InvenTrust Properties
InvenTrust
DOWNERS GROVE, Ill.--(BUSINESS WIRE)-- InvenTrust Properties Corp. (“InvenTrust” or the “Company”) (NYSE: IVT) today reported financial and operating results for the period ended June 30, 2022. For the three months ended June 30, 2022 and 2021, Net Income was $41.9 million, or $0.62 per diluted share, compared to Net Income of $1.5 million, or $0.02 per diluted share, respectively.
Second Quarter 2022 Highlights:
“InvenTrust continues to execute on its business objectives and produce strong results,” stated Daniel (DJ) Busch, President and CEO of InvenTrust. “Our leasing activity remains solid, and we believe the company is well-positioned, with our simple and focused Sun Belt strategy, to deliver sustainable cash flow growth in any economic environment.”
FINANCIAL SUMMARY
NET INCOME
NAREIT FFO
CORE FFO
PRO RATA SAME PROPERTY NOI
DIVIDEND
PORTFOLIO PERFORMANCE & INVESTMENT ACTIVITY
LIQUIDITY AND CAPITAL STRUCTURE
2022 GUIDANCE
InvenTrust has updated its 2022 guidance, as summarized in the table below.
(Unaudited, dollars in thousands, except per share amounts)
Current
Previous
Net Income per diluted share (1)
$0.74
—
$0.78
$0.18
$0.24
NAREIT FFO per diluted share (2)
$1.61
$1.65
$1.58
$1.64
Core FFO per diluted share
$1.52
$1.56
$1.51
Same Property NOI (“SPNOI”) Growth
4.00%
5.00%
3.75%
5.25%
General and administrative (3)
$32,750
$33,750
$33,500
$34,500
Interest expense, net
$24,500
$25,500
$26,500
Net investment activity (4)
~$210,000
(1)
Net Income per diluted share excludes potential gains and losses on asset sales, and any related GAAP adjustments resulting from these transactions.
(2)
2022 NAREIT FFO per diluted share Guidance:
(3)
General and administrative guidance is inclusive of expenses associated with our oversight of the joint venture.
(4)
Net investment activity represents anticipated acquisition activity less disposal activity for 2022.
Net Income, NAREIT FFO, Core FFO and SPNOI guidance are inclusive of prior period rent that we anticipate collecting in 2022.
The Company's 2022 Guidance is based on a number of assumptions that are subject to change and may be outside the control of the Company. If actual results vary from these assumptions, the Company's expectations may change. There can be no assurances that InvenTrust will achieve these results.
CONFERENCE CALL INFORMATION
Date:
August 2, 2022
Time:
9:00 a.m. ET
Dial-in:
(888) 396-8049 / Conference ID: 54356319
Webcast:
https://events.q4inc.com/attendee/388301422
Replay
Webcast Archive: https://www.inventrustproperties.com/investor-relations/
A webcast replay will be available shortly after the conclusion of the presentation using the webcast link above.
NON-GAAP FINANCIAL MEASURES
This Earnings Release includes certain non-GAAP financial measures and other terms that management believes are helpful in understanding our business. These measures should not be considered as alternatives to, or more meaningful than, net income (calculated in accordance with GAAP) or other GAAP financial measures, as an indicator of financial performance and are not alternatives to, or more meaningful than, cash flow from operating activities (calculated in accordance with GAAP) as a measure of liquidity. Non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental financial results to those calculated in accordance with GAAP. The Company's computation of these non-GAAP performance measures may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to similarly titled measures presented by such other REITs. Investors are cautioned that items excluded from these non-GAAP performance measures are relevant to understanding and addressing financial performance. A reconciliation of our non-GAAP measures to the most directly comparable GAAP financials measures are included herein.
SAME PROPERTY NOI or SPNOI
Information provided on a same property basis includes the results of properties that were owned and operated for the entirety of both periods presented. NOI excludes general and administrative expenses, depreciation and amortization, provision for asset impairment, other income and expense, net, gains (losses) from sales of properties, gains (losses) on extinguishment of debt, interest expense, net, equity in earnings (losses) from unconsolidated entities, lease termination income and expense, and GAAP rent adjustments (such as straight-line rent, above/below market lease amortization and amortization of lease incentives).
