Data center-focused real estate investment trust QTS Realty Trust Inc. launched a restructuring plan focusing on hyperscale and hybrid colocation, which it said are the two primary drivers of demand in its business.
Chairman and CEO Chad Williams said the company will refocus 100% of its resources to the two offerings. The restructuring also includes further narrowing the company's emphasis on C3, with plans to exit certain noncore C3 custom products, and cloud and managed services products. It will also execute a broader cost reduction initiative, which will include reducing rent expenses, software licenses and communications expense.
As part of the plan, QTS Realty unveiled a slew of management changes. With Dan Bennewitz, COO for sales and marketing, retiring within 2018, the company started a search for a chief revenue officer as his replacement. The executive will lead both hybrid colocation sales and marketing.
QTS COO of Operations Jim Reinhart will transition out of the company and his responsibilities will be assumed by David Robey and Jon Greaves. Robey presently leads QTS property development, hyperscale sales engineering and property engineering, and will be named COO. Meanwhile, Chief Technology Officer Greaves will increase his operational responsibilities in the hybrid colocation business.
QTS is projecting a marginal impact on its consolidated 2018 adjusted EBITDA and operating funds from operations per diluted share from the restructuring plan. The company will alter its earnings reporting and supplemental disclosures to reflect the realignment of its business around Hyperscale and Hybrid Colocation, starting from the first quarter.
Separately, the company said in its fourth-quarter 2017 earnings statement that it received roughly $15.0 million in net proceeds from the issue of 274,440 shares of its class A common stock during the period. For the full year, it netted about $108.1 million from the issuance of 2,036,121 shares of class A common stock.
QTS also declared a regular quarterly cash dividend of 41 cents per share for the 2018 first quarter, a 5.1% uptick over its 2017 quarterly per-share dividend rate of 39 cents per share. The distribution will be paid April 5 to common stockholders on record March 22.