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Postal Realty Trust, Inc. Reports Third Quarter 2019 Results

November 11, 2019 GMT

CEDARHURST, N.Y.--(BUSINESS WIRE)--Nov 11, 2019--

Postal Realty Trust, Inc. (NYSE:PSTL) (the “Company”), an internally managed real estate investment trust that owns properties leased to the United States Postal Service (“USPS”), today announced its results for the quarter ended September 30, 2019.

“We made significant progress this quarter in sourcing and securing acquisitions,” stated Andrew Spodek, Postal Realty Trust, Inc.’s Chief Executive Officer. “Our thesis for consolidation of these stable, cash flowing properties continues to prove out. We have closed on 95 properties for $28.4 million since our IPO with an additional 98 properties for approximately $28 million under definitive agreements. We expect that all of these acquisitions will collectively contribute $5.1 million in annual rental revenue. Our acquisition activity is well-supported by our new $100 million credit facility and our ability to selectively issue operating partnership units. We continue to scale our platform and deliver growing cash flow for our shareholders.”

Highlights for Quarter Ended September 30, 2019

Highlights Subsequent to Quarter End*

* The Company believes results for subsequent quarters will provide more meaningful insight into the financial and operational activities of the Company.

Property Portfolio

As of September 30, 2019, the Company owns 289 postal properties in 43 states comprising approximately 984,000 net leasable interior square feet, is 100.0% occupied and has a weighted average rental rate of $9.59 per square foot. As of November 11, 2019, the Company owns 366 properties in 43 states comprising approximately 1,200,000 net leasable interior square feet, is 100.0% occupied and has a weighted average rental rate of $9.60 per square foot.

Capital Markets Activity

On September 27, 2019, the Company entered into a $100 million senior revolving credit facility with a 4-year term through September 2023. The floating rate facility carries an interest rate of either a base rate plus a range of 70 to 140 basis points or LIBOR plus a range of 170 to 240 basis points, each depending on a consolidated leverage ratio. The Credit Agreement also provides an accordion feature permitting expansion to $200 million subject to certain conditions.

Dividend

On November 5, 2019, the Company’s board of directors approved a cash dividend of $0.14 per share of Class A common stock for the quarter-ended September 30, 2019, an increase of the previously announced dividend on the quarter ended June 30, 2019. The dividend will be paid on December 2, 2019 to stockholders of record as of November 15, 2019.

Non-GAAP Supplemental Financial Information

An explanation of certain non-GAAP financial measures used in this press release, including, FFO and AFFO, as well as reconciliations of those non-GAAP financial measures, to the most directly comparable GAAP financial measure, is included below.

The Company calculates FFO in accordance with the current National Association of Real Estate Investment Trusts (“NAREIT”) definition. NAREIT currently defines FFO as follows: net income (loss) (computed in accordance with GAAP) excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by an entity. Other REITs may not define FFO in accordance with the NAREIT definition or may interpret the current NAREIT definition differently than we do and therefore our computation of FFO may not be comparable to such other REITs.

The Company calculates AFFO by starting with FFO and adjusting for recurring capital expenditures (defined as all capital expenditures that are recurring in nature, excluding capital improvements that are incurred in connection with the acquisition of a property or obtaining a lease or lease renewal) and acquisition expenses that are not capitalized and then adding back non-cash items including: non-real estate depreciation, loss on extinguishment of debt, straight-lined rents and fair value lease adjustments and non-cash components of compensation expense. AFFO is a non-GAAP financial measure and should not be viewed as an alternative to net income calculated in accordance with GAAP as a measurement of our operating performance. We believe that AFFO is widely-used by other REITs and is helpful to investors as a meaningful additional measure of our ability to make capital investments. Other REITs may not define AFFO in the same manner as we do and therefore our calculation of AFFO may not be comparable to such other REITs.

These metrics are non-GAAP financial measures and should not be viewed as an alternative measurement of our operating performance to net income. Management believes that accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. As a result, we believe that the additive use of FFO and AFFO, together with the required GAAP presentation, is widely-used by our competitors and other REITs and provides a more complete understanding of our performance and a more informed and appropriate basis on which to make investment decisions.

Webcast and Conference Call Details

Postal Realty Trust will host a webcast and conference call to discuss the third quarter 2019 financial results on November 11, 2019 at 8:30 A.M. Eastern Time. A live audio webcast of the conference call will be available on the Company’s investor website at https://investor.postalrealtytrust.com/QuarterlyResults. To participate in the conference call, callers from the United States and Canada should dial-in ten minutes prior to the scheduled call time at 1-877-300-8521. International callers should dial 1-412-317-6026.

