NEWPORT BEACH, Calif., Aug. 3 /PRNewswire/ -- Pacific Gulf Properties Inc.
(NYSE: PAG), an equity real estate investment trust that owns, develops and
manages industrial and multifamily properties, including rental housing for
active seniors in the West, today reported operating results for the periods
ended June 30, 1999. For the second quarter ended June 30, 1999, pro forma
funds from operations (assuming the conversion of all preferred shares and all
remaining subordinated debentures) totaled $14,664,000, or $0.62 per share.
That number reflects an increase of 13% per share over the $12,818,000, or
$0.55 per share, generated one year ago which is due primarily to strong
increases in same-store rents. The $0.62 per share exceeds First Call Corp.
consensus estimates by $0.02 per share.
For the six months ended June 30, 1999, pro forma funds from operations
increased 15% to $28,666,000, or $1.22 per share, over the $24,921,000, or
$1.06 per share, for the year-ago first half. That increase was due both to
strong growth in same-store rents and to acquisitions made in 1998.
Net operating income, or gross rental income less rental operating
expenses, for the second quarter of 1999 was $23,234,000 on revenues of
$30,864,000, versus $20,673,000 on revenues of $27,799,000 for the year-ago
period. This represents a 12% increase for the Company. Income available to
common shareholders was $8,102,000, or $0.40 per diluted share, compared with
$6,436,000, or $0.32 per diluted share, reported in the second quarter of
1998.
Net operating income for the first six months of 1999 was $45,364,000 on
revenues of $60,554,000, versus $38,970,000 on revenues of $53,117,000 a year
ago, representing a 16% increase. Income available to common shareholders
increased to $17,873,000, or $0.88 per diluted share, from $12,644,000, or
$0.63 per diluted share, a year ago.
Commenting on the Company's performance, Pacific Gulf Properties' Chairman
and CEO Glenn L. Carpenter said, "I am very pleased with the Company's strong
performance and operating results during the second quarter and first half of
this year. The significant increases in funds from operations, net income and
other performance benchmarks are a direct result of strong Company
fundamentals, and steady internal growth. We intend to continue our strategy
of maximizing internal growth of the Company's existing core portfolio of
small and mid-sized industrial facilities in targeted Western markets, as well
as continuing to build our portfolio of active senior apartments."
PROPERTY SALES
In June of 1999, the Company sold a single tenant industrial property
located in Anaheim, California, realizing a profit of $1.3 million. Net
proceeds of $4.5 million from the sale are expected to be reinvested within
the next 30 days.
Gain on sale of real estate for the six months ended June 30, 1999 was
$4.6 million, which includes the gain realized during the first quarter of
1999 from the sale of the Company's Park Place Apartments located in Santa
Ana, California.
INDUSTRIAL PORTFOLIO
In its industrial portfolio, Pacific Gulf completed leases for 1.0 million
square feet at its stabilized properties during the second quarter. This
activity generated a 12% increase in effective rental rates over ending rates
on expired leases. Industrial properties generated 82% of the Company's total
net operating income for both the 1999 second quarter and first half. For the
first half of 1999, 2.5 million square feet were re-leased at the Company's
stabilized properties, reflecting an 11% increase in stabilized rents. For
the first six months of 1999, the Company retained the tenants occupying over
83% of the square footage expiring during that period.
Same-store results for the 11.6 million square feet of industrial
properties owned during both the second quarter of 1999 and the second quarter
of 1998 reflect an increase in net operating income of 11% due primarily to an
11% increase in rental revenues. For the first half of 1999, same-store net
operating income increased 12% due to an 11% increase in rental revenues.
As of June 30, the occupancy rate in the Company's industrial portfolio
was 96% in 1999 compared with 95% in 1998.
MULTIFAMILY PORTFOLIO
Same-store net operating income in the multifamily operations increased 7%
during the second quarter versus the same period a year ago, resulting
primarily from a 6% increase in rental revenues. For the first half of 1999,
same-store net operating income increased 7% versus the year-ago first half
due again to a 6% increase in revenues. Overall occupancy for the multifamily
portfolio at June 30 was 95% in 1999 compared with 96% in 1998.
