CORRECTING and REPLACING CoreSite Reports First-Quarter 2017 Financial Results Reflecting Revenue Growth of 24% Year over Year
The corrected release reads:
CORESITE REPORTS FIRST-QUARTER 2017 FINANCIAL RESULTS REFLECTING REVENUE GROWTH OF 24% YEAR OVER YEAR
Quarterly and Subsequent Highlights
-
Reported first-quarter total operating revenues of
$114.9 million , representing a 24.3% increase year over year -
Reported first-quarter net income per diluted share of
$0.48 , representing 29.7% growth year over year -
Reported first-quarter funds from operations (“FFO”) of
$1.13 per diluted share and unit, representing 31.4% growth year over year -
Executed 128 new and expansion data center leases comprising 46,484
net rentable square feet (NRSF), representing
$9.7 million of annualized GAAP rent at an average rate of$209 per square foot -
Commenced 37,352 NRSF of new and expansion leases representing
$9.1 million of annualized GAAP rent at an average rate of$244 per square foot - Realized rent growth on signed renewals of 1.9% on a cash basis and 5.5% on a GAAP basis and recorded rental churn of 1.1% in the first quarter
-
Subsequent to the end of the first quarter, CoreSite closed two
separate financing transactions, resulting in additional liquidity of
$275 million to support its growth and development plans -
On
April 24, 2017 , CoreSite signed a contract to acquire a 2-acre land parcel immediately adjacent to its existingSanta Clara campus. CoreSite estimates that it can build approximately 160,000 square feet of new data center capacity, comprising 18 megawatts at full build out on this parcel.
“We continued our momentum from Q4 and started the year strongly in the
first quarter. Importantly, we continued to execute on our business
objectives while increasing efficiency and effectiveness across our
organization,” said
Financial Results
CoreSite reported net income attributable to common shares of
CoreSite reported FFO per diluted share and unit of
Total operating revenues for the three months ended
Sales Activity
CoreSite executed 128 new and expansion data center leases representing
CoreSite’s first-quarter data center lease commencements totaled 37,352
NRSF at a weighted average GAAP rental rate of
CoreSite’s renewal leases signed in the first quarter totaled
Development and Acquisition Activity
CoreSite had a total of 116,212 square feet of turn-key data center
capacity under construction as of
Balance Sheet and Liquidity
As of
Subsequent to the end of the first quarter, CoreSite executed two
separate financing transactions resulting in additional liquidity of
The first transaction results in an incremental
As a result of the above financings, CoreSite has
Dividend
On
CoreSite also announced on
2017 Guidance
CoreSite is increasing its 2017 guidance of net income attributable to
common shares in the range of
This outlook is based on current economic conditions, internal assumptions about CoreSite’s customer base, and the supply and demand dynamics of the markets in which CoreSite operates. The guidance does not include the impact of any future financing, investment or disposition activities, beyond what has already been disclosed.
Upcoming Conferences and Events
CoreSite will participate in REITWeek:
Conference Call Details
CoreSite will host a conference call on
The call will be accessible by dialing +1-877-407-3982 (domestic) or
+1-201-493-6780 (international). A replay will be available until
Interested parties may also listen to a simultaneous webcast of the conference call by logging on to CoreSite’s website at www.CoreSite.com and clicking on the “Investors” link. The on-line replay will be available for a limited time beginning immediately following the call.
About CoreSite
Forward-Looking Statements
This earnings release and accompanying supplemental information may
contain forward-looking statements within the meaning of the federal
securities laws. Forward-looking statements relate to expectations,
beliefs, projections, future plans and strategies, anticipated events or
trends and similar expressions concerning matters that are not
historical facts. In some cases, you can identify forward-looking
statements by the use of forward-looking terminology such as “believes,”
“expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,”
“plans,” “pro forma,” “estimates” or “anticipates” or the negative of
these words and phrases or similar words or phrases that are predictions
of or indicate future events or trends and that do not relate solely to
historical matters. Forward-looking statements involve known and unknown
risks, uncertainties, assumptions and contingencies, many of which are
beyond CoreSite’s control that may cause actual results to differ
significantly from those expressed in any forward-looking statement.
