– Closes $105.6 Million of Development Investments –
– Increases Investment Pipeline to $825 Million –
– Begins Second Quarter with $50 Million ATM Launch –
MEMPHIS, Tenn. -- (Business Wire)
Jernigan Capital, Inc. (NYSE:JCAP), a leading capital partner for
self-storage entrepreneurs nationwide, today announced results for the
quarter ended March 31, 2017, issued earnings guidance for the second
quarter, and reaffirmed earnings guidance for full year 2017.
Highlights for the quarter ended March 31, 2017 include:
-
Earnings per share and adjusted earnings per share of $0.14 and $0.21,
respectively;
-
$105.6 million of on-balance sheet development investments through
quarter end ($155.7 million through May 2, 2017);
-
Increased investment pipeline to approximately $825 million; and
-
Launched $50.0 million “at-the-market” offering program on April 5,
2017.
“It has been said that great teams create their own momentum, and our
exceptional JCAP team built upon the strong momentum we created late
last year, producing outstanding first quarter results,” stated Dean
Jernigan, Chairman and Chief Executive Officer of Jernigan Capital. “The
$105.6 million of developments closed in the first quarter was our
largest investment quarter to date, and the remainder of the year looks
very promising as well. The continued growth in our pipeline to
approximately $825 million gives us a high degree of confidence that we
remain the investment partner of choice to self-storage entrepreneurs in
a development cycle that we believe is a long way from ending. Our
continued access to a large volume of high-quality development
investment opportunities, combined with continued strong self-storage
fundamentals and our access to significant amounts of capital leave us
very optimistic about our future.”
John Good, President and Chief Operating Officer of Jernigan Capital
added, “We are on pace to substantially exceed in 2017 the investment
volume of 2015 and 2016 combined. As of today, we have closed $155.7
million of development investments in 2017 and have executed term sheets
for another $212 million of investments. Moreover, an additional $613
million of high quality prospective investments is in our underwriting
process. The well-executed and efficient issuance of approximately $20.0
million of common stock under our “at-the-market” program in the first
few days after launch leaves us highly confident in our ability to
finance the Company over the long term. With access to reasonably-priced
capital and a business that is highly scalable, we remain poised to
create meaningful long-term value for our stockholders.”
Financial Highlights
Net income attributable to common stockholders for the three months
ended March 31, 2017 increased $0.1 million to $1.2 million, or $0.14
per share, compared to net income of $1.1 million, or $0.18 per share,
for the comparable period in 2016. Net income attributable to common
stockholders is reflected after giving effect to the impact of $371,000,
or $0.04 per share, attributable to dividends on shares of Series A
Preferred Stock declared in the first quarter 2017 payable in shares of
common stock. Net income attributable to common stockholders on a per
share basis for the first quarter of 2017 reflects the issuance of
approximately three million new shares of common stock in December 2016.
Adjusted earnings were $1.9 million, or $0.21 per share, for the
quarter, compared to adjusted earnings of $3.4 million, or $0.55 per
share, for the comparable 2016 quarter.
Net income attributable to common stockholders and adjusted earnings for
the three months ended March 31, 2017 includes a $1.4 million increase
in fair value of investments, compared to a $3.8 million increase for
the comparable 2016 period, primarily due to a higher volume of
development investments approaching certificate of occupancy in the
first quarter of 2016 compared to the first quarter of 2017. In part as
a result of the Company’s Heitman joint venture, the Company did not
make any on-balance sheet investments from January 1 through August 31,
2016.
General and administrative expenses for each of the quarters ended March
31, 2017 and 2016 were $1.6 million and $1.3 million, respectively and
included non-cash expense of stock-based compensation of $292,000 and
$175,000, respectively. Stock-based compensation was affected by the
increase in the Company’s common stock price during the first quarter of
2017. General and administrative expenses were impacted by additional
franchise taxes accrued in the first quarter 2017.
Capital Markets Activities
On April 5, 2017, the Company entered into an at-the-market continuous
equity program, where the Company may, from time to time, offer and sell
up to $50.0 million of shares of common stock (the “ATM Program”). Since
the inception of the ATM Program, the Company has sold 874,402 shares of
common stock at a weighted average price of $22.76 per share.
Dividends
On March 7, 2017, the Company declared a dividend of $0.35 per common
share. The dividend was paid on April 14, 2017 to common shareholders of
record on April 3, 2017.
