SAN DIEGO, April 2 /PRNewswire/ -- Burnham Pacific Properties, Inc.
(NYSE: BPP) today announced financial results for the fourth quarter and year
ended December 31, 2000. Net income available to common stockholders for this
fourth quarter was $1,691,000, or $0.05 per share, as compared to net income
of $653,000, or $0.02 per share, for the quarter ended December 31, 1999. For
the year ended December 31, 2000, net income (loss) available to common
stockholders was a net loss of $41,245,000, or a loss of $1.45 per share, as
compared to net income of $12,487,000, or $0.39 per share, for 1999.
The year-over-year decline in net income was primarily attributable to a
third quarter impairment write-off taken in connection with the Company's plan
to liquidate, lower revenues resulting from asset sales in 1999 and 2000, a
decrease in lease termination fees and management fee income, an increase in
borrowing costs, and costs associated with the Company's pursuit of its
strategic alternatives and the implementation of its Plan of Complete
Liquidation and Dissolution.
Results for 2000 were also negatively impacted by legal and litigation
settlement expenses related to a verdict against the Company in favor of a
tenant, severance expenses related to the resignation of former executive
officers of the Company, and a restructuring charge related to the termination
of the CalPERS joint venture.
The Company has historically reported Funds From Operations ("FFO")
because it is generally accepted in the REIT industry as a meaningful
supplemental measure of performance. However, because the Company is
liquidating, it no longer believes that FFO is meaningful to understanding its
performance and is therefore no longer reporting FFO.
Review of Results
For the fourth quarter ended December 31, 2000, revenues decreased by
$1,855,000 to $29,900,000 from $31,755,000 in the fourth quarter of 1999.
This decrease was primarily attributable to a decrease of $1,020,000 in
management fee income resulting from the termination of the Company's joint
venture with CalPERS in September 2000, and a decrease in interest and other
income of $875,000. Including the one-time expense items referenced below,
net income available to common stockholders was $1,691,000, or $0.05 per
share, as compared to $653,000, or $0.02 per share, for the prior-year period.
Net income for the fourth quarter of 2000 included a net gain on sales of real
estate of $5,660,000, while net income for the fourth quarter of 1999 included
a net gain on sales of real estate of $872,000. The 2000 and 1999 three-month
periods were unfavorably impacted by costs of $3,052,000 and $1,876,000,
respectively, associated with the Company's pursuit of its strategic
alternatives. The fourth quarter of 2000 was also unfavorably impacted by
legal and litigation settlement expenses of $337,000 related to a verdict
against the Company in favor of a tenant. If these one-time charges were
excluded, net income available to common stockholders before gain on sales of
real estate in the fourth quarter of 2000 was a net loss of $580,000, or a
loss of $0.02 per share, as compared to net income of $1,657,000, or $0.05 per
share, in the fourth quarter of 1999.
For the twelve months ended December 31, 2000, revenues decreased
$11,600,000 to $121,210,000 from $132,810,000 for the twelve months ended
December 31, 1999. This decrease was primarily the result of asset
dispositions, a decrease in management fee income of $4,310,000, and a
decrease in lease termination fees of $3,200,000. Including the one-time
expense items referenced below, net income (loss) available to common
stockholders for 2000 was a net loss of $41,245,000, or a loss of $1.45 per
share, as compared to net income of $12,487,000, or $0.39 per share, for 1999.