These risks include, without limitation: the geographic concentration of
the company’s data centers in certain markets and any adverse
developments in local economic conditions or the demand for data center
space in these markets; fluctuations in interest rates and increased
operating costs; difficulties in identifying properties to acquire and
completing acquisitions; significant industry competition; the company’s
failure to obtain necessary outside financing; the company’s ability to
service existing debt; the company’s failure to qualify or maintain its
status as a REIT; financial market fluctuations; changes in real estate
and zoning laws and increases in real property tax rates; and other
factors affecting the real estate industry generally. All
forward-looking statements reflect the company’s good faith beliefs,
assumptions and expectations, but they are not guarantees of future
performance. Furthermore, the company disclaims any obligation to
publicly update or revise any forward-looking statement to reflect
changes in underlying assumptions or factors, of new information, data
or methods, future events or other changes. For a further discussion of
these and other factors that could cause the company’s future results to
differ materially from any forward-looking statements, see the section
entitled “Risk Factors” in the company’s most recent annual report on
Form 10-K, and other risks described in documents subsequently filed by
the company from time to time with the
| Consolidated Balance Sheets | ||||||||
| (in thousands) | ||||||||
|
March 31, |
December 31, |
|||||||
| Assets: | ||||||||
| Investments in real estate: | ||||||||
| Land | $ | 97,258 | $ | 100,258 | ||||
| Buildings and improvements | 1,475,029 | 1,472,580 | ||||||
| 1,572,287 | 1,572,838 | |||||||
| Less: Accumulated depreciation and amortization | (395,039 | ) | (369,303 | ) | ||||
| Net investment in operating properties | 1,177,248 | 1,203,535 | ||||||
| Construction in progress | 98,695 | 70,738 | ||||||
| Net investments in real estate | 1,275,943 | 1,274,273 | ||||||
| Cash and cash equivalents | 2,386 | 4,429 | ||||||
| Accounts and other receivables, net | 21,369 | 25,125 | ||||||
| Lease intangibles, net | 8,743 | 9,913 | ||||||
| Goodwill | 41,191 | 41,191 | ||||||
| Other assets, net | 102,957 | 96,372 | ||||||
| Total assets | $ | 1,452,589 | $ | 1,451,303 | ||||
| Liabilities and equity: | ||||||||
| Liabilities | ||||||||
| Debt, net | $ | 719,657 | $ | 690,450 | ||||
| Accounts payable and accrued expenses | 55,164 | 72,519 | ||||||
| Accrued dividends and distributions | 41,097 | 41,849 | ||||||
| Deferred rent payable | 9,099 | 7,694 | ||||||
| Acquired below-market lease contracts, net | 4,086 | 4,292 | ||||||
| Unearned revenue, prepaid rent and other liabilities | 34,820 | 37,413 | ||||||
| Total liabilities | 863,923 | 854,217 | ||||||
| Stockholders' equity | ||||||||
| Series A cumulative preferred stock | 115,000 | 115,000 | ||||||
| Common stock, par value $0.01 | 338 | 334 | ||||||
| Additional paid-in capital | 444,653 | 438,531 | ||||||
| Accumulated other comprehensive income (loss) | 332 | (101 | ) | |||||
| Distributions in excess of net income | (128,797 | ) | (118,038 | ) | ||||
| Total stockholders' equity | 431,526 | 435,726 | ||||||
| Noncontrolling interests | 157,140 | 161,360 | ||||||
| Total equity | 588,666 | 597,086 | ||||||
| Total liabilities and equity | $ | 1,452,589 | $ | 1,451,303 | ||||
| Consolidated Statements of Operations | ||||||||||||
| (in thousands, except share and per share data) | ||||||||||||
| Three Months Ended | ||||||||||||
|
March 31,
2017 |
December 31,
2016 |
March 31,
2016 |
||||||||||
| Operating revenues: | ||||||||||||
| Data center revenue: | ||||||||||||
| Rental revenue | $ | 64,251 | $ | 61,106 | $ | 50,371 | ||||||
| Power revenue | 30,861 | 30,722 | 25,574 | |||||||||
| Interconnection revenue | 14,512 | 13,984 | 12,742 | |||||||||
| Tenant reimbursement and other | 2,276 | 2,104 | 1,830 | |||||||||
| Total data center revenue | 111,900 | 107,916 | 90,517 | |||||||||
| Office, light-industrial and other revenue | 3,021 | 2,592 | 1,963 | |||||||||
| Total operating revenues | 114,921 | 110,508 | 92,480 | |||||||||
| Operating expenses: | ||||||||||||
| Property operating and maintenance | 29,226 | 28,690 | 24,663 | |||||||||
| Real estate taxes and insurance | 4,504 | 4,591 | 3,065 | |||||||||
| Depreciation and amortization | 32,338 | 30,674 | 24,770 | |||||||||
| Sales and marketing | 4,503 | 4,308 | 4,221 | |||||||||
| General and administrative | 8,124 | 8,399 | 8,720 | |||||||||
| Rent | 5,962 | 5,913 | 5,417 | |||||||||
| Impairment of internal-use software | — | — | — | |||||||||
| Transaction costs | — | — | 3 | |||||||||
| Total operating expenses | 84,657 | 82,575 | 70,859 | |||||||||
| Operating income | 30,264 | 27,933 | 21,621 | |||||||||
| Gain on real estate disposal | — | — | — | |||||||||
| Interest income | — | — | 1 | |||||||||
| Interest expense | (5,107 | ) | (4,698 | ) | (2,012 | ) | ||||||
| Income before income taxes | 25,157 | 23,235 | 19,610 | |||||||||
| Income tax expense | (97 | ) | (74 | ) | (4 | ) | ||||||
