BINGHAM FARMS, Mich., July 27 /PRNewswire/ -- Malan Realty Investors, Inc.
(NYSE: MAL), a self-administered real estate investment trust (REIT), today
announced a deficit in total funds from operations (FFO) in the second quarter
of 2000. The company previously announced it would incur nonrecurring
expenses in the quarter associated with the recent proxy contest and the
resulting change in control.
For the quarter ended June 30, 2000, Malan incurred a deficit in FFO of
$1.6 million or 31 cents per basic share vs. FFO of $2.6 million or 50 cents
per basic share for the quarter ended June 30, 1999. FFO on a diluted basis
(assuming conversion of convertible debt securities and inclusion of other
common stock equivalents) was $67,000 or 1 cent per share in the second
quarter of 2000 vs. $4.3 million or 46 cents per share in the second quarter
of 1999. Total revenues (excluding a gain on the sale of property of
approximately $3.2 million), consisting primarily of rent and recoveries from
tenants, were $10.1 million in the second quarter of 2000 vs. $10.8 million in
the second quarter of 1999.
Included in the FFO for the second quarter of 2000 were nonrecurring
expenses totaling approximately $3.4 million. This included approximately
$775,000 in expenses for the proxy contest and $2.6 million incurred for lump-
sum payments and accrued future health insurance benefits as part of change of
control agreements with the company's three executive officers. The company
noted that although these expenses are nonrecurring in nature, the October
1999 White Paper issued by the National Association of Real Estate Investment
Trusts (NAREIT) requires that these items be included in the calculation of
FFO. The White Paper excludes from FFO calculations extraordinary items as
defined under generally accepted accounting principles, as well as gains and
losses from sales of depreciable operating property.
For the six months ended June 30, 2000, FFO was $986,000 or 19 cents per
basic share vs. $4.9 million or 95 cents per basic share for the six months
ended June 30, 1999. FFO on a diluted basis was $4.3 million or 46 cents per
share for the first six months of 2000 vs. $8.3 million or 89 cents per share
for the first six months of 1999. Total revenues (excluding gains on property
sales of approximately $3.2 million) were $21.2 million for the first half of
2000 compared with $21.8 million (excluding a gain on a property sale of
approximately $1.8 million) in the first half of 1999.
FFO for 1999 has been restated to reflect a previously announced change in
the company's method of accounting for contingent (percentage) rents applied
retroactively to January 1, 1999 pursuant to SEC Staff Accounting Bulletin No.
101 issued in December 1999.
"The quarter's results, given the expenses taken for a situation that is
thankfully behind us, are not indicative of our potential going forward," said
Malan Chairman Paul Gray. "The board and management together are pursuing
several strategies for strengthening the portfolio that we believe will result
in enhanced shareholder value."
During the quarter, Malan completed the sale of a 117,255 square-foot
shopping center in Manchester, Missouri, a suburb of St. Louis. Net proceeds
to the company, after payment of debt and transaction fees, were approximately
$5.0 million.
Malan Realty Investors, Inc. owns, acquires, redevelops and manages
properties that are leased primarily to national and regional retail
companies. The company owns a portfolio of 64 properties located in 9 states
that contains an aggregate of approximately 5.9 million square feet of GLA.
Safe Harbor Statement: Certain statements in this release regarding
anticipated operating results are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Although the
company believes the statements and projections are based upon reasonable
assumptions, actual results may differ from those projected. Key factors that
could cause actual results to differ materially include economic downturns,
successful and timely completion of acquisitions, renovations and development
programs, leasing activities and other risks associated with the commercial
real estate business, and as detailed in the company's filings from time to
time with the Securities and Exchange Commission.
News releases for Malan Realty Investors are available on the company's
web site at http://www.malanreit.com or through Company News On-Call by fax at (800)
758-5804, ext. 114165, or http://www.prnewswire.com .
MALAN REALTY INVESTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(Unaudited)
Three Months Ended June 30
Six Months Ended June 30
2000 1999 2000 1999
Revenues
Minimum rent $7,455 $7,773 $14,916 $15,455
Percentage
and overage rents 165 222 684 467
Recoveries from
tenants 2,401 2,736 5,188 5,720
Interest and other
income 104 72 366 159
Gain on sale of
real estate 3,170 3,170 1,751
Total Revenues 13,295 10,803 24,324 23,552
Expenses
Property operating
and maintenance 682 729 1,626 1,899
Other operating
expenses 452 475 832 843
Real estate taxes 2,099 2,159 4,173 4,317
General and
administrative 634 468 1,156 1,013
Proxy contest and
related change in
control costs 3,351 3,401
Depreciation and
amortization 1,637 1,543 3,269 3,122
Total Operating
Expenses 8,855 5,374 14,457 11,194
Operating Income 4,440 5,429 9,867 12,358
Interest Expense 4,499 4,377 8,978 8,815
Income (Loss) before
extraordinary item
and cumulative effect
of change in
accounting principle (59) 1,052 889 3,543
Extraordinary Item:
Loss on
extinguishments
of debt (93) (93) (459)
Income (Loss) before
cumulative effect of
change in accounting
principle (152) 1,052 796 3,084
Cumulative effect of
change in accounting
principle (522)
Net Income (Loss) ($152) $1,052 $796 $2,562
Earnings per share
before extraordinary
item and cumulative
effect of change
in accounting
principle:
Basic ($0.01) $0.20 $0.17 $0.69
Diluted ($0.01) $0.20 $0.17 $0.68
Earnings per share
before cumulative
effect of change in
accounting principle:
Basic ($0.03) $0.20 $0.15 $0.60
Diluted ($0.03) $0.20 $0.15 $0.59
Earnings per share:
Basic ($0.03) $0.20 $0.15 $0.50
Diluted ($0.03) $0.20 $0.15 $0.49
Depreciation and
Amortization:
Depreciation of
buildings and
improvements $1,546 $1,470 $3,091 $2,977
Amortization of
tenant allowances
and improvements 47 38 94 76
Amortization of
leasing costs 43 33 82 66
Gain on sale of
real estate (3,170) (3,170) (1,751)
Loss on
extinguishments
of debt 93 93 459
Cumulative effect
of change in
accounting principle 522
Funds From Operations,
Basic (1,593) 2,593 986 4,911
Interest expense
on convertible
securities 1,589 1,640 3,178 3,281
Amortization of
deferred financing
costs on
convertible securities 71 72 140 143
Funds From Operations,
Diluted $67 $4,305 $4,304 $8,335
Funds From Operations
Per Share:
Basic ($0.31) $0.50 $0.19 $0.95
Diluted $0.01 $0.46 $0.46 $0.89
Weighted average
shares outstanding:
Basic 5,173 5,170 5,173 5,169
Diluted 5,175 5,184 5,175 5,184
Diluted, assuming
conversion of
convertible
securities 9,278 9,415 9,277 9,415
SOURCE Malan Realty Investors, Inc.
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Related links:
http://www.malanreit.com
CONTACT:
Michael K. Kaline, Vice President of Malan
Realty Investors, Inc., 248-644-7110; or Fred Nachman of Marjan
Communications Inc. for Malan Realty Investors, 312-867-1771
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