Greetings, and welcome to Wheeler Real Estate Investment Trust 2017 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now pleasure to turn the conference over to your host Laura Nguyen, Director of Investor Relations. Thank you. You may begin.

Good morning, everyone, and thank you for joining us. On the call today will be Jon Wheeler, Chairman and CEO, Wheeler Real Estate Investment Trust; and Wilkes Graham, Chief Financial Officer. Following Management’s discussion, there will be a question-and-answer session, which is open to all participants on the call. On today’s call, management’s prepared remarks and answers to questions may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ from those discussed today. For a more detailed discussion related to these risks and uncertainties, we encourage listeners to review the Company’s most recent filings with the SEC. As a reminder, forward-looking statements represent management’s view only as of the date of this call. Wheeler Real Estate Investment Trust assumes no obligations to update any forward-looking statements in the future. Definitions and reconciliations of non-GAAP measures are included in the Company’s quarterly supplemental package, which is available through the Company’s Web site. With that, I’d now like to turn the call over to Jon Wheeler, Chief Executive Officer and Chairman of Wheeler Real Estate Investment Trust. Jon please go ahead.

Thank you, Laura. Good morning, everyone. And welcome to the 2017 first quarter earnings call for Wheeler Real Estate Investment Trust. Today's call will begin with the high-level review on the results from our portfolio operations and then I'll discuss the retail market headwinds we are seeing which undoubtedly affected our shareholders and how we are in fact outperforming our peers on a total return basis despite our seemingly flat stock price over the past nine months. We will also review our quarterly financials, update our second quarter and full year 2017 guidance then discuss our balance sheet and speak briefly about the reverse stock split and move to our quarterly dividend payments which were effective on March 31. I'll then close the call with our long and short-term goals for 2017. As stated in our last conference call 2017 is the gear of results for Wheeler. We have spent the past four years acquiring accretive assets that fit our core criteria of being grocery anchored and necessity based retail and growing shareholder value through positive leasing spreads, revenue growth and expense management, lowering our weighted average cost of capital, reducing our general and administrative cost and growing AFFO. The company has grown exponentially since 2012, yet we still continue to believe the stock is trading well below NAV, and we are not being rewarded for all our good work we have done to get here. We maintain that our strategy is sound and that we have a very skilled team of associates across all disciplines focusing on maximizing shareholder value. That being said we had a miss on our AFFO guidance of $0.36 to $0.38 per share for the first quarter mostly due to higher than expected seasonal property expenses and general and administrative costs. Still in the face…

Thank you, Jon and good morning everyone. I’ll begin by touching on some of the financial highlights in the first quarter of 2017. I’ll then address guidance followed by our review of our operations and balance sheet. We reported first quarter 2017 AFFO per share of $0.31 below our guidance of $0.36 to $0.38. The variance to our guidance principally comprises $0.01 per share and higher than expected auditing, [indiscernible] and tax return fees some of which have been budgeted for the second quarter of 2017. Approximately, $0.02 per share of higher than expected property operating expenses including higher still removable cost, and most of which can be reimbursed by our tenants later in the year. Another few pennies per share and higher than expected seasonal G&A cost including onetime catch up payment on 2016 sale income taxes and slightly higher benefits costs. To summarize we had guided to $0.045 per share of seasonal costs and these came in $0.03 higher overall, or $0.075 per share for the quarter. The additional $0.02 per share of higher property expenses for which we will seek reimbursements from our tenants later in the year accounted for the rest of the $0.05 miss relative to the lower end of our guidance. Further these $0.075 of seasonal cost and $0.02 of higher operating expenses add up to $0.095 which combined with the $0.015 share of loss income from the Career Point Vacancy at parameter square that will be backfilled with higher rents later this year, accounts from 100% of the $0.11 per share variance between our reported $0.31 results and our $0.42 dividend. Comparing our results to the first quarter 2016, or reported AFFO of $0.31 came in 45% up year-over-year and after adjusting for the $0.11 of total seasonal property and corporate expenses higher…

Thank you, Wilks. As we look to the second quarter we are not pleased with the overages on the expenses during the first quarter and specifically the miss on guidance. However we are working hard to maintain and grow top line results to improve our cost containment initiatives at both the property and corporate levels, to opportunistically strengthen our balance sheet and broaden our investor base. We see 2017 as an increasingly challenging operating environment, but see opportunity specialty and ancillary income over the balance of the year to additional leasing, development and other unscheduled income opportunities in our current portfolio. Long-term we see ability to refinance properties that have materially higher interest rates and as what is market today and recouping some of the unexpected expenses in Q1 during our year and reconciliation process. We are hyper focused on creating long-term shareholder value as I along with management and the board have heavily invested in the company. With that I would like to thank you all and turn it back over to the operator. Operator?

