Armada Hoffler Properties, Inc. (NYSE: AHH), a full service real estate
company, which develops and owns high-quality office, retail and
multifamily properties in key Mid-Atlantic markets, today announced its
results for the quarter ended September 30, 2013.
Highlights include:
-
Generated Core Funds From Operations (“Core FFO”) of $6.6 million, or
$0.20 per diluted share.
-
Average occupancy stable at 93.3% across the operating property
portfolio.
-
New and renewal leases executed during the quarter totaling
approximately 42,000 square feet in the office and retail property
portfolios.
-
Development pipeline of six properties, consisting of approximately
376,000 square feet of office and retail property and 489 multifamily
units. The 4525 Main Street development project in the Town Center of
Virginia Beach is 45% pre-leased.
-
$81.5 million of new construction loans since the end of last quarter
to fund the development pipeline.
-
$25.3 million of new construction contract work executed during the
quarter; approximately $59.5 million of total backlog at the end of
the quarter.
-
Credit facility capacity increased by $55.0 million to $155.0 million
in October 2013.
-
Admiral Joseph W. Prueher, USN (Ret.) unanimously elected to the
Company's board of directors, effective October 24, 2013.
“We are pleased with our performance this quarter and delighted with how
well-positioned the Company is following our IPO in May,” commented
Louis Haddad, Chief Executive Officer. “We are on track to accomplish
what we set out to do this year, including maintaining a stable
portfolio and executing on our identified development pipeline. I am
extremely pleased with the attractive array of opportunities for the
next generation pipeline. We are well-positioned to grow net operating
income and create value for our stockholders into the future.”
Financial Results
Net income was $1.3 million, or $0.04 per share, for the three months
ended September 30, 2013. Core FFO was $6.6 million, or $0.20 per
diluted share, for the three months ended September 30, 2013. In
addition to the Company’s third quarter 2013 operating results, a
reconciliation of Core FFO to GAAP net income can be found on page eight
of this release.
Operating Performance
During the third quarter the Company executed one new office lease and
five office lease renewals totaling approximately 17,000 square feet and
six retail lease renewals totaling approximately 25,000 square feet. At
the end of the third quarter, the Company’s office, retail and
multifamily property operating portfolios were 93.4%, 93.6% and 92.7%
occupied, respectively.
General Contracting Activity
During the quarter, the Company executed approximately $25.3 million of
new construction contracts and generated approximately $1.0 million of
gross profit on its third party construction contracts. At the end of
the third quarter, the Company had total backlog of approximately $59.5
million.
Balance Sheet and Financing Activity
At the end of the third quarter, the Company had total outstanding debt
of approximately $247.4 million, including $45.0 million outstanding on
its revolving credit facility, as compared to approximately $244.3
million of total debt outstanding as of June 30, 2013. In October 2013,
the Company increased the total capacity on its revolving credit
facility to $155.0 million by adding six properties to the borrowing
base collateral.
In July, the Company closed on a $63.0 million loan to fund the
construction of 4525 Main Street and Encore Apartments in the Town
Center of Virginia Beach. In October, the Company closed on an $18.5
million loan to fund development of the Whetstone Apartments in Durham,
NC.
Dividend
On August 13, 2013, the Company announced that its Board of Directors
declared a cash dividend of $0.16 per share on the Company's common
stock for the third quarter of 2013. The dividend was paid on October
10, 2013.
Supplemental Financial Information
Further details regarding operating results, properties and leasing
statistics can be found in the Company’s supplemental financial package
available at www.ArmadaHoffler.com
under the Investor Relations section.
Webcast and Conference Call
The Company will host a webcast and conference call on Friday, November
8, 2013 at 8:30 a.m. Eastern Time to review third quarter ended
September 30, 2013 results and discuss recent events. The live webcast
will be available through the Investor Relations page of the Company’s
website, www.ArmadaHoffler.com,
or through www.viavid.com.
