SAN DIEGO, Aug. 14 /PRNewswire/ -- Burnham Pacific Properties, Inc.
(NYSE: BPP) announced today operating results for the second quarter ended
June 30, 2000.
Funds From Operations ("FFO") for the second quarter of 2000 on a
fully-diluted basis was $2.7 million or $0.08 per share (based on
32,319,000 shares), as compared to $13.2 million or $0.32 per share (based on
41,710,000 shares) for the quarter ended June 30, 1999. Fully-diluted FFO for
the second quarter of 2000 does not assume the conversion of the Company's
convertible preferred stock and other common stock equivalents because such
conversion would be accretive to the Company. For the six months ended June
30, 2000, FFO on a fully-diluted basis was $9.1 million or $0.28 per share
(based on 32,301,000 shares), as compared to $21.9 million or $0.59 per share
(based on 37,154,000 shares) for the first six months of 1999. Fully-diluted
FFO for the first six months of 2000 does not assume the conversion of the
Company's convertible preferred stock and other common stock equivalents
because such conversion would be accretive to the Company. Fully-diluted FFO
for the first six months of 1999 does not assume the conversion of the
Company's convertible preferred stock but does assume conversion of other
common stock equivalents. FFO for both the 1999 and 2000 periods is
calculated in accordance with the revised definition adopted by the Board of
Governors of the National Association of Real Estate Investment Trusts
(NAREIT) effective January 1, 2000. FFO is considered the primary earnings
measure for equity REITs.
The year-over-year decline in FFO for the six months was primarily
attributable to lower revenues resulting from asset sales occurring subsequent
to March 31, 1999, a decrease in lease termination fees, an increase in
borrowing costs which is partially due to the refinancing of the Company's
line of credit during the fourth quarter of 1999, and costs associated with
the Company's pursuit of its strategic alternatives. We anticipate that the
foregoing dilutive effects will continue to impact the Company's operating
results.
Results for the first six months of 2000 were also negatively impacted by
legal fees and a litigation reserve related to a recent verdict against the
Company in favor of a tenant. If one-time revenue and expense items were
excluded, fully-diluted FFO for the quarter-ended June 30, 2000, would have
been $6.3 million or $0.20 per share, as compared to $13.3 million or $0.32
per share for the prior year period; and fully-diluted FFO for the six-months
ended June 30, 2000, would have been $13.2 million or $0.41 per share, as
compared to $23.5 million or $0.63 per share for the prior year period.
Review of Results
For the second quarter ended June 30, 2000, revenues decreased
$3.3 million to $31.1 million from $34.4 million in the second quarter of
1999. Including the one-time revenue and expense items referenced below, net
income (loss) available to common shareholders was a net loss of $3.8 million
or a loss of $0.12 per share as compared to net income of $2.4 million or
$0.08 per share for the prior year period.
Revenues in the 2000 and 1999 three-month periods included one-time lease
termination fees of $41,000 and $800,000, respectively. The 2000 and 1999
three-month periods were unfavorably impacted by costs of $983,000 and
$875,000, respectively, associated with the Company's pursuit of its strategic
alternatives. The 2000 three-month period was also unfavorably impacted by
legal fees and a litigation reserve totaling $2.4 million associated with a
verdict against the Company, and severance expense of $250,000 relating to the
resignation of the Company's former Chief Operating Officer. The 1999
three-month period was also unfavorably impacted by an impairment write-off in
the amount of $1.2 million related to the prospective sale of an office
building.
For the six months ended June 30, 2000, revenues decreased $7.3 million to
$62.2 million from $69.5 million in the first half of 1999. Including the
one-time revenue and expense items referenced below, net income (loss)
available to common stockholders was a net loss of $3.8 million or a loss of
$0.12 per share, as compared to net income of $2.7 million or $0.08 per share
for the prior six-month period.
Revenues in the 2000 and 1999 six-month periods included one-time lease
termination fees of $117,000 and $1.5 million, respectively. The 2000
six-month period was impacted by costs of $1,322,000 associated with the
Company's pursuit of its strategic alternatives, the legal fees and litigation
reserve totaling $2.6 million, and the $250,000 severance expense. The 1999
six-month period was also impacted by one-time charges taken in the first
quarter of 1999, in addition to the $1.2 million impairment charge and
$875,000 in costs related to the pursuit of strategic alternatives. The first
quarter included charges of $1.5 million related to the Company's decision to
outsource its property management function to third-party providers,
$748,000 associated with the abandonment of prospective acquisition
transactions in process prior to the AMB portfolio acquisition, and
$1.9 million recognized as the cumulative effect of a change in accounting
principle.
