Retail Opportunity Investments (US:ROIC)2020-07-31 02:06Financial Data and Key Metrics Changes - GAAP net income attributable to common shareholders for Q2 2020 was $4.6 million, equating to $0.04 per diluted share, with funds from operations totaling $29.2 million, equating to $0.23 per diluted share [15] - Same center net operating income declined by 9.3% in Q2 2020 and 3.1% for the first six months of 2020, marking a significant downturn after 33 consecutive quarters of growth [16] Business Line Data and Key Metrics Changes - 88% of tenants were open and operating by the end of the second quarter, up from 70% in April [11] - Rent received increased from 67% in April to 82% for the entire second quarter, with approximately $9.3 million in outstanding rent, of which $2.2 million has been deferred [11][17] Market Data and Key Metrics Changes - There has been a considerable increase in inquiries from retailers seeking space, particularly in the service and specialty sectors, as well as traditional indoor mall retailers looking to relocate to open-air centers [13] - The portfolio lease rate held up well at 97% at the start of the pandemic and ended the second quarter at 97% despite temporary closures [22] Company Strategy and Development Direction - The company is focusing on enhancing health, safety, and cleaning protocols at shopping centers, as well as creating outdoor dining spaces for restaurant tenants [10][12] - The company is optimistic about the demand for space returning, with a focus on grocery and drug stores, which have remained open and performed well during the pandemic [29] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the pandemic but noted a quick return of customers to shopping centers, with parking lots bustling and stores active [12] - The company plans to continue conserving cash flow and has temporarily suspended its quarterly dividend to navigate the ongoing uncertainty [34][21] Other Important Information - The company recorded $5.9 million in bad debt expense, with $4.9 million reserved for current tenants [18] - The company has $161.3 million in cash on its balance sheet, representing a $27.8 million increase since April [21] Q&A Session Summary Question: What is the impact of the $5.9 million bad debt number? - The bad debt number primarily relates to rent and recoveries, with $185,000 impacted by write-offs of straight-line rent, mainly from one fitness tenant [41] Question: What are the expectations for August collections? - August collections are fluid, and while it is too early to provide specific numbers, management believes collections will continue to improve as tenants fulfill deferred rent agreements [57] Question: How many 24-Hour Fitness locations are still in the portfolio? - The company has three additional 24-Hour Fitness locations, accounting for less than 1% of total base rent, and expects to re-lease the space quickly [60] Question: What is the tenant participation in the PPP loan program? - The company has encouraged tenants to apply for available assistance, including local grants and federal programs, to help with rent payments [137] Question: What industries are mall tenants coming from? - The company is seeing interest from a broad range of uses, with a focus on tenants that fit the space available, particularly in grocery-anchored centers [144]