Thank you. [Operator Instructions] Our first question comes from Mitch Germain with JMP Securities. Please proceed with your question.

So it seems like the ability to meet that dividend payment at this point, to the higher end, everything kind of has to go right for you to get there. A lot of your gains that you referenced Jon in terms of stock performance being given back today, why not just cut it and right size the dividend to a level that appears to be more aligned with the cash flows of the company?

Thank you, Mitch. First of all, obviously, that wouldn’t be my decision that would be a board decision as you know, number one. Number two, we feel very strong about where we are and what our prospects are for 2017, we can't predict mother nature and the excess of snow removable cost, some of the items that we felt that would have been expensed in the second quarter of 2017 took effect in the first quarter of 2017. And it's not a smoothen if you will or a blending that we can do over a 12-month period, we have to do the measuring [ph] quarter-by-quarter. So now that we are out of the first quarter in essence and we are in the second quarter, we feel our prospects are strong and we don’t think that a dividend cut is warranted.

And you guys reported earnings Feb 28th, establish guidance then, how much of that $0.09 or so because I know you've referenced them, so how much of that $0.09 was already somewhat known?

I mean, we established guidance in the February we only had January results so the $0.02 of higher property operating expenses obviously we determined that as we got results from the properties over the course of all three-months and the same as can be said to the $0.03 of extra seasonal cost, the majority of those happened in February and March.

Got you, and then seems it has to do about $0.44 of quarter to get to the mid-point of your guidance, for the rest of the way you are guiding to about $0.40 to $0.41. So where is that big pick-up in the back half of the year, is that the Career Point backfill?

Mitch it's Jon. I think there is a couple of things. I think it's the reconciliation process that will be completed when you get into April, May and June. Obviously, some of them are true, obviously take a little bit longer than what we've liked. I think number two the progression on the leasing that we have seen very, very strong results at on none of the small jobs that as we referenced earlier on the anchored renewing early, and I think on some of the Phase 2 components that we have in the pipeline is referenced on Falling Road and also we talked in the past about the Colombia powerhouse project down in Colombia, South Carolina. So I think it's really like four or five so process that will get us there. It's not just one. And quite frankly it's the constant focus, constant push on rent spreads and the ancillary and specialty income of the parking deals. As I've said the last four and half years, it's amazing the income that you can pick up literally investing in the parking fields.

Last question for me. Wilkes just with regards to the new expiation details that are illustrated in the supplement, I guess I'm confused, what's expiring for the next nine months?

For the next nine months we have 269,000 expiring, just at the end of this year.

So that’s not in the supplement alright?

The supplement is on a 12-month basis, so its displayed as the 12-month ending March 31 2018.

Any way you can shoot me that information on the nine months ended for December 31?

I think going forward we are going to break it out on a calendar basis in our disclosures, but I'll get it to you.

Our next question comes from Steve Shaw with Compass Point. Please proceed with your question.

You guys had three renewals at lower rental rates, can you guys talk about those?

Which one were those? I am not -- where was that referenced Steve?

[Multiple Speakers] you guys each have renewal rates, leases, what -- when amount of lease of that increase were flat and decreased there three that quarter renewed that lower rental rates.

We could follow up offline on that Steve. To give you the details.

[Operator Instructions] Our next question comes from Craig Kuccera with Wunderlich. Please proceed with your question.

Just following back up on the guidance, I think last quarter Wilkes you had talked that I think for the year cash G&A was going to be around 4.8 million, what is emended in the new guidance?

It should be practically 200,000, so 5 million which accounts with higher seasonal cost in the first quarter.

Okay so that’s the only change. I saw you -- you did mention you extended the loan with Reviewer [ph], but can you comment on how things are progressing with your third quarter maturity, particularly the bank line of credit? I think both are fairly small balances, but are coming good?

The 15 million of maturities we have next two years is outside of KeyBank and Reviewer. They're all small balances, we are working on each of them. I don’t think we can comment on any one individual, but we feel our prospects are good for each of them.

And I appreciate you mentioning the bad debt, but clearly there has been a pretty healthy uptick the last couple of quarters can you comment on higher seeing, tenant performance and are you seeing any segments or tenants that you have on a negative watch list that give you some concern?

