Independence Realty Trust Announces First Quarter 2015 Financial Results

PHILADELPHIA--()--Independence Realty Trust, Inc. (“IRT”) (NYSE MKT: IRT) today announced its first quarter 2015 financial results.

Highlights

  • Core funds from operations (“CFFO”) increased 127% to $5.9 million for the quarter ended March 31, 2015 from $2.6 million for the quarter ended March 31, 2014.
  • CFFO per share increased 12% to $0.19 for the quarter ended March 31, 2015 from $0.17 for the quarter ended March 31, 2014.
  • Total revenues grew 168% to $21.7 million for the quarter ended March 31, 2015 from $8.1 million for the quarter ended March 31, 2014.
  • Operating income increased 192% to $3.8 million for the quarter ended March 31, 2015 from $1.3 million for the quarter ended March 31, 2014.

Financial Results

IRT reported CFFO, a non-GAAP financial measure, of $5.9 million for the three-month period ended March 31, 2015, or $0.19 per share - diluted based on 31.8 million weighted-average shares outstanding – diluted, as compared to CFFO for the three-month period ended March 31, 2014 of $2.6 million, or $0.17 per share – diluted based on 15.2 million weighted-average shares outstanding – diluted. IRT reported a net loss allocable to common stock for the three-month period ended March 31, 2015 of $0.2 million, or $(0.01) per share - diluted based on 31.8 million weighted-average shares outstanding – diluted, as compared to net income allocable to common stock for the three-month period ended March 31, 2014 of $2.9 million, or $0.19 per share – diluted based on 15.2 million weighted-average shares outstanding – diluted.

A reconciliation of IRT's reported net income (loss) to its funds from operations (“FFO”) and CFFO is included as Schedule I to this release. Schedule I also includes management's rationale for the usefulness of each of these non-GAAP financial measures.

Distributions

On April 13, 2015, IRT’s Board of Directors declared monthly cash dividends for the second quarter of 2015 on IRT’s shares of common stock in the amount of $0.06 per share per month. The monthly dividends total $0.18 per share for the second quarter. The month for which each dividend was declared is set forth below, with the relevant amount per share, record date and payment date set forth opposite the month:

                 
Month Amount Record Date Payment Date
April 2015 $ 0.06 04/30/2015 05/15/2015
May 2015 $ 0.06 05/29/2015 06/15/2015
June 2015 $ 0.06 06/30/2015 07/15/2015

Key Statistics

(Unaudited and dollars in thousands, except per share and per unit information)

 

As of or For the Three-Month Periods Ended

  March 31, 2015   December 31, 2014   September 30, 2014   June 30, 2014   March 31, 2014
Financial Statistics:
Total revenue $ 21,700 $ 16,362 $ 13,057 $ 11,649 $ 8,135
Earnings (loss) per share-diluted $ (0.01 ) $ 0.01 - $ (0.01 ) $ 0.19
Funds from Operations (“FFO”) per share $ 0.18 $ 0.14 $ 0.14 $ 0.18 $ 0.33
Core funds from operations (“CFFO”) per share $ 0.19 $ 0.17 $ 0.17 $ 0.19 $ 0.17
Dividends declared per common share $ 0.18 $ 0.18 $ 0.18 $ 0.18 $ 0.18
Total Shares Outstanding 31,894,751 31,800,076 25,801,540 17,751,540 17,742,540
 
Apartment Property Portfolio:
Reported investments in real estate at cost $ 689,867 $ 689,112 $ 444,050 $ 362,323 $ 320,437
Net operating income $ 11,562 $ 8,660 $ 6,905 $ 6,064 $ 4,147
Number of properties owned 30 30 22 19 17
Multifamily units owned 8,819 8,819 6,470 5,342 4,970
Portfolio weighted average occupancy 94.0 % 92.7 % 92.6 % 93.1 % 93.9 %
Same store portfolio weighted average occupancy 94.2 % 93.1 % 92.3 % 94.9 % 95.0 %
Weighted average monthly effective rent per unit (1) $ 827 $ 788 $ 791 $ 764 $ 730
Same Store weighted average monthly effective rent per unit $ 792 $ 785 $ 778 $ 761 $ 765

(1)

 

Weighted average monthly effective rent per occupied unit represents the average monthly rent collected for all occupied units after giving effect to tenant concessions. We do not report average effective rent per unit in the month of acquisition as it is not representative of a full month of operations.

