Fourth-quarter/Full-year Highlights
- 10.1% increase in full-year FFO per share
- 7.8% increase in fourth-quarter FFO per share
- 40% increase in annual EBITDA
- 45% growth in total assets
- 2.9x debt service coverage
- Portfolio occupancy at 93%
Financial Highlights (dollars in 000's, except per-share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
1998 1997 % 1998 1997 %
Change Change
Revenues $36,702 $26,537 38% $131,037 $97,552 34%
EBITDA $24,184 $16,929 43% $83,812 $60,019 40%
Funds from
Operations $14,016 $11,783 19% $52,316 $42,710 23%
FFO Per Share
- Basic $0.55 $0.51 8% $2.09 $1.89 11%
FFO Per Share
- Diluted $0.55 $0.51 8% $2.08 $1.89 10%
Net Income to
Common Share
Owners $7,191 $4,614 56% $56,598 $25,127 125%
Net Income Per
Share - Basic $0.30 $0.21 43% $2.39 $1.15 108%
Net Income Per
Share - Diluted $0.30 $0.21 43% $2.37 $1.15 106%
At December 31, 1998 1997
Total Market
Capitalization $1,075,261 $817,662 32%
Portfolio Occupancy 93% 94% (1%)
Total Square
Feet 15.8 million 10.1 million 56%
No. of Properties 98 53 85%
NORTHBROOK, Ill., Feb. 4 /PRNewswire/ -- Bradley Real Estate, Inc.
(NYSE: BTR) today reported a 7.8 percent increase in fourth-quarter funds from
operations per share over the prior-year quarter to $0.55, or $14.0 million,
from $0.51, or $11.8 million. Funds from operations for the year increased
10.1 percent per share to $2.08 per share, or $52.3 million, compared to $1.89
per share, or $42.7 million, in the prior year. All per-share amounts are
reported for common shares on a diluted basis.
Commenting on the quarter and year-end 1998 results, Thomas P. D'Arcy,
chairman and chief executive officer, stated, "Our fourth-quarter and
full-year results reflect the continued solid performance of our portfolio and
our Midwest markets. We had a very productive year in 1998, increasing our
asset base 45 percent by adding 47 properties. At December 31, we owned 98
shopping centers comprising approximately 16 million square feet. We are now
one of the leading owners of grocery-anchored shopping centers in the Midwest
and, as such, enjoy significant economies of scale in our markets. We plan to
aggressively leverage this infrastructure to create earnings growth and value
for our share owners."
D'Arcy continued, "During 1998, despite a difficult market for real estate
securities, Bradley delivered a 4.4 percent total return to our share owners,
outperforming the NAREIT equity index by 22 percent and the NAREIT strip
shopping center index by 11.4 percent. While encouraged by our relative
performance, we were disappointed with the aggregate return provided to our
investors in 1998. However, over the past three years, Bradley has delivered
an average total return of 23.6 percent, and we are optimistic about our
company's prospects for 1999 and beyond."
Net income for the quarter totaled $7.2 million, or $0.30 per share,
compared with $4.6 million, or $0.21 per share, for the prior-year quarter.
Net income for 1998 totaled $56.6 million, or $2.37 per share, compared with
$25.1 million, or $1.15 per share, for the prior year. Net income for 1998
included a net gain of $29.7 million on the sale of real estate investments,
and net income for 1997 included a net gain of $7.4 million on the sale of
real estate investments.
At December 31, 1998, total assets increased to $969 million from
$669 million a year earlier. The company's debt to total market
capitalization was 44 percent, and its debt service coverage ratio for the
quarter was 2.9 times. Total debt outstanding was $472 million at a weighted
average interest rate of 7.16 percent and a weighted average maturity of 5.31
years. At December 31, 1998, the company had approximately $80 million
available under its $250 million unsecured line of credit. Also, the company
was holding for sale certain non-core real estate assets with a book value of
approximately $46.5 million.
