BOSTON, Nov. 3, 2016 /PRNewswire/ -- STAG
Industrial, Inc. (the "Company") (NYSE: STAG), a real estate
investment trust focused on the acquisition and operation of
single-tenant, industrial properties throughout the United States, today announced its
financial and operating results for the third quarter of 2016.
"We are pleased with our performance this year and our
expectations for the fourth quarter and beyond," said Ben Butcher, Chief Executive Officer of the
Company. "We will continue to focus on growing the bottom line and
delivering the best risk adjusted returns to our
shareholders."
Highlights:
- Reported $(0.06) of net loss per
basic and diluted share for the third quarter of 2016, a increase
of 45.5% compared to the third quarter ended September 30, 2015. Reported $(4.3) million of net loss attributable to common
stockholders compared to $(7.1)
million for the third quarter of 2015, a increase of 39.9%.
For the nine months ended September 30, 2016, net loss
attributable to common stockholders increased 48.1% compared to the
same period last year.
- Achieved $0.40 of Core FFO per
basic and diluted share for the third quarter of 2016, an increase
of 2.6% compared to the third quarter ended September 30, 2015. Generated Core FFO of
$30.3 million compared to
$27.7 million for the third quarter
of 2015, an increase of 9.1%. For the nine months ended
September 30, 2016, Core FFO increased 11.9% in the aggregate
compared to the same period last year.
- Generated Cash NOI of $51.9
million compared to $47.2
million for the third quarter of 2015, an increase of 9.9%.
For the nine months ended September 30,
2016, Cash NOI increased 13.9% in the aggregate compared to
the same period last year.
- Acquired 13 buildings in the third quarter of 2016, consisting
of 3.7 million square feet for $166.0
million with a weighted average Capitalization Rate of
7.9%.
- Sold three buildings in the third quarter of 2016, consisting
of 139,509 square feet for $835,000.
- Achieved occupancy of 95.3% on the portfolio, and 96.4% on the
Operating Portfolio as of September 30,
2016.
- Executed Operating Portfolio leases for 1.1 million square feet
for the third quarter of 2016. Experienced a cash rent change and
GAAP Rent Change of 6.6% and 16.4%, respectively, for the quarter's
Operating Portfolio leasing activity.
- Experienced 92.4% Retention for 1.3 million square feet of
leases expiring in the quarter. Achieved an increase in cash rent
change and GAAP Rent Change of 2.5% and 3.4%, respectively, for
these renewals.
- Raised gross proceeds of $100.7
million of equity through the Company's at-the-market
offering ("ATM") program for the third quarter ended September 30, 2016. Subsequent to quarter end and
through November 3, 2016, raised gross proceeds of
$71.1 million through the ATM
program.
- Subsequent to quarter end, redeemed all $69 million of outstanding 9.0% Series A
Preferred Stock on November 2,
2016.
- Subsequent to quarter end, the Board of Directors voted to
increase the monthly dividend by approximately 1% to $0.116667 ($1.40
annualized) per share effective January
2017.
Please refer to the Non-GAAP Financial Measures and Other
Definitions section at the end of this release for definitions of
capitalized terms used in this release.The Company will host a
conference call tomorrow, November 4, 2016 at 10:00 a.m
(Eastern Time), to discuss the quarter's results and provide
information about acquisitions, operations, capital markets and
corporate activities. Details of the call can be found at the end
of this release.
Key Financial Measures
THIRD QUARTER 2016
KEY FINANCIAL MEASURES
|
|
|
|
|
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|
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|
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|
|
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Three months
ended
September 30,
|
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Nine months
ended
September 30,
|
|
|
Metrics
|
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
(in millions,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable
to common stockholders
|
|
$(4.3)
|
|
$(7.1)
|
|
39.9%
|
|
$(9.8)
|
|
$(18.8)
|
|
48.1%
|
Net loss
per share — basic and diluted
|
|
$(0.06)
|
|
$(0.11)
|
|
45.5%
|
|
$(0.14)
|
|
$(0.29)
|
|
51.7%
|
Cash NOI
|
|
$51.9
|
|
$47.2
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|
9.9%
|
|
$150.4
|
|
$132.0
|
|
13.9%
|
Adjusted
EBITDA
|
|
$46.2
|
|
$40.9
|
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12.8%
|
|
$132.5
|
|
$114.2
|
|
16.0%
|
Core FFO
|
|
$30.3
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|
$27.7
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|
9.1%
|
|
$85.2
|
|
$76.1
|
|
11.9%
|
Core FFO
per share / unit - basic
|
|
$0.40
|
|
$0.39
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|
2.6%
|
|
$1.17
|
|
$1.10
|
|
6.4%
|
Core FFO
per share / unit - diluted
|
|
$0.40
|
|
$0.39
|
|
2.6%
|
|
$1.16
|
|
$1.10
|
|
5.5%
|
AFFO
|
|
$31.0
|
|
$28.4
|
|
8.9%
|
|
$87.8
|
|
$78.5
|
|
11.9%
|
Definitions of the above mentioned non-GAAP financial measures,
together with reconciliations to net income (loss) in accordance
with GAAP, appear at the end of this release. Please also see the
Company's supplemental information package for additional
disclosure.
