Plymouth Industrial REIT Reports Second Quarter Results

BOSTON, Aug. 03, 2023 (GLOBE NEWSWIRE) -- Plymouth Industrial REIT, Inc. (: PLYM) (the “Company”) today announced its financial results for the second quarter ended June 30, 2023 and other recent developments.

Second Quarter and Subsequent Highlights

• Reported results for the second quarter of 2023 reflect a net loss attributable to common stockholders of $(0.08) per weighted average common share; Core Funds from Operations attributable to common stockholders and unit holders (“Core FFO”) of $0.46 per weighted average common share and units; and Adjusted FFO (“AFFO”) of $0.42 per weighted average common share and units.
• Same store NOI (“SS NOI”) increased 3.5% on a GAAP basis excluding early termination income for the second quarter compared with the same period in 2022; increased 6.0% on a cash basis excluding early termination income. SS NOI increased 3.6% on a GAAP basis excluding early termination income for the first six months of 2023 compared with the same period in 2022; increased 7.5% on a cash basis excluding early termination income.
• Commenced leases during the second quarter experienced a 19.3% increase in rental rates on a cash basis from leases greater than six months with new leases experiencing a 36.0% increase on a cash basis and renewal leases experiencing an 11.2% increase on a cash basis. Through July 31, 2023, executed leases scheduled to commence during the second half of 2023 total an aggregate of 2,310,149 square feet, all of which are associated with terms of at least six months. The Company will experience a 23.1% increase in rental rates on a cash basis from these leases.
• Issued approximately 1.2 million common shares through its ATM program at an average price of $23.05 per share, raising approximately $27.1 million in net proceeds.
• Announced the redemption of all outstanding shares of the 7.50% Series A Cumulative Redeemable Preferred Stock on September 6, 2023 for a total redemption payment of $48.8 million.
• Paid a regular quarterly cash dividend for the second quarter of 2023 of $0.225 per share for the common stock and a regularly quarter cash dividend of $0.46875 per share for the Preferred Stock.
• Affirmed the full year 2023 guidance range for Core FFO of $1.84 to $1.86 per weighted average common share and units previously issued on February 23, 2023 and adjusted the range of net loss of $(0.17) to $(0.15) per weighted average common share and units as well as several of its accompanying guidance assumptions.
  

Jeff Witherell, Chairman and Chief Executive Officer of Plymouth Industrial REIT, noted, “We are making great progress on our objectives with over 88% of lease expirations already addressed for 2023, and we are well ahead of expectations on the 2024 lease expirations. Strategic utilization of our ATM program and visibility into near-term, one-off dispositions allowed us to announce the redemption of our remaining preferred stock. This redemption, along with strong organic growth and contributions from the development program, improve the balance sheet. With an estimated rental rate mark-to-market of 18% to 20% across our portfolio, continued rent growth in our markets, and strong operating fundamentals, we are well positioned to continue delivering organic growth.”

Financial Results for the Second Quarter of 2023
Net loss attributable to common stockholders for the quarter ended June 30, 2023 was $3.6 million, or $(0.08) per weighted average common share outstanding, compared with $6.6 million, or $(0.17) per weighted average common share outstanding, for the same period in 2022. The net loss decreased year-over-year primarily due to an increase in net operating income, partially offset by increased interest expense resulting from higher interest rates and acquisition activity. Weighted average common shares outstanding for the second quarters ended June 30, 2023 and 2022 were 42.6 million and 39.1 million, respectively.

Consolidated total revenues for the quarter ended June 30, 2023 were $49.9 million, compared with $45.6 million for the same period in 2022.

NOI for the quarter ended June 30, 2023 was $34.2 million compared with $31.8 million for the same period in 2022. Same store NOI (“SS NOI”) excluding early termination income – GAAP basis for the quarter ended June 30, 2023 was $30.5 million compared with $29.5 million for the same period in 2022, an increase of 3.5%. SS NOI excluding early termination income – Cash basis for the quarter ended June 30, 2023 was $29.8 million compared with $28.2 million for the same period in 2022, an increase of 6.0%. SS NOI for the second quarter was positively impacted by rent escalations and renewal and new leasing spreads. The same store portfolio is comprised of 183 buildings totaling 31.0 million square feet, or 90.5% of the Company’s total portfolio, and was 98.9% occupied as of June 30, 2023.

EBITDAre for the quarter ended June 30, 2023 was $30.4 million compared with $27.7 million for the same period in 2022.

Core FFO for the quarter ended June 30, 2023 was $19.9 million compared with $18.6 million for the same period in 2022, primarily as a result of the growth in same-store NOI, contribution from acquisitions and a decrease in preferred stock dividends resulting from the full conversion of the Series B Convertible Stock, partially offset by an increase in interest expense. The Company reported Core FFO for the quarter ended June 30, 2023 of $0.46 per weighted average common share and unit compared with $0.47 per weighted average common share and unit for the same period in 2022. Weighted average common shares and units outstanding for the second quarters ended June 30, 2023, and 2022 were 43.5 million and 39.9 million, respectively.

