SOURCE: Excel Trust, Inc.

Excel Trust, Inc.

July 30, 2014 16:27 ET

Excel Trust Announces Results for the Quarter Ended June 30, 2014 Declares Dividend

SAN DIEGO, CA--(Marketwired - Jul 30, 2014) - Excel Trust, Inc. (the "Company") (NYSE: EXL) announced today financial and operating results for the quarter ended June 30, 2014. A supplemental financial package with additional information can be found on Excel Trust's website under the Investor Relations tab.

Highlights for the Second Quarter 2014

  • Reported Adjusted Funds from Operations (AFFO) for the quarter of approximately $12 million, or $0.24 per diluted share
  • Reported Funds from Operations (FFO) for the quarter of approximately $10.7 million or $0.21 per diluted share
  • Declared a third quarter 2014 dividend of $0.175 per share of common stock, which equates to an annualized dividend rate of $0.70 per share
  • Issued $250 million in 4.625% 10-year Senior Unsecured Notes with a 4.691% yield to maturity
  • Issued 12.65 million shares of common stock at a price of $13.25 per share, generating net proceeds of approximately $160.7 million

"We believe the progress we made in the second quarter will benefit the company for years to come," said Gary Sabin, Chairman and CEO. "In May, we capitalized on our investment grade ratings by issuing $250 million of attractive, long-term, unsecured debt. In June, we successfully raised approximately $161 million in equity to help purchase several high quality properties currently under contract. These transactions mark important milestones for the company as they enhance the quality of our earnings, strengthen our balance sheet, and lay a foundation for future growth."

Financial Results

Excel Trust reported Adjusted Funds From Operations (AFFO) for the second quarter of 2014 of $12.0 million, or $0.24 per diluted share and Funds From Operations (FFO) for the second quarter of $10.7 million or $0.21 per diluted share. Net loss attributable to the common stockholders for the second quarter was $0.8 million, or $0.02 per diluted share. This compares to AFFO of $10.7 million, or $0.22 per diluted share, FFO of $12.0 million or $0.25 per diluted share and net income attributable to the common stockholders of $0.6 million, or $0.1 per diluted share in the three-month period ended June 30, 2013.

Excel Trust reported AFFO for the six months ended June 30, 2014 of $23.8 million or $0.48 per diluted share and FFO of $22.1 million or $0.44 per diluted share. Net loss attributable to the common stockholders for the six months ended June 30, 2014 was $1.4 million or $0.03 per diluted share. The compares to AFFO of $20.7 million, or $0.44 per diluted share, FFO of $22.3 million or $0.47 per diluted share and a net loss attributable to the common stockholders of $1.8 million or $0.04 per diluted share in the six month period ended June 30, 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 the common shareholders to AFFO and FFO and a definition of both are included at the end of this release.

Operating Results

At the end of the second quarter 2014, the retail portfolio was 94.0% leased compared to 93.7% in the first quarter 2014. Anchor space was 99.1% leased compared to 99.1% in the first quarter 2014 and inline space was 84.5% leased compared to 83.9% in the first quarter 2014.

During the second quarter 2014, the Company signed 49 retail leases and renewals, totaling 231,779 square feet. The average releasing spread on comparable new leases was 4.9%.

Same Store Net Operating Income ("SSNOI") for the second quarter 2014 increased 1.8%.

Summary of Significant Activities During Second Quarter 2014

On May 12, 2014, the Company completed an underwritten public offering of $250.0 million aggregate principal amount of 4.625% Senior Unsecured Notes due 2024. The notes were priced at 99.477% of the principal amount to yield 4.691% to maturity. The notes will be senior unsecured obligations of the operating partnership and will be fully and unconditionally guaranteed by Excel Trust, Inc.

On June 25, 2014, the Company completed a public offering of 12.65 million shares of its common stock at a public offering price of $13.25 per share. After the underwriting discount and estimated offering expenses payable by the Company, the Company received net proceeds of approximately $160.7 million.

Third Quarter 2014 Dividends Declared

The Board of Directors declared a third quarter cash dividend of $0.175 per common share payable on October 15, 2014 to shareholders of record as of September 30, 2014.

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 October 15, 2014 to shareholders of record as of September 30, 2014.

