Second Quarter Financial Highlights:
-- Diluted FFO per share of $0.50
-- Diluted FFO of $7.3 million
-- 93.1% portfolio occupancy
-- $0.42 per share regular quarterly dividend paid on July 16, 2002
SOUTHFIELD, Mich., July 18 /PRNewswire-FirstCall/ -- Ramco-Gershenson
Properties Trust (NYSE: RPT) announced today results for the second quarter
and six months ended June 30, 2002.
For the three months ended June 30, 2002, diluted Funds from Operations
(FFO), decreased 4.0 percent, or approximately $303,000, to $7,343,000,
compared with $7,646,000 for the three months ended June 30, 2001. On a per
share basis the decrease was 20.6 percent, or $0.13, to $0.50 compared with
$0.63 in 2001. Total revenues increased 1.6 percent or $328,000, to a total
of $21,430,000, compared with $21,102,000 in 2001.
For the six months ended June 30, 2002, diluted FFO, decreased
5.2 percent, or approximately $806,000, to $14,798,000 compared with
$15,604,000 for the six months ended June 30, 2001. On a per share basis, the
decrease was 14.7 percent, or $0.19, to $1.10 compared with $1.29 in 2001.
Total revenues decreased 2.5 percent or $1,117,000, to a total of $43,169,000,
compared with $44,286,000 in 2001.
The Company's FFO for the quarter and the six months ended June 30, 2002
were in line with expectations, due to the redevelopment of two shopping
centers and the common stock offering completed in April. RPT previously
estimated that 2002 annual diluted FFO per share will be between $ 2.10 and
$ 2.20 per share. The Company remains comfortable with that estimate.
Income from continuing operations for the three months ended June 30,
2002, was $2,162,000 compared with $2,454,000 for the three months ended June
30, 2001. On a diluted earnings per share basis, earnings from continuing
operations increased from $0.23 in 2001 to $0.39 in 2002. The increase is
attributable to the $2.4 million gain on the redemption of preferred shares
that occurred in May 2002. For the six months ended June 30, 2002, diluted
earnings per share from continuing operations decreased $0.28, from $0.94 in
2001 to $0.66 in 2002. The decrease in earnings per share is attributable to
the $5.3 million gain on sale of real estate in 2001.
"Our 2002 numbers are on track with our business plan, which included
reduced operations at two shopping centers currently under redevelopment to
increase the long term value of these centers and improve shareholder value,"
said Dennis Gershenson, president and chief executive officer of Ramco-
Gershenson Properties Trust. "In the second quarter we achieved a number of
strategic objectives including the successful sale of 4.8 million shares of
common stock allowing us to raise $84 million. We used these funds in part to
redeem Morgan Stanley Asset Management's investment of preferred shares in our
Company. We also purchased the interest of our joint venture partner in two
well located shopping centers at a favorable cap rate. In addition, we
acquired three new centers, two in Florida and one in Georgia."
Acquisitions/Dispositions
During the quarter the Company purchased Horizon Village shopping center
in Suwanee, Georgia (a suburb of Atlanta). The 97,000 square foot center is
anchored by Publix Supermarket and was purchased for $11.3 million.
The Company also purchased two 106,000 square foot community shopping
centers in southeastern Florida; The Crossroads in Palm Beach County and Coral
Creek in Coconut Creek (a suburb of Ft. Lauderdale). The centers were
purchased jointly for $34.2 million. Each center is anchored by Publix
Supermarket.
In addition, the Company acquired its institutional partner's 75 percent
equity interest in Chester Springs, a 224,000 square foot shopping center
located in Chester, New Jersey and Rivertowne Square, a 137,000 square foot
center located in Deerfield Beach, Florida. The transaction generated an
initial unleveraged return of 11.6 percent for these two grocery anchored
centers.
"Our 2002 acquisition plan is proceeding on course, allowing us to
immediately utilize a significant portion of our public offering proceeds,"
said Dennis Gershenson. "Each of the shopping centers met our acquisition
criteria, in that they are well located in markets with appealing
demographics, are anchored by successful supermarket tenants, and lend
themselves to value added opportunities."