To participate in the call, please dial 877-407-3982 (domestic) or
201-493-6780 (international). A replay of the conference call will be
available through December 8, 2013, by dialing 877-870-5176 (domestic)
or 858-384-5517 (international) and entering the pass code 10000728.
About Armada Hoffler Properties, Inc.
Armada Hoffler Properties, Inc. is a full service real estate company
with extensive experience developing, building, owning and managing
high-quality, institutional-grade office, retail and multifamily
properties in attractive markets throughout the Mid-Atlantic United
States. The Company has elected to be taxed as a real estate investment
trust (REIT) for U.S. federal income tax purposes.
Forward-Looking Statements
Certain matters within this press release are discussed using
forward-looking language as specified in the Private Securities
Litigation Reform Act of 1995, and, as such, may involve known and
unknown risks, uncertainties and other factors that may cause the actual
results or performance to differ from those projected in the
forward-looking statement. These forward-looking statements may include
comments relating to the current and future performance of the Company’s
operating portfolio, the Company’s identified & next generation
development pipelines, the Company’s construction and development
business including backlog, and financing activities as well as comments
on the Company’s outlook. For a description of factors that may cause
the Company's actual results or performance to differ from its
forward-looking statements, please review the information under the
heading “Risk Factors” included in the Company's final prospectus
related to its IPO, which was filed with the Securities and Exchange
Commission on May 9, 2013, and other documents filed by the Company with
the Securities and Exchange Commission.
Non-GAAP Financial Measures
The Company calculates FFO in accordance with the standards established
by the National Association of Real Estate Investment Trusts (“NAREIT”).
NAREIT defines FFO as net income (loss) (calculated in accordance with
GAAP), excluding gains (or losses) from sales of depreciable operating
property, real estate related depreciation and amortization (excluding
amortization of deferred financing costs) and after adjustments for
unconsolidated partnerships and joint ventures.
FFO is a supplemental non-GAAP financial measure. The Company uses FFO
as a supplemental performance measure because it believes that FFO is
beneficial to investors as a starting point in measuring the Company’s
operational performance. Specifically, in excluding real estate related
depreciation and amortization and gains and losses from property
dispositions, which do not relate to or are not indicative of operating
performance, FFO provides a performance measure that, when compared year
over year, captures trends in occupancy rates, rental rates and
operating costs. We also believe that, as a widely recognized measure of
the performance of REITs, FFO will be used by investors as a basis to
compare the Company’s operating performance with that of other REITs.
However, because FFO excludes depreciation and amortization and captures
neither the changes in the value of the Company’s properties that result
from use or market conditions nor the level of capital expenditures and
leasing commissions necessary to maintain the operating performance of
the Company’s properties, all of which have real economic effects and
could materially impact the Company’s results from operations, the
utility of FFO as a measure of the Company’s performance is limited. In
addition, other equity REITs may not calculate FFO in accordance with
the NAREIT definition as the Company does, and, accordingly, the
Company’s FFO may not be comparable to such other REITs’ FFO.
Accordingly, FFO should be considered only as a supplement to net income
as a measure of the Company’s performance.
Management also believes that the computation of FFO in accordance with
NAREIT’s definition includes certain items that are not indicative of
the results provided by the Company’s operating portfolio and affect the
comparability of the Company’s period-over-period performance.
Accordingly, the Company further adjusts FFO to arrive at Core FFO,
which eliminates certain of these items, including, but not limited to,
gains and losses on the extinguishment of debt and non-cash stock
compensation expense.
