Parkit Enterprise Reports Q3 Results
Parkit Enterprise Inc. (“Parkit” or the “Company”) (TSXV: PKT), today reported the Company’s third quarter 2023 results. Steve Scott, Chair of Parkit, commented:
“In Q3, Parkit achieved significant revenue and net rental income growth through successful negotiations with new and existing tenants by integrating the 10 industrial assets purchased this year. With 95% of our debt fixed, Parkit continues to have a strong balance sheet and expects to continue to look for accretive acquisitions in the coming quarters.”
2023 Q3 Results and Recent Business Highlights
- Industrial properties revenue and net rental income. Industrial properties revenue and net rental income increased as the Company onboarded and integrated its Winnipeg and Saskatchewan portfolio, streamlined operations, and signed new leases. Industrial properties revenue for the three and nine months ended September 30, 2023 rose 99% and 95%, respectively, to $5,671,599 and $14,900,662, compared to $2,846,709 and $7,649,000, respectively, for the three and nine months ended September 30, 2022. Net rental income (“NRI”), increased by 141% and 147%, respectively, to $3,826,615 and $9,468,132, for the three and nine months ended September 30, 2023 compared to $1,589,859 and $3,832,075, respectively, for the three and nine months ended September 30, 2022.
- Liquidity position. The Company maintained a strong liquidity position with cash and cash equivalents of over $5,000,000 at the end of the quarter. The Company has unencumbered assets and significant availability on its credit facilities to fund future acquisitions.
- Cash flows. Parkit increased its cash flow with $10,759,015 received from operating activities for the nine months ended September 30, 2023, compared to $3,571,514 received for the nine months ended September 30, 2022. Parkit used net cash of $102,043,727 in investing activities for the nine months ended September 30, 2023, compared to cash used of $40,252,477 from investing activities for the nine months ended September 30, 2022, as the Company completed $95.2 million of net acquisitions. Parkit received net cash of $76,822,942 in financing activities for the nine months ended September 30, 2023, compared to net cash received of $33,512,344 for the nine months ended September 30, 2022, as a result of financing received from credit facilities to fund acquisitions.
- Funds from operations (“FFO”) increased for the period. The FFO, a Non-IFRS Measure, for the three and nine months ended September 30, 2023 increased by 137% and 110%, respectively, to $1,264,167 and $2,725,803, compared to FFO of $533,385 and $1,295,171, respectively for the three and nine months ended September 30, 2022. The increase in FFO was a result of additional NRI from industrial properties.
- Income for the period. The Company had a net loss of $793,939 and $848,470, respectively, for the three and nine months ended September 30, 2023, compared to a net loss of $177,183 and $927,150, respectively, for the three and nine months ended September 30, 2022.
- Parking operations. The share of income and loss from equity-accounted investees was an income of $59,951 and $1,968,995 for the three and nine months ended September 30, 2023, compared to income of $160,236 and $404,328 for the three and nine months ended September 30, 2022. The quarterly decrease and year to date increase in income is a result of the joint venture’s sale.
Subsequent to the acquisition of the remaining 50% interest in Fly Away Parking, the Company consolidated its results in the new Parking operations. The parking properties revenue was $914,200 and $1,591,723 for the three and nine months ended September 30, 2023. The parking properties operating income was $305,343 and $529,821 for the three and nine months ended September 30, 2023. The current results reflect an increase in both revenue and income compared to the prior year results for Fly Away Parking which is a result of streamlined operations, lower financing costs and a growing market in Nashville, TN.
- Leasing at market rental spreads. During the three months ended September 30, 2023, Parkit continued to sign and renew leases at market rates including 70,419 sf in Burlington, ON, the Company realized a 127% increase from its prior in-place lease. Parkit continues to maximize the occupancy of its gross leasable area by signing leases at market rates with escalations.
- Continued focus on environmental, social and governance (“ESG”) initiatives. Parkit continued its focus on ESG initiatives by prioritizing environmental investments in its development plans and reviewing its corporate policies.
Parkit is focused on growing and maximizing cash flows on its industrial portfolio, while strategically operating its parking properties.
Change in Management
Carey Chow is now the sole CFO of the Company, where he worked as Co-CFO over the past 2 years. JoAnne Odette has completed her transitional role as Co-CFO of the Company.
For comprehensive disclosure of Parkit’s performance for the three and nine months ended September 30, 2023 and its financial position as at such date, please see Parkit’s Unaudited Condensed Financial Statements and Management’s Discussion and Analysis for the three and nine months ended September 30, 2023 filed on SEDAR+ at www.sedarplus.ca.
Management uses both IFRS and Non-IFRS Measures to assess the financial and operating performance of the Company’s operations. These Non-IFRS Measures are not recognized measures under IFRS, do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures presented by other companies. The Non-IFRS Measures referenced in this news release include the following:
Funds from Operations (“FFO”) is a Non-IFRS Measure of operating performance as it focuses on cash flow from operating activities. REALPAC is the national industry association dedicated to advancing the long-term vitality of Canada’s real property sector. REALPAC defines FFO as net income (calculated in accordance with IFRS), adjusted for, among other things, depreciation, transaction costs, gains and losses from property dispositions, foreign exchange, as well as other non-cash items. The Company believes that FFO can be a beneficial measure, when combined with primary IFRS measures, to assist in the evaluation of the Company’s ability to generate cash and evaluate its return on investments as it excludes the effects of real estate amortization and gains and losses from the sale of real estate, all of which are based on historical cost accounting and which may be of limited significance in evaluating current performance.
