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Share Name | Share Symbol | Market | Type |
---|---|---|---|
InvenTrust Properties Corporation | NYSE:IVT | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 24.76 | 0 | 09:09:58 |
InvenTrust Properties Corp. (“InvenTrust” or the “Company”) (NYSE: IVT) today reported financial and operating results for the fourth quarter and full year ended December 31, 2023 and provided initial guidance for 2024. For the three months ended December 31, 2023 and 2022, the Company reported Net Income of $2.9 million, or $0.04 per diluted share, compared to a Net Loss of $0.1 million, or $0.00 per diluted share, respectively. For the years ended December 31, 2023 and 2022, the Company reported Net Income of $5.3 million, or $0.08 per diluted share, compared to $52.2 million, or $0.77 per diluted share, respectively.
Fourth Quarter and Full Year 2023 Highlights:
”We are pleased to report another year of outstanding performance driven by our simple and focused business plan; that is, owning high quality open-air retail centers in Sun Belt markets,” commented DJ Busch, CEO and President. “Significant tenant demand for our space has continued into the early part of 2024. Meanwhile, our low levered balance sheet allows us to remain flexible and opportunistic. To that end, subsequent to the quarter end, we strategically expanded our footprint into the Phoenix MSA through the acquisition of a premier essential retail center.”
NET INCOME (LOSS)
NAREIT FFO
CORE FFO
SAME PROPERTY NOI
DIVIDEND
PORTFOLIO PERFORMANCE & INVESTMENT ACTIVITY
LIQUIDITY AND CAPITAL STRUCTURE
SUBSEQUENT EVENTS
FULL YEAR 2024 OUTLOOK AND INITIAL GUIDANCE
The Company has provided initial 2024 guidance, as summarized in the table below.
(Unaudited, dollars in thousands, except per share amounts)
Initial 2024 Guidance(1)(2)
2023 Actual
Net Income per diluted share
$0.04
—
$0.10
$0.08
NAREIT FFO per diluted share
$1.69
—
$1.75
$1.70
Core FFO per diluted share (3)
$1.66
—
$1.70
$1.65
Same Property NOI (“SPNOI”) Growth
2.25%
—
3.25%
4.9%
General and administrative
$33,000
—
$34,250
$31,797
Interest expense, net (4)
$35,000
—
$35,750
$34,025
Net investment activity (5)
~ $75,000
$110,670
(1)The Company’s initial 2024 guidance excludes projections related to gains or losses on dispositions, gains or losses on debt transactions, or depreciation, amortization, and straight-line rent adjustments related to acquisitions.
(2)The Company’s initial 2024 guidance includes an expectation of uncollectibility, reflected as 50-100 basis points of expected total revenue.
(3)Core FFO per diluted share excludes certain remaining amortization assumptions within NAREIT FFO, debt extinguishment charges, straight-line rent adjustments, and non-routine items which, in management’s judgement, are not pertinent to measuring on-going operating performance.
(4)Interest expense, net, excludes amortization of debt discounts and financing costs, and expected interest income of approximately $1.0 million.
(5)Net investment activity represents anticipated acquisition activity less disposition activity.
In addition to the foregoing, the Company's initial 2024 Guidance incorporates a number of other assumptions that are subject to change and may be outside the control of the Company. If actual results vary from these assumptions, the Company's expectations may change. There can be no assurances that InvenTrust will achieve these results.
The following table provides a reconciliation of the range of the Company's 2024 estimated net income per diluted share to estimated NAREIT FFO and Core FFO per diluted share:
(Unaudited)
Low End
High End
Net income per diluted share
$
0.04
$
0.10
Depreciation and amortization related to investment properties
1.65
1.65
NAREIT FFO per diluted share
1.69
1.75
Amortization of market-lease intangibles and inducements, net
(0.02
)
(0.03
)
Straight-line rent adjustments, net
(0.04
)
(0.05
)
Amortization of debt discounts and financing costs
0.03
0.03
Core FFO per diluted share
$
1.66
$
1.70
This press release does not include a reconciliation of forward-looking SPNOI to forward-looking GAAP Net Income because the Company is unable, without making unreasonable efforts, to provide a meaningful or reasonably accurate calculation or estimation of certain reconciling items which could be significant to the Company’s results.