Net income for 2000 included a net gain on sales of real estate of $6,886,000,
while net income for 1999 included a net gain on sales of real estate of
$10,371,000. The 2000 and 1999 periods were unfavorably impacted by costs of
$7,694,000 and $4,548,000, respectively, associated with the Company's pursuit
of its strategic alternatives. Net income for 2000 was also unfavorably
impacted by a third quarter impairment write-off of $32,330,000 taken in
contemplation of the Company's plan to liquidate, a restructuring charge of
$1,921,000 for severance and related costs for employees affected by the
termination of the Company's joint venture with CalPERS, legal and litigation
settlement expenses of $3,902,000 related to a verdict against the Company in
favor of a tenant. Net income for 1999 was unfavorably impacted by a
$1,353,000 restructuring charge related to the Company's decision to outsource
its property management function to third-party providers, $748,000 in costs
associated with the abandonment of certain prospective acquisition
transactions, $2,200,000 in impairment write-offs related to the sales of two
office building properties, and $1,866,000 recognized as the cumulative effect
of a change in accounting principle. If these one-time charges were excluded,
net income (loss) available to common stockholders before gain on sales of
real estate for 2000 was a net loss of $2,284,000, or a loss of $0.07 per
share, compared to net income of $12,831,000, or $0.40 per share, in 1999.
Adjustment to Liquidation Basis of Accounting
As a result of the adoption of the Plan of Liquidation and its approval by
the Company's stockholders, the Company adopted the liquidation basis of
accounting for all periods subsequent to December 15, 2000. Under the
liquidation basis of accounting, assets are stated at their estimated net
realizable values, and liabilities, including the reserve for estimated costs
during the period of liquidation, are stated at their anticipated settlement
amounts. The estimated value of real estate held for sale is based on current
contracts, estimates as determined by independent appraisals or other
indications of sales value, net of estimated sales costs and capital
expenditures of approximately $21,351,000 anticipated during the liquidation
period. The estimated valuations of other assets and liabilities under the
liquidation basis of accounting are based on management estimates and
assumptions as of December 31, 2000. The financial results for 2000 are
presented separately for the period prior to the adoption of the liquidation
basis of accounting (January 1, 2000 to December 15, 2000) and subsequent to
its adoption (December 16, 2000 to December 31, 2000). To permit comparisons
of the financial results for the year ended December 31, 2000 to those of the
prior year, the amounts for 2000 have been combined in the Consolidated
Statements of Income (Loss).
On December 16, 2000, in accordance with the liquidation basis of
accounting, assets were adjusted to estimated net realizable value and
liabilities were adjusted to estimated settlement amounts, including estimated
costs associated with carrying out the liquidation. The net adjustment at
December 31, 2000, required to convert from the going concern (historical
costs) basis to the liquidation basis of accounting, amounted to a negative
adjustment of $85,228,000, which is included in the December 31, 2000
Consolidated Statement of Changes in Net Assets (liquidation basis).
Significant increases (decreases) in the carrying value of net assets are
summarized, as follows:
Increase to reflect estimated net realizable values of
certain real estate properties $28,388,000
Deferral of appreciated gain on real estate properties (15,584,000)
Decrease to reflect estimated net realizable value of
real estate (56,004,000)
Write-off of other assets (21,802,000)
Increase to reflect net realizable value of investments in
unconsolidated subsidiaries 1,763,000
Deferral of appreciated gain on investments in
unconsolidated subsidiaries (1,763,000)
Reserve for estimated costs during the period of
liquidation (19,116,000)
Liquidation Preference on Series 2000-C Preferred Stock
and Preferred Units (6,000,000)
Write-off of deferred debt costs (364,000)
Effect on minority interest of adjustment to liquidation
basis 5,254,000
Adjustment to reflect the change to liquidation basis of
accounting $(85,228,000)
Adjusting assets to estimated net realizable value resulted in the
write-up of certain real estate properties and the write-down of other real
estate properties. The anticipated gains associated with the write-up of
certain real estate properties have been deferred until their sales, and the
anticipated losses associated with the write-down of other certain real estate
properties have been included in the Consolidated Statement of Changes of Net
Assets. The write-down of other assets included amounts for unamortized lease
commissions and straight-line rents.
Under liquidation accounting, the Company is required to estimate and
accrue the costs associated with executing the Plan of Liquidation. These
amounts can vary significantly due to, among other things, the timing and
realized proceeds from property sales, the costs of retaining personnel and
trustees to oversee the liquidation, including the costs of insurance, the
timing and amounts associated with discharging known and contingent
liabilities and the costs associated with cessation of the Company's
operations. These costs are estimates and are expected to be paid during the
liquidation period.
