BINGHAM FARMS, Mich., Feb. 26 /PRNewswire-FirstCall/ -- Malan Realty
Investors, Inc. (NYSE: MAL), a self-administered real estate investment trust
(REIT), today announced financial results for the fourth quarter and full year
of 2001.
For the quarter ended December 31, 2001, funds from operations (FFO) was
$1.4 million or 26 cents per share vs. $1.3 million or 25 cents per share for
the quarter ended December 31, 2000. Cash available for distribution (CAD)
for the quarter ended December 31, 2001 was $1.4 million or 27 cents per share
compared with $1.0 million or 20 cents per share for the quarter ended
December 31, 2000. Total revenues (excluding net gains on property sales),
consisting primarily of rent and recoveries from tenants, were $9.9 million in
the fourth quarter of 2001 vs. $10.4 million in the fourth quarter of 2000.
For the year ended December 31, 2001, FFO was $5.9 million or $1.14 per
share vs. $4.7 million or 92 cents per share for the year ended December 31,
2000. CAD for 2001 was $5.5 million or $1.08 per share compared with
$3.9 million or 75 cents per share for 2000. Total revenues in 2001 were
$40.1 million compared with $41.8 million in 2000. Total revenues exclude net
gains on property sales in both years.
"We continue to keep a close watch on the Kmart situation in conjunction
with our bankruptcy counsel," said Jeffrey Lewis, chief executive officer of
Malan Realty Investors. "While we do not anticipate any further adjustments to
the results of operations for 2001, at this time we cannot determine the exact
effect of Kmart's bankruptcy proceedings on the company's future results." To
date, Kmart has affirmed one lease and is current in all post-petition
obligations.
Malan also announced that it recorded an impairment of real estate under
Statement of Financial Accounting Standard Number 121 (FAS 121) of
$11.4 million in the fourth quarter of 2001.
"As a result of the plan approved by the board of directors in December
2001 to sell a substantial number of properties in 2002 to help meet our debt
obligations, we have reassessed our holding periods used to evaluate the
recovery of each asset under FAS 121," said Chief Financial Officer Elliott
Broderick. "The revised holding periods, as well as the potential decline in
market value of some of our Kmart properties because of the bankruptcy filing,
resulted in a writedown of several properties to their estimated net
realizable values, thereby creating the impairment loss."
The company estimates that it has unrealized gains on its other properties
in excess of the writedown; however accounting rules prohibit any offset
against the impairment charge. The impairment does not affect FFO or CAD but
is a charge to GAAP-basis earnings, which consisted of a net loss of
$11.7 million and $12.8 million, respectively, for the quarter and year ended
December 31, 2001.
Malan Realty Investors, Inc. owns, acquires, redevelops and manages
properties that are leased primarily to national and regional retail
companies. The company owns a portfolio of 58 properties located in nine
states that contains an aggregate of approximately 5.4 million square feet of
gross leasable area.
Safe Harbor Statement: This news release contains forward-looking
statements. Although the company believes that the statements and projections
are based on reasonable assumptions, actual results may differ from those
projected. Key factors that could cause actual results to differ materially
include litigation costs, development risks such as unanticipated costs,
economic downturns, bankruptcies and other financial difficulties of tenants,
including the ultimate disposition of lease agreements with Kmart Corporation
and the risk that delays in re-tenanting space subject to rejected leases
would require a writedown in the carrying value of such space in the company's
financial statements or lengthen the time needed to implement the company's
strategic plan, and other risks associated with the commercial real estate
business, and as detailed in the company's filings from time to time with the
Securities and Exchange Commission. Many of these factors are beyond the
control of the company. Malan does not undertake to update these forward-
looking statements.
News releases for Malan Realty Investors are available on the company's
Web site at http://www.malanreit.com or through Company News On-Call by fax at (800)
758-5804, ext. 114165, or http://www.prnewswire.com .
MALAN REALTY INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000
Revenues
Minimum rent $6,949 $7,217 $28,217 $29,430
Percentage and overage rents 543 588 1,369 1,531
Recoveries from tenants 2,324 2,492 10,076 10,222
Interest and other income 76 77 399 661
Gain on sale of real estate 222 3,830 3,158
Total Revenues 10,114 10,374 43,891 45,002
Expenses
Property operating and maintenance 687 947 3,317 3,215
Other operating expenses 486 849 1,848 2,151
Real estate taxes 2,083 2,259 8,310 8,409
General and administrative 775 505 2,979 2,156
Proxy contest and related change in
control costs 30 3,200
Depreciation and amortization 1,812 1,695 6,808 6,795
Impairment of real estate 11,447 190 15,266 190
Total Operating Expenses 17,290 6,475 38,528 26,116
Operating Income (Loss) (7,176) 3,899 5,363 18,886
Interest Expense 4,495 4,485 17,710 17,962
Income (loss) before extraordinary
item and cumulative effect of
change in accounting principle (11,671) (586) (12,347) 924
Extraordinary Item:
Loss on extinguishment of debt (93)
Income (loss) before cumulative
effect of change in accounting
principle (11,671) (586) (12,347) 831
Cumulative effect of change in
accounting principle (450)
Net Income (Loss) ($11,671) ($586) ($12,797) $831
Earnings (loss) per share before
extraordinary item and
cumulative effect of change in
accounting principle:
Basic and diluted ($2.28) ($0.11) ($2.40) $0.18
Earnings (loss) per share before
cumulative effect of change
in accounting principle:
Basic and diluted ($2.28) ($0.11) ($2.40) $0.16
Earnings (loss) per share:
Basic and diluted ($2.28) ($0.11) ($2.49) $0.16
Depreciation and Amortization:
Depreciation of buildings and
improvements $1,501 $1,553 $5,998 $6,255
Amortization of tenant allowances
and improvements 210 89 564 365
Amortization of leasing costs 90 53 210 171
Gain on sale of real estate (222) (3,830) (3,158)
Loss on extinguishment of debt 190 93
Impairment of real estate 11,447 15,266 190
Cumulative effect of change in
accounting principle 450
Funds From Operations, Basic and
Diluted $1,355 $1,299 $5,861 $4,747
Funds From Operations Per Share:
Basic and Diluted $0.26 $0.25 $1.14 $0.92
Weighted average shares outstanding:
Basic 5,123 5,174 5,138 5,173
Diluted 5,123 5,174 5,138 5,180
SOURCE Malan Realty Investors, Inc.
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Related links:
http://www.malanreit.com
CONTACT:
Elliott J. Broderick, Chief Financial Officer
of Malan Realty Investors, Inc., +1-248-644-7110, or Fred Nachman
of Marjan Communications Inc., +1-312-867-1771
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