Montag, 27.01.2020 12:05 von PR Newswire | Aufrufe: 618

Tanger Reports Fourth Quarter And Full Year Results

Eine Tageszeitung (Symbolbild). pixabay.com

PR Newswire


GREENSBORO, N.C., Jan. 27, 2020 /PRNewswire/ -- Tanger Factory Outlet Centers, Inc. (NYSE:SKT) today reported financial and operating results for the three months and year ended December 31, 2019.

Fourth Quarter Results

  • Net loss available to common shareholders was $0.13 per share, or $12.1 million, compared to net income available to common shareholders of $0.21 per share, or $19.4 million, for the prior year period. The current year period is inclusive of a $0.04 per share dilutive impact related to assets sold in March 2019, net of interest expense savings related to the use of proceeds. The current year period was also impacted by a non-cash impairment charge totaling $37.6 million, or $0.39 per share, related to the Company's outlet center in Jeffersonville, Ohio. The prior year period was impacted by a non-cash impairment charge related to certain assets in a Canadian unconsolidated joint venture totaling $7.2 million, or $0.07 per share.
  • Funds from operations ("FFO") and adjusted funds from operations ("AFFO") available to common shareholders were both $0.59 per share, or $57.5 million, compared to $0.64 per share, or $63.1 million, for the prior year period. The current year period is inclusive of a $0.04 per share dilutive impact related to the asset sales discussed above.

Full Year Results

  • Net income available to common shareholders was $0.93 per share, or $86.5 million, compared to $0.45 per share, or $42.4 million, for the prior year. The current year is inclusive of a $0.38 per share accretive impact related to the asset sales, net of interest expense savings, discussed above, including a gain on the sale of four outlet centers totaling $43.4 million, or $0.44 per share. The current and prior years were impacted by non-cash impairment charges totaling $37.6 million, or $0.39 per share, and $56.9 million, or $0.58 per share, respectively.
  • FFO available to common shareholders was $2.27 per share, or $221.7 million, compared to $2.48 per share, or $243.3 million, for the prior year. The current year period is inclusive of an $0.11 per share dilutive impact related to the asset sales, net of interest expense savings, discussed above.
  • AFFO available to common shareholders was $2.31 per share, or $226.1 million, compared to $2.48 per share, or $243.3 million, for the prior year. AFFO excludes certain items that the Company does not consider indicative of its ongoing operating performance. The current year is inclusive of an $0.11 per share dilutive impact related to the asset sales, net of interest expense savings, discussed above and excludes $4.4 million, or $0.04 per share, of general and administrative expense for the accelerated recognition of compensation cost related to the retirement of an executive officer.

FFO and AFFO are widely accepted supplemental non-GAAP financial measures used in the real estate industry to measure and compare the operating performance of real estate companies. A complete reconciliation containing adjustments from GAAP net income to FFO and AFFO are included in this release. Per share amounts for net income, FFO and AFFO are on a diluted basis.

"Better than anticipated performance in the fourth quarter and throughout 2019 enabled us to surpass our expectations," said Steven B. Tanger, Chief Executive Officer. "With strong leasing execution, we ended the year with consolidated portfolio occupancy above that of the prior year at 97.0%, contributing to better than expected same center net operating income. Increases in traffic and sales validate consumers' ongoing desire for the best brands, prices and shopping experience at Tanger Outlets."

"As we enter 2020, we are focused on building on last year's leasing success, as we believe this is the fastest way to restore internal growth. Maintaining strong occupancy remains our top priority as our team works to overcome the challenges associated with the recapture of space due to both previously announced closures and any additional space that could come back from ongoing negotiations with select tenants. Along with leasing, we will also continue to focus on our strategic marketing efforts to further increase traffic and shopper engagement. However, releasing the recaptured space will take time. While we anticipate potential near-term occupancy and rent pressure, we plan to lease strategically to upgrade our tenancy and the consumer experience in order to drive long-term growth. Brand name retailers remain committed to the outlet distribution channel and continue to benefit from our value proposition, including our low cost of occupancy," Mr. Tanger added.