For those unable to participate during the live broadcast, a telephonic replay of the call will also be available from 11:30 a.m. Eastern Time on Monday, November 11, 2019, through 11:59 p.m. eastern time on Monday, November 25, 2019, by dialing 1-844-512-2921 in the United States and Canada or 1-412-317-6617 internationally and entering passcode 10136570.

About Postal Realty Trust, Inc.

Postal Realty Trust, Inc. is an internally managed real estate investment trust that owns properties leased to the USPS. The Company believes it is one of the largest owners and managers measured by net leasable square footage of properties that are leased to the USPS.

Forward-Looking and Cautionary Statements

This press release contains “forward-looking statements.” Forward-looking statements include statements regarding the proposed public offering and other statements identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects” and similar references to future periods, or by the inclusion of forecasts or projections. Forward-looking statements, including, among others, statements regarding the Company’s ability to obtain financing, the Company’s expected capitalization rates and the Company’s ability to close on pending transactions on the terms or timing it expects, if at all, are based on the Company’s current expectations and assumptions regarding capital market conditions, the Company’s business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, the Company’s actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the USPS’s terminations or non-renewals of leases, changes in demand for postal services delivered by the USPS, the solvency and financial health of the USPS, competitive, financial market and regulatory conditions, general real estate market conditions, the Company’s competitive environment and other factors set forth under “Risk Factors” in the Company’s filings with the Securities and Exchange Commission. Any forward-looking statement made in this press release speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

Postal Realty Trust, Inc. and Predecessor

Consolidated and Combined Consolidated Statements of Operations

For the Three and Nine Months Ended September 30, 2019 and 2018 (Unaudited)

 

 

Predecessor

 

Predecessor

Three Months ended
September 30, 2019

Three Months ended
September 30, 2018

Nine Months ended
September 30, 2019

Nine Months ended
September 30, 2018

Revenues

 

 

Rent income

$

2,387,082

 

$

1,417,534

 

$

5,735,896

 

$

4,199,767

 

Tenant reimbursements

 

342,419

 

 

220,676

 

 

852,504

 

 

668,502

 

Fee and other income

 

278,846

 

 

255,971

 

 

842,097

 

 

862,317

 

Total revenues

 

3,008,347

 

 

1,894,181

 

 

7,430,497

 

 

5,730,586

 

 

 

 

Operating expenses

 

 

Real estate taxes

 

353,663

 

 

227,373

 

 

880,117

 

 

688,953

 

Property operating expenses

 

332,892

 

 

203,994

 

 

821,839

 

 

639,289

 

General and administrative

 

1,207,197

 

 

282,361

 

 

2,385,228

 

 

1,086,384

 

Equity-based compensation

 

394,530

 

 

-

 

 

584,873

 

 

-

 

Depreciation and amortization

 

1,066,338

 

 

457,907

 

 

2,314,553

 

 

1,363,575

 

Total operating expenses

 

3,354,620

 

 

1,171,635

 

 

6,986,610

 

 

3,778,201

 

 

 

 

Income from operations

 

(346,273

)

 

722,546

 

 

443,887

 

 

1,952,385

 

 

 

Interest expense, net:

 

 

Contractual interest expense

 

(48,916

)

 

(361,743

)

 

(635,423

)

 

(1,112,353

)

Amortization of deferred financing costs

 

(4,523

)

 

(3,126

)

 

(9,558

)

 

(9,375

)

Loss on extinguishment of debt

 

-

 

 

-

 

 

(185,586

)

 

-

 

Interest income

 

1,136

 

 

1,158

 

 

3,394

 

 

3,370

 

Total interest expense, net

 

(52,303

)

 

(363,711

)

 

(827,173

)

 

(1,118,358

)

 

 

Income (loss) before income tax (expense) benefit

 

(398,576

)

 

358,835

 

 

(383,286

)

 

834,027

 

Income tax (expense) benefit

 

6,259

 

 

143,382

 

 

(39,749

)

 

83,742

 

Net income (loss)

 

(392,317

)

 

502,217

 

 

(423,035

)

 

917,769

 

 

 

Less: Net income attributable to noncontrolling interest in properties

 

-

 

 

(2,829

)

 

(4,336

)

 

(9,462

)

 

 

Net income attributable to predecessor and Affiliates Predecessor

 

-

 

 

499,388

 

 

(463,414

)

 

908,307

 

Net loss attributable to Operating Partnership unitholders’ noncontrolling interests

 

84,348

 

 

 

191,020

 

Net income (loss) attributable to common stockholders

$

(307,969

)

 

$

(699,765

)

 

 

Net income (loss) per share (basic and diluted)

$

(0.06

)

 

$

(0.14

)

 

 

Weighted average common shares outstanding (basic and diluted)

 

5,164,264

 

 

 

5,164,264

 

