SAN DIEGO, Aug. 6 /PRNewswire/ -- Burnham Pacific Properties, Inc.
(NYSE: BPP) today announced operating results for the quarter ended June 30,
1998. For the second quarter, diluted Funds From Operations ("FFO") was
$13,921,000 or $0.34 per share, up 9.7 percent on a per-share basis, as
compared to $6,596,000 or $0.31 per share for the quarter ended June 30, 1997.
Basic FFO per share increased 16.1 percent to $0.36 per share as compared to
$0.31 per share for the second quarter of 1997. Diluted FFO for the six
months ended June 30, 1998 was $24,573,000 or $0.67 per share, up 11.7 percent
on a per-share basis, as compared to $11,566,000 or $0.60 per share for the
prior six-month period. Basic FFO per share increased 16.7 percent to $0.70
per share as compared to $0.60 per share for the first half of 1997. FFO is
calculated based on the revised definition adopted by the Board of Governors
of the National Association of Real Estate Investment Trusts (NAREIT) and is
considered a primary earnings measure for equity REITs.
Review of Results
For the quarter ended June 30, 1998, compared to the prior year period,
revenues grew $15,138,000 from $16,987,000 to $32,125,000. Net income
available to common shareholders was $5,112,000 or $0.16 per share (both basic
and diluted) as compared to $3,444,000 or $0.16 per share (both basic and
diluted) for the prior three-month period.
For the six months ended June 30, 1998, compared to the prior year period,
revenues grew $32,028,000 from $29,964,000 to $61,992,000. Net income
available to common shareholders was $7,248,000 or $0.26 per share (both basic
and diluted) as compared to $5,028,000 or $0.26 per share (both basic and
diluted) for the prior six-month period.
Revenues for both the quarter and six-month period were positively
impacted by a lease termination fee of $1,795,000. Without the benefit of
this fee, results were less than management's expectations. Revenues were
less than anticipated due to a slower-than-expected leasing of the core
portfolio and new property acquisitions, due, in part, to the need to absorb
the 29 properties purchased in the fourth quarter of 1997. Expenses were
higher than anticipated due to non-recurring third-party management fees
incurred in connection with the absorption of the fourth quarter acquisitions,
expensing of internal acquisition costs, and increased staffing in
anticipation of the Company's proposed new relationship with CalPERS.
Total assets increased to $1,062,435,000 at June 30, 1998, from
$529,969,000 a year earlier. Total outstanding debt increased to
$544,857,000, of which $375,063,000 was fixed at a weighted average interest
rate of 7.68 percent; $137,869,000 was variable rate debt incurred under the
Company's line of credit, which bears interest at a weighted average rate of
LIBOR plus 1.43 percent; and $31,925,000 was a construction loan secured by
one of the Company's development properties, which bears interest at LIBOR
plus 1.90 percent.
Weighted average common shares outstanding increased to 31,911,000 from
21,203,000 in the year ago period. This increase occurred primarily as a
result of a 7,475,000 share offering (including the underwriters' over-
allotment option) which was completed on March 30, 1998. In addition, on
March 30, 1998, the Company sold 965,518 shares of stock to a Unit Investment
Trust managed by Everen Securities.
Acquisitions
Operating results for the second quarter also benefited from the Company's
acquisition of seven additional properties containing approximately 491,800
square feet of Company-owned space. The properties were acquired at an
aggregate purchase price of approximately $55,200,000.
Lake Arrowhead Village: In late May, the Company purchased 193,809 square
feet of a 230,461 square-foot shopping center located adjacent to Lake
Arrowhead in the San Bernardino National
Forest. The property is anchored by a 33,580 square-foot Stater Brothers and
a 9,000 square-foot Rite Aid.
* Powell Portfolio: In early June, the Company acquired three additional
shopping centers from Powell Development containing approximately 115,100
square feet of Company-owned space.
Keizer Creekside: Located in Keizer, Oregon, this property contains
104,212 square feet of GLA of which the Company purchased 61,943 square feet,
and is anchored by an Albertson's Supermarket (not owned).
Park Manor: Located in Bellingham, Washington, this property contains
96,266 square feet of GLA of which the Company purchased 28,454 square feet,
and is anchored by an Albertson's Supermarket (not owned).
Cruces Norte: Located in Las Cruces, New Mexico, this property contains
78,885 square feet of GLA of which the Company purchased 24,930 square feet,
and is anchored by an Albertson's Supermarket (not owned).
* Palm Springs Portfolio: In June, the Company acquired three properties
in the Palm Springs area containing approximately 152,600 square feet of
Company-owned space.
Mission Plaza: Located in Cathedral City, this 72,400 square-foot center
is anchored by a 43,000 square-foot Lucky Supermarket.