Yes, its Jon, Craig. So obviously as we've previously mentioned that soft goods and we really don’t have that much soft goods. And as you know with more in the safety and service retail oriented. So on a watch list per say with the consolidation going on in the grocery store industry, which I think is good and it makes the makes that consolidation of his competitors stronger. I do think you could potentially will see some type of fall-out in the future, now who that will be and who that will not be, I don’t know. But again, the retailers that are in all markets in the sector of tertiary markets doing our analysis and our health ratio we feel that they are all in a pretty good position right now been at that 3% to 4% rent versus growth sales. So as those specific type, I think the electronics, we don’t have a heavy emphasis on electronics or furniture. The video stores we don’t give any value to. So as to any higher percentage it just doesn’t exist.

Craig, let me also note that the $250,000 of bad debt in the first quarter, about $150,000 of that was Career Point rents that we still accrued in the first quarter. I think we won't be accruing those in the second. So you'll see about 150,000 -- you'll see a %150,000 reduction both rental income and the bad debt expense.

Got it, all right thanks for the color.

Our next question comes from the line of Frank Ullman with FCU Holdings. Please proceed with your question.

Jon, in your prepared remarks you commented that your tenants are reporting increases in the same-store sales. I'm curious if you can provide a little bit more color on that because most of the tenants in your Top 10 list, at least the ones that are publicly traded have reported declines nationally. And then the one quick comment, I see in your Top 10 list that Byloan and Dixie separated out as different companies, as are Kroger and Harris Teeter, yet they are affiliated in those two respective cases. May I suggest you add a note in the future to reflect that.

That's a very good point. Thank you for Sir and the reason we do that is because they do operate those independently. So referencing Kroger and Harris Teeter, obviously Kroger bought Harris Teeter and they are operated independently. That maybe have there buying power collectively as to their wholesale and credit lines but we had a couple of Kroger, we had the one Harris Teeter and since you brought up here is Teeter, that's the one down there on Falling Road outside that we will probably go down outside of Charleston. As it relates to trending our upward trending sales we've focused on the health ratio, we will prefer that a grocery store would be between 3% and 4% in their base rent versus their growth sales and if you look at the investor deck on our website we've shown a little pie chart, I'm not sure what page that's on, but a pie chart is to where those percentages are and there are just a few out liars that are in that 4% to 5% range, but most of them are between 3% and 4%. Now a product typical grocery in the secondary and tertiary markets, they're healthy and they're profitable between $250 and $275 per square foot on an annual basis. So if you take a 30,000 foot store and just do the multiple between $8 million and $10 million growth sales stores are profitable, and that leads to a whole another conversation about competition risk, where we are buying assets at 50% of replacement cost. Whereas somebody new came in, it would be at 200 or 250 a foot and were to 100 bucks a foot. So where there may be declining sales on a particular tenant, their health ratios were still good and they are still profitable stores, but they may have declined because of whatever type of competition, as I mentioned in past conversations, you have Wegman's in south and Public's march in north. You have the consolidation we have previously talked about and also you have the hold in leaders of the coming in from Germany that are obviously taking retail dollars away from somebody else. And one last point on that, the years ago with the Wal-Mart effect, that was always the big beast, almost the devil out there that’s gone, and Wal-Mart's really not doing that many more super stores and they've cut back on the inner-city express doors and they're mainly focusing on the village grocery stores. But also they are putting a heavy focus on online as other that we know about the Amazon and so for, but as with privacy mentioned that our narrative, we just don’t see that online sales generating too much business in our secondary and tertiary markets as well as those stores or those sales to be generated from those sales and those markets. Have I answered your question sir?

Ladies and gentlemen, we have reached the end of the question and answer session. I would like to turn the call back to Jon Wheeler for closing remarks.

Thank you, operator. Again, focusing on retail and general we are sometimes kind of looped in or thrown into retail as to the big box retailers and the malls. And we don’t do malls we don’t do big box we don’t do town centers and we don’t do outlet centers. And we're primarily focused on grocery anchored shopping centers and then assassin service business. And a lot of the backfills for the formal video stores had been fitness facilities as well as like for example, we had a prior fitness going into formal Career Point down in parameter and Tulsa Oklahoma. And I am proud to say that both privately prior to November 12, and now publicly that just about in all cases, when we had some type of failure that was an unscheduled event created by a tenant, we've been able to easily backfield that space at higher rates with better crop shopping and co-tenancy with retailers that are not currently represented in that particular sub market. So in turn that creates just an overall better environment and also in most cases it creates a customer draw or traffic that is switched from maybe a three to five mile radius to attend 15 even a 20 mile radius and again bringing customers to the shopping center. So one thing I always like to say is, we know how to buy well, but we know how to lease and manage very well and also when situation happen like Career Point, and there will be future ones as well down the road. So on behalf the team here of Wheeler, I would like to thank all those that dialed in for the call and we look forward to talk to you again in august when we report second quarter 2017 results. Everybody have a great day. Thank you.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.