MCLEAN, Va., Feb. 18, 2014 /PRNewswire/ -- Gladstone
Commercial Corporation (NASDAQ: GOOD), or the Company, today
reported financial results for the fourth quarter and year ended
December 31, 2013. A
description of funds from operations, or FFO, a relative non-GAAP
(generally accepted accounting principles in the United States) financial measure, is
located at the end of this press release. All per share
references are to fully-diluted weighted average shares of common
stock, unless otherwise noted. Please read the Company's
Annual Report on Form 10-K, filed today with the U.S. Securities
and Exchange Commission, or the SEC, which can be retrieved from
the SEC's website at www.sec.gov or from the Company's website
at www.GladstoneCommercial.com.
(Logo:
http://photos.prnewswire.com/prnh/20101005/GLADSTONECOMMERCIAL
)
Summary Information (dollars in thousands, except per
share data):
|
|
|
|
|
|
|
|
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As of and for
the
three months
ended
December 31,
2013
|
|
As of and for
the
three months
ended
September 30,
2013
|
|
Change
|
|
% Change
|
Operating
Data:
|
|
|
|
|
|
|
|
Total operating
revenue
|
$
16,860
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|
$
16,190
|
|
$
670
|
|
4.1%
|
Total operating
expenses
|
(9,542)
|
|
(8,639)
|
|
(903)
|
|
10.5%
|
Other
expense
|
(6,984)
|
|
(7,242)
|
|
258
|
|
-3.6%
|
Net
income
|
$
334
|
|
$
309
|
|
$
25
|
|
8.1%
|
Dividends
attributable to preferred stock
|
(1,023)
|
|
(1,023)
|
|
-
|
|
0.0%
|
Dividends
attributable to senior common stock
|
(97)
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|
(83)
|
|
(14)
|
|
16.9%
|
Net loss available to
common stockholders
|
$
(786)
|
|
$
(797)
|
|
$
11
|
|
-1.4%
|
Real estate
depreciation and amortization
|
6,453
|
|
6,253
|
|
200
|
|
3.2%
|
Funds from operations
available to common stockholders
|
$
5,667
|
|
$
5,456
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|
$
211
|
|
3.9%
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|
|
|
|
|
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|
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|
|
|
|
|
Share and Per
Share Data:
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|
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|
|
|
Net loss available to
common stockholders - basic and diluted
|
$
(0.05)
|
|
$
(0.06)
|
|
$
0.01
|
|
-16.7%
|
FFO available to
common stockholders - basic and diluted
|
$
0.38
|
|
$
0.38
|
|
$
-
|
|
0.0%
|
Weighted average
shares outstanding-basic
|
14,798,950
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|
14,196,423
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|
602,527
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|
4.2%
|
Weighted average
shares outstanding-diluted
|
15,095,381
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|
14,453,852
|
|
641,529
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|
4.4%
|
Cash dividends
declared per common share
|
$
0.375
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|
$
0.375
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|
$
-
|
|
0.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial
Position:
|
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Real estate, before
accumulated depreciation
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$
642,353
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|
$
622,481
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|
$
19,872
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|
3.2%
|
Total
assets
|
$
690,525
|
|
$
666,412
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|
$
24,113
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3.6%
|
Mortgage notes
payable, term preferred stock and borrowings
under the line of
credit
|
$
485,502
|
|
$
477,162
|
|
$
8,340
|
|
1.7%
|
Total stockholders'
equity
|
$
183,146
|
|
$
164,857
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|
$
18,289
|
|
11.1%
|
Properties
owned
|
87
|
|
85
|
|
2
|
|
2.4%
|
Square feet
owned
|
9,256,779
|
|
9,000,782
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|
255,997
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|
2.8%
|
Square feet
leased
|
96.8%
|
|
96.7%
|
|
0.1%
|
|
0.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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As of and for
the
year ended
December 31,
2013
|
|
As of and for
the
year ended
December 31,
2012
|
|
Change
|
|
% Change
|
Operating
Data:
|
|
|
|
|
|
|
|
Total operating
revenue
|
$
61,343
|
|
$
51,270
|
|
$
10,073
|
|
19.6%
|
Total operating
expenses
|
(32,823)
|
|
(24,895)
|
|
(7,928)
|
|
31.8%
|
Other
expense
|
(26,993)
|
|
(22,614)
|
|
(4,379)
|
|
19.4%
|
Net
income
|
$
1,527
|
|
$
3,761
|
|
$
(2,234)
|
|
-59.4%
|
Dividends
attributable to preferred stock
|
(4,094)
|
|
(4,093)
|
|
(1)
|
|
0.0%
|
Dividends
attributable to senior common stock
|
(300)
|
|
(113)
|
|
(187)
|
|
165.5%
|
Net loss available to
common stockholders
|
$
(2,867)
|
|
$
(445)
|
|
$
(2,422)
|
|
544.3%
|
Real estate
depreciation and amortization
|
22,827
|
|
16,831
|
|
5,996
|
|
35.6%
|
Funds from operations
available to common stockholders
|
$
19,960
|
|
$
16,386
|
|