Operating Metrics

Kurse

  
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Tanger Outlet Chart

The Company's key portfolio results were as follows:

  • Consolidated portfolio occupancy rate was 97.0% on December 31, 2019, compared to 95.9% on September 30, 2019 and 96.8% on December 31, 2018
  • Blended average rental rates increased 2.7% on a straight-line basis and decreased 1.3% on a cash basis for all renewals and re-tenanted leases that commenced during the trailing twelve months ended December 31, 2019
  • Lease termination fees totaled $1.6 million for 2019, including $0.1 million for the fourth quarter of 2019, compared to $1.2 million for 2018, including $0.1 million for the fourth quarter of 2018
  • Same center net operating income ("Same Center NOI") for the consolidated portfolio decreased 0.4% for the quarter and 0.7% for the full year due primarily to the impact of tenant bankruptcies, lease modifications and store closures
  • Average tenant sales productivity for the consolidated portfolio was $395 per square foot for the twelve months ended December 31, 2019, compared to $385 per square foot in the comparable prior year period
  • Same center tenant sales performance for the overall portfolio increased 1.5% for the twelve months ended December 31, 2019 compared to the twelve months ended December 31, 2018
  • Occupancy cost ratio for the trailing twelve months ended December 31, 2019 was 10.0%

Same Center NOI is a supplemental non-GAAP financial measure of operating performance. A complete definition of Same Center NOI and a reconciliation to the nearest comparable GAAP measure is included in this release.

Leasing Activity

Total commenced leases for the trailing twelve months ended December 31, 2019 that were renewed or re-leased for all terms included 337 leases, totaling approximately 1.5 million square feet.

As of January 22, 2020, Tanger had lease renewals executed or in process for 45.8% of the space in the consolidated portfolio scheduled to expire during 2020 compared to 58.6% of the space scheduled to expire during 2019 that was executed or in process as of January 31, 2019.

Tanger recaptured approximately 198,000 square feet within its consolidated portfolio during 2019 related to bankruptcies and brand-wide restructurings by retailers, including 3,000 square feet in the fourth quarter. During 2018, approximately 126,000 square feet were recaptured, including 3,000 square feet during the fourth quarter.

Dividend Increase

In January 2020, the Company's Board of Directors approved a 0.7%, or $0.01 per share, increase in the annualized dividend on its common shares to $1.43 per share and simultaneously declared a quarterly dividend of $0.3575 per share for the first quarter ended March 31, 2020. This cash dividend will be payable on May 15, 2020 to holders of record on April 30, 2020. Since becoming a public company in May 1993, the Company has paid a cash dividend each quarter and has increased its dividend each year, putting it among a very small group of equity REITs to achieve such a milestone.

Balance Sheet and Capital Market Activity

As of December 31, 2019:

  • Total enterprise value was $3.0 billion
  • Total outstanding floating rate debt was approximately $11 million, representing less than 1% of both total consolidated debt outstanding and total enterprise value
  • Unused capacity under the Company's $600 million unsecured lines of credit was nearly 100%, or $599.8 million
  • Weighted average interest rate was 3.5% and weighted average term to maturity of outstanding consolidated debt, including extension options, was approximately 5.5 years
  • Approximately 94% of the Company's consolidated square footage was unencumbered by mortgages
  • Interest coverage ratio was 4.3 times for 2019
  • FAD payout ratio was 70% for 2019

FAD payout ratio is a supplemental non-GAAP financial measure of operating performance. A definition of FAD payout ratio is included in this release.

Tanger has reduced its outstanding consolidated debt by $143.1 million since December 31, 2018.

During 2019, the Company repurchased approximately 1,209,000 common shares for total consideration of approximately $20.0 million. As of December 31, 2019, $80.0 million remains under the current repurchase authorization, which is valid through May 2021.

