InvenTrust Properties
InvenTrust
DOWNERS GROVE, III.--(BUSINESS WIRE)-- InvenTrust Properties Corp. (“InvenTrust” or the “Company”) (NYSE: IVT) today reported financial and operating results for the period ended September 30, 2022. For the three months ended September 30, 2022 and 2021, Net Income was $0.9 million, or $0.01 per diluted share, compared to Net Income of $4.0 million, or $0.06 per diluted share, respectively.
Third Quarter 2022 Highlights:
“Since our listing on the New York Stock Exchange last October, our business plan and strategy has offered a simple and unique investment opportunity within the strip center sector,” Daniel (DJ) Busch, President and CEO of InvenTrust commented. “Our team’s efforts and execution across all areas of the business as well as our conservative balance sheet has the company positioned to navigate any economic scenario.”
FINANCIAL SUMMARY
NET INCOME
NAREIT FFO
CORE FFO
PRO RATA SAME PROPERTY NOI
DIVIDEND
PORTFOLIO PERFORMANCE & INVESTMENT ACTIVITY
LIQUIDITY AND CAPITAL STRUCTURE
SUBSEQUENT ACTIVITY
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)
$0.76
—
$0.80
$0.74
$0.78
NAREIT FFO per diluted share (2)
$1.65
$1.69
$1.61
Core FFO per diluted share
$1.57
$1.60
$1.52
$1.56
Same Property NOI (“SPNOI”) Growth
4.00%
5.00%
General and administrative (3)
+/- $32,250
$32,750
$33,750
Interest expense, net
+/- $24,500
$24,500
$25,500
Net investment activity (4)
+/- $135,000
+/- $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 unrecognized 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 Company’s control. 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:
Wednesday, November 2, 2022
Time:
9:00 a.m. ET
Dial-in:
(844) 200-6205 / Access Code: 844005
Webcast:
https://events.q4inc.com/attendee/509450688
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, direct listing costs, 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 September 30
As of December 31
2022
2021
Assets
(unaudited)
Investment properties
Land
$
649,634
598,936
Building and other improvements
1,820,161
1,664,525
Construction in progress
4,650
9,642
Total
2,474,445
2,273,103
Less accumulated depreciation
(385,000
)
(350,256
Net investment properties
2,089,445
1,922,847
Cash, cash equivalents and restricted cash
216,516
44,854
Investment in unconsolidated entities
56,490
107,944
Intangible assets, net
92,295
81,026
Accounts and rents receivable
34,184
30,059
Deferred costs and other assets, net
54,479
25,685
Total assets
2,543,409
2,212,415
Liabilities
Debt, net
807,639
533,082
Accounts payable and accrued expenses
45,032
36,208
Distributions payable
13,836
13,802
Intangible liabilities, net
30,247
28,995
Other liabilities
27,908
28,776
Total liabilities
924,662
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 September 30, 2022 and 67,344,374 shares issued and
outstanding as of December 31, 2021
67
Additional paid-in capital
5,455,228
5,452,550
Distributions in excess of accumulated net income
(3,865,885
(3,876,743
Accumulated comprehensive income (loss)
29,337
(4,322
Total stockholders' equity
1,618,747
1,571,552
Total liabilities and stockholders' equity
Financial Statements, Continued
Condensed Consolidated Statements of Operations and Comprehensive Income
Dollars in thousands, except share and per share amounts, unaudited
Three Months Ended September 30
Nine Months Ended September 30
Income
Lease income, net
57,859
53,965
174,562
154,869
Other property income
304
310
886
760
Other fee income
594
863
1,988
2,770
Total income
58,757
55,138
177,436
158,399
Operating expenses
Depreciation and amortization
24,021
21,318
71,055
65,000
Property operating
10,787
8,143
28,256
23,926
Real estate taxes
8,937
8,490
25,595
24,781
General and administrative
7,236
8,782
23,239
29,043
Direct listing costs
1,704
Total operating expenses
50,981
48,437
148,145
144,454
Other (expense) income
(7,689
(3,999
(18,129
(11,956
Loss on extinguishment of debt
(400
(96
Gain on sale of investment properties, net
636
36,856
1,516
Equity in earnings of unconsolidated entities
352
1,046
3,784
2,441
Other income and expense, net
497
8
652
(155
Total other (expense) income, net
(6,840
(2,709
23,067
(8,554
Net income
936
3,992
52,358
5,391
Weighted-average common shares outstanding - basic
67,427,571
71,261,403
67,398,713
71,731,832
Weighted-average common shares outstanding - diluted
67,547,259
71,395,625
67,558,315
71,802,082
Net income per common share - basic