$
3,574
|
|
21.8%
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Share and Per
Share Data:
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Net loss available to
common stockholders - basic and diluted
|
$
(0.22)
|
|
$
(0.04)
|
|
$
(0.18)
|
|
450.0%
|
FFO available to
common stockholders - basic
|
$
1.52
|
|
$
1.50
|
|
$
0.02
|
|
1.3%
|
FFO available to
common stockholders - diluted
|
$
1.49
|
|
$
1.48
|
|
$
0.01
|
|
0.7%
|
Weighted average
shares outstanding-basic
|
13,164,244
|
|
10,953,325
|
|
2,210,919
|
|
20.2%
|
Weighted average
shares outstanding-diluted
|
13,402,370
|
|
11,075,216
|
|
2,327,154
|
|
21.0%
|
Cash dividends
declared per common share
|
$
1.50
|
|
$
1.50
|
|
$
-
|
|
0.0%
|
|
|
|
|
|
|
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|
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|
Financial
Position:
|
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|
|
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Real estate, before
accumulated depreciation
|
$
642,353
|
|
$
533,753
|
|
$
108,600
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|
20.3%
|
Total
assets
|
$
690,525
|
|
$
564,779
|
|
$
125,746
|
|
22.3%
|
Mortgage notes
payable, term preferred stock and borrowings
under the line of
credit
|
$
485,502
|
|
$
422,685
|
|
$
62,817
|
|
14.9%
|
Total stockholders'
equity
|
$
183,146
|
|
$
122,365
|
|
$
60,781
|
|
49.7%
|
Properties
owned
|
87
|
|
80
|
|
7
|
|
8.8%
|
Square feet
owned
|
9,256,779
|
|
8,043,792
|
|
1,212,987
|
|
15.1%
|
Square feet
leased
|
96.8%
|
|
98.8%
|
|
-2.0%
|
|
-2.0%
|
Highlights of 2013:
- Acquired Properties: Purchased seven fully-occupied
properties, comprised of an aggregate of approximately 983,000
square feet of rental space, for $131.2
million;
- Expanded Property: Expanded one existing property by
102,400 square feet at a cost of $3.3
million, and simultaneously extended the lease with the
existing tenant by 8 years ;
- Issued Debt: Borrowed a total of $80.0 million from 7 separate banks, which are
collateralized by 7 properties at a weighted average fixed interest
rate of 4.53% for periods ranging from 3 to 25 years;
- Closed New Line of Credit: Closed on a new, $60.0 million unsecured line of credit with a
3-year term, and a 1-year extension option;
- Issued Common Stock: Issued 4.6 million shares of common
stock, resulting in total net proceeds of $80.8 million;
- Extended Leases: Extended the term of 6 leases for
additional periods ranging from 1 to 13 years;
- Re-leased Vacant Property: Initiated a 10-year lease
with a new tenant for the previously vacant property located in
Hazelwood, Missouri; and
- Paid Distributions: Paid monthly cash distributions for
the year totaling $1.50 per share on
the common stock, $1.94 per share on
the Series A Preferred Stock, $1.88
per share on the Series B Preferred Stock, $1.78 per share on the Series C Term Preferred
Stock and $1.05 per share on the
senior common stock. The common stock distributions paid in 2013
were an 81.7% return of capital.
Fourth Quarter 2013 Results: FFO available to common
stockholders for the three months ended December 31, 2013, was $5.7 million, or $0.38 per share, a 3.9% increase when compared to
the three months ended September 30,
2013. FFO increased primarily due to the increase in
operating revenues derived from the two properties acquired this
quarter coupled with a full quarter of earnings from the two
properties acquired during the third quarter, which was partially
offset by an increase in interest expense due to the mortgage debt
issued during the third quarter coupled with an increase in overall
operating expenses. FFO per share remained flat during the quarter
as the additional revenue achieved from new acquisitions was offset
by additional shares issued during the fourth quarter.
2013 Results: FFO available to common stockholders for
the year ended December 31, 2013, was
$20.0 million, or $1.49 per share, a 21.8% increase when compared
to the same periods one year ago. FFO in 2013 increased
primarily due to the increase in operating revenues derived from
the seven properties acquired in 2013, partially offset by an
increase in interest expense from the mortgage debt issued in 2013
coupled with an increase in property operating expenses during the
year from vacant properties.
Net loss available to common stockholders for the three months
and year ended December 31, 2013, was
($0.8) million and ($2.9) million, or ($0.05) and ($0.22)
per share, respectively, compared to net loss available to common
stockholders for the three months ended September 30, 2013 and year ended December 31, 2012, of ($0.8) million and ($0.4)
million, or ($0.06) and
($0.04) per share for both respective
periods. A reconciliation of FFO to net loss for the
three months ended December 31, 2013
and September 30, 2013 and the years
ended December 31, 2013 and 2012,
which the Company believes is the most directly comparable GAAP
measure to FFO, and a computation of basic and diluted FFO per
weighted average share of common stock and basic and diluted net
income per weighted average share of common stock is set forth in
the Summary Information table above.