Guidance for 2020

Based on the Company's internal budgeting process and its view on current market conditions, management currently believes the Company's net income and FFO per share for 2020 will be as follows:

For the year ended December 31, 2020:




Low Range

High Range

Estimated diluted net income per share

$0.65

$0.73

Depreciation and amortization of real estate assets - consolidated and the Company's share of unconsolidated joint ventures

1.31

1.31

Estimated diluted FFO per share

$1.96

$2.04





Tanger's estimates reflect the following key assumptions:

  • Same Center NOI guidance for the consolidated portfolio between (6.75)% and (8.25)%, which reflects the following:
    • Approximately (0.7%) impact related to the Jeffersonville, Ohio property, for which the Company recorded a significant impairment as discussed above
    • Projected average occupancy for the year is expected to be between 92% and 93%
    • Projected store closures related to tenant bankruptcies and restructurings
      • 303,000 square feet of known closures related to all of the Dressbarn and Kitchen Collection stores and certain Forever 21 and Destination Maternity stores that all closed in January and which, if not released, would represent 350 basis points of Same Center NOI (27,000 square feet and 10 basis points attributable to the Jeffersonville, Ohio property)
      • 322,000 to 372,000 square feet of potential additional closures that are unknown or unresolved at this time
  • Projected full-year lease termination fees (which are not included in Same Center NOI) of approximately $1.5 million for the consolidated portfolio
  • Annual general and administrative expense of between $48.0 million and $50.0 million
  • Annual consolidated portfolio interest expense of $59.5 million to $60.0 million
  • The Company's share of annual interest expense in the unconsolidated portfolio of $7.2 million to $7.6 million
  • 2020 weighted average diluted common shares of approximately 92.5 million for earnings per share and 97.5 million for FFO per share
  • Combined annual recurring capital expenditures and second generation tenant allowances of approximately $44 million to $48 million
  • Does not include the impact of any financing activity, the sale of any outparcels, properties or joint venture interests, or the acquisition of any properties or joint venture partner interests

The following table provides a bridge from the Company's 2019 actual FFO per diluted share to the low and high ranges of the Company's 2020 diluted FFO per share guidance:



Low Range

High Range

2019 diluted FFO per share

$2.27

$2.27

2019 compensation related to executive officer retirement

0.04

0.04

2019 diluted AFFO per share

2.31

2.31

Same Center NOI decline

(0.26)

(0.22)

Dilutive impact of 2019 asset sales

(0.04)

(0.04)

Change in general and administrative expense

(0.01)

0.01

Decreased interest expense, including approximately $0.01 at the joint venture level

0.03

0.03

Net decline in non-cash rents (1)

(0.07)

(0.05)

Estimated 2020 diluted FFO per share

$1.96

$2.04

 

(1)  Includes straight-line and market rent adjustments

Fourth Quarter and Full Year Conference Call

Tanger will host a conference call to discuss its fourth quarter and full year results for analysts, investors and other interested parties on Monday, January 27, 2020, at 8:30 a.m. Eastern Time. To access the conference call, listeners should dial 1-877-277-5113 and provide conference ID # 8599609 to be connected to the Tanger Factory Outlet Centers Fourth Quarter 2019 Financial Results call. Alternatively, a live audio webcast of this call will be available to the public on Tanger's Investor Relations website, investors.tangeroutlets.com, hosted by S&P Global Market Intelligence. A telephone replay of the call will be available from January 27, 2020 at 11:30 a.m. through February 3, 2020 at 11:59 p.m. by dialing 1-855-859-2056, conference ID # 8599609. An online archive of the webcast will also be available through February 3, 2020.

Tanger Outlets. (PRNewsFoto/Tanger Factory Outlet Centers, Inc.)

About Tanger Factory Outlet Centers, Inc.

