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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Cencora Inc | NYSE:COR | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-4.46 | -1.95% | 224.74 | 228.792 | 224.32 | 228.49 | 2,034,368 | 21:49:50 |
- Delivered Strong Q1 Financial Results, Including 7.0% Revenue Growth Year Over Year - - Executed $7.0 Million of New and Expansions Sales, Driven by Retail Colocation and Small Scale -
CoreSite Realty Corporation (NYSE:COR) (“the Company”), a premier provider of secure, reliable, high-uptime data center campuses with high-performance cloud access and interconnection solutions across the U.S., today announced financial results for quarter ended March 31, 2021.
Q1 2021 Quarterly Highlights
“We are pleased with our start to the year, and we are excited about the growth opportunities achievable as we lease up our vacant and available capacity,” said Paul Szurek, CoreSite’s President and Chief Executive Officer. “CoreSite’s network and cloud-dense customer communities continue to evidence a differentiated value proposition for customers who increasingly rely on digital operations to advance their business, and we believe our priorities and operating objectives will continue to drive long-term value creation.”
Sales Activity
CoreSite achieved new and expansion sales of $7.0 million of annualized GAAP rent for the quarter, which included annualized GAAP rent of $3.6 million, $2.6 million, and $0.8 million from retail colocation, small scale, and large scale leases, respectively.
“Our sales results were primarily driven by retail colocation and small scale leasing through strong organic growth from existing customers and demand from new enterprises during the first quarter,” said Steve Smith, CoreSite’s Chief Revenue Officer. “We continue to pursue large scale and hyperscale leases supplementing our retail and small scale leasing volume throughout the remainder of 2021. We have the available capacity to provide the flexibility and scalability required by customers to execute their hybrid and multi-cloud architectures.”
In addition, on April 1st, CoreSite achieved an 89% leased percentage at LA3 Phase 1 within six months of construction completion as a result of signing a large scale lease for approximately $0.8 million of annualized GAAP rent immediately subsequent to quarter end. LA3 Phase 1 will become stabilized upon the expected commencement of the large scale lease in Q3 2021.
CoreSite had annualized GAAP backlog of $9.6 million, or $19.3 million on a cash basis, which is inclusive of the large scale lease signed at LA3 subsequent to quarter end.
Other Financial Results
CoreSite’s $157.6 million of operating revenues for the first quarter included $133.0 million of rental, power and related revenue, reflecting 6.8% year over year growth, $22.2 million of interconnection revenue, reflecting 10.3% year over year growth, and $2.5 million of office, light-industrial and other revenue. Net income was $24.9 million for the quarter, or $0.51 attributable to each common diluted share.
Development Activity
CoreSite continues to invest and develop new capacity as needed to meet market demand.
CoreSite’s ongoing data center development and operational position includes –
Balance Sheet and Liquidity
The Company’s balance sheet remains strong, with a ratio of net principal debt to fourth quarter annualized adjusted EBITDA of 5.1 times, or 4.9 times including GAAP backlog. As of the end of the first quarter, CoreSite had approximately $278.7 million of current liquidity, including $3.8 million of cash and $274.9 million of available capacity on its revolving credit facility.
2021 Guidance
The Company’s 2021 guidance, including operating revenues, adjusted EBITDA, depreciation and amortization and capital expenditures, along with guidance drivers and other information, can be found on page 21 of CoreSite’s Supplemental Information.
Conference Call Details
CoreSite will host its first quarter 2021 earnings call on Thursday, April 29, 2021, at 12:00 p.m. (Eastern Time). The call will be accessible by dialing 1-877-407-3982 (domestic) or 1-201-493-6780 (international).
A replay will be available after the call until May 6, 2021, and can be accessed dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international). The passcode for the replay is 13717856.
The quarterly conference call also will be offered as a simultaneous webcast, accessible by visiting CoreSite.com and clicking on the “Investors” link. An on-line replay will be available for a limited time immediately following the call.
Concurrently with issuing its financial results, the Company will post its first quarter 2021 Supplemental Information on its website at CoreSite.com, under the “Investors” link.
Upcoming Conferences and Events
CoreSite’s management will participate virtually in the RBC Capital Markets Data Center & Connectivity Conference on May 25th, Cowen’s 49th Annual Technology, Media & Telecom Conference on June 2nd, the Nareit REITweek 2021 Investor Conference on June 8-9th, and Credit Suisse’s 23rd Annual Communications Conference on June 15th.
