Second Quarter Highlights:
Financial Information
-- Diluted FFO per share of $0.61
-- 7.0% increase on a per share basis
-- 7.3% increase in Diluted FFO
-- $0.42 per share regular quarterly dividend declared June 7, 2000
Operating Statistics
-- Crossroads Centre development commences in Toledo, Ohio
-- East Towne Plaza acquired in Madison, Wisconsin
-- Hobby Lobby lease signed at Conyers Crossing in Conyers, Georgia
-- Publix expansion announced for Sunshine Plaza in Tamarac, Florida
-- $5 Million net lease asset sold in Southfield, Michigan
-- Average rental rates for new store openings 28.6% above portfolio
average
-- Average increase in lease renewals 10.8% over prior rental rates
SOUTHFIELD, Mich., July 20 /PRNewswire/ -- Ramco-Gershenson Properties
Trust (NYSE: RPT) announced today results for the second quarter and six
months ended June 30, 2000.
For the three months ended June 30, 2000, diluted Funds from Operations
(FFO) increased 7.3 percent, or approximately $504,000, to $7,415,000,
compared with $6,911,000 for the three months ended June 30, 1999. On a per
share basis, the increase was 7.0 percent, or $0.04, to $0.61 compared with
$0.57 in 1999. Total revenues increased 18.4 percent or $3,818,000, to a
total of $24,578,000, compared with $20,760,000 in 1999.
For the six months ended June 30, 2000, diluted Funds from Operations
(FFO) increased 7.7 percent, or approximately $1,097,000, to $15,301,000,
compared with $14,204,000 for the six months ended June 30, 1999. On a per
share basis, the increase was 7.7 percent, or $0.09, to $1.26 compared with
$1.17 in 1999. Total revenues increased 9.1 percent or $3,873,000, to a total
of $46,406,000, compared with $42,533,000 in 1999.
"I am pleased to report another quarter of solid financial performance,"
said Dennis Gershenson, president and chief executive officer of
Ramco-Gershenson Properties Trust. "We have continually been able to meet
growth objectives due to a focused business plan which emphasizes the
improvement of core assets as well as the acquisition and development of
strategically located shopping centers."
Asset Management
At quarter end, RPT had seven redevelopment projects underway at an
estimated cost of $14.3 million. Projects commencing in the second quarter
are:
-- Conyers Crossing, Conyers, Georgian -- A lease has been signed for a
55,000 square foot Hobby Lobby craft superstore. Hobby Lobby will
occupy the space vacated by Upton's department store and will join
Kmart as an anchor at the center. A facade renovation of the center
is also planned.
-- Sunshine Plaza, Tamarac, Florida -- RPT has entered into an agreement
with Publix Supermarket to build a new 51,000 square foot store.
Publix's existing 37,000 square foot store will be demolished to
accommodate the new facility.
The Company is on schedule with its redevelopment plans for the year and
expects to announce an additional shopping center expansion before year-end.
Development
In June 2000, RPT held a ground breaking ceremony commencing construction
of its newest development project, Crossroads Centre, located in Rossford,
Ohio, a suburb of Toledo. This 650,000 square foot shopping center will be
anchored by Home Depot, Target and Giant Eagle supermarket. The project will
also include a craft superstore, a home furnishing operation and an office
superstore. Complimentary retail uses and freestanding restaurants are also
planned. It is expected that the majority of retailers will open in the
spring of 2001.
The Company's Auburn Mile project located in Auburn Hills, Michigan is
proceeding on schedule with the construction of Meijer, Target and JoAnn etc.
All three retailers are expected to open this summer. Additional retailers
under construction include COSTCO, Best Buy and Ethan Allen.
Acquisitions/Dispositions
In April 2000, RPT as part of its $125 million joint venture with an
affiliate of Investcorp International, acquired East Town Plaza, a 209,000
square foot shopping center located in Madison, Wisconsin. Anchors of the
center include JoAnn Fabrics, Burlington Coat Factory, Marshall's and Borders
books. The $16.5 million purchase is the third acquisition by the joint
venture.
Also in April, the Company completed the sale of a freestanding, net
leased asset adjacent to its Tel-Twelve shopping center located in Southfield,
Michigan. The sale price was approximately $5 million resulting in a gain of
$3.4 million. The proceeds from this transaction, as well as funds to be
generated from asset sales that are expected to occur later this year, are
planned to be used to fund RPT's 2000 business plan, pay down variable rate
debt and buy back stock.
Leasing
In the second quarter, the Company opened 13 non-anchor stores, at an
average base rent of $13.96 per square foot, which represents a 28.6% increase
above the portfolio average. In addition, seven non-anchor leases were
renewed at an average increase of 10.8% over the tenants' prior base rental
rate.
Dividend
The Company paid a cash dividend on its common stock of $0.42 per share on
July 18, 2000 to shareholders of record on June 30, 2000.
Summary
"For the foreseeable future, our portfolio lends itself to redevelopment
opportunities where management can apply their experience and knowledge to
generate significant returns," said Dennis Gershenson. "Our development
pipeline remains full and we are very confident that construction of new
shopping centers will continue to be a part of the Company's future plans.
