Clipper realty inc. announces fourth quarter and full-year 2020 results
New york--(business wire)--clipper realty inc. (nyse: clpr) (the “company”), a leading owner and operator of multifamily residential and commercial properties in the new york metropolitan area, today announced financial and operating results for the three months and year ended december 31, 2020. highlights for the three months and year ended december 31, 2020 achieved quarterly revenues of $30.3 million for the fourth quarter of 2020, and record annual revenues of $122.9 million for full-year 2020 achieved quarterly income from operations of $6.5 million for the fourth quarter of 2020 achieved quarterly net operating income (“noi”)1 of $14.7 million for the fourth quarter of 2020, and record annual noi of $63.6 million for full-year 2020 recorded quarterly net loss of $3.8 million for the fourth quarter of 2020 achieved quarterly adjusted funds from operations (“affo”)1 of $3.0 million for the fourth quarter of 2020 declared a dividend of $0.095 per share for the fourth quarter of 2020 david bistricer, co-chairman and chief executive officer, commented, “our operating trends are improving as new york city continues to recover from the depths of the covid-19 pandemic, highlighted by an increase in leasing activity. we anticipate such rental demand to accelerate, and pricing to improve, as vaccines are broadly administered and urban economic activity continues to strengthen. we continue to focus on efficiently operating our portfolio, with the safety of our tenants and employees our highest priority. despite the headwinds, our properties are 95% leased and our fourth quarter rent collection rate was over 95%. in addition, we refinanced our 141 livingston street property in february with a $100 million, ten-year interest-only loan at 3.21%, which is expected to reduce annual debt service by $1.3 million while adding approximately $22.6 million, before reserves, to our liquidity position. we have no debt maturities on any operating properties until 2027, providing further support in the current environment. we remain committed to executing our strategic initiatives to create long-term value.” financial results for the fourth quarter of 2020, revenues decreased by $0.3 million, or 1.0%, to $30.3 million, compared to $30.6 million for the fourth quarter of 2019; the change was primarily attributable to a decline in leased occupancy and residential rental rate at the tribeca house property, partially offset by the commencement of a new office lease at the 250 livingston street property during the third quarter of 2020. for full-year 2020, revenues increased by $6.7 million, or 5.8%, to $122.9 million, compared to $116.2 million for full-year 2019; the growth was primarily attributable to bringing the clover house property online during the third quarter of 2019 and the commencement of the new office lease at the 250 livingston street property, partially offset by a decline in leased occupancy and residential rental rate at the tribeca house property. for the fourth quarter of 2020, net loss was $3.8 million, or $0.10 per share, compared to net loss of $2.7 million, or $0.06 per share ($2.0 million, or $0.05 per share, excluding a non-recurring $0.7 million loss on extinguishment of debt), for the fourth quarter of 2019; the change, excluding the non-recurring item, was primarily attributable to the revenue change discussed above and higher property operating expenses (including an increase in the provision for bad debt), property taxes, insurance expense, depreciation and amortization expense and interest expense, partially offset by lower general and administrative expenses. for full-year 2020, net loss was $12.2 million, or $0.31 per share ($8.9 million, or $0.23 per share, excluding a non-recurring $0.8 million gain on termination of lease, a non-recurring $4.2 million loss on modification of debt and a non-recurring $0.1 million gain on involuntary conversion), compared to net loss of $4.1 million, or $0.11 per share ($1.7 million, or $0.06 per share, excluding a non-recurring $2.4 million loss on extinguishment of debt), for full-year 2019; the change, excluding the non-recurring items, was primarily attributable to the revenue increase discussed above, offset by higher property operating expenses (including an increase in the provision for bad debt), property taxes, insurance expense, depreciation and amortization expense, and general and administrative expenses (each such expense inclusive of the impact of bringing the clover house property online), and higher interest expense primarily resulting from the refinancing of the flatbush gardens property in may 2020 and the recognition of interest expense in connection with bringing the clover house property online. for the fourth quarter of 2020, affo was $3.0 million, or $0.07 per share, compared to $5.3 million, or $0.12 per