Acquisitions and Redevelopments Fuel Results, Company Maintains 2002 Guidance
2001 Year-End Highlights
Financial Information
-- Diluted FFO per share of $2.62
-- 5.6% increase in Diluted FFO per share
-- 2.8% increase in Total Revenues
-- 4.9% increase in Same Center Operating Income
-- $1.68 Annual Dividend paid
Operating Results
-- West Acres shopping center acquired in Flint Twp., Michigan
-- Shenandoah Square shopping center acquired in Davie, Florida
-- De-Malling of Tel-Twelve shopping center announced in Southfield,
Michigan
-- Expanded Publix Supermarket opens at Sunshine Plaza in Tamarac,
Florida
-- Bed, Bath & Beyond lease signed at Jackson Crossing in Jackson,
Michigan
-- Wal-Mart opens at Roseville Plaza, Roseville, Michigan
-- 95.5% Portfolio Occupancy, at December 31, 2001
SOUTHFIELD, Mich., Feb. 13 /PRNewswire-FirstCall/ -- Ramco-Gershenson
Properties Trust (NYSE: RPT) announced today results for the fourth quarter
and year-ended December 31, 2001.
For the twelve months ended December 31, 2001, diluted Funds from
Operations (FFO) increased 4.9 percent, or approximately $1,481,000, to
$31,607,000, compared with $30,126,000 for the twelve months ended December
31, 2000. On a per share basis, the increase was 5.6 percent, or $0.14, to
$2.62, compared with $2.48 in 2000. Total revenues increased 2.8 percent or
$2,441,000, to $90,973,000, compared with $88,532,000 in 2000.
For the three months ended December 31, 2001, diluted FFO increased
9.7 percent, or approximately $718,000, to $8,134,000, compared with
$7,416,000 for the three months ended December 31, 2000. On a per share
basis, the increase was 9.8 percent, or $0.06, to $0.67, compared with $0.61
in 2000. Total revenues, for the quarter, decreased 2.5 percent or $602,000,
to $23,310,000, compared with $23,912,000 in 2000. The reduction in revenues
was primarily the result of the first quarter 2001 sale of White Lake
MarketPlace and Athens Towne Center.
"I am pleased to report that 2001 was a year in which we saw solid
financial growth, significant center redevelopment progress and the
substantial completion of our Crossroads development project," said Dennis
Gershenson, President and Chief Executive Officer. "All of our efforts were
focused on meeting the goals set forth in our business plan. We believe that
our 2001 objectives were achieved despite a difficult retail climate."
Acquisitions/Dispositions
In 2001, Ramco-Gershenson acquired the West Acres shopping center, a
95,000 square foot asset anchored by Farmer Jack (A & P) in Flint Township,
Michigan and Shenandoah Square shopping center, an 119,000 square foot Publix
anchored center in Davie, Florida for an aggregate purchase price of
$27 million. Both centers are part of joint ventures in which the Company has
a 40% interest. Under the terms of the joint venture agreements, RPT received
an acquisition fee and will be responsible for the property management and
leasing of the shopping centers. Each center met the Company's acquisition
criteria of having a grocery component as well as being located in a
metropolitan market.
Also during the year, RPT sold White Lake MarketPlace, a 350,000 square
foot community shopping center located in White Lake, Michigan, Athens Town
Center, a 210,000 square foot community center located in Athens, Alabama and
four out parcels. Total proceeds from the sales amounted to approximately
$29 million and were used to pay off the property mortgages and to pay down
the Company's revolving credit facility.
Asset Management
Redevelopment of Portfolio Centers
In 2001, the Company affirmed its continued commitment to adding value to
its core assets by completing three redevelopment projects, the commencement
of two center expansions and the announcement of a major shopping center de-
malling. The three projects completed during the year include; the opening of
a 136,000 square foot Wal-Mart at Roseville Plaza shopping center in
Roseville, Michigan, the opening of a 25,000 square foot Designer Shoe
Warehouse as part of a complete shopping center renovation at Clinton Valley
shopping center in Clinton Township, Michigan as well as the grand opening of
a new 51,000 square foot Publix Supermarket at Sunshine Plaza shopping center
in Tamarac, Florida, which coincides with a complete facelift of the center.
The aggregate cost of the three projects approximated $9.1 million producing a
return on new dollars invested of 13%.