Strong Leasing Activity
Portfolio occupancy at year-end was 93 percent, the same as the prior
quarter. Leasing activity remained strong during the quarter with 35 new
leases signed totaling 114,000 square feet at an average base rent for
comparable space of $13.97 per square foot, a twenty-three percent increase
over the prior average base rent. In addition, during the quarter the company
renewed 48 leases totaling 146,000 square feet at an average base rent of
$11.75 per square foot, a six percent increase over the prior average base
rent.
For the year, the company signed 142 new leases, totaling 663,000 square
feet, at an average base rent for comparable space of $10.91 per square foot,
a 12 percent increase over the prior average base rent. In addition, the
company renewed 170 leases, totaling 658,000 square feet, at an average base
rent of $10.07 per square foot, a six percent increase over the prior average
base rent.
Focus for 1999
Commenting on the company's outlook for 1999, D'Arcy stated, "We are
optimistic regarding the company's outlook entering the new year. Our core
portfolio is performing well and we have earmarked a number of assets for
redevelopment which should provide high returns on invested capital. In
addition, our acquisition and development infrastructure within the Midwest
enables us to continually identify selected higher-yielding investment
opportunities. While the level of investment in such opportunities will be
carefully calibrated to the overall state of the capital markets, it will be
partially financed with the proceeds from the sale of certain non-core
properties and retained cash. In sum, we believe our 1999 activities will
produce a very acceptable level of earnings growth while strengthening our
capital position."
Bradley Real Estate, Inc. is the nation's oldest real estate investment
trust (REIT) and a leading owner and operator of neighborhood and community
shopping centers located in the Midwest region of the United States. The
company has paid 150 consecutive quarterly distributions to its share owners,
one of the longest records of distributions among publicly traded REITs. The
company owns 98 properties located in 16 states, aggregating 15.8 million
square feet of rentable space.
In addition to the regular quarterly earnings releases and quarterly
reports, the company also makes available on a quarterly basis supplemental
information which includes property- and corporate-level detail. This
information is available upon request from the company.
The preceding information contains forward-looking statements of the
company's plans, objectives and expectations, which are dependent upon a
number of factors including a stable retailing climate in the Midwestern
United States, the financial viability of the company's tenants and the
continuing availability of retail center acquisitions and development
opportunities in the Midwest on favorable terms. Reference is made to the
discussions under the captions "Risk Factors" in the company's Form 10-K
report for 1997 which includes a discussion of certain other factors which
could cause actual results to differ materially from those in forward-looking
statements.
BRADLEY REAL ESTATE, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
December 31, %
1998 1997 Change
ASSETS
Real estate investments-at cost $936,465 $626,247 49.5%
Accumulated depreciation and
amortization (59,196) (40,574) 45.9%
Net real estate investments 877,269 585,673 49.8%
Real estate investments held for sale 46,492 52,692 -11.8%
Other assets:
Cash and cash equivalents - 4,747 -100.0%
Rents and other receivables, net of
allowance for doubtful accounts of
$4,078 for 1998 and $2,438 for 1997 14,994 13,038 15.0%
Investment in partnership 13,249 - 100.0%
Deferred charges, net and other assets 16,676 12,641 31.9%