CONFERENCE CALL INFORMATION
Date:
Wednesday, February 14, 2024
Time:
10:00 a.m. ET
Dial-in:
(833) 470-1428 / Access Code: 861039
Webcast & Replay Link:
https://events.q4inc.com/attendee/254590774
Webcast Archive:
https://www.inventrustproperties.com/investor-relations/
NON-GAAP FINANCIAL MEASURES
This Press Release includes certain non-GAAP financial measures and other terms that management believes are helpful in understanding the Company’s business. These measures should not be considered as alternatives to, or more meaningful than, net income (calculated in accordance with GAAP) or other GAAP financial measures, as an indicator of financial performance and are not alternatives to, or more meaningful than, cash flow from operating activities (calculated in accordance with GAAP) as a measure of liquidity. Non-GAAP performance measures have limitations as they do not include all items of income and expense that affect operations, and accordingly, should always be considered as supplemental financial results to those calculated in accordance with GAAP. The Company's computation of these non-GAAP performance measures may differ in certain respects from the methodology utilized by other REITs and, therefore, may not be comparable to similarly titled measures presented by such other REITs. Investors are cautioned that items excluded from these non-GAAP performance measures are relevant to understanding and addressing financial performance. A reconciliation of the Company’s non-GAAP measures to the most directly comparable GAAP financials measures are included herein.
SAME PROPERTY NOI or SPNOI
Information provided on a same property basis includes the results of properties that were owned and operated for the entirety of both periods presented. NOI excludes general and administrative expenses, depreciation and amortization, other income and expense, net, gains (losses) from sales of properties, gains (losses) on extinguishment of debt, interest expense, net, equity in earnings (losses) from unconsolidated entities, lease termination income and expense, and GAAP rent adjustments such as amortization of market lease intangibles, amortization of lease incentives, and straight-line rent adjustments ("GAAP Rent Adjustments"). NOI from other investment properties includes adjustments for the Company's captive insurance company.
NAREIT FUNDS FROM OPERATIONS (NAREIT FFO) and CORE FFO
The Company’s non-GAAP measure of NAREIT Funds from Operations ("NAREIT FFO"), based on the National Association of Real Estate Investment Trusts ("NAREIT") definition, is net income (or loss) in accordance with GAAP, excluding gains (or losses) resulting from dispositions of properties, plus depreciation and amortization and impairment charges on depreciable real property. Adjustments for the Company’s unconsolidated joint venture are calculated to reflect the Company’s proportionate share of the joint venture's NAREIT FFO on the same basis. Core Funds From Operations (“Core FFO”) is an additional supplemental non-GAAP financial measure of the Company’s operating performance. In particular, Core FFO provides an additional measure to compare the operating performance of different REITs without having to account for certain remaining amortization assumptions within NAREIT FFO and other unique revenue and expense items which some may consider not pertinent to measuring a particular company’s on-going operating performance.
ADJUSTED EBITDA
The Company’s non-GAAP measure of Adjusted EBITDA excludes gains (or losses) resulting from debt extinguishments, straight-line rent adjustments, amortization of above and below market leases and lease inducements, and other unique revenue and expense items which some may consider not pertinent to measuring a particular company’s on-going operating performance. Adjustments for the Company’s unconsolidated joint venture are calculated to reflect the Company’s proportionate share of the joint venture's Adjusted EBITDA on the same basis.
NET DEBT-TO-ADJUSTED EBITDA
Net Debt-to-Adjusted EBITDA is Net Debt divided by trailing twelve month Adjusted EBITDA.
