NexPoint Residential Trust Inc (NYSE:NXRT) Q2 2020 Earnings Conference Call - Final Transcript

Aug 04, 2020 • 11:00 am ET

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NexPoint Residential Trust Inc (NYSE:NXRT) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
Jackie Graham

and net debt to the company's earnings release that was filed earlier today.

I would now like to turn the call over to Brian Mitts. Please go ahead, Brian.

Executive
Brian Mitts

Thanks, Jackie. I want to welcome everyone to the NXRT 2020 second quarter conference call. Today, we're going to discuss the highlights for the quarter, we'll spend some time analyzing Q2 results, as well as the early part of Q3 through July.

This is Brian Mitts, so let me start with the Q2 and year-to-date highlights. First, we announced last week on July 27, the Board elected to expand the compositional Board from five to six members and we added Catherine Wood as an Independent Director. We believe Catherine brings significant experience and a unique perspective to the Board. So we're glad to welcome her on.

Net loss for the quarter was $9.3 million or $0.38 -- negative $0.38 per diluted share, as compared to $2 million loss or negative $0.08 per diluted share in Q2 of '19.

Same-store NOI increased for the quarter is $1.1 million or an increase of 5.8%, as compared to Q2 2019. We're reporting Q2 2020 core FFO of $14.5 million or $0.59 per diluted share, which is an increase of 31.1% on a per share basis, as compared to Q2 2019.

Total revenue for Q2 was $50.7 million and total NOI was $29.2 million, which represents an increase of 17.6% and 18.9% year-over-year, respectively. NOI margins for Q2 were 57.6%, which was a 50 basis point improvement over margins in Q2 of '19 of 57.1%. We continue to execute our value-add business plan by completing 411 full and partial renovations during the quarter with 392 upgraded units leased, achieving an average monthly rent premium of $113 and 23.4% ROI during the quarter.

Inception-to-date in the portfolio as of June 30, we've completed 7,325 full and partial upgrades, achieving an average monthly rent premium of $95 and the return on investment of 25%. Through our equity repurchase program, we repurchased approximately $2.4 million shares of stock through Q2 of 2020 at an average repurchase price of $25.70 per share. We ended the quarter with $85 million of cash.

On our NAV per share given the unprecedented disruption in the economy over what is also an unprecedentedly short period of time, cap rates become difficult to judge, although, we do have more clarity today than we did after Q1. Nevertheless, we're updating our NAV based on our revised outlook for NOI and cap rates, and Matt will discuss this in detail in his prepared remarks.

Based on our updates in cap rates and NOI, we are revising our NAV per share as follows, $34.37 in the low end, $42.31 in the high end, for midpoint of $38.34, that's compared to midpoint of $38.47 in the prior quarter or 33 basis point quarter-over-quarter decrease, and a midpoint of $37.51 at June 30 of last year or a 2.21% year-over-year increase.

For dividends, for the first quarter, we paid