CTO Realty Growth, Inc. (NYSE: CTO) (the “Company” or “CTO”) today
announced its operating results and earnings for the quarter ended
June 30, 2022.
Select Highlights
- Reported Net
Income per diluted share attributable to common stockholders of
$0.00 for the quarter ended June 30, 2022, an increase of 100.0%
from the comparable prior year period.
- Reported Core
FFO per diluted share attributable to common stockholders of $1.41
for the quarter ended June 30, 2022, an increase of 60.2% from the
comparable prior year period.
- Reported AFFO
per diluted share attributable to common stockholders of $1.48 for
the quarter ended June 30, 2022, an increase of 38.3% from the
comparable prior year period.
- Entered into a
preferred equity agreement to provide $30.0 million of funding
towards the acquisition of the Watters Creek at Montgomery Farm in
Allen, Texas at an initial investment yield above the range of the
Company’s guidance for initial investment cash yields.
- Entered into a
loan agreement to provide $19.0 million of funding towards the
development of the retail portion of the WaterStar Orlando
mixed-use property in Kissimmee, FL at an initial investment yield
above the range of the Company’s guidance for initial investment
cash yields.
- Reported a 23.8%
increase in Same-Property NOI during the quarter ended June 30,
2022, as compared to the comparable prior year period.
- Paid a regular
common stock cash dividend during the second quarter of 2022 of
$1.12 per share, representing an increase of 12.0% from the
comparable prior year period, a payout ratio of 75.7% of the
Company’s second quarter 2022 AFFO per diluted share, and an
annualized yield of 6.9% based on the closing price of the
Company’s common stock on July 27, 2022.
- Completed a
three-for-one stock split and began trading at the post-split price
on July 1, 2022. The stock split was effected in the form of a
stock dividend of two additional shares of common stock for each
outstanding share of common stock held as of the record date for
the stock dividend.
- On July 8, 2022, the Company
acquired Madison Yards, a newly built, grocery-anchored retail
property located in Atlanta, Georgia for a purchase price of $80.2
million. The purchase price represents a going-in cap rate below
the range of the Company’s prior guidance for initial cash
yields.
CEO Comments
“I am very encouraged by our second quarter
performance as our team continues to make strong operational
progress with our leasing and repositioning initiatives and finds
attractive opportunities for external growth through our
disciplined, retail-focused investment strategy,” said John P.
Albright, President and Chief Executive Officer of CTO Realty
Growth. “Our recent Madison Yards acquisition was a great
opportunity to acquire a newly built grocery-anchored shopping
center in one of the strongest markets in the country, further
improving our already high-quality, growth market-oriented
portfolio. With year-to-date same-store NOI growth of more than 20%
and over 200 bps of leased occupancy set to rent commence over the
next twelve months, we’re very excited about our prospects to drive
double digit same-store NOI growth during the back half of this
year and in 2023. This embedded growth should continue to help
drive strong earnings for the foreseeable future and further
support our attractive and growing dividend.”
Quarterly Financial Results
Highlights
The tables below provide a summary of the
Company’s operating results for the three months ended June 30,
2022:
| (in thousands, except per
share data) |
For the ThreeMonths
EndedJune 30, 2022 |
|
For the ThreeMonths
EndedJune 30, 2021 |
|
Variance to ComparablePeriod in the Prior
Year |
|
Net Income (Loss) Attributable to the Company |
$ |
1,218 |
|
$ |
(3,724 |
) |
|
$ |
4,942 |
132.7 |
% |
|
| Net Income (Loss) Attributable
to Common Stockholders |
$ |
22 |
|
$ |
(3,724 |
) |
|
$ |
3,746 |
100.6 |
% |
|
| Net Income (Loss) per Diluted
Share Attributable to Common Stockholders (1) |
$ |
0.00 |
|
$ |
(0.63 |
) |
|
$ |
0.63 |
100.0 |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
| Core FFO Attributable to
Common Stockholders (2) |
$ |
8,485 |
|
$ |
5,218 |
|
|
$ |
3,267 |
62.6 |
% |
|
| Core FFO per Common Share –
Diluted (2) |
$ |
1.41 |
|
$ |
0.88 |
|
|
$ |
0.53 |
60.2 |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
| AFFO Attributable to Common
Stockholders (2) |
$ |
8,890 |
|
$ |
6,294 |
|
|
$ |
2,596 |
41.2 |
% |
|
| AFFO per Common Share –
Diluted (2) |
$ |
1.48 |
|
$ |
1.07 |
|
|
$ |
0.41 |
38.3 |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
| Dividends Declared and Paid,
per Preferred Share |
$ |
0.40 |
|
$ |
— |
|
|
$ |
0.40 |
100.0 |
% |
|
| Dividends Declared and Paid,
per Common Share |
$ |
1.12 |
|
$ |
1.00 |
|
|
$ |
0.12 |
12.0 |
% |
|
(1) The denominator for this measure in
2022 excludes the impact of 1.0 million shares related to the
Company’s adoption of ASU 2020-06, effective January 1, 2022, which
requires presentation on an if-converted basis for its 2025
Convertible Senior Notes, as the impact would be anti-dilutive.
(2) See the “Non-GAAP Financial Measures”
section and tables at the end of this press release for a
discussion and reconciliation of Net Income (Loss) Attributable to
the Company to non-GAAP financial measures, including FFO
Attributable to Common Stockholders, FFO per Common Share -
Diluted, Core FFO Attributable to Common Stockholders, Core FFO per
Common Share – Diluted, AFFO Attributable to Common Stockholders
and AFFO per Common Share - Diluted.