Also in 2001, RPT commenced the redevelopment of our Lantana shopping
center in Lantana, Florida, which will include an entirely updated facade and
the building of a new 61,000 square foot Publix Supermarket prototype. At our
Jackson Crossing center in Jackson, Michigan we announced the signing of a
lease with Bed, Bath & Beyond. A number of tenants were relocated in 2001 to
make way for the new store.
In addition, the Company announced the de-malling and expansion of its
Tel-Twelve shopping center in Southfield, Michigan. The enclosed portion of
the center totaling 133,000 square feet of tenant space will be demolished to
allow for the construction of a new 140,000 square foot Lowe's Home
Improvement and a 25,000 square foot Designer Shoe Warehouse. Additional
improvements to the shopping center include the development of two retail
outlots of 13,000 square feet each. These buildings will be occupied for the
most part by retailers who performed so well in the mall portion of the center
that they wished to maintain their presence at this location. Also
contemplated are two restaurant outlots.
Same Center Analysis
In the fourth quarter operating income improved 6.1% as compared to the
4th quarter in 2000. On a twelve-month basis operating income improved in
2001 over 2000 by 4.9%. These numbers reflect a healthy increase for the core
portfolio even as the Company was taking some rental income off-line in
anticipation of the 2001/2002 redevelopment projects.
Leasing and Occupancy
During the year, the Company opened 64 new non-anchor stores, at an
average base rent of $11.54 per square foot, which represents a 2.5% increase
above the portfolio average. The Company also renewed 69 non-anchor leases,
achieving an increase of 6.7% above prior rental rates. Additionally, the
Company signed 8 new anchor leases. Approximately 95.5% of the gross leasable
area for the portfolio was leased at year-end.
Development
At year-end, construction of the Company's 600,000 square foot Crossroads
Centre in Rossford, Ohio (Toledo, Ohio) was substantially complete. Home
Depot, Target and Giant Eagle opened in the spring of 2001. Michael's Crafts,
Linens 'N Things, Payless Shoes, Shoe Carnival, Fashion Bug, Bath & Body
Works, Pet Supplies Plus and Pier I Imports also opened during the year. The
Company is in the process of leasing the remaining outlots at the center as
well as one mid-box site.
Finance
Total capitalization as of December 31, 2001 was approximately
$540.5 million. At year-end, fixed rate loans accounted for approximately
77.8% of RPT's outstanding debt with an average maturity of 4 years and an
average interest rate of 7.7%. The weighted average interest rate on the
Company's variable rate debt was 5.1%. EBITDA interest rate coverage ratios
were 2.2 and 2.2 for the quarter and year-end, respectively.
Subsequent Events
In January of 2002, Kmart Corporation filed for Chapter 11 bankruptcy
protection. RPT currently has eight Kmart stores in operation as well as two
Builder Square leases guaranteed by Kmart. At the time of this release Kmart
has rejected the Builders square lease at RPT's West Allis Towne Center
shopping center in West Allis, Wisconsin. The remaining Builders Square
location at the Company's Kentwood shopping center in Grand Rapids, Michigan
is currently being sublet and is presently 100% occupied. All of the
Company's Kmart stores are located in major metropolitan markets. Of the
eight Kmart stores five are located in metropolitan Detroit. The average
rental rate for the eight locations is less than $4.00 per square feet. Kmart
represented 6.1% of the Company's base rental revenues at year-end.
Share Repurchase
During the year the Company purchased 44,200 common shares at an average
price of $14.78 per share. Since inception of the share repurchase program in
March of 2000 the Company has purchased 135,900 common shares at an average
price of $14.29 per share. At year-end 7,091,526 common shares were
outstanding.
Dividend
The Company paid a cash dividend on its common shares of $0.42 per share
on January 15, 2002 to shareholders of record as of December 31, 2001, which
represents a payout ratio of 62.3% of FFO for the quarter. The annual
dividend amounted to $1.68 per share, of which 30.71% represents a capital
gain and 69.29% was ordinary income. The FFO payout ratio improved to 64.2%
for the year, compared with 67.7% for year-ended December 31, 2000. For the
year, total shareholder return on investment was 37%, taking into
consideration share price appreciation and dividend yield.
2002 Guidance/Conference Call Information
As stated previously in our third quarter release the Company estimates
that our 2002 annual FFO will be between $2.30 and $2.40 per share. This
range reflects the results of RPT taking income off line as part of several
major redevelopment projects. In each instance leases have been executed with
national, credit tenants who will commence rental payments in the second half
of 2002 or in the first half of 2003. Thus, although the revenue loss is
unavoidable, it will be more than replaced by anchor rents that exceed rentals
terminated and in each instance increase the value of the asset. It is also
important to note that if the Company's FFO per share were to come in at the
low end of guidance range of $2.30 per share for 2002, the payment of the
dividend at the current rate would represent a payout ratio of approximately
73% of FFO and 84% of FAD (Funds available for Distribution).