At June 30, 1999, Pacific Gulf's multifamily portfolio included 3,069
units of which 1,438 are communities for active seniors age 55 and older.
Second Quarter Highlights
-- Funds from Operations (FFO) increased 13 percent
-- Company sold one single tenant industrial property, realizing gain of
$1.3 million
-- Industrial properties generated 82 percent of Company's total net
operating income
-- Company completed industrial facility leases totaling 1.0 million
square feet and generating 12 percent increase in effective rents
-- Industrial same-store net operating income increased 11 percent
-- Multifamily same-store net operating income increased 7 percent
-- Current industrial occupancy rate: 96 percent
-- Current multifamily occupancy rate: 95 percent
Pacific Gulf Properties is a real estate investment trust that owns,
develops and manages a growing portfolio of industrial properties targeting
small to mid-size tenants in selected high-growth western markets. The
Company's industrial portfolio includes 72 properties encompassing more than
15.5 million square feet of space. Pacific Gulf also maintains a smaller
multifamily portfolio that includes eight rental communities comprising almost
1,500 units designed for the burgeoning population of active seniors age 55
and older. The company is headquartered in Newport Beach, California.
Forward-looking statements and comments in this press release are made
pursuant to the safe harbor provisions of Section 21E of the Securities
Exchange Act of 1934. Such statements relating to, among other things,
events, conditions, prospects and financial trends that may affect the
company's future plans of operations, business strategy, growth of operations
and financial position are not guarantees of future performance and are
necessarily subject to risks and uncertainties, some of which are significant
in scope and nature, including without limitation, increased competition,
adverse economic trends, increasing interest rates and other factors.
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
June 30, 1999 Dec. 31, 1998
(Unaudited) (Audited)
ASSETS
Real estate assets
Land $227,485 $229,920
Buildings 632,715 633,268
860,200 863,188
Accumulated depreciation (60,630) (49,776)
799,570 813,412
Properties under development,
including land 50,363 39,926
849,933 853,338
Cash and cash equivalents 5,749 2,276
Accounts receivable 5,626 4,984
Other assets 15,138 14,529
$876,446 $875,127
LIABILITIES AND SHAREHOLDERS' EQUITY
Loans payable $405,413 $403,845
Accounts payable and
accrued liabilities 14,263 15,828
Dividends payable 9,875 9,844
Convertible subordinated debentures 11,946 12,244
441,497 441,761
Minority interest in consolidated
partnerships 18,181 17,812
Commitments and contingencies --- ---
Shareholders' equity
Preferred shares, $.01 par value;
10,000,000 shares authorized;
2,763,116 shares Senior Cumulative
Convertible Class A outstanding at
June 30, 1999 and December 31, 1998,
respectively 28 28
Preferred shares, $.01 par value;
300,000 shares authorized; Class C
Junior Participating Cumulative Preferred
Stock; no shares outstanding --- ---
Common shares, $.01 par value;
100,000,000 shares authorized;
20,054,862 and 20,017,814 shares
outstanding at June 30, 1999 and
December 31, 1998, respectively 201 201
Outstanding restricted stock (1,419) (1,203)
Additional paid-in capital 412,890 412,093
Retained earnings 5,068 4,435
416,768 415,554
$876,446 $875,127
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
(UNAUDITED)
Six Months Ended June 30
1999 1998
REVENUES
Rental income
Industrial properties $47,826 $34,659
Multifamily properties 12,728 18,458
60,554 53,117
EXPENSES
Rental property expenses
Industrial properties 10,691 7,532
Multifamily properties 4,499 6,615
15,190 14,147
Depreciation 12,379 9,272
Interest (including amortization
of debenture discount and
financing costs of $423 and
$679 respectively) 13,553 11,848
General and administrative expenses 3,119 2,349