Plaza de Monterey: Located in Palm Desert, this property contains 85,482
square feet of GLA of which the Company purchased 37,482 square feet, and is
anchored by a 46,998 square-foot Lucky Supermarket (not owned).
Palms to Pines: This 42,754 square-foot center located in Palm Desert is
anchored by an 11,600 square-foot Metropolitan Theater. The center is part of
a larger shopping center anchored by a Von's Supermarket, which is not
included in the transaction.
Subsequent Events
Greentree Plaza: In July, the Company acquired 78,676 square feet of this
178,932 square-foot center located in Everett, Washington. The property is
anchored by a 100,256 square-foot Target (not owned).
* Zimel Portfolio: In August, the Company acquired three properties in
Oregon containing approximately 219,616 square feet of Company-owned space for
$15.5 million.
Farmington Village: Located in Aloha, the Company owns 32,740 square feet
of this 105,247 square-foot center anchored by an Albertson's and Bi-Mart,
both of which own their own parcels.
Young's Bay Plaza: Located in Warrenton, this 93,776 square-foot property
is anchored by a 33,400 square-foot Rite Aid and a 25,684 square-foot Lamont's
Apparel.
Greenway Town Center: Located in Tigard, this 93,100 square-foot center
is anchored by a 37,500 square-foot Howard's Thriftway Supermarket and a
17,000 square-foot Rite Aid.
Additional Management
During the first half of this year the Company added several Vice
President positions in building the middle management level within the
organization. Kathleen Burgi-Sandell, formerly with Allegis Realty Advisors
for over ten years, and Susan Rorison, who held a prior position with
Prudential Realty Group for over ten years, have assumed the roles of Vice
President/Regional Asset Managers. Collectively they are responsible for the
Company's 75 properties and 26 Asset and Property Managers. Terrence Tallen,
with over ten years of retail leasing experience, was named Vice
President/Director of Leasing, responsible for a leasing staff of 14. Peggy
Thrailkill, a 14-year retail property veteran, was named Vice President of
Asset Management Training and Transitions. Donna Godbout was named Vice
President of Human Resources and Administration, with responsibility for
overseeing the Company's staff of 120. Other members of the middle management
team include John Waters, Vice President/Director of Acquisitions and Due
Diligence, and Marc Artino, Vice President of Finance.
CalPERS
As previously announced, the Company has been selected as the exclusive
investment partner of the California Public Employees Retirement System
(CalPERS). The Company has signed a preliminary agreement and is in the
process of finalizing the documents. The initial commitment from CalPERS will
be $400 million, which the Company would co-invest and leverage into a
portfolio of non-mall retail in the western United States. The Company
expects that its co-investment and management activities with CalPERS will
commence at the beginning of the fourth quarter.
J. David Martin, Burnham Pacific's CEO, commented on the Company's results
for the first half of the year, "Notwithstanding financial results slightly
below our expectations, we are satisfied with our efforts for the first half
of this year. We have absorbed the 29 properties purchased in the fourth
quarter of 1997, as well as the 11 new assets we have acquired this year. We
are now fully staffed with our new middle management team and are focused on
the expansion of our relationship with CalPERS. We continue to be the largest
owner of shopping centers in the West, and with our new capital, we intend to
continue our growth within the region. We are well positioned for 1999."
Burnham Pacific Properties is a fully integrated real estate operating
company which acquires, rehabilitates, develops and manages retail properties.
With 75 properties in its portfolio to date, the Company is the largest owner
of retail centers on the West Coast. Burnham Pacific maintains offices in
California, Oregon and Washington and makes available on a quarterly basis
supplemental information that includes property and corporate level detail
which is available upon request. More information on Burnham Pacific may be
found on the Company's web site at http://www.burnhampacific.com or by calling 800-
462-5181.
This news release contains forward-looking statements regarding future
events or financial performance of the Company. These statements are only
predictions and actual events or results may differ materially. Investors
should refer to the documents the Company files from time to time with the
Securities and Exchange Commission, specifically the cautionary statement
identifying certain factors that could affect future results included in the
MD&A section of the Company's most recent 10-K report.
