DALLAS, Nov. 2, 2023
/PRNewswire/ -- NexPoint Real Estate Finance, Inc. ("NREF" or the
"Company") (NYSE: NREF) today reported its financial results for
the quarter ended September 30,
2023.
NREF reported a net loss of $(15.4)
million, or $(0.82) per
diluted share1, for the three months ended September 30, 2023.
NREF reported cash available for distribution2 of
$10.8 million, or $0.47 per diluted share1, for the
three months ended September 30,
2023.
"NREF's portfolio continues to provide stable and defensive
yields despite a challenging commercial real estate
environment. We're pleased today to announce an offering of
up to 16,000,000 shares of NREF's 9.00% Series B Cumulative
Redeemable Preferred Stock," said Chief Investment Officer
Matthew McGraner. He added "We
continue to believe NREF will be able to offensively capitalize on
current market dislocation in multifamily, single-family rental,
life sciences, and self-storage sectors, all of which are sectors
in which we have robust operating platforms."
Third Quarter 2023 Highlights
- Outstanding total portfolio of $1.6
billion, composed of 89 investments3
- Single-family rental ("SFR"), multifamily, life sciences, and
self-storage represent 45.8%, 48.1%, 4.6%, and 1.5% of the
Company's debt portfolio, respectively
- Weighted-average loan to value ("LTV")4 and debt
service coverage ratio ("DSCR") on our SFR, CMBS, CMBS IO strips,
preferred, mezzanine, credit risk transfer and mortgage-backed
security investments are 69.0% and 1.77x3,
respectively
- As of November 1, 2023, there are
no loans currently in forbearance in our portfolio
- During 3Q 2023, NREF made follow on investments of $16.3MM to its existing preferred equity
investments with an all-in blended yield of 11.3%
- During 3Q 2023, NREF received $3.5MM and $44.8MM
in preferred equity and CMBS B-Piece redemptions, respectively
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1
|
Weighted-average
diluted shares outstanding assumes vesting of all outstanding
unvested restricted stock units and the conversion of all
redeemable non-controlling interests.
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|
2
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Earnings available for
distribution and cash available for distribution are non-GAAP
measures. For a discussion of why we consider these non-GAAP
measures useful and reconciliations of earnings available for
distribution and cash available for distribution to net income
(loss) attributable to common stockholders, see the
"Reconciliations of Non-GAAP Financial Measures" and "Non-GAAP
Financial Measures" sections of this release.
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|
3
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As of September 30,
2023; CMBS B-Pieces reflected on an unconsolidated
basis.
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4
|
Loan to value is
generally based on the initial loan amount divided by the as-is
appraised value as of the date the loan was originated or by the
current principal amount as of the date of the most recent as-is
appraised value. For our CMBS B-Pieces, LTV is based on the
weighted-average LTV of the underlying loan pool.
|
|
5
|
Net income attributable
to common stockholders in 4Q 2023 is estimated to be between $6.4MM
and $8.3MM. See reconciliations below.
