Second-Quarter Highlights:
-- 9.8% increase in second-quarter FFO per share
-- 27% increase in EBITDA
-- 24% growth in total assets
-- 3.3x debt service coverage
-- Portfolio occupancy at 94%
Financial Highlights (dollars in 000's, except per share data)
Three Months Ended Six Months Ended
June 30, % June 30, %
1999 1998 Change 1999 1998 Change
Revenues $37,558 $31,041 21.0% $76,911 $60,396 27.3%
EBITDA $24,941 $19,586 27.3% $49,690 $37,724 31.7%
Funds from
Operations $14,544 $12,775 13.8% $29,045 $25,114 15.7%
FFO Per Share-
Basic $0.57 $0.51 11.8% $1.14 $1.01 12.9%
FFO Per Share-
Diluted $0.56 $0.51 9.8% $1.13 $1.01 11.9%
Net Income $7,831 $6,964 12.4% $15,642 $13,315 17.5%
Net Income
Per Share -
Basic $0.33 $0.29 13.8% $0.65 $0.57 14.0%
Net Income
Per Share -
Diluted $0.33 $0.29 13.8% $0.65 $0.57 14.0%
At June 30, 1999 1998 % Change
Total Market
Capitalization $1,080,765 $933,128 16%
Portfolio Occupancy 94% 92% 2%
Total Square Feet 15.3 M 11.8 M 30%
No. of Properties 96 66 45%
NORTHBROOK, Ill., Aug. 4 /PRNewswire/ -- Bradley Real Estate, Inc.
(NYSE: BTR) today reported a 9.8 percent increase in second-quarter funds from
operations per share to $0.56, or $14.5 million, from $0.51, or $12.8 million,
a year earlier. For the six months ended June 30, 1999, funds from operations
per share increased 11.9 percent to $1.13, or $29.0 million, compared to
$1.01, or $25.1 million, in the prior year. All per share amounts are
reported on a diluted basis.
Commenting on the second-quarter results, Thomas P. D'Arcy, chairman and
chief executive officer, stated, "The company had another solid quarter driven
by the strength of our markets and the performance of our properties within
these markets. We continue to realize operating efficiencies as we
aggressively lease and manage our assets, increasing current cash flow and
earning high returns on invested capital."
Net income for the quarter totaled $7.8 million, or $0.33 per share,
compared with $7.0 million, or $0.29 per share, for the prior-year quarter.
For the six months ended June 30, 1999, net income totaled $15.6 million, or
$0.65 per share, compared to $13.3 million, or $0.57 per share, in the prior
year.
At June 30, 1999, total assets were $965 million, up from $781 million a
year earlier. The company's debt to total market capitalization was 39
percent, and its debt service coverage ratio for the quarter was 3.3 times.
Total debt outstanding was $422 million at a weighted average interest rate of
7.05 percent and a weighted average maturity of 5.19 years. At June 30, 1999,
the company had approximately $121 million outstanding under its $250 million
unsecured line of credit.
During July, the company received notification from Standard & Poor's that
it has affirmed the company's BBB- rating and has raised its rating outlook
from stable to positive.
Leasing Activity Review
Portfolio occupancy at quarter's end was 94 percent versus 92 percent a
year earlier. Leasing activity was strong during the quarter with 38 new
leases signed totaling 166,000 square feet at an average base rent for
comparable space of $10.82 per square foot, a 13.7 percent increase over the
prior average base rent. In addition, during the quarter, the company renewed
77 leases totaling 329,000 square feet at an average base rent of $9.99 per
square foot, an 8.3 percent increase over the prior average base rent.
Year to date, the company signed 60 new leases, totaling 328,000 square
feet, at an average base rent for comparable space of $10.75 per square foot,
an 11.3 percent increase over the prior average base rent. In addition, the
company renewed 149 leases, totaling 672,000 square feet, at an average base
rent of $9.62 per square foot, a 7.3 percent increase over the prior average
base rent.