Also during the quarter, the Company sold Hickory Corners, a 178,000
square foot community shopping center located in Hickory, North Carolina. The
center, purchased as part of a portfolio acquisition, was redeveloped by
adding a mid box anchor and expanding the supermarket. The center was sold
once its value had been maximized. Total proceeds from the sale approximated
$10.7 million and were used to pay down debt.
Asset Management
The Company is actively engaged in four redevelopment projects including
Lantana shopping center, Jackson Crossing, Tel-Twelve and Shoppes of Lakeland.
A new, expanded Publix Supermarket is scheduled to open in the fourth quarter
of 2002 at RPT's Lantana shopping center. Bed Bath & Beyond should open in
October of 2002 at Jackson Crossing. At Tel-Twelve, a 25,000 square foot DSW
Shoe Warehouse opened in May and construction is on schedule for Lowe's Home
Improvement to open in the second quarter of 2003. The Company is in the
final planning stage for its Shoppes of Lakeland center and is currently in
negotiations with several national retailers.
Leasing
In the second quarter, the Company opened 13 new non-anchor stores, at an
average base rent of $15.55 per square foot, which is 30.8 percent above
portfolio average. The Company also renewed 7 non-anchor leases at an average
increase of 7.3 percent over prior rental rates. As of June 30, 2002, the
portfolio was 93.1 percent leased.
Common Share Offering
In April, the Company successfully completed a 4,830,000 common share
public offering. Underwriters for the transaction were Deutsche Bank
Securities, McDonald Investments Inc. and Robertson Stephens. The closing
price per share was $17.50.
The Company utilized 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 were used to pay
down the Company's credit facility.
"We were pleased at the response to our recent stock offering," said
Dennis Gershenson. "Accessing the public equity markets allowed us to achieve
a number of corporate objectives including broadening institutional
representation in our stock, increasing the average volume of daily trades and
stimulating our stock price."
Finance
Total capitalization as of June 30, 2002 was approximately $683 million.
Total Debt was $377.3 million with an average interest rate of 7.0 percent and
an average maturity of 3.6 years. The EBITDA interest coverage ratio was 2.2
for the quarter.
Subsequent Events-Kmart Exposure
At the time of this release, the Company's exposure to Kmart has been
reduced from eight leases at quarter end to five effective July 1, 2002. The
five Kmart stores are located in major metropolitan markets and are achieving
gross sales in excess of Kmart's national average. They represent 4.1 percent
of the Company's annualized base rental revenue for the portfolio. Of the
three leases no longer guaranteed by Kmart; one is controlled by the Company.
The other two leases have been assigned based upon designation rights, which
the Company is challenging.
Dividend
The Company paid a cash dividend on its common stock of $0.42 per share on
July 16, 2002 to shareholders of record on June 30, 2002.
Earnings Guidance/Conference Call
The Company maintains its estimate that 2002 annual diluted FFO per share
will be between $2.10 and $2.20 per share. The Company estimates its 2003
annual diluted FFO per share will be between $2.23 and $2.33.
