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MD

Medalist Diversified REIT, Inc. (MDRR)·Q4 2022 Earnings Summary

Executive Summary

  • FY 2022 reported with operating loss of $1.41M vs operating income of $0.81M in FY 2021; NOI rose 6.8% to $6.88M and FFO turned positive to $0.997M, reflecting portfolio repositioning toward retail/flex and disposal of hotel assets .
  • Same-property NOI increased 7.9%; year-end occupancy reached 96.0% with WALT of 3.9 years, supported by necessity-based tenants and resilient leasing .
  • The Board formed a Special Committee to explore strategic alternatives (including asset sales or combinations), a potential stock reaction catalyst for value realization .
  • Q4 dividend of $0.01 per common share was paid on Jan 27, 2023 (seventh consecutive quarter); dividends for FY 2022 totaled $0.07 per share .
  • Wall Street consensus (S&P Global) for Q4 2022 EPS and revenue was unavailable at time of query; estimate-beat/miss analysis cannot be performed due to data unavailability [GetEstimates error].

What Went Well and What Went Wrong

What Went Well

  • NOI rose 6.8% YoY to $6.88M and same-property NOI grew 7.9%, demonstrating underlying rental strength in retail/flex .
  • FFO improved by $1.97M to $0.997M in FY 2022, turning positive versus FY 2021, aided by portfolio mix shift and disciplined operations .
  • Occupancy increased to 96.0% at year-end with robust leasing and anchor tenant stability; management emphasized recession-resistant profile of necessity-based centers .

What Went Wrong

  • Total revenue fell 3.3% YoY to $11.09M, primarily due to hotel asset dispositions driving a $3.13M decline in hotel revenues .
  • FY 2022 net loss attributable to common shareholders widened to $(4.77)M and operating swung to a loss, reflecting higher depreciation/amortization and interest expense on a larger property base .
  • AFFO declined to $0.241M from $0.333M, pressured by capital expenditures and non-cash adjustments, which dampened distributable cash metrics .

Financial Results

Annual Performance (FY 2021 → FY 2022)

MetricFY 2021FY 2022
Total Revenue ($USD)$11,472,549 $11,091,325
Operating Income (Loss) ($USD)$814,504 $(1,413,626)
Net Loss Attributable to Common ($USD)$(4,364,264) $(4,769,241)
Loss per Share (Basic/Diluted) ($)$(0.33) $(0.28)
NOI ($USD)$6,443,860 $6,884,918
EBITDA ($USD)$4,536,012 $4,325,620
FFO ($USD)$(974,219) $997,253
AFFO ($USD)$332,514 $241,024
Dividends per Common Share ($)$0.04 $0.07

Quarterly Trend (Q2 2022 → Q3 2022)

Note: The company furnished FY 2022 results; Q4 2022 standalone quarterly line items were not provided. Quarterly trends are shown through Q3 2022.

MetricQ2 2022Q3 2022
Total Revenue ($USD)$2,595,901 $2,841,073
Loss per Share (Basic/Diluted) ($)$(0.06) $(0.10)
NOI ($USD)$1,614,861 $1,488,336
EBITDA ($USD)$1,120,130 $1,003,820
FFO ($USD)$284,191 $96,382
AFFO ($USD)$127,673 $(241,602)
Dividends per Common Share ($)$0.02 $0.02

Segment Revenue Breakdown (FY 2022)

SegmentFY 2021 Revenue ($USD)FY 2022 Revenue ($USD)
Retail Centers$5,634,396 $7,053,757
Flex Centers$1,202,822 $2,529,919
Hotel Rooms$4,590,372 $1,494,836
Hotel Other$44,959 $12,813
Total$11,472,549 $11,091,325

KPIs

KPIQ2 2022Q3 2022FY 2022
Occupancy (%)96.4% (retail+flex portfolio incl. Salisbury) 96.5% 96.0%
WALT (Years)4.27 (Retail+Flex avg) 4.11 (Retail+Flex avg) 3.91 (Retail+Flex avg)
Weighted Avg Mortgage Maturity (Years)5.89 6.33 6.08
Weighted Avg Mortgage Interest Rate (%)4.4% 4.04% 4.2%

Guidance Changes

The company did not provide formal revenue, margin, OpEx, OI&E, tax, or segment guidance. Dividend actions are noted below.