Acquisition and Disposition Activity
For the three months ended September 30, 2016, the Company
acquired 13 buildings for $166.0
million with an Occupancy Rate of 100% upon acquisition. The
chart below details the acquisition activity for the quarter:
THIRD QUARTER 2016
ACQUISITION ACTIVITY
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Location
(CBSA)
|
Date
Acquired
|
Square
Feet
|
Buildings
|
Purchase
Price ($MM)
|
Weighted
Average Lease
Term (Years)
|
Capitalization
Rate
|
Columbia,
SC
|
7/11/2016
|
185,600
|
1
|
$7.3
|
10.0
|
|
Augusta-Richmond
County, GA-SC
|
7/11/2016
|
450,000
|
1
|
15.7
|
3.5
|
|
Greenville-Anderson-Mauldin, SC
|
7/11/2016
|
168,087
|
1
|
7.0
|
3.2
|
|
Philadelphia-Camden-Wilmington,
PA-NJ-DE-MD
|
8/11/2016
|
217,000
|
2
|
11.2
|
2.1
|
|
Detroit-Warren-Dearborn, MI
|
8/12/2016
|
268,000
|
1
|
18.7
|
9.2
|
|
Philadelphia-Camden-Wilmington,
PA-NJ-DE-MD
|
8/18/2016
|
485,987
|
1
|
27.5
|
15.0
|
|
Worcester,
MA-CT
|
9/12/2016
|
121,700
|
1
|
7.9
|
4.3
|
|
Dallas-Fort
Worth-Arlington, TX
|
9/22/2016
|
420,000
|
1
|
19.1
|
3.0
|
|
Atlanta-Sandy
Springs-Roswell, GA
|
9/22/2016
|
799,200
|
2
|
24.9
|
3.1
|
|
Charlotte-Concord-Gastonia, NC-SC
|
9/29/2016
|
315,520
|
1
|
9.9
|
1.8
|
|
Augusta-Waterville,
ME
|
9/30/2016
|
265,000
|
1
|
16.8
|
14.8
|
|
Total / weighted
average
|
|
3,696,094
|
13
|
$166.0
|
6.2
|
7.9%
|
The chart below details the 2016 acquisition activity and
pipeline through November 2, 2016:
2016 ACQUISITION
ACTIVITY AND PIPELINE DETAIL
|
|
|
|
|
|
|
|
Square
Feet
|
Buildings
|
Purchase
Price ($MM)
|
Weighted
Average Lease
Term (Years)
|
Capitalization
Rate
|
Q1
|
710,754
|
5
|
$27.9
|
4.3
|
8.5%
|
Q2
|
1,389,639
|
5
|
58.2
|
6.6
|
7.9%
|
Q3
|
3,696,094
|
13
|
166.0
|
6.2
|
7.9%
|
2016 closed
acquisitions
|
5,796,487
|
23
|
$252.1
|
6.1
|
8.0%
|
|
|
|
|
|
|
As of November 2,
2016 (1)
|
|
|
|
|
|
Subsequent to
quarter-end acquisitions
|
1,911,051
|
9
|
$101.7
|
|
|
Under contract and
non-binding Letter of Intent ("LOI")
|
4,078,536
|
19
|
177.0
|
|
|
Total subsequent
to Q3 acquisitions under contract and LOI
|
5,989,587
|
28
|
$278.7
|
|
|
|
|
|
|
|
|
Forward commitment
for build-to-suit takeout in 2017
|
906,204
|
2
|
$52.4
|
|
|
|
|
|
|
|
|
Pipeline
|
38.1
million
|
170
|
$1,852.7
|
|
|
(1)
|
The purchase and sale
agreements for the properties under contract are subject to
satisfaction of closing conditions, and the properties under LOI
require the negotiation and execution of definitive purchase and
sale agreements. There can be no assurance that any of the
properties under contract or letter of intent will be acquired on
the terms anticipated or at all.
|
During the three months ended September 30, 2016, the
Company sold three buildings consisting of 139,509 square feet for
$835,000. The chart below details the
disposition activity for the nine months ended September 30,
2016:
2016 DISPOSITION
ACTIVITY
|
|
|
|
|
|
|
Year
|
Square
Feet
|
Buildings
|
Sale Price
($MM)
|
Q1
|
1,182,450
|
|
4
|
$32.8
|
|
Q2
|
634,404
|
|
7
|
17.8
|
|
Q3
|
139,509
|
|
3
|
0.8
|
|
Total
|
1,956,363
|
|
14
|
$51.4
|
|
Subsequent to quarter end, the Company entered into a purchase
and sale agreement to sell a portfolio of six buildings with
expected gross proceeds of approximately $80
million. The transaction is expected to close in the fourth
quarter of 2016.(1)
Operating Portfolio Leasing Activity
For the three months ended September 30, 2016, the Company
executed 11 leases for approximately 1.1 million square feet. The
chart below details the leasing activity for leases signed during
the quarter:
THIRD QUARTER 2016
LEASING ACTIVITY
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|
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|
Lease
Type
|
Square
Feet
|
|
W.A.
Lease
Term
(Years)
|
Cash
Base
Rent
$/SF
|
GAAP Base
Rent $/SF
|
Lease
Commissions
$/SF
|
Tenant
Improvements
$/SF
|
Total Costs
$/SF
|
Cash
Rent
Change
|
GAAP
Rent
Change
|
New leases
|
75,500
|
|
1.9
|
$3.89
|
$3.89
|
$0.10
|
$0.09
|
$0.19
|
(2.1)%
|
(2.1)%
|
Renewal
leases
|
774,749
|
|
5.2
|
3.48
|
3.61
|
0.51
|
0.56
|
1.07
|
7.2%
|
17.8%
|
Total / weighted
average
|
850,249
|
|
4.9
|
$3.51
|
$3.63
|
$0.48
|
$0.52
|
$1.00
|
6.6%
|
16.4%
|
Temporary
leases
|
272,080
|
|
|
|
|
|
|
|
|
|
Total leasing
activity
|
1,122,329
|
|
|
|
|
|
|
|
|
|
(1)
|
The purchase and sale
agreement for the properties under contract are subject to
satisfaction of closing conditions.
|
The chart below details the leasing activity for leases signed
during the nine months ended September 30, 2016:
2016 LEASING
ACTIVITY
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|
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|
|
|
|
|
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|
Lease
Type
|
Square
Feet
|
|
W.A.
