Exhibit 99.1
PRESS RELEASE | FOR IMMEDIATE RELEASE |
| Omaha, Nebraska |
November 3, 2022
MEDIA CONTACT:
Karen Marotta
Greystone
212-896-9149
Karen.Marotta@greyco.com
INVESTOR CONTACT:
Andy Grier
Investors Relations
402-952-1235
America First Multifamily Investors, L.P. Reports Third Quarter 2022 Results
Omaha, Nebraska – On November 3, 2022, America First Multifamily Investors, L.P. (NASDAQ: ATAX) (the “Partnership” or “ATAX”) announced financial results for the three months ended September 30, 2022.
Financial Highlights
The Partnership reported the following results for the three months ended September 30, 2022:
In September 2022, the Partnership announced that the Board of Managers of Greystone AF Manager LLC declared a cash distribution to the Partnership's BUC holders of $0.57 per BUC. The distribution consisted of a regular quarterly distribution of $0.37 per BUC plus a supplemental distribution payable in the form of additional BUCs equal in value to $0.20 per BUC. The supplemental distribution was paid at a ratio of 0.01044 BUCs for each issued and outstanding BUC as of the record date. The regular cash and supplemental distributions were paid on October 31, 2022, to BUC holders of record as of the close of trading on September 30, 2022. While the Board has not yet declared any distributions for subsequent quarters, the Partnership currently expects to continue to be in a position to make supplemental distributions, in addition to the regular quarterly distributions, for the fourth quarter of 2022.
Management Remarks
“Our third quarter results continue to demonstrate strong returns from the execution of our strategies,” said Kenneth C. Rogozinski, the Partnership’s Chief Executive Officer. “The successful sale of Vantage at O’Connor in July is the latest transaction to generate significant returns on our joint venture equity investments. Despite recent market volatility, we continue to see opportunities to execute additional joint venture equity investments as well as fund traditional MRB and GIL transactions. We also believe our current liquidity position allows us to capitalize on additional investment opportunities in our pipeline.”
“In October 2022, we executed our first joint venture equity commitment with the Freestone development group to fund $16.0 million for the construction of Freestone at Greeley, a 306-unit market-rate multifamily property in Greeley, CO. The key principals of the Freestone development group were formerly affiliated with the Vantage development group and were closely involved in our 20 Vantage joint venture equity investments to date,” said Rogozinski. “We are looking forward to working collaboratively with the Freestone and Vantage development groups to bring the Partnership’s 10 remaining Vantage-branded joint venture equity investments to completion and ultimate sale. The remaining key principals of the Vantage development group may present future joint venture equity investments opportunities to the Partnership, as may the Freestone development group.”
Recent Investment and Financing Activity
The Partnership reported the following notable transactions during the third quarter of 2022:
In October 2022, the Partnership issued 1,000,000 Series A-1 Preferred Units with an aggregate stated value of $10,000,000 in exchange for 1,000,000 outstanding Series A Preferred Units held by a financial institution. We received no net proceeds as a result of the exchange transaction. Except in certain limited circumstances, the newly issued Series A-1 Preferred Units will be eligible for redemption on the sixth anniversary of the date of the exchange in October 2028. To date, we have exchanged $30.0 million of our previously issued $94.5 million of Series A Preferred Units for newly issued Series A-1 Preferred Units.
Investment Portfolio Updates
The Partnership announced the following updates regarding its investment portfolio:
Disclosure Regarding Non-GAAP Measures
This report refers to Cash Available for Distribution (“CAD”), which is identified as a non-GAAP financial measure. The Partnership believes CAD provides relevant information about our operations and is necessary, along with net income, for understanding its operating results. Net income is the GAAP measure most comparable to CAD. There is no generally accepted methodology for computing CAD, and the Partnership’s computation of CAD may not be comparable to CAD reported by other companies. Although the Partnership considers CAD to be a useful measure of our operating performance, CAD is a non-GAAP measure and should not be considered as an alternative to net income that is calculated in accordance with GAAP, or any other measures of financial performance presented in accordance with GAAP. See the table at the end of this press release for a reconciliation of our net income as determined in accordance with GAAP and the Partnership’s CAD for the periods set forth.
Earnings Webcast & Conference Call
The Partnership will host a conference call for investors on Thursday, November 3, 2022 at 4:30 p.m. Eastern Time to discuss the Partnership’s Third Quarter 2022 results.