Minority partners' interest in earnings
of consolidated partnerships 593 443
44,834 38,059
INCOME BEFORE GAIN ON SALE OF REAL ESTATE 15,720 15,058
Gain on sale of real estate 4,624 --
NET INCOME 20,344 15,058
Less preferred dividend requirements 2,471 2,414
INCOME AVAILABLE TO COMMON SHAREHOLDERS $17,873 $12,644
EARNINGS PER SHARE
Basic $0.90 $0.63
Diluted $0.88 $0.63
DIVIDENDS DECLARED PER COMMON SHARE $0.86 $0.84
PACIFIC GULF PROPERTIES INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share data)
(UNAUDITED)
Three Months Ended June 30
1999 1998
REVENUES
Rental income
Industrial properties $24,496 $18,352
Multifamily properties 6,368 9,447
30,864 27,799
EXPENSES
Rental property expenses
Industrial properties 5,408 3,749
Multifamily properties 2,222 3,377
7,630 7,126
Depreciation 6,319 4,882
Interest (including amortization
of debenture discount and
financing costs of $210 and
$458 respectively) 6,816 6,573
General and administrative expenses 1,739 1,238
Minority partners' interest in
earnings of consolidated partnerships 296 337
22,800 20,156
INCOME BEFORE GAIN ON SALE OF REAL ESTATE 8,064 7,643
Gain on sale of real estate 1,273 ---
NET INCOME 9,337 7,643
Less preferred dividend requirements 1,235 1,207
INCOME AVAILABLE TO COMMON SHAREHOLDERS $8,102 $6,436
EARNINGS PER SHARE
Basic $0.41 $0.32
Diluted $0.40 $0.32
DIVIDENDS DECLARED PER COMMON SHARE $0.43 $0.42
FUNDS FROM OPERATIONS (a)
SUPPLEMENTAL TABLE
(in thousands except share data)
For the Three Months Ended For the Six Months Ended
June 30, June 30, June 30, June 30,
1999 1998 1999 1998
Income Available to
Common Shareholders $ 8,102 $ 6,436 $ 17,873 $12,644
Loss on Sale of
real estate (1,273) --- (4,624) ---
Depreciation 6,319 4,882 12,379 9,272
Funds from Operations $ 13,148 $11,318 $ 25,628 $ 21,916
Weighted Average Common
Shares Outstanding 19,972 19,941 19,967 19,935
Funds from Operations
Per Common Share $ .66 $ .57 $ 1.28 $ 1.10
(a) Industry analysts generally consider funds from operations ("FFO") an
appropriate measure of performance of a real estate investment trust
("REIT"). Funds from operations represent amounts available to common
shareholders and is defined as net income (computed in accordance with
generally accepted accounting principles), excluding gains (or losses)
from debt restructuring and sales of property, plus depreciation and
amortization (excluding amortization of deferred financing costs and
depreciation of non real estate assets), and after adjustments for
unconsolidated partnerships and joint ventures and preferred dividend
requirements.
PRO FORMA FUNDS FROM OPERATIONS (b)
Funds from Operations $ 13,148 $11,318 $ 25,628 $ 21,916
Preferred Dividend
Requirements 1,235 1,207 2,471 2,414
Interest Expense
on Debentures 249 260 505 524
Amortization of Debenture
Discount and Costs 32 33 62 67
Pro Forma Funds
from Operations $ 14,664 $12,818 $28,666 $ 24,921
Weighted Average Common
Shares Outstanding 19,972 19,941 19,967 19,935
Additional Shares
Assuming Conversion
Other (c) 135 104 131 101
Preferred Stock 2,763 2,763 2,763 2,763
Debentures 643 668 643 668
Pro Forma Weighted Average
Outstanding Shares 23,513 23,476 23,504 23,467
Pro Forma Funds from
Operations per
Common Share $ .62 $.55 $1.22 $1.06
(b) Pro Forma Funds from Operations Calculations -- Assumes the conversion
of Convertible Subordinated Debentures and Preferred Stock and
excludes the conversion of limited partnership units (consistent with
the Company's previous calculation methodology).
(c) Represents non-vested restricted stock and options as converted.
SOURCE Pacific Gulf Properties Inc.
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Company News On-Call:
http://www.prnewswire.com/comp/671475.html or fax,
800-758-5804, ext. 671475
CONTACT:
Donald G. Herrman, Chief Financial Officer,
949-223-5000, or Victoria J. Baker, General Information,
703-370-8652, both of Pacific Gulf Properties Inc.
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