Year-to-Date Financial Results
Highlights
The tables below provide a summary of the
Company’s operating results for the six months ended June 30,
2022:
| (in thousands, except per
share data) |
For the SixMonths
EndedJune 30, 2022 |
|
For the SixMonths
EndedJune 30, 2021 |
|
Variance to Comparable Period in the Prior
Year |
|
Net Income Attributable to the Company |
$ |
1,420 |
|
|
$ |
4,061 |
|
$ |
(2,641 |
) |
(65.0 |
%) |
|
| Net Income (Loss) Attributable
to Common Stockholders |
$ |
(971 |
) |
|
$ |
4,061 |
|
$ |
(5,032 |
) |
(123.9 |
%) |
|
| Net Income (Loss) per Diluted
Share Attributable to Common Stockholders (1) |
$ |
(0.16 |
) |
|
$ |
0.69 |
|
$ |
(0.85 |
) |
(123.2 |
%) |
|
| |
|
|
|
|
|
|
|
|
|
|
| Core FFO Attributable to
Common Stockholders (2) |
$ |
16,712 |
|
|
$ |
10,068 |
|
$ |
6,644 |
|
66.0 |
% |
|
| Core FFO per Common Share –
Diluted (2) |
$ |
2.81 |
|
|
$ |
1.71 |
|
$ |
1.10 |
|
64.3 |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
| AFFO Attributable to Common
Stockholders (2) |
$ |
17,607 |
|
|
$ |
11,981 |
|
$ |
5,626 |
|
47.0 |
% |
|
| AFFO per Common Share –
Diluted (2) |
$ |
2.96 |
|
|
$ |
2.03 |
|
$ |
0.93 |
|
45.8 |
% |
|
| |
|
|
|
|
|
|
|
|
|
|
| Dividends Declared and Paid,
per Preferred Share |
$ |
0.80 |
|
|
$ |
— |
|
$ |
0.80 |
|
100.0 |
% |
|
| Dividends Declared and Paid,
per Common Share |
$ |
2.20 |
|
|
$ |
2.00 |
|
$ |
0.20 |
|
10.0 |
% |
|
(1) The denominator for this measure in
2022 excludes the impact of 1.0 million shares related to the
Company’s adoption of ASU 2020-06, effective January 1, 2022, which
requires presentation on an if-converted basis for its 2025
Convertible Senior Notes, as the impact would be anti-dilutive.
(2) See the “Non-GAAP Financial Measures”
section and tables at the end of this press release for a
discussion and reconciliation of Net Income Attributable to the
Company to non-GAAP financial measures, including FFO Attributable
to Common Stockholders, FFO per Common Share - Diluted, Core FFO
Attributable to Common Stockholders, Core FFO per Common Share –
Diluted, AFFO Attributable to Common Stockholders and AFFO per
Common Share - Diluted.
Investments
During the three months ended June 30, 2022, the
Company originated two structured investments to provide $49.0
million of funding towards two properties. The Company’s second
quarter 2022 investments included the following:
- Provided $30.0
million of preferred equity for the acquisition of Watters Creek at
Montgomery Farm, a grocery-anchored, mixed-use property located in
Allen, Texas. Watters Creek at Montgomery Farm is approximately
458,000 square feet of grocery-anchored retail and office, anchored
by Market Street, Anthropologie, Mi Cocina, DSW, The Cheesecake
Factory, Brio Italian Grille, and Michaels, and includes a variety
of national and local retailers and restaurants. The three-year
preferred investment for the acquisition was fully funded at
closing, is interest-only through maturity, includes an origination
fee, and bears a fixed preferred return of 8.50%.
- Provided a $19.0 million first
mortgage for the development of the retail portion of the WaterStar
Orlando mixed-use property in Kissimmee, FL. WaterStar Orlando is a
mixed-use project at the center of one of the strongest performing
retail corridors in Florida, includes 320 onsite residential units,
and is in close proximity to the Margaritaville Resort Orlando,
Island H20 Water Park, and the western entrance to Walt Disney
World. The retail portion of the development is 102,000 square feet
and is anchored by Marshalls, Burlington, pOpshelf, Portillo’s and
Outback Steakhouse. The loan matures on August 31, 2022, is
interest-only through maturity, includes an origination fee, and
bears a fixed interest-only rate of 8.00%.
During the six months ended June 30, 2022, the
Company acquired one multi-tenant retail property for total income
property acquisition volume of $39.1 million and originated three
structured investments to provide $57.7 million of funding towards
three retail and mixed-use properties. These acquisitions and
structured investments represent a blended weighted average
going-in yield of 7.9%.
Subsequent to quarter-end, the Company acquired
Madison Yards, a 162,500 square foot grocery-anchored property
located in the Inman Park/Reynoldstown submarket along the Memorial
Drive corridor of Atlanta, Georgia for a purchase price of $80.2
million. The property is 98% occupied, anchored by Publix and AMC
Theatres, includes a well-crafted mix of retailers and restaurants,
including AT&T, First Watch, and Orangetheory Fitness, and is
the Company’s first Publix-anchored center. The purchase price
represents a going-in cap rate below the range of the Company’s
guidance for initial cash yields.
Dispositions
During the six months ended June 30, 2022, the
Company sold two single tenant income properties, one of which was
classified as a commercial loan investment due to the tenant’s
repurchase option, for $24.0 million at a weighted average exit cap
rate of 6.0%.
Income Property Portfolio
The Company’s income property portfolio consisted of the
following as of June 30, 2022:
|
Asset Type |
|
# of
Properties(1) |
|
Square Feet |
|
Weighted AverageRemaining Lease Term |
| Single Tenant |
|
7 |
|
422 |
|
6.3 years |
| Multi-Tenant |
|
14 |
|
2,418 |
|
6.7 years |
| Total / Weighted Average Lease
Term |
|
21 |
|
2,840 |
|
6.6 years |
|
Property Type |
|
# of
Properties(1) |
|
Square Feet |
|
% of Cash Base Rent |
|
Retail |
|
14 |
|
1,905 |
|
61.5% |
| Office |
|
4 |
|
532 |
|
19.5% |
| Mixed-Use |
|
3 |
|
403 |
|
19.0% |
| Total / Weighted Average Lease
Term |
|
21 |
|
2,840 |
|
100.0% |
|
Leased Occupancy |
93.5% |
|
|
| Economic Occupancy |
91.3% |
|
|
| Physical Occupancy |
90.2% |
|
|
Square feet in thousands.