Revised 2014 Guidance

Excel Trust is revising its previously announced guidance to incorporate recent debt and equity offerings. The Company expects its AFFO per share for fiscal year 2014 to be between $0.85 and $0.91and its FFO per share to be between $0.77 and $0.83. The Company will further discuss assumptions surrounding guidance tomorrow on the conference call.

Conference Call

In conjunction with Excel Trust's results, you are invited to listen to its conference call on Thursday, July 31, 2014 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.

REPLAY: A replay of the conference call will be made available through Excel Trust's web site at www.exceltrust.com. A replay will also be available by phone for three days beginning at 4:00 p.m. ET on July 31, 2014. 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 contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties include, without limitation: general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases, dependence on tenants' financial condition, and competition from other developers, owners and operators of real estate); adverse economic or real estate developments in the retail industry or the markets in which the Company operates; increased interest rates and operating costs; decreased rental rates or increased vacancy rates; the Company's failure to obtain necessary outside financing on favorable terms or at all; changes in the availability of additional acquisition opportunities; the Company's inability to successfully complete real estate acquisitions or successfully operate acquired properties; the Company's failure to qualify or maintain its status as a REIT; risks associated with the Company's dependence on key personnel whose continued service is not guaranteed; and risks associated with downturns in domestic and local economies, and volatility in the securities markets. For a further list and description of such risks and uncertainties, see the reports filed by the Company with the Securities and Exchange Commission, including the Company's most recent annual report on Form 10-K and quarterly reports on Form 10-Q. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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 Consolidated Balance Sheet   
   
CONSOLIDATED BALANCE SHEETS  
(Dollars in thousands)  
   
    June 30, 2014     December 31, 2013  
ASSETS:                
                 
Property:                
  Land   $ 380,363     $ 380,366  
  Buildings     647,401       642,356  
  Site improvements     64,769       63,242  
  Tenant improvements     56,459       54,025  
  Construction in progress     14,980       7,576  
  Less accumulated depreciation     (75,834 )     (61,479 )
    Property, net     1,088,138       1,086,086  
Cash and cash equivalents     183,749       3,245  
Restricted cash     6,973       8,147  
Tenant receivables, net     3,205       5,117  
Lease intangibles, net     68,213       78,345  
Deferred rent receivable     10,342       9,226  
Other assets (1)     22,572       20,135  
Real estate held for sale, net of accumulated amortization     -       -  
Investment in unconsolidated entities     8,303       8,520  
  Total assets   $ 1,391,495     $ 1,218,821  
                 
LIABILITIES AND EQUITY:                
                 
Liabilities:                
  Mortgages payable, net   $ 207,048     $ 251,191  
  Notes payable     -       179,500  
  Unsecured notes     348,693       100,000  
  Accounts payable and other liabilities     29,110       21,700  
  Lease intangibles, net     25,845       28,114  
  Dividends/distributions payable     13,160       10,932  
  Total liabilities     623,856       591,437  
                 
Equity:                
  Total stockholders' equity     755,611       615,446  
  Non-controlling interests     12,028       11,938  
  Total equity     767,639       627,384  
    Total liabilities and equity   $ 1,391,495     $ 1,218,821  
   
   
    (1) Other assets is primarily comprised of deposits, notes receivable, prepaid expenses and furniture, fixtures, and equipment  
   
   
Excel Trust Consolidated Statement of Operations   
   
CONSOLIDATED STATEMENTS OF OPERATIONS  
(In thousands, except per share data and dividends per share)  
   
   
    Three Months Ended June 30, 2014     Three Months Ended June 30, 2013     Six Months Ended June 30, 2014     Six Months Ended June 30, 2013  
                                 
Revenues:                                
  Rental revenue   $ 25,179     $ 22,227     $ 50,086     $ 44,129  
  Tenant recoveries     4,855       4,446       10,110       9,076  
  Other income     596       285       1,030       601  
    Total revenues     30,630       26,958       61,226       53,806  
                                 
Expenses:                                
  Maintenance and repairs     2,186       1,737       4,409       3,418  
  Real estate taxes     2,930       2,992       6,295       5,958  
  Management fees     519       415       1,037       633  
  Other operating expenses     1,615       1,354       3,346       2,862  
  Changes in fair value of contingent consideration     -       (1,558 )     -       (1,558 )
  General and administrative     4,158       3,306       7,973       7,137  
  Depreciation and amortization     11,411       10,810       23,207       22,976  
    Total expenses     22,819       19,056       46,267       41,426  
                                 
