Wheeler Real Estate Investment Trust, Inc. Q1 FY2020 earnings call

Bruce's Statements:

• The COVID-19 pandemic has impacted the business, but the portfolio has shown relative outperformance. Cedar's assets are mostly grocery-anchored shopping centers with necessity-based retailers, making them more resilient. Team Cedar has been actively engaging with tenants, leading to better rent collection. May collections are solid, and the team expects relative portfolio outperformance to continue. Also, emphasized supporting local food pantries during the crisis.

Robin's Statements:

• In April, 70.4% of rent was collected, and May currently at 65% with expected increase. Top five tenant categories include grocery stores, restaurants, fitness, and dollar stores. The team's efforts in tenant communication and engagement have contributed to rent collection. Also highlighted the cohesiveness of the team in navigating the crisis.

Philip's Statements:

• Q1 operating FFO was $16.7 million or $0.18 per share, with same property NOI increasing 0.8% excluding redevelopment properties. Took actions like drawing $75M on revolver, reducing dividend, and evaluating non-essential expenditures. Q2 earnings will be negatively impacted by COVID due to potential cash basis accounting for uncollectible lease income.

In April, Cedar Realty Trust collected 70.4% of rent, and in May, 65% with expectations of increasing. The top five tenant categories by annualized base rent are grocery stores (28% of total annualized base rent), fast/casual and full service restaurants, fitness, and dollar stores, making up 50% of total annualized base rent. Absolute rent collection in April was 70.4%, May currently at 65%, with grocery anchors and essential retail tenant composition contributing to strong collection.

• Withdrew full-year 2020 guidance due to COVID uncertainty. Q1 earnings not significantly impacted by COVID, but Q2 earnings will be negatively affected. Took actions to increase liquidity like drawing $75M on revolver, reducing dividend to $0.01 per share, and reducing near-term construction spend.

• Potential negative impact on earnings starting Q2 due to uncertain collectability of lease income, leading to cash basis accounting and bad debt expenses. Capital markets volatility affecting property values and transaction activity. Economic uncertainty from the COVID-19 pandemic impacting tenant ability to pay rent.

Q: Todd Thomas asked about signs of budding demand from grocers or other essential retailers to take additional space in the portfolio.

A: Bruce Schanzer said it's too soon to tell, but odds of leasing to grocers have improved due to their strong performance during the pandemic, but need to see clear of the pandemic to confidently say.

Q: Collin Mings asked about capital spending year-to-date and reimagining mixed-use projects.

A: Philip Mays said year-to-date development and renovation spend was less than $10 million. Bruce Schanzer mentioned mixed-use projects are oriented around grocers, which have done well, but it's premature to discuss further publicly.

Q: Floris van Dijkum asked about breakeven cash rent collection level and $7.4 million impairment.

A: Philip Mays said they could absorb about a 30% reduction in NOI to breakeven after considering dividend reduction and capital spending cuts. The $7.4 million impairment relates to Metro Square, driven by a dark anchor with terminated lease income.

Q: Floris van Dijkum asked about reducing leverage and stock split.

A: Bruce Schanzer said reducing leverage is not a first order focus currently, with priorities on maximizing rent and minimizing capital outflows. Stock split may be explored to meet NYSE requirements if share price doesn't recover by year-end, with no specific ratio determined yet.