(1) The properties include a property in
Hialeah, Florida leased to a master tenant which includes three
tenant repurchase options. Pursuant to FASB ASC Topic 842, Leases,
the $21.0 million investment has been recorded in the Company’s
consolidated balance sheets as a Commercial Loan Investment.
Operational Highlights
The Company’s Same-Property NOI totaled $7.4
million during the second quarter of 2022, an increase of 23.8%
over the comparable prior year period, as presented in the
following table.
| (in thousands) |
|
For the ThreeMonths
EndedJune 30, 2022 |
|
For the ThreeMonths
EndedJune 30, 2021 |
|
Variance to ComparablePeriod in the Prior
Year |
|
Single Tenant |
|
$ |
2,190 |
|
$ |
2,055 |
|
$ |
135 |
6.6 |
% |
| Multi-Tenant |
|
|
5,256 |
|
|
3,961 |
|
|
1,295 |
32.7 |
% |
| Total |
|
$ |
7,446 |
|
$ |
6,016 |
|
$ |
1,430 |
23.8 |
% |
During the second quarter of 2022, the Company
signed leases totaling 41,163 square feet. A summary of the
Company’s leasing activity is as follows:
|
Retail |
|
Square Feet |
|
Weighted Average Lease Term |
|
Cash Rent Per Square Foot |
|
Tenant Improvements |
|
Leasing Commissions |
|
New Leases |
|
31.0 |
|
12.2 years |
|
$32.66 |
|
$ |
2,721 |
|
$ |
298 |
| Renewals & Extensions |
|
10.2 |
|
3.6 years |
|
$29.28 |
|
$ |
— |
|
$ |
28 |
|
Total / Weighted Average |
|
41.2 |
|
10.3 years |
|
$31.82 |
|
$ |
2,721 |
|
$ |
326 |
In thousands except for per square foot and
lease term data.
Subsurface Interests
During the three months ended June 30, 2022, the
Company sold approximately 8,330 acres of subsurface oil, gas, and
mineral rights for $0.5 million, resulting in aggregate gains of
$0.5 million.
During the six months ended June 30, 2022, the
Company sold approximately 13,080 acres of subsurface oil, gas and
mineral rights for $0.9 million, resulting in a gain on the sale of
$0.8 million. As of June 30, 2022, the Company owns full or
fractional subsurface oil, gas, and mineral interests underlying
approximately 356,000 “surface” acres of land owned by others in 19
counties in Florida.
Capital Markets and Balance
Sheet
During the quarter ended June 30, 2022, the
Company completed the following notable capital markets
activity:
- Issued 88,065
common shares under its ATM offering program at a weighted average
gross price of $66.03 per share, for total net proceeds of $5.7
million.
- Repurchased
20,010 shares for approximately $1.1 million at a weighted average
gross price of $57.37 per share.
- Completed a three-for-one stock split and began trading at the
post-split price on July 1, 2022. The stock split was effected in
the form of a stock dividend of two additional shares of common
stock for each outstanding share of common stock held as of the
record date for the stock dividend.
The following table provides a summary of the
Company’s long-term debt, at face value, as of June 30, 2022:
|
Component of Long-Term Debt |
|
Principal |
|
Interest Rate |
|
Maturity Date |
| Revolving Credit Facility |
|
$111.0 million |
|
30-day LIBOR + [1.35% – 1.95%] |
|
May 2023 |
| 2025 Convertible Senior
Notes |
|
$51.0 million |
|
3.875% |
|
April 2025 |
| 2026 Term Loan (1) |
|
$65.0 million |
|
30-day LIBOR + [1.35% – 1.95%] |
|
March 2026 |
| 2027 Term Loan (2) |
|
$100.0 million |
|
30-day LIBOR + [1.35% – 1.95%] |
|
January 2027 |
| Mortgage Note (3) |
|
$17.8 million |
|
4.06% |
|
August 2026 |
| Total Debt / Weighted Average
Interest Rate |
|
$344.8 million |
|
2.63% |
|
|
(1) The Company utilized interest rate
swaps on the $65.0 million 2026 Term Loan balance, including (i)
its redesignation of the existing $50.0 million interest rate swap,
entered into as of August 31, 2020, and (ii) a $15.0 million
interest rate swap effective August 31, 2021, to fix LIBOR and
achieve a weighted average fixed interest rate of 0.35% plus the
applicable spread.
(2) The Company utilized interest rate
swaps on the $100.0 million 2027 Term Loan balance, including (i)
its redesignation of the existing $100.0 million interest rate
swap, entered into as of March 31, 2020, and (ii) an additional
interest rate swap, effective March 29, 2024, to extend the fixed
interest rate through maturity on January 31, 2027, to fix LIBOR
and achieve a fixed interest rate of 0.73% plus the applicable
spread.
(3) Mortgage note assumed in connection
with the acquisition of Price Plaza Shopping Center located in
Katy, Texas.
As of June 30, 2022, the Company’s net debt to
Pro Forma EBITDA was 6.6 times, and as defined in the Company’s
credit agreement, the Company’s fixed charge coverage ratio was 3.4
times. As of June 30, 2022, the Company’s net debt to total
enterprise value was 41.0%. The Company calculates total enterprise
value as the sum of net debt, par value of its 6.375% Series A
preferred equity, and the market value of the Company's outstanding
common shares.