About CoreSite
CoreSite Realty Corporation (NYSE:COR) delivers secure, reliable, high-uptime data center campuses with high-performance cloud access and interconnection solutions to a growing customer ecosystem across eight key North American markets. More than 1,375 of the world’s leading enterprises, network operators, cloud providers, and supporting service providers choose CoreSite to connect, protect and optimize their performance-sensitive data, applications and computing workloads. Our scalable, flexible solutions and 475+ dedicated employees consistently deliver unmatched data center options — all of which leads to a best-in-class customer experience and lasting relationships. For more information, visit www.CoreSite.com.
Forward Looking Statements
This earnings release and accompanying supplemental information may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events or trends and that do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond CoreSite’s control that may cause actual results to differ significantly from those expressed in any forward-looking statement. These risks include, without limitation: the geographic concentration of the Company’s data centers in certain markets and any adverse developments in local economic conditions or the level of supply of or demand for data center space in these markets; fluctuations in interest rates and increased operating costs; difficulties in identifying properties to acquire and completing acquisitions; significant industry competition, including indirect competition from cloud service providers; failure to obtain necessary outside financing; the ability to service existing debt; the failure to qualify or maintain its status as a REIT; financial market fluctuations; changes in real estate and zoning laws and increases in real property tax rates; the effects on our business operations, demand for our services and general economic conditions resulting from the spread of the novel coronavirus (“COVID-19”) in our markets, as well as orders, directives and legislative action by local, state and federal governments in response to such spread of COVID-19; and other factors affecting the real estate industry generally. All forward-looking statements reflect the Company’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the Company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in its most recent annual report on Form 10-K, and other risks described in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission.
Use of Funds From Operations (“FFO”)
FFO is a supplemental measure of CoreSite’s performance which should be considered along with, but not as an alternative to, net income and cash provided by operating activities as a measure of operating performance. The Company calculates 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 property and undepreciated land and impairment write-downs of depreciable real estate, plus real estate related depreciation and amortization (excluding amortization of deferred financing costs) and after adjustments for unconsolidated partnerships and joint ventures.
CoreSite’s management uses FFO as a supplemental performance measure because, by excluding real estate related depreciation and amortization and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs.
CoreSite offers this measure because it recognizes that investors use FFO as a basis to compare its operating performance with that of other REITs. However, the utility of FFO as a measure of the Company’s performance is limited because FFO excludes depreciation and amortization and captures neither the changes in the value of its properties that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of its properties, all of which have real economic effect and could materially impact the Company’s financial condition and results from operations. FFO is a non-GAAP measure and should not be considered a measure of liquidity, an alternative to net income, cash provided by operating activities or any other performance measure determined in accordance with GAAP, nor is it indicative of funds available to fund the Company’s cash needs, including its ability to pay dividends or make distributions. In addition, CoreSite’s calculations of FFO are not necessarily comparable to FFO as calculated by other REITs that do not use the same definition or implementation guidelines or interpret the standards differently from the Company. Investors in CoreSite’s securities should not rely on these measures as a substitute for any GAAP measure, including net income.
Use of Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”)
EBITDAre is calculated in accordance with the standards established by the National Association of Real Estate Investment Trusts (“Nareit”). EBITDAre is defined as earnings before interest, taxes, depreciation and amortization, gains or losses from the sale of depreciated property, and impairment of depreciated property. CoreSite calculates adjusted EBITDA by adding its non-cash compensation expense, transaction costs from unsuccessful deals and business combinations and litigation expense to EBITDAre as well as adjusting for the impact of other impairment charges, gains or losses from sales of undepreciated land and gains or losses on early extinguishment of debt. Management uses EBITDAre and adjusted EBITDA as indicators of the Company’s ability to incur and service debt. In addition, CoreSite considers EBITDAre and adjusted EBITDA to be appropriate supplemental measures of its performance because they eliminate depreciation and interest, which permits investors to view income from operations without the impact of non-cash depreciation or the cost of debt. However, because EBITDAre and adjusted EBITDA are calculated before recurring cash charges including interest expense and taxes, and are not adjusted for capital expenditures or other recurring cash requirements of the Company’s business, their utilization as a cash flow measurement is limited.