Properties

The following table presents an overview of our apartment portfolio as of March 31, 2015:

Property Name   Location   Acquisition
Date
  Year
Built or
Renovated(1)
  Units (2)   Physical
Occupancy (3)
  Average Monthly
Effective
Rent per
Occupied Unit(4)
Belle Creek Henderson, CO 4/29/2011 2011 162((5 )) 96.30 % $ 1,068
Copper Mill Austin, TX 4/29/2011 2010 320 97.50 % 838
Crestmont Marietta, GA 4/29/2011 2010 228 92.98 % 775
Cumberland Glen Smyrna, GA 4/29/2011 2010 222 95.95 % 741
Heritage Trace Newport News, VA 4/29/2011 2010 200 88.50 % 698
Tresa at Arrowhead Phoenix, AZ 4/29/2011 2006 360 96.11 % 865
Centrepoint Tucson, AZ 12/16/2011 2006 320 95.31 % 845
Runaway Bay Indianapolis, IN 10/11/2012 2002 192 95.31 % 923
Berkshire Square Indianapolis, IN 9/19/2013 2012 354 90.96 % 589
The Crossings Jackson, MS 11/22/2013 2012 432 93.06 % 740
Reserve at Eagle Ridge Waukegan, IL 1/31/2014 2008 370 94.59 % 935
Windrush Edmond, OK 2/28/2014 2011 160 98.13 % 778
Heritage Park Oklahoma City, OK 2/28/2014 2011 453 88.96 % 642
Raindance Oklahoma City, OK 2/28/2014 2011 504 92.46 % 544
Augusta Oklahoma City, OK 2/28/2014 2011 197 96.45 % 724
Invitational Oklahoma City, OK 2/28/2014 2011 344 89.83 % 677
King’s Landing Creve Coeur, MO 3/31/2014 2005 152 96.13 % 1,576
Carrington Park Little Rock, AR 5/07/2014 1999 202 95.05 % 1,011
Arbors at the Reservoir Ridgeland, MS 6/04/2014 2000 170 96.47 % 1,082
Walnut Hill Cordova, TN 8/28/2014 2001 360 91.39 % 876
Lenoxplace Raleigh, NC 9/05/2014 2012 268 96.27 % 822
Stonebridge Cordova, TN 9/15/2014 1994 500 91.20 % 751
Bennington Pond Groveport, OH 11/24/2014 2000 240 97.50 % 781
Prospect Park Louisville, KY 12/08/2014 1990 138 89.13 % 876
Brookside Louisville, KY 12/08/2014 1987 224 95.54 % 764
Jamestown Louisville, KY 12/08/2014 1970 355 93.24 % 1,004
Meadows Louisville, KY 12/08/2014 1988 400 98.50 % 763
Oxmoor Louisville, KY 12/08/2014 1999-2000 432 94.44 % 945
Stonebridge at the Ranch Little Rock, AR 12/16/2014 2005 260 95.38 % 906
Iron Rock Ranch Austin, TX 12/30/2014 2001-2002 300   95.67 %   1,161
 
Total/Weighted Average 8,819   93.97 % $ 827

(1)

 

All dates are for the year in which a significant renovation program was completed, except for Runaway Bay, Arbors at the Reservoir, King’s Landing, Walnut Hill, Stonebridge, Bennington Pond, Prospect Park, Brookside, Jamestown, Meadows, Oxmoor, Stonebridge at the Ranch and Iron Rock Ranch which is the year construction was completed.

 

(2)

Units represent the total number of apartment units available for rent at March 31, 2015.

 

(3)

Physical occupancy for each of our properties is calculated as (i) total units rented as of March 31, 2015 divided by (ii) total units available as of March 31, 2015, expressed as a percentage.

 

(4)

Average monthly effective rent per occupied unit represents the average monthly rent for all occupied units for the three-month period ended March 31, 2015.