Dividends
On May 24, 2022, the Company announced a cash
dividend on its common stock and Series A Preferred stock for the
second quarter of 2022 of $1.12 per share and $0.40 per share,
respectively, payable on June 30, 2022 to stockholders of record as
of the close of business on June 9, 2022. The second quarter 2022
common stock cash dividend represents a 12.0% increase over the
comparable prior year period quarterly dividend and a payout ratio
of 79.4% and 75.7% of the Company’s second quarter 2022 Core FFO
per diluted share and AFFO per diluted share, respectively.
2022 Outlook
The Company has increased its outlook for 2022
to take into account the Company’s year-to-date performance and
revised expectations regarding the Company’s investment activities,
forecasted capital markets transactions, and other significant
assumptions. The revised per share estimates take into account the
Company’s recently completed three-for-one stock split
The Company’s increased outlook for 2022 is as
follows:
| |
2022 Revised Outlook Range |
|
Change from Prior Outlook |
|
|
Low |
|
High |
|
Low |
|
High |
| Acquisition of Income
Producing Assets |
$250.0 million |
to |
$275.0 million |
|
$50 million |
to |
$25 million |
| Target Investment Initial Cash
Yield |
7.00% |
to |
7.25% |
|
50 bps |
to |
25 bps |
| Disposition of Assets |
$50.0 million |
to |
$80.0 million |
|
$10 million |
to |
$10 million |
| Target Disposition Cash
Yield |
6.25% |
to |
6.75% |
|
100 bps |
to |
25 bps |
| |
|
|
|
|
|
|
|
| Core FFO Per Diluted
Share |
$1.58 |
to |
$1.64 |
|
$0.06 |
to |
$0.04 |
| AFFO Per Diluted Share |
$1.70 |
to |
$1.76 |
|
$0.05 |
to |
$0.03 |
| |
|
|
|
|
|
|
|
| Weighted Average Diluted
Shares Outstanding |
18.3 million |
to |
18.5 million |
|
0 million |
to |
0.3 million |
2nd Quarter Earnings Conference Call
& Webcast
The Company will host a conference call to
present its operating results for the quarter ended June 30, 2022
on Friday, July 29, 2022, at 9:00 AM ET.
A live webcast of the call will be available on
the Investor Relations page of the Company’s website at
www.ctoreit.com or at the link provided in the event details below.
To access the call by phone, please go to the link provided in the
event details below and you will be provided with dial-in
details.
Webcast:
https://edge.media-server.com/mmc/p/uh9ig8iu
Dial-In:
https://register.vevent.com/register/BI03c8d5540d254fb798fffd5daa427848
We encourage participants to dial into the
conference call at least fifteen minutes ahead of the scheduled
start time. A replay of the earnings call will be archived and
available online through the Investor Relations section of the
Company’s website at www.ctoreit.com.
About CTO Realty Growth,
Inc.
CTO Realty Growth, Inc. is a publicly traded
real estate investment trust that owns and operates a portfolio of
high-quality, retail-based properties located primarily in higher
growth markets in the United States. CTO also externally manages
and owns a meaningful interest in Alpine Income Property Trust,
Inc. (NYSE: PINE), a publicly traded net lease REIT.
We encourage you to review our most recent
investor presentation and supplemental financial information, which
is available on our website at www.ctoreit.com.
Safe Harbor
Certain statements contained in this press
release (other than statements of historical fact) are
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking
statements can typically be identified by words such as “believe,”
“estimate,” “expect,” “intend,” “anticipate,” “will,” “could,”
“may,” “should,” “plan,” “potential,” “predict,” “forecast,”
“project,” and similar expressions, as well as variations or
negatives of these words.
Although forward-looking statements are made
based upon management’s present expectations and reasonable beliefs
concerning future developments and their potential effect upon the
Company, a number of factors could cause the Company’s actual
results to differ materially from those set forth in the
forward-looking statements. Such factors may include, but are not
limited to: the Company’s ability to remain qualified as a REIT;
the Company’s exposure to U.S. federal and state income tax law
changes, including changes to the REIT requirements; general
adverse economic and real estate conditions; macroeconomic and
geopolitical factors, including but not limited to inflationary
pressures, interest rate volatility, global supply chain
disruptions, and ongoing geopolitical war; the ultimate geographic
spread, severity and duration of pandemics such as the COVID-19
Pandemic and its variants, actions that may be taken by
governmental authorities to contain or address the impact of such
pandemics, and the potential negative impacts of such pandemics on
the global economy and the Company’s financial condition and
results of operations; the inability of major tenants to continue
paying their rent or obligations due to bankruptcy, insolvency or a
general downturn in their business; the loss or failure, or decline
in the business or assets of PINE; the completion of 1031 exchange
transactions; the availability of investment properties that meet
the Company’s investment goals and criteria; the uncertainties
associated with obtaining required governmental permits and
satisfying other closing conditions for planned acquisitions and
sales; and the uncertainties and risk factors discussed in the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2021 and other risks and uncertainties discussed from
time to time in the Company’s filings with the U.S. Securities and
Exchange Commission.
There can be no assurance that future
developments will be in accordance with management’s expectations
or that the effect of future developments on the Company will be
those anticipated by management. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. The Company undertakes
no obligation to update the information contained in this press
release to reflect subsequently occurring events or
circumstances.
Non-GAAP Financial Measures
Our reported results are presented in accordance
with accounting principles generally accepted in the United States
of America (“GAAP”). We also disclose Funds From Operations
(“FFO”), Core Funds From Operations (“Core FFO”), Adjusted Funds
From Operations (“AFFO”), Pro Forma Earnings Before Interest,
Taxes, Depreciation and Amortization (“Pro Forma EBITDA”), and
Same-Property Net Operating Income (“Same-Property NOI”), each of
which are non-GAAP financial measures. We believe these non-GAAP
financial measures are useful to investors because they are widely
accepted industry measures used by analysts and investors to
compare the operating performance of REITs.
