Wheeler Real Estate Investment Trust, Inc. - FORM 8-K - EX-99.1

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8-K - FORM 8-K - Wheeler Real Estate Investment Trust, Inc.	d514666d8k.htm

Exhibit 99.1

LOGO

FOR IMMEDIATE RELEASE

WHEELER REAL ESTATE INVESTMENT TRUST, INC. ANNOUNCES

2012 YEAR END FINANCIAL RESULTS

Virginia Beach, VA – March 28, 2013 – Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLR) (“Wheeler” or the “Company”), a real estate investment trust (“REIT”) specializing in owning, acquiring, financing, developing, renovating, leasing and managing income-producing assets, such as community centers, neighborhood centers, strip centers and free-standing retail properties, today reported financial results for the year ended December 31, 2012.

Significant Events for the Year Ended December 31, 2012

•

In November 2012, the Company completed its Initial Public Offering (“IPO”), generating approximately $13.4 million in net proceeds.

•

Since the completion of its IPO, Wheeler has purchased two grocery-anchored shopping centers and a free-standing retail property. The aggregate total purchase price of these three properties was approximately $11.4 million.

•

Currently, the Company is under contract to purchase an additional free-standing retail property located in Bixby, Oklahoma for a purchase price of $10.6 million.

•

The Company has declared a monthly dividend at an initial annual distribution of $0.42 per share, equal to approximately $0.035 per month.

Jon S. Wheeler, Chairman and Chief Executive Officer, commented, “We completed our IPO last November and have since acquired three additional assets, all of which fit the Company’s acquisition criteria. We believe that as a public company, we have been provided an opportunity to capitalize on the steady pipeline of ‘necessity-shopping’ based properties in secondary and tertiary markets that are available for purchase. In the year ahead, we expect to continue to pursue acquisitions that will maximize the Company’s return and create long-term value for shareholders.”

2012 Financial Highlights

•

Wheeler reported Funds from Operations (“FFO”) for the year ended December 31, 2012 of negative $383,506, or $0.12 per basic and diluted share. Same store total FFO was negative $489,785, as a result of an increase in corporate general and administrative expenses of $878,857, primarily related to the audit, operational and organizational costs that were incurred during the Company’s IPO process. New store total FFO was $106,279, as result of the three acquisitions that occurred as part of the REIT formation transactions in November 2012 and the three acquisitions completed in December 2012.

•

Property net operating income (“NOI”) was $1.9 million for the year ended December 31, 2012, consisting of approximately $1.6 million in same store NOI and approximately $332,000 of new store NOI. Same store property NOI benefited from an additional $83,183 received in base rental income and tenant reimbursements over the prior year.

•

Same store revenue was $2.0 million for the year ended December 31, 2012. New store revenue was $425,518 which relates to the three properties that the Company acquired as part of the REIT formation transactions in November 2012 and the three properties acquired during December 2012, as noted above.

•

Net loss attributable to common stockholders for the year ended December 31, 2012 was $1.2 million, or $0.35 per basic and diluted share.

•

Total other operating expense, which includes depreciation and amortization, provision for credit losses and general and administrative expenses, was $2.2 million for the year ended December 31, 2012. New stores total operating expenses were $233,570, while same store operating expenses increased to $1.9 million, primarily due to the $878,857 increase in corporate general and administrative expenses related to Wheeler’s REIT formation process.

Additional “same store” and “new store” information is included in the accompanying tables.

FFO is a non-GAAP financial measure within the meaning of the rules of the Securities and Exchange Commission. See the discussion included in this press release for information regarding non-GAAP financial measures. A reconciliation of non-GAAP financial measures is included in the accompanying financial tables.

IPO and Acquisition Activity

As mentioned above, in November 2012, Wheeler closed its IPO of 3,016,045 shares of common stock at a price of $5.25 per share. The Company’s shares were listed on The NASDAQ Capital Market and commenced trading on November 19, 2012. The Company realized approximately $13.4 million in net proceeds from the offering, after the deduction of underwriting fees and related costs.

Since completion of the IPO, the Company has acquired 2 grocery-anchored shopping centers and a free-standing retail property. The combined purchase price of these properties was approximately $11.4 million and was paid for using a combination of proceeds from the IPO, debt financing and the issuance of operating partnership units.

Currently, the Company is under contract to purchase for $10.6 million a free-standing retail property. The property is a 75,000 sq. foot supermarket located in Bixby, Oklahoma.