PRO RATA FINANCIAL INFORMATION
On January 18, 2023, the Company acquired the four remaining retail properties from its unconsolidated joint venture, IAGM Retail Fund I, LLC (“IAGM” or “JV”), a joint venture partnership between the Company and PGGM Private Real Estate Fund (“PGGM”), in which it held a 55% ownership share. Throughout this Press Release, the Company has included the results from its ownership share of its joint venture properties when combined with the Company's wholly owned properties, defined as "Pro Rata," with the exception of property and lease count, as of and for the three months and year ended December 31, 2022.
Financial Statements
Consolidated Balance Sheets
In thousands, except share amounts
As of December 31,
2023
2022
Assets
(unaudited)
Investment properties
Land
$
694,668
$
650,764
Building and other improvements
1,956,117
1,825,893
Construction in progress
5,889
5,005
Total
2,656,674
2,481,662
Less accumulated depreciation
(461,352
)
(389,361
)
Net investment properties
2,195,322
2,092,301
Cash, cash equivalents and restricted cash
99,763
137,762
Investment in unconsolidated entities
—
56,131
Intangible assets, net
114,485
101,167
Accounts and rents receivable
35,353
34,528
Deferred costs and other assets, net
42,408
51,145
Total assets
$
2,487,331
$
2,473,034
Liabilities
Debt, net
$
814,568
$
754,551
Accounts payable and accrued expenses
44,583
42,792
Distributions payable
14,594
13,837
Intangible liabilities, net
30,344
29,658
Other liabilities
29,198
28,287
Total liabilities
933,287
869,125
Commitments and contingencies
Stockholders' Equity
Preferred stock, $0.001 par value, 40,000,000 shares authorized, none outstanding
—
—
Common stock, $0.001 par value, 146,000,000 shares authorized,
67,807,831 shares issued and outstanding as of December 31, 2023 and
67,472,553 shares issued and outstanding as of December 31, 2022
68
67
Additional paid-in capital
5,468,728
5,456,968
Distributions in excess of accumulated net income
(3,932,826
)
(3,879,847
)
Accumulated comprehensive income
18,074
26,721
Total stockholders' equity
1,554,044
1,603,909
Total liabilities and stockholders' equity
$
2,487,331
$
2,473,034
Financial Statements
Consolidated Statements of Operations and Comprehensive (Loss) Income
In thousands, except share and per share amounts, unaudited
Three Months Ended December 31
Year Ended December 31
2023
2022
2023
2022
Income
Lease income, net
$
64,332
$
58,418
$
257,146
$
232,980
Other property income
390
275
1,450
1,161
Other fee income
—
578
80
2,566
Total income
64,722
59,271
258,676
236,707
Operating expenses
Depreciation and amortization
28,091
23,897
113,430
94,952
Property operating
11,776
11,983
42,832
40,239
Real estate taxes
7,448
7,330
34,809
32,925
General and administrative
8,408
10,103
31,797
33,342
Total operating expenses
55,723
53,313
222,868
201,458
Other (expense) income
Interest expense, net
(9,697
)
(8,648
)
(38,138
)
(26,777
)
Loss on extinguishment of debt
(15
)
(85
)
(15
)
(181
)
Gain on sale of investment properties
—
1,393
2,691
38,249
Equity in (losses) earnings of unconsolidated entities
(110
)
(121
)
(557
)
3,663
Other income and expense, net
3,713
1,378
5,480
2,030
Total other (expense) income, net
(6,109
)
(6,083
)
(30,539
)
16,984
Net income (loss)
$
2,890
$
(125
)
$
5,269
$
52,233
Weighted-average common shares outstanding, basic
67,563,908
67,428,549
67,531,898
67,406,233
Weighted-average common shares outstanding, diluted
68,090,912
67,428,549
67,813,180
67,525,935
Net income (loss) per common share - basic
$
0.04
$
—
$
0.08
$
0.77
Net income (loss) per common share - diluted
$
0.04
$
—
$
0.08
$
0.77
Distributions declared per common share outstanding
$
0.22
$
0.21
$
0.86
$
0.82
Distributions paid per common share outstanding
$
0.22
$
0.21
$
0.85
$
0.82
Comprehensive (loss) income
