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Plymouth Industrial REIT Reports Second Quarter Results and Affirms Guidance

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Plymouth Industrial REIT, Inc. (NYSE America: PLYM) (the "Company")
today announced its consolidated financial results for the quarter ended
June 30, 2018 and other recent developments. A comparison of the
reported amounts per share for the second quarter of 2018 to prior-year
periods has been affected by an increase in the common stock outstanding
resulting from the completion of, and the use of proceeds from, the
Company's initial public offering (the "IPO") in June 2017 and its
preferred stock offering in October 2017, as discussed below.

Second Quarter and Subsequent Highlights

  • Reported results for the second quarter of 2018 reflect a net loss
    attributable to common stockholders of $7.7 million, or $(2.27) per
    weighted average common share, including a loss on extinguishment of
    debt of $3.6 million; net operating income ("NOI") of $8.2 million;
    Funds from Operations ("FFO") of $2.5 million; FFO attributable to
    common stockholders and unit holders of $0.39 per weighted average
    common share and units; and Adjusted FFO ("AFFO") of $0.42 per
    weighted average common share and units.
  • For the second quarter of 2018, declared a regular quarterly cash
    dividend of $0.375 for the common stock and a regular quarterly cash
    dividend of $0.46875 per share for the 7.50% Series A Cumulative
    Redeemable Preferred Stock ("the Preferred Stock").
  • On April 9, 2018, the Company acquired two Class B industrial
    properties totaling 270,000 square feet in the Chicago area for
    $15.675 million in cash and a projected initial yield of 8.0%.
  • From April to July 2018, the Company completed a series of financings
    totaling $135 million that eliminated variable rate and higher
    interest rate debt, resulting in 80% of its total debt at fixed rates
    maturing over the next 5 to 10 years with a weighted average interest
    rate of 4.13%.
  • On July 23, 2018, the Company completed an underwritten registered
    public offering of 1.1 million shares of common stock that resulted in
    net proceeds of approximately $16.0 million.

Jeff Witherell, Chairman and Chief Executive Officer of Plymouth
Industrial REIT, noted, "Our focus continues to be on improving our
portfolio through re-leasing, asset management and acquisitions as well
as enhancing our capital structure. We made major strides on all fronts
as we had over 857,000 square feet of new and renewal leases commencing
this quarter, bringing our occupancy to 93.4%. The reconciliation of the
balance sheet was substantial as we completed over $135 million of new
financings that locked up 80% of our debt with low, long-term fixed
rates and eliminated high interest rate mezzanine debt. The recent
overnight follow-on offering also raised $16 million in equity while
enabling us to achieve shelf registration eligibility, which should
improve our future ability to access capital when the market is
appropriately rewarding the embedded value we have created in the
portfolio."

Financial Results for the Second Quarter of 2018

The completion of the IPO on June 14, 2017 and a preferred stock
offering on October 25, 2017 provided the Company with a meaningfully
different capital structure compared to the prior-year period. The
Company believes the use of IPO proceeds and related higher share count,
makes year-over-year comparisons less meaningful, particularly on a per
share basis.

Net loss attributable to common stockholders for the quarter ended June
30, 2018 was $7.7 million, or $(2.27) per weighted average common share
outstanding, compared with net loss attributable to common stockholders
of $1.2 million, or $(1.26) per weighted average common share, for the
same period in 2017. The increase in net loss for the second quarter of
2018 was primarily due to an increase in depreciation and amortization
expense of $3.7 million, a Loss on Debt Extinguishment of $3.6 million
related to the payoff of the prior mezzanine debt, and, increased
general and administrative expense for professional fees related to
public company requirements of approximately $160,000.

Consolidated total revenues for the quarter ended June 30, 2018 were
$12.0 million, compared with $5.0 million for the same period in 2017.

Net operating income (NOI) for the quarter ended June 30, 2018 was $8.2
million compared with NOI of $3.5 million for the same period in 2017.
NOI in the current quarter included a one-time reduction in operating
expenses for real estate tax accruals of $520,000.

EBITDA for the quarter ended June 30, 2018 was $6.7 million compared
with $2.2 million for the same period in 2017.

