Spirit Realty Capital (SRC) Misses Q3 EPS by 8c

Spirit Realty Capital (NYSE: SRC) reported Q3 EPS of $0.11, $0.08 worse than the analyst estimate of $0.19.

THIRD QUARTER 2020 HIGHLIGHTS

• Collected 90.0% of third quarter 2020 Base Rent of $118.2 million and 93.3%1 of October 2020 Base Rent of $40.3 million as of October 26, 2020.
• Invested $215.3 million, including $214.3 million for the acquisition of 18 properties, with an initial weighted average cash yield of 7.02% and an economic yield of 7.69%. Generated $42.2 million in gross proceeds from the disposition of 11 properties, of which four were vacant.
• Generated net income of $0.11 vs $0.87 per diluted share, FFO of $0.59 vs $1.06 per share and AFFO of $0.72 vs $1.27 per share, compared to the same quarter in 2019. AFFO excluding the termination fee income received from SMTA related to SMTA’s termination of the Asset Management Agreement, net of the income tax expense impact, was $0.87 per share for the third quarter of 2019.
• Issued $450.0 million of Spirit Realty, L.P.’s 3.20% Senior Unsecured Notes due 2031.
• Issued 2.8 million shares of common stock, generating net proceeds of $99.7 million, to settle certain forward contracts entered into in the second quarter of 2020. Entered into additional forward contracts for 0.3 million shares of common stock under the Company’s At-the-Market Program at an average price of $37.06 per share. As of September 30, 2020, Spirit had unsettled forward contracts for 6.7 million shares of common stock.
• Adjusted Debt to Annualized Adjusted EBITDAre of 5.6x or 5.1x assuming the settlement of the 6.7 million open forward equity contracts.
• Had Corporate Liquidity of $1.1 billion as of October 30, 2020, comprised of availability under the 2019 Credit Facility, cash and cash equivalents and available proceeds from unsettled forward equity contracts.

CEO COMMENTS

“The third quarter marked a rapid, positive shift in our business, as our tenants reopened, rent collections accelerated and the capital markets became more constructive. Our portfolio has performed extremely well, with occupancy at 99.3% and rent collections reaching 93.3%, a strong affirmation of this team’s underwriting and the strength and stability of our well-diversified portfolio. During the third quarter, we continued to fortify our balance sheet through the issuance of $450.0 million of unsecured notes and ended the quarter with $1.1 billion in liquidity, an ideal position as we resume focus on external growth. We were able to quickly ramp our acquisition pipeline, deploying $215 million in the third quarter, and are raising our guidance for the rest of the year. We look forward to carrying the momentum from our rent collections and acquisition pipeline to finish the year strong,” stated Jackson Hsieh, President and Chief Executive Officer.

For earnings history and earnings-related data on Spirit Realty Capital (SRC) click here.

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