Lease
Term
(Years)
|
Cash
Base
Rent
$/SF
|
GAAP Base
Rent $/SF
|
Lease
Commissions
$/SF
|
Tenant
Improvement
$/SF
|
Total Costs
$/SF
|
Cash
Rent
Change
|
GAAP
Rent
Change
|
New leases
|
295,880
|
|
5.5
|
$4.20
|
$4.37
|
$1.45
|
$0.02
|
$1.47
|
(2.1)%
|
(2.1)%
|
Renewal
leases
|
4,185,546
|
|
4.6
|
3.95
|
4.08
|
0.31
|
0.32
|
0.63
|
0.5%
|
6.9%
|
Total / weighted
average
|
4,481,426
|
|
4.6
|
$3.96
|
$4.09
|
$0.38
|
$0.30
|
$0.68
|
0.5%
|
6.8%
|
Temporary
leases
|
935,820
|
|
|
|
|
|
|
|
|
|
Total leasing
activity
|
5,417,246
|
|
|
|
|
|
|
|
|
|
The Company experienced 92.4% Retention for the quarter. The
chart below details the Retention activity for the nine months
ended September 30, 2016:
2016
RETENTION
|
|
|
|
|
|
|
|
|
|
Quarter
|
Expiring
Square
Footage
|
|
Retained
Square
Footage
|
|
W.A. Lease
Term (Years)
|
Retention
|
Cash Rent
Change
|
GAAP Rent
Change
|
Q1
|
1,251,975
|
|
530,485
|
|
3.2
|
42.4%
|
3.1%
|
6.1%
|
Q2
|
921,971
|
|
695,395
|
|
5.0
|
75.4%
|
5.8%
|
9.9%
|
Q3
|
1,276,074
|
|
1,178,574
|
|
4.2
|
92.4%
|
2.5%
|
3.4%
|
Total / weighted
average
|
3,450,020
|
|
2,404,454
|
|
4.2
|
69.7%
|
3.6%
|
5.9%
|
The Occupancy Rate of the Operating Portfolio as of
September 30, 2016 was 96.4%.
As of September 30, 2016, the Company's portfolio included
16 non-core, flex/office buildings that constituted approximately
2% of the overall portfolio's square footage and approximately 3%
of the overall portfolio's annualized base rental revenue.
Liquidity and Capital Market Activity
As of September 30, 2016, the Company had total Debt
Capacity of $468 million and
liquidity of $480 million, comprised
of $12 million of cash and
$468 million of Immediate
Availability on the Company's unsecured credit facility and
unsecured term loans.
During the three months ended September 30, 2016, the
Company issued 4,201,500 shares of common stock under its ATM
program, realizing gross proceeds of $100.7
million. The chart below details the ATM program activity
for the nine months ended September 30, 2016:
2016 ATM
ACTIVITY
|
|
|
|
|
|
|
|
|
|
ATM
|
Shares
Issued
|
Price per
Share
(Weighted Avg)
|
Gross
Proceeds
$(MM)
|
Net
Proceeds
$(MM)
|
Q1
|
—
|
|
—
|
—
|
—
|
Q2
|
—
|
|
—
|
—
|
—
|
Q3
|
4,201,500
|
|
$23.97
|
$100.7
|
$99.2
|
Total / Weighted
Average
|
4,201,500
|
|
$23.97
|
$100.7
|
$99.2
|
Subsequent to September 30, 2016, the Company sold
3,124,700 shares under its ATM program for gross proceeds of
$71.1 million. The net proceeds of
$70.2 million were used to repay
amounts outstanding under the Company's unsecured credit
facility.
Dividends
Subsequent to quarter end, on November 2, 2016, the
Company's Board of Directors declared a monthly common stock
dividend of $0.116667 per share for
the months of January, February and March 2017, representing
an increase of approximately 1%. The chart below details the common
dividends declared:
FOURTH QUARTER
2016 & FIRST QUARTER 2017 COMMON DIVIDENDS
|
|
|
|
|
|
|
|
Month
|
|
Record Date
|
|
Payment Date
|
|
Dividend
|
October
2016
|
|
October 31,
2016
|
|
November 15,
2016
|
|
$0.115833
|
November
2016
|
|
November 30,
2016
|
|
December 15,
2016
|
|
$0.115833
|
December
2016
|
|
December 30,
2016
|
|
January 17,
2017
|
|
$0.115833
|
January
2017
|
|
January 31,
2017
|
|
February 15,
2017
|
|
$0.116667
|
February
2017
|
|
February 28,
2017
|
|
March 15,
2017
|
|
$0.116667
|
March 2017
|
|
March 31,
2017
|
|
April 17,
2017
|
|
$0.116667
|
Subsequent to quarter end, on November 2, 2016, the
Company's Board of Directors declared the following fourth quarter
preferred stock dividends:
FOURTH QUARTER
2016 PREFERRED DIVIDENDS DECLARED
|
|
|
|
|
Series
|
Record
Date
|
Payment
Date
|
Quarterly
Dividend
|
Series B - 6.625%
Cumulative Redeemable Preferred Stock (NYSE: STAG Pr B)
|
December 15,
2016
|
December 30,
2016
|
$0.4140625
|
Series C - 6.875%
Cumulative Redeemable Preferred Stock (NYSE: STAG Pr C)
|
December 15,
2016
|
December 30,
2016
|
$0.4296875
|
On November 2, 2016, the Company redeemed all of the
outstanding Series A Preferred Stock, at a cash redemption price of
$25.00 per share, plus accrued and
unpaid dividends to but excluding the redemption date, without
interest, at a rate of $0.19375 per
share.
