Wheeler Real Estate Investment Trust, Inc. - FORM 8-K - EX-99.1 - May 21, 2013

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Exhibit 99.1

 

LOGO

FOR IMMEDIATE RELEASE

WHEELER REAL ESTATE INVESTMENT TRUST, INC. ANNOUNCES

2013 FIRST QUARTER FINANCIAL RESULTS

Virginia Beach, VA – May 15, 2013 – Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLR) (“Wheeler” or the “Company”), today reported financial results for the three month period ended March 31, 2013.

2013 First Quarter Summary of Activities

 

•  

Property portfolio occupancy rate of 94.3%

 

•  

The Company signed a contract to purchase Bixby Commons, a 75,000 square foot free-standing retail property located in Bixby, Oklahoma for the purchase price of approximately $10.6 million. Principle tenant is Associated Wholesale Grocers, Inc., and is secured under an initial 20-year lease term.

 

•  

For the three month period, the Company’s Board of Directors declared monthly cash dividends of approximately $0.035 per a share.

2013 First Quarter Financial Highlights

 

•  

Wheeler reported Funds from Operations (“FFO”) for the three month period ended March 31, 2013 of $168,794, or $0.05 per basic and diluted share. Same store total FFO was negative $261,103, primary due to the added corporate general and administrative expenses related to operating as a publicly traded company. While new store total FFO was $429,897 for the period.

 

•  

Total revenue for the first quarter of 2013 was $1.6 million. Same store revenue was $497,772 for the period ended March 31, 2013 and new store revenue was approximately $1.1 million.

 

•  

Property net operating income (“NOI”) was $1.3 million for the quarter ended March 31, 2013. Same store NOI was approximately $397,638, while new store NOI was approximately $919,576.

 

•  

Net loss attributable to Wheeler REIT for common stockholders for the period ended March 31, 2013 was $433,682, or $0.13 per basic and diluted share.

 

•  

Total operating expense was $1.5 million for the first quarter of 2013. New stores operating expenses were $824,391, while same store operating expenses were $723,235 for the period ended March 31, 2013.

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.

Wheeler Real Estate Investment Trust    Page 2
May 15, 2013   

 

Portfolio Summary

 

Property

    Location    Year Built/Renovated    GLA      % Leased  

Amscot Building

    Tampa, FL    2004      2,500         100 % 

Harps Food Store

    Grove, OK    2012      31,500         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    1998/2002      47,680         100 % 

Walnut Hill Plaza

    Petersburg, VA    1959/2006/2008      89,907         82.7 % 
        

 

 

     

 

 

  

Totals

      470,350         94.3 % 
        

 

 

     

 

 

  

2013 Dividend Distribution History

 

Announce Date

    Record Date    Pay Date    Amount      Frequency  

4/16/2013

    4/30/2013    5/31/2013      0.035         Monthly   

3/15/2013

    3/31/2013    4/30/2013      0.035         Monthly   

2/19/2013

    3/1/2013    3/31/2013      0.035         Monthly   

1/16/2013

    2/1/2013    2/28/2013      0.035         Monthly   
           

 

 

  

Total Amount Paid to Shareholders:

             $ 613,989   
           

 

 

  

Acquisition Activity Subsequent to First Quarter 2013

Currently, the Company has entered into assignments of purchase and sale agreements with Wheeler Interest, LLC to assume the contracts of four third-party retail focused properties. Additionally, the Company has entered into purchase and sale agreements to acquire a third-party retailed focused property and an adjoining parcel of vacant land.

The Company has also entered into purchase contacts with five related-party sellers to acquire an additional three shopping centers, one strip center and one free-standing retail building.

Additional information regarding these properties will be available upon filing the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2013 via the U.S. Securities and Exchange Commission website (www.sec.gov).

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 Quarterly Report on Form 10-Q which includes the Company’s 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.

Wheeler Real Estate Investment Trust    Page 3
May 15, 2013   

 

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.

 

CONTACT:    -OR-      INVESTOR RELATIONS:
Wheeler Real Estate Investment Trust, Inc.         The Equity Group Inc.
Robin Hanisch         Adam Prior
Corporate Secretary         Senior Vice President
(757) 627-9088 / robin@whlr.us         (212) 836-9606 / aprior@equityny.com
        Terry Downs
        Associate
        (212) 836-9615 / tdowns@equityny.com

Wheeler Real Estate Investment Trust    Page 4
May 15, 2013   

 

Wheeler Real Estate Investment Trust

Condensed Consolidated Statements of Income

(in thousands, except for share data)

 

     Three Months Ended March 31,  
     2013     2012  

REVENUE:

     

Rental revenues

    $ 1,393,032      $ 396,732   

Other revenues

      224,884        133,111   
  

 

 

    

 

 

  

Total Revenue

      1,617,916        529,843   
  

 

 

    

 

 

  

OPERATING EXPENSES:

     

Property operations

      300,702        115,177   

Depreciation and amortization

      648,132        186,611   

Provision for credit losses

      15,000        —     

Corporate general & administrative

      583,792        170,302   
  

 

 

    

 

 

  

Total Operating Expenses

      1,547,626        472,090   
  

 

 

    

 

 

  

Operating Income (Loss)

      70,290        57,753   

Interest expense

      (549,628 )      (197,904 ) 
  

 

 

    

 

 

  

Net Loss

      (479,338 )      (140,151 ) 

Less: Net loss attributable to noncontrolling interests

      (45,656 )      —     
  

 