Net income (loss)
$
2,890
$
(125
)
$
5,269
$
52,233
Unrealized (loss) gain on derivatives
(7,268
)
(860
)
6,228
32,052
Reclassification (to) from net income (loss)
(3,786
)
(1,756
)
(14,875
)
(1,009
)
Comprehensive (loss) income
$
(8,164
)
$
(2,741
)
$
(3,378
)
$
83,276
Reconciliation of Non-GAAP Measures
In thousandsSame Property NOI
Three Months Ended December 31
Year Ended December 31
2023
2022
2023
2022
Income
Base rent
$
36,739
$
35,889
$
135,732
$
130,613
Real estate tax recoveries
6,345
6,655
25,821
26,244
CAM, insurance, and other recoveries
7,413
7,187
24,829
24,119
Ground rent income
3,683
3,690
13,535
13,319
Short-term and other lease income
1,763
1,462
4,244
4,203
Provision for uncollectible billed rent and recoveries
(662
)
(286
)
(1,325
)
(814
)
Reversal of uncollectible billed rent and recoveries
—
11
395
1,279
Other property income
339
277
1,212
1,127
Total income
55,620
54,885
204,443
200,090
Operating Expenses
Property operating expenses
10,271
11,537
33,841
35,695
Real estate taxes
6,640
6,969
28,478
28,852
Total operating expenses
16,911
18,506
62,319
64,547
Same Property NOI
$
38,709
$
36,379
$
142,124
$
135,543
Net Income (Loss) to Same Property NOI
Three Months Ended December 31
Year Ended December 31
2023
2022
2023
2022
Net income (loss)
$
2,890
$
(125
)
$
5,269
$
52,233
Adjustments to reconcile to non-GAAP metrics:
Other income and expense, net
(3,713
)
(1,378
)
(5,480
)
(2,030
)
Equity in losses (earnings) of unconsolidated entities
110
121
557
(3,663
)
Interest expense, net
9,697
8,648
38,138
26,777
Loss on extinguishment of debt
15
85
15
181
Gain on sale of investment properties
—
(1,393
)
(2,691
)
(38,249
)
Depreciation and amortization
28,091
23,897
113,430
94,952
General and administrative
8,408
10,103
31,797
33,342
Other fee income
—
(578
)
(80
)
(2,566
)
Adjustments to NOI (a)
(1,500
)
(1,671
)
(7,528
)
(9,743
)
NOI
43,998
37,709
173,427
151,234
NOI from other investment properties
(5,289
)
(1,330
)
(31,303
)
(15,691
)
Same Property NOI
$
38,709
$
36,379
$
142,124
$
135,543
(a)
Adjustments to NOI include termination fee income and expense and GAAP Rent Adjustments.
Reconciliation of Non-GAAP MeasuresIn thousands
NAREIT FFO and Core FFO
The following table presents a reconciliation of Net Income (Loss) to NAREIT FFO and Core FFO Attributable to Common Shares and Dilutive Securities, and provides additional information related to its operations:
Three Months Ended December 31
Year Ended December 31
2023
2022
2023
2022
Net income (loss)
$
2,890
$
(125
)
$
5,269
$
52,233
Depreciation and amortization related to investment properties
27,864
23,698
112,578
94,142
Gain on sale of investment properties
—
(1,393
)
(2,691
)
(38,249
)
Unconsolidated joint venture adjustments (a)
—
1,595
342
3,850
NAREIT FFO Applicable to Common Shares and Dilutive Securities
30,754
23,775
115,498
111,976
Amortization of market-lease intangibles and inducements, net
(626
)
(995
)
(3,343
)
(5,589
)
Straight-line rent adjustments, net
(857
)
(690
)
(3,349
)
(3,815
)
Amortization of debt discounts and financing costs
827
741
4,113
2,816
Adjusting items, net (b)
(2,385
)
(36
)
(969
)
(18
)
Unconsolidated joint venture adjusting items, net (c)
80
282
(92
)
582
Core FFO Applicable to Common Shares and Dilutive Securities
$
27,793
$
23,077
$
111,858
$
105,952
Weighted average common shares outstanding - basic
67,563,908
67,428,549
67,531,898
67,406,233
Dilutive effect of unvested restricted shares (d)
527,004
—
281,282
119,702
Weighted average common shares outstanding - diluted
68,090,912
67,428,549
67,813,180
67,525,935
NAREIT FFO per diluted share
$
0.45
$
0.35
$
1.70
$
1.66
Core FFO per diluted share
$
0.41
$
0.34
$
1.65
$
1.57
(a)
Represents the Company's share of depreciation, amortization and gain on sale related to investment properties held in IAGM.