The Company's dividend policy is set by the Board of Directors,
which considers, among other factors, REIT distribution
requirements and recurring, distributable, cash income.
Conference Call
The Company will host a conference call tomorrow, Friday, November 4, at 10:00 a.m. (Eastern
Time) to discuss the quarter's results. The call can be
accessed live over the phone toll-free by dialing (877) 407-4018,
or for international callers, (201) 689-8471. A replay will
be available shortly after the call and can be accessed by dialing
(844) 512-2921, or for international callers, (412) 317-6671.
The passcode for the replay is 13646298.
Interested parties may also listen to a simultaneous webcast of
the conference call by visiting the Investor Relations section of
the Company's website at www.stagindustrial.com, or by clicking on
the following link:
http://ir.stagindustrial.com/corporateprofile.aspx?iid=4263385
Supplemental Schedules
The Company has provided a supplemental information package to
provide additional disclosure and financial information on its
website (www.stagindustrial.com) under the "Presentations" tab in
the Investor Relations section.
Additional information is also available on the Company's
website at www.stagindustrial.com.
CONSOLIDATED
BALANCE SHEETS
STAG
Industrial, Inc.
(unaudited, in thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
September 30,
2016
|
|
December 31,
2015
|
Assets
|
|
|
|
Rental
Property:
|
|
|
|
Land
|
$
|
254,909
|
|
|
$
|
228,919
|
|
Buildings and
improvements, net of accumulated depreciation of $183,386 and
$150,395, respectively
|
1,440,311
|
|
|
1,332,298
|
|
Deferred leasing
intangibles, net of accumulated amortization of $238,235 and
$200,758, respectively
|
276,829
|
|
|
276,272
|
|
Total rental
property, net
|
1,972,049
|
|
|
1,837,489
|
|
Cash and cash
equivalents
|
12,273
|
|
|
12,011
|
|
Restricted
cash
|
9,325
|
|
|
8,395
|
|
Tenant accounts
receivable, net
|
23,302
|
|
|
21,478
|
|
Prepaid expenses and
other assets
|
24,978
|
|
|
18,064
|
|
Interest rate
swaps
|
—
|
|
|
1,867
|
|
Assets held for sale,
net
|
6,617
|
|
|
—
|
|
Total
assets
|
$
|
2,048,544
|
|
|
$
|
1,899,304
|
|
Liabilities and
Equity
|
|
|
|
Liabilities:
|
|
|
|
Unsecured credit
facility
|
$
|
129,000
|
|
|
$
|
56,000
|
|
Unsecured term loans,
net
|
297,032
|
|
|
296,618
|
|
Unsecured notes,
net
|
397,909
|
|
|
397,720
|
|
Mortgage notes,
net
|
200,855
|
|
|
229,910
|
|
Accounts payable,
accrued expenses and other liabilities
|
34,994
|
|
|
25,662
|
|
Interest rate
swaps
|
15,953
|
|
|
3,766
|
|
Tenant prepaid rent
and security deposits
|
15,146
|
|
|
14,628
|
|
Dividends and
distributions payable
|
8,814
|
|
|
8,234
|
|
Deferred leasing
intangibles, net of accumulated amortization of $10,132 and $8,536,
respectively
|
14,899
|
|
|
11,387
|
|
Total
liabilities
|
1,114,602
|
|
|
1,043,925
|
|
|
|
|
|
Equity:
|
|
|
|
Preferred stock, par
value $0.01 per share, 15,000,000 shares authorized,
|
|
|
|
Series A, 2,760,000
shares (liquidation preference of $25.00 per share) issued and
outstanding at September 30, 2016 and December 31,
2015
|
69,000
|
|
|
69,000
|
|
Series B, 2,800,000
shares (liquidation preference of $25.00 per share) issued and
outstanding at September 30, 2016 and December 31,
2015
|
70,000
|
|
|
70,000
|
|
Series C, 3,000,000
shares (liquidation preference of $25.00 per share) issued and
outstanding at September 30, 2016 and no shares issued and
outstanding at December 31, 2015
|
75,000
|
|
|
—
|
|
Common stock, par
value $0.01 per share, 150,000,000 shares authorized, 72,460,009
and 68,077,333 shares issued and outstanding at September 30, 2016
and December 31, 2015, respectively
|
725
|
|
|
681
|
|
Additional paid-in
capital
|
1,117,045
|
|
|
1,017,394
|
|
Common stock
dividends in excess of earnings
|
(416,540)
|
|
|
(334,623)
|
|
Accumulated other
comprehensive loss
|
(15,669)
|
|
|
(2,350)
|
|
Total stockholders'
equity
|
899,561
|
|
|
820,102
|
|
Noncontrolling
interest
|
34,381
|
|
|
35,277
|
|
Total
equity
|
933,942
|
|
|
855,379
|
|
Total liabilities
and equity
|
$
|
2,048,544
|
|
|
$
|
1,899,304
|
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
STAG
Industrial, Inc.