RPT will host a live broadcast of its 2nd Quarter conference call on July
19, 2002 at 10:30 a.m. eastern time, to discuss its financial results and 2002
and 2003 guidance. The live broadcast will be available online at
http://www.ramcogershenson.com and http://www.streetevents.com and also by telephone at
(888) 530-7880 (no passcode needed). A replay will be available shortly after
the call on the aforementioned websites (for ninety days) or by telephone at
800-642-1687, passcode 4817512 (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 59 shopping centers,
with approximately 11.4 million square feet of gross leasable area, 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)
(Unaudited)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
6/30/02 6/30/01 6/30/02 6/30/01
REVENUES
Minimum rents $15,022 $14,749 $28,890 $29,781
Percentage rents 194 173 716 1,094
Recoveries from tenants 5,762 5,390 11,710 11,029
Fees and management income 229 438 880 1,096
Interest and other income 223 352 973 1,286
Total Revenues 21,430 21,102 43,169 44,286
EXPENSES
Real estate taxes 2,728 2,185 5,300 4,278
Recoverable operating
expenses 3,242 3,468 6,626 7,192
Depreciation and
amortization 4,339 4,038 8,349 7,964
Other operating 382 419 694 751
General and administrative 2,108 1,751 4,159 4,246
Interest expense 6,056 6,436 12,366 13,393
Total Expenses 18,855 18,297 37,494 37,824
Operating income 2,575 2,805 5,675 6,462
Earnings from unconsolidated
entities 177 339 346 414
Income before gain on sale
of real estate and
minority interest 2,752 3,144 6,021 6,876
Gain on sale of real estate - 342 - 5,348
Minority interest (590) (1,032) (1,573) (3,614)
Income from continuing
operations 2,162 2,454 4,448 8,610
Discontinued operations,
net of minority interest:
Gain on sale of property 2,164 - 2,164 -
Income (Loss) from operations (4) 180 147 360
Net income 4,322 2,634 6,759 8,970
Preferred dividends - (838) (828) (1,666)
Gain on redemption of
preferred shares 2,425 - 2,425 -
Net income available
to common shareholders $6,747 $1,796 $8,356 $7,304
Basic earnings per share:
Income from continuing
operations $0.44 $0.23 $0.69 $0.98
Income from discontinued
operations 0.21 0.02 0.26 0.05
Net Income $0.65 $0.25 $0.95 $1.03
Diluted earnings per share:
Income from continuing
operations $0.39 $0.23 $0.66 $0.94
Income from discontinued
operations 0.17 0.02 0.21 0.04
Net Income $0.56 $0.25 $0.87 $0.98
Weighted average shares
outstanding:
Basic 10,435 7,102 8,771 7,111
Diluted 14,674 7,120 13,392 9,122
Ramco-Gershenson Properties Trust
Calculation of Funds from Operations(A)
(In thousands, except per share data)
(Unaudited)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
6/30/02 6/30/01 6/30/02 6/30/01
Net Income $4,322 $2,634 $6,759 $8,970
Add:
Depreciation and
amortization expense 4,597 4,101 8,569 8,083
Minority interest in
partnership:
Continuing operations 590 1,053 1,573 3,658
Discontinued operations (2) 53 61 105
Less:
Discontinued operations,
gain on sale of property (2,164) - (2,164) -
Gain on sale of
real estate - (195) - (5,212)
Funds from Operations
-diluted 7,343 7,646 14,798 15,604
Less:
Preferred share dividends - (838) (828) (1,666)
Funds from Operations-basic $7,343 $6,808 $13,970 $13,938
Funds from Operations
per share:
Diluted $0.50 $0.63 $1.10 $1.29
Basic $0.55 $0.68 $1.19 $1.39
Basic weighted average
shares outstanding(B) 13,373 10,047 11,713 10,056
Convertible Preferred
shares and options 1,301 2,018 1,679 2,011
Diluted weighted average
shares outstanding(C) 14,674 12,065 13,392 12,067
Ramco-Gershenson Properties Trust
Consolidated Balance Sheets
(In thousands)
June 30, 2002 December 31, 2001
ASSETS (unaudited)
Investment in real estate, net $578,345 $496,269
Cash and cash equivalents 5,740 5,542
Accounts receivable, net 18,779 17,627
Equity investments in and
advances to unconsolidated
entities 10,981 12,658
Other assets, net 21,069 20,633
Total Assets $634,914 $552,729
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgages and notes payable $377,253 $347,275
Distributions payable 6,374 5,062
Accounts payable and accrued
expenses 20,267 18,830
Total Liabilities 403,894 371,167
Minority Interest 48,106 48,157
Commitments and Contingencies - ---
Shareholders' Equity 182,914 133,405
Total Liabilities and
Shareholders' Equity $634,914 $552,729
(A) 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 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.
(B) Represents the weighted average total shares outstanding, assuming the
redemption of all operating partnership units for common shares.
(C) 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, of Ramco-Gershenson Properties Trust,
+1-248-350-9900, Fax, +1-248-350-9925
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