share, for the fourth quarter of 2019; the change was primarily attributable to the revenue change discussed above and higher property operating expenses (including an increase in the provision for bad debt), property taxes, insurance expense and interest expense. for full-year 2020, affo was $16.8 million, or $0.38 per share, compared to $22.0 million, or $0.50 per share, for full-year 2019; the change was primarily attributable to the revenue increase discussed above, offset by higher property operating expenses (including an increase in the provision for bad debt), property taxes, insurance expense, recurring cash general and administrative expenses, and interest expense. balance sheet at december 31, 2020, notes payable (excluding unamortized loan costs) was $1,089.7 million, compared to $1,009.4 million at december 31, 2019; the increase primarily reflected the refinancing of the flatbush gardens property in may 2020, partially offset by scheduled principal amortization. the company repurchased approximately 1.71 million shares of common stock during the fourth quarter at a weighted average price of $5.70 per share, including approximately 1.67 million shares from indaba capital management, l.p., under its $10.0 million stock repurchase program announced in august 2020. the company completed the stock repurchase program in november 2020. 141 livingston street refinancing on february 18, 2021, the company refinanced the debt on its 141 livingston street property with a $100 million, ten-year secured first mortgage loan with citi real estate funding inc. the loan bears interest at 3.21% and requires interest-only payments for the entire term, which is expected to reduce annual debt service by $1.3 million. with the proceeds, the company repaid the $74 million amortizing loan on the property due june 2028, which bore interest at 3.875% through may 2023. net remaining proceeds of $22.6 million, before reserves, increased the company’s cash position. dividend the company today declared a fourth quarter dividend of $0.095 per share, the same amount as last quarter, to shareholders of record on march 26, 2021, payable march 31, 2021. restatement as previously disclosed, the company concluded that the previously issued unaudited consolidated financial statements covering each of the company’s first three quarters of 2020 (collectively, the “restated periods”), require restatement and should no longer be relied upon. for additional information, please see note 14 to the consolidated financial statements in our annual report on form 10-k for the year ended december 31, 2020. the company will file amended quarterly reports on form 10-q for each of the restated periods. conference call and supplemental material the company will host a conference call on march 17, 2021, at 11:00 am eastern time to discuss the fourth quarter 2020 results and provide a business update. the conference call can be accessed by dialing (800) 346-7359 or (973) 528-0008, conference entry code 972054. a replay of the call will be available from march 17, 2021, following the call, through march 31, 2021, by dialing (800) 332-6854 or (973) 528-0005, replay conference id 972054. supplemental data to this press release can be found under the “quarterly earnings” navigation tab on the “investors” page of our website at www.clipperrealty.com. the company’s filings with the securities and exchange commission (the “sec”) are filed at www.sec.gov under clipper realty inc. about clipper realty inc. clipper realty inc. (nyse: clpr) is a self-administered and self-managed real estate company that acquires, owns, manages, operates and repositions multifamily residential and commercial properties in the new york metropolitan area, with a portfolio in manhattan and brooklyn. for more information on the company, please visit www.clipperrealty.com. forward-looking statements various statements contained in this press release, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. these forward-looking statements may include estimates concerning capital projects and the success of specific properties. our forward-looking statements are generally accompanied by words such as "estimate," "project," "predict," "believe," "expect," "intend," "anticipate," "potential," "plan" or other words that convey the uncertainty of future events or outcomes. the forward-looking statements in this press release speak only as of the date of this press release. we disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly. we have based these forward-looking statements on our current expectations and assumptions about future events. while our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties (including uncertainties regarding the ongoing impact of the covid-19 pandemic, and measures intended to curb its spread, on our business, our tenants and the economy generally), most of which are difficult to predict and many of