DALLAS, May 2, 2024
/PRNewswire/ -- NexPoint Real Estate Finance, Inc. ("NREF" or
the "Company") (NYSE: NREF) today reported its financial results
for the quarter ended March 31,
2024.
NREF reported a net loss of $(14.6)
million, or $(0.83) per
diluted share1, for the three months ended March 31, 2024.
NREF reported cash available for distribution2
of $14.9 million, or $0.60 per diluted share1, for the
three months ended March 31,
2024.
"Amid challenging conditions in the commercial real estate
market, NREF's portfolio remains a reliable source of stable and
defensive returns," commented Chief Investment Officer Matthew McGraner. He added, "NREF is actively
leveraging its core operating platforms to capitalize on market
dislocation."
First Quarter 2024 Highlights
- Outstanding total portfolio of $1.2
billion, composed of 90 investments3
- Single-family rental ("SFR"), multifamily, life sciences and
specialty manufacturing, and self-storage represent 21.9%, 64.6%,
11.4%, and 2.1% 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 86.6% and 1.74x3,
respectively
- As of May 1, 2024, there are no
loans currently in forbearance in our portfolio
- During 1Q 2024, NREF purchased a K – Series B-Piece with an
outstanding principal balance of $30.9MM with bond equivalent yield of 9.75%
- During 1Q 2024, NREF received $508.7MM from the redemption of one of our senior
loans and recognized $8.9MM in
aggregate prepayment penalties
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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 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 As
of March 31, 2024; and excluding the common stock investments,
preferred stock investment, the Hudson Montford and Alexander at
the District multifamily properties, 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.
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5 Net
income attributable to common stockholders in 2Q 2024 is estimated
to be between $7.4MM and $9.8MM. See reconciliations below.
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Looking Ahead: Second Quarter 2024
Guidance
Earnings Available for Distribution
- 2Q 2024 EAD per diluted common share guidance is $0.455 at the midpoint
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Low
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Mid
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High
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Jun. 30, 2024
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Jun. 30, 2024
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Jun. 30, 2024
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Net income attributable to common
stockholders
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$
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7,438
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$
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8,571
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$
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9,802
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Net income attributable to redeemable noncontrolling
interests
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1,749
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1,967
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2,186
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Adjustments
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Amortization of
stock-based compensation
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1,618
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1,618
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1,618
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EAD
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$
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10,805
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$
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12,156
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$
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13,606
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Weighted average common shares outstanding -
basic
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17,434
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17,434
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17,434
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Weighted average common shares outstanding -
diluted
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27,013
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27,013
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27,013
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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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0.45
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$
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0.50
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Cash Available for Distribution
- 2Q 2024 CAD per diluted common
share guidance is $0.405
at the midpoint
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Low
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Mid
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High
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Jun. 30, 2024
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Jun. 30, 2024
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Jun. 30, 2024
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EAD
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$
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10,805
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$
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12,156
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$
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13,606
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Adjustments
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Amortization of
premiums
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4,379
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4,379
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4,379
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Accretion of
discounts
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(6,794)
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(6,794)
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(6,794)
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Amortization and
depreciation
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1,055
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1,055
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1,055
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CAD
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$
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9,445
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$
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10,796
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$
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12,246
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Weighted average common shares outstanding -
basic
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17,434
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17,434
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17,434
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Weighted average common shares outstanding -
diluted
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27,013
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27,013
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27,013
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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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0.35
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$
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0.40
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$
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0.45
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Conference Call Details
The Company
is scheduled to host a conference call on Thursday, May 2, 2024, at 11:00 a.m. ET (10:00 a.m.
CT), to discuss first quarter 2024 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, May 9, 2024, 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 March
31,
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2024
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2023
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Net income (loss) attributable to common
stockholders
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$
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(14,286)
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$
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6,567
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Net income (loss) attributable to redeemable
noncontrolling interests
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(1,894)
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1,937
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Adjustments
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Amortization of
stock-based compensation
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1,798
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847
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Provision for
(reversal of) credit losses, net
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(420)
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(34)
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Equity in income
(losses) of equity method investments (1)
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2,000
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—
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Unrealized (gains) or
losses (2)
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1,351
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2,564
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EAD
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$
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(11,451)
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$
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11,881
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EPS per Diluted Weighted-Average
Share
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$
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(0.83)
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$
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0.37
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EAD per Diluted Weighted-Average Share
(3)
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$
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(0.46)
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$
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0.52
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Adjustments
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Amortization of
premiums
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$
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27,874
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$
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3,531
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Accretion of
discounts
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(3,880)
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(3,500)
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Depreciation and
amortization of real estate investment
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2,318
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476
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Amortization of
deferred financing costs
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12
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11
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CAD
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$
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14,873
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$
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12,399
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EPS per Diluted Weighted-Average
Share
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$
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(0.83)
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$
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0.37
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CAD per Diluted Weighted-Average Share
(3)
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$
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0.60
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$
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0.55
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Weighted-average common shares outstanding
– basic
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17,264
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17,118
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Weighted-average common shares outstanding
– diluted
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24,862
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22,678
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(1)
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Starting in the third
quarter of 2023, the Company has adjusted EAD to remove the
income/(losses) from equity method investments as they represent
changes in the equity value of our investment rather than
distributable earnings. The Company will include income from equity
method investments to the extent that we receive cash distributions
and upon realizing gains and/or losses.
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(2)
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Unrealized gains
represent the net change in unrealized gains on investments held at
fair value.
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(3)
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Q2 decrease from prior
2023 run rate attributable to $508.7 million SFR loan
repayment and timing adjustments for capital
redeployment.
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About NexPoint Real Estate Finance, Inc.
NexPoint Real Estate Finance, Inc., is a publicly traded
REIT, with its common stock and 8.50% Series A Cumulative
Redeemable Preferred Stock listed on the New York Stock Exchange,
primarily focused on originating, structuring and investing in
first-lien mortgage loans, mezzanine loans, preferred equity,
convertible notes, multifamily properties and common equity
investments, as well as multifamily and single-family 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", "believe," "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 and second quarter
2024 guidance, including net loss attributable to common
stockholders, EAD and CAD and related assumptions and estimates.
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. Starting in the
third quarter of 2023, the Company has adjusted EAD to remove the
income/(losses) from equity method investments as they represent
changes in the equity value of our investment rather than
distributable earnings. The Company will include income from equity
method investments to the extent that we receive cash distributions
and upon realizing gains and/or losses.
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. 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
Investor Relations
KThomas@nexpoint.com
Media: MediaRelations@nexpoint.com
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SOURCE NexPoint Real Estate Finance, Inc.