RPT will host a live broadcast of its 4th Quarter/Year-End conference call
on February 14, 2002 at 10:30 a.m. eastern time. The live broadcast will be
available online at http://www.ramcogershenson.com and http://www.streetevents.com and also
by telephone at 888-792-1093 (no pass code needed). A replay will be
available shortly after the call on the aforementioned Websites (for ninety
days) or by telephone at 888-266-2086, passcode 5814895 (for one week).
Supplemental financial information is available via e-mail by sending
requests to dhendershot@rgpt.com and is also available at the investor section
of our Web page.
Ramco-Gershenson Properties Trust has a portfolio of 57 shopping centers
totaling approximately 11.4 million square feet of gross leasable area,
consisting of 56 community centers, of which nine are power centers and three
are single tenant properties, as well as one enclosed regional mall. Our
centers are located in Michigan, Ohio, Wisconsin, New Jersey, Maryland,
Virginia, North Carolina, South Carolina, Tennessee, Georgia, Alabama and
Florida. Headquartered in Southfield, Michigan, the Trust is a fully
integrated, self-administered, publicly-traded real estate investment trust
(REIT) which owns, develops, acquires, manages and leases community shopping
centers, regional malls and single tenant retail properties, nationally.
This press release contains forward-looking statements with respect to the
operation of certain of the Trust's properties. Management of Ramco-
Gershenson believes the expectations reflected in the forward-looking
statements made in this document are based on reasonable assumptions. Certain
factors could occur that might cause actual results to vary. These include
general economic conditions, the strength of key industries in the cities in
which the Trust's properties are located, the performance of the Trust's
tenants at the Trust's properties and elsewhere, and other factors discussed
in the Trust's reports filed with the Securities and Exchange Commission.
Ramco-Gershenson Properties Trust
Consolidated Statements of Income
(In thousands, except per share amounts)
Three Three
Months Months Year Year
Ended Ended Ended Ended
12/31/01 12/31/00 12/31/01 12/31/00
REVENUES (Unaudited) (Unaudited) (Unaudited)
Minimum rents $15,804 $15,263 $61,043 $60,228
Percentage rents 216 160 1,442 1,745
Recoveries from tenants 6,268 7,743 23,303 23,884
Fees and management income 551 - 2,485 -
Interest and other income 471 746 2,700 2,675
Total Revenues 23,310 23,912 90,973 88,532
EXPENSES
Real estate taxes 3,327 3,737 10,168 9,449
Recoverable operating expenses 3,314 4,069 14,286 15,104
Depreciation and amortization 4,960 4,270 17,083 15,274
Other operating 351 365 1,464 1,460
General and administrative 2,069 1,487 8,337 5,520
Interest expense 6,436 7,631 26,332 27,756
Total Expenses 20,457 21,559 77,670 74,563
Operating income 2,853 2,353 13,303 13,969
Earnings from unconsolidated
entities 196 83 813 198
Income before gain on sale of
real estate and minority
interest 3,049 2,436 14,116 14,167
Gain on sale of real estate 84 375 5,550 3,795
Minority interest 914 672 5,803 4,942
Net income before cumulative
effect of change in
accounting principle 2,219 2,139 13,863 13,020
Cumulative effect of change
in accounting principle (A) - - - (1,264)
Net income $2,219 $2,139 $13,863 $11,756
Preferred stock dividends 847 845 3,360 3,360
Net income available to
common shareholders $1,372 $1,294 $10,503 $8,396
Basic and diluted earnings
per share before cumulative
effect of change in
accounting principle:
Basic $0.19 $0.18 $1.48 $1.34
Diluted $0.19 $0.18 $1.47 $1.34
Basic and diluted earnings
per share after cumulative
effect of change in
accounting principle:
Basic $0.19 $0.18 $1.48 $1.17
Diluted $0.19 $0.18 $1.47 $1.17
Weighted average shares
outstanding:
Basic 7,092 7,151 7,105 7,186
Diluted 7,125 7,151 7,125 7,187
Ramco-Gershenson Properties Trust
Calculation of Funds from Operations(B)
(In thousands, except per share data)
(Unaudited)
Three Three
Months Months Year Year
Ended Ended Ended Ended
12/31/01 12/31/00 12/31/01 12/31/00
Net Income $2,219 $2,139 $13,863 $11,756
Add:
Depreciation and amortization
expense 4,999 4,356 17,148 15,584
Cumulative effect of change
in accounting principle - - - 1,264
Gain on sale of undepreciated
land - 249 - -
Minority interest in
partnership 914 672 5,803 4,942
Less:
Loss (Gain) on sale of
real estate(C) 2 - (5,207) (3,420)
