Campus Crest Communities (NYSE: CCG) reported Q3 FFO of $0.15, $0.01 worse than the analyst estimate of $0.16. Revenue for the quarter came in at $28.3 million versus the consensus estimate of $27.83 million.

Thec ompany also announced additional changes in senior management, as well as its intent to acquire Copper Beech assets, discontinue its construction and development business, reduce joint venture exposure and sell non-core assets as part of the Company’s release of financial results for the three months ended September 30, 2014.

Highlights

Change in Management

• Effective immediately, Ted W. Rollins, Chairman and Chief Executive Officer, has resigned and will no longer be actively involved with the Company. The Independent Directors of the Board of Directors of the Company have elected Richard Kahlbaugh, lead independent director, as Executive Chairman and Interim CEO. It is intended that Mr. Kahlbaugh will guide the Company through the completion of its strategic repositioning.
• Effective immediately, Donnie Bobbitt has resigned and will no longer serve as the Company’s Chief Financial Officer. Mr. Bobbitt will remain as a transition advisor to the Company reporting to Mr. Kahlbaugh. Scott Rochon has been named acting Chief Financial Officer in addition to his duties as the Company’s Chief Accounting Officer.
• Aaron Halfacre and Angel Herrera remain as the Company’s Chief Investment Officer and Chief Operating Officer, respectively.

Copper Beech Transaction

• Entered into an amendment to the Copper Beech purchase agreement to acquire remaining equity interests in 32 properties in the Copper Beech portfolio; transaction expected to generate approximately $20 million of incremental net operating income (“NOI”) at an incremental purchase cap rate of 7.3% based on current share price
• Total consideration of approximately $60.3 million cash, approximately $140.6 million of debt assumption and the issuance of approximately 12.4 million operating partnership units (“OP units”)
• OP units to be issued at premium to the current share price and above consensus net asset value
• Achieves full operational control while also providing scale, diversification and accretion
• Target closing of December 31, 2014

Strategic Repositioning

• Discontinuing all construction and development to simplify the business model and focus on organic growth
• Identifying cost savings at the property and corporate level to enhance profitability
• Reducing joint venture exposure through select asset dispositions to reduce indebtedness and increase liquidity
• Exploring strategic options for our projects in Montreal, to include capital solutions to reduce exposure, concurrent with ongoing efforts to drive occupancy
• Marketing development pipeline assets for sale to increase liquidity and simplify balance sheet

"Today’s announcement exemplifies our commitment to our investors. Not only are we completing the Copper Beech transaction on attractive terms, we have also taken the necessary actions to deliver change," declared the Independent Directors of the Board of Directors of the Company. "After a thorough and deliberate process, the Board of Directors of the Company have accepted the resignations of Mr. Rollins and Mr. Bobbitt. We thank them for their years of service and wish them the very best in their future endeavors.”

“The Board of Directors will be working closely with Aaron, Scott and Angel as we continue the strategic repositioning of Campus Crest,” noted Mr. Kahlbaugh. “As previously stated, our initiatives for change include a focus on operations to deliver organic growth, instilling a disciplined approach to capital allocation, manifesting meaningful cost savings across our organization and bringing about thoughtful balance sheet improvements. We look forward to providing more information in the weeks and months ahead.”

“We are proactively taking the steps necessary to restore investor confidence and are intently focused on improving shareholder value. We thank our investors for their continued support,” said Aaron Halfacre.

For earnings history and earnings-related data on Campus Crest Communities (CCG) click here.