Consolidated Balance Sheets
(in thousands, except per share data)
March 31,
December 31,
2021
2020
Assets:
Investments in real estate:
Land
$
109,400
$
104,734
Buildings and improvements
2,281,662
2,273,536
2,391,062
2,378,270
Less: Accumulated depreciation and amortization
(907,256
)
(867,975
)
Net investment in operating properties
1,483,806
1,510,295
Construction in progress
335,913
319,411
Net investments in real estate
1,819,719
1,829,706
Operating lease right-of-use assets, net
168,879
173,928
Cash and cash equivalents
3,791
5,543
Accounts and other receivables, net
22,102
20,849
Lease intangibles, net
2,061
2,507
Goodwill
40,646
40,646
Other assets, net
108,015
103,094
Total assets
$
2,165,213
$
2,176,273
Liabilities and equity:
Liabilities
Debt, net
$
1,736,972
$
1,715,911
Operating lease liabilities
184,775
189,404
Accounts payable and accrued expenses
79,185
79,140
Accrued dividends and distributions
62,861
63,878
Acquired below-market lease contracts, net
2,263
2,313
Unearned revenue, prepaid rent and other liabilities
50,340
53,149
Total liabilities
2,116,396
2,103,795
Stockholders' equity
Common stock, par value $0.01
424
422
Additional paid-in capital
559,777
555,595
Accumulated other comprehensive loss
(14,463
)
(20,526
)
Distributions in excess of net income
(502,894
)
(471,910
)
Total stockholders' equity
42,844
63,581
Noncontrolling interests
5,973
8,897
Total equity
48,817
72,478
Total liabilities and equity
$
2,165,213
$
2,176,273
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended
March 31,
December 31,
March 31,
2021
2020
2020
Operating revenues:
Data center revenue:(1)
Rental, power, and related revenue
$
132,976
$
130,430
$
124,505
Interconnection revenue
22,160
21,947
20,085
Total data center revenue
155,136
152,377
144,590
Office, light-industrial and other revenue
2,506
2,561
2,772
Total operating revenues
157,642
154,938
147,362
Operating expenses:
Property operating and maintenance
42,632
43,649
40,183
Real estate taxes and insurance
6,735
6,218
6,190
Depreciation and amortization
44,628
44,386
40,991
Sales and marketing
5,862
5,844
6,144
General and administrative
11,517
10,302
11,267
Rent
9,221
10,187
8,399
Total operating expenses
120,595
120,586
113,174
Operating income
37,047
34,352
34,188
Interest expense
(12,123
)
(11,933
)
(11,183
)
Income before income taxes
24,924
22,419
23,005
Income tax expense
(9
)
(10
)
(17
)
Net income
24,915
22,409
22,988
Net income attributable to noncontrolling interests
3,047
2,751
5,140
Net income attributable to common shares
$
21,868
$
19,658
$
17,848
Net income per share attributable to common shares:
Basic
$
0.52
$
0.46
$
0.48
Diluted
$
0.51
$
0.46
$
0.48
Weighted average common shares outstanding:
Basic
42,378
42,330
37,336
Diluted
42,592
42,529
37,504
(1) Below is a breakout of our contractual data center rental, power, and tenant reimbursements and other revenue:
Three Months Ended
March 31,
December 31,
March 31,
2021
2020
2020
Rental revenue
$
85,207
$
83,891
$
80,886
Power revenue
44,360
43,374
41,278
Tenant reimbursement and other
3,409
3,165
2,341
Rental, power, and related revenue
$
132,976
$
130,430
$
124,505
Reconciliations of Net Income to FFO
(in thousands, except per share data)
Three Months Ended
March 31,
December 31,
March 31,
2021
2020
2020
Net income
$
24,915
$
22,409
$
22,988
Real estate depreciation and amortization
42,889
42,518
39,415
FFO available to common shareholders and OP unit holders
$
67,804
$
64,927
$
62,403
Weighted average common shares outstanding - diluted
42,592
42,529
37,504
Weighted average OP units outstanding - diluted
5,941
5,943
10,796
Total weighted average shares and units outstanding - diluted
48,533
48,472
48,300
FFO per common share and OP unit - diluted
$
1.40
$
1.34
$
1.29
Reconciliations of Net Income to EBITDAre and Adjusted EBITDA:
(in thousands)
Three Months Ended
March 31,
December 31,
March 31,
2021
2020
2020
Net income
$
24,915
$
22,409
$
22,988
Adjustments:
Interest expense
12,123
11,933
11,183
Income taxes
9
10
17
Depreciation and amortization
44,628
44,386
40,991
EBITDAre
$
81,675
$
78,738
$
75,179
Non-cash compensation
4,393
4,033
3,482
Transaction costs / litigation
3
—
—
Adjusted EBITDA
$
86,071
$
82,771
$
78,661
View source version on businesswire.com: https://www.businesswire.com/news/home/20210429005200/en/
Kate Ruppe Investor Relations Manager 303-222-7369 InvestorRelations@CoreSite.com
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