Additionally on March 7, 2017, the Company declared cash and stock
dividends on its Series A Preferred Stock. These dividends were paid on
the following dates and in the following amounts:
|
|
| |
|
| |
|
| |
Series A Preferred |
|
| Payment/ Issue Date |
|
| Aggregate Value |
|
| No. of Shares |
Cash Dividend
|
|
|
April 14, 2017
|
|
|
$175,000
|
|
|
N/A
|
Stock Dividend
|
|
|
April 17, 2017
|
|
|
$371,000
|
|
|
16,497 shares of common stock
|
| | | | | | | | |
|
Second Quarter and Full Year 2017 Guidance
The following table reflects earnings per share and adjusted earnings
per share guidance for the second quarter ending June 30, 2017. Such
guidance is based on management's current and expected views of Company
investment activity (including fair value appreciation), the
self-storage market, and overall economic conditions. Adjusted earnings
is a performance measure that is not specifically defined by accounting
principles generally accepted in the United States (“GAAP”) and is
defined as net income (loss) attributable to common stockholders
(computed in accordance with GAAP) plus stock dividends payable to
preferred stockholders, stock-based compensation expense, and
depreciation on real estate assets.
|
|
|
| |
| | | | Dollars in thousands, Except share and per share
data
|
| | | | Quarter ending June 30, 2017 |
| | | | Low |
|
| High |
Total revenues
| | | |
$
|
2,345
| |
|
|
$
|
2,465
| |
JV income
| | | |
|
500
|
|
|
|
|
575
|
|
Total interest and JV income
| | | |
$
|
2,845
| | | |
$
|
3,040
| |
G&A expenses
| | | | |
(2,475
|
)
| | | |
(2,350
|
)
|
Property operating expenses
| | | | |
(95
|
)
| | | |
(80
|
)
|
Interest expense
| | | | |
(275
|
)
| | | |
(250
|
)
|
Other
| | | | |
110
| | | | |
125
| |
Change in fair value of investments (1)
| | | |
|
2,500
|
|
|
|
|
3,200
|
|
Net income
| | | | |
2,610
| | | | |
3,685
| |
Net income attributable to preferred stockholders (2)
| | | |
|
(175
|
)
|
|
|
|
(175
|
)
|
Net income attributable to common stockholders
| | | | |
2,435
| | | | |
3,510
| |
Add: stock dividends
| | | | |
-
| | | | |
-
| |
Add: stock based compensation
| | | | |
525
| | | | |
500
| |
Add: depreciation on real estate assets
| | | |
|
45
|
|
|
|
|
40
|
|
Adjusted earnings
| | | |
$
|
3,005
| | | |
$
|
4,050
| |
Earnings per share – diluted
| | | |
$
|
0.25
| | | |
$
|
0.36
| |
Adjusted earnings per share – diluted
| | | |
$
|
0.31
| | | |
$
|
0.42
| |
Average shares outstanding - diluted
| | | | |
9,750,000
| | | | |
9,750,000
| |
| | | | | | | | | | |
|
(1)
|
|
Excludes $0.4 million (low) / $0.5 million (high) of unrealized
appreciation in fair value of investments from the real estate
venture which is included in JV income for the three months ending
June 30, 2017.
|
(2)
| |
Represents both cash dividends and stock dividends estimated with
respect to outstanding shares of Series A Preferred Stock.
|
| |
|
The Company is also reaffirming its previously issued guidance for full
year 2017. Net income attributable to common shareholders is expected to
be between $1.62 and $2.02 and adjusted earnings per share is expected
to be between $1.80 and $2.30.
The guidance above is based on the following key assumptions regarding
the Company’s business activities in 2017:
-
Projected closings on $350 million to $375 million of new development
property investments with a profits interest for the full year 2017;
-
Additional advances of approximately $30 million to $35 million on the
Company’s December 31, 2016 investment portfolio, and advances of
approximately $115 million to $125 million on new investment
commitments;
-
Anticipated proceeds of $30 million to $40 million from the issuance
of Series A Preferred Stock in the latter part of 2017, approximately
$40 million to $45 million of proceeds from senior participations
primarily in the latter part of 2017, and approximately $30 million to
$40 million from the issuance of common stock under the Company’s ATM
Plan;
-
Seven additional on-balance sheet properties receiving certificates of
occupancy in 2017; and
-
No change in the key assumptions used to value the Company’s
investments other than the assumption of two 25 basis points interest
rate increases in 2017.