(b)Adjusting items, net, are primarily loss on extinguishment of debt, depreciation and amortization of corporate assets, and non-operating income and expenses, net, which includes items which are not pertinent to measuring on-going operating performance, such as basis difference recognition arising from acquiring the four remaining properties of the Company's joint venture, and miscellaneous and settlement income.
(c)Represents the Company's share of amortization of market lease intangibles and inducements, net, straight line rent adjustments, net and adjusting items, net related to IAGM.
(d)For purposes of calculating non-GAAP per share metrics, the same denominator is used as that which would be used in calculating diluted earnings per share in accordance with GAAP.
Reconciliation of Non-GAAP Measures
In thousands
EBITDA and Adjusted EBITDA
The following table presents a reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA, and provides additional information related to its operations:
Three Months Ended December 31
Year Ended December 31
2023
2022
2023
2022
Net income (loss)
$
2,890
$
(125
)
$
5,269
$
52,233
Interest expense, net
9,697
8,648
38,138
26,777
Income tax expense
129
94
517
363
Depreciation and amortization
28,091
23,897
113,430
94,952
Unconsolidated joint venture adjustments (a)
—
2,054
417
8,075
EBITDA
40,807
34,568
157,771
182,400
Gain on sale of investment properties
—
(1,393
)
(2,691
)
(38,249
)
Amortization of market-lease intangibles and inducements, net
(626
)
(995
)
(3,343
)
(5,589
)
Straight-line rent adjustments, net
(857
)
(690
)
(3,349
)
(3,815
)
Adjusting items, net (b)
(2,612
)
(235
)
(1,821
)
(828
)
Unconsolidated joint venture adjusting items, net (c)
80
367
(108
)
(1,551
)
Adjusted EBITDA
$
36,792
$
31,622
$
146,459
$
132,368
(a)
Represents IVT's share of depreciation, amortization, interest expense, net, and income tax expense related to IAGM.
(b)Adjusting items, net, are primarily loss on extinguishment of debt and non-operating income and expenses, net, which includes items which are not pertinent to measuring on-going operating performance, such as basis difference recognition arising from acquiring the four remaining properties of the Company's joint venture, and miscellaneous and settlement income.
(c)Represents IVT's share of loss on extinguishment of debt, amortization of market lease intangibles and inducements, net, straight line rent adjustments, net and non-operating income and expense, net, related to IAGM.
Financial Leverage Ratios
Dollars in thousands
The following table presents the calculation of net debt and Net Debt-to-Adjusted EBITDA:
As of December 31,
2023
2022 (a)
Net Debt:
Outstanding Debt, net
$
814,568
$
805,253
Less: Cash and cash equivalents
(96,385
)
(164,448
)
Net Debt
$
718,183
$
640,805
Net Debt-to-Adjusted EBITDA (trailing 12 months):
Net Debt
$
718,183
$
640,805
Adjusted EBITDA (trailing 12 months)
146,459
132,368
Net Debt-to-Adjusted EBITDA (a)
4.9x
4.8x
(a)
Outstanding debt, net, Cash and cash equivalents, and Net Debt as of December 31, 2022 are Pro-Rata.
About InvenTrust Properties Corp.
