Excel Trust Announces Results for the Quarter Ended March 31, 2013, Declares Dividend

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Excel Trust Announces Results for the Quarter Ended March 31, 2013, Declares Dividend

SAN DIEGO--(BUSINESS WIRE)-- Excel Trust, Inc. (NYS: EXL) (the "Company") announced today financial and operating results for the quarter ended March 31, 2013. A supplemental financial package with additional information can be found on Excel Trust's website under the Investor Relations tab.

Highlights for the First Quarter 2013

  • Reported Adjusted Funds from Operations (AFFO) for the quarter of $10.0 million, or $0.21 per diluted share
  • Reported Funds from Operations (FFO) for the quarter of $10.3 million or $0.22 per diluted share.
  • Adjusted guidance to a range of $0.82 to $0.88 for AFFO, and $0.78 to $0.84 for FFO
  • Declared a second quarter 2013 dividend of $0.17 per share, which equates to an annualized dividend rate of $0.68 per share
  • Acquired Tracy Pavilion Shopping Center for approximately $30.7 million
  • Issued approximately $37 million of common stock through the Company's ATM (At-The-Market) program (including sales subsequent to March 31, 2013)

"Since the beginning of the year we have moved forward on our stated objective of positioning the Company to be able to access the unsecured debt markets," stated Gary Sabin, Chairman and CEO. "We have successfully locked in attractive debt at our West Broad property, prepaid two above market mortgages, added a quality asset to our portfolio, and issued equity through our ATM program to further strengthen our balance sheet."

Excel Trust reported Adjusted Funds From Operations (AFFO) for the first quarter of $10.0 million, or $0.21 per diluted share. Excel Trust reported Funds From Operations (FFO) for the three-month period ended March 31, 2013 of $10.3 million or $0.22 per diluted share. Net loss attributable to the common stockholders for the three-month period ended March 31, 2013 was $2.4 million, or $0.06 per diluted share. This compares to AFFO of $6.4 million, or $0.19 per diluted share, FFO of $6.5 million or $0.19 per diluted share and net loss attributable to the common stockholders of $1.7 million, or $0.06 per diluted share in the three-month period ended March 31, 2012.

Included in FFO for the quarter ended March 31, 2013 were transaction costs of approximately $133,000 related to acquisitions. Also included in FFO was non-cash compensation expense of approximately $562,000, or $0.01 per diluted share in the quarter ended March 31, 2013 resulting from the Company's incentive stock award plan. FFO was also impacted by a non-cash gain related to changes in the fair value of financial instruments and the redemption of certain OP units of approximately $230,000. The gain of $230,000 reflected in changes in the fair value of financial instruments was a reclassification of the remaining balance of a redemption provision related to the OP Units issued in connection with the acquisition of the Edwards Theatres property, which expired in March 2013.

Excel Trust considers AFFO and FFO important supplemental measures of its operating performance and believes that they are frequently used by securities analysts, investors and other interested parties in the evaluation of real estate investment trusts (REITs), many of which present AFFO and FFO when reporting their results. A complete reconciliation containing adjustments from GAAP net income available to common shareholders to AFFO and FFO and a definition of both are included at the end of this release.

Summary of Significant Activities During First Quarter 2013

On January 24, 2013, Excel Trust acquired Tracy Pavilion, a 374,766 square foot shopping center in Tracy, California, for approximately $30.7 million. The Company owns 162,353 square feet as Home Depot and WinCo are both tenant owned. Other major tenants include Marshalls, Ross, PetSmart, Staples and Ulta. In a five mile radius average household income is estimated to be $95,558 (Source: AGS 2013).

During the three months ended March 31, 2013 the Company issued common stock through an ATM (At-The-Market) stock issuance program resulting in net proceeds of $25.6 million. Subsequent to March 31, 2013, the Company issued additional shares resulting in net proceeds of approximately $10.7 million. The Company used the net proceeds to repay outstanding indebtedness under its unsecured revolving credit facility and for other general corporate and working capital purposes.

Events Subsequent to First Quarter 2013

On April 19, 2013, the Company refinanced the loan at West Broad Village, resulting in a new principal amount of $39.7 million, which will bear interest at a fixed rate of 3.3% and will mature in May 2020.

On April 29, 2013, the Company utilized borrowings from its unsecured credit facility to repay approximately $20.0 million in mortgage notes with 2013 maturities related to the Five Forks Place and Grant Creek Town Center properties.