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per Common ShareQ4 2022$0.02 paid in Q3 2022 $0.01 paid Jan 27, 2023 for Q4 Lowered

Earnings Call Themes & Trends

No Q4 2022 earnings call transcript was available in the document set; themes are derived from press releases.

TopicPrevious Mentions (Q2 2022)Previous Mentions (Q3 2022)Current Period (Q4/FY 2022)Trend
Portfolio repositioning to retail/flexAcquired Salisbury Marketplace; exit hotel exposure underway Completed sale of Clemson Best Western; portfolio now retail/flex only Full year shows retail/flex strength, hotel revenues down due to dispositions Continued shift completed; retail/flex mix driving stability
Leasing and occupancyOccupancy 96.4%; robust leasing activity YTD Occupancy 96.5% with resilient tenants Year-end occupancy 96.0%; WALT 3.9 years Stable high occupancy; modest WALT compression
Capital structure and debtNew $20.1M Wells Fargo facility; refinanced mortgages; $1.5M LOC Long-tenured primarily fixed-rate debt cited Weighted avg maturity 6.08 yrs; rate 4.2% Stable maturities; rates modestly higher YoY
Strategic alternativesNot mentionedNot mentionedSpecial Committee formed to explore strategic alternatives New; potential corporate action catalyst
Dividends$0.02 per share in Q2; fourth consecutive quarter $0.01 per share paid in Q3 $0.01 per share paid for Q4; FY total $0.07 Maintained cadence; per-quarter reduced vs Q2

Management Commentary

  • “During the third quarter, we completed the repositioning of our portfolio, which is now exclusively comprised of retail and flex/industrial properties that have proven to be resilient throughout COVID-19. Our operating portfolio is strong with occupancy of 96.5% and long-tenured, primarily fixed rate debt…We believe our portfolio will prove to be recession-resistant…we hope to create significant shareholder value by trading more in-line with our peers.” — Thomas E. Messier, Chairman & CEO .
  • The Board established a Special Committee of independent directors to explore strategic alternatives, engaging JLL Securities as financial advisor and Troutman Pepper as legal counsel .

Q&A Highlights

  • No Q4 2022 earnings call transcript was available; therefore, Q&A highlights and any clarifications are not accessible in our document set [ListDocuments earnings-call-transcript returned none].

Estimates Context

  • Wall Street consensus (S&P Global Capital IQ) for Q4 2022 EPS and revenue was unavailable at the time of query due to data access limits; estimate comparison cannot be provided [GetEstimates error].
  • Investors should note that MDRR’s microcap profile and limited analyst coverage can result in sparse quarterly consensus data; we anchor on reported results and operational KPIs .

Key Takeaways for Investors

  • Retail/flex pivot is complete; FY 2022 retail revenues rose to $7.05M and flex to $2.53M while hotel revenues fell sharply due to asset sales, aligning the portfolio with more stable, necessity-based demand .
  • Underlying operations strengthened: same-property NOI +7.9% and NOI +6.8% YoY, supported by 96.0% occupancy and solid WALT, positioning MDRR defensively into macro uncertainty .
  • Despite positive FFO, AFFO declined YoY, reflecting higher capital expenditures and non-cash adjustments; monitor AFFO trajectory for dividend sustainability and growth prospects .
  • Debt metrics remain manageable with ~6.1-year weighted average maturity and a 4.2% weighted average rate; modest rate increases are evident quarter to quarter, but maturities appear laddered .
  • The Special Committee’s strategic review introduces optionality (asset sale(s), business combination, JV, restructuring) and could act as a near-term trading catalyst depending on outcomes .
  • Sequential quarterly trends into Q3 show mixed performance (NOI/EBITDA/FFO down vs Q2); absent Q4 quarterly detail, focus on FY stability and management’s operational execution .
  • Dividend actions show continued cadence with $0.01 per share in Q4; monitor AFFO coverage and strategic actions for dividend policy implications .