Total assets $968,680 $668,791 44.8%
LIABILITIES AND SHARE OWNERS' EQUITY
Mortgage loans $103,333 $51,227 101.7%
Unsecured notes payable 199,542 99,783 100.0%
Line of credit 169,500 151,700 11.7%
Accounts payable, accrued expenses and
other liabilities 29,415 25,086 17.3%
Total liabilities 501,790 327,796 53.1%
Minority interest 21,573 21,170 1.9%
Share Owners' equity:
Shares of preferred stock and paid-in
capital, par value $.01 per share;
liquidation preference $25.00 per share:
Authorized 20,000,000 shares; 3,478,493
shares issued and outstanding 86,809 -- 100.0%
Shares of common stock and paid-in
capital, par value $.01 per share:
Authorized 80,000,000 shares; issued
and outstanding, 23,958,662 at
December 31, 1998 and 22,999,120
at December 31, 1997 349,254 333,452 4.7%
Shares of excess stock, par value $.01
per share:
Authorized 50,000,000 shares; 0 shares
issued and outstanding -- --
Retained earnings (distributions in excess
of accumulated earnings) 9,254 (13,627) -167.9%
Total share owners' equity 445,317 319,825 39.2%
Total liabilities and share owners'
equity $968,680 $668,791 44.8%
BRADLEY REAL ESTATE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
Three months ended Twelve months ended
December 31, December 31,
% %
1998 1997 Change 1998 1997 Change
Income:
Rental income $35,802 $26,193 36.7% $128,444 $96,115 33.6%
Other income 900 344 161.6% 2,593 1,437 80.4%
36,702 26,537 38.3% 131,037 97,552 34.3%
Expenses:
Operations,
maintenance and
management 5,629 3,534 59.3% 18,915 14,012 35.0%
Real estate taxes 5,272 4,746 11.1% 21,713 18,398 18.0%
Mortgage and other
interest 8,114 4,969 63.3% 27,681 16,562 67.1%
General and
administrative 1,956 1,328 47.3% 7,183 5,123 40.2%
Non-recurring
stock-based
compensation -- 3,415 -100.0% -- 3,415 -100.0%
Depreciation and
amortization 6,628 4,507 47.1% 22,974 16,606 38.3%
27,599 22,499 22.7% 98,466 74,116 32.9%
Income before equity
in earnings of
partnership, net
gain on sale of
properties and
extraordinary
item 9,103 4,038 125.4% 32,571 23,436 39.0%
Equity in earnings
of partnership 339 -- 100.0% 586 -- 100.0%
Net gain on sale
of properties -- 5,665 -100.0% 29,680 7,438 299.0%
Income before
extraordinary item
and allocation to
minority
interest 9,442 9,703 -2.7% 62,837 30,874 103.5%
Income allocated to
minority interest (425) (458) -7.2% (3,317) (1,116) 197.2%
Income before
extraordinary
item 9,017 9,245 -2.5% 59,520 29,758 100.0%
Extraordinary loss
on prepayment of
debt, net of
minority interest -- (4,631) 100.0% -- (4,631) 100.0%
Net income 9,017 4,614 95.4% 59,520 25,127 136.9%
Preferred share
distributions (1,826) -- -100.0% (2,922) -- -100.0%
Net income
attributable to
common share
owners $7,191 $4,614 55.9% $56,598 $25,127 125.2%
Basic net income per
common share:
Income before
extraordinary
item $0.30 $0.42 -28.6% $2.39 $1.36 75.7%
Extraordinary loss
on prepayment of
debt, net of
minority interest -- (0.21) 100.0% -- (0.21) 100.0%
Net income $0.30 $0.21 42.9% $2.39 $1.15 107.8%
Diluted net income per
common share:
Income before
extraordinary
item $0.30 $0.42 -28.6% $2.37 $1.36 74.3%
Extraordinary loss
on prepayment of
debt, net of
minority interest -- (0.21) 100.0% -- (0.21) 100.0%
Net income $0.30 $0.21 42.9% $2.37 $1.15 106.1%
CALCULATION OF FUNDS FROM OPERATIONS
(Dollars in thousands, except per share data)
Three Months Ended Twelve Months Ended
December 31, December 31,
% %
1998 1997 Change 1998 1997 Change
FUNDS FROM OPERATIONS:
Income before
extraordinary items
and allocation to
minority
interest $9,442 $9,703 -2.7% $62,837 $30,874 103.5%
-Preferred share
distributions (1,826) -- -100.0% (2,922) -- -100.0%
+ Depreciation of
real estate assets
& amortization of
tenant
improvements 5,450 3,773 44.4% 18,635 13,407 39.0%
+ Amortization of
deferred leasing
commissions 610 259 135.5% 2,184 1,259 73.5%
