PR Newswire
MINNEAPOLIS, July 31, 2023
MINNEAPOLIS, July 31, 2023 /PRNewswire/ -- Centerspace (NYSE: CSR) announced today its financial and operating results for the three and six months ended June 30, 2023. The tables below show Net Income (Loss), Funds from Operations ("FFO")1, and Core FFO1, all on a per common share basis, for the three and six months ended June 30, 2023; Same-Store Revenues, Expenses, and Net Operating Income (Loss) ("NOI")1 over comparable periods; and Same-Store1 Weighted-Average Occupancy for each of the three months ended June 30, 2023, March 31, 2023, and June 30, 2022.
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
Per Common Share | 2023 | 2022 | 2023 | 2022 | ||||
Net income (loss) - diluted | $ (0.23) | $ (0.30) | $ 2.55 | $ (0.97) | ||||
FFO - diluted(1) | $ 1.11 | $ 1.02 | $ 2.01 | $ 2.03 | ||||
Core FFO - diluted(1) | $ 1.28 | $ 1.12 | $ 2.36 | $ 2.10 |
Year-Over-Year Comparison | Sequential Comparison | YTD Comparison | ||||
Same-Store Results | Q2 2023 vs. Q2 2022 | Q2 2023 vs. Q1 2023 | 2023 vs. 2022 | |||
Revenues | 8.5 % | 2.1 % | 9.5 % | |||
Expenses | 3.3 % | (4.9) % | 6.6 % | |||
NOI(1) | 12.1 % | 7.2 % | 11.6 % |
Three months ended | Six months ended | |||||||||
Same-Store Results | June 30, 2023 | March 31, 2023 | June 30, 2022 | June 30, 2023 | June 30, 2022 | |||||
Weighted Average Occupancy | 95.2 % | 94.8 % | 95.0 % | 95.0 % | 94.5 % |
(1) | NOI, FFO, Core FFO, and same-store results are non-GAAP financial measures. For more information on their usage and presentation, and a reconciliation to the most directly comparable GAAP measures, refer to "Non-GAAP Financial Measures and Reconciliations" in supplemental and financial operating data within. |
Highlights
- Net loss increased 23.3% to $0.23 per diluted share for the second quarter of 2023, compared to Net loss of $0.30 per diluted share for the same period of 2022;
- Core FFO per diluted share increased 14.3% to $1.28 for the three months ended June 30, 2023, compared to $1.12 for the three months ended June 30, 2022;
- Same-store revenues increased by 8.5% for the second quarter of 2023 compared to the second quarter of 2022, driving a 12.1% increase in NOI compared to the same period of the prior year;
- Total expenses decreased by $3.4 million to $55.9 million for the three months ended June 30, 2023, compared to $59.3 million for the three months ended June 30, 2022; and
- Increased the 2023 financial outlook ranges for net income per diluted share, FFO per diluted share, and Core FFO per diluted share. Refer to page S-18 in the supplemental and financial operating date within for additional detail.
Balance Sheet
At the end of the second quarter, Centerspace had $246.7 million of total liquidity on its balance sheet, consisting of $237.0 million available under the lines of credit and cash and cash equivalents of $9.7 million.
Revised 2023 Financial Outlook
Centerspace revised its 2023 financial outlook upward. For additional information, see S-18 of the Supplemental Financial and Operating Data for the quarter ended June 30, 2023 included at the end of this release. These ranges should be considered in their entirety. The table below reflects the revised outlook.