(unaudited, in
thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
Rental
income
|
$
|
53,511
|
|
|
$
|
47,731
|
|
|
$
|
156,575
|
|
|
$
|
136,201
|
|
Tenant
recoveries
|
8,911
|
|
|
8,063
|
|
|
26,807
|
|
|
23,135
|
|
Other
income
|
173
|
|
|
127
|
|
|
327
|
|
|
410
|
|
Total
revenue
|
62,595
|
|
|
55,921
|
|
|
183,709
|
|
|
159,746
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Property
|
11,258
|
|
|
10,949
|
|
|
35,672
|
|
|
31,265
|
|
General and
administrative
|
7,603
|
|
|
6,429
|
|
|
26,373
|
|
|
21,453
|
|
Property acquisition
costs
|
1,978
|
|
|
1,006
|
|
|
3,113
|
|
|
2,511
|
|
Depreciation and
amortization
|
32,020
|
|
|
28,656
|
|
|
93,318
|
|
|
82,042
|
|
Loss on
impairments
|
—
|
|
|
5,733
|
|
|
11,231
|
|
|
8,378
|
|
Other
expenses
|
279
|
|
|
226
|
|
|
857
|
|
|
892
|
|
Total
expenses
|
53,138
|
|
|
52,999
|
|
|
170,564
|
|
|
146,541
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
3
|
|
|
2
|
|
|
8
|
|
|
7
|
|
Interest
expense
|
(10,504)
|
|
|
(9,317)
|
|
|
(31,841)
|
|
|
(26,260)
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
(1,973)
|
|
|
—
|
|
Gain on the sales of
rental property, net
|
643
|
|
|
1,713
|
|
|
21,589
|
|
|
1,713
|
|
Total other income
(expense)
|
(9,858)
|
|
|
(7,602)
|
|
|
(12,217)
|
|
|
(24,540)
|
|
Net income
(loss)
|
$
|
(401)
|
|
|
$
|
(4,680)
|
|
|
$
|
928
|
|
|
$
|
(11,335)
|
|
Less: loss
attributable to noncontrolling interest after preferred stock
dividends
|
(216)
|
|
|
(359)
|
|
|
(505)
|
|
|
(951)
|
|
Net income (loss)
attributable to STAG Industrial, Inc.
|
$
|
(185)
|
|
|
$
|
(4,321)
|
|
|
$
|
1,433
|
|
|
$
|
(10,384)
|
|
Less: preferred stock
dividends
|
4,001
|
|
|
2,712
|
|
|
10,914
|
|
|
8,136
|
|
Less: amount
allocated to participating securities
|
95
|
|
|
95
|
|
|
289
|
|
|
291
|
|
Net loss
attributable to common stockholders
|
$
|
(4,281)
|
|
|
$
|
(7,128)
|
|
|
$
|
(9,770)
|
|
|
$
|
(18,811)
|
|
Weighted average
common shares outstanding — basic and diluted
|
71,130,848
|
|
|
67,799,700
|
|
|
68,984,670
|
|
|
65,803,304
|
|
Net loss per share
— basic and diluted
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
— basic and diluted
|
$
|
(0.06)
|
|
|
$
|
(0.11)
|
|
|
$
|
(0.14)
|
|
|
$
|
(0.29)
|
|
|
|
|
|
|
|
|
|
RECONCILIATIONS OF
GAAP TO NON-GAAP MEASURES
STAG
Industrial, Inc.
(unaudited, in
thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
NET OPERATING
INCOME RECONCILIATION
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(401)
|
|
|
$
|
(4,680)
|
|
|
$
|
928
|
|
|
$
|
(11,335)
|
|
Asset management fee
income
|
(60)
|
|
|
(87)
|
|
|
(166)
|
|
|
(302)
|
|
General and
administrative
|
7,603
|
|
|
6,429
|
|
|
26,373
|
|
|
21,453
|
|
Property acquisition
costs
|
1,978
|
|
|
1,006
|
|
|
3,113
|
|
|
2,511
|
|
Depreciation and
amortization
|
32,020
|
|
|
28,656
|
|
|
93,318
|
|
|
82,042
|
|
Interest
income
|
(3)
|
|
|
(2)
|
|
|
(8)
|
|
|
(7)
|
|
Interest
expense
|
10,504
|
|
|
9,317
|
|
|
31,841
|
|
|
26,260
|
|
Loss on
impairments
|
—
|
|
|
5,733
|
|
|
11,231
|
|
|
8,378
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
1,973
|
|
|
—
|
|
Other
expenses
|
279
|
|
|
226
|
|
|
857
|
|
|
892
|
|
Gain on the sales of
rental property, net
|
(643)
|
|
|
(1,713)
|
|
|
(21,589)
|
|
|
(1,713)
|
|
Corporate sublease
rental income
|
—
|
|
|
(85)
|
|
|
—
|
|
|
(187)
|
|
Net operating
income
|
$
|
51,277
|
|
|
$
|
44,800
|
|
|
$
|
147,871
|
|
|
$
|
127,992
|
|
|
|
|
|
|
|
|
|
Net operating
income
|
$
|
51,277
|
|
|
$
|
44,800
|
|
|
$
|
147,871
|
|
|
$
|
127,992
|
|
Straight-line rent
adjustments, net
|
(914)
|
|
|
395
|
|
|
(2,264)
|
|
|
(2,305)
|
|
Intangible
amortization in rental income, net
|
1,564
|
|
|
2,051
|
|
|
4,751
|
|
|
6,331
|
|
Cash net operating
income
|
$
|
51,927
|
|
|
$
|
47,246
|
|
|
$
|
150,358
|
|
|
$
|
132,018
|
|
|
|
|
|
|
|
|
|
Cash net operating
income
|
$
|
51,927
|
|
|
|
|
|
|
|
Cash NOI from
acquisitions' and dispositions' timing
|
1,893
|
|
|
|
|
|
|
|
Run Rate Cash
NOI
|
$
|
53,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADJUSTED EBITDA
RECONCILIATION
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(401)
|
|
|
$
|
(4,680)
|
|
|
$
|
928
|
|
|
$
|
(11,335)
|
|
Intangible
amortization in rental income, net
|
1,564
|
|
|
2,051
|
|
|
4,751
|
|
|
6,331
|
|
Straight-line rent
adjustments, net
|
(841)
|
|
|
(930)
|
|
|
(2,026)
|
|
|
(2,410)
|
|
Non-cash compensation
expense
|
2,043
|
|
|
1,919
|
|
|
6,128
|
|
|
5,667
|
|
Termination
income
|
(71)
|
|
|
(460)
|
|
|
(199)
|
|
|
(1,687)
|
|
Property acquisition
costs
|
1,978
|
|
|
1,006
|
|
|
3,113
|
|
|
2,511
|
|
Depreciation and
amortization
|
32,020
|
|
|
28,656
|
|
|
93,318
|
|
|