AFFO for the quarter ended June 30, 2023 was $18.5 million, or $0.42 per weighted average common share and unit, compared with $16.5 million, or $0.41 per weighted average common share and unit, for the same period in 2022. The results reflected the aforementioned changes in Core FFO and a reduction in recurring capital expenditures.

See “Non-GAAP Financial Measures” for complete definitions of NOI, EBITDAre, Core FFO and AFFO and the financial tables accompanying this press release for reconciliations of net income to NOI, EBITDAre, Core FFO and AFFO.

Liquidity and Capital Markets Activity
As of July 31, 2023, the Company’s current cash balance was approximately $12.4 million, excluding operating expense escrows of approximately $6.7 million, and it has approximately $287.5 million of capacity under the existing unsecured line of credit.

During the second quarter and to date in the third quarter, the Company issued approximately 1.2 million common shares through its ATM program at an average price of $23.05 per share, raising approximately $27.1 million in net proceeds.

On August 2, 2023, the Company announced that on September 6, 2023 it will redeem all of its outstanding 7.50% Series A Cumulative Redeemable Preferred Stock for a total redemption payment of $48.8 million. The Preferred Stock will be redeemed in cash at a redemption price equal to $25.00 per share. On September 6, 2023, a dividend in the amount of $0.34647 per share of Series A Preferred Stock will be paid in cash to holders of record at the close of business on August 25, 2023. On and after the redemption date, the shares of Series A Preferred Stock will no longer be deemed outstanding, and no further dividends will be declared or payable on them. Upon redemption, the shares of Preferred Stock will be delisted from trading on the American.

Investment Activity
As of June 30, 2023, the Company had real estate investments comprised of 210 industrial buildings totaling 34.2 million square feet.

Plymouth has three projects totaling 260,322 square feet remaining in the current phase of its development program with approximately 87% of the expected $23.9 million in development costs funded as of June 30, 2023. In Jacksonville, Florida, two industrial buildings totaling 80,322 square feet are expected to be completed in the third and fourth quarters of 2023. These buildings are fully leased. In Atlanta, a 180,000-square-foot industrial building is expected to be completed in the third quarter of 2023.

Leasing Activity
Leases commencing during the second quarter ended June 30, 2023 totaled an aggregate of 2,103,095 square feet, all of which are associated with terms of at least six months. The Company will experience a 19.3% increase in rental rates on a cash basis from these leases. These leases included 662,930 square feet of new leases with a 36.0% increase in rental rates on a cash basis and 1,440,165 square feet of renewal leases (11.4% of these leases were associated with contractual renewals) with an 11.2% increase in rental rates on a cash basis. Consistent with the Company’s full year 2023 forecast, occupancy was 98.0% and reflects budgeted roll-over that has been largely addressed as well as recent new developments now in service.

Through July 31, 2023, executed leases scheduled to commence in the second half of 2023 total an aggregate of 2,310,149 square feet, all of which are associated with terms of at least six months. The Company will experience a 23.1% increase in rental rates on a cash basis from these leases. These leases included 566,784 square feet of new leases with a 24.5% increase in rental rates on a cash basis and 1,743,365 square feet of renewal leases (7.0% of these leases were associated with contractual renewals) with a 22.6% increase in rental rates on a cash basis.

The Company has already leased 1,717,325 square feet of space that will commence during 2024, all of which are associated with terms of at least six months. The Company will experience a 14.6% increase in rental rates on a cash basis from these leases. These leases included 346,564 square feet of new leases with a 43.7% increase in rental rates on a cash basis and 1,370,761 square feet of renewal leases (52.7% of these leases were associated with contractual renewals) with an 8.7% increase in rental rates on a cash basis for these leases.

Quarterly Distributions to Stockholders

On July 31, 2023, the Company paid a regular quarterly common stock dividend of $0.225 per share for the second quarter of 2023 to stockholders of record on June 30, 2023.

On June 30, 2023, the Company paid a regular quarterly cash dividend of $0.46875 per share for the Preferred Stock for the second quarter of 2023 to stockholders of record on June 15, 2023.

Guidance for 2023
Plymouth affirmed its full year 2023 guidance ranges for Core FFO per weighted average common share and units previously issued on February 23, 2023 and adjusted its ranges for net loss per weighted average common share and units as well as several of its accompanying guidance assumptions, which can be found in the tables below.

Earnings Conference Call and Webcast

The live audio webcast of the Company’s quarterly conference call will be available online in the Investor Relations section of the Company’s website at ir.plymouthreit.com. The online replay will be available approximately one hour after the end of the call and archived for approximately 90 days.

About Plymouth
Plymouth Industrial REIT, Inc. (: PLYM) is a full service, vertically integrated real estate investment company focused on the acquisition, ownership and management of single and multi-tenant industrial properties. Our mission is to provide tenants with cost effective space that is functional, flexible and safe.

Forward-Looking Statements
This press release includes “forward-looking statements” that are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 and of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this release do not constitute guarantees of future performance. Investors are cautioned that statements in this press release, which are not strictly historical statements, including, without limitation, statements regarding management's plans, objectives and strategies, constitute forward-looking statements. Such forward-looking statements are subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those anticipated by the forward-looking statement, many of which may be beyond our control, including, without limitation, those factors described under the captions “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.