For those interested in participating in the question-and-answer session, please note that there is a new process to access the call via telephone. Individuals interested in joining by telephone should register for the call at the following link to receive the dial-in number and unique PIN to access the call:
https://register.vevent.com/register/BI5566458d709d4ecd951e813da55e58c8
The call is also being webcast live in listen-only mode. The webcast can be accessed via the Partnership's website under “Events & Presentations” or via the following link: https://edge.media-server.com/mmc/p/bwfspybn
It is recommended that you join 15 minutes before the conference call begins (although you may register, dial-in or access the webcast at any time during the call).
A recorded replay of the webcast will be made available on the Partnership’s Investor Relations website at http://www.ataxfund.com.
About America First Multifamily Investors, L.P.
America First Multifamily Investors, L.P. was formed on April 2, 1998 under the Delaware Revised Uniform Limited Partnership Act for the primary purpose of acquiring, holding, selling and otherwise dealing with a portfolio of mortgage revenue bonds which have been issued to provide construction and/or permanent financing for affordable multifamily, student housing and commercial properties. The Partnership is pursuing a business strategy of acquiring additional mortgage revenue bonds and other investments on a leveraged basis. The Partnership expects and believes the interest earned on these mortgage revenue bonds is excludable from gross income for federal income tax purposes. The Partnership seeks to achieve its investment growth strategy by investing in additional mortgage revenue bonds and other investments as permitted by the Partnership’s Amended and Restated Limited Partnership Agreement, dated September 15, 2015, taking advantage of attractive financing structures available in the securities market, and entering into interest rate risk management instruments. America First Multifamily Investors, L.P. press releases are available at www.ataxfund.com.
Safe Harbor Statement
Certain statements in this press release are intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by use of statements that include, but are not limited to, phrases such as “believe,” “expect,” “future,” “anticipate,” “intend,” “plan,” “foresee,” “may,” “should,” “will,” “estimates,” “potential,” “continue,” or other similar words or phrases. Similarly, statements that describe objectives, plans, or goals also are forward-looking statements. Such forward-looking statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Partnership. The Partnership cautions readers that a number of important factors could cause actual results to differ materially from those expressed in, implied, or projected by such forward-looking statements. Risks and uncertainties include, but are not limited to: defaults on the mortgage loans securing our mortgage revenue bonds and governmental issuer loans; the competitive environment in which the Partnership operates; risks associated with investing in multifamily, student, senior citizen residential properties and commercial properties; general economic, geopolitical, and financial conditions, including the current and future impact of changing interest rates, inflation, international conflicts, and the novel coronavirus (“COVID-19”) on business operations, employment, and financial conditions; uncertain conditions within the domestic and international macroeconomic environment, including monetary and fiscal policy and conditions in the investment, credit, interest rate, and derivatives markets; adverse reactions in U.S. financial markets related to actions of foreign central banks or the economic performance of foreign economies, including in particular China, Japan, the European Union, and the United Kingdom; the general condition of the real estate markets in the regions in which we operate, which may be unfavorably impacted by increases in mortgage interest rates, slowing economic growth, persistent elevated inflation levels, and other factors; changes in interest rates and credit spreads, as well as the success of any hedging strategies we may undertake in relation to such changes, and the effect such changes may have on the relative spreads between the yield on our investments and our cost of financing; persistent inflationary trends, spurred by multiple factors including expansionary monetary and fiscal policy, high commodity prices, a tight labor market, and low residential vacancy rates, which may result in further interest rate increases and lead to increased market volatility; the Partnership’s ability to access debt and equity capital to finance its assets; current maturities of the Partnership’s financing arrangements and the Partnership’s ability to renew or refinance such financing arrangements; potential exercising of redemption rights by the holders of the Series A Preferred Units; local, regional, national and international economic and credit market conditions; recapture of previously issued Low Income Housing Tax Credits in accordance with Section 42 of the Internal Revenue Code; geographic concentration within the mortgage revenue bond and governmental issuer loan portfolio held by the Partnership; changes in the U.S. corporate tax code and other government regulations affecting our business; and the other risks detailed in the Partnership’s SEC filings (including but not limited to, the Partnership’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K). Readers are urged to consider these factors carefully in evaluating the forward-looking statements.
If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, the developments and future events concerning the Partnership set forth in this press release may differ materially from those expressed or implied by these forward-looking statements. You are cautioned not to place undue reliance on these statements, which speak only as of the date of this document. We anticipate that subsequent events and developments will cause our expectations and beliefs to change. The Partnership assumes no obligation to update such forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events, unless obligated to do so under the federal securities laws.