which are beyond our control and which may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements. for a discussion of these and other important factors that could affect our actual results, please refer to our filings with the sec, including the "risk factors" section of our annual report on form 10-k for the year ended december 31, 2020, and other reports filed from time to time with the sec. 1 noi and affo are non-gaap financial measures. for a definition of these financial measures and a reconciliation of such measures to the most comparable gaap measures, see “reconciliation of non-gaap measures” at the end of this release. clipper realty inc. consolidated balance sheets (in thousands, except for share and per share data) $ 540,859 $ 540,859 630,662 602,547 3,121 3,051 12,217 11,707 36,118 31,787 1,222,977 1,189,951 (132,479 ) (109,418 ) 1,090,498 1,080,533 72,058 42,500 16,974 14,432 7,002 4,187 2,454 1,274 7,720 8,782 11,160 14,499 $ 1,207,866 $ 1,166,207 $ 1,079,458 $ 997,903 11,725 13,029 6,983 7,570 157 1,625 5,429 4,297 1,103,752 1,024,424 - - 160 178 87,347 93,431 (48,045 ) (36,375 ) 39,462 57,234 64,652 84,549 104,114 141,783 $ 1,207,866 $ 1,166,207 clipper realty inc. consolidated statements of operations (in thousands, except per share data) three months ended december 31, year ended december 31, 2020 2019 2020 2019 (unaudited) (unaudited) $ 21,198 $ 23,351 $ 90,543 $ 87,386 9,139 7,276 32,307 28,779 30,337 30,627 122,850 116,165 8,008 7,220 29,902 28,887 7,181 6,788 28,286 24,966 2,404 3,016 9,728 9,167 6,266 5,581 23,630 19,649 23,859 22,605 91,546 82,669 - - 838 - 6,478 8,022 32,142 33,496 (10,254 ) (10,011 ) (40,228 ) (35,187 ) - (661 ) (4,228 ) (2,432 ) - - 85 - (3,776 ) (2,650 ) (12,229 ) (4,123 ) 2,283 1,579 7,323 2,458 $ (1,493 ) $ (1,071 ) $ (4,906 ) $ (1,665 ) $ (0.10 ) $ (0.06 ) $ (0.31 ) $ (0.11 ) 17,080 17,815 17,629 17,814 26,317 26,317 26,317 26,317 43,397 44,132 43,946 44,131 clipper realty inc. consolidated statements of cash flows (in thousands) year ended december 31, 2020 2019 $ (12,229 ) $ (4,123 ) 23,148 18,956 1,212 1,687 963 1,175 (390 ) (1,180 ) 4,228 2,432 (85 ) - (838 ) - (1,180 ) 1,211 1,805 1,510 2,543 - (5,358 ) (607 ) 3,228 (1,256 ) (1,602 ) 2,586 (587 ) 933 1,132 448 15,990 23,772 (31,811 ) (43,774 ) 111 - (14 ) - - (31,129 ) (31,714 ) (74,903 ) (10,002 ) - (249,630 ) (142,638 ) 329,919 226,457 (17,243 ) (17,089 ) (5,220 ) (4,531 ) 47,824 62,199 32,100 11,068 56,932 45,864 $ 89,032 $ 56,932 $ 42,500 $ 37,028 14,432 8,836 $ 56,932 $ 45,864 $ 72,058 $ 42,500 16,974 14,432 $ 89,032 $ 56,932 $ 39,592 $ 33,956 1,060 956 4,189 3,891 clipper realty inc. reconciliation of non-gaap measures (in thousands, except per share data) (unaudited) non-gaap financial measures we disclose and discuss funds from operations (“ffo”), adjusted funds from operations (“affo”), adjusted earnings before interest, income taxes, depreciation and amortization (“adjusted ebitda”) and net operating income (“noi”), all of which meet the definition of “non-gaap financial measures” set forth in item 10(e) of regulation s-k promulgated by the sec. while management and the investment community in general believe that presentation of these measures provides useful information to investors, neither ffo, affo, adjusted ebitda, nor noi should be considered as an alternative to net income (loss) or income from operations as an indication of our performance. we believe that to understand our performance further, ffo, affo, adjusted ebitda, and noi should be compared with our reported net income or income from operations and considered in addition to cash flows computed in accordance with gaap, as presented in our consolidated financial statements. funds from operations and adjusted funds from operations ffo is defined by the national association of real estate investment trusts (“nareit”) as net income (computed in accordance with gaap), excluding gains (or losses) from sales of property and impairment adjustments, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. our calculation of ffo is consistent with ffo as defined by nareit. affo is defined by us as ffo excluding amortization of identifiable intangibles incurred in property acquisitions, straight-line rent adjustments to revenue from long-term leases, amortization costs incurred in originating debt, interest rate cap mark-to-market adjustments, amortization of non-cash equity compensation, acquisition and other costs, loss on modification/extinguishment of debt, gain on involuntary conversion, gain on termination of lease and non-recurring litigation-related expenses, less recurring capital spending. historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. in fact, real estate values have historically risen or fallen with market conditions. ffo is intended to be a standard supplemental measure of operating performance that excludes historical cost depreciation and valuation