Portfolio Summary


Property	Location	Year Built/Renovated	GLA		% Leased
Amscot Building	Tampa, FL	2004		2,500		100	%
Harps Food Store	Grove, OK	2012		31,705		100	%
Lumber River Village	Lumberton, NC	1985/1997-98/2004		66,781		100	%
Monarch Bank	Virginia Beach, VA	2002		3,620		100	%
Perimeter Square	Tulsa, OK	1982-1983		58,277		95.7	%
Riversedge North	Virginia Beach, VA	2007		10,550		100	%
Shoppes at TJ Maxx	Richmond, VA	1982/1999		93,552		90.6	%
Surrey Plaza	Hawkinsville, GA	1993		42,680		100	%
The Shoppes at Eagle Harbor	Carrollton, VA	2009		23,303		100	%
Twin City Crossing	Batesburg-Leesville, SC	1998		47,680		100	%
Walnut Hill Plaza	Petersburg, VA	1959/2006/2008		89,907		82.7	%
Totals				470,350		94.3	%

The above table does not include the pending acquisition of Bixby Commons which is 100% leased and will add approximately 75,000 sq. feet of GLA to Wheeler’s portfolio.

About Wheeler Real Estate Investment Trust, Inc.

Headquartered in Virginia Beach, VA, the Company specializes in owning, acquiring, financing, developing, renovating, leasing and managing income producing assets, such as community centers, neighborhood centers, strip centers and free-standing retail properties. Wheeler’s portfolio contains strategically selected properties, primarily leased by nationally and regionally recognized retailers of consumer goods and located in the Mid-Atlantic, Southeast and Southwest regions of the United States.

Additional information about Wheeler and its properties can be found at its corporate website: www.whlr.us.

Financial Information

Additional information about Wheeler, including a copy of Wheeler’s Annual Report on Form 10-K which includes the Company’s audited consolidated financial statements and Management’s Discussion & Analysis, will be available upon filing via the U.S. Securities and Exchange Commission website (www.sec.gov) or through Wheeler’s website at www.whlr.us.

Forward-Looking Statement

This press release contains forward-looking statements, including discussion and analysis of our financial condition, anticipated capital expenditures required to complete projects, amounts of anticipated cash distributions to the Company’s shareholders in the future and other matters. These forward-looking statements are not historical facts but are the intent, belief or current expectations of management based on its knowledge and understanding of our business and industry. Forward-looking statements are typically identified by the use of terms such as “may,” “will,” “should,” “potential,” “predicts,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” or the negative of such terms and variations of these words and similar expressions. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements.

Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. You are cautioned to not place undue reliance on forward-looking statements, which reflect management’s view only as of the date of this press release. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results. Factors that could cause actual results to differ materially from any forward-looking statements made in this press release include:

•

the imposition of federal taxes if the Company fails to qualify as a REIT in any taxable year or opts to forego an opportunity to ensure REIT status;

•

uncertainties related to the national economy, the real estate industry in general and in our specific markets;

•

legislative or regulatory changes, including changes to laws governing REITs;

•

adverse economic or real estate developments in Virginia, Florida, Georgia, South Carolina, North Carolina or Oklahoma;

•

increases in interest rates and operating costs;

•

inability to obtain necessary outside financing;

•

litigation risks;

•

lease-up risks;

•

inability to obtain new tenants upon the expiration of existing leases;

•

inability to generate sufficient cash flows due to market conditions, competition, uninsured losses, changes in tax or other applicable laws; and

•

the need to fund tenant improvements or other capital expenditures out of operating cash flow.


CONTACT:	-OR-	INVESTOR RELATIONS:
Wheeler Real Estate Investment Trust, Inc.		The Equity Group Inc.
Robin Hanisch		Adam Prior
Corporate Secretary		Senior Vice President
(757) 627-9088 / robin@whlr.us		(212) 836-9606 / aprior@equityny.com

		Terry Downs
		Associate
		(212) 836-9615 / tdowns@equityny.com

Wheeler Real Estate Investment Trust

Condensed Consolidated Statements of Income

(in thousands, except for share data)


	Years Ended December 31,
	2012			2011

REVENUE:
Minimum rent	$	1,954,321		$	1,458,083
Percentage of sales rent		9,360			6,525
Tenant reimbursements		452,110			329,452
Other income		18,188			131,217


Total Revenue		2,433,979			1,925,277


OPERATING EXPENSES:
Property operating		311,042			352,508
Real estate taxes		134,301			104,555
Repairs and maintenance		73,877			63,253
Depreciation and amortization		822,152			744,931
Provision for credit losses		25,000			20,000
Corporate general & administrative		1,307,151			388,660


Total Operating Expenses		2,673,523			1,673,907


Operating Income (Loss)		(239,544	)		251,370

Interest expense		(966,113	)		(805,969	)


Net Loss		(1,205,657	)		(554,599	)

Less: Net loss attributable to noncontrolling interests		(43,880	)		—


Net Loss Attributable to Wheeler REIT	$	(1,161,777	)	$	(554,599	)