Cash Available for Distribution (“CAD”)
The following table shows the calculation of CAD (and a reconciliation of the Partnership’s net income, as determined in accordance with GAAP, to CAD) for the three and nine months ended September 30, 2022 and 2021:
|
| For the Three Months Ended September 30, |
|
| For the Nine Months Ended September 30, |
| ||||||||||
|
| 2022 |
|
| 2021 |
|
| 2022 |
|
| 2021 |
| ||||
Net income |
| $ | 18,516,593 |
|
| $ | 12,988,384 |
|
| $ | 62,387,292 |
|
| $ | 30,245,918 |
|
Change in fair value of derivatives |
|
| (2,871,716 | ) |
|
| 9,261 |
|
|
| (6,579,280 | ) |
|
| 11,304 |
|
Depreciation and amortization expense |
|
| 688,488 |
|
|
| 680,925 |
|
|
| 2,056,512 |
|
|
| 2,049,269 |
|
Provision for credit loss (1) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 900,080 |
|
Provision for loan loss (2) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 330,116 |
|
Reversal of impairment on securities (3) |
|
| (5,712,230 | ) |
|
| - |
|
|
| (5,712,230 | ) |
|
| - |
|
Reversal of provision for loan loss (4) |
|
| (593,000 | ) |
|
| - |
|
|
| (593,000 | ) |
|
| - |
|
Amortization of deferred financing costs |
|
| 982,388 |
|
|
| 368,829 |
|
|
| 1,926,580 |
|
|
| 823,212 |
|
Restricted unit compensation expense |
|
| 580,156 |
|
|
| 570,467 |
|
|
| 919,563 |
|
|
| 839,551 |
|
Deferred income taxes |
|
| (42,543 | ) |
|
| (42,011 | ) |
|
| (49,250 | ) |
|
| (77,681 | ) |
Redeemable Preferred Unit distributions and accretion |
|
| (716,490 | ) |
|
| (717,762 | ) |
|
| (2,150,734 | ) |
|
| (2,153,288 | ) |
Tier 2 Income allocable to the General Partner (5) |
|
| (70,200 | ) |
|
| (534,873 | ) |
|
| (2,905,748 | ) |
|
| (2,603,020 | ) |
Recovery of prior credit loss (6) |
|
| (17,345 | ) |
|
| - |
|
|
| (39,968 | ) |
|
| - |
|
Bond premium, discount and origination fee amortization, net |
|
| 957,343 |
|
|
| (17,846 | ) |
|
| 819,627 |
|
|
| (54,552 | ) |
Total CAD |
| $ | 11,701,444 |
|
| $ | 13,305,374 |
|
| $ | 50,079,364 |
|
| $ | 30,310,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average number of BUCs outstanding, basic |
|
| 22,247,781 |
|
|
| 20,426,559 |
|
|
| 22,247,336 |
|
|
| 20,423,679 |
|
Net income per BUC, basic |
| $ | 0.79 |
|
| $ | 0.57 |
|
| $ | 2.56 |
|
| $ | 1.24 |
|
Total CAD per BUC, basic |
| $ | 0.53 |
|
| $ | 0.65 |
|
| $ | 2.25 |
|
| $ | 1.48 |
|
Cash Distributions declared, per BUC (7) |
| $ | 0.366 |
|
| $ | 0.327 |
|
| $ | 1.257 |
|
| $ | 0.921 |
|
BUCs Distribution declared, per BUC (8) |
| $ | 0.20 |
|
| $ | - |
|
| $ | 0.20 |
|
| $ | - |
|
For the nine months ended September 30, 2022, Tier 2 income allocable to the General Partner consisted of approximately $2.6 million related to the gain on sale of Vantage at Murfreesboro in March 2022, and approximately $260,000 related to the gain on sale of Vantage at Westover Hills in June 2022. For the nine months ended September 30, 2021, Tier 2 income allocable to the General Partner consisted of approximately $703,000 related to the gain on sale of Vantage at Germantown in March 2021, approximately $1.4 million related to the gain on sale of Vantage at Powdersville in May 2021, approximately $462,000 related to the redemption of Rosewood Townhomes - Series A and South Pointe Apartments - Series A MRBs in July 2021, and approximately $73,000 related to the gain on sale of Vantage at Bulverde in August 2021.