0.01
0.06
0.78
0.08
Net income per common share - diluted
0.77
Distributions declared per common share outstanding
0.21
0.20
0.62
0.58
Distributions paid per common share outstanding
Comprehensive income
Unrealized gain (loss) on derivatives
11,992
(195
32,912
1,560
Reclassification (to) from net income
(770
1,102
747
3,228
12,158
4,899
86,017
10,179
Pro Rata Same Property NOI
Dollars in thousands
The following table reflects Pro Rata Same Property NOI:
Minimum base rent
33,044
30,402
97,643
91,089
Real estate tax recoveries
7,097
7,067
20,190
20,899
Common area maintenance, insurance, and other recoveries
6,471
5,770
18,427
17,155
Ground rent income
3,407
3,247
10,084
9,730
Short-term and other lease income
649
849
2,812
2,486
Provision for uncollectible billed rent and recoveries
(255
(13
(614
(1,611
Reversal of uncollectible billed rent and recoveries
69
2,259
1,177
4,011
296
869
764
50,778
49,891
150,588
144,523
Operating Expenses
9,803
7,786
25,530
23,218
7,801
7,950
22,390
23,797
17,604
15,736
47,920
47,015
Same Property NOI
33,174
34,155
102,668
97,508
JV Same Property NOI
2,589
2,643
7,880
7,347
35,763
36,798
110,548
104,855
The following table presents a reconciliation of Net Income to Pro Rata Same Property NOI:
Adjustments to reconcile to non-GAAP metrics:
(497
(8
(652
155
(352
(1,046
(3,784
(2,441
7,689
3,999
18,129
11,956
400
96
(636
(36,856
(1,516
(594
(863
(1,988
(2,770
Adjustments to NOI (a)
(1,777
(1,825
(8,071
(5,674
NOI
36,662
35,817
113,526
101,248
NOI from other investment properties
(3,488
(1,662
(10,858
(3,740
IAGM Same Property NOI at share
(a)
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
The following table presents a reconciliation of Net Income to NAREIT FFO and Core FFO Attributable to Common Shares and Dilutive Securities and provides additional information related to its operations:
Depreciation and amortization related to investment properties
23,826
21,107
70,444
64,328
Unconsolidated joint venture adjustments (a)
1,335
1,787
2,255
5,943
NAREIT FFO Applicable to Common Shares and Dilutive Securities
26,097
26,250
88,201
74,146
Amortization of above and below-market leases and lease inducements, net
(985
(1,019
(4,594
(3,404
Straight-line rent adjustments, net
(757
(633
(3,125
(1,902
Adjusting items, net (b)
696
758
2,093
2,214
Unconsolidated joint venture adjusting items, net (c)
172
260
300
566
Core FFO Applicable to Common Shares and Dilutive Securities
25,223
27,320
82,875
73,324
Weighted average common shares outstanding - basic
Dilutive effect of unvested restricted shares (d)
119,688
134,222
159,602
70,250
Weighted average common shares outstanding - diluted
per share
0.39
0.37
1.31
1.03
0.38
1.23
1.02
Represents our share of depreciation, amortization and gain on sale related to investment properties held in IAGM.
(b)
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.
(c)
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.
(d)
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 Dollars in thousands
The following table presents a pro rata reconciliation of Net Income to EBITDA and Adjusted EBITDA, with reconciling items reflecting our consolidated entities and our pro rata share of our JV:
Interest expense
8,200
4,690
19,772
14,385
Income tax expense
114
74
329
275
25,356
23,325
75,373
71,163
EBITDA
34,606
32,081
147,832
91,214
Adjustments to reconcile to Adjusted EBITDA
(856
(38,919
(1,736
Loss on debt extinguishment
518
207
526
Non-operating income and expense, net (a)
(207
(229
(827
(6
Other leasing adjustments (b)
(1,645
(1,588
(7,547
(5,072
Adjusted EBITDA
32,754
31,630
100,746
86,630
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:
Pro Rata Net Debt:
Pro Rata Outstanding Debt, net
876,738
624,289
Less: Pro Rata Cash
(224,107
(79,628
Pro Rata Net Debt
652,631
544,661
Pro Rata Net Debt-to-Adjusted EBITDA (trailing 12 months):
Adjusted EBITDA (trailing 12 months)
131,389
117,273
Net Debt-to-Adjusted EBITDA
5.0x
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 September 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 Company’s 2022 guidance and ability to navigate any economic scenario, 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; the impact of inflation on the Company and on its tenants; 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/20221101006299/en/
Dan Lombardo Vice President of Investor Relations 630-570-0605 [email protected]
Source: InvenTrust Properties Corp.