During the quarter, the company completed the redevelopment of its Crystal
Lake center with the opening of a 28,400-square-foot Marshall's and a 30,000-
square-foot Toys 'R Us which join the newly opened 71,000-square-foot Jewel
grocery store. The center's occupancy is now 97 percent. In addition, during
July, a new Carson Pirie Scott furniture store opened in a portion of the
former Montgomery Ward space at the company's Heritage Square property,
raising that property's occupancy level from 45 percent to 78 percent. Active
discussions continue with a tenant for the balance of the space.
Acquisitions and Redevelopment
In June, the company acquired two centers both of which are slated for
major redevelopment. Cherry Hill Marketplace located in Westland, Mich., and
30th Street Plaza located in Canton, Ohio, were acquired at an aggregate cost
of $14 million. These acquisitions bring the number of active redevelopment
projects being undertaken by the company to four. The total estimated
incremental investment in these four projects is $32 million, generating an
expected initial return of approximately 11.5 percent.
Dispositions
During the quarter, the company completed the sale of two enclosed malls
located in Nebraska, Imperial Mall and Monument Mall, both of which had been
acquired as part of the August 1998 acquisition of Mid-America Realty
Investments. These centers were not aligned with the company's grocery-
anchored community center focus. The properties were sold for an aggregate
sales price of $24 million. In addition, the company has held for sale the
three remaining mall assets, also acquired in the Mid-America transaction, and
anticipates completing their sale by year-end. Also during the second
quarter, the company sold its Macon County Center located in Tennessee and its
Town West Center located in Arkansas for an aggregate sales price of $5.4
million.
Commenting on the company's goals for the remainder of the year, D'Arcy
stated, "Our primary objective remains the achievement of targeted growth
rates through aggressive management, leasing and redevelopment of our existing
portfolio. These activities will be supplemented with investment
opportunities focused mainly on development and redevelopment and will be
funded primarily through asset sales and retained cash. We remain on track to
secure several development projects during 1999 and are encouraged by the
pipeline of opportunities for 2000 and beyond. We believe that the strength
of our markets, the quality of our portfolio and our substantial presence
within our markets will lead to meaningful value creation for our share
owners."
Bradley Real Estate, Inc. is the nation's oldest real estate investment
trust and a leading owner and operator of neighborhood and community shopping
centers located in the Midwest region of the United States. The company has
paid 152 consecutive quarterly distributions to its share owners, one of the
longest records of distributions among publicly traded REITs. The company
owns 96 properties located in 15 states aggregating 15.3 million square feet
of rentable space.
In addition to the regular quarterly earnings releases and quarterly
reports, the company also makes available on a quarterly basis supplemental
information which includes property- and corporate-level detail. This
information is available upon request from the company or may be obtained from
our website: http://www.bradleyrealestate.com .
The preceding information contains forward-looking statements of the
company's plans, objectives and expectations, which are dependent upon a
number of factors including a stable retailing climate in the Midwestern
United States, the financial viability of the company's tenants and the
continuing availability of retail center acquisitions and development
opportunities in the Midwest on favorable terms. Reference is made to
the discussions under the captions "Risk Factors" in the company's Form 10-K
report for 1998 which includes a discussion of certain other factors which
could cause actual results to differ materially from those in forward-looking
statements.