82,042
|
|
Interest
income
|
(3)
|
|
|
(2)
|
|
|
(8)
|
|
|
(7)
|
|
Interest
expense
|
10,504
|
|
|
9,317
|
|
|
31,841
|
|
|
26,260
|
|
Severance
costs
|
—
|
|
|
—
|
|
|
3,063
|
|
|
—
|
|
Non-recurring other
expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
167
|
|
Loss on
impairments
|
—
|
|
|
5,733
|
|
|
11,231
|
|
|
8,378
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
1,973
|
|
|
—
|
|
Gain on the sales of
rental property, net
|
(643)
|
|
|
(1,713)
|
|
|
(21,589)
|
|
|
(1,713)
|
|
Adjusted
EBITDA
|
$
|
46,150
|
|
|
$
|
40,897
|
|
|
$
|
132,524
|
|
|
$
|
114,204
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
46,150
|
|
|
|
|
|
|
|
Adjusted EBITDA from
acquisitions' and dispositions' timing
|
1,893
|
|
|
|
|
|
|
|
Run Rate Adjusted
EBITDA
|
$
|
48,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATIONS OF
GAAP TO NON-GAAP MEASURES
STAG
Industrial, Inc.
(unaudited, in
thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
CORE FUNDS FROM
OPERATIONS RECONCILIATION
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(401)
|
|
|
$
|
(4,680)
|
|
|
$
|
928
|
|
|
$
|
(11,335)
|
|
Rental property
depreciation and amortization
|
31,947
|
|
|
28,610
|
|
|
93,130
|
|
|
81,910
|
|
Loss on
impairments
|
—
|
|
|
5,733
|
|
|
11,231
|
|
|
8,378
|
|
Gain on the sales of
rental property, net
|
(643)
|
|
|
(1,713)
|
|
|
(21,589)
|
|
|
(1,713)
|
|
Funds from
operations
|
$
|
30,903
|
|
|
$
|
27,950
|
|
|
$
|
83,700
|
|
|
$
|
77,240
|
|
Preferred stock
dividends
|
(4,001)
|
|
|
(2,712)
|
|
|
(10,914)
|
|
|
(8,136)
|
|
Amount allocated to
participating securities
|
(95)
|
|
|
(95)
|
|
|
(289)
|
|
|
(291)
|
|
Funds from
operations attributable to common stockholders and unit
holders
|
$
|
26,807
|
|
|
$
|
25,143
|
|
|
$
|
72,497
|
|
|
$
|
68,813
|
|
|
|
|
|
|
|
|
|
Funds from
operations attributable to common stockholders and unit
holders
|
$
|
26,807
|
|
|
$
|
25,143
|
|
|
$
|
72,497
|
|
|
$
|
68,813
|
|
Intangible
amortization in rental income, net
|
1,564
|
|
|
2,051
|
|
|
4,751
|
|
|
6,331
|
|
Termination
income
|
(71)
|
|
|
(460)
|
|
|
(199)
|
|
|
(1,687)
|
|
Property acquisition
costs
|
1,978
|
|
|
1,006
|
|
|
3,113
|
|
|
2,511
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
1,973
|
|
|
—
|
|
Severance
costs
|
—
|
|
|
—
|
|
|
3,063
|
|
|
—
|
|
Non-recurring other
expenses
|
—
|
|
|
—
|
|
|
—
|
|
|
167
|
|
Core funds from
operations
|
$
|
30,278
|
|
|
$
|
27,740
|
|
|
$
|
85,198
|
|
|
$
|
76,135
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares, participating securities, performance units and
other units
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding
|
71,130,848
|
|
|
67,799,700
|
|
|
68,984,670
|
|
|
65,803,304
|
|
Weighted average
participating securities outstanding
|
272,337
|
|
|
275,663
|
|
|
277,720
|
|
|
284,020
|
|
Weighted average
units outstanding
|
3,684,471
|
|
|
3,474,370
|
|
|
3,689,000
|
|
|
3,394,986
|
|
Weighted average
common shares, participating securities, other units - basic and
diluted
|
75,087,656
|
|
|
71,549,733
|
|
|
72,951,390
|
|
|
69,482,310
|
|
Weighted average
performance units
|
278,788
|
|
|
—
|
|
|
210,617
|
|
|
—
|
|
Weighted average
common shares, participating securities, performance and other
units - diluted
|
75,366,444
|
|
|
71,549,733
|
|
|
73,162,007
|
|
|
69,482,310
|
|
Core funds from
operations per share / unit - basic
|
$
|
0.40
|
|
|
$
|
0.39
|
|
|
$
|
1.17
|
|
|
$
|
1.10
|
|
Core funds from
operations per share / unit - diluted
|
$
|
0.40
|
|
|
$
|
0.39
|
|
|
$
|
1.16
|
|
|
$
|
1.10
|
|
|
|
|
|
|
|
|
|
ADJUSTED FUNDS
FROM OPERATIONS RECONCILIATION
|
|
|
|
|
|
|
|
Core funds from
operations
|
$
|
30,278
|
|
|
$
|
27,740
|
|
|
$
|
85,198
|
|
|
$
|
76,135
|
|
Add: non-rental
property depreciation and amortization
|
73
|
|
|
46
|
|
|
188
|
|
|
132
|
|
Straight-line rent
adjustments, net
|
(841)
|
|
|
(930)
|
|
|
(2,026)
|
|
|
(2,410)
|
|
Recurring capital
expenditures
|
(306)
|
|
|
(252)
|
|
|
(1,059)
|
|
|
(588)
|
|
Renewal lease
commissions and tenant improvements
|
(709)
|
|
|
(481)
|
|
|
(1,846)
|
|
|
(1,367)
|
|
Non-cash portion of
interest expense
|
428
|
|
|
399
|
|
|
1,208
|
|
|
907
|
|
Non-cash compensation
expense
|
2,043
|
|
|
1,919
|
|
|
6,128
|
|
|
5,667
|
|
Adjusted funds
from operations (1)
|
$
|
30,966
|
|
|
$
|
28,441
|
|
|
$
|
87,791
|
|
|
$
|
78,476
|
|
|
|
|
|
|
|
|
|
(1)
|
Excludes
Non-Recurring Capital Expenditures of approximately $2,527, $7,220,
$4,822 and $9,498 and new leasing commissions and tenant
improvements of approximately $228, $1,085, $446 and $661, for the
three and nine months ended September 30, 2016 and
September 30, 2015, respectively.