FFO, Core FFO, AFFO, Pro Forma EBITDA, and
Same-Property NOI do not represent cash generated from operating
activities and are not necessarily indicative of cash available to
fund cash requirements; accordingly, they should not be considered
alternatives to net income as a performance measure or cash flows
from operating activities as reported on our statement of cash
flows as a liquidity measure and should be considered in addition
to, and not in lieu of, GAAP financial measures.
We compute FFO in accordance with the definition
adopted by the Board of Governors of the National Association of
Real Estate Investment Trusts, or NAREIT. NAREIT defines FFO as
GAAP net income or loss adjusted to exclude extraordinary items (as
defined by GAAP), net gain or loss from sales of depreciable real
estate assets, impairment write-downs associated with depreciable
real estate assets and real estate related depreciation and
amortization, including the pro rata share of such adjustments of
unconsolidated subsidiaries. The Company also excludes the gains or
losses from sales of assets incidental to the primary business of
the REIT which specifically include the sales of mitigation
credits, impact fee credits, subsurface sales, and land sales, in
addition to the mark-to-market of the Company’s investment
securities and interest related to the 2025 Convertible Senior
Notes, if the effect is dilutive. To derive Core FFO, we modify the
NAREIT computation of FFO to include other adjustments to GAAP net
income related to gains and losses recognized on the extinguishment
of debt, amortization of above- and below-market lease related
intangibles, and other unforecastable market- or transaction-driven
non-cash items. To derive AFFO, we further modify the NAREIT
computation of FFO and Core FFO to include other adjustments to
GAAP net income related to non-cash revenues and expenses such as
straight-line rental revenue, non-cash compensation, and other
non-cash amortization, as well as adding back the interest related
to the 2025 Convertible Senior Notes, if the effect is dilutive.
Such items may cause short-term fluctuations in net income but have
no impact on operating cash flows or long-term operating
performance. We use AFFO as one measure of our performance when we
formulate corporate goals.
To derive Pro Forma EBITDA, GAAP net income or
loss attributable to the Company is adjusted to exclude
extraordinary items (as defined by GAAP), net gain or loss from
sales of depreciable real estate assets, impairment write-downs
associated with depreciable real estate assets and real estate
related depreciation and amortization, including the pro rata share
of such adjustments of unconsolidated subsidiaries, non-cash
revenues and expenses such as straight-line rental revenue,
amortization of deferred financing costs, above- and below-market
lease related intangibles, non-cash compensation, and other
non-cash income or expense. Cash interest expense is also excluded
from Pro Forma EBITDA, and GAAP net income or loss is adjusted for
the annualized impact of acquisitions, dispositions and other
similar activities.
To derive Same-Property NOI, GAAP net income or
loss attributable to the Company is adjusted to exclude
extraordinary items (as defined by GAAP), gain or loss on
disposition of assets, gain or loss on extinguishment of debt,
impairment charges, and depreciation and amortization, including
the pro rata share of such adjustments of unconsolidated
subsidiaries, if any, non-cash revenues and expenses such as above-
and below-market lease related intangibles, straight-line rental
revenue, and other non-cash income or expense. Interest expense,
general and administrative expenses, investment and other income or
loss, income tax benefit or expense, real estate operations
revenues and direct cost of revenues, management fee income, and
interest income from commercial loans and investments are also
excluded from Same-Property NOI. GAAP net income or loss is further
adjusted to remove the impact of properties that were not owned for
the full current and prior year reporting periods presented. Cash
rental income received under the leases pertaining to the Company’s
assets that are presented as commercial loans and investments in
accordance with GAAP is also used in lieu of the interest income
equivalent.
FFO is used by management, investors and
analysts to facilitate meaningful comparisons of operating
performance between periods and among our peers primarily because
it excludes the effect of real estate depreciation and amortization
and net gains or losses on sales, which are based on historical
costs and implicitly assume that the value of real estate
diminishes predictably over time, rather than fluctuating based on
existing market conditions. We believe that Core FFO and AFFO are
additional useful supplemental measures for investors to consider
because they will help them to better assess our operating
performance without the distortions created by other non-cash
revenues or expenses. We also believe that Pro Forma EBITDA is an
additional useful supplemental measure for investors to consider as
it allows for a better assessment of our operating performance
without the distortions created by other non-cash revenues,
expenses or certain effects of the Company’s capital structure on
our operating performance. We use Same-Property NOI to compare the
operating performance of our assets between periods. It is an
accepted and important measurement used by management, investors
and analysts because it includes all property-level revenues from
the Company’s properties, less operating and maintenance expenses,
real estate taxes and other property-specific expenses (“Net
Operating Income” or “NOI”) of properties that have been owned and
stabilized for the entire current and prior year reporting periods.
Same-Property NOI attempts to eliminate differences due to the
acquisition or disposition of properties during the particular
period presented, and therefore provides a more comparable and
consistent performance measure for the comparison of the Company's
properties. FFO, Core FFO, AFFO, Pro Forma EBITDA, and
Same-Property NOI may not be comparable to similarly titled
measures employed by other companies.