Previous Outlook for 2023 | Updated Outlook for 2023 | |||
Low | High | Low | High | |
Net income per Share – diluted | $ 2.73 | $ 3.62 | $ 2.84 | $ 3.64 |
Same-Store Revenue | 6.00 % | 8.00 % | 6.50 % | 8.00 % |
Same-Store Expenses | 4.75 % | 6.25 % | 4.00 % | 5.25 % |
Same-Store NOI | 7.00 % | 9.00 % | 8.50 % | 10.00 % |
FFO per Share – diluted | $ 4.03 | $ 4.33 | $ 4.14 | $ 4.35 |
Core FFO per Share – diluted | $ 4.27 | $ 4.56 | $ 4.55 | $ 4.75 |
Additional assumptions:
- Same-store capital expenditures of $1,100 per home to $1,150 per home
- Value-add expenditures of $31.5 million to $34.5 million
- Investments from potential acquisitions of $95.0 million to $100.0 million
- Proceeds from potential dispositions of $220.0 million to $225.0 million
Earnings Call
Live webcast and replay: https://ir.centerspacehomes.com | ||||
Live Conference Call | Conference Call Replay | |||
Tuesday, August 1, 2023, at 10:00 AM ET | Replay available until August 15, 2023 | |||
USA Toll Free Number | 1-833-470-1428 | USA Toll Free Number | 1-866-813-9403 | |
International Toll Free Number | 1-929-526-1599 | International Toll Free Number | 44-204-525-0658 | |
Canada Toll Free Number | 1-833-950-0062 | Canada Toll Free Number | 1-226-828-7578 | |
Conference Number | 474781 | Conference Number | 413439 |
Supplemental Information
Supplemental Operating and Financial Data for the quarter ended June 30, 2023 included herein ("Supplemental Information"), is available in the Investors section on Centerspace's website at www.centerspacehomes.com or by calling Investor Relations at 701-837-7104. Non-GAAP financial measures and other capitalized terms, as used in this earnings release, are defined and reconciled in the Supplemental Financial and Operating Data, which accompanies this earnings release.
About Centerspace
Centerspace is an owner and operator of apartment communities committed to providing great homes by focusing on integrity and serving others. Founded in 1970, as of June 30, 2023, Centerspace owned interests in 75 apartment communities consisting of 13,497 apartment homes located in Colorado, Minnesota, Montana, Nebraska, North Dakota, and South Dakota. Centerspace was named a Top Workplace for the fourth consecutive year in 2023 by the Minneapolis Star Tribune. For more information, please visit www.centerspacehomes.com.
Forward-Looking Statements
Certain statements in this press release and the accompanying Supplemental Operating and Financial Data are based on the company's current expectations and assumptions, and are "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. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future. Forward-looking statements are typically identified by the use of terms such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "will," "assumes," "may," "projects," "outlook," "future," and variations of such words and similar expressions. These forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from the results of operations, financial conditions, or plans expressed or implied by the forward-looking statements. Although the company believes the expectations reflected in its forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be achieved. As a result, reliance should not be placed on these forward-looking statements, as these statements are subject to known and unknown risks, uncertainties, and other factors beyond the company's control and could differ materially from actual results and performance. Such risks, uncertainties, and other factors that might cause such differences include, but are not limited to those risks and uncertainties detailed from time to time in Centerspace's filings with the Securities and Exchange Commission, including the "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" contained in its Annual Report on Form 10-K for the year ended December 31, 2022, in its subsequent quarterly reports on Form 10-Q, and in other public reports. The company assumes no obligation to update or supplement forward-looking statements that become untrue due to subsequent events.