NAREIT FUNDS FROM OPERATIONS (NAREIT FFO) and CORE FFO
Our non-GAAP measure of NAREIT Funds from Operations ("NAREIT FFO"), based on the National Association of Real Estate Investment Trusts ("NAREIT") definition, is net income (or loss) in accordance with GAAP, excluding gains (or losses) resulting from dispositions of properties, plus depreciation and amortization and impairment charges on depreciable real property. Adjustments for our unconsolidated joint venture is calculated to reflect our proportionate share of the joint venture's NAREIT FFO on the same basis. Core Funds From Operations (“Core FFO”) is an additional supplemental non-GAAP financial measure of our operating performance. In particular, Core FFO provides an additional measure to compare the operating performance of different REITs without having to account for certain remaining amortization assumptions within NAREIT FFO and other unique revenue and expense items which some may consider not pertinent to measuring a particular company’s on-going operating performance.
ADJUSTED EBITDA
Our non-GAAP measure of Adjusted EBITDA excludes gains (or losses) resulting from debt extinguishments, transaction expenses, straight-line rent adjustments, amortization of above and below market leases and lease inducements, and other unique revenue and expense items which some may consider not pertinent to measuring a particular company’s on-going operating performance. Adjustments for our unconsolidated joint venture is calculated to reflect our proportionate share of the joint venture's Adjusted EBITDA on the same basis.
NET DEBT-TO-ADJUSTED EBITDA
Net Debt-to-Adjusted EBITDA is Pro Rata Net Debt divided by Adjusted EBITDA on a trailing twelve month basis.
PRO RATA
Where appropriate, the Company has included the results from its ownership share of its joint venture properties when combined with the Company's wholly owned properties, defined as "Pro Rata," with the exception of property and lease count.
FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets
Dollars in thousands, except share amounts
As of June 30,
As of December 31,
2022
2021
Assets
(unaudited)
Investment properties
Land
$
649,634
598,936
Building and other improvements
1,804,485
1,664,525
Construction in progress
16,857
9,642
Total
2,470,976
2,273,103
Less accumulated depreciation
(369,291
)
(350,256
Net investment properties
2,101,685
1,922,847
Cash, cash equivalents and restricted cash
95,893
44,854
Investment in unconsolidated entities
57,550
107,944
Intangible assets, net
98,501
81,026
Accounts and rents receivable
27,979
30,059
Deferred costs and other assets, net
46,105
25,685
Total assets
2,427,713
2,212,415
Liabilities
Debt, net
702,802
533,082
Accounts payable and accrued expenses
35,952
36,208
Distributions payable
13,836
13,802
Intangible liabilities, net
31,712
28,995
Other liabilities
23,922
28,776
Total liabilities
808,224
640,863
Commitments and contingencies
Stockholders' Equity
Preferred stock, $0.001 par value, 40,000,000 shares authorized, none outstanding
Common stock, $0.001 par value, 146,000,000 shares authorized,
67,427,571 shares issued and outstanding as of June 30, 2022 and
67,344,374 shares issued and outstanding as of December 31, 2021
67
Additional paid-in capital
5,454,292
5,452,550
Distributions in excess of accumulated net income
(3,852,985
(3,876,743
Accumulated comprehensive income (loss)
18,115
(4,322
Total stockholders' equity
1,619,489
1,571,552
Total liabilities and stockholders' equity
Condensed Consolidated Statements of Operations and Comprehensive Income
Dollars in thousands, except share and per share amounts, unaudited
Three Months Ended June 30
Six Months Ended June 30
Income
Lease income, net
58,935
50,978
116,703
100,904
Other property income
318
268
582
450
Other fee income
640
894
1,394
1,907
Total income
59,893
52,140
118,679
103,261
Operating expenses
Depreciation and amortization
24,205
21,995
47,034
43,682
Property operating
9,184
7,774
17,469
15,783
Real estate taxes
8,615
8,158
16,658
16,291
General and administrative
8,116
9,910
16,003
20,261
Total operating expenses