To receive additional information on Bradley Real Estate free of charge
via fax, dial 1-800-PRO-INFO and enter "BTR" or visit the company's website at
http://www.bradleyrealestate.com
BRADLEY REAL ESTATE, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
(UNAUDITED)
June 30, Dec. 31,
ASSETS 1999 1998 % Change
Real estate investments-at cost $970,710 $936,465 3.7%
Accumulated depreciation and amortization (69,713) (59,196) 17.8%
Net real estate investments 900,997 877,269 2.7%
Real estate investments held for sale 30,116 46,492 -35.2%
Other assets:
Cash and cash equivalents 108 - 100.0%
Rents and other receivables, net of
allowance for doubtful accounts
of $4,884 for 1999 and $4,078 for 1998 17,423 14,994 16.2%
Investment in partnership - 13,249 -100.0%
Deferred charges, net and other assets 16,095 16,676 -3.5%
Total assets $964,739 $968,680 -0.4%
LIABILITIES AND SHARE OWNERS' EQUITY
Mortgage loans $102,000 $103,333 -1.3%
Unsecured notes payable 199,573 199,542 0.0%
Line of credit 120,900 169,500 -28.7%
Accounts payable, accrued expenses and
other liabilities 28,068 29,415 -4.6%
Total liabilities 450,541 501,790 -10.2%
Exchangeable limited partnership units 20,542 21,573 -4.8%
Series B preferred units 49,100 - 100.0%
Total minority interest 69,642 21,573 222.8%
Share Owners' equity:
Shares of preferred stock and paid-in
capital, par value $.01 per share;
liquidation preference $25.00 per share:
Authorized 20,000,000 shares; issued
and outstanding 3,478,471 and 3,478,493
shares of Series A Convertible
Preferred Stock at June 30, 1999 and
December 31, 1998, respectively 86,809 86,809 0.0%
Shares of common stock and paid-in capital,
par value $.01 per share:
Authorized 80,000,000 shares; issued
and outstanding 24,057,300 and 23,958,662
shares at June 30, 1999 and
December 31, 1998, respectively 350,653 349,254 0.4%
Shares of excess stock, par value $.01
per share:
Authorized 50,000,000 shares; 0 shares
issued and outstanding - - -
Retained earnings 7,094 9,254 -23.3%
Total share owners' equity 444,556 445,317 -0.2%
Total liabilities and share owners' equity $964,739 $968,680 -0.4%
BRADLEY REAL ESTATE, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share data)
(UNAUDITED)
Three Months Ended June 30, Six Months Ended June 30,
1999 1998 % Change 1999 1998 % Change
Income:
Rental income $36,872 $30,601 20.5% $75,582 $59,337 27.4%
Other income 686 440 55.9% 1,329 1,059 25.5%
37,558 31,041 21.0% 76,911 60,396 27.3%
Expenses:
Operations, maintenance
and management 5,405 4,443 21.7% 12,083 8,776 37.7%
Real estate taxes 5,556 5,295 4.9% 11,671 10,776 8.3%
Mortgage and other
interest 7,182 6,585 9.1% 14,869 12,143 22.4%
General and
administrative 1,866 1,717 8.7% 4,067 3,120 30.4%
Depreciation and
amortization 6,484 5,631 15.1% 12,941 10,594 22.2%
26,493 23,671 11.9% 55,631 45,409 22.5%
Income before equity
in earnings of
partnership and
provision for loss
on real estate
investment 11,065 7,370 50.1% 21,280 14,987 42.0%
Equity in earnings
of partnership 153 - 100.0% 500 - 100.0%
Provision for loss on
real estate investment - - 0.0% - (875) 100.0%
Income before allocation
to minority interest11,218 7,370 52.2% 21,780 14,112 54.3%
Income allocated to
exchangeable limited
partnership units (452) (406) 11.3% (921) (797) 15.6%
Income allocated to
Series B preferred
units (1,109) - -100.0% (1,565) - -100.0%
Net income 9,657 6,964 38.7% 19,294 13,315 44.9%
Preferred share
distributions (1,826) - -100.0% (3,652) - -100.0%
Net income attributable
to common share
owners $7,831 $ 6,964 12.4% $15,642 $13,315 17.5%
Basic net income
per share $0.33 $0.29 13.8% $0.65 $0.57 14.0%
Diluted net income
per share $0.33 $0.29 13.8% $0.65 $0.57 14.0%
CALCULATION OF FUNDS FROM OPERATIONS