Contact Information
Investor Relations
Josh Klaetsch
Phone: 701-837-7104
Email: [email protected]
Marketing & Media
Kelly Weber
Phone: 701-837-7104
Email: [email protected]
Common Share Data (NYSE: CSR) | ||||||||||
2nd Quarter | 1st Quarter | 4th Quarter | 3rd Quarter | 2nd Quarter | ||||||
2023 | 2023 | 2022 | 2022 | 2022 | ||||||
High closing price | $ 64.18 | $ 71.07 | $ 70.20 | $ 89.71 | $ 103.17 | |||||
Low closing price | $ 53.98 | $ 51.39 | $ 58.50 | $ 65.85 | $ 76.65 | |||||
Average closing price | $ 58.61 | $ 61.68 | $ 64.64 | $ 79.40 | $ 87.61 | |||||
Closing price at end of quarter | $ 61.36 | $ 54.63 | $ 58.67 | $ 67.32 | $ 81.55 | |||||
Common share distributions – annualized | $ 2.92 | $ 2.92 | $ 2.92 | $ 2.92 | $ 2.92 | |||||
Closing dividend yield – annualized | 4.8 % | 5.3 % | 5.0 % | 4.3 % | 3.6 % | |||||
Closing common shares outstanding (thousands) | 14,949 | 15,032 | 15,020 | 15,376 | 15,373 | |||||
Closing limited partnership units outstanding (thousands) | 961 | 967 | 971 | 980 | 995 | |||||
Closing Series E preferred units outstanding, as converted (thousands) | 2,094 | 2,103 | 2,119 | 2,186 | 2,186 | |||||
Total closing common shares, limited partnership units, and Series E preferred units, as converted, outstanding (thousands) | 18,004 | 18,102 | 18,110 | 18,542 | 18,554 | |||||
Closing market value of outstanding common shares, plus imputed closing market value of outstanding limited partnership units and Series E preferred units, as converted (thousands) | $ 1,104,725 | $ 988,912 | $ 1,062,514 | $ 1,248,247 | $ 1,513,079 |
CENTERSPACE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
6/30/2023 | 3/31/2023 | 12/31/2022 | 9/30/2022 | 6/30/2022 | 6/30/2023 | 6/30/2022 | |||||||||
REVENUE | $ 64,776 | $ 67,897 | $ 67,848 | $ 65,438 | $ 63,116 | $ 132,673 | $ 123,430 | ||||||||
EXPENSES | |||||||||||||||
Property operating expenses, excluding real estate taxes | 17,872 | 21,342 | 21,755 | 20,290 | 19,011 | 39,214 | 38,025 | ||||||||
Real estate taxes | 7,174 | 7,581 | 7,464 | 7,039 | 7,205 | 14,755 | 14,064 | ||||||||
Property management expense | 2,247 | 2,568 | 2,358 | 2,563 | 2,721 | 4,815 | 4,974 | ||||||||
Casualty loss | 53 | 252 | 335 | 276 | 382 | 305 | 980 | ||||||||
Depreciation and amortization | 24,371 | 25,993 | 25,768 | 23,720 | 24,768 | 50,364 | 55,769 | ||||||||
General and administrative expenses | 4,162 | 7,723 | 3,276 | 4,519 | 5,221 | 11,885 | 9,721 | ||||||||
TOTAL EXPENSES | $ 55,879 | $ 65,459 | $ 60,956 | $ 58,407 | $ 59,308 | $ 121,338 | $ 123,533 | ||||||||
Gain (loss) on sale of real estate and other investments | (67) | 60,159 | 14 | — | 27 | 60,092 | 27 | ||||||||
Loss on litigation settlement | (2,864) | — | — | — | — | (2,864) | — | ||||||||
Operating income (loss) | 5,966 | 62,597 | 6,906 | 7,031 | 3,835 | 68,563 | (76) | ||||||||
Interest expense | (8,641) | (10,319) | (9,603) | (7,871) | (7,561) | (18,960) | (15,276) | ||||||||
Interest and other income (loss) | 295 | 49 | 132 | 70 | (17) | 344 | 1,046 | ||||||||
Net income (loss) | $ (2,380) | $ 52,327 | $ (2,565) | $ (770) | $ (3,743) | $ 49,947 | $ (14,306) | ||||||||
Dividends to Series D preferred unitholders | (160) | (160) | (160) | (160) | (160) | (320) | (320) | ||||||||
Net (income) loss attributable to noncontrolling interest – Operating Partnership and Series E preferred units | 712 | (8,566) | 753 | 439 | 950 | (7,854) | 3,107 | ||||||||
Net income attributable to noncontrolling interests – consolidated real estate entities | (35) | (30) | (34) | (32) | (38) | (65) | (61) | ||||||||
Net income (loss) attributable to controlling interests | (1,863) | 43,571 | (2,006) | (523) | (2,991) | 41,708 | (11,580) | ||||||||
Dividends to preferred shareholders | (1,607) | (1,607) | (1,607) | (1,607) | (1,607) | (3,214) | (3,214) | ||||||||
NET INCOME (LOSS) AVAILABLE TO COMMON SHAREHOLDERS | $ (3,470) | $ 41,964 | $ (3,613) | $ (2,130) | $ (4,598) | $ 38,494 | $ (14,794) | ||||||||
Per Share Data - Basic | |||||||||||||||
Net income (loss) per common share – basic | $ (0.23) |