50,120
47,837
97,164
96,017
Other income (expense)
(5,631
(3,972
(10,440
(7,957
Loss on extinguishment of debt
(96
Gain on sale of investment properties, net
36,856
361
880
Equity in earnings of unconsolidated entities
716
775
3,432
1,395
Other income and expense, net
207
32
155
(163
Total other income (expense), net
32,148
(2,804
29,907
(5,845
Net income
41,921
1,499
51,422
1,399
Weighted-average common shares outstanding, basic
67,413,049
71,943,542
67,384,044
71,970,945
Weighted-average common shares outstanding, diluted
67,550,846
72,036,346
67,577,524
72,024,473
Net income per common share, basic and diluted
0.62
0.02
0.76
Distributions declared per common share outstanding
0.21
0.19
0.41
0.39
Distributions paid per common share outstanding
0.20
0.38
Comprehensive income
Unrealized gain (loss) on derivatives
5,514
(138
20,920
1,755
Reclassification to net income
492
1,078
1,517
2,126
47,927
2,439
73,859
5,280
Pro Rata Same Property NOI
Dollars in thousands
The following table reflects Pro Rata Same Property NOI:
Minimum base rent
32,514
30,703
64,600
60,687
Real estate tax recoveries
6,646
7,058
13,093
13,832
Common area maintenance, insurance, and other recoveries
6,100
5,646
11,956
11,385
Ground rent income
3,349
3,242
6,677
6,483
Short-term and other lease income
1,105
691
2,162
1,637
Provision for uncollectible billed rent and recoveries
(124
(603
(359
(687
Reversal of uncollectible billed rent and recoveries
258
841
1,108
306
269
573
454
50,154
47,847
99,810
94,632
Operating Expenses
8,089
7,630
15,727
15,431
7,430
7,937
14,589
15,846
15,519
15,567
30,316
31,277
Same Property NOI
34,635
32,280
69,494
63,355
JV Same Property NOI
2,682
2,382
5,292
4,705
37,317
34,662
74,786
68,060
Reconciliation of Net Income to Pro Rata Same Property NOI
The following table is a reconciliation of Net Income to Pro Rata Same Property NOI:
Adjustments to reconcile to non-GAAP metrics:
(207
(32
(155
163
(716
(775
(3,432
(1,395
5,631
3,972
10,440
7,957
96
(36,856
(361
(880
(640
(894
(1,394
(1,907
Adjustments to NOI (a)
(2,422
(1,968
(6,294
(3,849
NOI
39,032
33,346
76,864
65,431
NOI from other investment properties
(4,397
(1,066
(7,370
(2,076
IAGM Same Property NOI at share
Adjustments to NOI include termination fee income and expense and GAAP rent adjustments.
NAREIT FFO and Core FFO
Dollars in thousands, except share and per share amounts
Depreciation and amortization related to investment properties
23,996
21,774
46,618
43,221
Unconsolidated joint venture adjustments (a)
1,385
2,086
920
4,156
NAREIT FFO Applicable to Common Shares and Dilutive Securities
30,446
24,998
62,104
47,896
Amortization of above and below-market leases and lease inducements, net
(1,062
(1,143
(3,609
(2,385
Straight-line rent adjustments, net
(1,211
(653
(2,368
(1,170
Adjusting items, net (b)
524
539
1,397
1,358
Unconsolidated joint venture adjusting items, net (c)
(66
146
128
Core FFO Applicable to Common Shares and Dilutive Securities
28,631
23,887
57,652
46,005
Weighted average common shares outstanding - basic
Dilutive effect of unvested restricted shares (d)
137,797
92,804
193,480
53,528
Weighted average common shares outstanding - diluted
per share
0.45
0.35
0.92
0.66
Core FFO Applicable to Common Shares and Dilutive Securities per share
0.42
0.33
0.85
0.64
Represents our share of depreciation, amortization and gain on sale related to investment properties held in IAGM.
Adjusting items, net, are primarily loss on extinguishment of debt, amortization of debt discounts and financing costs, depreciation and amortization of corporate assets, and non-operating income and expenses, net, which includes items which are not pertinent to measuring on-going operating performance, such as miscellaneous and settlement income.
Represents our share of amortization of above and below-market leases and lease inducements, net, straight line rent adjustments, net and adjusting items, net related to IAGM.
For purposes of calculating non-GAAP per share metrics, the same denominator is used as that which would be used in calculating diluted earnings per share in accordance with GAAP.