 

(5)

Includes 6,256 square feet of retail space in six units, of which 1,010 square feet of space is occupied by RAIT Residential for use as the leasing office. The remaining 5,246 square feet of space is 86% occupied by four tenants with an average monthly base rent of $1,623, or $16 per square foot per year. These four tenants are principally engaged in the following businesses: grocery, retail and various retail services.

Conference Call

All interested parties can listen to the live conference call webcast at 9:00 AM ET on Friday, May 1, 2015 from the investor relations section of the IRT website at www.irtreit.com or by dialing 1.877.703.6106, access code 50197578. For those who are not available to listen to the live call, the replay will be available shortly following the live call on IRT’s website and telephonically until Friday, May 8, 2015, by dialing 888.286.8010, access code 69032060.

About Independence Realty Trust, Inc.

Independence Realty Trust, Inc. (NYSE MKT: IRT) is a real estate investment trust that seeks to own well-located apartment properties in geographic submarkets that it believes support strong occupancy and the potential for growth in rental rates. IRT seeks to provide stockholders with attractive risk-adjusted returns, with an emphasis on distributions and capital appreciation. IRT is externally advised by a wholly-owned subsidiary of RAIT Financial Trust (NYSE: RAS).

Forward-Looking Statements

This press release may contain certain 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. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," “trend”, "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," “seek” or other similar words. Because such statements include risks, uncertainties and contingencies, actual results may differ materially from the expectations, intentions, beliefs, plans or predictions of the future expressed or implied by such forward-looking statements. These risks, uncertainties and contingencies include, but are not limited to, those disclosed in IRT’s filings with the Securities and Exchange Commission. IRT undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required by law.

Independence Realty Trust, Inc.

Consolidated Statements of Operations

(Dollars in thousands, except share and per share information)

(unaudited)

 
For the Three-Month
Period Ended

March 31

  2015       2014  
Revenues:
Rental income $ 19,443 $ 7,353
Tenant reimbursement income 950 366
Other income   1,307     416  
Total revenue 21,700 8,135
Expenses:
Property operating expenses 10,138 3,988
General and administrative expenses 499 168
Asset management fees 1,212 146
Acquisition expenses 33 362
Depreciation and amortization   6,038     2,123  
Total expenses   17,920     6,787  
Operating income 3,780 1,348
Interest expense (4,022 ) (1,299 )
Interest income 1 4
Gain (loss) on assets   -     2,882  
Net income (loss): (241 ) 2,935
(Income) loss allocated to non-controlling interests   8     -  
Net income (loss) allocable to common stock $ (233 ) $ 2,935  
 
Earnings (loss) per share:
Basic $ (0.01 ) $ 0.19  
Diluted $ (0.01 ) $ 0.19  
Weighted-average shares:
Basic   31,768,468     15,198,096  
Diluted   31,768,468     15,213,951  

Independence Realty Trust, Inc.

Consolidated Balance Sheets

(Dollars in thousands, except share and per share information)

(unaudited)

   
As of

March 31,

2015

As of

December 31,

2014

Assets:
Investments in real estate:
Investments in real estate at cost $ 689,867 $ 689,112
Accumulated depreciation   (27,261 )   (23,376 )
Investments in real estate, net 662,606 665,736
Cash and cash equivalents 19,084 14,763
Restricted cash 6,228 5,206
Accounts receivable and other assets 1,818 2,270
Intangible assets, net of accumulated amortization of $4,177 and $4,346, respectively 1,342 3,251
Deferred costs, net of accumulated amortization of $665 and $505, respectively   2,954     2,924  
Total assets $ 694,032   $ 694,150  
 
Liabilities and Equity:
Indebtedness $ 422,613 $ 418,901
Accounts payable and accrued expenses 10,691 8,353
Accrued interest payable 31 49
Dividends payable 1,982 1,982
Other liabilities   1,860     1,831  
Total liabilities 437,177 431,116
 
Equity:

Stockholders’ equity:

Preferred stock, $0.01 par value; 50,000,000 shares authorized, 0 and 0 shares issued and outstanding, respectively

-

-

Common stock, $0.01 par value; 300,000,000 shares authorized, 31,894,751 and 31,800,076 shares issued and outstanding, including 124,000 and 36,000 unvested restricted common stock awards, respectively

318

318

Additional paid-in capital 267,695 267,683
Retained earnings (accumulated deficit)   (22,680 )   (16,728 )
Total shareholders’ equity 245,333 251,273
Non-controlling interests   11,522     11,761  
Total Equity   256,855     263,034  
Total liabilities and equity $ 694,032   $ 694,150  

Schedule I

Independence Realty Trust, Inc.