FFO for the quarter ended June 30, 2018 was $2.5 million compared with
$(583,000) for the same period in 2017, primarily as a result of
significantly higher NOI, the adjustment for loss on extinguishment of
debt and the increase in weighted average shares following the IPO in
June 2017. FFO attributable to common stockholders and unit holders for
the quarter ended June 30, 2018 was $1.6 million, or $0.39 per weighted
average common share and units, compared with $(583,000), or $(0.63) per
weighted average common share, for the same period in 2017. The increase
was due to the reasons noted above for FFO, offset by $1.0 million of
preferred stock dividends.

AFFO for the quarter ended June 30, 2018 was $1.7 million, or $0.42 per
weighted average common share and units, compared with $(399,000), or
$(0.43) per weighted average common share, for the same period in 2017,
primarily driven by the change in FFO, an increase in deferred finance
fees and non-cash interest of $655,000 offset by increased straight line
rent and above/below market rent adjustments and recurring capital
expenditures and lease commissions of approximately $813,000 incurred in
the quarter and the increase in weighted average shares following the
IPO in June 2017.

Investment Activity

As of June 30, 2018, the Company had real estate investments comprised
of 51 industrial properties totaling 9.5 million square feet with
occupancy of 93.4%. On April 9, 2018, the Company completed the
acquisition of two single-tenant Class B industrial properties totaling
270,000 square feet in the greater Chicago area for $15.675 million in
total consideration. The purchase price is projected to provide an
initial yield of 8.0%.

Leasing Activity

Leases commencing during the second quarter totaled an aggregate of
857,000 square feet, of which 812,000 square feet was for leases of at
least six months. The leases six months or longer included 147,000
square feet of renewal leases and 665,000 square feet of new leases. The
Company will experience an 8.4% increase in rental rates on a cash basis
from these leases. The leasing activity for the quarter was heavily
influenced by the 527,127-square-foot lease that commenced in April 2018
at the Company's property at 3500 Southwest Boulevard in Columbus, Ohio.

For the six months ended June 30, 2018, leases executed totaled
1,362,000 square feet, of which 1,121,000 square feet was for leases of
at least six months. The leases six months or longer included 294,000
square feet of renewal leases and 827,000 square feet of new leases. The
Company will experience a 7.7% increase in rental rates, on a cash
basis, from all of the leases executed in the first six months of 2018
with a lease term of at least six months.

Capital Markets Activity

On April 30, 2018, the Company closed on a 10-year, $21.5 million
mortgage with a fixed interest rate of 3.78% that is secured by seven
industrial properties. Proceeds from the new financing were used to pay
down outstanding borrowings on the Company's senior secured revolving
credit facility.

On May 24, 2018, the Company repaid in full its outstanding mezzanine
debt, which was scheduled to mature in October 2023 and had an interest
rate of 15.0%, with proceeds from a new $35.7 million senior secured
term loan that bears interest at LIBOR plus 700 basis points and matures
in August 2021.

On July 10, 2018, the Company closed on a new 10-year $78.0 million loan
with a fixed interest rate of 4.35% and secured by 18 Chicago area
properties. The proceeds, together with additional working capital, were
used to repay in full the Company's $79.8 million variable rate secured
term loan that was scheduled to mature in December 2019 and had a
floating interest rate of 310 basis points over LIBOR.

On July 23, 2018, the Company closed on an underwritten registered
public offering of 1.1 million shares of its common stock, resulting in
net proceeds to the Company of approximately $16.2 million.

Quarterly Distributions to Stockholders

On June 1, 2018, the Company's Board of Directors declared a regular
quarterly cash dividend of $0.46875 per share for the Company's
Preferred Stock for the second quarter of 2018. The dividend was paid on
July 2, 2018 to stockholders of record on June 15, 2018.

On June 14, 2018, the Company's Board of Directors declared a regular
quarterly cash dividend of $0.375 per share for Company's common stock
for the second quarter of 2018. The dividend was payable on July 31,
2018, to stockholders of record on June 29, 2018.