Leasing Results
The Company executed leases for approximately 333,197 square feet during
the second quarter at a weighted average rent of $15.49 per square foot per
year, with approximately 115,220 square feet representing space not previously
occupied, and approximately 116,704 square feet representing renewals of
existing tenants. Of the total, approximately 128,666 square feet was leased
to anchor tenants (tenants greater than 14,000 square feet) at a weighted
average rent of $12.20 per square foot per year, as compared to a weighted
average rent for anchor tenants in the Company's overall portfolio of
$9.54 per square foot per year; and approximately 204,531 square feet was
leased to non-anchor tenants at a weighted average rent of $17.56 per square
foot per year, as compared to a weighted average rent for non-anchor tenants
in the Company's overall portfolio of $16.71 per square foot per year.
Rental rates on renewals increased approximately 9.9% over the previous
rates. Same-store net operating income increased approximately 1% in the
current quarter, as compared to the same quarter a year ago, and economic
occupancy at June 30, 2000 was 91.6%.
Dispositions
On April 28, 2000, the Company closed on the sale of the Chambers Creek
Shopping Center located in Tacoma, Washington, for a sales price of
approximately $3.25 million. Net proceeds after repayment of a related
mortgage obligation of approximately $1.5 million were used for general
working capital purposes.
Subsequent Events
On July 31, 2000, the Company closed on the sale of the Scripps Ranch
office buildings located in San Diego, California, for a sales price of
approximately $5.55 million. Net proceeds were used to reduce outstanding
indebtedness under the Company's line of credit.
Burnham Pacific is a real estate investment trust (REIT) that focuses on
value-added retail real estate opportunities throughout the United States. On
a quarterly basis, Burnham Pacific makes available supplemental information
that includes property and corporate level detail which is available upon
request. More information on Burnham Pacific may be obtained by calling
800.462.5181, or visiting the Company's website at http://www.burnhampacific.com.
This news release contains forward-looking statements that predict or
indicate future events or trends or that do not relate to historical matters.
There are a number of important factors that could cause actual events to
differ materially from those indicated by such forward-looking statements.
These factors include, but are not limited to, uncertainties in the strategic
alternatives process, the timing and cost of completion of properties under
development or redevelopment, the timing of lease-up and occupancy of
properties, and the availability and timing of financing, as well as other
factors discussed in the Company's periodic reports filed with the Securities
and Exchange Commission, including the risk factors that were disclosed in our
Form 10-K that was filed with the SEC on March 30, 2000. You should be aware
that the risk factors contained in that Form 10-K may not be exhaustive.
Therefore, we recommend that you read the information in that Form 10-K
together with other reports and documents that we file with the SEC from time
to time, including our Forms 10-K, 10-Q and 8-K which may supplement, modify,
supersede or update those risk factors.