Second Quarter 2013 Dividends Declared

The Board of Directors declared a second quarter cash dividend of $0.17 per common share payable on July 15, 2013 to shareholders of record as of June 28, 2013.

The Board of Directors has also declared a dividend of $0.4375 per share on the Company's Series A Cumulative Convertible Perpetual Preferred Shares, and a dividend of $0.5078 on its Series B Cumulative Redeemable Preferred Shares. The dividend on Excel Trust's outstanding Series A and Series B Preferred Shares will be payable on July 15, 2013 to the Series A and Series B Preferred shareholders of record as of June 28, 2013.

Guidance

Excel Trust expects its AFFO per share for fiscal year 2013 to be between $0.82 and $0.88 and its FFO per share to be between $0.78 and $0.84, which excludes transaction costs, leasing commissions and tenant improvement allowances. The Company will further discuss assumptions surrounding guidance tomorrow on the conference call. Excel Trust believes that AFFO is the most helpful indicator of the Company's ability to pay recurring dividends since it adjusts for certain non-cash and non-recurring items.

The foregoing estimates are forward-looking and reflect management's view of current and future market conditions, including certain assumptions with respect to leasing activity, rental rates, occupancy levels, interest rates, and the amount and timing of acquisitions and development activities. Excel Trust's actual results may differ materially from these estimates.

Conference Call

In conjunction with Excel Trust's results, you are invited to listen to its conference call on Thursday, May 2, 2013 at 1:00 p.m. Eastern Time.

PHONE: Conference call access information is as follows:
Dial in number: (800) 299-8538
International Dial in number: (617) 786-2902
Pass code: 34697712

INTERNET: A live webcast of the conference call will be available through Excel Trust's web site at www.exceltrust.com. The conference call will be recorded and available for replay for seven days beginning at 4:00 p.m. ET on May 2, 2013. Replay access information is as follows:
Dial in number: (888) 286-8010
International Dial in number: (617) 801-6888
Pass code: 30082346

About Excel Trust

Excel Trust, Inc. is a retail focused REIT that primarily targets community and power centers, grocery anchored neighborhood centers and freestanding retail properties. The Company has elected to be treated as a REIT, for U.S. federal income tax purposes. Excel Trust trades publicly on the NYSE under the symbol "EXL." For more information on Excel Trust, Inc., please visit www.exceltrust.com.

Forward Looking Statements

This press release may contain statements that are forward-looking, as that term is defined by the Private Securities Litigation Reform Act of 1995 or by the Securities and Exchange Commission in its rules, regulations and releases. These statements include, but are not limited to, discussions related to the Company's expectations regarding the performance of its business, its liquidity and capital resources and other non-historical statements. These forward-looking statements are based on management's beliefs, as well as assumptions made by, and information currently available to, management. When used in this release, the words "believe," "anticipate," "estimate," "expect," "intend" and similar expressions are intended to identify forward-looking statements. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct.

Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO)

Excel Trust considers FFO and AFFO to be important supplemental measures of its operating performance and believes they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO and AFFO when reporting their results. FFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO and AFFO exclude depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, they provide a performance measure that, when compared year-over-year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income.

Excel Trust computes FFO in accordance with standards established by the National Association of Real Estate Investment Trusts, or NAREIT. As defined by NAREIT, FFO represents net income (loss) (computed in accordance with generally accepted accounting principles, or GAAP), excluding real estate-related depreciation and amortization, impairment charges and net gains (losses) on the disposition of assets and after adjustments for unconsolidated partnerships and joint ventures. Excel Trust computes AFFO by adding to FFO the non-cash compensation expense, amortization of prepaid financing costs and non-recurring transaction costs, and other one-time items, then subtracting or adding straight-line rents, amortization of above and below market leases and non-incremental capital expenditures. Excel Trust's computation of FFO and AFFO may differ from the methodology for calculating FFO and AFFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. Further, FFO and AFFO do not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties.

FFO and AFFO should not be considered alternatives to net income (loss) (computed in accordance with GAAP) as an indicator of Excel Trust's financial performance or to cash flow from operating activities (computed in accordance with GAAP) as an indicator of Excel Trust's liquidity, nor are they indicative of funds available to fund Excel Trust's cash needs, including Excel Trust's ability to pay dividends or make distributions.

Summarized Financial Statements

Reported results are preliminary and not final until the filing of Excel Trust's Form 10-Q or 10-K with the Securities and Exchange Commission and, therefore, remain subject to adjustment. The accompanying notes to follow in the Form 10-Q or 10-K are an integral part of these consolidated financial statements.