CTO Realty Growth,
Inc.Consolidated Balance Sheets(In
thousands, except share and per share data)
| |
|
As of |
|
|
|
(Unaudited)June 30,
2022 |
|
December 31,2021 |
|
ASSETS |
|
|
|
|
|
|
|
Real Estate: |
|
|
|
|
|
|
|
Land, at Cost |
|
$ |
205,245 |
|
|
$ |
189,589 |
|
|
Building and Improvements, at Cost |
|
|
344,205 |
|
|
|
325,418 |
|
|
Other Furnishings and Equipment, at Cost |
|
|
741 |
|
|
|
707 |
|
|
Construction in Process, at Cost |
|
|
10,419 |
|
|
|
3,150 |
|
|
Total Real Estate, at Cost |
|
|
560,610 |
|
|
|
518,864 |
|
|
Less, Accumulated Depreciation |
|
|
(31,735 |
) |
|
|
(24,169 |
) |
|
Real Estate—Net |
|
|
528,875 |
|
|
|
494,695 |
|
|
Land and Development Costs |
|
|
686 |
|
|
|
692 |
|
|
Intangible Lease Assets—Net |
|
|
78,328 |
|
|
|
79,492 |
|
|
Assets Held for Sale |
|
|
— |
|
|
|
6,720 |
|
|
Investment in Alpine Income Property Trust, Inc. |
|
|
38,483 |
|
|
|
41,037 |
|
|
Mitigation Credits |
|
|
3,436 |
|
|
|
3,702 |
|
|
Mitigation Credit Rights |
|
|
21,018 |
|
|
|
21,018 |
|
|
Commercial Loans and Investments |
|
|
68,783 |
|
|
|
39,095 |
|
|
Cash and Cash Equivalents |
|
|
7,137 |
|
|
|
8,615 |
|
|
Restricted Cash |
|
|
27,189 |
|
|
|
22,734 |
|
|
Refundable Income Taxes |
|
|
286 |
|
|
|
442 |
|
|
Deferred Income Taxes—Net |
|
|
105 |
|
|
|
— |
|
|
Other Assets |
|
|
28,029 |
|
|
|
14,897 |
|
|
Total Assets |
|
$ |
802,355 |
|
|
$ |
733,139 |
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
Accounts Payable |
|
$ |
1,325 |
|
|
$ |
676 |
|
|
Accrued and Other Liabilities |
|
|
15,705 |
|
|
|
13,121 |
|
|
Deferred Revenue |
|
|
5,358 |
|
|
|
4,505 |
|
|
Intangible Lease Liabilities—Net |
|
|
5,277 |
|
|
|
5,601 |
|
|
Deferred Income Taxes—Net |
|
|
— |
|
|
|
483 |
|
|
Long-Term Debt |
|
|
343,196 |
|
|
|
278,273 |
|
|
Total Liabilities |
|
|
370,861 |
|
|
|
302,659 |
|
|
Commitments and Contingencies |
|
|
|
|
|
|
|
Stockholders’ Equity: |
|
|
|
|
|
|
|
Preferred Stock – 100,000,000 shares authorized; $0.01 par value,
6.375% Series A Cumulative Redeemable Preferred Stock, $25.00 Per
Share Liquidation Preference, 3,000,000 shares issued and
outstanding at June 30, 2022 and December 31, 2021 |
|
|
30 |
|
|
|
30 |
|
|
Common Stock – 500,000,000 shares authorized; $0.01 par value,
6,082,626 shares issued and outstanding at June 30, 2022 and
5,916,226 shares issued and outstanding at December 31,
2021 |
|
|
61 |
|
|
|
60 |
|
|
Additional Paid-In Capital |
|
|
86,347 |
|
|
|
85,414 |
|
|
Retained Earnings |
|
|
332,916 |
|
|
|
343,459 |
|
|
Accumulated Other Comprehensive Income |
|
|
12,140 |
|
|
|
1,517 |
|
|
Total Stockholders’ Equity |
|
|
431,494 |
|
|
|
430,480 |
|
|
Total Liabilities and Stockholders’ Equity |
|
$ |
802,355 |
|
|
$ |
733,139 |
|
|
|
|
|
CTO Realty Growth,
Inc.Consolidated Statements of Operations
(Unaudited)(In thousands, except share, per share and dividend
data)
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
June 30, |
|
June 30, |
|
June 30, |
|
June 30, |
|
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
| Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Properties |
|
$ |
16,367 |
|
|
$ |
11,574 |
|
|
$ |
31,535 |
|
|
$ |
23,023 |
|
|
Management Fee Income |
|
|
948 |
|
|
|
752 |
|
|
|
1,884 |
|
|
|
1,421 |
|
|
Interest Income From Commercial Loans and Investments |
|
|
1,290 |
|
|
|
709 |
|
|
|
2,008 |
|
|
|
1,410 |
|
|
Real Estate Operations |
|
|
858 |
|
|
|
1,248 |
|
|
|
1,246 |
|
|
|
3,141 |
|
|
Total Revenues |
|
|
19,463 |
|
|
|
14,283 |
|
|
|
36,673 |
|
|
|
28,995 |
|
| Direct Cost of Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Properties |
|
|
(4,812 |
) |
|
|
(2,787 |
) |
|
|
(8,828 |
) |
|
|
(5,704 |
) |
|
Real Estate Operations |
|
|
(228 |
) |
|
|
(533 |
) |
|
|
(279 |
) |
|
|
(615 |
) |
|
Total Direct Cost of Revenues |
|
|
(5,040 |
) |
|
|
(3,320 |
) |
|
|
(9,107 |
) |
|
|
(6,319 |
) |
| General and Administrative
Expenses |
|
|
(2,676 |
) |
|
|
(2,665 |
) |
|
|
(5,719 |
) |
|
|
(5,797 |
) |
| Impairment Charges |
|
|
— |
|
|
|
(16,527 |
) |
|
|
— |
|
|
|
(16,527 |
) |
| Depreciation and
Amortization |
|
|
(6,727 |
) |
|
|
(5,031 |
) |
|
|
(13,096 |
) |
|
|
(9,861 |
) |
|
Total Operating Expenses |
|
|
(14,443 |
) |
|
|
(27,543 |
) |
|
|
(27,922 |
) |
|
|
(38,504 |
) |
| Gain (Loss) on Disposition of
Assets |
|
|
— |
|
|
|
4,732 |
|
|
|
