements452,110329,452
Other income  18,188  131,217 
 
Total Revenue  2,433,979  1,925,277 
 

OPERATING EXPENSES:

Property operating311,042352,508
Real estate taxes134,301104,555
Repairs and maintenance73,87763,253
Depreciation and amortization822,152744,931
Provision for credit losses25,00020,000
Corporate general & administrative  1,307,151  388,660 
 
Total Operating Expenses  2,673,523  1,673,907 
 
Operating Income (Loss)

(239,544

)

251,370
 
Interest expense  

(966,113

)

 

(805,969

)

 
Net Loss

(1,205,657

)

(554,599

)

 
Less: Net loss attributable to noncontrolling interests  

(43,880

)

 

- 
 
Net Loss Attributable to Wheeler REIT

$

 

(1,161,777

)

$

(554,599

)
 
Loss per share:
Basic 

$

(0.35

)
Diluted 

$

(0.35

)
 
Weighted-average number of shares:
Basic  3,301,502 
Diluted  3,301,502 
 
      

Wheeler Real Estate Investment Trust

Consolidated Balance Sheets

(in thousands, except for share data)

 

     
December 31,
 2012  2011 
 

ASSETS:

Investment properties, at cost

$

      46,637,221

$

      15,774,838

Less accumulated depreciation and amortization 3,291,556  2,618,324 

43,345,665

        13,156,514

 
Cash and cash equivalents2,053,192104,007
Receivables:
Rents and other tenant receivables, net183,02182,849
Rents and other tenant receivables due from related parties, net250,063128,790
Unbilled rent328,030360,952
Deferred costs and other assets 6,271,604  991,784 
 
Total Assets

 $

       52,431,575

 

 $

       14,824,896

 
 

LIABILITIES:

Mortgages and other indebtedness

$

      31,843,503

$

      12,136,083

Below market lease intangible, net3,673,019-
Accounts payable, accrued expenses and other liabilities748,727846,742
Due to related parties 190,169  1,172,746 
 
Total Liabilities 

36,455,418

  

        14,155,571

 
 
--

Commitments and contingencies

 

EQUITY:

Convertible preferred stock (no par value, 500,000 shares authorized,
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