FFO should not be viewed as an alternative to, in isolation from, or superior to, net income or cash flow from operations, or results from Parkit’s comprehensive operations, respectively, or other measures calculated in accordance with IFRS. FFO should not be interpreted as an indicator of cash generated from operating activities and is not indicative of cash available to fund operating expenditures, or for the payment of cash distributions. FFO is simply an additional measure of operating performance which highlight trends in Parkit’s core business that may not otherwise be apparent when relying solely on IFRS financial measures. Parkit’s management also uses this Non-IFRS Measure in order to facilitate operating performance comparisons from period to period and to prepare operating budgets. In addition, while Parkit’s methods of calculating FFO comply with REALPAC recommendations, FFO may differ from and not be comparable to FFO used by other companies.
The following table indicates how Parkit reconciles FFO to the nearest IFRS measure.
|Three months ended September 30, 2023||Three months ended September 30, 2022||Nine months ended September 30, 2023||Nine months ended September 30, 2022|
|Net (loss) and comprehensive (loss)||$||(793,939)||$||(177,183)||$||(848,470)||$||(927,150)|
|Add / (Deduct):|
|Share of (gain) from equity-accounted investees||(59,951)||(160,236)||(1,968,995)||(404,328)|
|Income tax expense||–||–||336||319|
|FFO per share||$||0.01||$||0.00||$||0.01||$||0.01|
About Parkit Enterprise Inc.
Parkit Enterprise is an industrial real estate platform focused on the acquisition, growth and management of strategically located industrial properties across key urban markets in Canada. In addition, Parkit has parking assets across various markets in the United States of America. Parkit’s Common Shares are listed on TSX-V (Symbol: PKT).
For more information, please contact Mr. Carey Chow, Mr. Iqbal Khan or Mr. Steven Scott:
Contact Number: 1-888-627-9881
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Information: This news release contains “forward-looking information” within the meaning of applicable Canadian securities legislation. All statements, other than statements of historical fact, included herein is forward-looking information. In particular, this news release contains forward-looking information in relation to: Parkit continuing to look for acquisitions in the coming quarters; Parkit’s continued focus on ESG initiatives by prioritizing environmental investments; Parkit’s focus on growing and maximizing cash flows on its industrial portfolio, while strategically operating its parking properties; and Parkit’s strategy and focus regarding acquiring high-quality and strategically located industrial properties across key urban markets in Canada. This forward-looking information reflects Parkit’s current beliefs and is based on information currently available to Parkit and on assumptions Parkit believes are reasonable. These assumptions include, but are not limited to: the level of activity in the industrial real estate business and the economy generally; continued consumer interest in Parkit’s services and products; Parkit’s continued ability to acquire properties that are in-line with its strategic focus, including prioritizing environmental investments; Parkit’s continuing ability to grow its portfolio of investment properties; Parkit’s past results continuing to be an indicator of future results; the diminishing effects of the COVID-19 pandemic in Canada, the United States, and elsewhere; consumer interest in Parkit’s services and products; and Parkit’s continued response and ability to navigate the COVID-19 pandemic being consistent with, or better than, its ability and response to date. Forward-looking information is subject to known and unknown risks and uncertainties that may cause the actual results, performance or developments to differ materially from those contained in or implied by such forward-looking information. These risks, uncertainties, and factors may include, but are not limited to: general business, economic, competitive, political and social uncertainties; general capital market conditions and market prices for securities; delay or failure to receive board of directors, third party or regulatory approvals; the actual results of Parkit’s future operations; competition; changes in legislation, including environmental legislation, affecting Parkit; the timing and availability of external financing on acceptable terms; conclusions of economic evaluations and appraisals; lack of qualified, skilled labour or loss of key individuals; risks related to the COVID-19 pandemic; and the impact that the COVID-19 pandemic may have on Parkit which may include: a short-term delay in payments from customers, an increase in accounts receivable and an increase of losses on accounts receivable; decreased demand for the services that Parkit offers; and a deterioration of financial markets that could limit Parkit’s ability to obtain external financing. A description of additional risk factors that may cause actual results to differ materially from forward-looking information can be found in Parkit’s disclosure documents on the SEDAR+ website at www.sedarplus.ca. Although Parkit has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. Readers are cautioned that the foregoing list of risks, uncertainties and factors is not exhaustive. Accordingly, readers should not place undue reliance on forward-looking information. Readers are further cautioned not to place undue reliance on forward-looking information as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking information contained in this news release is expressly qualified by this cautionary statement. The forward-looking information contained in this news release represents the expectations of Parkit as of the date of this news release and, accordingly, is subject to change after such date. However, Parkit expressly disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable securities law.