Three Months Ended June 30, Six Months Ended June 30,
1999 1998 % Change 1999 1998 % Change
Income before
allocation to
minority interest $11,218 $7,370 52.2% $21,780 $14,112 54.3%
-Preferred share
distributions (1,826) - -100.0% (3,652) - -100.0%
-Income allocated
to Series B
preferred units (1,109) - -100.0% (1,565) - -100.0%
+Depreciation of
real estate assets
& amortization of
tenant improvements5,553 4,315 28.7% 11,002 8,246 33.4%
+Amortization of
deferred leasing
commissions 353 791 -55.4% 784 1,284 -38.9%
+Other amortization
including deferred
finance & non-real
estate related costs 578 525 10.1% 1,155 1,064 8.6%
-Amortization of
deferred finance &
non-real estate
related costs (280) (226) 23.9% (559) (467) 19.7%
+Depreciation and
amortization included
in equity in earnings
of partnership 57 - 100.0% 100 - 100.0%
-Provision for loss
on real estate
investments - - 0.0% - 875 -100.0%
Funds From Operations $14,544 $12,775 13.8% $29,045 $25,114 15.7%
Funds from Operations
per share - basic $0.57 $0.51 11.8% $1.14 $1.01 12.9%
Funds from Operations
per share - diluted $0.56 $0.51 9.8% $1.13 $1.01 11.9%
RECONCILIATION OF BASIC EARNINGS AND FUNDS FROM OPERATIONS PER SHARE
TO DILUTED EARNINGS AND FUNDS FROM OPERATIONS PER SHARE
Three Months Ended June 30, Six Months Ended June 30,
1999 1998 1999 1998
Net Income
NUMERATOR
Basic:
Net income attributable
to common share
owners $7,831,000 $6,964,000 $15,642,000 $13,315,000
Diluted:
Net income attributable
to common share
owners $7,831,000 $6,964,000 $15,642,000 $13,315,000
Income allocated to
exchangeable limited
partnership units 452,000 406,000 921,000 797,000
Convertible preferred
stock distributions* - - - -
Diluted net income $8,283,000 $7,370,000 $16,563,000 $14,112,000
DENOMINATOR
Basic:
Weighted average common
shares outstanding 24,056,671 23,702,522 24,026,988 23,503,183
Diluted:
Weighted average common
shares outstanding 24,056,671 23,702,522 24,026,988 23,503,183
Effect of dilutive
securities:
Stock option 40,101 50,014 34,823 49,450
Convertible preferred
stock* - - - -
Exchangeable limited
partnership units 1,387,823 1,381,352 1,414,264 1,408,182
Weighted average
shares and assumed
conversions 25,484,595 25,133,888 25,476,075 24,960,815
Basic earnings per share $0.33 $0.29 $0.65 $0.57
Diluted earnings per share $0.33 $0.29 $0.65 $0.57
Funds From Operations
NUMERATOR
Basic:
Funds from
operations $14,544,000 $12,775,000 $29,045,000 $25,114,000
Diluted:
Funds from
operations $14,544,000 $12,775,000 $29,045,000 $25,114,000
Convertible
preferred stock
distributions 1,826,000 - 3,652,000 -
Diluted funds from
operations $16,370,000 $12,775,000 $32,697,000 $25,114,000
DENOMINATOR
Basic:
Weighted average
common shares and
partnership units
outstanding 25,444,494 25,083,874 25,441,252 24,911,365
Diluted:
Weighted average
common shares and
partnership units
outstanding 25,444,494 25,083,874 25,441,252 24,911,365
Effect of dilutive
securities:
Stock options 40,101 50,014 34,823 49,450
Convertible preferred
stock 3,550,910 - 3,550,912 -
Weighted average
shares and assumed
conversions 29,035,505 25,133,888 29,026,987 24,960,815
Basic Funds from
Operations per share $0.57 $0.51 $1.14 $1.01
Diluted Funds from
Operations per share $0.56 $0.51 $1.13 $1.01
* Amounts are not included for the three-and six-month periods ended
June 30, 1999, as the effects are anti-dilutive.
SOURCE Bradley Real Estate, Inc.
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Related links:
http://www.bradleyrealestate.com
CONTACT:
Thomas P. D'Arcy, Chairman and CEO of Bradley
Real Estate, 847-272-9800; or Ellen McGinnis of The Financial
Relations Board, 312-274-2233
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