+ Other amortization
including deferred
finance & non real
estate related
costs 568 475 19.6% 2,155 1,940 11.1%
- Amortization of
deferred finance &
non real estate
related costs (270) (177) 52.5% (962) (747) 28.8%
+ Depreciation and
amortization
included in equity
in earnings of
partnership 42 -- 100.0% 69 -- 100.0%
+ Non-recurring
stock-based
compensation -- 3,415 -100.0% -- 3,415 -100.0%
- Net (gain) provision
for loss on real
estate investments -- (5,665) 100.0% (29,680) (7,438) 299.0%
FUNDS FROM
OPERATIONS $14,016 $11,783 19.0% $52,316 $42,710 22.5%
Funds from
Operations per
share - basic $0.55 $0.51 7.8% $2.09 $1.89 10.6%
Funds from
Operations per
share - diluted $0.55 $0.51 7.8% $2.08 $1.89 10.1%
RECONCILIATION OF BASIC EARNINGS AND FUNDS FROM OPERATIONS PER SHARE
TO DILUTED EARNINGS AND FUNDS FROM OPERATIONS PER SHARE
Three Months Ended December 31,
1998
Net Income Income Shares Per-Share
Basic:
Income before extraordinary item $7,191,000 23,848,450 $0.30
Effect of dilutive securities:
Dilutive options exercised -- 44,467
Stock-based compensation -- --
Preferred stock * -- --
Conversion of OP Units 425,000 1,409,103
Diluted:
Income before extraordinary item $7,616,000 25,302,020 $0.30
Funds From Operations
Basic:
Funds From Operations $14,016,000 25,257,553 $0.55
Effect of dilutive securities:
Dilutive options exercised -- 44,467
Preferred stock 1,826,000 3,551,672
Diluted:
Funds From Operations $15,842,000 28,853,692 $0.55
Three Months Ended December 31,
1997
Net Income Income Shares Per-Share
Basic:
Income before extraordinary item $9,245,000 22,087,730 $0.42
Effect of dilutive securities:
Dilutive options exercised -- 51,978
Stock-based compensation -- 1,250
Preferred stock * -- --
Conversion of OP Units 458,000 1,093,529
Diluted:
Income before extraordinary item $9,703,000 23,234,487 $0.42
Funds From Operations
Basic:
Funds From Operations $11,783,000 23,181,259 $0.51
Effect of dilutive securities:
Dilutive options exercised -- 51,978
Preferred stock -- --
Diluted:
Funds From Operations $11,783,000 23,233,237 $0.51
Twelve Months Ended December 31,
1998
Net Income Income Shares Per-Share
Basic:
Income before extraordinary item $56,598,000 23,660,542 $2.39
Effect of dilutive securities:
Dilutive options exercised -- 47,452
Stock-based compensation -- --
Preferred stock * 2,922,000 1,440,286
Conversion of OP Units 3,317,000 1,401,464
Diluted:
Income before extraordinary item $62,837,000 26,549,744 $2.37
Funds From Operations
Basic:
Funds From Operations $52,316,000 25,062,006 $2.09
Effect of dilutive securities:
Dilutive options exercised -- 47,452
Preferred stock 2,922,000 1,440,286
Diluted:
Funds From Operations $55,238,000 26,549,744 $2.08
Twelve Months Ended December 31,
1997
Net Income Income Shares Per-Share
Basic:
Income before extraordinary item $29,758,000 21,776,146 $1.36
Effect of dilutive securities:
Dilutive options exercised -- 42,451
Stock-based compensation -- 315
Preferred stock * -- --
Conversion of OP Units 1,116,000 799,938
Diluted:
Income before extraordinary item $30,874,000 22,618,850 $1.36
Funds From Operations
Basic:
Funds From Operations $42,710,000 22,576,084 $1.89
Effect of dilutive securities:
Dilutive options exercised -- 42,451
Preferred stock -- --
Diluted:
Funds From Operations $42,710,000 22,618,535 $1.89
*Amounts are not included for the three month period ended December 31,
1998 as the effects are anti-dilutive.
SOURCE Bradley Real Estate, Inc.
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CONTACT:
Thomas P. D'Arcy, Chairman and CEO of Bradley
Real Estate, 847-272-9800; or Dennis Waite, of The Financial
Relations Board, 312-640-6674
NOTE TO EDITORS: To receive additional information on Bradley
Real Estate free of charge via fax, dial 1-800-PRO-INFO and enter
"BTR."
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