|
Non-GAAP Financial Measures and Other Definitions
Acquisition Capital Expenditure: We define Acquisition
Capital Expenditure as Recurring and Non-Recurring Capital
Expenditures identified at the time of acquisition and underwritten
to occur in the first twelve months. Acquisition Capital
Expenditures also include new lease commissions and tenant
improvements for space that was not occupied under STAG's
ownership.
Adjusted Earnings before Interest, Taxes, Depreciation, and
Amortization (Adjusted EBITDA), and Run Rate Adjusted EBITDA:
We define Adjusted EBITDA as net income (loss) (computed in
accordance with GAAP) before interest, tax, depreciation and
amortization, property acquisition costs, gain on the sales of
rental property, termination income, straight-line rent
adjustments, non-cash compensation, intangible amortization in
rental income, loss on impairments, loss on extinguishment of debt
and other non-recurring items.
We define Run Rate Adjusted EBITDA as Adjusted EBITDA plus
incremental Adjusted EBITDA related to acquisitions acquired in
each quarter for which a full quarter's results were not reflected
less Adjusted EBITDA related to the quarter's dispositions. Run
Rate Adjusted EBITDA does not reflect the Company's historical
results and does not predict future results, which may be
substantially different.
Adjusted EBITDA and Run Rate EBITDA should not be considered as
an alternative to net income (determined in accordance with GAAP)
as an indication of our performance, and we believe that to
understand our performance further, Adjusted EBITDA and Run Rate
Adjusted EBITDA should be compared with our reported net income or
net loss in accordance with GAAP, as presented in our consolidated
financial statements. We believe that Adjusted EBITDA and Run Rate
Adjusted EBITDA are helpful to investors as supplemental measures
of the operating performance of a real estate company because they
are direct measures of the actual operating results of our
industrial properties. We also use these measures in ratios to
compare our performance to that of our industry peers.
Capitalization Rate: We define Capitalization Rate as the
estimated weighted average cash capitalization rate, calculated by
dividing (i) the Company's estimate of year one net operating
income from the applicable property's operations stabilized for
occupancy (post-lease-up for vacant properties), which does not
include termination income, miscellaneous other income, capital
expenditures, general and administrative costs, reserves, tenant
improvements and leasing commissions, credit loss, or vacancy loss,
by (ii) the purchase price plus estimated Acquisition Capital
Expenditures. These capitalization rate estimates are subject to
risks, uncertainties, and assumptions and are not guarantees of
future performance, which may be affected by known and unknown
risks, trends, uncertainties, and factors that are beyond our
control, including those risk factors contained in our Annual
Report on Form 10-K for the year ended December 31, 2015, as updated by our quarterly
reports on form 10-Q.
Comparable Lease: We define a Comparable Lease as a lease
with a similar lease structure as compared to the previous in-place
lease, excluding new leases for space that was not occupied under
our ownership, leases on space with downtime in excess of two
years, and leases with materially different lease structures.
Core Based Statistical Area (CBSA): We define Core Based
Statistical Area (CBSA) as a U.S. geographic area defined
by the Office of Management and Budget that consists of one or more
counties (or equivalents) anchored by an urban center of at least
10,000 people plus adjacent counties that are socioeconomically
tied to the urban center by commuting.
Debt Capacity: We define Debt Capacity as the aggregate
undrawn nominal commitments under the Company's unsecured debt
instruments.
Enterprise Value: We define Enterprise Value as the
market value of our common stock (based on the period-end closing
price on the NYSE) plus the liquidation value of our preferred
stock plus the amounts outstanding under our unsecured credit
facility, unsecured term loans, unsecured notes, and mortgage
notes.
Equity Market Capitalization: We define Equity Market
Capitalization based on period ended closing stock price multiplied
by cumulative shares and units at quarter end.