EBITDA, Pro Rata
The following table presents the Company’s calculation of EBITDA and Adjusted EBITDA:
Interest expense (a)
6,125
4,780
11,572
9,695
Income tax expense (a)
109
102
215
201
Depreciation and amortization (a)
25,590
24,081
50,017
47,838
EBITDA
73,745
30,462
113,226
59,133
Adjustments to reconcile to Adjusted EBITDA (a)
(38,919
Loss on debt extinguishment
50
8
Non-operating income and expense, net (b)
(550
(71
(620
125
Other leasing adjustments (c)
(2,252
(1,716
(5,902
(3,386
Adjusted EBITDA
34,137
28,314
67,992
55,000
Includes our consolidated entities and our pro-rata share of our JV.
Non-operating income and expense, net, includes other items which are not pertinent to measuring ongoing operating performance, such as miscellaneous and settlement income.
Other leasing adjustments includes amortization of above and below market leases and straight-line rent adjustments.
Financial Leverage Ratios
The following table presents the calculation of net debt and Net Debt-to-Adjusted EBITDA:
As of December 31
Pro Rata Net Debt:
Pro Rata Outstanding Debt, net
771,852
624,289
Less: Pro Rata Cash
(103,377
(79,628
Pro Rata Net Debt
668,475
544,661
Pro Rata Net Debt-to-Adjusted EBITDA (trailing 12 months):
Adjusted EBITDA (trailing 12 months)
130,265
117,273
Net Debt-to-Adjusted EBITDA
5.1x
4.6x
About InvenTrust Properties Corp.
InvenTrust Properties Corp. (“we,” the “Company,” “our,” “us,” "IVT" or "InvenTrust") is a premier Sun Belt, multi-tenant essential retail REIT that owns, leases, redevelops, acquires and manages grocery-anchored neighborhood and community centers as well as high-quality power centers that often have a grocery component. We pursue our business strategy by acquiring retail properties in Sun Belt markets, opportunistically disposing of retail properties, maintaining a flexible capital structure, and enhancing environmental, social and governance ("ESG") practices and standards. A trusted, local operator bringing real estate expertise to its tenant relationships, IVT has built a strong reputation with market participants across its portfolio. IVT is committed to leadership in ESG practices and has been a Global Real Estate Sustainability Benchmark (“GRESB”) member since 2013. As of June 30, 2022, the Company is an owner and manager of 62 retail properties, representing 10.5 million square feet of retail space. For more information, please visit www.inventrustproperties.com.
Forward-Looking Statements Disclaimer
Forward-Looking Statements in this press release, or made during the earnings call, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including statements about the timing of the senior notes issuance, or regarding management’s intentions, beliefs, expectations, representation, plans or predictions of the future, are typically identified by words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” “will,” “would,” “outlook,” “guidance,” and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by us and our management, are inherently uncertain. The following factors, among others, could cause actual results and financial position and timing of certain events to differ materially from those described in the forward-looking statements: the effects and duration of the COVID-19 pandemic; interest rate movements; local, regional, national and global economic performance; competitive factors; the impact of e-commerce on the retail industry; future retailer store closings; retailer consolidation; retailers reducing store size; retailer bankruptcies; government policy changes; and any material market changes and trends that could affect the Company’s business strategy. For further discussion of factors that could materially affect the outcome of our forward-looking statements and our future results and financial condition, see the Risk Factors included in InvenTrust’s most recent Annual Report on Form 10-K, as updated by any subsequent Quarterly Report on Form 10-Q, in each case as filed with the Securities and Exchange Commission. InvenTrust intends that such forward-looking statements be subject to the safe harbors created by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, except as may be required by applicable law. We caution you not to place undue reliance on any forward-looking statements, which are made as of the date of this press release. We undertake no obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
Availability of Information on InvenTrust Properties Corp.'s Website and Social Media Channels
Investors and others should note that InvenTrust routinely announces material information to investors and the marketplace using U.S. Securities and Exchange Commission filings, press releases, public conference calls, webcasts and the InvenTrust investor relations website. The Company uses these channels as well as social media channels (e.g., the InvenTrust Twitter account (twitter.com/inventrustprop); and the InvenTrust LinkedIn account (linkedin.com/company/inventrustproperties)) as a means of disclosing information about the Company's business to our colleagues, investors, and the public. While not all of the information that the Company posts to the InvenTrust investor relations website or on the Company’s social media channels is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media and others interested in InvenTrust to review the information that it shares on www.inventrustproperties.com/investor-relations and on the Company’s social media channels.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220801005750/en/
Dan Lombardo Vice President of Investor Relations 630-570-0605 dan.lombardo@inventrustproperties.com
Source: InvenTrust Properties Corp.