Diluted FFO per share of $0.62
SOUTHFIELD, Mich., April 15 /PRNewswire-FirstCall/ -- Ramco-Gershenson
Properties Trust (NYSE: RPT) announced today results for the first quarter
ended March 31, 2002.
For the three months ended March 31, 2002, diluted Funds from Operations
(FFO) were $7,454,000 compared with $7,958,000 for the three months ended
March 31, 2001. On a per share basis first quarter results were $0.62
compared with $0.66 in 2001. The decrease in FFO for the quarter is primarily
the result of the major redevelopment of two shopping centers, Tel-Twelve and
Lakeland. Both centers experienced a planned drop in net income, affecting
FFO, as the Company took a substantial portion of the regional and local
tenant rentals off line to make way for national anchor credit tenants. The
reduction in FFO also reflects a reduction in income due to the sale in the
first quarter of 2001 of White Lake MarketPlace and Athens Towne Center.
Income from continuing operations for the three months ended March 31,
2002, was $2,223,000 compared with $6,081,000 for the three months ended
March 31, 2001. On a diluted earnings per share basis, earnings from
continuing operations decreased from $0.67 in 2001 to $0.20 in 2002. The
decrease in earnings is attributable to the $5.0 million gain on the sale of
White Lake and Athens Towne Center, which occurred in the first quarter of
last year.
"Our numbers are in line with expectations and are reflective of
significant changes occurring in our portfolio," said Dennis Gershenson,
president and chief executive officer. "We anticipated a drop in earnings
this year as we take income off line for the de-malling of our Tel-Twelve
shopping center and the expansion and retenanting of Lakeland. These
projects demonstrate the Company's willingness to accept a short-term decrease
in FFO in order to achieve a long-term increase in shareholder value. The
income from our new national tenants will begin to come on line in late 2002
and 2003. "
Asset Management
During the quarter the Company made substantial progress on the de-malling
of its 650,000 square foot Tel-Twelve shopping center in Southfield, Michigan.
The Designer Shoe Warehouse expansion and relocation is nearing completion and
the construction of the new Lowe's Home Improvement store will commence in the
second quarter with completion expected in the second quarter 2003. One
retail outlot building at the shopping center is complete and occupied. A
second retail outlot building is nearing completion.
The Publix Supermarket expansion at Lantana shopping center in Lantana,
Florida is on schedule. A grand re-opening of the center is planned for the
fourth quarter this year. Bed, Bath and Beyond is also currently under
construction at RPT's Jackson Crossing shopping center, with a fall planned
opening.
Leasing
Leasing activity continues to be strong throughout the portfolio. In the
first quarter, the Company opened 11 new non-anchor stores, at an average base
rent of $14.14 per square foot, which is 24.5% above portfolio average. The
Company also renewed 40 non-anchor leases at an average increase of 6.9% over
prior rental rates. As of March 31, 2002 the portfolio was 94.0% leased.
Acquisitions/Dispositions
On April 10, 2002, the Company sold Hickory Corners, a 178,000 square foot
community shopping center located in Hickory, North Carolina. Total proceeds
from the sale approximated $10.7 million and will be deployed to pay down debt
and fund future acquisitions and redevelopments. This center was accounted
for as property held for sale at March 31, 2002.
Common Share Offering
The Company intends to issue 3,500,000 shares of common stock through a
public offering. Deutsche Bank Securities, McDonald Investments and Robertson
Stephens are underwriting the offering. Upon completion of the sale,
approximately 10.9 million shares of common stock will be outstanding.
The Company intends to use the proceeds from the sale to redeem the Series
A Preferred Shares held by Morgan Stanley Asset Management and its clients and
to acquire the equity of RPT's institutional partner in Rivertowne Square and
Chester Springs shopping centers. The remaining proceeds will be utilized to
pay down the Company's credit facility.
A registration statement relating to these securities has been filed with
the Securities and Exchange Commission but has not yet become effective.