Net operating income     7,811       7,902       14,959       12,380  
                                 
  Interest expense     (5,981 )     (4,444 )     (10,970 )     (9,022 )
  Interest income     54       48       103       97  
  Income (loss) from equity in unconsolidated entities     95       (65 )     165       (25 )
  Gain on acquisition of real estate and sale of land parcel     -       -       -       -  
  Changes in fair value of financial instruments and gain on OP unit redemption     -       -       -       230  
                                 
Net income (loss) from continuing operations     1,979       3,441       4,257       3,660  
                                 
  Income from discontinued operations before gain on sale of real estate assets     -       31       -       136  
  Gain on sale of real estate assets     -       -       -       -  
                                 
Income from discontinued operations     -       31       -       136  
                                 
Net income (loss)     1,979       3,472       4,257       3,796  
  Net (income) loss attributable to non-controlling interests     (74 )     (105 )     (157 )     (133 )
                                 
Net income (loss) attributable to Excel Trust, Inc.     1,905       3,367       4,100       3,663  
  Preferred stock dividends     (2,744 )     (2,744 )     (5,488 )     (5,488 )
                                 
Net income (loss) attributable to the common stockholders   $ (839 )   $ 623     $ (1,388 )   $ (1,825 )
                                 
Basic and diluted net income (loss) per share   $ (0.02 )   $ 0.01     $ (0.03 )   $ (0.04 )
Weighted-average common shares outstanding - basic and diluted     48,567       47,150       48,178       46,256  
                                 
    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  
   
For the Periods Ended June 30, 2014  
(In thousands, except per share data)  
   
Excel Trust, Inc.'s FFO and AFFO available to common stockholders and operating partnership unitholders and a reconciliation to net income(loss) for the three and six months ended June 30, 2014 and 2013 is as follows:  
 
                         
    Three Months Ended June 30, 2014     Three Months Ended June 30, 2013     Six Months Ended June 30, 2014     Six Months Ended June 30, 2013  
                                 
Net income (loss) attributable to the common stockholders   $ (839 )   $ 623     $ (1,388 )   $ (1,825 )
                                 
Add:                                
  Non-controlling interests in operating partnership     (16 )     20       (26 )     (39 )
  Depreciation and amortization     11,411       11,149       23,207       23,540  
Deduct:                                
  Depreciation and amortization related to joint venture     156       255       326       666  
Funds from operations   $ 10,712     $ 12,047     $ 22,119     $ 22,342  
                                 
Adjustments:                                
  Transaction costs     171       313       477       447  
  Deferred financing costs     499       419       923       913  
  Stock-based and other non-cash compensation expense     1,390       568       1,964       1,130  
  Changes in fair value of contingent consideration     -       (1,558 )     -       (1,558 )
  Changes in fair value of financial instruments     -       -       -       (230 )
  Straight-line effects of lease revenue     (524 )     (1,100 )     (1,116 )     (1,977 )
  Amortization of above- and below-market leases     (222 )     179       (360 )     219  
  Non-incremental capital expenditures     (68 )     (234 )     (179 )     (350 )
  Non-cash expenses (income) related to joint venture     (8 )     16       (17 )     (281 )
                                 
Adjusted funds from operations   $ 11,950     $ 10,650     $ 23,811     $ 20,655  
                                 
Weighted average common shares outstanding     48,567       47,150       48,178       46,256  
Add:                                
  OP units     1,020       1,225       1,020       1,233  
  Restricted stock     747       213       -       223  
  Contingent consideration related to business combinations     -       -               -  
  LTIP restricted stock     -       94       -       94  
    Weighted average common shares outstanding - diluted (FFO and AFFO)     50,334       48,682       49,198       47,806  
                                 
Funds from operations per share (diluted)   $ 0.21     $ 0.25     $ 0.44     $ 0.47  
Adjusted funds from operations per share (diluted)   $ 0.24     $ 0.22     $ 0.48     $ 0.44  
                                 
                                 
Other Information:                                
  Leasing commissions paid   $ 216     $ 462     $ 488     $ 970  
  Tenant improvements paid   $ 771     $ 711     $ 2,028     $ 3,092  

 

Contact Information

  • Excel Trust, Inc.
    Matt Romney
    SVP, Capital Markets
    858-613-1800
    Email Contact