Through the remainder of the year, these two disciplines will be the
cornerstone of our growth strategy."
Ramco-Gershenson Properties Trust has a portfolio of 55 shopping centers,
with approximately 11.1 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
6/30/00 6/30/99 6/30/00 6/30/99
REVENUES
Minimum rents $14,710 $14,909 $29,747 $30,023
Percentage rents 504 534 1,388 1,159
Recoveries from
tenants 5,272 5,121 10,645 10,929
Gain on sale of
real estate 3,420 - 3,420 -
Interest and
other income 672 196 1,206 422
Total Revenues 24,578 20,760 46,406 42,533
EXPENSES
Real estate taxes 1,895 2,008 3,783 3,986
Recoverable operating
expenses 3,541 3,305 7,177 7,195
Depreciation and
amortization 3,735 3,361 7,230 6,652
Other operating 277 181 669 748
General and
administrative 1,491 1,840 2,904 3,313
Interest expense 6,701 6,428 13,127 12,939
Total Expenses 17,640 17,123 34,890 34,833
Operating income 6,938 3,637 11,516 7,700
Earnings (Loss) from
unconsolidated entities 78 (82) 84 (150)
Income before
minority interest 7,016 3,555 11,600 7,550
Minority interest 2,044 1,030 3,404 2,216
Net income before cumulative
effect of change in
accounting principle 4,972 2,525 8,196 5,334
Cumulative effect of change
in accounting
principle(A) - - (1,264) -
Net income $ 4,972 $ 2,525 $ 6,932 $ 5,334
Net income available to
common shareholders $ 4,137 $ 1,676 $ 5,262 $ 3,645
Basic and diluted earnings per share
before cumulative effect of
change in accounting principle:
Basic $0.57 $0.23 $0.91 $0.50
Diluted $0.54 $0.23 $0.89 $0.50
Basic and diluted earnings
per share after cumulative
effect of change in
accounting principle:
Basic $0.57 $0.23 $0.73 $0.50
Diluted $0.54 $0.23 $0.73 $0.50
Weighted average shares outstanding:
Basic 7,195 7,218 7,207 7,218
Diluted 9,195 7,219 7,207 7,218
Ramco-Gershenson Properties Trust
Calculation of Funds from Operations(B)
(In thousands, except per share data)
(Unaudited)
Three Three Six Six
Months Months Months Months
Ended Ended Ended Ended
6/30/00 6/30/99 6/30/00 6/30/99
Net Income $4,972 $2,525 $6,932 $5,334
Add:
Depreciation and
amortization expense 3,819 3,356 7,370 6,654
Cumulative effect of
change in accounting
principle - - 1,264 -
Minority Interest
in partnership 2,044 1,030 3,404 2,216
Less:
Gain on sale
of real estate (3,420) - (3,669) -
Funds from
Operations-diluted 7,415 6,911 15,301 14,204
Less:
Preferred share
dividends 835 849 1,670 1,689
Funds from Operations
-basic $6,580 $6,062 $13,631 $12,515
Funds from Operations per share:
Diluted $0.61 $ 0.57 $1.26 $1.17
Basic $0.65 $ 0.60 $1.34 $1.23
Basic weighted average
shares outstanding(C) 10,140 10,170 10,152 10,170
Convertible Preferred
shares and options 2,000 2,001 2,000 2,001
Diluted weighted average
shares outstanding(D) 12,140 12,171 12,152 12,171
Ramco-Gershenson Properties Trust
Consolidated Balance Sheets
(In thousands)
June 30, 2000 December 31, 1999
ASSETS (unaudited)
Investment in real estate, net $ 511,621 $ 507,463
Cash and cash equivalents 3,335 5,744
Accounts receivable, net 13,473 12,791
Equity investments in and
advances to unconsolidated entities 9,435 7,642
Other assets, net 19,713 16,866
Total Assets $ 557,577 $ 550,506
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgages and notes payable $ 344,944 $ 337,552
Distributions payable 5,089 5,127
Accounts payable and accrued expenses 17,133 15,983
Total Liabilities 367,166 358,662
Minority Interest 48,237 48,396
Commitments and Contingencies --- ---
Shareholders' Equity 142,174 143,448
Total Liabilities and
Shareholders' Equity $ 557,577 $ 550,506
(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. The Company had
previously recorded percentage rents throughout the year based on
rent estimated to be due from the tenant. The Company has
elected to adopt 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") to be
one measure of financial performance of an Equity REIT. The Trust
has adopted the most recent National Association of Real Estate
Investment Trusts ("NAREIT") definition of FFO, which was amended
effective January 1, 2000. Under the NAREIT definition, FFO
represents income before minority interest, excluding "extraordinary"
items, as defined under generally accepted accounting principles,
gains on sale of property, plus real estate related depreciation and
amortization (excluding amortization of financing costs), and after
adjustment for unconsolidated partnerships and joint ventures. This
clarification of the definition of FFO did not change amount
previously reported for 1999.
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) Represents the weighted average total shares outstanding, assuming
the redemption of all operating partnership units for common shares.
(D) 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 via facsimile at
no cost, simply dial 1-800-PRO-INFO and enter the company code RPT or 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, 248-350-9900, or
Fax 248-350-9925
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