| Net income | 25,060 | 23,161 | 19,606 | |||||||||
| Net income attributable to noncontrolling interests | 6,684 | 6,181 | 6,261 | |||||||||
| Net income attributable to CoreSite Realty Corporation | 18,376 | 16,980 | 13,345 | |||||||||
| Preferred stock dividends | (2,084 | ) | (2,085 | ) | (2,084 | ) | ||||||
| Net income attributable to common shares | $ | 16,292 | $ | 14,895 | $ | 11,261 | ||||||
| Net income per share attributable to common shares: | ||||||||||||
| Basic | $ | 0.49 | $ | 0.45 | $ | 0.37 | ||||||
| Diluted | $ | 0.48 | $ | 0.44 | $ | 0.37 | ||||||
| Weighted average common shares outstanding: | ||||||||||||
| Basic | 33,558,787 | 33,431,318 | 30,252,693 | |||||||||
| Diluted | 33,981,776 | 33,859,539 | 30,694,747 | |||||||||
| Reconciliations of Net Income to FFO | ||||||||||||
| (in thousands, except per share data) | ||||||||||||
| Three Months Ended | ||||||||||||
|
March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
||||||||||
| Net income | $ | 25,060 | $ | 23,161 | $ | 19,606 | ||||||
| Real estate depreciation and amortization | 31,029 | 29,354 | 23,385 | |||||||||
| FFO | $ | 56,089 | $ | 52,515 | $ | 42,991 | ||||||
| Preferred stock dividends | (2,084 | ) | (2,085 | ) | (2,084 | ) | ||||||
| FFO available to common shareholders and OP unit holders | $ | 54,005 | $ | 50,430 | $ | 40,907 | ||||||
| Weighted average common shares outstanding - diluted | 33,982 | 33,860 | 30,695 | |||||||||
| Weighted average OP units outstanding - diluted | 13,851 | 13,851 | 16,856 | |||||||||
| Total weighted average shares and units outstanding - diluted | 47,833 | 47,711 | 47,551 | |||||||||
| FFO per common share and OP unit - diluted | $ | 1.13 | $ | 1.06 | $ | 0.86 | ||||||
Funds From Operations “FFO” is a supplemental measure of our performance
which should be considered along with, but not as an alternative to, net
income and cash provided by operating activities as a measure of
operating performance and liquidity. We calculate FFO in accordance with
the standards established by the
Our management uses FFO as a supplemental performance measure because, in excluding real estate related depreciation and amortization and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs.
We offer this measure because we recognize that FFO will be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our financial condition and results from operations, the utility of FFO as a measure of our performance is limited. FFO is a non-GAAP measure and should not be considered a measure of liquidity, an alternative to net income, cash provided by operating activities or any other performance measure determined in accordance with GAAP, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends or make distributions. In addition, our calculations of FFO are not necessarily comparable to FFO as calculated by other REITs that do not use the same definition or implementation guidelines or interpret the standards differently from us. Investors in our securities should not rely on these measures as a substitute for any GAAP measure, including net income.
| Reconciliations of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA): | |||||||||
| (in thousands) | |||||||||
| Three Months Ended | |||||||||
|
March 31, 2017 |
December 31, 2016 |
March 31, 2016 |
|||||||
| Net income | $ | 25,060 | $ | 23,161 | $ | 19,606 | |||
| Adjustments: | |||||||||
| Interest expense, net of interest income | 5,107 | 4,698 | 2,011 | ||||||
| Income taxes | 97 | 74 | 4 | ||||||
| Depreciation and amortization | 32,338 | 30,674 | 24,770 | ||||||
| EBITDA | $ | 62,602 | $ | 58,607 | $ | 46,391 | |||
| Non-cash compensation | 1,802 | 2,018 | 2,093 | ||||||
| Transaction costs / litigation | — | — | 3 | ||||||
| Adjusted EBITDA | $ | 64,404 | $ | 60,625 | $ | 48,487 | |||
EBITDA is defined as earnings before interest, taxes, depreciation and amortization. We calculate adjusted EBITDA by adding our non-cash compensation expense, transaction costs from unsuccessful deals and business combinations and litigation expense as well as adjusting for the impact of impairment charges, gains or losses from sales of property and undepreciated land and gains or losses on early extinguishment of debt. Management uses EBITDA and adjusted EBITDA as indicators of our ability to incur and service debt. In addition, we consider EBITDA and adjusted EBITDA to be appropriate supplemental measures of our performance because they eliminate depreciation and interest, which permits investors to view income from operations without the impact of non-cash depreciation or the cost of debt. However, because EBITDA and adjusted EBITDA are calculated before recurring cash charges including interest expense and taxes, and are not adjusted for capital expenditures or other recurring cash requirements of our business, their utilization as a cash flow measurement is limited.
View source version on businesswire.com: http://www.businesswire.com/news/home/20170427005805/en/
Source:
CoreSite
Greer Aviv
Vice
President of Investor Relations and Corporate Communications
+1
303-405-1012
+1 303-222-7276
Greer.Aviv@CoreSite.com