|
Looking Ahead: Fourth Quarter 2023 Guidance
Earnings Available for Distribution
- 4Q 2023 EAD per diluted common share guidance is $0.455 at the midpoint
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Low
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Mid
|
|
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High
|
|
|
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Dec. 31,
2023
|
|
|
Dec. 31,
2023
|
|
|
Dec. 31,
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common stockholders
|
|
$
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6,385
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|
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$
|
7,348
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|
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$
|
8,311
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|
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Net income
attributable to redeemable noncontrolling interests
|
|
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1,565
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|
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1,757
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|
|
|
1,948
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Adjustments
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|
|
|
|
|
|
|
|
|
|
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Amortization of
stock-based compensation
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1,284
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1,284
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|
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1,284
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EAD
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$
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9,234
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$
|
10,389
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$
|
11,543
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|
|
|
|
|
|
|
|
|
|
|
|
|
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Weighted average
common shares outstanding - basic
|
|
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18,048
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|
|
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18,048
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|
|
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18,048
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Weighted average
common shares outstanding - diluted
|
|
|
23,086
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|
|
|
23,086
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|
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23,086
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|
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EPS per Diluted
Weighted Average Share
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$
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0.34
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$
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0.39
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$
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0.44
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EAD per Diluted
Weighted Average Share
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$
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0.40
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|
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$
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0.45
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$
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0.50
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Cash Available for Distribution
- 4Q 2023 CAD per diluted common
share guidance is $0.475
at the midpoint
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Low
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|
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Mid
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|
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High
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Dec. 31,
2023
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Dec. 31,
2023
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|
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Dec. 31,
2023
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|
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EAD
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$
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9,234
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$
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10,389
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$
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11,543
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Adjustments
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|
|
|
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|
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Amortization of
premiums
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3,530
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3,530
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3,530
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Accretion of
discounts
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(3,543)
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(3,543)
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(3,543)
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Amortization and
depreciation
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475
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475
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475
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CAD
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$
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9,696
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$
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10,851
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$
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12,005
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Weighted average
common shares outstanding - basic
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|
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18,048
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|
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18,048
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|
|
|
18,048
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|
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Weighted average
common shares outstanding - diluted
|
|
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23,086
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23,086
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23,086
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EPS per Diluted
Weighted Average Share
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$
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0.34
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$
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0.39
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$
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0.44
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CAD per Diluted
Weighted Average Share
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$
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0.42
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$
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0.47
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$
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0.52
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Conference Call Details
The Company is scheduled to
host a conference call on Thursday, November
2, 2023, at 11:00 a.m. ET
(10:00 a.m. CT), to discuss third
quarter 2023 financial results.
The conference call can be accessed live over the phone by
dialing 888-660-4430 or +1 646-960-0537 and entering Conference ID
6891136. A live audio webcast of the call will be available online
at the Company's website, https://nref.nexpoint.com (under
"Resources"). An online replay will be available shortly after the
call on the Company's website and continue to be available for 60
days.
A replay of the conference call will also be available through
Thursday, November 9, 2023, by
dialing 1 800- 770- 2030 or, for international callers, +1 647-
362- 9199 and entering passcode 6891136.
For additional commentary and portfolio information, please view
NREF's earning supplement, which was posted on the Company's
website, http://nref.nexpoint.com.
Reconciliations of Non-GAAP Financial Measures
The
following table provides a reconciliation of Earnings Available for
Distribution and Cash Available for Distribution to GAAP net income
attributable to common stockholders (in thousands, except per share
amounts):
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For the Three Months
Ended September 30,
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2023
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2022
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Net income (loss)
attributable to common stockholders
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$
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(14,186)
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$
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(8,059)
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Net income (loss)
attributable to redeemable noncontrolling interests
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(2,103)
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(1,509)
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Adjustments
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Amortization of
stock-based compensation
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1,285
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870
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Provision for
(reversal of) credit losses, net
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4,641
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—
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Equity in income
(losses) of equity method investments
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1,675
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—
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Unrealized (gains) or
losses (1)
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18,508
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|
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19,473
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EAD
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$
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9,820
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$
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10,775
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EPS per Diluted
Weighted-Average Share
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$
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(0.82)
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$
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(0.54)
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EAD per Diluted
Weighted-Average Share
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$
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0.43
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$
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0.48
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Adjustments
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|
|
|
|
|
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Amortization of
premiums
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$
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3,530
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$
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3,425
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Accretion of
discounts
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(3,038)
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(3,517)
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Depreciation and
amortization of real estate investment
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476
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545
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Amortization of
deferred financing costs
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(26)
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12
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CAD
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$
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10,762
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$
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11,240
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EPS per Diluted
Weighted-Average Share
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$
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(0.82)
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$
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(0.54)
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CAD per Diluted
Weighted-Average Share
|
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$
|
0.47
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$
|
0.50
|
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|
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|
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Weighted-average
common shares outstanding - basic
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17,232
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|
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14,962
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|
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Weighted-average
common shares outstanding - diluted
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|
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23,086
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22,678
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(1)
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Unrealized gains
represent the net change in unrealized gains on investments held at
fair value.
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About NexPoint Real Estate Finance, Inc.