2018 Outlook

The Company affirmed its 2018 guidance for revenues and NOI previously
issued on May 3, 2018. The information provided contains estimates based
on the Company's anticipated results of operations for 2018. All
estimates exclude any potential impact from additional acquisitions:

  • Total revenues of $44.8 million to $45.6 million
  • Net operating income of $28.9 million to $29.8 million
  • General and administrative expenses of $5.0 million to $5.7 million,
    including non-cash expenses of $0.8 million to $1.0 million
  • 5.1 million common shares and operating partnership units outstanding

Earnings Conference Call and Webcast

The Company will host a conference call and live audio webcast, both
open for the general public to hear, on Thursday, August 9, 2018 at
10:00 a.m. Eastern Time. The number to call for this interactive
teleconference is (412) 717-9587. A replay of the call will be available
through August 16, 2018, by dialing (412) 317-0088 and entering the
replay access code, 10122697.

The live audio webcast
of the Company's quarterly conference call will be available online in
the Investor Relations section of the Company's website at www.plymouthreit.com.
The online replay will be available approximately one hour after the end
of the call and archived for approximately 90 days.

About Plymouth

Plymouth Industrial REIT, Inc. is a vertically integrated and
self-managed real estate investment trust focused on the acquisition and
operation of single and multi-tenant industrial properties located in
secondary and select primary markets across the United States. The
Company seeks to acquire properties that provide income and growth that
enable the Company to leverage its real estate operating expertise to
enhance shareholder value through active asset management, prudent
property re-positioning and disciplined capital deployment.

Forward-Looking Statements

This press release includes "forward-looking statements" that are made
pursuant to the safe harbor provisions of Section 27A of the Securities
Act of 1933 and of Section 21E of the Securities Exchange Act of 1934.
The forward-looking statements in this release do not constitute
guarantees of future performance. Investors are cautioned that
statements in this press release, which are not strictly historical
statements, including, without limitation, statements regarding
management's plans, objectives and strategies, constitute
forward-looking statements. Such forward-looking statements are subject
to a number of known and unknown risks and uncertainties that could
cause actual results to differ materially from those anticipated by the
forward-looking statement, many of which may be beyond our control.
Forward-looking statements generally can be identified by the use of
forward-looking terminology such as "may," "plan," "seek," "will,"
"expect," "intend," "estimate," "anticipate," "believe" or "continue" or
the negative thereof or variations thereon or similar terminology. Any
forward-looking information presented herein is made only as of the date
of this press release, and we do not undertake any obligation to update
or revise any forward-looking information to reflect changes in
assumptions, the occurrence of unanticipated events, or otherwise.

 
PLYMOUTH INDUSTRIAL REIT, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

UNAUDITED
(In thousands, except share and per share amounts)
   
 
 
 
June 30, December 31,
2018 2017
Assets
Real estate properties $ 320,863 $ 303,402
Less accumulated depreciation   (32,809 )   (25,013 )
Real estate properties, net 288,054 278,389
 
Cash 4,311 12,915
Cash held in escrow 6,221 5,074
Restricted cash 1,596 1,174
Deferred lease intangibles, net 25,020 27,619
Other assets   7,430     4,782  
Total assets $ 332,632   $ 329,953  
 
Liabilities, Series A Preferred Stock and Equity
Liabilities:
Secured debt, net 251,919 195,431
Mezzanine debt, net - 29,364
Borrowings under line of credit, net 18,678 20,837
Deferred interest - 1,357
Accounts payable, accrued expenses and other liabilities 16,864 16,015
Deferred lease intangibles, net   6,657     6,807  
Total Liabilities   294,118     269,811  
 
 
Preferred stock, Series A; $0.01 par value, 100,000,000 shares
authorized; 2,040,000 shares issued and outstanding (aggregate
liquidation preference of $51,000)
48,868 48,931
 
Equity (Deficit):
Common stock, $0.01 par value: 900,000,000 shares authorized;
3,556,043 and 3,819,201 shares issued and outstanding at June 30,
2018 and December 31, 2017, respectively
36 39
 
Additional paid in capital 114,085 123,270
Accumulated deficit   (129,982 )   (119,213 )
Total stockholders' equity (deficit) (15,861 ) 4,096
Non-controlling interest   5,507     7,115  
Total equity (deficit)   (10,354 )   11,211  
Total liabilities, Series A preferred stock and equity $ 332,632   $ 329,953  
 
       
PLYMOUTH INDUSTRIAL REIT, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(In thousands, except share and per share amounts)
 
 
For the Three Months For the Six Months
Ended June 30, Ended June 30,
2018 2017 2018 2017
 
