C2C Industrial Properties Inc.
TSX VENTURE : CCH

C2C Industrial Properties Inc.

May 02, 2013 17:16 ET

C2C Industrial Properties Inc. Reports First Quarter 2013 Results

TORONTO, ONTARIO--(Marketwired - May 2, 2013) - C2C Industrial Properties Inc. ("C2C" or the "Company") (TSX VENTURE:CCH) announced today strong growth and solid operating performance for the three months ended March 31, 2013.

FIRST QUARTER 2013 HIGHLIGHTS:

  • 2012 acquisitions make significant contribution to first quarter financial results
  • NOI more than doubles to $3.4 million compared to prior year's first quarter
  • AFFO rises to $1.7 million or $0.08 per diluted common share
  • Total assets increase to $221.7 million from $113.8 million at March 31, 2012
  • Balance sheet remains strong with 59.1% debt ratio

"The increase in the size and scale of our property portfolio in 2012, combined with our proven property management program, continued in the first quarter of 2013 generating solid and accretive growth in all our key performance benchmarks," commented Chris Ross, President.

Strong Operating and Financial Performance

Primarily as a result of acquisitions over the last twelve months, rental income for the three months ending March 31, 2013 increased to $5.7 million from $2.5 million in the first quarter of the prior year while NOI increased to $3.4 million from $1.5 million over the same quarter of the prior year. Occupancy remained stable at March 31, 2013 with the prior year's first quarter at 95.8%. In-place rental rates rose to $6.48 per square foot at March 31, 2013 from $6.45 per square foot at March 31, 2012.

Funds from Operations ("FFO") for the three months ended March 31, 2013 were $1.8 million or $0.09 per diluted common share, up from $52,000 or $0.02 per diluted common share in the prior year. Adjusted Funds from Operations ("AFFO") for the first quarter of 2013 were $1.7 million or $0.08 per diluted common share, up from $16,000 or $0.00 per diluted common share in the prior year's first quarter. The weighted average diluted number of shares outstanding increased to 21.0 million in the first quarter of 2013 compared to 3.5 million in the same period last year.

The Company maintained a conservative debt to gross book value ratio of 59.1% at March 31, 2013 compared to 59.4% at December 31, 2012, with a weighted average effective interest rate for its mortgage debts of 4.2%, consistent with the prior year end. The Company continues to proactively manage its mortgage portfolio to diversify its lender base and spread out maturities between five-year and ten-year terms.

2013 Recent Events

On April 22, the Company announced that dividends of $0.0265 per common share will be paid on May 18, 2013 to shareholders of record as at May 10, 2013.

On April 19, 2013, the Company acquired an industrial property located in Longueuil, Quebec, totaling 222,464 square feet of gross leasable area. The purchase price was $7.5 million, excluding closing costs, and was paid in cash.

On March 19, 2013, Dundee Industrial REIT ("DIR") and C2C jointly announced that they have entered into a support agreement pursuant to which Dundee Industrial REIT has agreed to make an offer to acquire all of the issued and outstanding shares (the "C2C Shares ") of C2C Industrial Properties Inc. in exchange for units of Dundee Industrial REIT (the "Offer"). C2C Shareholders will receive 0.4485 Dundee Industrial REIT units for each C2C Share, representing an Offer price of $4.85 per C2C Share based on the volume-weighted average trading price of the Dundee Industrial REIT units on the TSX over the 10 trading days ended March 18, 2013. Details regarding the support agreement between Dundee Industrial REIT and C2C are set out in the definitive support agreement dated March 19, 2013, which is available on SEDAR at www.sedar.com. Dundee Industrial REIT's take-over bid circular describing the terms of the Offer to C2C Shareholders was mailed to beneficial holders concurrently with C2C's Directors' Circular on April 8, 2013.

On February 19, 2013 the Company acquired an industrial property located in Toronto, Ontario, totaling 177,562 square feet of gross leasable area. The purchase price of $11.1 million, excluding closing costs, was financed through the assumption of a first mortgage with a principal balance of $5.1 million with the balance in cash.

On February 8, 2013, the Company completed the acquisition of approximately 5 acres of development land in Halifax, Nova Scotia. The purchase price of $1.0 million was paid in cash.

FINANCIAL AND OPERATING HIGHLIGHTS

CDN $ Thousands except per share amounts March 31, 2013 December 31, 2012 March 31, 2012
Operations Information
Number of properties 24 22 14
Gross leasable area (square feet) 2,307,386 2,129,824 1,210,464
Portfolio occupancy 95.8% 95.2% 95.8%
In-place rental rates (per sq. ft.) $ 6.48 $ 6.56 $ 6.45
Financial Information
Investment properties $ 208,260 $ 193,690 $ 102,310
Development Land $ 1,228 $ - $ -
Total assets $ 221,707 $ 212,673 $ 113,827
Mortgages payable $ 113,433 $ 109,135 $ 62,036
Convertible Debentures - liability amount 17,633 17,176 -
Average effective interest rate - mortgages 4.2% 4.1% 5.2%
Debt to gross book value 59.1% 59.4% 54.5%
Shareholders' equity $ 84,437 $ 80,900 $ 49,409
Shares outstanding(1) 17,386,620 17,386,620 12,292,980
$CDN Thousands except per share amounts 3 months ending March 31, 2013 3 months ending March 31, 2012
Results of Operations
Rental revenue $ 5,674 $ 2,491
Net operating income (2) $ 3,375 $ 1,504
Net income $ 3,529 $ 874
Basic income per share $ 0.20 $ 0.27
Diluted income (loss) per share(3) $ 0.19 $ 0.25
Funds from operations ("FFO")(4) $ 1,790 $ 52
FFO per share - basic $ 0.10 $ 0.02
FFO per share - diluted $ 0.09 $ 0.02
Adjusted funds from operations ("AFFO") $ 1,674 $ 16
AFFO per share - basic $ 0.10 $ 0.00
AFFO per share - diluted $ 0.08 $ 0.00
Weighted average basic common shares 17,386,620 3,257,894
Weighted average diluted common shares 21,025,268 3,537,828
(1) On April 11, 2012, C2C did a 25 to 1 share consolidation.
(2) Net operating income is property rental revenue, less property operating costs, property taxes and property management fees.
(3) Diluted income per share includes the impact of the conversion of convertible debentures to common shares.
(4) The Company has revised its definition of FFO to add back the amortization of mortgage transaction and debt settlement costs, previously treated as an add back to AFFO. The FFO values for the prior periods have been restated for this change.

Forward Looking Statements

This document contains forward-looking statements relating to C2C and the industry in which it operates and its strategy, action plans and investments, which may involve estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and/or are beyond C2C's control. Consequently, readers should not place any undue reliance on such forward-looking statements. These forward-looking statements are made as of the date of this press release. C2C is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or other factors, unless otherwise required to do so by applicable law. All forward-looking statements attributable to C2C are expressly qualified by these cautionary statements.

About C2C Industrial Properties Inc.

C2C is a real estate investment corporation specializing in the acquisition, ownership and operation of light industrial properties across Canada. C2C currently owns 25 industrial assets totalling approximately 2.5 million square feet of gross leaseable area. More information about C2C (TSX VENTURE:CCH) is available at www.c2cindustrialproperties.com.

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this press release.

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