VEREIT (VER) Tops Q2 EPS by 1c, Revenues Miss

VEREIT (NYSE: VER) reported Q2 EPS of $0.04, $0.01 better than the analyst estimate of $0.03. Revenue for the quarter came in at $278.6 million versus the consensus estimate of $282.68 million.

Second Quarter 2020 Financial and Operating Highlights

• Net income of $54.2 million and net income per diluted share of $0.04
• Achieved $0.15 AFFO per diluted share
• Rent collection for the quarter of 85% which increased to 91% for July
• Acquisitions totaled $10.0 million in the second quarter and $156.2 million year-to-date
• Dispositions totaled $66.2 million in the second quarter and $200.3 million year-to-date, including the Company's share of dispositions contributed to the office partnership of $70.2 million
• Issued $600.0 million aggregate principal amount of 3.40% senior notes due 2028 to ultimately refinance its 3.75% convertible senior notes due December 2020, redeem $150.0 million of VEREIT's 6.7% Series F preferred stock, and to repay borrowings under the Operating Partnership's revolving credit facility
• Total debt decreased from $6.31 billion to $5.97 billion; Net Debt decreased from $5.82 billion to $5.80 billion, or 39.5% Net Debt to Gross Real Estate Investments
• Net Debt to Normalized EBITDA ended at 6.1x and includes the negative effects of portfolio enhancing abatement amendments, which largely impact second quarter revenue. Excluding this, Net Debt to Normalized EBITDA would have been 5.8x.

Management Commentary

Glenn J. Rufrano, Chief Executive Officer, stated, "Rent collection for Q2 was higher at 85% than previously announced and was further increased to 91% for July. In addition, liquidity improved to $1.8 billion with the $600.0 million bond issuance, which now finances our December 2020 convertible debt maturity and leaves us with no corporate bonds due until 2024. While we have had better than expected results on rent collections, we chose to maintain capital within the balance sheet, maximizing value to all stakeholders in the form of liquidity and future growth. Our board has, therefore, decided to maintain the current dividend, which at a 51% payout ratio for Q2, is a solid base on which to grow to a more traditional level."

2020 Guidance

As previously stated, given the economic uncertainty and rapidly-evolving circumstances related to COVID-19, the Company has withdrawn its previously issued 2020 guidance and is not providing an updated outlook at this time.

For earnings history and earnings-related data on VEREIT (VER) click here.

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