Rental revenue $ 9,019 $ 3,650 $ 17,503 $ 7,295
Tenant recoveries 2,957 1,376 5,903 2,669
Other revenue   71     1     521     1  
Total revenues   12,047     5,027     23,927     9,965  
 
Operating expenses:
Property 3,787 1,517 8,240 2,925
Depreciation and amortization 6,444 2,785 12,986 5,557
General and administrative 1,533 1,209 2,905 1,933
Acquisition costs   -     82     -     82  
Total operating expenses   11,764     5,593     24,131     10,497  
 
Operating income/(loss) 283 (566 ) (204 ) (532 )
 
Other expense:
Interest expense (4,216 ) (2,802 ) (8,202 ) (5,743 )
Loss on debt extinguishment   (3,601 )   -     (3,601 )   -  
Total other expense   (7,817 )   (2,802 )   (11,803 )   (5,743 )
 
Net loss $ (7,534 ) $ (3,368 ) $ (12,007 ) $ (6,275 )
 
Net loss attributable to non-controlling interest $ (829 ) $ (2,209 ) $ (1,292 ) $ (4,674 )
 
Net loss attributable to Plymouth Industrial REIT, Inc. $ (6,705 ) $ (1,159 ) $ (10,715 ) $ (1,601 )
 
Less: Series A preferred stock dividends 956 - 1912 -
Less: amount allocated to participating securities 46 - 107 -
       
Net loss attributable to common shareholders $ (7,707 ) $ (1,159 ) $ (12,734 ) $ (1,601 )
 

Net loss per share attributable to Plymouth Industrial REIT, Inc.
common stockholders

$ (2.27 ) $ (1.26 ) $ (3.61 ) $ (2.55 )
 
Weighted-average common shares outstanding basic and diluted   3,400,012     922,885     3,522,959     629,057  
 

Non-GAAP Financial Measures Definitions

Net Operating Income (NOI): We consider net operating income, or
NOI, to be an appropriate supplemental measure to net income because it
helps both investors and management understand the core operations of
our properties. We define NOI as total revenue (including rental
revenue, tenant reimbursements, management, leasing and development
services revenue and other income) less property-level operating
expenses including allocated overhead. NOI excludes depreciation and
amortization, general and administrative expenses, impairments,
gain/loss on sale of real estate, interest expense, and other
non-operating items.

EBITDA: We believe that earnings before interest, taxes,
depreciation and amortization, or EBITDA, is helpful to investors as a
supplemental measure of our operating performance as a real estate
company because it is a direct measure of the actual operating results
of our industrial properties. We also use this measure in ratios to
compare our performance to that of our industry peers. EBITDA as
presented herein is equal to EBITDAre as defined by NAREIT.

Funds From Operations attributable to common stockholders ("FFO"):
Funds from operations, or FFO, is a non-GAAP financial measure that is
widely recognized as a measure of REIT operating performance. We
consider FFO to be an appropriate supplemental measure of our operating
performance as it is based on a net income analysis of property
portfolio performance that excludes non-cash items such as depreciation.
The historical accounting convention used for real estate assets
requires straight-line depreciation of buildings and improvements, which
implies that the value of real estate assets diminishes predictably over
time. Since real estate values rise and fall with market conditions,
presentations of operating results for a REIT, using historical
accounting for depreciation, could be less informative. We define FFO,
consistent with the National Association of Real Estate Investment
Trusts, or NAREIT, definition, as net income, computed in accordance
with GAAP, excluding: gains (or losses) from sales of property,
depreciation and amortization of real estate assets, impairment losses,
losses on extinguishment of debt and after adjustments for
unconsolidated partnerships and joint ventures. Adjustments for
unconsolidated partnerships and joint ventures will be calculated to
reflect FFO on the same basis. Other equity REITs may not calculate FFO
(in accordance with the NAREIT definition) as we do, and, accordingly,
our FFO may not be comparable to such other REITs' FFO. FFO should not
be used as a measure of our liquidity, and is not indicative of funds
available for our cash needs, including our ability to pay dividends.