Postal Realty Trust, Inc. and Predecessor

Consolidated and Combined Consolidated Balance Sheets

 

 

Predecessor,

September 30,
2019

December 31,
2018

ASSETS

(Unaudited)

Real Estate Properties

 

 

Land

$

16,827,724

 

$

7,239,213

 

Buildings and improvements

 

57,177,951

 

 

29,550,076

 

Tenant improvements

 

2,114,364

 

 

1,646,215

 

Total real estate properties

 

76,120,039

 

 

38,435,504

 

Less: accumulated depreciation

 

(8,180,839

)

 

(7,121,532

)

Total real estate, net

 

67,939,200

 

 

31,313,972

 

 

 

 

Cash

 

10,969,557

 

 

262,926

 

Rent and other receivables

 

1,138,621

 

 

601,670

 

Prepaid expenses and other assets

 

2,853,298

 

 

146,014

 

Escrows and reserves

 

610,200

 

 

598,949

 

Deferred rent receivable

 

31,687

 

 

14,060

 

In-place lease intangibles (net of accumulated amortization

 

 

of $5,628,459 and $4,388,699, respectively)

 

4,776,515

 

 

2,735,927

 

Above market leases (net of accumulated amortization

 

 

of $16,539 and $8,688, respectively)

 

9,401

 

 

10,914

 

 

 

 

Total assets

$

88,328,479

 

$

35,684,432

 

 

 

 

LIABILITIES AND EQUITY (DEFICIT)

 

 

Liabilities

 

 

Secured borrowings, net

$

3,237,327

 

$

34,792,419

 

Revolving credit facility

 

17,000,000

 

 

-

 

Accounts payable, accrued expenses and other

 

4,224,599

 

 

1,869,084

 

Below market leases (net of accumulated amortization

 

 

of $1,860,167 and $1,525,540, respectively)

 

5,365,118

 

 

3,842,495

 

Deferred tax liability, net

 

-

 

 

793,847

 

Due to affiliates

 

512,530

 

 

-

 

 

 

 

Total liabilities

$

30,339,574

 

$

41,297,845

 

 

 

 

Commitments and contingencies

 

 

 

 

 

Equity (deficit)

 

 

Common stock,

 

 

PSTL - $.01 par value per share

 

 

Class A, 500,000,000 shares authorized: 5,285,904 shares issued and outstanding

 

52,859

 

 

-

 

Class B, 27,206 shares authorized, 27,206 shares issued and outstanding

 

272

 

 

-

 

UPH - no par, 1,000 shares authorized, 1,000 shares issued and outstanding

 

-

 

 

4,000,000

 

NPM - no par, 200 shares authorized, issued and outstanding

 

 

200

 

Additional paid-in capital

 

46,502,630

 

 

3,441,493

 

Accumulated deficit

 

(1,034,471

)

 

(11,003,876

)

Member's deficit

 

-

 

 

(2,095,823

)

Total Stockholders' and Predecessor Equity

 

45,521,290

 

 

(5,658,006

)

Operating Partnership unitholders' noncontrolling interests

 

12,467,615

 

 

-

 

Noncontrolling interest in properties

 

-

 

 

44,593

 

Total equity (deficit)

 

57,988,905

 

 

(5,613,413

)

 

 

Total liabilities and equity (deficit)

 

88,328,479

 

 

35,684,432

 

 

Postal Realty Trust, Inc.

Reconciliation of Net Income (Loss) to FFO and AFFO

For the Three Months Ended September 30, 2019 (Unaudited)

Three Months Ended
September 30, 2019
 

Net Income (loss)

$

(392,317

)

Depreciation and amortization of real estate assets

 

1,066,338

 

FFO

$

674,021

 

Recurring capital expenditures

 

(31,417

)

Acquisition related expenses

 

82,065

 

Amortization of debt issuance costs

 

4,523

 

Straight-line rent adjustments

 

(5,041

)

Amortization of above and below market leases

 

(135,948

)

Non-cash stock compensation expense

 

394,530

 

AFFO

$

982,733

 

FFO per common share and common unit outstanding

$

0.10

 

AFFO per common share and common unit outstanding

$

0.15

 

Common shares and common units outstanding

 

6,766,227

 

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20191111005162/en/

CONTACT: Investor Relations and Media Relations

Email:Investorrelations@postalrealtytrust.com

Phone: 516-232-8900

KEYWORD: NEW YORK UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: OTHER CONSTRUCTION & PROPERTY COMMERCIAL BUILDING & REAL ESTATE CONSTRUCTION & PROPERTY REIT

SOURCE: Postal Realty Trust, Inc.

Copyright Business Wire 2019.

PUB: 11/11/2019 07:00 AM/DISC: 11/11/2019 07:01 AM

http://www.businesswire.com/news/home/20191111005162/en