EXCEL TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

 
  

March 31, 2013

  December 31, 2012
ASSETS:
 
Property:
Land$326,669$320,289
Buildings585,304564,352
Site improvements53,50351,875
Tenant improvements45,53742,903
Construction in progress3,1351,709
Less accumulated depreciation (43,125) (36,765)

Property, net

971,023944,363
Cash and cash equivalents6,6585,596
Restricted cash6,3445,657
Tenant receivables, net3,4865,376
Lease intangibles, net80,96185,646
Mortgage loan receivable--
Deferred rent receivable6,8515,983
Other assets (1)18,49717,618
Investment in unconsolidated entities 9,021  9,015 
Total assets$1,102,841 $1,079,254 
 
LIABILITIES AND EQUITY:
 
Liabilities:
Mortgages payable, net$332,732$333,935
Notes payable

88,000

75,000
Accounts payable and other liabilities22,06125,319
Lease intangibles, net25,32026,455
Dividends/distributions payable 10,491  9,773 
Total liabilities478,604470,482
 
Equity:
Stockholders' equity
Preferred stock136,423136,423
Common stock468448
Additional paid-in capital474,321459,151
Cumulative deficit (1,118) (1,414)
610,094594,608
Accumulated other comprehensive loss (415) (572)
Total stockholders' equity609,679594,036
Non-controlling interests 14,558  14,736 
Total equity 624,237  608,772 
Total liabilities and equity$1,102,841 $1,079,254 

The notes in the Form 10-Q or 10-K are an integral part of these condensed consolidated financial statements.

(1) Other assets is primarily comprised of deposits, notes receivable, prepaid expenses and furniture, fixtures, and equipment
 
 

EXCEL TRUST, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data and dividends per share)
 
  

Three Months Ended
March 31, 2013

  

Three Months Ended
March 31, 2012

Revenues: 
Rental revenue$22,481$16,153
Tenant recoveries4,7323,267
Other income 316  360 
Total revenues27,52919,780
 
Expenses:
Maintenance and repairs1,7151,322
Real estate taxes3,0262,065
Management fees234191
Other operating expenses1,527829
General and administrative3,8343,502
Depreciation and amortization 12,390  8,279 
Total expenses 22,726  16,188 
 
Net operating income4,8033,592
 
Interest expense(4,798)(3,674)
Interest income5053

Income (loss) from equity in unconsolidated entities

39-
Changes in fair value of financial instruments and gain on OP unit redemption 230  462 
Net income (loss)324433
Net (income) loss attributable to non-controlling interests (28) 5 
Net income (loss) attributable to Excel Trust, Inc.296438
Preferred stock dividends (2,744) (2,121)
 
Net loss attributable to the common stockholders$(2,448)$(1,683)
 
Basic and diluted net loss per share$(0.06)$(0.06)
Weighted-average common shares outstanding - basic and diluted 45,352  31,761 
Dividends declared per common share$0.1700 $0.163 

The notes in the Form 10-Q or 10-K are an integral part of these condensed consolidated financial statements.

 
 

Reconciliation of Net Income to FFO and AFFO

 
  

Three Months Ended
March 31, 2013

  

Three Months Ended
March 31, 2012

 
Net loss attributable to the common stockholders$(2,448)$(1,683)
 
Add:
Non-controlling interests in operating partnership(59)(71)
Depreciation and amortization12,3908,279
Deduct:

Depreciation and amortization related to joint venture

 411  (62)

Funds from operations

$10,294$6,463
 
Adjustments:
Transaction costs133194
Deferred financing costs495472
Stock-based and other non-cash compensation expense562785
Changes in fair value of financial instruments(230)(462)
Straight-line effects of lease revenue(877)(750)
Amortization of above and below market leases40(228)
Non-incremental capital expenditures(116)(110)

Non-cash expenses (income) related to joint venture

 (297) - 

Adjusted funds from operations

$10,004 $6,364 
 
Weighted average common shares outstanding45,35231,761

Add:

OP units1,2411,393
Restricted stock234370
Contingent consideration related to business combinations-102
LTIP restricted stock 190  - 
Weighted average common shares outstanding - diluted (FFO and AFFO) 47,017  33,626 
 

Funds from operations per share (diluted)

$0.22$0.19

Adjusted funds from operations per share (diluted)

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