Reconciliation of Net income (loss) Allocable to Common Stock and

Funds From Operations (“FFO”) and

Core Funds From Operations (“CFFO”) (1)

(Dollars in thousands, except share and per share amounts)

(unaudited)

               
For the Three-Month Period Ended March 31,  
2015       2014  
Amount Per Share (2) Amount Per Share (3)
Funds From Operations:
Net income (loss) $ (241 ) $ (0.01 ) $ 2,935 $ 0.19
Adjustments:
Real estate depreciation and amortization   6,038     0.19     2,123     0.14  
Funds From Operations $ 5,797   $ 0.18   $ 5,058   $ 0.33  
 
Core Funds From Operations:
Funds From Operations $ 5,797 $ 0.18 $ 5,058 $ 0.33
Adjustments:
Acquisition fees and expenses 33 0.00 362 0.03
Equity based compensation 70 0.01 31 0.00
(Gains) losses on assets   -     -     (2,882 )   (0.19 )
Core Funds From Operations $ 5,900   $ 0.19   $ 2,569   $ 0.17  

(1)

 

IRT believes that FFO and CFFO, each of which is a non-GAAP measure, are additional appropriate measures of the operating performance of a REIT and IRT in particular. IRT computes FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT, as net income or loss allocated to common stock (computed in accordance with GAAP), excluding real estate-related depreciation and amortization expense, gains or losses on sales of real estate and the cumulative effect of changes in accounting principles.

 
CFFO is a computation made by analysts and investors to measure a real estate company’s operating performance by removing the effect of items that do not reflect ongoing property operations, including acquisition expenses, expensed costs related to the issuance of shares of our common stock, gains or losses on real estate transactions and equity-based compensation expenses, from the determination of FFO. IRT incurs acquisition expenses in connection with acquisitions of real estate properties and expenses those costs when incurred in accordance with U.S. GAAP. As these expenses are one-time and reflective of investing activities rather than operating performance, IRT adds back these costs to FFO in determining CFFO.
 
IRT’s calculation of CFFO differs from the methodology used for calculating CFFO by certain other REITs and, accordingly, IRT’s CFFO may not be comparable to CFFO reported by other REITs. IRT’s management utilizes FFO and CFFO as measures of IRT’s operating performance, and believes they are also useful to investors, because they facilitate an understanding of IRT’s operating performance after adjustment for certain non-cash items, such as depreciation and amortization expenses, and acquisition expenses and pursuit costs that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and that may not accurately compare IRT’s operating performance between periods. Furthermore, although FFO, CFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, IRT also believes that FFO and CFFO may provide IRT and our investors with an additional useful measure to compare IRT’s financial performance to certain other REITs. IRT also uses CFFO for purposes of determining the quarterly incentive fee, if any, payable to our advisor. Neither FFO nor CFFO is equivalent to net income or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO and CFFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Neither FFO nor CFFO should be considered as an alternative to net income as an indicator of IRT’s operating performance or as an alternative to cash flow from operating activities as a measure of IRT’s liquidity.
 

(2)

Based on 31,768,468 weighted-average shares outstanding-diluted for the three-month period ended March 31, 2015.

 

(3)

Based on 15,213,951 weighted-average shares outstanding-diluted for the three-month period ended March 31, 2014.

Contacts

Independence Realty Trust, Inc.
Andres Viroslav, 215.243.9000
aviroslav@irtreit.com

Contacts

Independence Realty Trust, Inc.
Andres Viroslav, 215.243.9000
aviroslav@irtreit.com