Consolidated Statements of Income
Quarter Ended Year-to-Date
06/30/2000 06/30/1999 06/30/2000 06/30/1999
Revenues
Rents $29,814 $32,456 $59,109 $66,891
Fee Income 889 1,582 2,089 1,966
Interest & Other 406 331 971 647
Total Revenues 31,109 34,369 62,169 69,504
Expenses
Interest 10,589 9,610 19,734 19,498
Rental Operating 9,590 9,541 18,867 18,915
General & Administrative 2,458 1,905 4,704 3,659
Litigation 2,400 0 2,636 0
Costs Associated
w/Unsolicited Proposal &
Pursuit of Strategic
Alternatives 983 875 1,322 875
Restructuring Charge 0 0 0 1,500
Abandoned Acquisition Costs 0 0 0 748
Impairment Write-Off 0 1,200 0 1,200
Depreciation &
Amortization 6,905 6,629 14,368 13,790
Total Expenses 32,925 29,760 61,631 60,185
Income (Loss) from
Operations before Income
from Unconsolidated
Subsidiaries, Minority
Interest, Gain on
Sales of Real Estate
and Cumulative
Effect of Change
in Accounting
Principle (1,816) 4,609 538 9,319
Income from Unconsolidated
Subsidiaries 27 473 76 442
Minority Interest (928) (1,281) (2,011) (2,383)
Gain on Sales of
Real Estate 394 0 394 0
Net Income (Loss) before
Cumulative Effect of
Change in Accounting
Principle (2,323) 3,801 (1,003) 7,378
Cumulative Effect
of Change in
Accounting Principle 0 0 0 (1,866)
Net Income (Loss) $(2,323) $3,801 $(1,003) $5,512
Dividends Paid to
Preferred Stockholders (1,400) (1,400) (2,800) (2,800)
Income (Loss) Available
to Common Stockholders $(3,723) $2,401 $(3,803) $2,712
Basic Earnings Per Share:
Income (Loss) before
Cumulative Effect of
Change in
Accounting Principle $(0.12) $0.08 $(0.12) $0.14
Cumulative Effect of
Change in
Accounting Principle 0.00 0.00 0.00 (0.06)
Net Income (Loss) $(0.12) $0.08 $(0.12) $0.08
Diluted Earnings Per Share:
Income (Loss) before
Cumulative Effect of
Change in Accounting
Principle $(0.12) $0.08 $(0.12) $0.14
Cumulative Effect of
Change in Accounting
Principle 0.00 0.00 0.00 (0.06)
Net Income (Loss) $(0.12) $0.08 $(0.12) $0.08
Funds from Operations-Diluted: (New Definition)
Income (Loss) Available
to Common Stockholders $(3,723) $2,401 $(3,803) $2,712
Adjustments:
Depreciation &
Amortization of Real
Estate and Tenant
Improvements 6,842 6,928 13,266 13,708
Dividends Paid to
Preferred Stockholders 0 1,400 0 0
Cumulative Effect of
Change in Accounting
Principle 0 0 0 1,866
Impairment Write-Off 0 1,200 0 1,200
Gain on Sales of
Real Estate (394) 0 (394) 0
Minority Interest 0 1,281 0 2,383
Funds from Operations-
Diluted $2,725 $13,210 $9,069 $21,869
Funds from Operations
Per Share: (New Definition)
Basic $0.08 $0.33 $0.28 $0.61
Diluted $0.08 $0.32 $0.28 $0.59
Weighted Average
Shares Outstanding-FFO
Basic 32,318,854 31,960,069 32,301,064 31,957,055
Diluted 32,318,854 41,710,211 32,301,064 37,154,351
CONSOLIDATED BALANCE SHEETS
06/30/2000 12/31/1999
ASSETS
Real Estate $1,025,079 $1,036,294
Less Accumulated Depreciation (72,315) (65,494)
Real Estate-Net 952,764 970,800
Real Estate Held for Sale 29,755 8,737
Cash and Cash Equivalents 5,474 11,119
Restricted Cash 9,474 9,827
Receivables-Net 8,975 8,413
Investment in Unconsolidated Subsidiaries 3,823 3,650
Other Assets 25,182 22,469
Total $1,035,447 $1,035,015
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts Payable and Other Liabilities $21,506 $29,224
Tenant Security Deposits 2,651 2,606
Notes Payable 405,989 400,410
Line of Credit Advances 162,420 138,420
Total Liabilities 592,566 570,660
Commitments and Contingencies
Minority Interest 64,951 66,350
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, 2000 and December 31, 1999 28 28
Common Stock, Par Value $.01/Share, 95,000,000
Shares Authorized, 32,324,046 and 32,273,546
Shares Outstanding at June 30, 2000 and
December 31, 1999, Respectively 323 323
Paid in Capital in Excess of Par 529,505 528,811
Dividends Paid in Excess of Net Income (151,926) (131,157)
Total Stockholders' Equity 377,930 398,005
Total $1,035,447 $1,035,015
SOURCE Burnham Pacific Properties, Inc.
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Related links:
http://www.burnhampacific.com
CONTACT:
Daniel B. Platt, Chief Financial Officer of
Burnham Pacific Properties, Inc., 619-652-4700, or fax
619-652-4711, dbplatt@bpac.com
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