(245 |
) |
|
|
5,440 |
|
| Gain (Loss) on Extinguishment of
Debt |
|
|
— |
|
|
|
(641 |
) |
|
|
— |
|
|
|
(641 |
) |
|
Other Gains and Income (Loss) |
|
|
— |
|
|
|
4,091 |
|
|
|
(245 |
) |
|
|
4,799 |
|
|
Total Operating Income (Loss) |
|
|
5,020 |
|
|
|
(9,169 |
) |
|
|
8,506 |
|
|
|
(4,710 |
) |
| Investment and Other Income
(Loss) |
|
|
(1,311 |
) |
|
|
3,903 |
|
|
|
(3,205 |
) |
|
|
9,235 |
|
| Interest Expense |
|
|
(2,277 |
) |
|
|
(2,421 |
) |
|
|
(4,179 |
) |
|
|
(4,865 |
) |
|
Income (Loss) Before Income Tax Benefit (Expense) |
|
|
1,432 |
|
|
|
(7,687 |
) |
|
|
1,122 |
|
|
|
(340 |
) |
| Income Tax Benefit (Expense) |
|
|
(214 |
) |
|
|
3,963 |
|
|
|
298 |
|
|
|
4,401 |
|
|
Net Income (Loss) Attributable to the Company |
|
|
1,218 |
|
|
|
(3,724 |
) |
|
|
1,420 |
|
|
|
4,061 |
|
| Distributions to Preferred
Stockholders |
|
|
(1,196 |
) |
|
|
— |
|
|
|
(2,391 |
) |
|
|
— |
|
|
Net Income (Loss) Attributable to Common Stockholders |
|
$ |
22 |
|
|
$ |
(3,724 |
) |
|
$ |
(971 |
) |
|
$ |
4,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Per Share Information: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Net Income (Loss) Attributable to Common
Stockholders |
|
$ |
0.00 |
|
|
$ |
(0.63 |
) |
|
$ |
(0.16 |
) |
|
$ |
0.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted Average Number of Common
Shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted |
|
|
6,004,178 |
|
|
|
5,898,280 |
|
|
|
5,956,798 |
|
|
|
5,888,735 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends Declared and Paid – Preferred Stock |
|
$ |
0.40 |
|
|
$ |
— |
|
|
$ |
0.80 |
|
|
$ |
— |
|
|
Dividends Declared and Paid – Common Stock |
|
$ |
1.12 |
|
|
$ |
1.00 |
|
|
$ |
2.20 |
|
|
$ |
2.00 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CTO Realty Growth,
Inc.Non-GAAP Financial
MeasuresSame-Property NOI
Reconciliation(Unaudited)(In thousands)
|
|
|
Three Months Ended |
|
|
|
June 30,2022 |
|
June 30,2021 |
|
Net Income (Loss) Attributable to the Company |
|
$ |
1,218 |
|
|
$ |
(3,724 |
) |
|
Gain on Disposition of Assets |
|
|
— |
|
|
|
(4,732 |
) |
|
Loss on Extinguishment of Debt |
|
|
— |
|
|
|
641 |
|
|
Impairment Charges |
|
|
— |
|
|
|
16,527 |
|
|
Depreciation and Amortization |
|
|
6,727 |
|
|
|
5,031 |
|
|
Amortization of Intangibles to Lease Income |
|
|
(497 |
) |
|
|
338 |
|
|
Straight-Line Rent Adjustment |
|
|
507 |
|
|
|
490 |
|
|
COVID-19 Rent Repayments |
|
|
(26 |
) |
|
|
(434 |
) |
|
Other Income Property Related Non-Cash Amortization |
|
|
38 |
|
|
|
38 |
|
|
Interest Expense |
|
|
2,277 |
|
|
|
2,421 |
|
|
General and Administrative Expenses |
|
|
2,676 |
|
|
|
2,665 |
|
|
Investment and Other Loss (Income) |
|
|
1,311 |
|
|
|
(3,903 |
) |
|
Income Tax Expense (Benefit) |
|
|
214 |
|
|
|
(3,963 |
) |
|
Real Estate Operations Revenues |
|
|
(858 |
) |
|
|
(1,248 |
) |
|
Real Estate Operations Direct Cost of Revenues |
|
|
228 |
|
|
|
533 |
|
|
Management Fee Income |
|
|
(948 |
) |
|
|
(752 |
) |
|
Interest Income from Commercial Loans and Investments |
|
|
(1,290 |
) |
|
|
(709 |
) |
|
Less: Impact of Properties Not Owned for the Full Reporting
Period |
|
|
(4,494 |
) |
|
|
(3,557 |
) |
|
Cash Rental Income Received from Properties Presented as Commercial
Loans and Investments |
|
|
363 |
|
|
|
354 |
|
| Same-Property NOI |
|
$ |
7,446 |
|
|
$ |
6,016 |
|
| |
| |
CTO Realty Growth,
Inc.Non-GAAP Financial
Measures(Unaudited)(In thousands, except per share
data)
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
|
|
|
June 30, 2022 |
|
June 30, 2021 |
|
June 30, 2022 |
|
June 30, 2021 |
|
Net Income (Loss) Attributable to the Company |
|
$ |
1,218 |
|
|
$ |
(3,724 |
) |
|
$ |
1,420 |
|
|
$ |
4,061 |
|
|
Add Back: Effect of Dilutive Interest Related to 2025 Notes
(1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Net Income (Loss) Attributable to
the Company, If-Converted |
|
$ |
1,218 |
|
|
$ |
(3,724 |
) |
|
|
1,420 |
|
|
|
4,061 |
|
|
Depreciation and Amortization of Real Estate |
|
|
6,707 |
|
|
|
5,031 |
|
|
|
13,076 |
|
|
|
9,861 |
|
|
(Gains) Losses on Disposition of Assets |
|
|
— |
|
|
|
(4,732 |
) |
|
|
245 |
|
|
|
(5,440 |
) |
|
Gains on Disposition of Other Assets |
|
|
(632 |
) |
|
|
(748 |
) |
|
|
(964 |
) |
|
|
(2,575 |
) |
|
Impairment Charges, Net |
|
|
— |
|
|
|
12,474 |
|
|
|
— |
|
|
|
12,474 |