Over 75% of the development property investment commitments closed by
the Company in 2016 were made through the Heitman joint venture. The
Company resumed closing on-balance sheet investments in late 2016. The
2017 guidance reflects the impact of the limited number of on-balance
sheet closings in 2016 resulting in modest fair value adjustments in
2017 on the 2016 investments. The Company expects that the substantial
increase in on-balance sheet investment activity in 2017 will result in
significant increases in interest income and fair value appreciation in
2018 and beyond.
Conference Call and Webcast Information
The Company will host a webcast and conference call on Thursday, May 4,
2017 at 11:00 a.m. Eastern Time to discuss the financial results and
recent events. A webcast will be available on the Company’s website at investors.jernigancapital.com.
To listen to a live broadcast, access the site at least 15 minutes prior
to the scheduled start time in order to register and download and
install any necessary audio software. The replay of the webcast will be
available on the Company’s website until Thursday, May 18, 2017.
Supplemental financial and operating information as of and for the
period ended March 31, 2017 is available on the Company’s website under
Investor Relations – Financial Information – Quarterly Supplemental
Information.
To Participate in the Telephone Conference Call:
Dial in at least 15 minutes prior to start time.
Domestic: 1-877-407-0792
International: 1-201-689-8263
Conference Call Replay:
Domestic: 1-844-512-2921
International: 1-412-317-6671
Passcode:
13660588
The replay can be accessed until midnight Eastern Time on May 18, 2017.
About Jernigan Capital, Inc.
Jernigan Capital, Inc. is a New York Stock Exchange-listed real estate
investment trust (NYSE: JCAP) that provides debt and equity capital to
private developers, owners, and operators of self-storage facilities.
Our mission is to be the preeminent capital partner for self-storage
entrepreneurs nationwide by offering creative solutions through an
experienced team demonstrating the highest levels of integrity,
dedication, excellence and community, while maximizing shareholder
value. The Jernigan Capital team has extensive experience in over 100
U.S. markets—from acquiring and managing self-storage properties to new
self-storage development—providing JCAP with knowledge unmatched by any
lender, broker or advisor to the sector. Jernigan Capital is the only
source of construction and development capital focused solely on the
self-storage sector.
Forward-Looking Statements
This press release includes "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 and
other federal securities laws, including statements regarding our future
performance, our second quarter 2017 earnings guidance and full year
2017 updated earnings guidance, including related key assumptions,
future profits from investments, our anticipated loan closings, our
access to capital and our ability to fund our existing loan commitments.
The ultimate occurrence of events and results referenced in these
forward-looking statements is subject to known and unknown risks and
uncertainties, many of which are beyond our control. These
forward-looking statements are based upon the Company's present
intentions and expectations, but the events and results referenced in
these statements are not guaranteed to occur. Investors should not place
undue reliance upon forward-looking statements. For a discussion of
these and other risks facing our business, see the information under the
heading “Risk Factors” in our most recent Annual Report on Form 10-K
filed with the Securities and Exchange Commission (“SEC”) and our other
filings with the SEC from time to time, which are accessible on the
SEC’s website at www.sec.gov.
Non-GAAP Financial Measures
Adjusted Earnings is a non-GAAP measure and is defined as net income
plus stock dividends payable on preferred stock, stock-based
compensation expense, depreciation on real estate assets, transaction
and other expenses, deferred termination fee to manager, and
restructuring costs. Management uses Adjusted Earnings and Adjusted
Earnings per diluted share as key performance indicators in evaluating
the operations of the Company's business. The Company is a capital
provider to self-storage developers and believes that these measures are
useful to management and investors as a starting point in measuring its
operational performance because they exclude various equity-based
payments (including stock dividends) and other items included in net
income that do not relate to or are not indicative of its present and
future operating performance, which can make periodic and peer analyses
of operating performance more difficult. The Company’s computation of
Adjusted Earnings and Adjusted Earnings per share may not be comparable
to other key performance indicators reported by other REITs or real
estate companies. Reconciliations of Adjusted Earnings and Adjusted
Earnings per share to Net Income and Earnings per share, respectively,
are provided in the attached table entitled “Calculation of Adjusted
Earnings.”
View source version on businesswire.com: http://www.businesswire.com/news/home/20170503006515/en/
Contacts:
Jernigan Capital, Inc.
Investor Relations:
901-567-9580
Investorrelations@jerningancapital.com
Source: Jernigan Capital, Inc.
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