Comments from the Company's President, Bob Cutlip: "Our financial results for the
year reflect a substantial increase in revenues from our real
estate investments made during the year. The weighted average cap
rate on our invested capital in 2013, including acquisitions and
expansions, was 8.9%.We have increased our total assets by 50.0% in
the past two years, in line with our objective to expand our asset
base. We were able to partially fund these investments with
long-term debt and continue to take advantage of the low interest
rate environment. We continued our strategy during 2013 of lowering
our overall leverage by reducing our weighted average loan to value
on newly issued debt to 60% from 68% in 2012. We also continue to
focus on our portfolio, working with our existing tenants to extend
leases scheduled to expire in 2015 and to re-lease the 3.0% of our
space that remains vacant. We are looking forward to an active
2014."
Subsequent to the end of the year:
- Declared Distributions: Declared monthly cash
distributions of $0.125 per share on
the common stock, $0.1614583 per
share on the Series A Preferred Stock, $0.15625 per share on the Series B Preferred
Stock, $0.1484375 per share on the
Series C Term Preferred Stock and $0.0875 per share on the senior common stock, for
each of January, February and March 2014.
Conference Call: The Company will hold a conference call
on Wednesday, February 19, 2014, at
8:30 a.m. EST to discuss its earnings
results. Please call (800) 860-2442 to enter the
conference. An operator will monitor the call and set a queue
for any questions. A conference call replay will be available
beginning one hour after the call and will be accessible through
March 19, 2014. To hear the
replay, please dial (877) 344-7529 and use conference number
10029513. The live audio broadcast of the Company's quarterly
conference call will also be available online at the Company's
website, www.GladstoneCommercial.com. The event will also be
archived and available for replay on the Company's website through
April 19, 2014.
About Gladstone Commercial: Gladstone Commercial
Corporation is a real estate investment trust that invests in and
owns net leased industrial, commercial and retail real property and
selectively makes long-term industrial and commercial mortgage
loans. Including payments through January 2013, the Company has paid 109
consecutive monthly cash distributions on its common stock.
Prior to paying distributions on a monthly basis, the Company paid
5 consecutive quarterly cash distributions. The Company has also
paid 97 consecutive monthly cash distributions on its Series A
Preferred Stock, 88 consecutive monthly cash distributions on its
Series B Preferred Stock, 24 consecutive monthly cash distributions
on its Series C Term Preferred Stock and 46 consecutive monthly
cash distributions on its senior common stock. The Company
has never skipped, reduced or deferred a distribution since
inception, over 10 years ago. Further information on the
Company can be found at www.gladstonecommercial.com.
About the Gladstone Companies: Information on the
business activities of all the Gladstone funds can be found at
www.gladstonecompanies.com.
Investor Relations: For Investor Relations inquiries
related to any of the monthly dividend paying Gladstone funds, please visit
www.gladstone.com.
Non-GAAP Financial Measure – FFO: The National
Association of Real Estate Investment Trusts ("NAREIT") developed
FFO as a relative non-GAAP supplemental measure of operating
performance of an equity REIT in order to recognize that
income-producing real estate historically has not depreciated on
the basis determined under GAAP. FFO, as defined by NAREIT,
is net income (computed in accordance with GAAP), excluding gains
(or losses) from sales of property and impairment losses on
property, plus depreciation and amortization of real estate assets,
and after adjustments for unconsolidated partnerships and joint
ventures. FFO does not represent cash flows from operating
activities determined in accordance with GAAP and should not be
considered an alternative to net income as an indication of its
performance or to cash flow from operations as a measure of
liquidity or ability to make distributions. The Company
believes that FFO per share provides investors with an additional
context for evaluating its financial performance and as a
supplemental measure to compare it to other REITs; however,
comparisons of its FFO to the FFO of other REITs may not
necessarily be meaningful due to potential differences in the
application of the NAREIT definition used by such other
REITs. To learn more about FFO, please refer to the Company's
Form 10-K for the year ended December 31,
2013, as filed with the SEC today.
The statements in this press release regarding the Company's
ability, plans or prospects to re-lease its unoccupied properties,
maintain its portfolio, and renegotiate leases 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. These forward-looking statements
inherently involve certain risks and uncertainties, although they
are based on the Company's current plans that are believed to be
reasonable as of the date of this press release. Factors that
may cause actual results to differ materially from these
forward-looking statements include, but are not limited to,
the Company's ability to raise additional capital; availability and
terms of capital and financing, both to fund its operations and to
refinance its indebtedness as it matures; the duration of, or
further downturns in, the current economic environment; the
performance of its tenants; the impact of competition on its
efforts to renew existing leases or re-lease space; and significant
changes in interest rates. Additional factors that could
cause actual results to differ materially from those stated or
implied by its forward-looking statements are disclosed under the
caption "Risk factors" of its Form 10-K for the fiscal year ended
December 31, 2013, as filed with the
SEC on February 18, 2014.
The Company cautions readers not to place undue
reliance on any such forward-looking statements, which speak only
as of the date made. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except
as required by law.
SOURCE Gladstone Commercial Corporation