|
|
Unrealized Loss (Gain) on Investment Securities |
|
|
1,891 |
|
|
|
(3,386 |
) |
|
|
4,348 |
|
|
|
(8,220 |
) |
| Funds from Operations |
|
$ |
9,184 |
|
|
$ |
4,915 |
|
|
$ |
18,125 |
|
|
$ |
10,161 |
|
|
Distributions to Preferred Stockholders |
|
|
(1,196 |
) |
|
|
— |
|
|
|
(2,391 |
) |
|
|
— |
|
| Funds From Operations
Attributable to Common Stockholders |
|
$ |
7,988 |
|
|
$ |
4,915 |
|
|
$ |
15,734 |
|
|
$ |
10,161 |
|
|
Loss on Extinguishment of Debt |
|
|
— |
|
|
|
641 |
|
|
|
— |
|
|
|
641 |
|
|
Amortization of Intangibles to Lease Income |
|
|
497 |
|
|
|
(338 |
) |
|
|
978 |
|
|
|
(734 |
) |
|
Less: Effect of Dilutive Interest Related to 2025 Notes (1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Core Funds From Operations
Attributable to Common Stockholders |
|
$ |
8,485 |
|
|
$ |
5,218 |
|
|
$ |
16,712 |
|
|
$ |
10,068 |
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Straight-Line Rent Adjustment |
|
|
(507 |
) |
|
|
(490 |
) |
|
|
(1,045 |
) |
|
|
(1,175 |
) |
|
COVID-19 Rent Repayments |
|
|
26 |
|
|
|
434 |
|
|
|
53 |
|
|
|
654 |
|
|
Other Depreciation and Amortization |
|
|
(31 |
) |
|
|
(150 |
) |
|
|
(170 |
) |
|
|
(374 |
) |
|
Amortization of Loan Costs and Discount on Convertible Debt |
|
|
212 |
|
|
|
478 |
|
|
|
446 |
|
|
|
953 |
|
|
Non-Cash Compensation |
|
|
705 |
|
|
|
742 |
|
|
|
1,611 |
|
|
|
1,700 |
|
|
Non-Recurring G&A |
|
|
— |
|
|
|
62 |
|
|
|
— |
|
|
|
155 |
|
| Adjusted Funds From Operations
Attributable to Common Stockholders |
|
$ |
8,890 |
|
|
$ |
6,294 |
|
|
$ |
17,607 |
|
|
$ |
11,981 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| FFO Attributable to Common
Stockholders per Common Share – Diluted |
|
$ |
1.33 |
|
|
$ |
0.83 |
|
|
$ |
2.64 |
|
|
$ |
1.73 |
|
| Core FFO Attributable to
Common Stockholders per Common Share – Diluted |
|
$ |
1.41 |
|
|
$ |
0.88 |
|
|
$ |
2.81 |
|
|
$ |
1.71 |
|
| AFFO Attributable to Common
Stockholders per Common Share – Diluted |
|
$ |
1.48 |
|
|
$ |
1.07 |
|
|
$ |
2.96 |
|
|
$ |
2.03 |
|
(1) Interest related to the 2025
Convertible Senior Notes excluded from net income attributable to
the Company to derive FFO effective January 1, 2022 due to the
implementation of ASU 2020-06 which requires presentation on an
if-converted basis, as the impact to net income attributable to
common stockholders would be anti-dilutive.
CTO Realty Growth,
Inc.Non-GAAP Financial
MeasuresReconciliation of Net Debt to Pro Forma
EBITDA(Unaudited)(In thousands)
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2022 |
|
Net Income Attributable to the Company |
|
$ |
1,218 |
|
|
Depreciation and Amortization of Real Estate |
|
|
6,707 |
|
|
Gains on Disposition of Other Assets |
|
|
(632 |
) |
|
Unrealized Loss on Investment Securities |
|
|
1,891 |
|
|
Distributions to Preferred Stockholders |
|
|
(1,196 |
) |
|
Straight-Line Rent Adjustment |
|
|
(507 |
) |
|
Amortization of Intangibles to Lease Income |
|
|
497 |
|
|
Other Depreciation and Amortization |
|
|
(31 |
) |
|
Amortization of Loan Costs and Discount on Convertible Debt |
|
|
212 |
|
|
Non-Cash Compensation |
|
|
705 |
|
|
Interest Expense, Net of Amortization of Loan Costs and Discount on
Convertible Debt |
|
|
2,065 |
|
| EBITDA |
|
$ |
10,929 |
|
|
|
|
|
|
| Annualized EBITDA |
|
$ |
43,716 |
|
|
Pro Forma Annualized Impact of Current Quarter Acquisitions and
Dispositions, Net (1) |
|
|
3,050 |
|
| Pro Forma EBITDA |
|
$ |
46,766 |
|
| |
|
|
|
| Total Long-Term Debt |
|
|
343,196 |
|
|
Financing Costs, Net of Accumulated Amortization |
|
|
1,194 |
|
|
Unamortized Convertible Debt Discount |
|
|
444 |
|
|
Cash & Cash Equivalents |
|
|
(7,137 |
) |
|
Restricted Cash |
|
|
(27,189 |
) |
| Net Debt |
|
$ |
310,508 |
|
| |
|
|
|
| Net Debt to Pro Forma
EBITDA |
|
|
6.6x |
|
(1) Reflects the pro forma annualized
impact on Annualized EBITDA of the Company’s acquisition and
disposition activity during the three months ended June 30,
2022.
| |
|
|
| |
|
|
| Contact: |
|
Matthew M. Partridge |
| |
|
Senior Vice President, Chief Financial Officer and
Treasurer |
| |
|
(407) 904-3324 |
| |
|
mpartridge@ctoreit.com |
Alpine Income Property (NYSE:PINE)
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Von Mär 2024 bis Apr 2024
Alpine Income Property (NYSE:PINE)
Historical Stock Chart
Von Apr 2023 bis Apr 2024