adjustments from net income. we consider ffo useful in evaluating potential property acquisitions and measuring operating performance. we further consider affo useful in determining funds available for payment of distributions. neither ffo nor affo represent net income or cash flows from operations computed in accordance with gaap. you should not consider ffo and affo to be alternatives to net income (loss) as reliable measures of our operating performance; nor should you consider ffo and affo to be alternatives to cash flows from operating, investing or financing activities (computed in accordance with gaap) as measures of liquidity. neither ffo nor affo measure whether cash flow is sufficient to fund all of our cash needs, including principal amortization, capital improvements and distributions to stockholders. ffo and affo do not represent cash flows from operating, investing or financing activities computed in accordance with gaap. further, ffo and affo as disclosed by other reits might not be comparable to our calculations of ffo and affo. the following table sets forth a reconciliation of ffo and affo for the periods presented to net loss, computed in accordance with gaap (amounts in thousands): three months ended december 31, year ended december 31, 2020 2019 2020 2019 $ (3,776 ) $ (2,650 ) $ (12,229 ) $ (4,123 ) 6,266 5,581 23,630 19,649 $ 2,490 $ 2,931 $ 11,401 $ 15,526 $ 2,490 $ 2,931 $ 11,401 $ 15,526 121 121 481 482 (32 ) (100 ) (390 ) (1,180 ) (494 ) 211 (1,180 ) 1,211 302 424 1,212 1,687 556 325 1,805 1,510 - 661 4,228 2,432 - - (85 ) - - - (838 ) - 114 879 724 966 (72 ) (188 ) (514 ) (593 ) $ 2,985 $ 5,264 $ 16,844 $ 22,041 $ 0.07 $ 0.12 $ 0.38 $ 0.50 adjusted earnings before interest, income taxes, depreciation and amortization we believe that adjusted ebitda is a useful measure of our operating performance. we define adjusted ebitda as net income (loss) before allocation to non-controlling interests, plus real estate depreciation and amortization, amortization of identifiable intangibles, straight-line rent adjustments to revenue from long-term leases, amortization of non-cash equity compensation, interest expense (net), acquisition and other costs, loss on modification/extinguishment of debt and non-recurring litigation-related expenses, less gain on involuntary conversion and gain on termination of lease. we believe that this measure provides an operating perspective not immediately apparent from gaap income from operations or net income (loss). we consider adjusted ebitda to be a meaningful financial measure of our core operating performance. however, adjusted ebitda should only be used as an alternative measure of our financial performance. further, other reits may use different methodologies for calculating adjusted ebitda, and accordingly, our adjusted ebitda may not be comparable to that of other reits. the following table sets forth a reconciliation of adjusted ebitda for the periods presented to net loss, computed in accordance with gaap (amounts in thousands): three months ended december 31, year ended december 31, 2020 2019 2020 2019 $ (3,776 ) $ (2,650 ) $ (12,229 ) $ (4,123 ) 6,266 5,581 23,630 19,649 121 121 481 482 (32 ) (100 ) (390 ) (1,180 ) (494 ) 211 (1,180 ) 1,211 556 325 1,805 1,510 10,254 10,011 40,228 35,187 - 661 4,228 2,432 - - (85 ) - - - (838 ) - 114 879 724 966 $ 13,009 $ 15,039 $ 56,374 $ 56,134 net operating income we believe that noi is a useful measure of our operating performance. we define noi as income from operations plus real estate depreciation and amortization, general and administrative expenses, acquisition and other costs, amortization of identifiable intangibles and straight-line rent adjustments to revenue from long-term leases, less gain on termination of lease. we believe that this measure is widely recognized and provides an operating perspective not immediately apparent from gaap income from operations or net income (loss). we use noi to evaluate our performance because noi allows us to evaluate the operating performance of our company by measuring the core operations of property performance and capturing trends in rental housing and property operating expenses. noi is also a widely used metric in valuation of properties. however, noi should only be used as an alternative measure of our financial performance. further, other reits may use different methodologies for calculating noi, and accordingly, our noi may not be comparable to that of other reits. the following table sets forth a reconciliation of noi for the periods presented to income from operations, computed in accordance with gaap (amounts in thousands): three months ended december 31, year ended december 31, 2020 2019 2020 2019 $ 6,478 $ 8,022 $ 32,142 $ 33,496 6,266 5,581 23,630 19,649 2,404 3,016 9,728 9,167 121 121 481 482 (32 ) (100 ) (390 ) (1,180 ) (494 ) 211 (1,180 ) 1,211 - - (838 ) - $ 14,743 $ 16,851 $ 63,573 $ 62,825