BPP Second Quarter 1998 Financial Results
In Thousands, Except Share Amounts
Three Months Ended
6/30/98 6/30/97 3/31/98
Revenues
Rents $31,899 $16,798 $29,639
Interest 226 189 228
Total Revenues 32,125 16,987 29,867
Costs and Expenses
Interest 7,749 4,725 9,466
Rental Operating 8,596 4,757 8,252
General & Administrative 1,392 712 1,111
Depreciation & Amortization 6,750 3,387 6,431
Total Costs and Expenses 24,487 13,581 25,260
Income from Operations before Income
from Unconsolidated Subsidiaries,
Minority Interest, Extraordinary
Item and Dividends Paid to
Preferred Stockholders 7,638 3,406 4,607
Income from Unconsolidated
Subsidiaries 33 49 95
Minority Interest (1,159) (11) (1,166)
Income before Extraordinary Item 6,512 3,444 3,536
Loss from Early Extinguishment of Debt 0 0 0
Net Income $6,512 $3,444 $3,536
Dividends Paid to Preferred
Stockholders (1,400) 0 (1,400)
Income Available to Common
Stockholders $5,112 $3,444 $2,136
Basic and Diluted Earnings Per Share:
Income before Extraordinary Item $0.16 $0.16 $0.09
Extraordinary Item 0.00 0.00 0.00
Net Income $0.16 $0.16 $0.09
Funds from Operations-Diluted:
Income before Extraordinary Item $6,512 $3,444 $3,536
Adjustments:
Depreciation and Amortization of Real
Estate and Tenant Improvements 6,250 3,141 5,950
Minority Interest 1,159 11 1,166
Funds from Operations-Diluted $13,921 $6,596 $10,652
Funds from Operations Per Share:
Basic $0.36 $0.31 $0.34
Diluted $0.34 $0.31 $0.33
Weighted Average Shares Outstanding:
Basic 31,911,239 21,203,276 23,640,659
Diluted 41,035,295 21,287,696 32,265,779
Six Months Ended
6/30/98 6/30/97
Revenues
Rents $61,538 $29,601
Interest 454 363
Total Revenues 61,992 29,964
Costs and Expenses
Interest 17,215 8,056
Rental Operating 16,848 8,386
General & Administrative 2,503 1,555
Depreciation & Amortization 13,181 6,929
Total Costs and Expenses 49,747 24,926
Income from Operations before
Income from Unconsolidated
Subsidiaries, Minority Interest,
Extraordinary Item and Dividends
Paid to Preferred Stockholders 12,245 5,038
Income from Unconsolidated Subsidiaries 128 64
Minority Interest (2,325) (22)
Income before Extraordinary Item 10,048 5,080
Loss from Early Extinguishment of Debt 0 (52)
Net Income $10,048 $5,028
Dividends Paid to Preferred Stockholders (2,800) 0
Income Available to Common Stockholders $7,248 $5,028
Basic and Diluted Earnings Per Share:
Income before Extraordinary Item $0.26 $0.27
Extraordinary Item 0 (0.01)
Net Income $0.26 $0.26
Funds from Operations-Diluted:
Income before Extraordinary Item $10,048 $5,080
Adjustments:
Depreciation and Amortization of Real
Estate and Tenant Improvements 12,200 6,464
Minority Interest 2,325 22
Funds from Operations-Diluted $24,573 $11,566
Funds from Operations Per Share:
Basic $0.70 $0.60
Diluted $0.67 $0.60
Weighted Average Shares Outstanding:
Basic 27,798,879 19,161,209
Diluted 36,711,739 19,245,384
CONSOLIDATED BALANCE SHEETS
06/30/98 12/31/97
ASSETS
Real Estate $1,093,564 $964,755
Less Accumulated Depreciation (67,841) (55,823)
Real Estate-Net 1,025,723 908,932
Cash and Cash Equivalents 6,219 6,841
Restricted Cash 5,054 5,242
Receivables-Net 9,560 7,456
Investments in Unconsolidated Subsidiaries 3,683 3,683
Other Assets 12,196 11,641
Total $1,062,435 $943,795
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts Payable and Other Liabilities $17,890 $19,296
Tenant Security Deposits 2,731 2,396
Notes Payable 406,988 369,511
Line of Credit Advances 137,869 180,869
Total Liabilities 565,478 572,072
Commitments and Contingencies
Minority Interest 71,024 58,759
Preferred Stock 0 28,160
Stockholders' Equity:
Preferred Stock, Par Value $.01/Share,
5,000,000 Shares Authorized, 4,800,000
Shares Designated as Series 1997-A
Convertible Preferred, 2,800,000 Shares
Outstanding at June 30, 1998 and
December 31, 1997 28 17
Common Stock, Par Value $.01/Share, 95,000,000
Shares Authorized, 31,932,008 and 23,448,852
Shares Outstanding at June 30, 1998 and
December 31, 1997, Respectively 319 234
Paid in Capital in Excess of Par 524,639 376,326
Dividends Paid in Excess of Net Income (99,053) (91,773)
Total Stockholders' Equity 425,933 284,804
Total $1,062,435 $943,795
SOURCE Burnham Pacific Properties, Inc.
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Related links:
http://www.burnhampacific.com
CONTACT:
Daniel B. Platt, Chief Financial Officer,
Burnham Pacific Properties, Inc., 619-652-4700, fax:
619-652-4711, dbplatt@bpac.com
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