Tanger Factory Outlet Centers, Inc. (NYSE: SKT), is a publicly-traded REIT headquartered in Greensboro, North Carolina that presently operates and owns, or has an ownership interest in, a portfolio of 39 upscale outlet shopping centers. Tanger's operating properties are located in 20 states and in Canada, totaling approximately 14.3 million square feet, leased to over 2,800 stores which are operated by more than 510 different brand name companies. The Company has more than 39 years of experience in the outlet industry. Tanger Outlet Centers continue to attract more than 181 million visitors annually. Tanger is furnishing a Form 8-K with the Securities and Exchange Commission that includes a supplemental information package for the quarter and year ended December 31, 2019. For more information on Tanger Outlet Centers, call 1-800-4TANGER or visit the Company's website at www.tangeroutlets.com.

Safe Harbor Statement

This news release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with the safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe the Company's future plans, strategies and expectations, are generally identifiable by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," "will," "forecast" or similar expressions, and include the Company's expectations regarding its financial results and the assumptions used to forecast such expected results, our leasing strategy and value proposition to retailers, occupancy and rent pressures, marketing programs, uses of capital, liquidity, dividend payments, cash flows, filling vacant space and share repurchases.

You should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other important factors which are, in some cases, beyond our control and which could materially affect our actual results, performance or achievements. Important factors which may cause actual results to differ materially from current expectations include, but are not limited to: our inability to develop new outlet centers or expand existing outlet centers successfully; risks related to the economic performance and market value of our outlet centers; the relative illiquidity of real property investments; impairment charges affecting our properties; our dispositions of assets may not achieve anticipated results; competition for the acquisition and development of outlet centers, and our inability to complete outlet centers we have identified; the bankruptcy of one or more of the retailers in our centers; the fact certain of our lease agreements include co-tenancy and/or sales-based provisions that may allow a tenant to pay reduced rent and/or terminate a lease prior to its natural expiration; environmental regulations affecting our business; risks associated with possible terrorist activity or other acts or threats of violence and threats to public safety; our dependence on rental income from real property; our dependence on the results of operations of our retailers; the fact that certain of our properties are subject to ownership interests held by third parties, whose interests may conflict with ours; risks related to uninsured losses; the risk that consumer, travel, shopping and spending habits may change; risks associated with our Canadian investments; risks associated with attracting and retaining key personnel; risks associated with debt financing; risks associated with our guarantees of debt for, or other support we may provide to, joint venture properties; the effectiveness of our interest rate hedging arrangements; uncertainty relating to the potential phasing out of LIBOR; our potential failure to qualify as a REIT; our legal obligation to make distributions to our shareholders; legislative or regulatory actions that could adversely affect our shareholders, including the recent changes in the U.S. federal income taxation of U.S. businesses; our dependence on distributions from the Operating Partnership to meet our financial obligations, including dividends; the risk of a cyber-attack or an act of cyber-terrorism and other important factors set forth under Item 1A - "Risk Factors" in the Company's and the Operating Partnership's Annual Report on Form 10-K for the year ended December 31, 2018, as may be updated or supplemented in the Company's Quarterly Reports on Form 10-Q and the Company's other filings with the SEC. Accordingly, there is no assurance that the Company's expectations will be realized. The Company disclaims any intention or obligation to update the forward-looking statements, whether as a result of new information, future events or otherwise. You are advised to refer to any further disclosures the Company makes or related subjects in the Company's Current Reports on Form 8-K that the Company files with the SEC.

Investor Contact Information




Cyndi Holt                                                            

Jim Williams

VP, Investor Relations                                          

EVP & CFO

336-834-6892                                                      

336-834-6800                                                                                                                  

cyndi.holt@tangeroutlets.com                               

jim.williams@tangeroutlets.com



Media Contact Information




Quentin Pell


VP, Corporate Communications and Enterprise Risk Management


336-834-6827                                                        


quentin.pell@tangeroutlets.com                             


               

 

TANGER FACTORY OUTLET CENTERS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(Unaudited)






Three months ended


Year ended


December 31,

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