InvenTrust Properties Corp. (the “Company,” "IVT," or "InvenTrust") is a premier Sun Belt, multi-tenant essential retail REIT that owns, leases, redevelops, acquires and manages grocery-anchored neighborhood and community centers as well as high-quality power centers that often have a grocery component. Management pursues the Company's business strategy by acquiring retail properties in Sun Belt markets, opportunistically disposing of retail properties, maintaining a flexible capital structure, and enhancing environmental, social and governance ("ESG") practices and standards. A trusted, local operator bringing real estate expertise to its tenant relationships, IVT has built a strong reputation with market participants across its portfolio. IVT is committed to leadership in ESG practices and has been a Global Real Estate Sustainability Benchmark (“GRESB”) member since 2013. For more information, please visit inventrustproperties.com.
The enclosed information should be read in conjunction with the Company's filings with the U.S. Securities and Exchange Commission (“SEC”), including, but not limited to, the Company's Form 10-Qs filed quarterly and Form 10-Ks filed annually. Additionally, the enclosed information does not purport to disclose all items required under Generally Accepted Accounting Principles (“GAAP”). The information provided in this press release is unaudited and includes non-GAAP measures (as discussed below), and there can be no assurance that the information will not vary from the final information in the Company’s Form 10-K for the year-ended December 31, 2023. IVT may, but assumes no obligation to, update information in this press release.
Forward-Looking Statements Disclaimer
Forward-Looking Statements in this press release, or made during the earnings call, which are not historical facts, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, including statements about the Company's 2024 guidance, the amount and timing of payment of the Company's next quarterly dividend, the Company's expectation for continued tenant demand for its centers, strength of and anticipated opportunities based on IVT's low leverage levels, or regarding management’s intentions, beliefs, expectations, representations, plans or predictions of the future, are typically identified by words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” "continue," “likely,” “will,” “would,” "outlook," "guidance," and variations of these terms and similar expressions, or the negative of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by the Company and its management, are inherently uncertain. The following factors, among others, could cause actual results, financial position and timing of certain events to differ materially from those described in the forward-looking statements: interest rate movements; local, regional, national and global economic performance; the impact of inflation on the Company and on its tenants; competitive factors; the impact of e-commerce on the retail industry; future retailer store closings; retailer consolidation; retailers reducing store size; retailer bankruptcies; government policy changes; and any material market changes and trends that could affect the Company’s business strategy. For further discussion of factors that could materially affect the outcome of management's forward-looking statements and IVT's future results and financial condition, see the Risk Factors included in the Company's most recent Annual Report on Form 10-K, as updated by any subsequent Quarterly Report on Form 10-Q, in each case as filed with the SEC. InvenTrust intends that such forward-looking statements be subject to the safe harbors created by Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, except as may be required by applicable law. IVT cautions you not to place undue reliance on any forward-looking statements, which are made as of the date of this press release. IVT undertakes no obligation to update publicly any of these forward-looking statements to reflect actual results, new information or future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable laws. If IVT updates one or more forward-looking statements, no inference should be drawn that IVT will make additional updates with respect to those or other forward-looking statements.
Availability of Information on InvenTrust Properties Corp.'s Website and Social Media Channels
Investors and others should note that InvenTrust routinely announces material information to investors and the marketplace using U.S. Securities and Exchange Commission filings, press releases, public conference calls, webcasts and the InvenTrust investor relations website. The Company uses these channels as well as social media channels (e.g., the InvenTrust X account (twitter.com/inventrustprop); and the InvenTrust LinkedIn account (linkedin.com/company/inventrustproperties) as a means of disclosing information about the Company's business to colleagues, investors, and the public. While not all of the information that the Company posts to the InvenTrust investor relations website or on the Company’s social media channels is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media and others interested in InvenTrust to review the information that it shares on inventrustproperties.com/investor-relations and on the Company’s social media channels.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240213927273/en/
Dan Lombardo Vice President of Investor Relations 630-570-0605 dan.lombardo@inventrustproperties.com
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