Adjusted Funds From Operations attributable to common stockholders
("AFFO"):
Adjusted funds from operation, or AFFO, is presented in
addition to FFO. AFFO is defined as FFO, excluding certain non-cash
operating revenues and expenses, acquisition and transaction related
costs for transactions not completed and recurring capitalized
expenditures. Recurring capitalized expenditures includes expenditures
required to maintain and re-tenant our properties, tenant improvements
and leasing commissions. AFFO further adjusts FFO for certain other
non-cash items, including the amortization or accretion of above or
below market rents included in revenues, straight line rent adjustments,
impairment losses, non-cash equity compensation and non-cash interest
expense.

We believe AFFO provides a useful supplemental measure of our operating
performance because it provides a consistent comparison of our operating
performance across time periods that is comparable for each type of real
estate investment and is consistent with management's analysis of the
operating performance of our properties. As a result, we believe that
the use of AFFO, together with the required GAAP presentations, provide
a more complete understanding of our operating performance.

As with FFO, our reported AFFO may not be comparable to other REITs'
AFFO, should not be used as a measure of our liquidity, and is not
indicative of our funds available for our cash needs, including our
ability to pay dividends.

 
PLYMOUTH INDUSTRIAL REIT, INC.
SUPPLEMENTAL RECONCILIATION OF NON-GAAP DISCLOSURES
UNAUDITED
(In thousands, except share and per share amounts)
       
 
 
 
For the Three Months For the Six Months
Ended June 30, Ended June 30,
NOI: 2018 2017 2018 2017
Net loss $ (7,534 ) $ (3,368 ) $ (12,007 ) $ (6,275 )
General and administrative 1,533 1,209 2,905 1,933
Acquisition costs - 82 - 82
Depreciation and amortization 6,444 2,785 12,986 5,557
Interest expense 4,216 2,802 8,202 5,743
Loss on debt extinguishment 3,601 - 3,601 -
Other expense (income)   (71 )   (1 )   (521 )   (1 )
NOI $ 8,189   $ 3,509   $ 15,166   $ 7,039  
 
 
For the Three Months For the Six Months
Ended June 30, Ended June 30,
EBITDA: 2018 2017 2018 2017
Net loss $ (7,534 ) $ (3,368 ) $ (12,007 ) $ (6,275 )
Depreciation and amortization 6,444 2,785 12,986 5,557
Interest expense 4,216 2,802 8,202 5,743
Loss on debt extinguishment   3,601     -     3,601     -  
EBITDA $ 6,727   $ 2,219   $ 12,782   $ 5,025  
 
 
For the Three Months For the Six Months
Ended June 30, Ended June 30,
FFO: 2018 2017 2018 2017
Net loss $ (7,534 ) $ (3,368 ) $ (12,007 ) $ (6,275 )
Depreciation and amortization 6,444 2,785 12,986 5,557
Loss on debt extinguishment   3,601     -     3,601     -  
FFO: $ 2,511   $ (583 ) $ 4,580   $ (718 )
Preferred stock dividends   (956 )   -     (1,912 )   -  
FFO attributable to common stockholders and unit holders $ 1,555   $ (583 ) $ 2,668   $ (718 )
 
Weighted average common shares and units outstanding 3,977 923 4,104 629
FFO attributable to common stockholders and unit holders per share $ 0.39 $ (0.63 ) $ 0.65 $ (1.14 )
 
 
For the Three Months For the Six Months
Ended June 30, Ended June 30,
AFFO: 2018 2017 2018 2017
FFO attributable to common stockholders and unit holders $ 1,555 $ (583 ) $ 2,668 $ (718 )
Deferred finance fee amortization 466 171 854 765
Non-cash interest expense 560 200 806 200
Acquisition costs - 82 - 82
Stock compensation 200 35 400 35
Straight line rent (461 ) (32 ) (818 ) (76 )
Above/below market lease rents (306 ) (83 ) (717 ) (166 )
Recurring capital expenditure (1)   (350 )   (189 )   (1,342 )   (232 )
AFFO: $ 1,664   $ (399 ) $ 1,851   $ (110 )
 
Weighted average common shares and units outstanding 3,977 923 4,104 629
AFFO per share $ 0.42 $ (0.43 ) $ 0.45 $ (0.17 )
 
(1) Excludes non-recurring capital expenditures of $874 and $13 for
the three months ended June 30, 2018 and 2017, respectively, and
$1,247 and $13 for the six months ended June 30, 2018 and 2017,
respectively.
 

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