Funds from Operations (FFO), Core FFO, and Adjusted FFO
(AFFO): We define FFO in accordance with the standards
established by the National Association of Real Estate Investment
Trusts ("NAREIT"). FFO represents net income (loss) (computed in
accordance with GAAP), excluding gains (or losses) from sales of
depreciable operating property, impairment write-downs of
depreciable real estate, real estate related depreciation and
amortization (excluding amortization of deferred financing costs
and fair market value of debt adjustment) and after adjustments for
unconsolidated partnerships and joint ventures. Core FFO and AFFO
exclude property acquisition costs, lease termination income,
intangible amortization in rental income, loss on extinguishment of
debt, and non-recurring other expenses. AFFO also excludes
non-rental property depreciation and amortization, straight-line
rent adjustments, non-cash portion of interest expense, non-cash
compensation expense and deducts recurring capital expenditures and
lease renewal commissions and tenant improvements.
None of FFO, Core FFO or AFFO should be considered as an
alternative to net income (determined in accordance with GAAP) as
an indication of our performance, and we believe that to understand
our performance further, these measurements should be compared with
our reported net income or net loss in accordance with GAAP, as
presented in our consolidated financial statements. We use FFO as a
supplemental performance measure because it is a widely recognized
measure of the performance of REITs. FFO may be used by investors
as a basis to compare our operating performance with that of other
REITs. We and investors may use Core FFO and AFFO similarly as
FFO.
However, because FFO, Core FFO and AFFO exclude, among other
items, depreciation and amortization and capture neither the
changes in the value of our buildings that result from use or
market conditions nor the level of capital expenditures and leasing
commissions necessary to maintain the operating performance of our
buildings, all of which have real economic effects and could
materially impact our results from operations, the utility of
theses measures as measures of our performance is limited. In
addition, other REITs may not calculate FFO in accordance with the
NAREIT definition as we do, and, accordingly, our FFO may not be
comparable to such other REITs' FFO. Similarly, our calculations of
Core FFO and AFFO may not be comparable to similarly titled
measures disclosed by other REITs.
GAAP: U.S. generally accepted accounting
principles.
GAAP Rent Change: We define GAAP Rent Change as the
change in the average base rent over the contractual lease term
(excluding above/below market lease amortization) of the Comparable
Lease.
Immediate Availability: We define Immediate Availability
as the amount of Debt Capacity the Company could immediately borrow
consistent with the financial covenants in its debt
instruments.
Net operating income (NOI), Cash NOI, and Run Rate Cash
NOI: We define NOI as rental income, including reimbursements,
less property expenses and real estate taxes, which excludes
depreciation, amortization, loss on impairments, general and
administrative expenses, interest expense, interest income,
corporate sub-lease rental income, asset management fee income,
property acquisition costs, loss on extinguishment of debt, gain on
sales of rental property, and other expenses.
We define Cash NOI as NOI less straight-line rent adjustments
and less intangible amortization in rental income.
We define Run Rate Cash NOI as Cash NOI plus Cash NOI adjusted
for a full period of acquisitions, less cash termination income,
and less Cash NOI from dispositions. Run rate Cash NOI does not
reflect the Company's historical results and does not predict
future results, which may be substantially different.
We consider NOI, Cash NOI and Run Rate Cash NOI to be
appropriate supplemental performance measures to net income because
we believe they help us and investors understand the core
operations of our buildings. None of these measures should be
considered as an alternative to net income (determined in
accordance with GAAP) as an indication of our performance, and we
believe that to understand our performance further, these
measurements should be compared with our reported net income or net
loss in accordance with GAAP, as presented in our consolidated
financial statements. Further, our calculations of NOI, Cash NOI
and Run Rate NOI may not be comparable to similarly titled measures
disclosed by other REITs.
Non-Recurring Capital Expenditures: We define
Non-Recurring Capital Expenditures as capital items for upgrades or
items that previously did not exist at a building or capital items
which have a longer useful life, such as roof replacements.
Occupancy Rate: We define Occupancy Rate as the
percentage of total leasable square footage for which the lease
term has commenced as of the close of the reporting period.
Operating Portfolio: We define our Operating Portfolio as
including all warehouse and light manufacturing assets and
excluding non-core flex/office assets and assets under
redevelopment. The Operating Portfolio also excludes billboard,
parking lot and cell tower leases.
Pipeline: We define Pipeline as a point in time measure
that includes all of the transactions under consideration by the
Company's acquisitions group that have passed the initial screening
process. The pipeline also includes transactions under
contract and transactions with non-binding LOIs.
Real Estate Cost Basis: We define Real Estate Cost Basis
as the book value of rental property and deferred leasing
intangibles, exclusive of the related accumulated depreciation and
amortization.
Recurring Capital Expenditures: We define Recurring
Capital Expenditures as capital items required to sustain existing
systems and capital items which generally have a shorter useful
life.
Renewal Lease: We define a Renewal Lease as a lease
signed by an existing tenant to extend the term for twelve months
or more, including (i) a renewal of the same space as the
current lease at lease expiration, (ii) a renewal of only a
portion of the current space at lease expiration and (iii) an
early renewal or workout, which ultimately does extend the original
term for twelve months or more, but the renewal term commences
before the lease expiration of their current lease.
Retention: We define Retention as the percentage
determined by taking Renewal Lease square footage commencing in the
period divided by square feet of leases expiring in the
period. Neither the Renewal Leases nor leases expiring include
Temporary Leases or License Agreements.
Temporary Leases/License Agreements: We define a
Temporary Lease or a License Agreement as any lease that is signed
for an initial term of less than twelve months; this includes
short-term new leases and short-term renewal leases.
Weighted Average Lease Term: We define Weighted Average
Lease Term as the contractual lease term in years as of the lease
start date weighted by square footage. Weighted Average Lease Term
related to acquired assets reflects the remaining lease term in
years as of the acquisition date weighted by square footage.
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SOURCE STAG Industrial, Inc.