 

    

 

 

  

Net Loss Attributable to Wheeler REIT

    $ (433,682 )    $ (140,151 ) 
  

 

 

    

 

 

  

Loss per share:

     

Basic and Diluted

    $ (0.13 )   
  

 

 

    

Weighted-average number of shares:

     

Basic and Diluted

      3,301,502     
  

 

 

    

Wheeler Real Estate Investment Trust    Page 5
May 15, 2013   

 

Wheeler Real Estate Investment Trust

Consolidated Balance Sheets

(in thousands, except for share data)

 

     March 31,     December 31,  
     2013     2012  
     (unaudited)        

ASSETS:

     

Investment properties, at cost

    $ 46,748,018      $ 46,637,221   

Less accumulated depreciation and amortization

      3,612,525        3,291,556   
  

 

 

    

 

 

  
     43,135,493        43,345,665   

Cash and cash equivalents

      1,053,480        2,053,192   

Rents and other tenant receivables, net

      815,658        761,114   

Deferred costs and other assets

      6,360,737        6,527,906   
  

 

 

    

 

 

  

Total Assets

    $ 51,365,368      $ 52,687,877   
  

 

 

    

 

 

  

LIABILITIES:

     

Mortgages and other indebtedness

    $ 31,821,342      $ 31,843,503   

Below market lease intangible, net

      3,523,869        3,673,019   

Accounts payable, accrued expenses and other liabilities

      808,792        938,896   

Total Liabilities

      36,154,003        36,455,418   
  

 

 

    

 

 

  

Commitments and contingencies

      —          —     

EQUITY:

     

Convertible preferred stock (no par value, 500,000 shares authorized, no shares issued and outstanding, respectively)

      —          —     

Common stock ($0.01 par value, 15,000,000 shares authorized, 3,301,502 and 3,301,502 shares issued and outstanding, respectively)

      33,015        33,015   

Additional paid-in capital

      14,097,453        14,097,453   

Accumulated deficit

      (6,418,537 )      (5,443,099 ) 
  

 

 

    

 

 

  

Total Shareholders’ Equity

      7,711,931        8,687,369   

Noncontrolling interests

      7,499,434        7,545,090   
  

 

 

    

 

 

  

Total Equity

      15,211,365        16,232,460   
  

 

 

    

 

 

  

Total Liabilities and Equity

    $ 51,365,368      $ 52,687,877   
  

 

 

    

 

 

  

Wheeler Real Estate Investment Trust    Page 6
May 15, 2013   

 

The following tables provide same store and new store financial information. Same store date includes the results for the three month period ended March 31, 2013 of the following entities that were part of the original REIT formation transaction:

 

  •  

The Shoppes at Eagle Harbor

 

  •  

Monarch Bank Building

 

  •  

Amscot Building

 

  •  

Riversedge North

 

  •  

Walnut Hill Plaza

New store financial information reflects the activity from the acquisition date to March 31, 2013

 

  •  

Lumber River Village (acquired November 16, 2012))

 

  •  

Perimeter Square (acquired November 16, 2012)

 

  •  

Shoppes at TJ Maxx (acquired November 16, 2012)

 

  •  

Harps at Harbor Point (acquired December 14, 2012)

 

  •  

Twin City Crossing (acquired December 18, 2012)

 

  •  

Surrey Plaza (acquired December 21, 2012)

Wheeler Real Estate Investment Trust

Funds From Operations

Three Months Ended March 31,

 

     Same Stores     New Stores      Totals     Period Over  Period
Changes		  
     2013     2012     2013     2012      2013     2012     $     %  

Net income (loss)

    $ (385,751 )    $ (140,151 )    $ (93,587 )    $ —         $ (479,338 )    $ (140,151 )    $ (339,187 )      (242.02 %) 

Depreciation of real estate assets

      124,648        186,611        523,484        —           648,132        186,611        461,521        247.32 % 
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Total FFO

    $ (261,103 )    $ 46,460      $ 429,897      $ —         $ 168,794      $ 46,460      $ 122,334        263.31 % 
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

Funds From Operations (FFO)

Wheeler considers FFO to be an important supplemental measure of its operating performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is 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 exclude depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides 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.

Wheeler Real Estate Investment Trust    Page 7
May 15, 2013   

 

Wheeler Real Estate Investment Trust

Same Store and New Store Operating Income

 

     Three Months Ended March 31,  
     Same Store     New Store      Total  
     2013     2012     2013     2012      2013     2012  

Property revenues

    $ 497,772      $ 529,843      $ 1,120,144      $ —         $ 1,617,916      $ 529,843   

Property expenses

      100,134        115,177        200,568        —           300,702        115,177   
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Property Net Operating Income

      397,638        414,666        919,576        —           1,317,214        414,666   
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Depreciation and amortization

      124,648        186,611        523,484        —           648,132        186,611   

Provision for credit losses

      —          —          15,000        —           15,000        —     

Corporate general & administrative

      498,453        170,302        85,339        —           583,792        170,302   
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Total Other Operating Expenses

      623,101        356,913        623,823        —           1,246,924        356,913   
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Interest expense

      160,288        197,904        389,340        —           549,628        197,904   
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Net Loss

    $ (385,751 )    $ (140,151 )    $ (93,587 )    $ —         $ (479,338 )    $ (140,151 ) 
  

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Wheeler Real Estate Investment Trust, Inc. Reports