Dispositions
From the adoption of the Plan of Liquidation by the Company's Board of
Director's in August 2000 through March 31, 2001, the Company has sold
9 properties.
During the fourth quarter of 2000, the Company sold five shopping centers
and one office building. In October 2000, the Company sold the Anacomp office
building for approximately $21,300,000. On December 5, 2000, the Company sold
the Meridian Village and San Diego Factory Outlet Center for an aggregate of
approximately $48,700,000. On December 29, 2000, the Company sold La Mancha,
the Plaza at Puente Hills and Valley Central shopping center for an aggregate
of approximately $109,900,000. Meridian Village, San Diego Factory Outlet, La
Mancha, the Plaza at Puente Hills, and Valley Central represent a portion of a
portfolio of properties targeted for sale under an agreement with The
Prudential Life Insurance Company of America.
In February 2001, the Company sold the Puget Park and Cameron Park
shopping centers for approximately $18,953,000. In March 2001, the Company
sold the Richmond shopping center for approximately $10,381,000. These
transactions also represent a portion of a portfolio of properties targeted
for sale under the agreement with Prudential.
This press release contains forward-looking statements that predict or
indicate future events or trends or that do not relate to historical matters.
There are a number of important factors that could cause actual events to
differ materially from those indicated by such forward-looking statements.
These factors include, but are not limited to, the following: we may be
unsuccessful in implementing our liquidation strategy; we may not be able to
complete the liquidation in a timely manner or realize proceeds from the sales
of assets in amounts that will enable us to provide currently anticipated
liquidating distributions to our stockholders; we have outstanding
indebtedness maturing at various times during 2001, and we may be unable to
repay, refinance, replace or extend any or all of this indebtedness on terms
that are favorable to the Company, or at all; and occupancy rates and market
rents may be adversely affected by economic and market conditions which are
beyond our control, including imbalances in supply and demand for retail
shopping center space and the financial condition of our tenants.
You should also read the risk factors that are discussed in the Company's
periodic reports filed with the Securities and Exchange Commission, including
the risk factors that were disclosed in our Form 10-K which will be filed with
the SEC on April 3, 2001. You should be aware that the risk factors contained
in that Form 10-K may not be exhaustive. Therefore, we recommend that you
read the information in that Form 10-K together with other reports and
documents that we file with the SEC from time to time, including our Forms
10-K, 10-Q and 8-K and Proxy Statements, which may supplement, modify,
supersede or update those risk factors.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(in thousands, except per share amounts)
Quarter Ended Year to Date
12/31/2000 12/31/1999 12/31/2000 12/31/1999
Revenues
Rents $30,136 $30,096 $119,448 $126,091
Fee Income -- 1,020 768 5,078
Interest and Other Income (236) 639 994 1,641
Total Revenues 29,900 31,755 121,210 132,810
Costs and Expenses
Interest 10,804 9,172 42,823 38,209
Rental Operating 9,129 8,914 35,345 35,832
Provision for Bad Debt 1,044 604 1,829 1,231
General & Administrative 897 1,901 8,906 7,581
Restructuring Charge (223) -- 1,921 1,353
Litigation 1,852 727 5,465 1,215
Costs Associated with
Unsolicited Proposal
and Pursuit of Strategic