Funds from Operations-diluted 8,134 7,416 31,607 30,126
Less:
Preferred share dividends 847 845 3,360 3,360
Funds from Operations-basic $7,287 $6,571 $28,247 $26,766
Funds from Operations per share:
Diluted $0.67 $0.61 $2.62 $2.48
Basic $0.73 $0.65 $2.81 $2.64
Basic weighted average
shares outstanding(D) 10,037 10,096 10,050 10,131
Convertible Preferred shares
and options 2,032 2,000 2,020 2,001
Diluted weighted average
shares outstanding(E) 12,069 12,096 12,070 12,132
Ramco-Gershenson Properties Trust
Consolidated Balance Sheets
(In thousands)
December 31, December 31,
2001 2000
ASSETS (Unaudited)
Investment in real estate, net $496,269 $509,629
Cash and cash equivalents 5,542 2,939
Accounts receivable, net 17,627 15,954
Equity investments in and advances
to unconsolidated entities 7,837 9,337
Other assets, net 25,454 22,425
Total Assets $552,729 $560,284
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgages and notes payable $347,275 $354,008
Distributions payable 5,062 5,076
Accounts payable and accrued expenses 18,830 15,355
Total Liabilities 371,167 374,439
Minority Interest 48,157 47,301
Commitments and Contingencies --- ---
Shareholders' Equity 133,405 138,544
Total Liabilities and Shareholders' Equity $552,729 $560,284
(A) In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
(SAB 101), which among other topics, requires that real estate companies
should not recognize contingent percentage rents until the specified
target that triggers this type of income is achieved. We had previously
recorded percentage rents throughout the year based on rent estimated to
be due from the tenant. We adopted the provisions of SAB 101 as of
April 1, 2000. The cumulative effect of such adoption is a reduction in
percentage rents retroactive to January 1, 2000, of approximately
$1,264,000.
(B) Management generally considers funds from operations ("FFO") an
appropriate supplemental measure of our financial performance because it
is predicated on cash flow analyses. We have adopted the most recent
National Association of Real Estate Investment Trusts ("NAREIT")
definition of FFO, which was amended January 1, 2000. Under the NAREIT
definition, FFO represents income before minority interest excluding
extraordinary items, as defined under accounting principles generally
accepted in the United States of America, gains on sales of depreciable
property, plus real estate related depreciation and amortization
(excluding amortization of financing costs), and after adjustments for
unconsolidated partnerships and joint ventures. Our computation of FFO
may, however, differ from the methodology for calculating FFO utilized by
other real estate companies, and therefore, may not be comparable to these
other real estate companies. FFO should not be considered an alternative
to net income as an indication of our performance or to cash flows as a
measure of liquidity or our ability to pay distributions.
FFO does not represent cash generated from operating activities in
accordance with generally accepted accounting principles and should not be
considered an alternative to net income as an indication of the Trust's
performance or to cash flows from operating activities as a measure of
liquidity or the ability to pay distributions. Furthermore, while net
income and cash generated from operating, investing and financing
activities, determined in accordance with generally accepted accounting
principles, consider capital expenditures which have been and will be
incurred in the future, the calculation of FFO does not.
(C) Excludes gain on sale of undepreciated land of $343,000 in 2001 and
$375,000 in 2000.
(D) Represents the weighted average total shares outstanding, assuming the
redemption of all operating partnership units for common shares.
(E) Represents the weighted average total shares outstanding, assuming the
redemption of all operating partnership units for common shares, the
conversion of convertible preferred shares to common shares, and dilutive
stock options.
For more information on Ramco-Gershenson Properties Trust visit our
Website @ http://www.ramcogershenson.com
SOURCE Ramco-Gershenson Properties Trust
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Related links:
http://www.ramcogershenson.com
CONTACT:
Dennis Gershenson, President & CEO, or
Richard Smith, CFO, +1-248-350-9900, or fax, +1-248-350-9925,
both of Ramco-Gershenson
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