NexPoint Real Estate Finance, Inc., is a publicly traded REIT,
with its shares of common stock and 8.50% Series A Cumulative
Redeemable Preferred Stock listed on the New York Stock Exchange
under the symbol "NREF" primarily focused on originating,
structuring and investing in first-lien mortgage loans, mezzanine
loans, preferred equity, convertible notes, multifamily properties
and common stock investments, as well as multifamily commercial
mortgage-backed securities securitizations, multifamily structured
credit risk notes and mortgage-backed securities. More information
about the Company is available at http://nref.nexpoint.com.
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995
that are based on management's current expectations, assumptions
and beliefs. Forward-looking statements can often be identified by
words such as "anticipate", "estimate", "expect," "intend," "may",
"should" and similar expressions, and variations or negatives of
these words. These forward-looking statements include, but are not
limited to, statements regarding the Company's business and
industry in general, fourth quarter 2023 guidance, including net
income attributable to common stockholders, EAD and CAD and related
assumptions and estimates, and that NREF will be able to
offensively capitalize on current market dislocation in
multifamily, single-family rental, life sciences and self-storage
sectors. They are not guarantees of future results and
forward-looking statements are subject to risks, uncertainties and
assumptions that could cause actual results to differ materially
from those expressed in any forward-looking statement, including
those described in greater detail in our filings with the
Securities and Exchange Commission, particularly those described in
our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
Readers should not place undue reliance on any forward-looking
statements and are encouraged to review the Company's Annual Report
on Form 10-K and the Company's other filings with the SEC for a
more complete discussion of risks and other factors that could
affect any forward-looking statement. The statements made herein
speak only as of the date of this press release and except as
required by law, the Company does not undertake any obligation to
publicly update or revise any forward-looking statements.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. A
"non-GAAP financial measure" is defined as a numerical measure of a
company's financial performance that excludes or includes amounts
so as to be different than the most directly comparable measure
calculated and presented in accordance with GAAP in the statements
of income, balance sheets or statements of cash flows of the
Company. The non-GAAP financial measures used within this press
release are earnings available for distribution ("EAD") and cash
available for distribution ("CAD").
EAD is defined as net income (loss) attributable to our common
stockholders computed in accordance with GAAP, including realized
gains and losses not otherwise included in net income (loss),
excluding any unrealized gains or losses or other similar non-cash
items that are included in net income (loss) for the applicable
reporting period, regardless of whether such items are included in
other comprehensive income (loss), or in net income (loss) and
adding back amortization of stock-based compensation. Net income
(loss) attributable to common stockholders may also be adjusted for
the effects of certain GAAP adjustments and transactions that may
not be indicative of our current operations. In addition, EAD in
this press release includes the dilutive effect of non-controlling
interests. We use EAD to evaluate our performance and to assess our
long-term ability to pay distributions. We believe providing EAD as
a supplement to GAAP net income (loss) to our investors is helpful
to their assessment of our performance and our long-term ability to
pay distributions. We also use EAD as a component of the management
fee paid to our manager. EAD does not represent net income or cash
flows from operating activities and should not be considered as an
alternative to GAAP net income, an indication of our GAAP cash
flows from operating activities, a measure of our liquidity or an
indication of funds available for our cash needs. Our computation
of EAD may not be comparable to EAD reported by other REITs.
We calculate CAD by adjusting EAD by adding back amortization of
premiums, depreciation and amortization of real estate investment
and amortization of deferred financing costs and by removing
accretion of discounts and non-cash items, such as stock dividends.
We use CAD to evaluate our performance and our current ability to
pay distributions. We also believe that providing CAD as a
supplement to GAAP net income (loss) to our investors is helpful to
their assessment of our performance and our current ability to pay
distributions. CAD does not represent net income or cash flows from
operating activities and should not be considered as an alternative
to GAAP net income, an indication of our GAAP cash flows from
operating activities, a measure of our liquidity or an indication
of funds available for our cash needs. Our computation of CAD may
not be comparable to CAD reported by other REITs.
Contact:
Kristen
Thomas
KThomas@nexpoint.com
Media: Pro-Nexpoint@prosek.com
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SOURCE NexPoint Real Estate Finance, Inc.