Loss per share:
Basic	$	(0.35	)

Diluted	$	(0.35	)


Weighted-average number of shares:
Basic		3,301,502

Diluted		3,301,502

Wheeler Real Estate Investment Trust

Consolidated Balance Sheets

(in thousands, except for share data)


	December 31,
	2012			2011

ASSETS:
Investment properties, at cost	$	46,637,221		$	15,774,838
Less accumulated depreciation and amortization		3,291,556			2,618,324

		43,345,665			13,156,514

Cash and cash equivalents		2,053,192			104,007
Receivables:
Rents and other tenant receivables, net		183,021			82,849
Rents and other tenant receivables due from related parties, net		250,063			128,790
Unbilled rent		328,030			360,952
Deferred costs and other assets		6,271,604			991,784


Total Assets	$	52,431,575		$	14,824,896


LIABILITIES:
Mortgages and other indebtedness	$	31,843,503		$	12,136,083
Below market lease intangible, net		3,673,019			—
Accounts payable, accrued expenses and other liabilities		748,727			846,742
Due to related parties		190,169			1,172,746


Total Liabilities		36,455,418			14,155,571


Commitments and contingencies		—			—

EQUITY:
Convertible preferred stock (no par value, 500,000 shares authorized, 0 and 126,250 shares issued and outstanding, respectively)		—			505,000
Common stock ($0.01 par value, 15,000,000 shares authorized, 3,301,502 and 0 shares issued and outstanding, respectively)		33,015			—
Additional paid-in capital		14,097,453			—
Capital contributions		0			2,755,675
Accumulated deficit		(5,443,099	)		(2,591,350	)

Total Shareholders’ Equity		8,687,369			669,325

Noncontrolling interests		7,288,788			—


Total Equity		15,976,157			669,325


Total Liabilities and Equity	$	52,431,575		$	14,824,896

The following tables provide same store and new store financial information. Same store date includes the twelve month results of the following entities that were part of the original REIT formation transaction:

•

The Shoppes at Eagle Harbor

•

Monarch Bank Building

•

Amscot Building

•

Riversedge North

•

Walnut Hill Plaza

New store financial information reflects the activity from the acquisition date to year-end for the following entities:

•

Lumber River Village (acquired November 16, 2012))

•

Perimeter Square (acquired November 16, 2012)

•

Shoppes at TJ Maxx (acquired November 16, 2012)

•

Harps at Harbor Point (acquired December 14, 2012)

•

Twin City Crossing (acquired December 18, 2012)

•

Surrey Plaza (acquired December 21, 2012)


	Wheeler Real Estate Investment Trust Funds From Operations Year Ended December 31,
	Same Stores						New Stores					Totals						Period Over Period Changes
	2012			2011			2012			2011		2012			2011			$			%

Net income (loss)	$	(1,143,000	)	$	(554,599	)	$	(62,657	)	$	—	$	(1,205,657	)	$	(554,599	)	$	(651,058	)		(117.39	%)
Depreciation of real estate assets		653,215			744,931			168,936			—		822,151			744,931			77,220			10.37	%

Total FFO	$	(489,785	)	$	190,332		$	106,279		$	—	$	(383,506	)	$	190,332		$	(573,838	)		(301.49	%)

Funds From Operations (FFO)

Wheeler considers FFO to be an important supplemental measure of its operating performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO exclude depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year-over-year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing perspective not immediately apparent from net income.


	Wheeler Real Estate Investment Trust Same Store and New Store Operating Income Year Ended December 31,
	Same Store						New Store					Total
	2012			2011			2012			2011		2012			2011

Property revenues	$	2,008,460		$	1,925,277		$	425,519		$	—	$	2,433,979		$	1,925,277
Property expenses		425,660			520,316			93,560			—		519,220			520,316


Property Net Operating Income		1,582,800			1,404,961			331,959			—		1,914,759			1,404,961


Depreciation and amortization		653,215			744,931			168,936			—		822,151			744,931
Provision for credit losses		—			20,000			25,000			—		25,000			20,000
Corporate general & administrative		1,267,517			388,660			39,634			—		1,307,151			388,660


Total Other Operating Expenses		1,920,732			1,153,591			233,570			—		2,154,302			1,153,591


Interest expense		805,068			805,969			161,046			—		966,114			805,969


Net Loss	$	(1,143,000	)	$	(554,599	)	$	(62,657	)	$	—	$	(1,205,657	)	$	(554,599	)

Wheeler Real Estate Investment Trust, Inc. - FORM 8-K - EX-99.1 - April 2, 2013

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Wheeler Real Estate Investment Trust, Inc. Reports