For reference, as an aid in understanding the Company’s computation of
FFO and Core FFO, a reconciliation of FFO and Core FFO to net income
calculated in accordance with GAAP has been included on page eight of
this release.
|
|
|
ARMADA HOFFLER PROPERTIES, INC.
|
CONDENSED CONSOLIDATED BALANCE SHEET
|
(dollars in thousands)
|
(Unaudited)
|
|
|
|
|
|
September 30,
|
|
|
2013
|
Assets
|
|
|
Real estate investments:
|
|
|
Income producing property
|
|
$404,742
|
|
Held for development
|
|
7,081
|
|
Construction in progress
|
|
29,091
|
|
Accumulated depreciation
|
|
(101,920
|
)
|
Net real estate investments
|
|
338,994
|
|
|
|
|
Cash and cash equivalents
|
|
9,775
|
|
Restricted cash
|
|
2,966
|
|
Accounts receivable, net
|
|
17,846
|
|
Construction receivables, including retentions
|
|
12,619
|
|
Construction contract costs and estimated earnings in excess of
billings
|
|
1,452
|
|
Other assets
|
|
23,199
|
|
Total Assets
|
|
$406,851
|
|
|
|
|
|
|
|
Liabilities and Equity
|
|
|
Secured debt
|
|
$247,356
|
|
Accounts payable and accrued liabilities
|
|
6,970
|
|
Construction payables, including retentions
|
|
26,162
|
|
Billings in excess of construction contract costs and estimated
earnings
|
|
2,270
|
|
Other liabilities
|
|
16,142
|
|
Total Liabilities
|
|
298,900
|
|
|
|
|
Equity
|
|
|
Common stock
|
|
192
|
|
Additional paid-in capital
|
|
1,010
|
|
Distributions in excess of earnings
|
|
(46,195
|
)
|
Noncontrolling interests in operating partnership
|
|
152,944
|
|
Total Equity
|
|
107,951
|
|
Total Liabilities and Equity
|
|
$406,851
|
|
|
|
|
ARMADA HOFFLER PROPERTIES, INC.
|
CONDENSED CONSOLIDATED INCOME STATEMENT
|
(dollars in thousands, except per share)
|
(Unaudited)
|
|
|
|
|
|
Three months ended
|
|
|
September 30, 2013
|
|
|
|
Revenues
|
|
|
Rental revenues
|
|
$14,899
|
|
General contracting and real estate services revenues
|
|
21,896
|
|
Total revenues
|
|
36,795
|
|
Expenses
|
|
|
Rental expenses
|
|
3,840
|
|
Real estate taxes
|
|
1,317
|
|
General contracting and real estate services expenses
|
|
20,907
|
|
Depreciation and amortization
|
|
3,933
|
|
General and administrative expenses
|
|
1,638
|
|
Total expenses
|
|
31,635
|
|
Operating income
|
|
5,160
|
|
Interest expense
|
|
(2,598
|
)
|
Loss on extinguishment of debt
|
|
(1,127
|
)
|
Other expense
|
|
(109
|
)
|
Income before taxes
|
|
1,326
|
|
Income tax provision
|
|
(74
|
)
|
Net income
|
|
$1,252
|
|
Per Share:
|
|
|
Basic and Diluted
|
|
$0.04
|
|
Weighted Average Common Shares and Units:
|
|
|
Basic and Diluted
|
|
32,223
|
|
|
|
|
ARMADA HOFFLER PROPERTIES, INC.
|
RECONCILIATION OF NET INCOME TO CORE FUNDS FROM OPERATIONS
|
(dollars in thousands, except per share)
|
(Unaudited)
|
|
|
|
|
|
Three months ended
|
|
|
September 30, 2013
|
|
|
|
Net Income
|
|
$1,252
|
|
|
|
Funds From Operations Adjustments:
|
|
|
Depreciation and amortization
|
|
3,933
|
|
|
|
Funds From Operations
|
|
5,185
|
|
|
|
|
|
|
Core FFO Adjustments:
|
|
|
Loss on extinguishment of debt
|
|
1,127
|
Non-cash stock compensation
|
|
242
|
|
|
|
Core Funds From Operations
|
|
$6,554
|
|
|
|
Core Funds From Operations per diluted share
|
|
$0.20
|
|
|
|
Common Shares and Units Outstanding
|
|
32,223
|
Copyright Business Wire 2013