These securities may not be sold nor may offers to buy be accepted prior to
the time the registration statement becomes effective. This release shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
2002 Guidance
On April 8, 2002, the Company revised guidance previously stated to
investors in the third and fourth quarter last year regarding the Company's
expected funds from operations (FFO) per share for 2002. The Company
currently estimates that FFO per share for 2002 are expected to be slightly
lower, in the range of $2.20 to $2.30 per share. This revision in the
estimated range primarily reflects the greater number of shares expected to be
outstanding during the year as a result of the proposed offering of common
stock, and the lag in time between the closing of the offering and the full
deployment of the capital raised for the Company's operations.
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 56 shopping centers
totaling approximately 11.2 million square feet of gross leasable area,
consisting of 55 community centers, of which nine are power centers and three
are single tenant properties, as well as one enclosed regional mall. The
Company's 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 Company 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)
(Unaudited)
Three Three
Months Months
Ended Ended
3/31/02 3/31/01
REVENUES
Minimum rents $13,868 $15,032
Percentage rents 522 921
Recoveries from tenants 5,948 5,639
Fees and management income 651 658
Interest and other income 750 934
Total Revenues 21,739 23,184
EXPENSES
Real estate taxes 2,572 2,093
Recoverable operating expenses 3,384 3,724
Depreciation and amortization 4,010 3,926
Other operating 312 332
General and administrative 2,051 2,495
Interest expense 6,310 6,957
Total Expenses 18,639 19,527
Operating income 3,100 3,657
Earnings from unconsolidated entities 169 75
Income from continuing operations before gain on
sale of real estate and minority interest 3,269 3,732
Gain on sale of real estate - 5,006
Minority interest (1,046) (2,657)
Income from continuing operations 2,223 6,081
Income from discontinued operations 214 255
Net income 2,437 6,336
Preferred dividends 828 828
Net income available to common shareholders $1,609 $5,508
Basic earnings per share:
Income from continuing operations $0.20 $0.74
Income from discontinued operations $0.03 $0.03
Net Income $0.23 $0.77
Diluted earnings per share:
Income from continuing operations $0.20 $0.67
Income from discontinued operations $0.03 $0.02
Net Income $0.23 $0.69
Weighted average shares outstanding:
Basic 7,089 7,121
Diluted 7,146 9,124
Ramco-Gershenson Properties Trust
Calculation of Funds from Operations(1)
(In thousands, except per share data)
(Unaudited)
Three Three
Months Months
Ended Ended
3/31/02 3/31/01
Net Income $2,437 $6,336
Add:
Depreciation and amortization expense 3,971 3,982
Minority Interest in partnership 1,046 2,657
Less:
Gain on sale of property(2) - 5,017
Funds from Operations-diluted 7,454 7,958
Less:
Preferred share dividends 828 828
Funds from Operations-basic $6,626 $7,130
Funds from Operations per share:
Diluted $0.62 $0.66
Basic $0.66 $0.71
Basic weighted average shares outstanding(3) 10,034 10,066
Convertible Preferred shares and options 2,057 2,003
Diluted weighted average shares outstanding(4) 12,091 12,069
Ramco-Gershenson Properties Trust
Consolidated Balance Sheets
(In thousands)
March 31, December 31,
2002 2001
ASSETS (unaudited)
Investment in real estate, net $497,370 $496,269
Cash and cash equivalents 5,062 5,542
Accounts receivable, net 17,287 17,627
Equity investments in and advances to
unconsolidated entities 12,986 12,977
Other assets, net 20,394 20,314
Property held for sale 7,210 ---
Total Assets $560,309 $552,729
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgages and notes payable $355,488 $347,275
Distributions payable 5,043 5,062
Accounts payable and accrued expenses 18,985 18,830
Total Liabilities 379,516 371,167
Minority Interest 47,853 48,157
Commitments and Contingencies --- ---
Shareholders' Equity 132,940 133,405
Total Liabilities and Shareholders' Equity $560,309 $552,729
(1) Management generally consider funds from operations, also known as
"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 on April 4,
2002, to reflect the adoption that FFO from income-producing property
held for sale, sold or otherwise transferred and reported in income
from discontinued operations, should be included in FFO. 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.
(2) Excludes loss on sale of undepreciated land of $11.
(3) Represents the weighted average total shares outstanding, assuming the
redemption of all operating partnership units for common shares.
(4) 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, both of Ramco-Gershenson Properties Trust,
+1-248-350-9900, or fax, +1-248-350-9925
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