Alternatives 3,052 1,876 7,694 4,548
Abandoned Acquisition Costs -- -- -- 748
Impairment Write-Off -- -- 32,330 2,200
Depreciation &
Amortization 4,914 6,737 24,874 26,364
Total Costs and Expenses 31,469 29,931 161,187 119,281
Income from Operations
before Income from
Unconsolidated Subsidiaries,
Minority Interest, Gain
(Loss) on Sales of Real
Estate and Cumulative
Effect of Change in
Accounting Principle (1,569) 1,824 (39,977) 13,529
Income from Unconsolidated
Subsidiaries 1 431 100 1,077
Minority Interest (201) (1,074) (1,587) (5,024)
Gain (Loss) on Sales of
Real Estate 5,660 872 6,886 10,371
Income before Cumulative
Effect of Change in
Accounting Principle 3,891 2,053 (34,578) 19,953
Cumulative Effect of Change
in Accounting Principle -- -- -- (1,866)
Net Income 3,891 2,053 (34,578) 18,087
Dividends Paid to
Preferred Stockholders (2,200) (1,400) (6,667) (5,600)
Income Available to
Common Stockholders $ 1,691 $653 $(41,245) $12,487
Basic Earnings Per Share:
Income before Cumulative
Effect of Change in
Accounting Principle $ 0.05 $0.02 $(1.45) $0.45
Cumulative Effect of
Change in Accounting
Principle -- -- -- (0.06)
Net Income $ 0.05 $0.02 $(1.45) $0.39
Diluted Earnings Per Share:
Income before Cumulative
Effect of Change in
Accounting Principle $ 0.05 $0.02 $(1.45) $0.45
Cumulative Effect of
Change in Accounting
Principle -- -- -- (0.06)
Net Income $ 0.05 $0.02 $(1.45) $0.39
Weighted Average Shares
Outstanding 32,336,000 32,268,274 32,336,000 32,062,331
BURNHAM PACIFIC PROPERTIES, INC.
CONSOLIDATED STATEMENT OF NET ASSETS AS OF DECEMBER 31, 2000
(LIQUIDATION BASIS)
AND CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1999
(GOING CONCERN BASIS)
(in thousands, except per share amounts)
2000 1999
ASSETS
Real Estate-Net $970,800
Real Estate Held for Sale $743,527 8,737
Cash and Cash Equivalents 5,110 11,119
Restricted Cash 9,004 9,827
Receivables-Net 8,467 8,413
Investment in Unconsolidated Subsidiaries 5,131 3,650
Other Assets 1,993 22,469
Total 773,232 1,035,015
LIABILITIES
Accounts Payable and Other Liabilities 21,235 29,224
Tenant Security Deposits 2,246 2,606
Notes Payable 349,237 400,410
Line of Credit Advances 51,267 138,420
Reserve for Estimated Costs During the
Period of Liquidation 19,116
Deferred Gain on Real Estate Assets 17,347
Total Liabilities 460,448 570,660
Minority Interest 19,837 66,350
Mandatorily Redeemable Series 2000-C
Convertible Preferred Stock 115,500
STOCKHOLDERS' EQUITY
Preferred Stock, Par Value $.01/share,
10,000,000 and 5,000,000 Shares
Authorized at December 31, 2000 and 1999,
respectively; 4,800,000 Shares Designated
as Series 2000-C Convertible Preferred,
and 4,800,000 Shares Designated as Series
1997-A Convertible Preferred at December 31,
2000 and 1999, respectively; 4,400,000 and
2,800,000 Shares Outstanding at December 31,
2000 and 1999, respectively 28
Common Stock, Par Value $.01/share,
90,000,000 and 95,000,000 Shares Authorized,
32,336,622 and 32,273,546 Shares Outstanding
at December 31, 2000 and 1999, respectively 323
Paid-in Capital in Excess of Par 528,811
Dividends Paid in Excess of Net Income (131,157)
Total Stockholders' Equity 398,005
Total Liabilities and Stockholders' Equity $1,035,015
NET ASSETS IN LIQUIDATION $177,447
For further information, please contact Daniel B. Platt, Chief Financial
Officer of Burnham Pacific Properties, Inc., 619-652-4700, fax, 619-652-4711,
dbplatt@bpac.com.
SOURCE Burnham Pacific Properties, Inc.
 back to top
Related links:
http://www.burnhampacific.com
CONTACT:
Daniel B. Platt, Chief Financial Officer of
Burnham Pacific Properties, Inc., 619-652-4700, fax,
619-652-4711, dbplatt@bpac.com
|
